STRATEGY STRATEGY AS A DETERMINANT OF THE PERCEIVED VALUE OF OUTSIDER ASSISTANCE TO NEW VENTURES: AN EXPLORATORY STUDY'ames J. Chrisman University ol'algary George W. Danforth GulfNct, inc. ABSTRACT Tliis study erteads the research on ou&sider assis(ance by cmnparing a venture's strategy ui(h the types of tissistaace i( received. Resul(s si&gges( (ha( certain types of tlssisraace are more liiglily value&I by venmres folloiving certain types of srraregies. Uufortuaa(ely, resulr& also sian v (licit iuost veri(ares do a&it recei ve rhe (ypcs of a tsi su& nce rhar best support their strategies. Directions fiir emrepreneurt aad oa(sider arsis(&nice programs are offered (o address ibis problem. INTRODUCTION Experts suggest that outsiders —persons not associated with a business in tcnns of ownership or employment who provide it with advice or assistance (e.g., consultants, accountants, bankers. lawyers) —can bc a valuable resource for new and dcvcloping ventures (Robinson & Pearce, 1984; Stevenson & Sahlman. 1988). There is also a considerable amount ol'mpirical evidence that outsider assistance can positively inliuence new vcnturc pcrhirmancc (Long & Ohtani, 1986; McMullan, Long & Graham, 1986; Lussier g& Corman, 1995; Pelham, 1985: Robinson, 1982). Unfonunately, previous studies have, for the most part, trcatcd new ventures as a homogeneous population with similar assistance needs. However, contingency theory (Hofer, 1975) suggests that it is morc likely that new vcnturcs will di1'fcr in meaning('ul ways that lead to dif1'ercnt business problems and outside assistance needs. Rcscarch on the problems of new vcnturcs supports this conclusion (cf.. Chrisman & Leslie, 1989). Seeking to expand our knowledge ol'hc issues facing new ventures and how outsiders can hest assist in the new venture dcvelopmcnt process, this study explores the relationship between ncw venture strategy, outsider assistance, and the perceived value of outsider scrviccs. As suggested above. it has already been cstahlishcd that outsider assistance, in general, can he quite valuable (Chrisman, Hoy. & Robinson, 1987; Chrisman & Katrishen. 1994), especially il'it involves strategic planning (Chrisman &. Carsrud, 1989; Robinson, 1982). What has not 'ho author~ wish to thank Gary Costrog&ovanni and Bah(us&is for their helpful corn&nants on earlier drafts of this manuscript An earher version of this manuscnpt was prevented a& the 1993 meeong of the U.S Association for Sinan Business and Bntrepreneursh&p 47 bccn dctcnnincd, howcvcr, is il'if'ferent assistance needs arc associated with different stratcgics. This study investigates this issue. Drawing from mainstremn strategic management thought, we apply business level strategy theory to dcvclop hypotheses concerning the nature ol'hc assistance that will add value to ncw ventures following dilfcrcnt strategies. Wc then test these hypotheses on a large sample of ventures that received consulting assistance t'rom a Small Business Dcvclopmcnt Ccntcr (SBDC) program in onc state in the U.S, over a two year period (sec Appendix). The rcmaimlcr ol'his article discusses this study. RESEARCH MODEL AND HYPOTHESES Venture Problems I or the purpose of this study, three broad classes of business prohle&ns wc&u idcntilicd. Ansoly(1965, pp. 5-6) states that the srrnregic prul&lrm is "deciding what businesses thc lirm is in and what kinds of businesses it will seek to enter." Adn&inis&ruri& e prrrblems, on the other han&l. concern the l&rm's organization (e.g., structuring of authority and &esponsihility &clat&unsh&ps, wo&k flows) and &ts acqu&s&t&on and dcvclopn&cnt ol &'csou&'ccs (c.g.. personnel training and dcvelopmcnt, linancing). Finally, operuring prr&I&leo&s involve I'unctional decisions in areas such as marketing and production. Although. all ventures could be expected to perceive each type of assistance to be valuable, thc strategies they pursue should inl)uence thc nature ol'hc dominant problems cncountcrc&l. Indeed, a central tenet ol'he strategic managcmcnt paradigm is that the implementation ol'ilfcrent strategies lead to dif1'crcnt problems and de&nand dilyerent managcmcnt skills and organizational require&nents (Chandler, 1962; Galbraith &z& Kazanj inn, 1986; Porter, 19g0). In general, it is proposed that the types of'»ssistancc tlmt will have thc greatest positive impact on the perceived value of outsider services will vary depending upon thc competitive business strategy pursued. The Im ortance of Strata i Simply put, business level strategy is concerned with competitive advantage (Hot'er k. Schcndcl, 1978; Po&tcr, I 980). How a venture matches its rcsourcc; with thc I'actors critical to success in its chosen cnvironmcnt defines its strategy and dc&em&ines whcthc& a competitive advantage is I'onhcoming. Because fcw firms are able to command th rcsourccs necessary to dominate competitors in every area, and because the importance of kcy success I'actors tend to vary hy market segment, there are a variety of different strategies that can lead to superior perl'onnancc (Hofcr. 1975). Thus, l&nns following diff'erent strategies will need diffcrcnt rcsourccs and must focus their cff'ons on strengthening dif1'erent functional areas. This is especially important I'or ncw ventures which arc usually resource poor. Strategy assumes great importance during a firm's early years ol'development. A ncw venture's strategy is its pri&nary lever I'or overcoming thc "liability ol'newncss" (Stinchcombe. 1965) as it attempts to gain control of essential resources ag and secure a position in the environment. Because of the complexity and importance of lormulating and implementing strategy, entrepreneurs often turn to outsiders I'or assistance in making decisions concerning how to hest utilize their limited resources. The central premise of this article is that outsider assistance is most valuable to new ventures when it is provided in areas that both strengthen the resources necessary to implement strategy, and results in a strategy more closely aligned with those resources. y~Tyk Tu create a competitive advantage, strategy must I'irst align scarce resources in ways that create value for customers. Value may be thought of as a function of the bene(its a particular product or service provides to a customer relative to its cost or price (Willard & Cooper, 1985). Thus, there are three primary strategies firms can employ to create value (Chrisrnan, Hol'er, & Boulton, (988). A cost strategy adds value by lowering the cost ol' given level of benefits. It is based on efficiency and attracts customers who are willing to I'orego additional benefits for a lower price. A benefit (diflcrcntiation) strategy, by contrast, adds value by increasing the benefits ol'a product or service at a given or higher cost. Such a strategy emphasizes ef'I'ectiveness and appeals to customers who are willing to pay morc to obtain greater