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  In Press - Academy of Management Journal 1  A MULTI-DIMENSIONAL MODEL OF VENTURE GROWTHJ. ROBERT BAUMUniversity of Maryland at College Park Dingman Center for EntrepreneurshipCollege Park, Md. 20740Tel: (301) 403-4290Fax: (301) 403-4292e-mail: jrbaum@rhsmith.umd.eduEDWIN A. LOCKEUniversity of Maryland at College Park College of Business and ManagementCollege Park, Md. 20742(301) 405-2238KEN G. SMITHUniversity of Maryland at College Park College of Business and ManagementCollege Park, Md. 20742(301) 405-2238  In Press - Academy of Management Journal 2  A MULTI-DIMENSIONAL MODEL OF VENTURE GROWTHABSTRACTWe draw upon strategic management theory, organizational behavior theory, organizationtheory, and entrepreneurship models to form an integrated model of venture growth including 17concepts from 5 micro/macro research domains. The model was tested with responses from 307companies from the architectural woodworking industry. CEO’s specific competencies and motivation,and competitive strategies, were direct predictors of venture growth. CEO’s traits and generalcompetencies, and the environment had significant indirect effects.  In Press - Academy of Management Journal 3 This research explores the causes of venture growth. Past entrepreneurship research has oftenstudied individual differences (Begley & Boyd, 1987), strategic management concepts (McDougall,Robinson, & DeNisi, 1992), and organization theory concepts (Aldrich & Wiedenmayer, 1993) asisolated causes of venture performance. More recent studies propose that individual, organizational,and environmental dimensions combine to provide a more comprehensive prediction of venturedevelopment and growth than any one dimension in isolation (Chrisman, Bauerschmidt, & Hofer, 1999;Covin & Slevin, 1997; Herron & Robinson, 1993; Lumpkin & Dess, 1996; Naffziger, Hornsby, &Kuratko, 1994; Sandberg, 1986). However, there has been limited examination of these multilevelmodels.Our purpose is to propose and test a comprehensive multilevel model of venture growth. Asshown in Figure 2, five research domains were included that have been theoretically identified asantecedents of venture performance: personality traits and general motives; personal competencies;situationally specific motivation; competitive strategies; and the business environment. We choseventure growth as our performance measure, rather than other indicators of performance becauseentrepreneurship researchers point to growth as the crucial indicator of venture success (Covin &Slevin, 1997; Low & MacMillan, 1988). Our goals were: (1) to test whether a multi-level model thatsampled relevant concepts from individual, organizational, and environmental domains would predictfirm performance successfully, (2) to test whether each domain would contribute something to theprediction, and (3) to explore alternative forms of the relationship among the domains and performance.By empirically examining multiple domains across multiple levels, we hope to produce a more completeunderstanding of venture growth.  In Press - Academy of Management Journal 4 THEORY AND HYPOTHESESDirect Effects: The EntrepreneurTraits and motives. Personality theories point to the importance of personal predispositions forventure success (McClelland, 1965), and venture capitalists report that entrepreneur characteristics aremost important for venture success (MacMillan, Siegel, & SubbaNarisimha, 1985). Some traits andmotives of successful entrepreneurs have been identified, but these concepts have typically producedweak (less than 7% of the variance) relationships with venture performance (Begley & Boyd, 1987;Low & MacMillan, 1988). Furthermore, Sandberg and Hofer (1987) found that organizational andindustry variables completely dominate individual-level variables as causes of venture success. Thereare three possible implications of these prior results: (1) traits do not matter; (2) traits do not work inisolation from other factors; or, (3) the wrong traits have been tested in past entrepreneurship studies.Our research design examines the second possibility. To control for the third we included additionaltraits in our study that have been proposed as characteristics of successful leaders: tenacity, proactivity,and passion (Bass, 1990; Locke, 1997). Furthermore, entrepreneurship theorists have proposed thattenacity and proactivity/initiative are important for successful establishment and operation of newventures (Bird, 1989, Chandler & Jansen, 1992). And, Smilor (1997, p 342) suggested that passion is“...perhaps the most observed phenomenon of the entrepreneurial process.”. Thus, we predicted:Hypothesis 1: Controlling for other domains, the greater the CEO’s tenacity,proactivity, and passion for work, the greater the venture growth.Individual competencies. “Competencies” refers to the underlying individual characteristics suchas knowledge, skills, and/or abilities required to perform a specific job. Testing his job performancetheory, Boyatzis (1982) found significant performance relationships with “general” people andorganization competencies (oral presentation skill, decision-making ability, conceptualization ability,diagnostic use of concepts, and use of power) and “specific” competencies (technical skill and industryskill). Entrepreneurship studies have developed skill/ability clusters that are similar to those found inBoyatzis’ management/leadership theory (Bird, 1989; Chandler & Jansen, 1992; Herron & Robinson,  In Press - Academy of Management Journal 5 1990); however, opportunity recognition appears in these studies as an important additional general skillof entrepreneurs, and the components of “people and organization competency” are combined as“managerial skill” (Chandler & Jansen, 1992). We focus on two “general” and two “specific”competencies that appear in common in entrepreneurship studies and predict that:Hypothesis 2: Controlling for other domains, the greater the CEO’s general competencywith respect to organization skill and opportunity skill the greater the venture growth..And,Hypothesis 3: Controlling for other domains, the greater the CEO’s specificcompetency with respect to industry skill and technical skill, the greater the venturegrowth.Situationally specific motivation. In this domain, we chose to study vision, growth goals, andself-efficacy as motivation concepts, because: (1) all three concepts have demonstrated significantempirical relationships with business performance, and (2) entrepreneurship theorists point to theimportance of vision, business goals, and self-efficacy for planning and venture performance (Bird,1989; Low & MacMillan, 1988). Vision is a core element of motivation in charismatic leadershiptheory (Bass, 1990). Indeed, two laboratory simulations found direct and indirect performance effectsfor vision. Goal theory has demonstrated more scientific validity for its proposition that specific,challenging goals lead to higher performance than any other motivation theory (Locke & Latham, 1990).Entrepreneurship researchers have found that entrepreneurs’ self-efficacy [task specific self-confidence(Bandura, 1986)] about their ability to start and grow their ventures relates with venture performance(Chandler & Jansen, 1992). We examine the direct effect of these three aspects of motivation andpredict:Hypothesis 4: Controlling for other domains, the greater the CEO’s situationallyspecific motivation with respect to vision, growth goals, and self-efficacy, thegreater the venture growth.
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