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This is to certify that the

dissertation entitled

RETAIL SUPERPRENEURS AND
THEIR INFLUENCE ON SMALL COMMUNITIES

presented by

Linda Swihart Niehm

has been accepted towards fulﬁllment
of the requirements for

Ph.D. degreein Design and Management

 

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Date July 12, 2002

 

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6’01 c;/ClRC/DateDue.p65-p.15

RETAIL SUPERPRENEURS AND
THEIR INFLUENCE ON SMALL COMMUNITIES

By

Linda Swihart Niehm

A DISSERTATION
Submitted to
Michigan State University

in partial fulﬁllment of requirements
for the degree of

DOCTOR OF PHILOSOPHY

Department of Human Environment and Design

2002

ABSTRACT

RETAIL SUPERPRENEURS AND
THEIR INFLUENCE ON SMALL COMMUNITIES

By
Linda Swihart Niehm

Some independent retailers are highly successful under changing market
conditions. What makes these individuals successful is not known. Qualitative research
by Niehm and Frazier (2000) suggests a unique combination of traits, business practices,
and personal perspectives may inﬂuence retailer success. I call these highly successful
independent retailers “superprenems”.

This research identiﬁes leadership, entrepreneurial, and personal characteristics
which comprise the superpreneur archetype. I also develop and test a theory of
superpreneurs’ leadership role in community-based business networks and the
relationship between business network involvement, development of community social
capital, superpreneurs’ community opinion leadership, and community and ﬁrm success.
An interpretive framework derived from social network theory (Burt & Janicik, 1996) and
the diffusion of innovations perspective (Rogers, 1995, 1976) is employed.

Data collection involved a two-step process. First, a peer nomination procedure
was conducted to identify superpreneurs in small and non-urban communities.
Superpreneurs were identiﬁed by community and industry sources from a multi-state area
(Michigan, Ohio, Indiana, Illinois, Wisconsin, Iowa). Phase two involved mailing a pre-
tested survey instrument to nominated superpreneurs. The survey was comprised of ﬁve
parts: superpreneur proﬁle, network associations, community opinion leadership,

community and ﬁrm success, and demographics. A structural equation procedure

(Lisrel 8.50) was used to test a model of the superpreneur proﬁle and causal relationships
linking superpreneur presence to ﬁrm and community success.

Results of model testing support a two-dimensional superpreneur proﬁle
comprised of transformational leadership and entrepreneurial orientation. Superpreneurs
were found to be central leaders in local business networks. Involvement in business
networks enhances development of social capital and supports superpreneurs’ role as
community opinion leaders. Social capital was inversely related to superpreneurs’
community opinion leadership role in this study. Further, community opinion leadership
was not found to signiﬁcantly inﬂuence community success, but did signiﬁcantly
inﬂuence the success of superpreneurs’ individual ﬁrms.

Examination of initial results revealed measurement issues concerning the
community opinion leadership construct. A more parsimonious model of superpreneurs’
business leadership and community inﬂuence was subsequently developed and tested.
The ﬁnal model indicates positive and signiﬁcant relationships between superpreneur

business network involvement, social capital, and community success.

Cepyright by
LINDA SWIHART NIEHM
2002

To Bruce, Lindsey, and Lauren. Your endless support and encouragement made this
dissertation and doctoral degree possible.

ACKNOWLEDGMENTS

Completion of my doctoral degree would not have been possible without the
support of some signiﬁcant individuals. I would like to ﬁrst thank Dr. Brenda Stemquist,
my Academic Advisor and Chair of my Doctoral Committee. I have grown signiﬁcantly
as a researcher and academician thanks to her guidance, support, and encouragement. I
also want to thank Dr. Linda Good and Dr. Patricia Huddleston for being wonderful
mentors throughout my doctoral program. I truly could not have asked for a better or
more fulﬁlling doctoral experience than I received in the Merchandising Management
Program. Thanks also to Dr. Roger Calantone in Marketing and Supply Chain
Management for his advice and guidance in statistical analysis. His research expertise,
insightful recommendations, and personal encouragement were greatly appreciated.

I would also like to acknowledge the support of my family throughout my doctoral
program. My husband Bruce, and daughters Lindsey and Lauren, have sacriﬁced much
for me to work on this degree. I especially want to thank Bruce and Lindsey for their
assistance with survey preparation and data entry. My mother Rosemary Swihart and
sister Diane Pickworth have provided emotional support and assistance on the “home
front” many times, as have Bruce’s parents Virginia and Ray Niehm and his sister
Marcia. I would also like to thank Kathryn Mangopoulos for helping to keep my family
safe, sane, and ﬁmctioning during past summers so I could work on my research.

Finally, I would like to thank a group of my fellow doctoral students for their
support, friendship, and encouragement throughout the past seven years. Thanks to
Jae Eun Chung, Barb Frazier, Linda Femandes Plank, Leslie Stoel, and Vanessa

Wickliffe. I value you all as friends and colleagues.

TABLE OF CONTENTS

LIST OF FIGURES .......................................................................................
LIST OF TABLES ........................................................................................

Chapter 1

Introduction. ..................................................................................................
Signiﬁcance of Study ........................................................................
Problem Deﬁnition ..........................................................................

Chapter 2
Literature Review .........................................................................................
Superpreneur Proﬁle .........................................................................
Theoretical Framework .....................................................................
Social Network Theory .........................................................
Diffusion of Innovations .......................................................
Network Involvement. ......................................................................
Social Capital ....................................................................................
Community Opinion Leadership ....................... -
Outcomes ..... - ................................................................
Community Success ................................
Firm Performance .................................................................

 

 

 

Chapter 3
Methodology .................................................................................................
Measures ..............................................
Transformational Leadership ................................................
Entrepreneurial Orientation ..................................................
Critical Life Experiences ......................................................
Network Involvement- - ....... - - ........................
Social Capital - - ......... -
Community Opinion Leadership ...........................................
Outcomes: Community Success, Firm Performance ............
Demographics .......................................................................
Sample ..............................................................................................
Data Collection. ................................................................................
Data Analysis ....................................................................................

 

 

 

Chapter 4

Results and Discussion - - - ..........................................
Measurement Model .........................................................................
Structural Model ...............................................................................

Hypothesis Testing ...........................................................................
Revised Model - ..............................................

 

 

vii

ix

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67
67
89
93

Chapter 5

Conclusions ..................................................................................................

Implications ......................................................................................
Limitations and Future Research ......................................................

APPENDICES ..............................................................................................

Appendix A: Initial Conﬁrmatory Factor Analyses by Model Construct...

1&9

1

Conﬁrmatory Factor Analysis: Transformational leadership.

Conﬁrmatory Factor Analysis: Entrepreneurial Orientation...

Conﬁrmatory Factor Analysis: Critical Life Experiences ........
Conﬁrmatory Factor Analysis:

Business Network Involvement ................................................
Conﬁrmatory Factor Analysis: Social Capital ..........................
Conﬁrmatory Factor Analysis:

Community Opinion Leadership ...............................................
Conﬁrmatory Factor Analysis: Community Success ................
Conﬁrmatory Factor Analysis: Firm Performance ..................

Appendix B: Peer Nomination Request and

Nomination Form ....................................................................

Appendix C: Cover Letter ............................................................................

Survey Instrument

Appendix D: Formulas for composite reliability and variance extracted...

References .....................................................................................................

viii

105
108
111

113

114

115

116

117

118

119

120

121

122

123

126

136

138

Figure 1.

Figure 2.

Figure 3.

Figure 4.

LIST OF FIGURES

Conceptual Model: Superpreneurs and Their Impact on
Small Communities .......................................................................

Measurement Model: Superpreneur Proﬁle, Business Network
Leadership, and Inﬂuence in Small Communities .........................

Structural Model and Hypothesized Relationships:
Superpreneurs’ Business Network Leadership and
Community Inﬂuence ......................................................................

Revised Structural Model: Superpreneurs’ Business Network
Leadership and Community Inﬂuence ............................................

ix

44

85

91

101

LIST OF TABLES

Table 1. Sample Characteristics:
Retail Superpreneurs in Small Midwestern Communities ........... 60

Tables 2.1-2.8
Item Content for Measurement Model Constructs: ..................... 70
Superpreneur Proﬁle, Business Network Leadership,
Social Capital, Opinion Leadership, Community Success,
and Firm Performance.

Table 3. First Order Conﬁrmatory Factor Analysis of the Retail
Superpreneur Proﬁle ..................................................................... 82

Table 4. Second Order Conﬁrmatory Factor Analysis of the Retail
Superpreneur Proﬁle ..................................................................... 83

Table 5. Composite Reliabilities of Measurement Model Constructs:
Superpreneur Proﬁle, Business Network
Leadership, and Inﬂuence in Small Communities ......................... 87

Table 6. Full Conﬁrmatory Factor Analysis of Measurement Model:
Retail Superpreneur Proﬁle, Business Network Leadership,
and Community Inﬂuence .............................................................. 88

Table 7. Hypothesized Relationships Between
Retail Superpreneurs’ Business Network Leadership and
Community Inﬂuence ...................................................................... 92

Table 8. Revised Structural Model of Retail Superpreneurs’ Business
Network Leadership and Community Inﬂuence ............................ 102

Chapter 1
Introduction
Signiﬁcance of Study
Retailers in non-urban communities operate under highly volatile market
conditions. The prevalence of large discount chains has forced independent retailers to
address niches under-served or ignored by larger ﬁrms. Sustainability of local retail
markets is an ongoing challenge in smaller communities.

Some visionary entrepreneurs have emerged as dominant players in turbulent
retail environments. They have found novel paths to success in the midst of change and
championed growth and development in many non-urban communities (Drabenstott &
Smith, 1996; Jossi, 1997; Koretz, 1996). These entrepreneurs have successfully
developed innovative strategies, enabling them to coexist with discount chains and other
retail formats. Their vision and leadership allow them to see opportunity where others
see them. They thrive on disequilibrium and change, and motivate their communities to
achieve success. These highly successful retail entrepreneurs, I call ‘fsuperpreneurs”,
demonstrate transforming leadership behavior and higher levels of entrepreneurial
thinking than traditional small business owner-managers. They are “retail champions”
(O’Neal, 1993; Shaw, 1996).

Championing has been used to describe the efforts of tireless, committed, and
visionary individuals in new product development and technology adoption (Howell &
Higgins, 1990; Landers, 1999; Shane,l994). The notion of a retail champion is new to
the literature and provides signiﬁcant insight into the superpreneur as a transforming

community business leader. Champions are generally regarded as individuals who

informally emerge in organizations and make signiﬁcant contributions to idea generation
and the implementation of innovations. This is accomplished by actively and
enthusiastically promoting innovations through critical stages of organizational growth
(Schon, 1963; Tuschman & Nadler, 1986). Superpreneurs emerge as informal leaders in
local business and community networks. They function as idea champions in the small
community context, promoting innovative business practices and novel network linkages
which foster success for their ﬁrm and community.

Schon (1963) notes that champions initially encounter sharp resistance to new
ideas. They overcome resistance by belief in the innovation and vigorous promotional
eﬁ'ort. Once accepted, supporters of the idea work together through informal networks to
diffuse the concept through the broader population. Bobrow (1991) adds several levels of
champions may be necessary to overcome barriers of resistance in organizations.
Problem Deﬁnition

Retailers learn from each other. Superpreneurs may serve as behavioral
benchmarks for retailers in small communities. Understanding them, their behaviors, and
how their knowledge and ideas transfer in the local context can help develop and sustain
local business and community leadership. These individuals act as role models and
disseminators of relevant ideas, information and business practices to other community
members. Because of their leadership, visibility, and social position in the community,
they shape local agendas and mold public opinions.

Can superpreneurs be identiﬁed by unique leadership and personal characteristics?
Does the presence of a superpreneur change community dynamics and affect overall

success? The purpose of this study is to proﬁle the characteristics, transforming

leadership, and innovative behaviors of small retail superpreneurs. How these
individuals foster community success and vitality through social networks and personal
inﬂuence is also be explored. My speciﬁc aim is to identify leadership, entrepreneurial,
and personal characteristics which deﬁne the superpreneur archetype. I also identify
superpreneurs’ roles in local networks and examine how they are used for diffusion of
innovative ideas, processes, and practices. Research outcomes address the relationship
between superpreneurs and community and ﬁrm success.
WW

To better understand the proposed retail superpreneur and their role as community
leaders, it is important to ﬁrst distinguish them by their unique and transforming
leadership ability.

WW

Superpreneurs are transformational leaders; they lead by example.
Transformational leadership is an empowering relationship between superprenetu's and
community groups or networks. It fosters collective innovation and community support.
Superpreneurs possess an intangible means of motivating others to achieve collective
goals (Tichy & Devanna, 1986). Superpreneurs may affect successful communities by
promoting adoption of self renewing processes and appropriate responses to change
through social networks.

Transformational leaders generate support through traits of charisma, intellectual
stimulation, and individual consideration (Bass, 1985, 1990b). This study uses
charisma, intellectual stimulation, and individual consideration to examine and explicate

the leadership traits of superpreneurs. Charismatic leaders are emotionally stimulating.

Charisma is demonstrated by the ability of leaders to transform accepted thoughts and
behaviors through the power of their person. They inspire followers to work toward a
cause with greater emphasis on group than self. In a social context, charisma is viewed
as an extremely high level of esteem, value, or inﬂuence attributed by others.
Charismatic leaders arouse achievement, afﬁliation, and power motives associated with
the mission of the group. Superpreneurs function in a charismatic, inspirational manner
as focal leaders and members of community networks. Through network associations,
collective community innovation occurs.

The impact of superpreneurs’ on the adoption of novel business practices and
network interactions is exhibited through intellectual stimulation. This aspect of
transformational leadership creates arousal and change in follower’s problem awareness
and problem solving. Instead of short term drinking, followers are encomaged to be
visionary and see problems as opportunities. Individe consideration focuses on
developing group resources through individual empowerment and collective involvement
of others. Network interactions permit superpreneurs to positively affect other retailers,
community groups, and general community well being through their leadership.
Superprenetu's stimulate retailers and community others to see issues and practices in new
ways, creating resources and opportunities for growth and success.

Superpreneurs can implement novel ideas and innovations by changing their
community’s approach to problem solving. This notion is supported by a process
outlined by Yuk] (1989). He suggests transformational leaders utilize aggregate traits of
charisma, individual consideration, and intellectual stimulation to inﬂuence major

changes in attitudes and assumptions of organization members. Through this process,

commitment is developed toward organizational objectives. Superpreneurs’
transformational leadership produces major changes in community thinking and the
strategic behavior of ﬁrms and social groups embedded in the local environment.

Differentiating superprenetus as transformational leaders concurs with views of
Kirzner (1985). He suggests that any economically successful society or group is one
guided by the “right set” of coordinated actions. Part of this coordinated action is having
the right leader who, through entrepreneurial alertness, can see opportrmity and create a
means by which to capitalize on it in an environment of uncertainty and change.
Nonanka (1994) adds the entrepreneurial process begins with identiﬁcation of
opportunity by a key individual or leader. Superpreneurs function in this manner in non-
urban communities, seeing opportunity in what others consider unfavorable market
conditions.

Superpreneurs demonstrate higher levels of entrepreneurial behavior than other
entrepreneurs. What constitutes an entrepreneur? The literature focuses on deﬁnitive
characteristics such as risk proneness, boundary spanning behavior, innovativeness, and
information seeking (Schumpeter, 1934; Gartner 1988, Carland, Hoy, & Carland, 1988;
Baumol, 1993). Entreprenem's provide creative response to environmental change and
discontinuity (Schumpeter, 1947). Creative response depends on the quality of
individuals present in a society or particular ﬁeld of ability, situational inﬂuences and
individual decisions, actions and patterns of behavior (Schumpeter, 1947). Retail
entrepreneur’s creative responses include creating new retail formats, new processes,

new markets, new products or services, or new modes of delivery (Pellegrini, 1994).

Superpreneurs provide new conceptualizations of their community and strategic options
for local ﬁrms.

Superpreneurs have a keenly developed sense of vision. They are astute pattern
recognizers, able to take advantage of discontinuities present in the market and broader
environment. They see things diﬂ‘erently and earlier than others embedded in the same
environment and possess higher levels of entrepreneurial orientation than traditional
entrepreneurs. This allows them to formulate innovative and competitive agendas which
better position them for success. Realizing it may not be feasible to fulﬁll agendas on
their own, superpreneurs harness collective energies and lead community networks and
constituencies toward common goals. Their ability may be attributed to an aggregation of
traits, such as entrepreneurial orientation, level of transforming leadership ability, and the
ability to transform life experiences into a distinct cognitive model. Together these traits
provide a unique perspective for business and related decisions (N iehm & Frazier, 2000).

This study employs the entrepreneurial orientation construct (Covin & Slevin,
1989) to develop a proﬁle of the superpreneur. Entrepreneurial orientation is comprised
of four dimensions: innovativeness, proactiveness, competitive aggressiveness, and risk
taking. Each is relevant to the superpreneur, their network interactions, and business
practices at the community level.

Innovation is key to the entrepreneurial process. It provides new ideas and ways
of doing things. Innovation ultimately causes organimtional evolution or change.
Superpreneurs are leaders of community ctmnge. Their innovation and vision can serve
as exemplar behaviors for retailers and community others, enhancing community growth

and success. Superpreneurs are highly proactive and able to quickly detect sources of

opportunity. Proactiveness cultivates appropriate strategic responses to environmental
change, a force present in all small commrmities. Head -to- head competitive
aggressiveness is not strategically feasible for most small ﬁrms. Alternatively,
competitive awessiveness supports the superpreneur proﬁle, as it implies a willingness
to try non-traditional, innovative forms of competitive behavior. Risk taking is a critical
component of entrepreneurial behavior. It suggests the ability to make decisions under
conditions of change or uncertainty. Superpreneurs in non-urban communities operate
under conditions of constant environmental change, continually employing risk taking in
business decisions.

W:

Negative life events (ie. loss of job, health issues) tend to threaten one’s self worth
and psychological well being (Dohrenwed & Dohrenwed, 1981). Interviews with
successful rural retailers revealed signiﬁcant attribution of business accomplishment to
motivation produced by critical life experiences (Frazier & Niehm, 1999; Niehm &
Frazier, 2000). A possible explanation for this inverse effect is social support
experienced through community network involvement. Pretorious (1994) found that
network interaction and social support moderates levels of depression for subjects who
experience negative life events.

Social support generated from one’s community following critical life experiences
creates positive community feelings and greater commitment. Avolio (1994) links
major life experiences in a study regarding effective leader behavior. Leaders were
found to be more adept at creating and applying mental models or unique perspectives to

administrative decisions, varying with the nature and outcome of critical life experiences.

Critical life experiences may ﬁmction as triggers for transforming leadership and
entrepreneurial activity by superpreneurs.
N ' Su n

Community leadership creates multiple social network associations for the
superpreneur. Networks enable superpreneurs to operationalize individual and collective
agendas, leading to community and ﬁrm success. Retailers, local businesses, public
policy makers, political groups, school and parent groups, and other social groups
comprise the diverse collection of social contacts providing information and resource
exchange for the superpreneur. Networks are deﬁned as a speciﬁc type of relation linking
a deﬁned set of persons, objects, or events. Referred to as actors, these elements are tied
in a strong or weak manner to numerous other actors, forming webs of network relations.

The structure of relations and location of actors in networks have important
behavioral, perceptual, and attitudinal implications for individuals and the system as a
whole (Knoke & Kuklinski, 1991). Cultivation of network relationships is critical to
knowledge development and transfer of innovative ideas and practices. Network

involvement provides a vehicle for superpreneurs to impact ﬁrm and community success.

 

Social capital is the by-product of network involvement. It is the outcome of
reciprocal relationships that develop over time from social interaction between
community groups. Social interactions result in expectations and obligations in
relationships between various community networks (Coleman, 1988). Examples of
social capital in the community setting include trust, information sharing, shared norms,

effective sanctions, authority relations (leadership), and group obligations (reciprocity).

Bourdieu (1986) notes that social capital is more than just network ties. It must also
involve reciprocal, transforming, and contingent relationships. Transformational qualities
of superpreneurs and diverse network associations serve as mechanisms for development

of social capital in small communities.

 

Superprenern's’ transformational leadership implies a high degree of centrality in
community network relations. Network leader status casts them “irrﬂuentials” or opinion
leaders in the community. Transformational leadership, community inﬂuence, and
serving as a referent for others enables superpreneurs to gather and disseminate
information, harness community energies, and promote their own agendas through
collective innovation. In this way, they serve as management exemplars for other
retailers and community sectors and promote community success.

Superpreneurs also function as change agents for the broader community by
promoting and diffusing innovative ideas within business networks. Wireman (1998)
identiﬁes ﬁve characteristics of change agents consistent with the entrepreneurial and
transforming leadership qualities of retail superpreneurs: creativity, courage, visibility,
perseverance, and driving motivation. Weick and Quinn (1999) explain that change
agents are important in organizations (communities) not only to institute change, but to
identify emergent changes, reﬁ'ame them, and help others in the organization to
understand and support change activities. I posit superpreneurs frmction as opinion
leaders within business networks, fostering economic change and social well being in the

broader community.

W

A major thrust of this study is to examine the impact of superpreneur business
leadership on community success and vitality. The likelihood of sustained community
growth and change is more likely in the presence of superpreneurs’ transformational
leadership. They serve as exemplars for other retailers and help to sustain the viability of
local business sectors. Reciprocal network relationships and social capital developed by
superpreneurs engender success and vitality in non-urban communities. The vitality of
local retail ﬁrms is important not only to economic well being, but as a gauge of life
quality in the broader community. Irwin, Tolbert, and Lyson (1997) suggest small retailers
serve as the “glue” that bonds communities together. They provide not just goods and
services, but a place for informal public life and social exchange.

