Importance of Entrepreneurial Leadership - Essay Example

?Assignment Entrepreneurial Leadership Entrepreneurial Leadership Teresa L. Stevenson Dr. Brenda Harper BUS 508: Business Enterprise July 14, Introduction Strong leadership rises to the top again and again as the key advantage that separates world-class companies from the rest. Strong leadership includes innovation that seriously takes into account the reality of change in society and the capacity-building for change. Leading at a time of change is every leader’s responsibility, be it in politics, government, and business. Leadership enhances entrepreneurship. Great leaders are able not only to craft winning competitive strategies, but also to drive critical innovation, implement change, and create agile organizations that can succeed in complex markets. (www.exed.hbs., 2011). Hence, entrepreneurial leadership is a hybrid leadership theory combining the principles of effective leadership and entrepreneurial skills. Such hybrid theory aims to ensure an optimal business results in practice. Hybrid Theory In today’s dynamic market, there is a need to combine the best principles and practices available in every entrepreneurship, management, and leadership theories. In short, looking at a wide range of possible help is important for an organization to survive. Since an organization is about people, it is imperative to understand the dynamics operative in the lives of people and how these can be made assets to the good of the organization. Arguably, the issue in every organization is “people knowledge” and “people management.” Entrepreneurial leadership is skills-based, competence-driven, and value-laden kind of leadership that aims to bring business companies to succeed. Entrepreneurial leaders are able to identify the right people for the right posts in order to ensure the effective and efficient operation of the company. They can achieve it by working hard, maintaining a constant message and/or being available to solve employees’ problems, and influencing them to meet the company’s standards, among others. Entrepreneurial leaders can build trust and confidence in employees, by showing employees that they are fully committed to achieving the vision. (www.growthink.com. The Definition of an Entrepreneur) Types of Organizations Entrepreneurial leadership builds on certain types of organization that give flesh to the theory. As such, every organization rises or falls with the theory it adopts for operation and sustainability. Every organization then becomes a necessary context within which a theory is bound up – for good or ill. The types of organization are the following: 1) Transactional Leadership Transactional leadership is a style of leadership in which subordinates seek motivation from their leaders via a combination of punishment and rewards in the workplace. An example would be subordinates might receive a punishment if they do a task incorrectly. In contrast, a reward might be given to subordinates who accomplish their tasks correctly and in a timely manner. Max Weber, one the founders of modern sociology, developed this leadership theory in 1947. However, there are things which transactional leadership needs to avoid. These are NEVER to: (1) assume that such leadership can be applied across all situations; (2) fail to harness the power of positive leadership; (3) rely on a reactive posture that can be characterized by indifference, delayed action, and/or absence; (4) provide leadership over task areas in which leaders have no expertise in; (5) coerce employees to do unethical actions. (cf. www.leadership-and-motivation-training.com. Transactional Leadership). 2) Transformational Leadership Transformational leadership is a type of leadership style that leads to positive changes in those who follow. Transformational leaders are generally energetic, enthusiastic and passionate. Not only are these leaders concerned and involved in the process; they are also focused on helping every member of the group succeed as well. (www.psychology.about.com. Transformational Leadership). There are four different components of transformation leadership: 1) Intellectual Stimulation, i.e., challenging the status quo as well as encouraging creativity among the people; 2) Individualized Consideration, i.e., fostering supportive relationships, by keeping lines of communication open allowing mutual exchange of ideas and views among people; 3) Inspirational Motivation, i.e., having a clear vision and articulating it clearly to the people, in view of instilling in them the same vision and passion for the success of the organization; and 4) Idealized Influence, i.e., serving as the role model to others to gain trust and confidence in the leadership. (www.psychology.about.com. Transformational Leadership). 3) Authentic Leadership Authentic leaders are those who pursue a life of integrity. They are not only honest in relationship with others but most importantly they are honest and true to themselves. Under such kind of leadership people become more honest with themselves and those they are in contact. In the process they develope mutual trust and respect for one another. (cf. www.ahigherself.com.au. Authentic Leadership). Leadership involves the transformation of people into highly competent individuals with a shared vision and a sense of social responsibility. In other words, since an organization is only as good as the people in it, it is important that the leader and his subordinates mutually develop positive relationships among themselves to ensure the success of the organization. “Transforming leadership ultimately becomes moral in that it raises the level of human conduct and ethical aspirations of both leader and the led.” (Burns 1978, 20). Therefore, under transformational leadership we believe an organization would most likely thrive. A leadership style that runs contrary to the transformational model will most likely spell the looming collapse of an organization. Meaning to say, when people are not valued on the merit of their dignity