satisfactions from the product or service. A un(ity strategy uses cost and benefit weapons simultaneously Fiona following this strategy seek both cf'I'ii;icncy and effectiveness advantages by adding value through lower cost and prices as well as greater bene('its. Nevedheless, while such a sirategy offers the possibility of greater competitive advantage and hence greater returns, it also carries with it a greater element ol'isk, in that few firms are able to successfully difl'crcntiatc on both cost and benefit dimensions. The danger of becoming stuck-in-the-middle without advantage in either costs or benel'its has been well documented and is typically found to lead to low performance (Porter, 1980). Some lions, however, do not seem to be aware of the conscqucnccs of heing average and are content with merely filling imbalances between industry supply and dmnand. Thus, both unsuccess('ul auempts or lack of attempts to create competitive advantage are possible. We shall refer to the strategies of such misaligned firms as shortage (Vesper, 1980), because they create no advantage other than)ust "bemg there" (Chrisman, ct al., 1988). Strategies may be aimed at a whole mdustry or at a segment within an industry. The start-up ventures investigated in this study, however, generally employed their limited resources to address smaller clusters or segments of customers within an industry. For this reason, their strategies fall more accurately under the purview of'hat Porter refcrrcd to as focus strategies. Mindful of this distinction, we classilied strategies as cost, benefit, utility, and shortage I'or thc sake of simplicity. C~a«i..T ky. 1 k% u ky I p y investment (Wright, 1987). Thus, tight cost control, detailed product cost reports, and efficient orgamzational design are required (Porter, 1980). In the case ol'ew ventures, thc means by which low operating costs can be achicvcd are limited by both size and stage of'cvclopment. Unlike larger firms, few new ventures can be expected to obtain cost advantages from operational factors such as economies of scale or scope, learning effects, or high capacity 49 utilixaiion (Hofer k. Sandberg, 1987). 0 is much more likely that new vcnturcs will obtain low operating costs through administrative mcasurcs such as cl'fcctive organixation, supervision, aml the improvement ol nascent work Iiows. At thc same time, cost data aml historical accounting information arc often nonexistent or woefully inadequate in new or small I'irms (Kcnncdy, Loutxcnhiscr, k Chancy, 1979; Khan A. Rocha, 1982; Rocha k Khan, 1984). Fvcn when accounting inf'ormation docs exist, such lions often require help wiih proiluct cost allocation (Rocha k Khan, 1984). I'or exatnple, Potts'1977) I'ound tluit small manul'acturcrs that used outside accounting and finance services werc more successf'ul thmi tlmsc that did not. Limiting thc initial investment in a venture is principally a financial task. Barring a serendipitous event, such as thc availability ol'heap assets not available to compctitiirs, holding down the amount of initial invcstmcnt involves administrative issues such as whcthcr to buy or lease assets (Block 8t MacMillan, 1985), how to arrange payments and credit (Khan k. Roche, 1982), how to maximixc tax benelits, and how to minirnixc woiking capital and aggregate capital investment (Van Kirk fk Noonan, 1982). After initial investments have bccn made, thc key is to avoid adtlitional borrowing and to minimixc "I'ixcd" comrnitmcnts (Kennedy, et al., 1979). Bccausc administrative mechanisms to control costs and invcsimcnts arc cssemial to a successful cost strategy for new ventures, administrative assistance should bc ol'ritical importance to new ventures following a cost strategy. as noted below. Hf: Thc value of outsider assistance will l&e greater tvhen ncw ventures following cost strategies receive administrative assistance. Strategic assistance should also bc very bcnclicial (Chrisman k Carsrud. 1989; Chrisman k Leslie, 1989). Ncw ventures arc often challcngctl with mcciing substantial and varied demands with limiictl and sometimes inadcquatc rcsouices. Compctcnt strategic assistance can provide sorely needed direction to managers on how to focus and intcgraic whatever iesources and capabilities are at their command. Bccausc strategy is thc critical Icvcr I'or administrative activities, ventures with cost strategies that reccivc both types of'assistance should perceive outsider assistance to be more valuable than those that receive either type alone. H2: The value of outsider assistance will be greatest when new ventures following cost strategies receive both administrative and strategic assistance. ~ll f S ..G "lty. F hilby fn» « t kg vis competitors depends on the nature of the physical product, supporting services, or marketing activities (Poner, 1985). In the case of a product with unique functions or I'eaturcs, the transition from prototype development to systematic production is likely to present a greater number of enginccring and production problems than would be the case with a less unique product. However. the greatest assistance needs of new ventures following bcncfit strategies may be in thc area of marketing (Porter. 1980). Accurate identil'ication ol'he. target market is 50 especially important to avoid direct competition with larger, morc established firms (Rocha & Khan, l984). Equally important, a clear target inarket allows a venture to better I'ocus its scarce resources on producing specialized goods or services for a specified market niche; in this way, more cl'ficient and eff'ective use ol'advertising and promotion is possible (Roche & Khan, l984). From a practical standpoint, many entrepreneurs lack knowledge and skills related to distribution. advertising, and pricing. As a consequence, wc cxpcct that ventures I'ollowing benefit strategies will require operating assistance, especially in thc areas of'arketing and production (Vozikis & Glucck, l980). Furthcnnorc. given thc importance of strategy, the combination of operating and strategic assistance should be of'reater value than assistance in either area alone. Thus: Hgh The value of outsider assistance will be greater when new ventures following benefit strategies receive operating assistance. H4: The value of outsider assistance will be greatest when new ventures following benefit strategies receive both operating and strategic assistance. ~Sh»: S; x. A. II t:ahu .:h 8 .h k ~ .