Effects of Entrepreneurial Orientation Within Organizations: The Role of Passion for Inventing and Organizational Identification

Abstract

In recent years, entrepreneurial orientation (EO) has emerged as a key concept in the management literature, with various studies demonstrating its positive effects on important firm-level outcomes. However, our understanding of whether and how EO shapes dynamics within organizations is still underdeveloped. Thus, by integrating EO and social information–processing theories, this study develops and tests a cross-level contingency model that describes how and when EO cascades through an organization—bridging firm, supervisor, and employee levels. We conducted a three-source, three-wave study involving 280 supervisors and 1,214 employees from 94 organizations to test our model. The results show that firm-level EO is positively related to employees’ creative performance and that supervisors’ and employees’ passion for inventing serves as the central serial mediators for these links. The results also reveal that these cascading effects of EO do not occur unconditionally but depend on an important boundary condition—that is, the extent to which supervisors identify with their organizations. A follow-up study of 238 supervisors from various firms provides further support for the social information–processing perspective of our model. It shows that the link between firm EO and supervisors’ passion for inventing is mediated by perceived normative expectations for creativity. Taken together, these findings offer a new perspective on the internal dynamics of EO, uncover a crucial boundary condition, and provide insights for the effective implementation of EO.