The Leadership Quarterly 21 (2010) 144–158

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The Leadership Quarterly

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Entrepreneurial leadership vision in nonprofit vs. for-profit organizations

Ayalla Ruvio a,⁎, Zehava Rosenblatt b, Rachel Hertz-Lazarowitz b

a Fox School of Business, Temple University, Philadelphia, PA, USAb University of Haifa, Mount Carmel, Haifa 31905, Israel

a r t i c l e i n f o

⁎ Corresponding author. Tel.: +972 4 8288491.E-mail address: aruvio@gsb.haifa.ac.il (A. Ruvio).

1048-9843/$ – see front matter © 2009 Elsevier Inc.doi:10.1016/j.leaqua.2009.10.011

a b s t r a c t

Keywords:

This paper explores the role that entrepreneurial leadership vision plays in the entrepreneurialprocess of nonprofit and for-profit ventures. The results indicate significant differences in themeaning of vision articulated for each type of venture. Differences between ventures were alsofound with regard to the relationship that vision has with the ventures' strategies andperformance. In the nonprofit organizations vision was associated with a wide-range strategyas well as the ventures' performance and growth. In addition, wide-range strategy partiallymediated the relationship between the ventures' vision and its performance and growth. Inbusiness enterprises, vision directly predicted only a differentiation strategy, which alsomediated the relationship between vision and the ventures' performance and growth. Incontrast, a wide-range strategy in these organizations actually reduced growth. These findingscontribute both to the literature on vision as well as to the literature on entrepreneurship.

© 2009 Elsevier Inc. All rights reserved.

VisionEntrepreneurSocial entrepreneurshipComparison

Vision guides entrepreneurs' long journeys to establishing new ventures (Baum & Locke, 2004; Dees, 1998; Ensley, Carland, &Carland, 2000; Ensley, Pearson, & Pearce, 2003; Greenberger & Sexton, 1988). At the incubation stage, all the entrepreneur has is amental image of what the venture should look like, its place in the business world, and a roadmap for reaching the goal. Vision is socentral to the entrepreneurial process that Gupta, MacMillan, and Surie (2004) based their entrepreneurial leadership definitionaround it. For them entrepreneurial leadership is “leadership that creates visionary scenarios that are used to assemble andmobilize asupporting cast of participants who become committed by the vision to the discovery and exploitation of strategic value creation”(p. 242). Similary, Yukl (2006) stressed themultiple roles of the desired vision as “simple and idealistic, a picture of a desirable future”that “should appeal to the values, hopes and ideals for organizational members and other stakeholders whose support is needed. Thevision should emphasize distant ideological objectives rather than immediate tangible benefits” (p. 295).

The histories of many well-known organizations reveal a variety of visions. UNICEF's vision is, “For every child health,education, equality, protection. ADVANCE HUMANITY.” This definition expresses a broad vision coupled with an ideologicalobjective (helping all children). Microsoft's vision, “to enable people and businesses throughout the world to realize their fullpotential,” also expresses a wide-ranging ideal with future-oriented characteristics. The USDA Forest Service's vision is one of“caring for land and serving people,” and Ashoka's vision is to “develop the profession of social entrepreneurship around theworld.” Both of these visions express the values, hopes and ideals of the organization with no immediate tangible benefits. Theseexamples illustrate the scope and depth of vision and the important role it plays in the organization's activities.

The literature on entrepreneurial vision (EV) generally focuses on its importance for the venture's creation and growth (Baum& Locke, 2004; Dees, 1998; Baum, Locke, & Kirkpatrick, 1998; Ensley et al., 2000, 2003; Greenberger & Sexton, 1988; Moore, 1986;Naffziger, Hornsby, & Kuratko, 1994) and the ways in which EVs differ from those of executives (Kirkpatrick & Locke, 1996;Kirkpatrick, Wofford, & Baum, 2002; Fable & Larwood, 1995). These studies assume (explicitly or implicitly) the existence of acoherent construct of EV, with consistent characteristics across types of ventures that distinguish it from other types of vision (e.g.,managerial vision). Fable and Larwood (1995) provided empirical evidence for the difference between the vision of entrepreneurs

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and non-entrepreneurs (entrepreneurs scored higher on risk taking and proactive adoption and lower on vision formulation).They attributed these differences to the way entrepreneurs envision their venture strategically as an extension of themselves andtheir needs (Bird & Jelinek, 1988; Fable & Larwood, 1995; Hornaday, 1992; Timmons, 1994).

However, although the difference between entrepreneurs and non-entrepreneurs' vision has been established, to the best ofour knowledge, the differences between the EV of different types of entrepreneurs has not yet been tested. Thus, the main focus ofthis study is on the organizational context of EV. In their model of venture initiation, Greenberger and Sexton (1988) regardedvision as related to the underlying cause of the venture and/or the type of venture imitated. Fable and Larwood (1995) suggestedthat since vision reflects the uniqueness of the organization, it may be developed and utilized in different ways in different types oforganizations (see also Cossette & Audet, 1992; Naffziger et al., 1994; Nanus, 1992). Based on these theoretical arguments, thisstudywill examine the differences in EV between nonprofit entrepreneurs in the educational sector and for-profit, service orientedbusiness entrepreneurs. The study will also test the differences in the effect of EV on the new venture's strategy and performance.Consequently, the studywill consider several questions. Are differences between EVs systematic? Do they reflect differences in thenature of their corresponding entrepreneurial organizations? Does EV have a different effect on the new venture's strategy andperformance in different types of ventures?

In sum, the main purpose of this research is to advance the knowledge regarding cross-sector differences in EV and its role inthe process of establishing new ventures. The paper begins with a review of the extant literature, posits a series of researchhypotheses, moves to a discussion of the methodology, and concludes with an analysis of the findings and their implications forresearch and management.

1. What is entrepreneurial vision?

Vision is a seminal concept in leadership literature (e.g., Avolio, Zhu, Koh, & Bhatia, 2004; Awamleh & Gardner, 1999; Baumet al., 1998; Bennis & Nanus, 1985; Conger, 1989; Elenkov, Judge, & Wright, 2005; Groves, 2006; Strange & Mumford, 2002) and akey component in the leadership style of all leaders — social, political or organizational. While the definition of vision varies, it isgenerally an idealized goal to be achieved in the future (Conger, 1999; Conger & Kanungo, 1987; Elenkov et al., 2005; Kirkpatricket al., 2002) or an ideal and unique image of the future that articulates the values, purposes, and identity of its followers (Boal &Bryson, 1988). In the organizational arena, Shamir and colleagues (1993) define vision as an ideal statement that reflects theshared values to which the organization should aspire. Bennis and Nanus (1985) offer a more practical definition, regarding visionas the projected mental image of the product, services, and organization that a business leader wants to achieve. These definitionshighlight the future-oriented nature of vision and its role in motivating followers toward that future.

The definitions in the entrepreneurial literature reflect the general nature of the role of vision in entrepreneurial contexts, aswell as its unique characteristics. Greenberger and Sexton (1988), for example, argue that “entrepreneurs are likely to havesome abstract image in mind about what they intend to accomplish,” and entrepreneurs “must be able to create a similar imagein the minds of others.” (p.5). Here again, these definitions of vision are future-oriented and describe the role of vision inmotivating followers toward this future. According to Ensley et al. (2000), EV is a result of the entrepreneur's intuitive andholistic thinking and bridges the current situation and the future state. They focus on entrepreneurs' exceptional ability toformulate a suitable EV for their ventures. Fable and Larwood (1995) address the differences between managerial andentrepreneurial vision. Given that at the beginning of the entrepreneurial process the entrepreneur is actually the venture itself,he or she “may be more likely to envision the organization strategically as an extension of his/her needs” (Fable & Larwood,1995; no page numbers available). Some researchers argue that entrepreneurs do not have a vision or that if they do, it is notformal or stated explicitly (Baum et al., 1998). We follow the majority of the leadership and entrepreneurial literature, whichemphasizes the existence and importance of vision in the entrepreneurial context (e.g., Cogliser & Brigham, 2004; Gupta et al.,2004; Larwood, Falbe, Kriger, & Miesing, 1995).