This research also addresses the relationship of superpreneur business network
involvement and community opinion leadership to ﬁrm success. The literature contains no
conclusive path to ﬁrm success for small retailers or for community success. Findings by
Leaman, Cook, and Stewart (1992) support superpreneurs’ impact on community success.
Their work identiﬁes leadership, cooperation, and comrrritrnent of key economic
development staff and resources as predictors of community success. Greiner (1998) adds
that strategic evolutions or revolutions occur as a natural part of any organization’s or
commrmity’s growth. He proposes ﬁve stages of organizational growth and change
beginning with entrepreneurial start-up and progressing to the highest level of problem
solving and innovation. Superpreneurs may be catalysts for positive community change at

each of these phases.

10

Theoretical Framework

Social network theory is employed to examine network relationships and inﬂuence
of superpreneurs in non-urban communities. This framework focuses on relationships
between actors, their interdependence, and emergent effects (Borgatti, 1999). Social
network theory explains variation in opportunities and resource access for groups based
on the structure and quality of network ties. Social ties among networks shape economic
action and outcomes. The types of networks in which an organization is embedded
deﬁnes potential Opportunities (Romo & Schwartz, 1995). As leaders of networks
embedded in non-urban environments, superpreneurs help to guide and shape
opportrmities and outcomes for their ﬁrm and the broader community.

I use a particular perspective from social networks theory, ego networks (Brut &
Janicik, 1996), as it addresses pe0ple’s tendency to identify with behavioral network
models. Ego networks perspective allows for the identiﬁcation and explanation of
centrality effects, or actor’s structural position within networks using survey techniques
(Freeman, 1979). It does not imply true network analysis, but rather a perspective for
interpreting and understanding network relationships.

I also use a diﬁitsion of innovations ﬁamework to explain how new ideas and
practices spread within and between community networks. Innovations tend to spread
through vehicles of interpersonal communication and social interaction (V alente & Davis,
1999, Valente & Rogers, 1995). Extensive research by Rogers (1995, 1976) focuses on
new product adoption and diffusion. His ﬁndings support the idea that interpersonal

contacts are highly important inﬂuencers of adoption behavior.

11

A related stream of research stresses the importance of interpersonal networks in
the diﬂ‘usion process (Rogers & Kincaid, 1981; Scott, 1991; Wasserrnan & Faust, 1994).
The “ network dtﬁitsion model” uses individuals or opinion leaders to initiate the diffusion
of a new idea or practice. They function as “champions” for the new idea or practice and
actually accelerate the diffusion process (V alente, 1996). A variant of the network
diffusion model, the peer promotion model, is used for the present study. This model
assumes that some individuals will act as role models for others. These role models act as
opinion leaders and can be important determinants of sustained behavioral change
(V alente & Davis, 1999). The diffusion of innovations perspective is particularly
useful for explanation of superpreneurs’ impact as opinion leaders at the community level.
Summary

Superpreneurs frmction as opinion leaders in local business networks, promoting
change in small communities. Through transfomring leadership and championing ability,
superpreneurs impact economic and social well being and serve as exemplars for retailers
and community others. Non-urban communities with a retail superprenem' present may be
more innovative, growth oriented, and sustain greater competitive advantage than

communities without such leadership.

12

Chapter 2
Literature Review

Introduction

Entrepreneurs are risk prone, innovative individuals, who demonstrate
responsiveness to environmental change. Boundary spanning and information seeking
behavior enables them to capitalize on environmental opportunities for the purpose of
economic gain (Schumpeter, 1947; Gartrrer, 1988; Baumol, 1993). I present an
enhanced deﬁnition of successful retail entrepreneurs, called superpreneurs.
Superpreneurs are highly innovative and visionary. They demonstrate business leadership
and inﬂuence in small communities. Their proactive posture allows them to overcome
barriers of environmental resistance. Superpreneurs function as retail clumpions. They
serve as exemplars, fostering innovation and success for their ﬁrms and communities.
W

Superpreneurs are analogous to idea champions. They vigorously promote new
issues or practices through informal community networks and provide eﬁ‘ort necessary to
ensure success. (Cook, 1995; Schon, 1963; Tuschman & Nadler, 1986). Vandersluis’
(1998) ﬁndings indicate champions are accountable for successful system implementation
and holding to project goals against environmental resistance. I posit superpreneurs
function as champions in small communities, as demonstrated through innovative and
transforming business leadership.

Pinto and Slevin (1989) identify four characteristics of champions consistent with
my deﬁnition of superpreneurs: they possess personal or positional power in an

organization or community, they are willing to use that power to beneﬁt the project or

13

overall goal, they use their power non-traditionally or entrepreneurially, and they go
beyond expected responsibilities for their given job. Retail superpreneurs in small
communities demonstrate similar characteristics.

Shane (1994) compared champions with non-champions in a multi-country,
cross-cultural study of 43 ﬁrms from diverse industries. Champions were found to be
signiﬁcantly different in how they developed cross-functional ties and established
organizational autonomy. Their unique approach enabled them to circumvent hierarchy,
use informal means to persuade others to support innovation efforts, and building group
decision making mechanisms. Howell and Higgins (1990) found technology champions
to exhibit signiﬁcantly higher risk taking and innovativeness tactics than traditional
business managers. They demonstrated more inﬂuence attempts within their business
networks, and used a greater variety of competitive strategies and tactics. Research by
Markham and Grifﬁn (1998) indicates champions may not directly affect new product
development at the ﬁrm level, but rather indirectly impact overall program performance,
ultimately inﬂuencing ﬁrm level performance. Superpreneurs may similarly improve
performance of their overall community, realizing broad, collective efforts will positively
impact their own ﬁrm.

Literature from three domains provides support for a superpreneur composite
proﬁle. Constructs forming the composite are: transformational leadership,
entrepreneurial orientation, and critical life experiences. Relevant literature is presented
in support of hypothesized relationships of superpreneur inﬂuence on community and

ﬁrmsuccess.

l4

WW

Superpreneurs possess a unique quality of leadership that allows them to be
highly inﬂuential and effective in their ﬁrms and communities. Transformational
leadership (Bass, 1990 a) describes superpreneurs’ leader style. Transformational
leadership is accomplished when a key individual emerges informally from a group and
leads by example. The goal is to maximize potential and outcomes for the well-being of
the group. Transformational leaders put group or community needs before their own.
Followers are encouraged to adopt the same perspective. The leader focuses on
developing people with goals for high performance. Transformational leaders use of
visionary planning guides group decision making. Followers are empowered to
individually and collectively lead the organization. Transformational leadership captures
the meaning most people attach to an ideal leader (Bass, 1990a).

Transformational leadership is explicated through Bass’ (1985, 1990b)
transformational leadership theory. This theory presents a dynamic management
process where needs of the organization, leader, and follower become one (Gaspar, 1992).
Traits of transformational leaders consistent with the superpreneur proﬁle are: charisma,
intellectual stimulation, and individual consideration. Discussion of transformational
leader traits follow with relevant ﬁndings from the literature.

m: Charismatic leaders inspire followers to develop a sense of pride and
ownership in the organization. This is accomplished when the focal leader garners
follower respect and trust. Charisma is a necessary ingredient in the transformational
leadership process. Followers who trust, adnrire, and respect their leader are motivated to

do more or perform beyond original expectations. Bass (1985) feels charisma is the most

15

important component of all transformational leadership qualities, but also the most
nebulous.

Charisma alone does not make a transforming leader. Charismatic leaders exhibit
a need for power and the opportunity to exert self conﬁdence (Bass, 1990a; Yukl, 1989).
Ross and Oﬁ'erman (1997 ) examined factors which would allow human resources
personnel to identify attributes of transformational leadership which positively inﬂuence
group work performance. The attribute found to be of greatest predictive power was an
enabling personality. Groups perceived no limits to what they could achieve under
conﬁdent and inspiring leadership. In this study group leadership was deﬁned by
characteristics of high inﬂuence and inspiration among coworkers, an ongoing need for
change, self conﬁdence, and group dominance. Similar characteristics may frame
superpreneurs as leaders in key community networks and facilitate their role as opinion
leaders.

Being charismatic also includes the ability to inspire, exhibit energy, to be a
dynamic communicator, and to orchestrate organizational change. Miles (1998) ﬁndings
suggest this is accomplished through articulation of compelling and credible vision to
those in the organization. They express important objectives and purposes in simple
ways. The goal is to motivate and stimulate followers to strive beyond the routine and
expected. Research by Sosik and Mergerian (1999) found positive correlations between
focal leaders who possessed high self awareness (personal efﬁcacy, interpersonal control,
and social self conﬁdence) and transformational leadership traits. Superpreneurs may
similarly possess greater self awareness and conﬁdence, enabling them to inspire

followers in small communities.

16

W: This trait raises follower awareness, perception, and
value of organizational outcomes. Ackoﬂ‘ (1999) concludes today’s leaders must foster
transformation, including continuous knowledge development, the management of
interactions, and designing a structure that facilitates continuous change.
Transformational behavior occurs when the leader inspires followers to share group
values, meaning, and vision. Followers by-pass their own self interest and short term
goals for those of the organization. Congruency between extrinsic
organizational needs and intrinsic values of followers reﬂects successful intellectual
stimulation and transforming behavior (Bass, 1990b, Gaspar, 1992).

Tracey and Hinkin (1994) examined transformational leaders in the hospitality
industry. They found transformational leadership to have strong, positive correlations
with followers ability to help realize organizational goals and outcomes (mission clarity,
role clarity, openness of communication, and satisfaction with the leader). Exploratory
work by these authors (1998), found transformational leaders to be more effective if they
encouraged followers to question assumptions and use non-traditional thinking. This
indicates leaders who use a more stimulating, transforming style may be more effective in
achieving organizational change. Greater community growth and change may occur
when a superpreneur provides the necessary stimulation within community networks.

WW: Individual consideration involves building the
conﬁdence of followers to realize goals and think creatively. Positive reinforcement
takes many forms. Transformational leaders focus on the individual through personal
attention, actively appreciating them and recognizing their importance, coaching,

advising, presenting new learning opportunities, and recognizing employee abilities and

17

interests (Bass, 1990a). Relational resources, such as social capital and community
support, are important outcomes of superpreneurs’ individual consideration in
community leadership roles.

In small communities, functions of transformational leaders may also extend to
network associations. Grundstein-Amado (1999) supports a new application of
transformational leadership, bi-lateral leadership, which links individual consideration to
network and community relationships. Findings yield two additional transformational
dimensions, self-discovery and reﬂection. These leadership aspects encourage
empowerment and joint development of organizational goals by leaders and followers.
Psychological empowerment was also found to signiﬁcantly enhance job satisfaction for
workers supervised by transformational leaders in work by Fuller, Morrison, James,
Bridger, & Brown (1999). Social structural variables (job design, work unit climate, and
unit structure) were positively related to workers’ sense of psychological
empowerment. This suggests structural elements present in small communities (social
networks) may have a similar enabling effects on superpreneurs’ transforming community
leadership.

Bass (1997) formd positive associations between transformational leadership and
effective selling by salespersons. This effect may extend to the ability of superpreneurs to
be community inﬂuentials. Superpreneurs diffuse their ideas to retailers and others in the
small community setting, attempting to foster collective innovation. Innovation may be
more likely to occur in the presence of a transfomring leader. These ﬁndings support
inclusion of transformational leadership in the superpreneur proﬁle and lead to the

following hypothesis:

l8

H1 a: Transformational leadership is positively related to the superpreneur
proﬁle.

WM

Entrepreneurial orientation (EO) refers to processes, practices, and decision
activities leading to new entry or opportunity for an individual or ﬁrm (Covin & Slevin,
1989). New opportunities are successﬁrlly undertaken by “purposeful enactment” of a
key individual in an organization. Entrepreneurial orientation involves the traits,
intentions, and actions involved in the dynamic generation of and acting upon new ideas
(Van de Ven & Poole, 1995).

Previous applications of the E0 construct have primarily focused on ﬁrm level
innovation (Slevin & Covin, 1990; Miller, 1983,1988). Lumpkin and Dess (1996)
examined various conﬁgurations of the E0 construct. Their ﬁndings suggest construct
composition may vary by organizational or business context. In other words,
entrepreneurs in small communities may demonstrate a different conﬁguration of the E0
construct than individuals within large ﬁrms (intrapreneurs). Lumpkin and Dess further
suggest that BO dimensions may combine to form unique entrepreneurial types, such as
the superpreneur. The E0 construct is comprised of four dimensions: innovativeness,
proactiveness, competitive aggressiveness, and risk taking. Each is discussed relevant to
the superpreneur and their innovation activities.

M; An innovation is a radically different way of doing something. It is
broadly deﬁned as the adoption or use of an internally generated system, policy, program,
process, product, or service new to an organimtion (Lumpkin & Dess, 1996; Damanpour

& Evan, 1984; Zaltrnan, Duncan & Holbeck, 1973). Innovation is deﬁned as an

19

individual’s tendency for involvement in new ideas, and creative processes resulting in
new products, services, or managerial processes. Schumpeter (1934) ﬁrst identiﬁed
innovation as an important characteristic of entrepreneurship. He conceptualized
innovation as a key component of the entrepreneurial process. It creates new
competitive entry or a novel approach to business activity, ultimately causing evolution or
change in the economy. Superpreneurs are a key source of new ideas, innovation, and
change. Their presence provides novel approaches and practices which potentially
differentiate successful and unsuccessful ﬁrms and communities.

Mm: Proactiveness is a forward-looking perspective accompanied by a
propensity for involvement in new venture activities (Lumpkin & Dess, 1996). Although
closely related to innovation, proactiveness focuses more on the prusuit of opportunities
and initiation of activities (Covin & Slevin, 1989).

Individuals vary along a continuum of proactiveness according to their level of
EO. Merz and Sauber (1995) found small ﬁrms can be classiﬁed by perceived
differences in strategy, structure, and responses to environmental context. Crant (1996)
examined the relationship between a proactive personality and the intensity of
entrepreneurial intentions. Findings show proactiveness is positively associated with the
degree of entrepreneurial intentions. A proactive personality also explained a
signiﬁcant amormt of variation in entrepreneurship. Khan and Manopichetwattana
(1989) formd highly innovative entrepreneurial ﬁrms to demonstrate greater proactiveness
in management strategies and practices than non-innovative ﬁrms. A study by Smart and
Conant (1994) formd independent business owners with higher levels of E0 to use a

wider variety of distinctive marketing competencies and demonstrate better overall

20

performance. Respondents indicated drawing from a wider resource base for decision
making and they possessed a wider range of managerial attributes. Superpreneurs’
presence in small communities may provide both proactive strategies and responses to
enhance small retailer and community effectiveness.

WM: Competitive aggressiveness describes how ﬁrms
strategically react to competition and market changes. Competitive aggressiveness may
mean head-to-head competition, but this is not a generally prudent approach for small
retail ﬁrms (Lumpkin & Dess, 1996). Covin and Covin (1990) and Stone (1995)
suggest small ﬁrms should compete not only on price, but also on complementary
merchandise, customization, and customer service. McGee and Rubach (1996) found
successful small stores in hostile environments exhibited multiple competitive behaviors
of which price was only one dimension.

Competitive aggressiveness also implies a willingness to use unconventional
modes of competition (Cooper & Dunkelberg, 1986). Unconventional forms of
competition may include collective innovation through community networks.
Ramachandran and Ramnarayan (1993) found entrepreneurs with high pioneering and
innovation scores to have more extensive network involvement. Those high in E0
gathered information and ideas from network associations and synthesized it to promote
learning and resource development. Dean’s (1993) research indicates competitive
aggressiveness explains a signiﬁcant amount of variation in corporate entrepreneurship in
comparison to variables of strategy and structru'e. Competitive aggressiveness through
network associations may partially explain variations in superpreneur innovation behavior

and their impact in small communities.

21

W Central to entrepreneurial behavior is the involvement in creating
new business. This inherently requires a level of uncertainty or risk, a situation that
would be unacceptable to a non-innovative individual or business (Clark & Aram, 1997).
Adopting new ways of doing business also presents risks to small retailers. Risk contains
various meanings to the enhepreneur. Baird and Thomas (1985) identify components of
venturing into the unknown, asset commitment, and need to borrow as situations which
present uncertainty. Gasse (1982) mentions personal, social, and psychological risk
inherent in the resource outlay and decision making of entrepreneurs. Miller (1983) and
Covin and Slevin (1991) have used E0 to measure risk taking as deﬁned by the managers
of ﬁrms likely to engage in bold versus cautious acts. Firms with high E0 may
necessarily be more be risk prone (higher debt, larger resource commitment) in order to
take advantage of marketplace opportunities and implement technological changes. It is
plausible to suggest that risk proneness may also inﬂuence superpreneur success and
involvement at the community level.

Superpreneur risk proneness is demonstrated in their modeling of business
practices under changing environmental situations with conﬁdence and action. This
behavior may inﬂuence the adoption of innovative ideas and approaches by retailers and
other community sectors (O’Shaughnessy, 1994). Becherer and Maurer (1997) suggest
individuals high in entrepreneurial tendency (EO) may perceive environmental hostility
and turbulence differently and use this unique perception of risk to shape their ﬁrm’s
marketing strategies. Combined effects of the E0 construct provide support for the

following hypothesized relationship:

22

H1 b: Entrepreneurial orientation is positively related to the superpreneur
proﬁle.

Stressful life events are linked to negative outcomes such as psychiatric and
physical dysfrmction (Dohrenwend & Dohrenwend , 1981). Stress can be deﬁned as
physical exertion, the emphasis or signiﬁcance attached to a thing or event, an internal
response to external forces, or physical disequilibrium of an organism (Lin, Dean, &
Ensel, 1986). Negative life events tend to threaten one’s self concept and have
generalized negative effects on self worth and levels of selfesteem (Epstein, 1976).

Stressful effects may negatively impact personal and professional endeavors for
many individuals. Qualitative interviews with highly successful retail entrepreneurs
(Frazier & Niehm, 1999; Niehm & Frazier, 2000) found an inverse effect. A signiﬁcant
number of interviewees reported greater levels of drive, ambitiOn, and resourcefulness in
personal and business decisions attributed to critical life experiences. Zautra and Reich
(1983) investigated this type of inverse stress effect, referred to as cross-domain
inﬂuence. They suggest such experiences may be commonly be referred to as “blessings
in disguise”, because the negative experience actually raises ones level and ability of
positive response. It is possible for some people to set the stage for or trigger positive
performance through a type of cognitive contrast effect. The explanation for this effect is
found in crisis theory, which state successful adaptation to a crisis situation produces an
increase in adaptability and growth. Successful resolution can occur through
a number of avenues, such as reappraisal of the situation, self introspection, or

development of coping mechanisms.

23

Another aspect of cross domain effects is the perceived controllability of life
events. Research by Higgins, St. Amand, and Poole (1997) examined the impact of
negative life experiences on relative risk judgements. Controllable negative experiences
increased recurrent optimism for subjects, but uncontrollable negative experiences did
not. Pretorious (1994) found network interaction and social support moderates the effects
of depression for subjects experiencing negative life events. Positive network
associations ameliorated negative effects for subjects in this study. Superpreneurs’
perceived control over negative, risky, or stressful events may be attributed to unique life
and business experiences and the social support they receive from associations with social
networks in the small community.

Cohen and Hoberman (1983) found the availability of social support (social
networks) and the number of positive events also experienced by an individual moderated
the relationship between negative life experiences and physical distress. Social support
provides a buﬂ‘ering effect to the negativity of critical experiences. Similarly, Pretorious
(1994), found negative life events to effect individuals differentially varying with
perceived level of social support. Superpreneurs mobilize positive forces from negative
life events. Their involvement in social networks may create signiﬁcant community
support systems. Enabling personality attributes derived from critical life and business
experiences allow them to be successful under changing environmental conditions. Life
and business experiences provide a unique resource base for superpreneurs, supporting
the following hypothesis:

H] c: Critical life and business experiences are positively related to the
superpreneur proﬁle.

24

Theoretical Framework
J elinek and Litterer (1995) reviewed extensive literature regarding successful
entrepreneurial activity in organizations. They observed entrepreneurial ﬁrms are ﬁlled
with a variety of “self starters” who ﬁnd their own way to accomplish goals, make
judgements, and decide on actions to improve performance. Badawy (1988) states that
any organization which achieves success does so through effective identiﬁcation of key
individuals. This includes entrepreneurs, intrapreneurs (entrepreneurs within large
organizations), gatekeepers, and product champions. Bobrow (1991) similarly found
several levels of champions are needed to successﬁrlly overcome barriers of resistance to
internal and external organizational change and innovation. Superpreneurs may function
in this capacity in small communities.
Interviews of superpreneurs preceding this study (Frazier & Niehm, 1999;

Niehm & Frazier, 2000) support variation in entrepreneurial and innovation activities
among highly successful independent retailers, suggesting a multidimensional approach
to superpreneurs’ innovation behavior and community inﬂuence. I use a ﬁamework
derived from social network theory and the diﬁiwion of innovations literature. This
framework builds on qualitative ﬁndings and provides explanation for proposed construct
relationships in the present study.
W

Social network theory focuses on the social relations of social structures. It is
broadly applicable as it is not bounded by time, place, groups, or areas. The theory begins
withasetofnetworkmembers(referredtoasnodesinthe literature)andasetoftiesthat

connect the nodes (Wasserrnan & Faust, 1994). Social structures are conceived as the

25

patterned organization and interaction of network members and their relational ties
(Wellman, 1999). This approach allows the researcher to study a diverse set of
structural phenomena such as network density and clustering, tightness or looseness of
network connections, whether the group under study is homogeneous or varied, the
complexity or layering of group (network) ties, and how indirect (weaker) ties and
network structural position affects individual and network behavior (Wellman, 1999).
For these reasons, it is an ideal ﬁamework for the examination of superpreneur
characteristics, innovation behavior, and network relationships in the small community
context.

