Administration & Society 2010

Administration
& Society
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Stimulating Entrepreneurial Practices in the Public Sector: The

Roles of Organizational Characteristics
Younhee Kim
Administration & Society 2010 42: 780 originally published online 4 August 2010
DOI: 10.1177/0095399710377432
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Stimulating
Entrepreneurial
Practices in the Public
Sector:The Roles
of Organizational
Characteristics
Administration & Society

42(7) 780814
2010 SAGE Publications
DOI: 10.1177/0095399710377432
http://aas.sagepub.com
Younhee Kim1
Abstract
Unlike the practices of contracting out and privatization, which reduce public
sector involvement and responsibility in service provision, public entrepreneurial
practices may be one of the best ways to improve government performance
and meet citizens demand efficiently and effectively. This study examines the
relationships between organizational characteristics and public entrepreneurship
in order to provide empirical support for entrepreneurial practices in state
governments in the United States. The study found that most organizational
characteristics influence the entrepreneurial behaviors defined as risk-taking,
innovativeness, and proactiveness. The findings suggest that organizational
structures and strategies in the public sector need to be adjusted to stimulate
entrepreneurial activities and culture through opportunity-driven management.
Keywords
public entrepreneurship, innovativeness, proactiveness, risk-taking, reinventing
government
1
East Carolina University, Greenville, North Carolina
Corresponding Author:
Younhee Kim, Department of Political Science, East Carolina University, Greenville, NC 27858
Email: kimy@vanguard.edu
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Kim
The virtues of traditional ideas about government have been challenged as

significant changes have emerged in economic, societal, demographic, and
cultural movements. The need to be more competitive in a turbulent environment demands changes in the role of government, and the public sector has
created innovative ways of structuring and managing government arrangements as a consequence of administrative reform activities. Recent administrative reforms under the umbrella term reinvention (e.g., the Government
Performance and Results Act and the New Public Management movement)
have been introduced and implemented to improve government performance.
With the goal of performing government tasks effectively, a number of marketbased approaches have been introduced into the public sector, such as privatization, publicprivate partnerships, outsourcing, and entrepreneurship. Because
public management is a multidimensional concept (Walker & Boyne, 2006),
introducing an entrepreneurial framework will provide important insights
into governments reform strategies.
The form of entrepreneurial government is introduced as a means to
market-oriented practices for better services (Borins, 1998b; Boyett, 1996;
Drucker, 1985; Osborne & Gaebler, 1992). The adoption of some beneficial
entrepreneurial practices into the public sector could be a sound approach
for satisfying citizens needs for more efficient, more responsive, and lower
cost government. Despite the enthusiasm and widespread belief in the applicability of entrepreneurial practices to the public sector, there are still ongoing debates about their suitability to public organizations in terms of core
values of the public sector (Cohen & Eimicke, 2000), such as democratic
theory (Terry, 1998), accountability (Roberts & King, 1996), and structural
and legal restrictions on managerial behaviors (Goodsell, 1993). However,
the main point behind public entrepreneurship is not to make the government more businesslike or market savvy. Rather, the idea of public entrepreneurship is to increase opportunities to take challengeable ideas and find
ways to offer more public choices and benefits, providing high-quality services to citizens.
Unlike privatization or contracting out, which reduces public sector
involvement and responsibility as a significant service provider (Morris &
Jones, 1999), market-based practices like public entrepreneurship provide a
great many advantages and have important roles to play in public policy and
management (Bozeman, 2007, p. 7). Thus, adopting entrepreneurial practices, such as searching innovative opportunities and providing the ability to
be proactive, can improve in-house capacities for contributing to the public
values of sustainability and productivity (Bozeman, 2007) and could be the
best way to resolve recurrent perceptions of less efficient services (Llewellyn
782
Administration & Society 42(7)
& Jones, 2003). Furthermore, implementing entrepreneurial approaches is

not contradictory to long-established views of the public managements role
in providing services, being responsible to citizens, and supporting public
values using applicable market practices for efficiency and effectiveness. An
attempt to establish an appropriate balance between entrepreneurial management and organizational structures is needed because the public sector lacks
built-in systems for stimulating entrepreneurial arrangements.
Prior research on public sector entrepreneurship has focused on psychological and behavioral characteristics of individuals, but such research has
been insufficient in terms of the need to understand the very heart of public
entrepreneurship as a systematic mechanism for improving government performance. Individual qualities and motivations are far less important than the
institutional and collective commitment to public entrepreneurialism (Forster,
Graham, & Wanna, 1996). Little research has been conducted to provide
empirical support for promoting public sector entrepreneurship through analysis of the effects of organizational factors on three aspects of entrepreneurship: risk taking, innovativeness, and proactiveness. This research seeks to
fill the gap between conceptual arguments about public entrepreneurship and
the empirical realities of entrepreneurial practices by using large-scale survey
data that was specifically designed for assessing public entrepreneurship.
Accordingly, after discussing the concept of public sector entrepreneurship
defined in terms of risk taking, innovative, and proactive dimensions, this
study examines the relationships between the organizational characteristics
and public entrepreneurship.
Framing Public Sector Entrepreneurship

Conceptualization
Entrepreneurship is considered to be a driving force of change and innovation
by introducing innovative opportunities to achieve efficient, effective performance in both public and private sectors. Entrepreneurial efforts can respond
to changes in the environmental turbulence more promptly and effectively
than other public management models for improving performance (Cornwall
& Perlman, 1990; Covin & Slevin, 1989; Miller & Friesen, 1983). Since the
emergence of inquiry into entrepreneurship in the early 1980s, researchers
have continuously fine-tuned the field of entrepreneurship, focusing on the
concepts of entrepreneurial orientation and opportunities (Kirzner, 1979;
Shane & Venkataraman, 2000), economic growth (Baumol, 1990), firm performance (Covin & Slevin, 1989; Lumpkin & Dess, 1996), new venture
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Kim
strategies (Gartner, 1985; Low & MacMillian, 1988), institutional changes

(North, 1990), psychological characteristics of entrepreneurs (Boyett, 1996;
Gartner, 1985), and social network (Aldrich & Zimmer, 1986).
At the organizational level, scholars have researched both entrepreneurial
orientation and entrepreneurial management (Fox, 2005). The term entrepreneurial orientation has been used to describe an organizations commitment
to the intensity of entrepreneurial actions. This approach proposes that entrepreneurial organizations tend to take risks and search for new business opportunities proactively more than other types of organizations (Mintzberg, 1973).
Furthermore, the field of management perceives entrepreneurship as an organizational process that promotes innovation, risk-taking, and proactivity (Miller
& Friesen, 1982), and Drucker (1985) noted that entrepreneurial management promoted openness to innovation, willingness to change, and creation
of practices of performance measurement.
The phenomenon of entrepreneurship is intertwined with a multifaceted
set of overlapping constructs such as management of change, innovation,
technological and environmental turbulence, and new product development
(Low, 2001). As a result, the notion of entrepreneurship encompasses different disciplines, different theoretical frameworks, and different levels of analyses and methodological traditions (Cornelius, Landstrom, & Persson, 2006;
Stone, 1992). Thus, entrepreneurship research has been characterized as a
diverse and fragmented field (Davidsson, Low, & Wright, 2001; Gartner, 2001;
Schildt, Zahra, & Sillanpaa, 2006; Shane & Venkataraman, 2000) because of
its multidimensional approaches.
The early period of entrepreneurial government has been connected with
the New Public Management movement, promoting nonbureaucratic mechanisms to remedy fundamental problems of traditional bureaucracy. Along
with promotion of entrepreneurial government, the concept of entrepreneurship has been attractive to underperforming public organizations. Because of
the unique characteristics of public organizations, the application of private
sector entrepreneurial themes cannot be directly translated into the public
entities. Public entrepreneurship is more than simply being enterprising or
businesslike (Sadler, 1999). Thus, entrepreneurial government can adopt
techniques and efficiencies from the business side whereas bureaucracies are
still functioning within the legal and policy frameworks of the public sector
(Laurent, 2000). Public entrepreneurship is generally defined as a means of
achieving less inefficiency and inflexibility through promoting managerial
improvement and a process of creating value for citizens to exploit social
opportunities (Morris & Jones, 1999). Table 1 introduces the definitions of
public sector entrepreneurship. This study defines public sector entrepreneurship
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Table 1. Definitions of Public Sector Entrepreneurship

