ENTREPRENEURSHIP: Preliminary Related Literature and

Studies
Garcia, Carlito D. Fundamentals of Research and Research
Designing. Quezon City: Katha Publishing Comany, !nc., "##$.
Punch, Keith F. De%eloing &'ecti%e Research Proosal. (ondon:
)age Publications, "###.
Related )tudies
htt:**+++.sbaer.uca.edu*research*icsb*"##,*F-$-,*D-,-$.htm
htt:**+++.huizenga.no%a.edu*.ame*&ntrereneurial.htm
Components of Entrepreneurial Orientation
by Morris, Michael H.^Coombes, Susan^Schindehutte, Minet^Allen, Jeffrey
Journal of Leadership & Orani!ational Studies " Summer, #$$% "
)ource:
htt:**+++.entrereneur.com*trade.ournals*article*,/0#,1,,02".html
Antecedents and outcomes of entrepreneurial and maret orientations in a
non!pro"t conte#t: t$eoretical and empirical insi%$ts
3rganizations can be e4ected to %ary in terms of their entrereneurial
orientation 5&36. &ntrereneurial orientation has been concetualized as
ha%ing t$ree underlyin% components: inno&ati&eness' ris!tain%'
and proacti&eness 5Co%in and )le%in, ,7178 Kreiser, et al., "##"8 9iller,
,71$8 :i;lund and )heherd, "##06.
Inno&ati&eness refers to the see;ing of creati%e, unusual, or no%el solutions
to roblems and needs. <hese solutions ta;e the form of ne+ rocesses, as
+ell as ne+ roducts and ser%ices.
Ris!tain% in%ol%es a +illingness to commit signi=cant resources to
oortunities ha%ing a reasonable chance of costly failure. <hese ris;s are
calculated and manageable.
Proacti&eness is concerned +ith imlementation of something ne+, doing
+hat is necessary to anticiate and act uon an entrereneurial oortunity.
)uch ioneering beha%ior usually entails considerable erse%erance,
adatability, and tolerance of failure. >n entrereneurial e%ent 5i.e., a ne+
roduct, ser%ice, rocess, technology6 +ill %ary in terms of ho+ inno%ati%e,
ris;y and roacti%e it is, and any number of these e%ents is ossible in a
gi%en organization. >ccordingly, entrereneurshi can be said to occur in
%arying degrees and amounts 5Kreiser et al., "##"8 9orris and )e4ton, ,77/6.
(um;in and Dess 5,77/6 ha%e suggested &3 may ha%e t+o additional
comonents, cometiti%e aggressi%eness and autonomy. ?o+e%er, as
cometiti%e aggressi%eness concetually o%erlas +ith roacti%eness, and
autonomy is arguably a conte4tual %ariable that enables entrereneurial
beha%ior 5Kurat;o, et al., "##06, the current study concentrates on the three
comonents emhasized in the ma.ority of concetual and emirical studies.
<here is also some debate regarding +hether &3 is best aroached as a uni-
dimensional construct comrised of inno%ati%eness, ris;-ta;ing, and
roacti%eness, or a multidimensional construct +here the underlying
comonents %ary indeendently of one another. <he research has
consistently demonstrated signi=cant correlations among inno%ati%eness,
ris;-ta;ing and roacti%eness, but emirical e%idence of signi=cant
indeendent %ariance has also been roduced 5e.g., Kreiser, et al., "##"6. !t
+ould seem, ho+e%er, that the fundamental @uestion is concetual, as
oosed to emirical. &ntrereneurial orientation is a formati%e construct
+here some le%el of all three comonents is necessary for an organization to
be considered entrereneurial 5Co%in and )le%in, ,77,8 9iller, ,71$6. &ach
comonent is necessary, and, +hile they can oerate indeendently, each is
not suAcient +ithout the other t+o comonents. <o be entrereneurial is to
simultaneously demonstrate inno%ati%eness, ris;-ta;ing, and roacti%eness.
> series of studies ha%e reorted a ositi%e relationshi bet+een &3 and both
=nancial and non-=nancial measures of cororate erformance 5Co%in and
)le%in, ,7178 Da%is et al., ,77,8 Bahra et al., ,7778 :i;lund and )heherd,
"##06. <his relationshi aears to be most mar;ed under conditions of
en%ironmental turbulence. 3ther +or; has demonstrated an association
bet+een entrereneurial orientation and ho+ the =rm aroaches strategy
formulation 5>mit et al., "###8 Co%in, Green, and )le%in, "##/8 ?itt and Reed,
"###6, organizational structure 5Pettigre+ and Fenton, "##,6, cororate
culture 5Corn+all and Perlman, ,77#6, mar;eting hilosohy 5Ca+ors;i and
Kohli, ,77$6, information management systems 5)chafer, ,77#6, and design
of human resource management ractices 59orris and Cones, ,77$6. 3ne
inference of these studies is that the challenge to management lies in
designing +or; en%ironments that are consistent +ith and reinforce
entrereneurial beha%ior on the art of emloyees. Further, such
en%ironments in%ol%e an array of organizational %ariables--a number of +hich
are not +ell-understood. > case in oint is the =rmDs management control
system, the de facto urose of +hich is to inEuence the beha%ior of
emloyees as they erform their .obs.
Entrepreneurs$ip: (eanin%
)ource: htt:**en.+i;iedia.org*+i;i*&ntrereneurshi
Entrepreneurs$ip is the ractice of starting ne+ organizations or
re%italizing mature organizations, articularly ne+ businesses generally in
resonse to identi=ed oortunities. &ntrereneurshi is often a diAcult
underta;ing, as a %ast ma.ority of ne+ businesses fail. &ntrereneurial
acti%ities are substantially di'erent deending on the tye of organization
that is being started. &ntrereneurshi ranges in scale from solo ro.ects
5e%en in%ol%ing the entrereneur only art-time6 to ma.or underta;ings
creating many .ob oortunities. 9any Fhigh-ro=leF entrereneurial %entures
see; %enture caital or angel funding in order to raise caital to build the
business. >ngel in%estors generally see; returns of "#-$#G and more
e4tensi%e in%ol%ement in the business. 9any ;inds of organizations no+ e4ist
to suort +ould-be entrereneurs, including secialized go%ernment
agencies, business incubators, science ar;s, and some HG3s.
<he understanding of entrereneurshi o+es much to the +or; of economist
Coseh )chumeter and the >ustrian economists such as (ud+ig %on 9ises
and %on ?aye;. !n )chumeter 5,70#6, an entrereneur is a erson +ho is
+illing and able to con%ert a ne+ idea or in%ention into a successful
inno%ation. &ntrereneurshi forces Fcreati%e destructionF across mar;ets
and industries, simultaneously creating ne+ roducts and business models. !n
this +ay, creati%e destruction is largely resonsible for the dynamism of
industries and long-run economic gro+th. Desite )chumeterDs early "#th-
century contributions, the traditional microeconomic theory of economics has
had little room for entrereneurs in its theoretical frame+or;s 5instead
assuming that resources +ould =nd each other through a rice system6
For Fran; ?. Knight 5,7/I6 and Peter Druc;er 5,7I#6 entrereneurshi is
about ta;ing ris;. <he beha%ior of the entrereneur reEects a ;ind of erson
+illing to ut his or her career and =nancial security on the line and ta;e ris;s
in the name of an idea, sending much time as +ell as caital on an
uncertain %enture. Knight classi=ed three tyes of uncertainty.
Ris;, +hich is measurable statistically 5such as the robability of
dra+ing a red colour ball from a .ar containing 0 red balls and 0 +hite
balls6.
>mbiguity, +hich is hard to measure statistically 5such as the
robablity of dra+ing a red ball from a .ar containing 0 red balls but
+ith an un;no+n number of +hite balls6.
<rue Jncertainty or Knightian Jncertainty, +hich is imossible to
estimate or redict statistically 5such as the robability of dra+ing a
red ball from a .ar +hose number of red balls is un;no+n as +ell as the
number of other coloured balls6.
<he acts of entrereneurshi is often associated +ith true uncertainty,
articularly +hen it in%ol%es bringing something really no%el to the +orld,
+hose mar;et ne%er e4ists. Kefore !nternet, nobody ;ne+ the mar;et for
!nternet related businesses such as >mazon, Google, Lou<ube, Lahoo etc.
3nly after the !nternet emerged did eole begin to see oortunities and
mar;et in that technology. ?o+e%er, e%en if a mar;et already e4ists, letDs say
the mar;et for cola drin;s 5+hich has been created by Coca Cola6, there is no
guarantee that a mar;et e4ists for a articular ne+ layer in the cola
category. <he @uestion is: +hether a mar;et e4ists and if it e4ists for you.
C$aracteristics of Entrepreneurs
&ntrereneurs ha%e many of the same character traits as leaders. )imilarly to
the early great man theories of leadershi8 ho+e%er trait-based theories of
entrereneurshi are increasingly being called into @uestion. &ntrereneurs
are often contrasted +ith managers and administrators +ho are said to be
more methodical and less rone to ris;-ta;ing. )uch erson-centric models of
entrereneurshi ha%e sho+n to be of @uestionable %alidity, not least as
many real-life entrereneurs oerate in teams rather than as single
indi%iduals. )till, a %ast but no+ clearly dated literature studying the
entrereneurial ersonality found that certain traits seem to be associated
+ith entrereneurs:
Da%id 9cClelland 5,7/,6 described the entrereneur as rimarily
moti%ated by an o%er+helming need for achie%ement and strong urge
to build.
Collins and 9oore 5,7I#6 studied ,0# entrereneurs and concluded
that they are tough, ragmatic eole dri%en by needs of
indeendence and achie%ement. <hey seldom are +illing to submit to
authority.
