In The Last Three Decades Business Essays


Leadership is a philosophy rather than a single word. Leadership as the key dynamic force that motivates and coordinates the organization in the achievement of its objectives (Bass, as cited in Dubrin & Dalglish 2003, p 3). However the concept of leadership is defined by various theories. According to Great Man theories, great leaders are born not made. In conjunction with this, trait theories indicate leaders are gifted with certain traits not possessed by other people (Yukl 1998). However behavioural theories point out that leader can be made by suitable training (Cherry 2010). Contingency theories and situational theories are bit similar and indicates that leadership styles relied on some environmental and situational parameters. Participative leadership theories suggest leaders inspire participation and contributions of followers and involve them to the decision-making process. Transactional theories emphasize on the role of supervision, organization and group performance (Cherry 2010).To summarize all, it can be said that leadership depends on the qualities of the leaders (qualities may be God gifted or created) and interactions of the leader with his followers. On the other hand, entrepreneurship is a dynamic process comprised of vision, change, creativity and it requires energy and enthusiasm for creation and implementation of innovative ideas (Kuratko & Hodgetts 2004). SMEs are defined on the basis of turnover which is varied from country to country. For example, in EU, the numbers of employees for small enterprises are less than 50 and for medium enterprises are less than 250. Whereas in the USA, the corresponding figures are 100 and 500 respectively ( 2010).

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Leadership plays a vital role in order to achieve successful outputs for entrepreneurial organization. Research of Perren, Grant and Burgoyne reveals that leadership capability is one of the key to the development and success of SMEs. Similarly a recent study of Timmons concludes that leadership and vision are considered as significant facilitators of entrepreneurship (Kempster & Cope 2009, p.7-8). Likewise good leadership can address the problems of an enterprise through innovative and creative way which result in achievement of organization goal by establishing the mission of the enterprise (Marcketti & Kozar 2007). For this reason the Council for Excellence in Management and Leadership (CEML) was established in the UK and a working group was set up to build up a consistent leadership improvement scheme for UK SMEs (Kempster & Cope 2009). However recent research reveals that relationship based leadership styles shows a positive impact, with an intensity of more than double that of participative leadership. On the other hand task-oriented leadership style reduces the chances of transmitting the entrepreneurial spirit to the work team by having a negative influence on the generation of collective entrepreneurship in the firm( Soriano & Martinez 2007) . So all types of leadership styles are not suitable for successful entrepreneurial outcomes. That's why a new concept evolved in SMEs context which is known as entrepreneurial leadership. The main attributes of entrepreneure leaders are high degree of enthusiam and creativity, visionary perspective, preferance for dealing with external customers (Dubrin & Dalglish 2003), a positive and decisive mindset, intellectual stimulation, ambitious foresight and creative thinking (Gupta et al 2004). Both leadership and entrepreneurship literature acknowledge that the above mentioned attributes are emergent and evolving which is similar to trait theories (Kempster & Cope 2009). However authorities are not interested about the exixtance of an entrepreneurial leader. For example Howard H. Stevenson of Harvard Business School says,

"You can't build a single psychological profile of the entrepreneure because there are too many examples that breaks the rules" (Warshaw, as cited in Dubrin & Dalglish 2003,p.316).

In SME, entrepreneurship depends on efficient leadership to many extents in order to transfer innovative business proposal into successful entrepreneurial outputs. To start with, the key characteristic of the entrepreneurial process is its paradoxical nature (Smilor & Sexton ed. 1996). For instance in the entrepreneurial organization, order exists besides chaos. Although orders are essential to remove chaos, yet too much order kills the energy and the creativity of building process. In same way the entrepreneur must take short-term actions while maintaining long-term visions. This paradoxical feature is a big resistance towards the growth of enterprise especially at the initial stage of the enterprise. Eggers and Smilor conducted a study to find out which helps the entrepreneurs to deal with these competing and conflicting requirements (Smilor & Sexton, ed. 1996). Their study shows that it is the ability of entrepreneurs to correctly flex the way they lead. This involves using a complex but clear matrix of skills which on the surface may appear contradictory and paradoxical. Highly successful entrepreneurial leaders are very directive and influential, yet are able to delegate and let go of responsibility. Moreover a recent study indicates that entrepreneurial leaders, who are risk taker, hands-on and innovative, can stimulate new venture's inventive ability and creativity of their team members (Chen 2007).The perfect example is creation of Flight Centre in Australia by Graham Turner and Geoff Lomas in 1981. During that time airfares were strictly regulated in Australia. However they saw an opportunity to sell discount flights which was a bit different from stereotype practices. Their creative thought worked properly and at present Flight Centre is one of the top ranked travel facility providers in Australia whereas it was a medium sized company during foundation time (Dubrin & Dalglish 2003).

