ENTREPRENEURIAL ORIENTATION IN A
SITUATIONAL CONTEXT: COMPARISONS BETWEEN

GERMANY AND THE UNITED STATES

Darla Domke-Damonte
Coastal Carolina University

Conway, SC

JensAndreasFauhtich
RheinAhr Campus, Remagen

Fachhochschule Koblenz
Remagen, Germany

William Woodson III

Abstract

Previous research has evaluatedsome elements ofU.S. students'entrepreneur-
ial orientation, while the present research extends and broadens this research
to consider different situational settings across students in both Germany (n =
95) and the United States (n = 147). The study evaluates both self-perceptions
ofentrepreneurial orientation and perceptions ofthe average level ofentrepre-
neurial orientation ofthe country in which the student resides, based on parental
involvement and the different economic and social conditions within which the
student resides. Results indicate that parental entrepreneurship and country of
origin affect self-perception ofentrepreneurial orientation, but that only country
oforigin affects perceptions ofone S countrymen s entrepreneurial orientation.

Entrepreneurial orientation provides an indicator of the requisite behavioral
initiatives that are conducive to new venture development (Lumpkin & Dess, 1996)
and insight into the predispositions that an individual may carry with him or her
into a business setting (Grant & Bush, 1995; West, Bamford, & Marsden, 2008).
However, limited attention has been given to the evaluation of an individual's
self-perceptions of his or her entrepreneurial orientation and how that evaluation
may differ by the social and economic background of the country in which the
individual was socialized. The present paper attempts to integrate an explanation
of the effects of social and economic issues on self-perception of entrepreneurial
orientation. The paper begins by providing a basic literature review and overview
of its major hypotheses, the methods used to collect the data are described along
with the process used to evaluate the data, and finally results are presented along
with a discussion of the outcomes of the process.



16 Journal ofBusiness Strategies Vol. 25, No.1

Figure 1
Research Model: Effects of Social and Economic Conditions on

Perceptions of Entrepreneurial Orientation

Economic and Social Setting
(Country)

Situational Influence
(Parental Involvement in

Entrepreneurship)

Demographic Influence
(Age, Gender)

/
Entrepreneurial Orientation

(Self Perception)
(Perception of Countrymen)

Literature Review and Hypothesis Development

Lumpkin and Dess (1996: 136-137) note that entrepreneurial orientation (EO)
"involves the intentions and actions of key players functioning in a dynamic
generative process aimed at new venture creation .... The key dimensions that char-
acterize an entrepreneurial orientation include a propensity to act autonomously,
a willingness to innovate and take risks, and a tendency to be aggressive toward
competitors and proactive relative to marketplace opportunities." Miller (1983)
noted that competitive aggressiveness was a strong component of entrepreneurial
orientation, and Burgelman (1983) noted that independent action and autonomy
were critical elements of internal corporate venturing behavior.

The present research attempts to formulate a clearer understanding of some of
the precursors to individuals' own perceptions of entrepreneurial orientation. As
shown in Figure 1, the research model attempts to link the economic and social
setting within which an individual grows up to his or her own perceptions of
entrepreneurial orientation. In addition, the model recognizes and builds on prior
work that indicates that situational factors, such as role models in entrepreneurial
activity, and demographic factors also may affect entrepreneurial orientation.
The following paragraphs further delineate the constructs under study, provide
background on the research supporting the model's proposed relationships, and
develop specific hypotheses which are tested in the research.

A core challenge with the previous conceptualization of much of the work on
entrepreneurial orientation is that it is linked only to the top management team
level, or to the organizational level and not to the individual level of analysis.



Spring 2008 Domke-Damonte et al.: Entrepreneurial Orientation 17

To fonnalize the measurement of the construct of entrepreneurial orientation, a
variety of scales have been developed. Lyon, Lumpkin, and Dess (2000) note
numerous ways to measure the construct, but point out that it may be an artifact
of the individual respondent, rather than a finn-level construct. Miller (1983)
developed a scale to assess the EO construct which Covin and Slevin (1989) ex-
panded. However, numerous challenges have been posed with these instruments,
based on the combination of both present and past behaviors. Moreover, these
scales were developed to assess finn-level entrepreneurship, while our intention
in the present paper was to measure entrepreneurial orientation of future potential
business owners. As Bird (1988) noted, entrepreneurial intention is the precursor
to entrepreneurial activity and it is in this direction that the current research is
directed as clearly the initiative and interest must exist before the action ofstarting
a business will proceed. Grant and Bush (1995) noted that "these scales assess
an organization's business orientation rather than an employee's psychological
orientation or propensity to act in an entrepreneurial manner." As a result, they
developed and validated a scale to measure entrepreneurial orientation (EO)
among individual salespeople.