« bcncf'it weapons. Thcrcl'orc, thcrc is no a priori reason to suspect that such ventures will require a disproportionatc;unount of cithcr administrative or operating assistance. The I'uturc prolitability and indccd survival of'hortage ventures are largely detcrtnined by external and uncontrollable factors such as thc continued existence ol'excess demand or local monopoly conditions. As a consequcncc, thcsc businesses arc likely to face I'undamental strategic problems. Lacking a clear business strategy, shortage ventures have many of the same strategic needs as ventures still in thc piccommercialization stage. Chrisman and Carsrud ( l989) found that prc-vcnturcs received sigmficantly morc strategic assistance than established busincsscs. We cxpcct to Iind a similar relationship in thc case of shortage ventures. Although shortage vcnturcs aie not expected to require disproportionate amounts ol'either administrative or operating assistance, thc lack of'dvantage ol'uch ventures suggests that their abilities in both areas arc lacking. It is unlikely that many shortage businesses lack competitive weapons by preference. It is conceivable that many ventures that fall into this category are failed utility ventures that are now "stuck-in-the-middle" (Porter, l980). The general lack of coinpetitivcncss of shortage ventures could force many to attempt strategic or operational turnarounds which would pose a variety of strategic, administrative, and operational problems (Hofer. 1980). As a conscqucncc. such ventures arc expected to need comprehensive assistance covering many areas since thc problcins causing the lacl ol'competitive advantage are likely to be imcrrelated. Put dil'I'ercmly. a shortage strategy is more likely to be caused by a coinbination ol'roblems in strategic vision, inadequate I'unctional skills, and improper execution rather than one of these problems alone. Thercf'orc. ventures without a distinctive competitive strategy arc cxpcctcd to nccd comprehensive assistance; shortage ventures which receive such assistance should bcncfu more I'rom the advice of outsiders than those that do not. 51 HS. The value of outsider assistance will he greatest when new ventures following shortage strategies receive comprehensive assistance. ~ll I S;:.V Inly„p . pp % hy &p x p. utility strategy should rcquiic a &lisproportionate amount ol'dministrative, operating, or strategic assistance. Howcvcr, such ventures could be cxpcctcd to expericncc a broad array ol'problems due to their usc of both cost and benefit weapons. However, these problems will bc somewhat dilTcrent in nature than thc problems OI'shortage vcnturcs. Ventures I'ollowing a utility strategy nccd administrative skills and assistance to achicvc a competitive cost structure. They will also nccd operational skills and assistance to maximize the real or perceived value of their products told services. Finally, vcnturcs pursuing a utility strategy are likely to nccd strategic assistance to coordinate thcsc disparate efforts to ensure, I'or example, that cost control mcasurcs are consistent with product quality and marl cling requirements. Such ventures must nnt only maintain a clear definition of the business hut also ensure that they obtain both thc cost an&I hcncfit advantages that thc utility strategy Icquires (Chrisman et al., 1988; Porter. 1980). On thc whole, thcsc ventures must have comprehensive assistance because implementation of a utility strategy dcman&ks comprehcnsivc, skills. H6: Thc value of outsider assistance will be greatest when new ventures following utility strategies receive comprehensive assistance. METHODOI.OGY Thc relationships hctwccn strategy, outsider;Issistancc, and its pcrceivcd value were investigated via two surveys ol'1421 small businesses thai rcccivcd assistance I'rom one SBDC state system over a two year period. Thc owner of each vcnturc vms contacted by mail and asked to complctc a questionnaire concerning thc areas ol'ssistance soughl, thc competiiivc stratcgics cmploycd, and the quality of'hc scrvicc rcccivcd. Three mailings were conducted for both surveys yielding a total of 398 rcsponscs (28%%. Howcvcr, wc conl'ined our analysis to thc 223 I'( spouses I&oui owners of vcntul'( s Ih;Il had hccn in oper uion eight years or less and whom provi&lcd usable strategy,:Issistancc, and scrvic«rating data. An eight year cu&OIT point is consistent with other studies ol silo'I(IF van&utes (Biggadikc, 1979; Wciss, I(781). Chi-square goodness-ol'-lit tests indicated that resp(mdcnts were highly I'cpfcscntal(vc ol'hc long-term client population in terms of'heir geographic location, gandcr, ethnic background, and type OI'&usincss. To teal lol''cspolIsc bias, chi-square tests ol'ndependence compared rcspondcnts to tile first, sec&md, and third mailings; no cvidcnc«was I'ound that the thrcc groups difl'ered along any ol'hcsc dimensions. As Oppcnheim (1966) argued, late respondents arc very similar to nonrespondcnts and a comparison betwccn ihc three groups provides reasonable assurance of thc sample's rcprcscntativcncss. Onc-way ANOVAs, Chow tests (1960), and chi-square icsts I'ound no cvidcncc that the relationships of'nterest werc moderated by either thc client's type of'usiness or thc SBDC site whcrc assistance was received. In thc lirst year in which thc survey was comluctcd wc had also asked respondents whether they were thc fouiulcrs of their husin«ss an&I a variety of'questions concerning their 52 experience in management. Of'he eighty-five clients who responded to the first of these questions, 72 (84.7%) were founders; the rest were senior level managers. However. no significant relationship was found between founder status and thc pcrceivnl value of outsider assistance, types of assistance received, or strategy followed. The average management experience of the 63 respondents who provided such information was 8.9 years, a figure consistent with that found in a study on cntrcprcncurial success and failure (Lussier & Connan. 1995). Again. ANOVAs and t-tests indicated that managcmcnt experience had no significant relationship to the value or types of assistance reccivcd, or the strategies followed by the ventures in this subsample. Table I. provides a breakdown ol'hc sample in tcnns of business age, size, and industry sector. ANOVAs were conducted to determine whether the sample was suitably homogeneous, in terms ol'gc and size. for pooling. Results indicated that the mean age and total sales did not differ based upon strategy pursued. T-tests also provided evidence that neither age nor size inllucnccd thc type ol'ssistance received. Classification of Strate ies A venture's strategy was classified as cost, henefit, utility, or shortage based upon the cxteni to which it used cost and/or benet'it competitive weapons (see Figure I). Clients were asked to compare their prices, non-price benel'its of products or services, and uniqueness or newncss of products or scrviccs with those ol'heir competitors on a seven-point scale ranging from 'signilicantly lower'I) to 'signilicantly higher'(7). A midpoint response ol'(4) indicated the client was 'about the same's competitors on thc factor of interest. Measurements of venture strategy via comparisons with cmnpetitors has been used in other studies (Chaganti & Schneer, 1994; Gartncr, Mitchell, & Vesper. 