BD28
Dewey
.H41A
ALFRED
P.
WORKING PAPER
SLOAN SCHOOL OF MANAGEMENT
A STRUCTURAL EQUATION MODEL OF SCANNING BEHAVIOR OF
MANAGERS
Professor Sumantra Ghoshal
Sloan School of Management
August, 1985
W.P. #1696-35
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
A STRUCTURAL EQUATION MODEL OF SCANNING BEHAVIOR OF
MANAGERS
Professor Sumantra Ghoshal
Sloan School of Management
August, 1985
W.P.
//1696-35
A STRUCTURAL EQUATION MODEL OF SCANNING BEHAVIOR
OF MANAGERS ,
Sumantra Ghoshal
The Sloan School of Management
Massachusetts Institute of Technology
50 Memorial Drive, Cambridge, MA 02138
June, 1985
First draft
Comments welcome. Please do not cite,
:
The
author is grateful for the comments and suggestions
Westney, Donald Lessard, Michael Scott
Eleanor
of
Morton, John Carroll, and Howard Stevenson; for help and
in
Seok Ki Kim and Yun Key Yun
from
assistance
financial
and
for
Korea;
in
research
conducting field
support from the Sloan School of Management, MIT.
RiU.T.
USft^^S
SEP 2 4
1985
RECEIVED
- page
SECTION
Policy
Business
called
the
models
of
organizations
can
of
the
that
analytical
through
1971),
planning
1965; Ackoff, 1970), and through modifications
Supporters
emergent-incremental view, in contrast, have depended on
empirical observations.
from
Quinn,
do
constrained
strategy
by
;
rejected
the
view
management"
of
incrementalist
practice
according
the
to
navigating
of
limitations
internal
and
adaptive
along
in
and
view, is an
corridors
the
stream of disjointed decisions.
as
Believers
actual
in
of
of bargaining and coalition building that become
manifest
a
that
the "rational" process assumed
external
both
process
indifference
They (e.g., Pettigrew,
Strategic freedom of Organizations are
formulation,
incremental
of
follow
not
models.
normative
shown
have
1980)
organizations
the
claimed
have
They
structures and processes (Chandler, 1962).
deductions
1973;
based their
have
adapt through managerial actions
proactively
Andrews,
1957;
(Ansoff,
their
view
and changing organizational purpose (Barnard, 1938;
creating
in
followed
In the strategy literature,
behave.
should
have
change.
of how purposeful organizations
models
normative
debate
the
to
rational-analytical
the
on
organizational
and
paths.
parallel
leaders)
systems
sides
two
the
of
Selznick,
formulation
strategy
proponents
of
Organization Theory is between what can be
and
non-intersecting
(or
INTRODUCTION
"rational-analytical" and the "emergent-incremental"
Historically
arguments
:
the major ongoing debates in the fields of both
of
One
1
-
1
rational-analytical view, labeling
that
strategic
view
as
is
both
planning,
and
it
as a "heroic
unrealizable.
in turn, have repudiated
accurate nor useful.
neither
rebuttal from Andrews is typical
unreal
Thus, they have
:
the
A recent
.
-
page
-
2
something to be said, I must admit, for the
"There
is
owlish adherents
to the primacy of incremental ism and
administrative process.
Repelled by
the best and
brightest analysts,
they assert
the wisdom of the
organization,
practitioner
and
believe
that
an
properly nurtured, can lay out like a snail the path
own
So
its
progress.
it
can, but the path is
of
visible only behind the snail. Those who believe that
life
too uncertain
to
permit planning and that
is
must
remain
mostly
intuitive, are a kind of
purpose
Greek chorus, keeping the rest of us honest while they
hymn their classic cop-out." (Andrews, 1983, p3)
differences
manifest
from
extreme,
the
the
as
perspective
in
organization
of
field
the
In
about
diversity
the
role
the
similar
theory,
strategy
of
is
views that range from, on one
of
choice argument of Child (1972) and, on
strategic
other, the population ecology model proposed by authors such
Aldrich
argued
Astley
by
perspective
In fact, as
and Van de Ven (1983) and Pfeffer (1982),
action
on
deterministic,
Hannan and Freeman (1977).
and
(1979)
or
volun tarist ic
the
assumptions
emergent
or
nature
the
regarding
of decision-
and choice is a critical dimension that distinguish among
making
different theoretical positions on the nature of organizations.
Only
debate
this
through
Burgelman
(1978),
view
contingency
nature
its
of
a
part
that
versions
such
as Mintzberg
of
what
can
They
called
be
In essence they argue
strategy.
freedom enjoyed by
and
is
that
entrepreneurship
eclectic
authors
a
that the
and
a
firm depends on the nature of
the characteristics of its own organization
Dyer, 1983).
The realized strategy of
a
firm has
deliberate and an emergent component (Mintzberg, 1978);
both
part
of
and Lawrence and Dyer (1983).
(1983),
of
environment
(Lawrence
work
the
organizational adaptation process and the extent
the
strategic
conceptual synthesis is emerging out of
a
different
proposed
have
of
recently
induced
is
by
a
the current structural context and a
autonomous,
(Burgelman, 1983).
arising
from
managerial
There is evidence that this
and contingent view of strategy is receiving increasing
-
theoretical
management
page
attention
empirical
and
literature
the
in
on
(see Burgelman, 1985 for
theory
organization
and
-
3
a
review ).
view
This
There
question.
corporations.
corporations,
planning
and
argues,
"autonomous".
emerge
strategy
of
then
out
of
normative models.
becomes
the
Yet,
system is not fully
the
this
process
that most modern firms adopt
?
:
how
does
of "rational"
In other words,
through which, in the planning mechanism,
process
the
is
in the
output
the
question
The
planning
formal
the world's largest
of
fairly extensive systems for long term
have
the "rationality" implied
"induced"
500
that most of these systems are at least designed to
Burgelman
what
over
Klein and Linneman (1984) have shown than over 90%
companies
such
as
involving
three-year,
concluded
recently
their
In
study
multiphased
achieve
that
the increasing use of formal planning systems in large
documents
of
an important
literature
empirical
sufficient
is
begs
however,
strategy,
of
current strategy or structure of the firm affects its future
the
strategy
?
Bower
an
had provided one answer to this question
(1970)
answer that focussed on the internal process through which
alternative proposals are initiated and,
problems
are
defined,
finally,
one
of the proposals receives the "impetus" that leads
to
its
Bower,
Internal structure, in the process model of
acceptance.
affects
strategy
by
influencing these sub-processes of
definition, initiation and impetus.