Kird 5,77"6 sees entrereneurs as mercurial, that is, rone to insights,
brainstorms, decetions, ingeniousness and resourcefulness. they are
cunning, oortunistic, creati%e, and unsentimental.
Cooer, :oo, M Dun;elberg 5,7116 argue that entrereneurs e4hibit
e4treme otimism in their decision-ma;ing rocesses. !n a study of
"77N entrereneurs they reort that 1,G indicate their ersonal odds
of success as greater than I#G and a remar;able $$G seeing odds of
success of ,# out of ,#.
Kusenitz and Karney 5,77I6 claim entrereneurs are rone to
o%ercon=dence and o%er generalizations.
Cole 5,7076 found there are four tyes of entrereneur: the inno%ator,
the calculating in%entor, the o%er-otimistic romoter, and the
organization builder. <hese tyes are not related to the ersonality but
to the tye of oortunity the entrereneur faces.
Characteristics of Entrepreneurship
<he entrereneur has an enthusiastic %ision, the dri%ing force of an
enterrise.
<he entrereneurDs %ision is usually suorted by an interloc;ed
collection of seci=c ideas not a%ailable to the mar;etlace.
<he o%erall bluerint to realize the %ision is clear, ho+e%er details may
be incomlete, Ee4ible, and e%ol%ing.
<he entrereneur romotes the %ision +ith enthusiastic assion.
:ith ersistence and determination, the entrereneur de%elos
strategies to change the %ision into reality.
<he entrereneur ta;es the initial resonsibility to cause a %ision to
become a success.
&ntrereneurs ta;e rudent ris;s. <hey assess costs, mar;et*customer
needs and ersuade others to .oin and hel.
>n entrereneur is usually a ositi%e thin;er and a decision ma;er.
Contri)utions of Entrepreneurs
,. De%elo ne+ mar;ets. Jnder the modern concet of mar;eting,
mar;ets are eole +ho are +illing and able to satisfy their needs. !n
&conomics, this is called e'ecti%e demand. &ntrereneurs are
resourceful and creati%e. <hey can create customers or buyers. <his
ma;es entrereneurs di'erent from ordinary businessmen +ho only
erform traditional functions of management li;e lanning,
organization, and coordination.
". Disco%er ne+ sources of materials. &ntrereneurs are ne%er satis=ed
+ith traditional or e4isting sources of materials. Due to their inno%ati%e
nature, they ersist on disco%ering ne+ sources of materials to
imro%e their enterrises. !n business, those +ho can de%elo ne+
sources of materials en.oy a comarati%e ad%antage in terms of
suly, cost and @uality.
$. 9obilize caital resources. &ntrereneurs are the organizers and
coordinators of the ma.or factors of roduction, such as land labor and
caital. <hey roerly mi4 these factors of roduction to create goods
and ser%ice. Caital resources, from a laymanDs %ie+, refer to money.
?o+e%er, in economics, caital resources reresent machines,
buildings, and other hysical roducti%e resources. &ntrereneurs ha%e
initiati%e and self-con=dence in accumulating and mobilizing caital
resources for ne+ business or business e4ansion.
N. !ntroduce ne+ technologies, ne+ industries and ne+ roducts. >side
from being inno%ators and reasonable ris;-ta;ers, entrereneurs ta;e
ad%antage of business oortunities, and transform these into ro=ts.
)o, they introduce something ne+ or something di'erent. )uch
entrereneurial sirit has greatly contributed to the modernization of
economies. &%ery year, there are ne+ technologies and ne+ roducts.
>ll of these are intended to satisfy human needs in more con%enient
and leasant +ay.
0. Create emloyment. <he biggest emloyer is the ri%ate business
sector. 9illions of .obs are ro%ided by the factories, ser%ice industries,
agricultural enterrises, and the numerous small-scale businesses. For
instance, the suer deartment stores li;e )9, Jni+ide, Robinson and
others emloy thousands of +or;ers. (i;e+ise giant cororations li;e
)9C, >yala and )oriano grou of comanies are great .ob creators.
)uch massi%e emloyment has multilier and accelerator e'ects in the
+hole economy. 9ore .obs mean more incomes. <his increases demand
for goods and ser%ices. <his stimulates roduction. >gain, more
roduction re@uires more emloyment.
Advantages of Entrepreneurship
&%ery successful entrereneur brings about bene=ts not only for himself*
herself but for the municiality, region or country as a +hole. <he bene=ts
that can be deri%ed from entrereneurial acti%ities are as follo+s:
,. &normous ersonal =nancial gain
". )elf-emloyment, o'ering more .ob satisfaction and Ee4ibility of the
+or; force
$. &mloyment for others, often in better .obs
N. De%eloment of more industries, esecially in rural areas or regions
disad%antaged by economic changes, for e4amle due to globalisation
e'ects
0. &ncouragement of the rocessing of local materials into =nished goods
for domestic consumtion as +ell as for e4ort
/. !ncome generation and increased economic gro+th
I. ?ealthy cometition thus encourages higher @uality roducts
1. 9ore goods and ser%ices a%ailable
7. De%eloment of ne+ mar;ets
,#.Promotion of the use of modern technology in small-scale
manufacturing to enhance higher roducti%ity
,,.&ncouragement of more researches* studies and de%eloment of
modern machines and e@uiment for domestic consumtion
,".De%eloment of entrereneurial @ualities and attitudes among
otential entrereneurs to bring about signi=cant changes in the rural
areas
,$.Freedom from the deendency on the .obs o'ered by others
,N.<he ability to ha%e great accomlishments
,0.Reduction of the informal economy
,/.&migration of talent may be stoed by a better domestic
entrereneurshi climate
Entrepreneurs$ip: *$at +oes It Really (ean,
by Dr. >l%in Chan
)ource: htt:**+++.ce.com.h*
!ntroduction:
!n a +orld +here ideas dri%e economies, it is no +onder that inno%ation and
entrereneurshi are often seen as insearable bedfello+s. <he go%ernments
around the +orld are starting to realize that in order to sustain rogress and
imro%e a countryOs economy, the eole ha%e to be encouraged and trained
to thin; out-of-the-bo4 and be constantly de%eloing inno%ati%e roducts and
ser%ices. <he once feasible +ays of doing business are no longer guarantees
for future economic successP
!n resonse to this ine%itable change, some go%ernments are rethin;ing the
+ay the young are educated by infusing creati%e thin;ing and inno%ation in
their nationOs educational curriculum. !n the same %ein, they are utting
much emhasis on the need to train future entrereneurs through infusing
entrereneurshi comonents +ithin the educational system, esecially at
the tertiary le%el.
)ome countries ha%e ta;en this initiati%e to a higher le%el by introducing
entrereneurshi education at elementary schools and encouraging them to
be future entrereneurs +hen they are of age. !n a series of sur%ey funded by
Kau'man Center for &ntrereneurial (eadershi, it +as found that nearly
se%en out of ,# youths 5aged ,N-,76 +ere interested in becoming
entrereneurs.
Keing an entrereneur is no+ the choice of the ne+ generation as comared
to the referred career choices of yesteryears such as being a doctor, la+yer
or a =ghter ilot. !n a recent %isit to the bustling city of )hanghai in China, an
informal sur%ey +as carried out among Chinese youths by the author. <he
results of the sur%ey sho+ed that being an entrereneur, esecially in the
=eld of comuter and e-commerce, is ercei%ed as a QcoolO career and is an
asiration for many Chinese youths Prior to the Qoening uO of modern China,
being an entrereneur +as ercei%ed as the outcome of oneOs inability to
hold a good go%ernment .ob and those +ho dared to %enture, +ere often
scorned at by their eers. <imes ha%e indeed changed.
:ith this change in mindset and the relati%e ;no+ledge that entrereneurs
bring forth increased .ob creations, the a+areness and academic studies of
entrereneurshi ha%e also heightened. !n many tertiary institutes, many
courses of entrereneurshi and inno%ation are being de%eloed and o'ered
to cater to the increasing demand. <he term RentrereneurshiS has also
e%ol%ed +ith numerous %ariations. <he roliferation of .argons such as
netreneur, biotechreneur, technoreneur and multireneur are coined to
;ee u +ith the e%er-changing times and business conditions that surround
us.
!n %ie+ of these changes, it is imortant that the de=nition of
entrereneurshi be re=ned or rede=ned to enable its alication in this ",st
century. <o ut it succinctly, RGood science has to begin +ith good de=nitions
5Kygra%e M ?ofer, ,77,, ,$6.S :ithout the roer de=nition, it +ill be
laborious for olicyma;ers to de%elo successful rograms to inculcate
entrereneurial @ualities in their eole and organizations +ithin their
country.
<he aer +ill ro%ide a summary of the de=nitions of entrereneurshi
ro%ided by scholars in this sub.ect area. <he author +ill also e4and on one
of the de=nitions by Coseh )chumeter to create a better understanding of
the de=nition of the term RentrereneurshiS as alied in todayOs business
+orld.
&ntrereneurshi through the Lears:
!t +as disco%ered that the term QentrereneurshiO could be found from the
French %erb QentrerendeO in the t+elfth century though the meaning may not
be that alicable today. <his meaning of the +ord then +as to do something
+ithout any lin; to economic ro=ts, +hich is the antithesis of +hat
entrereneurshi is all about today. !t +as only in the early ,I##Os, +hen
French economist, Richard Cantillon, described an entrereneur as one +ho
bears ris;s by buying at certain rices and selling at uncertain rices
5Karreto, ,717, Casson ,71"6 +hich is robably closer to the term as alied
today.
