How Managing Errors Facilitates Entrepreneurial Orientation: The Mediating Role of Ambidextrous Leadership

Introduction Today’s agile and globalized markets of economies with increased complexities force organizations to be more open to new ideas, exploit those ideas, and take risks to sustain their competitive advantages (Khan et al., 2011). The demand to accommodate those particular conditions increases the inquiry of how valuable are the organizational-level entrepreneurial activities that have been conceptualized varyingly as corporate entrepreneurship, intrapreneurship, entrepreneurial posture, corporate venturing, and entrepreneurial orientation (EO) (Antoncic and Hisrich, 2003; Covin and Slevin, 1991; Lumpkin and Dess, 1996; Pinchot, 1985; Zahra et al., 1999). Rauch et al. (2009) advocate that organizations with EO have diverse leverages. It is associated with the organization’s new business creation (Guth and Ginsberg, 1990), and it enhances general (Ferreira et al., 2021; Swierczek and Ha, 2003) and innovative performance (Freixanet et al., 2020). Moreover, it is essential to compete capably in volatile business conditions (Wiklund and Shepherd, 2005). Despite the significance, there is a limited understanding of how organizations stimulate EO (Wiklund and Shepherd, 2011). Wales et al. (2021) posit that it is primarily studied as a main effect, and the number of studies questioning its antecedents is relatively small. Accordingly, they argue the importance of focusing on its “genesis” (Wales et al., 2021: 575). Furthermore, Wales et al. (2021) advocate that organizations can lead to EO by cultivating a supportive internal context. Nevertheless, scholars barely consider this strategic orientation as an aspect encompassing organizational structures and managerial styles (Wales et al., 2020; Wales et al., 2021). Wales (2016) discusses that it is a meaningful area of research to explore those underlying internal dynamics. Past research of EO mobilizes participants mainly from Anglo territory, Germanic and Nordic Europe, and Confucian Asia (Martens et al., 2016). Nevertheless, studies indicate differences in entrepreneurial processes among different economies (i.e. developed, developing, emerging) (Martens et al., 2016). Boso et al. (2013) argue that EO deserves to be further studied in the context of a developing economy. Thus, scholars recommend further investigating organizations operating in different contexts with different dynamics (Galbreath et al., 2020). Driven by the paucity in the literature, the present study examines EO as a fallout of organizational (i.e. error management) and managerial (i.e. ambidextrous leadership) components. To build the theoretical scaffold, the dynamic capabilities framework (Teece et al., 1997), the upper echelon theory (Hambrick and Mason, 1984), and the regulatory focus theory (Higgins, 1998) are employed. Based on the theoretical discussions, a model is drawn to test the possible contribution of the organization’s strategy toward errors to enhance the EO by creating a learning atmosphere where leaders will demonstrate both opening and closing behaviors in a balanced way. There are a few critical contributions of the present study. First, an untapped conceptual framework is tested to comprehend the origins of EO. There is no study to date that particularly considers learning from errors as a dynamic capability (Teece, 2016) that endorses entrepreneurial orientation by stimulating managerial ambidexterity. Second, it provides insights from a managerial perspective based upon the argument that the fit between the management style and other contextual conditions would positively affect the organizational variables