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DISCUSSION AND CONCLUSIONS

Hypothesis 1 examines whether or not the entrepreneurial orientation of the small firm owner has a positive impact on the rate of growth of the firm. The results of the analysis support this hypothesis. Although this agrees with previous research, it is independently important for two reasons. One, the measurement of firm performance, growth rate, is a more rigorous measure than used before. Past research that examined entrepreneurial orientation used evaluative measures of firm performance (Covin & Slevin, 1986) or various financial composites (Naman & Slevin, 1993; Zahra & Covin, 1995). Furthermore, Brush & Vanderwerf (1992) found that the most common measures of firm performance were rates of employment and sales growth. Thus, firm growth is an appropriate measure of firm performance, especially if broader economic issues are considered.

Two, our research focused on the small business owner and his or her firm. While this may not seem remarkable on the surface, much of the previous research that focuses on entrepreneurial orientation at the firm level centers on larger firms, corporate entrepreneurship and revitalization (e.g., Covin & Slevin, 1986, 1988; Guth & Ginsburg, 1990; Naman & Slevin, 1993). The mean number of employees in the firms used in our study was slightly over 16.

Hypothesis 2 was developed to examine whether or not entrepreneurial orientation and firm growth are moderated by environmental conditions. In previous research, higher levels of entrepreneurial orientation in dynamic and hostile environments were associated with higher performance, while lower levels of entrepreneurial orientation in stable and benign environmentswere also associated with higher performance (e.g., Covin & Slevin, 1988, 1989; Naman & Slevin,1993; Zahra & Covin, 1995). However, the results of our analysis did not support the existence of a moderating effect.

This current research is the only study to use moderated regression to examine both the hostile-benign and dynamic-stability dimensions of the environment as a moderating effect on entrepreneurial orientation and firm growth. Therefore, it is probable that there is no effect. On the other hand, Darrow and Kahl (1982) have cautioned researchers about concluding that no effects exist because the moderating effect may be too weak to be diagnosed using current moderated regression. This is an area that needs further investigation.

Hypothesis 3 was developed to test the effect of a small business owner's perception of environmental munificence on his or her entrepreneurial orientation. These results supported this conclusion. In fact the magnitude of this support was quite strong with employment growth as the dependent variable (g = .27, p < .01) and with sales growth as the dependent variable (g = .22, p < .01). Thus, a small business owner's perception of environmental munificence does seem to have a positive influence on his or her entrepreneurial orientation. These results suggest that if a small business owner sees his or her environment as accepting and abundant with resources, the owner is more likely to have his or her firm be proactive, innovative and risk-oriented.

Hypothesis 4 was developed to test whether or not a small business owner's resource acquisition self-efficacy had a positive impact on his or her firm's entrepreneurial orientation. The hypothesis is confirmed at the 0.10 level of statistical significant suggesting that resource acquisition self-efficacy does have a positive impact. However, the relationship is weaker than expected for three reasons. First, as mentioned above, small business owners were used in this study as surrogates for entrepreneurs. While small business owners may adequately represent the views of entrepreneurs, there are some meaningful differences, especially in the area in resource acquisition. For example, the acquisition of financial resources may not be as critical to established small businesses as to entrepreneurs. In the established small firm, the owners likely have established relationships with banking institutions. In addition as stated by some of the respondents, small businesses are often self-financed by using the retained earnings of the firm. Therefore, the acquisition of financial resources may be less of a concern for the small business owner. However in the case of the entrepreneurial firm, financial resources may not only be more critical but also more difficult to obtain. Because the entrepreneurial firm is closer to start-up, they have fewer banking relationship and typically little or no retained earnings. And as stated above, entrepreneurial activities are resource consuming (Kirchhoff, 1994; Romanelli, 1987). Therefore, an entrepreneur who believes s/he could acquire financial resources would be expected to have a high level of resource acquisition self-efficacy and to be more entrepreneurially oriented. These findings, then, are not inconsistent for established small firm owners and it remains to further test entrepreneurs to adequately reveal the hypothesized relationship.

The second reason may lie with the construction of the self-efficacy measure. In this initial attempt to operationalize the resource acquisition self-efficacy construct, it was thought that financial resources would be the most significant resources. For this reason, resources were measured narrowly as money. A resource acquisition self-efficacy instrument based on another resource (i.e., human resources, information, etc.) or broader operationalization may have led to a stronger result.

The third and final reason may be related to restriction of range. Only successful small business owners and firms, as indicated by their survival, were tested using the resource acquisition self-efficacy measure. Owners of failed businesses and newly established firms were not tested. As a result, the distribution the scores may be too narrow to utilize the full power of the statistical tests. Therefore, the relationship between resource acquisition self-efficacy and entrepreneurial orientation should be investigated further using a broader range of self-efficacy scores.

In sum, the three reasons presented may have led to the weaker than expected relationship. The results, here, however are sufficiently strong to indicate that resource acquisition self-efficacy is an important concept in entrepreneurial orientation that justifies additional research.

Hypothesis 5 was developed to test whether the two components of perceived resource availability (i.e., a small business owner's perception of munificence and a small business owner's resource acquisition self-efficacy) were positively associated. The result supported this hypothesis. In fact the magnitude of this support was quite strong with employment growth as the dependent variable (f = .19, p < .01) and with sales growth as the ultimate variable. (f = .18, p < .01). This indicates a small business owner's resource acquisition self-efficacy is related to his or her perception of environmental munificence. More specifically, the more a small business owner believes that resources are abundant and available in the environment, the more the owner believes s/he can acquire them.

Resource Availability

The research reported here demonstrates that the small business owner's perception of resource availability affects her or his entrepreneurial orientation and subsequently, the firm's rate of growth. The results also confirm that increases in entrepreneurial orientation lead to higher rates of growth in small firms. In addition, the perception of resource abundance in the environment has a positive influence on the degree of firm-level entrepreneurial orientation. And while resource acquisition self-efficacy's impact on entrepreneurial orientation was not robustly demonstrated, there is ample evidence to suggest the relationship exists. And resource acquisition self-efficacy is certainly associated with the perception of environmental munificence. As a result, it can be said that the perception of resource availability has a positive influence on entrepreneurial orientation, which has a positive impact on firm growth.

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