1042-2587-91-154$1.50
Copyright 1991 by
Baylor University
The Relationship
Between Marketing
Orientation and
Entrepreneurial
Orientation
Morgan P. Miles
Danny R. Arnold
Increasing environmental uncertainty has focused greater attention on firms' overall business orientations, particularly on the marketing orientation and the entrepreneurial orientation. The major purpose of this empirical Investigation was to determine whether the
marketing orientation and entrepreneurial orientation represent the same or two unique
business philosophies.
A
firm's business orientation consists of those underlying philosophies that determine the nature and scope of its activities and plans (Peterson, 1989). Different business
orientations result in varied perceptions of organizational priorities, how the customer is
viewed, and how the firm implicitly defines its business. Hence, an organization's
business orientation is its underlying philosophy, which tends to flavor the overall
decision-making framework of its management.
While a marketing orientation implies that a firm should focus on its customers, an
entrepreneurial orientation suggests that organizations must constantly seek to exploit
the dynamics of their macroenvironment and task environments. Thus, an entrepreneurial orientation provides an excellent basis for the appropriate strategic response to organizational crises caused by environmental turbulence (Khandwalla, 1977; Smart &
Vertinsky, 1984). Morris and Paul (1987) define an entrepreneurial orientation as "the
propensity of a company's top management to take calculated risks, to be innovative,
and to demonstrate proactiveness." They also suggest that both the marketing orientation and the entrepreneurial orientation are interrelated strategic responses to environmental uncertainty.
The nature of the interrelationship between a marketing orientation and an entrepreneurial orientation has begun to receive greater attention. Specific attention has been
devoted to determining if the two orientations are the same or represent unique environmental responses (Murray, 1981; Webster, 1981; Zeithaml & Zeithaml, 1984; Hills,
1987; Morris & Paul, 1987).
Consequently, the purpose of this study was to evaluate the interrelationship between the marketing orientation construct and the entrepreneurial orientation construct.
Specifically, the major purpose was to determine whether the marketing orientation
Summer, 1991
49
construct and the entrepreneurial orientation construct describe the same underlying
business philosophy or two unique perspectives.
MARKETING ORIENTATION
Marketing scholars suggest that a marketing-oriented firm has adopted the marketing
concept and the corresponding customer focus. For example, Foxall (1984) states that
marketing orientation is an organizational adoption of the marketing concept that will
color the ''attitudes and behavior of all members of the company. '' The marketing
concept itself represents a distinct organizational culture and true adoption by an organization results in a strategic customer focus (Deshpande & Webster, 1989). McCarthy
and Perreault (1984) define marketing orientation simply as the organization's willingness to adopt the marketing concept as its underlying business philosophy. They suggest
that a marketing orientation implies the goal of satisfying customer needs while meeting
organizational objectives. Consequently, the adoption of the marketing concept served
as the operational definition of the marketing orientation construct for the present investigation.
Adherence to certain specific maxims generally indicates that an organization has
adopted the marketing concept as its core business philosophy. The four traditional
components of the marketing concept are (1) customer orientation, (2) customer satisfaction, (3) coordinated or integrated marketing, and (4) a focus on profitability (Borch,
1957; Felton, 1959; Keith, 1959; King, 1965; Bell & Emory, 1971; Konopa & Calabro,
1971; Bennett & Cooper, 1979; Bennett & Cooper, 1981; Lamb & Crompton, 1986;
Lusch & Laczniak, 1987; Kotler, 1988; Peterson, 1989). A summary of the various
conceptual definitions of the marketing orientation construct is provided in Table 1.
Table 1
Conceptual Comparison of Selected Definitions of the
Marketing Orientation Construct
AUTHOR
Barksdale and
Darden (1971)
McNamara (1972)
Lawton and
Parasuraman (1980)
Parasuraman (1983)
Bartlett, Schewe,
and Allen (1984)
Foxall (1984)
Morris a11d
Paul (1987)
Canning (1988)
Deshpande and
Webster (1989)
50
DEFINITIONAL KEYWORDS
Adoption of marketing concept, consumer orientation, profit driven, meet
consumer needs, desire more government regulation
Adoption of marketing concept, implementation of marketing concept, status of
marketing, coordinated marketing, scope of marketing research
Adoption of marketing concept, background of the firm's top management
Status of marketing research, focus on consumer needs, adoption of marketing
concept
Organizational orientation, consumer orientation, planning orientation,
segmentation orientation, aggressiveness orientation, dynamic orientation
Adoption of marketing concept by entire organization
Marketing department, use of consultants and marketing research, planning,
product managers, status of marketing, background of management, feedback
devices
C.E.O. 's role in marketing, adaptive strategy, market orientated MIS, cost
effectiveness, new product development and marketing coordination, marketing
considered professional, marketing as corporate culture
Strategic focus on customer, marketing concept as corporate culture
ENTREPRENEURSHIP THEORY and PRACTICE
Entrepreneurial Orientation
Entrepreneurship has been referred to as the ''parent of innovation'' (Meyers, 1986)
because it serves as the innovative change agent that moves organizations and society
forward (McClelland, 1976). Without entrepreneurship, business and society would be
neither dynamic nor adaptive, thereby resulting in stagnation. With entrepreneurship,
however, firms tend to seek innovative and flexible means to exploit opportunities and
achieve desired objectives (Khandwalla, 1977; Meyers, 1986).