!n the ,II/ thought-ro%o;ing boo; Q<he :ealth of HationsO, >dam )mith
e4lained clearly that it +as not the bene%olence of the ba;er but self-
interest that moti%ated him to ro%ide bread. From )mithOs standoint,
entrereneurs +ere the economic agents +ho transformed demand into
suly for ro=ts.
!n ,1N1, the famous economist Cohn )tuart 9ill described entrereneurshi as
the founding of a ri%ate enterrise. <his encomassed the ris; ta;ers, the
decision ma;ers, and the indi%iduals +ho desire +ealth by managing limited
resources to create ne+ business %entures.
3ne of the de=nitions that the author feels best e4emli=es entrereneurshi
+as coined by Coseh )chumeter 5,7$N6. ?e stated that the entrereneur is
one +ho alies Rinno%ationS +ithin the conte4t of the business to satisfy
unful=lled mar;et demand 5(iebenstein, ,7706. !n elaboration, he sa+ an
entrereneur as an inno%ator +ho imlements change +ithin mar;ets
through the carrying out of ne+ combinations. <he carrying out of ne+
combinations can ta;e se%eral forms:
<he introduction of a ne+ good or standard of @uality8
T <he introduction of a no%el method of roduction8
T <he oening of a ne+ mar;et8
T <he ac@uisition of a ne+ source of ne+ materials suly8 and
T <he carrying out of the ne+ organization in any industry.
<hough the term Qinno%ationO has di'erent meanings to di'erent eole,
se%eral +riters tended to see Rinno%ationS in the form of entrereneurshi as
one not of incremental change but @uantum change in the ne+ business
start-us and the goods*ser%ices that they ro%ide 5egs, Kygra%e, ,7708
Kygra%e M ?ofer, ,77,6.
!n the %ie+ of Druc;er 5,7106, he ercei%ed entrereneurshi as the creation
of a ne+ organization, regardless of its ability to sustain itself, let alone ma;e
a ro=t. <he notion of an indi%idual +ho starts a ne+ business %enture +ould
be suAcient for him*her to be labeled as an entrereneur. !t is this
characteristic that distinguishes entrereneurshi from the routine
management tas;s of allocating resources in an already established business
organization. <hough the de=nition tends to be some+hat simlistic in
nature, it =rmly attaches the nature of entrereneurial action +ith ris;-ta;ing
and the bearing of uncertainty by the indi%idual 5)+oboda, ,71$6
!n a Delhi study, Gartner 5,77#6 found eight themes e4ressed by the
articiants that constitute the nature of entrereneurshi. <hey +ere the
entrereneur, inno%ation, organization creation, creating %alue, ro=t or non-
ro=t, gro+th, uni@ueness, and the o+ner-manager. <he themes could be
seen as a deri%ati%e and e4ansion of )chumterOs earlier concet.
&4anding on )chumeterOs De=nition:
>fter digesting the numerous de=nitions of entrereneurshi, one +ould tend
to see a strong lin; bet+een these t+o terms: entrereneurshi and
inno%ation. !n retrosect, most of the de=nitions tended to be, to some
e4tent, a re-+or; and e4ansion of )chumeterOs de=nition of
entrereneurshi 5+hich is that of inno%ation being alied in a business
conte4t6.
>s de=ning the term of Qinno%ationO is highly debatable and +ould merit a
aer on its o+n, the author has thus, for con%enience, summarised the
de=nition of inno%ation. !nno%ation can be ercei%ed simly as the
transformation of creati%e ideas into useful alications by combining
resources in ne+ or unusual +ays to ro%ide %alue to society for or imro%ed
roducts, technology, or ser%ices.
!n the authorOs oinion, the diAculties of de=ning Rinno%ationS could be the
reason for the @uandary one =nds in attemting to arri%e at a clear-cut
de=nition of the term R &ntrereneurshiS.
<a;e for e4amle, if someone starts another run-of-the-mill hot dog stand in
the streets of He+ Lor;, +ill he termed as an entrereneurU >ccording to
Druc;erOs de=nition, he +ill be seen as one. ?o+e%er, if the abo%e de=nition
by )chumeter +as used as a guideline, the ans+er is robably QH3O.
:hyU <he core of the matter lies in +hat is so inno%ati%e about setting u
another hot-dog stand +hich are in abundance in He+ Lor;. 3n the contrary,
if he is the =rst one to start a stand selling hot-dogs +ith 3riental )+eet and
)our sauce toing8 he could be termed as an entrereneur 5e%en based on
)chumeterOs re@uirement6 as he has done +hat others ha%e not done
before. !n the conte4t of entrereneurshi, creati%ity and inno%ation are ;ey
oints in the +hole scheme of things.
!n this manner, by adding Rinno%ati%eS features to a roduct or ser%ices and
setting u a business based on these additional features to comete in the
e4isting mar;et, ne+ entrants may be able to gain this cometiti%e
ad%antage o%er e4isting mar;et layers.
!n the case of the hot-dog seller, it may be argued that his addition of
3riental )+eet and )our sauce toings may be seen as nondescrit. <his
runs in contrary to some scholarsO de=nition of entrereneurshi as re@uiring
@uantum changes in the roducts* ser%ices to be .usti=ed as being
entrereneurial 5Kygra%e, ,7108 Kygra%e M ?ofer, ,77,6.
Consistent +ith creating ne+ roducts for sale, someone +ho starts a
business by ro%iding a totally ne+ +ay of ser%ing his customers* clients is
considered to be entrereneurial too. <hough, it is often argued that there are
no real ne+ roducts or ser%ices in a case +here one does not loo; to the
ast roducts and ser%ices for ideas for imro%ements. <hus, the notion of
incremental imro%ements should be acceted as being inno%ati%e too.
!nno%ation in the business sense may not necessarily in%ol%e, in the hysical
sense, the introduction of a ne+ roduct or ser%ice. !t can be in the form of
+hat is commonly ;no+n as creati%e imitations. For e4amle, if an indi%idual
starts selling a roduct that is already common in his area or country, he +ill
not be seen as being entrereneurial. ?o+e%er, if he is the =rst to sell the
same roduct in a %irgin locale or to an untouched mar;et segment, he +ill
be seen as an entrereneur in his o+n rights.
<a;e 9uhammad Lunus, for e4amle. Lunus became an entrereneur +hen he
started a micro-loan rogram for the oor %illagers in a rural art of
Kangladesh named Grameen, +ith only J)V"/. <he loan +as di%ided among
N" %illagers to assist them to buy small items such as combs, scissors,
needles and other necessities to start their o+n home businesses. !n the ast
"" years, Grameen Kan; has gro+n +ith o%er V" billion loans granted. !t has
no+ become a model for se%eral micro-loan facilities.
WFrom the follo+ing e4amle, Lunus created ban;ing and lending facilities in
Grameen seci=cally for the oor %illagers. Kan;ing and lending money
acti%ities are not ne+ but Lunus +as the =rst to ro%ide such facilities in a
rural art of Kangladesh and that is de=nitely inno%ation and ris;-bearing on
his art as a social entrereneur. !n short, inno%ation need not arise mainly
from a ne+ roduct or ser%ice but it could be an old roduct or ser%ice =nding
a ne+ mar;et for enetration.
>n indi%idual could be termed as an entrereneur if he or she sells a roduct
or ser%ice using ne+ systems and* or mediums of mar;eting, distribution or
roduction methods as a basis for a ne+ business %enture. > good e4amle
+ill be Ce' Kezos, the founder of >mazon, the successful :eb-based
boo;store. ?e +as one of the =rst to sell boo;s on a large scale using an
online store and also atented the one-clic; system for online buying. <hough
selling boo;s is not an inno%ation in itself, Ce' Kezos +as inno%ati%e in the
use of the !nternet then as a %iable mar;eting and sales channel for selling
boo;s.
>nother e4amle from the =eld of e-commerce is )tuart );orman, the founder
of Reel.com. Reel.com is essentially one of the =rst cyber mo%ie store +ith a
%ery large in%entory of o%er a ,## ### %ideos. <hough setting a mo%ie store
+as re%olutionary then, Reel.com main distinction +as being ;no+n as the
=rst online store to e4and by oening an oXine store. <he founder felt that
by doing so, the online store could be an ad%ertisement for the oXine store
and %ice %ersa, thus strengthening this clic; and mortar business %enture- an
e4amle of creati%ity and inno%ation alied in a ro=table business conte4t.
Conclusion:
<his aer has started as an attemt to rede=ne the term of
entrereneurshi but ended u QudatingO the +heel, based on the de=nition
as roosed by )chumeter. <he aer e4anded on this inEuential +or; by
gi%ing e4amles to illustrate +hat inno%ation in entrereneurshi +as and
hoe that along the +ay, ne+ insights +ere unearthed in the study of
de=ning entrereneurshi.
!n summary, the author hoes that this aer +ould further encourage the
infusion of creati%e thin;ing and inno%ation +ithin the educational system to
nurture future entrereneurs +ith a cometiti%e edge. !n the authorOs %ie+,
the characteristics and caabilities to set u a ne+ business %enture based
on doing things that ha%e not done before should be encouraged. !nno%ation
needs to be the cornerstone of entrereneurshi as oosed to the mere
setting u of another ne+ enterrise +ithout imlementing changes or
adding features of imro%ements to the roducts and ser%ices ro%ided and*
or its business rocesses.
PGMA's Speech during the "Go Negosyo Summit of the Philippine Center for
Entrepreneurship" Every Nation Bldg., Fort Bonifacio Global City Taguig City, MM (23 February
2006)
)ource: http&''(((.ops.o).ph'speeches#$$*'speech+#$$*,feb#-.htm
<han; you, )ecretary >rtee La, Presidential >d%iser on Cob Creation.
