This paper aims to contribute to the field of public entrepreneurship by addressing the question of what can public sector organizations learn from corporate entrepreneurship to create a more motivating work environment. The study develops a scale developed to measure key organizational work environment factors that influence employee discretionary work effort behaviours in public organizations. In doing so, it uses concepts from Morris & Douglas (2005; 2004) and expands on the work of Eisenhauer (1995) and Douglas & Shepherd (2000) by further unpacking the perceived psychic benefits and costs of working conditions associated with employment. While the relevance of corporate entrepreneurship to the public sector has been questioned (Terry, 1993; Frederickson, 1997 for example), the need for public organizations to be more entrepreneurial is also strongly espoused (Bellone & Goerl, 1992; Osborne & Gaebler, 1994; Morris & Jones, 1999). Today public institutions are perhaps in greater need of corporate renewal than many large established private sector firms. In the face of tight fiscal constraints, rising public demands and tight labour market conditions, new ways of acquiring revenues, combining resources, retaining talented employees and achieving better outcomes within statutory constraints are needed. This study supports the view that valuable lessons can be learned from corporate entrepreneurship in assisting public organizations to be more responsive and to provide higher quality public services. To find ways of doing business better public organizations need to not only foster entrepreneurial behaviours amongst their employees but also more generally motivate greater discretionary work effort, that is voluntary effort above and beyond what is minimally required for the benefit of the organization. The importance of contextual factors in influencing entrepreneurial behaviour at both the organizational and individual levels is well documented in the entrepreneurship literature (e.g. Hornsby, Kuratko & Zahra, 2002; Amabile, 1996; Zahra, 1993; Covin & Slevin, 1991; Kuratko, Montagno & Hornsby, 1990; Kant, 1988). The study focuses on how to create an internal environment to better motivate employees to contribute greater levels of discretionary effort, which includes initiative and proactive behaviours. As its emphasis is on individual level behaviour within organisations, this study follows the approach to corporate entrepreneurship used by Kuratko, Hornby and others (1990, 1993, 2002) which uses the ''initiative from below'' definition of corporate entrepreneurship (Vesper, 1984) to develop a measure for an effective internal entrepreneurial corporate environment
