Abstract

The current study uses a national (United States) random sample of 201 lead entrepreneurs to examine the interactive effects of entrepreneurs’ improvisational behavior with key individual (i.e., optimism) and environmental (i.e., industry dynamism) variables on firm performance (i.e., lagged measures of revenue and employment growth). Results indicate that these factors moderate the effects of entrepreneurs’ improvisational behavior; in fact, a three-way interaction between improvisational behavior, optimism, and environmental dynamism was observed with respect to firm performance. Consistent with predictions, in dynamic environments, the effects of entrepreneurs’ improvisational behavior on firm performance were positive when combined with moderate optimism, but non-significant when combined with high optimism. In stable environments, the effects of improvisational behavior were relatively weak, and were not moderated by optimism. Overall, results suggest that improvisational behavior can be an effective form of entrepreneurial action within rapidly and unpredictably shifting environments, but only when coupled with realistic levels of optimism.

NATIONAL FEDERATION OF INDEPENDENT BUSINESS (NFIB) AWARD FOR EXCELLENCE IN RESEARCH ON THE GENERAL TOPIC OF ENTREPRENEURSHIP

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