a longitudinal study of the relation of vision and vision

7/29/2019 A Longitudinal Study of the Relation of Vision and Vision

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Journal of Applied Psychology1998, Vol. 83, No, 1, 43-54 Copyright 1998 by the American Psychological Association, Inc.0021-90IO/9M3.00

A Longitudinal Study of the Relation of Vision and VisionCommunication to Venture Growth in Entrepreneurial Firms

J. Robert BaumIvan C. Dutterer, Inc.

Edwin A. LockeUniversity of Maryland College Park

Shelley A. KkkpatrickThe American Institutes for Research

The relationships among vision attributes, vision content, vision communication, andventure growth were explored in one industry using a longitudinal design. Charismaticleadership, entrepreneurship, andbusiness strategy theory guidedthe formation of hypoth-eses that were tested with data collected from 183 entrepreneur-CEO and employeepairs. Visions were evaluated for 7 attributes that were derived from the literature andfor content. Structural modelingconfirmed that vision attributes and vision content affectsubsequent venture growth directly and through verbal and writtencommunication.

A recent focus in the leadership literature has been oncharismatic (alternatively called transformational, vision-ary, or inspirational) leadership. A review of seven leader-ship theories that address charisma in some form (Bass,1985; Bennis &Nanus, 1985; Conger & Kanungo, 1987;House, 1977; Kouzes &Posner, 1987; Locke et al., 1991;Tichy & Devanna, 1986) reveals that there are three corecomponents that are common across the theories: (a)communicating a vision, (b) possessing a charismatic(e.g., forceful, animated, and confident) personality style,and (c) taking various actions intended to implement thevision (e.g., serving as a role model, intellectually stimu-lating followers, and building followers' confidence).Each theory makes similar predictions, namely, that acharismatic leader will have positive effects onboth orga-nizational and follower outcomes. Our review of the litera-ture,however, found only two empirical studies that exam-ined the effects of charismatic leadership on business unitperformance (Barling, Weber, & Kelloway, 1996; How-ell & Avolio, 1993). Both studies reported significantrelationships between charismatic leadership andbusinessunit performance.

With respect to follower outcomes, Shamir, House, andArthur (1993) reviewed more than 20 studies that found

J. RobertBaum,Ivan C.Dutterer, Inc., Hanover,Pennsylvania;Edwin A. Locke, College of Business and Management,Univer-sity of Maryland College Park; Shelley A. Kirkpatrick, TheAmerican Institutes for Research, Washington,DC.

Correspondence concerning this article should be addressedto J. Robert Baum, Ivan C. Dutterei; Inc., 115 Ann Street, Han-over, Pennsylvania 17331. Electronic mail may be sent [email protected].

charismatic or transformational leadership to be positivelyassociated with followers' performance, attitudes, andperceptions. Another set of 15 studies, reviewed by BassandAvolio (1993), and a meta-analysis by Lowe, Kroeck,and Sivasubramaniam (1996) of 38 studies that used theMultifactor Leadership Questionnaire reported equallypositive findings. Previous studies typically have exam-ined charismatic leadership as ablend of various charis-matic leadership components; however, Howell and Frost(1989), in an experimental laboratory study, found thatthe combination of two componentsvisionand charis-matic personalityhad strong, positive effects on fol-lower performance and attitudes. Following this, a labora-tory study by Kirkpatrick and Locke (1996) empiricallyseparated these two components and found that visionwas far more potent than charismatic personality in termsof its direct and indirect effects on follower performanceand attitudes.

