TY - JOUR

T1 - Harmonious passion, effectuation and firm performance: the moderated mediation effect of entrepreneurial experience

AU - Laskovaia, Anastasiia

AU - Lee, Younggeun

AU - Bogatyreva, Karina

AU - Herrmann, Pol

PY - 2022/8/8

Y1 - 2022/8/8

N2 - Purpose: Entrepreneurial passion lies at the foundation of the business development process, yet the available evidence is ambiguous regarding its effects on firm performance. In this study, we examine the entrepreneurial passion puzzle by looking into decision-making mechanisms underlying its potential to increase business performance outcomes. Based on the literature on passion and effectuation theory, we link harmonious passion to firm performance through effectual behavioral logic. Design/methodology/approach: To empirically test the theoretical model, we performed bootstrapping-based mediation, ordinary least squares moderated regression and moderated mediation analysis based on survey data collected from 105 executives of US firms. Findings: We found that harmonious passion indirectly increases firm performance through effectuation. The direct link between harmonious passion and firm performance is insignificant. Moreover, the proposed mediation model is strengthened when the executives attain high levels of entrepreneurial experience. Research limitations/implications: This study is not without limitations. First, a cross-sectional data set was adopted as the empirical setting of our research. Hence, further studies could benefit from applying longitudinal research designs. Second, a self-reported survey was utilized to measure firm performance. Although such operationalization is widely accepted in management and entrepreneurship studies, objective measures can produce additional insights into focal relationships. Practical implications: This study provides practical implications for educators, consultants and managers. First, educators should encourage harmonious passion and teach effectual decision-making through various educational programs. Consultants and business practitioners should take similar orientations when organizing training for employees and executives. Finally, managers need to comprehend the motivational types of their employees and promote harmonious passion through appraisal systems and organizational culture. Originality/value: This research uncovers a mechanism and a boundary condition on the relationship between harmonious passion and performance. The results show the critical moderating role of human capital and the mediating role of effectual decision-making on the passion and performance relationship. The current study contributes to the passion literature by providing a more nuanced understanding of the dynamics between entrepreneurial passion and firm performance.

AB - Purpose: Entrepreneurial passion lies at the foundation of the business development process, yet the available evidence is ambiguous regarding its effects on firm performance. In this study, we examine the entrepreneurial passion puzzle by looking into decision-making mechanisms underlying its potential to increase business performance outcomes. Based on the literature on passion and effectuation theory, we link harmonious passion to firm performance through effectual behavioral logic. Design/methodology/approach: To empirically test the theoretical model, we performed bootstrapping-based mediation, ordinary least squares moderated regression and moderated mediation analysis based on survey data collected from 105 executives of US firms. Findings: We found that harmonious passion indirectly increases firm performance through effectuation. The direct link between harmonious passion and firm performance is insignificant. Moreover, the proposed mediation model is strengthened when the executives attain high levels of entrepreneurial experience. Research limitations/implications: This study is not without limitations. First, a cross-sectional data set was adopted as the empirical setting of our research. Hence, further studies could benefit from applying longitudinal research designs. Second, a self-reported survey was utilized to measure firm performance. Although such operationalization is widely accepted in management and entrepreneurship studies, objective measures can produce additional insights into focal relationships. Practical implications: This study provides practical implications for educators, consultants and managers. First, educators should encourage harmonious passion and teach effectual decision-making through various educational programs. Consultants and business practitioners should take similar orientations when organizing training for employees and executives. Finally, managers need to comprehend the motivational types of their employees and promote harmonious passion through appraisal systems and organizational culture. Originality/value: This research uncovers a mechanism and a boundary condition on the relationship between harmonious passion and performance. The results show the critical moderating role of human capital and the mediating role of effectual decision-making on the passion and performance relationship. The current study contributes to the passion literature by providing a more nuanced understanding of the dynamics between entrepreneurial passion and firm performance.

KW - Effectuation

KW - Entrepreneurial experience

KW - Harmonious passion

KW - Human capital

UR - http://www.scopus.com/inward/record.url?scp=85131357808&partnerID=8YFLogxK

U2 - 10.1108/MD-11-2020-1569

DO - 10.1108/MD-11-2020-1569

M3 - Article

AN - SCOPUS:85131357808

VL - 60

SP - 2331

EP - 2348

JO - Management Decision

JF - Management Decision

SN - 0025-1747

IS - 8

ER -