The Leadership Quarterly

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1 The Leadership Quarterly 21 (2010) Contents lists available at ScienceDirect The Leadership Quarterly journal homepage: 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, USA b University of Haifa, Mount Carmel, Haifa 31905, Israel article info abstract Keywords: Vision Entrepreneur Social entrepreneurship Comparison This paper explores the role that entrepreneurial leadership vision plays in the entrepreneurial process of nonprofit and for-profit ventures. The results indicate significant differences in the meaning of vision articulated for each type of venture. Differences between ventures were also found with regard to the relationship that vision has with the ventures' strategies and performance. In the nonprofit organizations vision was associated with a wide-range strategy as well as the ventures' performance and growth. In addition, wide-range strategy partially mediated the relationship between the ventures' vision and its performance and growth. In business enterprises, vision directly predicted only a differentiation strategy, which also mediated the relationship between vision and the ventures' performance and growth. In contrast, a wide-range strategy in these organizations actually reduced growth. These findings contribute both to the literature on vision as well as to the literature on entrepreneurship Elsevier Inc. All rights reserved. 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 a mental image of what the venture should look like, its place in the business world, and a roadmap for reaching the goal. Vision is so central to the entrepreneurial process that Gupta, MacMillan, and Surie (2004) based their entrepreneurial leadership definition around it. For them entrepreneurial leadership is leadership that creates visionary scenarios that are used to assemble and mobilize a supporting cast of participants who become committed by the vision to the discovery and exploitation of strategic value creation (p. 242). Similary, Yukl (2006) stressed the multiple 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. The vision 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 ideological objective (helping all children). Microsoft's vision, to enable people and businesses throughout the world to realize their full potential, 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 the world. Both of these visions express the values, hopes and ideals of the organization with no immediate tangible benefits. These examples 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 a coherent 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 Corresponding author. Tel.: address: [email protected] (A. Ruvio) /$ see front matter 2009 Elsevier Inc. All rights reserved. doi: /j.leaqua

2 A. Ruvio et al. / The Leadership Quarterly 21 (2010) 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 and their 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 of our knowledge, the differences between the EV of different types of entrepreneurs has not yet been tested. Thus, the main focus of this study is on the organizational context of EV. In their model of venture initiation, Greenberger and Sexton (1988) regarded vision as related to the underlying cause of the venture and/or the type of venture imitated. Fable and Larwood (1995) suggested that since vision reflects the uniqueness of the organization, it may be developed and utilized in different ways in different types of organizations (see also Cossette & Audet, 1992; Naffziger et al., 1994; Nanus, 1992). Based on these theoretical arguments, this study will examine the differences in EV between nonprofit entrepreneurs in the educational sector and for-profit, service oriented business entrepreneurs. The study will also test the differences in the effect of EV on the new venture's strategy and performance. Consequently, the study will consider several questions. Are differences between EVs systematic? Do they reflect differences in the nature of their corresponding entrepreneurial organizations? Does EV have a different effect on the new venture's strategy and performance 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 in the process of establishing new ventures. The paper begins with a review of the extant literature, posits a series of research hypotheses, moves to a discussion of the methodology, and concludes with an analysis of the findings and their implications for research 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; Baum et al., 1998; Bennis & Nanus, 1985; Conger, 1989; Elenkov, Judge, & Wright, 2005; Groves, 2006; Strange & Mumford, 2002) and a key component in the leadership style of all leaders social, political or organizational. While the definition of vision varies, it is generally an idealized goal to be achieved in the future (Conger, 1999; Conger & Kanungo, 1987; Elenkov et al., 2005; Kirkpatrick et 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 the shared values to which the organization should aspire. Bennis and Nanus (1985) offer a more practical definition, regarding vision as the projected mental image of the product, services, and organization that a business leader wants to achieve. These definitions highlight 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, as well as its unique characteristics. Greenberger and Sexton (1988), for example, argue that entrepreneurs are likely to have some abstract image in mind about what they intend to accomplish, and entrepreneurs must be able to create a similar image in the minds of others. (p.5). Here again, these definitions of vision are future-oriented and describe the role of vision in motivating followers toward this future. According to Ensley et al. (2000), EV is a result of the entrepreneur's intuitive and holistic thinking and bridges the current situation and the future state. They focus on entrepreneurs' exceptional ability to formulate a suitable EV for their