This study defines EV as a future-oriented image of the new venture, intended to motivate both the entrepreneurs and theirfollowers (investors, future employees) toward this desirable future.

2. The content of entrepreneurial vision

The theoretical and empirical literature characterizes vision as optimistic (Berson, Shamir, Avolio, & Popper, 2001; Devanna &Tichy, 1990), desirable (Baum et al., 1998; Conger, 1989), challenging (Baum et al., 1998; Nanus, 1992; Sashkin, 1988), clear(Baum et al., 1998; Nanus, 1992), brief (Baum et al., 1998), and achievable (Conger, 1989; Levin, 2000).

Larwood and colleagues conducted the first large-scale sample empirical study of vision content and attributes amongentrepreneurs in 1995. They asked corporate executives to describe their vision for their respective organizations in a single sentence.Respondents then evaluated their own visionary statements using a 26-item list. These items reflect a positive characterization ofvision in theoretical and applied discussions, using terms such as risky, action-oriented, inspirational, focused, and purposeful. Theauthors assert that “the items on the self-evaluation listwere representative ofmanydefinitions and descriptions of vision available inthe literature; the study intentionally avoided focusing on or selecting any one theoretical perspective” (Larwood et al., 1995).

Next, the authors subjected the 26-item list to an exploratory factor analysis. The respondents' ratings form seven independentfactors. The main ones are vision formulation, indicating a strategic emphasis; implementation, stressing successful communicationof the vision; and innovative realism, focusing on tactical responsiveness to both internal and external events. The four minor

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factors are general, reflecting the ambiguous side of vision; detailed, the opposite of general; risk taking, emphasizing the risky andnon-conservative nature of vision; and profit oriented, assessing whether the vision is bottom-line oriented.

Larwood et al.'s (1995) dimensions of vision derive from the general literature of business and management. The notion offormulation reflects the perception of vision in strategic planning research as a long-term perception that guides the organization'splanned behavior, thus formulating its specific strategy and goals. According to the new venture initiation model (Greenberger &Sexton, 1988), EV is the first stage of the venture; later, once the venture is launched, it will be transformed into a full-fledgedstrategic orientation.

Implementation, generally conveyed through communication skills, is an essential part of vision in charismatic leadershiptheories (e.g., Avolio et al., 2004; Baum et al., 1998; Bennis & Nanus, 1985; Conger & Kanungo, 1987; Groves, 2006). According tothese theories, the perception of leaders as charismatic and inspirational depends on their ability to communicate their vision totheir followers (Awamleh & Gardner, 1999; Baum & Locke, 2004; Berson et al., 2001; Hunt, Boal, & Dodge, 1999; Strange &Mumford, 2002). In relation to entrepreneurship, Baum et al. (1998) and Baum and Locke (2004) demonstrate empirically theimportance of communicating vision for the growth of a new venture.

Finally, innovativeness and risk taking are perhaps the most characteristic attributes of entrepreneurship in general (Covin &Slevin, 1991; Kreiser, Marino, & Weaver, 2002; Lumpkin & Dess, 1996) and of EV in particular. Still, like other dimensionsdelineated by Larwood et al. (1995), these two attributes are also important features of leadership in organizations. Althoughthey represent unique characteristics of entrepreneurship, various aspects of EV echo similar concepts in managementliterature.

3. Types of venture and types of vision

Gartner (1985) notes that the differences between entrepreneurs and their ventures are much greater than the differencesbetween entrepreneurs and non-entrepreneurs or between entrepreneurial and non-entrepreneurial firms. This insight isreflected in the social entrepreneurship paradigm. The literature on social entrepreneurshipmirrors this perception as researchersconceptualize social entrepreneurship in a variety of contexts (Alvord, Brown, & Letts, 2004; Dees, 1998; Thompson, Alvy, & Lees,2000; Witt, 2007), including non-governmental not-for-profit organizations (Weerawardena & Mort, 2006), for-profit activitieswithin social organization that support social causes (Cook, Dodds, &Mitchell, 2003;Wallace, 1999), and innovative actionswithinfor-profit organizations that promote social causes (Thompson et al., 2000).

Greenberger and Sexton (1988), in their model of venture initiation, argue that EV is related to the underlying cause or type ofventure. Hence, the venture's vision statement will vary depending on the type of venture. Naffziger et al. (1994) support thisnotion and believe that different entrepreneurs have unique sets of goals for their ventures, which are influenced by the context.Their model of entrepreneurial motivation associates this set of goals with the venture's idea, namely its vision.

Thus, variation in EV should be a function of entrepreneurs' goals and aspirations and of the venture's organizational context.One of the foremost distinctions that separates entrepreneurs' goals from the organizational context concerns the venture'spurpose. The distinction between nonprofit and for-profit organizations is a prime example of such a contextual difference. Thesocial mission is an important distinction between the two organizational types. Nonprofit, social organizations seek to do good byproviding new services or promoting social goals for the community in which they operate (Dees, 1998). Profit for theseorganizations is more a means to an end than an end in itself. On the other hand, in for-profit (business) organizations, theopposite is true. For-profit organizations focus on business goals, such as making money. Even when for-profit organizationsbecome involved in social activities, their prime purpose is usually to make a profit.

Some researchers argue that EV reflects this profound difference between the two organizational contexts. In a study notdirectly related to entrepreneurship, Larwood et al. (1995) address the issue empirically by comparing the vision of corporateexecutives with those of business school deans. Cluster analysis of self-evaluation items reveals that the executives' pattern issimilar but not identical to that of the business school deans. Furthermore, an item-by-item comparison between the executivesand the deans for the 26 items noted above identifies significant differences for most items. Factor analysis yields six factors for thedeans' group, compared with seven for that of the executives. Larwood et al. (1995) conclude, “the results suggest the need to usecaution before developing any universal concept of vision” (p.758).

Studies show that vision is a primary factor that distinguishes nonprofit social entrepreneurs from for-profit businessentrepreneurs. For example, Prabhu (1999) argues that although social entrepreneurs may display many of the characteristics andbehaviors of business entrepreneurs in the process of creating andmanaging their ventures, their vision and ideologies may differ.For Prabhu (1999), core issues in the social venture and its performance are ideologies and values, which guide socialentrepreneurs' choices of mission, means, and ends; they play a smaller part in most business ventures.

Thompsonet al. (2000) support this notionof vision as amajordifference between social andbusiness entrepreneurs. They claim thatalthough many traits and behaviors of social entrepreneurs mirror those of business entrepreneurs (e.g., leadership style, personalqualities, ambition, anddrive), thevisionof social entrepreneursholds anaddedvalue for theunderprivileged sectionsof the community.

In light of this evidence, this study posits that the content of vision in nonprofit and for-profit sectors will have differentmeanings. Given that nonprofit organizations stress ideology and social values, the study hypothesizes that their leaders will needto use amore inspirational vision and stronger communicative tools to influence their followers. In contrast, the study expects thatfor-profit entrepreneurs, whosemessages typically include economic and business-like factors, will convey their vision in practicaland down-to-earth terms to convince their audience. Thus, the study expects a relationship between the type of organization(nonprofit vs. for-profit) and the method used to convey its mission.

