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Entrepreneurial behaviour in a large traditional firm: exploring key drivers

Listed author(s):
  • Mair, Johanna


    (IESE Business School)

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    Innovative use of resources to pursue opportunities has become vital for all organizations. Even large traditional firms operating in stable and mature markets increasingly stress entrepreneurial initiative as a key element in their strategic long-term orientation. While traditional management literature has identified contextual features that foster entrepreneurial activity, little research has looked at why -in the same objective organizational context- some managers act entrepreneurially and others do not. I recognize the importance of context in shaping managerial behaviour. However, while differences in the behavioural context might explain variance in entrepreneurial behaviour between companies, they fail to explain variance within the same company. Drawing on literature in entrepreneurship, strategic management, organizational behaviour and social cognitive theory, I present a model on the micro-foundations of entrepreneurial behaviour in large traditional organizations. I propose that entrepreneurial behaviour is largely affected by managers' subjective interpretations of their supportive context and their set of cognitive and emotional characteristics. Furthermore -acknowledging a proactive role of individuals in controlling their own behaviour and cognition- I introduce entrepreneurial self-efficacy beliefs -defined as managers' perceived capability to perform entrepreneurial tasks- as a critical influencer of actual entrepreneurial behaviour. I empirically test this model and use structural equation modeling (SEM) to analyze data from 150 middle managers of a large European financial service company striving to become "entrepreneurial". Preliminary findings reveal that managers' subjective interpretations of their sociopolitical support and access to resources significantly stimulate entrepreneurial behaviour. Contrary to the predictions of the literature, individual cognitive and emotional characteristics do not affect entrepreneurial behaviour directly, but are critical in shaping managers' perceptions of their "playground for action". Furthermore, findings suggest that managers' entrepreneurial self-efficacy beliefs are a powerful predictor of entrepreneurial behaviour. They are critical to translate perceptions of context and individual characteristics into behaviour, and represent an important cognitive and motivational device to steer and regulate entrepreneurial behaviour. Based on an explorative yet rigorous research design, this study broadens our understanding of the main determinants of entrepreneurial behaviour within established organizations and consolidates various streams of literature. Last but not least, it offers valuable insights for managerial practice on how to encourage entrepreneurial behaviour across multiple levels of the organization.

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    Paper provided by IESE Business School in its series IESE Research Papers with number D/466.

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    Length: 15 pages
    Date of creation: 15 Jun 2002
    Handle: RePEc:ebg:iesewp:d-0466
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