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Leadership in start-ups


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This article explores the role of leadership in start-ups and outlines a model of when, why and how leadership behaviour of founder-CEOs influences start-up performance. The model has been tested using a sample of 102 start-ups and their founder-CEOs and includes feedback from 372 employees, rating their leadership behaviour of founder-CEOs. The results indicate that transformational leadership has a significant and positive effect on start-up performance. However, no significant, direct effects on start-up performance were found for transactional leadership or laissez-faire leadership. Furthermore, the size of the start-up has a significant, positive, moderating effect on the relationship between laissez-faire leadership and start-up performance, as well as a significant, positive, moderating effect on the relationship between the transactional leadership dimension, management by exception and start-up performance. Results indicate that for start-ups and their performance, leadership behaviour is as important as their context. Today, leadership is neglected by most entrepreneurs and is not considered a motivation for founding a business. The results show that founders should focus more on leadership behaviour.
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DOI: 10.1177/0266242616676883
Leadership in start-ups
Simon Zaech
GS1 Switzerland, Switzerland
Urs Baldegger
University of Liechtenstein, Liechtenstein
This article explores the role of leadership in start-ups and outlines a model of when, why and
how leadership behaviour of founder-CEOs influences start-up performance. The model has
been tested using a sample of 102 start-ups and their founder-CEOs and includes feedback from
372 employees, rating their leadership behaviour of founder-CEOs. The results indicate that
transformational leadership has a significant and positive effect on start-up performance. However,
no significant, direct effects on start-up performance were found for transactional leadership or
laissez-faire leadership. Furthermore, the size of the start-up has a significant, positive, moderating
effect on the relationship between laissez-faire leadership and start-up performance, as well as a
significant, positive, moderating effect on the relationship between the transactional leadership
dimension, management by exception and start-up performance. Results indicate that for start-ups
and their performance, leadership behaviour is as important as their context. Today, leadership is
neglected by most entrepreneurs and is not considered a motivation for founding a business. The
results show that founders should focus more on leadership behaviour.
founder-CEO, laissez-faire, leadership, size, start-up, start-up performance, transactional
leadership, transformational leadership
While leadership research in general has a long tradition (Bass and Bass, 2008; Day and Antonakis,
2012), entrepreneurship research is a fairly new field of research (Cornelius et al., 2006).
Accordingly, only a few theoretical and empirical studies address the interface of both domains.
This is surprising, as leadership is of high relevance for the success of start-ups. The foundation
and development of start-ups is inevitably connected with leadership. As a result, leadership is
Corresponding author:
Simon Zaech, GS1 Switzerland, Monbijoustrasse 68, Bern 3007, Switzerland.
676883ISB0010.1177/0266242616676883International Small Business JournalZaech and Baldegger
158 International Small Business Journal 35(2)
increasingly becoming part of the sphere of action of founder-CEOs and represents an essential
factor for successful venture development (Cogliser and Brigham, 2004).
In the current literature, the interface between leadership and entrepreneurship is often called
entrepreneurial leadership. This can be defined as the role a founder-CEO takes in the new business
in order to create the flexibility needed to attend to, and contend with, an uncertain environment
through the conception and realization of new transaction sets (Gupta et al., 2004). Most defini-
tions of entrepreneurial leadership focus on specific entrepreneurial behaviour or their exceptional
abilities, such as recognizing and exploiting entrepreneurial opportunities (Renko et al., 2015), or
the discovery and exploitation of strategic value creation (Gupta et al., 2004).
Our adaptation of the term ‘leadership’ in the specific context of start-ups is slightly different
from that described above. Our leadership perspective is influenced more by traditional leadership
theories, which have a more general understanding of leadership behaviour. One of the most widely
used definitions is that of Bass and Stogdill (1990):
Leadership is an interaction between two or more members of a group that often involves a structuring or
restructuring of the situation and the perceptions and expectations of members … Leadership occurs when
one group member modifies the motivation or competencies of others in the group. Any member of the
group can exhibit some amount of leadership. (pp. 19–20)
According to this definition, we see in entrepreneurial leadership a common form of leadership
behaviour, applied to a specific context. So, entrepreneurial leadership describes a person influenc-
ing and directing another person towards a certain action or way of thinking in the context of a start-
up. While entrepreneurial leadership defines the specific behaviour of a founder-CEO, our definition
describes his leadership behaviour in a specific context, that is, the start-up context, which is in line
with previous research done on start-ups (Ensley et al., 2006a; Peterson et al., 2009).