ventures. Fable and Larwood (1995) address the differences between managerial and entrepreneurial 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 not formal or stated explicitly (Baum et al., 1998). We follow the majority of the leadership and entrepreneurial literature, which emphasizes 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 their followers (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 among entrepreneurs in 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 of vision in theoretical and applied discussions, using terms such as risky, action-oriented, inspirational, focused, and purposeful. The authors assert that the items on the self-evaluation list were representative of many definitions and descriptions of vision available in the 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 independent factors. The main ones are vision formulation, indicating a strategic emphasis; implementation, stressing successful communication of the vision; and innovative realism, focusing on tactical responsiveness to both internal and external events. The four minor

3 146 A. Ruvio et al. / The Leadership Quarterly 21 (2010) factors are general,reflecting the ambiguous side of vision; detailed, the opposite of general; risk taking, emphasizing the risky and non-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 of formulation reflects the perception of vision in strategic planning research as a long-term perception that guides the organization's planned 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-fledged strategic orientation. Implementation, generally conveyed through communication skills, is an essential part of vision in charismatic leadership theories (e.g., Avolio et al., 2004; Baum et al., 1998; Bennis & Nanus, 1985; Conger & Kanungo, 1987; Groves, 2006). According to these theories, the perception of leaders as charismatic and inspirational depends on their ability to communicate their vision to their 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 the importance 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 dimensions delineated by Larwood et al. (1995), these two attributes are also important features of leadership in organizations. Although they represent unique characteristics of entrepreneurship, various aspects of EV echo similar concepts in management literature. 3. Types of venture and types of vision Gartner (1985) notes that the differences between entrepreneurs and their ventures are much greater than the differences between entrepreneurs and non-entrepreneurs or between entrepreneurial and non-entrepreneurial firms. This insight is reflected in the social entrepreneurship paradigm. The literature on social entrepreneurship mirrors this perception as researchers conceptualize 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 activities within social organization that support social causes (Cook, Dodds, & Mitchell, 2003; Wallace, 1999), and innovative actions within for-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 of venture. Hence, the venture's vision statement will vary depending on the type of venture. Naffziger et al. (1994) support this notion 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's purpose. The distinction between nonprofit and for-profit organizations is a prime example of such a contextual difference. The social mission is an important distinction between the two organizational types. Nonprofit, social organizations seek to do good by providing new services or promoting social goals for the community in which they operate (Dees, 1998). Profit for these organizations is more a means to an end than an end in itself. On the other hand, in for-profit (business) organizations, the opposite is true. For-profit organizations focus on business goals, such as making money. Even when for-profit organizations become 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 not directly related to entrepreneurship, Larwood et al. (1995) address the issue empirically by comparing the vision of corporate executives with those of business school deans. Cluster analysis of self-evaluation items reveals that the executives' pattern is similar but not identical to that of the business school deans. Furthermore, an item-by-item comparison between the executives and the deans for the 26 items noted above identifies significant differences for most items. Factor analysis yields six factors for the deans' group, compared with seven for that of the executives. Larwood et al. (1995) conclude, the results suggest the need to use caution 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 business entrepreneurs. For example, Prabhu (1999) argues that although social entrepreneurs may display many of the characteristics and behaviors of business entrepreneurs in the process of creating and managing 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 social entrepreneurs' choices of mission, means, and ends; they play a smaller part in most business ventures. Thompson et al. (2000) support this notion of vision as a major difference between social and business entrepreneurs. They claim that although many traits and behaviors of social entrepreneurs mirror those of business entrepreneurs (e.g., leadership style, personal qualities, ambition, and drive), the vision of social entrepreneurs holds an added value for the underprivileged sections of the community. In light of this evidence, this study posits that the content of vision in nonprofit and for-profit sectors will have different meanings. Given that nonprofit organizations stress ideology and social values, the study hypothesizes that their leaders will need to use a more inspirational vision and stronger communicative tools to influence their followers. In contrast, the study expects that for-profit entrepreneurs, whose messages typically include economic and business-like factors, will convey their vision in practical and 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.