Environmental
through
which
current
scanning
can
be
another
mechanism
strategy, despite an intendedly rational
can circumscribe future strategy. Scanning is
planning
process,
assumed
to
is
the
starting
point for all normative strategic planning models.
If,
however,
the
provide
current
the
external
situation
of
intelligence
the
firm
that
determines what
.
- Pag e 4 -
the environment will be paid attention to and how the
of
aspect
Weick,
by
described
making
will be perceived (i.e., the enactment process
sectors
attended
incremental
the normative models,
follows
process
or,
if the actual
even
then
1969),
strategy
the output may be
Burgelman's terms, display induced strategic
in
behavior
scanning
If
called
environment"
"task
the
entirely
is
and
limited to what Dill (1958)
Thompson (1967) called the
information base on which future strategy will be
"domain",
the
based
limited to the current activities of the organization.
is
cannot
scanning
Such
strategy"
"autonomous
strategy
input
understanding
what
of
must
planning
the
that
firm's
the
fields
new
in
process
domain is
;
-
to
For autonomous
must
limited
entirely
not
is
by
have
an
current
i.e., a part of
the task environment to the broader
beyond
look
ventures
to
defined by Burgelman.
as
emerge,
to
information
scanning
lead
"general environment".
Therefore,
behavior
the
factors
An analysis of the
following the preceding line of argument, provide
can,
insights
into
insights
Such
firms.
to
influence focus or breadth in scanning behavior of
that
interesting
to which scanning is either limited
extends beyond it ("breadth").
or
managers
issue in studying scanning
environment (referred subsequently in this paper as
current
"focus"),
interesting
extent
the
is
an
strategy formation processes of
the
have
can
useful implications for both
theory and practice.
In
the
following
individual
level
operat ionalized
drawing
for
from
reports
paper
This
a
explaining
so
the findings of such an analysis.
section, the concepts of focus and breadth in
scanning
as
to
behavior
are
be measurable.
diverse stream of literature,
the
differences
in
developed
and
In sections 3 and 4,
a
model is proposed
this aspect of scanning.
In
-
section
-
5
data
and
the model are explained, and
refining
in
methodology
the
5,
page
section
hypotheses,
testing
for
and
the findings are presented
supports many of the theory derived
data
The
6.
used
also yields some results that are contradictory
but
to expectations.
Limitations
constrain
generalizability
the
do
provide
conjectures.
These
findings
sampling,
of
of
basis
the
data,
the
for
a
data
and
results.
analysis
However, the
of interesting
number
are discussed in the seventh
implications
and concluding section of the paper.
Issues
sampling
of
measurement
and
are
briefly
discussed in the Appendix.
SECTION
based
is
on
"domain", as developed by Thompson
a
notion
the
(1958)
of
those
as
the
"task-environment"
parts
of
the
broader
are relevant to the setting and attainment of
which
environment
of
Dill
by
suggested
OPERATIONALIZING SCANNING BEHAVIOR
:
concept
The
(1967)
2
Dill suggested that the task environment
goals.
Specifically,
consists
of
groups.
These, according to Thompson, constitute the membership
of
the
domain
notion
the
Defining
(1966).
organization-set
is
organization-sets
organization
generally,
members
the
occupy"
concepts
the
are
"organization-set" developed by Evan
there
important
the
of
are
a
focal
organization's
different
statuses
(Aldrich and Whetten, 1981).
members
organization's
tied
and regulatory
subjective task and "there may be as many
as
to
of
of
members
a
competitors
A concept quite similar to that of the
domain.
firm's
is
suppliers,
customers,
together
for
an
However,
of the set are those who are
task-domain for ultimately both
through the notion of goals -
-
membership
affect
both
of
are
page
-
determined
organization's
the
6
the actors who can
by
attainment
goals
of
(Caplow,
1964).
Following
domain-constrained
through
obtained
words,
scanning
related
information
distributors
the
current
members
customers,
characterize
of
the
domain.
and
and
In other
agents
domain-focussed
regulatory,
social,
and
scanning
information about general
political, economic or resource-related
through publications, consultants, advertising agents
characterizes what may be called broad or unconstrained
Such a scheme for categorizing scanning behavior
scanning.
is
task -environment
suppliers
In contrast, obtaining
etc.
or
about market, competition and
behavior.
issues
focussed
be defined as scanning for
can
information
through
technology
to
other
acquiring
arguments,
these
shown
two
types
is
made
Figure
in
1.
Note that the division between the
of scanning behavior is fuzzy and
primarily
in
terms
of
what
is
the distinction
the
principal
component of the manager's scanning activity.
Residual
broad
environment
Information
Factors
Immed iate
task
environment
Within domain
Outside domain
Informat ion
Sources
Figure
1
:
Categorization of scanning behavior
- page 7
SECTION
A
paper
by
some
suggest
in
reported in this
and
environmental
on scanning have already suggested
business
Research in the fields of
policy and organization behavior
of others that have so far not been considered
number
a
research
organizational
studies
psychology,
cognitive
the
influencing variables.
these
of
of
individual,
of
Previous
attributes.
THE INFLUENCING VARIABLES
scanning behavior of individuals may be affected
that
host
a
:
premise
starting
was
3
-
scanning studies.
influencers
possible
positions
the
in
diversity,
characteristics included in the study as
individual
The
management
hierarchy, their experience with
entrepreneurial
their
and
scanning behavior of managers are their
of
(there is no
orientation
assumption of the attributes being independent).
Aguilar
and
Schoderbeck
demonstrated
managers,
affect
findings
(1973)
scanning
(1968),
and
Keen
management
is
(1980),
(1973).
individual's
their
derived
from
Schroeder,
to comprehend and
and
tolerate and deal with ambiguity.
is
Kefalas
on individual
to
diversity may
the suggestions and
Driver
and
Strenfert
cognitive complexity thus improving her
ability
scanning
,
Wide experience with diversity can
an
individual's
level
exposure
enhance
to
Keegan (1967)
The possibility that the past background of
behavior
Hogarth
,
Hambrick (1982), among others, have
of
particularly,
and,
of
and
influence
the
behavior.
scanning
Collings (1968)
(1967),
integrate diverse pieces of information
entrepreneurial
orientation
The possibility of the
affecting
the
way
carried out arises out of the arguments of Stevenson
(1983) and other researchers on entrepreneurial behavior.
While
individual
behavior
is
affected
by
individual attributes, it is also shaped by context - by the
these
page 8 -
-
characteristics
tasks,
and
of the environment,
orientation
the
with
dealing
decision
making.
systems.