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There are some similarities between the characteristics and responsibilities of a leader and an entrepreneur such as innovativeness, desire for achievement, high energy level and creative vision (Dubrin & Dalglish 2003). However a study by Dalglish and Evans illustrates that there are dissimilarities also exists (Dubrin & Dalglish 2003, p.309). For example entrepreneurs may have problems with partnerships whereas efficient leadership is relied on the capacity to encourage and motivates followers while improving strategic alliances. Moreover entrepreneurs need a specific range of business related skills which builds on decisive skills of opportunity recognition. On the contrary, leadership involves a more personally specific set of skills, dependant on the character of the leader and involving skills that are relevant in a wide range of contexts. Similarly entrepreneurs accept failure and rise again whereas leaders depend on adaptability. Furthermore entrepreneurs interested about achieving workable groups although leaders prefer making group. Although leadership and entrepreneurship have some different dimensions, both of them are essential for entrepreneurial success.

There are lots organizations which benefited through the implementation of innovative thinking of entrepreneurial leaders. Vosges Ltd is one of them which manufactures chocolates and was established by Katrina Markoff in Chicago in 1997. In 1995 Katrina completed graduation in chemistry and psychology at Vanderbilt University in the USA. Later she finished a degree about cuisine, pastry and oenology in Paris. Moreover she worked in various restaurants in Europe, Asia, Australia and Hawaii. In 1997, she set up a shop in her own apartment in Chicago by getting loan from the Small Business Association (Greenwood 2010). Then she started experiments about how to make chocolates with unique flavours by mixing various ingredients such as spices, herbs, roots, flowers, fruits and nuts. Later she managed to make chocolates with unique flavours and started selling them. At present Vosges have fifty employees around their five stores in Chicago, Las Vegas and New York City and their annual revenue is around $12 million (Ladies Who 2010). In 2004 and 2007 Katrina was awarded as Woman of the Year and Food Artisan of the Year by Bon Appétit and Entrepreneur respectively (Greenwood 2010). At that time there was not enough innovations in chocolate industries. Considering this situation Katrina thought differently to make unique flavoured chocolates which enable customers to taste and experience flavours of different parts of the world which is an example of creativity and enthusiasm. Positive mindset, desire for achievement and high level of energy helped her to go through long time experiments by including flavours of different parts of the world such as Mexican ancho chili , Japanese wasabi , Indian curry and Italian taleggio (ladies who 2010). She implemented innovative idea by using experiences regarding diverse place, people and culture which she got during her travel and study into various countries (Greenwood 2010). This is not the ending of this story because innovative thinking never stopped. At present, Vosges is very concerned about environment and establishes green policies and green standards in every stage of production, despatch and shipping. For example all the plants use 100% renewable energy and all chocolate boxes are recyclable and made from 100% recycled material ( 2010).

The second case related to a financial institution named Grameen Bank which was founded by a social entrepreneurial leader named Muhammad Yunus (Dubrin & Dalglish 2003, p.320). In 1972, Yunus became Professor of Economics at the University of Chittagong in Bangladesh after completing study in the USA. At time the economy of Bangladesh was very bad because of the war of independence in 1971. He was very much anxious about the poverty of locals which inspired him to think innovatively to help them which is a feature of natural leaders who always personally involved in helping others (Butzloff & Greif 2007). By using his knowledge of economics, he formed micro credit scheme and initially he started providing low-interest unsecured loans to poor women. This helped them to start their own business and eventually enabled them to build their own house. Yunus realised that targeting those women with low-interest unsecured loans was a way to change the nation. As a result, his system evolved into the Grameen Bank. At present Grameen bank have nearly 1290 regional branches with more than 68000 local outlets. So far about $3.3 billion has been loaned to a total of 2.4 million people an about 40000 villages (Dubrin & Dalglish 2003, p.320). The pursuit of entrepreneurial profit can exist within an ethical leadership framework in the context of social entrepreneurship which was shown by Yunus in his guidance for radical and pioneering change in banking by his sensitive use of loan marketing to poor people (Butzloff & Greif 2007). His ability to self-empower women and their families is exemplified by the housing program of Grameen Bank, where these structures were designed by the people who would live in them and request financing to build them. These structures won the International Aga Khan Award for Architecture in 1989 and later, the World Habitat Award in 1997. At present his microfinance concept is serving the poor of wealthy nations including Indian tribes in the US and Canada, Finland and Norway (Conlin as cited in Butzloff & Greif 2007).

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In the above two example, Katrina and Yunus, are considered as entrepreneurial leaders because of their creative thinking, feeling for society, high degree of enthusiam, visionary perspective, positive mindset and emotional intelegence althouh none of them were born as leader or entrepreneur. They use their knwledge and experience to achieve their objectives. However in reality it is hard to find people with lots of attributes and this idea bit similar to trait approach. Anyway in this easy attempts are made to find relationship between leader and entrepreneure by focusing on the initiativeness, creativity and vision of the leaders. However effects of interaction between leader and group members was not focused properly because of limited access to resources and deadlines. In conclusion it can be said that leadership and entrepreneurship are the opposite sides of a coin and they have be intregated to get