Professional Documents
Culture Documents
AN OPERATIONALIZATION OF STEVENSON’S
CONCEPTUALIZATION OF ENTREPRENEURSHIP AS
OPPORTUNITY-BASED FIRM BEHAVIOR
TERRENCE E BROWN,1 PER DAVIDSSON2 * and JOHAN WIKLUND2
1
Stockholm School of Entrepreneurship, Stockholm, Sweden
2
Jönköping International Business School, Jönköping University, Jönköping, Sweden
Copyright 2001 John Wiley & Sons, Ltd. Received 28 January 1999
Final revision received 22 January 2001
954 T. E. Brown, P. Davidsson and J. Wiklund
weaknesses of the instrument should be noted. The of entrepreneurship echoes classical definitions
instrument taps a mix of current attitudes and past such as Kirzner’s (1973) “alertness to oppor-
behavior. Consequently, researchers find it hard to tunity”. More recently, Stevenson’s opportunity-
determine what type of construct the scale really based view of entrepreneurship has received wide-
measures and the proper label of the scale (Wik- spread recognition and support in the literature (cf.
lund, 1999). In addition, careful assessment of item references above). In summary, Stevenson has pro-
content and factor structure suggests that the proac- vided us with a conceptualization of entrepreneur-
tiveness dimension is ambiguous (Lumpkin and ship that places it within a broader management
Dess, 1996; 1997). framework and is coherent with classical as well
More importantly, while the instrument taps as contemporary definitions of entrepreneurship.
important aspects of firm-level entrepreneurship it Despite its recognition and intuitive appeal,
may not be comprehensive enough (Zahra, 1993). Stevenson’s opportunity-based view of entrepre-
In particular, while addressing partly overlap- neurship has hitherto not been subject to sys-
ping aspects, the measure does not explicitly and tematic empirical testing. We find this to be a
directly address to what extent firms are involved major impediment to the further development of
in the recognition or exploitation of opportunity. entrepreneurship research given the importance of
Contemporary definitions of entrepreneurship tend entrepreneurship to a gamut of organizations and
to center around the pursuit of opportunity (e.g., the significance of opportunity-based definitions of
Brazael, 1999; Churchill and Muzyka, 1994; Shane entrepreneurship.
and Venkataraman, 2000; Venkataraman, 1997). In Consequently, the purpose of this article is
fact, Shane and Venkataraman (2000) define the to develop a measurement instrument to empiri-
domain of entrepreneurship research in terms of cally gauge Stevenson’s conceptualization of entre-
opportunity recognition and exploitation. Unfortu- preneurship as opportunity-based firm behavior
nately, to our knowledge, no measurement instru- and to test it on a large sample of firms. The next
ment that gauges firm-level opportunity-based be- section outlines the eight dimensions of Steven-
havior exists today. Thus, while acknowledging the son’s conceptualization. This provides the theo-
value of the Miller/Covin and Slevin instrument, retical domain for the measurement instrument.
we hold that the development of such an instru- Following this, we turn to a detailed description
ment is essential. of how the instrument was developed, revised
The opportunity-based conceptualization of and empirically validated. This includes an exam-
entrepreneurship developed by the Harvard profes- ination of convergent validity through compar-
sor Howard Stevenson and collaborators provides isons with Covin and Slevin’s (1989) widely used
an important point of departure for the develop- Entrepreneurial Orientation scale and an evalua-
ment of such an instrument. He has long argued tion of our scale against established psychometric
that entrepreneurial value creating processes can criteria. The following section discusses the use-
take place in any type of organization (Steven- fulness and possible extension of the scale we have
son, 1983; Stevenson and Gumpert, 1985; Steven- developed. We conclude with discussing the schol-
son and Jarillo, 1986; 1990). In established orga- arly and managerial implications of the scale.