4 A. Ruvio et al. / The Leadership Quarterly 21 (2010) 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 by communicating a strong sense of vision and by their ability to transform this vision into specific missions 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 central element of a business strategy (Ireland & Hitt, 1999; Kirkpatrick et al., 2002). Specifically, Mintzberg and Waters (1982) refer to entrepreneurial strategy-making as the product of a clear and complete vision. Bird (1988) strengthens the concept of vision within strategic entrepreneurship by describing it as a focus on the present with a firm picture of the future. However, most of these studies have considered the relationship between vision and strategy from a theoretical point of view, and the empirical studies supporting this relationship are scarce. Entrepreneurial strategies have become one of the most dominant issues in the entrepreneurship discipline. Most of the studies have relied on the broader strategy literature in their conceptualization and measurement. The theories developed by Porter (1980) and Miles and Snow (1978) have been particularly influential in the study of entrepreneurial strategies. However, although some parts of these theoretical frameworks can be employed within the context of entrepreneurial strategies, entrepreneurial scholars agree that these established classifications (as well as others borrowed from the general strategy literature) must be adjusted 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 differentiation will be explored. These dimensions 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 and distinguishes between narrow (niche) and wide, multi-segmented breadth. The second, differentiation, distinguishes between aggressive competition and differentiation and refers to the depth and frequency of operating in narrow or wide segments. In some cases, differentiation implies a narrow focus based on exclusivity that does not mesh with a wide focus (Porter, 1980). The entrepreneurial 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 fact that new ventures have limited resources, they need to establish themselves in a niche market first, as well as avoid direct competition with 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 supports the 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). The most extensive work on the vision-performance relationship in the entrepreneurial context was conducted by Baum and his colleagues in a series of studies (Baum et al., 1998, 2001; Baum & Locke, 2004; Kirkpatrick et al., 2002; Kirkpatrick & Locke, 1996). Concentrating on the communicative 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 be tested, in order to complete our model. Previous research suggests that strategies emphasizing quality, service, and a narrow market 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 entrepreneurships. However, they are surprised by the negative relationship between a focus strategy and venture performance, a finding they attribute 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 context similar to this paper's, Van Slyke and Newman (2006) argue that a link exists between the strategies used by social entrepreneurs and their ventures' outcomes. Since most of the entrepreneurial literature supports the implementation of narrow breadth and differentiation strategies for new ventures (Stinchcombe, 1965; Tsai et al., 1991), we hypothesized that:

5 148 A. Ruvio et al. / The Leadership Quarterly 21 (2010) 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 of new ones. Unlike the old schools of higher education, the new institutions addressed a wider spectrum of the population and stressed teaching over research. More than 150 higher education institutions were founded during this time. These new institutions meet 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 leaders from 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 Sample This study focuses on the vision of entrepreneurs. Over the years, many definitions have been used for the concepts of entrepreneurs 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 idea for 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 open new markets (Schumpeter, 1934; Vesper, 1980). According to the strategic planning and the entrepreneurial literature, such a new venture (new organization) should be an independent entity, hire it own employees, must evolve over time (more than a year), must be considered a new market 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 and The study sample does not include any form of franchising or branches of existing organizations. Two sample sets from two different 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 took approximately one hour to complete. Initially, the study used various data sources (higher education council publications, yellow pages, student manuals, educational conferences, etc.), covering practically all the new educational institutions established in Israel between 1994 and 1999 to identify the educational entrepreneurs. The researchers selected and approached 105 educational entrepreneurs. Of these, 78 completed the questionnaire, for a response rate of 74.3%. Most non-respondents cited the questionnaire's length as their reason for failing to complete it. 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, business services, 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 snowball sampling approach (also known as network sampling) refers to the process of identifying a few respondents who fit the research criteria and asking them to propose others who fit the criteria as well. The proposed participants are then interviewed and asked to point out others. This process is repeated, ideally until a saturation point is reached, that is, no new nominations are made, or when the 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 of 82.1%. Given that this was a convenience sub-sample, the researchers made an effort to establish how representative of the general population it was. Data on for-profit entrepreneurships are scarce, so the researchers relied on the Bureau of Statistics (2002) to generate an average number of employees in the relevant service sectors and compared that number with the average number of employees in the sample. The means, 7.51 for the sample and 6.56 for the relevant population, are very close, confirming the representative nature of the convenience sample. The mean age of the nonprofit educational entrepreneurs is 47 years, compared with 39 years among for-profit service entrepreneurs. This difference might be due to the fact that among the former group, some are established academicians in the prime of their careers. Of the nonprofit entrepreneurs, 70% are males, compared with 78% of the for-profit entrepreneurs. About