Sources
Definition
Bellone & Goerl (1992)
Carpenter (2001)
Drucker (1985)
Edwards, Jones, Lawton, &
Llewellyn (2002)
Gansler (2003)
Marcias (2000)
Moon (1998)
Morris & Jones (1999)
Roberts & King (1991)
Roberts (1992)
Stone (1992)
Be participatory or one where the citizenry

have greater opportunities to participate
in the designing and delivery of their
public goods and services (p. 132).
The incremental selling of new program
ideas (p. 30).
Perceptiveness to change (p. 25).
Driving the process of utilizing the energy
and creativity of the community to
support managers to identify needs and
solutions to meet those needs (p. 1548).
The development of separate fee-forservice entities operating within a
governmental agency (p. 37).
The risky use of public resources in the
creation of value for the people (p. 6).
Entrepreneurial role behavior (p. 52).
The process of creating value for citizens by
bringing together unique combinations of
public and/or private resources to exploit
social opportunities (p. 74).
The process of introducing innovation
the generation, translation, and
implementation of new ideasinto the
public sector (p. 147).
The generation of a novel or innovative
idea and the design and implementation
of the innovative idea into public sector
practice (p. 56).
An organizational process involving
innovation, risk and pro-activity which
results in a disjuncture from standard
operating procedures and responses
by current systems in order to achieve
public purposes (pp. 31-32).
as any attempt at creating new opportunities with resulting improvement in

government performance characterized by risk taking, innovativeness, and
proactiveness.
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Kim
Dimensionalities
Several dimensions of entrepreneurial orientation have been suggested in the
entrepreneurship literature. Harbison (1956) linked the modern entrepreneurial
organization, whether privately or publicly owned, to several functions, including the undertaking of risk, the handling of economic uncertainty, planning and
innovation, coordination, administration and control, and routine supervision.
Moreover, a commonly accepted definition of entrepreneurship includes the
three dimensions of risk taking, innovativeness, and proactiveness (Collins &
Moore, 1970; Covin & Slevin, 1991; M. P. Miles & Arnold, 1991; Miller,
1983; Morris & Jones, 1999; Morris & Paul, 1987; Stone, 1992). These characteristics could be translated to the public sector because public entrepreneurial efforts are intended to revitalize government performance.
Risk taking. Entrepreneurial risk taking entails making a conscious decision to assume uncertainty of outcomes when new services, products, or processes are introduced; thus, risk taking requires an appreciation that adversity
and uncertainty can be overcome in the quest for better outcomes (Berman
& West, 1998, p. 346). Risk-taking behaviors are influenced by organizational
target performance, an organizational decision process, and a risk-seeking
organizational culture (West & Berthon, 1997), so mixed positive and negative outcomes connected with financial risks linked to a net loss, servicebased risks linked to new or untried services, and relational risks linked to
rules and political relationships could discourage taking risks, especially in
the public sector, which has been commonly perceived as risk-averse because
of managerial ineffectiveness (Bozeman & Kingsley, 1998). In the public
sector, failures resulting from risk taking are less acceptable because of the
need for accountability and responsiveness, so public employees are inclined
to avoid risky alternatives in decision making (Berman & West, 1998). Therefore, the logic of the greater the risk, the greater the reward could not be
easily reproduced in the public sector (Eggers & OLeary, 1995). However,
the possibility of and tolerance for failure cannot be ignored in the public sector because it needs to be competitive and flexible for dealing with unexpected changes. A risk-taking propensity can continuously contribute to desirable
outcomes of performance in responding to citizen demands, not just to satisfy
the status quo, and can be a common aspect of daily work life for public managers (Bozeman & Kingsley, 1998). This study defines risk taking in public
entrepreneurship as the willingness to pursue risky alternatives and a tolerance for minimal failure on service-based risks.
Innovativeness. Environmental turbulence requires public organizations to
take innovative approaches to resolve emerging problems (Berman, 1998).
786
Although some public service activities can be transferred to the private sector through privatization, the more massive public services could not be converted into profit-making enterprises. To provide these nontransferable
services effectively, public organizations need to develop new service strategies and be more innovative in responding to social, technological, economic,
and demographic shifts as opportunities during rapid changes (Berman, 1998;
Drucker, 1985; Holzer & Callahan, 1998; Moon & deLeon, 2001). Although
innovation has generally been defined as the development and/or the use
of new ideas or behaviors resulting in a new outcome for an organization
(Damanpour & Schneider, 2009; Walker, 2008), innovation in the public
sector may not necessarily be associated with invention or creation of new
services and new managerial processes. The concept may be close to a
repackaging of existing concepts to create new realities (Keys, 1988, p. 62).
Thus, innovation in the public sector may range from the development of new
services and programs to the improvement of managerial processes and
institutional tasks through reconceptualizing existing resources (Morris &
Kuratko, 2002). This study defines innovativeness as the willingness to seek
the adoption of new services and the reconstruction of managerial processes.
As Kanter (1983) suggested, public organizations may follow three steps of
advancing innovation: eliminating structural and practical barriers to flexibility and prompt actions for innovation, providing tools and incentives for
entrepreneurial projects, and developing an entrepreneurial climate.
Proactiveness. Proactiveness defined as an aggressive behavior (Stevenson
& Jarillo-Mossi, 1990) focuses on the future by anticipating and preventing
problems, communicating effectively with internal and external environments, and preserving implementation of the new process or new product
(Morris & Kuratko, 2002). Organizations can exercise a proactive propensity
to be placed in a more competitive position than others because proactiveness
involves seizing the initiative in an effort to shape the environment to ones
own advantage (Lumpkin & Dess, 2001). Proactiveness in the public sector
implies the active search for creative solutions, service delivery, taking the
initiative to introduce change, implementation, and responding rapidly to
opportunities and employing the best resources, not passiveness or reactiveness (Salazar, 1992, p. 33). Although traditional organizations invariably
respond defensively, proactive public organizations are alert to new opportunities and embrace them. Prior studies found that managers proactive attitudes and orientations facilitate the adoption of innovation, development of an
innovative environment, and allocation of resources to acquire and implement
those opportunities (Damanpour & Schneider, 2006; Moon & Bretschneider,
2002). The proactive argument is also similar to the prospectors system
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Kim
suggested by R. E. Miles and Snow (1978), in which public-sector prospectors

would like to search for new market opportunities in response to emerging environmental trends. To be more innovative and competitive as an early adopter, a
public-sector prospector could be eager to take risks and be more proactive
than other agencies (Boyne & Walker, 2004). Therefore, this study defines
proactiveness as the willingness to be aggressive for implementing actions in
pursuit of changes and improvement in inefficient organizational settings,
rather than simply responding to events as they occur.
Organizational Characteristics and