On
environments
fewer
required
for
require complex scanning
not
may
Managers
have
may
categories
information
They
other hand, organizations facing complex
the
environments
may
clusters
sectors
of
of the organization.
non-complex
important
critically
the nature of managerial
scanning of individual or
extensive
need
Theoretically,
environment.
the
in
arguments follow from proposals of Thompson (1967) and
these
Galbraith
King
(1975)
the findings of Fahey and
Empirically,
(1977).
Kefalas
and
Schoderbek (1973) provide at
and
least limited supporting evidence.
expectation
The
characteristics
from
scanning
and
between
link
a
behavior
of
that
nature
evidence
empirical
the
of
task
managers arises
of
the
task
represents
one source of variation in managerial information
processing
requirements
Tushman,
1969;
greater
need
reduction
performance
available
needs
it can,
managers
to
for
uncertainty
(Tushman
and Nadler,
Scanning is one of the
Ven and Ferry, 1980).
mechanisms
scanning
uncertainty and therefore
information
of
effective
de
and
high
face
amounts
and
Van
1978;
When tasks are non-routine or highly
1979).
participants
complex,
1950; Becker and Baloff,
(Bavelas,
for
meeting information
therefore, be expected that the nature of
depend on the nature of tasks that
would
a
manager
has to carry out.
effect
The
system
and
on
proposed
been
of
tested
the
more analytically
is
its
provides
an
prospecting
depend
more
input
firm
on
a
for
(Miles
strategy on its scanning
behavior of its managers have
by Hambrick (1982).
Put simply,
firm is oriented, the more extensive
system
scanning
firm's
scanning
the
and
a
expected
carrying
and
to
out
be
such
since
scanning
analysis.
A
Snow, 1978), in contrast, may
experimentation and trial and error and may
show lesser scanning intensity.
- page
These
included
be
scan
detailed
discussion
inclusion
in
(see Ghoshal, 1984 for
In
.
the
final
and not the other variables for
these
of
variables)
such
of
a
the framework is a subjective decision based on
keeping
judgement
best
are
that
This is not an exhaustive list and
environments
their
managers
choice
variables
number of other factors that can affect how
a
analysis,
-
influencing
the
model.
the
in
may
there
are
9
view the conflicting demands of
in
parsimony and completeness.
SECTION 4
Figure
model
that
focus
of
the
attempts
of
a
variations in breadth and
scanning
level
influences
due to direct and
as
different factors discussed in
the
The hypotheses underlying the model
section.
preceding
diagrammatic representation of
explain
to
individual
mediated
MODEL AND HYPOTHESES
the
is
2
:
are discussed below.
perceived
monitor
to
environment,
the
words,
other
members
contrast,
of
environmental
with
:
actors
such
continuity - and the
relative stability in the
stability, say, due
a
within
the
domain
and
it
predictable environment, the needs of
in a
the
predictable
are monitored and responded to.
signals
be served by monitoring existing
may
cause
the
instability
cope
system
the domain.
of
a
stable oligopoly, there is usually an
a
intelligence
external
a
In
a
When there is such
these
if
from
arises
is
manager feel the need to
linearity -
a
signalling
suffices
that
is
existence of
effective
In
there
a
environment
the
issues.
of
range
environment.
task
more does
the
often
continuity
to
be,
diverse
a
unpredictable
more
The
In an
of
domain
and
unpredictable environment, in
may
uncertainty
itself
and
a
lie
in
the
broader range of
issues may need to be monitored to
uncertainty.
Hence, it can be hypothesized
-
page 10 -
CO
o
o
CO
w
>
w
Q
O
En
o
w
o
o
o
Ed
w
o
Pm
o
PL,
PS
P
page 11 -
-
HI
When the environment is perceived as predictable,
the
be
focussed. When
will
scanning
managerial
is
perceived as unpredictable, scanning
environment
will be relatively broad and unconstrained.
:
Environmental
uncertainties.
processing
uncertainty
managers
model,
develop
by
Daft
predictability
managers
as
outcomes
and
discontinuities
(1974).
than analysis is used by
causal relations between
the
be
or
because
there
exists
Under
anticipated.
limited
actors
and
hypotheses
contrast,
In
when
environment
the
issues
need
a
to be monitored. This leads to the
:
less analytically oriented.
perceived
as
is
environment
When
the
in
analytical
will
be
more
heterogeneous, managers
their approach.
H3
:
Further,
very
large
1981)
and
a
domain
a
heterogeneous
organizational
it
networks
environment
(Aldrich
results in
and Whetten,
becomes increasingly difficult to either define
parsimoniously
is
large number
In an unpredictable environment, managers will be
:
such
This inverse
value.
need for analysis goes up since
heterogeneous , the
H2
seen as
noted by Kobrin et al (1980), Boulton et al (1982) and
been
of
is
An environment is perceived
unknown
of
As argued
between environmental unpredictability and analysis
relationship
Keegan
is
environment
rather
cannot
that
analysis
circumstances,
has
are
is
However, perceptions of
the
either
because
unpredictable
actions
when
(1984),
cope with uncertainty.
to
processes
environmental homogeneity are
and
experimentation
unpredictable,
Hence, in the
managerial
of
need for
the
for analysis differently.
the need
Weick
and
be
analytical orientation.
an
endogenous variable.
to affect
more the perceived
will
more
information
the
of
that
is
orientation
an
as
environmental
expected
argument
environment,
the
analytical
considered
integral
organizations
of
in
to
is a
An
view
response to environmental
analysis
enough
for
the
term to have any
,
page 12 -
-
practical
connotation
specified
set
linked.
At the limit, in the case of extreme heterogeneity
of
or to limit scanning attention to any
actors
of
to
which
firm
the
is
directly
the environment, the entire environment becomes a part of
firm's
the
perceived
become
environment.
task
Thus, as the environment is
to be more and more heterogeneous,
broad,
scanning has to
involving more and more environmental actors.
In other words,
H4
:
In
a
heterogeneous environment,
relatively broad and unconstrained.
Greater
greater
processed
by
Also,
amount
managers
variety.
task
they
unstructured.
This
essential
has
to
be
environmental
information
processed
by
also
perceive
plausible
is
environment
their
their
tasks
to
be
for the multiplicity of
considered
be
be
to
effective
task
(the cause of environmental heterogeneity)
is an
that
performance
with
environment,
associated with their perception of
perceive
heterogeneous,
issues
that
be
This finding can be extended to suggest that
managers
when
the
will
as shown by Daft and Macintosh (1981),
positively
is
cope
to
environmental
of
of
information
of
manager
the
uncertainty.
the
amount
the
is
heterogeneity
the
scanning
need
feature
to
of
an
for
unstructured task (Perrow, 1967).
