The use of the Guttman scale in development of a family orientation index for small-to-medium-sized firms

This research study tests whether family orientation criteria in small-to-medium-sized businesses (SMEs) can be ordered in difficulty from broad to narrow, using an existing statistical technique referred to as the Guttman scaleogram or scale. The results of the study lend support to the notion of imbeddedness of criteria, at least among SMEs, that is, some criteria are easier to meet than others, and also that the sets of firms meeting the more difficult criteria are subsets of the firms meeting easier criteria. Furthermore, in the sample under study (885 Dutch SMEs), the family orientation index produced via Guttman scaling techniques predicts self-perceptions as a family business almost as well as a statistical approach treating criteria as separate variables in a multiple regression.

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