Entrepreneurial Propensities
Characteristics of the Organizational Structure
Organizational structure significantly influences a public entitys capacity
to promote entrepreneurial tendency (Cornwall & Perlman, 1990; Slevin &
Covin, 1990). Traditional organizations depend on bureaucratic structures to
ensure that work is efficient by minimizing errors and reinforcing conformity
and control. Contemporary environments, however, are constantly changing
and unpredictable. Public institutions can deliver the demanded services only
by being flexible, responsive, and less hierarchical. Therefore, organizations
having entrepreneurial tendencies may respond well to changing structural
conditions because an entrepreneurial organization is inclined to be more
consensual, loosely controlled, and flexible rather than being a mechanical
organization, which is considered more rigid, controlled, and hierarchical
(Slevin & Covin, 1990).
Hierarchy. A hierarchical system is likely to maintain the status quo in
organizations and reduce the probability of change and innovation (Hage &
Aiken, 1970). Thus, a less hierarchical organization is likely to initiate innovation and change in organizations. For instance, flat organizational structures are more flexible to adopting innovative programs and administrative
systems, but more hierarchical layers cause administrative delays, undermine
communications (Moon, 1999), and have greater transaction costs for adopting risky and innovative services. These conditions could inhibit innovative
decisions and new programs. However, proactive organizations like prospectors tend to be less hierarchical (R. E. Miles & Snow, 1978). As a result, a
higher degree of hierarchy may have a negative effect on risk-taking, innovative, and proactive tendencies.
Formalization. The degree of formalization in an organization refers to activities that are visible in written documents such as procedures, job descriptions,
788
regulations, and policy manuals (Hall, 1996). Formalization enhances an organizations stability and accountability by formal devices (e.g., internal rules
and regulations, specific guidelines) designed for preventing unexpected changes,
increasing internal control, and reducing goal ambiguity. It also forces public
employees to follow general patterns of behaviors and hold attitudes and values for minimizing unexpected circumstances (Ingram & Clay, 2000). On the
other hand, those higher degrees of formalism in the public sector may undermine risk taking (Bozeman & Kingsley, 1998) as well as other outcomes of
reforms. Therefore, a higher degree of formalization will generally reduce risktaking, innovative, and proactive propensities.
Flexibility. Flexibility refers to the degree of feasible changes possible in
structural and managerial settings. Flexibility allows for greater possibility
of adopting innovative and risk-taking opportunities as quickly as possible
through structural and managerial changes. Bozeman and Kingsley (1998)
argued that having a risk-taking culture requires less rigid structures and
inflexible procedures. In addition, an entrepreneurial organization has similar
features to organically structured organizations that are flexible and less rigid
(Jennings, 1994). Accordingly, public entrepreneurship would be encouraged
by having a higher level of flexibility.
Size. There is no definitive empirical research on the impact of the organizational size on cultivating public entrepreneurship. Two contradictory arguments are still discussed to analyze the effect of organizational size in the
public sector. One tenet asserts that smaller organizations engage in better
entrepreneurial behaviors than larger organizations because the latter have
rigid rules and procedures that hinder innovative entrepreneurial activities
(Jennings, 1994). On the other hand, some have argued that larger organizations may be more entrepreneurial because they are more competitive in
terms of external changes (Schumpeter, 1934) and have more opportunities to
access extra resources. Given the opposing arguments and mixed empirical
results, this study proposes that organizational size will not be significantly
related to public entrepreneurial tendencies.
Characteristics of the Managerial Structure

The managerial aspect of public entrepreneurship should be able to promote
entrepreneurial hands-on managerial processes and behaviors (Cornwall &
Perlman, 1990), given that managerial characteristics should focus on factors
that influence employees empowerment and managerial behaviors for
cultivating entrepreneurial management. Autonomy and participatory decision making directly affect employees empowerment. On the other hand,
789
Kim
performance-based rewards and specialization influence personal and organizational behaviors and attitudes for adopting entrepreneurial actions.
Autonomy. Autonomy refers to an independent action or decision making
by an individual or a team intended to bring a vision to fruition (Lumpkin &
Dess, 2001). As the commitment of public managers to public service has
been verified by many studies (Rainey, 1983), the provision of public service
would be motivated by allowing more autonomy for public managers, especially when services are less routinized tasks. In general, public organizations
have been strictly constrained in the areas of personnel, purchasing, and budgeting and accounting (Rainey & Bozeman, 2000) because of legislative and
political oversight and rules, so the magnitude of autonomy discussed here
does not mean offering unlimited and uncontrolled autonomy for public managers as it does in private sector practices. Rather, autonomy for public entrepreneurship may occur on procedural and managerial occasions. Offering
more managerial autonomy would stimulate positive reactions toward risktaking (Bozeman & Kingsley, 1998), innovative, and proactive orientation in
the public sector (Forster et al., 1996; Ramamurti, 1986).
Participatory decision making. Empirical research has found that entrepreneurial organizations tend to be more participative in decision-making processes (Jennings & Lumpkin, 1989) because diffusing the power of decision
making to all levels of employees could enhance entrepreneurial actions, especially for innovative activities (Hage & Aiken, 1970; Miller & Friesen, 1982).
Andrews, Boyne, Law, and Walker (2007) found that employee involvement
in decision making can make executive managers identify opportunities
effectively for better service delivery. Rainey and Bozeman (2000) also asserted
that employee involvement in the policy decision-making cycles is an important aspect to increasing work satisfaction. Therefore, participatory decision
making would have a positive impact on encouraging innovative approaches,
action-oriented attitudes, and even risk-taking behaviors.
Performance-based rewards. The appropriate use of performance-based
reward systems encourages managers to try more entrepreneurial activities
(Kanter, 1983), but reward expectancy for good performance has been consistently low in public organizations, generally because of rule enforcement
and rigid managerial processes (Bozeman & Kingsley, 1998). Compared to
their private counterparts, who prefer the benefits of monetary rewards, public managers tend to place lower value on financial rewards (Sadler, 1999)
and higher value on contribution to others and on self-sacrifice, responsibility and integrity (Rainey & Bozeman, 2000, p. 448). Therefore, performancebased reward systems offering nonfinancial rewards (e.g., employee recognition
and promotion) and emotional rewards (e.g., self-sacrifice, self-satisfaction)
790
could play a significant role in generating entrepreneurial behaviors among

public employees. Assigning rewards based on employee performance ratings in the public sector could lead to innovative and proactive attitudes,
but could also cause public mangers to avoid any nonguaranteed actions
from risky practices.
Specialization. Many studies have argued that professional employees generally recognize the needs for changes, so that an organization with a high
proportion of specialists could be more innovative (Hage & Aiken, 1970).
Because high levels of professional information and technical expertise cause
a decrease in uncertainty level when risky and innovative opportunities are
introduced in public agencies, higher specialization would contribute to supporting risk-taking (Berman & West, 1998; Moon, 1999) and innovative propensities (Hage & Aiken, 1970). Public managers at the professional level
also tend to be more action oriented when entrepreneurial strategies are
implemented. Thus, higher specialization among employees could result in
positive interactions of all three entrepreneurial attributes.
Characteristics of the Cultural Structure