nizations entrepreneurship is largely a manage-
ment question. As Stevenson notes: “Entrepreneur-
ship is more than just starting new businesses. . . STEVENSON’S OPPORTUNITY-BASED
entrepreneurial management may be seen as a VIEW OF ENTREPRENEURSHIP
‘mode of management’ different from traditional
management” (Stevenson and Jarillo, 1990:25) Stevenson conceptualizes entrepreneurship as a
Stevenson defines entrepreneurship as “The pro- management approach that has at its heart an all-
cess by which individuals—either on their own or consuming passion for the pursuit and exploita-
inside organizations—pursue opportunities with- tion of opportunity without regard to resources
out regard to the resources they currently control” currently controlled (Stevenson, 1983). He con-
(Stevenson and Jarillo, 1990:23). This definition trasts entrepreneurial behavior with administra-
puts the focus on entrepreneurship as the pursuit of tive behavior. Along the spectrum of behaviors
opportunity irrespectively of organizational con- between these extremes, promoter firms are placed
text. This opportunity oriented conceptualization at the entrepreneurial end and trustees at the
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
An Operationalization of Stevenson’s Entrepreneurship 955
administrative end. The promoter’s sole intent is the environment and not the resources that may
pursuing and exploiting opportunities regardless of be required to exploit them. As opportunities
resources controlled, while the trustee strives to drive strategy, almost any opportunity is rele-
make the most efficient use of its resources pool vant to the firm. Once an opportunity is identi-
(as “required” by fiduciary responsibility). Certain fied, resources to exploit it need, of course, to be
business and environmental factors pull individu- marshaled. Conversely, the trustee’s strategy is to
als and firms towards entrepreneurial behavior or utilize the resources of the firm efficiently. The
towards administrative behavior. resources are the starting point and only opportu-
In his early work, Stevenson categorized the nities that relate to existing resources are relevant
management behavior of the promoter and trustee to the firm.
types along six dimensions: Strategic Orienta- The Commitment to Opportunity is similarly
tion, Commitment to Opportunity, Commitment related to strategic action. The promoter is action-
of Resources, Control of Resources, Manage- oriented and able to commit and decommit to
ment Structure and Reward Philosophy (Steven- this action rapidly. Trustees tend to be analysis-
son, 1983; Stevenson and Gumpert, 1985). He oriented and as a result of multiple decision
has developed his thoughts with slight varia- constituents, negotiated strategies, and an eye
tions in a series of subsequent papers where he toward risk reduction, their behavior tends to
more or less explicitly adds two more dimensions: be slow and inflexible. For a given opportunity,
Entrepreneurial Culture and Growth Orientation the promoter is much more likely than is the
(Stevenson and Gumpert, 1985; Stevenson and Jar- trustee to pursue it. If the trustee chooses to pur-
illo, 1986; 1990). Table 1 summarizes Stevenson’s sue the given opportunity, it would be with a
conceptualization and the key characteristics firms much larger initial investment and the intention
are likely to exhibit at the entrepreneurial and of remaining in that line of business for consider-
administrative ends of the spectrum. The dimen- able time.
sions are elaborated below.
Commitment of resources and control of
Strategic orientation and commitment to resources
opportunity
For Stevenson an opportunistic resource orienta-
These first two dimensions are strategic in nature. tion consists firstly of a particular Commitment
Strategic Orientation describes what factors drive of Resources. An entrepreneurially managed firm
the creation of strategy. The promoter’s strat- attempts to maximize value creation by exploit-
egy is driven by the opportunities that exist in ing opportunities while minimizing the resources
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
956 T. E. Brown, P. Davidsson and J. Wiklund
required, especially firm resources. In this effort lines of authority, highly routinized work, systems
the firm may “test the waters” by committing small designed to measure productivity, etc.
amounts of resources in a multi-step manner with How a firm’s Reward Philosophy is organized is
minimal (risk) exposure at each step. This allows important to firm behavior. The promoter is inter-
the firm to stop and change direction at any step, ested in creating and harvesting wealth (value).
if and when circumstances deem necessary. The As a result, entrepreneurially managed firms tend
accumulation of resources creates organizational to base compensation on how individuals con-
pressures that make it difficult to maintain this tribute to value creation. The organization’s struc-
type of commitment of resources. These pressures ture is conducive to this evaluation because it
include the use of capital allocation systems, for- is designed for independent action and account-
mal planning systems, certain incentive systems, ability. Trustee firms, managed administratively,
attempts for managers to reduce their personal risk, tend to relate their compensation to the amount
and managerial turnover. The trustee’s commit- of resources under the individual’s control (i.e.,
ment of resources, therefore, is characterized by assets and/or people) and with seniority. If the
a thorough analysis in advance with large, but less individual is successful, s/he is promoted to a
reversible, investments. position with even more resources under his/her
The second component of Stevenson’s oppor- management.
