Home Business & Economics Entrepreneurial Leadership and Innovation Performance in New Ventures: Examining the Roles of Strategic Flexibility and Environmental Turbulence
Article
Licensed
Unlicensed Requires Authentication

Entrepreneurial Leadership and Innovation Performance in New Ventures: Examining the Roles of Strategic Flexibility and Environmental Turbulence

  • Yunjiang Yu , Xiang Zhang , Shenglan Huang EMAIL logo , Zhi Chen and Zhicheng Chen
Published/Copyright: August 24, 2020

Abstract

This study seeks to disclose the influencing mechanism of entrepreneurial leadership on innovation performance in new ventures. Drawing on the upper echelons theory, we construct a mediation model to examine the mechanism through which entrepreneurial leadership affects innovation performance of new ventures via strategic flexibility. To obtain an in-depth understanding of the mediating mechanism, this study argues that environmental turbulence could be considered as the moderating variable. Our hypotheses are tested on a sample of 175 Chinese high-tech new ventures. The results show that strategic flexibility mediates the association between entrepreneurial leadership and innovation performance. However, the results only support the moderation of technological turbulence on the association between entrepreneurial leadership and strategic flexibility. Our findings extend the entrepreneurship and leadership research by investigating how entrepreneurial leadership affects innovation performance of new ventures via strategic flexibility, and the effectiveness of entrepreneurial leadership under technological turbulence.


Corresponding author: Shenglan Huang, School of Business Administration, Shanghai Lixin University of Accounting and Finance, Shanghai, China, E-mail:

Funding source: National Social Science Foundation of China

Award Identifier / Grant number: 19CRK021

Funding source: Philosophy and Social Science Program of Shanghai City

Award Identifier / Grant number: 2019EGL020

Funding source: Philosophy and Social Science Program of Shanghai City

Award Identifier / Grant number: 2018BSH006

Funding source: Humanities and Social Sciences Program of Chinese Ministry of Education

Award Identifier / Grant number: 18YJA79011

  1. Research funding: This work was supported by the National Social Science Foundation of China (No. 19CRK021), Philosophy and Social Science Program of Shanghai City (No. 2019EGL020), Philosophy and Social Science Program of Shanghai City (No. 2018BSH006) and Humanities and Social Sciences Program of Chinese Ministry of Education (No. 18YJA79011).

References

Agnihotri, A. 2014. “The Role of the Upper Echelon in the Value Chain Management.” Competitiveness Review 24 (3): 240–55, https://doi.org/10.1108/cr-05-2013-0049.Search in Google Scholar

Aiken, L. S., and S. G. West. 1991. Multiple Regression: Testing and Interpreting Interactions. Newbury Park: Sage Publications.Search in Google Scholar

Bagheri, A. 2017. “The Impact of Entrepreneurial Leadership on Innovation Work Behavior and Opportunity Recognition in High-Technology SMEs.” The Journal of High Technology Management Research 28: 159–66, https://doi.org/10.1016/j.hitech.2017.10.003.Search in Google Scholar

Baldegger, U., and J. Gast. 2016. “On the Emergence of Leadership in New Ventures.” International Journal of Entrepreneurial Behavior & Research 22 (6): 933–57, https://doi.org/10.1108/ijebr-11-2015-0242.Search in Google Scholar

Bliemel, M. J., I. P. Mccarthy, and E. Maine. 2014. “An Integrated Approach to Studying Multiplexity in Entrepreneurial Networks.” Entrepreneurship Research Journal 4 (4): 367–402, https://doi.org/10.1515/erj-2014-0007.Search in Google Scholar

Brinckmann, J., J. Villanueva, D. Grichnik, and L. Singh. 2019. “Sources of Strategic Flexibility in New Ventures: An Analysis of the Role of Resource Leveraging Practices.” Strategic Entrepreneurship Journal 13 (2): 154–78, https://doi.org/10.1002/sej.1313.Search in Google Scholar

Brozovic, D. 2018. “Strategic Flexibility: A Review of the Literature.” International Journal of Management Reviews 20: 3–31, https://doi.org/10.1111/ijmr.12111.Search in Google Scholar