The approach taken by Grant and Bush (1995) is unique from other concep-
tualizations, which focus on the domain of entrepreneurial orientation on the
top management team (Morris & Paul, 1987; Lyon, Lumpkin, & Dess, 2000;
Lumpkin & Dess, 1996; Hughes & Morgan, 2007; Avlonitis & Salavou, 2007,
among others). Grant and Bush (1995) allow for the notion that entrepreneurial
orientation may be noted at any level of an organization, because it may not be
viewed just as a strategic orientation of top managers, but rather as a psychologi-
cal disposition to acting within any organizational environment.

This distinction is critical to the present argument, because it suggests that
individuals arrive into an institutional setting with a comfort zone of how they
will approach risk taking, innovation, acting autonomously, and proactively
initiating action on the part of the firm. As Grant and Bush (1995) note, it is
more likely that these attitudes develop from childhood experiences. Genera-
tional effects that condition behaviors starting in young and early adulthood
(Baumeister & Muraven, 1996) may condition individuals to perceive the
social environment around them in ways that either encourage or discourage
innovation and risk taking behavior. Belief systems theory (Rokeach, 1973)
also notes that as long as the individual is relatively happy with his or her own
self-concept and self-presentation to others, the value systems and percep-
tions that have been adopted will remain stable. Self-concept may be both
oriented toward one's own role within society and also may be used to gauge
the perception of the society from an insider's perspective. This perception of
the level of entrepreneurial activity of one's own society may be instructive
as it should also condition the potential pursuit of future activity, according
to belief systems theory (Rokeach, 1973). Therefore, to fully understand an
individual '8 self-perception of entrepreneurial orientation as well as their per-
ception of their countrymen's level of entrepreneurial orientation, it is clearly



18 Journal of Business Strategies VoL 25, No, 1

important to consider the ways in which social forces may affect differences
in entrepreneurial orientations.

Gender has long been suggested to be tied to risk taking behavior and career
choice. Jiankoplos and Bernasek (1998) note that women are more risk averse
in financial risk taking, while Hersch (1996) noted more conservative consumer
decision making practices. Parks-Yancy, DiTomaso, and Post (2005) demonstrate
that women have lower access to social capital resources than do men, and
Brush (1997) noted that women experience important cultural and situational
barriers to entrepreneurship. Langowitz, Sharpe, and Godwin (2006) note that
women face significant levels of challenge with respect to establishing new
businesses, including their own perception of their ability to be successful, and
Grant (1996) found that women had lower entrepreneurial intentions. Further-
more, the importance of social capital to successful startup of new ventures has
been established by Davidsson and Honig (2003), and that networks (Aldrich &
Martinez, 2001) and role models (Wagner & Sternberg, 2004) are important for
successful startup. Langowitz, et al. (2006) note that there is a strong increase
in the support available to women entrepreneurs in the U.S, has increased over
the last few decades especially since the passage of HR 5050, which was also
known as the Women's Business Ownership Act of 1988. Despite the larger
number of role models of female entrepreneurs evident than in the past, with
5.4 million businesses generating $819 billion in revenues owned by women in
1997 in the United States (Small Business Administration, 2003), it is anticipated
that women's self-perceptions of entrepreneurial orientation will be lower than
men's. In addition, because self-perception may also be linked to inference ofthe
level of entrepreneurial orientation of others, it is also likely that perceptions of
countrymen's entrepreneurial orientation will differ by gender (Rokeach, 1973).
Thus, the following hypothesis is proposed:

Hypothesis 1: Gender will be correlated with both self-perceptions of
entrepreneurial orientation and perceptions of entrepreneurial orien-
tation offellow countrymen, with males scoring higher in both areas
than women.