1989). Use ot a cost weapon was mcasurcd hy client rcsponscs concerning relative prices; a response ol'3" or lower indicated the, usc ol' cost weapon. Such a response indicated that the venture competed on price and suggested the need I'or carel'ul cost control. Usc of a benefit weapon was determined by examining clients'atings of'elative nonprice benefits and uniqueness of products or services; a response iif "5" or grcatcr on either scale indicated use of a bcncfit weapon. Such rcsponscs suggcstcd that thc venture sought to dilfercniiatc its products or services based on some attribute other than prices or costs. Using the breakpoints discussed above, shortage vcnturcs werc those that did not indicate the usc of either a cost or bene(it weapon; those that employed both weapons werc classified as following a utility strategy. Because 16 clients provided strategy data in both of'hc yearly surveys, we were able to make a rough assessmcnt of thc reliability of the strategy measure. Clients'esponses to relative price, non-price benefits, and uniqueness or newness of product were comelated at 0.84, 0.74, and 0.77, respectively. Using thc scheine described above, 13 of the 16 clients reported strategies (81.3%)remained unchanged. Of the three clients whose strategy responses differed, two changed from shonagc to benelit strategies, and one client moved from a benefit to a utility strategy. The diffcrcncc in strategies reported by these three clients may indicate response error or reflect a true change in competitive posuion. In all three cases. the client's 53 response inthcatcd the venture had nhtained a conqlctitivc weapon which it did not possess thc year hcf'ore. In particular, wc might cxpcct sholxage ventures to attempt to develop a basis on which to compete as a result of'he SBDC's counseling cf'I'orts. Iqcvcrthelcss, thcsc three clicnm werc dropped from thc analysis leaving a sample of 220 ventures. Inde endent Variables Managers werc asked to indicate the nreas m which outsider assistance was rcccivcd. Following the distinctions made by Ansoff (1965), each area of assistance was classified by the rcscarchers as pcrtalmng to strategic (strategic planning, I'easihility analysis. pro-fonna financial analysis, and business planning), administrative (linancc, accounting, pmsonncl. and gcnmal management), or operating problems (markctlng, production, invenlory control and purchasing, and operations) to mcasurc thc types of;Issistancc received. A panel ol''ivc judges, I'amiliar with the cntrepreneurship and strategic managcmcnt independently classified each of'the assistance areas. Thc lcvcl of'agreement between their cl lssil'ications and those of'hc researchers was 73 percent. To assess rcliabihty, the areas of assistance rcpoltctl welc compared with those documented In 17 availablc SBDC case I'iles. Thc level of agrcemcnt bctwccn thc case idle data and thc survey responses was 94 percent (16 ol'7 cases), indicating that thc assistance measure was reliable. We used thc types ol';Issistancc each client rccelved (strategic, administralivc. or operating) as nur Imlcpcndcnt variables. Vcnlures that received all thrcc lypcs ol assistance were said to have rcccivcd comptchensivc assistance, those with less than three types werc considcrcd to have rcceivcd limited assistance. ~DV d IV Idd The tlependcnt variable used was clients'erceptions ol'hc value of'BDC assistance, Clients were asked to rate thc SBDCs counseling services on a seven point scale ranging I'rom 'wodhlcss'I) to 'vital to success'7). In gcnmul, thc 220 clients who provided rcsponscs rated the services I'lworahly; the average rating was S.23. The use ol'his nIcasurc Is conststcnl with both previous rcscarch on outsider assistance to entrepreneurs (Chrisn lan dtd Cm srud, 1989) and studies that evaluate the elfcctiveness ol'consulting cf'I'orts ln the organizational development litcraturc (Armcnakis dtx Burdg, 1988). To assess reliability, clients were also asked if the services received from the SBDC werc hcncficial. Responses to this question were significantly correlated with pcrccivcd scl vlcc value (I = .68; p = .000). RESULTS One-tailed t-tests werc used to test all the hypotheses cxccpting H4. Because only two cost ventures reccivcd both adlninistrative and strategic assistance, a Mann-Whitney test was used to test that hypothesis. Variable means and standard deviations are provided, by strategy, in Table 2. 54 ~c& s& It was expcctcd that ventures with cost strategies that received administrative assistance would perceive the value of the assistance received to bc greater than those that did not. As Table 3 shows, a one-tailed t-test I'ailcd to support H 1; thc scrvicc value ratings of those that received administrative assistance were not significantly greater than those that did not (p = 0.46). H2 was supported, however. As reported in Table 3, a Mann-Whitney test detected a sigmficant dif1'ercncc in service value when ventures that received borh administrative nnd strategic assistance were compared to those that received either strategic or administrative assistance (p = 0 034). While we did not develop hypotheses regarding the types of assistance the ventures would bc most likely to receive I'rom thc SBDC, we thought it useful to mvestigate this issue in order to gain further insight. Although one might cxpcct ihat thc assistance rcccived would conform to the assistance that we hypothesized would bc needed, this did not turn out to be the case. Thus, only 30 percent of the ventures with cosi straiegics rcccivcd administrative assistance, and exactly half received strategic assistance. ~a& n As shown in Table 3, ventures following bencfii strategies that received operating assistance perceived the value ol'utsider assistance to bc grcatcr than those that did not receive such assistance, supporting H3 (p = 0.011). Support was also found for H4. Benefit ventures receiving both operating anrf strategic assistance reported significantly higher service value ratings than those that received only one type ol'ssistance (p = 0.002). In spite ol'hc support for our hypotheses it is interesting to note that only 28 percent ol the ventures with benefit strategies received operating assistance. On thc other hand, 69 percent dtd receive strategic assistance. Again, a large number ol'entures do not seem to receive the types of outsider assistance that appeal to be valued most. ~sa & s Our results indicate that shortage ventures that received comprehensive assistance perceived the value of outsider assistance to be greater than those that did not (p = 0.027). Thus, HS was supported (Table 3). Unfortunately, though comprehensive assistance appears to be valued by shortage ventures, only 13 percent received this sort ol help. This ts not altogether surprising, however. While we argued that these ventures should seek comprehensive assistance, it is reasonable to expect that