Cultural characteristics influence the understanding, development, and maintenance in entrepreneurial organizations of value creation through innovation
and change, commitment and personal responsibility, and emphasis on the
future (Cornwall & Perlman, 1990) for not only employees but also organizations themselves in terms of norms and values. Morris and Kuratko (2002)
further noted that creating an effective entrepreneurial culture is not simply
a matter of creating certain values but a choice among conflicting values. In
this study, organizational culture for public entrepreneurship was focused on
identifying factors that affect organizational missions and identities as
defined by Moon (1999), as well as employees commitment and responsibility
(Cornwall & Perlman, 1990). However, accountability, performance objectives, and goal ambiguity factors would have an impact on organizational
commitment to common values and beliefs.
Accountability. Lack of accountability to citizens and managers is a major
obstacle to practicing public entrepreneurship (Morris & Jones, 1999)
because entrepreneurial characteristics identified as an unwillingness to follow rules and stay within bounds and a preference for action need to hold
accountability (deLeon & Denhardt, 2000, p. 92). As Bellone and Goerl (1992)
discussed, a strong theory of public entrepreneurship should be supported by a
strong commitment to accountability as a civic-regarding entrepreneurship.
Accountability permits a more efficient allocation of organizational resources
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by lowering transaction costs and increasing the flexibility of decisions, and

it facilitates organizational decisions to search for new alternatives. In the
absence of commitment to accountability, government could easily be
exposed to negative reactions from political entities as well as citizen groups
when entrepreneurial opportunities are concerned. Thus, stimulating entrepreneurial efforts in the public sector will require higher accountability to
stakeholders.
Goal ambiguity and multiplicity. A widespread assumption of public agencies goal ambiguity is generally accepted in the literature (Bozeman & Kingsley,
1998; Rainey, 1993; Rainey & Bozeman, 2000), but studies of the relationship between goal ambiguity and entrepreneurial orientations have returned
different empirical results. One empirical group found that goal clarity
enhances the risk-taking and innovative propensities because they allow an
organization to tolerate a higher degree of outcome uncertainty for a certain
expected probability of goal achievement (Bozeman & Kingsley, 1998;
Moon, 1999; Morris & Jones, 1999). However, another group has argued that
goal ambiguity generates more opportunities to develop innovative solutions
and adopt entrepreneurial processes (Sadler, 1999). For public organizations,
goal ambiguity could be an opportunity for the exercise of entrepreneurial
discretion (Begley & Boyd, 1987; Ramamurti, 1986) because public organizations simultaneously manage competing demands that are positively associated with goal ambiguity (Chun & Rainey, 2005). When objectives are too
strictly developed, organizations tend to be defensive and adopt rigid behavioral patterns (Jennings & Lumpkin, 1989). Ambiguous and multiple-goal
setting in public organizations can provide room for risk-taking and innovative opportunities at the cost of lack of a clear direction. Such ambiguous or
multiple goals, however, have a negative impact on the proactive propensity
because inconsistent objectives do not provide a clear direction when entrepreneurial opportunities are implemented.
Performance objectives. Performance objectives (Ramamurti, 1986) and a
high need for achievement (Shane & Venkataraman, 2000) generally give
rise to more entrepreneurial opportunities to improve government performance. Unlike private entrepreneurships emphasis on quantitative and
resource-controlled performance, performance objectives for public entrepreneurship can focus on outcomes-based performance in pursuing public
values, an approach that is similar to a primary characteristic of managing
publicness as argued by Bozeman (2007). Therefore, performance objectives
oriented toward outcomes-based management and administrative effectiveness could allow for adopting risk-taking, innovative, and proactive practices
in the public sector.
792
Characteristics of the Environmental Structure

External government environments have direct implications for searching
entrepreneurial opportunities and implementing their effects (Covin & Slevin,
1991; Davidsson, Low, & Wright, 2001). The operating external environment
of an organization influences the organizations involvement and capacity to
engage in risky, innovative, and proactive tasks. Most prior studies in organization and management literature confirm the importance of external environments in adopting entrepreneurial behaviors in the public organization
settings.
Political influence. The political environment exercises a critical influence on
public sector management (Nutt, 2006; Wanna, Forster, & Graham, 1996), and
public organizations are highly regulated by political entities (Hood, Scott, Oliver, & Travers, 1999). However, such political requirements may not correspond with entrepreneurial practices if these activities do not guarantee
successful outputs and positive electoral consequences (Sadler, 1999). As a
result, an organization under a higher degree of political influence is subject to
greater external control from political authorities, thus limiting the exercise of
entrepreneurial opportunities in general (Moon, 1999). Borins (1998a), however, argued that political influence has a positive impact on innovative entrepreneurship. Political influence may have a differing impact depending on the
entrepreneurial dimension, for example, a positive impact on innovativeness,
but a negative impact on both risk taking and proactiveness.
Legal liability. Legal practices are generally used for financial and administrative control in both public and private sectors (Bovens, 2005), but public
organizations have more extensive legal constraints than those of the private
sector. As a result, wide-ranging legal liability has generally caused public
organizations to avoid the possibility of legal obligations resulting from risky,
innovative behaviors (Moon, 1999). A high degree of legal liability in the
public sector may limit risky, innovative, and/or proactive practices.
Perceived competition. The reinvention movement in the public sector
applied the idea of competition because it was believed to guide the improvement of using resources in new ways to maximize productivity (deLeon &
Denhardt, 2000, p. 92). If an organization recognizes external competition
through comparison with other government agencies or other benchmarking
organizations, it may lead to the adoption of entrepreneurial actions. Morris
and Jones (1999) found that lack of competition among public organizations
was ranked as a serious obstacle to behaving entrepreneurially. Therefore, a
higher level of perceived competition would generate more positive reactions
toward entrepreneurship. Figure 1 presents the conceptual framework for
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Kim
Structural Characteristics
-
Hierarchy
Formalization
Flexibility
Size
Managerial Characteristics
- Autonomy
- Participatory Decision Making
- Performance-Based Rewards
- Specialization
Public Entrepreneurship
Risk-taking
Innovativeness
Cultural Characteristics
- Accountability
- Goal Ambiguity & Multiplicity
- Performance Objectives
Proactiveness
Environmental Characteristics
- Political Influence
- Legal Liability
- Perceived Competition
Figure 1. Conceptual Relationship Framework
hypothesizing the relationships between organizational characteristics and

three entrepreneurial dimensions at the state level (see Appendix A).
Data and Methods

