ELSEVIER EFFECTS OF MANAGERS' ENTREPRENEURIAL BEHAVIOR ON SUBORDINATES JOHN A. PEARCE II Villanova University TRACY ROBERTSON KRAMER Consultant D. KEITH ROBBINS University of Richmond The recent surge of interest in promoting corporate entrepreneurship seems EXECUTIVE linked to a growing body of empirical evidence of a positive relationship SUMMARY between a firm's entrepreneurial orientation and its improved financial per- formance. Logical induction suggests that organizations that promote cor- porate entrepreneurship must employ managers who are entrepreneurial in their behaviors. By extension, it would seem that managers who are entrepre- neurial must have a positive impact on their subordinates if the organization's entrepreneurial initiatives are to be successful. Unfortunately, despite the implicit appeal of this logic, what would "seem" to be true has not yet been substantiated empirically. To address this shortcoming and to provide managers with information from which to judge their efforts to promote corporate entrepreneurship, research was undertaken to address two specific re- search questions: 1. What behaviors distinguish managers who exhibit an entrepreneurial orientation? 2. How do subordinates judge the actions of managers who work for an organizational metamorphosis to an entrepreneurial model of management? Providing a rigorous assessment of these issues necessitated the selection of a setting not typically seen as receptive to entrepreneurial initiatives. Thus, the data were collected from 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 10,000 employees and $4.297 billion in 1992 revenues. Together, these units employed 60% of the corporate staff and generated 89% of total corporate revenues. Because of the perception of the company's top management that the prospect of deregulation, if Address correspondence to Dr. John A. Pearce II, Department of Management, College of Commerce and Finance, Villanova University, Villanova, PA 19085. Journal of Business Venturing 12, 147-160 © 1997 Elsevier Science Inc. 655 Avenue of the Americas, New York, NY 10010 0883-9026/97/$17.00 PII S0883-9026(96)00066-3