they lack a strategy based on competitive advantage, in part, because they undmstand neither the value of strategy nor the value ol'he operating and admtmstrative arrangements necessary to make strategy work 'nteresungly, ventures foaowmg benefit strateg&es d&d not perce&ve admm&strat&ve ass&stance to be uf's&gn&ncant value, as ovidence&l by a laci; ul'stat&socal d&fference between those that dtd and those that d&d not receive that son of help. A sunilar lack of assumauon was found between percept&one of vert u.e value fur ventures fonowmg cost strateg&es that received operat&ng as&a&&ance 55 ! Unfortunately, these results also suggest that the consultants were cithcr unablc to diagnose this need or unwilling to press thc issue with thcsc clients. ~ll 0IB S t Strong support was I'ound I'or H6 (Table 3). As anticipated, utility businesses that received comprehensive assistance rated the value of outsider services significantly higher than those that did not (p = 0.009). However, consistent with our oiher analyses, only a small number of'entures with utility strategies (18%) actually got this sort ol'russistance. CONCLUSIONS This exploratory study examined thc relationship bctwcen ncw venture strategy, outsider assistance, and thc pcrccivcd value of assistance. The resulus provided support I'or all hut one el'he hypotheses. Our contention that ventures I'ollowing a cost strategy would value administrative assistance was not supported. However cost vcnturcs that received both strategic and administrative iissistance pcrccivcd thc value ol'hat russistancc to bc significantly greater than those that rcccivcd onc or thc other alone. In addition, thc pcrccivcd value ol'ssistancewas significantly higher I'or bcnclit ventures that received operating assistance, hut was higher still when such clients received both together. Finally, shortage and utility ventures that rcccived comprehensive assistance pcrccivcd thc SBDC's services to be signil icantly more valuable than those that did not, although probably for difl'crcnt reasons. Thus, for all but onc of thc hypothcscs linking strategy, iypcs ol'ssistance, and perceived value of assistance, thc results werc statistically signil'icant. However, thc results also showed that, with one exception, the proponion of busincsscs that received the assistance tluit was posited to hc most benelicial was lower or no grcatcr than thc proportion of ventures that did not receive ihat suit ol'assistance. Limitations of the Stud This study has important implications for entrepreneurs, consultants, and future rcscarch. However, it also has a number of limitations. First, this study invcstigatcd one source ol'outsider assistance, thc SBDC, in one state among clients that rcccived counseling over a two year period. Therefore, it may not be gencralizable to other settings. Although our research design may have limited thc study's generalizability, it also increased the homogeneity of the population, and this wc consider to be a stivngth. Thus: Narrower, more, homogeneous populations would limit the generalizability ol'ny single study, hut this would be offset hy gains in thc definitiveness of'hc findings, the levels ol'ariance explained, and the applicability ol thc results to thc population. In short, solid findings about a narrower population are hetter than marginal findings of t)ucstionable gencralizability to a broadly defincil population (McKclvey, l978: 1438). 5&z Second, the small number ol'cost ventures in the sample restricted our ability to test the relationships ol'intcrcst. Hence, we could not ascertain the value of administrative assistance to cost ventures with as high a level of confidence as we would have wished. Third, thc study focused exclusively upon the types ol'assistance received rather than thc depth ol'ussistancc in spccil'ic areas. It is possible that a measuremcnt of depth would have yielded new insights or di(l'erent conclusions. Fourth, hccausc both thc indcpendcnt and depcndcnt variables were mcasurcd via the same survey instrument, this study may have been vulnerable to problems associated with common method variance (Campbell k Fiske. 1959; Fiske, )982). When our survey mcasurcs are cvaluatcd in tcnrts of'hc potential causes o( aiti factual covariance described by Podsakofl'nd Org;m (19)I6), however, wc did not I'ind cvidiaice iif'ffects that would invalidate our results. Our strategy measures may also be criticized on scvcral grounds. First, they were somewhat simplistic I'or the purpose ol capturing a complex construct. Howcvcr, the scales cmploycd were direct, highly consistent with our conceptual frumcwork, aml undcrstandablc to clients regardless of their business sophistication. Nnncthclcss, this musi be still hc cnnsidcrcd a limitation ol'his study It is also possible that respondents'ssessments of'heir competitive positions werc inflated with regard to price, non-puce benef'its, and unitlucncss. II'uch bias was prcscnt, howcvcr, one would expect to lind a disproportionate number ol'tility ventures to shortage vcmures as thc former strategy indicates a strong position on both cost and benclit dimensions and thc latter a weak position in both areas. Since thc numbers ol'utility (N = 44) and shortage ventures (N = 39) in our sample werc very similar, thc probability of this sort ol'bias seems remote. although still greater than zero. Furthermore, our meihndology did not permit mcasurcmcnt ol'he appropriateness of thc stratcgics I'nllowcd by the ventures. h is possible that some ventures followed an inappmpriatc strategy. If this is true, the accuracy of our conclusions would hc open to doubt. However, given thc attention to problem diagnosis hy SBDC consultants, wc do not belicvc that this possibility was great, or that the few occasions whcrc ii might have occurred caused serious bias io the results of thc study. If it had. we would have expcctcd to see lower evaluations of thc SBDC's services than werc obtained. Since there was a lag of one year between when thc assistance was provided and when thc survey was conducted, such serious strategic errors would have undouhtahly affected perfonnance and been rc(1ected in client evaluations. Finally, thc study is also limited by our use of sub)ective measures of the value of outsider assistance. Although subjective mcasurcs arc useful, they can not rcplacc hard data on prnfitabihty, sales growth, productivity, and so forth. While studies have shown subjective 57 measures to bc correlated with objective pert'otmancc measures (Dcss & Robinson, 1984), the evidence is not conclusive (Sapienza, Smith, & Gannon, 1988). Im lications for Entre reneurs and Ncw Venture Mana ers Because this study involved only clients of one outsider assistance progratn in one state over a relatively short period of time, its findings should be considcrcd tentative. Noncthcless, it olTcrs important implications for cntrcprcncurs