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To test these propositions, a field study using mailed questionnaires was conducted in two phases.   This approach is useful for accessing organizational processes in the settings where they natural-ly occur with minimal intrusiveness by the researcher (McGrath, 1982).  The study is cross–sectional and the objective was to use factor analysis and a correlational approach to test the hypothesized relationships.  The next three subsections describe the research instrument, the sample, and analysis used in this research.

Research Instrument

A pretest of the research instrument was conducted in order to evaluate new questionnaire items developed for the research.  This provided an exploratory approach to aid in operationalizing constructs that need further development, such as competitive aggres-sive-ness, for which a widely recognized set of survey items is not currently in use.  After preparing written responses, pre–test respondents were interviewed for feedback regarding the clarity and intent of the survey items.  Results of the pre–test were evaluated and implemented prior to finaliz-ing the research instrument.

The research instrument was a mail questionnaire.  Some researchers have found it difficult to obtain data from small businesses (Sapienza, Smith, & Gannon, 1988). Therefore, a procedure developed by Dillman (1978) to increase response rates was followed.  Dillman's approach is based on a series of specifically timed mailings including an initial mailing along with a cover letter, a postcard reminder sent out one week after the initial mailing, and, three weeks after the original mail–out, a letter and replacement questionnaire was sent to all nonrespondents. In some cases, a final attempt was made seven weeks after the original mailing.

Four dimensions of EO—innovativeness, risk taking, proactiveness, and competitive aggressiveness—were measured using scales developed and tested for reliability by Khandwalla (1977), Miller (1983), Covin and Slevin (1986, 1989) and Covin and Covin (1990).  These scales have been supplemented by items developed by the first author to capture aspects of the constructs that may not be included in the previously used scales.  The full entrepreneurial orientation scale is included in Appendix 1. For purposes of this analysis, only the competitive aggressiveness and proactiveness scales are discussed below.

Proactiveness was measured using a two item, 7–point scale developed by Covin and Slevin (1986) that asks about the firm's tendency to lead rather than follow in the development of new procedures and technologies, and the introduction of new products or services.  These two items were supplemented by a third question developed by the first author to ask about the firm's tendency to act in anticipation of future changes and needs.  Competitive aggressiveness was measured with one 7–point scale item developed by Covin and Slevin (1989) using language originated by Khandwalla (1977).  This question asks managers if they prefer  to "undo–the– competitors"  or  to "live–and–let–live."   An  additional  question  aimed  at  identifying  the firm's posture relative to industry rivals was also originated by the first author.

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