Therefore
H5
:
When the environment is perceived to be heterogeneous,
managers
perceive
their
tasks
to
be
relatively
unstruc tured
.
A
with
management's
Analysis
causal
from
the
to
emphasis
commitment
useful
is
effect
becomes
and
strong
when
on
to
there
analysis is usually associated
firm's
the
is
some
of events on outcomes.
current
understanding of the
The further away one goes
immediate
task
environment,
discern
such
causal implications.
risk-taking
domain.
the
more
difficult
it
Experimentation
rather than analysis are the characteristics of
page 13 -
-
who
managers
look
in
analytical
high
with
Managers
environment.
opportunities
for
the
broader
orientation
their scanning within the task environment since it is
focus
such domain-constrained information that is amenable to
only
formal analysis. Or,
H6
:
More analytically oriented managers are also more
focussed in their scanning attention.
Experience
of
diversity enrich the cognitive script
with
managers (Abelson, 1976) and enhance their capacities to deal
to limit the perceptions of ambiguity and equivocality
compelled
in
Managers more exposed to diversity feel less
ambiguities.
with
(Daft and Macintosh, 1981; Kiesler and Sproull,
tasks
their
1982).
They are more willing and able to see the ill-structured
aspects
of their tasks and to acknowledge rather than ignore the
of issues and influences that must be considered in
multiplicity
Therefore,
managerial judgement and decision-making.
H7
:
Greater the managers' experiences with diversity,
more they will recognize the unstructured
aspects of their tasks.
the
Following
orientation
can
(1983), an individual's strategic
Stevenson
be
categorized
as
entrepreneurial
or
Trustees have the characteristics of bureaucrats;
trustee-like.
they
attempt to find standard operating procedures and rules and
they
see
those
their
aspects
amenable
explore
the
environment.
broad
the
as
that
job
ambiguity.
and
equivocal
and
structured.
relatively
standardization
or
They ignore
ill-structured
are
and
They
formalization.
not
avoid
Their schemas do not require them to
often
weak
cues
from the broader
Entrepreneurs, in contrast, typically explore the
environment
acknowledge
tasks.
of
to
complexity
tasks
the
for
opportunities
ill-structured
Two hypotheses follow
:
and
aspects
are
of
more willing to
their
managerial
- page 14 -
H8
More entrepreneurial managers perceive their tasks
to
relatively less structured compared
to
be
managers who are less entrepreneurial.
:
H9
:
More entrepreneurial managers display relatively
broader scanning behavior.
and, by extension, analysis act as symbols
Information
and
signals
as
(Feldman
more
to
managerial actions and perceptions
1981).
The more analytical a manager, the
creates an internal environment that suggests analysis
she
be
March,
and
guide
that
basis
the
characteristic
amenable
for
ill-structured
of
formal
to
decisions
actions.
and
tasks
emphasize
analysis
typical
a
they are not
that
is
quantitative) analysis because of the
(and
Therefore, managers who
and ambiguity inherent in them.
variety
But,
those who see their tasks as relatively
are
more structured, or
H10:
More analytically oriented managers perceive their
tasks to be relatively more structured.
Higher
position
the
hierarchy,
organizational
differentiation
(Lawrence
unstructured
her
junior
are
managers,
involve
Top
managers
relatively
of
are
more
tasks
the
Lorsch,
(Wellinsky,
that
complexity
a
is
and
decisions
greater
consideration
less
manager
a
a
and
top
occupies
extent
the
internal
of
and
1967)
more
Compared to
1967).
manager
explicit
in
has
implicit
or
far diverse range of issues and
to take
influences.
more involved in long term decisions that are
impacted
environment of the firm.
by
factors
outside the current task
Hence,
Hll:
Higher
up
a
manager in the organizational
hierarchy, more unstructured her tasks are and
appear to be.
H12:
Higher the position a manager occupies in the
organizational hierarchy, broader is her scanning.
- page 15 -
Finally,
tasks
their
diversity
to
of
of
cm
domain
a
unstructured,
information
becomes
it
of
than
task is
the
to identify the actors
a
particular course of
who
focussed
attention
characterizes
perceive
the
to
a
scanning
their tasks to be
Hence the hypothesis:
The more unstructured a manager feels her tasks to
be, the broader becomes her scanning.
SECTION
The
scanning
based
it
managers
highly unstructured.
:
take
broader attention to the overall
a
of
part
particular
to
The whole notion
when
since
difficult
rather
environment
H13
fuzzy
is
Therefore,
action.
behavior
problems.
unstructured
need to form the
essential
are
that
the variety and
is
they
that
affect the outcome of
can
who
greater
the
judgements
qualitative
decisions
be,
unstructured managers see
more
the
in
5
:
TESTING AND REFINING THE MODEL
model
behavior
South
was
of
Korea.
111
tested
and
managers
Sampling,
refined using data on
in
16
data
large companies
collection
and
measurement procedures are explained in the Appendix.
followed
nested design, with
a
survey
the
In principle,
individual respondents belonging to different companies in two
However, one-way
broad
sectors (trading and manufacturing).
variance tests on all the measured variables indicated that
sector or company level of analysis was not very useful since
neither could explain a significant part of the variance for
responses were treated
Hence,
the
most of the variables.
For a
independently at the individual level of analysis.
detailed discussion on the level of analysis, see Ghoshal
(1985).
*
-
general linear model developed by Joreskog and
The
Sorbom
number
and
endogenous
variables,
prevented
of the measurement model and only allowed testing of
Exploratory
model.
causal
analysis
factor
of
indicators was used to obtain composite measures of
essentially
are
therefore,
effect,
latent
variables
the model.
in
In
latent variables were treated as if
the
variables,
measured
were
they
sample size, given the relatively large
exogenous
of
multiple
what
used for testing and refining the model.
small
the
testing
the
was
(1982)
However,
page 16 -
ignoring
thereby
separate
However,
all
individual
measurement
errors.
analysis
correlations among different indicators of each
of
of
the variables, as well as reliability coefficients of the
composite
measures
convergent
validity
details)
indicated
satisfactory
level
of
the measures (see Ghoshal, 1985 for
of
V,
computer program that supports the
the
Joreskog, offers
linear
model
of
unweighted
least
squares
general
estimator
depends
a
.
LISREL
the
and
methods
for
and
the
a
choice between
maximum likelihood
parameter estimation.