Buganza, T., C. Dell’Era, and R. Verganti. 2009. “Exploring the Relationships between Product Development and Environmental Turbulence: The Case of Mobile Tlc Services.” Journal of Product Innovation Management 26 (3): 308–21, https://doi.org/10.1111/j.1540-5885.2009.00660.x.Search in Google Scholar

Cai, W. J., E. I. Lysova, S. N. Khapova, and B. A. G. Bossink. 2019. “Does Entrepreneurial Leadership Foster Creativity Among Employees and Teams? The Mediating Role of Creative Efficacy Beliefs.” Journal of Business and Psychology 34: 203–17, https://doi.org/10.1007/s10869-018-9536-y.Search in Google Scholar

Chen, M. H. 2007. “Entrepreneurial Leadership and New Ventures: Creativity in Entrepreneurial Teams.” Creativity and Innovation Management 16 (3): 239–49, https://doi.org/10.1111/j.1467-8691.2007.00439.x.Search in Google Scholar

Chen, T. T., F. L. Li, X. P. Chen, and Z. Y. Ou. 2018. “Innovate or Die: How Should Knowledge-Worker Teams Respond to Technological Turbulence?” Organizational Behavior and Human Decision Processes 149: 1–16, https://doi.org/10.1016/j.obhdp.2018.08.008.Search in Google Scholar

Dai, Y., J. C. Goodale, G. Byun, and F. S. Ding. 2018. “Strategic Flexibility in New High-Technology Ventures.” Journal of Management Studies 55 (2): 265–94, https://doi.org/10.1111/joms.12288.Search in Google Scholar

Dai, Y., G. Byun, and F. S. Ding. 2019a. “The Direct and Indirect Impact of Gender Diversity in New Venture Teams on Innovation Performance.” Entrepreneurship Theory and Practice 43 (3): 505–28, https://doi.org/10.1177/1042258718807696.Search in Google Scholar

Dai, Y., G. Byun, J. I. Chok, and F. S. Ding. 2019b. “Learning From Referents Across Geographic Distance and Institutional Contexts: The Perceived Speed of ISO 9000 Certification in Chinese High-Technology New Ventures.” Journal of Small Business Management 57 (2): 400–20, https://doi.org/10.1111/jsbm.12374.Search in Google Scholar

Das, T. K., and B. S. Teng. 1999. “Cognitive Biases and Strategic Decision Processes: An Integrative Perspective.” Journal of Management Studies 36 (6): 757–78, https://doi.org/10.1111/1467-6486.00157.Search in Google Scholar

De Clercq, D., N. Thongpapanl, and M. Voronov. 2018. “Sustainability in the Face of Institutional Adversity: Market Turbulence, Network Embeddedness, and Innovative Orientation.” Journal of Business Ethics 148 (2): 437–55, https://doi.org/10.1007/s10551-015-3004-7.Search in Google Scholar

Edwards, J. R., and L. S. Lambert. 2007. “Methods for Integrating Moderation and Mediation: A General Analytical Framework Using Moderated Path Analysis.” Psychological Methods 12 (1): 1–22, https://doi.org/10.1037/1082-989x.12.1.1.Search in Google Scholar

Eva, N., A. Newman, Q. Miao, B. Cooper, and K. Herbert. 2019. “Chief Executive Officer Participative Leadership and the Performance of New Venture Teams.” International Small Business Journal-Researching Entrepreneurship 37 (1): 69–88, https://doi.org/10.1177/0266242618808558.Search in Google Scholar

Fan, Z. G., D. Wu, and X. B. Wu. 2013. “Proactive and Reactive Strategic Flexibility in Coping with Environmental Change in Innovation.” Asian Journal of Technology Innovation 21 (2): 187–201, https://doi.org/10.1080/19761597.2013.866316.Search in Google Scholar

Feng, C., X. Huang, and L. Zhang. 2016. “A Multilevel Study of Transformational Leadership, Dual Organizational Change and Innovative Behavior in Groups.” Journal of Organizational Change Management 29 (6): 855–77, https://doi.org/10.1108/jocm-01-2016-0005.Search in Google Scholar

Franco, M., and H. Haase. 2017. “Collective Entrepreneurship: Employees’ Perceptions of the Influence of Leadership Styles.” Journal of Management & Organization 23 (2): 241–57, https://doi.org/10.1017/jmo.2016.3.Search in Google Scholar