In addition, it is not unreasonable to expect that those who have a parent who is
involved with his or her own business will have higher entrepreneurial orientation
because they will more likely understand the demands that it places on risk taking,
innovation, and being proactive within the competitive environment. Previous re-
search (Krueger 1993; Scott & Twomey, 1988, Grant, 1996) has found that those
with parents who have their own businesses are more likely to have an interest or
to be planning to be involved in entrepreneurial activity. Moreover, Van Lange,
De Bruin, Otten, and Joireman (1997) suggested that basic value orientations are
partly linked to the types of social interactions engaged in during early childhood
to early adulthood and further influenced by the social interactions and experi-
ences encountered during adulthood, As these students will have perceived their



Spring 2008 Domke-Damonte et at.: Entrepreneurial Orientation 19

parents to have the role of risk taker, innovator, and proactive business leader, it is
expected that they will be more likely to generalize this perception to their fellow
countrymen. As noted by Aldrich and Martinez (200 I) and Wagner and Sternberg
(2004), role models and networks are critical to entrepreneurial activity, and the
networks that these individuals see as a normal part of their parent's or parents'
business environment as entrepreneurs may contribute to their believing that all
of their countl)f111en have similar circumstances. Thus, the following hypothesis
is proposed:

Hypothesis 2: Individuals who have parents who operate their own busi-
nesses will have greater perceptions of their own entrepreneurial ori-
entation and higher perceptions of their countrymen s average level of
entrepreneurial orientation.

Finally, social settings may also influence self-perceptions of entrepreneurial
orientation and of the level of entrepreneurial orientation of one's countrymen.
Modernization theory (c.f., Inglehart & Baker, 2000; Gundelach, 1994) suggests
that scarcity in social and economic resources provide strong influences on the
creation ofinitial value systems for young preadults, by enabling increasingoppor-
tunities and reinterpretation of existing social norms during periods of economic
and social growth and prosperity, and by requiring a curtailed focus on survival
needs during times of economic scarcity and social pressures (Inglehart & Baker,
2000). Changes in the basic social institutions in various countries have made the
process of growing up different for youth over the last fifty years (Trump, 1991).
Baumeister and Muraven (1996: 406) suggest that there has been "an immense
loosening of societal guidelines, restrictions, and pressures, allowing people an
almost unprecedented degree of freedom." This freedom has placed additional
pressures on individuals to create their own identity, and this pressure is particu-
larly acute during adolescent years (Gundelach, 1994). Moreover, the increasing
range of potential career opportunities available and increases in educational
availability to students from more disparate economic backgrounds and genders
have made the choice of one's identity broaden from the list available to those
in earlier generations. Trump (1991:367) notes that Inglehart's modernization
theory suggests "environmental conditions in existence when one is growing
up are seen as crucial in determining the psychological need level at which one
fixates, and therefore the type of values one holds most dear." In support of this
view, Bloodgood, Sapienza, and Carsrud (1995) note that factors such as com-
munity, government agencies, financial resources, and fami ly issues all may affect
entrepreneurial activity as well. To consider this effect requires that one evaluate
the different social settings in which these students have grown up as Lee and
Peterson (2000: 403) noted "individuals' personalities, and behaviors, firms,
political legal systems, economic conditions, and social mores are all intertwined
with the national culture from which they originate." It is further appropriate to
consider the effects of such social and economic conditions on what individuals



20 Journal ofBusiness Strategies Vol. 25, No.1

within the respective country think about the level of entrepreneurial orientation
oftheir countrymen because these perceptions may also frame a different dimen-
sion to the readiness to actually engage in entrepreneurial activity.

As one seeks to understand whether social and economic conditions contribute to
perceptions ofentrepreneurial orientation, it seems appropriate to first test whether
such differences existed in two well developed nations that are more similar to
one another culturally. In their qualitative study, Lee-Ross and Mitchell (2007)
found that prevailing economic conditions make for very different conditions
and possibilities for entrepreneurs and noted significant divergence from western
models. As such, our assumption was that if such differences existed between
individuals within two well developed nations, then there was justification in
exploring differences in social settings that were even more diverse. Given that
Germany and the United States score relatively closely to one another on several
of Hofstede's (200 I} dimensions, with the only large difference that of the U.S.
being much higher on individualism than Germany and a moderate difference
in uncertainty avoidance with Germany higher on uncertainty avoidance that the
United States, this study sought to explore differences in perceptions of entre-
preneurial orientation between the United States and Germany. The following
section provides a snapshot of the differing economic and social evolutions in
the U.S. and Germany over the last two decades.

