Captain at the Helm: CEO Characteristics that Drive Firm Entrepreneurial Orientation

Abstract

The question of why some organizations foster and pursue entrepreneurial activities when others do not is of great interest in strategic entrepreneurship. While prior empirical studies have emphasized CEO cognitive characteristics such as overconfidence and narcissism, CEO regulatory focus remains unexplored regarding entrepreneurial orientation, despite recent findings linking it to firm performance and firm acquisition behaviors. Additionally, while CEO overconfidence and narcissism have previously been explored, the boundary conditions of these cognitions demand attention. This study investigates the influence of these three CEO cognitions under the environmental conditions of munificence, dynamism, and complexity on the level of entrepreneurial orientation. I find that regulatory focus and narcissism are associated with entrepreneurial orientation, but contrary to prior findings, overconfidence is not. Furthermore, I find that the environmental conditions under which a CEO makes decisions regarding entrepreneurial orientation matter. This study contributes to the entrepreneurial orientation by examining the effect of CEO regulatory focus on entrepreneurial as well as delving deeper into the environmental boundary conditions of CEO overconfidence and narcissism.