In the entrepreneurship and business strategy litera-tures, the importance of vision and itseffects on organiza-tion-level performance also has been stressed in theoreti-cal discussions (e.g.. Bird, 1992; Filion, 1988; Isenberg,1987; Maccoby, 1981; Mendall &Gerguoy, 1984; Peters,1988; Slater, 1993; Timmons, Smollen, & Dingee, 1990)and inempirical research (e.g., Filion, 1991;Kotter, 1990;Larwood, Falbe, Rriger, & Miesing, 1995; Westley &Mintzberg, 1989). For example, case studies by Westleyand Mintzberg and by Kotter suggest that vision is im-portant for strategic change in mature organizations. Fil-ion used interviews with entrepreneurs andfound that newventure vision content included imagery about products,markets, and organizations that were a function of thestage of venture development. He determined that vision

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44 BAUM, LOCKE, AND HRKPATRICK

process depended on theentrepreneur's values and energy.Larwood et al. published the first large sample empiricalstudy of vision content. They asked executives to describetheir vision in one sentence and to evaluate their visionsalong 26 content dimensions. The executives' self-ratingsformed seven independent factors, including vision formu-lation (strategic emphasis), implementation (successfulcommunication), and innovative realism (responsivenessto change). Vision content ratings appeared in differentclusters that were associated with degree of executivecontrol, rate of organizational change, and type of indus-try. Their study did not, however, relate the vision attri-butes to organizational effectiveness.

Given that (a) vision is a core component across charis-matic leadershiptheories, (b) empirical studies have con-firmed that vision has significant effects on follower out-comes, and (c) theory and research conducted in the entre-preneurship and business strategy literatures have foundthat vision may have an effect on organizational out-comes, the present studyfocused on the vision componentinentrepreneurial firms. Furthermore, this is the first studyto examine the effects of vision on the performanceofthe organization as a whole.

In addition to examining the direct effect of vision onorganizational performance, the present study examinedone process through which vision could affect organiza-tional performance: vision communication. Some theo-rists further specify the process as one through whichleaders link followers' self-concepts to the leader's vision,or align followers' needs and values with a collectivevision (Bass & Avolio, 1993; House & Shamir, 1993).Charismatic leadership theories tend tofocus onfollower-level effects rather than organizational-level effects. Inaddition, theydo not specify the role that communicationplays (e.g., is it in the causal path or does it change thecausal relationship between vision and performance?).However, allseven charismatic leadership theoriesempha-size the importance of communicating thevision.Accord-ingly, we examined the role of vision communication inthe vision-organizationalperformance relationship.

VisionHouse and Shamir (1993) defined vision as an ideal

that represents or reflects the shared values to which theorganization should aspire. Similar definitions are foundthroughout the charismatic leadership literature. For ex-ample, Bennis and Nanus (1985) defined it as the pro-jected mental image of the products, services, and organi-zation that abusiness leader wantstoachieve; andKouzesand Posner (1987) defined it as "an ideal and uniqueimage of the future" (p. 85). In this study weexaminedvision as the leader defined it, because it was the leader'sactual vision that guided theleader's choices and actions.

However, as explained below, we used theoretically de-rived attributes for measuring vision.

VisionAttributesTwo foci of the present study are "Does vision signifi-

cantly affect organizational performance, and if so, whatare the attributes of an effective vision?" A comprehen-sive review of leadership, business strategy,and entrepre-neurship theories identified seven attributes that are saidtobe necessary for a vision to be effective (i.e., to signifi-cantly affect organizational performance): brevity (Lockeet al., 1991), clarity (Jacobs & Jaques, 1990; Nanus,1992), abstractness (Locke et al., 1991), challenge (Na-nus, 1992; Sashkin, 1988; Sims &Lorenzi, 1992), futureorientation (Collins & Lazier, 1992; Jacobs & Jaques,1990), stability (Locke et al., 1991), and desirability orability to inspire (Sashkin, 1988; Sims & Lorenzi, 1992).Despite the focus in the literature onattributesof an effec-tive vision, there is noempirical research that relatesanyof these attributes tooutcomes. The present study exam-ined the predictive validity of these attributes. (As ex-plained in the Method section, thepresent study examinedventure growth as the indicator of organizationalperformance.)