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H1. Nonprofit entrepreneurs will convey their EV in more inspirational and communicative terms than for-profit entrepreneurs.

H2. For-profit entrepreneurs will convey their EV in more practical terms than nonprofit entrepreneurs.

4. Consequences of entrepreneurial vision

Organizational strategy and performance are the most discussed consequences of vision in general and EV in particular(e.g. Barling, Weber, & Kelloway, 1996; Filion, 1991; Howell & Avolio, 1993; Kirkpatrick & Locke, 1996; Larwood et al., 1995;Westley & Mintzberg, 1989).

According to the leadership literature, charismatic leaders gain the admiration, confidence, and trust of their followers bycommunicating a strong sense of vision and by their ability to transform this vision into specificmissions and strategies (Gardner &Avolio, 1998).

Scholars argue that vision is related to the venture strategy (Greenberger & Sexton, 1988; Naffziger et al., 1994; Van Slyke &Newman, 2006). As an ideal picture of the shared values to which the organization should aspire, vision is considered a centralelement of a business strategy (Ireland & Hitt, 1999; Kirkpatrick et al., 2002). Specifically, Mintzberg and Waters (1982) refer toentrepreneurial strategy-making as the product of a clear and complete vision. Bird (1988) strengthens the concept of visionwithin strategic entrepreneurship by describing it as a focus on the present with a firm picture of the future. However, most ofthese studies have considered the relationship between vision and strategy from a theoretical point of view, and the empiricalstudies supporting this relationship are scarce.

Entrepreneurial strategies have become one of themost dominant issues in the entrepreneurship discipline.Most of the studieshave relied on the broader strategy literature in their conceptualization and measurement. The theories developed by Porter(1980) andMiles and Snow (1978) have been particularly influential in the study of entrepreneurial strategies. However, althoughsome parts of these theoretical frameworks can be employed within the context of entrepreneurial strategies, entrepreneurialscholars agree that these established classifications (as well as others borrowed from the general strategy literature) must beadjusted in order to fully comprehend the nature of the strategies used by new ventures (Carter, Stearns, Reynolds, &Miller, 1994;Hitt, Ireland, Camp, & Sexton, 2001; McDougall & Robinson, 1990).

In this paper, the relationship between two types of strategies, namely, market breadth and differentiationwill be explored. Thesedimensions have been identified in many studies as the most characteristic types of entrepreneurial strategy (Carter et al., 1994;McDougall & Robinson, 1990; Mullins & Cardozo, 1993). The first, market breadth, refers to the scope of organizational activities anddistinguishes between narrow (niche) and wide, multi-segmented breadth. The second, differentiation, distinguishes betweenaggressive competition and differentiation and refers to the depth and frequency of operating in narrow or wide segments. In somecases, differentiation implies a narrow focus based on exclusivity that does not mesh with a wide focus (Porter, 1980). Theentrepreneurial strategy literature generally advises new ventures to implement a narrow breadth and differentiation strategies,because they suffer from the “liability of newness” (Stinchcombe, 1965; Tsai, MacMillan, & Low, 1991). In other words, due to the factthat newventures have limited resources, they need to establish themselves in a nichemarketfirst, aswell as avoid direct competitionwith more established organizations. Thus, we hypothesize that:

H3a. EV will be positively related with a differentiation strategy.

H3b. EV will be negatively related with a wide-ranging strategy.

A substantial amount of theoretical and empirical literature from the business strategy and entrepreneurial context supportsthe importance of vision and its effects on performance, both at the individual and organizational levels (e.g. Baum et al., 1998;Bird, 1992; Filion, 1991; Kirkpatrick & Locke, 1996; Larwood et al., 1995;Westley &Mintzberg, 1989). Themost extensive work onthe vision-performance relationship in the entrepreneurial context was conducted by Baum and his colleagues in a series ofstudies (Baum et al., 1998, 2001; Baum & Locke, 2004; Kirkpatrick et al., 2002; Kirkpatrick & Locke, 1996). Concentrating on thecommunicative aspect of vision, they established a positive relationship between vision and venture growth. Thus,

H4. EV will be positively related with new venture performance.

Although it is outside the scope of our paper, the relationship between new venture strategies and performance will also betested, in order to complete our model. Previous research suggests that strategies emphasizing quality, service, and a narrowmarket enhance the performance of new ventures, particularly in the service industry (Stearns, Carter, Reynolds, & Williams,1995). Baum et al. (2001) find that a differentiation strategy enhances performance in their sample of for-profit entrepreneur-ships. However, they are surprised by the negative relationship between a focus strategy and venture performance, a finding theyattribute to the nature of their industry (geographically concentrated craft manufacturers). In contrast, Miller and Toulouse (1986)find that both focused and differentiated strategies affect return-on-investment for for-profit entrepreneurships. In a contextsimilar to this paper's, Van Slyke and Newman (2006) argue that a link exists between the strategies used by social entrepreneursand their ventures' outcomes. Since most of the entrepreneurial literature supports the implementation of narrow breadth anddifferentiation strategies for new ventures (Stinchcombe, 1965; Tsai et al., 1991), we hypothesized that:

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H5a. Differentiation will affect the venture's performance positively.

H5b. A wide-ranging strategy will affect the venture's performance negatively.

5. Method

5.1. Study context

The initiative for the present study is the fundamental change in the higher education system in Israel in the 1990s. In the past,this system has been homogeneous, elitist, and research oriented and served students primarily interested in academic careers.Growing public demand for higher education caused a dramatic expansion of existing institutions as well as the establishment ofnew ones. Unlike the old schools of higher education, the new institutions addressed a wider spectrum of the population andstressed teaching over research.More than 150higher education institutionswere founded during this time. These new institutionsmeet conventional definitions of entrepreneurship, which, in general imply, the creation of new organizations (Gartner, 1985).Consequently, the rise of these new institutions constitutes a form of entrepreneurship in the sphere of higher education.

The study compares the vision of a sample of Israeli entrepreneurs from various service sector businesses with that of leadersfrom the field of higher education. The rationale for this sampling strategy is that education is part of the service sector in Israel,and that stratifying the sample based on service would help to control for major industry differences.

5.2. Sample

This study focuses on the vision of entrepreneurs. Over the years, many definitions have been used for the concepts ofentrepreneurs and entrepreneurship. The classical definition regards entrepreneurs as the founders of a new venture (e.g., Begley,1995; Begley & Boyd, 1987; Gartner, 1989; Mair & Marti, 2006). In its simplest form an entrepreneur is an individual with an ideafor an organization who then makes this idea a reality. Thus, we can regard entrepreneurship as the creation of new organizations(Gartner, 1985, 1989; Lee & Venkataraman, 2006).

However, expanded definitions expect entrepreneurs and their new ventures to introduce new goods or services or to opennewmarkets (Schumpeter, 1934; Vesper, 1980). According to the strategic planning and the entrepreneurial literature, such a newventure (new organization) should be an independent entity, hire it own employees, must evolve over time (more than a year),must be considered a newmarket entrant by its competitors, and be regarded as a new source of supply by its potential customers(Gartner, 1989; Weick, 1978). Our sample includes individuals who meet all of these criteria.

The study includes 158 Israeli entrepreneurs who were the founders and private owners of their businesses between 1994 and1999. The study sample does not include any form of franchising or branches of existing organizations. Two sample sets from twodifferent sectors are included:

1) The nonprofit sector: 78 entrepreneurs from various higher education institutions.2) The for-profit sector: 78 entrepreneurs from various service sector businesses.

Data were collected in 1999 by questionnaires administered at the entrepreneurs' premises. Each questionnaire tookapproximately one hour to complete.