In the literature, no generally accepted definitions of start-ups are evident. Most authors speak
of a company in its first stage of operations. However, the beginning and end of this first stage are
not clearly defined, and the number of stages is not finally determined (Levie and Liechtenstein,
2010). As a first step, we have evaluated existing definitions of start-ups and conclude that most
refer only to the age of the firms as an indicator for start-ups. Therefore, we have chosen a period
of time between 5 and 12 years, as this corresponds with other research studies (Bruneel et al.,
2010; Pellegrino et al., 2012; Salomo et al., 2008). We argue that especially in these young firms,
which have limited processes, structures and routines, the leadership behaviour of the founder-
CEOs plays a crucial role. They have to develop a vision in order to motivate all employees, stimu-
late them intellectually and guide them to achieve the company’s vision.
All these aspects are covered in the full-range leadership (FRL) model developed by Bass
(1995), which is one of the most widely accepted leadership theories (Westerlaken and Woods,
2013). The model focuses on the relationship between the leader and the follower. In doing so, it
distinguishes between three types of leadership – transformational leadership, transactional leader-
ship and laissez-faire leadership. Transformational leadership is considered to be the most effective
and active form of leadership behaviour, and transactional leadership focuses on medium effective-
ness and activity, while laissez-faire leadership describes the least effective and most passive
leadership behaviour (Bass, 1995).
Transformational leaders motivate their followers by communicating an inspiring vision of
the future, often through the use of symbols and appeals to emotions of the followers. In addi-
tion, these leaders show respect to their followers and are genuinely concerned with their per-
sonal growth and development (Bass and Bass, 2008), by providing them with opportunities
that challenge them to learn new skills and abilities and by encouraging them to think
Zaech and Baldegger 159
continually about situations differently than they might have previously (Ayman et al., 2009).
Their social interactions with their followers are based on coaching or mentoring relationships
in which the leader takes responsibility for facilitating the growth and development of the fol-
lower (Bass and Avolio, 1993). Transformational leaders explore new ways of working, seek
opportunities in the face of risk, prefer effective answers to efficient answers and are less likely
to support the status quo.
Transactional leadership is characterized by contingent reward and management by exception
(Avolio and Bass, 1995). Contingent reward refers to the degree to which a leader sets up construc-
tive exchanges with his followers (Judge and Piccolo, 2004). In other words, a leader clarifies and
communicates to the follower what is expected and what they will receive if these expectations are
met (Avolio et al., 1999). It can be regarded as a motivation-based system that is used to reward
followers who meet their goals of the leaders. However, management by exception is the degree to
which the leader takes corrective action on the basis of results of leader–follower transactions
(Judge and Piccolo, 2004) and can be divided into an active and a passive dimension. The former
focuses on monitoring task execution for any problems that might arise and correcting those prob-
lems to maintain current performance levels (Avolio et al., 1999). In contrast, the latter describes
leaders who react with corrective action only after problems have become serious and who often
avoid making any decisions at all (Avolio et al., 1999). Bass (1995) described laissez-faire leader-
ship as the total absence of leadership. It implies a lack of concern and guidance for guidance of
the followers. With such a leadership approach, feedback, rewards and involvement are non-exist-
ent, while decisions are slow or not taken at all which can impact negatively on motivations and
needs of the followers.
Many empirical studies have reported a positive relationship between transformational leader-
ship behaviour and different performance indicators, regardless of whether the analysed firms were
start-ups or established firms (e.g. Gumusluoglu and Ilsev, 2007; Walumbwa et al., 2008; Wang
et al., 2011b). At the organizational level, the results are partly ambiguous and not clearly interpret-
able (Wang et al., 2011a). These conflicting results may be explained by the different contexts in
which the various studies were conducted. Leadership success is likely to be influenced signifi-
cantly by context variables such as firm development or company structure (Lowe and Gardner,
2000; Porter and McLaughlin, 2006; Shamir and Howell, 1999). Accordingly, the context in which
leadership takes place should be incorporated in research.
This study aims to address this research gap and focuses on the leadership behaviour of founder-
CEOs in a start-up context. In doing so, the main objectives of this article are to improve the under-
standing of leadership in start-ups and present new insights concerning the influence of leadership
behaviour on organizational performance. We hope to address the ways in which leadership behav-
iour influences start-up performance and how start-up size influences this relationship.
Theoretical background
The literature suggests that leadership success is primarily influenced by its context, which includes
business environment, company life cycle or firm structure (Porter and McLaughlin, 2006). Start-
ups operate in a specific context which is characterized by a high risk of failure (Ouimet and
Zarutskie, 2014), huge complexity and unforeseeable uncertainty (Sommer et al., 2009).
Furthermore, they are associated with a lack of experience and a high degree of flexibility and
dynamics (Pellegrino et al., 2012). Concerning the growth of start-ups, research points out the
growing resistance to organizational transformation processes and improvements with increasing
company age. In young enterprises, this resistance is much less developed, which simplifies lead-
ership in this context compared to leadership in established firms (Aldrich and Auster, 1985).
