EFFECTS OF MANAGERS ENTREPRENEURIAL BEHAVIOR ON SUBORDINATES

The recent surge of interest in promoting corporate entrepreneurship s eems linked to a growing body of empirical evidence of a positive rela tionship between a firm's entrepreneurial orientation and its improved financial performance. Logical induction suggests that organizations that promote corporate entrepreneurship must employ managers who are e ntrepreneurial in their behaviors. By extension, it would seem that ma nagers who are entrepreneurial must have a positive impact on their su bordinates if the organization's entrepreneurial initiatives are to be successful. Unfortunately, despite the implicit appeal of this this l ogic, what would ''seem'' to be true has not yet been substantiated em pirically. To address this shortcoming and to provide managers with in formation from which to judge their efforts to promote corporate entre preneurship, research was undertaken to address two specific research questions: 1. What behaviors distinguish managers who exhibit an entre preneurial orientation? 2. How do subordinates judge the actions of ma nagers who work for an organizational metamorphosis to an entrepreneur ial model of management? Providing a rigorous assessment of these issu es necessitated the selection of a setting not typically seen as recep tive to entrepreneurial initiatives. Thus, the data were collected fro m the two largest units of an electric utility system, one with 8,000 employees and $2.847 billion in 1992 revenues and the other with 10,00 0 employees and $4.297 billion in 1992 revenues. Together, these units employed 60% of the the corporate staff and generated 89% of total co rporate revenues. Because of the perception of the company's top manag ement that the prospect of deregulation, if not its inevitability, thr eatened the viability of the company's traditional management style ex ecutives considered specific programs to;become more competitive They formulated a plan for the long-term development of an entrepreneurial organization based on the belief of the company's executives that its future success required fundamental change in corporate culture and co mpetitive posture. To track the evolution of its managers toward an en trepreneurial orientation the company used two survey instruments deve loped with and administered by executives of the company to monitor ea ch manager's progress and to evaluate its impact. To assess the types and frequency of entrepreneurial behaviors among managers, a theoretic ally driven, management ''behaviors'' questionnaire was developed. Ele ven of its items were designed to assess entrepreneurial behavior as a distinguishable subset of generally advocated management practice. Th is survey was administered by the company To all 833 immediate subordi nates of each of 102 individual managers. A second survey instrument, completed approximately 6 months after the behaviors questionnaire, wa s used to assess the ''effects'' of the managers' behaviors. Of partic ular interest were 12 questions from this instrument that measured the satisfaction levels of the 102 managers' 1,522 immediate and second l evel subordinates with the supervision that they received, ie, the 12 items provided on indication of the effects of managers' entrepreneuri al behaviors on their subordinates' satisfaction with the managers. Th e results of the data analyses support the idea that managers who are entrepreneurial in their behavior have a positive impact on their subo rdinates' satisfaction with their supervisors. The results indicate th at as entrepreneurial behaviors increased subordinates satisfaction wi th supervision increased. Whereas 62% of the subordinates of entrepren eurial managers reported high levels of satisfaction with their superv isors, 69% of subordinates of bureaucratic managers reported low level s of satisfaction with their supervisors. Further analysis indicated t hat eight of 11 of the ''behaviors'' survey items were able to discrim inate high and low subordinate satisfaction. This demonstrated that th e scale developed through this research is robust in the measurement o f entrepreneurial behaviors of managers. The major contributions of th is study were in the development and validation of a scale that can be used to gauge entrepreneurial behaviors, and the finding that corpora te entrepreneurship, as gauged by these behaviors, was well received b y subordinates even when entrepreneurial management was counter to its organization's preexisting culture. (C) 1997 Elsevier Science Inc.