Hypothesis 1: The vision attributes of brevity, clarity, ab-stractness,challenge, future orientation, stability, anddesir-ability are significantly related to subsequent venturegrowth.

Vision ContentA second aspect of vision is the actual content. Far

example, the content of one vision could be concernedwith market share whereas another vision could be con-cerned with producing quality products. Toproperly testfor the effects of vision on organizational performance,there shouldbe correspondence between the focus of thevision content and the dependent measure of interest.

Wechosegrowthas thedependent measure inthis studybecause growth is a key focus of entrepreneurial firms(Bird, 1992; Carriere, 1989; Gartner, Bird, & Starr, 1992;Hood & Young, 1993; Kirzner, 1985; Timmons et al.,1990). Indeed, entrepreneurship researchers focus onbusiness growth because of the entrepreneur's leadingrole in job creation and product market growth (Ku-ratko & Welsch, 1994; Timmons et al., 1990).

Thus, we predicted that organizations would growfaster when the leader's (in this study, entrepreneurs) vi-sion was focused on growth.

Hypothesis 2: Vision growth imagery issignificantly asso-ciated with subsequent venture growth.


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VISION, VISION COMMUNICATION, AND VENTURE GROWTH 45

Vision CommunicationEach of the seven charismatic leadership theories

stressed the importance of communicating the vision.House (1977) noted that leaders who communicate theirvision affect follower outcomes. Bennis and Nanus(1985) discussed the importance of getting the organiza-tion to accept and support the vision by communicatingit in a variety of ways, both written and orally. Bass(1985) and Tichy and Devanna (1986) referred to theimportance of the leader's inspiring followers throughspeeches and pep talks that get them to work toward thevision. Kouzes and Posner (1987) stated that the visionmust be communicated to others, through written state-ments as well as through personal communication, in or-der to convince them to support it. Conger and Kanungo(1987) as well as Locke et al. (1991) proposed that lead-ers must use their personal communication skills, includ-ing speaking and listening skills, to articulate the visionto followers.Strategic management researchers, drawing upon casestudies, have found that top managers can inspire workerswith communicated vision (Westley & Mintzberg, 1989).Furthermore, entrepreneurship theorists point to the im-portance of communication of the entrepreneur's visionto new venture teams and, ultimately, to the managementteam that supervises venture growth (Bird, 1989). Thus,the importance of vision communication must be empiri-cally tested rather than taken for granted.

Hypothesis 3: The vision-venture growth relationshipshows indirect effects throughvision communication.

MethodResearch Model and Controls

The three hypotheses described previously are the basis forthe research model depicted inFigure 1.Causal paths are shown

from vision attributes and vision content directly to venturegrowth (Hypothesis 1 andHypothesis 2) and indirectly toven-ture growth through vision communication (Hypothesis 3).

Industry effects were controlled by studying a single industry.Three additional control variables were measured: (a)organiza-tion size, (b) organization age, and (c) past venture growth.Although Larwood et al. (1995) found no organization sizeeffects in their analysis of vision content, organization size andage were controlled because researchers report strong relation-ships between these variables and organization process and per-formance (Pugh, Hickson, Hinings, & Turner, 1968; Quinn,1980). Past venture growthwas controlled toprovide abaselinefor analysis of the effects on the performance variable.

Pilot StudyWe conducted thirty-one structured interviews with practicing

business founders and buyers (entrepreneur-CEOs) who intendedto "grow" their businesses. The purpose of the interviews wasto (a) determine whether they were aware of what a vision is,(b) evaluate whether they could write their vision in an open-ended questionnaire, and (c) discover vision attributes that hadnot been mentioned by leadership theorists. Twenty-two of the31 interviewees were entrepreneur-CEOs from the architecturalwoodwork industry, which provided the population for this study.The other interviewees were entrepreneur-CEOs from \brkCounty, Pennsylvania, manufacturing companies.