Sample and Data Collection
This study analyzes public sector entrepreneurship using state government
department data in the United States. As a part of the executive structure,
state government departments headed by commissioners have more daily
interactions with citizens than those in the federal government, so each state
has a more detailed written constitution than the federal counterpart to better
serve its residents. Within the state organization structure, a state government
department is a typical type of organization for investigating the common
794
characteristics of state government entrepreneurship rather than executive

offices, divisions, and other special types.
Data were drawn from the public entrepreneurship survey mailed to 957
heads of state government departments in 48 U.S. states, except Alaska and
Hawaii. The self-administered survey questionnaire presented the closedended question format that gives a uniform frame of reference for which
respondents could consider their answers (Weisberg & Bowen, 1977). To
measure the intensity of the respondents views, the semantic-differential
approach was used along a 7-point Likert-type scale. Because psychological
research has indicated that respondents can grasp seven distinctions reliably
(Weisberg & Bowen, 1977), a 7-point Likert-type scale is not overly complicated for capturing the degree of agreement or disagreement with an item.
The questions were grouped by topic to measure the intensity of a respondents analysis concerning structural, managerial, cultural, environmental,
and entrepreneurial practices and organization demographic factors.
Pretesting a survey questionnaire is a vital stage in preparing for a selfadministered survey in order to identify and correct weaknesses, ambiguity,
and invalidity of questions. This research conducted a two-stage procedure
pretest because Converse and Presser (1986) recommend a minimum of two
pretests. The first procedure was a review of the questionnaire draft by
faculty and doctoral students for detecting content validity of measurement
items. After significant changes were made to the questionnaire based on the
critiques and suggestions, the second pretest with a new draft was conducted
with 29 executive MPA students and 17 MPA students.1 The final survey was
redrafted by dropping ambiguous and irrelevant questions in response to the
pretest subjects comments and the pretest findings.2
The sampling frame was selected from four geographical regions: Southern
(296 departments in 13 states); Northeast (211 departments in 12 states);
North-Central (210 departments in 12 states); and Western (240 departments
in 11 states).3 Of the 957 questionnaires mailed twice to the survey subjects,
334 were returned, including 35 invalid responses.4 The total response rate
was about 34.9% (n = 334) and the valid response rate was 31.3% (n = 299),
with each region represented by a fairly equal number of respondents.
Measures
Public entrepreneurship. Public entrepreneurship is characterized by three
dimensions, which are used as the dependent variables for this study. Risk
taking was measured by computing the factor score of responses to four items
rated on a 7-point scale (1 = very low, 2 = low, 3 = somewhat low, 4 = neutral,
5 = somewhat high, 6 = high, 7 = very high). The four items derived from
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Kim
Morris and Jones (1999) and Bozeman and Kingsley (1998) addressed the
following: the degree of risk-taking propensity, the degree of tolerance for
failure, the tendency for undertaking high-risk projects, and the employees
perception on risk taking. The measures of innovativeness evaluated by four
items (1 = very low to 7 = very high) derived from Morris and Jones (1999):
the degree of the overall organizational innovation, the intensity of searching
for new and innovative opportunities, the tendency of emphasizing innovative changes, and the degree of fee-for-service operations. Proactiveness was
evaluated by three items (1 = very low to 7 = very high), which explored the
organizations tendency to actions: the degree of implementation of new programs and services in the past 3 years, the tendency of implementing administrative procedural changes in the past 3 years, and the degree of initiating
new and innovative opportunities in the past 3 years.
The Cronbachs alpha coefficients for risk taking and proactiveness were .68
and .72, respectively, but the alpha level for innovativeness was .53. Because the
alpha level of .60 is the minimum acceptable standard (Nummally & Bernstein,
1994), the four items for innovativeness needed to be reconsidered. Within the
innovativeness structure, the inn4 item had a low itemrest correlation of .14,
which is below a minimum acceptable level of .20 (Helfrich et al., 2007), so that
item (the degree of fee-for-service operations) was excluded from the scale.
After deleting the inn4 item, the Cronbachs alpha value for innovativeness was
finalized at the .68 level. For extracting a feasible factor structure using observed
items, this study uses the principal component technique with varimax rotation
(Afifi et al., 2004). Each public entrepreneurial dimension was loaded on one
factor structure with an eigenvalue greater than 1. Although one of four items for
risk taking had a slightly higher unique variance value of .62, it was acceptable
as part of the risk-taking loading due to the acceptable levels of eigenvalues
greater than 1 and the item value greater than .40.
Structural characteristics. Hierarchy as a layer of authority and communication is a common aspect, so the measures of hierarchy are characterized
by this boundary, derived from Morris and Jones (1999) and Rainey and
Bozeman (2000). The heads of state government departments were asked to
rate the degrees of hierarchy through four items (1 = very low to 7 = very
high) used for computing the factor score by varimax rotation: the degree of
multiple layers of authority, the extent of structured channels of communication, the degree of hierarchical processes for project approvals, and the degree
of required red tape. Formalization was evaluated by three items using a
7-point scale (1 = very low to 7 = very high) in order to investigate the degrees
of written forms derived from Bozeman and Kingsley (1998) and Rainey and
Bozeman (2000). Respondents were asked to identify as following: the extent
of existing organizational regulations and procedures, the level of internal
796
strictness by rules and regulations, and the degree of emphasis on written

rules and procedures. Perceived flexibility was evaluated through three items
(1 = very low to 7 = very high) measuring the level of organizational flexibility in decision making, the extent of organizational integration of new units
or services in the past 3 years, and the degree of experienced organizational
changes within the past 3 years. Organizational size was measured by the
number of full-time employees in each department.
The Cronbachs alpha levels for hierarchy ( = .73) and formalization ( =
.78) were greater than .70, but the alpha coefficient for flexibility was .50. The
fle1 item (the level of organizational flexibility in decision making) was
excluded to increase the alpha level because fle1 had the low itemrest correlation level of .22. After the fle1 item was deleted, the Cronbachs alpha coefficient for flexibility was increased to about .60. To verify a feasible factor
structure for structural characteristics, three factor loadings were extracted with
an eigenvalue greater than 1. Four items for hierarchy were loaded on Factor 2
with higher loadings of .50 and lower uniqueness of .50, except the hie4 item of
.57. Three items for formalization were loaded on Factor 3 with higher loadings
of .80 and lower uniqueness of .40. Two items for flexibility attained loadings
greater than .70 and uniqueness lower than .40 on Factor 3 (see Appendix B).
Managerial characteristics. The two levels of autonomy posited by Bozeman
and Kingsley (1998) were rated by respondents in three items (1 = very low
to 7 = very high): the degree of organizational independence in determining
organizational strategies without any external approvals, the degree of employees self-rule in deciding resource allocation, and the level of employees
authority to determine their job ranges. Participatory decision making was
measured by four items (1 = very low to 7 = very high) ranked for nonexecutive employees participatory opportunities in decision-making processes: the
degree of organizational emphasis on encouraging nonexecutive employees
participation in the decision-making process, the existence of formal institutional devices for obtaining the opinions from nonexecutive employees, the
degree of nonexecutive employees participation in formulating new policies
and strategies, and the degree of nonexecutive employees participation in
budgetary decision processes. Furthermore, performance-based rewards
were measured by four items ranked on a 7-point scale. Respondents were
asked to rate the degree of financial and nonfinancial incentives as through
the following: the availability of financial incentives, the use of promotional
opportunities as rewards of high performance, the tendency to recognize
high-performing employees, and the offering of educational opportunities as
rewards for high performance. Finally, specialization was evaluated by three
items (1 = very low to 7 = very high): the degree of managed special tasks, the
level of specialized positions matched with specialized job requirements, and
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Kim
the level of specialization among employees with higher education degrees