Network membership and interaction is a primary means of building resoruces,
opportunities, and implementing innovative ideas for the retail superpreneur. This is
supported by the presence of embedded ties forming a pattern of non-economic network
exchange in small communities (Granovetter, 1985). Johannison and Monsted (1997)
provide support for application of network analysis in the study of entrepreneurship.
Theycontendthatentreprenemshipisanactofcreationanda“wayoflife” ; a
phenomena beyond explanation by rational economic behavior. Mick’s (1998) research
concerning trust in network eﬂ'ectiveness supports the use of a sociological explanation,
such as social network theory, for network outcomes. Mick also identiﬁes two types of
social networks; those which rely on individualistic and autonomous entrepreneurship
and those who use more of a group think approach. When networks use multiple
strategies to achieve their goals, networks and hierarchies can co-exist. This notion of

hierarchy supports the role of superprenerns as leaders in community networks.

26

Superpreneurs may transform networks into groups of “collective actors” which facilitate
the ﬂow of innovations leading to small community success (Kontopoulos, 1993).

W

A particular dimension of social network theory is used to explain and interpret
ﬁndings in the present study. The ego networks perspective (Burt & J anicik, 1996)
focuses on dynamics inherent in informal leadership structures of social networks.
Actions described by this perspective include degree of social support in networks, how
networks go about “sense making” activities, social control mechanisms, access to
resources in the environment, and behavioral modeling of key people and processes in the
network environment.

A main assumption of this perspective is that people beneﬁt from heterogeneous
network associations. Superpreneurs are more likely to obtain information and other
resources to accomplish desired goals if they have a diverse network structure. These
features are unique to the ego perspective of social networks and relate well to
superpreneurs’ network interactions in small communities. An ego networks perspective
provides for research interpretation from a social networks perspective. This approach is

particularly useful in may research where traditional sociometric network analysis

would be prohibitive.

 

Collective innovation may occur through a diﬂ’usion process lead by
superpreneurs. Diffusion occurs within and between community networks and is
encouraged by opinion leaders. Opinion leaders are inﬂuential members found within

one’s reference group. Opinion leaders are necessary to introduce and promote new ideas

27

and concepts among group members (Rogers, 1983). As central network members,
superpreneurs may function as opinion leaders, promoting new ideas and concepts
beneﬁcial to the community and local business. Related research by Rogers (1976)
focuses on new product adOption and diffusion. The diffusion of innovations perspective
also has application to superpreneur’s adoption of new technologies and processes, to
activities conducted in their organizations, and to the way in which they shape community
agendas.

Rogers (1976) deﬁnes innovation diffusion as the spread of a new idea from its
source of innovation to its ultimate users or adopters. Superpreneurs may develop the
new idea or process, serve as an idea generator and diffuser, or be the lead consumer in
new product or process adoption. Innovation and adoption are affected by a variety of
environmental characteristics. Structural inﬂuences are exhibited at the organizational or
community level (culture, commrmication, income level), through organizational
character (size, proﬁtability, pressrue to change), and by administration traits (education,
age, and sophistication) (Kotler, 1997; Zaltmarr, Duncan, Holbek, 1973). Community
environment, size, and network characteristics may impact diﬂhsion efforts of
superpreneurs. I suggest superprenerus function as vehicles for the diffusion of
innovations. In this capacity they may inﬂuence network activity in a direction deemed
desirable by the broader group or community.

Network Leadership and Development of Social Capital

A network is a speciﬁc type of relation linking a set of persons, objects, or events,

referred to as actors (Knoke & Kuklinski, 1991). Networks are a key means of

information transfer and social inﬂuence in small communities. Superpreneurs may

28

garner social inﬂuence through their central role in multiple community networks.
Network position also provides early access to unique and innovative information.
Networks most eﬂ‘ectively produce community beneﬁts when they are diverse, inclusive,
and ﬂexible in composition. Effective networks generate social SUPPOIL reciprocity, and
trust at the community level. Effective networks engender the development of social
capital which may lead to more successful communities. To maximize community
success and development, it is important for superpreneurs to achieve balanced
involvement in horizontal networks (those linking individuals of similar status) and
vertically linked networks (those linking community members with external organizations
and resources) (Flora, 1998; Ibarra & Andrews, 1993).
Wireman

Social network theory oﬂ'ers two types of network structures relevant to
superpreneurs. The ﬁrst structure, instrumental networks, describes relationship linkages
produced through work-role performance. Instrumental networks tend to be weaker
associations because they link people of different professional, business, or personal
characteristics. Composition of linked individuals may differ by job or social status, or
degree of access to community resources. Because of their asymmetric nature,
instrumental networks are critical for access to resources and mobilizing collective
community action (Lin, 1982). A second type of social structure is expressive networks.
They are derived from associations of ﬁiendship, casual acquaintance, or generalized
social support. Network ties in this structure tend to be stronger and more intimate,

linking people of highly similar characteristics. Associations tend to be more frequent,

29

enduring, and capable of being highly persuasive and inﬂuential (T ichy, Tuschman, &
Fombrun, 1974; Krackhardt, 1992; Granovetter, 1973, 1985).

The literature presents two approaches which explain relationship patterns and
transfer of information and resources in social networks: weak ties (Granovetter, 1973)
and structural holes (Burt, 1992). I use a combination of these approaches to discuss
network associations of superpreneurs, with greatest emphasis placed on the structural
holes ﬁ'amework. Both perspectives illuminate structural differences in superpreneur
networks. Structural differences impact degree of superpreneurs’ social inﬂuence and
the efﬁciency of obtaining and implement resources.

Weak versus strong ties (Granovetter, 1973) provides an egocentric explanation of
network associations. This perspective maintains weak ties are of greater value because
they lie outside of one’s typical social circle. Their diverse natrrre makes them beneﬁt
rich and sources of new information. Individuals to whom one is strongly tied know the
same pool of information and are less capable of providing access to resources. Value
in the form of social capital is best derived from associations of direct contact and
indirect or weak network associations. This approach is supported by Krackhardt (1992)
and Wellman (1999) who view the individual as the center of their own networks. An
individual perspective allows for examination of network effects embedded in the
community context. It more accurately portrays the informal system of resource
exchange which occurs in small communities.

A second, more sociocentric approach, examines “structural holes” or gaps
between community network associations (Brrrt, 1992, 1999). Valuable social capital is

produced from multiple relationships with multiple actors in instrumental and expressive

30

networks. The focus of this perspective is the non-redundant nature of network contacts.
Contacts are viewed as redundant and less valuable if they lead to the same people
holding the same information or resources. A structural hole is a buffer between two
network contacts, indicating additive, non-overlapping network beneﬁts. Relationship
ties can be strong or weak, but they must provide a non-redundant network beneﬁt. The
presence of structural holes offers a competitive advantage and access to greater
information and resources for individuals whose relationships bridge the gap. Floyd and
Woolridge (1999) suggest that idea champions function in a bridging capacity.
Champions facilitate novel patterns of interaction and transform non-existent social ties
into recurrent relationships. I posit that superpreneurs also function in this manner in
small communities.

Two indicators of structural holes which explicate superpreneurs’ network
involvement are cohesion and structural equivalency. Cohesion refers to the strength of
network associations. It is typically measrned by indicators such as homophily,
intimacy, frequency, and emotional intensity. It focuses on the degree or strength of
direct connections to similar people. Weaker relationships produce a structural hole
providing non-redundant information and network beneﬁts. Cohesion is higher in
friendship or expressive network associations as is structural equivalency. Ibarra (1992)
deﬁnes equivalency as having similar relationships with other people. Similar
relationships lead to the same people with the same information, creating redundancy.
Expressive network relationships tend to be strong, symmetric and reciprocal
(Krackhardt, 1992) Highly equivalent relationships are valuable, however, in triggering

contagion or diffusion of new ideas and information across groups. Their contacts are

31

ﬁequent in nature and their strong associations have positive indirect effects on the
attitudes and opinion shaping of weakly equivalent people. Measures of cohesion and
structural equivalency should not be viewed as absolute, but as strong or weak in relative
to other network associations (Burt, 1992).

Granovetter (1985) supports the need for network leadership, stating authority
between ﬁrms is even more important than authority within one’s ﬁrm for networks to
frmction efﬁciently. Superpreneurs may promote collective community by their position
in network hierarchies. This conceptualization of superpreneurs’ leadership roles relates
to two dimensions of structural equivalency: density and centrality. Density refers to the
actual number of network contacts of the focal network member. It is also a measrue of
network concentration and diversity, focusing on redundant versus non-redundant
contacts. Density can be assessed by physically counting the number of observed
contacts and then differentiating them as instrumental or expressive associations (Ibarra,
1993). Density is also a reﬂection of network member interconnectedness (Wellman,
1999). Brass, Butterﬁeld, and Skaggs (1998) indicate dense networks may be necessary
requirements for characteristics which promote social capital, such as shared norms and
values.

Centralin is an indicator of an individual’s perceived closeness to other network
actors. I use it as an indicator of network leadership and a proxy for status. Centrality
generally leads to attributed power in network structures and increases the likelihood of
various resources ﬂowing through the network. Information ﬂows to and ﬂour
individuals who are more centrally located in networks. Centrally located individuals

have the potential to become more inﬂuential than those who are less central due to

32

implicit resource dependencies (Burt, 1996; Borgatti, 1999). Rowley (1997) presents a
network theory of stakeholder inﬂuences supporting the effects of superpreneurs’ network
centrality. He states that under conditions of high network density (many stakeholders)
and high centrality (a highly central organization or individual), the focal group or person
will adopt a compromiser role, fostering negotiation and collective action with
stakeholders. This may explain in part how superpreneurs mobilize collective action
through community network activity.

In a study regarding the effects of informal workplace interactions, instnunental
network centrality and ﬁiendship network proximity were strongly related to employee
job perceptions (Ibana,1992). Centrality was also found to be the most signiﬁcant
predictor of administrative innovation roles (Ibarra, 1993). Floyd and Woolridge (1999)
support superpreneurs as network leaders, suggesting hierarchical network structures
evolve in small communities. Brass et al. (1998) suggest identifying employees who hold
highly central network positions may aid in transmitting organizational values and norms.
Identifying superpreneurs, their network roles, and associations may similarly aid in
development of social capital and the diffusion of ideas and information necessary for
community success. These factors lead to the following hypotheses:

H 2a: The superpreneur archetype is positively associated with instrumental
business network involvement.

H 2b: Superpreneurs demonstrate equivalency in instrumental business networks
as indicated by low density and high centrality.

11 2c: Superprenems demonstrate cohesion in instrumental business networks
as indicated by low emotional intensity and high homophily.

33

§ . I g 'I I

Superpreneurs may encourage community success through the development of
social capital. Social capital is the outcome of positive social interactions. Interactions
do not singly have economic value, but are capable of producing value (Becker, 1986).
Putnam (1995) describes social capital as features of social organization including
networks of civic engagement, social norms of reciprocity, and trust. These factors
facilitate group cooperation for mutual and collective beneﬁt.

Networks are an important mechanism in the development of social capital.
Through network interaction trust is developed. Other attributes, such as individual
characteristics and leadership ability, travel through one’s web of social networks. More
dense networks contribute to system interaction and the development of social capital.
Putnam (1995) suggests this is largely due to networks fostering robust norms of
reciprocity and the desire of members to sustain information ﬂow based on past positive
experiences. More diverse, and horizontal networks add to social capital. Weak ties,
such as those among business associates and organizational acquaintances, contribute
more to the development of social capital than strong, intimate ﬁiend and family based
ties. Weak ties are the mechanism for transmitting information about trust to community
groups. Superpreneurs may garner community trust and respect through trust derived
from leadership roles in multiple community networks.

Social capital has been applied to outcomes of various system activities in the
literature. It has been attributed to individual actions (Useem & Karabel, 1986), groups
(Burt, 1997), communities (Putnam, 1993), nations (F ukuyama, 1995), and networks

(Walker, Kogurt, & Shan, 1997). Its original conceptualization is attributed to Coleman

34

(1988, 1990) who suggests social capital exists in many forms, such as in organizations
or communities. Regardless of context, social capital is always based on outcomes of
social structrn'es comprised of relationships. Flora (1998) adds that social capital thrives
when social system members interact in multiple roles over time. Structure is built on
informal social norms which depend on a dense and relatively closed system that has
continuity over time (Coleman, 1988, 1993). Small community structure provides
opportunity for social capital development through dense and lasting network
associations.

Transforming leadership of superpreneurs engenders multiple network
associations and the development of social capital. Nahapiet and Goshal (1998) suggest
social capital facilitates network activity and productivity in small ﬁrms. Taylor,
Kazakov and Thompson (1997) found support for social networks to constitute a form of
social capital in research regarding Russian entrepreneurs. Networks created by the
entrepreneur fed on their own success. Reciprocation behavior enhanced the efficiency of
achieving network goals, leading to greater ﬁrm performance. Social capital justiﬁes
individual commitment to the collective good, it facilitates ﬂexibility and adaptability in
the organization, it serves as a mechanism for collective action, and it facilitates
knowledge development (Leena & Van Buren, 1999). Superpreneurs’ network
leadership may enhance creation of social capital and success outcomes for their ﬁrms
and commrmities.

Three aspects of network activity which produce social capital are reciprocity,

trust and commitment or shared vision:

35

W The non-contractual sense of obligation to repay a beneﬁt received,
to follow, or patronize one with whom a social, market, or network exchange has
occurred represents reciprocal relationships. Each member has something to give to
each other within their network. Miller and Kean (1997a, 1997b) identify this condition
as “community reciprocity”. They refer to reciprocity in terms of what is given and
expected in exchanges between rural consumers and retailers. Their research found local
consumers more likely to inshop when a higher level of community support and
reciprocity was expressed by retailers. Reciprocal behavior was tied to both market and
non-market actions between community members concerning the decision of consumers
to outshop ﬁ'om their local communities. Reciprocity was linked to community
member relationships by Lumpkin, Hawes, and Darden (1986). This study indicates rural
consumer attitudes about relationships with local retailers are greater determinants of
retail patronage than any other demographic, lifestyle, or socioeconomic variable in
comparison to urban consumers.

1mg; Trust is an antecedent to cooperation (Gambetta, 1988; Gulati, 1995; Ring
and Van de Ven, 1992). It is a necessary relational component for community network
activity and emergence of a key individual or leader. Trust is particularly important in
network contexts where actors develop reputations for trustworthiness. This reputation is
linked to credibility and respect and determines who shares what information with whom.
Tsai and Goshal (1998) suggest it is reasonable to expect trustworthy actors will
exchange more information and emerge as key ﬁgures in organizational or network
structures. Superpreneurs demonstrate charismatic and transforming leadership traits

leading to trust relationships in community networks. Because they are trusted and

36

credible, they will likely play a more central role in network activities. Neace (1999)
examined entrepreneurs’ network interactions in four former Soviet republics. The trust
dimension of social capital was identiﬁed as the factor most critical to development of
value creation networks leading to entrepreneurial success.

WWW Related to the inﬂuence of transformational
leaders is the dimension of social capital called shared vision or commitment (Tsai &
Goshal, 1998). Shared vision is the collective goals and aspirations of a group, network,
organizational, or community structure. If group members share a similar vision for their
organization, they will be more likely to exchange resources, communicate and integrate
system activities.

I propose that all dimensions of social capital will develop more fully in small
communities under the inﬂuence of superpreneurs’ transforming leadership and vision.
Burt (1996, p. 11) notes that social capital is most often produced in situations where an
individual must ﬁgure out for himself how to best perform a job and then persuade others
the method and rationale is legitimate. This view parallels the superpreneur’s role in
small community networks. It is supported by Flora (1998) who found social capital and
entrepreneurial inﬁastructure to contribute jointly and independently to community
economic development and community action. Flora further suggests that the presence of
social capital can improve the efﬁciency of economic, human, and environmental capital.
This is accomplished by reduction of transactions costs through trust development
garnered by social interactions. These ﬁndings support the following hypotheses and
justify the relationship between superpreneurs presence and community success.

H 3 : Business network involvement of superpreneurs is positively related to the
deve10pment of social capital in small communities.

37

Superpreneurs as Inﬂuentials and Opinion Leaders

High network involvement and social capital enable superpreneurs to bring about
innovation and success in their communities. The literature deﬁnes individuals with the
ability and inﬂuence to promote change their communities as “inﬂuentials”. My
deﬁnition of superpreneurs overlaps with that of inﬂuentials. Weimann (1994) deﬁnes
inﬂuentials as individuals having a preference for risk, proactiveness, and high social
standing in the community. His cross-cultural study (1991) involving Israeli and German
samples formd inﬂuentials positively associated with innovative personality traits.
Inﬂuentials were also found to hold primary roles in social network structures.
Superpreneurs also act as community inﬂuentials. They may serve as advice givers and
exemplars for retailers and others in their communities, ultimately impacting commrmity
social dynamics and economic well-being.

Weimann (1994) suggests inﬂuentials can be used to better understand the role of
opinion leaders in information diffusion. Opinion leadership describes the degree to
which an individual can inﬂuence other’s attitudes and behavior through informal means,
in a desirable direction, and with frequency. Opinion leaders are part of one’s reference
group. Superpreneurs are members of various reference groups within the small
community, chieﬂy business and personal social networks. Their central role in
community networks makes them highly visible and plausible candidates for opinion
leadership. As opinion leaders they informally mold and shape community agendas.

Opinion leadership has substantial representation in the consumer behavior
literature. Models abundantly depict the inﬂuence of opinion leaders on decision making

(Rogers, 1983; Engel, Blackwell, & Miniard, 1990), construct measurement issues (Katz

38

& Lazarsfeld, 1955; Rogers, 1961; King & Summers, 1970; Childers, 1986; and Flynn,
Goldsnrith, & Eastman, 1996), and outcomes of opinion leadership (Bloch, 1986). The
bulk of research addresses opinion leadership from either a global perspective or product
speciﬁc categories. The addition of inﬂuentials to this body of research presents a new
dimension of opinion leadership; the diffusion of innovative ideas and information.

Valente and Davis (1999) offer an accelerated information diffusion model. They
suggest opinion leaders really function as “champions” for a new practice or idea and can
aid in accelerating the diffusion process (V alente, 1996; Katz, 1957). Their model
assumes some individuals will act as role models for others in community settings.
Champions can be important determinants of rapid and sustained behavioral change.
Burt (1999) states that opinion leaders are more precisely described as opinion brokers
because of their centrality and inﬂuence over network resource ﬂow and activity. They
are essential “network entrepreneurs”. Their strong and multiple relationships with
weakly equivalent groups allows them to trigger contagion, inﬂuence, and change across
community groups. Superpreneurs frmction in a similar manner, facilitating community
change and success efforts.

One’s position as an opinion leader is fostered through their perceived
competency, social acceptability, and similarity to others and norms of their social system
(Rogers, 1983). Wireman (1998) adds opinion leaders must possess creative thinking
and problem solving, the courage to change, visibility, perseverance, and driving
motivation. Chan and Misra (1990) support the superpreneur proﬁle, ﬁnding risk

preference and open-mindedness correlated with opinion leader characteristics.

39

Weimann (1994) identiﬁes centrality of opinion leaders in community networks
as a major deﬁning factor. Centrality supports superpreneurs as opinion leaders, as they
are focal leaders who emerge informally in community network hierarchies. Wiemann
further suggests opinion leaders are socially active, gregarious, accessible, socially
recognized, and credible. Ibarra and Andrews (1993) found instrumental network
centrality and friendship to inﬂuence network effects of job-related perceptions.
Superpreneurs’ central position in instrumental business networks and strong ties in
expressive friendship networks may similarly foster positive community perceptions and
build their reputation as opinion leaders. Superpreneurs are uniquely positioned to serve
as opinion leaders and inﬂuentials due to their visibility, multiple network linkages, and
formation of social capital. These joint ﬁndings provide support for the following
hypotheses:

H 4: Development of social capital is positively related to superpreneurs’ role as
community inﬂuentials and opinion leaders.

H5: The impact of superpreneurs’ business network involvement on community
opinion leadership is mediated by social capital.

Community Success

1 posit superpreneurs are more effective in their ﬁrms and communities because of
unique composite characteristics. Dense community network associations, focal network
roles, and the ability to promote change through transforming leadership make
superpreneurs vehicles for success. Transformational leadership’s major outcome is
major organizational or social system change. Leader inﬂuence empowers others to
collectively participate in the change process. lrrdividuals effective at creating change

have the capacity to move resources from an area of lesser to greater productivity (Yukl,

4O

1989; Tichy & Devanna, 1986). This may be best accomplished in small communities
through the collective energies of networks, guided by superpreneurs.

The ability to bring about community change may vary by community size, scope
of network involvement, and degree of social capital. Social capital prospers when trust
and reciprocity develop through repeated social interactions. Tucker and McNemey
(1992) propose a model for organizational change intervention involving networks and
coalition formation. Informal networks and the identiﬁcation of opinion leaders enable
organizational change in this research. Network structure and reciprocity were also
important mechanisms for change.

Fettig (1996) suggests community development should focus on opportunity
oriented approaches, including economic development, labor force development, and
generation of social capital. The inﬂuence of superpreneurs cuts across all suggested
modes of intervention. Woolcock’s ﬁndings (1998) suggest strong community social
capital supports both formal and informal decision making and collective public
involvement. It provides a forum for information exchange between networks and
enhances opportunity for leadership development and community growth. These ﬁndings
lend support to the following hypothesis:

H6: Community opinion leadership positively inﬂuences small community
success.