The ML method
on the assumption of multinomial normal distribution
of the variables but has the advantage of readily providing
*
To build
model using all
the
concerned measured
the
indicators of the eight
variables (i.e., all different
would
require the
inclusion of 32
latent
variables)
variables and, following the arguments of Lawley and Maxwell
rules out
option.
sample size of 111
that
(1971),
a
three of the measured variables
Further, between two and
loaded
significantly on the factors that, through the
process of exploratory factor analysis, defined the measures
of
Thus, the sample size limitation
the
latent variables.
prevented construction of even a simplified measurement
model
including only the most significant measured variables
for each of the latent variables.
- page 17
errors and t-statistics for the estimates.
standard
does
method
-
The ULS
assume any distribution for the variables,
not
but
does not generate either standard errors or t-statistics
for
the
nor an overall statistic for goodness of
estimates
fit.
Given
that
most of the variables in the model are
either ordinal or are computed by addition of variables
measured
on ordinal scales, ULS is clearly the theoretically
superior
method.
However, the difference between ULS and ML
estimates
of the parameters are usually small and so, in the
analysis,
the
ML
method
was
used
for
model testing and
refinement but the final model was also estimated on ULS.
Instead
of
simply testing the proposed model, the
of an iterative process of model testing, modifying
approach
and
retesting was adopted.
the
starting
The original hypotheses provided
for the refinement process.
point
Parameters
estimates were small compared to their standard errors
whose
eliminated
were
process
the resulting model was retested.
refinement
model
of
The
was guided by the analysis of
residuals
of
the variance-covariance matrix and
multipliers
of
the
normalized
legrange
and
log likelihood function (what
Joreskog and Sorbom call "modification indices").
problem
The
absence
associated with this approach is that
of appropriate control, the final model may
in
the
be
strongly influenced by chance sampling error in the data.
One
way
sample
to
into
control
two
for
halves
this possibility was to split the
so that one half could be used
for
model
building and the other half could be used to provide
clean
test
case,
of
however,
possibility
.
the
the
refined model (Bentler, 1980).
small
sample
size
ruled
a
In this
out
that
page 18 -
-
control
solution
The
only
on
model
refinement
capitalizing
possibilities
of
stopping
refinement
the
condition
proposed
correct
Lawley
by
overcorrecting
minimize
to
the
This was done by
on chance.
as
soon
Saris,
de
Pijper,
and
Maxwell
specification
real
as
tight
a
p('/' 2
as
)X).10
and Zegwaart
that this stopping criterion, originally
shown
have
(1979)
so
process
reached.
was
available was to adopt
errors
model
the
(1971), is most likely to
spurious
for
model
the
in
without
error
sampling
(reference in Anderson, 1984, p31).
SECTION
5
process
The
:
FINDINGS
modification
model
of
and
reconfirmation yielded parameter estimates shown in Table
Before
desirable
of
run
review
to
0.985
an
adjusted
0.037.
of
The
of
freedom).
between
The
value
0.973
of
and an RMS
was 0.297 with DLS and 0.316 with
of
the
f
variances
of 5.57 (7 degrees
were
negative, no
The correlations
modification
suggested
indicator
residual
for
index
by
2.18
was
Joreskog
further
-
less than the
and Sorbom (1982) as
model
trimming.
The
plot had a slope very near one compared
o
to the 45
The ULS
estimates were small, the largest being -0.297.
5.0
normalized
is
The ML run yielded
coefficient was more than one.
largest
positive
.
it
The total coefficient of determination
equations
None
the
of
measure
ML estimation also showed a
ML.
correlation
values,
overall goodness-of-f it
goodness-of-f it
structural
for
parameter
an RMS residual of 0.036.
and
residual
the
the
model yielded an adjusted goodness-of-f it index
the
of
reviewing
1.
line (there was some skewness at the top).
-
PARAMETER
HYPOTHESIZED
SIGN
page 19
-
ULS
ESTIMATE
-
goodness-of-f i t index
The
since
interpreted
distribution.
bound
All
can
that
LISREL cannot be directly
follow
not
determination
of
Walker
per
any
known statistical
be said is that it sets an upper
sets the
Weber
and
"suggests
goodness-of-f it
in
does
it
in
the percentage of variance explained by the model (the
on
coefficient
as
page 20 -
that
lower bound).
(1984),
a
the
high
However,
measure
of
major portion of the variance
the data is explained by the model as a whole" (pl8).
Figure
parameters.
The
the path structure with the estimated
shows
3
effects
total
of the different variables on
scanning behavior are summarized in Table 2.
Total effect on individual
scanning behavior (extent of
domain focus)
Explanatory variables
1.
Perceived environmental predictability
2.
Perceived environmental homogeneity
-
0.078
3.
Experience with diversity
-
0.029
A.
entrepreneurial orientation
-
0.089
5.
Analytical orientation
6.
Perceived extent of structure in tasks
Table
2
:
because
methodology
0.095
-
0.178
Total effect of influencing factors on
managerial scanning behavior
These
caution
0.171
that
findings
of
must, however, be interpreted with
the
limitations
in
the
data
and
constrain validity and general izab i 1 i ty of
-
page 21
-
page 22 -
-
the
after
-
error
all
(coefficient
and
determination)
percent
even
difficulty
with
highlighted
by
that
it
with
the
users
structural
with
models
may
is
One
way.
models
not
often
number of
a
path-structures and
different
data equally well and the only
the
made on behalf of
particular model
a
superior to another model that shows
is
worse fit
a
Not having such an alternative model (few
data.
this technique ever do), even that claim cannot be
of
the final model developed
made
for
the
relationships
measurement
Finally,
other
the
equation
very
fit
be
can
that
that may fit the data equally well
users of the methodology is that
path-strengths
claim
(adjusted
97
variance and there can be
the
relationships
significant
different
and
either not reflect these relationships or may
may
show
of
models
alternative
that
model explains anything between 32
the
of
goodness-of-f it)
many
there is the possibility of modeling
First,
results.
error
or
may
they
process
the
be
out
of
development.
model
of
artifact
an
arising
spurious,
be
may
Besides,
in this study.
of sampling, caused by
non-random selection of respondents.
On
certain
data
tests
internal
of
subjected
was
possible
positive side, however, are the results of
the
to
and
For
to.
external validity that the
want
space,
of
it
is not
discuss those tests in this paper (see Ghoshal,
1985 for details), but the broad outcomes deserve mention.
validity of the data (Kidder, 1981) was
Concurrent
tested
by
checking
characteristics
scanning
of
example,
associations
managers
and
concentrate
conditions,
managers
use
for
certain
intuitively
behavior
of
between
obvious
managers.
For
functional specialization of
kinds of information they gather (R&D managers
technology,
on
and
so
on)
marketing
and
sources
managers
they
use
on
market
(finance
bankers, planners use publications, etc.) were
all strong and of the right kind.