>nd before ! greet our other distinguished ersonalities here in the latform, !
+ould li;e to introduce the role of >rtee La. !f you remember in my inaugural
address in "##N +hen ! tal;ed about my ,#-oint ro-oor, ro- gro+th and
ro-eace rogram, number one item in the ten oints +as to create / to ,#
million .obs by de%eloing $ million entrereneurs and " million hectares of
land for agri-business. >nd thatDs the reason +hy +hene%er Coey Concecion
in%ites me to an entrereneur summit li;e this ! accet the in%itation because
itDs the number one riority of our administration.
!Dd li;e to congratulate therefore Coey for utting this together and of course
to greet our %ery distinguished trustees +ho are here on stage, not only are
they trustees of the Philiine Center for &ntrereneurshi but they are also
either on their o+n or their families are models and insiration for all +ould-
be entrereneurs in the country. <han; you %ery much for being role models
for us.
<his summit on entrereneurshi symbolizes the commitment of the Filiino
eole to the economy. >nd !Dm glad that youDre holding your summit on this
day, it becomes a art of our celebration of &D)> ,. !ndeed, +e need a ne+
form of Peole Po+er to dri%e entrereneurshi and that ne+ form of eole
o+er is the inno%ati%e use of resources to build businesses and ro%ide .obs
-- that is the de=nition actually of entrereneurshi.
<here is great atriotism in setting u businesses that gi%e .obs and feed the
stomachs and sirit of our countrymen and their families. Filiino
entrereneurs are atriots, those here on the stage and those here on the
Eoor, atriots +ho belie%e in our country and eole and +ho in%est in our
nationDs future.
&arlier +hen ! +as gi%en the t-shirt and it said, Ddo you ha%e the &-factorUD
that means, do you ha%e the entrereneur factor because itDs li;e the D4-
factorD -- itDs something e4tra.
>nd +hat is the &-factorU -ein% an entrepreneur is a sill in$erent in
t$e .ilipino/ 0ust as .ilipinos are natural musicians' .ilipinos are
natural entrepreneurs/ (ost .ilipinos do $a&e t$at E!factor. >nd !Dm
%ery hay that Coey has ut together a mechanism to be able to bring out
that &-factor to its greatest otential and reality.
<he Filiinos are creati%e and erse%ering and thatDs art of the &-factor.
)uccessful entrereneurs are ;no+n for their creati%ity and the Filiinos are
;no+n for our creati%ity. <hatDs +hy +e e4cel in music, +e e4cel in dance, +e
e4cel in the arts, +e e4cel in soft+are de%eloment because of our creati%ity.
Kut Coey tal;ed about something else in addition to inno%ati%eness and
creati%eness, one more trait that ;ees entrereneurs going and that is
otimism. >nd !Dm glad that Coey has chosen that as the theme for this
morningDs session.
!tDs not only Coey, the entrereneurshi ad%ocate, that tells us: be otimistic.
Ke not afraid, Cesus Christ told his disciles.
<his morning, ! came across that hrase because ! +as %ery hay reEecting
on this ne+ testament e4hortation on the occasion of something %ery %ery
imortant haening to us as Catholics in the Philiines -- the choice of
>rchbisho Rosales as cardinal. >nd though it is not e4actly... >nd though itDs
not e4actly an integral art of the theme of this session, let me ta;e this
oortunity to be .oyful as a catholic and to be otimistic as a catholic and to
celebrate our ne+ cardinal.
:e share the .oy and ride of the entire Filiino catholic community on this
e%ent. Cardinal Rosales deser%es this honor for the leadershi he has sho+n
in sreading and uholding the faith and in guiding our eole along the ath
of moral and siritual enlightenment. !t +as an ausicious day that +e got
the message about his naming, because on this ausicious day, +e reminisce
the call of his redecessor, the late Caime Cardinal )in, for eole o+er in
the shining moments of &D)>.
<+enty years ago and today, +e celebrate the guiding role of the church in
defending +hat is good and right for the eole. 3ur solidarity +ith Cardinal
Rosales +ill be unsullied in the =ght against o%erty and in building a God-
centered society.
Gro+ing the economy through entrereneurshi and steadily denting o%erty
+ill hel us to o%ercome di%isi%e olitics and indeed build a God-centered
society.
> Central Kan; oll late last +ee; found e4ecuti%es more bullish on the
outloo; for their comanies than at any eriod since that Central Kan; sur%ey
began -- that is otimistic, that is being not afraid.
! remember +hen CoeyDs father, Coe Concecion +as my boss in the
Deartment of <rade and !ndustry, he +ould al+ays tell us: Dbelie%ing you can
do it is half being able to do itD -- that is otimism. >nd !D%e ne%er forgotten
that e4hortation through the many trying times !D%e had as a ublic ser%ant.
>nd so on this day, on the occasion of the "#th >nni%ersary of &D)>, on the
occasion of our celebrating otimism as an inherent art of that &-factor, let
us resol%e to not let olitic;ing or destabilization ut do+n or destroy +hat
+e ha%e here before us -- the Filiino sirit of enterrise.
>nother thing ! use to remember from +hat )ecretary Concecion use to tell
us, and +e ut it all o%er the D<! establishments so that +e could al+ays
remember, he +ould say: Dyes, the Filiino can.D -- that is otimism, that is
entrereneurshi.
9abuhay ang Piliino entrereneurP
9araming salamat sa inyong lahat.
>rtee La as; me to announce to you that ! ha%e instructed him, as my
residential ad%iser on .ob creation, to coordinate +ith the (and Kan; and the
DKP to set aside an initial amount of 0# million esos to ser%e as an
incubation fund +ith softer rates and longer term ro%isions for the =nancing
use of deser%ing and romising start-u business lan +inners that the
Philiine Center for &ntrereneurshi +ill endorse and %et during the
business start-u eriod.
Ke not afraid, our ne+ entrereneurs.
9araming salamat muli.
PROACTI1ENESS AN+ CO(PETITI1E A22RESSI1ENESS
)ource& http&''(((.babson.edu'entrep'fer'papers.%'lump/in'lum-.htm
<he concet of an entrereneurial orientation 5&36 to e4lain the mind set of
=rms engaged in ursuing ne+ %entures or underta;ing organizational
rene+al ro%ides a useful frame+or; for researching entrereneurial
endea%ors. Recently, (um;in and Dess 5,77/6 noted a distinction bet+een
entrereneurial orientation and entrereneurshi by suggesting that &3
reresents ;ey entrereneurial rocesses that ans+er the @uestion of ho+
ne+ %entures are underta;en, +hereas the term entrereneurshi refers to
the content of entrereneurial decisions by addressing +hat is underta;en.
<he salient dimensions of an &3 emerge from a re%ie+ of the
entrereneurshi literature 5e.g., Kanter, ,71$8 9iller, ,71$8 9ac9illan M Day,
,71I6. <hese attributes and acti%ities are catured in a de=nition roosed
by 9iller 5,71$6 +hich states that an entrepreneurial "rm is one t$at
3en%a%es in product maret inno&ation' undertaes some4$at risy
&entures and is "rst to come up 4it$ 5proacti&e6 inno&ations'
)eatin% competitors to t$e punc$F 5,71$: II#6. Kuilding on rior
literature and 9illerDs de=nition, numerous scholars ha%e used the term
Fentrereneurial orientationF to describe a fairly consistent set of related
acti%ities or rocesses 5e.g., Ginsberg, ,7108 9iles M >rnold, ,77,8 9orris M
Paul, ,71I8 )mart M Conant, ,77N6. >lthough 9illerDs 5,71$6 de=nition can be
bro;en do+n into four dimensionsYinno%ati%eness, ris; ta;ing,
roacti%eness, and cometiti%e aggressi%enessYmany researchers ha%e
identi=ed and tested only three of the dimensions of &3: inno%ati%eness, ris;
ta;ing, roacti%eness. !n some entrereneurial orientation studies, the notion
of cometiti%e aggressi%eness has been o%erloo;ed8 other research has
laced rimary emhasis on the cometiti%e aggressi%eness dimension of &3
5e.g., Dean, <hibodeau4, Keyerlein, &brahimi M 9olina, ,77$6.
> fe+ studies ha%e addressed cometiti%e aggressi%eness by e@uating it +ith
roacti%eness. For e4amle, Co%in and )le%in 5,717, ,77,6 suggested that
roacti%e =rms comete aggressi%ely +ith other =rms. !n describing their
entrereneurial strategic osture scale 5,7176 these authors cite three of
9illerDs 5,71$6 factorsYinno%ati%eness, roacti%eness and ris; ta;ingYand
describe them as follo+s:
an entrereneurial strategic osture is characterized by fre@uent and
e4tensi%e technological and roduct inno%ation, an aggressi%e cometiti%e
orientation, and a strong ris;Zta;ing roensity by to management 5,717:
I7, emhasis added6
> similar trend is e%ident in their ,77, aer +hich describes an
entrereneurial osture as a =rmDs Froensity to aggressi%ely and
roacti%ely comete +ith industry ri%alsF 5,77,: ,#6. !n fact, the $Zitem
roacti%eness scale used in the Co%in and )le%in 5,7176 study is identical to
the Fcometiti%e aggressi%enessF scale used in a ,77# study by Co%in and
Co%in. >lthough a roacti%e stance relati%e to cometitors may be %ital to
entrereneurial success, Co%in and )le%inDs aroach seems to ha%e
minimized imortant di'erences bet+een cometiti%e aggressi%eness and
roacti%eness.