Ginsberg (1985) adapted Miller and Friesen's (1983) definition, which assesses the
relationship between environmental uncertainty and strategic orientation, by adding
Khandwalla's (1977) tripartite measure of entrepreneurial orientation. The result of this
adaptation is a five-item definition that purports to describe more fully the hypothetical
domain of a firm's entrepreneurial orientation.
A correlation between environmental hostility within dynamic task environments
and the tendency for manufacturing firms to adopt an entrepreneurial orientation was
reported by Covin and Slevin ( 1989). Their results indicate that financially successful
firms tend to exhibit an entrepreneurial posture in hostile environments. Covin and
Slevin extended Miller and Friesen's (1983) and Khandwalla's (1977) findings by adding the propensity to seek high risk/high return projects to their definitions. Table 2
provides a summary of entrepreneurial orientation definitions.
Interrelationship Between Marketing Orientation and
Entrepreneurial Orientation
In this era of increasingly volatile and sometimes hostile external environments,
marketers have been criticized for not adopting a more entrepreneurial perspective
(Webster, 1981). Webster suggests an entrepreneurial orientation as a general scheme
for managing the macroenvironment in states of uncertainty. Zeithaml and Zeithaml
Table 2
Conceptual Comparison of Selected Definitions of the
Entrepreneurial Orientation Construct
AUTHOR
McClelland (1976)
Meyers (1976)
Khandwalla (1977)
Shapero and Sokol
(1982)
Miller and
Friesen ( 1983)
Foxall (1984)
Ginsberg (1985)
Morris and Paul
(1987)
Covin and Slevin
(1989)
Summer, 1991
DEFINITIONAL KEYWORDS
Innovation, need to achieve, risk accepting, proactive
Innovative
Financial innovation, proactive, pragmatic
Proactive, functional, initiator management, decentralized, rewards to risk-takers
Aggressiveness, innovative new products, novel solutions, logistical innovation,
emphasis on research and development
Opportunity seeking, control of external parties for own gain
Aggressive, seek novel solutions, innovative, new products, innovative distribution
New product introductions, innovative production and logistics, risk taking,
aggressive, seek novel solutions, research and development emphasis, active
opportunity scans, bold, growth oriented, pragmatic, compromising, charismatic
leaders
Innovative, aggressive, proactive
51
(1984) suggest that firms should adopt a proactive "entrepreneurial philosophy" to deal
with both the macroenvironment and task environments.
A recent empirical study addressed the relationship between the marketing and
entrepreneurial business philosophies (Morris & Paul, 1987). The major hypothesis was
that there should be a significant difference in entrepreneurial orientation scores between
firms "in which marketing appeared to receive greater emphasis" and those in which
marketing receives less of an emphasis. The correlation between the entrepreneurial
orientation and marketing orientation constructs was proposed to result from increasing
levels of environmental uncertainty.
THE THEORETICAL PROPOSITION
The literature discussed thus far involves the interrelationship between the marketing
orientation construct and the entrepreneurial orientation construct. Zeithaml and Zeithaml (1984) suggest that an entrepreneurial orientation may be a useful business philosophy to assist a firm in dealing with both its macroenvironment and task environments. Morris and Paul (1987) propose that both the marketing and entrepreneurial
orientations are strategic responses to increasing levels of environmental uncertainty.
