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Ho w entr epr eneurial orientation
can le v erage inno v ation pr oject
portf olio management
Alexander K ock 1 and Hans Georg Gemünden 2,3
1 Chair for T echnology and Innov ation Management, T echnische Univ ersität Darmstadt, Hochschulstraße
1, 64289, Darmstadt, Germany . k [email protected]
2 Department of Leadership & Or ganization,Handelsho yskolen BI, Oslo, Akershus Norway .
[email protected]
3 Chair for T echnology and Innov ation Management,T echnische Uni versität Berlin, Straße des 17. Juni
135, 10623, Berlin, Germany . [email protected]
Innov ation project portf olio management (IPPM) is a key task in R&D management because
this decision-making pr ocess determines which R&D projects should be undertak en and
how R&D r esources ar e allocated. Pre vious resear ch has developed a good understanding of
the r ole of IPPM in R&D strategy implementation and of successful IPPM practices. But the
fundamental orientations that driv e the strategy f ormation and implementation process ha ve
nev er been in vestigated in the context of IPPM, and it is unclear whether successful prac -
tices ar e equally valid f or different strategic orientations. This study , theref ore, in vestigates
the moderating impact of a f irm’ s entrepr eneurial orientation on the relationship between
strategic portf olio management practices and portfolio success. An empirical analysis of 257
f irms shows that both innovati veness and risk taking as entr epreneurial orientation’ s dimen -
sions positiv ely moderate the relationship between managerial practices and perf ormance.
Specif ically , we f ind that f irms high in innovativ eness prof it more fr om stakeholder engage -
ment compar ed to f irms low in innov ativeness. Firms high in risk-taking pr of it more fr om
a clearly f ormulated strategy . With incr easing innov ativeness and risk-taking pr opensity ,
f irms also prof it more fr om b usiness case monitoring and agility in portf olio steering. The
r esults suggest that a f irm’ s entrepr eneurial orientation can leverage the effect of IPPM
practices. V ice versa, a lacking entr epreneurial orientation can r ender these practices inef -
fectiv e. Strategic orientation and IPPM practices should, theref ore, be aligned with each
other to enable f irms to better implement their strategy and generate competitive advantage.
1. Intr oduction
T he management of research and de velopment
takes place at three dif ferent le vels: (1) the stra-
tegic le vel, on which managers de velop strate gic in-
nov ation goals and the roadmaps ho w to reach them
(Salomo et al., 2008; T alke et al., 2011); (2) the tacti-
cal le vel of innov ation project portfolio management,
on which managers determine which R&D projects
are undertaken and ho w resources are allocated to
them (Floricel and Ibanescu, 2008; Spieth and Lerch,
2014); and (3) the operational le vel of single R&D
projects, on which innov ati ve de velopment and re-
search tasks are e xecuted (K eller , 2017; Chappin
et al., 2019). The current paper concentrates on the
connection between the strate gic and the tactical

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
2 R&D Management 2020
le vel, by analyzing ho w the ef fecti veness of portfolio
management practices at the tactical le vel is af fected
by characteristics of the strategic le vel. Such an in-
vestig ation is useful because R&D di visions work
on many projects simultaneously , and the selection
of the right candidates, the allocation of scarce re-
sources to projects, and the management of interde-
pendencies between projects has become a critical
process for the ov erall innov ation success (Spieth
and Lerch, 2014; K ock and Gemünden, 2016; Clegg
et al., 2018).
Innov ation project portfolio management (IPPM)
is a dynamic decision-making process to screen,
select, and prioritize project proposals, as well as
to allocate resources to projects according to prior -
ities (Cooper et al., 2001b). Quite a fe w studies hav e
in vestig ated what constitutes success in portfolio
management (Cooper et al., 2001a; Jonas et al., 2013;
K ester et al., 2014; Martinsuo and Killen, 2014) and
what or ganizational le vers af fect success (Müller
et al., 2008; Lerch and Spieth, 2013; Spieth and
Lerch, 2014; K ock et al., 2015). Since not all prac-
tices are likely to be ef fecti ve in all conte xts, many
authors call for a contingency perspecti ve to in ves-
tigate the boundary conditions of successful portfo-
lio management (Floricel and Ibanescu, 2008; Petit,
2012; Martinsuo, 2013; K ock et al., 2016).
Pre vious research has mainly concentrated on
contingency f actors such as portfolio characteris-
tics (T eller et al., 2012; K opmann et al., 2015) or
the external en vironment (Floricel and Ibanescu,
2008; Petit, 2012; K opmann et al., 2017) and largely
neglected boundary conditions stemming from the
strategic le vel (an e xception is Rank et al., 2015).
Specif ically , an important, yet neglected contin-
gency f actor is the strate gic orientation of the f irm
(Mintzber g, 1973; Miller , 1983; V enkatraman, 1989;
Covin and Sle vin, 1991). This is surprising, because
research on portfolio management emphasizes that
portfolios are important vehicles for strate gy reali-
zation in that they represent the connection between
strategy and operational projects (Mesk endahl, 2010;
K opmann et al., 2017; Clegg et al., 2018). Although
there is empirical e vidence that firms with a strong
innov ation orientation ha ve more inno v ativ e portfo-
lios, which in turn leads to higher success (T alke et
al., 2011), little is kno wn whether and how success-
ful IPPM practices actually dif fer for these firms. T o
the best of our kno wledge, so far , no empirical study
in vestig ated whether portfolio management practices
ha ve dif ferent performance ef fects under dif ferent
strategic orientations.
In the current study , we resort to the concept of
entrepreneurial orientation (EO) as a particularly
important form of strategic orientation (Rauch et al.,
2009; Anderson et al., 2015) and empirically
in vestig ate its moderating impact on the relation-
ship between portfolio management and success.
Therefore, the research question is: How do IPPM
practices dif fer in their performance impact depend-
ing on the entr epr eneurial orientation of the firm?
The paper contrib utes to both literatures on port-
folio management and on EO. First, the study con-
trib utes to a better understanding of the boundary
conditions for successful strategy implementation by
portfolio management. Pre vious conceptual research
stressed the strategy formation process’ s impor-
tance in portfolio management and the possible role
of strategic orientation (Mesk endahl, 2010). This
study provides the f irst empirical test of this role by
sho wing that portfolio practices differ in their rela-
tionship to performance depending on the f irm’ s EO.
The results suggest that a f irm’ s EO can le verage the
performance impact of IPPM practices and that these
practices should be aligned to the f irm’ s EO to enable
f irms to better implement their strategy and generate
competiti ve adv antage. In sho wing the moderating
ef fect of EO, this study identifies a ne w and import-
ant strategic contingenc y factor for IPPM.
Second, we follo w the call for more empiri-
cal research on moderators of the EO-performance
link (Rauch et al., 2009; Rosenb usch et al., 2013).
EO is one of the most studied concepts in the
Entrepreneurship literature, yet most studies concen-
trate on its dir ect performance ef fects. Since reported
performance relationships are heterogeneous (Rauch
et al., 2009), ‘research needs to reconsider models of
the role of third v ariables in the relationship between
EO and performance’ (Rosenb usch et al., 2013,
p. 651). By introducing a portfolio management per -
specti ve to the EO f ield, we also enrich this stream of
research and in vestig ate IPPM as a possible enabler .