tunistic view of resources maintains that promoter
firms further reduce the resources they own and Growth orientation and entrepreneurial
use as much as possible. Promoters become skilled culture
at the use of other people’s resources including
financial capital, intellectual capital, skills, com- A closer reading of Stevenson’s later work sug-
petencies, etc. (Starr and MacMillan, 1990). In gests that in addition to the six dimensions included
this effort the firm is less concerned with own- in his charts, he also regards Growth Orientation
ing resources than it is with its ability to use, and Entrepreneurial Culture (Stevenson and Jar-
exploit and/or extract value from them. Stevenson illo, 1986:11; Stevenson and Jarillo, 1990:25) as
further explains that the process of determining important dimensions of entrepreneurial manage-
which assets to own and which to rent, subcon- ment. As regards growth, it is assumed that pro-
tract, outsource, etc. is “a time-phased sequence of moters desire rapid growth and that entrepreneurial
decisions” (1983:10) for the firm. Stevenson calls management will help create it. While the trustee
this dimension Control of Resources. The trustee, may also desire growth, it must be slower, even,
on the other hand, favors ownership control of and at a steady pace, because anything faster is
resources, and the management of these resources unsettling for the firm, i.e., it puts at risk the
tends to come into the focus of top management’s resources that have already been accumulated and
attention. the jobs of top management. Furthermore, trustees
believe that administrative management will help
Management structure and reward create this type of growth.
philosophy The promoter firm encourages ideas, experimen-
tation and creativity, thus developing an entre-
The Management Structure of the promoter orga- preneurial culture in which new ideas are valued
nization is organic (Burns and Stalker, 1961). It and sought out. As opportunity is the starting point,
is flat and made of multiple informal networks. a broad range of ideas is worth seeking and consid-
Because some of the resources that the promoter ering. Conversely, if currently controlled resources
uses may not be owned by the firm, and there- were the starting point, then only ideas that relate
fore fall outside of the formal organization, non- to these resources would be relevant. With this
traditional means of organizing are often needed. narrow span the flow of ideas judged worthy of
The promoter’s organization is designed to coor- consideration would be much smaller even if ideas
dinate key non-controlled resources, to be flexible were actively sought for. Therefore, promoters
and to create an environment where employees are create a work environment that is full of ideas,
free to create and seek opportunity. The trustee’s while trustees create a work environment with just
firm, on the other hand, is organized as a for- enough ideas to match the resources of the firm,
malized hierarchy, characterized by clearly defined or even a lack of ideas.
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
An Operationalization of Stevenson’s Entrepreneurship 957
The first version of the questionnaire was tested on and additions were made. The remainder of the full
a convenience sample of 186 small and medium- sample received a 22-item version of the question-
sized firms—both independent and those that were naire. When complete data had been collected it
part of company groups. The responding CEOs turned out that one resource item had a misloading
were approached with a cover letter and a mail on the Reward Philosophy factor and was dropped.
questionnaire. The mailings resulted in 121 com- Another resource item loaded on two different fac-
pleted questionnaires after one reminder (65% tors at levels barely above 0.40. As a result, this
response rate). At this stage of the research we item was also dropped. A copy of the 20 questions
hoped to develop reliable indices of the eight that constitute our measurement instrument can be
dimensions of Stevenson’s conceptualization, as found in the Appendix (Table A1).
well as combining them into an overall index Factor analysis was run with the remaining 20
of entrepreneurial management. As they are all items using principal components extraction and
assumed to be aspects of the same promoter/trustee varimax rotation. The results are displayed in
distinction it was uncertain, however, whether one, Table 2. Each item has its highest loading on the
eight, or some other number of dimensions would factor it conceptually belongs to, and no item has
be extracted in an orthogonal factor analysis. a loading of 0.30 or more on any other factor. A
The result from this pretest confirmed that the vast majority of the loadings are in the high 0.60s
items were relevant, although alterations of indi- and up. Our conclusion from this analysis is that
vidual items were needed. The second pretest had we have successfully isolated six empirically dis-
the form of a ‘rolling’ test. Mailings were halted tinct factors that represent important dimensions
when approximately 200 questionnaires had been of Stevenson’s conceptualization of entrepreneur-
sent out, and the target items were factor analyzed. ship as opportunity-based business behavior. How-
As a result of this analysis a few more deletions ever, the number of factors is six rather than the
Table 2. Final factor analysis results for Stevenson’s conceptualization of entrepreneurial management (n = 1233)
Variable
Strategic Orientation 1 0.79
Strategic Orientation 2 0.85
Strategic Orientation 3 0.82
Resource Orientation 1 0.56
Resource Orientation 2 0.80
Resource Orientation 5 0.72
Resource Orientation 6 0.49
Mgmnt Structure 1 0.75
Mgmnt Structure 2 0.80
Mgmnt Structure 3 0.68
Mgmnt Structure 4 0.67
Mgmnt Structure 5 0.65
Reward Philosophy 1 0.74
Reward Philosophy 2 0.66
Reward Philosophy 3 0.73
Growth Orientation 1 0.84
Growth Orientation 2 0.86
Entrepren Culture 1 0.82
Entrepren Culture 2 0.66
Entrepren Culture 3 0.84
Note: Respondents who did not complete the mail part of the survey (n = 751) were (of course) excluded from this analysis,
as were respondents who skipped this entire section in the questionnaire. For other respondents with internal non-response mean
substitution was employed. This concerns only a few cases except for the Resource items 5 and 6 (non-response approx. 150)
which were introduced after the ‘rolling’ test run. ‘Absolute values less than 0.30 were suppressed; i.e., no variables had substantial
‘side loadings’. The displayed ‘explained variance’ is after varimax rotation. Cumulative variance explained is 60%. KMO = 0.774.