Friske, W. M., and M. A. Zachary. 2019. “Regulation, New Venture Creation, and Resource-Advantage Theory: An Analysis of the US Brewing Industry.” Entrepreneurship Theory and Practice 43 (5): 999–1017, https://doi.org/10.1177/1042258718760840.Search in Google Scholar

Grewal, R., and P. Tansuhaj. 2001. “Building Organizational Capabilities for Managing Economic Crisis: The Role of Market Orientation and Strategic Flexibility.” Journal of Marketing 65 (2): 67–80, https://doi.org/10.1509/jmkg.65.2.67.18259.Search in Google Scholar

Guo, R. P. 2019. “Effectuation, Opportunity Shaping and Innovation Strategy in High-Tech New Ventures.” Management Decision 57 (1): 115–30, https://doi.org/10.1108/md-08-2017-0799.Search in Google Scholar

Guo, B., and Y. Q. Wang. 2014. “Environmental Turbulence, Absorptive Capacity and External Knowledge Search Among Chinese SMEs.” Chinese Management Studies 8 (2): 258–72, https://doi.org/10.1108/cms-03-2014-0051.Search in Google Scholar

Guo, R. P., L. Cai, and Y. P. Fei. 2019. “Knowledge Integration Methods, Product Innovation and High-Tech New Venture Performance in China.” Technology Analysis & Strategic Management 31 (3): 306–18, https://doi.org/10.1080/09537325.2018.1500688.Search in Google Scholar

Gupta, V., I. C. Macmillan, and G. Surie. 2004. “Entrepreneurial Leadership: Developing and Measuring a Cross-Sectional Construct.” Journal of Business Venturing 19 (2): 241–60, https://doi.org/10.1016/s0883-9026(03)00040-5.Search in Google Scholar

Gupta, V. K., D. K. Dutta, and X. Chen. 2014. “Entrepreneurial Orientation Capability and Firm Performance under Conditions of Organizational Learning.” Journal of Managerial Issues 26 (2): 157–73.Search in Google Scholar

Hambrick, D. C. 2007. “The Field of Management’s Devotion to Theory: Too Much of a Good Thing?” Academy of Management Journal 50 (6): 1346–52, https://doi.org/10.5465/amj.2007.28166119.Search in Google Scholar

Hayes, A. F. 2013. Introduction to Mediation, Moderation, and Conditional Process Analysis: A Regression-Based Approach. New York: Guilford Press.Search in Google Scholar

Hitt, M. A., R. D. Ireland, D. G. Sirmon, and C. A. Trahms. 2011. “Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society.” Academy of Management Perspectives 25 (2): 57–75, https://doi.org/10.5465/amp.25.2.57.Search in Google Scholar

Huang, S., D. Ding, and Z. Chen. 2014. “Entrepreneurial Leadership and Performance in Chinese New Ventures: A Moderated Mediation Model of Exploratory Innovation, Exploitative Innovation and Environmental Dynamism.” Creativity and Innovation Management 23 (4): 453–71, https://doi.org/10.1111/caim.12085.Search in Google Scholar

Hughes, M., S. L. Martin, R. E. Morgan, and M. J. Robson. 2013. “Realizing Product-Market Advantage in High-Technology International New Ventures: The Mediating Role of Ambidextrous Innovation.” Journal of International Marketing 18 (4): 1–21, https://doi.org/10.1509/jimk.18.4.1.Search in Google Scholar

Hutchison-Krupat, J., and S. Kavadias. 2015. “Strategic Resource Allocation: Top-Down, Bottom-Up, and the Value of Strategic Buckets.” Management Science 61 (2): 391–412, https://doi.org/10.1287/mnsc.2013.1861.Search in Google Scholar

Ireland, R. D., M. A. Hitt, and D. G. Sirmon. 2003. “A Model of Strategic Entrepreneurship: The Construct and its Dimensions.” Journal of Management 29 (6): 963–89, https://doi.org/10.1016/s0149-2063_03_00086-2.Search in Google Scholar

Jansen, J. J. P., D. Vera, and M. Crossan. 2009. “Strategic Leadership for Exploration and Exploitation: The Moderating Role of Environmental Dynamism.” The Leadership Quarterly 14 (1): 5–18, https://doi.org/10.1016/j.leaqua.2008.11.008.Search in Google Scholar

