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THIS STUDY

This study provides a longitudinal view of entrepreneurial technology driven firms and reports on the relationships between strategy and performance over a multi-year period. The primary methodology used to collect data was content analysis, an inexpensive, albeit, time
consuming technique to record corporate strategy selections, rather than the traditional "point-in-time" self-completed survey instruments. The results of the content analysis were then used as independent variables in a series of multivariate statistical analyses. While the content analysis is a point-in-time data collection method, data from individual firms can be linked over several years, resulting in a longitudinal study.

The records of three sets of industry specific firms were selected from Compact Disclosure. The selections were based on several criteria. First a firm had to have had an IPO between 1989 and 1991. As "going public" is considered the sine quo non of entrepreneruship, these firms are thus considered entrepreneurial.". Second, the firms' primary SIC codes were in 367, 384, or 7372. Third, the firms within an SIC code had to offer similar products, meaning they were operating within the same or similar industries. From the IPO year forward the annual Presidents' Letter and the Management Reports were content analyzed for the presence or absence of comments or statements about the adoption of specific corporate strategies. The minimum number of years for a firm to be included in the data base was three, the maximum was seven. A small number of the firms in the study's data set were either acquired or withdrew from public trading subsequent to their IPO. From that point forward, they were then no longer included in the data base.

The current data set now has 62 firms with 317 annual observations. The firm names are not disclosed in this paper due to length restrictions. As a group, these firms were generally ten years old or less when they went public. Firms may have been participating in other industry segments in addition to their primary SIC code. Tables I and II report information on the sample population.

TABLE I
Firm SIC codes and date of their IPOs

The Presidents' Letter and the Management Reports were content analyzed for the presence or absence of a number of strategy variables. For example, if the documents described marketing development efforts, that item was coded as a one (1). If there were no explicit references or a related discussion to a strategy, it was coded as a zero (0). Table III identifies the strategy variables which were utilized for the analyses. These strategies were basic corporate, divisional and/or functional variables discussed in most strategy text books and referenced in many research studies (Carter et. al, 1994).

TABLE II
Firm revenue and growth rates

Data exists for 1989 and 1990 and 1996, but for fewer firms.
Most firms have fiscal years ending at the end of 1996, so 1996
data is very limited.

If a particular strategy was either explicitly or implicitly discussed within the public documents, it was assumed that the strategy, consistent with legal restraints placed on public firms and their public statements was, or was being, implemented. The converse may not be true, i.e., there may be strategies which have been implemented, but not mentioned in the firm's public reports. The latter is not different than what might occur on a self-completed survey, a respondent might fail to identify every employed strategy, i.e., a sin of omission. While survey respondents may also be untruthful in their answers, there is a lawful duty for a public firm to accurately disclose in its public documents.

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