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.