:e suggest that roacti%eness and cometiti%e aggressi%eness are distinct
concets +ith uni@ue de=nitions. Proacti&eness su%%ests a for4ard7
looin% perspecti&e c$aracteristic of a maretplace leader t$at $as
t$e foresi%$t to act in anticipation of future demand. <his is consistent
+ith 9iller and FriesenDs 5,7I16 %ie+ of proacti&eness as s$apin% t$e
en&ironment )y introducin% ne4 products and tec$nolo%ies, and +ith
[en;atramanDs 5,7176 de=nition of proacti&eness as 3seein% ne4
opportunities 4$ic$ may or may not )e related to t$e present line of
operations' introduction of ne4 products and )rands a$ead of
competition, strate%ically eliminatin% operations 4$ic$ are in t$e
mature or declinin% sta%es of life cycleF 5[en;atraman, ,717: 7N76.
Cometiti%e aggressi%eness, in contrast, refers to the intensity of a =rmDs
e'orts to outerform industry ri%als. !t is characterized by a strong o'ensi%e
osture directed at o%ercoming cometitors and may be @uite reacti%e as
+hen a =rm aggressi%ely enters a mar;et that a ri%al has identi=ed. <his is
accomlished by, for e4amle, setting ambitious mar;et share goals and
ta;ing bold stes to achie%e them such as cutting rices and sacri=cing
ro=tability 5[en;atraman, ,7176, or sending aggressi%ely comared to
cometitors on mar;eting, roduct ser%ice and @uality, or manufacturing
caacity 59ac9illan M Day, ,71I6.
Kecause of these distinctions, +e suggest that proacti&eness is a
response to opportunities 4$ereas competiti&e a%%ressi&eness is a
response to t$reats. <hat is, proacti&eness refers to $o4 "rms relate
to maret opportunities )y sei8in% initiati&e and leadin% in t$e
maretplace8 cometiti%e aggressi%eness refers to ho+ =rms react to
cometiti%e trends and demands that already e4ist in the mar;etlace.
<hese distinct roles are noted by Chen and ?ambric; +ho suggest that Fa
=rm should be both roacti%e and resonsi%e in its en%ironment in terms of
technology and inno%ation, cometition, customers and so forth.
Proacti&eness in&ol&es tain% t$e initiati&e in an e9ort to s$ape t$e
en&ironment to one6s o4n ad&anta%e8 resonsi%eness in%ol%es being
adati%e to cometitorsD challengesF 5,770: N0I6. Proacti%eness and
cometiti%e aggressi%eness are thus searate dimensions of an
entrereneurial orientation that may each contribute uni@uely to
entrereneurial success. <herefore, +e suggest:
?yothesis ,: Proacti%eness and cometiti%e aggressi%eness are discrete
dimensions of an entrereneurial orientation.
Chen and ?ambric;Ds 5,7706 descrition suggests that successful =rms need
to be both roacti%e and cometiti%ely aggressi%e. Humerous
entrereneurshi scholars ha%e suggested that all the dimensions of an &3
are resent simultaneously in an entrereneurial =rm. <hat is, rior
researchers ha%e argued that the dimensions of an entrereneurial
orientation coZ%ary, and that the &3 construct is unidimensional 5e.g., Co%in
M )le%in, ,7176. >lthough it is @uite ossible that a =rm +ould e4hibit both
cometiti%e aggressi%eness and roacti%eness, +e suggest that these t+o
dimensions may %ary indeendently of each other in a gi%en conte4t. !n
other +ords, a =rm may e4hibit both cometiti%e aggressi%eness and
roacti%eness, but their resence may %ary in strength or change o%er time.
<his suggests that =rms do not necessarily need to be both cometiti%ely
aggressi%e and roacti%e in order to be successful. <hus, the e4tent to +hich
cometiti%e aggressi%eness is related to erformance +ill be indeendent of
the e4tent to +hich roacti%eness is related to erformance. <herefore:
?yothesis ": Proacti%eness and cometiti%e aggressi%eness are
di'erentially related to erformance.
<he ne4t section reorts the research methodology. ?ere, the research
instrumentation, samle, and data analysis +ill be addressed.
T$e Conte#t: Entrepreneurs$ip in t$e P$ilippines
by (etOs G3 Foundation
)ource: htt:**+++.letsgo.com.h*+hat-+e-do*the-conte4t-entrereneurshi-
in-the-hiliines
&ntrereneurs are the bac;bone of our economy. <he Philiines is an
entrereneurial country. )mall and medium-sized enterrises 5)9&6, including
micro-enterrises, account for 77 ercent of all business establishments and
/# ercent of the e4orting =rms in the Philiines. >ccording to the
Deartment of <rade and !ndustry, )9&Os currently emloy about 00 ercent
of the Philiine labor force and contribute $# ercent to total domestic sales
%olume.
>mong the current roblems that Filiino entrereneurs encounter today are
the inade@uate access to technology, =nancing caital, mar;eting ad%ice and
logistical roblems in setting u and maintaining their cometiti%eness in
their community. For this reason, the Philiine go%ernment has identi=ed the
need to foster entrereneurial sirit to .umstart our lagging economy.
<o further emhasize the imortance of de%eloing entrereneurshi
education, a recent study by the Center for >sia Paci=c )tudies re%eals, Rout
of e%ery ,## children enrolled e%ery year, // +ill comlete elementary
education, N" +ill =nish high school and only ,N +ill earn a college degree.S >
study by )mart Communications adds, S only I.IG of graduates get
emloyedS. <his means that out of ,## children that goes to school, only one
+ill end u getting a .ob.
<his has led (&<O) G3 to as; - :hat haens to the restU )tudents +ho do not
graduate or cannot =nd decent emloyment in the country usually fall into
the tra of .oining the unemloyed oulation, or resort to dealing +ith illegal
drugs and crime as a means of li%ing. <he scarcity of .obs has further
contributed to the e4odus of s;illed +or;ers abroad, +here ",### Filiinos
lea%e the country e%eryday to see; higher income and greater oortunities
in career ad%ancement.
:ith this in mind, (&<O) G3 belie%es that a %iable solution to o%ercome these
challenges today is by romoting &ntrereneurshi and gi%ing Filiinos the
roer ;no+ledge and tools in start their o+n businesses.
R&(><&D F3R&!GH )<JDL
From: htt:**+++.sbaer.uca.edu*research*icsb*"##,*F-$-,*D-,-$.htm
Where are the entrepreneurs ! Ten Country Co"parison of the #i"ensions of the
Entrepreneurial $rientations or $%ner&Managers in '"all and Mediu" Enterprises
(. Mar) Weaver * +niversity of !laba"a
,at -. #ic)son . Georgia Tech +niversity
/ouis Marino*+niversity of !laba"a
/eslie #avies*+niversity of /uton
W.E. #uring . +niversity of T%ente
Fran) -oy* +niversity of Te0as*El ,aso
Claes -ult"an . $rebro +niversity
#ianne Wingha" . Edith Co%an +niversity
Brian Gibson . +niversity of Ne%castle
Charal. (. (anellopoulos . +niversity of ,ireaus
Fran) Martin .+niversity of 'tirling
'tefan ,a)uls)i
,atric) (reiser . +niversity of !laba"a
'ub"itted to 1 23
th
4nternational Council for '"all Business
01203404 A5S26AC2
EXTENDED ABSTRACT ONLY- FINAL PAPER TO FOLLOW
INTRODUCTION
6esearchers in the small and medium enterprise field are constantly as/ed
(here are the most entrepreneurial firms7 Are there differences in the
entrepreneurial beha)iors bet(een different si!e firms7 4o firms enaed in
international acti)ities beha)e differently than domestic firms7 4oes e8uity
o(nership chane the entrepreneurial beha)ior of o(ners'manaers7 2hese
are only some of the 8uestions as/ed by consultants, practitioners and public
officials but are a startin point that (e can address by use of the
entrepreneurial orientation scale
2he results reported here are based on the responses from 9:;- firms in a
multi country study of small and medium enterprises <SM0s=. 2he study uses
the entrepreneurial orientation scale that has been adapted by numerous
researchers in the last 9; years and has pro)en to be remar/ably useful in
multiple countries. Lin/s to performance, stratey formation, mar/etin
orientation, employee satisfaction and strateic alliance formation ha)e been
cited by researchers <>ahra, 9..-, Co)in and Sle)in, 9.:.,?niht, 9..%,
4ees, Lump/in and Co)in, 9..%, Morris and @aul , 9.:%, 5echerer and
Maurer, 9..%, 4oh, #$$$, ?niht , #$$$, @earce, ?ramer, and 6obbins, 9..%
Slater and 3ar)er, #$$$, and 4ic/son and Aea)er, 9..%=. Bn addition, a lin/
to the en)ironmental conteCt, (hich in our case is the country of oriin, has
been demonstrated < Lump/in and 4ees,9..%D >ahra, 9..:D Co)in and Miles,
9...=.
2he entrepreneurial orientation <0O= construct has played a fundamental role
in the entrepreneurship and strateic manaement literature. Co)in and Sle)in
<9.::= arued that entrepreneurial orientation Eis demonstrated by the eCtent
to (hich top manaers are inclined to ta/e business+related ris/s <the ris/+
ta/in dimension=, to fa)or chane and inno)ation in order to obtain a
competiti)e ad)antae for their firm <the inno)ation dimension=, and to
compete aressi)ely (ith other firms <the proacti)eness dimension=F <Co)in
and Sle)in& #9:=.
6esearch indicates that firms scorin hihly on the three dimensions of 0O
achie)ed superior performance compared to firms that scored lo(er on these
dimensions <e.., >ahra, 9..-D 4ess, Lump/in, and Co)in, 9..%=.