and new venture managers. First, this study emphasizes the importance of strategy as well as its linkage u& the administration and functional operations of a vcnturc. Although this message is not ncw its importance intlicates it is worth repeating. Thus, thc principal implication ol'his study is that entrcprcncurs cun benefit most I'rom outside assistance that helps build or enhance thc critical I'unctional skills and competencies required to compctitivcly impl«ment a strategy. Furthcrmotc, when this is accompanied hy strategic assistance, thc potential value is greater still. Specifically, vcnturcs I'ollowing cost strutcgics seem to obtain thc most value from a comhination of'dtninistrativc and strategic assistance. I'or ventures I'ollowing hencf'it strategies. assistance in operations aml strategy sctan to provide th«greatest value. Finally, ventures that employ utility strategies, or that arc stuck-in-the-middle with a shortage strategy, appear to gain the most when comprcl&ensivc nssistancc in struegic, ralministrativc, and operating areas is received. Thcsc arc panicularly impottant lindings since it appcnrs tlu&t many cntrcprencurs do not seek assistance in areas that are consistent with thc strategic requirements of their vcnturcs. Since strategy should bc built upon strength, it is likely that these cntrcprencurs seek assistance based not upon strategy. but upon other criteria such as perceived weakncsscs or most pressing nccds. If so, numy new businesses arc cithcr failing to recognize, t&r ineffectually addressing, thc compctitivc I'orccs in their cnviromnents. This is not to say that assistance in tmproving areas of wcakncss is not valuable or ncccssary. Howev«r. using outsider assistance to simply prop up or strengthen weak functional orcus may result in incflicicnt deployment ol'carce rcsourccs to areas that arc fess critical to a venture's strategy. It may also result in a strategy that is not adequately supponed hy thc skills and tcsources required to mcct th«key succ«ss I'actors in th«cnviromncnt. Theref'orc, strategy should hccomc a tlriving I'cree in thc search I'r cffcctivc outsider assistance. Entrcprcncurs and ncw venture managers should he as willing to seek or accept advice in areas that arc perceived as strengths as in areas that are perceived as wcaknesscs if'hc I'ull value ot'outsid«r assistance is to be obtained. This also suggests that entrepreneurs should more actively evaluate and manage their outside advisors (Stcvcnson & Sahlman, 1988). Entrcprcneurs should seek outside consultants who possess thc skills aml experience ncccssary to aid in thc I'ormulation of strategy and in tying specific I'unctional assistance to thc vcnturc's present or I'uturc source(s) of'compctitivc advantage. However, thc I'undamcntal linkage between strategy and outsider assistance suggested in this article indicates that care tnust be taken to ensure that advisors also possess thc requisite skills needed to diagnose thc true needs ol'he vcnturc. 58 Finally, this study provides further evidence that entrepreneurs can obtain useful assistance I'roin the Small Business Development Center program in both I'ormulating and implementing a strategy. The value of this resource to ncw venture developinent should not be overlooked hy aspiring entrepreneurs. Im lications for Outside Consultants and Assistance Pro rams Outside consultants should not assume that entrepreneurs will always accurately perceive their assistance needs in tcnns of developing a long-term source of competitiveness. Few entrepreneurs received assistance in areas most pivotal to their long-tenn success. Directors of outside assismnce programs, such as thc SBDC, should therel'orc consider these findings with the aim of optimizing the impact of'heir limited resources. An analysis of a venture's strategy can idcntil'y critical areas in which outside assistance should be primarily targeted. In panicular, strategic assistance is clearly bcncficial as strategy is thc principle lever by which other critical competitive needs are identified. Without a clearly R&nnulatcd strategy, the new venture's most critical assistance needs may not be understood or idcntilied. Consultants should be instructed to ask questions during thc initial client meeting that will allow them to discern the strategy ol'hc vcnturc. Once the strategy is identified consultants should probe for inl'ormation concerning thc kcy functional skills used by the venture to support that strategy. Such a proactive stance in thc client-consultant relationship must of course bc handled with tact and patience. However. the potential btnicf its from such an approach appears to outweigh inconvenicncc in time or effort as well as any risk of alienating a recalcitrant client. A related implication is that SBDCs and other assistance programs would do well to evaluate their capability to intcgratc assistance in strategy I'onnulation with that of implementation (Nahavandi k. Chesteen, 1988). This would entail more detailed enviromnental analysis in areas such as customer needs, competitors'trengths, and the target market's key success factors. Thc finn's specific resources and capabilities should be evaluated in light of those required to compctc succcssl'ully. In turn, assistance should hc targeted at I'uncnonal areas that best address the gap bctwccn what thc vcnturc is capable of doing and what it needs to do to compete elfcctively. To accomplish this, it may bc ncccssary to utilize a team approach to consulting because the skills of any one consultant are limited. Traditionally. thc SBDC has assigned clients to a consultant who has expenise in their area of most pressing need. Given the widely diverse assistance nccds ol'he new venture, however, a funher division of labor among consultants by task, rather than solely by client, may lead to more effective assistance. Directions for Future Research This study and its conceptual foundation ofl'er rich opportunities for I'urther research. For example, thc small number ol'cost ventures identil'icd in this study highlights a relatively untapped need I'or large sample research that investigates ncw ventures that strive for low cost advantages. Because entreprcncurship tends to be assoi:iated with product innovation, wc know less about thc nature and feasibility of ventures I'ollowing cost strategies. 59 In aildition, research to dctcnninc how the strategic and nonstrategic;issistance needs ol'cw ventures are identified, and how and by whom such assistance is hest provided is needed. Do entrcprencurs seek to build and enhance appropriate coinpetitive strengths or do they, as this study suggests, simply look to remedy perccivcd weaknesses and short-term cxigcncicsg What part do consultants play, if any, in the idcntilication of assistance nccds? li is also p(issihlc, if not likely, that entrcprcneurs seek ()ut difTerent types ()I'assistance I'rolli dilTcrcnt souivcs. If this is sii, rcscarch is needed to determine thc soutrecs ol'ssistance that arc most cl'Ibctivc and when. While SI3DCs and other assistance programs are c&imparattvely inexpensive;mil provide coinpctcnt basic assistance, industi3 cxpcrts and other specialists may bc morc capable ol'uiding ventures in certain situations (Stevenson bs Sahlinan. 