Figure 2
New Business Start Ups of Firms with Employees in Germany and the

United States, 1990-2002

::
f-----..--~wfl ....."-··.. ·I.'I...

800

- 750If)0
0
0..... 700
~.. 650til
E....

u::: 600
~
(J)

z 550.....
0
....

500(J)
..0
E
:::l 450z

400
1990 1995 2000 2001 2002e

Source: U.S. Small Business Administration; Federal Statistical Office of Germany



Spring 2008 Domke-Damonte et al.: Entrepreneurial Orientation 21

Basic Overview of the Conditions for Small Business Startup in the United
States

The United States has the highest level ofentrepreneurial activity in the G7 and
within First World countries (Minniti & Bygrave~ 2004). In the United States~ the
last decades have provided consistency in gross domestic savings at approximately
17% ofGDP~ inflation in consumer prices has dropped from approximately 5.4%
in 1990 to 2.19 % in 1999, real interest rates have remained relatively stable at
around 6% with periods of increases and decreases, GDP per capita rose from
$23,000 to approximately $32,000, and unemployment dropped over the 1990s
until the fallout from the technology sector losses and the aftermath of the Sep-
tember 11,2001 attacks (World Bank I International Bank for Reconstruction and
Development, 2001). Aside from the challenges of the technology slump and the
terrorist attacks in 2001, the economic and social settings have been relatively
stable. Attention to small business development has been a longstanding area of
focus with the Small Business Administration getting its start as early as 1932
but officially beginning to offer service in 1953, since which time it has helped
more than 20 million people start and grow businesses and offered more than $170
billion in loans, grants, or other programs to these individuals. According to the
U.S. Small Business Administration (Small Business Administration Office of
Advocacy, 2003), small businesses represented more than 99.7% of all employers
(less than 500 employees) in the United States in 2002 and provided more than
50% of the nonfarm GDP in the United States, employed over fifty percent of
all private sector employees, and totaled approximately 22.9 million businesses
overall in 2002. New business start up of employer firms (those employing more
than one person) in the United States had strong periods of growth in the 1990s~
but growth in this sector slowed in the 2000s, as shown in Figure 2. However,
it is important to note that sole proprietorships are not reported in this data~ and
they represent approximately two times the number of enterprises as do employer
firms in the United States (Small Business Administration, 2003).

Basic Overview of the Conditions for Small Business Startup in Germany
In Germany, the period beginning in 1990 was fraught with social change,

the most important of which was the reunification of the former East Germany
with West Germany. Vast sums of money were used to support the reunification
effort and to enable economic development and infrastructure support to the new
states in the eastern part of the reunited country. Large increases were made in
taxes paid by West Germans to fund infrastructure development, and economic
improvements were centered on the eastern states in an effort to raise salaries~ deal
with an unemployment rate at least twice that of the western states, and to buffer
economic productivity. At the same time, during that decade, the country's overall
unemployment rate raised from 6% to 9.7%, real interest rates stayed stable at
around 8%, consumer price inflation was reduced, gross domestic savings stayed
stable at approximately 23%, and GDP per capita grew from $19,000 to over
$23,000 (World Bank I International Bank for Reconstruction and Development,



22 Journal ofBusiness Strategies VoL 25, No.1

2001). At the same time, the "Mittelstand" sector of the economy, which includes
small and medium sized enterprises, consisted on.2 million enterprises in 1999,
represented 99.3% of all enterprises subject to VAT (Value Added Tax payments),
and employed 20 million people (Hauser, 2000). As Figure 2 demonstrates,
the number of new business registrations in Germany increased much over the
19905, reflecting an increasing trend toward entrepreneurial activity in both the
former East Germany and the Western states. However, the increasing shift to
entrepreneurial development in Germany has not yet been mirrored in the way
in which early stage venture capital investment funds are being spent in the two
countries though. According to EUROSTAT (EUROSTAT 2003), between 2-3
times the percentage of GDP is spent in early stage venture capital investment
in the United States than in Germany. In his evaluation of the state of small and
medium enterprises in Germany in 2000, Hauser (2000: 14-15) notes, " the
entrepreneurial spirit in the overall population has been invigorated and an
increasing number of people nowadays is prepared to take on the risks and op-
portunities ofself-employment. .. During the first years after the reunification, the
number of self-employed has increased more rapidly in the New Federal States
than in the old ones .... But in the following years the number of newly established
businesses, starting from a very high level, has been decreasing."