2he measure of 0O most commonly employed in these )arious studies (as de)eloped by
Co)in and Sle)in <9.:.=, and (as based on the earlier (or/ of ?hand(alla <9.%%= and
Miller and Griesen <9.:#=. 2his scale consisted of three dimensions, inno)ation,
proacti)eness, and ris/ ta/in, (hich are used to assess the entrepreneurial nature of a
firm. Co)in and Sle)inHs measure of 0O has been found to possess hih le)els of
reliability and )alidity in numerous studies <e.., 5arriner and 5luedorn, 9...D 5echerer
and Maurer, 9..%D, 4ic/son and Aea)er, 9..%D 3aman and Sle)in, 9..-D Steensma,
Marino, Aea)er, and 4ic/son, #$$$=. Miller and GriesenHs <9.:-= oriinal
conceptuali!ation of entrepreneurial orientation, li/e Co)in and Sle)inHs measure <9.::=,
(as comprised of three dimensions& inno)ation, ris/ ta/in and proacti)ness.
2he research 8uestions posed in this study include the follo(in&
9. Ahich countries eChibit the hihest entrepreneurial orientation based on the three
dimensions of proacti)eness, inno)ati)eness, and ris/ ta/in7
2. Are there differences by si!e of firm in the three dimensions of 0O7
3. Are there differences by internationali!ation in the three dimensions of 0O7
4. Are there differences in the o(nership of e8uity for the three dimensions of 0O7
2he preliminary results sho( that there are differences in the three dimensions of
entrepreneurial orientation across the countries. Bn addition, differences based on the si!e
of firms and the percentae of e8uity o(ned are sho(n. 2ables for preliminary analysis
are attached t the end of the teCt to indicate the types of analysis to be done.

Limitations
As (ith any research, there (ere potential limitations to this study. 2he most
sinificant limitation (as the collection of data from only one indi)idual in each
orani!ation. 2his presented t(o possible problems. Girst, there (as the issue of
common method )ariance. Ahen data is collected from the same source, Eany defect in
that source contaminates both measures, presumably in the same fashion and in the same
directionF <@odsa/off and Oran, 9.:*& ;--=. 2he second potential problem (ith usin
sinle source information is that the o(ner'eneral manaer of a firm may not accurately
percei)e the strateies of the orani!ation. Ho(e)er, Chandler and Han/s <9..-= found
that self+reports from the o(ner'eneral manaer of small firms (ere hihly correlated
(ith archi)al data. 2heir research pro)ided Eadditional e)idence for the accuracy and
reliability of founder+reported performance dataF <Chandler and Han/s, 9..-& I$;=.
Lyon, Lump/in, and 4ess <#$$$= arued Eresearch usin sinle+respondent self+reports
can be an appropriate and necessary means of operationali!in /ey constructs (hen
carefully performedF <Lyon, Lump/in, and 4ess, #$$$& :=.
Another potential limitation to this study (as that it only e)aluated three+
dimensional models of entrepreneurial orientation because of the factor analysis results
for the 99 samples.
Future Research Directions and Conclusion
2he results of this study encourae se)eral directions of future research. 6esearch
is also suested on the lin/ bet(een the )arious dimensions of entrepreneurial
orientation and firm performance. Since the results of this study lend support to the
independence of these three dimensions, studies comparin the lin/ different
confiurations of entrepreneurial orientation and performance (ould help assess (hich
dimensions of 0O are most important in particular situations. Bn particular, studies
assessin the interaction bet(een the three dimensions of 0O and firm performance in the
multi country'en)ironmental settins (ould be useful
Another eCtension of this research is to compare the le)el of entrepreneurial
orientation to the correspondin score on HofstedeHs <9.:I= cultural dimensions for each
country. 2he measures of uncertainty a)oidance, masculinity, and indi)idualism (ould
be ideal for such research. Since one of the dimensions of the 0O measure is ris/+ta/in,
uncertainty a)oidance (ould be particularly useful. Hofstede claims that cultures hih on
uncertainty a)oidance are typically less (illin to ta/e ris/s. Guture study is also
suested comparin the results of this study across more nations. Steen/amp and
5aumartner <9..:= suested a frame(or/ for testin the cross+national e8ui)alence of
constructs. 2his approach could be used to test data sets from )arious countries to see if
the entrepreneurial orientation measure performs similarly across cultures.
Bn conclusion, the results of this study clearly demonstrate that differences do
eCist in the 0O constructs across countries and these should be considered in de)elopin
public policy for the SM0 sector. 4ifferences based on si!e of the firm also may be one
(ay to address the issue of differentiatin bet(een small business o(ners and ro(th
oriented, Job creatin EentrepreneursF Bt is hoped that this study represents a necessary
step in clarifyin issues related to the entrepreneurial orientation construct and that it (ill
help build a frame(or/ for future research on the topic.
R&(><&D F3R&!GH )<JDL
From: htt:**+++.huizenga.no%a.edu*.ame*&ntrereneurial.htm
Entrepreneurial Orientation, Organiational Culture, and !irm Performance" An Empirical
Study in the #an$ing %ndustry
?en Chad(ic/, 3icholls State Kni)ersity
2im 5arnett, Louisiana 2ech Kni)ersity
Sean 4(yer, Louisiana 2ech Kni)ersity
E&ecuti'e Summary
The ob5ective of this study is to further the e0tant research on fir"*level entrepreneurship by
e"pirically assessing the relationships bet%een 678 entrepreneurial orientation and fir" perfor"ance,
and 698 organi:ational culture and entrepreneurial orientation. To test our hypotheses, a self*report
;uestionnaire %as "ailed to a national sa"ple of 9,7<< ban) presidents. ! total of =>= co"pleted
and usable ;uestionnaires %ere returned. !fter controlling for ban) si:e and age, no significant
relationship %as found bet%een entrepreneurial orientation and any of the three "easures of fir"
perfor"ance. -o%ever, there is e"pirical support for the theoretical lin) bet%een organi:ational
culture and entrepreneurial orientation.
Fir"*level entrepreneurship, and especially its lin) to perfor"ance, has, and continues to
generate high levels of interest a"ong scholars and practitioners. Much of this attention results
fro" the perception that fir"s %hich engage in relatively high levels of ris)y, proactive, and
innovative behaviors can effectively develop, "aintain, and&or enhance organi:ational
co"petitiveness and perfor"ance 6Covin ? Miles, 7@@@8. Barrett and Weinstein 67@@@8 suggest
that the proliferation of research has enriched the field in ter"s of i"proved conceptuali:ations,
"odeling, and e"pirical study. -o%ever, the abundance of both anecdotal and e"pirical
evidence espousing a positive relationship bet%een entrepreneurship and perfor"ance has led
"any to vie% entrepreneurship as inherently beneficial. 'uch beliefs "ay have resulted in
nu"erous "anagers e0periencing pressure fro" sta)eholders to engage in higher levels of
entrepreneurial activities 6Wi)lund, 7@@@8, possibly to the detri"ent of the fir".
While "uch of the published research in the field does support a positive relationship
bet%een entrepreneurial orientation and fir" perfor"ance, additional e"pirical evidence is needed
before researchers or practitioners should, %ith confidence, encourage %holesale adoption of an
entrepreneurial orientation 6Wi)lund, 7@@@8. Evidence suggests that an entrepreneurial orientation
"ay not always be appropriate 6e.g., (arago:oglu ? Bro%n, 7@AAB Na"an ? 'levin, 7@@>B Cahra ?
Covin, 7@@=8. 4n addition, other studies i"ply that fir"s that are overly focused on any strategic
orientation "ay divert attention and resources a%ay fro" %hat "ay be e;ually, or "ore, i"portant
concerns. For e0a"ple, Covin and 'levin 67@A@8 found that strategic posture %as not a significant
independent predictor of fir" perfor"ance. !lso, %hile Wi)lund 67@@@8 did report a significant and
enduring association bet%een entrepreneurial orientation and fir" perfor"ance, access to financial
capital had a larger influence on perfor"ance. 4n su", the notion that an entrepreneurial orientation
provides a funda"ental fir"*%ide advantage re"ains in ;uestion and in need of additional
e0a"ination.
Further research is also needed to "ore specifically identify in %hat conte0t an
entrepreneurial orientation "ay best be supported. Covin and 'levin 67@@78, in developing their
Model of Entrepreneurship as Fir" Behavior, identified three categories of variables that could be
theoretically or e"pirically lin)ed to a fir"Ds ability to successfully develop and&or "aintain an
entrepreneurial orientationEenviron"ental, strategic, and internal. 4ncluded a"ong the latter %as
organi:ational culture, a focus of the current study. $ther potentially significant variables have also
been proposed and tested. !nd %hile over 2= e"pirical papers have e0a"ined organi:ational and
environ"ental factors that influence a fir"Ds entrepreneurial activities and&or the outco"es of these
activities 6Cahra, Fennings, ? (urat)o, 7@@@8, a fra"e%or) for fully e0plaining and predicting fir"*
level entrepreneurship has not yet been achieved. 4ncreasing understanding in this regard %ill
re;uire continued efforts to identify, test, and retest the nature, antecedents, and effects of an
entrepreneurial orientation.
$ne potentially i"portant factor that "ay influence the direction, nature, and effect of
entrepreneurial activities is organi:ational culture 6Cahra, 7@@>B Cahra, et al., 7@@@8. 4n fact,
Corn%all and ,erl"an 67@@<8 suggest that organi:ational culture is a )ey deter"inant of
entrepreneurial orientation. $ther researchers, in recogni:ing organi:ational cultureGs potential
influence on E$, have called for an e0a"ination of the relationship bet%een organi:ational
culture and entrepreneurial orientation 6e.g., Covin ? 'levin, 7@A@, 7@@7B ,earce, (ra"er, ?