2. Conceptual backgr ound
2.1. Entr epr eneurial orientation
The entrepreneurial orientation (EO) concept is
rooted in the strategy-making literature and can be
described as ‘the entrepreneurial strategy-making
processes that ke y decision makers use to enact their
f irm’ s organizational purpose, sustain its vision, and
create competiti ve adv antage(s)’ (Rauch et al., 2009,
p. 763). Already Mintzberg (1973) ar gued that firm
performance is lar gely dictated by gestalts comprised
of strategic choices, or ganizational structure, and
en vironmental requirements. As one such gestalt is
entrepreneurial, Miller (1983) characterized entre-
preneurial f irms as those that pursue innov ation,

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 3
aggressi vely enter ne w markets, and accept a mea-
sure of strategic risk. Based on this w ork, Covin
and Sle vin (1991) suggested that a firm’ s strategic
beha vioral procli vities range on a continuum from
more conserv ativ e to more entrepreneurial. They
posited that the entrepreneurial end of the continuum
is e videnced by innov ati veness, proacti veness, and
risk taking. Although alternati ve approaches ha ve
been de veloped (e.g., Lumpkin and Dess, 1996; see
also the similar construct of strategic orientation by
V enkatraman, 1989), meta-analyses sho w that the
conceptualization by Covin and Sle vin is the domi-
nant perspecti ve (Rauch et al., 2009; Rosenb usch et
al., 2013).
Conceptually , firms should prof it from adopting
an EO, because a rapidly changing en vironment ren-
ders future re venues from existing b usiness uncertain
and f irms need to constantly identify ne w opportuni-
ties (Lumpkin and Dess, 1996; Rauch et al., 2009).
Empirically , Rauch et al. (2009) can confirm the pos-
iti ve relationship between EO and f irm performance
in their meta-analysis. Ho wev er , they also observ e a
lar ge v ariance in ef fect sizes and consequently sug-
gest that future research should in vestig ate, ho w EO
interacts with other v ariables in their relationship
with performance. So far , only fe w studies in ves-
tigated the moderating influence of EO (W alter et
al., 2006; W u et al., 2008; W ales et al., 2013; Rank
et al., 2015). Since portfolio management is a cen-
tral means of strategy implementation (Mesk endahl,
2010; K opmann et al., 2017; Clegg et al., 2018), we
in vestig ate whether and ho w EO le verages the perfor -
mance of strategic portfolio management practices.
There is considerable debate in the literature
reg arding EO’ s proper dimensionality and mea-
surement (e.g., Covin and W ales, 2012; Lomberg
et al., 2017). Lomber g et al. (2017) demonstrated
a high ov erlap between the dimensions innov ativ e-
ness, proacti veness and risk taking, as well as their
ef fect on performance. W ith regard to this concep-
tual and empirical ov erlap, Anderson et al. (2015,
p. 1,580) suggest a reconceptualization along only two
dimensions and ar gue that ‘entrepreneurial behaviors
and managerial attitude to wards risk jointly and in
totality comprise the conceptual domain of f irm-
le vel EO’ (Anderson et al., 2015, p. 1,580). In order
to keep our model parsimonious and a void redun-
dancy in our in vestigation, we follo w this approach.
W e, therefore, in vestig ate innovativeness (which
includes proacti veness) and risk taking as the two
def ining dimensions of entrepreneurial orientation.
Innovativeness is the forw ard-looking predisposition
to engage in creati vity and experimentation, charac-
terized by the introduction of ne w products ahead of
the competition, and risk taking in v olves taking bold
actions by venturing into the unkno wn and commit-
ting resources to ventures in uncertain en vironments.
Strategic portfolio management practices will lik ely
dif fer in their performance impact depending on the
f irm’ s positioning along these dimensions of EO.
2.2. P ortfolio manag ement
Innov ation project portfolio management is a
dynamic decision-making process in which projects
are e valuated and selected and in which resources
are allocated (Cooper et al., 2001b). Cooper et al.
(2001b) summarize the purpose of portfolio manage-
ment as doing the right things and contrast it with the
purpose of project management – doing things right .
According to their initial studies, the right projects
are the ones that provide maximum v alue, achie ve a
balance, and align with strategy . Since then, research-
ers de veloped a comprehensi ve understanding of
portfolio success (Martinsuo and Lehtonen, 2007;
Müller et al., 2008; Jonas, 2010; Meskendahl, 2010;
Martinsuo and Killen, 2014). Recent research con-
ceptualizes portfolio success as a multidimensional
construct with the follo wing dimensions (Jonas
et al., 2013; K ester et al., 2014; K ock et al., 2015;
K opmann et al., 2017): strategic implementation suc-
cess, portfolio balance, a verage product success, and
syner gy exploitation.
Strate gic implementation success is defined by the
strategic f it of the portfolio (Meskendahl, 2010) and
the percei ved implementation success of the strat-
egy (K opmann et al., 2017). P ortfolio balance con-
cerns the equilibrium of risks, long- and short-term
opportunities, and the steady utilization of resources
within the project portfolio’ s ex ecution (Killen et al.,
2008; T eller et al., 2012). A verag e pr oduct success is
measured by the commercial success of project out-
comes, which determine in their entirety the quality
and success of the strategy implementation. Syner gy
e xploitation represents the added v alue that emerges
from dedicated portfolio management, ov er and
abov e contributions from indi vidual projects by cap-
italizing on interdependencies and a voiding redun-
dancies (Jonas, 2010; Meskendahl, 2010).
Portfolio management has been characterized as a
phase-based decision-making process (Jonas, 2010;
Beringer et al., 2013; Jonas et al., 2013). Although
dif ferent phase models with different le vel of detail
exist, we will concentrate on the tw o most generic
phases portfolio structuring and portfolio steering to
extract those management practices that most lik ely
dependent on the f irm’ s strategic orientation in their
performance impact.
The portfolio structuring phase refers to the target
portfolio’ s composition that contributes the highest

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
4 R&D Management 2020
v alue to the organization and is aligned with the strat-
egy . Structuring comprises the innov ation projects’
e valuation, prioritization, and selection. The main
objecti ve in this phase is to ensure that the portfo-
lio optimally reflects the or ganization’ s strategy .
Based on pre vious literature (Morris and Jamieson,
2005; Salomo et al., 2008; de Brentani et al., 2010;
Meskendahl, 2010; T urner and Zolin, 2012), we
ar gue that adequately in volving critical stak ehold-
ers and def ining a clear strategy are essential stra-
tegic management practices in portfolio structuring.
Stakeholder in volvement is defined as the e xtent
to which dif ferent relev ant firm-internal portfolio
stakeholders (such as functional managers, di vision
heads) ha ve the possibility to engage in and af fect
the de velopment of the portfolio strategy (T urner
and Zolin, 2012; Beringer et al., 2013). In the long
run, portfolio decisions af fect nearly all corporate
functions (K ester et al., 2011). Integrating dif ferent
internal stakeholders in the strate gy process is, there-
fore, necessary to obtain di verse perspecti ves and a
greater v ariance of alternativ es – resulting in a more
holistic portfolio assessment – and to simultaneously
gain consensus and joint commitment (Meskendahl,
2010; T urner and Zolin, 2012). Strate gic clarity
means that the company or b usiness unit has a clearly
formulated strategy , which is communicated and
understood within the or ganization. A clearly formu-
lated strategy is a necessary condition for ef fecti ve
implementation of deliberate strate gy (Meskendahl,
2010; K opmann et al., 2017). Firms with a clear
and focused strategy mak e better portfolio decisions
(K ock and Gemünden, 2016) and more ef fecti vely
implement the right projects (Salomo et al., 2008; de
Brentani et al., 2010).