6 A. Ruvio et al. / The Leadership Quarterly 21 (2010) half (48%) of the educational entrepreneurs have graduate degrees, compared with 21% of the business entrepreneurs. This difference is not surprising, given that the former individuals come mostly from established universities in Israel Measurement Given that the original scales were developed in English, a back-translation method was used to prepare the Hebrew version for this study. One bilingual individual translated the questionnaire from English into Hebrew. Then, the Hebrew version of questionnaire was translated back into English by another bilingual individual, who had not seen the original questionnaire. The final step was a comparison of the three versions of the questionnaire and an assessment of the translation and its cultural accuracy by the two translators and a third bilingual individual. Disagreements were resolved through a discussion to arrive at the final Hebrew version for the study Entrepreneurial vision EV 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; Larwood et 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 then calculated 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 widely circulated views of vision (p. 218). They chose a self-evaluation procedure that follows the psychological literature on naive analysis (Bettis, 1991; Westley & Mintzberg, 1989). This method has advantages over other ways of measuring statements about vision (e.g., closed questionnaires) in that no constraints are forced on the responders when they write down their vision, and they can express their thoughts openly. Furthermore, the self-evaluating procedure that follows the articulation of the vision also intentionally avoids a predetermination of what a vision is or what it means to the responders. Ultimately, this instrument enables us 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 factors for EV (see the Results section for more details). The first and most important factor in terms of explained variance combines two factors of Larwood et al.'s (1995) research and reflects the most common characteristic of vision its communicative nature. This factor expresses the manner in which vision is imparted to the venture's followers and is considered the most important aspect of implementation. The leadership literature has frequently discussed the importance of getting followers to support the organizational 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 nature and 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 element of 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 of leadership, 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 finding may imply that entrepreneurs are a special 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 Larwood et al.'s (1995) study, the latter two elements indicate the realism of the vision, while the first item was singly loaded on their last factor (profit oriented), unrelated to all other factors. Since our study combined those three items into one factor, we labeled this factor the realistic factor, highlighting the practical aspect of vision (Greenberger & Sexton, 1988). Each of last three factors contained only two items. The flexibility dimension of the EV articulates the strategic aspect of EV as flexible and responsive to competition. Flexibility represents the entrepreneurs' awareness of competitors. Singh and colleagues (1986), among others, note the liability of newness, that plagues young companies. The youth and the small size of these organizations contribute to this situation. One of the ways to cope with the newness problem is to maintain flexibility and to avoid an aggressive strategy in the form of direct encounters with competitors. The fifth factor includes the items: conservative and formulized, the latter being a term coined 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 in Larwood et al.'s (1995) study and represents the ambiguous aspect of EV. The overall Cronbach's alpha reliability of the scale was Consequences of vision The consequences of EV in this study include entrepreneurial strategy and venture performance. Entrepreneurial strategy was 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 selected these 16 items based on the responses to an initial exploratory study. Our exploratory study was designed to capture the nature of

7 150 A. Ruvio et al. / The Leadership Quarterly 21 (2010) strategies used by social ventures. It included in-depth interviews with five social entrepreneurs in order to understand their chosen strategies. Afterwards, we went back to the literature, and based on the knowledge gleaned from the interviews, we composed a list of 19 items that reflected the strategies used by social entrepreneurs. Then, we went back to our interviewees and asked for their evaluation of our adjusted scale. Once again, we adjusted the items accordingly. The final scale included 16 items representing 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 a subjectively personal evaluation by the entrepreneurs regarding their businesses' performance compared to the performance of their competitors. Comparisons to competing businesses were evaluated using Chandler and Hanks' (1994) 8-item scale. The reliability level achieved in the present study was α=.89. Like Baum et al. (1998), we tested growth as an indicator of venture performance, as it is a key focus of entrepreneurial firms (Gartner, Bird, & Starr, 1992; Hood & Young, 1993). Growth was measured by examining the increase in the percentage of clients per year in each of the organizations. Coming as they did from the organizations' records, these figures serve as an objective measure of the ventures' performance Control variables Several 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 the venture. None of the control variables was found to be associated with EV, strategy or venture performance, with the exception of a significant positive correlation between venture maturity and growth. However, this significant relationship was expected due to the fact that the estimation of growth is constructed relative to the venture's maturity. Similar results were reported by Fable and Larwood (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 the means and standard deviation for the 26 vision items for the total sample and the educational and business entrepreneurs' sub-samples. As Table 1 demonstrates, both types of entrepreneurs score high in the long-term and action-oriented categories, and both groups score low in the difficult to describe, conservative, and formulized categories. Educational entrepreneurs score high in the category of purposeful vision, while business entrepreneurs score high in the category of well-communicated vision. Table 1 Means (Standard Deviation) for vision items for the total sample and the educational and business entrepreneurs' sub-samples. Total sample (n=156) Educational entrepreneurs (n=78) Business entrepreneurs (n=78) Mean SD Mean SD Mean SD 1. Difficult to describe Risky Bottom-line oriented Flexible Changing Conservative Formulized Describes what is taking place Widely accepted Well-communicated Understood Detailed Tactical Innovative Product of leadership Focused Planned General Inspirational Integrated with visions of others Direct effort Responsive to competition Purposeful Strategic Long-term Action-oriented Highest score in boldface, lowest score in italics.