Firm Performance

Individual ﬁrm success is enhanced because of superpreneurial characteristics.
Howell and Avolio (1993) found transformational leadership to positively and
signiﬁcantly predict consolidated business unit performance of managers in the transport
industry. Kirkpatrick and Locke (1996) found leader vision to inspire and affect

41

employee goal setting, impacting performance. Entrepreneurial orientation also impacts
ﬁrm success. Smart and Conant yielded a positive relationship between EO and
organizational performance, suggesting that highly successful entrepreneurs may possess
a wider variety of distinctive marketing and management competencies, combined with a
greater propensity for risk and involvement in proactive business activities.

By enhancing community success, the local labor market and individual ﬁrms
may also realize positive outcomes. Increased social capital created through
superpreneur network involvement should positively impact individual ﬁrms due to
increased trust, respect, and reciprocity. In a study of Jamaican micro entrepreneurs,
Benson (1998) found social capital to increase ﬁrm proﬁtability , controlling for all other
factors. MacKenzie (1992) suggests small community growth may most likely occur
when communities respond to change by fostering entrepreneurship. Superpreneurs are
well suited to direct change and growth at ﬁrm and community levels, leading to the
following hypotheses:

H7: Community opinion leadership is positively related to individual ﬁrm
performance in small communities.

Summary

Van de Ven (1993) supports a network or system approach to help understand a
“collective process of entrepreneurship”. This process occurs in small communities
when superpreneurs lead key networks. Embedded network ties shape and foster
enduring relationships. This produces social capital allowing communities to thrive

(Granovetter, 1985). Degree of network involvement and generation of social capital

42

may inﬂuence superpreneurs’ effectiveness as opinion leaders. Diffusion of innovations
and innovative ideas by opinion leaders may positively impact community success. An

initial model depicting construct relationships is shown in Figure l.

43

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Chapter 3
Methodology
Measures
Superpreneur Proﬁle
The superpreneur is a dominant community business leader; a proactive and
innovative entrepreneur. Unique in how they use vision and form collaborative
networks, superpreneurs foster ﬁrm and community success through transforming
leadership and personal inﬂuence. These descriptors suggest multiple constructs and
measures to identify and assess superpreneur proﬁle characteristics. Item content for
model constructs is provided in Tables 2.1 through 2.8.
MW
Superpreneurs lead by example. They are not transactional, contingency based
leaders, but empowering transformers of change. To measure their leadership behavior I
use selected sub-scales from Bass’ Multifactor Leadership Questionnaire (MLQ) (1985,
1990a). The original questionnaire is comprised of ﬁve factors, each consisting of
multiple measures. The ﬁve factors are: charisma and inspiration, individualized
consideration, and contingent reward, individualized consideration, management by
exception, and intellectual stimulation. Factor sub-scales represent a combination of
both transactional and transformational leadership qualities. In its original form, the
MLQ demonstrates composite reliability of .86 (Bass & Avolio, 1990).
Assessments of the MLQ have generated criticism of the original factor structure.
Carless (1998) notes that dimensions of the MLQ are highly correlated, providing little

justiﬁcation for interpreting individual sub-scale scores. Her ﬁndings suggest the MLQ

45

assesses a single, overarching transformational leadership construct, lacking evidence of
construct validity. Bycio, Hackett, and Allen (1995) support this ﬁnding, citing lack of
discriminant validity. Subordinates do not distinguish between the three types of
transforming leadership behaviors. Revisions of the MLQ have been attempted (MLQ-
5X, MLQ-SX), but construct validation is still needed. Despite criticism, the original
MLQ remains a widely used instrument for assessment of leadership traits.

I employ three MLQ sub-scales to measure transformational leadership of
superpreneurs: charisma and inspiration, individualized consideration, and intellectual
stimulation. Charisma measures the extraordinary inspirational effects a leader has on
followers. Individualized consideration refers to empowerment and autonomy awarded
followers under transforming leadership. Intellectual stimulation is an indicator of how
leaders manage knowledge, promoting learning and growth in followers. Anchor points
for original MLQ sub-scales are A=ﬁequently and E=not at all. I adapt the scale to a
seven-point Likert system (1=not at all, 7=ﬁequently) reﬂecting superpreneurs’ perceived
transformational behavior in business and community interactions. Ross and Offerman’s
(1997) study of transformational leader personality attributes relative to group
performance reported high reliabilities for these three sub-scales, ranging from .95 for
charisma to .82 for individual consideration.

E . I Q . .

Entrepreneurial orientation (E0) is a measure of individual or ﬁrm level
entrepreneurial intensity. E0 is measured using the ENTRESCALE. It includes
dimensions of : innovation, proactiveness, competitive aggressiveness, and risk taking.

Composite reliabilities for the ENTRESCALE are reported at .83 (Covin & Slevin,

46

1989) and .87 (Miles, Arnold, & Thompson, 1993; Becherer & Maurer, 1997). Cross-
cultmal research by Knight (1997) reports reliabilities of .83 and .76 respectively for
English and French versions of the E0 scale. Knight’s factor analysis derived
dimensions of innovativeness, proactiveness, risk, and competitive aggressiveness.
Reliabilities were not reported in this study. Niehm, Frazier, and Plank’s (1999) research
regarding E0 and small retailer success produced the same four constructs in factor
analysis. Reliabilities were .77 for innovativeness and .83 for proactiveness. Risk and
competitive aggressiveness were single indicators.

I use the E0 scale as a summary construct to develop the superpreneur proﬁle.
Modiﬁcations are made to the innovation dimension using Goldsmith and Hofacker’s
Domain Speciﬁc Innovativeness Scale (1991). Entrepreneurial orientation as an
aggregate measure is supported in research by Khandawalla (1977), Miller and Friesen
(1983), and Porter (1990). Responses on a seven-point Likert scale reﬂect the degree to
which superpreneurs align themselves with the entrepreneurial behavior (l= strongly
disagree, 7 = strongly agree). Higher scores indicate greater entrepreneurial tendency of
superpreneurs.

'ti Li x
Superpreneurs’ vision and motivation may be driven by personal reserves
cultivated from a diverse set of life experiences. Sarason, Johnson, and Siegel (1978)
found stressful life events to affect individuals differentially depending on perceived
degree of control over events. Although some life events can produce negative results and

behaviors, others can act as positive events which propel individuals to higher levels of

47

accomplishment. Both positive and negative life events can motivate people to move to
higher levels of entrepreneurial status.

I identify and measure the perceived effect of ten critical life experiences using
selected items from the Life Experiences Survey (Samson, Johnson, & Siegel, 1978).
The scale is adapted for use with small retailers and augmented with self-designed
measures of critical business experiences. Examples of measures include: serious illness
or injury, loss of job, failure of a business, change in marital status. Reliability of this
scale in its original 60-item form is .88. Responses are on a seven-point Likert scale
(1=extremely negative impact on one’s business perspective, 7= extremely positive
impact on one’s business perspective), reﬂecting superpreneurs’ perceptions of critical
event impact on their business and professional life.

N v 1v

Measuring superpreneurs’ ties to community networks and their relative network
status requires a consistent referencing procedure. Burt (1999) suggests establishing
group or network boundaries by a' standard recall process. Two approaches to the
establishment of boundaries are recommended by Laumann, Marsden, & Prensky (1983).
One is to adopt the actor’s perspective in deﬁning social structures. A second approach
is to impose a conceptual framework that suits the purpose ofthe study. I use a
combination of these approaches to devise a network referencing procedure for
superprenem's prior to completion of survey questions.

A sociometric questionnaire is embedded in the survey form prior to sections
regarding superpreneur network involvement. I deﬁne network involvement as the

totality of persons connected to the superpreneur through two types of relationships:

48

instrumental and expressive networks. Instrumental networks are those which develop
through the course of work role performance. Expressive networks are more social in
nature and involve friendships, community associations, and casual social contact
between various community groups (Krackhardt, 1990; Tichy, Tuschman, & Fombrun,
1974; Lincoln & Miller, 1979). Respondents are asked to identify by name or initials
members of these community networks.

Procedures used by Ibarra and Andrews (1993) and Krackhardt (1990), are
referenced regarding identiﬁcation of instrumental network associations. Superpreneurs
are asked: “Who in your local business community might you turn to for feedback if you
had a new idea for your business or local business in general, concerns regarding a
business related issue, or for advice concerning a business related decision? Examples
could be local retailers, other local business owners, government ofﬁcials, community
development boards, family members-anyone who gives you feedback, support, and
advice about these business related areas”. This process provides recall for respondents
and a mental framework of instrumental network associations.

Twelve blanks are provided in the sociometric questionnaire for noting names or
initials of superpreneur network members. Respondents are instructed to list individuals
with whom they maintain active network ties. Wellman (1999) deﬁnes these as
“signiﬁcant ties”, meaning signiﬁcant in both amount of contact and what network
members do for each other. Respondents are not restricted to a ﬁxed number of
nominations to limit measurement error (Holland & Leinhart, 1973).

A parallel set of questions is asked regarding expressive network associations

using the same network recall procedure previously presented. In this sociometric

49

questionnaire respondents identify anyone outside of business related circles from who
they obtain general information and feedback regarding the local community life,
community issues and needs, and community development. This could be family
members, ﬁiends, organizations to which they belong, or other routine social contacts.
Expressive network information is indirectly used by the superpreneur for making
business decisions, acting on new ideas, and problem solving.

Wellman (1999) acknowledges procedural difﬁculties presented in analysis of
network structures in “personal communities”. Software for network analysis (ie.
UCINet) is presently designed to analyze one network at a time, making assessment of
large personal networks inefﬁcient. Large sample network studies necessarily rely on
survey responses about network associations, possibly hindering reliability (Bernard,
Killworth, Kronenﬁeld, & Sailer, 1984). Wellman (1999) suggests , however, that threat
to reliability is no greater in surveys regarding personal networks than respondent reports

about other aspects of their behavior.

 

Following the sociometric questionnaire, a series of questions assesses the degree
of superpreneurs’ involvement in instrumental and expressive networks. I deﬁne

network involvement by structural equivalency and network cohesion. Equivalency and

cohesion serve as triggers of network involvement or contagion by inﬂuence (Burt, 1999).

A major aim of this study is to determine the impact of superpreneurs’ presence on
community and ﬁrm success. This essentially describes a contagion effect, where

superpreneurs inﬂuence opinions or belief structures of others through networks of

SO

equivalent actors. Transforming leadership and conditions of social capital make ideas
and beliefs of superpreneurs contagious to local retailers and community others.
Wm

Structural equivalence refers to similar relationships with and between other
network actors in the community. The more similar superpreneurs network associations
are to other retailers’ relations with community members, the more likely retailers and
community members will adopt the superpreneur’s innovations. Measures of structural
equivalency are operationalized by continuous variables representing density and
centrality, rather than true network analytic techniques (Burt 1992; Wasserman & Faust,
1994).

W: Density reﬂects the degree of network connectedness in
instrumental and expressive network associations. It is a measure of superpreneurs’
perceived network connectedness relevant to network members identiﬁed on the
sociometric questionnaires. I measure superpreneurs’ network density using statements
adapted from work by Frazier (2000). Measures include: “These people know each other
by name”, These people talk to each other about business/community issues”, and “These
people see each other regularly in business/community situations”. Frazier’s work (2000)
examined two types of network structures: market intelligence and innovation networks.

These network structures are referenced in regard to measures of density, centrality,
emotional intimacy, and homophily employed in this study. Market intelligence
networks correspond to my deﬁnition of instrumental networks, while innovative
networks relate to expressive or relational network ties. Reliability of Frazier’s density

measures is .84 for market intelligence networks and .89 for innovation networks.

51

Cm: Centrality is a descriptor of a focal actor’s structural network position.
Network centrality is operationalized as aggregate prominence, a proxy for network
leadership. Aggregate prominence (Freeman, 1979), suggests that all network
relationships do not contribute equally to an actor’s centrality. Actors will demonstrate
differential degrees of prominence in their network associations. They have more direct
or short indirect links to many other central actors (Knoke & Burt, 1983). This measure
provides a centrality rating relative to others who are highly central in network structures.

A sociometric procedure for calculating aggregate prominence (Burt, 1987) is
modiﬁed to reﬂect superpreneurs’ perceptions of their network leadership roles. I
measure superpreneurs’ aggregate prominence (centrality) using a series of self-designed
measures modiﬁed from work by Ibarra (1993) and Frazier (2000). This study assesses
effects of individual power attributed to network centrality on involvement in technical
and administrative innovations. Examples of questions include: “I talk directly with
theses people about business/community issues”, “Among these people, I often pass
along business/community information from one person to another”, and “My
interactions with these people aﬂ‘ect outcomes of important local business/community
level decisions”. Examples of questions addressing superpreneur’s network leadership
include: “I play a primary role in group associations with these persons.” , and “ I see
myself as a leader in business/commrmity activities where I am involved with these
persons”. Responses to centrality measures are on a ﬁve-point Likert scale (1=not true to
5=very true), indicating superpreneurs’ perceived prominence of their role in key
community networks. Reliability of Frazier’s original centrality measures is .90 for

market intelligence networks and .87 for innovation networks.

52

Cohesion: Cohesion measures strength of network ties or linkages between
superpreneurs and others in community networks. Tie strength can be tightly or loosely
structured and is typically measured in terms of frequency, emotional intensity, intimacy,
and reciprocity (Granovetter, 1973). I measure cohesion in two ways: emotional
intimacy, the closeness of information communicated with other networks, and
homophily or degree of similarity between the superpreneur and central members of other
networks.

W: Strong network ties reﬂect relationship development and
emotional commitment. Trust and commitment are developed through more ﬁequent and
intense patterns of interaction. Casual or less intense social acquaintances are
characterized by weak network ties. Information may be exchanged, but it is unlikely it
will be of a sensitive or highly valuable nature. Reciprocation behavior is likely as
interaction, trust, and emotional intensity increase (Brass, Butterﬁeld, & Skaggs, 1998).

More frequent and intense network interactions indicate stronger ties, trust, and
commitment. Along with these characteristics is an increased likelihood of sharing
personal information with central network members. Intimate networks ties are
characterized by voluntary interaction, interest in being together in multiple social
contexts, and mutual interest in the other’s needs (Granovetter, 1973). I measure
emotional intimacy of instrumental and expressive network interactions with a series of
self-designed questions modiﬁed from work by Ibarra (1993) and Frazier (2000).
Examples include: “My relationships with these people are very close”, “I often share
business/community information with these people”, “I often talk face-to-face with these

people”, “I consider most of these people to be my business associates/friends”, “I share

53

personal information with them, and “I ask them for advice about a private matters”.
Responses are measured on a ﬁve-point Likert scale (1=not true at all, 5= very true)
indicating frequency of interaction between superpreneurs and business and community
networks. Reliability of Frazier’s original emotional intimacy measures is .94 for
market intelligence networks and .87 for innovation networks.

ME The likelihood of people to establish network ties with people like
themselves deﬁnes homophily. HOmophily is operationalized as similarity between
central network members and superpreneurs. It is a measure of sameness in network
relations; who chooses whom (Wellman, 1999). Similar people tend to interact more
frequently leading to greater levels of similarity, stronger network ties, and greater
information exchange.

I measure homophily of instrumental and expressive network interaction with a
series of self designed questions adapted from work by Frazier (2000). Examples
include: “ In general, comparing yourself to named others with whom you interact in local
business and community networks, how similar would you say you are to these people
with respect to: “Your outlook on life”, ﬂour likes and dislikes”, “your business
philosophy”, and “your values and beliefs”? Responses are measured on a ﬁve-point
Likert scale (l= very dissimilar, 5 =very similar) indicating degree of similarity between
superpreneurs and business and community networks. Reliability of Frazier’s original
emotional intimacy measures is .76 for market intelligence networks and .87 for

innovation networks.

54

Mm

Social capital is a relational resource, or set of resources, embedded in and
produced by relationships with others. To deﬁne and measure dimensions of social
capital, I draw on work by Tsai and Goshal (1998) who examined how social capital
contributes to a ﬁrm’s ability to create value through innovations. I posit that
superpreneurs generate social capital through their transformational leadership in diverse
network associations. This process supports ﬁrm and community success.

Social capital is comprised of three dimensions: social interaction, trust and
trustworthiness, and shared vision and commitment (T sai & Goshal , 1998). I modify
these measures by replacing social interaction with community reciprocity. Trust and
trust worthiness are measures of intercommunity trust relationships. A series of
questions are adapted from work by Tsai and Goshal (1998), Stolle and Rochon (1998),
Paxton (1999), and Frazier (2000). Trust measures include: “I can rely on community
members without fear they will take advantage of me even if the opportunity arises, “In
general, community members keep promises they make to me”, and “In general, I would
say people in this community can be trusted”. Responses are measured on a seven-point
Likert scale (l= strongly disagree, 7=strongly agree), reﬂecting superpreneur’s
perspective of generalized community trust. Reliability for the trust dimension of Tsai
and Goshal’s original scale is .96.

Shared vision and commitment is a collective measure of community goals and
aspirations. A series of questions are developed ﬁom Tsai and Goshal’s (1998) original
statements. Measures include: “ Our community shares the same ambitions and vision

for the future”, and “People in our town are enthusiastic about pm'suing collective goals

55

that beneﬁt the whole community”. Responses are measured on a seven-point Likert
scale (1=strongly disagree, 7 =strongly agree), reﬂecting superpreneurs’ perceptions of
collective community vision. Reliability for the shared vision dimension of Tsai and
Goshal’s original scale is .71.

Reciprocity addresses the level of support and return of favors owed between
superpreneurs and community members. A series of questions are used to measure
reciprocity drawing on work by Miller and Kean (1997a, 1997b). Measures include:
“How satisﬁed are you that people in the community are fair in their dealings with each
other, and “How satisﬁed are you with the amount of give and take you receive for your
efforts ﬁ'om other members of the community?”. Responses to reciprocation questions
are on a seven point Likert scale (1=strongly disagree, 7= strongly agree), indicating
superpreneurs’ perceived satisfaction with degree of reciprocity created through business
and community interactions. Reliability of reciprocity scale items is .85.

E . Q . . I l l .

Network involvement, leadership, and the development of social capital serve as
enabling conditions to the superpreneur’s role of community opinion leader. For
innovative ideas, business practices, or collaborative efforts to diﬁ‘use, a change agent or
opinion leader must be present to lead retailers and others in the community. I use the
Personality Strength scale to measure personal and social dimensions of superpreneurs’
community opinion leadership. The PS Scale (Noelle-Neumann, 1985) identiﬁed
personal, social, and socio-demographic attributes that predict opinion leadership of
organizational members in a cross-cultural study by Weimann (1991). Split-half

reliability tests for this scale in a two-group analysis of German and Israeli samples

56

yielded coefﬁcients of .78 and .76 respectively. Two factors emerged when the ten-item
scale was factor analyzed in this study: internal sources of inﬂuence and external origins
derived ﬁom comparisons with other people. Responses are measured on a seven-point
Likert scale (l= strongly disagree, 7=strongly agree) reﬂecting superpreneurs’ perception
of their degree of community inﬂuence. Examples of measures include: “I often notice
that I serve as a model for others”, and “I often give others advice and suggestions”.
92mm

Community success is a major outcome of the leadership, innovation, and
network activities of superpreneurs. I measure community success using a series of self-
designed measures. Respondents are ﬁrst asked to assess their perception of community
economic well being. Examples include: “Local business failure rates have decreased in
the past several years”, and “the population of our community is active and growing”.
Responses are on a seven-point Likert scale (1= strongly disagree, 7=strongly agree)
regarding community growth and success.

Next a series of success measures are adapted from work on rural retailing by
Sternquist, Jolly, Leistritz, Kean, Bastow-Shoop, Jasper, and Gaskill (1995) and
organizational change in educational institutions by Bloom and Sheerer (1992).
Measures are intended to assess superpreneur’s perceptions of community support and
vitality. Examples include: “Local businesses are willing to invest their time and money
in this community”, “Local residents have a strong sense of loyalty to the community”,
and “Local government supports business and community development”. Responses are
on a seven-point Likert scale (l= strongly disagree, 7=strongly agree) reﬂecting

superpreneur perceptions of community success.

57

Mariam

Superpreneurs are posited to have more successful ﬁrms because of their
composite traits (transformational leadership, entrepreneurial orientation, and life
experiences) and resources cultivated through network interactions. F irm success
reinforces the superpreneur’s role as an opinion leader among other retailers and the
community as a whole. Three measures are used to assess ﬁrm performance (Frazier,
2000): “How would you describe the overall performance of your store last year?”,
“How would you describe your performance relative to competitors?”, and “How would
you describe your performance relative to stores like yours in the industry?”. Responses
are on a seven-point Likert scale (1mm and 7=excellent) regarding superpreneurs’
perceptions of individual ﬁrm performance. Reliability of Frazier’s (2000) ﬁrm
performance scale is .84.
Ensembles

A series of demographic questions are asked at the end of the survey. Examples
of questions include: type of business ownership, number of employees, number of years
in business, number of years lived in community, past business experience, education,
age, and gender.
Sample

The sample is comprised of 217 superpreneur nominees ﬁom small, non-
metropolitan communities in the Midwestem United States. Communities represent six
states: Michigan (30%), Iowa (22%), Wisconsin (18%), Ohio (17%), Indiana (7%) and
Illinois (6%). Fifty-eight percent of respondents solely own their business and 30% own

and manage their ﬁrm. A majority of the ﬁrms employ three or fewer full-time and part-

58

time employees. Sixty-four percent of respondents are male and 36% are female. The
average age of respondents is 51 years and most have greater than 20 years of retail
experience. Retailers comprising the sample are well educated. Thirty-six percent have a
college degree and 16% have completed post graduate work. On the average, these
superpreneurs have owned their current ﬁrm for about 17 years, while most have owned a
business in the local community for approximately 20 years. Businesses represent a
variety of retail sectors and 70% of the ﬁrms were proﬁtable in 2001 . Table 1 shows
complete sample characteristics.
Communities

Small, non-metropolitan communities in Michigan, Ohio, Indiana, Illinois, Iowa,
and Wisconsin comprise the sample for this study. Non-metropolitan areas are deﬁned
by the USDA as those with county populations less than 100,000 and no city over 50,000.
For this study, communities were designated as having populations between 100 and
70,000 residents and situated at least 20 miles from a major metropolitan statistical core
area. Location response bias is minimized by use of a multi-state sample and inclusion of
small communities in six states. Broad sampling extends the generalizability of ﬁndings
to other community and organizational settings.
2 . .

