Elucidating the Linkages Between Entrepreneurial Orientation and Local Government Sustainability Performance

• Author: William L. Swann,Aaron Deslatte
• DOI: 10.1177/0275074019869376
• Published date: 01 January 2020
• Date: 01 January 2020
• Subject Matter: Articles

https://doi.org/10.1177/0275074019869376

American Review of Public Administration

2020, Vol. 50(1) 92 –109

© The Author(s) 2019

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/0275074019869376

journals.sagepub.com/home/arp

Article

Local government managers are often tasked with running a

political gauntlet: preserving or enhancing services as

resources become more constrained, responding to myriad

stakeholders with diverse preferences, and proactively con-

sidering long-term opportunities and threats (Kearney &

Meynhardt, 2016; Singla, Stritch, & Feeney, 2018; Teske &

Schneider, 1994). Sustainability, defined as actions meant to

address current and future needs of citizens (Brundtland

et al., 1987), is one arena of local government activity where

these management demands come to the fore. Two streams

of literature dealing with strategic planning (Bryson, Berry,

& Yang, 2010; Poister & Streib, 2005) and performance

management (Moynihan & Pandey, 2005; Van Dooren &

Van de Walle, 2016) have examined the systems public man-

agers employ to demonstrate progress and confront longer

term challenges, with a subset of these studies examining

local sustainability specifically (Wang, Hawkins, & Berman,

2014; Wang, Hawkins, Lebredo, & Berman, 2012). A miss-

ing link in these literatures is attention to the catalytic role

that organizational entrepreneurialism plays in the strategic

management of sustainability performance.

Performance in the context of local sustainability can be

conceptually defined similarly to organizational perfor-

mance, in the sense of comparison of government outputs

and outcomes with intended results, goals, or objectives.

Although an “entrepreneurial orientation” (EO) is important

for private (Lumpkin & Dess, 1996; Rauch, Wiklund,

Lumpkin, & Frese, 2009) and nonprofit organizations

(Morris, Webb, & Franklin, 2011), public organizations also

engage in EO activities of risk taking, innovation, and pro-

activity to enhance organizational processes, decision-mak-

ing, and performance (Currie et al., 2008; Kearney &

Meynhardt, 2016; Morris & Jones, 1999). Prior efforts to

develop a theory of entrepreneurial public management for

promoting innovation, efficiency, and improved program-

matic performance have largely focused on structural, cul-

tural, and environmental antecedents (Borins, 2000; Kim,

2010; Meynhardt & Diefenbach, 2012; Moon, 1999; Teske

& Schneider, 1994). Although advancing our understanding,

the ability to generate practical and theoretical insight into

869376ARPXXX10.1177/0275074019869376The American Review of Public AdministrationDeslatte and Swann

research-article2019

1Indiana University Bloomington, USA

2University of Colorado Denver, USA

Corresponding Author:

Aaron Deslatte, O’Neill School of Public and Environmental Affairs,

Indiana University Bloomington, 1315 E. Tenth Street, Bloomington, IN

47405-1701, USA.

Email: adeslatt@indiana.edu

Elucidating the Linkages Between Entrepreneurial

Orientation and Local Government Sustainability

Performance

Aaron Deslatte1 and William L. Swann2

Abstract

Linking strategic management to performance has been called essential for public managers to confront pernicious environmental

and community problems in the 21st century. This article examines the role that an organization’s entrepreneurial orientation

(EO) plays in the linkages between organizational capacities, strategies, and perceived performance. An EO is considered a key

driver of a public organization’s willingness to engage in risk taking, innovation, and proactivity aimed at enhancing organizational

routines, decision-making, and performance. Scholars have provided empirical guidance for the antecedents and consequences

of entrepreneurialism in bureaucracy, yet we know little systematically about how EO links to strategies that may affect

performance in the public sector. To investigate, we employ a mixed methods design using a nationwide survey of U.S. local

governments and interviews with local government managers about their experiences in sustainability programs. Quantitatively,

we find evidence for environmental factors of political and administrative capacities positively influencing EO, and that strategic

activities of performance information use, venturing, and interorganizational collaboration mediate the relation between EO

and perceived sustainability performance. Interviews corroborate these findings and illuminate how local government managers

proactively engage stakeholders, consider risk taking, build capacity, and pursue innovation in sustainability.

Keywords

entrepreneurial orientation, local governments, public organizations, strategic management, performance management,

sustainability

Deslatte and Swann 93

how entrepreneurialism may be cultivated and harnessed in

public organizations has been curtailed by gaps in our

empirical understanding of the linkages between financial,

human, and material resources; management strategies; and

performance. Sustainability is one such arena of increased

local government activity which could benefit from an

explicit examination of the role EO plays in capacity-build-

ing, strategic actions, and performance (Wang et al., 2012;

Swann, 2017).