Initially, the study used various data sources (higher education council publications, yellow pages, student manuals, educationalconferences, etc.), covering practically all the new educational institutions established in Israel between 1994 and 1999 to identify theeducational entrepreneurs. The researchers selected and approached 105 educational entrepreneurs. Of these, 78 completed thequestionnaire, for a response rate of 74.3%.Most non-respondents cited thequestionnaire's length as their reason for failing to completeit. In short, the non-response bias for this group should be minimal and the results obtained should apply to the population at large.

The researchers selected for-profit entrepreneurs from four main industries of the service sector: food services, businessservices, communication services, and personal services. They identified these potential study candidates by two methods:approximately half through referral by a business enterprise promotion agency and the others by a snowball approach. A snowballsampling approach (also known as network sampling) refers to the process of identifying a few respondents who fit the researchcriteria and asking them to propose others who fit the criteria as well. The proposed participants are then interviewed and asked topoint out others. This process is repeated, ideally until a saturation point is reached, that is, no new nominations aremade, or whenthe researcher has the number of participants he/she needs.

Out of the 95 service entrepreneurs asked to participate in this study, 78 completed the questionnaire, for a response rate of82.1%. Given that this was a convenience sub-sample, the researchersmade an effort to establish how representative of the generalpopulation it was. Data on for-profit entrepreneurships are scarce, so the researchers relied on the Bureau of Statistics (2002) togenerate an average number of employees in the relevant service sectors and compared that number with the average number ofemployees in the sample. The means, 7.51 for the sample and 6.56 for the relevant population, are very close, confirming therepresentative nature of the convenience sample.

The mean age of the nonprofit educational entrepreneurs is 47 years, compared with 39 years among for-profit serviceentrepreneurs. This difference might be due to the fact that among the former group, some are established academicians in theprime of their careers. Of the nonprofit entrepreneurs, 70% are males, compared with 78% of the for-profit entrepreneurs. About

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half (48%) of the educational entrepreneurs have graduate degrees, compared with 21% of the business entrepreneurs. Thisdifference is not surprising, given that the former individuals come mostly from established universities in Israel.

5.3. Measurement

Given that the original scales were developed in English, a back-translation method was used to prepare the Hebrew versionfor this study. One bilingual individual translated the questionnaire from English into Hebrew. Then, the Hebrew version ofquestionnaire was translated back into English by another bilingual individual, who had not seen the original questionnaire. Thefinal step was a comparison of the three versions of the questionnaire and an assessment of the translation and its culturalaccuracy by the two translators and a third bilingual individual. Disagreements were resolved through a discussion to arrive at thefinal Hebrew version for the study.

5.3.1. Entrepreneurial visionEV represents an abstract image of the kind of organization the entrepreneur intends to create (Greenberger & Sexton, 1988).

EV was measured using the survey procedure developed by the Vision Research Group (Larwood, Kriger, & Falbe, 1993; Larwoodet al., 1995) and focused on the content of vision. The instrument asks respondents to describe their EV in a few short sentences.Next, they were asked to analyze their statements using the list of 26 self-evaluation descriptive attributes (e.g., understood,planned, risky, formulized, focused) on 5-point scales (1— very little, to 5— very much). Means and standard deviation were thencalculated for each item. In our final analysis, one item (changing) was dropped due to a low level of internal consistency.

According to Larwood and her colleagues (1993) “the items were intended as broadly representative of the most widelycirculated views of vision” (p. 218). They chose a self-evaluation procedure that follows the psychological literature on naiveanalysis (Bettis, 1991; Westley & Mintzberg, 1989). This method has advantages over other ways of measuring statements aboutvision (e.g., closed questionnaires) in that no constraints are forced on the responders when theywrite down their vision, and theycan express their thoughts openly. Furthermore, the self-evaluating procedure that follows the articulation of the vision alsointentionally avoids a predetermination of what a vision is or what it means to the responders. Ultimately, this instrument enablesus to get a sense of what vision is in the eyes of those who use the term.

Like Larwood et al. (1995), we found that vision is a multi-dimensional construct. Using factor analysis, we identified six factorsfor EV (see the Results section for more details). The first and most important factor in terms of explained variance combines twofactors of Larwood et al.'s (1995) research and reflects the most common characteristic of vision — its communicative nature. Thisfactor expresses the manner in which vision is imparted to the venture's followers and is considered the most important aspect ofimplementation. The leadership literature has frequently discussed the importance of getting followers to support theorganizational vision by communicating it in a variety of ways (Baum & Locke, 2004; Baum et al., 1998; Conger & Kanungo, 1987;Groves, 2006; Kirkpatrick et al., 2002). This study confirms that entrepreneurs regard their EV as having a communicative natureand as being understood, widely accepted, focused, and detailed.

The second dimension of the EV, inspirational, emphasizes the potential of the EV to lead and to innovate (Larwood et al., 1995).This factor represents yet another very distinctive characteristic of vision as reflected in leadership theory (Awamleh & Gardner,1999; Baum & Locke, 2004; Berson et al., 2001; Hunt et al., 1999; Strange &Mumford, 2002). The results indicate that this elementof EV conveys a common element in entrepreneurial orientation (innovativeness, risk taking, and pro-activeness: Covin & Slevin,1991; Kreiser et al., 2002; Lumpkin & Dess, 1996) and the transformational form of leadership (inspirational, product ofleadership, and strategic: Avolio et al., 2004; Awamleh & Gardner, 1999; Baum & Locke, 2004; Baum et al., 1998; Bennis & Nanus,1985; Berson et al., 2001; Conger, 1989; Groves, 2006; Strange &Mumford, 2002). This findingmay imply that entrepreneurs are aspecial case of leaders, as reflected in their vision (Vecchio, 2003).

The third factor contains three items— bottom-line orientation, integrating with visions of others and direct effort. In Larwoodet al.'s (1995) study, the latter two elements indicate the realism of the vision, while the first item was singly loaded on their lastfactor (profit oriented), unrelated to all other factors. Since our study combined those three items into one factor, we labeled thisfactor the realistic factor, highlighting the practical aspect of vision (Greenberger & Sexton, 1988).

Eachof last three factors contained only two items. Theflexibilitydimension of the EV articulates the strategic aspect of EVasflexibleand responsive to competition. Flexibility represents theentrepreneurs' awareness of competitors. Singhandcolleagues (1986), amongothers, note the “liability of newness,” that plagues young companies. The youth and the small size of these organizations contribute tothis situation. One of the ways to cope with the newness problem is to maintain flexibility and to avoid an aggressive strategy in theform of direct encounters with competitors. The fifth factor includes the items: conservative and formulized, the latter being a termcoined by Larwood et al. They were labeled as conservative because this term expresses the formal and representational side of the EV(Greenberger & Sexton, 1988). Finally, the last factor was labeled general. This factor is identical to the general factor reported inLarwood et al.'s (1995) study and represents the ambiguous aspect of EV. The overall Cronbach's alpha reliability of the scale was .84.

5.4. Consequences of vision

The consequences of EV in this study include entrepreneurial strategy and venture performance.Entrepreneurial strategywas measured by 16 items from several sources that were adjusted in order to reflect the nature of the

strategies used by social entrepreneurs (Carter et al., 1994; McDougall & Robinson, 1990; Mullins & Cardozo, 1993). We selectedthese 16 items based on the responses to an initial exploratory study. Our exploratory study was designed to capture the nature of

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strategies used by social ventures. It included in-depth interviews with five social entrepreneurs in order to understand theirchosen strategies. Afterwards, we went back to the literature, and based on the knowledge gleaned from the interviews, wecomposed a list of 19 items that reflected the strategies used by social entrepreneurs. Then, we went back to our interviewees andasked for their evaluation of our adjusted scale. Once again, we adjusted the items accordingly. The final scale included 16 itemsrepresenting two aspects of new venture strategies. Eight items operationalize as a [wide market focus with a reliability of α=.70,and eight measured differentiations. Both measures in this study achieved the reliability level of α=.70.