The portfolio steering phase comprises the portfo-
lio’ s ongoing coordination and control. This includes
re-prioritizing or terminating projects, re-allocating
resources, and exploiting syner gies (Blomquist and
Müller , 2006; Blichfeldt and Eskerod, 2008; Unger
et al., 2012; K ock and Gemünden, 2016). Successful
portfolio management depends on the right type of
controlling acti vities (Müller et al., 2008). High-
performing f irms not only track time, cost, and scope
adherence, b ut also continuously monitor the v alid-
ity of each project’ s business case (K opmann et al.,
2015). An essential managerial practice is, therefore,
b usiness case monitoring – the ‘re v alidation of a
project’ s business case considering changing project
scope and timing as well as changing en vironmental
conditions’ (K opmann et al., 2015, p. 532). Equally
important in the portfolio steering phase is the or ga-
nization’ s ability to quickly adapt the portfolio in a
dynamic en vironment (Floricel and Ibanescu, 2008;
Petit, 2012). Agility describes the extent to which a
f irm is able to quickly adapt its innov ation portfolio
to changing conditions (K ester et al., 2011; K ock and
Gemünden, 2016). K ester et al. (2014) hav e sho wn
that the ability of the f irm to make agile portfolio
decisions and implement them is positi vely related to
portfolio success.
While we are aw are that there are other potentially
rele vant IPPM practices, we concentrate on these four
specif ic practices for the follo wing reasons. First,
we deliberately chose the two most salient practices
from the portfolio structuring phase (i.e., stakeholder
in v olvement and strate gic clarity) and the portfolio
steering phase (i.e., b usiness case monitoring and
agility), respecti vely , to capture relev ant practices
along the whole portfolio process. Second, all four
practices are highly rele vant in IPPM, because the y
ha ve been repeatedly sho wn to be related to portfo-
lio success in dif ferent studies. Finally , the practices
do not sho w conceptual overlap and are, therefore,
not expected to be highly correlated. They , therefore,
capture a wide spectrum of managerial acti vity , with-
out being unspecif ic indicators of ov erall portfolio
management maturity . In order to control for omitted
practices, we also include portfolio management for -
malization in the empirical model.
Although all practices will likely be related to
portfolio success, we will refrain from formulating
hypotheses for their a verage ef fects and concentrate
in the follo wing on how the relationship may be
af fected by the firm’ s EO.
2.3. Hypotheses
The ov erall framew ork is depicted in Figure 1. W e
expect that the performance impact of IPPM practices
in the structuring phase (i.e., stakeholder engagement
and strategic clarity) and steering phase (i.e., b usi-
ness case monitoring and agility) is stronger for f irms
with a high EO characterized by innov ati veness and
risk taking.
2.4. P ortfolio structuring
Firms with a high EO stri ve for more innov ati ve proj-
ects and are willing to take higher risks (Anderson
et al., 2015). They f ace higher uncertainty regarding
their en vironment: In highly innov ati ve projects, cus-
tomers are often not kno wn in advance, and critical
innov ati ve contrib utions often come from ne w and
pre viously unknown e xternal partners (O’Connor
and Rice, 2013). Firms with a high EO will thus,
more likely search for ne w partners and lay more
stress on assessing the risks they may induce. More
acti ve search in a f irms’ market-related and tech-
nology-related en vironments means an increasing

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 5
specialization and segmentation of their mark eting,
R&D, and production functions. It also means higher
uncertainty and more turb ulence regarding ne w
technology , new customers, ne w suppliers, and ne w
competitors.
According to contingency theory (La wrence and
Lorsch, 1967; Donaldson, 2001), a higher le vel of
specialization implies that a higher le vel of integra-
tion helps to a void otherwise increasing coordination
losses between the more specialized functions. This
is conf irmed by Ahmad et al. (2013) who sho wed
that for increasing complexity functional integration
is benef icial for NPD success (see also T roy et al.,
2008). The collaboration between dif ferent functions
provides a common understanding of the underlying
assumptions, and therefore likely fosters the com-
mitment to the formed project portfolio. Moreov er ,
the in v olvement of dif ferent functions in portfolio
decisions will limit the risk of one perspecti ve’ s
dominance and will promote the consideration of
long-term objecti ves (T alke et al., 2011). Inte grating
these functions’ stakeholders in the portfolio deci-
sion-making process is, therefore, likely benef icial
for potfolio success (Beringer et al., 2013). This inte-
gration can happen at an operational le vel through
cross-functional expert teams in projects (Nakata
and Im, 2010) and at the strategic le vel go verning
resource allocation in project portfolios (Cooper et
al., 2001b; Beringer et al., 2013).
W e assume that firms with a higher EO are often
already working in more turb ulent high-tech indus-
tries and/or mov e their firms to ward such en viron-
ments. In turb ulent and complex en vironments,
where data are incomplete or inaccurate, cross-func-
tional integration has been sho wn to be particularly
important for ef fectiv e decision making (Ancona and
Caldwell, 1992). This is also sho wn in the meta-anal-
ysis of T roy et al. (2008) who f inds that cross-func-
tional integration is more strongly related to success
in high-tech industries than in lo w-tech industries.
In addition to the horizontal cross-functional inte-
gration, the vertical integration of dif ferent manage-
ment le vels has been sho wn to be related to project
portfolio success (K opmann et al., 2017). Breaking
do wn strategic goals to specif ic operational objec-
ti ves can guide project selection and prioritization
(Meskendahl, 2010). Ho we ver , in turbulent times,
the premises of such top-do wn dev eloped strategies
may get eroded and unanticipated strategic oppor -
tunities are likely to be better recognized by middle
and lo wer managers who can better access informa-
tion on ne w technology- and market-related gro wth
paths (K opmann et al., 2017). Firms with a high EO
gi ve more autonomy to lo wer and middle managers
(Lumpkin and Dess, 1996) and more likely encour -
age the de velopment of bottom-up emerging strate gd
market-related uncertainties as opportunities. These
f irms often use specific acti vities to sense and seize
opportunities, and transform their or ganization to
exploit them (T eece, 2007). A better integration of
internal stakeholders in order to process the infor -
mation and generate ne w concepts improves sensing
and seizing functions. The returns for sensing and
seizing opportunities are likely to be higher than the
cost of performing these acti vities. Consequently ,
f irms with a high EO should realize a higher port-
folio v alue from stakeholder in volv ement than firms
with a lo w EO:
H1: The r elationship between stakeholder in volve-
ment and portfolio success is str onger for firms with
an EO that is (a) high in innovativeness and (b) high
in risk-taking pr opensity .
Extant research documents that a higher strate gic
goal clarity positi vely influences project portfolio
success, because it allo ws to channel creativity for
generating ideas and to better identif iy opportuni-
ties (K ock et al., 2015), and thus select those proj-
ects which promise a high strategy contrib ution
(Meskendahl, 2010; Unger et al., 2012). This is in
Figure 1. Research frame work.