Hobbins, 7@@I8. -o%ever, the influence of organi:ational culture on a fir"Ds ability to develop,
"aintain, or enhance entrepreneurial orientation has not been e"pirically tested. The pri"ary
ob5ective of this study is to fill this void in the literature.
This paper reports the results of a national study in %hich the entrepreneurial orientation,
organi:ational culture, and perfor"ance of ban)s %ere e0a"ined. The purpose of the study %as
to e"pirically e0a"ine the influence of entrepreneurial orientation on fir" perfor"ance in an
industry*specific settingB and to e0plore the antecedent influence of organi:ational culture on
entrepreneurial orientation. Thus, this study atte"pts to ans%er t%o research ;uestions1 678 What
is the relationship bet%een entrepreneurial orientation and fir" perfor"ance and 698 What is the
association bet%een organi:ational culture and entrepreneurial orientation
#ac$ground and (ypotheses
Jarious typologies have been proposed to describe and operationali:e the concept of
strategic posture. Miles and 'no% 67@IA8 vie% strategic posture as relatively enduring patterns of
strategic behavior that see) to align the organi:ation %ith its environ"ent. #ifferent postures are
posited as having a particular strategy and co"bination of structure, culture, and processes for
responding to the environ"ent. /i)e Miles and 'no% 67@IA8, Mint:berg 67@I>8 suggests that
fir"s can be characteri:ed according to their approach to strategic "anage"ent. -e describes
various attributes that correspond to different Kstrategy*"a)ing "odes.K Both typologies describe
the concept of strategic posture as the relationships bet%een the organi:ation and the
environ"ent. Each provides a useful basis for understanding fir"*level behavior 6Covin 7@@78.
!ccording to Covin and 'levin 67@A@8, another "ethod of describing and operationali:ing
the concept of strategic posture is the entrepreneurial orientation of the fir". Fir"s that display
relatively high levels of ris)*ta)ing, innovative, and proactive behaviors have entrepreneurial
strategic postures 6i.e., entrepreneurial orientation8. Those fir"s that display relatively lo% levels
of these behaviors have conservative strategic postures 6i.e., conservative orientation8.
!ccording to Miller 67@A>8, these three co"ponents of strategic posture co"prise a basic,
unidi"ensional strategic orientation.
4n the present study entrepreneurial orientation is defined as that strategic posture
characteri:ed by a fir"Gs engage"ent in relatively high levels of ris)*ta)ing, proactivity, and a
propensity to develop and introduce ne% product innovation 6Miller, 7@A>8. !ccording to this
perspective, entrepreneurship is vie%ed as a characteristic of organi:ations that can be
"easured by e0a"ining fir"*level behaviors 6Covin ? 'levin, 7@A@8. This is consistent %ith the
%idely held perspective of "any researchers in the field 6e.g., Burgel"an ? 'ayles, 7@A3B Covin
? 'levin, 7@A@, 7@@7B /u"p)in ? #ess, 7@@3B Na"an ? 'levin, 7@@>B 'tevenson ? Gu"pert,
7@A=B Cahra ? Covin, 7@@=8.
Covin and 'levin 67@@78 state that increased interest in the study of entrepreneurship results
fro" the belief that a focus on relatively high levels of ris)y, proactive, and innovative behaviors leads
to i"proved fir" perfor"ance. This perspective suggests that entrepreneurial oriented fir"s are able
to position the"selves to ta)e advantage of "ar)et opportunities. 'uch fir"s are able to target
pre"iu" "ar)et seg"ents, charge high prices, and establish industry standards 6Wi)lund, 7@@@B
Cahra ? Covin, 7@@=8. 'uch first*"over advantages play a critical role in a fir"Ds ability to develop
and&or sustain co"petitive advantages over rivals and achieve above*average profitability.
Most of the recently published e"pirical evidence supports a positive relationship bet%een
entrepreneurial orientation and fir" perfor"ance. Covin and 'levin 67@A38 found a si"ple
correlation of r L .>@ 6p M .<<78 bet%een entrepreneurial posture and a "ultivariable "easure of fir"
perfor"ance. Both Cahra 67@@78, and '"art and Conant 67@@28, reported a positive relationship
bet%een entrepreneurial activities and fir" perfor"ance. Cahra and CovinDs 67@@=8 longitudinal
study found a positive and significant association bet%een entrepreneurial activities and return on
assets and return on sales. More recently, Wi)lund 67@@@8 investigated the sustainability of the
entrepreneurial orientation to perfor"ance relationship. 4n addition to finding a positive association
bet%een the variables, they reported that the strength of the relationship increased over ti"e. This
suggests that the effects of entrepreneurial orientation appear to be long ter" and persistent.
While there e0ists so"e a"biguity regarding the financial i"pact of entrepreneurial
orientation 6e.g., Covin ? 'levin, 7@A@B Covin, 'levin, ? 'chult:, 7@@2B Fast, 7@A78, both theoretical
and e"pirical research generally supports a positive relationship %ith fir" perfor"ance.

-71 Entrepreneurial orientation is positively associated %ith fir" perfor"ance.
Corn%all and ,erl"an 67@@<8 state that organi:ational culture is a )ey deter"inant of a fir"Ds
ability to understand, develop, or "aintain entrepreneurial activity. Fir"s see)ing to develop or
"aintain an entrepreneurial orientation "ust also develop or "aintain a Npositive cultureOEone that
is congruent %ith the fir"Ds vision, "ission, and strategies. 4n an entrepreneurial oriented fir" a
positive culture %ould be one that supports ris)*ta)ing, opportunity see)ing, and innovation.
Therefore, %e e0pect organi:ational culture to be associated %ith entrepreneurial orientation.
-o%ever, the nature of this relationship**positive or negative**is e0pected to vary %ith the
culture type e"phasi:ed %ithin the fir". For e0a"ple, Burgel"an and 'ayles 67@A38 state that
culture can encourage or discourage business*related ris)*ta)ing. By e0a"ining specific
organi:ational types, it can be inferred that, for e0a"ple, an adhocracy culture, %hich stresses the
values of creativity, adaptability, change, and a focus on the e0ternal environ"ent 6#enison ?
'preit:er, 7@@78, can be e0pected to provide the conte0t for the develop"ent or enhance"ent of an
entrepreneurial orientation. Conversely, a hierarchy culture, %ith a focus on stability, order, rules, and
regulations 6Ca""uto ? (ra)o%er, 7@@78, reflects the nor"s and values associated %ith a "ore
conservatively oriented strategic posture. This e"phasis on a "ore "echanistic for" of organi:ation
can be e0pected to negatively affect a fir"Gs ability to create and "aintain entrepreneurial behaviors.

The effect of t%o other types of organi:ational culture**"ar)et and clan**on the ability of a
fir" to create and "aintain a specific strategic posture is less clear. The "ar)et culture e"phasi:es
not only the achieve"ent of a co"petitive position for the overall syste", but also planning,
efficiency, and the attain"ent of %ell*defined goals. The clan culture focuses on fle0ibility and the
develop"ent of hu"an potential but does so through consensus building and an e"phasis on the
internal organi:ation. Thus, the relationships bet%een "ar)et and clan cultures and entrepreneurial
orientation are a"biguous. This uncertainty results fro" their e"phases on various values and
ideals that are e0pected to both positively and negatively influence a fir"Gs ability to create and
"aintain specific postures.
-9a1 !dhocracy culture is positively associated %ith entrepreneurial orientation.
-9b1 -ierarchy culture is negatively associated %ith entrepreneurial orientation.
F4N#4NG'
!s posited by -7 %e e0pected to find a positive relationship bet%een entrepreneurial orientation and
fir" perfor"ance. The results of the hierarchical regression analysis are sho%n in Table 9. To
re"ove e0traneous influences on the three dependent perfor"ance variables, ban) si:e and ban)
age %ere first entered into the regression e;uation. The independent variableEentrepreneurial
orientation**%as entered in the ne0t step. No significant relationships %ere found bet%een
entrepreneurial orientation and any of the three "easures of fir" perfor"ance, or the fir"Ds ability to
understand, develop, or "aintain entrepreneurial activity.
Further analysis %as perfor"ed by classifying fir"s as either conservative or entrepreneurial
based on their score on the Entrepreneurial $rientation scale. Those that scored less than >.=
%ere classified as conservative. Fir"s that scored above 2.= %ere classified as entrepreneurial.
Fir"s %ith scores of >.= to 2.= on the I*point scale could not be una"biguously classified and
%ere o"itted fro" this analysis. This classification techni;ue has been used in previous fir"*
level entrepreneurship research to create distinct conservative and entrepreneurial subgroups
6Covin, 7@@7B (arago:oglu ? Bro%n, 7@AAB Miller ? Friesen, 7@A98.
Multivariate analysis of co*variance %as conducted on the three perfor"ance "easures
%ith ban) si:e and age as co*variates 6see Table >8. The conservative versus entrepreneurial
ban)s had "ean scores of <.>A and <.== on the %eighted average perfor"ance "easure, 7.93P
and 7.9=P for return on assets, and 7>.<3P and 72.3=P for return on e;uity, respectively.
2he multi)ariate analysis of co+)ariance resulted in a sinificant multi)ariate effect <G-,#.# L
;.:I, p M $.$9=. 2hus, (hen the three measures are assessed as an o)erall e)aluation of
performance, entrepreneurial ban/s (ere found to perform sinificantly better than
conser)ati)e ban/s. An eCamination of the mean scores for the t(o subroups re)eals that
the difference (as attributable to the hiher (eihted a)erae performance and 6O0 scores
for entrepreneurial )ersus conser)ati)e ban/s.