Venture performance was evaluated by two different measures— perceived success and growth. Perceived success represents asubjectively personal evaluation by the entrepreneurs regarding their businesses' performance compared to the performance oftheir competitors. Comparisons to competing businesses were evaluated using Chandler and Hanks' (1994) 8-item scale. Thereliability level achieved in the present study was α=.89. Like Baum et al. (1998), we tested growth as an indicator of ventureperformance, as it is a key focus of entrepreneurial firms (Gartner, Bird, & Starr, 1992; Hood & Young, 1993). Growthwasmeasuredby examining the increase in the percentage of clients per year in each of the organizations. Coming as they did from theorganizations' records, these figures serve as an objective measure of the ventures' performance.

5.4.1. Control variablesSeveral control variables were tested in regards to the six dimensions of EV, strategy and venture performance, including:

gender, entrepreneur's age, previous experience as an entrepreneur, previous experience as a manager, and maturity of theventure. None of the control variables was found to be associatedwith EV, strategy or venture performance, with the exception of asignificant positive correlation between venture maturity and growth. However, this significant relationship was expected due tothe fact that the estimation of growth is constructed relative to the venture's maturity. Similar results were reported by Fable andLarwood (1995) in their study on vision among entrepreneurs vs. non-entrepreneurs using the same measure as in this study.They found that neither the firm's age nor its size was a significant predictor of the vision's dimensions.

6. Results

Table 1 presents themeans and standard deviation for the 26 vision items for the total sample and the educational and businessentrepreneurs' sub-samples.

As Table 1 demonstrates, both types of entrepreneurs score high in the long-term and action-oriented categories, and bothgroups score low in the difficult to describe, conservative, and formulized categories. Educational entrepreneurs score high in thecategory of purposeful vision, while business entrepreneurs score high in the category of well-communicated vision.

Table 1Means ⁎ (Standard Deviation) for vision items for the total sample and the educational and business entrepreneurs' sub-samples.

Total sample (n=156) Educationalentrepreneurs (n=78)

Business entrepreneurs(n=78)

Mean SD Mean SD Mean SD

1. Difficult to describe 1.94 1.21 1.83 1.18 2.03 1.232. Risky 2.91 1.29 3.06 1.20 2.76 1.373. Bottom-line oriented 3.49 1.40 3.71 1.30 3.27 1.474. Flexible 3.32 1.30 3.25 1.30 3.39 1.305. Changing 3.14 1.36 3.26 1.28 3.03 1.426. Conservative 2.10 1.25 1.84 1.05 2.32 1.377. Formulized 2.53 1.38 2.36 1.28 2.68 1.458. Describes what is taking place 3.91 1.26 4.13 1.13 3.70 1.349. Widely accepted 3.56 1.38 3.32 1.32 3.79 1.4010. Well-communicated 4.03 1.14 3.99 1.09 4.07 1.1911. Understood 4.11 1.09 4.20 0.96 4.02 1.2112. Detailed 3.78 1.23 4.00 1.05 3.57 1.3513. Tactical 3.39 1.29 3.61 1.16 3.17 1.3814. Innovative 3.60 1.38 4.10 1.03 3.12 1.5015. Product of leadership 3.43 1.46 3.84 1.35 3.06 1.4716. Focused 4.08 1.07 4.25 0.80 3.93 1.2417. Planned 4.04 1.09 4.29 0.84 3.80 1.2418. General 2.78 1.39 2.90 1.40 2.68 1.3919. Inspirational 3.58 1.35 4.21 1.09 2.99 1.3120. Integrated with visions of others 3.15 1.42 3.47 1.39 2.85 1.4021. Direct effort 3.84 1.21 4.18 0.93 3.54 1.3522. Responsive to competition 3.95 1.23 3.98 1.27 3.91 1.2123. Purposeful 4.19 1.03 4.47 0.67 3.94 1.2224. Strategic 4.00 1.17 4.27 1.03 3.75 1.2425. Long-term 4.49 0.93 4.75 0.51 4.26 1.1526. Action-oriented 4.33 0.99 4.54 0.71 4.14 1.15

⁎ Highest score in boldface, lowest score in italics.

Table 2Factor loadings ⁎ of vision items.

Communicative Inspirational Realistic Conservative Flexible General

Difficult to describe −0.03 0.00 −0.13 0.28 0.01 0.73Risky −0.15 0.61 0.10 0.20 −0.25 0.24Bottom-line oriented 0.15 0.06 0.62 0.10 −0.08 0.15Flexible 0.15 −0.14 0.13 −0.12 0.67 0.14Conservative 0.02 0.05 −0.02 0.85 −0.02 0.00Formulized 0.15 −0.05 0.16 0.76 −0.03 0.07Describes what is taking place 0.50 −0.10 0.28 −0.00 −0.30 −0.06Widely accepted 0.40 −0.07 0.31 0.33 0.18 0.06Well-communicated 0.72 −0.02 −0.16 0.09 0.40 −0.09Understood 0.73 0.00 −0.02 0.12 0.34 0.10Detailed 0.65 0.19 −0.03 0.04 0.18 0.05Tactical 0.49 0.20 0.15 −0.03 0.29 0.25Innovative 0.21 0.65 0.10 −0.34 −0.16 0.24Product of leadership 0.21 0.63 −0.04 0.10 0.13 −0.05Focused 0.69 0.14 0.28 0.23 0.01 −0.12Planned 0.75 0.03 0.13 0.08 −0.13 0.05General 0.05 0.06 0.29 −0.23 0.11 0.74Inspirational 0.07 0.66 0.29 −0.27 −0.05 −0.26Integrated with visions of others 0.02 0.08 0.69 0.09 0.26 −0.22Direct effort 0.24 0.14 0.77 −0.06 0.06 0.14Responsive to competition 0.12 0.32 0.39 0.31 0.51 −0.17Purposeful 0.67 0.21 0.27 −0.04 0.02 0.04Strategic 0.32 0.47 0.40 0.19 0.36 0.17Long-term 0.64 0.28 0.19 −0.15 0.04 −0.12Action-oriented 0.42 0.56 0.012 0.02 0.43 −0.05Explained variance (%) 18.28 10.29 9.84 8.27 7.05 6.28

⁎ Highest loading in boldface.

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An exploratory factor analysis with Varimax rotationwas used (Hair, Anderson, Tatham, & Black, 1998) to analyze the 25 items.Given that this sample varies substantially from that of Larwood et al. (1995) – entrepreneurs rather than executives, and Israelisrather than Americans – the exploratory procedure is more suitable than a confirmatory procedure. Table 2 presents the results ofthe factor analysis. Even though the two sub-samples do not obey the five-cases-per-variable rule (Hair et al., 1998), theresearchers still explored their factor structure, taking into account the results' potential instability. Given that the results weresubstantively similar to those of the unified sample, the researchers examined the results of the unified factor analysis and used itsfactor structure for subsequent analyses as well.

The researchers extracted six factors with eigenvalues higher than 1 (a total explained variance of 60%): communicative, in-spirational, realistic, conservative, flexible, and general. All items' loadings exceeded 0.40 (Hair et al., 1998).