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© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
6 R&D Management 2020
line with goal setting theory positing that challenging
and more specif ic goals lead to higher performance
(Locke and Latham, 2002).
For more inno vati ve projects, higher uncertainty
reg arding technological feasibility and customer
preferences makes it more dif ficult to deri ve these
goals (Salomo et al., 2007). Firms with a high EO
should, therefore, require more learning processes
reg arding technology and application and should on
a verage ha ve less clear goals. Ho wev er , we argue that
they will prof it more form an increase in strategic
clarity than f irms with a lo w EO. Three ar guments
underly this moderation hypothesis.
First, market and technology visioning for radi -
cally ne w products direct the attention on new chal -
lenging goals, ener gize innov ators and moti v ate them
intrinisically to engage themselv es for ne w products
and services that enable important ne w functional -
ities. Reid and de Brentani (2012) sho w a positiv e
impact on early performance reg arding the moti v a -
tion of innov ating teams, attraction of innov ating
customers, and attraction of ne w financial capital.
Second, a major problem in radically ne w prod -
ucts is that their resources are often cannibalized
by less innov ati ve products with kno wn customers.
Innov ation leaders often implement strategic b uck -
ets for highly innov ati ve projects to protect them
against such a cannibalization by incremental projects
(Hutchison-Krupat and Ka v adias, 2015). Salomo et al.
(2008) analyze ho w innov ati ve topics are b undled in
innov ation f ields, which implement strategic iniati ves
for major innov ation themes. This acti vity structures
portfolios and clarif ies visible goal commitments. The
authors sho w that these activities increase the inno v a -
ti veness of product portfolios and e ventually portfolio
performance. W e assume that these strategic iniati ves
not only coordinate innov ati ve projects to ward com -
mon goals b ut also moti v ate managers and kno wledge
work ers to engage in such acti vities.
Third, innov ati ve portfolios require a pipeline of
v aluable ideas. Firms engaging in initiativ es to create
such an ideation portfolio realize a higher front-end
success (K ock et al., 2015). The y giv e their employ -
ees more support and autonomy , and apply trans -
parent and fair processess to pick the best ideas. In
doing so, f irms learn what ne w technologies are able
to deli ver and ho w customers v alue ne w functional -
ities. Such pro-acti ve ideation leads to higher project
portfolio success. Firms with a risk-taking orientation,
prof it more from pro-acti ve ideation practices if the
expected g ain is high (K ock et al., 2016).
Firms with a sustained innov ation orientation are
more likely to in vest in such practices and impro ve
them ov er time as innov ation competences. This will
allo w them to motiv ate and coordinate better and to
learn faster . Overall, we, therefore, e xpect a positi ve
moderation ef fect:
H2: The r elationship between strate gic clarity and
portfolio success is str onger for f irms with an EO
that is (a) high in innovativeness and (b) high in
risk-taking pr opensity .
2.5. P ortfolio steering
Formal control and coordination of a portfolio
through regular monitoring of project performance
ha ve been repeatedly related to higher portfolio
performance (Cooper et al., 2001a; Müller et al.,
2008; T eller et al., 2012). Howe ver , steering proj -
ects according to the iron triangle of b udget, time,
and scope adherence is likely not suf ficient and
potentially harmful in the case of highly innov ati ve
projects. For e xample, Salomo et al. (2007) show
that formalized planning and process control is
only benef ical for incremental ne w product de vel -
opment projects b ut harmful for highly innov ati ve
projects. The more firms adapt an EO, the more
they will aim for more inno vati ve and more risk y
projects, thus the less useful will be traditional
portfolio control mechanisms.
K opmann et al. (2015) suggest that instead
of monitoring operational project performance,
managers should rather control the created v alue,
which innov ati ve solutions consequently e xploit,
and prefer b usiness case control ov er iron-triangle
control. The authors hav e shown that the combi -
nation of b usiness planinng ov er the whole proj -
ect cycle, clear responsibilities and accountability
for the results, as well as result-oriented incen -
ti ves increases portfolio success (K opmann et al.,
2015). The higher the innov ati veness and risk of
the projects in the portfolio, the higher is the like -
lihood that the initial b usiness case will change in
the course of a project. Therefore, business case
monitoring likely becomes more v aluable than in
portfolios of incremental, lo w-risk projects. In sup -
port of this ar gument, K opmann et al. (2015) find
that the impact of b usiness case control on port -
folio success increases when the f irm en vironment
is characterized by strong technological and mar -
ket-related changes. W e, therefore, assume:
H3: The r elationship between business case monitor -
ing and portfolio success is str onger for firms with an
EO that is (a) high in innovativeness and (b) high in
risk-taking pr opensity .
Being able to adapt the portfolio to changing
en vironments has been identif ied as an important
ability in project portfolio management (Floricel

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 7
and Ibanescu, 2008; K ock and Gemünden, 2016;
Petit, 2012). K ester et al. (2014) accordingly find
a positi ve relationship between agility and port -
folio success. Arguably , the stronger the en viron -
mental dynamism (i.e., the higher the uncertainty
and unpredictability of future market and technol -
ogy de velopments), the more rele v ant will agility
become for f irms.
Since rapid change and unpredictability provide
opportunities for f irms b ut also make e xisting busi-
ness obsolete, f irms in dynamic en vironments more
likely adopt an EO. The meta-analysis of Rosenbusch
et al. (2013) conf irms this by finding a strong posi-
ti ve relationship between EO and en vironmental
dynamism. W e, therefore, assume that being able to
quickly adapt the portfolio to ne w opportunities or
risk will be e ven more adv antageous for f irms adopt-
ing an EO (K ester et al., 2011). Firms with a strong
EO observe their en vironment more carefully and
recognize changes earlier , so they are more lik ely to
make timely decisions and inform their or ganization
about the necessary measures for adaptation. These
changes are enabled by flexible resources, a high
strategic and operational transparenc y , and a shared
understanding that learning from mistakes is neces-
sary – conditions that are more likely present in an
or ganization with a strong EO (Lumpkin and Dess,
1996). W e, therefore, argue:
H4: The r elationship between agility and portfolio
success is str onger for firms with an EO that is (a)
high in innovativeness and (b) high in risk-taking
pr opensity .
3. Method
3.1. Sample
W e test the proposed hypotheses on a cross-industry
sample of f irms. The b usiness unit’ s innov ation proj -
ect portfolio is the unit of analysis. For each portfolio,
we contacted two informants of dif ferent manage -
ment le vels. The senior management informant had
decision authority ov er the project portfolio regarding
initiation, prioritization, and termination of projects.
T ypicial titles of senior managers were CEO, head of
b ussiness unit, or head of R&D. The middle manage -
ment informant had a good ov erview of the portfo -
lio and the management processes used in the f irm.
Middle managers had titles such as portfolio manag -
ers, innov ation managers, or head of project manage -
ment of fice. By contacting two informants in each
f irm, we obtained dif fering perspecti ves within the
f irm’ s hierarchy and reduced common method bias.