3eCt, (e eCamined (hether entrepreneurial ban/s outperformed conser)ati)e ban/s
on any of the three performance measures indi)idually. 3o sinificant uni)ariate results
(ere found for the three performance measures. Sinificant results (ere found for ban/
si!e and 6OA <G9,#.* L ;.I., p M $.$;= and for ban/ si!e and 6O0 <G9,#.* L 9..-. p M $.$$9=.
The results of the regression analysis used in testing -9 are presented in Table 2. Ban) age
and the natural log of total assets %ere entered in the first step follo%ed by the four organi:ational
culture types. !s e0pected, after controlling for age and si:e, the organi:ational culture types
e0plained an additional 27P of the variance in entrepreneurial orientation. The overall statistical
significance of the regression e;uation %as F 3,=<2 L IA.3@, p M <.<<7. 'pecifically, adhocracy culture
%as found to be significantly and positively related to entrepreneurial orientation 6B L <.3<, p M
<.<<78. hus, ban)s %ith stronger e"phasis on an adhocracy culture %ere "ore entrepreneurial
oriented than ban)s that put less e"phasis on an adhocracy culture. -ierarchy culture %as found to
be significantly and negatively related to entrepreneurial orientation 6B L *<.79, p M <.<78. This sho%s
that ban)s %ith a stronger e"phasis on a hierarchy culture %ere "ore conservatively oriented than
ban)s that put less e"phasis on a hierarchy culture. 4n addition, "ar)et culture %as found to be
significantly and positively related to entrepreneurial orientation 6B L <.<A, p M <.<=8. Thus, ban)s
%ith a stronger e"phasis on a "ar)et culture %ere "ore entrepreneurial oriented than ban)s that put
less e"phasis on a "ar)et culture. !n e0a"ination of the beta coefficients revealed infor"ation
about the strength of the relationships bet%een these three culture types and entrepreneurial
orientation. !dhocracy culture 6B L <.3<, p M <.<<78, had a stronger association %ith entrepreneurial
orientation than did hierarchy culture or "ar)et culture. -ierarchy culture, in turn, had a stronger
association %ith entrepreneurial orientation than did "ar)et culture. Therefore, the results of the
analysis strongly support -9.
)iscussion and %mplications
-7 posited that entrepreneurial orientation is positively associated %ith fir" perfor"ance.
The findings of this study did not support this relationship. While "ultivariate significance %as found
for the t%o groups in the "ultivariate analysis of covariance, the lac) of univariate results and the
non*significant results found in the regression analysis indicate that -7 %as not supported.
This suggests that the degree to %hich the sa"pled ban)s engaged in fir"*level ris)*ta)ing,
proactive, and innovative behaviors had little or no relation to perfor"ance. While so"e ban)s that
engaged in relatively high levels of these behaviors perfor"ed relatively %ell, others perfor"ed
poorly. The sa"e can be said for ban)s engaging in relatively lo% levels of these sa"e behaviors.
The lac) of support for -7 "ay be attributable, at least in part, to relatively little variance in the scores
on the Entrepreneurial $rientation scale. The range for the I*point /i)ert*type scale %as 2.>> %ith a
standard deviation of <.A=. This is so"e%hat lo%er than %hat has been reported in previous studies
6e.g., Covin ? 'levin, 7@A@8. 4n addition, ban)s are traditionally conservative in nature and relatively
high levels of ris)*ta)ing, proactive, and innovative behaviors "ay negatively affect invest"ent
attractiveness. !lso, the cross sectional nature of this study "ay not reflect the future i"pact of
entrepreneurial orientation on ban) perfor"ance. Finally, even organi:ations %ithin the sa"e
industry can co"pete along different strategic di"ensions and still achieve the sa"e outco"es. !s
a result, there "ay be little or no difference in the perfor"ance of entrepreneurial versus
conservative fir"s 6Fennings ? 'ea"an, 7@@2B Cahra, et al., 7@@@8
The lac) of support for -7 contradicts so"e previous e"pirical research in the field 6e.g.,
Cahra, 7@@7B Cahra ? Covin, 7@@=8. -o%ever, other research suggests that not all
entrepreneurial efforts %ill i"prove fir" perfor"ance 6e.g., Fast, 7@A78 or that a fir"Ds strategic
posture "ay not be a significant independent predictor of fir" perfor"ance 6Covin ? 'levin, 7@A@8.
Thus, %hile the regression and univariate analyses did not support -7, the findings are consistent
%ith so"e of the theoretical and e"pirical research in the field.
-9 posited that organi:ational culture type is associated %ith entrepreneurial orientation. The
findings in the present study strongly support this hypothesis. !fter controlling for ban) age and si:e,
the four organi:ational culture variables e0plained an additional 27P of the variance in
entrepreneurial orientation. This supports the proposed lin) bet%een organi:ational culture and
entrepreneurial orientation 6Corn%all ? ,erl"an, 7@@<B /u"p)in ? #ess, 7@@38.
4t %as e0pected that certain organi:ational cultures provide the conte0t for enhancing or
di"inishing entrepreneurial orientation. 'pecifically, an adhocracy culture, %hich stresses the values
of creativity, adaptability, change, and a focus on the e0ternal environ"ent, %as e0pected to be
positively associated %ith entrepreneurial orientation. $n the other hand, a hierarchy culture focuses
on stability, order, rules, and regulations. This reflects the nor"s and values associated %ith a "ore
conservative strategic posture. Therefore, %e e0pected that hierarchy culture %ould be negatively
associated %ith entrepreneurial orientation. The theoretical lin) bet%een "ar)et and clan cultures
and entrepreneurial orientation %as less clear.
The results of the analysis provided strong support for -9. 4n addition, the direction of the
relationships %as as e0pected. !dhocracy culture %as significantly and positively associated %ith
entrepreneurial orientation 6B L <.3<, p M <.<<78. !lso, hierarchy culture %as significantly and
negatively related to entrepreneurial orientation 6B L *<.79, p M <.<78.
These results support previous e"pirical research that found significant and positive
relationships bet%een organi:ational culture and business*related ris)*ta)ing 6Burgel"an ? 'ayles,
7@A38, proactiveness 6Miller ? Friesen, 7@A28, and innovation 6(anter, 7@A98, all of %hich are
di"ensions of the Entrepreneurial $rientation scale used in this study. Finally, a significant and
positive relationship %as found bet%een "ar)et culture and entrepreneurial orientation 6B L <.<A, p M
<.<=8.
4n su""ary, the results of the hierarchical regression analysis, after controlling for ban) si:e
and age, strongly support -9. 'ignificant associations %ere found bet%een entrepreneurial
orientation and three of the four culture types. 4n addition, the direction of the relationships, %here
proposed, %as as predicted.
The results of this study have i"portant i"plications for both ban)ing e0ecutives and
"anagers in general. Entrepreneurial activity generally re;uires the e0penditure of resources
beyond a baseline level found in conservative organi:ations. For e0a"ple, the develop"ent and
introduction of ne% services re;uires additional e0penditures %ith no guarantees of a satisfactory
return. This study provides ban)ing e0ecutives %ith e"pirical evidence for the potential i"pact of
increased entrepreneurial activity on perfor"ance. The costs associated %ith developing,
i"ple"enting, and "aintaining such an entrepreneurial orientation "ay out%eigh the benefits. 4n
addition, ban)s have traditionally been conservative by nature. Many investors have co"e to e0pect
a conservative approach to ban) "anage"ent. Helatively high levels of entrepreneurial behavior
"ay negatively i"pact invest"ent attractiveness.
This study also provides a fra"e%or) that allo%s "anagers to deter"ine their fir"Gs current
orientation, to understand the role of organi:ational culture on entrepreneurial activity, and to guide
future planning. The results suggest that when an entrepreneurial orientation can positively i"pact
fir" perfor"ance, an i"portant co"ponent of a strategic plan to enhance the degree of
entrepreneurial orientation is the develop"ent of an appropriate organi:ational culture. This
supports Corn%all ? ,erl"anGs 67@@<8 vie% that culture is the first step in fostering entrepreneurial
activity %ithin the fir". !n e"phasis on an adhocracy culture provides an appropriate fra"e%or) for
developing fir"*level entrepreneurship. Thus, %hen an entrepreneurial orientation is dee"ed
appropriate, "anage"ent "ight direct its attention to the develop"ent of an adhocracy culture.
Certain li"itations are inherent in this study. First, the sa"ple enco"passed only ban)s.
Conse;uently, the results "ay not be generali:able to other industries. 4n addition, only one
e0ecutive per ban) %as sa"pled. Thus, the potential for )ey infor"ant bias e0ists 6-uber ? ,o%er,
7@A=8. Multiple respondents per ban) %ould have been preferred.
!ll of the construct scales used in the study have been used in previous research. -o%ever,
the CronbachGs alpha coefficient for hierarchy and "ar)et culture types %as <.=I and <.=7,
respectively. !lthough these scales have proven reliable in the past, caution should thus be used in
interpreting the results.
!lso, the use of regression analysis %ith cross*sectional data precludes any inference of
causality bet%een variables. 4t is plausible that a fir"Gs strategic posture "ay influence a fir"Gs
organi:ational culture, or that perfor"ance "ay influence the fir"Gs strategic posture. Managers
"ay feel that a "ore entrepreneurial posture is needed if they perceive that ris)*ta)ing, proactive,
and innovative behaviors are needed to i"prove fir" perfor"ance. $ther "anagers in poorly
perfor"ing fir"s "ay feel that such behaviors are e0actly %hat their fir" should avoid 6Covin ?
'levin, 7@AA8. Finally, the obtained correlations, or "ultiple correlations, bet%een the set of
independent and dependent variables are s"all although significantly different fro" :ero.