Smith, Arnold, and Bizzell (1988) suggest that organizations now face "increasingly
turbulent, complex, threatening environments." This "acceleration of environmental
change" (Smith, Arnold, & Bizzell, 1988) may result in the adoption by an organization
of a latent operating philosophy that serves as a coping strategy for uncertain environments. This provides the basis for an interesting question: "Is there a difference between
a marketing orientation and an entrepreneurial orientation?" This question leads to the
present study's null hypothesis:
The construct defined by an organization's level of marketing orientation and the
construct defined by an organization's level of entrepreneurial orientation are one
and the same construct, and represents an organization's business philosophy.
SCALE DEVELOPMENT
The Marketing Orientation Scale
An analysis of the properties of commonly used marketing orientation scales indicated that the psychometric assessment of marketing orientation scales has been typically
neglected or not reported by business orientation researchers (Hise, 1965; Barksdale &
Darden, 1971; McNamara, 1972; Lawton & Parasuraman, 1980; Parasuraman, 1983;
Bartlett, Schewe, & Allen, 1984; Morris & Paul, 1987; Canning, 1988; Peterson, 1989).
Morris and Paul (I 987) developed a 22-item dichotomous scale by intermingling
McNamara's implementation and adoption indicators with behavioral measures of a firm
embracing the marketing concept. Due to the dichotomous nature of the scale, neither
reliability nor validity analyses were conducted by Morris and Paul. However, I I items
purporting to measure the marketing orientation construct were found in a series of
t-tests to be significant at the .1 level. Since the Morris and Paul scale appeared to be one
of the most promising scales, the items were psychometrically assessed for reliability in
the present study's pre-test. Morris and Paul's scale was adapted into a semantic differential format and exhibited an alpha coefficient of .8437 (Miles, 1989), thereby
indicating an internally consistent measure.
Morris and Paul's (1987) 11-item scale was adapted for the present study's pre-test
and restated in both a semantic differential and a Likert format to allow for a multi-trait,
52
ENTREPRENEURSHIP THEORY and PRACTICE
multi-method assessment. The same 11 items were assessed for convergent and discriminant validities using a multi-trait, multi-method approach. The scale was found to
exhibit convergent validity and a weak form of discriminant validity. In addition, the
items have a substantial history of theoretical support (Hise, 1965; McNamara, 1972;
Lawton & Parasuraman, 1980; Parasuraman, 1983; Morris & Paul, 1987). Hence, a
scale purporting to measure marketing orientation was adapted from the Morris and Paul
item set and used in the present study.
The Entrepreneurial Orientation Scale
Three scales purporting to measure a firm's degree of entrepreneurial orientation
have published indicators of reliability (Ginsberg, 1985; Morris & Paul, 1987; Covin &
Slevin, 1989). All three are similar in content, appearance, and conceptual foundation.
Ginsberg ( 1985) developed a multi-item scale of eight measures based on a synthesis
of the works of Miller and Friesen (1983) and Khandwalla (1977). Ginsberg used
canonical factor analysis to assess construct validity and found that five of the eight
initial items loaded on a single factor, which he labeled "entrepreneurial orientation."
Ginsberg's entrepreneurial orientation scale exhibited a coefficient alpha of .755. Although the convergent and discriminant validities of the scale were not assessed, this
scale established the conceptual foundations and psychometric standards for subsequent
scale-development efforts.
Morris and Paul (1987) used Ginsberg's (1985) scale as the foundation to develop
a scale purporting to measure an organization's entrepreneurial orientation. Morris and
Paul's scale exhibited a coefficient alpha of .789. Convergent and discriminant validity
of the scale were not assessed. They conducted a factor analysis to assess construct
validity, with five items loading on one underlying dimension of the entrepreneurial
orientation construct, named the "risk-taking/innovative" factor.
Covin and Slevin (1989) developed a nine-item scale to measure a firm's degree of
entrepreneurial orientation. Items were adapted from both the Miller and Friesen (1983)
and Khandwalla ( 1977) scales and resulted in the same set of items specified by Ginsberg (1985). In addition, four new items were added by Covin and Slevin to develop a
scale that more fully reflects the entrepreneurial orientation construct's hypothetical
domain for manufacturers. The scale exhibited a coefficient alpha of .87. Construct
validity was established utilizing factor analysis (Allen & Yen, 1979) and all items
loaded on a single factor. Hence, the Covin and Slevin scale, in its original semantic
differential format, was selected to measure entrepreneurial orientation for the present
study.