8 A. Ruvio et al. / The Leadership Quarterly 21 (2010) Table 2 Factor loadings of vision items. Communicative Inspirational Realistic Conservative Flexible General Difficult to describe Risky Bottom-line oriented Flexible Conservative Formulized Describes what is taking place Widely accepted Well-communicated Understood Detailed Tactical Innovative Product of leadership Focused Planned General Inspirational Integrated with visions of others Direct effort Responsive to competition Purposeful Strategic Long-term Action-oriented Explained variance (%) Highest loading in boldface. An exploratory factor analysis with Varimax rotation was 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 Israelis rather than Americans the exploratory procedure is more suitable than a confirmatory procedure. Table 2 presents the results of the factor analysis. Even though the two sub-samples do not obey the five-cases-per-variable rule (Hair et al., 1998), the researchers still explored their factor structure, taking into account the results' potential instability. Given that the results were substantively similar to those of the unified sample, the researchers examined the results of the unified factor analysis and used its factor structure for subsequent analyses as well. The researchers extracted six factors with eigenvalues higher than 1 (a total explained variance of 60%): communicative, inspirational, 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 or her vision, and makes subordinates accept the vision. Explained variance for this factor is over 18%, with Cronbach's alpha reliability coefficients of.85. The second factor, inspirational, includes items such as inspirational, strategic, and action-oriented. It highlights the entrepreneur's leadership skills in formulating an inspirational and pioneering vision. The explained variance of this factor is over 10%, with Cronbach's alpha reliability coefficients of.74. The third factor is realistic, with items such as bottom-line oriented 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, with explained 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 competition in shaping the EV. It consists of two items, flexible and responsive to competition, with an explained variance of 7% and Cronbach's alpha 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. These findings 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 business entrepreneurs' sub-samples, as well as those of the consequential constructs. It also presents t-values for differences between the two groups. Importantly, multiple discriminant analysis (discussed below) does not provide estimates of group differences in the independent variables; it only provides estimates for the contribution of these variables to classification accuracy. Thus, the researchers used t-tests to assess mean differences across the two groups. In general, an EV is high on the communicative dimension and low on the conservative and general dimensions. However, the two groups differ significantly on four of the six dimensions (except flexible and general), with the largest difference being in the inspirational dimension. The educational EV is more communicative, inspirational, and realistic. The business EV scores higher on the conservative dimension. These results support H 1, positing that social entrepreneurs would be more communicative and inspirational in conveying their vision than business entrepreneurs. H 2, however, is not supported, as social, not business, entrepreneurs exhibit the realistic dimension, which

9 152 A. Ruvio et al. / The Leadership Quarterly 21 (2010) Table 3 Vision dimensions means (standard deviation) and t-tests for entrepreneur types. Total sample (N=156) Educational entrepreneurs (N=78) Business entrepreneurs (N=78) Mean SD Mean SD Mean SD t-test (p-value) Communicative (.02) Inspirational (.00) Realistic (.00) Conservative (.04) Flexible (n.s.) General (n.s.) Differentiation strategy (n.s.) Wide range strategy (n.s.) Venture performance (n.s.) Growth (n.s.) Highest score in boldface. is close in meaning to practicality. Note that the standard variations of all four dimensions are lower for the social entrepreneurs than 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 educational entrepreneurs from business entrepreneurs in one comprehensive model. Discriminant analysis has an advantage over the t-test in that it compares the two groups in terms of group categories, thereby taking into account the interactions between the individual variables entered. The researchers performed a stepwise discriminant analysis to select the most useful discriminating variables. 