The questions about vision included, "Do you have a visionfor your firm? Can you summarizeit? Do you tell your employeesabout it? Does it matter for firm performance? What are theattributes of a good vision?" Twenty-twoparticipants (71%) wereable to summarize their vision. Nineteen (61%)said that theyhad communicated their vision to employees, and 11 (35%)saidthat visions were part of their firms formal motivation program.

The interviews exposed a high level of awareness of the adver-tised value of vision setting. Although a few participants ex-pressed the view that formal vision-setting programs were "justanother management fad," nearly all of the entrepreneurs feltthat it was useful to hold a personal mental picture of whatthey want their company to be. Over 90% (28 of 31) of the

Figure 1. Vision attributes, vision content, vision communication, and venture growth researchmodel. Hypothesis 1(HI) and Hypothesis 2 (H2) are the direct effects model. Hypothesis 3(H3) is the indirect effects model. Control concepts are denoted with an asterisk.


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46 BAUM, LOCKE, AND KIRKPATRICKinterviewees felt that most businesses benefit from having aclear, well-communicated vision. Among the array of conceptsthat were discussed, participants considered vision second inimportance only to self-efficacy as a cause of high ventureperformance. None of the interviewees added to, or disagreedwith, the list of seven attributes that were previously identifiedby leadership theorists (brevity, clarity, abstractness,challenge,future orientation, stability, and desirability or ability toinspire).

Population and RespondentsWe constructed a questionnaire to gather data for statistical

analysis of the research model. The survey population was the849 architectural woodwork industry companies in the UnitedStates. The population was identified in member lists from theArchitectural Woodwork Institute, Centreville, Virginia, andcustomer lists from three major suppliers of raw material tothe industry. The industry manufactures high-end custom woodproducts (stairs, moldings, entries, and cabinets) for residential,commercial, and industrial buildings. A letter to each CEO,an advertisement in a trade journal, and a presentation at anarchitectural woodwork industry convention introduced thestudy. Each communication stressed that the questionnaire re-sponses, which included performance data, would be mailed to,summarized by, and kept confidential by an independent dataservice that produces annual cost comparisons for industrymembers. Members were guaranteed that the authors could notlink responses with specific companies. CEOs were asked toreturn a response card if they were willing to participate andthey alsowere asked to identify a subordinate, with whom theyworked directly, whomight be willing toparticipate in the study.Wemailed questionnaires to the CEO andemployee-participant(EP) separately.To be consistent with the practice of entrepreneurship re-searchers (Carland &Garland, 1993; Gartner et al., 1992), par-ticipation in the study wasconstrained to include owner-found-ers and owner-buyers who had actively managed their busi-nesses (CEOs) for fewer than 12 years and who reported thatthey had intended to grow their businesses beyond "incomesubstitution" levels when they foundedor purchased their com-panies. Responses from companies with fewer thanfiveemploy-ees were excluded, as were responses from companies with anEP who had worked with the entrepreneur-CEO for less than2 years. The CEO's vision and reports from EPs about visioncommunication, demographic information about the entrepre-neur-CEOs and EPs, organization size and age, and 1991 and1992 performance data (sales, employment, profits, and networth) were collected in 1993. Performance data for 1994(sales, employment, and profits) were collected in 1995 usingthe same data collection practices used in 1993.

Three-hundred seventy-four entrepreneur-CEOs (44% of thepopulation of organizations) and 183EPs (21%)met the criteriafor our sample, including complete vision and complete 1991and 1992 performance data. Because we used a dual sourcemethodology (each observation required information from boththe entrepreneur-CEOand theEP),our sample sizewas limitedby the number of qualified EPs to 183. Among the 183 paired

entrepreneur-CEOs and EPs, visions were reported by 127 en-trepreneur-CEOs.

The average qualified entrepreneur-CEO respondent had 25employees and $2.3 million in sales in 1992. The typical EPwas a manager of sales, production, or administration; all EPsreporteddirectly to the entrepreneur-CEO.The averageEP had14 years of experience in the industry and had worked for theentrepreneur-CEO for 7 years.