The Combined Scale
The instrument used in the present study consisted of two sections: (1) the marketing
and entrepreneurial orientation scale items; and (2) classification information. In the first
section of the survey, each executive was requested to answer questions pertaining to the
organization's business orientation. This section of the questionnaire contained an independent random combination of Covin and Slevin's (1989) nine-item entrepreneurial
orientation scale intermingled with the 11 items used by Morris and Paul ( 1987) and
adapted into a semantic differential format to measure a firm's degree of marketing
orientation. Scale direction for the items was altered randomly to minimize response
bias. In the second section, subjects were requested to supply classification information
pertaining to their job title and number of years with the firm, the size of the organiSummer, 1991
53
zation's total asset base, as well as the organization's ownership status and age. The
items constituting the survey instrument are summarized in Table 3.
METHODOLOGY
Data was collected using a field study methodology, with a pencil and paper survey
instrument. This methodology assumed that the study industry's top managers were
willing and able to provide insight into their own underlying business orientations
through a written, self-administered survey instrument. This assumption is based on the
fruitful utilization of management surveys by previous business orientation researchers
(Hise, 1965; Barksdale & Darden, 1971; McNamara, 1972; Lawton & Parasuraman,
1980; Parasuraman, 1983; Bartlett et al., 1984; Ginsberg, 1985; Morris & Paul, 1987;
Canning, 1988; Covin & Slevin, 1989; Peterson, 1989). The underlying assumption of
this methodology is that "top managers" will direct the organization's overall business
philosophy to such an extent that a survey of an industry's top management will serve
as the "key informant" (Zelditch, 1962) for assessing the industry's underlying business
philosophy(ies) (Chaganti & Sambharya, 1987).
A total of 901 firms were sent survey instruments and requested to complete and
return them. The sample comprised 375 members of a nationwide furniture manufacturer
trade association and 526 furniture manufacturing firms located in Mississippi or Alabama.
Analysis of the American Furniture Manufacturers Association mailing list revealed
that it was composed primarily of firms operating in the South Atlantic region. The other
Table 3
Combined Scale Items
ITEMS ADOPTED FROM MORRIS AND PAUL (1987) THAT PURPORT TO MEASURE
THE MARKETING ORIENTATION CONSTRUCT
I.
2.
3.
4.
5.
6.
7.
8.
9.
JO.
JI.
MKTD
MKTC
MKTVP
MR
PD
MGT
CUSTI
MRD
A800NO
NEWP
MIMP
Have a marketing department
Employ marketing consultants
Top level marketing employee is Vice President or higher
Regularly performs marketing research
Have a new product development department
Top management has a marketing background
Customers commonly a source uf new ideas
Have a marketing research department
Have an 800 number for customer feedback
Marketing generates most new product ideas
Marketing has a significant impact on the strategic direction of the firm
COVIN AND SLEVIN'S (1989) SET OF ITEMS THAT PURPORT TO MEASURE
THE ENTREPRENEURIAL ORIENTATION CONSTRUCT
I. RD
2.
3.
4.
5.
6.
7.
8.
9.
54
NP5
CHANGE
PROA
INNOV
LIVE
HIGHRR
BOLD
AGGPOS
Cultural emphases on innovation and R&D
High rate of new product introduction
Bold, innovative product development
Initiator, proactive posture
First to introduce new technologies and products
Competitive posture toward competitor
Strong proclivity for high risk, high return projects
Environment requires boldness to achieve objectives
When faced with risk, adopts aggressive, bold posture
ENTREPRENEURSHIP THEORY and PRACTICE
major concentration of household furniture manufacturing in the United States is in and
around the Tupelo, Mississippi, area. Since firms in the Tupelo furniture manufacturing
area (categorized to be in the East South Central region) were under-represented in the
trade association list, a census of the 526 furniture manufacturers from the Mississippi
and Alabama manufacturing directories was also included in the sample. Members of the
American Furniture Manufacturers Association operating within the states of Alabama
or Mississippi were sent only one instrument, to eliminate overlapping samples. Including the Alabama and Mississippi firms in the sample provided a better representation of
industry characteristics. The combined regions accounted for approximately 47% of all
domestic household furniture value added in 1982 (U.S. Department of Commerce,
Bureau of the Census, 1986) and 89% of all domestic furniture manufacturing new
ventures in 1986 (O'Connor, 1987).
To increase the response rate and minimize the nonresponse bias of the present
study, a cash inducement was offered to respondents. Subjects were offered an opportunity to win cash prizes of $100.00, $75.00, or $50.00 if their completed and returned
survey's form number was one of three selected in a random drawing.