W e contacted medium-sized and large German
f irms, explained the study , and requested participa -
tion. After the mailing, we made follo w-up phone
calls to identify the correct informants. Registered
informants recei ved an e-mail with a letter explain -
ing the multi-informant design and the question -
naires with an introduction describing the terms and
def initions. Again, follo w-up phone calls ensured
increased participation. T o provide an incenti ve for
participation, we promised an indi vidualized report
and an in vitation to a practitioner conference, where
the study results were presented. W e recei ved 268
senior manager questionnaires and 279 middle man -
ager questionnaires from 286 f irms, resulting in 261
matched dyads with data from both types of infor -
mants. Some questionnaires had missing data; thus,
the f inal sample comprised 257 firms. W e did not find
any signif icant dif ferences between the first 25% and
the last 25% of responding f irms in any v ariable used
in this study ( P > 0.05), so response bias most lik ely
did not af fect the results. T able 1 sho ws some char -
acteristics of the sample f irms and their project port -
folios. The firms were from di verse industries and
reflecti ve of a reasonable spread according to size.
3.2. Measur ement
W e used multi-item scales for the constructs, which
were taken from e xisting literature and in some
cases adapted to the context of IPPM. Decision
makers assessed the dependent and moderator v ari -
ables and coordinators assessed the independent
v ariables. This approach reduced common method
v ariance because different informants assessed
dependent and independent v ariables. W e v ali -
dated the scales using conf irmatory factor analysis
T able 1. Sample characteristics
Industry Re venue
Automoti ve 26% <100 million € 24%
Electronics/IT 18% 100–500 million € 28%
Finance 16% 501–2,000 million € 20%
Construction and
utility
11% >2,000 million € 28%
Health care 8%
Logistics 7%
Pharmaceuticals/
chemicals
5%
Others 9%
Employees Portfolio b udget
<500 37% <10 million € 26%
500–2,000 28% 10–30 million € 21%
>2,000 35% 30–100 million € 26%
<100 million € 27%

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
8 R&D Management 2020
(CF A). Cronbach’ s Alpha and composite reliabil -
ity is used to assess scale reliability with accept -
able v alues larger than 0.7. The CF A confirmed the
measurement model and the second-order structure
of portfolio success.
P ortfolio success was measured as a multidimen -
sional second-order construct using dimensions and
their items from existing literature (Jonas et al., 2013;
T eller and K ock, 2013; V oss and K ock, 2013): strategy
implementation (four items), portfolio balance (three
items), a verage project outcome (four items), and
syner gy exploitation (four items). T able 2 contains
the results of the CF A, which sho ws an acceptable f it
( χ 2  = 126.88 (df = 61; P  < 0.00); RMSEA = 0.065;
SRMR = 0.055; CFI = 0.97). Similar to pre vious
research on portfolio management (K ock et al.,
2015), the results suggest that portfolio success is a
multidimensional construct. W e also nomologically
v alidated the construct by relating it to business unit
performance, which was measured by three items
assessing ov erall business success, sales gro wth, and
prof itability in comparison to competitors (alpha:
0.78). The two constructs sho wed a high correlation
(0.38, P  = 0.000), which giv es further indication to
the v alidity of our portfolio success measure.
Stakeholder in volvement determines the degree
to which dif ferent portfolio stakeholders hav e the
possibility to engage in and af fect the dev elop -
ment of the portfolio strategy . Three items adapted
from T urner and Zolin (2012) were used. Strate gic
clarity was measured using a three-item scale that
assessed whether the f irm had a comprehensible
and well communicated strategy . The items were
based on a related scale de veloped by Bates et
al. (1995). W e measured business case monitor -
ing with three items from K opmann et al. (2015).
Agility describes the extent to which a f irm is able
to change and adapt its portfolio to changing con -
ditions (K ester et al., 2014). Items were taken from
K ock and Gemünden (2016).
The innovativeness dimension of EO is the for -
ward-looking predisposition to engage in creati vity
and experimentation, characterized by the introduc-
tion of ne w products ahead of the competition. W e
measured innov ati veness with three items (Anderson
et al., 2015). Risk taking in v olves taking bold actions
by venturing into the unkno wn and committing
resources to ventures in uncertain en vironments. W e
measured risk-taking propensity using three items
(K ock et al., 2016).
T able 2. Confirmatory f actor analysis for project portfolio success
Construct / Dimension /Item F actor loading
Project portf olio success (second-order construct)
Strate gy implementation (Cr onbach’ s α  = 0.88) 0.82
The project portfolio is consistently aligned with the future of the company 0.85
The corporate strategy is implemented ideally through our project portfolio 0.93
Resource allocation to projects reflects our strategic objecti ves 0.78
The implementation of the strategy is considered a great success in the or ganization 0.74
P ortfolio balance ( α  = 0.86) 0.64
Ther e is a good balance in our pr oject portfolio…
… between ne w and old areas of application 0.86
… between ne w and existing technologies 0.92
A verag e pr oduct success ( α  = 0.82) 0.62
Please assess the avera ge success of completed pr ojects:
Our products/project results achie ve the tar get costs defined in the project 0.57
Our products/project results achie ve the planned mark et goals (e.g., market share) 0.66
Our products/project results achie ve the planned prof itability goals (e.g., R OI) 0.95
Our products achie ve the planned amortization period 0.84
Syner gy exploitation ( α  = 0.77) 0.73
During the project ex ecution, dev elopment synergies (e.g., shared use of modules, platforms, tech-
nologies etc.) between projects are rigorously exploited
0.80
After project completion, exploitation syner gies (e.g., shared marketing/sales channels, infrastruc-
ture, etc.) between projects are rigorously exploited
0.85
W e hardly e ver ha ve double work or redundant de velopment 0.60
7-Likert-type Scale; χ 2 =126.88 (df=61; P <0.00); RMSEA = 0.065; SRMR = 0.055; CFI=0.97; n =256.

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 9
W e controlled for three variables that might
af fect portfolio success. First, we included formal -
ization , which is def ined as the extent to which the
portfolio management process is clearly def ined and
specif ied. Pre vious research has sho wn that formal -
ization af fects portfolio success and captures the
maturity of project portfolio management (Cooper
et al., 2001a; Martinsuo and Lehtonen, 2007; T eller
et al., 2012). It is, therefore, necessary to control
for portfolio management formalization when
in vestig ating the performance ef fect of strategic
antecedents to portfolio success, so that observed
ef fects are not only due to differences in portfolio
management maturity . The items were tak en from
pre vious research (T eller et al., 2012) and were
assessed by the middle manager . Furthermore, we
control for f irm size, measured as the logarithm of
the number of employees. Lar ger firms might dif -
fer in their portfolio management approaches and
also their strategy processes. Finally , we control
for portfolio size, measured as the logarithm of the
portfolio b udget in million Euros, to account for
the importance of the portfolio.
T able 3 shows the results of the CF A for all inde -
pendent v ariables and T able 4 displays all variables’
descripti ves. The a verage v ariance extracted and
composite reliability sho wed values abo ve 0.5 and
0.7, respecti vely . Overall, the measures sho wed an
acceptable reliability and v alidity according to the
standards proposed by Bagozzi and Y i (1988). W e
further tested for discriminant v alidity by examin -
ing the square root of the a verage v ariance extracted
for each construct. All the v alues were greater than
the respecti ve correlations with other constructs,
supporting suf ficient discriminant v alidity .