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 a discriminant 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 business entrepreneurs (82% vs. 73%), but both are high, indicating excellent discrimination (Hair et al., 1998). Moreover, classification accuracy exceeds C pro (0.50) by a large margin. Furthermore, Press's Q (45.23) exceeds the threshold (6.63) at pb0.001 (1 df). Both C pro 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, classifying each case by the functions derived from all cases other than the one classified. For both sub-groups (75% and 71% for education and business entrepreneurs, respectively) and as a whole (71%), cross-validated accuracy is not discernibly less than without crossvalidation, and all three exceed C pro. Second, the researchers conducted the analysis with a holdout sample. Specifically, they selected 75% of the sample, conducted the discriminant analysis, and treated the remaining 25% as a holdout sample. Then, they applied the discriminant function from the analysis sample to the holdout sample (Hair et al., 1998). The discriminant function classified 76% and 81% of educational entrepreneurs and 68% and 83% of the business entrepreneurs in the analysis and holdout samples, respectively. In total, it classified 72% and 82% of the total analysis and holdout samples, respectively. These results provide 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. Table 4 Discriminant analysis. Wilks' Lambda F Standardized weight Inspirational Realistic Conservative Flexible Wilks' Lambda.77 Eigenvalues.30 Canonical correlation.48 Chi-square 33.9, df =4,(.00) Predicted Group Membership Educational entrepreneurs 81% Business entrepreneurs 735% Total Predicted Group Membership 77% Notes: pb0.001; C pro =0.50; Press's Q=45.23N6.63 [pb0.01, one df]. pb0.05. pb0.01.

10 A. Ruvio et al. / The Leadership Quarterly 21 (2010) The loading is highest for inspirational (0.75), followed by realistic (0.56), conservative ( 0.44), and flexible ( 0.43). These loadings imply that the educational entrepreneurs view their EV as more inspirational and realistic in nature than do the business entrepreneurs. Conversely, the business entrepreneurs seem to emphasize conservatism and flexibility in their EV more than the educational entrepreneurs do. These results provide further partial support for H 1 (educational entrepreneurs are more inspirational, but not more communicative) and do not support H 2 (educational, not business, entrepreneurs are more realistic). The t-tests and the discriminant analysis 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 the correlation between the six dimensions of EV and the rest of the research constructs. The results are presented in Table 5. Next, we placed 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 the structural model were tested Measurement model The measurement model assessed whether all items on a given scale represent the same latent construct. Since most of the constructs were measured with more than five items, a parceling procedure was used (Bagozzi & Heatherton, 1994).The items in each construct were randomly parceled into three composite indicators, which were entered into the measurement model as multiple indicators to estimate the latent constructs. The measurement model fit the data well. While a significant χ 2 (264.87; df=162; p=.00) was expected, given the small sample size, other fit statistics were good (normed-χ 2 =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 good model fit with satisfactory convergent and discriminant validity, enabling the authors to proceed to the next step Structural model Table 6 shows regression weights, correlations, and fit measures of the hypothesized structural model. The hypothesized model fit the data well: all fit indexes exceeded 0.90 and RMSEA was 0.06, which is somewhat higher than the recommended level of Notably, the total explained variance for both of the performance variables was also satisfactory in both samples. According to H 3a and H 3b, vision should exhibit a positive relationship with differentiation strategy and a negative relationship with a wide-ranging strategy. Mixed results were obtained in the two samples. While in the business sample a significant positive relationship was established between vision and differentiation (β=0.56; pb.01), no significant relationship between vision and a wide-ranging strategy was found. The educational sample reveals an opposite picture: the relationship between vision and differentiation was found not to be significant, while the relationship between vision and a wide-ranging strategy was positive and significant (β=0.40; pb.01). Thus, hypothesis H 3a was supported only in the business sample, and H 3b was not supported in either sample. H 4 posited a positive association between vision and performance. Again, mixed results were found in the two samples. In the business sample no significant relationships were found between vision and both indicators of venture performance. In the educational sample a significant positive association was established between vision and subjective evaluation of the venture's performance (β=0.38; pb.05), and between vision and venture growth (β=0.30; pb.05). Thus, H 4 was supported only in the educational sample. Finally, H 5a and H 5b focus on the relationships between the venture strategy and its performance. The differentiation performance relationship was only supported in the business sample regarding subjective evaluation of the venture's performance Table 5 Pearson correlations of the study's constructs Business entrepreneurs 1. Vision 2. Differentiation strategy Wide range strategy Venture performance Growth Educational entrepreneurs 1. Vision 2. Differentiation strategy Wide range strategy Venture performance Growth Significant at pb0.05. significant at pb0.01.