We compared the population and sample means with respectto three known characteristics to test whether the sample of 183qualifying companies was representative of the population of849 companies and to determine whether the sample had sig-nificant statistical bias. There were no significant differencesamong mean employment levels (z = 0.32; p < .38), percentdistribution of companies by U.S. region (Northeast, z = 0.89,p < .19; South, z = 0.47, p < .32; Central, z = 0.49,p < .31;and West, z = 0.89, p < .19), and proportion of industry tradeassociation members (z = 1.4; p < .09).

MeasuresVision attributes. The questionnaire asked participants

whether they had a company vision (yes/no) and, if so,whetherit was written, spoken, or both. If the participants did not haveor did not know about a company vision, they were instructedto leave the open-ended vision item blank. If a company visionexisted in any format, the respondent was asked towrite itdownor enclose a copy of it; these visions were the basis for theanalysis. Although some of the reported visions may not qualityas visions under some definitions (they may be missions, strate-gies, or goals; or they may be unintelligible), we treated allresponses as worthy of study because this study's purpose wastodeterminewhether venture growth could be affected by what-ever CEOs identifiedastheir operative vision. Further, our accep-tance of whatever was reported as a vision was intended toproduce sufficient variability in the vision measure to test thehypotheses.

I. Robert Baum and a research assistant rated visions ac-cording to the seven attributes that had been extracted fromthe review of leadership theory (brevity, clarity, abstractness,challenge, future orientation, stability, and desirability or abilityto inspire). Each rater practiced rating seven vision prototypesthat contained extremes of each attribute (Collins & Lazier,1992; Collins & Porras, 1991; Locke et al., 1991) and referredto the prototypes during the rating of the actual visions. Eachdimension was scored along an 11-point scale from 0 to 10: 0(the attribute was absent), 5 (the attribute was present at amoderate level), and 10 (the attribute was present at a highlevel). If a participant indicated that his or her company didnot haveavision, vision attributes were scored as 0 andincludedin the test data. Appendix A includes typical visions and theirratings.

A principal-components factor analysis of the average scoresof the two raters yielded only one factor with an eigenvaluelarger than 1.00 (E = 5.18); all loadings exceeded .64, and74% of the variance was explained. Thus, we formed a singlevision attributes score for each respondent (for each rater) bysumming the seven attribute scores. Rater reliability for the totalscores was shownby a correlation between raters of .78 (p


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Table 1Measurement Model Reliabilities

Latent variableVision attributes

Vision attributes rater 1Vision attributes rater 2Vision contentVision content rater 1Vision content rater 2

Vision communicationWritten visionExplained visionVenture growthSales growthEmployment growthProfit growth

Organizational sizeOrganizational agePast venture growthSales growth

Employment growthProfit growth

ParametercoefficientW

0.990.920.990.770.780.881.000.880.53

0.960.920.61

If

0.980.850.980.590.610.771.000.770.28

0.920.850.37

Compositereliability0.96

0.88

0.81

0.85

1.001.000.88

Note. The parameter coefficient, lambda, indicates the strength of thereflection of the latent variable in the measure. The squared multiplecorrelation coefficient is the item reliability. Composite reliability, anindication of internal consistency, is the sum of the square roots of theitem squared multiple correlations, squared, and divided by the samequantity plus the sum of the error variances (Werts, Linn, &Jdreskog,1974).'Parameter estimate-standard error >2.0..001), andTable 1shows that the composite reliability (overallR) for the vision attributes was .96, which exceeds guidelinesfor good reliability (>.80; Fbmell & Larcker, 1981).