Jaworski, B. J., and A. K. Kohli. 1993. “Market Orientation: Antecedents and Consequences.” Journal of Marketing 57 (3): 53–71, https://doi.org/10.1177/002224299305700304.Search in Google Scholar

Jeng, J. F., and A. Pak. 2016. “The Variable Effects of Dynamic Capability by Firm Size: The Interaction of Innovation and Marketing Capabilities in Competitive Industries.” International Entrepreneurship and Management Journal 12 (1): 115–30, https://doi.org/10.1007/s11365-014-0330-7.Search in Google Scholar

Jones, O., and H. Crompton. 2009. “Enterprise Logic and Small Firms: A Model of Authentic Entrepreneurial Leadership.” Journal of Strategy & Management 2 (4): 329–51, https://doi.org/10.1108/17554250911003836.Search in Google Scholar

Kakabadse, N. K., A. Tatli, K. Nicolopoulou, and A. Tankibayeva. 2018. “A Gender Perspective on Entrepreneurial Leadership: Female Leaders in Kazakhstan.” European Management Review 15 (2): 155–70, https://doi.org/10.1111/emre.12125.Search in Google Scholar

Kamasak, R., U. Yozgat, and M. Yavuz. 2017. “Knowledge Process Capabilities and Innovation: Testing the Moderating Effects of Environmental Dynamism and Strategic Flexibility.” Knowledge Management Research & Practice 15 (3): 356–68, https://doi.org/10.1057/s41275-017-0068-4.Search in Google Scholar

Kang, J. H., G. T. Solomon, and D. Y. Choi. 2015. “CEOs’ Leadership Styles and Managers’ Innovative Behaviour: Investigation of Intervening Effects in an Entrepreneurial Context.” Journal of Management Studies 52 (4): 531–54, https://doi.org/10.1111/joms.12125.Search in Google Scholar

Kline, R. B. 2005. Principles and Practice of Structural Equation Modeling. New York: The Guilford Press.Search in Google Scholar

Koryak, O., K. F. Mole, A. Lockett, J. C. Hayton, D. Ucbasaran, and G. P. Hodgkinson. 2015. “Entrepreneurial Leadership, Capabilities and Firm Growth.” International Small Business Journal 33 (1): 89–105, https://doi.org/10.1177/0266242614558315.Search in Google Scholar

Kumar, V., E. Jones, R. Venkatesan, and R. P. Leone. 2011. “Is Market Orientation a Source of Sustanable Competitive Advantage or Simply the Cost of Competing?” Journal of Marketing 75: 16–30, https://doi.org/10.1509/jmkg.75.1.16.Search in Google Scholar

Lee, T., and H. M. Liu. 2018. “How Do Firms with Management Ability Promote Competitive Advantages? An Integrated Model from Entrepreneurial Strategy Making and Internal Resources.” Entrepreneurship Research Journal 8: 71, https://doi.org/10.1515/erj-2017-0071.Search in Google Scholar

Li, L. 2018. “China’s Manufacturing Locus in 2025: With a Comparison of “Made-In-China 2025” and “Industry 4.0”.” Technological Forecasting and Social Change 135: 66–74, https://doi.org/10.1016/j.techfore.2017.05.028.Search in Google Scholar

Li, Y., Y. Liu, Y. Duan, and M. Li. 2008. “Entrepreneurial Orientation, Strategic Flexibilities and Indigenous Firm Innovation in Transitional China.” International Journal of Technology Management 41: 223–46, https://doi.org/10.1504/ijtm.2008.015993.Search in Google Scholar

Liao, S. Q., Z. Y. Liu, L. H. Fu, and P. C. Ye. 2019. “Investigate the Role of Distributed Leadership and Strategic Flexibility in Fostering Business Model Innovation.” Chinese Management Studies 13 (1): 93–112, https://doi.org/10.1108/cms-02-2018-0420.Search in Google Scholar

Marvel, M. R., and P. C. Patel. 2018. “Self-Leadership and Overcoming the Time Resource Constraint: Accelerating Innovation for New Products.” IEEE Transactions on Engineering Management 65 (4): 545–56, https://doi.org/10.1109/tem.2017.2690818.Search in Google Scholar