Bartlett’s test approx. Chi2 = 5214; d.f. = 190; p < 0.001. The numbering of the factors has been changed for enhanced readability.
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
An Operationalization of Stevenson’s Entrepreneurship 959
eight that could have been anticipated on the basis entrepreneurial management is a “cohesive pat-
of the theoretical dimensions. At the first pretest tern of behaviors” (Stevenson, 1983:16) we would
we were unable to extract a separate Opportu- expect the six dimensions to be positively cor-
nity Orientation factor. The items intended to tap related. When summed indices were created on
that dimension dropped out of the analysis, and the basis of the factor pattern, moderately positive
we found it hard to develop new ones without correlations were generally found. Ten out of the
clear conceptual overlap with Strategic Orientation fifteen correlations were positive and significant
and/or Commitment of Resources. Further, the two (p < 0.001). The only two significantly negative
resource dimensions Commitment of Resources correlations occurred for the Growth Orientation
and Control of Resources merged into one factor, index. This may be because the survey was under-
which we label Resource Orientation. Our inter- taken immediately after a very severe recession,
pretation of the analysis is that our six empirical possibly demanding firms to find creative ways to
dimensions represent Stevenson’s eight conceptual shrink rather than to grow in order to survive.
dimensions. As noted above, there is little reason To further assess the reliability of the indices,
a priori to expect Stevenson’s dimensions to be Cronbach’s Alpha and item-total correlation coef-
uncorrelated. Therefore, our extracting six orthog- ficients were computed (see Table 3). The results
onal factors actually indicates a higher discrimi- revealed that while for Strategic Orientation (α =
nant validity than expected. 0.82), Management Structure (α = 0.78), Growth
The fact that these dimensions could be extracted Orientation (α = 0.71), and Entrepreneurial Cul-
as orthogonal factors suggests that the dimensions ture (α = 0.68) the Cronbach’s Alpha values were
are conceptually sound and that they need not above or approaching Nunnally’s (1967) recom-
co-vary empirically. If Stevenson is correct and mended level, the Alphas for Resource Orientation
Corrected
item-total
Index Mean S.D. Alpha correlation
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
960 T. E. Brown, P. Davidsson and J. Wiklund
(α = 0.58) and Reward Philosophy (α = 0.58) did groups) the results closely mirrored the full sam-
not quite reach that level. Corrected item-total cor- ple results. There were six strong and clear factors
relations ranged from 0.23 to 0.66, the majority with no incorrect highest loadings and very few
being above 0.50. This indicated that all items side-loadings of substance. When the factor anal-
share a high degree of variance with their respec- ysis was done on the two sub-samples based on
tive constructs and that the addition of one or two size (i.e., 10–49 employees and 50–250 employ-
items with similar measurement properties to the ees) the results again closely mirrored the results
problematic indices should have increased their of the full sample.