or specialized licenses.
The Cronbachs alpha values for participatory decision making ( = .80)
and specialization ( = .80) were greater than .80, and the alpha coefficients
for rewards ( = .66) and autonomy ( =. 61) were greater than .60, all of
which are acceptable as reliable instrument measures. In terms of verification
of a feasible factor structure for managerial characteristics, four factor structures were specified with an eigenvalue greater than 1. All 14 items were
loaded on appropriate factors with loadings higher than .60 and unique variance lower than .50 (see Appendix B).
Cultural characteristics. The variable of goal ambiguity and multiplicity indicates a variety of organizational goals. Bozeman and Kingsleys (1998) measures for goal clarity were used for developing three items (1 = very low to
7 = very high) that measured the degree of the goal and mission clarity, the
level of employees awareness of organizational goals, and the tendency to
have multiple goals. Furthermore, accountability was evaluated through four
items for computing the factor score with varimax rotation: the degree of general accountability to stakeholders and the public, the emphasis on organizational interaction with stakeholders and citizens, the importance of formalized
evaluations or citizen surveys, and the frequency of customer surveys or formalized evaluations. Finally, the variable of performance objectives was measured with three items (1 = very low to 7 = very high) measuring the degree of
the development on performance objectives, the emphasis on setting measurable goals, and the emphasis on employee-performance evaluation.
The Cronbachs alpha coefficients for performance objectives ( = .82)
and accountability ( = .76) were greater than .70, but goal multiplicity had
the low alpha value of .51. In the goal multiplicity structure, the mg3 item
(the tendency to have multiple goals) had a low itemtest correlation of .14,
so it was deleted because of lower correlation with other scales. By deleting
the mg3 item, the alpha level was raised to .78. For verifying a feasible factor
structure for cultural characteristics, three factors were extracted from the
cultural cluster with an eigenvalue greater than 1. One of four items for
accountability was loaded on the inappropriate factor, the goal multiplicity
variable. Because the acc1 item (the degree of general accountability to
stakeholders and the public) was developed for accountability, it was eliminated from the accountability factor structure. All eight items were loaded
properly with satisfying cutoff standards (see Appendix B).
Environmental characteristics. Political influence was originally measured by
seven items (1 = very low to 7 = very high), but two items (pi3 and pi6) were
not loaded on the designated factor. As a result, both items with higher uniqueness were eliminated from the political influences loading. The five items for
798
political influence are as follows: the degree of political support needed to

obtain authorization for actions, the degree of political intervention in organizational decisions, the influence of changing organizational behaviors affected
by external interactions, the degree of external environments that change rapidly, and the influence of public sector reform. Legal liability was evaluated
through three items (1 = very low to 7 = very high) that measured the level of
rigid financial control in allocating resources to new projects, the tendency to
transfer funds to other projects, and the level of prohibition by law of transferring funds. Measures of perceived competition derived from Morris and Jones
(1999) formed three items (1 = very low to 7 = very high): the level of facing
competition with other government departments for partnering with private
and nonprivate entities, the degree of competition with other government
departments in delivering public services, and the degree of competition with
other government departments in applying for grant projects.
The Cronbachs alpha levels of political influence ( = .64) and perceived
competition ( = .70) were greater than .60, but the alpha value for legal liability
was lower than .60. Because the alpha coefficient was close to .60 with high
itemtest correlation, it was acceptable for inclusion in the legal liability measures. In terms of verification of a feasible factor structure for environmental
characteristics, 11 items were loaded on three factor structures as proposed, with
the exception of two items addressing political influence (see Appendix B).
Results
Multiple regression analysis was conducted to test the hypotheses concerning the relationships between organizational characteristics and public entrepreneurship. Before performing the finalized three regression models, this
study carefully detected the underlying assumptions of regression and corrected the minor problem of homoscedasticity in the innovativeness model.
In testing for multicollinearity using the variance inflation factors, none of
the inflation factors between 1.11 and 1.37 in the three models have any
multicollinearity problems. All three models were quite successful in
explaining the impact of the organizational independent variables on risktaking, innovativeness, and proactiveness (Table 2).
In the risk-taking model (R2 = .304), eight variables are statistically
significant at the 5% level on the risk-taking dimension: formalization,
hierarchy, flexibility, participatory decision making, autonomy, performance
objectives, accountability, and perceived external competition. Except for
formalization and hierarchy, which are negatively associated with a risk-taking
culture, the other six variables have positive effect on the risk-taking
propensity. These results imply that state government departments have
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Kim
Table 2. Results of Regression Analysis
Risk-taking model
Proactiveness
model
p > |t|
Coefficient
p > |t|
Coefficient
p > |t|
-.134**
-.119**
.126**
.035
.019
.027
.020
.501
-.063
-.095*
.289***
-.032
.237
.059
.000
.503
-.115**
-.007
.545***
.026
.020
.874
.000
.557
.192***
.078
-.009
.142***
.141***
.151***
.021
.001
.161
.867
.009
.011
.006
.716
.195***
.028
.088*
.150***
.128**
.187***
.050
.000
.597
.083
.003
.013
.000
.346
.031
.160***
.033
.014
.063
.144***
-.012
.523
.001
.481
.769
.183
.002
.800
.129
.155***
.002
.102**
.027
Coefficient
Formalization
Hierarchy
Flexibility
Size
Participatory
decision
Specialization
Rewards
Autonomy
Performance
Objectives
Accountability
Goal
multiplicity
Political
influence
Competition
Legal liability
R2
Adjusted R2
F (p > F)
No. of
observations
Innovativeness
model
.081
.161***
.002
-.057
.284
.3015
.2665
8.63 (.0000)
295
.104**
.034
.021
.673
.4014
.3715
13.41 (.0000)
295
.032
.479
-.015
.747
.4915
.4664
19.33 (.0000)
295
*p < .10. **p < .05. ***p < .01.
been discouraged, through structural rigidity, from taking risky opportunities

for better outcomes (Bozeman & Kingsley, 1998). The risk-taking model
confirms that managerial effectiveness to allow more autonomy and participatory decision making for government employees, a cultural setting that has
higher accountability and performance objectives, and an external environment that is more competitive with other organizations have led state government departments to consider risk-taking opportunities. Although previous
research has suggested the negative impact of both performance-based rewards
and legal liability on risk taking (Moon, 1999), this study found nonsignificant effects for both variables on risk taking.
800
The innovativeness model (R2 = .402) identified the relationships between