Vision content. The entrepreneur-CEOvisions were codedfor growth imagery by two authors using an 11-point scale.Visions that referred directly to high growth of profits, sales,employment, facilities, market share, financial strength, or prod-uct offerings were rated as 8, 9, or 10(see the Appendix, visionstatement 3). Visions with implications of growth or referencesto moderate growth were given midrange ratings of 4, 5, 6, or7 (see Appendix, Vision Statements 1, 2, and 4). Low ratingsof 0, 1, 2, or 3 were given for visions with no implications ofor references to growth (see Appendix, Vision Statement 5).The correlation between the two raters was .77 (p < .001), andthe composite reliability for the vision content latent variablewas .88, as shown in Table 1. Thus, the latent variable wasindicated reliably.

Vision communication. Vision communication was mea-sured with EPs' responses to two items: (a) "Does your com-pany have a written vision?" and (b) "Has your CEO talkedabout avision for the company'' (1 = yes; 0 = no)? Asshownin Table 1, the vision communication items had a compositereliability of .81.

Venture growth. Three measures of venture growth weredeveloped. Sales growth was measured as the difference be-tween 1992 and1994 sales,divided by 2, toequal average annualsales growth for the period. Similar calculations produced thesecond and third measures, average annual employment growth

and average annual profit growth. Similarly, the past venturegrowth control variable was measured with the difference be-tween 1991 and 1992 sales, employment, and profits.

Five companies had closed by 1994 for unknown reasons.Companies could have been bankrupt or could have been liqui-dated for a gain. Although it is unlikely that successful firmswere liquidated, we adopted a conservative approach. Analysisof the research model was conducted with alternative assump-tions about the appropriate value for 1994 performance forclosed companies: (a) the five cases with missing 1994 perfor-mance data were deleted (thus, n = 178 for this alternativesolution), (b) 0% wasassigned, and (c) -100% was assigned.Results were robust across all of these assumptions. Acceptingthe notion that the closing of a company was a performanceresult worthy of inclusion in the study, we included these fiveclosed companies in the analysis. We took the least extremealternative and report results hereinafter using 0% as the averageannual venture growth from 1992 to 1994 for closed companies.

The reliability of the raw performance data reported in thequestionnaire-was evaluated by checking the agreement of arandom sample of 30 of the entrepreneur-CEO responses withDun and Bradstreet, Inc. (D & B; 1993) reports. Wewere ableto find D & B information for 26 of the 30 cases. Results ofthe correlation and t tests are shown in Table 2.

The correlations among the self-reported and D & B perfor-mance measures were high and significant in all cases. Theaccuracy of the absolute level of the data was checked with ttests of means. Although the self-reports about sales, employ-ment, and profits were not significantly different than the D &B reports, the net worth data were significantly different: for1992, ((24) = 2.60, p < .02. Thus, net worth data were deletedas a measure. Owners of small, closely held companies maytreat company resources as if they were personal resources.Thus, equity may not be a good basis for indicating perfor-mance; accordingly, net worth data were not collected in 1995.As shown in Table 1, the three indicators of venture growth(sales growth, employment growth, and profit growth) devel-oped composite reliability of .85; this is sufficient (>.80) tosupport the position that the three growth measures reflect theunderlying latent variable reliably (Fomell & Larcker, 1981).We also found that the mean reported sales, employment, andprofit growth for the sample companies was 3% per year duringthe 1991 control year and 10% per year during the 1992 and1993 study period; these results are consistent with industryreports that 1992 and 1993 were years of recovery.

Controls. Organization size was indicated by the number of

Table 2Performance Data Reliability: Correlation and MeansDifference t Tests of Company- and Credit Service-ReportedData for 26 Randomly Selected Companies1992 performance

measureSalesEmploymentProfitNet worth

Correlation

.99.94

.97.94

/ of meansdifference

0.580.651.142.60

df24242424

P< .57< .52< .26< .02


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48 BAUM, LOCKE, AND KIRKPATRICK

employees. Log transformation was not used because the sizerange was not large and the distribution was not highly skewed.Organization age was measured as the number of years sincefounding or transfer of ownership to the entrepreneur-CEO.Past venture growth was measured as the difference between1991 and 1992 sales, employment, and profit.