reliability coefficients considerably (Nunnally and Factor analysis of the four sub-samples repre-
Bernstein, 1994). senting the industrial sectors also yielded quite
strong results. The manufacturing results closely
Sub-sample validation mirrored the full sample. Knowledge-intensive ser-
vices had a minor deviation in the form of a
In a further attempt to examine the validity and
few ‘side-loadings’ above 0.30, while the whole-
reliability of these indices, sub-sample factor anal-
sale/retail had the only occurrence of a highest
ysis was performed. As stated above, the sampling
frame was stratified based on corporate gover- loading on the wrong factor (i.e., one out of 180
nance (three groups), firm size (two groups), and [9 sub-groups times 20 items] loadings was wrong
industrial sector (four groups). Therefore, while in this regard). However, the “other services” sub-
the analysis was not done for each of the 24 cells sample produced our six factors plus an additional
(which would have meant too small sub-samples), one (a split of the ‘Resource Orientation’ fac-
it was done for the nine partly overlapping groups tor). When the analysis was rerun forcing it to
representing the selection criteria. There is no six factors, the results were just one ‘side-loading’
room here to give a full report on the results short of perfect. The variance explained was close
of these analyses. Table 4 summarizes the most to 60% with very little variation across analyses.
important information. Over all, the results of the sub-sample valida-
When the factor analysis was performed on tion were highly satisfactory. Taken together, the
the three sub-samples representing the governance sub-sample analyses suggest that the measurement
criterion (i.e., independent firms, firms in small instrument gauges entrepreneurial management in
company groups, and firms in large company different organizational contexts.
No. of incorrect
p of No. of factors Cum.
loadings
No. of Bartlett’s with var. expl. by
Sub-sample cases KMO test Eigenval. >1 6 factors Type Ia Type IIb
Governance:
Independent 399 0.77 0.000 6 61.1% 0 1
Part of ‘small’ group 446 0.74 0.000 6 61.4% 0 2
(<250 empl.)
Part of large group 433 0.74 0.000 6 59.6% 0 1
(250 + empl.)
Size:
10–49 employees 655 0.77 0.000 6 59.8% 0 1
50–249 employees 623 0.76 0.000 6 61.2% 0 0
Industry sector:
Manufacturing 372 0.75 0.000 6 61.3% 0 1
Prof. services 366 0.77 0.000 6 61.5% 0 3
Retail/Wholesale 226 0.70 0.000 6 60.2% 1 4
Other services 314 0.75 0.000 7c 60.2% 0 1
Note: a) No. of occurrences that the highest loading is on the ‘wrong’ factor. b) No. of ‘side-loadings’ >0.30. c) The Resource
Orientation dimension split into two factors.
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
An Operationalization of Stevenson’s Entrepreneurship 961
Factor Factor 3 Factor 5 Factor 1 Factor 2 Factor 4 Factor 6 Factor 7 Factor 8 Factor 9
(expl. var) (8.2%) (6.6%) (10.3%) (6.3%) (5.9%) (7.3%) (6.1%) (5.7%) (7.4%)
Variable
Strategic Orientation 1 0.78
Strategic Orientation 2 0.84
Strategic Orientation 3 0.81
Resource Orientation 1 0.55
Resource Orientation 2 0.80
Resource Orientation 5 0.72
Resource Orientation 6 0.50
Mgmnt Structure 1 0.74
Mgmnt Structure 2 0.80
Mgmnt Structure 3 0.68
Mgmnt Structure 4 0.68
Mgmnt Structure 5 0.65
Reward Philosophy 1 0.73
Reward Philosophy 2 0.66
Reward Philosophy 3 0.72
Growth Orientation 1 0.83
Growth Orientation 2 0.85
Entrepren Culture 1 0.81
Entrepren Culture 2 0.64
Entrepren Culture 3 0.84
EO Innovation 2 0.88
EO Innovation 3 0.84
EO Proactiveness 1 0.85
EO Proactiveness 2 0.82
EO Risktaking 1 0.68
EO Risktaking 2 0.75
EO Risktaking 3 0.77
Note: Respondents who did not complete the mail part of the survey (n = 751) were (of course) excluded from this analysis, as
were respondents who skipped either of these entire sections in the questionnaire. For respondents with internal non-response mean
substitution was employed (cf. Table 1). Absolute values less than 0.30 were suppressed; i.e., no variables had substantial ‘side
loadings’. The displayed ‘explained variance’ is after varimax rotation. Cumulative variance explained is 63.6%. KMO = 0.79.
Bartlett’s test approx. Chi2 = 7455; d.f. = 351; p < 0.001. The numbering of the factors has been changed for enhanced readability.