1988k Future studies would also benefit if thc background, expcricncc, and skills ol'ntreprcncurswerc tal cn into consideration. Preliminary analysis suggcstcil no relationship bctwecn management cxpcricncc, value ol'assistance, strategy, or type ol'tssistan«c receiveil. Howcvcr. mitre in-depth analysis may yield additional insights. Some cntrcprcncurs may pcrccive, and perhaps rightly so, that their own spccialixcd cxpetxi c in critical aieas is greater than that availablc from certain programs or consultants. I.or example, wc might expect scasoncd managers that spinoff'vcnturcs train cstablishcd corporations to rely heavily on their own cxpcnisc and resources in critical areas, and to scck solutions to less important concerns through, I'or cxamplc, the SI3DC. In cimclusion, il'the economic henefiks ol'cntrcprcncurial activity arc as extensive as many experts aml observers belicvc, wc should look to discover bcttcr way» to clTiciently link new ventures to thc limited rcsourccs availablc io them. As this aml other studies have (Ieili(iltstl"lte(l, ()lie iilipoltalit I'Cs(illl'CC is outsider assist;lltce. Oui coltceptllill iippl'oacli alul lindings, tentative. as they are, suggest that ncw venture strategy may explain why cenain types or combinations ol';issist llice liiily hc nmrc valuable ill olio crise tliilli 111 illiotliel. 60 Appendix: The Small Business Development Center Program" Started in 1978, the Small Business Dcvelopmcnt Center program in United States provides I'rcc, in-depth management assistance to resource-poor individuals who are seeking either to launch a new venture or to learn how to manage ihcir existing business morc effectively. Although most of thc SBDCS clients compete in the retail or service sectors of the economy. these businesses remain vital to thc Iramework of regional economies. The SBDC provides a wide range of strategic, administrative, and operating assistance to its clients in areas such as business and strategic planning, I'castbility analysis, general management, finance, accounting, pcrsonncl. marketing, production operations, and inventory control. It also offers a variety ol'ailored programs I'r exporting, government procurement, minority assistance, computer assistance, and inventor assistance. Its distinctive compctcncies, however. are in the areas of business planning and I'inancial analysis. Because ol' large and ever expanding client base, and because many of its clients lack sophisticated managcmcni skills, the philosophical approach of the SBDC is to guide and train its clientele rather than do thc work for them as a for-fcc consultant might. Thus, thc SBDC concentrates on problem diagnosis. developing a client's management skills, and providing advice, information, and assistance. It does noi prepare a clicru's business plans, formulate its strategy, give loans. etc. Thc South Carolina SBDC, thc site ol'his study, employs 60 persons in 14 offices around thc state. Employees include 30 I'ull-time consultants and 10 part-time consultants. The remaining 20 employees are involved in administrative tasks (e.g.. inl'onnation systems) and special assignments (e.g., procurement assistance). Because ol'he importance of providing high quality assistance in a relatively short period of time (consultants spend an average of 6-7 hours per client in I'acc-to-face counseling and preparations), the hinng and training policies I'or both I'ull- and part-time consultants are ngorous. Part-time consultants are typically MBA students who possess highly developed skills in financial analysis and marketing. Once hired, part-time staff arc closely mentored for the first six weeks of their cmploymcnt and this mcntoring process continues as nccdcd for a period ol'8 months. The mcntoring process involves mccting with expcricnccd consultants hei'orc and al'tcr client contacts; furthenuorc. no new employee is pcnniitcd tti work with u client without a mentor present. The purpose ol'his mcntoring is to supplement thc consultant's quaniitaiive skills with skills in problem diagnosis and human relations. Full-time consultants hired by the SBDC must also possess skills in finance, marketing and general management, as well as hold a graduate degree or have previous experience as a consultant or small business manager. These employees must also be mentored although the length of the process ls shorter than I'r part-time employees. In addition, all I'ull-time consultants must obtain prolcssional certification I'rom thc Nati&mal Development Council. The certification process consists ol''our onc-week training courses over a 6-12 month period followed by thc successl'ul completion of a multi-part examination. 'his informanon was obtatnett in an interview with John Lenft, Director of the South Carolma Srnau Business Development Center, January 5, 1994. 61 REFERENCES AnsolT, H.I. (1965). Co orate Stratc: An Anal tical A roach to Business Polic I'or Growth and Ex &ansion. Ncw York, NY: McGraw-Hill. Annenakis, A.A., k Burdg, H.B. (1988). Consultation Research: Contributions to Practice and Directions I'or Improvement. Journal of Mana ement, 14, 339-365. Biggadike, E.R. (1979). The Risky Business ol'iversification. Harvard Business Review, 57 (3), 103-111. Block, Z, k. MacMillan, I.C. (1985). Miles&uncs lot'ucccssf'ul Venture Planning. Harvard Business Rcvicw, 63 (5), 184-196. Campbell, J.P., fv I iskc. D.W. (1959). Convcrgcnt and Discriminant Validation by thc Multitrait-Multimcthod Matrix. Ps cholo ical Bulletin, 56, 81-105. Chaganti, R.. k. Schnecr, J.A. (1994). A Study of thc Impact of Owner's Mode of Entry on Venture Pcrfom&ance and Management Paucrns. Journal of'usiness Vcnturin, 9, 243-260. Chandler, A. (1962). Stratc and Structure. Cmnbridgc, MA: Thc MIT Press. Chow, C&.C. (1960). Tests of Equality Bctwccn Sets of'Cocllicicnts in Two Linear Equations. Economctrica, 28, 591-605. Chrisman, J.J., 8( Carsrud A.L. (1989). Outsider Contributions to thc Dcvelopmcn& and Change of13usincss Ventures. Journal ol'Or anixational Chan c Mana cmcnt, 2 (3), 75-87. Chrisman. J.J., Holeb C.W., 8( Boulton, W.R. (1988). Toward a System fol Classif'ying Business Strategy. Academ ol'ana cmcnt Review, 13 (3), 413-428. Chrism;m, J.J., liny, I ., 8: Robinson, R.B.Jr. (1987). Nt'w Vcnlul'c Dcvclof&n'lent: Thc Costs NB II. I'B NII 5 A&frl» "..I»:I fB .» .