Miao, Q., N. Eva, A. Newman, and B. Cooper. 2019. “CEO Entrepreneurial Leadership and Performance Outcomes of Top Management Teams in Entrepreneurial Ventures: The Mediating Effects of Psychological Safety.” Journal of Small Business Management 57 (3): 1119–35, https://doi.org/10.1111/jsbm.12465.Search in Google Scholar

Miller, K. D. 2007. “Risk and Rationality in Entrepreneurial Processes.” Strategic Entrepreneurship Journal 1: 57–74, https://doi.org/10.1002/sej.2.Search in Google Scholar

Morse, E. A., S. W. Fowler, and T. B. Lawrence. 2007. “The Impact of Virtual Embeddedness on New Venture Survival: Overcoming the Liabilities of Newness.” Entrepreneurship Theory and Practice 31 (2): 139–59, https://doi.org/10.1111/j.1540-6520.2007.00167.x.Search in Google Scholar

Najmaei, A. 2016. “How Do Entrepreneurs Develop Business Models in Small High-Tech Ventures? An Exploratory Model From Australian IT Firms.” Entrepreneurship Research Journal 6 (3): 297–343, https://doi.org/10.1515/erj-2014-0037.Search in Google Scholar

Nambisan, S. 2017. “Digital Entrepreneurship: Toward a Digital Technology Perspective of Entrepreneurship.” Entrepreneurship Theory and Practice 41 (6): 1029–55, https://doi.org/10.1111/etap.12254.Search in Google Scholar

Newman, A., C. Neesham, G. Manville, and H. H. M. Tse. 2018a. “Examining the Influence of Servant and Entrepreneurial Leadership on the Work Outcomes of Employees in Social Enterprises.” International Journal of Human Resource 29 (20): 2905–26, https://doi.org/10.1080/09585192.2017.1359792.Search in Google Scholar

Newman, A., H. H. M. Tse, G. Schwarz, and I. Nielsen. 2018b. “The Effects of Employees’ Creative Self-Efficacy on Innovative Behavior: The Role of Entrepreneurial Leadership.” Journal of Business Research 89: 1–9, https://doi.org/10.1016/j.jbusres.2018.04.001.Search in Google Scholar

Pitelis, C. N., and J. D. Wagner. 2019. “Strategic Shared Leadership and Organizational Dynamic Capabilities.” The Leadership Quarterly 30 (2): 233–42, https://doi.org/10.1016/j.leaqua.2018.08.002.Search in Google Scholar

Preacher, K. J., and A. F. Hayes. 2008. “Asymptotic and Resampling Strategies for Assessing and Comparing Indirect Effects in Multiple Mediator Models.” Behavior Research Methods 40 (3): 879–91, https://doi.org/10.3758/brm.40.3.879.Search in Google Scholar

Raynor, M. E., and X. Leroux. 2004. “Strategic Flexibility in R&D.” Research-Technology Management 47 (3): 1–27, https://doi.org/10.1080/08956308.2004.11671627.Search in Google Scholar

Renko, M., A. E. Tarabishy, A. L. Carsrud, and M. Brännback. 2015. “Understanding and Measuring Entrepreneurial Leadership Style.” Journal of Small Business Management 53 (1): 54–74, https://doi.org/10.1111/jsbm.12086.Search in Google Scholar

Sarros, J. C., B. K. Cooper, and J. C. Santora. 2008. “Building a Climate for Innovation Through Transformational Leadership and Organizational Culture.” Journal of Leadership & Organizational Studies 15 (2): 145–58, https://doi.org/10.1177/1548051808324100.Search in Google Scholar

Schoemaker, P. J. H., S. Heaton, and D. Teece. 2018. “Innovation, Dynamic Capabilities, and Leadership.” California Management Review 61 (1): 15–42, https://doi.org/10.1177/0008125618790246.Search in Google Scholar

Sedita, S. R., R. Apa, T. Bassetti, and R. Grandinetti. 2019. “Incubation Matters: Measuring the Effect of Business Incubators on the Innovation Performance of Start-Ups.” R&D Management 49 (4): 439–54, https://doi.org/10.1111/radm.12321.Search in Google Scholar