In summary, the measurement model exhibited reliable mea-surement of the latent variables (all composite reliabilities >.80). As shown in Figure 2, all of the measure coefficients(lambdas) were significant, f(66) > 2.0; p < .05; thus, themeasurement modelhadconvergent validity. Discriminant valid-ity was verified by determining for each latent variable that theaverage variance extracted by the latent variable's measures waslarger than the latent variable's shared variance with any otherlatent variable (Fornell & Larcker, 1981). Thus, each latent

variable had more in common with its measures than with otherlatent variables.

ResultsDescriptive Statistics

The means and standard deviations of the study vari-ables and the correlations between them are shown inTable 3. The means are the average of the multiple mea-sures and pooled standard deviations are reported.

Analytical DesignThe relationship between the independent and depen-

dent variables was explored with solutions of an array of

Figure 2. Structural equation, direct effects, and measurement model. Measurement errorterms are not shown. Xi = vision attributes Rater 1; X2 = vision attributes Rater 2; Xj =written vision; X4 = spoken vision; X5 = vision content Rater 1; X& = vision content Rater 2;X7 = number of employees; X8 = years since founded/bought;X9 = sales growth 1991-1992;X,0 = employment growth 1991-1992; Xn = profit growth 1991-1992; Y! = sales growth1992-1994; Y2 = employment growth 1992-1994; Y3 = profit growth 1992-1994.x2(con-strained model) = 72.44; degrees of freedom = 36; p = .00. x2 (independence model) =1,234.61; degrees of freedom = 66; n = 183. Goodness-of-fit index = .92; adjusted goodness-of-fit index = .87; parsimony normed fit index = .43; root-mean-square error = .041; root-mean-square error of approximation = .054. 3> is symmetric with a standard diagonal; $0,and Of are diagonal. Asterisk denotes parameter estimate/standard error > 2.0.


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Table 3Means, Standard Deviations, and Correlations

Measure SD

1 .2.3.4.5.6.7.

Vision attributesVision contentCommunicationVenture growthOrganizational sizeOrganizational agePast venture growth

23.773.440.410.1025.008.450.03

21.223.100.470.2914.092.550.33

.16*

.36***

.37***.11

.06

.05

.25**

.30***.06

.11

.05

3*-.10

.04

.04

-.06

.07

.12.07

-.03 -.01Note. N = 183.*p < .05. **p < .01. ***p < .001.

structural equation models that were alternative configu-rations of this study's research model. The initial pathmodel, a direct effects model, had paths to venture growthfrom vision attributes, vision content, vision communica-tion, and the three control variables. An indirect effectsmodel was configured with additional paths from visionattributes and vision content through vision communica-tion to venture growth.'Direct Effects Model

Figure 2 shows the direct effects model for vision attri-butes, vision content, and communication to venturegrowth. Both vision attributes and vision content had sig-nificant paths toventure growth, which supports Hypothe-ses 1 and 2. Additionally, vision communication had asignificant relationship with venture growth; the controlvariable coefficients were not significant. We used thefollowing indices and interpretations to indicate structuralequation fit (Breckler, 1990; Browne & Cudeck, 1989;Joreskog & Sorbom, 1993; Wheaton, 1987): (a) Al-though it is highly sensitive to sample size, the chi-squareprobability should be larger than < .05 for amodel to beidentified as a good fit; (b) the goodness-of-fit index(GFI) and adjusted goodness-of-fit index (AGFI) shouldbe near or better than .90; (c) the parsimony normed fitindex (PNFI) should be greater than .50; (d) the root-mean-square residual (RMS) should be less than .100;and (e) the root-mean-square error of approximation(RMSEA) should be less than .080. The fit index resultsfor the direct effects model were: x2(36) = 72.44, p 2.0.

was slightly lower but still good, x2(23) = 72.08, p

a longitudinal study of the relation of vision and vision

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