~y« fu, .3I5 32N. Chrisman, J.J., cvv Katri hcn, F. (1994). Thc Economic Imp u:t ol'mall Business Development Cc cr Counseling Activities in thc United States: 1990-1991.Journal of Bus&ness Vclllu&1n, 9, 271-280. Chrisman. J.J..8: Lcslic J. (1989). Strategic, Administrative, and Operating Problems: Thc Impact ol'utsiders on Small Firm Performance. Entre&reneurshi Theor and Prac&icc, 13 (3), 37-51. Dcss, G.G., 8. Robinson, R.B. Jr. (1984). Measuring Organif ational I'crf'(&nnancc in thc Ahscncc of'bjective Measures; Thc Case of thc Privately-Held Firm and Conglomcratc 13usincss Unit. Stratc 'ic Mana 'ement Journal, 5, 265-273. I iskc, D.W. (1982). Convcrgcnt-D&scriminant Validation in Measurcmcnts and Research Strategies. In D. D. Brinsberg 8( L. Kidder (eds.), New Directions I'or Methodolo of Social and Behavioral Science: I.orms ol'alidit in Rcscarch. San Francisco: Jossey-Bass, 12, 77-92. Cfalbraith, J.R., ((k Kaxanji;m, R.K. (1986). Strate Im lementation Structure S stems and Process. St. Paul, MN: West Publishing Company. Gartncr, W.B., Mitchell, T.R., f(k Vesper, K.H. (1989). A Taxonomy of'cw Business Vcnturcs..lournal of'Business Vcnturin, 4, 169-186. B I, C.W. (1)75). T .»5 . C I I; y TN uy f B:I:.5: Ny. ~A" 5 AN . « I NI, IN. 75(-NI(l. Hofer, C.W. (1980). Turnaround Stralcgics. Journal of Business Stratc, I ( I), 19-31 62 Hol'er. C.W.. & Sandberg, W.R. (1987). Improving New Venture Performance: Some Guidelines for Success. American Journal of Small Business, 12 (I), 11-25. Hofer, C.W., &. Schcndcl, W.R. (1978). Strate Formulation Anal tical Conce ts. St. Paul. MN: West Publishing Company. Kennedy, J.. Loutzenhiser, J., & Chancy, J. (1979). Problems of Small Business Firms: An Analysis ol'he SBI Consulting Program. Journal of Small Business Management, 17 ( I ), 7-14. Khan. M.R., & Rocha, J.R. Jr. (1982). Recurring Managerial Problems in Small Business. American Journal of Small Business, 7 ( I), 50-58. Long. W.A., & Ohtani, N. (1986). Facilitating New Vcnturc Development Through Market and Design Feasibility Study. In R. Ronstadt, J.A. Hornaday, R. Peterson, and K.H. Vcspcr (cds.), Frontiers of Entre rcneurial Research. Wellesley. MA: Babson College, 463-481. Lussier, R.N., & Comtan. J. (1995). Thcrc arc I=ew Dtl'fcrcnces Between Succcssf'ul and Fatled Small Businesses. Journal ol'Small Business Stratca . 6 (I). 21-33. McKelvcy, B. (1978). Organizational Systematics: Taxonomic Lessons from Biology. ~NN:" 4 ., 4. I428-144tl. McMul lan, W.E., Long. W.A., & Graham, J.B. (1986). Assessing Economic Value Added by University-Based Ncw-Vcnturc Outreach Programs. Journal of Bustness Vm2turin, I, 225-240. Nahavandt, A., & Chcstccn, S. (1988). Thc Impact ol'Consulting on Small Business: A Furthm'nvestigation. Entre rcneurshi Thcor and Practice, 13 (I). 29-40. Oppcnhcim, A.N. (19fifi). ucstionnaite Desi n and Attitude Measurement. New York, NY: Basic Books. Pelham, A.M. (1985). Should thc SBDC Program bc Dismnntledg American Journal of Small Business, 10 (2), 41-51. podsakolf, p.M.. & Organ, D.W. (1986). ScllzRcpods in Orgamzattonal Research: problems and Prospects. Journal ol'Mana emcnt, 12, 531-544. P .MC. II98tlt. ~C» ll 8: ~ Y»S,NY 9 P Porter. M.E. (1985). Com ctitivc Advanta c. New York. NY: I ree Press. Potts. A.J. (1977). A Study ol'hc Success an&I Failure Rates ol'Small Businesses and the Use or Non-Usc of Accounting Information. Unpublished doctoral dissertation. George Washington University. Robinson, R.B. Jr. (1982). Thc Importance ol'Outsiders'n Small Firm Strategtc Planning. Academ ol Mana cmcnt Journal, 25, 80-93. Robinson. R.B.Jr.. & Pcarcc, J.A. (1984). Research Thmsts in Small Finn Strategic Planning. Acadcm of Mana emcnt Review, 9, 128-137. Rocha, J.R..& Khan, M.R. (1984). Impact ol'Counseling on Small Business Performance. American Journal of Small Business, 9 ( I). 34-43. Sapienza. H.J.. Smith. K.G., &. Gannon, M.J. (1988). Using Subjective Evaluations of Organizational Perl'onnancc in Small Business Research. American Journal of Small Business. 12 (3), 45-53. Stevenson. H.S., &. Sahlman. W.A. (1988). How Small Companies Should Handle Advisers. Harvard Business Rcvicw, 66 (2), 28ff. Stinchcombc. A.L. (1965). Social Structure and Organizations. In J.G. March (ed.) Handbook ~ttk ":»:.Ck "k,lk 8: a4 M N IIY l42 I93. 63 Van Kirk, J.E., k Noonan, K. (1982). Key Factors in Strategic Planning. Journal of Small Business Mana cmcnt, 21 (3), 1-7. Vesper, K.H. (1980). New Venture Strate 'ies, Englewood Cliffs, NJ: Prentice-Hall. Vozikis, G.S., k. Glucck, W.I . (1980). Small Business Problems and Stages of'Development. Procccdin s of thc Academ of Mana cmcnt, (August), 373-377. W .,I..A. )1981). S: -Upp '» .::AC 9» fP f «: ..~SI M: Review, 23 ( I), 37-53. Willard, G.E., & Cooper, A.C. (1985). Survivors of Industry Shakcouts: Thc Case ol the U.S Color Television Set Industry. Strate ic Mana emcnt Journal, 6, 299-31. W AN, P. ))9N)). A 9 f) . fP '. S 8 .. ~R » .AU~3 ;I.N,99- 101. 64 FIGURE I CLASSIFICATION OF NEW VENTURE STRATEGIES COST/PRICES Low Avel"age Hi h High Utility Benel'it (N =44) (N=)17) BENEFITS Average Cost Shortage (N =20) (N=39) Low 65 Tahlc I BreakCknvn of San&pie of Ne»'entures by Age, Am&ual Sales Volume, m&rl Ty!&e of Business: Frequency Dis(ributions Proportion Variable Frequency oC Sa&nplc AOI.: 0-1 years 75 34 1% 2-4 124 56A1% 5-tt 21 9.51% ANNUAI. SALES ($000) 0-250 195 II3.8% 251-500 7.1% 501-750 7 4.!% 751-1000 7 4.7% TYPE OF BUSINESS Retail 71 32!&% Sc»' & ca 75 34.3% Manul'acturing 46 20.!!% Other 2tt 12.ti% 66 Table 2 Descriptive Staustics of the independent anal Depeculent Variables for Nen'entures by Strategy COST BENEFIT SHORTAGE UTII ITY VENTURES VFNTURES VENTURES VENTURES (N=20) (N=117) (N=39) (N=44) Mean S D. Mean S D. Mean S D. Mean S D. ADMINISTRATIVE 0.30 0.47 0.51 0 50 0.59 0.50 0.45 0.50 ASSISTANCE STRATEGIC 0.50 0.51 0.69 0.46 0.41 0.50 0.55 0.50 ASSISTANCE OPERATING 0.20 0.41 0.28 0.45 0.38 0.49 0.41 0.50 ASSISTANCE COMPREHENSIVE 0.05 0.22 0.12 0.33 0 13 0.34 0.18 0.39 ASSISTANCE SERVICE VALUE 5.60 0.99 5.33 1.30 5.05 1.62 4.93 1.56 RATING VENTURE AGE 2.45 2.04 2.99 2.16 2.77 2.23 2.34 1.45 VENTURE SIZF. 182.94 294.19 132.83 259.69 110.78 229.39 73.89 134.80 67 Tahlc 3 kelariansltip Benveell Types af Oalsiller Assistance allll I crcclvcvl VCIne af Onlsilll'I'ssistance Test Assi slancc N Mean S.13. Statistic Significance Hypothcscs FIRMS WITH COST STRATEGIES Athnlnlst lani vc Ci 5.Ci7 1.21 t = 0.17 p = 0.426 H l. Not supported No Alhninistrative 14 5.57 0.94 Administrative and 2 7.00 0.00 a = 1.83* p = 0.034 H2. Suppol ted Strategic Administrative or 12 5.67 0.89 Strategic FIRMS WITH BENEFIT STRATEGIES Operating 33 5.73 1.04 t = 2.34 p = 0.011 H3. Supported No operating 84 5.18 1.36 Operating and 25 5.96 0.79 t = 2.42 p = 0.002 H4. Supported Strategic Operating or 64 5.24 I A I Strategic FIRMS WITH SHORTAGE STRATEGIES Comprchcnsivc 5 Ci.20 1.10 t = 2.34 p = 0.027 H5. Supported LlnlllCtl 34 4 88 1.63 FIRMS WITH UTILITY STRATEGIES Comprehensive 8 5.88 0.99 t = 2.62 p = 0.009 H6. Supported Limited 36 4.72 I.Ci I * Mann-Whitney U-test. 68