7. Measurement of the variables
Objective data were used for size, cost structure and business sector. Size was measured using the
annual sales turnover (£ million) for the respondents’ business unit. The cost structure of the business
unit was measured by indirect costs as a percentage of total costs and the respondents were asked to
indicate which of six business sectors applied to their business unit. The other independent variables of
interest required the use of perceptive measures and thus multi-question Likert-type seven point scales
were used to derive composite scores for each variable. Where possible the measures were based on prior
literature. Details specifying the number of questions used and Cronbach’s Alpha for the independent
variables are shown in Table 1.13