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Sample

The goal of sampling was to contact multiple management–level respondents, including the CEO, from small, non–diversified new entry firms, that is, firms that had been founded less than eight years earlier. Firms were selected from the Business Marketing Source, a commercial database of a large southwestern metropolitan area used by the sponsoring university. From a population of 3700 firms, approximately 220 non–affiliated for–profit firms with 11–100 employees also indicated that they had occupied their current address for five years or less. For firms with 11–100 employees, thirteen different industries were represented as indicated by industry categories grouped by three–digit SIC codes—accounting, advertising, banks & insurance, con-struction, computer service & sales, education/legal, engineering, hospital/medical, media/communications, manage-ment services, real estate, transportation, and wholesale. This sample did not include, however, small manufacturers and small retailers, which are likely to represent a signifi-cant portion of new entrants. Therefore, the sample was supplemented by a listing of small businesses developed from a survey conducted by a Chamber of Commerce within the same southwestern locality men-tioned above. In addition to the Chamber listing, former SBI clients of the sponsoring university and firms listed on the American Business Disk, a yellow pages based listing, were included in the sample. These additional sources of small businesses were well within the universe suitable to this study and added approximately 55 more firms for a total sample of 275 firms.

Six hundred and eighty surveys were mailed to executives in the two hundred and seventy–five firms. Executives from 108 of those firms were contacted by telephone prior to receiving the survey and specifically asked to participate. In most cases only one executive was contacted on the initial phone call and that executive provided the names of other top managers to contact. Executives from the remaining 167 firms received the survey "cold," that is, without either prior knowledge that the survey was coming or a specific verbal request to respond.

Survey responses were received from 123 executives in 97 firms in time to be included in the study. Thus, the overall firm–level response rate was 35%. However, not all of the responses received corresponded to the population of inter-est. That is, some firms that responded did not fit the population of interest either because they were too old, too small, or affiliated in some way with a parent firm. The sample population consisted, therefore, of non–affiliated firms less than eight years old with at least five employees. Based on this population, surveys from 73 executives in 52 firms were included in the final sample. The remaining 45 firms that responded were not members of the population of interest. Based on these results, it was concluded that 54% (52 of 97 responding firms) of the 275 firms that were originally mailed surveys should be included in the sample population of the study. The 52 responding firms, therefore, represented an overall firm–level response rate of 35% of the population.

Analysis

In phase one, we conducted factor analysis to determine whether the dimensions of an entrepreneurial orientation represented distinct constructs. The factor analysis used the principal factors method with a “promax” rotation. Promax employs an oblique rotation technique to obtain a simple factor structure without imposing conditions of orthogonality (Kim & Mueller, 1978). Using the factor scores developed in phase one, we examined the Pearson’s correlation coefficients for the proactiveness and competitive aggressiveness factors and key measures of performance including sales growth, profitability, financial strength and overall performance.

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