The research hypothesis was tested by conducting a maximum likelihood factor
analysis and using the chi-square test for determining the number of significant factors
to extract. The level of significance was set at .05 to replicate Ginsberg's (1985)
methodology. If items measuring both the entrepreneurial orientation and marketing
orientation constructs were to load on one and only one factor at the .05 level of
significance or greater, then the research hypothesis stating that the entrepreneurial
orientation and marketing orientation are one and the same underlying construct would
be supported. Operationally, if the computed chi-square level of significance for the
maximum likelihood solution was less than .05, an additional factor was extracted.
Factors continued to be extracted until the computed chi-square was equal to the researcher-specified level of significance, .05.
FINDINGS
Of the 901 surveys mailed 169 ( 18%) were completed and returned. Data pertaining
to the respondent's job title with the organization were collected as a check to ensure that
each respondent could reasonably serve as the firm's key informant (Ginsberg, 1985).
Approximately 85% of those responding were the organization's Chief Executive Officer or President. Approximately 11 % had job titles that indicated they held positions
that reported to the firm's Chief Executive Officer or President. Approximately 5% of
the respondents reported job titles that indicated that they were not part of the organization's top management, and hence were not included in the study.
Data pertaining to the respondent's years of service to the organization were also
collected to ensure that the respondents had sufficient experience in the organization to
act as the firm's key informant (Ginsberg, 1985). Approximately 80% of the respondents
had five or more years of service with the firm. These findings indicate a sufficient depth
of organizational experience for the respondents to serve as the firm's key informant.
Characteristics of Nonrespondents
Classification characteristics of a random telephone sample of fifteen nonrespondents were compared with a limited set of respondent classification characteristics. A
one-tailed t-test was used to test for a significant difference in organizational age between the groups, with a .05 level of significance specified. The number of years since
Summer, 1991
55
the organization's inception varied within the sample from 1 year to 141 years and the
mean age was 31.1 years. The findings indicated there was not a significant difference
between the mean organizational age of respondents and nonrespondents.
A second procedure was conducted as a check to better assess the nonresponse bias
in the present study's data set. Armstrong and Overton (1977) suggest that the extrapolation method, which compares the responses of the ''early'' respondents with those of
the "late" respondents, can be used as an alternative procedure to assess nonresponse
bias in mail surveys. The extrapolation method assumes that the "late" or last respondents in a sample are similar to the "theoretical" nonrespondents. In the present study
the responses were ordered sequentially by date received, with the first quartile selected
to represent the "early" respondents and the last quartile selected to represent the "late"
or "non" respondent.
T-tests were used to determine if there were significant differences in the mean
marketing orientation and entrepreneurial orientation scores between first quartile and
last quartile respondents. The findings indicate that there was not a significant difference
in the marketing orientation of ''early'' respondents and the marketing orientation of the
"late," or proxy, nonrespondents at the .05 level of significance. In addition, the
findings indicate that there was not a significant difference between ''early'' and ''late''
respondents in the degree of entrepreneurial orientation. The results suggest that there
appears to be no significant difference in the degree of marketing or entrepreneurial
orientations between the respondents and the "theoretical" nonrespondents (Armstrong
& Overton, 1977).
Psychometric Analysis
Two constructs were of relevance in this study. The scales used in the study have
enjoyed various published psychometric properties. Both the Morris and Paul (1987)
scale purporting to measure the marketing orientation and the Covin and Slevin (1989)
scale purporting to measure the entrepreneurial orientation construct were psychometrically assessed for reliability using coefficient alpha (Nunnally, 1978) and for validity
using factor analysis (Allen & Yen, 1979; Ginsberg, 1985; Kerlinger, 1986).
Marketing Orientation
The Morris and Paul ( 1987) scale had exhibited a coefficient alpha of . 84 in a
pre-test, using a set of similar subjects, compared to .72 in the primary study. The
scale's reliability as exhibited in the primary study adhered to Nunnally's (1978) guidelines of a coefficient alpha of .7 or greater to insure adequate scale reliability. The scale
in the pre-test had a mean of 44.18 and a standard deviation of 14.10, compared to the
scale's mean in the present study of 44.59 and a standard deviation of 11.98. Item means
(measured with a seven-point scale) were 4.02 in the pre-test and 4.05 in the study,
indicating a reasonably stable and non-biased scale. In addition, item deletion would not
meaningfully increase the scale's alpha, suggesting that all the items are sound. The
results indicate an internally consistent, stable, and reliable scale which purports to
measure the marketing orientation construct.
Construct validity pertains to the degree to which the scale actually measures what
it was designed to measure (Churchill, 1979). Kerlinger ( 1986) states that factor analysis
is a superior methodology to establish the construct validity of a specific scale. A factor
analysis was conducted on the marketing orientation scale to assess construct validity.