The first factor, communicative, focuses on how vision is transferred to others, emphasizing its clarity and brevity (Baum et al.,1998). It includes items measuring how well the entrepreneur succeeds in describing what is taking place, communicates his orher vision, and makes subordinates accept the vision. Explained variance for this factor is over 18%, with Cronbach's alphareliability coefficients of .85. The second factor, inspirational, includes items such as inspirational, strategic, and action-oriented. Ithighlights the entrepreneur's leadership skills in formulating an inspirational and pioneering vision. The explained variance of thisfactor is over 10%, with Cronbach's alpha reliability coefficients of .74. The third factor is realistic, with items such as bottom-lineoriented and integrated with others' visions. It stresses the usefulness of the vision in terms of its function as a roadmap to a goal.The explained variance of this factor is nearly 10%, with Cronbach's alpha reliability coefficients of .61. The next factor, withexplained variance of over 8%, and with Cronbach's alpha reliability coefficients of .71, is conservative. It includes two items(conservative and formulized) and expresses the formal side of the EV. Next, the flexible factor emphasizes the role of competitionin shaping the EV. It consists of two items, flexible and responsive to competition, with an explained variance of 7% and Cronbach'salpha reliability coefficients of .69. The last factor is general, describing the somewhat blurred aspect of the EV. It has two items,difficult to describe and general, with an explained variance of 6% and with Cronbach's alpha reliability coefficients of .67. Thesefindings reconfirm the multi-dimensional nature of vision established in previous research.

Table 3 presents the means and standard deviation of the six factors for the total sample and the educational and businessentrepreneurs' sub-samples, as well as those of the consequential constructs. It also presents t-values for differences between thetwo groups.

Importantly, multiple discriminant analysis (discussed below) does not provide estimates of group differences in theindependent variables; it only provides estimates for the contribution of these variables to classification accuracy. Thus, theresearchers used t-tests to assess mean differences across the two groups. In general, an EV is high on the communicativedimension and low on the conservative and general dimensions. However, the two groups differ significantly on four of the sixdimensions (except flexible and general), with the largest difference being in the inspirational dimension. The educational EV ismore communicative, inspirational, and realistic. The business EV scores higher on the conservative dimension. These resultssupport H1, positing that social entrepreneurs would be more communicative and inspirational in conveying their vision thanbusiness entrepreneurs. H2, however, is not supported, as social, not business, entrepreneurs exhibit the realistic dimension, which

Table 4Discriminant analysis.

Wilks' Lambda F Standardized weight

Inspirational .86 21.6⁎⁎ .75Realistic .83 13.8⁎⁎ .56Conservative .80 11.0⁎⁎ −.44Flexible .77 9.6⁎⁎ −.43Wilks' Lambda .77Eigenvalues .30Canonical correlation .48Chi-square 33.9, df=4,(.00)

Predicted Group MembershipEducational entrepreneurs 81%Business entrepreneurs 735%Total Predicted Group Membership 77%

Notes: pb0.001; Cpro=0.50; Press's Q=45.23N6.63 [pb0.01, one df].⁎pb0.05.⁎⁎pb0.01.

Table 3Vision dimensions — means ⁎ (standard deviation) and t-tests for entrepreneur types.

Total sample (N=156) Educationalentrepreneurs (N=78)

Business entrepreneurs(N=78)

Mean SD Mean SD Mean SD t-test (p-value)

Communicative 3.98 0.77 4.13 0.63 3.83 0.86 2.35 (.02)Inspirational 3.62 0.87 3.98 0.74 3.28 0.84 5.19 (.00)Realistic 3.53 1.01 3.79 0.81 3.29 1.13 3.02 (.00)Conservative 2.31 1.16 2.10 0.94 2.50 1.31 −2.05 (.04)Flexible 3.63 0.98 3.62 0.93 3.64 1.03 −0.14 (n.s.)General 2.30 1.06 2.28 1.07 2.31 1.05 −0.15 (n.s.)Differentiation strategy 3.40 0.86 3.45 0.74 3.34 0.96 −0.80 (n.s.)Wide range strategy 3.10 0.79 3.10 0.79 3.10 0.80 −0.02 (n.s.)Venture performance 3.46 0.89 3.56 0.89 3.36 0.89 −1.09 (n.s.)Growth 94.69 141.64 95.07 131.21 94.15 156.78 −0.03 (n.s.)

⁎ Highest score in boldface.

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is close in meaning to practicality. Note that the standard variations of all four dimensions are lower for the social entrepreneursthan for their business counterparts. These findings indicate a stronger similarity within the first group than the second group.

The researchers then used stepwise discriminant analysis to identify the vision dimensions that best differentiated educationalentrepreneurs from business entrepreneurs in one comprehensive model. Discriminant analysis has an advantage over the t-testin that it compares the two groups in terms of group categories, thereby taking into account the interactions between theindividual variables entered. The researchers performed a stepwise discriminant analysis to select the most useful discriminatingvariables. This procedure is particularly suitable in the case of an exploratory study (Klecka, 1980), such as the present study.Table 4 shows the results of the discriminant analysis, ordered by standardized correlation size. The researchers also ran adiscriminant analysis with all variables entered. The results are substantively similar, with only minor discernible changes.Classification accuracy improved only marginally. Therefore, only the findings from the stepwise analysis were reported.

The researchers found a significant canonical discriminant (χ²=33.9, df=4, pb0.001). The function correctly classifies 76.7%of the cases into their original groups. The classification is higher for educational entrepreneurs than for the businessentrepreneurs (82% vs. 73%), but both are high, indicating excellent discrimination (Hair et al., 1998). Moreover, classificationaccuracy exceeds Cpro (0.50) by a large margin. Furthermore, Press's Q (45.23) exceeds the threshold (6.63) at pb0.001 (1 df).Both Cpro and Press's Q suggest more accurate classifications than expected by chance or by sub-sample sizes (Hair et al., 1998).The researchers assessed classification accuracy in two additional ways. First, they examined cross-validated accuracy, classifyingeach case by the functions derived from all cases other than the one classified. For both sub-groups (75% and 71% for education andbusiness entrepreneurs, respectively) and as a whole (71%), cross-validated accuracy is not discernibly less than without cross-validation, and all three exceed Cpro. Second, the researchers conducted the analysis with a holdout sample. Specifically, theyselected 75% of the sample, conducted the discriminant analysis, and treated the remaining 25% as a holdout sample. Then, theyapplied the discriminant function from the analysis sample to the holdout sample (Hair et al., 1998). The discriminant functionclassified 76% and 81% of educational entrepreneurs and 68% and 83% of the business entrepreneurs in the analysis and holdoutsamples, respectively. In total, it classified 72% and 82% of the total analysis and holdout samples, respectively. These resultsprovide further support for the classification power of the discriminating variables used in the original analysis.

Four of the six dimensions discriminate between educational and business entrepreneurs: inspirational, realistic, conservative,and flexible. In line with Hair et al.'s (1998) recommendation, the researchers interpreted the discriminating variables' loadings.

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The loading is highest for inspirational (0.75), followed by realistic (0.56), conservative (−0.44), and flexible (−0.43). Theseloadings imply that the educational entrepreneurs view their EV as more inspirational and realistic in nature than do the businessentrepreneurs. Conversely, the business entrepreneurs seem to emphasize conservatism and flexibility in their EV more than theeducational entrepreneurs do.

These results provide further partial support for H1 (educational entrepreneurs are more inspirational, but not more com-municative) and do not support H2 (educational, not business, entrepreneurs are more realistic). The t-tests and the discriminantanalysis both show that the two groups of entrepreneurs are distinct, but different from the manner the study hypothesized.

Finally, we wanted to test the nomologic validity of the sixth dimensional construct of EV. As an initial testing, we looked at thecorrelation between the six dimensions of EV and the rest of the research constructs. The results are presented in Table 5. Next, weplaced EV in a nomologic model, which was tested using multiple group comparisons with Structural Equation Modeling (Kline,1998) with AMOS software. Following Anderson and Gerbing's (1988) two-step approach, the measurement model and then thestructural model were tested.

