EXPLORATORY FACTOR ANALYSIS OF ENTREPRENEURIAL ORIENTATION IN THE CONTEXT OF BANGLADESHI SMALL AND MEDIUM ENTERPRISES (SMES)

Generally, Exploratory Factor Analysis (EFA) is required to expose the appropriate items for using in the research instrument. Thus, this study takes steps to develop and validate instrument of Entrepreneurial Orientation (EO) construct through EFA particularly in the context of Small and Medium Enterprises (SMEs) in Bangladesh. This study is exercised EFA as it is far different from previous studies in terms of socio-economic, racial and cultural status and some items of the previous studies are no longer suitable for current research. More importantly, maximum number of previous studies examined only innovativeness, pro-activeness, and risk-taking as the dimensions of EO. However, quite a few researchers concentrating on other substantial attributes of EO. Hence, there is still no common agreement among researchers as the number of dimensions as well as items should be employed to measure EO. So, this study has examined innovativeness, pro-activeness, risk-taking, and resource-leveraging as the core dimensions to measure EO and also presenting an instrument of EO. This study adopted a cross-sectional research design, while quantitative data was collected from 384 SMEs across eight states in Bangladesh, using structured survey. Based on the reliability testing, this study finalized the instrument to twelve (12) items yielding three (3) dimensions, i.e., innovativeness (3 items), pro-activeness (3 items) risk-taking (3 items), and resource-leveraging (3 items). In this regard, researchers calculated the value of internal reliability (i.e., Cronbach Alpha value) for the current EO instrument. This study explained in detail the procedures for carrying out EFA analysis for EO construct. Future researchers could further extend the instrument presented in this study by cross-examining across the underdeveloped, developing and developed countries.