4. Results
W e used hierarchical regression to test the proposed
hypotheses. T able 5 presents the results in nine dif-
ferent models with portfolio success as dependent
v ariable. Model 1 includes control variables and
the direct ef fects of the independent and moderator
v ariables. Regarding controls, only project portfolio
management formalization was positi vely related to
portfolio success (unstandardized regression coef f i-
cient b = 0.05, P = 0.086), while f irm size and port-
folio b udget were not. Confirming pre vious research,
we found that management practices along the
phases of the portfolio process were related to port-
folio success: the coef ficients of stakeholder in volv e-
ment ( b = 0.21, P = 0.000), strategic clarity ( b = 0.08,
P = 0.032), b usiness case monitoring ( b = 0.06, P =
0.043), and agility ( b = 0.09, P = 0.030) were all pos-
iti ve and signif icant. Innov ati veness w as positi vely
related to portfolio success ( b = 0.20, P = 0.000),
while the direct ef fect of risk taking was not signif-
icant. This partly corresponds to the meta-analytical
results by Rauch et al. (2009), who f inds a stronger
positi ve ef fect of innov ati veness and proacti veness
than of risk taking. The ov erall model explains 34%
of the v ariance in portfolio success and serves as
the base model to test the hypothesized interaction
ef fects.
Models 2 to 5 include the interaction ef fects
between the management practices and the EO
dimension innov ati veness. W e mean-centered each
of the interacting v ariables and built product terms
that were subsequently introduced in the models.
Innov ati veness signif icantly moderated the associa-
tion of stakeholder in volv ement ( b = 0.07, P = 0.032),
b usiness case monitoring ( b = 0.08, P = 0.004), and
agility ( b = 0.08, P  < 0.027) with portfolio success,
respecti vely . Innov ativ eness, howe ver , did not sig-
nif icantly moderate the relationship between strate-
gic clarity and portfolio success ( b = 0.04, P = 0.201).
Models 6 to 9 include the interaction ef fects with
risk taking. W e did not find a signif icant interaction
with stakeholder in volv ement ( b = 0.05, P = 0.130).
Ho wev er , risk taking positi vely moderated the rela-
tionship between portfolio success and strategic clar -
ity ( b = 0.06, P = 0.032), b usiness case monitoring ( b
= 0.08, P = 0.002), and agility ( b = 0.07, P = 0.031).
Overall, the empirical data support all h ypotheses
except 1b and 2a.
W e use plots to illustrate the nature of the sig-
nif icant interactions. Instead of referring to sim-
ple slope plots, we apply mar ginal plots that sho w
the mar ginal ef fects of the independent v ariable for
each possible v alue of the moderator variable. This
allo ws an assessment over all moderator v alues and
the determination of the v alue of the moderator
v ariable, at which the marginal ef fects become sig-
nif icant or changes direction. Figure 2 shows all rel-
e vant mar ginal plots, the short-dashed lines represent
95%-conf idence interv als for the marginal ef fect.
The long-dashed lines sho w at which value the conf i-
dence interv al touches zero and the marginal ef fects
changes in signif icance. It can be seen, for example,
that already for a relati vely lo w v alue of approxi-
mately three on the innov ati veness scale (mean is
4.2), the ef fect of stakeholder in volv ement becomes
signif icant. Overall, the plots sho w that all in vesti-
gated portfolio management v ariables’ performance
ef fect disappears for firms with belo w-av erage v alues
in innov ati veness and risk taking. In the case of b usi-
ness case monitoring, the relationship with portfolio

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
10 R&D Management 2020
success e ven becomes neg ati ve for f irms with an
extremely lo w entrepreneurial orientation.
5. Discussion
The objecti ve of this study was to in vestigate,
whether and ho w a firm’ s strategic orientation le ver -
ages the performance impact of strategic inno vation
project portfolio management practices. Overall,
the results conf irm pre vious IPPM research that the
in vestig ated practices (i.e., stakeholder in volv ement,
strategic clarity , business case monitoring, and agil-
ity) are positi vely related to portfolio success. The
f indings are also in line with pre vious research that a
f irm’ s strategic orientation, specif ically its EO, is an
important antecedent to success (Rauch et al., 2009).
More precisely , innov ativ eness is directly related to
portfolio success, b ut risk taking is not. This demon-
strates the rele vance of EO for inno v ation portfolio
management. The most important finding, ho we ver ,
is that EO is an important contingency f actor for
the performance of strategic portfolio management
practices.
Results sho w that both components of EO hav e
positi ve moderating ef fects in three of four postulated
cases, meaning they both le verage the ef f icacy of port -
folio structuring and portfolio steering management
T able 3. Confirmatory f actor analysis for independent v ariables
Construct /Item Factor loading
Stakeholder in volvement (Cr onbach α = 0.86 )
All ke y stakeholders ha ve been engaged in de veloping the portfolio strategy or ha ve had the op-
portunity to influence it
0.92
All stakeholders ha ve been gi ven the opportunity to e xpress their views on the project portfolio
strategy
0.98
All ke y people engaged in portfolio projects kno w who decided their objectiv es 0.60
Strategic clarity ( α = 0.86)
W e hav e a written mission, long-term goals and strategies for implementation 0.80
Goals and strategies are communicated in our compan y 0.89
Our long-term competiti ve strate gy is clear and understandable 0.79
Business case monitoring ( α = 0.83)
W e check the business case for v alidity at specified points in time or e vents in the course of the
project and adjust if necessary
0.83
Once a project is approv ed a revie w of the objectiv es is rare. (rev ersed) 0.59
W e check on a regular basis for each b usiness case whether the necessary conditions are still valid 0.94
Agility ( α = 0.82)
W e quickly adapt our project portfolio to changing customer needs and competiti ve conditions 0.83
W e quickly adapt our project portfolio to changing resource situations 0.69
W e quickly adapt our project portfolio to ne w technologies 0.73
W e quickly adapt our project portfolio to changing strategic goals 0.71
Innov ativeness ( α = 0.72)
Through the introduction of innov ation we always try to be one step ahead of our competitors 0.63
W e rely more on radical (high degree of no velty) than on incremental (continuous impro vement)
innov ation
0.66
W e often break ne w ground (e.g., technologically) with our projects 0.81
Risk taking ( α = 0.71)
W e are not afraid to take risks when we ha ve to mak e significant portfolio decisions 0.67
W e frequently support projects, e ven if the e xpected market success is uncertain 0.57
W ithin our strategic boundaries we are prepared to tak e high risks 0.85
PM f ormalization ( α = 0.93)
Essential project decisions are made within clearly def ined portfolio meetings 0.70
Our project portfolio management process is di vided in clearly defined phases 0.90
Our process for project portfolio management is clearly specif ied 0.94
Overall, we e xecute our project portfolio management process in a well-structured way 0.94
7-Likert-type Scale; PM = Portfolio Management; χ 2 = 381.21 (df = 209; P < 0.00); RMSEA = 0.057; SRMR = 0.058; CFI = 0.95; n = 257.

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 11
practices. In case of the practice b usiness case mon -
itoring, the influences are signif icantly negati ve for
very lo w le vels of inno vati veness or risk taking and
become signif icantly positi ve for higher le vels. The
moderation ef fects are, therefore, substantial and EO’ s
component risk taking cannot be neglected, despite
its non-signif icant main ef fect. This is an import -
ant f inding for the use of strategic IPPM practices.