Factor analysis takes a large group of items and groups the items together with respect
56
ENTREPRENEURSHIP THEORY and PRACTICE
to the constructs that they measure. Items that are grouped together measure the same
underlying construct (Kerlinger, 1986). Cattell ( 1978) states that the scree test criteria is
the best indication of the true number of latent dimensions described by a measure.
Maximum likelihood analysis was specified as the extraction procedure and varimax
rotation was specified as the rotation procedure.
The maximum likelihood factor analysis converged in six iterations. The factor
loadings are provided in Table 4. A single factor solution was also indicated for the
Morris and Paul ( 1987) 11-item scale based upon the scree chart criteria.
Entrepreneurial Orientation
Covin and Slevin's (1989) entrepreneurial orientation scale was used to measure the
entrepreneurial orientation construct. The scale enjoys published measures of both reliability and validity. In addition, there is extensive theoretical and psychometric support
for the inclusion of the scale items, both individually and combined (Khandwalla, 1977;
Miller & Friesen, 1983; Ginsberg, 1985).
Table 4
Factor Loadings
MARKETING ORIENTATION FACTOR LOADINGS
Item*
FACTOR 1
FACTOR 2
FACTOR 3
FACTOR4
MRD
MKTVP
MKTC
MR
PD
MKTD
MGT
CUSTI
A800NO
NEWP
MIMP
.35740
.22143
.12942
.29483
.43652
.99950
.08451
.03536
.17858
.23004
.45355
.13437
.33379
.20125
.71719
.10460
- .00173
.52931
.14831
.06852
.38802
.39900
.00938
.18706
-.16612
- .31423
.18236
- .00057
-.08757
.27742
.06338
.30209
.50279
.15442
- .03475
.36038
.10766
.10686
- .00030
-.39450
.19968
.03093
-.31796
.14592
ENTREPRENEURIAL ORIENTATION FACTOR LOADINGS
FACTOR 1
FACTOR 2
.44602
.66046
.34850
.58059
.48755
.68314
.73742
.73791
.54243
.22937
-.02975
.40314
.45957
-.07657
-.05982
- .17417
- .23325
-.04087
RD
CHANGE
PROA
INNOV
LIVE
HIGHRR
BOLD
AGGPOS
NP5
* See Table 3 for scale item definitions.
Summer. 1991
57
The Covin and Slevin scale exhibited a published alpha of . 87 with a set of similar
subjects compared to . 83 in the present study. The scale's reliability as exhibited in the
present study is well within Nunnally's (1978) suggested minimum guidelines for a
coefficient alpha of . 7 or greater. The scale had a mean of 37 .18 and a standard deviation
of 10.12, when assessed in the present study. Item means (measured with a seven-point
Likert scale) were 4.13. In addition, item deletion resulted in no increase in the scale's
coefficient alpha, suggesting that all the items are sound. The results indicate an internally consistent, stable, and reliable scale which purports to measure the marketing
orientation construct.
Construct and convergent validity of the Covin and Slevin scale were assessed by a
factor analysis as suggested by numerous researchers (Allen & Yen, 1979; Ginsberg,
1985; Kerlinger, 1986). Maximum likelihood analysis was specified as the extraction
procedure and varimax rotation was specified as the rotation procedure. The factor
analysis converged in six iterations. All nine items of the scale loaded on a single factor,
with factor loads of .35 or greater (see Table 4). Such universally high factor loads for
all scale items on one factor indicate that the items converge upon and define a single
underlying construct resulting in a valid construct measure (Ginsberg, 1985; Kerlinger,
1986; Covin & Slevin, 1989). One factor was extracted from the nine-item scale based
upon the scree chart criteria supporting Covin and Slevin' s previous single factor findings. Hence, the findings and published psychometric properties indicate that the Covin
and Slevin scale provides a superior measure of the entrepreneurial orientation construct.
Pairwise Correlation
A Pearson pairwise correlations procedure for organizational" age, asset size, score
on the marketing orientation scale, and score on the entrepreneurial orientation scale was
conducted to determine items with associated variation. The pairwise correlation coefficients are presented in Table 5.