6.1. Measurement model

The measurement model assessed whether all items on a given scale represent the same latent construct. Since most of theconstructs were measured with more than five items, a parceling procedure was used (Bagozzi & Heatherton, 1994).The items ineach construct were randomly parceled into three composite indicators, which were entered into the measurement model asmultiple indicators to estimate the latent constructs.

The measurement model fit the data well. While a significant χ2 (264.87; df=162; p=.00) was expected, given the smallsample size, other fit statistics were good (normed-χ2=1.63; CFI=0.98, NFI=0.95, NNFI=.97, RMSEA=0.06). In addition,factor loadings ranged from 0.49 to 0.85 in support of the model's measurement properties. All these measures indicated a goodmodel fit with satisfactory convergent and discriminant validity, enabling the authors to proceed to the next step.

6.2. Structural model

Table 6 shows regressionweights, correlations, and fit measures of the hypothesized structural model. The hypothesizedmodelfit the data well: all fit indexes exceeded 0.90 and RMSEA was 0.06, which is somewhat higher than the recommended level of0.05. Notably, the total explained variance for both of the performance variables was also satisfactory in both samples.

According to H3a and H3b, vision should exhibit a positive relationship with differentiation strategy and a negative relationshipwith a wide-ranging strategy. Mixed results were obtained in the two samples. While in the business sample a significant positiverelationship was established between vision and differentiation (β=0.56; pb .01), no significant relationship between vision anda wide-ranging strategy was found. The educational sample reveals an opposite picture: the relationship between vision anddifferentiationwas found not to be significant, while the relationship between vision and awide-ranging strategywas positive andsignificant (β=0.40; pb .01). Thus, hypothesis H3a was supported only in the business sample, and H3b was not supported ineither sample.

H4 posited a positive association between vision and performance. Again, mixed results were found in the two samples. In thebusiness sample no significant relationships were found between vision and both indicators of venture performance. In theeducational sample a significant positive association was established between vision and subjective evaluation of the venture'sperformance (β=0.38; pb .05), and between vision and venture growth (β=0.30; pb .05). Thus, H4 was supported only in theeducational sample.

Finally, H5a and H5b focus on the relationships between the venture strategy and its performance. The differentiation–performance relationshipwas only supported in the business sample regarding subjective evaluation of the venture's performance

Table 5Pearson correlations of the study's constructs.

1. 2. 3. 4.

Business entrepreneurs1. Vision2. Differentiation strategy .39 ⁎⁎

3. Wide range strategy .07 −.044. Venture performance .19 ⁎ .35 ⁎⁎ −.015. Growth .05 .18 ⁎ −.30 ⁎⁎ .16

Educational entrepreneurs1. Vision2. Differentiation strategy −.033. Wide range strategy .34 ⁎⁎ −.154. Venture performance .35 ⁎⁎ .18 ⁎ .26 ⁎⁎

5. Growth .19 ⁎ .23 ⁎⁎ .20 ⁎ .05

⁎ Significant at pb0.05.⁎⁎ significant at pb0.01.

Table 6Regression weights and fit measures of the structural model.

Standardized regression weight Business entrepreneurs Educational entrepreneurs

From ToVision Differentiation strategy .56 ⁎⁎ −.05Vision Wide range strategy .03 .40 ⁎⁎

Vision Venture performance −.21 ⁎ .38 ⁎⁎

Vision Growth −.10 .30 ⁎⁎

Differentiation strategy Venture performance .52 ⁎⁎ .07Differentiation strategy Growth .20 ⁎ .18Wide range strategy Venture performance −.13 .48 ⁎⁎

Wide range strategy Growth −.36 ⁎⁎ .44 ⁎⁎

CorrelationsVenture performance Growth .36 ⁎⁎ .23 ⁎⁎

Explained variance Differentiation strategy 32% 0%Wide range strategy 0% 18%Venture performance 21% 44%Growth 16% 23%

Fit measures χ²(df) 268.7 (164) p=0.00NFI .95NNFI .97CFI .98RMSEA .06

⁎ Significant at pb0.05.⁎⁎ Significant at pb0.01.

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(β=0.52; pb .05). As with the wide-ranging strategy, positive and significant associations were established with both subjectiveevaluation of the venture's performance (β=0.48; pb .05) and with growth (β=0.44; pb .05) in the educational sample. Also, asignificant negative relationship betweenwide-ranging strategy and growthwere found in the business sample. Thus, H5a and H5b

were only supported in the business sample with regard to subjective evaluation of the venture's performance. H6 was fullysupported in the educational sample only.

Finally, in order to determine whether the differences in the relationships between the constructs across samples aresignificant, the hypothesized model was compared to a constrained model (Kline, 1998). In the constrained model therelationships between the constructs was constrained to be equal across samples. Then, the chi-square values of the two modelswere compared (unconstrained vs. constrained). The constrained model yielded χ²=289.58 (df=173), normed-χ2=1.67,NFI=0.95, NNFI=0.97, CFI=0.98, and RMSEA=0.07. The χ² difference between this model and the unconstrained structuremodel was significant [Δχ²=20.8; 9 df] at the level of pb0.05, supporting acceptance of the unconstrained model in favor of theconstrained model and indicating significant differences between the two samples.

7. Discussion and future research

Vision guides entrepreneurs' behaviors in the long journey of establishing a new venture. This study explores whether thereare different visions for different types of ventures. The study also looks at the differences in the effects of these variations invisions on the new ventures' strategies and performance. In particular, this study examines the nature of EV in two groups ofentrepreneurs, nonprofit educational institutions and for-profit service organizations. As a starting point, Larwood and colleagues'self-evaluation instrument of vision (Larwood et al., 1993, 1995) was used to identify six dimensions of EV: communicative, in-spirational, realistic, conservative, flexible, and general. Like the dimensions developed by Larwood et al. (1995) and by Fable andLarwood (1995), the dimensions advanced here are well accepted in the leadership, management, and entrepreneurial literature.The findings of this study hold theoretical and practical implications.

7.1. Theoretical implications

First, this study confirms the findings of Larwood and her associates (1995) that the most significant aspects of EV arecommunication and inspiration, reflecting formulation, innovation, and risk taking. These findings also corroborated other studiessuggesting that vision is a comprehensive construct that plays multiple roles in the venture creation process (Baum et al., 1998;Larwood et al., 1995; Lichtenstein, Dooley, & Lumpkin, 2006; Strange & Mumford, 2002). The findings also partially support thestudy's hypotheses and indicate significant differences between the entrepreneurial leadership vision of educational and businessentrepreneurs. The most discriminating factors are inspiration, realism, conservatism, and flexibility. The EV of the educationalentrepreneurs is more inspirational and realistic, and that of the business entrepreneurs is more conservative and flexible. T-testsalso show that educational entrepreneurs are more communicative, but this trait is not a significant discriminator.

These findings present a unique image of EV in each group. For nonprofit entrepreneurs, the finding related to theirinspirational character is consistent with their image as more social and ideal-driven. As noted earlier, the emergence of new

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higher education institutions in Israel in the 1990s was a response to the growing demand for higher education among the lowerechelons of Israeli society. Educational entrepreneurs, therefore, focused on advancing an important social agenda. This uniquemission naturally went along with inspiration, an attribute also characteristic of transformational leaders. Given that these leadersfunction with few resources and in a highly-regulated environment, they have realistic expectations.