seven organizational characteristics (flexibility, participatory decision making, autonomy, performance objectives, accountability, political influence,
and perceived competition) and innovativeness that were statistically positive
associations at the 5% significance level. The study also found the statistical
significance of both hierarchy and performance-based rewards at the 10%
level. Furthermore, among those positive effects on innovativeness, this study
found that structural flexibility has the strongest effect on promoting innovative behaviors in state governments; therefore, in order to respond to innovative changes and opportunities, state governments need to incorporate feasible
flexibility into the structural settings (Moon, 1999). The results also imply that
a means of empowering public employees is one of the effective approaches
to stimulating innovative behaviors in state governments. As this study proposed, organizational size has no significant impact but indicates a negative
influence for innovative tendencies. The innovativeness model, however, does
not support the positive impact of goal multiplicity, legal liability, or specialization for improving the innovative tendency in state governments.
The proactiveness model (R2 = .4916) found that flexibility (p < .001),
specialization (p < .001), accountability (p < .001), formalization (p < .05),
and political influence (p < .05) have a statistically significant impact on the
proactive propensity. These results indicate that flexibility is the most influential factor in encouraging proactive entrepreneurship. This finding confirms
that a flexible organizational structure promotes active entrepreneurial actions
by linking opportunity to an implementation stage for efficient and effective
government. Although the results of this study do not support the previous
studies on the positive effects of specialization on risk-taking and innovative
behaviors (Berman & West, 1998; Hage & Aiken, 1970), the positive relationship between specialization and proactiveness was verified. Because the variable of accountability was shown to have a positive influence on the proactive
tendency, state governments with a higher degree of accountability could
actively implement innovative, risky ideas. In addition, this study found that
political influence was positively associated with proactiveness, a finding that
contradicts the hypothesis. This result implies that political influence may be
a critical factor in supporting proactive entrepreneurial efforts focused on
change and improvement. Finally, goal multiplicity, legal liability, and hierarchy were expected to have negative effects on proactive entrepreneurship, but
none of the results for these variables statistically supported these hypotheses.
Although the results found no significant impact of organizational size on proactiveness, it indicated that a large organization may be more competitive than
a small organization in terms of proactive accomplishments.
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Kim
Discussion
In management and public administration literature, usually one or a combination of the dimensions of risk-taking, innovativeness, and proactiveness
have been emphasized as feasible possibilities to improving performance
and serving citizens. Prior empirical research (e.g., Berman & West, 1998;
Bozeman & Kingsley, 1998) has verified that any entrepreneurial behaviors
could not be undermined simply because of the stereotype of government
characteristics and untested links with public values and other concerns.
Debatable issues addressing public entrepreneurship still exist, but the
search for new opportunities and efficiency does not preclude promoting
other worthy public values such as accountability, democracy, and responsiveness. Entrepreneurial behaviors and activities, however, need to be
adjusted before being applied to public sector settings (Boyett, 1996;
Cornwall & Perlman, 1990) because the successful adoption of an entrepreneurial strategy relies on an appropriate fit for the organizational characteristics in terms of structures and processes (Andrews et al., 2007; R. E. Miles
& Snow, 1978).
This study ascertained the most significant positive effects of both accountability and flexibility across the three dimensions of public entrepreneurship. As
most empirical studies of entrepreneurship and public management have agreed,
the flexibility hypothesis may be the most significant requirement in making
more opportunities for stimulating entrepreneurial behaviors. The importance of
flexible organizational structures could be continuously emphasized as a means
for the effective structural settings to support public entrepreneurship.
Accountability does not offer a promise for improving organizational performance in itself, but higher accountability would result in more communication between government and relevant stakeholders, so as to gain a better
understanding of the benefits and outcomes of entrepreneurial activities. As
Morris and Jones (1999) found, one of the leading comments offered when
respondents were asked to suggest the single most important thing for increasing more public entrepreneurship is accountability. Being held accountable
by citizens and relevant stakeholders would allow state governments to take
on risky projects, search for new opportunities, and execute these efforts. In
addition, Berman and West (1998) indicated that taking well-defined risks
results in improved citizen trust. Developing well-defined entrepreneurial
strategies would help government to obtain more accountability from citizens
and political entities for entrepreneurial activities. As a result, government
should take action to advance accountability management in order to stimulate public entrepreneurial behaviors.
802
Analysis of this study confirms a connection between some of the managerial characteristics and public entrepreneurship. The findings suggest that
empowering employees by increasing autonomy and participatory decision
making is important in adopting risk-taking and innovative tendencies, as has
been suggested by prior research (Bozeman & Kingsley, 1998; Forster et al.,
1996; Lumpkin & Dess, 2001; Miller & Friesen, 1982); however, the same
does not hold true for proactive behaviors because the government boundaries
do not easily allow employees to exercise a full range of employee discretion
in implementing unguaranteed nontraditional government tasks. This study
also found that the use of performance-based rewards is not significantly related
to any of the entrepreneurial dimensions, but the performance-based rewards
factor is negatively associated with risk taking, as was originally proposed.
This result could imply that emphasizing performance-based rewards may
hinder the performance of risk-taking behaviors in state governments.
Moreover, the results indicate that the existence of performance objectives
in outcomes-based management cultivates a risk-taking and innovative culture, but not proactive culture, in state government departments. Considering
the effect of performance objectives on public entrepreneurial culture, this
finding gives state governments an indication to develop performance objective strategies that may cultivate a risk-taking and innovative culture as a
means of pursuing public values effectively. The results of the effect of goal
ambiguity and multiplicity on entrepreneurial predictability do not support
any of the proposed hypotheses, but the expected directional impacts on each
of the entrepreneurial dimensions are consistent with the hypothesized relationships. Accordingly, these results still could not confirm the previous mixed
empirical arguments on either a positive effect (Chun & Rainey, 2005) or a
negative effect (Bozeman & Kingsley, 1998; Moon, 1999) of goal ambiguity
and multiplicity on entrepreneurial tendencies. This study, however, can support previous arguments that goal ambiguity and multiplicity are consistently
positive influences in developing risk-taking and innovative culture and practices (Begley & Boyd, 1987; Ramamurti, 1986; Sadler, 1999).
With regards to environmental characteristics, this study confirms the significant positive effects of political influence supporting Borinss (1998a)
argument on accelerating innovative and proactive behaviors in state governments. This finding implies that the successful entrepreneurial practices in the
public sector require strong political support as well as positive attitudes
toward innovative and proactive efforts. As expected, this study confirms that
perceived external competition has a significant association with pursuing
risky and innovative alternatives. Supporting the arguments of prior studies
(e.g., deLeon & Denhardt, 2000; Morris & Jones, 1999), this finding suggests
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Kim
that more perceived external competition with other organizations will stimulate more risk-taking and innovative behaviors in state government departments. Contrary to this studys hypothesis, legal liability appears to have a
positive association with innovativeness although it had a nonsignificant
effect on the entrepreneurial characteristics. This result may indicate that legal
liability does not strongly restrict state governments from searching for innovative opportunities rather than risk-taking and proactive options.
Limitations and Future Research

