Decentralization, proactive innovation, and mediators: a comparative analysis of cross-level perceptional differences

This paper establishes how management can strengthen the proactive innovation of businessunits as well as how frontline employees can react to local environments through theidentification of the strategic actions by local firms. We examine the environment-strategyperformanceparadigm through a comparative analysis of a vertical and horizontal structureperspective tested by structural equation modelling, yielding a sample of 252 groups of 382dual informants interrelated as local managers and frontline employees from local insuranceservice firms. The findings indicate that perceived market uncertainty is influential indecentralizing management and in the proactive innovation of frontline employees. Consistent with management perception, employees consider resource commitment fromhubs and environmental scanning to be effective practices to facilitate proactive innovation. Frontline employees do not strongly consider tolerance in task conflict as a means toachieve proactive innovation, whereas their managers regard it as a method to encourage thefree expression of ideas. We use a comparative analysis to disclose the implied perceptionaldifferences in multilevel interactions for promoting organizational proactive innovationinstead of the monotonous method to test and interpret a theoretical model.