As a result of the differing social and economic conditions in place in each
country over the last fifteen years, it was anticipated that the students who had
grown up in these settings would have different self-perceptions about entre-
preneurial orientation as well as different perceptions about the entrepreneurial
orientation of their countrymen.

Hypothesis 3: Individuals from countries with less volatile economic
and social conditions will have a higher selfperception oftheir entre-
preneurial orientation and a higher perception ofthe entrepreneurial
orientations oftheir countrymen.

Methods

The survey was designed as a part of a cross-national summer school project
involving students from two institutions, a University of Applied Sciences in
Germany and a comprehensive liberal arts university in the Southeastern United
States. Students studying business administration topics at both institutions were
administered the survey. Surveys were administered in English only, after piloting
the survey with English-speaking German students majoring in business studies
at the University of Applied Sciences indicated acceptable understanding of all
terms and requirements of the surveys. Surveys were done as a part of an English
class assignment for the business students in Germany (n = 100 students), and
as a part of several sections of management courses in the United States (n =
177 students), resulting in a total sample of277. The German students involved
in the study had already had several years of English language study and were



Spring 2008 Domke-Damonte et al.: Entrepreneurial Orientation 23

completing some of their respective university course work in English as well.
Three of the students from the German institution and 35 of the students from
the U.S. institution were not citizens from the country in which the respective
educational institution was located, To enable the comparison of perceptions of
entrepreneurial orientation based on country-specific social and economic issues,
these students were eliminated from the analysis, and therefore, the remaining
sample (n = 242) included 95 German students studying at the University of
Applied Sciences in Germany and 147 U.S. students studying at the liberal arts
university in the Southeastern U.S.

The scale used to assess entrepreneurial orientation was taken from Grant and
Bush (1995) and adapted to also enable the capture of students' perceptions of
the level of entrepreneurial orientation of their countrymen. As this scale was
originally developed with the use of a student sample, this was not deemed
problematic, In addition, as the scale was developed to test student perceptions
of entrepreneurial orientation, the exploratory extension to using it within the
context of identifying student perceptions of countrymen's entrepreneurial ori-
entations was not deemed problematic, though all ofthe standard factor structure
and reliability analyses were done and reported for each scale separately in this
extension. The scale asked respondents to identify the extent to which they were
more or less likely to act in a particular manner with respect to 6 core behaviors:
seek creative ways to solve problems, challenge others to explore new ways
of thinking, look for new ways of dealing with routine situations, demonstrate
persistence in efforts to influence change, seek unusual or novel solutions to
problems, and continue efforts to change things even when others claim the "old"
way of doing things is better. We used this scale to measure Self-Perceptions of
Entrepreneurial Orientation by asking respondents, "Relative to most people you
know, are you more or less likely to ... " with each of the behaviors. We also used
this scale to measure Perceptions of Countrymen's Entrepreneurial Orientation,
by asking respondents, "On average, most people in my home country are more
or less likely to ... " with each of the behaviors. In both cases the scales were as-
sessed, as in Grant and Bush (1995) on a six-point scale. In this way, we were
able to assess both the student's own perceptions about hislher own behavior, as
well as the student's perceptions of how strong the entrepreneurial orientation
is among his/her countrymen.

Grant and Bush (1995) found acceptable reliability of the scale instrument
(a = .80) and a single factor which accounted for 46.8% of the variability in the
six items. We evaluated reliability for each group (German and US) separately
as well as a combined reliability measure. In our evaluation of the reliability of
the instrument for measuring Self-Perceptions ofEntrepreneurial Orientation, we
found reliability acceptable for Germany (a = .76), the United States (a = .90)
and the combined group (a = .87). In evaluating the reliability of the instrument
for measuring Perceptions of Countrymen's Entrepreneurial Orientation, we also
found acceptable reliability for all three (a = .84 for the Germans; a = .93 for
the United States; and a = ,90 for the combined group).