Although this study conducted a rigorous test to examine the impact of organizational factors on public entrepreneurial activities, possible limitations
still exist. The major limitation is driven from its reliance on single, perceptual data. Using single-source data from the questionnaire method may raise
such validity problems as social desirability responses, response bias, and
less accurate instrumentation of variables, even though the heads of the state
government departments were in better positions to assess most of the aspects
of the variables widely because of having assistance from professional administrators. However, some empirical studies (e.g., Bozeman & Bretschneider,
1994; Rainey & Bozeman, 2000) have found that individual perceptions are
not too biased to make an actual evaluation about agencies work and conditions. Because there is as yet no proper external measurement of the public
entrepreneurial tendencies of the state government departments, in order to
minimize the weakness in using the single questionnaire method, the questionnaire was designed carefully and tested rigorously.
In addition, like many other cross-sectional studies, this research has a
limitation on external validity for generalizing the results of the research,
although survey data for this study were randomly collected across the target
population with a fairly equal number of regional respondents. Future longitudinal research could provide a richer understanding of the public entrepreneurial tendencies over time. Another limitation would be related to a
measurement issue. Because of lack of empirical research on examining organizational determinants to public sector entrepreneurship, some measurements were not empirically proved, even though measures in this model
were reliable and valid for the empirical test. Future empirical inquiry may
take advantage of further measurements of exploratory factors based on more
fine-grained conceptualizations.
This study intended to focus on examining organizational determinants
for three public entrepreneurial dimensions independently, but there may be
possible relationships among the three dimensions independently (Dess,
804
Lumpkin, & McGee, 1999; Kreiser, Marino, & Weaver, 2002; Miller, 1983)
or dependently (Covin, Green, & Slevin, 2006). Based on further empirical
examination of the relationships among these dimensions, future research
may be able to investigate whether the concept of entrepreneurship in the
public sector should be set up as a unidimensional or multidimensional
construct. A sophisticated test such as structural equation analysis needs to
be used for evaluating these relational models. Another direction for future
research could be to examine the impact of entrepreneurial activities on organizational performance because organizational level entrepreneurship leads
to improved performance (Covin & Slevin, 1989; Lumpkin & Dess, 2001;
Zahra, 1995).
Conclusion
This study has explored the effects of organizational characteristics on risk
taking, innovativeness, and proactiveness. The major contribution of this
research to the growing literature on public entrepreneurship and innovative management is the examination of the relationships of organizational
characteristics across three dimensions of public entrepreneurship by bridging the gap between existing conceptual arguments and empirical practices
on entrepreneurship. Most state government departments are aware that
the values of public entrepreneurship are generally considered one of the
core reinventing approaches, and the outcomes of entrepreneurial activities may be connected to improved performance and service delivery to
the public.
Governments at all levels have been diversifying their areas of service
activities in responding to the turbulent environmental changes and newly
emerging citizen demands. Although public organizations cannot select their
own markets and service provision on a large scale, they can search for new
markets on a narrow scale, such as changing service groups among citizens
or in different geographical areas (Boyne & Walker, 2004). Such change
requires public services to be ready to take risks, innovate, and engage in
action-oriented behaviors. However, public organizations have traditionally
been faced with particular obstacles to innovation (Ho, 2002) and other entrepreneurial behaviors because of lack of incentives and funding, short-term
time pressures, and the need for political and public support (Damanpour &
Schneider, 2009).
State governments can increase entrepreneurial orientations by setting
appropriate organizational structures and strategies, supporting practical
managerial and cultural activities (e.g., participatory decision making,
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Kim
employees empowerment approaches, professional development activities),

and responding to external changes and concerns promptly. As Osborne and
Plastrik (1997) argued, reinvention and transformation to public entrepreneurship should be achieved by structural and functional changes toward
more opportunity-driven approaches rather than resource-driven strategies.
Without the organizational characteristics examined in this study, entrepreneurial attempts and behaviors cannot be successfully transplanted to the
public sector.
Appendix A
Summary of Hypothesized Relationships
Hypothesized relationship with
entrepreneurial dimensions
Characteristics
Structural
Managerial
Cultural
Environmental
Variables
Risk taking
Innovativeness
Proactiveness
Hierarchy
Formalization
Flexibility
Size
Autonomy
Participatory
decision
making
Performancebased rewards
Specialization
Accountability
Goal ambiguity
and
multiplicity
Performance
objectives
Legal liability
Political
influence
Perceived
competition
Negative
Negative
Positive
Positive
Positive
Positive
Negative
Negative
Positive
Negative
Positive
Positive
Negative
Negative
Positive
Positive
Positive
Positive
Negative
Positive
Positive
Positive
Positive
Positive
Positive
Positive
Positive
Positive
Positive
Negative
Positive
Positive
Positive
Negative
Negative
Negative
Positive
Negative
Negative
Positive
Positive
Positive
806
2.25648
2.13213
1.39120
Variance
.141
.394
.160
.255
.046
.008
.812
.817
.813
hie1
hie2
hie3
hie4
fle2
fle3
for1
for2
for3
2.76596
2.21461
Factor 1
Factor 2
.080
.174
.066
.168
.844
.758
.096
.158
.022
.829
.590
.781
.582
.042
.211
.076
.154
.270
Variance
Factor 3
Factor 2
Factor
Managerial factors
Factor 1
Item
Rotated factor loadings (orthogonal varimax)
Factor 1
Factor 2
Factor 3
Factor
Structural factors
Appendix B
Factor Loadings
0.55135
0.26205
Difference
.287
.466
.361
.568
.284
.386
.325
.283
.266
Uniqueness
0.12435
0.74094
Difference
2.38551
2.22186
1.86116
Variance
0.16365
0.36070
Difference
.246
.170
.070
.199
.278
.907
.919
.586
Factor 1
Factor 1
Factor 2
Factor
mg1
mg2
acc2
acc3
acc4
obj1
obj2
obj3
Item
.832
.871
.316
.119
.037
.203
.130
.445
Factor 3
2.35341
1.93760
Variance
Environmental factors
.139
.134
.704
.890
.844
.153
.198
.051
Factor 2
(continued)
0.41581
0.36504
Difference
.228
.199
.400
.154
.210
.113
.100
.457
Uniqueness
Revised rotated factor loadings (orthogonal varimax)
Factor 1
Factor 2
Factor 3
Factor
Cultural factors
807
1.57256
Difference
.798
.734
.845
.703
.265
.104
.318
.149
.095
.207
.345
.064
.024
.049
.028
.110
.021
.057
.018
.054
.089
.130
.067
.027
.150
.865
.879
.789
.146
.186
.106
.182
.661
.706
.654
.626
.013
.179
.214
.042
.117
.054
Note: The bold values present each factor loading.
pd1
pd2
pd3
pd4
rew1
rew2
rew3
rew4
aut1
aut2
aut3
spe1
spe2
spe3
Factor 3
.211
.080
.134
.097
.090
.208
.106
.246
.738
.753
.608
.029
.083
.023
.297
.409
.256
.460
.484
.444
.452
.506
.442
.358
.444
.246
.207
.372
pi1
pi2
pi4
pi5
pi7
ll1
ll2
ll3
pec1
pec2
pec3
.644
.719
.692
.661
.646
.047
. 046
.112
.071
.037
.255
Factor 1
.185
.061
.101
.187
.005
.058
.150
.037
.765
.876
.689
Factor 2
.075
.204
.147
.099
.015
.610
.660
.820
.086
.070
.052
Factor 3
.545
.438
.490
.518
.582
.622
.540
.314
.403
.226
.457
Uniqueness
Item
Factor 1 Factor 2
Factor 4 Uniqueness
Factor 3
Variance
Item
0.26417
.
Factor
Revised rotated factor loadings (orthogonal varimax)
1.95255
1.68838
Factor 3
Factor 4
Difference
Environmental factors
Rotated factor loadings (orthogonal varimax)
Variance
Factor
Managerial factors
Appendix B (continued)
808
Declaration of Conflicting Interests

The author declared no conflicts of interests with respect to the authorship and/or
publication of this article.
Funding
The author received no financial support for the research and/or authorship of this
article.
Notes
1.
2.
3.
4.
Twenty-nine current executive MPA students similarly represent the surveys target population and 17 current MPA students provide the broader range of respondent types.
The pretest data set was tested on the variance and reliability of items. Based on
calculated mean and standard deviation of all variables, all variables hold sufficient variation. The Cronbachs alpha values of all instrument measures of the
pretest data are greater than .65, which standardized items count together as an
index.
Southern region = Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana,
Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and
Virginia; Northeast region = Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island,
Vermont, and West Virginia; North-Central region = Illinois, Indiana, Iowa,
Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South
Dakota, and Wisconsin; Western region = Arizona, California, Colorado, Idaho,
Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
About 4 weeks after the initial mailing, a second mailing package was sent
to nonrespondents, including a revised cover letter that emphasized the usefulness of the study and the importance of their participation along with the survey
questionnaire.
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Bio
Younhee Kim is an assistant professor of political science at East Carolina University.
Her research interests include performance management, public entrepreneurship,
and information technology and e-governance.

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