Peer nominations identiﬁed superpreneurs in small, non-urban communities.
Nomination sources included local and regional chambers of commerce, government
ofﬁcials, Cooperative Extension Directors, trade associations, small business

development programs, and community development programs. These sources were

59

Table 1. Sample Characteristiee: Retail Superpreneurs in Small. Midwestern Communities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Characteristics Frequency % Mean
Age 50.75
20-30 years 4 2%
31-40 29 14%
41-50 78 36%
51-60 72 33%
61-70 28 13%
71 or more 4 2%
Gender
Female 77 36%
Male 138 64%
Education 3.54
Some high school (1) 2 1%
High school (2) 24 11%
Some college (3) 79 36%
College graduate (4) 75 35%
Post graduate (5) 35 16%
Professional Experience Range Mean
Years owned or managed 1-51 years 16.82
this business
Years of retail experience 1-59 years
23.50
Years owned business in
this community 1-69 years 20.1

 

 

 

 

 

 

Table 1 (cont’d).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Profile Frequency % Mean
Title 1.82
Owner (1) 126 58%
Manager (2) 10 5%
Both (3) 66 30%
Other (4) 15 5%
Business Type
Giﬁ 28 13%
Home Furnishings
l l 5%
Hardware 7 3%
Apparel 6 3%
Other/ 165 76%
miscellaneous
Number of Employees
Full-time
0-3 103 47%
4-10 52 24%
1 1-20 22 10%
21 or more 40 18%
Part-time
0.3 94 43%
4-10 61 28%
1 1-20 20 9%
21 or more 42 19%
2001 Performance 2.60
Lost money (1) 24 1 1%
Broke even (2) 38 19%
Made Proﬁt (3) 151 70%

 

 

61

 

used because of their interaction and experience with a variety of community sectors. A
copy of the peer nomination request is included in Appendix B.

A peer nomination procedure was adapted from research by Schwarzwald,
Koslowsky, and Mager-Bibi (1999). This procedure involved listing traits of
superpreneurs followed by brief descriptions and examples of representative behaviors.
Traits for superpreneur nomination include: charisma, inspiration, intellectual
stimulation, innovativeness, proactiveness in business practices and community
interactions. Respondents were asked to list the highest ranking community retailers on
the six superpreneur traits. No limit was imposed for the number of nomination
submissions by individual respondents. A total of 1,500 nomination requests were
mailed. Communities not responding to the initial request for superpreneur nominations
were mailed a replacement copy of the nomination form and cover letter within three
weeks of the ﬁrst mailing. Peer nominations generated a total of 569 retailers meeting
superpreneur criteria, for a total response rate of 38 percent. Superpreneurs obtained ﬁom
peer nominations formed the sample for survey research. A copy of the nomination form
is included in Appendix B.

Peer nominations lmve demonstrated results superior to other selection methods,
such as peer ratings. Studies conﬁrming the usefulness of peer nominations in
identifying population extremes have been conducted in the military (Schwarzwald,
Koslowsky, & Mager-Bibi, 1999) and in the identiﬁcation of gifted and talented children
(Cunningham, Callahna, & Plucker, 1998). Findings suggest nominations force
reviewers to make clearer distinctions among nominee traits versus identifying a best and

worst performer in a peer rating system. Peer nominations allow for greater

62

discrimination and emergence of multiple factors from the data. The process also forces
participants to identify extremes among their peers (Schwarzwald et al., 1999).
Superpreneurs are extreme examples of entrepreneurs and community leadership,
demonstrating good ﬁt with the peer nomination methodology.

A principle aim of this study was to develop and test a theory about the retail
superpreneur. The goal was to study only retailers ﬁom small communities who were
successful. I maintain that peer nominated individuals ﬁtting the superpreneur proﬁle
constitute an appropriate sample for this purpose. Calder, Phillips, and Tybout (1981)
support this approach, stating that any sample relevant to a theory represents a plausible
test of the theory.

Data Collection

A mailed, self-administered survey questionnaire was used for data collection [see
Appendix C]. The instrument was comprised of previously tested and self-designed
scales obtained from multiple research streams: entrepreneurship, leadership, social
networks, and diﬂ‘usion of innovations. The instrument contains six parts: superpreneur
proﬁle, business network involvement, opinion leadership role, community and ﬁrm
success, and demographics. County and community identiﬁcation codes were embedded
in survey question format for data tracking purposes.

Procedure

Expert sources assessed content validity of scale questions. Modiﬁcations and
revisions were made to the instrument based on feedback generated from these sources.
Internal consistency of revised scale items was assessed using coefﬁcient alpha. Scale

puriﬁcation procedures deleted unreliable items.

63

Some sections of the instrument necessarily contain self-developed measures,
indicating a need to pretest the questionnaire with a representative group of retailers. A
pretest sample size of twelve to twenty ﬁve cases is generally deemed sufﬁcient to detect
underlying problems (Rossi, Wright, & Anderson, 1983). Superpreneurs for the pretest
were identiﬁed from a pool of successful independent retailers interviewed during
exploratory research for this study (Frazier & Niehm, 1999; Niehm & Frazier, 2000).
Initial contact was made by letter and telephone. Those agreeing to participate were
mailed a questionnaire. Questionnaires were completed and returned by mail or fax. A
separate comment sheet was included with the questionnaire regarding ease of
comprehension, logic of response pattern, length suitability and time of completion
required. Reliability of pretest data was assessed using coefﬁcient alplm. Modiﬁcations
were made to the instrument as deemed necessary. Item content and scale reliabilities for
the survey are shown in Tables 2.1 through 2.8.

Questionnaires were mailed to participants identiﬁed through the peer nomination
process. A modiﬁed Dillman design method (1978) was used for collection of the
mailed survey data. A cover letter explaining the nomination process and the purpose of
the study [Appendix C] was enclosed along with a stamped, addressed reply envelope. A
replacement copy of the questionnaire was sent to non-respondents after three weeks.
The goal was to collect a minimum of 200 useable surveys for the analysis. From an
initial mailing of 569 surveys, 20 were returned as undeliverable. The adjusted total for
mailed surveys was 549, of which 233 were reﬁned. Two hundred seventeen of the 233

surveys were deemed useable, for a ﬁnal response rate of 40%.

Data Analysis

A structural equation modeling procedure was used to test the superpreneur
proﬁle and causal relationships linking superpreneur presence to community and ﬁrm
success. A multi-step process consisting of conﬁrmatory factor analysis and structural
model testing guided analyses (Anderson & Gerbing, 1988). Estimates were obtained
using Lisrel 8.50 Maximum Likelihood procedure.

Covariance matrix values for scale items served as input for all conﬁrmatory
factor analyses. Analyses utilized data pertaining only to superpreneurs’ instrumental
business networks, not personal expressive networks. The decision to use only business
network data for the network involvement construct was based on degree of data
completeness and modeling considerations. A two-group analysis was not feasible as
parallel sets of data were collected for both business and personal networks, from one
sample of superpreneurs. '

The measurement model [Figure 2] was estimated using a tiered approach to
conﬁrmatory factor analysis. Conﬁrmatory analyses were ﬁrst conducted for the eight
individual model constructs. Results of these initial analyses are shown in Tables 1
through 8, Appendix A. Next, conﬁrmatory analysis was conducted for ﬁrst order factors
of the superpreneur proﬁle [Table 3], followed by a second order analysis of the
superpreneur factor [Table 4]. Finally, the full measurement model was estimated
[Table 6].

A common procedure was used for analyzing data and assessing model ﬁt.
Examination of covariance matrix factor patterns and assessment of large residuals served

as a check for construct validity. Positive and signiﬁcant indicator to factor loadings

65

indicated convergent validity (Anderson & Gerbing, 1988). Discriminant validity was
assessed using Lisrel’s modiﬁcation index. Item measures which cross-loaded were
removed one at a time until a model of best ﬁt was obtained. Tables 2.1-2.8 indicate
items retained and deleted by construct as a result of this process. The purpose of this
multi-step procedure was to determine if constructs functioned well together, that each
measure was unidirnensional and non-redundant, and to assess ﬁt of the hypothesized
model to the data. Reliability of construct indicators was assessed using coefﬁcient
alpha, composite reliability, and variance extracted [Table 5]. Formulas used to compute
these measures are shown in Appendix D.

The second phase of analysis involved estimating the structural model [Figure 3].
Covariances of factors produced by the measurement model provided data input for the
structural model. Analyses focused on testing of the superpreneur proﬁle and
hypothesized construct relationships regarding superpreneurs’ impact on community and
ﬁrm success. Steps were again taken to assure validity, parsimony, and overall model ﬁt.
Results of structural model and hypothesis testing are shown in Table 7. Based on ﬁt
assessments, a revised version of the structrual model is presented in Figure 4. Test
results for the revised model are shown in Table 8. Chapter four discusses steps of data

analysis and model testing results in complete detail.

Chapter 4
Results and Discussion

Model Testing

A multi-step process of confirmatory factor analysis and causal model testing
provided a general framework for data analysis (Anderson & Gerbing, 1988). Model
testing results are presented in three parts. The ﬁrst part pertains to conﬁrmatory analyses
conducted on ﬁrst order factors of measurement model constructs. Also included in this
section are results of a second order factor analysis for the three-dimensional
superpreneur proﬁle. A full conﬁrmatory factor analysis employing all latent and
observed variables is presented as a ﬁnal assessment of the measurement model. Part
two discusses testing of the initial structural model and hypotheses. Based on ﬁt
assessments, part three presents a revised version of the original su'uctural model. All
analyses were conducted using Lisrel 8.50. ‘
Measurement Model
WWW

To assess dimensionality, individual constructs were subjected to conﬁrmatory
factor analysis. The aim of the analysis was to determine uni-dimensionality of
constructs and provide partial assessments of model ﬁt. All measurement items from the
survey were entered into the analysis by respective construct. Covariances for scale items
served as input for analyses.

A standard procedure was used for model assessment. First, ﬁt statistics were
checked to evaluate model ﬁt. The chi-square statistic is an absolute measure of model

ﬁt. Although useful as a general ﬁt indicator, it is biased in the case of large samples

67

(200 or >), complex models, and models with large numbers of indicators. Since these
conditions apply to the present model, alternative ﬁt indices are also referenced. A
particularly meaningful index of absolute ﬁt is the Root Mean Square Error of
Approximation (RMSEA). The RMSEA measures how well the model would ﬁt the
population covariance matrix, if available. Index values less than .05 indicate good ﬁt,
while those ranging ﬁ'om .08 to .10 are moderately acceptable (Byme,]998). Accuracy
of RMSEA estimates is assessed using Lisrel’s 90% conﬁdence interval. A narrow
conﬁdence interval around the RMSEA estimate suggests good precision and model ﬁt in
the population (MacCallum, Browne, & Sugawara, 1996; Steiger, 1990). An additional
measure of absolute ﬁt is the Goodness-of-Fit Index (GFI). Higher OF I values, generally
deﬁned as .90 and above, reﬂect better model ﬁt. The next level of model assessment
employs incremental ﬁt indices, comparing the hypothesized model to a null model.
Commonly reported incremental ﬁt indices are the Bentler Normed Fit Index (NF I), the
Bentler-Bonnett Normed-Fit Index (NNFI), and the Comparative Fit Index(CFI). Perfect
ﬁt for all incremental indices is 1.0. I

Next, item to factor loadings were assessed. Presence of positive and signiﬁcant
item to factor loadings supports convergent validity of the model. Lisrel modiﬁcation
indices were also checked for item to factor cross-loading. This step provided an
assessment of discriminant validity. Items which cross-loaded and produced high
estimates were subjected to further evaluation by checking standardized residuals. This
step was conducted concurrently with evaluation of modiﬁcation indices. Standardized
residuals are considered large if they exceed 2.58, and problematic if they form a pattern

of error among construct indicators (Byme, 1998; Bollen, 1989). Items which produced

68

high error terms and cross-loaded were removed one at a time, assessing model ﬁt after
each revision. This step provided an assessment of construct validity. Results of
conﬁrmatory factor analysis by construct are shown in Tables 1 through 8, Appendix A.

The eight model constructs [Figure 1] maintained during initial conﬁrmatory
analyses. Construct items retained and deleted as a result of model building are noted in
Tables 2.1 through 2.8. Acceptable ﬁt was obtained for transformational leadership and
entrepreneurial orientation constructs, thus no items were deleted. Due to high error,
item 3.11 was removed from the critical life experiences construct. This step resulted in
improved model ﬁt. Additional deletions made due to high error terms included items
4.9, 4.13, 4.15 from the community business network involvement construct. Items 4.17
and 4.19 from this construct produced high construct cross-loadings and were deleted to
improve model ﬁt. Assessment of the social capital construct revealed high error terms
for items 4.24 and 4.27, resulting in their removal. Finally, items 1.14, 1.20, and 1.21
from the community opinion leadership construct, and item 6.1r ﬁom the community
success construct were deleted due to high error terms. No modiﬁcations were made to
the ﬁrm performance construct.

Revised construct scales were assessed for internal consistency using coefﬁcient
alpha, composite scale reliability, and variance extracted. “Scales for all eight constructs
meet or exceed minimum levels (.70) of acceptable reliability (Nunnally, 1978).
Variance extracted also exceeds the minimum standard of .50 (Hair et al, 1985) for all

constructs. Formulas used to calculate composite reliability and variance extracted are

shown in Appendix D.

69

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Complexity and large sample size often hinder model convergence. Identiﬁcation
problems were anticipated for the superpreneur model considering its complexity and
sample size (N =2 1 7). Parameter estimates were needed for eight latent constructs and
multiple observed variables, potentially resulting in an underidentiﬁed model. As
structural models become more complex, there is no singular best approach for achieving
identiﬁcation. Suggested remedies include building the model with a limited number of
coefﬁcients, setting measurement error variance of constructs to 1.0 if possible, and
eliminating troublesome variables (Bollen, 1989; Hair et a1, 1995).

To address issues of model complexity and statistical identiﬁcation, I summed and
averaged all observed variables. A method devised by Yuan, Bentler, and Kano (1997)
was used to average variables by sub-construct. They suggest a model based on averaged
variables may provide better estimators and model ﬁt as opposed to omitting variables for
the sake of identiﬁcation. Averaging resulted in eight latent variables and 21 observed
variables for the measurement model. A three-item transformational leadership factor, a
two-item critical life experiences factor, and a four-item entrepreneurial orientation factor
comprised the superpreneur proﬁle. Additional model constructs included a four—item
business network involvement factor, a three-item social capital factor, a two-item
community opinion leadership factor, a two-item community success factor, and a single-
item ﬁrm performance factor.

Identiﬁcation and measurement of the superpreneur archetype is germane to the
proposed theory. Building on this assertion, factors of the superpreneur proﬁle

(transformational leadership, critical life experiences, and entrepreneurial orientation)

80

were subjected to ﬁrst order conﬁrmatory factor analysis. The resulting model was
evaluated using the standard assessment procedure previously presented.

The chi-square statistic for the initial superpreneur proﬁle model was non-
signiﬁcant (x 2 = 32.06, 24 df, p=.126). The RMSEA (.04) and its associated conﬁdence
interval (90% Conﬁdence Interval (CI))= .00 - .07) demonstrate good model ﬁt. High
values for incremental ﬁt indices provide further support for the three-dimensional
superpreneur proﬁle model ( NFI=.96; NNFI=.98; CFI=.99; GFI=.97). No high indicator
cross-loadings were noted in this analysis and the largest standardized residual was -3.15.
Each construct in the superpreneur proﬁle is distinct and unidimensional. Findings
provide support for convergent and discriminant validity of the model. Moderate
correlation (.35) between transformational leadership and entrepreneurial orientation
suggests nomolgical validity. All item to factor coefﬁcients were positive and
signiﬁcant, except critical life experiences, demonstrating convergent validity. The non-
signiﬁcant, critical life experiences construct was retained due to model technical
speciﬁcations. Results are shown in Table 3.

High item-factor loadings demonstrated in the previous analysis, combined with
excellent model ﬁt, support the concept of a higher order superpreneur factor. The
proposed theory suggests transforming leadership, critical life experiences, and
entrepreneurial orientation comprise the superpreneur proﬁle. A second order factor is
present when one higher order factor is accountable for the variance of a number of lower
level factors (Byme, 1998). Following this deﬁnition, the superpreneur does not have its

own set of measured indicators, but is instead directly linked to lower order factors of

81

 

 

 

 

 

 

 

 

 

 

 

 

 

Table 3. First Order Confirmatory Factor Analysis of the Retail Superpreneur Proﬁle.
Standardized
Construct Observed Parameter Standardized Residual
Variables Estimate t-value Estimate Varbuee
Transformational Y1 1.00 .77 .40
Leadership Y2 1.17 9.77" .78 .39
Y3 1.24 9.61* .75 .44
Critical Life Y4 1.00 .95 .10
Experiences Y5 .78 1.61 .71 .50
Entrepreneurial Y6 1.00 .78 .40
Orientation Y7 1.20 12.64* .94 .11
Y8 1.03 10.31‘ .68 .54
Y9 .82 6.89‘ .47 .78
‘ p < .05
Overall Fit Chi— df p RMSEA 90% NF] NNFI CF! GFl
square C1
Measurement
Model 32.06 24 .126 .04 00 - .07 96 .99 97

 

 

 

 

 

 

 

 

 

 

 

82

 

 

Table 4. Second Order Conﬂrrnatory Factor Analysis: Superpreneur Proﬁle.

 

 

 

 

 

 

 

 

 

 

 

 

 

Second Order First Order Factors Parameter t-value Standardized
Factor Estimate Estimate
Superpreneur Transformational .39 2.11* .66
Leadership
Critical Life and Business .17
Experiences .23 1.60
Entrepreneurial
Orientation .48 2.09* .54
(E0)
‘ p < .05
Overall Fit
Chi- 90%
square df p RMSEA CI NF] NNFI CFI GFI
Measurement
Model 32.06 24 .126 .04 .00 - .07 .96 .98 .99 .97

 

 

 

 

 

 

 

 

 

 

 

 

transformational leadership, critical life experiences, entrepreneurial orientation. In
Lisrel terminology, use of the second order factor results in an “all-Y” measurement
model. In other words, all variables in the model are observed variables.

Results of the second-order factor analysis (Table 4) indicate excellent model ﬁt
and high correspondence of the superpreneur factor to lower order factors of
transformational leadership (.66) and entrepreneurial orientation (.54). Critical life
experiences demonstrated a low factor loading of .17. The chi-square statistic was non-
signiﬁeant (x 2 = 32.06, 24df, p=.126). Excellent model ﬁt is further supported by a
RMSEA of .04 (90% Conﬁdence Interval (CI))= .00 - .07). Incremental indices also
reﬂect excellent ﬁt (NFI=.96; NNFI=.98; CFI=.99; GFI=.97). No high cross-loadings of

construct indicators or excessively large standardized residuals are noted. Each construct

83

appears distinct and unidimensional, supporting convergent and discriminant validity of

the model in its original form.

 

A ﬁnal level of conﬁrmatory factor analysis was conducted with the full
measurement model [Figure 2]. The model contained all eight latent constructs and their
observed variables. This analysis assessed the relationship of constructs, the nomological
network, contained in the measurement model. A test of discriminant validity was also
provided by this step, as it assessed overall factor structures and dimensionality.
Nomological validity is noted by evaluating between construct correlations. Byrne (1998)
supports this approach, suggesting that assessment of a full conﬁrmatory factor analysis
allows for overall evaluation of construct relationships and model ﬁt. Based on this
assessment, one can have more conﬁdence in ﬁndings related to the hypothesized

structural model.

84

 

 

E8

     
    
  

 
     
 
    

Community
Network
Involvement

Transformational
Leadership

Community
Success

   
 

  
   

Community
Opinion
Leadership

Social
Capital

Critical Life
Experiences

  
   

Superpreneur
Proﬁle

     
 

Entrepreneurial
Orientation

Firm
Performance

 

Figure 2. Measurement Model:
Superpreneur Proﬁle, Business Network Leadership,
and Inﬂuence in Small Communities

Figure 2. Observed Variable Deﬁnitions, Measurement Model:

Superpreneur Proﬁle, Business Network Leadership, and Inﬂuence in Small Communities.

y1=charisma y11= network centrality y21= relative performance-1
y2=individua1 consideration yl 2=emotional intensity y22= relative performance-2
y3=intellectual stimulation yl3=homophi1y y23= relative performance—3
y4=life experiences y14=community reciprocity

y5=business experiences y15=trust

y6=innovativeness y16=shared vision

y7=proactiveness y17=interna1 sources of inﬂuence

y8=risk taking y18=externa1 social comparisons

y9=competitive aggressiveness y19=economic well-being
y10= network density y20=community vitality

 

Identiﬁcation issues resulted in initial non-convergence of the measurement
model. Constructs containing two or less averaged indicators (community success,
community opinion leadership, ﬁrm performance) contributed to non-convergence,
violating the “three minimum indicators per construct rule” for structural equation models
(Bollen, 1989). To rectify this problem, the ﬁrm performance construct was respeciﬁed
with three individual rather than summed indicators. This modiﬁcation produced a
solution. The resulting chi-square statistic was signiﬁcant (x 2 =322.99, 202 df,

p < .001), likely due to large sample size and number of indicators in the analysis.
Moderately good ﬁt is indicated by a RMSEA of .05 (90% Conﬁdence Interval

(CI))= .04 - .06). Incremental ﬁt indices also suggest good to moderate ﬁt given model
complexity (NFI=.90; NNFI=.94; CF I=.95; GFI=.88). Strong and distinct item-factor
loadings are noted as well as moderate to strong between construct correlations for most
model dimensions. The largest standardized residual is 5.68. For reasons of statistical
identiﬁcation, no revisions were made based on this residual. Composite reliabilities of
all measurement model constructs meet minimum recommended levels of reliability and
variance extracted (Table 5). Results of measurement model analysis are shown in

Table 6.

