Abstract
ABSTRACTA chief executive officer (CEO) acting as the firm's transformational leader is typically viewed as instrumental to corporate entrepreneurship in established firms, but how exactly does a higher level of corporate entrepreneurship come about, given a transformational CEO's actions? We suggest that organizational ambidexterity can function as a core mediating mechanism between transformational CEOs and the observed level of corporate entrepreneurship and that the effectiveness of this mediating process varies as a function of critical contingencies related to characteristics of the top management team (TMT), the environment and the organization's design. Our empirical evidence, based on a sample of 145 Chinese private sector firms, and using three primary sources of data (145 CEOs, 506 TMT members, and 1,981 middle managers), provides support for a moderated mediation process. We find that the mediating pathway from transformational leadership to corporate entrepreneurship through organizational ambidexterity is not significant when boundary conditions are ignored. However, when environmental dynamism, TMT collectivism, and structural differentiation are included as moderators, CEO transformational leadership does affect corporate entrepreneurship via the creation and effective functioning of organizational ambidexterity.
Highlights
The linkages between leadership and corporate entrepreneurship (CE hereafter) have attracted much attention in both public discourse (e.g., Dyer & Gregersen, 2013) and academic studies (e.g., Dess, Ireland, Zahra, Floyd, Janney, & Lane, 2003)
We have shown that the mediating pathway from transformational leadership to corporate entrepreneurship through organizational ambidexterity is not significant
When environmental dynamism, top management team (TMT) collectivism, and structural differentiation are included as moderators, chief executive officer (CEO) transformational leadership does affect corporate entrepreneurship via the creation and effective functioning of organizational ambidexterity
Summary
The linkages between leadership and corporate entrepreneurship (CE hereafter) have attracted much attention in both public discourse (e.g., Dyer & Gregersen, 2013) and academic studies (e.g., Dess, Ireland, Zahra, Floyd, Janney, & Lane, 2003). Corporate entrepreneurship refers to ‘the pursuit of entrepreneurial actions and initiatives that transform the established organization through strategic renewal processes and/or extend the firm’s scope of operations into new domains, that is, new product-market segments or technological arenas’ (Goodale, Kuratko, Hornsby, & Covin, 2011: 116). As corporate entrepreneurship activities are critical to create new businesses and build competitive advantage (Zahra, 1996), scholars have paid significant attention to promoting opportunity recognition and exploitation in established firms (e.g., Hornsby, Kuratko, & Zahra, 2002). More indirectly (but perhaps more importantly, in large firms), they can promote an entrepreneurial context that will facilitate creative efforts in the organization
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