Business case monitoring appears to unfold its impact
only if the f irm is willing to in vest additional mone y
and to take more risks to seize promising opportuni -
ties. The benefits outlined in a b usiness case require a
moti vation to reach ambitious goals and to implement
solutions, once a proof-of-concept is gi ven.
The two non-signif icant moderation effects
deserve further e xplanation. W e deri ved se veral ar gu-
ments that EO should positi vely moderate strategic
clarity’ s ef fect b ut did not find signif icant support
for the innov ati veness dimension. In the frame work
by Locke and Latham (2002), goal clarity and goal
dif ficulty are considered as dri vers, which direct and
moti vate goal-oriented beha vior and the persistence
of ef forts. Howe ver , the effect of goal clarity is nearly
twice as high for simple tasks as for complex tasks
(Locke and Latham, 2002, p. 209). If we assume that
innov ati ve tasks are more dif f icult this implies that
we should expect a signif icant ne gative moderation
ef fect. Locke and Latham argue that in more comple x
tasks a lar ger v ariety of strategies are applied – and
that influence of goal setting on performance can only
work if ef fective task strategies are used. They mak e
a plea to assign learning goals for ef fectiv e task strat-
egies instead of performance goals. In the deri v ation
of our hypothesis we made a plea for learning prac-
tices, that is, implementing ideation pipelines to f ind
better task strategies, structuring inno vation f ields for
scoping strategic b uckets, and de velop visions, which
moti vate b ut leav e open a v ariety of task strategies.
W e argued that not goal clarity itself, b ut the pro-
cesses of de veloping sub-goals and learning goal-at-
tainment strategies are important. Ho we ver , we hav e
not measured this v ariable in our test – there is room
for future research to do this.
It is interesting that risk taking positi vely mod-
erates strategic clarity . A high strategic clarity also
implies that a strategy is focused. This may imply
a higher risk, particularly in innov ati ve situations,
where strategies are not v alidated by experience.
Implementing such strategies implies that the deci-
sion makers are willing to tak e a higher risk, because
they trust in their strate gic reasoning. The interac-
tion with innov ati veness is signif icantly positi ve. An
explanation might be that an innov ati ve task moti-
v ates stakeholders to cooperate because they see
more alternati ves that support a win-win-distrib ution
of expected returns.
T able 4. Descripti ves
V ariables (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
(1) Portfolio success 1.00
(2) Firm size (ln) −0.06 1.00
(3) Portfolio b udget (ln) 0.01 0.36 1.00
(4) PM formalization 0.24 0.08 0.05 1.00
(5) Stakeholder
in volv ement
0.43 −0.07 0.04 0.30 1.00
(6) Strategic clarity 0.26 0.00 0.09 0.11 0.14 1.00
(7) Business case
monitoring
0.25 0.06 0.10 0.20 0.14 0.28 1.00
(8) Agility 0.37 −0.09 −0.13 0.30 0.32 0.23 0.24 1.00
(9) Innov ati veness 0.30 −0.04 −0.11 −0.10 0.08 0.08 0.05 0.24 1.00
(10) Risk taking 0.17 −0.06 −0.01 −0.09 0.11 0.09 0.01 0.21 0.42 1.00
Mean 4.51 6.82 3.48 4.82 5.25 5.39 4.10 3.97 4.20 4.14
Standard de viation 0.83 1.97 1.67 1.66 1.23 1.27 1.51 1.18 1.05 1.14
Minimum 1.81 2.30 0.00 1.00 1.33 1.67 1.00 1.25 1.33 1.33
Maximum 6.60 11.54 7.31 7.00 7.00 7.00 7.00 6.50 6.67 7.00
Cronbach’ s alpha − − − 0.93 0.86 0.86 0.83 0.82 0.72 0.71
Composite reliability − − − 0.93 0.88 0.87 0.84 0.83 0.74 0.74
A verage v ariance
extracted
− − − 0.77 0.72 0.69 0.64 0.55 0.50 0.50
n =257; PM=portfolio management; all correlations larger than 0.12 are signif icant at the 5%-lev el.

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
12 R&D Management 2020
In contrast, the interaction of stakeholder in volv e-
ment and risk taking was not signif icant. W e assume
that f irms will more intensi vely in volv e market- and
technology-related stakeholders, if the y hav e created
trust with these partners, and their pre vious actions
ha ve been successful. If so, a willingness to in vest
more in a ne w joint activity w ould be dri ven by the
prospects of this acti vity , and innov ativ eness might
be a dri ver of v alue creation. The willingness to take
more risks may not be as decisi ve because the sharing
of resources and expected returns may already limit
expected g ains and losses – compared to an acti vity
that the f irm would do without a partner requiring
higher in vestments.
5.1. Implications
T o the best of our knowledge this is the f irst study
that in vestig ates strategic orientation as a contin-
gency f actor for IPPM practices. The results support
the proposition that portfolio management capabili-
ties aligned to the f irm’ s strategic orientation enable
T able 5. Results
Project portfolio success
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Contr ols
Firm size (ln) −0.02 −0.01 −0.02 −0.02 −0.02 −0.01 −0.02 −0.02 −0.02
Portfolio
b udget (ln)
0.01 0.02 0.02 0.01 0.01 0.02 0.02 0.03 0.01
PM
formalization
0.05 † 0.05 † 0.05 † 0.06* 0.04 0.05 † 0.05 † 0.06* 0.05
Independent variables
Stakeholder
in volv ement
0.21** 0.20** 0.20** 0.20** 0.21** 0.20** 0.20** 0.19** 0.21**
Strategic clarity 0.08* 0.07* 0.08* 0.08* 0.07* 0.07* 0.09* 0.08* 0.07*
Business case
monitoring
0.06* 0.06* 0.06* 0.05 0.06* 0.06 † 0.06* 0.05 † 0.07*
Agility 0.09* 0.10* 0.09* 0.09* 0.10* 0.10* 0.09* 0.11* 0.10*
Moderator s
Innov ati veness 0.20** 0.19** 0.19** 0.22** 0.20** 0.20** 0.20** 0.21** 0.20**
Risk taking −0.00 −0.00 −0.00 −0.01 −0.01 −0.00 −0.01 −0.03 −0.01
Interactions with inno vativeness
Stakeholder
in volv ement
0.07*
Strategic clarity 0.04
Business case
monitoring
0.08**
Agility 0.07*
Interactions with risk taking
Stakeholder
in volv ement
0.05
Strategic clarity 0.06*
Business case
monitoring
0.08**
Agility 0.07*
Constant 4.32** 4.26* 4.30** 4.31** 4.32** 4.29** 4.29** 4.26** 4.33**
R 2 0.34 0.35 0.35 0.36 0.35 0.35 0.35 0.37 0.35
R 2 (adjusted) 0.32 0.33 0.32 0.34 0.33 0.32 0.33 0.34 0.33
Delta R 2 0.01 0.00 0.02 0.01 0.00 0.01 0.03 0.01
F 14.24** 13.47** 13.01** 14.02** 13.51** 13.11** 13.47** 14.28** 13.47**
Hierarchical OLS regression; n  = 257; mean-centered variables; unstandardized re gression coeff icients are reported; PM = Portfolio
Management.
† P < 0.10 (two-sided), * P < 0.05 (two-sided), ** P < 0.01 (tw o-sided).