The flexibility of for-profit entrepreneurs may come from the nature of their environment. In education, the environment isgenerally stable and slow-changing in terms of market demands and student supply, sources of support, and governmentregulation. In the business world, on the other hand, these factors change faster, requiring rapid responses and increased flexibilityin the face of environmental changes. Also, the flexibility factor has content reflective of the entrepreneurial orientation of pro-activeness (Covin & Slevin, 1991) and competitive aggressiveness (Lumpkin & Dess, 1996). These dimensions are oftencharacteristic of new business ventures.

According to the study, the for-profit entrepreneurs are more conservative than the nonprofit entrepreneurs. Perhaps thenature of the educational reform as a niche reform in which the new educational organizations were competing against multiplerivals may explain the less conservative, more competitive stance of the educational entrepreneurs and their willingness to takerisks. However, in both sectors the mean score of conservatism is lower than all other scores in EV dimensions.

Finally, the lower standard variations for social entrepreneurs across the variables distinguishing them from their businesscounterparts indicate a stronger cohesion of the social group in regard to their EV. Drawing from the notion of “strong culture”(Cameron & Freeman, 1991), where organizational members generally share common cultural values, it is possible that here, too,educational entrepreneurs share their visionary values to a greater degree than the level of value sharing among businessentrepreneurs. Future studies should explore this notion of EV intensity or strength more rigorously.

More importantly, the differences in the meaning of the factors of EV in the two groups support mounting evidence about thesituational nature of vision (Berson et al., 2001; Fable & Larwood, 1995; Kirkpatrick et al., 2002; Sosik & Dinger, 2007; Strange &Mumford, 2002). These findings advance our knowledge regarding cross-cultural aspects of leadership theory as well asentrepreneurial theory. Numerous studies in the area of leadership suggest that vision varies across different types oforganizations as well as different types of leaders and is not a unified phenomenon. Fable and Larwood (1995), for example,substantiated differences in the EV of entrepreneurs vs. non-entrepreneurs. Cogliser and Brigham (2004) discussed the differencesand the overlaps between the visions of leaders and entrepreneurs. Bharat and Filiz (2008) pointed out the differences in visionbetween founder and non-founder CEOs. Berson et al. (2001) found that different types of leaders convey different types of vision.These findings were validated later in a study by Sosik and Dinger (2007), who found that charismatic leaders expressinspirational vision themes, whereas contingent reward leaders tend to have more instrumental vision themes. Additionalresearch is needed to identify the relationships between various facets of vision and different types of ventures or/and leaders. Ingeneral, the findings of this study imply that different people will emerge as leaders, and caution us about global applications ofleadership theory.

Regarding entrepreneurship research, these findings provide empirical evidence for what to date have generally beentheoretical arguments, that the differences between types of entrepreneurs can be as meaningful and significant as the differencesbetween entrepreneurs and non-entrepreneurs (Gartner, 1985). More research is needed in order to fully understand thosedifferences in regard to the nature of EV.

Another theoretical contribution of this study is the substantiation it offers about the relationships between EV and theventures' strategies and performance. We included two different measures of performance, both the entrepreneur's self-evaluation of his or her venture's success as well as an objective measurement of the venture's growth demonstrated by theincrease in the number of clients. Here, again, differences were found between the two types of ventures. In the for-profit sampleEV was positively related to a differentiation strategy, which serves as a full mediator between vision and subjective evaluation ofthe venture's performance. These relationships represent the traditional view of entrepreneurial strategy. Most of the literature onentrepreneurial strategy suggests that entrepreneurs should choose a differentiation strategy for their venture in order to avoiddirect competition with larger, better established companies (Stinchcombe, 1965; Tsai et al., 1991). This strategy enables them togain enough time to accumulate resources and overcome the “liabilities of newness” that characterize new ventures.

The educational nonprofit entrepreneurs translated their vision into a wide-ranging strategy, which was also found to bepositively and significantly associated with the two outcome variables. However, unlike the for-profit entrepreneurs, for thenonprofit entrepreneurs, vision was found to be directly associated with both the venture's growth and the subjective evaluationof success. These findings raise several theoretical issues. First, these findings suggest that the entrepreneurial vision plays a moresignificant role in the entrepreneurial process in nonprofit ventures than in for-profit ventures. Thus, not only does themeaning ofvision vary across venture types, but so does the emphasis given to it. Nonprofit entrepreneurs aspire to communicate their visionto as wide a range of individuals as possible. Success to them is directly connected to the number of people affected by their vision.In addition, these findings challenge the traditional perception about the recommended strategy for new ventures, and mightsuggest that different types of ventures require different types of strategies.

7.2. Practical implications

This study has several practical implications, generally concerning the training of entrepreneurs. In most cases, entrepreneursreceive very formal and very task-oriented training (e.g. writing a business plan). However, the findings of this study suggest thatentrepreneurs' actions are affected by their vision. Furthermore, Bharat and Filiz (2008) stressed that “when evaluating the initialdecision to invest in a start-up, VCs (authors: venture creators) tend to give significant weight to their assessment of the

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capabilities, career experiences, and track record of the founder CEO and their ability to provide leadership, strategic direction, andvision to the company as the firm evolves from a start-up to a public company” (p. 28). Downing (2005) suggested that “for manyentrepreneurs there is a fine line between the status of misfit and visionary, ‘failure’ and ‘success’” (p. 199). Nevertheless, althoughit is apparent that EV is critical for acquiring resources for the new venture and securing its success, formal training do not takesthis effect into consideration. The majority of business programs do not teach entrepreneurs to be aware of the power andsignificance of their vision, to polish it so it will be clear, communicative and “worthy of persistence” (Pinchot, 1994).

The findings also have implications for the uniformity of most training programs for entrepreneurs. The study's results indicatethat different types of entrepreneurs have different perceptions of their venture and act accordingly. However, most trainingprograms for entrepreneurs do not consider these differences.

7.3. Study limitations

The study suffers from a number of limitations, and the researchers urge caution in interpreting the findings. The first issueconcerns the generalizability of the findings. Given that a large majority of the educational entrepreneur population completed thequestionnaires, the results based on this sub-sample can be safely generalized. However, with regard to the business entrepreneurs,the study utilizes a convenience sample. Although the sample closely matches the relevant population, additional studies using arandom sampling of the populationwill increase our confidence in the findings reported here. In addition, a plausible explanation forthe findings might be that the vision content of educational institutions differs from that of general service firms (without regard toprofit/nonprofit status). Future studies should use a representative sample of all nonprofit organizations.

Second, several of the items on the vision scale (widely accepted; responsive to competition, strategic, and action-oriented)have cross-loadings higher than optimal. A similar patternwas also reported by Larwood and her colleagues (1995). Though cross-loadings are undesirable, the overall structure of the scale is satisfactory. However further validation of Larwood et al.'s (1995)scale is needed, particularly in the entrepreneurship sphere.

Third, the fact that this study was conducted within the context of Israeli entrepreneurships raises a question about the extentto which the findings would hold in other countries. Future studies need to address the question of whether cultural differencesaccount for EV structures and their effect on new venture strategies and performance.

Fourth, the study uses a single informant on a self-evaluation measure in each organization. This method reflects respondents'bias and does not permit confirmation of events each informant reports even though the informants will probably play a key rolein each new venture. However, future research should examine the structure this study identifies using multiple informants.

Fifth, the nomologic model tested only the concept of entrepreneurial strategy along with EV as a predictor of ventureperformance. Future studies should test other relevant constructs (e.g. environmental factors) as predictors of ventureperformance in order to determine the relative importance of EV to the venture's success.

Finally, the researchers believe that this study contributes to the understanding of the nature and context of entrepreneurialvision. Hopefully it will trigger more research in the directions outlined above.

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