Five resource factors are created in the group representing the younger businesses (< 10 years), accounting for 78.3% of the variance. The first factor represents Organizational Resources and includes employees, capabilities, and relationships. This factor explained 38% of the variance. The second factor measured organizational resources but was less clear, including cost structure and one of the respondent's expertise in technology and telecommunications. Next, however, the third factor combines achieved attributes of the respondent for a measure of human resources. All three financial measures combine in a Finance Factor Four. And finally, the respondents measures of experience by years in business and position are the final human resource factor.
Six factors are created in the group representing the older businesses (>=10 years). These factors differ in more than number from the previous group, illustrating a different underlying structure of correlations between the measures, and therefore a different pattern of resource configurations. Factor 1 is a clearer representation of organizational procedures or capabilities.
Respondent Perception of Resource Categories by Firm Age
Rankings According to Means of Variables
|Top 5||Firms < 10 years||Firms >= 10 years|
|2||Unique products or services||4.10||Years in firm||3.96|
|3||Expertise in technology & telecommunications||4.04||Unique products or services||3.86|
|4||Customer service capabilities||3.91||Years in position||3.83|
|5||Operating efficiencies (tie)||3.84||Customer service capabilities (tie)||3.73|
|Cost structure (tie)||3.84||Operating efficiencies (tie)||3.73|
|1||Access to equity||3.11||Access to equity||3.25|
|2||Access to debt||2.88||Access to debt||3.23|
|3||Multilingual staff||2.79||Employees with intl experience||3.04|
|4||Years in the position||2.26||International business education||2.91|
|5||Years in the firm||2.13||Multilingual staff||2.79|
The relationship between cost structure, operating efficiencies, and customer service capabilities indicate an increasingly sophistication in the level of organizational resources. Factor 2 combines all elements of international business attributes while Factor 3 provides an indicator of expertise relationships. The finance factor now includes only access to equity and access to debt. The measure of domestic profits has now aligned with measures of expertise, perhaps indicating a more mature approach to planning organizational profit levels as part of a business strategy. And finally, strategic alliance is combined in a negative relationship with the respondent's years of education. It is interesting to see strategic alliance become a more free-standing resource measure as organizational alliances may become more relevant as the business matures. It is more confusing to consider the inverse relationship with education.
Factor loadings of resource descriptors: Age group 1: < 10 years
|Factor 1||Factor 2||Factor 3||Factor 4||Factor 5|
|Descriptors||Employees/Procs/Rels.||Tech. Expertise/Cost structure||Owner/Founder Expertise/ Educ.||Finance access||Owner/Founder Yrs experience|
|Access to debt finance||0.93|
|Access to equity finance||0.83|
|Years in firm||0.88|
|Years in position||0.82|
|Customer svc capabilities||0.69|
|Years of education||0.69|
|Intnl business education||0.83|
|Intnl work experience||0.59|
|Variance on factor||38.0%||14.2%||10.7%||8.0%||7.5%|
|Total Variance 78.4%|
Are owner/founder characteristics associated with the mix of resource types over age of venture?
Are organizational characteristics associated with the mix of resource types over age of venture?
Our second and third research questions relate to whether the relationship between the mix of resource types and characteristics of the owner/founder and the organization vary based on age. Table 7A and 7B show the correlation analyses between the resource factors valid for each business age group and selected characteristics of the owner/founder and the firm. The younger set of firms shows relationships between factors and business owner characteristics. Gender has positive relationship with the expertise and education of the owner/founder. This finding is consistent with previous research suggesting that women business owners may be slightly more educated than male business owners (Brush, 1992). This relationship is not seen in the older businesses where gender has a positive relationship with organizational procedures and a negative relationship with the social resource factor, personal networks. Further, it is interesting that resources in younger businesses have more significant relationships with individual characteristics of the owner/founder than do more mature organizations (5 versus 3).
Factor loadings of resource descriptors: Age group 2: >= 10 years
|Factor 1||Factor 2||Factor 3||Factor 4||Factor 5||Factor 6|
|Descriptors||Procs.||Intnl||Expertise||O/F Yrs. Exp.||Finance access||Alliances|
|Access to debt finance||0.91|
|Access to equity finance||0.93|
|Years in firm||0.89|
|Years in position||0.88|
|Customer svc capabilities||0.81|
|Years of education||-0.75|
|Intnl business education||0.51|
|Intnl work experience||0.74|
|Variance on factor||32.2%||14.9%||11.3%||8.8%||6.8%||6.0%|
|Total Variance 80%|
Conversely, the more mature organizations have a greater number of relationships with company characteristics than the younger organizations (7 versus 4). The younger organizations show no relationship between any company characteristic and factors of organizational resources, the older organizations illustrate three such relationships; sales with organizational procedures, % ownership with expertise, and industry with strategic alliances. When considering the resource relationships, it must be remembered that the resource factors differ between the categories so the content is of crucial importance. However, even in factors similar across the two categories, no relationships are matched across the two groups.
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Last Updated 03/19/98