86

Table 5. Composite Reliabilities of Measurement Model Constructs:
Superpreneur Proﬁle, Business Network Leadership, and

 

 

 

 

 

 

 

 

 

Inﬂuence in Small Communities.
Composite Coefficient Variance
Construct Reliability Alpha Extracted

Transformational
Leadership .80 .87 .57
Entrepreneurial
Orientation .82 .89 .55
Critical Life and
Business .80 .89 .67
Experiences
Community

Business .81 .85 .52
Network

Involvement
Social
Capital .96 ' .87 .89
Community
Opinion Leadership .77 .83 .64
Community

Success .72 .70 .58
Firm

Performance .88 .82 .71

 

 

 

 

 

 

87

Table 6. Full Conﬁrmatory Factor Analysis of Measurement Model:
Retail Superpreneur Proﬁle, Business Network leadership, and
Community Inﬂuence.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Composite Standardized
Observed Parameter Standardized Residual
Construct Variables Estimate t-value Estimate Variance

Transformational

leadership Y1 1.00 .88 .23
Y2 .91 11.15" .68 .53
Y3 1.02 1 1 .36“ .69 .52

Critical Life!

Business Y4 1.00 .78 .38

Experiences
Y5 1.14 4.63‘ .85 .27

Entrepreneurial

Orientation Y6 1.00 .79 .38
Y7 1.17 13.33’ .93 .13

(single indicator) Y8 1.01 10.41’ .68 .53

(single indicator) Y9 .81 6.93‘ .48 .77

Business Network

Involvement Y10 1.00 .56 .68
Y11 1.09 8.33‘I .78 .39
v12 ‘ 1.14 7.83‘ .70 .so
Yl3 1.1 1 8.57’ .82 .32

Social Capital Y14 1.00 .97 .06
Y15 .99 35.77‘ .96 .07
Y16 .91 25.34' .90 .20

Community

Opinion Leader Y17 1.00 .72 .49
Y18 1.51 11.47‘ .87 .24

Community

Success Y19 1.00 .55 .70
Y20 1.73 4.14‘ .92 .15

 

 

 

 

88

Table 6 (cont’d).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Firm Performance Y21 1.00 .78 .39
(all single Y22 .99 13.44‘ .87 .25
indicators)
Y23 97 13.60‘ .88 .22
p < .05
Overall Fit
90%
Chi— df p RMSEA CI NF! NNFI CFI GFI
square
Measurement
Model 322.99 202 .001 .05 .04 -.06 .90 .94 .95 .88
Structural Model

The next phase of modeling involved estimation of structural parameters and
testing hypothesized construct relationships [Figure 3]. Summw variables were used in
analysis of the structural model, except for ﬁrm performance. This construct was
comprised of three single indicators. A total of eight latent and 23 observed variables
entered into the analysis.

The analysis produced a signiﬁcant chi-square statistic (x 2 =534.20, 221 df,

p <.000). This result may be attributed to large sample size and number of indicators in
the analysis. The Root Mean Square Error of Approximation (.08) and associated
conﬁdence interval (90% Conﬁdence Interval (CI))= .07 - .09) indicate only moderately
acceptable ﬁt. Incremental ﬁt indices are also suppressed under conditions of model
complexity and large sample size. These conditions are reﬂected in ﬁt indices for

the structural model (NFI=.80; NNFI=.84; CFI=.86; GFI=.82). Strong and distinct item-
factor loadings were produced for all model dimensions.

89

Mediocre ﬁt achieved with the structmal model warranted closer inspection of
standardized residuals and modiﬁcation indices. Evaluation of these diagnostics
revealed a large standardized residual (10.83) between observed variables for community
opinion leadership (Y18), and transformational leadership (Y1). Further investigation
indicated a pattern of high residuals between Y 17 and Y18 (composite variables for
community opinion leadership) and all indicators for transformational leadership.
Various model re-speciﬁcations were attempted, including the designation of Y17 as a
manifest variable. This change did not allow the model to converge and additional
modiﬁcations did not result in a solution. Results of model testing are shown in Table 7.

Given the ﬁnality of this analysis, I next discuss results of hypothesis testing as
indicated by parameter estimates for the original structural model. I then build and test a
revised model which addresses the presence of large error and cross-loadings between

the transformational leadership and community opinion leader constructs.

90

 

   

   

  

      
   
 
  
 
  
 

 
  
  
 
  
 
    
 
    
 

    
  
   

  
 
 

—
Community
Transformational Network Community
Leadership Success
*H 2 a,b,c /
*Hla\ Sig (3.60) + H 6
Sig (4.68) + .33 (.09) S.*I:8351) NS (1.78)
to + 1.19 (.14 ( )
1'" .
+ + «
Social Community

   
 
 

   
 
  
   

 
 
 
 
        
   
 

Emmi] Lii'e NS 1.78 Superpreneur Capital Opinion
xpenences Hlb Proﬁle Leadership
y 23(13) /
*H 7
+ *H1 c y14 Sig (2.69)
Sig (3.75)
/ .37 (10) /
Firm y22
Performance
Figure 3. Structural Model and Hypothesized Relationships: y
m_l

Superpreneurs’ Business Network Leadership
and Community Inﬂuence

Figure 3. Observed Variable Deﬁnitions for Structural Model:
Superpreneurs’ Business Network Leadership and Community Influence.

 

y1=charisma y11= network centrality y21= relative performance-l
y2=individual consideration y12=emotiona1 intensity y22= relative performance-2
y3=intellectual stimulation y13=homophi1y ‘ _ y23= relative performance-3
y4=life experiences y14=community reciprocity

y5=business experiences y15=trust

y6=innovativeness y16=shared vision

y7=proactiveness y17=intema1 sources of inﬂuence

y8=risk taking y18=externa1 social comparisons

y9=competitive aggressiveness y19=economic well-being

y10= network density y20=community Vitality

 

 

Table 7. Hypothesized Relationships Between Retail Superpreneurs’

Business Network Leadership and Community Inﬂuence

 

Hypotheses

Paths

Parameter
Estimate

t-value

Standardized
Estimates

 

Illa

Transformational
Leadership
-->Superpreneur

4.68*

 

Hlb

Critical Life Experiences
—->Superpreneur

1.78

.18

 

ch

Entrepreneurial
Orientation
-—->Superpreueur

.37

3.75"

.41

 

H2a,b,c

Superpreneur
—->Business
Network
Involvement

3.60*

.42

 

Network Involvement
-—>Social
Capital

1.19

8.51"

 

H4

Social Capital

—>Opiniou
Leadership

-.52

-2.91

«79

 

Network Involvement
—->Opinlon
Leadership

3.12*

.94

 

H6

Opinion leadership
—>Community
Success

.31

1.78

.18

 

H7

 

 

Opinion leadership
——->Firm
Performance

 

 

2.69*

 

 

‘ p<.05

Overall Flt

 

Chi-
square df p

RMSEA

90%

NF]

GFI

 

Structural
Model

 

 

534.20 221

 

 

 

 

.07 -.09

 

 

 

 

 

92

 

 

Hypothesis Testing

Support was found for most hypothesized relationships in the original structural
model [Figure 3]. Hypothesis testing results are presented in sequential order, beginning
with the superpreneur proﬁle.

Transformational leadership (Hla), critical life experiences (Hl b), and
entrepreneurial orientation (H1 c) were hypothesized to be positively and signiﬁcantly
related to the second order superpreneur factor. A positive and signiﬁcant relationship
was found between the superpreneur and transformational leadership (l‘—- .50; p < .05),
supporting Hla. This suggests superpreneurs are highly charismatic, inﬂuential, and
effective leaders in small communities. Superpreneurs have the potential to stimulate,
teach, and lead others by example, serving as community role models and business
leaders. This ﬁnding is consistent with Pinto and Slevin’s (1989) characterization of
community champions. Champions use personal and professional power to beneﬁt the
broader group, creating community growth and change. Weick and Quinn’s (1999)
ﬁndings similarly suggest that inﬂuential community leaders are important not only to
create change, but to identify emergent themes, and foster group support for change.

A positive and signiﬁcant relationship was also indicated between the
superpreneur and entrepreneurial orientation (I‘=.37; p < . 05). This supports the notion
that superpreneurs are innovators and generally lead other area businesses in terms of
managerial practices, adoption of technologies, and other proactive approaches to doing
business in small communities. Smart and Conant (1994) similarly found independent

business owners with high entrepreneurial orientation to connect to a wider resource base

93

(networks), possess a wider range of managerial attributes, use a greater variety of
distinctive marketing competencies, and demonstrate better ﬁrm performance.

Critical life experiences were not found to be signiﬁcantly related (I‘=.23; p < .05)
to the superpreneur proﬁle in this study. This result is not consistent with ﬁndings from
preliminary qualitative research with rural retail superpreneurs (N iehm & Frazier, 2000).
Strong support was found for a more parsimonious, two-dimensional superpreneur proﬁle
comprised of transformational leadership and entrepreneurial orientation.

In effort to examine how superpreneurs’ impact small communities, their role and
degree of involvement in local business networks was assessed. Networks serve as
conduits of information access and ﬂow in the small community context. Qualitative
interviews with successful rural retailers revealed an extraordinary ability to network
(Frazier & Niehm, 1999). Thus, a positive and signiﬁcant relationship was proposed
between the superpreneur proﬁle and community business network involvement (H23).
Further, superpreneurs were posited to demonstrate lower density (selective involvement
in business networks) and higher centrality (network leadership) (H2b) . I additionally
proposed that superpreneurs place less importance on emotional involvement in business
networks, but are more likely to seek out business related sources with similar needs and
interests (HZc).

Results support the primary hypothesis (112a) that superpreneurs are positively
associated with network involvement (I‘=.33; p < .05). Strength of item to factor
loadings further support sub-hypothesis H2b that superpreneurs are selective in their
amount of network involvement (.55) and highly involved as central network leaders

(.78). Additionally, as hypothesized in H2c, it is more important to be involved with

94

similar others in business networks (.83) than it is to develop emotional attachment with
network members (.70). These results are supported by ﬁndings of Gnyawali and
Ravindranath (2001). They state that centrality (network leadership position) is of chief
importance to business network competitiveness. It allows for an eﬁ'rciency-effectiveness
advantage in regard to resource and information access (Burt, 1992). Conversely,
network density (amount of involvement) serves to diminish centrality effects.
Superpreneurs in small communities may favor business networks with “like” others
because of business sector specialization or because they have structured their networks
to create unique resource advantages. It is not surprising that emotional attachment
would be less important in business network associations.

The third hypothesis (H3) proposes that superpreneurs’ involvement in business
networks is positively and signiﬁcantly related to developmentof community social
capital. Underlying logic (Coleman, 1988; Putnam, 1993) suggests that involvement,
exposure, and interaction in and between local social networks engenders development of
social capital (trust, reciprocity, shared vision) among members. Network members
transfer this relational resource through business activities and social network
involvement. The development of trust, social organization, and norms enables
commrmities to act together more effectively and efﬁciently. In this sense, social capital
can potentially enhance community vitality and serve as a precursor to success. A
positive and signiﬁcant relationship is indicated for H3 between community business
network involvement and social capital ([3=1 .19; p < .05). This ﬁnding suggests business

networks are an effective means of generating social capital. Further, social capital may

95

be a key vehicle by which superpreneur presence affects life quality, economic exchange,
and social vitality in small communities.

Initially surprising, a non-signiﬁcant, inverse relationship was indicated for H4,
linking social capital and community opinion leadership (B= -.52; p < .05). Intuitive
logic would argue that as more social capital is created by superpreneurs, the more trusted
and valued they would become in their community. Accordingly, there would be a
greater likelihood that they would function as inﬂuential opinion leaders. However,
small communities are often not accepting of new ideas, new people, or change in
general. The inverse relationship found for H4 suggests superpreneurs may use
transforming leadership to affect generalized community change as opposed to exerting
direct personal inﬂuence. Superpreneurs may realize an indirect approach yields better
results in small community social culture. They may empower others to be “ﬁrst movers”
with new ideas rather than casting themselves as a dominant opinion leader.

The embeddedness perspective (Granovetter, 1985) or the “double edged sword of
social capital”, may offer additional explanation for this ﬁnding. As superpreneurs
become more known and active in community networks, social ties become dense and
embedded. Concurrent with formation of network density is the development of social
capital, creating stronger trust and social norms. Social capital is most likely to develop
in communities with a strong sense of identity and structured boundaries. Logically, it
has been found to be stronger in small communities and rural areas (Coleman, 1988;
Nahapiet & Goshal, 1998).

Negative implications of social capital occur when social rules and norms become

rigid, forming closed social systems. Thus, social capital can be good for small

96

communities, but it can also stiﬂe progress varying with social norms, acceptance of
change, and reaction to that which is new and different Superpreneurs may actually be
resented in some communities because they do things differently. For this reason,
superpreneurs may use more subtle and socially acceptable modes of transforming
leadership that help them to excel in small community contexts.

The ﬁfth hypothesis (H5) links network involvement to community opinion
leadership. I hypothesize this relationship is mediated by social capital. In other words,
the degree of impact network involvement will have on opinion leadership is inﬂuenced
by the formation of social capital. The hypothesized relationship (H5) was supported in
the present model ([3= .83; p< .05). Results of this study indicate centrality is important
to superpreneurs’ business network involvement. It follows that network leadership and
visibility may logically transfer to opinion leadership in small communities. This result
infers that as network leaders and information brokers, superpreneurs do ﬁmction as
“inﬂuentials” or opinion leaders. They may be most capable of shaping local agendas
when the effects of social capital are managed.

Results for H4 and H5 initially appear in conﬂict. I suggest this result implies
that, when kept in balance, social capital can augment and support efforts of community
business networks. This explanation follows Frazier and Niehm (1999), who conclude
successful rural retailers have mastered the skill of “using community embeddedness to
create competitive advantages”. Successful retailers in this study balanced network
relationships in such a way that community members trusted them, patronized their
businesses and supported their innovative efforts. In other words, they were skilled at

maneuvering community interactions and the effects of social capital balanced out.

97

As these results imply, social capital can have positive and negative implications
for community leadership effectiveness. This study did not measure effects of the amount
of social capital in small communities, but rather the relationship between social capital,
community opinion leadership, and community success. The presence of an inverse
relationship between social capital and opinion leadership suggests a curvilinear effect,
warranting further investigation. Balance theory (Heider, 1958) may offer additional
explanation regarding social capital’s differential effect on were leadership and
small community success.

Outcomes of superpreneur community opinion leadership were hypothesized to be
positively related to both community success (H6) and individual ﬁrm performance (H7).
A non-signiﬁcant relationship was found between community opinion leadership and
community success (B= .31; p< .05). Alternatively, ﬁrm performance was positively and
signiﬁcantly associated with community opinion leadership (B=.38; p< .05) in the
superpreneur model. A possible interpretation is that superprenetus are gaining useful
business information and resources through network involvement, leading to competitive
ﬁrm advantages and enhanced performance. Networks appear to drive the opinion
leadership ﬁmction in this model; a relationship mediated by social capital. Ifthe initial
model is correct, local social dynamics appear to interfere with the potential impact of
superpreneurs. This may in turn inﬂuence superpreneurs to be more self and ﬁrm focused
than community focused in their business strategies. Superpreneurs have the potential to
transform small communities. Results of this study suggest, however, that their
leadership is not being effectively used in small communities, particularly in the presence

of deeply embedded social networks.

98

Although interesting, the lack of support for H4 and H6 was unexpected given the
hypothesized theory. The structural model which produced the non-signiﬁcant
relationships also did not demonstrate good overall ﬁt. Further examination of
standardized residuals and modiﬁcation indices for the structural model revealed multiple
cross-loadings and high residuals between construct indicators for community opinion
leadership and transformational leadership. As a diagnostic check for multicollinearity,
correlation coefﬁcients were generated for all original (not composite) survey items in the
two constructs. Results of the analysis show correlations of greater than .50 for four
variable pairs and eight additional correlations between .46 and .49. This suggests
multicollinearity may be affecting model results. Multicollinearity, correlation between
independent or observed variables, reduces the power to ﬁnd signiﬁcant differences when
they do exist, inﬂates standard error, and can create negative regression coefﬁcients
(Schwab, 1999). I next present a revised model which addresses multicollinearity of the
transformational leadership and opinion leadership constructs.

Revised Model

Development of the revised model was guided by relevant theory, results from
conﬁrmatory factor analyses, and diagnostic checks of the original structural model.
Critical life experience was not signiﬁcant in prior analyses, thus it was deleted from the
superpreneur proﬁle. This step only moderately improved model ﬁt. A series of model
runs were next conducted, checking residuals, modiﬁcation indices, and model ﬁt after
each revision. Rationale for model re-speciﬁcations follow.

Large errors and construct cross-loadings were noted for opinion leadership and

transformational leadership in the original structural model. These observations,

99

combined with multicollinearity results, supported deletion of the opinion leadership
construct in the revised model. Additionally, large residuals and assessment of
modiﬁcation indices warranted the removal of cohesion indicators (Y12 emotional
intensity and Y13 homophily) from business network involvement and the trust
dimension (Y 1 5) ﬁ'om social capital. Finally, the focus of this theory is the impact of
superpreneurs on community success. A secondary aspect is the impact of networks on
their ﬁrms. This fact combined with relatively high residuals for ﬁrm performance
indicators, guided the decision to delete the construct ﬁ'om the model.

The revised model[ Figure 4] was speciﬁed with links ﬁ'om the two-dimensional
superpreneur proﬁle, to community network involvement, to social capital, to community
success. Although a signiﬁcant chi-square statistic was generated (x 2= 99.59, 60 df,
p=.001), overall model ﬁt improved tremendously. The RMSEA (.06), associated
conﬁdence interval (90% Conﬁdence Interval (CI))= .04 - .07, p=.31), and incremental ﬁt
statistics also reﬂect excellent model ﬁt (NF 1= .92; NNFI=.96; CFI=.97; GFI=.93).

Examination of paths between latent constructs shows positive and signiﬁcant
associations transformational leadership (I‘- .48; p < .05) and the superpreneur proﬁle.
Entrepreneurial orientation is also positively related to the proﬁle (I‘- .3 8; p < .05). A
positive and signiﬁcant relationship is next indicated between the two-dimensional

superpreneur proﬁle and community business network involvement (I‘- .38; p < .05).

100

 

 

IOI

y10 yll

 
 
   

yl

Community
Network

Involvement

   
  

  
  
    
 
 

Transformational
Leadership

 
 

*Sig (4.54) *Sig. (3.63)

*s . 8.72
.48 (.11) .38(.10) ‘g( )

.81 (.09)

   
    
  

    
    

  

    
 

   
      
 
   

y19
*Sig. (2.34) /“ /
Superpreneur Socral 26 (-l 1) Communitv
Capital Success .
*Sig. (3.82) . yzo

.38 (.10)

Figure 4. Revised Structural Model:
Superpreneurs’ Business Network Leadership
and Community Inﬂuence

Figure 4. Observed Variable Deﬁnitions, Revised Structural Model:
Superpreneurs’ Business Network Leadership and Community Inﬂuence.

y1=charisrna y14=community reciprocity
y2=individual consideration - y16=shared Vision
y3=intellectual stimulation y19=economic well-being
y6=innovativeness y20=community vitality

y7=proactiveness

y8=risk taking

y9=competitive aggressiveness
y10= network density

y11= network centrality

 

 

Table 8. Revised Structural Model of Retail Superpreneurs’
Business Network Leadership and Community Inﬂuence.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Parameter Standardized
Paths Estimate t-value Estimates
Transformational leadership
—->Superpreneur .48 4.54* .83
Entrepreneurial
Orientation .38 3.82* .43
-—>Superpreneur
Superpreneur .38 3.63*
-—>Network Involvement .41
Network Involvement .81 8.72*
—->Social Capital .75
Social Capital .26 2.34‘
—->Community Success .28
" p < .05
Chi- 90%
Overall Fit square df p RMSEA CI NF] NNFI CFI GFI
Revised '
8mm ”.59 60 eml a“ a“ .e07 092 a” 097 e93
Model

 

 

 

 

 

 

 

 

 

 

 

 

Community business network involvement is positively related to social capital formation
([3= .81; p < .05) and social capital is positively related to community success ([3= .26;
p < .05). Results of the analysis are shown in Table 8. The revised model provides a
more simple and parsimonious explanation of superpreneurs and their impact on small
communities. It also indicates resoundingly better ﬁt to the data.