as persons, but merely on the basis of their capacity to function as expected, no organization can have a sustainable future. For example, it is not by reward and punishment, but by commitment and competence, that an organization can steadily grow. Thus, an organization will find it hard to develop adopting a transactional leadership paradigm. Business Administration/SCORE A systematic adoption of resources and tools for business development and sustainability are integral to business organizations. The Small Business Administration was founded on July 30, 1953, since then it has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses. SBA provides assistances primarily through its four programmatic functions: Access to Capital (Business Financing), Entrepreneurial Development (Education, Information, Technical Assistance & Training), Government Contracting (Federal Procurement) and Advocacy (Voice for Small Business). (www.SBA.gov. About SBA Services). SCORE is a nonprofit association dedicated to educating entrepreneurs and helping small businesses start, grow, and succeed nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA), and has been mentoring small business owners for more than forty years. (www.score.org ). SCORE is a valuable network of 13, 000+ volunteers who offer small business entrepreneurs confidential business counseling services at no charge. SCORE volunteers have the knowledge and experience to help any small business owner get the help they need. Our dedicated volunteers represent over 270,000 years of experience across 62 industries. (www.score.org ). Experience, expertise, and education are the important resources that must be present in every business organization. Given the evolving character of businesses, there have to be a continuing self-assessment, as well as a growing capability-building mechanism in businesses, in order to make their presence in the market relevant and sustainable. Hence, we can cite the programmatic function entrepreneurial development (involving the education, training, and updating of people) of small business administration as a promising resource for business organizations. Best Leadership Practices The principles of leadership necessarily include ways of doing that result in best practices. Some of these are the following: 1) Envisioning. Leaders have vision. Leaders have a strong sense of direction and a clear point of view. Unless the leader knows where he is going, people will be hesitant to follow. Leaders are always looking towards the future, plotting the course to new land, leaders are modern explorers, always seeking new lands and striving for distant shores. (www.thepracticeofleadership.net. Leadership Manifesto). 2) Creating change. Leaders create change. Leaders bring about change and leaders challenge the status quo. Leaders initiate change, before there is an urgent need for change. If there is no need for change, there is no need for leadership! Leaders bring about change, they initiate, they innovate, they make things happen, and they provide a better alternative to the status quo! (www.thepracticeofleadership.net. Leadership Manifesto). 3) Adapting to reality. Leaders know they do not live in a male-believe world. They face reality as it emerges. Leaders have the courage to face reality as it is, not as they imagine it to be. Leaders who fail to face reality as it is, delude themselves, they make change impossible and are doomed to fail. Leaders who face reality adapt their strategy and tactics to reflect reality. Leaders embrace reality and use it as a catalyst to accelerate change. (www.thepracticeofleadership.net. Leadership Manifesto). 4) Setting example. Leaders set the example. Leading by example is the most powerful form of leadership. Leaders are constantly seeking to become the change that they want to see in the world. They set the example and show the way. (www.thepracticeofleadership.net. Leadership Manifesto). Leadership is a function of consistent best practices that put into concrete ways principles and theories adopted to guide and achieve business tangible results. CONCLUSION Entrepreneurial leadership is an emerging paradigm-shift in today’s business organizations. It creates a new mindset of innovation needed in today’s increasingly changing market. Plainly, entrepreneurial leadership means that leadership is at the core of business. It puts in perspective the reasons why businesses are engaged in and the presuppositions as well as assumptions that need to be considered for an effective business. Entrepreneurial leadership is a visionary way of doing business that that puts premium on people as the most important element in business organizations. It is a vision that allows business organizations to see where they want to go. It also shapes the directions of business organizations towards their desired goals. References Authentic Leadership. (2006). A Higher Self. Retrieved from http://www.ahigherself.com.au/index.php.option=com_content&task=view&id=9. Entrepreneurial Leadership: The Definition of an Entrepreneur. (2011). Retrieved from http://www.growthink.com/businessplan./help-enter/entrepreneurial-leadership. Leadership-and-Motivation-Training.com. (2011). Transactional Leadership. Retrieved from http://www.leadership-and-motivation-training.com/transactional-leadership.html. Program for Leadership Development. (2011). Executive Education. Retrieved from http://www.exed.hbs.edu/programs/lbp/Pages/default.aspx. SBA.gov. (2011). U.S. Small Business Administration. Retrieved from http://www.sba.gov/about-sba-services/the-sba-website http://www.score.org. The Practice of Leadership. Leadership Manifesto. Retrieved from http://www.thepracticeofleadership.net/. Transformational Leadership. (2011). About.com Psychology. Retrieved from http://www.psychology.about.com/od/leadership/a/transformational.htm. Burns, J.M. (1978). Leadership. New York: Harper and Row. What is Transactional Leadership. (2011) Retrieved from http://www.wisegeek.com/what-is-transactional-leadership.htm. Read More