11 154 A. Ruvio et al. / The Leadership Quarterly 21 (2010) Table 6 Regression weights and fit measures of the structural model. Standardized regression weight Business entrepreneurs Educational entrepreneurs From To Vision Differentiation strategy Vision Wide range strategy Vision Venture performance Vision Growth Differentiation strategy Venture performance Differentiation strategy Growth Wide range strategy Venture performance Wide range strategy Growth Correlations Venture performance Growth Explained variance Differentiation strategy 32% 0% Wide range strategy 0% 18% Venture performance 21% 44% Growth 16% 23% Fit measures χ²(df) (164) p=0.00 NFI.95 NNFI.97 CFI.98 RMSEA.06 Significant at pb0.05. Significant at pb0.01. (β=0.52; pb.05). As with the wide-ranging strategy, positive and significant associations were established with both subjective evaluation of the venture's performance (β=0.48; pb.05) and with growth (β=0.44; pb.05) in the educational sample. Also, a significant negative relationship between wide-ranging strategy and growth were found in the business sample. Thus, H 5a and H 5b were only supported in the business sample with regard to subjective evaluation of the venture's performance. H 6 was fully supported in the educational sample only. Finally, in order to determine whether the differences in the relationships between the constructs across samples are significant, the hypothesized model was compared to a constrained model (Kline, 1998). In the constrained model the relationships between the constructs was constrained to be equal across samples. Then, the chi-square values of the two models were compared (unconstrained vs. constrained). The constrained model yielded χ²= (df=173), normed-χ 2 =1.67, NFI=0.95, NNFI=0.97, CFI=0.98, and RMSEA=0.07. The χ² difference between this model and the unconstrained structure model was significant [Δχ²=20.8; 9 df] at the level of pb0.05, supporting acceptance of the unconstrained model in favor of the constrained 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 there are different visions for different types of ventures. The study also looks at the differences in the effects of these variations in visions on the new ventures' strategies and performance. In particular, this study examines the nature of EV in two groups of entrepreneurs, 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, inspirational, realistic, conservative, flexible, and general. Like the dimensions developed by Larwood et al. (1995) and by Fable and Larwood (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 Theoretical implications First, this study confirms the findings of Larwood and her associates (1995) that the most significant aspects of EV are communication and inspiration, reflecting formulation, innovation, and risk taking. These findings also corroborated other studies suggesting 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 the study's hypotheses and indicate significant differences between the entrepreneurial leadership vision of educational and business entrepreneurs. The most discriminating factors are inspiration, realism, conservatism, and flexibility. The EV of the educational entrepreneurs is more inspirational and realistic, and that of the business entrepreneurs is more conservative and flexible. T-tests also 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 their inspirational character is consistent with their image as more social and ideal-driven. As noted earlier, the emergence of new

12 A. Ruvio et al. / The Leadership Quarterly 21 (2010) higher education institutions in Israel in the 1990s was a response to the growing demand for higher education among the lower echelons of Israeli society. Educational entrepreneurs, therefore, focused on advancing an important social agenda. This unique mission naturally went along with inspiration, an attribute also characteristic of transformational leaders. Given that these leaders function 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 is generally stable and slow-changing in terms of market demands and student supply, sources of support, and government regulation. In the business world, on the other hand, these factors change faster, requiring rapid responses and increased flexibility in the face of environmental changes. Also, the flexibility factor has content reflective of the entrepreneurial orientation of proactiveness (Covin & Slevin, 1991) and competitive aggressiveness (Lumpkin & Dess, 1996). These dimensions are often characteristic of new business ventures. According to the study, the for-profit entrepreneurs are more conservative than the nonprofit entrepreneurs. Perhaps the nature of the educational reform as a niche reform in which the new educational organizations were competing against multiple rivals may explain the less conservative, more competitive stance of the educational entrepreneurs and their willingness to take risks. 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 business counterparts 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 business entrepreneurs. 