A total of 477 respondents were included in the final dataset for this study. The process that was followed to arrive at this number is described in Section 5.8. In this section a description of the demographical characteristics of these firms in the sample are provided.
The average firm size of the respondent firms is 23 FTEs. This is much higher than the average size of six FTEs of New Zealand firms in general. The majority of firms that responded to this survey had between ten and 50 employees (55 per cent) while fewer than seven per cent of New Zealand SMEs overall fall into this category. This anomaly was expected, since few firms with fewer than ten employees were expected to have the time to complete a questionnaire such as this.
Ninety per cent of respondent firms saw their major product or service in the growth or maturity phases of the industry life cycle. This corresponds with the high average age of firms which was 3 3 years and the average number of years that managers or owners have been managing their firm, namely for 1 4 years. No indication of the average age of New Zealand SMEs in general could be found, but with the number of firm deaths at almost half of the number of start-ups on a yearly basis, it is considered that this number is probably towards the high end of the spectrum. This is in line with the finding in terms of size. It is therefore clear that the focus of this study is not start-up firms.
Ninety per cent of the participants indicated that their firms were in the growth or • • j . • •
maturity stages of the industry life ,cycle. Fifty-five per cent of firms were categorised by respondents as the manufacturing (3 1 per cent), wholesale ( 1 4 per cent) or construction ( 1 0 per cent) industry sectors, with sectors such as communication, consultation, property and business services, and retail presenting between five and ten per cent of the participants. When the industry sectors were condensed into four industry types, namely service, manufacturing and production, construction, and wholesale and retail, 46 per cent fell into the manufacturing and production category, and 27 per cent into the services category. Industry sectors were condensed to improve ease of use. Once again, the industry sectors of the respondent firms and SMEs in New Zealand were significantly different from each other. For example, whereas 57 per cent of New Zealand SMEs are classified as part of the service industry as reclassified in this study, only 27 per cent of the firms in the sample could be classified as from the service industry. Similarly, 3 1 per cent of the firms in the sample could be classified as manufacturing and production versus 25 per cent for all NZ firms. Appendix B provides 'an' illustration of the demographical data of this study.
Table 7.2 provides the comparable means (expressed as percentages), means, minimum and maximum values, and standard deviations for all these variables, including indices and factors used in this study. Comparable means were calculated by changing group means into percentages in order to improve ease of comparison and interpretation.
Preliminary investigation of the descriptive statistics of the factors employed in this study (see Table 7.2) reveals a few tentative observations. For instance, when the means for the four basic modes of strategy-making are compared, it seems that the simplistic or participative modes of strategy-making may be slightly more popular than the adaptive or entrepreneurial modes of strategy-making. Similarly, it seems that more firms are operating in dynamic than stable and hostile environments and that more firms employ differentiation strategies than focu,s and cost-leadership strategies. The comparisons can be made since the scores for each item that contribute to each factor variable were added up and divided by the number of items and reworked into percentage form. These results are interesting, and will be investigated further in subsequent sections.
Table 7.2 : Descriptive statistics of demographical variables, indices and factors
Type Variables Compara- Mini- Maxi- Mean
of ble mean % mum mum
variable
Internal Age 1.00 195.0 33.20
environ-
ment Length of service 0.00 60.00 14.03
Size 1.00 100.0 23.19
EO index 59. 17 9.00 59.00 37.28
Organi�ity index 63.49 8.00 49.00 3 1.10
Modes Intrapreneurial SM 65.72 1.00 5.00 3.285
of
strategy- Adaptive and Intrapreneurial SM 67.78 1.50 5.00 3.389
making Adaptive SM 69.85 1.33 5.00 3.492
(SM)
Participative & Adaptive & Intrapreneurial SM 69.96 1.61 . 4.97 3.498
Participative & Intrapreneurial SM 70.02 1.53 4.95 3.500
SimpliStic & Adaptive & Intrapreneurial SM 70.19 1 .76 4.86 3.509
Simplistic & Intrapreneurial SM 70.34 1.81 4.93 3.517
Simplistic & Participative & Intrapreneurial SM 1 .74 4.85 3.583
All SM modes 71.22 1.74 4.87 3.56 1
Adaptivet& Participative SM 72.09 1 .42 4.95 3.604
Simplistic & Adaptive t SM 72.42 1.48 4.79 3.621
Simplistic & Adaptive & Participative SM 73.05 ' '1 .62 4.82 ' 3:652
Participative SM 74.32 1.40 4.90 3.715
Simplistic & Participative SM 74.66 1.59 4.88 3.732
Simplistic SM 74.99 1 .29 5.00 3.749
Strategy Cost leadership 55.80. 1.00 6.50 3.906
Focus 60.37 1.00 7.00 4.225 Differentiation 61.8 1 1.00 6.78 . 4.326 External Hostility 51.61 1.20 6.40 3.613 environ- ment Dynamism 58.07 1.00 7.00, 4.065 ' Stability 59.65 1.00 6.83 4.175
Perfor- Pelformance index 1 55.97 21.00 250.0 139.9
m,ance
Performance index 2 7 1.77 13.00 50.00 35.88
7 . 2 . 2
The EO of New Zealand SMEs
As explained in Chapter Five, the nine items in the EO scale were summed to calculate the EO index that is used in the propositions that include EO. A major shortcoming in the EO scale is that high levels of risk are viewed as indicative of a high EO. But, as explained in Chapter Three, entrepreneurial firms are seen as taking moderate levels of risk by some authors (Marino et al., 2002; Morris & Kuratko, 2002). Ideally, the three items in the scale that represent risk-taking behaviour should be recoded to change moderate risk to represent high levels of EO. This will, however, complicate
First, the theoretically based competing models for. strategy-making process were
• .' • I
developed. Proposition 2a suggested one such model, but since EFA (see Chapter Six) suggested that this model (hereafter referred to as the 'Theoretical Model' ) may not best predict the strategy-making modes of New Zealand SMEs, competing models were designed as alternatives to Proposition 2a. In order to be complete, four additional models were designed, three based on models that exist in the literature (Dess et al., 1 997; Hart & Banbury, 1 994; Mintzberg, 1 973) and the fourth model (hereafter referred to as the 'Realised Model ') based on an alternative interpretation of the literature summarised i n Table 2. 1 . The five competing models were constructed as follows.
• The Dess (Figure F. l ) model used the same scale to the one employed in this
study. Therefore the items were loaded onto factors in exactly the same way as done in that study, namely onto the simplistic, adaptive, participative and entrepreneurial factors.
• The Hart (Figure F.2) model used a similar strategy-making scale to the one
employed in this study. Therefore, the items were loaded onto factors in the same way as done in that study, namely onto the command, symbolic, generative, rational and transactive factors.
• The Mintzberg model (Figure F.3) was based on the 1 973 conceptual study by
Mintzberg. This article was reviewed thoroughly and 19 of the items were loaded onto the three factors identified in this study, namely the planned, adaptive and entrepreneurial factors.
• The Theoretical Model (Figure F A) was constructed using the literature review
i n Chapter Two and consist of five factors, namely the rational, adaptive, participative, symbolic and entrepreneurial factors. In this model, some items were loaded onto more than one factor as the literature review suggested. This solution fits the data better than a solution where each item is only loaded onto one factor.
• The Realised Model (Figure 7 . 1 ) was constructed using an alternative interpretation of the literature summarised in Table 2. 1 . Following the findings of Dess �t al. ( 1 997) and the results of the EF A, four potential modes of strategy-making were identified. This meant that firstly, rationality was not included as a factor (mode of strategy-making). Secondly, the command mode was taken out of the entrepreneurial mode (which means it is now the