Exploring the Flow of Entrepreneurial Orientation Within Firms: A Cross-Level, Cascading Effects

To extend the field’s understanding of entrepreneurial orientation (EO), this paper explored whether and how EO shapes dynamics within organizations. Specifically, we developed and tested 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-level, three-wave study with a sample consisted of 280 supervisors and 1,214 employees from 94 organizations to test our model. The results show that firm-level EO has an indirect and positive relationship to employees’ creative performance serially via supervisors’ and employees’ passion for inventing. In addition, these cascading effects of EO is conditional upon the extent to which supervisors identify with their organizations, that is, the indirect effect is stronger when supervisors’ organizational identification is high. These findings provide a new theoretical perspective on the internal dynamics of EO, uncover a central yet unexplored boundary condition, and offer managerial insights for the effective implementation of EO.