-
- page 23
analysis
Factor
validity
indicators,
the
as
well as
supported construct
generally
analysis
correlation
simple
of
the variables and their operational izat ion
of
.
In
variables and measures were those that have
most
cases
been
successfully
the
previous researchers, though in
by
used
different environments and contexts.
Finally,
managers
sampled
attributes
and
with
(1983).
that
scanning
modes
range of variables such as
personal
attributes as well as the
The directions
surveys of scanning behavior of
past
of
managers
conducted
researchers such as
by
Keegan (1967), Collings (1968), Kefalas and
(1967),
Schoderbeck
and
a
with
and
results
American
Aguilar
used,
of these associations were largely consistent
strengths
North
attributes such as kinds of
of
their environments and tasks.
of
the
scanning behavior of the
of
sources
associated
were
professional
their
terms
in
acquired,
information
adopted
nature
the
Hambrick (1982) and Miller and Friessen
(1973),
provides some indirect (and weak) indication
This
the findings may be more generalizable than theoretical
evaluation of the sample would allow.
SECTION
Out
of
the
7
:
total
six
nature
effects,
predictability
environmental
perceived
DISCUSSION
tasks are strong.
only
and
those
of
perceptions
The effects of
regarding
the
perceived
environmental homogeneity, analytical orientation,
experience
are
weak.
with
Four
of
diversity,
of
these
expectations and two are not.
and entrepreneurial orientation
results
are
consistent
with
page 24 -
-
discussing
In
insignificant)
possibly
one's,
strong
the
interpretation
prove
than
weak
the
(and
considered along with
are
spirit
the
the most generous
that
findings is that they suggest rather
the
hypotheses.
of
section,
grounded
as
effects
in
set
a
introductory
seen
of
results,
these
following
the
indicated
As
in
the
should be
discussion
and not as analysis of cause
conjectures
for demonstrated effects.
When
unpredictable,
individuals
themselves
limiting
scanning
sociological
(1967)
The
his
in
information
processing
structure
for
a
for
based
(1967)
was
on
his
intelligence
observed
by Aguilar
of
organizations,
is
influenced
As per the
perceived
by
the
review). Therefore, at least to a limited extent, how
can
the managers of a firm feel the environment to
manipulated
be
at
the margin through organization
This perception of unpredictability, in turn, would
design.
affect
need
the organization (see Daft and Macintosh, 1981
of
unpredictable
be
view
unpredictability
environmental
This link
the
organization design.
for
not
The association may have an
studies.
implication
important
and
organizational
the
phenomenon
same
sector
as
ideological intelligence"
Wellinsky
of
case
broader
a
their task domain.
for "political and
study
function.
scan
to
by
perceived
is
unpredictability
suggested
been
had
only
environmental
between
broad
environment
the
nature
the
of
scanning
and,
in
the long term, the
adaptive capability of the firm.
Norma t ively ,
For
before.
Scott
Morton
needs
to
it
for
broad
both
instance,
such
It
an
argument
has
been
made
has been suggested by Lorange,
and Ghoshal (forthcoming)
that an organization
protect its core (Thompson, 1967) and expose
effective
environment
learning and adaptation.
is useful
in
Exposure to the
sensitizing the organization
.
page 25 -
-
(or
sub-unit)
a
isolating
it
Thus, according to these
change.
the
structure of the organization or the sub-unit
the
vary depending on the particular phase of adaptation
should
that
it
to be overintegrated
needs
broaden
to the wider environment.
scanning
their
phase,
change-embedding
the
the sensitizing phase so that
at
the environment to be more unpredictable
perceive
managers
add
An organization
argument.
normative
this
to
findings
present
The
through.
going
is
credibility
and
protecting and
;
desirable in the process of effecting and
is
institutionalizing
authors,
need for change
the
to
needs
it
At
be
to
overdif ferentiated
so that members perceive the environment
relatively
more stable and can institutionalize the
to
be
while paying attention only to the more limited task
change
environment
dangers
an overly analytical approach of companies that
of
Peters
-
sequence
with
of
that
scanning,
be
can
unpredictability
argument
as
domain-constrained
is
it
to
firm's
outside
promote
discontinuity,
.
Such
environmental
of
there
task
sensitivity
may be
a
valid
and
to
the broader
their ability to innovate.
enhance
to
opportunities
technology
era
an
members'
the
and
its
focussed
argued, is incapable of finding bold
In
and
and
deemphasizing analysis and linear thinking so
for
environment
A second,
High analytical orientation leads to
opportunities.
new
"ready-fire-aim"
the
weak, finding of the study is consistent
argument.
this
follow
to
to overcome the hubris of analysis.
and
scanning
need
the
admittedly
though
risk-taking.
and
Waterman (1982) have spoken about the "bias for
and
action"
experimentation
innovation,
curb
can
of authors have recently pointed out the
number
A
threats
environment
-
A
increasingly arise from
particularly in the high
industries where innovations in one industry can
revolutionize
another
with
which,
till that time,
it had
page 26 -
-
little
common.
in
unconstrained
reactive
model
of
gestalt
a
healthy dose of
essential for proactive or even
is
events to their effects.
discontinuity,
causal
the
analytically,
interpret
to
era,
an
Analysis is useful when there is
connects
possible
complex
a
causal
In the
face
may be too
links
intuition
and
and
rather than logic and analysis may be the preferred
learning
of
scanning
coping.
that
such
In
under
tools
cannot
with
justified
be
gut-feel
is
managers
will
The first signs
or of a threat is often a gut-feel that
opportunity
an
such circumstances.
analytical
If such
precision.
felt to be acceptable within the company,
not
gradually
stop looking beyond the immediate
task domain.
Managers
constrained
less
are
entrepreneurial
two
weak
but
implications
Driver
the
Both have interesting
placement
managers
of
suggested
had
(1969)
functions.
staffing
and
should
that
match their
functions in companies may require managers who are
sensitive
new
These are the other
complexities with the requirements of their jobs.
cognitive
Certain
training
the
More
orientation of managers, the
findings.
Streufert
and
scanning.
their
their scanning.
expected
for
organizational
is
with diversity
experience
in
personal
the
unconstrained
more
greater
with
to
the broad environment
strategic planning or
development are possible examples.
venture
traditional
more
;
greater
awareness
compared
to
functions,
of
the
accounting.
systematically
placing
broader
may
environmental
need
a
trends
organization can benefit by
An
more
marketing
Even among
entrepreneurial
managers and
those with greater exposure to diversity in such functions.