24 Journal o/Business Strategies Vol. 25, No.1

Principal components analysis was done for both scales to identify ifthey were
unidimensional, as noted in previous work. Factor analysis for the Self-Percep-
tions ofEntrepreneurial Orientation scale indicated one factor, with an eigenvalue
of 3.67 and variance explained of 60.94%, with commonalities ranging from
.43 - .68 for the combined groups on self-perceptions of entrepreneurial orien-
tation. Individual factor analyses were completed for each subgroup, and both
yielded one factor each, though the commonalities were rather low for one of
the items in the German sample. Factor analysis was also completed for the Per-
ceptions of Countrymen's Entrepreneurial Orientation. One factor resulted with
an eigenvalue of 4.101, explaining 68.35% of the variance, with commonalities
ranging from .50 - .75. Factor analysis was also completed for each of the sub-
groups with similar findings.

Parents' Business Status was assessed with five choices including neither
parent had his or her own business, father had his own business, mother had her
own business, each of the parents had his or her own business, and both parents
worked together in their own business. For data analysis purposes, these alter-
natives were compressed to provide a dichotomous variable with 0 indicating
that neither parent was involved in their own business and 1 indicating that at
least one was involved in his or her own business. Further operationalizations of
the data were the coding of Gender (0 if a male and 1 if a female) and Country
(l for Germany and 2 for the United States).

Table 1
Descriptives and Correlations

Variable Mean s.d. Correlations

1.Age 23.4 3.18

2. Country 1.60 .49 -.09:1:

3. Gender .4 .49 -.02 .11*

4. Parents Have Own Business? .38 .49 .11* .03 -.05

5. Perception of Country
Entrepreneurial Orientation 15.91 6.08 .07 .14* .09a .03

6. Self-Perception of
Entrepreneurial Orientation 18.91 5.65 .11* .10f .06 .17** .26**

~ p :; .10 * P =: .05 ** P:; .01 n:; 242



Spring 2008 Domke-Damonte et al.: Entrepreneurial Orientation

Table 2
Regression Results

25

Self·Perceptions of Perceptions of Countrymen's
Variable Entrepreneurial Orientation Entrepreneurial Orientation

Age .198:1: .233" .252* .130 .136 .163

Gender .656 .562 ,43 1,098 1.082 .901

Parents'
Business
Status 2.084** 2.157** .356 .456

Country 1.292:1: 1.765*

F 1.895 3.975** 3.788** 1,501 1.062 2.033+

R2/ Sign.
F Change .124 .218/8.023** .244/3.122+ .111 .114/.196 .181 /4.895*

:j:p=.10 *p=.05 **p=.01 n=242

Data analysis consisted of completing regression with age and gender in the
first step, and then adding in subsequent steps Parents' Business Status, and
Country for regressing each of the dependent variables of Self-Perceptions of
Entrepreneurial Orientation and Perceptions of Countrymen's Entrepreneurial
Orientation. Descriptive statistics and correlations are provided in Table 1.

Results

Inspection ofTable 1 indicated that Self-Perception of Entrepreneurial Orienta-
tion was positively and significantly correlated with Age (p < .05), indicating a
potential maturational effect (Inglehart & Baker, 2000). Moreover, Country of
citizenship was associated with both Perception ofCountrymen's Entrepreneurial
Orientation (p < .05) and Self-Perception ofEntrepreneurial Orientation (p < .10).
Parent's Business Status was associated with Self-Perception of Entrepreneurial
Orientation (r = -.17; P < .01). Further, Gender was only associated with Percep-
tions of Countrymen's Entrepreneurial Orientation (p < .10).

In reviewing the results ofthe regression analysis in Table 2, the results indicate
no support for Hypothesis I, which suggested that females would score lower on
entrepreneurial orientation than would males. Perhaps the lack of specificity in
the wording of the scale prompted the finding that was different from previous
studies. However, another explanation may be that these males and females had
self-selected into the respective business field of study and were already similarly
challenged with needs for risk taking and innovation.