Table 6. Correlations for the sub-indices of the entrepreneurial management and entrepreneurial orientation
Index 1 2 3 4 5 6 7 8
1 Strategic Orientation
2 Resource Orientation 0.10∗∗
3 Mgmnt Structure 0.33∗∗ 0.04
4 Reward Philosophy 0.33∗∗ −0.02 0.36∗∗
5 Growth Orientation −0.02 0.09∗∗ −0.14∗∗ −0.11∗∗
6 Entrepren Culture 0.14∗∗ 0.15∗∗ 0.10∗∗ 0.10∗∗ 0.15∗∗
7 EO Innovation 0.23∗∗ 0.05 0.15∗∗ 0.17∗∗ 0.11∗∗ 0.34∗∗
8 EO Proactiveness 0.19∗∗ −0.05 0.13∗∗ 0.15∗∗ 0.09∗∗ 0.19∗∗ 0.26∗∗
9 EO Risktaking 0.31∗∗ 0.07∗ 0.19∗∗ 0.20∗∗ 0.25∗∗ 0.26∗∗ 0.33∗∗ 0.26∗∗
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
An Operationalization of Stevenson’s Entrepreneurship 963
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An Operationalization of Stevenson’s Entrepreneurship 965
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
966 T. E. Brown, P. Davidsson and J. Wiklund
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)
An Operationalization of Stevenson’s Entrepreneurship 967
Zahra S. 1993. A conceptual model of entrepreneur- Zahra SA, Karutko DF, Jennings DF. 1999. Guest edito-
ship as firm behaviour: a critique and extension. rial: entrepreneurship and the acquisition of dynamic
Entrepreneurship Theory and Practice 16 (Summer): organizational capabilities. Entrepreneurship Theory
5–21. and Practice 23(3): 5–10.
APPENDIX
Table A1. Translated items used for the operationalization of Stevenson’s conceptualization of entrepreneurship
Strategic Orientation
1. As we define our strategies, our major 1 2 3 4 5 6 7 8 9 10 As we define our strategies, we are
concern is how to best utilize the driven by our perception of
resources we control. opportunity. We are not constrained
by the resources at (or not at) hand.
2. We limit the opportunities we pursue 1 2 3 4 5 6 7 8 9 10 Our fundamental task is to pursue
on the basis of our current resources. opportunities we perceive as valuable
and then to acquire the resources to
exploit them.
3. The resources we have significantly 1 2 3 4 5 6 7 8 9 10 Opportunities control our business
influence our business strategies. strategies.
Resource Orientation
1. Since we do not need resources to 1 2 3 4 5 6 7 8 9 10 Since our objective is to use our
commence the pursuit of an resources, we will usually invest
opportunity, our commitment of heavily and rapidly. (R)
resources may be in stages.
2. All we need from resources is the 1 2 3 4 5 6 7 8 9 10 We prefer to totally control and own the
ability to use it. resources we use. (R)
5. We like to employ resources that we 1 2 3 4 5 6 7 8 9 10 We prefer to only use our own resources
borrow or rent. in our ventures. (R)
6. In exploiting opportunities, having the 1 2 3 4 5 6 7 8 9 10 In exploiting opportunities, access to
idea is more important than just money is more important than just
having the money. having the idea. (R)
Management Structure
1. We prefer tight control of funds and 1 2 3 4 5 6 7 8 9 10 We prefer loose, informal control. There
operations by means of sophisticated is a dependence on informal relations.
control and information systems.
2. We strongly emphasize getting things 1 2 3 4 5 6 7 8 9 10 We strongly emphasize getting things
done by following formal processes done even if this means disregarding
and procedures. formal procedure.
3. We strongly emphasize holding to 1 2 3 4 5 6 7 8 9 10 We strongly emphasize adapting freely
tried and true management principles to changing circumstances without
and industry norms. much concern for past practices.
4. There is a strong insistence on a 1 2 3 4 5 6 7 8 9 10 Managers’ operating styles are allowed
uniform management style throughout to range freely from very formal to
the firm. very informal.
5. There is a strong emphasis on getting 1 2 3 4 5 6 7 8 9 10 There is strong tendency to let the
line and staff personnel to adhere requirements of the situation and the
closely to their formal job personality of the individual dictate
descriptions. proper job behavior.
Reward Philosophy
1. Our employees are evaluated and 1 2 3 4 5 6 7 8 9 10 Our employees are evaluated and
compensated based on their compensated based on the value they
responsibilities. add to the firm.
(Continued overleaf )
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968 T. E. Brown, P. Davidsson and J. Wiklund
Table A1. (Continued )
Items that were dropped after pre-testing or as a result of initial factor analysis results are not listed above. Items marked (R) are
reversed; i.e., a higher value suggests a lower level of entrepreneurship
Copyright 2001 John Wiley & Sons, Ltd. Strat. Mgmt. J., 22: 953–968 (2001)