Evaluation of factor loadings for the revised model provides additional insight
into to superpreneur and how they foster community success. Factor loadings are
interpreted in terms strength or importance of a construct indicator. Second order factor

loadings in the revised model show that above all superpreneurs are transformational

102

leaders (.83). All ﬁrst order indicators for transformational leadership demonstrated
strong association with the superpreneur factor, loading ﬁ'orn .75 to .78. Entrepreneurial
orientation also loaded moderately high on the superpreneur factor (.43). The strongest
entrepreneurial orientations were proactiveness (.94) and innovativeness (.78). These
loadings provide ﬁn'ther evidence of superpreneurs’ ability to seek novel information and
use it in innovative ways in their ﬁrms and communities. Superpreneurs additionally
demonstrated moderately strong involvement with business networks (.41). The business
network involvement construct contains two strong indicators, centrality or network
leadership (.97) and density (.63). This multi-dimensional proﬁle of the small
community superpreneur is evident in the following interview quotations (Frazier &
Niehm, 1999):
“There’s not a singular innovative event that has made me successﬁrl in this ’
community....lt’s about values and lifestyle and caring about the community. Having a
business in this community supports our value system. I want to make it work here.
There’s something about an entrepreneur that is fed by challenges”.
“We probably strive at least 60% more than the average store around here to have more
and unique products and services. I think a lot of them (store owners) are set in their
ways. They have their merchandise, they order it, it comes in, they put it on the shelf,
its’s over”.

The sum of these results suggests superpreneurs use their transforming
capabilities to formulate and lead core community networks. I propose that their
leadership, network centrality, proactiveness, and innovativeness allow network activity
and ideas to impact the community, a process explained by network diffusion theory
(Rogers, 1995; Valente Davis, 1999). It is noteworthy that none of the cohesive
(ﬁ'iendship) aspects of network involvement were maintained in the modeling process. I
suggest this is not only because model data reﬂects business versus personal networks,

103

but is rather a reﬂection of how superpreneurs balance and manage network associations
in small communities. In other words, they know why, how, and who they should
associate with in the community. This is an example of Burt’s (1992) structural holes
concept where central ﬁgures “bridge gaps” between selected social networks. In doing
so, they gain unique information and resources that lead to competitive advantages. In
support of this summary, Floyd and Woolridge (1999) suggest network centrality,
network density, and the ability to “bridge” relationships account for the greatest variance
in one’s ability to obtain novel information and use it to achieve inﬂuence.

In the revised model, business network involvement (as measured by density and
centrality) is positively associated with social capital. Qualitative research by Frazier
and Niehm (1999) found superpreneurs skilled at using embedded relationships to gain
competitive advantages. This suggests they are able to maximize the positive aspects of
social capital rather than succumbing to its negative effects. I suggest this observation is
further validated by revised model results showing reciprocity (.90) and shared vision
(.95) to be strong indicators of social capital. Social capital is positively linked to
community success in the model. This. relationship supports the idea that superpreneurs’
innovativeness, network leadership, balance of network involvement, and ability to foster

vision and reciprocity, does have positive impact at the community level.

104

Chapter 5

Conclusion

The purpose of this study was twofold. My initial aim was to discern if the retail
superpreneur was identiﬁable by speciﬁc personal traits and business behaviors. This
study conﬁrms a twocdimensional proﬁle of the retail superpreneur. Transforming
leadership and entrepreneurial orientation strongly characterize these retail champions.
The second objective was to test a theory of the superpreneur. I posit superpreneurs
facilitate economic success and vitality in small communities via transforming business
leadership. Guiding success is superpreneurs’ structural position and involvement in
community business networks. Social capital mediates the impact of business network
activity on community and ﬁrm success. Results of the initial structural model partially
support the theory. A revised model version provides full support.

Findings of the initial model suggest business networks are effective vehicles for
development of social capital and that network involvement is positively related to
superpreneurs’ opinion leadership capacity. The initial model also indicates differential
effects of social capital on opinion leadership. Social capital appears to positively
inﬂuence superpreneur opinion leadership capacity between business network members
as opposed to the broader community. Superpreneurs may be more effective in
managing community level social capital through indirect, empowering, and transforming
leadership approaches. This ﬁnding has important implications for business development

and programming approaches in small communities.

105

Findings of this research provide unique and valuable insight into economic and
business development issues for small communities. Identifying exemplar retailers with
transformational capabilities provides a new leadership base for small communities.

This study indicates superpreneurs are highly entrepreneurial and ﬁmction as focal leaders
of community business networks. They also serve as opinion leaders among business
cohorts. Results of this study indicate superpreneurs do serve as business leaders and
entrepreneurial mentors in small communities. These ﬁndings support my assertions that
retailers learn ﬁom each other and small communities with superpreneurs may
experience greater economic growth and business performance. The revised model
suggests development of social capital can lead to enhanced community economic
success and vitality. Outcomes of network activity (social capital) must be effectively
managed to maximize the impact of superpreneur leadership and commrmity
development efforts.

Identifying retail superpreneurs and enlisting their transforming leadership and
entrepreneurial skills may be a plausible success strategy for small communities. By
grave and Maenad (2000) found individuals who are able to observe entrepreneurs are
more likely to become entrepreneurs themselves. Through observation, opportunity costs
are more evident and perceived risks are reduced. Networking with other entrepreneurs
may also reduce new venture transaction costs and provide positive entrepreneurial role
models. Superprenems are exemplar retail entrepreneurs who I suggest have the capacity
to encourage entrepreneurial growth in small communities. Local businesses learn ﬁom
observing superpreneurs’ example. By grave and Maenad (2000) ﬁirther suggest local

entrepreneurs act as catalysts for economic activity and their presence creates network

106

extemalities which foster success. This facilitating condition encourages environmental
alertness and promotes business growth. I suggest retail superpreneurs similarly serve as
catalysts in successful small communities. This function is supported by their ability to
build positive social capital and non-redundant network associations .

For small communities to encourage entrepreneurial growth, this study suggests
recognition and management of social networks and network outcomes (social capital) is
necessary. Social capital can be produced anywhere there is .opportunity for voluntary
participation, trust, and mutual beneﬁt. It can be formed through network interactions in
the workplace, the community, or through social relationships. As a resource, social
capital can facilitate the attainment of community objectives. However, when social
capital is high, so is community embeddedness, rigid social rules, and resistance to
change. The extremes of social capital’s impact in embedded community settings is
noted in the following quotes from small community retailers (Frazier & Niehm, 1999):
“I’m on the board of the Downtown Business Association and I’m in charge of
promotions. I think the Chamber of Commerce would really like to see us hang. It’s a
ridiculous, strained relationship. They have all been here for years and I think they
thought we were stepping on their toes with our new ideas. All we’re trying to do is keep
our doors open and keep people coming into the community”.

Conversely,
“It’s really a great small community....I think part of that is because of the university. We
see people coming from larger cities who have a different mind-set. They don’t have that

closed thinking like “this is my little town”. They know there’s more out there and they
bring a diﬂ‘erent ﬂavor to the community...and I think that is good”.

107

It is possible to yield positive results when social capital is strong. Cook and
Willis (1999) studied the networks of small and medium size businesses who received
government monies for ﬁrm development. They found a positive relationship between
business network development and social capital. Increased social capital resulted in
enhanced business performance, increased market knowledge, and involvement in
external innovation. Similarly, small communities need leaders who can balance and
coordinate network linkages to yield positive outcomes from social capital. Findings
ﬁ'om the present study suggest superpreneurs possess the entrepreneurial characteristics
and transforming leadership ability to manage this task.
Implications

Research is needed to guide struggling communities and small businesses. While
urban areas have established economic development units, business organizations,
colleges and universities, and small business consultants, rural communities often lack
support networks and entrepreneurial role models. Small communities must look for
ways to create synergies and enhance collaborative efforts. Economic diversiﬁcation is
key for long-term economic well being of small commrmities. (Barkley, 1995;
Drabenstott & Smith, 1996). Leadership is strained, however, in many small
communities and there is a shortage of both individual entrepreneurs and entrepreneurial
clusters or networks. Further, most ﬁrms in rural areas are small. Networks can enhance
resources and make small ﬁrms of all types more competitive.

Findings of this research are particularly relevant to economic issues aﬂ'ecting
small and rural U.S. communities. An estimated one-fourth of the US population lives in

non-metropolitan areas. Despite the fact that overall job growth in non-metropolitan

108

counties compares favorably with metropolitan trends, rural growth experiences are
highly varied. Job losses continue to plague much of rural America. Many rural areas
have not adapted well to this new economic climate. (Barkley, 1995; Drabenstott, 2001).

Non-metropolitan economic restructuring focuses attention on the retail service
sector. Retailers bring community leadership and economic vitality to rural areas
through shopping, entertainment, services, and tourism. Services may provide a
sustainable competitive advantage for retailers in rural areas while fostering community
stability, more choice, and better life quality for consumers (Ozment & Martin, 1990).
Retailers bring community leadership and economic vitality to rural areas through
shopping, entertainment, services, and tourism. Services may provide a sustainable
competitive advantage for retailers in rural areas while fostering community stability,
more choice, and better life quality for consumers.

Entrepreneurship is the pursuit of opportunity. Pursuit begins with a creative
process leading to idea generation. Key resources superpreneurs can bring to small
communities are innovative ideas and new ways of looking at things. Superpreneurs are
innovators. They demonstrate higher levels of entreprenem'ial thinking and possess
characteristics beyond those of the typical small business owner-manager. They cope
with and expect constant change and ambiguity, their jobs hold a consistent lack of
clarity, they accept risk for what they believe in, and possess an inner drive to leave their
mark on projects they oversee. These characteristics support superpreneurs’ ability to
cultivate entrepreneurship and sustained economic growth in small communities.

The literature is inconclusive regarding factors contributing to small community

success. Prescriptive studies suggesting strategic manipulations that may lead to small

109

ﬁrm success are plentiful; empirical studies are scant. Findings ﬁom this study
contribute signiﬁcantly to the literature, identifying a new archetype of the successful
retail entrepreneur and providing a unique sociological explanation for community
success. Utilizing superpreneurs’ business and community leadership may play a key role
in helping small communities achieve success.

Superpreneurs are focal network leaders in small communities. Their structrual
position in business networks affords visibility, attributed power, and inﬂuence. Floyd
and Woolridge (1999) suggest structural aspects such as network centrality, density, and
the ability to bridge relationships are essential characteristics of network leaders.
Network leadership is critical for small communities to overcome inertia in capability and
resource development. The ego networks perspective of social network theory (Burt &
Janicik, 1996) explains that people tend to identify with behavioral models. This
supports my contention that superpreneurs can function as behavioral benchmarks
(N iehm & Frazier, 2000). Retailers and other small business owners learn ﬁ'om each
other. Observing entrepreneurship creates entrepreneurship. Network involvement
combined with transforming leadership make superpreneurs particularly capable of
shaping economic action and developing entrepreneurship in small communities.

Network position also provides superpreneurs with early access to novel
information and innovative ideas. Superpreneurs function as “champions”, vigorously
promoting new ideas and practices within networks while accelerating the diffusion of
ideas at the community level (Rogers, 1995; Valente, 1996). The notion of
superpreneurs as idea champions and network leaders complements long-range initiatives

for rural community development. Drabenstott (2001) proposes that collaborative

110

regional or cluster development is essential for rural community growth. He cites the
need for “network brokers” if the initiative is to be successﬁil. Brokers would promote
new ideas, technologies, inﬁastructures, and development programs, while guiding
network activity. Findings of the present study suggest superpreneurs are uniquely suited
for this role.

Limitations and Future Research

This study represents an initial test of the superpreneur theory. The more
parsimonious, revised model ﬁts the data well. It provides plausible representation of the
superpreneur theory as conceptualized and serves as the basis for ﬁnal conclusions.
Further testing of the theory is necessary, however, for generalization of results beyond
this study.

Caution is urged in interpretation of initial model results due to measurement
issues surrounding the opinion leader construct. Measurement redundancy appears to
exist between the transformational leadership and community opinion leader constructs.
Further, social capital, opinion leadership, and ﬁrm performance did not function well
together in the initial model. Mediation effects of social capital may play a key role in
model results, suggesting a need for additional investigation and modeling While the
revised model provides plausible theoretical explanation, other model variations may be
possible.

An immediate extension of this research includes testing the initial and revised
models with personal network data. Current results pertain only to business network
leadership and its impact on community success. Multi-group analyses will next be

conducted to compare superpreneurs’ economic and social impact in rural and urban

111

communities. Additional analyses will compare communities with and without
superpreneur leadership and examine facilitating structural factors in the small
community environment. A parallel study of superpreneurs in traditional versus virtual
community settings is also planned.

I posit the superpreneur archetype is present in varied community and cultural
contexts. Any environment which supports entrepreneurship presents a viable venue for
this phenomenon. Global rural communities are experiencing similar issues regarding
non-agricultural sustainability and could beneﬁt ﬁom superpreneur leadership.
Developing and transitional economies also present rich entrepreneurial research
opportunities and applications of the superpreneur theory.

This study proﬁles the characteristics and business leadership of retail
superpreneurs. Understanding superpreneur traits, business practices, and leadership
behaviors will allow for their identiﬁcation and utilization as community resources. The
ability to distinguish retail superpreneurs ﬁ'orn average retailers will help small
communities, investors and counselors identify and nurture such individuals. Knowledge
of superpreneurs, their distinctive business behaviors, and community network roles
provides new strategic information useful to practitioners, business advisors and

academicians.

112

Appendices

113

Appendix A

114

Table 1. Conﬁrmatory Factor Analysis and Reliabilities for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transformational Leadership.
Standardized
Construct Observed Parameter Standardized Residual
Sub-scales Variables Estimate t-value Estimate Variance
Charisma v1.1 1.00 .56 .68
v1.2 .85 6.45* .56 .68
v1.3 .73 6.39' .56 .69
v1.4 1.09 732* .68 .53
v1.5 1.19 7.46 .70 .50
Individual v1.6 1.00 .84 .30
Consideration v1.7 .65 7.84* .55 .70
v1.8 .70 7.69" .54 .71
v1.9 .73 6.29* .56 .69
Intellectual v1.10 1.00 .77 .41
Stimulation v1.11 1.15 12.34‘ .85 .27
v1.12 1.14 12.10* .83 .31
‘ p < .05
Overall Fit
Chi- df p RMSEA NFI NNFI CFI GFI
square
70.51 41 .003 .06 .92 .95 .97 .94
Composite Composite Variance
Construct Reliability Relhbility Extracted
Transformational
Leadership .80 .87 .57

 

 

 

 

 

115

 

 

 

Table 2. Conﬁrmatory Factor Analysis and Reliabilities for Entrepreneurial Orientation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardized
Construct Observed Parameter Standardized Residual
Sub-scales Variables Estimate t-value Estimate Variance
Innovativeness v2.1 1.00 .56 .69
v2.2 .85 6.45* .56 .69
v2.3 .77 6.66* .58 .66
v2.4 1.07 7.28* .67 .55
v2.5 1.17 7.41* .69 .53
v2.6 1.36 8.07* .80 .36
v2.7 .89 6.26* .54 .71
Proactiveness v2.8 1.00 .67 .55
v2.9 1.07 7.28* .50 .75
v2.10 1.28 7.17* .78 .40
v2.11 1.46 7.42* .85 .28
Risk Taking ' v2.12 .53 4.59 .47 .78
Competitive v2.13 .48 3.94* .44 .81
Aggressiveness
" p < .05
Overall Fit ,
Chi-square
(if p RMSEA NFI NNFI CFI GFI
[96.93 lsolmo |.91|94|.95|.93|
Composite Coefficient Variance
Construct Reliability Alpha Extracted
Entrepreneurial
Orientation .89 .55

 

 

 

 

 

 

116

Table 3. Conﬁrmatory Factor Analysis and Reliabilities:
Critical Life and Business Experiences.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardized
Construct Observed Parameter Standardbed Residual
Sub-scales Varhbles Estimate t-value Estimate Variance
Life v3.1 1.00 .56 .68
Experiences v3.2 .86 6.52“ .57 .67
v3.3 .72 6.37* .55 .69
v3.4 1.08 7.27" .67 .55
v3.5 1.20 7.50* .71 .50
Business v3.6 1.00 .82 .32
Experiences v3.7 .64 7.68* .54 .71
v3.8 .71 7.69* .54 .71
v3.9 .70 7.68* .54 .71
v3.10 .71 8.99* .62 .62
" p < .05
Overall Fit
Chi-square
df p RMSEA NFI NNFI CFI GFI
I 58.66 26 .000 l .08 .91 J .92 .94 I
Composite Coefﬁcient Variance
Construct Reliability Alpha Extracted
Critical Life and Business
Experiences .80 .89 .67

 

 

 

 

 

117

 

Table 4. Conﬁrmatory Factor Analysis and Reliabilities for
Community Business Network involvement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardbed
Construct Observed Parameter Standardized Residual
Sub-scales Variables Estimate t-value Estimate Varhace
Density v4.1 1.00 .70 .50
v4.2 .71 7.69* .59 .66
v4.3 .63 7.90" .60 .64
Centrality v4.4 1.00 .69 .53
v4.5 1.09 9.20* .71 .49
v4.6 1.24 10.22‘ .81 .35
v4.7 .79 6.98“ .53 .72
v4.8 .91 7.25* .55 .70
Emotional v4.10 1.00 .77 .40
Intensity v4.11 1.14 12.48“ .85 .28
v4.12 1.12 12.19‘ .83 .32
v4.14 .50 3.80* .27 .93
Homophily v4.16 1.00 .54 .71
v4.18 1.64 7.30‘ .86 .25
" p < .05
Overall Fit ,
Chi-square
df p RMSEA NFI NNFI CFI GFI
| 104.50 I71J.oos[ .os .91 | .9. | .97 | .94 l
Composite Coefficient Variance
Construct Reliability Alpha Extracted
Community Business Network
Involvement .81 .85 .52

 

 

 

 

 

118

 

 

Table 5. Conﬁrmatory Factor Analysis and Reliabilities for Social Capital.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardized
Construct Observed Parameter t- Standardized Residual
Sub-scales Variables Estimate value Estimate Variance
Community v4.20 1.00 .63 .60
Reciprocity v4.21 .84 6.67 .62 .61
v4.22 .75 6.77 .64 .59
Trust v4.23 1.00 .68 .54
v4.25 1.36 9.80 .88 .23
v4.26 .85 7.30 .56 .69
Shared v4.28 1.00 .50 .75
Vision v4.29 1.27 7.14 .77 .41
v4.30 1.47 7.42 .86 .27
v4.31 1.43 7.32 .82 .33
' p < .05
Overall Fit
Chl— -
square df p RMSEA NFI NNFI CFI CF]
I 29.27 J 32 I .605 I .000 I .96 I 1.00 I 1.00 I .97
Composite Coefﬁcient Variance
Construct Reliability Alpha Extracted
Social Capital .96 .87 .89

 

 

 

 

 

 

119

Table 6. Conﬁrmatory Factor Analyst and Reliabilities for Community Opinion Leadership.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardized
Construct Observed Parameter Standardized Residual
Sub-scales Variables Estimate t-value Estimate Variance
Internal v1.13 1.00 .57 .67
Sources of v1.14 .84 6.48" .57 .67
Inﬂuence v1.15 .73 6.47* .57 .67
v1.16 1.08 7.32‘ .69 .53
v1.17 1.13 7.27* .68 .54
External v1.18 1.00 .91 .18
Social v1.19 .60 7.09* .55 .69
Comparisons
‘ p < .05
Overall Fit , . ,
Chi-square
df p RMSEA NF] NNFI CFI CF]
I 29.26 13 L006J 08 I .94 I .94 I ' 96 I .96 J
Composite Coefficient Variance
Contract Reliability Alpha Extracted
Community Opinion .77 .83 .64
Leadership

 

 

 

 

 

 

120

Table 7. Conﬁrmatory Factor Analyst and Reliabilities for Community Success.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardized
Construct Observed Parameter Standardized Residual
Sub-scales Varhbles Estimate t-value Estimate Variance
Economic v6.2r 1.00 .55 .70
Well-Being v6.3 .84 6.01* .54 .71
v6.4 1.37 7.15" .71 .49
Community v6.5 1.00 .64 .59
Vitality v6.6 .97 13.66“ .85 .28
v6.7 .63 8.29’ .56 .68
" p < .05
Overall Fit
Chi-square
df p RMSEA NFI NNFI CFI CF]
I 7.76 I 8 I 457 I 000 I .98 1.00 I 100 I 99
Composite Coefficient Variance
Construct Reliability Alpha Extracted
Community Success .70 .58

 

 

 

 

 

121

 

 

Table 8.. Conﬁrmatory Factor Analyst and Relhbilities for Firm Performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standardized
Firm Observed Parameter Standardized Residual
Performance Variables Estimate t-value Estimate Variance
(Single v8.1 .78 5.67" .63 .60
indicators) v8.2 .84 6.07* .62 .61
v8.3 .74 6.12" .64 .59
* p < .05
Overall Fit
Chi-square
df p RMSEA NFI NNFT CFI GFI
I 3.20 I 2 I .202 I .05 I .98 J .97 I .99 .99
Composite Coefﬁcient Variance
Construct Reliability Alpha Extracted
Firm
Performance .88 .82 .71

 

 

 

 

 

122

 

 

Appendix B

123

MICHIGAN STATE

UNIVERSITY

 

November 10, 2001

«fname»

«location» «company»
«address_2», «address_1»
«city», «st» «zip»

Dear Chamber «fname»:

Some retailers naturally stand out in a community. You may know retail owner/managers who
possess a certain sense of conﬁdence and control, who are creative, yet intuitively decisive, and seem to
continuously reinvent their businesses at the risk of change. These individuals bring new deﬁnition to the
word entrepreneur. This type of individual is a “superpreneur” or a “retail champion ”. Much has been
written about the entrepreneur, but no one has identiﬁed or studied those people who make a big impact
on their communities and have that added “extra” which creates success.

