Entrepreneurship in Public Organizations: The Role of Leadership Behavior

Abstract

Despite increasing research on entrepreneurship in the private sector, little is known about entrepreneurship in public organizations in general and the effects of leadership behavior on entrepreneurship in the public sector in particular. Utilizing new data from the Australian Public Service Commission (2017), this study analyzes how three leadership behaviors—task-oriented, relations-oriented, and change-oriented leadership—affect public sector employees’ entrepreneurship behavior. The results of this study show that while all three types of leadership behavior are positively associated with public sector entrepreneurship, the effect is larger for relations-oriented leadership, followed by change-oriented leadership. A practical implication of this study is that relations-oriented leadership behavior is crucial to entrepreneurship in public organizations, suggesting the importance of developing relationships with subordinates.