Similarly,
programs
functions
may
to
be
internal
training
and
development
tailored so as to expose managers in such
greater
diversity
by
rotating
them
in
page 27 -
-
assignments
different
new and companies have been following
not
are
suggestions
traditionally.
them
These
locations.
different
in
It
comforting, however, that in
is
these implications, the findings are not counter-intuitive.
All
suggestions
theoretical
past
What
may
be
more
in
the
surprises
hypothesized,
are
two
the
as
environmental
instead
of being more
First,
scanning,
diverse
restricted
more
becomes
and
Second, as the task is perceived to be less
domain-bound.
less structured, scanning becomes less diverse and more
narrower
focussed
on
diagram
confirms
the
heterogeneity
really
one
unstructured
does
lead
an
constrained
et
individual's
cognitive maps.
this
hampered
integrative
the
between
complexity
of
Lawrence and Dyer (1984) have
suggest that beyond
to
innovation
and
level of
a
learning
Similarly, it can be argued that beyond
"information
complexity,
task
predominant
are
as
means
a
avoidance"
to
a
level
behavior
cognitive
reduce
Beyond this point, search becomes simple-minded
overload.
problemistic
symptoms
and
demonstrated
due to limitations in human information processing
capacity.
becomes
finding
complexity,
information
than less
relationship
U-shaped
inverted
complexity
on
have
(1968)
al
environmental
built
rather
?
Schroder
of
the surprise is
therefore,
perception of the task being
the
more
to
constrained scanning
existence
effect,
In
why
:
through the perception of
mediated
also
is
environmental
of
effect
the
path
The
environment.
task
that
structure.
task
of
review
to
model.
increases,
and
empirical observations.
and
interesting
heterogeneity
as
results and they confirm
expected
are
these
and
alternatives"
search
...
(Cyert
"...
-
in the
in
the
and
March,
neighborhood of problem
neighborhood
1963,
pl21).
of
current
In
this
.
- page 28 -
unstructured
occupied
respondents
survey
faced
tasks.
Therefore,
it
positions
and
judgemental
and
impossible
not
is
All
tasks.
managerial
unstructured
relatively
perhaps
see decreasing scanning
to
increasingly
with
diversity
expect
indeed
can
we
range,
that the data
pertains to this range.
research by Ben-zur and Breznitz (1981) and
Recent
Streufert,
stress
of
streufert
the decision situation reduces the dimensionality
in
behavior.
decision
risk-taking
Extending
domain.
implausible
does not affect the extent of
It
leads to to a more unid imensional focus on
but
action
one
Denson (1983) also suggests that
and
when
that
argument, it is not
this
become too complex, decision
tasks
makers narrow rather than extend their scanning focus.
Reviewing
information
search
noted
"...
that
benefits
deficient,
is
even
human
in
highly
made
skills
a
in
and Serre (1983) have
balancing the costs and
acquisition
be
may
seriously
laboratory task in which the balance
salient
opportunities
extended
and
of
If these findings generalize to the
are provided.
learning
Connolly
tasks,
information
of
on human performance in
literature
the
real
world
information
acquisition
they
imply
significant
non-optimalities
noted earlier,
tasks
may
be found in
such tasks" (p3)
also
has
It
validity
affects
validity
cues
error
and
suggested
information
may
Gilani,
1982).
behavior.
confirmed
the
show
Edwards
,
in
subjects
information
(1965)
based
Snapper
suggestion
that
behavior.
Low
yield enough reduction in decision
not
normat ively
decision
perceived cue
that
acquisition
to justify acquisition of such
relationship
which
been
on
and
(Connolly
suggested this
has
the Bayesian model of
Peterson
(1971)
have
their laboratory experiments
information
behavior
depart
page 29 -
-
when
information
optimum
from
substantially
d
iagnost ic ity
levels
intermediate
of
information
optimally
information.
Conolly
finding
show
to
information
d
:
subjects
is
low,
iagnosticity
that
under-acquisition
diagnostic
Serre (1983) have extended the
the
pattern
of overacquisition of
information
of
acquire
and
,
at
and
decisions
low-consequence
for
underacquire
highly
for
only
overacquire
for
and
high-consequence
robust to variations in overall cue validity.
decisions
is
Further,
they
have
that
shown
also
such
sub-optimal
acquisition behavior persists with feedback and
information
learning is often limited.
with
of
cognitive
when
stress
ambiguity
and
environment
Therefore
the
Given
behavior.
the
information that accompany
in
from
information
the
broader
even lesser cue validity than information
have
more
the
they perceive their tasks to be
equivocality
tasks,
unstructured
managers face a high degree
acquisition
information
their
:
This leads to an unidimensional focus
unstructured.
highly
from
scenario
following
the
in
of these findings is not inconsistent
pattern
The
interpietable
immediate
task environment.
unidimensional focus is directed toward that
Hence the finding that more unstructured the task,
domain.
more domain-constrained the manager's scanning behavior.
explanation for the finding may lie in the
Another
notion
may
slack.
of
have
more
may
slack
the
resources
capacity.
can
be
invest
to
tasks
in
scanning the broader
are highly unstructured, little
be available for any activity other than getting
immediate
physical
slack
When
environment.
Managers' carrying out structured tasks
slack
but
task done.
in
the
The slack in question may not be
sense
of
time
or other tangible
intellectual slack in the sense of cognitive
Further,
with structured tasks, most decisions
taken through SOP's and the ones that need external
-
information
environment
environment
the
SOP's.
may
be
because
may
implications
from
beyond
the
task
from
the
task
arising
are consistent and standard and are included
in
Thus, the scanning needs for structured tasks
biased
toward
task
the
environment
information
need
since
page 30 -
is
the
is
predictable
broader
environment precisely
structured
and
and
the
immediate
unambiguous and therefore
does not need to be constantly monitored.
- page 31
-
APPENDIX
SAMPLE
June,
In
Republic
to
16
agreed
as
in
The
well as questionnaire
Telephonic
participate in the study.
to
who
those
with
follow-up
firms
25
study the scanning practices of their managers.
to
firms
interviews
personal
conduct
largest
the
Korea (South Korea) were approached for access
of
surveys
1984,
refused
suggested that
access
firms perceived the research as an effort to find the
those
sources
specific
willing
what
with
part
to
of their scanning and were not
ways
and
they
considered to be highly
confidential information.
contact
was
a
Each company
given 10 questionnaires and was requested to distribute
managers
approach
selection
management
different
in
since
adopted
was
respondents from
of
representation
balanced
ensuring
internally,
them
This
request,
the
and met personally.
established
was
accepted
that
company
each
In
a
and
levels
of
functions.
proposal of random
the
list of company executives
did not find favor with most of the participating firms.