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 the situational 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 as entrepreneurial theory. Numerous studies in the area of leadership suggest that vision varies across different types of organizations 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 differences and the overlaps between the visions of leaders and entrepreneurs. Bharat and Filiz (2008) pointed out the differences in vision between 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 express inspirational vision themes, whereas contingent reward leaders tend to have more instrumental vision themes. Additional research is needed to identify the relationships between various facets of vision and different types of ventures or/and leaders. In general, the findings of this study imply that different people will emerge as leaders, and caution us about global applications of leadership theory. Regarding entrepreneurship research, these findings provide empirical evidence for what to date have generally been theoretical arguments, that the differences between types of entrepreneurs can be as meaningful and significant as the differences between entrepreneurs and non-entrepreneurs (Gartner, 1985). More research is needed in order to fully understand those differences in regard to the nature of EV. Another theoretical contribution of this study is the substantiation it offers about the relationships between EV and the ventures' strategies and performance. We included two different measures of performance, both the entrepreneur's selfevaluation of his or her venture's success as well as an objective measurement of the venture's growth demonstrated by the increase in the number of clients. Here, again, differences were found between the two types of ventures. In the for-profit sample EV was positively related to a differentiation strategy, which serves as a full mediator between vision and subjective evaluation of the venture's performance. These relationships represent the traditional view of entrepreneurial strategy. Most of the literature on entrepreneurial strategy suggests that entrepreneurs should choose a differentiation strategy for their venture in order to avoid direct competition with larger, better established companies (Stinchcombe, 1965; Tsai et al., 1991). This strategy enables them to gain 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 be positively and significantly associated with the two outcome variables. However, unlike the for-profit entrepreneurs, for the nonprofit entrepreneurs, vision was found to be directly associated with both the venture's growth and the subjective evaluation of success. These findings raise several theoretical issues. First, these findings suggest that the entrepreneurial vision plays a more significant role in the entrepreneurial process in nonprofit ventures than in for-profit ventures. Thus, not only does the meaning of vision vary across venture types, but so does the emphasis given to it. Nonprofit entrepreneurs aspire to communicate their vision to 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 might suggest that different types of ventures require different types of strategies Practical implications This study has several practical implications, generally concerning the training of entrepreneurs. In most cases, entrepreneurs receive very formal and very task-oriented training (e.g. writing a business plan). However, the findings of this study suggest that entrepreneurs' actions are affected by their vision. Furthermore, Bharat and Filiz (2008) stressed that when evaluating the initial decision to invest in a start-up, VCs (authors: venture creators) tend to give significant weight to their assessment of the

13 156 A. Ruvio et al. / The Leadership Quarterly 21 (2010) capabilities, career experiences, and track record of the founder CEO and their ability to provide leadership, strategic direction, and vision to the company as the firm evolves from a start-up to a public company (p. 28). Downing (2005) suggested that for many entrepreneurs there is a fine line between the status of misfit and visionary, failure and success (p. 199). Nevertheless, although it is apparent that EV is critical for acquiring resources for the new venture and securing its success, formal training do not takes this effect into consideration. The majority of business programs do not teach entrepreneurs to be aware of the power and significance 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 indicate that different types of entrepreneurs have different perceptions of their venture and act accordingly. However, most training programs for entrepreneurs do not consider these differences Study limitations The study suffers from a number of limitations, and the researchers urge caution in interpreting the findings. The first issue concerns the generalizability of the findings. Given that a large majority of the educational entrepreneur population completed the questionnaires, 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 a random sampling of the population will increase our confidence in the findings reported here. In addition, a plausible explanation for the findings might be that the vision content of educational institutions differs from that of general service firms (without regard to profit/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 pattern was also reported by Larwood and her colleagues (1995). Though crossloadings 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 extent to which the findings would hold in other countries. Future studies need to address the question of whether cultural differences account 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 role in 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 venture performance. Future studies should test other relevant constructs (e.g. environmental factors) as predictors of venture performance in order to determine the relative importance of EV to the venture's success. 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