Individual Entrepreneurial Orientation: Further Investigation of a Measurement Instrument

ABSTRACT Bolton and Lane (2012) recently proposed, developed, and validated a measure of individual entrepreneurial orientation (IEO) using a student sample. Their recommendations for future research included testing the instrument with non-student samples. In keeping with Hubbard, Vetter, and Little's (1998) call for publishing of replications with extensions in business research, a sample of 340 entrepreneurs in Western Kentucky was used to further validate the IEO. The ten items on the IEO measuring the dimensions of Innovativ eness, Risk-taking, and Proactiveness loaded as separate factors as in the original study, with the exception of one item (for Innovativ eness) which loaded on two factors (Innovativ eness and Risk-taking). Cronbach alphas computed for the three factors from the sample of entrepreneurs were all above 0.765, further verifying the internal consistency of the IEO. External validity was verified with correlations and t-tests for the IEO with self-reported performance measures by the entrepreneurs. This investigation of the IEO further demonstrates that it is a reliable and valid measure of entrepreneurial orientation at the individual level. A better understanding of entrepreneurial orientation at the individual level could be valuable to potential investors and to those determining business resource allocations. INTRODUCTION AND BACKGROUND Bolton and Lane (2012) recently proposed, developed, and validated a measure of individual entrepreneurial orientation (IEO) after pointing out that there is disparity in the literature on how entrepreneurial an individual may be and how that has been assessed. For example, while research has shown that entrepreneurs are more open, conscientious, extraverted, and less neurotic and less agreeable than regular managers (Zhao & Siebert, 2006), a recent meta-analysis (Zhao, Seibert, & Lumpkin, 2010) shows only openness and conscientiousness to be highly correlated with entrepreneurial performance and intentions. Entrepreneurial orientation (EO) at the organization level has been shown to correlate with entrepreneurial performance (Rauch, Frese, Koenig, & Wang, 2009). And yet, no research effort has been directed specifically at the trait and attitude measures that are inherent in the original EO scale for assessing the individual. Bolton and Lane's IEO attempts to fill that void. The work of Bolton and Lane (2012) surveyed a large student sample (n = 1 102) from a regional mid-south university with items generated from Lumpkin and Dess's (1996) original five EO variables (innovativeness, willingness to take risks, proactiveness, competitive aggressiveness, and autonomy). Validated measures of entrepreneurial orientation used by Lumpkin, Cogliser, and Schneider (2009) were adapted for individuals (e.g., "my firm" changed to "I") and students responded to the Likert scale items for these measures and for measures of propensity for entrepreneurship (i.e., I would like to work for myself; I would like to start my own venture). Bolton and Lane (2012) analyzed their data with principal component factor analysis. Three distinct factors resulted and accounted for 60% of the total variance: Innovativeness, Risk-taking, and Proactiveness. These were the same three variables that have been examined predominantly in EO research (Rauch, et al., 2009). Cronbach's alpha for internal consistency for all three were above Nunnally and Bernstein's (1994) standard for scale development studies. Bolton and Lane further analyzed the items of the subscales and measures of students' entrepreneurial intentions and found correlations among the three subscales as well as with entrepreneurial propensity. This is in keeping with past EO research which shows that the subscales of the EO correlate with each other and with firm performance (Rauch et al., 2009) and provides construct validity to their study. Bolton and Lane (2012) conclude that their scale development process resulted in three distinct factors as measured by their ten-item Individual Entrepreneurial Orientation which demonstrated reliability and validity. …