Correlates of Marketing Orientation
Marketing orientation was found to be significantly correlated with asset size, exhibiting a positive coefficient of .473. This is a reasonable finding in light of the items
used to measure the construct. However, this finding may be an artifact of the measuring
instrument, since firms with modest asset bases will typically not be able to afford
Table 5
Pairwise Correlation of Selected Variables
''Asset''
"Organizational Age"
"Marketing Orientation"
"Entrepreneurial Orientation"
* Significant at tht
58
(VI)
(V2)
(V3)
(V4)
VI
V2
LOO
.413*
.473*
.262*
LOO
.241*
-.040
V3
V4
LOO
.518*
LOO
.05 level.
ENTREPRENEURSHIP THEORY and PRACTICE
marketing consultants or a separate marketing or marketing research department. Marketing orientation was also found to be significantly correlated with organizational age,
exhibiting a positive coefficient of .241.
Correlates of Entrepreneurial Orientation
Entrepreneurial orientation was found to be significantly correlated with asset size,
exhibiting a positive coefficient of .262. This may imply a positive relationship between
asset size and a firm's ability to accept risks, be innovative, and maintain a proactive
posture. Entrepreneurial orientation was also found to be significantly correlated with
marketing orientation, exhibiting a positive coefficient of .518 significant at the .01
level. This finding supports Morris and Paul's (1987) findings of a correlation of .238
significant at the .028 level.
Results of Hypothesis Test
The factor analysis of the survey instrument converged in 11 iterations. The results
of the maximum likelihood factor analysis for the items of the instrument are presented
in Table 6. Factor loading for the present study's instrument are presented in Table 7.
The findings failed to support the monofactor hypothesis. The chi-square criteria indicated a multifactor solution.
The scree test and eigenvalue criteria were used as validity checks. Both checks
supported the finding that there is more than one factor represented within the data set.
The scree chart criteria confirms a multi-factor solution (see Figure 1). Six factors were
extracted with eigenvalues of 1.0 or more, confounding the findings. Both the scree
chart and the eigenvalue criteria suggest a multi-factor solution. Hence, the results of the
analysis fail to support the null hypothesis, and indicate that the marketing orientation
construct and the entrepreneurial orientation construct do not describe the same latent
business philosophy. These results conflict with Morris and Paul's (1987) findings, and
fail to add support to the implication drawn from Zeithaml and Zeithaml (1984) that the
marketing orientation construct and the entrepreneurial orientation construct describe the
same latent business philosophy.
Table 6
Factor Analysis Results: Factors Extracted and Corresponding
Chi-square Coefficients for the Random Instrument
NUMBER OF
FACTORS
CHI-SQUARE
STATISTIC
DEGREES OF
FREEDOM
SIGNIFICANCE
EIGENVALUE
319.04
197.60
138.09
ll2.03
80.83
58.02
170
151
133
ll6
100
85
.0000
.0065
.3635
.5868
.9199
.9889
5.0073
1.8143
1.5397
1.2393
1.1143
1.0827
l*
2*
3
4
5
6
* Significant at the .05 level.
Summer, 1991
59
Table 7
Random Instrument Factor Loadings
MRD
MKTVP
MKTC
MR
PD
MKTD
MGT
CUSTI
A800NO
NEWP
MIMP
RD
CHANGE
PROA
INNOV
LIVE
HIGHRR
BOLD
AGGPOS
NP5
FACTOR 1
FACTOR 2
FACTOR3
FACTOR 4
FACTOR 5
FACTOR 6
.24717
.40861
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DISCUSSION
The major finding of the present study, limited to the present study's sampling
frame, is that marketing orientation and entrepreneurial orientation were found to be
correlated, supporting Morris and Paul (1987), but they do not appear to represent the
same underlying business philosophy. Since the orientations appear to be separate, the
marketing orientation's hypothetical domain does not need to be expanded. Essentially,
the marketing orientation can exist independently and does not always need aspects
typical of an entrepreneurial orientation such as an organization's tendency to be innovative, accept risks, and act in a proactive manner. Further, the entrepreneurial orientation can be developed in an organization based upon the dynamics of the environment.
The positive correlation between the marketing orientation and entrepreneurial orientation constructs supports Murray's (1981) proposition that the marketing function
tends to act in an entrepreneurial manner when faced with competitive environments.
Murray further suggests that an entrepreneurial orientation is crucial for an organization's long-term survival in a competitive environment and that "marketing is uniquely
equipped'' to manage the interdependence between a firm and its environment. This
implies that the marketing function may already possess many of the resources necessary
to foster an entrepreneurial orientation.
The correlation between the two orientations found in the present study may be due
to financial performance pressures, as implied by Covin and Slevin (1989). As financial
performance expectations continue to increase, management may be forced by environmental dynamics to become more innovative, proactive, and risk accepting, while retaining a marketing orientation.