Shimizu, K., and M. A. Hitt. 2004. “Strategic Flexibility: Organizational Preparedness to Reverse Ineffective Strategic Decisions.” Academy of Management Executive 18 (4): 44–59, https://doi.org/10.5465/ame.2004.15268683.Search in Google Scholar

Sklaveniti, C. 2017. “Processes of Entrepreneurial Leadership: Co-acting Creativity and Direction in the Emergence of New SME Ventures.” International Small Business Journal 35 (2): 197–213, https://doi.org/10.1177/0266242616673420.Search in Google Scholar

Su, Z., and D. Wang. 2018. “Entrepreneurial Orientation, Control Systems, and New Venture Performance: A Dominant Logic Perspective.” Entrepreneurship Research Journal 8: 91, https://doi.org/10.1515/erj-2017-0091.Search in Google Scholar

Tang, W., D. Libaers, and J. Hao. 2014. “Opening the Black Box of Upper Echelons in China: TMT Attributes and Strategic Flexibility.” Journal of Product Innovation Management 32 (5): 685–703, https://doi.org/10.1111/jpim.12152.Search in Google Scholar

Tang, Y., J. Li, and Y. Liu. 2016. “Does Founder CEO Status Affect Firm Risk Taking?” Journal of Leadership & Organizational Studies 23 (3): 1–13, https://doi.org/10.1177/1548051815623736.Search in Google Scholar

Tlaiss, H. A., and S. Kauser. 2019. “Entrepreneurial Leadership, Patriarchy, Gender, and Identity in the Arab World: Lebanon in Focus.” Journal of Small Business Management 57 (2): 517–37, https://doi.org/10.1111/jsbm.12397.Search in Google Scholar

Tomlinson, P. R., and F. M. Fai. 2016. “The Impact of Deep Vertical Supply Chain Relationships Upon Focal-Firm Innovation Performance.” R&D Management 46: 277–90, https://doi.org/10.1111/radm.12181.Search in Google Scholar

Xia, T. J., and X. H. Liu. 2017. “Foreign Competition, Domestic Competition and Innovation in Chinese Private High-Tech New Ventures.” Journal of International Business Studies 48 (6): 716–39, https://doi.org/10.1057/s41267-017-0083-y.Search in Google Scholar

Xiu, L., X. Liang, Z. Chen, and W. Xu. 2017. “Strategic Flexibility, Innovative HR Practices, and Firm Performance A Moderated Mediation Model.” Personnel Review 46 (7): 1335–57, https://doi.org/10.1108/pr-09-2016-0252.Search in Google Scholar

Yang, J., B. Pu, and Z. Z. Guan. 2019. “Entrepreneurial Leadership and Turnover Intention of Employees: The Role of Affective Commitment and Person-Job Fit.” International Journal of Environmental Research and Public Health 16: 2380, https://doi.org/10.3390/ijerph16132380.Search in Google Scholar

Ye, J. F., B. Hao, and P. C. Patel. 2016. “Orchestrating Heterogeneous Knowledge: The Effects of Internal and External Knowledge Heterogeneity on Innovation Performance.” IEEE Transactions on Engineering Management 63 (2): 165–76, https://doi.org/10.1109/tem.2016.2541863.Search in Google Scholar

Zahra, S. A., H. J. Sapienza, and P. Davidsson. 2006. “Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda.” Journal of Management Studies 43 (4): 917–55, https://doi.org/10.1111/j.1467-6486.2006.00616.x.Search in Google Scholar

Zhang, Y., and H. Y. Li. 2010. “Innovation Search of New Ventures in a Technology Cluster: The Role of Ties with Service Intermediaries.” Strategic Management Journal 31 (1): 88–109, https://doi.org/10.1002/smj.806.Search in Google Scholar

Zhou, Y. Y., C. L. Shu, W. Jiang, and S. X. Gao. 2019. “Green Management, Firm Innovations, and Environmental Turbulence.” Business Strategy and the Environment 28 (4): 567–81, https://doi.org/10.1002/bse.2265.Search in Google Scholar

Received: 2018-04-17
Accepted: 2020-07-20
Published Online: 2020-08-24

© 2020 Walter de Gruyter GmbH, Berlin/Boston

Downloaded on 31.12.2025 from https://www.degruyterbrill.com/document/doi/10.1515/erj-2018-0090/html
Scroll to top button