This article begins to fill this gap by examining the link-

ages between organizational capacities which support an EO

and the strategic management and perceived performance

consequences of its cultivation in local governments.

Drawing from the capacity-building and strategic planning

literatures, we ask two related questions. First, how are orga-

nizational capacities that drive strategic activities mediated

by a local government’s EO? Although the EO literature has

examined antecedent conditions, it remains unclear whether

slack or scarce political, technical, and financial resources

hamper or drive the need for an EO in public organizations

(Singla et al., 2018).

Second, how does an EO influence the strategic manage-

ment of sustainability performance? Despite more than two

decades of experience developing strategic plans for address-

ing their long-term challenges (Poister & Streib, 2005), local

government progress in integrating strategic management

(i.e., the processes of planning, monitoring, and adjusting)

with performance has been halting at best (Poister, 2010).

Although ubiquitous in local governments, strategic plan-

ning tends to be process oriented and episodic (Bryson et al.,

2010), and performance information tends to be subjectively

identified and unevenly utilized (Moynihan, 2008). This arti-

cle aims to bridge this gap with empirical evidence from the

local sustainability context.

Utilizing a sequential, explanatory mixed methods design,

we investigate how an organizational EO mediates these link-

ages between capacities, strategies, and perceptions of orga-

nizational performance in the policy arena of sustainability.

Combining a survey of U.S. cities’ experiences in the Energy

Efficiency and Conservation Block Grant (EECBG) program

with in-depth interviews with suburban Chicago local gov-

ernment managers who participated in the program, we find

evidence of linkages between financial, technical, and politi-

cal capacities of organizations, organizational EO, and strate-

gic activities. Importantly, we find an EO has only an indirect

influence on perceptions of sustainability performance, but

mediates the influence of capacities on such performance.

Furthermore, strategic activities such as performance man-

agement, venturing, and interorganizational collaboration

mediate the relationship between EO and perceived sustain-

ability performance. The findings suggest the lack of entre-

preneurial characteristics in public organizations can limit the

effectiveness of strategic and performance management

efforts. Our interviews further elucidate the cyclical nature of

capacity-strategy-performance integration, and point to the

need for greater autonomy and management support for suc-

cessful organizational reforms.

The Role of EO in the Capacity–

Strategy–Performance Linkage

EO in the public sector has long received attention as gov-

ernments have undertaken waves of reform and been tasked

with enhancing services with dwindling resources (Shockley,

Stough, Haynes, & Frank, 2006). Despite the assumption

that reforms require entrepreneurial approaches to public

management, EO has not been examined within the strategic

planning and performance management literatures which

focus on shaping capacities (Wang, Van Wart, & Lebredo,

2014), strategic activities (Bryson et al., 2010), and perfor-

mance systems (Moynihan & Pandey, 2005).

Defined as “an organization’s commitment to the inten-

sity of entrepreneurial actions” (Kim, 2010, p. 783), EO in

public organizations entails degrees of risk taking, innova-

tion, and proactiveness (Miller, 1983). “Risk taking” is the

willingness of governments to accept moderate levels of pro-

fessional, financial, or relational risk in committing resources

to achieve uncertain outcomes; “innovation” is endeavoring

to develop and implement creative, unusual, or novel solu-

tions to problems, including new (combinations of) services,

organizations, or processes; and “proactiveness” is the abil-

ity and willingness of managers to anticipate and prevent

problems before they occur, and adapt to external changes

(Currie et al., 2008). As such, EO represents an organiza-

tional animus to seek out and respond to threats and opportu-

nities; formulate and execute strategic activities; and adjust

goals, objectives, and activities based, in part, on the resul-

tant outcomes.

Entrepreneurialism in public organizations has been

examined in the context of external antecedents such as the

lack of fiscal resources (Singla et al., 2018) and internal con-

ditions such as organizational formalization, specialization,

hierarchy, autonomy, and size (Kearney et al., 2000; Kim,

2010; Meynhardt & Diefenbach, 2012); mission-oriented

culture (Moon, 1999); performance rewards and objectives

(Kim, 2010); managerial attitudes toward organizational

reform (Kearney et al., 2000); and service delivery expecta-

tions and managers’ desire to fulfill local needs (Meynhardt

& Diefenbach, 2012). Studies examining the impact of entre-

preneurialism on service delivery and programmatic out-

comes are rarer (Swann, 2017), and no EO studies we are

aware of attempt to link these environmental contexts or

capacity limitations of organizations to the strategies

employed and perceived outcomes achieved.

This gap is not surprising given the difficulty in defining

performance in the public sector (Andersen, Boesen, &

Pedersen, 2016). Performance is hard to objectively quantify

in any policy arena given the unique constraints of public

organizations, which often have increased standards for legit-

imacy and transparency; greater need for political acumen