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 13
f irms to better implement their strategy and generate
competiti ve adv antage. This paper , therefore, inte-
grates and contrib utes to both literatures on portfolio
management and entrepreneurial orientation.
First, pre vious work on portfolio manage -
ment stresses that portfolio management practices
lar gely depend on the context and calls for more
work on contingenc y factors for ef fecti ve portfo -
lio management (Blomquist and Müller , 2006;
Martinsuo, 2013). In response, studies ha ve in ves -
tigated important contingenc y factors such portfo -
lio complexity (T eller et al., 2012; V oss and K ock,
2013; K opmann et al., 2015), portfolio size (V oss
and K ock, 2013; K opmann et al., 2015), the type of
projects (Müller et al., 2008; V oss and K ock, 2013),
or en vironmental turb ulence (Müller et al., 2008;
Petit, 2012; V oss and K ock, 2013; K opmann et al.,
2015). Although one of the most important objec -
ti ves in portfolio management is the implementa -
tion of strategies, surprisingly , no previous study
on portfolio management has in vestigated strate gic
contingency f actors. W e sho w that certain strategic
success factors of IPPM increase in importance for
f irms with a high EO. This means that although
f irms with a high EO do not necessarily in vest
more resources and ener gy to increase the intensity
of IPPM practices (EO and IPPM factors did not
strongly correlate), they can ef fecti vely le verage
Figure 2. Marginal plots of interaction ef fects (dotted lines are 95%-CI intervals).

© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
Ale xander K ock and Hans Geor g Gemünden
14 R&D Management 2020
their benef its. More importantly , as the marginal
plots in Figure 2 suggest, a certain threshold of EO
is necessary for IPPM practices to ha ve an y effect
at all. Kno wn success factors, may thus become
irrele vant for f irms with a conservati ve orientation.
This study , therefore, contributes to a better under -
standing of the boundary conditions for success -
ful innov ation project portfolio management and
sho ws that success factors can be further le veraged
by an appropriate strategic orientation. These find -
ings may inspire further research to identify other
le veraging factors such as or ganizational culture or
the coherence and f it between managerial practices.
Second, researchers of the EO-performance
relationship try to identify the conditions under
which EO contrib utes to firm performance. Based
on their meta-analysis, Rauch et al. (2009) call
for more research on possible moderators on the
EO-performance relationship. Our results also con -
trib ute to this stream of literature by introducing
a portfolio management perspecti ve to this f ield.
Certain project portfolio management practices bet -
ter support implementation of a more entrepreneur -
ially oriented strategy . Put differently , if a f irm stri ves
to adopt a more entrepreneurial posture, it is useful
to kno w which practices at the middle management
le vel are necessary to optimally complement this pos -
ture. Future research in vestig ating the performance
ef fects of strategic orientations should, therefore, also
consider the implementation-related aspects of strat -
egy , for example, practices of portfolio management.
This study has also some important managerial
implications. Portfolio managers need to be a ware
that there are no uni versally successful IPPM
practices, b ut that practices should fit the conte xt.
Managers need to consider the f irm’ s strategic
orientation when they try to f ind the optimal port -
folio gov ernance and align managerial practices
accordingly . In other words, they do not neces -
sarily ha ve to further intensify these practices to
increase success, b ut they can le verage the ef fec -
ti veness of IPPM practices by nurturing an EO.
V ice versa, it does not pay of f to in vest in IPPM
practices if the f irm’ s EO has not reached a certain
minimum threshold. Specif ically , if the firm has
a highly innov ati ve strate gic posture, the integra -
tion of portfolio stakeholders becomes one of the
most important success factors. As can be seen in
Figure 2, the relationship with portfolio success is
almost twice as strong for f irm’ s high in the inno -
v ativ eness dimension of EO as compared to f irms
of a verage inno vati veness posture. F or f irms with
a highly risk-af fine posture, a clearly formulated
strategy becomes e ven more rele v ant for portfolio
success. Generally , business case monitoring and
agility become more important for higher le vels of
EO. Ho wev er , b usiness case monitoring might not
be benef icial in all circumstances. W ith decreasing
EO in either dimension, the positi ve ef fect of b usi -
ness case monitoring diminishes and e ventually
e ven becomes neg ati ve. Since establishing b usiness
case control for all projects is connected with con -
siderable ef forts (K opmann et al., 2015), it might,
therefore, not be worth the ef fort in firms with a
relati vely lo w EO, and managers should concen -
trate their ef forts on other practices.
5.2. Limitations and avenues for futur e
r esear ch
There are a fe w limitations worth noting when
interpreting this study’ s f indings. First, the data are
cross-sectional and based on subjecti ve assessments
by ke y informants. While we tried to reduce com -
mon method bias using multiple informants for dif -
ferent constructs, we cannot prov e the causality with
cross-sectional models. In addition, although or study
in vestig ates EO as a contingency v ariable, a firm’ s
strategic orientation is not e xogenous and depends on
en vironmental conditions (Rosenb usch et al., 2013)
or e ven on past success. Pre vious studies on IPPM
ha ve in vestigated the rele v ance of en vironmental v ari -
ables such as turb ulence (e.g., K ock and Gemünden,
2016), b ut future research on IPPM could consider
the f it between EO and en vironmental conditions.
Second, our analysis concentrated on four central
managerial practices along the portfolio process:
in v olving portfolio stakeholders, formulating a clear
strategy , monitoring the portfolio using business
cases, and adapting the portfolio to changes. While
these constructs represent core strategic acti vities
in the portfolio formation and steering phases and
jointly explain a lar ge variance in portfolio suc -
cess, other non-process-related v ariables could be
considered. Future research could in vestig ate, for
example, ho w EO influences the ef fecti veness of
leadership, teamwork or competence de velopment
in innov ation project portfolio en vironments.
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© 2020 The Authors. R&D Management published by RADMA and John W iley & Sons Ltd
How entr epr eneurial orientation can lever ag e innovation
R&D Management 2020 17
W u, W .Y ., Chang, M.L., and Chen, C.W . (2008) Promoting
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Dr . Alexander K ock is a professor of technology and
innov ation management at the T echnische Univ ersität
Darmstadt, Germany . His research interests include
or ganizational issues of innov ation and project man -
agement, especially the management of project port -
folios, highly innov ati ve projects, the front end of
innov ation, and uni versity-industry collaboration.
His work is published in v arious journals, includ -
ing the Journal of Product Innov ation Management,
IEEE T ransactions on Engineering Management,
R&D Management, International Journal of Project
Management, and Project Management Journal.
Dr . Hans Georg Gemünden is a Professor emer -
itus of T echnology and Innov ation Management
of TU Berlin in the Faculty of Economics and
Management and a Professor emeritus of Project
Management at BI Norwegian Business School in
the Department of Leadership and Or ganization.
He holds a Diploma and a Doctorate in Business
Administration from the Uni versity of the Saarland
in Saarbrücken, and a Habilitation de gree and an
honorary doctorate from the Uni versity of Kiel.
He has recei ved se veral A wards of Excellence
for his research, which is published in refereed
journals including, among others Or ganization
Science, Research Policy , Journal of Product
Innov ation Management, Creati vity and Innov ation
Management, International Journal of Research
in Marketing, IEEE T ransactions on Engineering
Management, R&D Management, International
Journal of Project Management, and Project
Management Journal.

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