Grand challenges increasingly burden public leaders, requiring them to flexibly respond to the resulting uncertainty. We postulate that the effectuation principles that allow entrepreneurs to navigate such uncertainty also apply to public leaders, enabling them to creatively combine constrained resources on hand. However, to date, research has only limitedly focused on factors that foster public leaders’ flexible uncertainty coping routines. Drawing upon the creative cognition lens and promoting a cross-disciplinary approach, we theorize that effectual behavior in public leaders varies by the degree of creative, social, and practical imaginativeness, further contingent upon environmental dynamism, a major root of uncertainty. To test our theorizing, we conduct a survey of 324 public leaders throughout Germany, amid the COVID-19 pandemic. We find differences in effectual behavior pertaining to the degree of individuals’ social and practical imaginativeness and differing moderating effects of environmental dynamism on these two relationships, delineating a boundary condition to effectual behavior. We thereby build theory of public entrepreneurship explaining how entrepreneurial, effectual behavior is critical to the public sector. We conclude by unpacking the implications of our findings for practice in public sector organizations.