I am working on a major research project involving independent retailers. My objective is to
proﬁle the characteristics and activities of retail entrepreneurs in small communities of Michigan, Ohio,
Indiana, Illinois, Wisconsin, and Iowa. From this proﬁle I will develop “best practices” and business
leadership training information useful to retailers, business consultants, and conununity development
programs. I need your help in identifying the most successful retail entrepreneurs in non-metropolitan
areas of your state. Others have mentioned you as a reference due to your familiarity with the retail
industry and because you are a leader in your community. Can you or a qualiﬁed associate help me ﬁnd
the “retail champions” I am looking for? To be considered for this project, retailers must:

Be vtionary, innovative, and proactive; they bring about community change

Use their vision to dttinguish themselves and their businesses

Demonstrate high levels of business and community leadership and involvement

Serve as a business and community role model; they inspire and motivate others to excel
Sell merchandise, not just provide services.

Own and operate a retail business located in a non-metropolitan area.

Communities must be 20 miles or more from a major metropolitan area and

have an estimated population of 100 to 70,000 residents.

 

The retail superpreneur is unique and conducts business in a distinctive way. They expect and
are receptive to change. This person derives a sense of purpose from work, yet relies on networks of

COLLEGE OF
"MAN ECOLOGY friends, acquaintances, and other sources to help them anticipate and adapt to changes in the road ahead.

DOMINION 01 HUMOR if this description ﬁts one or more retailers in your community area or professional contacts,
Mronmern '9‘ Design would you please take a moment to identify them using the enclosed nomination form? The form needs to
Michigan State University be returned no later than December 12, 2001. For research purposes, none of your responses will be
lHuman 5001001! Building disclosed. My next step will be to survey nominated individuals.
535‘ Lansmgi Micmga" Thank you in advance for helping with this study. If you have any questions about this project,
488244030 please call me at 517-694-8865. You may ato fax (517-694-9054) or E-mail me your response
(517) 3554712 (niehmlin@msu.edu).

FAX: (517) 432-1058
Sincerely,

Linda S. Niehm, Doctoral Candidate
Merchandising Management Program
Michigan State University

Enclosures: Superpreneur Nomination Forrrr, business reply envelope

124

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Appendix C

126

 

COLLEGE OF
"MAN ECOLOGY

Department of Human
Environment and Design

Michigan State University
)4 Human Ecology Building
East Lansing. Michigan
48824-1030

(517) 355-7712
FAX: (517) 432-1058

MS U is an aﬁimiative-action,
equal opponumiy institution.

MICHIGAN STATE
U N l V E R S l T Y
February 10,2002

 

«fname» «lname»
«business_name»
«address_l »

«city», «st» «zip»

Dear «fname»:

Independent retailers like yourself face more challenges than ever before. The growth of national chains and the
changing market environment have threatened the survival of many smaller retailers. Yet some business owners
have shown the ability to thrive under conditions of change and use their “smallness” to create a competitive
advantage. These retailers are highly motivated and creative entrepreneurs that are successful in spite of strong
competition in today’s marketplace. They see themselves as key players in their local and regional markets. They
also possess the desire and ability to enhance not only their own ﬁrms, but the quality of life, economic development,
and vitality of their communities. We call these retailers “superpreneurs ”.

We are working on a research project at Michigan State University that involves surveying retail superpreneurs about
their business and community activities. Th8 major, multi-state study involves retailers from Michigan, Ohio,
Indiana, lllinois, Wisconsin, and Iowa. Our goal is to proﬁle the business and leadership practices of
exceptional independent retailers and examine the link between retailer leadership and community success.
Results of this study will be valuable to those involved in the retail industry, small business consultants, and
community and economic development specialists. Findings from this study will surely be of interest to you, your
ﬁrm, and community. Results will be made available by request as explained on the enclosed survey form.

Several business professionals or organizations in your community have nominated you as an example of a
“superpreneur”. You were selected because you are visionary, innovative, and considered to be an
outstanding business leader in your community. Your community thinks it is more successful because of you
and your contributions. We would appreciate it very much if you would be one of our initial survey participants.
This would involve your response to some brief questions about your leadership strategies, business practices, and
community involvement on the enclosed form. Your answers will remain completely conﬁdential. Time required to
complete the survey is approximately one hour. We would appreciate return of the completed survey form by
March 10, 2002.

information you provide in this survey will not be associated with you or your business. Results will only be
reported in summary form. If you do choose to participate, please return the survey in the stamped envelope
provided OR fax to 517-694-9054. You may decline to answer any questions on the survey form. You may also
choose to not participate and are free to withdraw from the study at any time. in case you have questions or concerns
about your rights in this research study, please feel free to contact David Wright, Michigan State University’s Chair
of the University Committee on Research Involving Human Subjects at (517) 355-2180. Thank you for your
consideration of this study. If you have any questions, please contact Linda Niehm at 517-694-8865.

Sincerely,

Linda S. Niehm, Doctoral Candidate Dr. Brenda Sternquist

Merchandising Management Program Merchandising Management Program

204 Human Ecology Building 114 Human Ecology Building

Michigan State University Michigan State University

East Lansing, MI 48824-1030 East Lansing, MI 48824-1030

Phone: (5l7) 694-8865 Fax: (517) 694-9054 Phone: (517) 355-0256 or(5|7) 353-2938
E-mail: niehmlinmuegg E-mail: stemguiMuedu

Enclosures: Retail Leadership Survey Form, business reply envelope

127

 

 

 

 

 

 

 

 

 

 

 

 

lD #
e ai ea ers i urve
R t [L d h p S y
Michigan State University
E
00 Note: This questionnaire should be completed only by the individual whose name appears on the enclosed cover letter~
the retail superpreneur nominee associated with the business listed in the cover letter address.
PART I. The questions below ask about your community business leadership and business practices. Please indicate your response
to each question by circling the number that best describes your feelings and opinions about each question.
£102,221: pizzas“ yourself in terms of leadership in your own business and in the local NM At A” Sometimes Frequently
1. I am a model that others tend to follow. 1 2 3 4 5 6 7
2. I inspire loyalty in my ﬁrm and community. 1 2 3 4 5 6 7
3. Others see me and my ﬁrm as symbols of success and accomplishment. 1 2 3 4 5 6 7
4. I help others vision what can be accomplished if we work together. 1 2 3 4 5 6 7
5. I have a special gift for seeing what is really important in community and business 1 2 3 4 5 6 7
issues.
6. I lead others and encourage them to reach goals with or without my input. 1 2 3 4 5 6 7
7. Others can count on me to express appreciation for a job well done. 1 2 3 4 5 6 7
8. lﬁnd out what the community needs and wants and try to help them get it. 1 2 3 4 5 6 7
9. I give attention to individuals and community groups which seem neglected. 1 2 3 4 5 6 7
10. I provide others with new ways of looking at things. 1 2 3 4 5 6 7
11. I encourage others to rethink ideas not previously questioned. 1 2 3 4 5 6 7
12. I enable others to think about old problems in new ways. 1 2 3 4 5 6 7
13. I usually count on being successful in everything I do. 1 2 3 4 5 6 7
14. I am rarely unsure about how I should behave. 1 2 3 4 5 6 7
15. I like to assume" responsibility. 1 2 3 4 5 6 7
16. I like to take the lead when a group does things together. 1 2 3 4 5 6 7
17. I enjoy convincing others of my opinions. - l 2 3 4 5 6 7
18. I often notice that I serve as a model for others to copy. 1 2 3 4 5 6 7
19. I am often a step ahead of others. 1 2 3 4 5 6 7
20. I often give others advice and suggestions. 1 2 3 4 5 6 7
21. I am good at getting what I want. 1 2 3 4 5 6 7

 

 

 

 

 

 

 

 

 

PART I]. Consider your business decisions and innovative behavior' in contrast to other area retailers. The scale below
represents two extremes. Circle the number on this continuum which best reﬂects your usual business behavior as you consider the

 

 

following statements:

 

 

1. I have added no new lines of merchandise or 1 5 I have added many newlines of
services in the past two years. merchandise or servrces In the past two
years.
...
N . .
o 2. Changes in merchandise or services have been 1 5 Changes In merchandise have usually been
mostly of a minor nature. quite dramatic.

3. [fl heard ofa new type of technology or 1 5 I“ heard ofa new type of technology or
innovative business practice, I would be hesitant innovative busrness practice, I would be
to try it. interested in trying it.

4. Compared to other retailers inrthis community, 1 5 Compared to other retailers in this
I use little technology in my business. community, I use much technology In my

business.

5. I would not consider trying a new technology or 1 5 I would consider trying a new technology
business practice if] had not heard of it before. or business practice even if! had not heard

of it before.

6. Usually I do not know about new technology 1 5 I know about new technology applications
applications and business practices before other and business practices long before other
retailers in this community. retailers in this community.

7. In general, I am among the last of retailers in I 5 In general, I am among the ﬁrst retailers in
my community to try a new type of technology my community to try a new type of
or innovative business practice. technology or innovative business practice.

8. In gerierai, I favor a strong emphasis on 5 5 E: genemi. E :21 we; .2 strong empi. on
established marketing practices. innovative marketing practices.

9. In dealing with competitors, I am seldom the 1 5 In dealing with competitors, 1 am very often
ﬁrst community business to introduce new the ﬁrst community business to introduce
merchandise, services, or business practices. new merchandise, services, or business

practices.

10. In general, I believe that considering the current 1 5 In general, I believe that considering the
market environment, it’s best to explore it current market environment, bold, wide—
gradually via careful, measured behavior. ranging acts are necessary to achieve my

business goals.

11. When confronted with uncertainty in business 1 5 When confronted with uncertainty in
decision making, I typically adopt a cautious business decision making, I typically adopt
“wait and see” posture in order to minimize the a bold, aggressive posture in order to
probability of costly decisions. maximize potential opportunities.

12. In general, I have a strong tendency for low risk 1 5 In general, I have a strong tendency for
proyects with normal and certain rates of return. high risk projects with chances of high

rates of return.

13. In dealing with competitors, I typically seek to 1 5 In dealing with competitors, I typically

 

avoid clashes, preferring a “live and let live”
posture.

 

adopt an aggressive, “undo the
competition” posture.

 

 

 

 

OEI

 

PART III. Life experience can be a valuable business tool. To what extent have the following experiences influenced your outlook
and the way you manage your business?

 

 

 

 

 

 

 

 

 

Life experiences which have impacted my business decisions, “gig/e Right [19:
perspective and management style include: Impact New,“ impact Apply
1. Major change in personal financial status 1 2 3 4 5 6 7 8
2. Serious personal illness or injury I 2 3 4 5 6 7 8
3. Serious illness or injury of family member 1 2 3 4 5 6 7 8
4. Change in marital status 1 2 3 4 5 6 7 8
5. Death of family member or close friend I 2 3 4 5 6 7 8
6. Termination of relationship with business partner 1 2 3 4 5 6 7 8
7. Major restructuring of your work situation 1 2 3 4 5 6 7 8
8. Failure of your business I 2 3 4 5 6 7 8
9. Foreclosure on a business loan or mortgage 1 2 3 4 5 6 7 8
10. Career change or retirement 1 2 3 4 5 6 7 8
11. Other (please list):‘ 1 2 3 4 5 6 7 8

 

 

 

PART IV. In the next section, we are going to ask you about business and professwnal people who give you information helpful in
making business decisions. This part of the survey concerns who _you get informatwn from about the followmg areas:

 

 

 

 

New merchandise
The latest trends >

New Iira'rkciilig ideas
New business techniques
Your customers‘ needs and preferences
Local competition
Loc‘al market conditions

Please think for a moment about the people you talk to when you need information or advice about the above areas. This group
would include business and professional people such as: local retailers, community development professionals, government ofﬁcials,

representatives from professional organizations, or any business related professional who gives you useful information and advice
about the above areas.

 

In the space provided below, please write the FIRST NAMES OR INITIALS of all the business related professionals that you
can think of who you turn to for advice and information about the above areas. We are going to ask you some questions about
this group of people in the next section. Make additional lines if necessary. THE LIST IS FOR RECALL PURPOSES ONLY.
The names you list will not be used in any way in this study.

1. 4. 7. 10.
2. 5. 8. 11.
3. 6. 9. 12.

 

 

Feel free to add additional spaces

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thinking about your relationships with the people you just listed in the box on , _‘ , y .
page 3, circle the number that indicates whether you think the statements are :3]: Neutral inﬁrm
very true OR not true at all:
I. They know each other by name. 5 4 3 2 1
E 2. They talk to each other about business. 5 4 3 2 l
3. They see each other regularly in business situations. , 5 4 3 2 l
4. I talk directly with them about business and community issues. 5 4 3 2 l
5. Among them, I often pass along business information from one person to 5 4 3 2 1
another.
6. My interactions with them affect local business and community decisions. 5 4 3 2 l
7. I play a primary role in my group associations with them. 5 4 3 2 l
8. I am a leader in business/community activities involving them. 5 4 3 2 l
9. I am one of the first to hear about new things from this group. 5 4 3 2 1
Thinking about people that you listed in the box on page 3, . ,
please indicate how likely OR unlikely it is that: 5 12:5: Neu‘ral tzji‘kelv
10. You would share personal matters with them. 5 4 3 2 l
11. You might discuss family matters with them. 5 4 3 2 1
12. You might ask them for advice about a private matter. 5 4 3 2 l
13. You would do things socially with them. 5 4 3 2 l
14. You would spend a free afternoon with them if given the chance. 5 4 3 2 1
15. You would list them as business associates or close acquaintances. 5 4 3 2 1
In general, comparing yourself to the people you listed in the box on page 3, Very Very
how similar would you say you are to these people with respect to: Similar Mum“ Dissimilar
16. Your outlook on life. 5 4 3 2 1
17. Your likes and dislikes. , | 5 4 3 2 1
18. Your business philosophy. 5 4 3 2 1
19. Your values and beliefs. 5 4 3 2 1

 

 

 

 

 

 

Thinking in general about the group of people you identiﬁed in the box on

 

 

 

page 3, indicate your agreement OR disagreement with the following: $12:le Neutral Kalli:
20. They are generally fair in dealings with each other. 5 4 3 2 I
21. I would do a favor for them if they asked. 5 4 3 2 I
22. They would be willing to do a favor for me if] asked them. 5 4 3 2 I
23. They keep promises they make to me. 5 4 3 2 l
S 24. They can be trusted. 5 4 3 2 I
N 25. They would say I am trustworthy. 5 4 3 2 I
26. They would trust me with personal information about themselves. 5 4 3 2 l
27. I can rely on them without fear that they will take advantage of me. 5 4 3 2 l
28. We share the same ambition and vision for our community’s future. 5 4 3 2 l
29. They like working toward the achievement of community goals. 5 4 3 2 l
30. If any of them had information that would help me in my business, they could 5 4 3 2 I
tell me directly.
3]. They are enthusiastic about projects that beneﬁt the whole community. 5 4 3 2 I

 

PART V. The next section of this survey is asking about otherpeople (non-business related) in your community who give you
information and advice about the following areas:

 

 

 

 

New merchandise
The latest trends
New marketing ideas
New business techniques
Your customers’ needs and preferences
Local competition
Local market conditions

 

 

 

Now think about other people you talk to when you need information or advice about the areas listed above. People in this group
include: family, friends, neighbors, community residents, and other non-business related people.

 

In the space provided below, please write the FIRST NAMES OR INITIALS of all the non-business related
people that you can think of who you turn to for advice and information about the above areas. We will be
asking the same questions about this group as we did for the last group. Again, THE LIST IS FOR RECALL
PURPOSES ONLY, and we will not use them in any way in this study. DO NOT INCLUDE NAMES THAT
YOU LISTED EARLIER IN THIS SURVEY ON PAGE 3.

 

4. 7. 10.
5. 8. I I.
6. 9. 12.

Feel free to add additional spaces.

 

 

 

 

 

 

 

 

 

 

 

Thinking ONLY about your relationships with people you just listed in

 

 

 

 

 

 

 

 

 

 

the box on page 5, circle the number that indicates whether you think the V52: Mum“ ﬂay“

statements are very true OR not true at all.

I. They know each other by name. 5 3 I

2. They talk to each other about business. 5 3 I

3. They see each other regularly in business situations. 5 3 I

4. I talk directly with them about business and community issues. 5 3 I

5. Among them, I often pass along business information from one person to 5 3 I
another.

6. My interactions with them affect local business and community decisions. 5 3 I

7. I play a primary role in my group associations with them. 5 3 I

8. I am a leader in business/community activities involving them. 5 3 I

9. I am one of the first to hear about new things from this group. 5 3 I

Thinking about the people that you named in the box on page 5, please Very Very

indicate how likely OR unlikely it is that: 'Iikc'y Wm” “"“kdy

10. You would share personal matters with them. 5 3 I

11. You might discuss family matters with them. 5 3 I

12. You might ask them for advice about a private matter. 5 3 I

13. You would do things socially with them. 5 3 I

14. You would spend a free afternoon with them if given the chance. 5 3 l

15. You would list them as business associates or close acquaintances. 5 3 I

In general, comparing yourself to the people you named in the box on “W Very

page 5, how similar would you say you are to these people with respect to: Similar Nemm' ”Mimi“

I6. Your outlook on life. 5 3 I

[7. Your likes and dislikes. 5 3 l

18. Your business philosophy. 5 3 I

19. Your values and beliefs. 5 3 l

 

 

 

 

 

 

17‘6I

 

 

Thinking in general about the group of people you identiﬁed in the box on

 

 

 

 

 

 

 

 

 

 

. . ~ - ' Strongly Strongl)

page 5, indicate your agreement OR disagreement With the followmg Agree Neutral Disagree

statements:

20. They are generally fair in dealings with each other. 5 3 2

21. I would do a favor for them if they asked. 5 3 2

22. They would be willing to do a favor for me if] asked them. 5 3 2

23. They keep promises they make to me. 5 3 2

24. They can be trusted. 5 3 2

25. They would say I am trustworthy. 5 3 2

26. They would trust me with personal information about themselves. 5 3 2

27. I can rely on them without fear that they will take advantage of me. 5 3 2

28. We share the same ambition and vision for our community’s future. 5 3 2

29. They like working toward the achievement of community goals. 5 3 2

30. If any of them had information that would help me in my business, they 5 3 2
could tell me directly.

3]. They are enthusiastic about projects that beneﬁt the whole community. 5 3 2

PART VI. COMMUNITY PROFILE

Concerning the economic status and general well—being of your community, to what

degree do you agree 0R disagree with the following: Strongly Strongly

Disagree Neutral Agree

1. Local business failures have increased over the past several years. 1 3 4 5 7

2. Property values are declining in our community. I 3 4 5 7

3. Our unemployment rate is lower in comparison to surrounding counties. I 3 4 5 7

4. Our town’s population has increased in recent years. I 3 4 5 7

5. Local businesses are willing to invest their time and money in this I 3 4 5 7
community.

6. Local residents have a strong sense of loyalty to this community. I 3 4 5 7

7. Local government supports business and community development efforts. I 3 4 5 7

PART VII. BUSINESS TECHNOLOGY PROFILE

Concerning your use of technology and the use of technology by other local businesses, Strongly Strongly

to what degree do you agree 0R disagree with the following: Disagree ”cum” Agree

1. Local retailers use computer technology extensiyely to assist with store I 3 4 5 7
operations.

2. Most local retailers have some form of Internet presence (website, on—Iine I 4 5 7
listing, etc.).

3. I use the Internet as a key way to market my business and communicate l 4 5 7
with customers.

4. I gain valuable information for use in business decisions through the I 4 5 7
Internet and other computer based network sources.

5. A majority of my revenue comes from Internet based sales. 1 4 5 7

 

 

 

 

 

 

SST

 

PART VIII. FIRM PERFORMANCE

 

 

Poor »\\'erage liu‘cllcnt

Concerning the performance of your ﬁrm:
I. How would you describe the overall performance of your store(s) l 2 3 4 5 6 7

last year (2001)?
2. How would you describe your performance relative to your major competitors? l 2 3 4 5 6 7
3. How would you describe your performance relative to other stores like yours in I 2 3 4 5 6 7

the industry?
4. In 2001, did your store (circle one): 3= Make a Proﬁt 2: Break Even 1: Lose Money

 

PART IX. GENERAL BACKGROUND INFORMATION: Please check or ﬁll in the appropriate information.
What is your title? Owner Manager Both Other (please specify)

Store/Business Type:

 

(i.e.- gift, hardware, apparel, etc.)
How many people do you employ full time (besides yourself)?
How many people do you employ part time ?

What is your age?

What is your gender? _Male _ Female

How many years have you owned or managed this business? years
How many years of experience in retailing do you have? , ___... years
How long have you owned a business in this community? years

Please indicate the highest level of education completed:

_Some high school Some College
_High school College Graduate
Post-graduate

 

 

 

 

Thank you very much for your time. Please place this survey in the enclosed, postage-paid return envelope and mail 93
Fax to (517) 694-9054 no later than March 23, 2002. Questions may be directed to Linda Niehm at (517) 694-8865
or Dr. Brenda Stemquist at (517) 355-0256.

If you would like a copy of results from this study, please contact Linda Niehm by mail, fax, or E-mail:
Linda Niehm, Doctoral Candidate

Merchandising Management Program

Michigan State University

204 Human Ecology Building

East Lansing, MI 48824-1030

Fax: (517) 694-9054 E-mail: niehmlin@msu.edu

 

 

 

 

Appendix D

136

Appendix D. Formulas for Composite Reliability and Variance Extracted

 

 

Construct
Reliability= (sum of standardized loadingsﬁ
(sum of standardized loadings)2 + sum of indicator measurement error
Variance
Extracted= sum of squared standardized loadings

 

 

sum of squared standardized loadings + sum of indicator measurement error

Hair, J .F., Anderson, R.E., Tatham, R.L. and Black, WC. (1995). Multivariate Data
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