When Trust and Shared Goals Spark Entrepreneurial Thinking

What is it about?

This study explores how trust and shared goals within organizations drive their entrepreneurial orientation (EO)—the willingness to innovate, take risks, and act proactively. It focuses on how internal knowledge sharing acts as a bridge between social relationships and entrepreneurial outcomes, and how this process depends on the degree of formalization in organizational structures. Using data from Canadian firms, the research shows that when employees trust each other and share aligned goals, they exchange knowledge more freely across departments, which in turn strengthens the organization’s entrepreneurial mindset. However, this positive chain of effects varies with the level of formalization—that is, how rigidly work procedures and rules are defined. In highly formalized settings, the benefits of trust and shared goals on knowledge exchange and entrepreneurship may be partially constrained. For practitioners, the study highlights the importance of creating trusting relationships and shared purpose to enhance knowledge sharing and foster entrepreneurial thinking. Managers should strive for a balance: enough structure to coordinate effectively, but not so much that it hinders collaboration and innovation.

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Photo by Sweet Life on Unsplash

Photo by Sweet Life on Unsplash

Why is it important?

This research is unique because it unpacks how two social elements—trust and goal alignment—fuel entrepreneurial behavior through knowledge exchange, while also accounting for the structural boundaries of the organization. It offers a nuanced understanding of how interpersonal and procedural forces interact to shape an entrepreneurial culture. Its timeliness lies in the growing recognition among Canadian organizations that innovation relies as much on social cohesion and shared intent as on strategy or resources. As companies navigate increasingly complex environments, this study provides valuable insight into how cultivating trust and common goals can transform ordinary workplaces into entrepreneurial, knowledge-rich communities.