Results indicated partial support for Hypothesis 2, which suggested that those
students who have parents with their own business will have higher levels of



26 Journal ofBusiness Strategies Vol. 25, No. I

entrepreneurial orientation than will those students whose parents are not so
engaged (p < .05). However, there was no significant difference on evaluation
of countrymen's entrepreneurial orientation (p > .10). Further analysis indicated
no significant differences on these perceptions based on whether the students'
father or mother had his or her own business. or whether the parents each had
their own businesses or operated a business together, and there was no signifi-
cant difference in female students' self-perceptions of EO scores based on which
parent had a business.

Finally, results indicated support for Hypothesis 3 that self-perceptions of
entrepreneurial orientation (p < .10) and perceptions of countrymen's entrepre-
neurial orientations (p < .05) will differ by social and economic settings with the
students from the U.S. reporting higher scores on both measures than students
from Germany.

Discussion

This paper has broadened the consideration of entrepreneurial orientation by
creating parallel measures of self-perception and perceptions of countrymen's
entrepreneurial orientation. In addition, we have attempted to extend the assess-
ment of entrepreneurial orientation by including different economic and social
settings within which business students have been socialized. The results provide
preliminary insight into the need for further consideration of the effects of differ-
ent social, economic, and cultural settings on the development of entrepreneurial
orientation.

Future research will need to explore the construct of entrepreneurial orienta-
tion as well as to include measures of entrepreneurial intention to further identify
potential outcomes of orientations. More work is also needed to identify the spe-
cific social and economic indicators that contribute to increased entrepreneurial
orientation of young people and future business leaders. Moreover, further at-
tention may also be directed to exploring the nature of the relationship between
parental involvement in entrepreneurship and effects on their children's interest
and involvement in entrepreneurial activity of their own.

The limitations of the study include a focus on only one institution from each
country, which may not be representative of all institutions in the respective
countries (Tung, 2008). The study also employs a rather conservative sample
size, but this is not unique as many cross-national samples rely on small sample
size (e.g., Preston, Karahanna, and Rowe (2006) compared information shar-
ing among ClOs in the U.S. (n = 163) and France (n = 44); Kickul, Lester, and
Belgio (2004) compared the perceptions of the psychological contract between
U.S. (n = 60) and Hong Kong Chinese (n = 76); and Lee, Yang, and Graham
(2006) studied total of 176 Chinese and U.S. executives to compare tension in
buyer seller interactions.) Furthermore, the questions asking about entrepreneur-
ial orientation were loosely tied to specific entrepreneurial activity, and more
directed statements should be formalized to assure common interpretation of the



Spring 2008 Domke-Damonte et al.: Entrepreneurial Orientation 27

construct. All respondents were required to answer the survey questionnaire in
English. Also, since Harzing (2005) notes that when English-language instruments
are administered to non-native speakers, there is a tendency for results to more
mirror those of native speakers, it would be helpful to evaluate and compare the
differences in results for such instruments and outcomes when administered in
native languages. Finally, it would probably be helpful in future studies to include
formal cultural, economic, and social indicators measures to use that as a control
rather than country by itself.

Despite these limitations, this study demonstrates a tentative and exploratory
step to uncover the differences in perception about risk taking behavior among
business students, and potentially future business leaders, in Germany and the
United States. If such differences exist among well developed nations that are
somewhat similar on cultural values (Hofstede, 2001), then this work supports
further the call of Lee-Ross and Mitchell (2007) in arguing for further develop-
ment of the issues that contribute to differences in entrepreneurial orientation as
a precursor to entrepreneurial activity.

References

Aldrich II, B., & Martinez, M. A. (2001). Many are called, but few are chosen: An evolu-
tionary perspective for the study of entrepreneurship. Entrepreneurship Theory and
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Darla Domke-Damonte, Ph.D., is Assistant Dean of International Programs at
the E. Craig Wall College of Business Administration at Coastal Carolina Univer-
sity (USA).

Jens Andreas Faulstich, M.A., is Deputy Director of Languages and Interna-
tional Affairs at the Fachhochschule Koblenz RheinAhr Campus (Gennany).

William Woodson III was fonnerly the Director ofthe Wall Fellows Program at
Coastal Carolina University (USA). He is now in independent law practice.


	Entrepreneurial Orientation in a Situational Context: Comparisons Between Germany and the United States