Increased levels of environmental uncertainty may also influence the relationship
positively, as suggested by other marketing theorists (Murray, 1981; Webster, 1981;
Smart & Vertinsky, 1984; Zeithaml & Zeithaml, 1984; Hills, 1987; Morris & Paul,
60
ENTREPRENEURSHIP THEORY and PRACTICE
Figure 1
Scree Chart
6.---~~~~~~~~~~~~~~~~~~~~~~~--,
5
Q)
4
::J
(ij
~
Q)
w
3
O>
2
1
o..J___,~~~~---.-~~~-.~.----.~---.----.~---.--~r--.--~.---.-~.------,.--'
1
2
3
4
5
6
7
8 9 10 11 12 13 14 15 16 17
Factors
1987). Note also that the relationship may also be mediated by business type, size, and
the interaction between the two.
Environmental dynamics may result in market-driven organizations potentially augmenting their current marketing-oriented business philosophy with the salient components of an entrepreneurial orientation. This suggests that performance-pressured marketing-orientated firms existing in turbulent environments will actively seek out highreturn, high-risk projects to exploit with novel technologies and solutions.
LIMITATIONS
Three factors potentially limit the extension and generalization of the results of this
study: (1) the non-random nature of the sample; (2) potential differences in the degree
of environmental uncertainty for firms within the sampling frame; and (3) potential
differences between manufacturing firms and non-manufacturing firms.
First, the sampling frame was selected to represent the major domestic furniture
manufacturing regions, which account for the majority of furniture manufacturing in the
United States. However, due to the non-probability nature of the sample, no statistical
inferences to the population can be made from the results of the sample.
Second, the degree of macroenvironmental uncertainty faced by the firms was
assumed to be fairly similar, since all firms are in the same industry. However, if this
assumption were not accurate, any between-firm variance in macroenvironmental uncertainty could change the results and conclusions of the study.
Third, the scales used to measure both marketing orientation and entrepreneurial
orientation have been assessed for reliability and validity using manufacturing populaSummer, 1991
61
tions. The findings may not be generalizable to non-manufacturers because of differences in their task environments.
RECOMMENDATIONS FOR FUTURE RESEARCH
Recommendations for future research will be discussed for three major issues: ( 1)
measurement of the marketing orientation construct; (2) measurement of the entrepreneurial orientation construct; and (3) assessment of the interrelationship between marketing orientation and entrepreneurial orientation.
Measurement of the Marketing Orientation Construct
Many marketing scholars have focused their efforts on developing better measures
of the marketing orientation. Perhaps future research should focus on the most promising
scale composed of the set of items that Morris and Paul ( 1987) developed. Psychometric
assessment of its properties with a wide variety of firm types, including nonmanufacturers, could be particularly enlightening.
Further research regarding item generation to better define and more fully capture
the hypothetical domain of the marketing construct would also be beneficial. Specifically, more needs to be known about which measures to .use. One promising approach,
for example, would involve assessing outcome measures by questioning the members of
a firm's task environment in an intensive case study. Customers, suppliers, and competitors may be in a better position than the firm's management to objectively assess
whether a firm's behavior indicates it has adopted the marketing concept as its core
business philosophy.
Measurement of the Entrepreneurial Orientation Construct
The scale used to measure a firm's degree of entrepreneurial orientation has been
supported by extensive scale development efforts and psychometric tests (Ginsberg,
1985; Morris & Paul, 1987; Covin & Slevin, 1989). However, the impact of a firm's
size has not been fully examined. The present study's findings suggest that a firm's size
as a function of total assets and its ability to behave in an entrepreneurial manner may
be related. This issue should be addressed in subsequent studies to gain a better understanding of the domain of the entrepreneurial orientation construct.
Assessment of the Interrelationship Between Marketing Orientation and
Entrepreneurial Orientation
The assessment of the interrelationship between marketing orientation and entrepreneurial orientation is probably more important to the development of the theory of
entrepreneurship than it is to the extension of marketing theory. However, the lack of
support found for the interrelationship between the two orientations is significant in
developing a more complete understanding of the range of organizational responses to
environmental turbulence.
Future research should focus on the development of support or non-support for the
strong, positive relationship between the marketing orientation and the entrepreneurial
orientation over a variety of conditions. Assessments should be made over a variety of
business types, sizes, and levels of environmental uncertainty.
62
ENTREPRENEURSHIP THEORY and PRACTICE
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Summer. 1991
65
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