A
were
of
total
Given
received.
distributed
firms
filled and usable questionnaires
111
sampling
the
the
process whereby the
internally,
questionnaires
no
evaluation of non-response bias was possible.
cross-tabulation
A
level
of the respondents by function
presented in table 3.
While all
and
management
111
respondents reported their management level (24 top, 26
middle,
junior),
64
affiliation
.
is
only
97
indicated
their functional
- page 32 -
Functions
.
-
categorized
agents
agents,
publications,
and
consultants,
general
publications, trade shows, and others,
trade
were asked to estimate the percentage
information
external
of
distributors,
and
respondents
the
suppliers, bankers, advertising
customers,
as
page 33 -
they
acquired from each of these
sources
competition and technology were considered
Market,
while
environment,
as
and
firm's
task-domain,
the
immediate
task
resource, broad issues and
that were part of the
Customers,
suppliers and
were considered as members of the
distributors
agents
to
factors
environment".
"broad
residual
regulatory,
considered
were
others
relevant
factors
information
as
the other sources were considered
and
as representing outside-domain actors.
Total
time
of each respondent for percentage of
spent acquiring market, competitive, and technological
information
percentage of information gathered through
and
suppliers and agents and distributors were added
customers,
and
scores
sum was used as
the
a
measure of the extent of domain-
focus in the respondent's scanning behavior.
2.
Environmental Characteristics
rationale
The
that are perceived by managers as necessary for
information
(1962),
decision making.
Starbuck
perception
reality"
and
the hypothesis
nature of the environment influences the kinds of
the
effective
environmental
including
as variables of interest was
characteristics
that
for
of
of
(1976)
and
environment
the
its
Following the arguments of Dill
Weick
(1969),
it
is
the
rather than any "objective
characteristics that drives the attention
interpretation
processes
collectively
labelled
as
page 34 -
behavior.
scanning
based
managerial
on
for
1979,
and not on any objective
perceptions
quantitative
measures,
Ireland,
measurement of the environment were
and
opera t ional izat ion
therefore,
study,
this
In
qualitative
or
discussion
detailed
a
Downey
(see
and
different
on
measures of environmental characteristics).
Questions
(1983)
directly
adopted
dynamism,
by
proposed
environment
and
along
three
authors
the
dimensions
hostility, and heterogeneity - factor analysis of
yielded only two distinct dimensions.
interpretation
of
the
Based
loadings (see Table 4),
factor
dimensions were labelled as predictability (factor
these
and
Miller
However, while
the study instrument.
construct
the
responses
the
on
in
theoretical
categorizes
by
for measuring environmental attributes were
Friessen
the
developed
scales
and
(factor
homogeneity
generated
Note that these empirically
almost perfectly match the environmental
factors
categorization
2).
1)
scheme
proposed
by
Lawrence
and
Lorsch
(1967).
Factor
Predictability of
competitors
0.75
Predictability of
customer needs
0.61
Predictability of
industry upswings
and downswings
0.50
1
Factor
2
Diversity in methods
of production and
marketing
0.56
Rate of new product
and process innovation
0.42
Table
4
:
Measurement of Environment Attributes
Factor Loadings
.
-
3.
Task Characteristic s
dimensions
with
percent
of
shown
-
suggested
structured-
and analyzability - factor
only
one significant
of 1.34 and which explained 27
a
categorization of tasks along
unstructured dimension.
dimension
extracted
two
This extracted factor (loadings
variance.
the
conceptualized
had
yielded
eigenvalue
an
in Table 5)
single
variety
responses
the
of
authors
the
task
of
factor
the
while
again,
analysis
the
developed by Daft and Macintosh (1981). However,
instrument
here
using
measured
were
characteristics
Task
a
page 35 -
Here again,
closely follows Perrow's proposal
(1967) of categorizing tasks as rout ine-nonroutine
Factor
lot of experience
0.83
1.
Tasks require
and training
2.
Tasks require extensive and demanding
search for solutions
a
3. Available
information can be
interpreted in several ways and can
lead to different but acceptable
dec isions
Table
4.
5
:
Task characteristics
and
0.55
0.43
extracted factor
Analytical Orientation
Analytical
a
:
1
broader
used
questions
orientation was one of the two dimensions of
variable - strategic orientation - that was developed
in
and
the
study.
scales
The
developed
variable
was
measured
using
by Miller and Friessen (1983).
.
-
The
questions
and
are
shown
Table
in
variance).
The
significant
any
the
results of factor analysis of responses
6
(the factors explained 41 percent of the
first
orientation.
analytical
page 36 -
effect
factor
was
used
as
indicator of
an
The second factor was found not to have
on
aspect
the
behavior
scanning
of
reported in this paper and was not included in the model.
Factor
1.
Futurity of analysis
0.60
2.
Top management involvement in
analysis
0.41
3.
Industry and competitive analysis
0.76
4. Use of analytical
techniques
Factor
1
0.64
5.
Extent of risk taking
0.57
6.
Aggressiveness in competition
0.66
7.
Product/process/service innovation
Table
6
:
measured
through
Stevenson
(1983).
dimensions
trustee-ship
strategic
resources,
structure
0.50
Strategic orientation - underlying factors
Entrepreneurial
five
2
the
The
orientation
concepts
of
individual
proposed
indicators
and
framework
the
was
by
proposed by him consists of
for differentiating between entrepreneurial and
orientation
drive,
control
of
commitment
of
managers.
to
resources,
These
opportunity,
and
dimensions are
commitment
preferred
of
management
.
page 37 -
-
All
administered
of
the
did
had
control
and
not
respondents'
an
Stevenson
by
were
However, only two
questions, those measuring respondents' attitudes toward
discriminating
control
proposed
using five-point ordinal scales.
commitment
and
questions
the
of
resources,
the
on
two
a
scale that was used as
entrepreneurial orientation.
their
marginally
but
poor
of commitment and
dimensions
of resources were added to form
of
Hence, the
the tests of construct validity.
pass
strong
The other questions were inter-correlated
power.
scores
indicator
showed
acceptable
reliability
The scale
(Cornbatch's
alpha of 0.47)
6.
of
Experience with Diversity
two
Experience
with
indicators
-
countries
lived
in.
diversity was operationalized as
number
of
a
sum
languages read, and number of
The resulting scale was found to have high
reliability (alpha 0.76).
7. Management Level
Management
respondent
based
Managing
top
to
on
level
was
measured
by
assigning
each
one of three categories - top, middle, and junior
their
Directors,
designations.
and
Executive
Vice Presidents,
Executive Directors were classified as
managers, Directors and General Managers as middle managers,
and Managers and Assistant Managers as junior managers.
- page 38 -
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