160 International Small Business Journal 35(2)
Limited financial and human resources are another central characteristic of start-ups (Romanelli,
1989), which often results in having a flat organization with a small number of levels of hierarchy.
In most cases, only one management level exists, which is led by the founder-CEO. Another char-
acteristic of start-ups is the degree of internal and external uncertainty that they can experience
(Sommer et al., 2009). Internal uncertainty is based on a short company tradition and a lack of
experience (Atherton, 2003) and is associated with a low level of developed routines and pro-
cesses. External uncertainty concerns specific environmental conditions such as a complex and
dynamic market in which young companies might be operating.
Most of the characteristics of start-ups described above are mentioned in the theoretical studies
of Bass (1995), Pawar and Eastman (1997) and Shamir and Howell (1999). In contrast, however,
the context of start-ups has seldom been the subject of empirical studies, as shown in our system-
atic literature review on the topic of leadership in such ventures. Following a simplified version of
the procedure outlined by Tranfield et al. (2003), we scanned the databases ABI/INFORM, EBSCO,
Emerald, SAGE, ScienceDirect and Wiley, to review only the most important journals in the
domains of leadership and entrepreneurship. These articles were chosen based on the following
three selection criteria: first, leadership behaviour is explicitly analysed in the context of start-ups;
second, it was published in a scholarly, peer-reviewed journal; and third, it was empirical in nature.
On this basis, nine studies were selected which are presented chronologically in Table 1.
Due to differences in operationalization approaches, research designs and sample compositions,
it is difficult to summarize and compare the results of prior research. For example, leadership
behaviour has been conceptualized differently and consequently, various questionnaires have been
applied. Jensen and Luthans (2006) researched authentic leadership using the Multi-Leadership
Questionnaire (MLQ) Form 5X-Short (Bass and Avolio, 1997), the future orientation by Knight
(1997) and the Ethical Climate Questionnaire by Victor and Cullen (1988). Moreover, the indi-
vidual research designs show variety, and several leadership models have been implemented. The
majority of the studies focused unilaterally on transformational leadership and disregarded both
transactional and laissez-faire leadership (Ensley et al., 2006a; Gumusluoglu and Ilsev, 2007),
which may have an impact on any conclusions drawn.
Hypothesis development
The few studies that examined leadership in start-ups have produced inconsistent results at the
organizational level. Nevertheless, analysing prior research on transformational or charismatic
leadership revealed a positive effect of transformational leadership at this level (Ardichvili, 2001;
Baum et al., 1998; Gumusluoglu and Ilsev, 2007; Peterson et al., 2009). Only Ensley et al.’s (2006a)
study found a significantly negative effect between transformational leadership and both sales
growth and employee growth. In general, most of the studies provide empirical support for the
assumption that transformational leadership has a positive effect on start-up firm performance.
According to the literature, the context of start-ups gives weight to the effectiveness of transfor-
mational leadership (Bass, 1995; Shamir and Howell, 1999). Following the FRL model, a founder-
CEO must create a vision for the start-up and motivate others to pursue their dreams in order to
attract employees and acquire the necessary resources for developing their new ventures (Baum
et al., 1998). Transformational leaders appeal to the ideals and morals of their followers to inspire
them to reach their highest levels of achievement and adopt the goals of the group (Bass, 1995).
Transformational activities appeal to the intrinsic rather than extrinsic motives of individuals
(Ensley et al., 2006b). Followers decide on their own to work towards the achievement of goals
because they understand and approve of them (Bass and Bass, 2008). Leaders are able to influence
and motivate their followers to act, ‘by using their ability to empower and to encourage others to
Zaech and Baldegger 161
Table 1. Authors, sample, variables and main results for leadership studies in start-ups.
Authors Sample Variables Main results
Baum etal.
127 firms operating in the timber
industry, which, on average, are 8.45
years old (SD = 2.55 years), achieve
annual sales of 2.3 million and employ
225 workers (SD = 14.09)
MV: charismatic leadership (vision content, vision
attributes and vision communication)
DV: venture growth (sales growth, employment
growth and profit growth)
CV: size, age and past venture growth of the firms
Charismatic leadership behaviour is a significant positive
predictor for firm performance
Features and content of the vision are significant positive
predictors for the communication of the vision
138 start-ups and 150 established
firms from Russia, 70% of which are
retail or service businesses
IV: laissez-faire leadership, management by
exception, contingent reward, transformational
DV: performance (satisfaction, extra effort,
CV: age and gender of the leaders
Inspirational motivation and charismatic leadership are found
to be significantly higher for founders being the leaders than for
Laissez-faire leadership and contingent reward are found to be
significantly higher for managers than for founders
Transformational leadership is a significant positive predictor
for employee satisfaction in case of both founders and
Contingent reward is a significant positive predictor for
employee satisfaction in the case of founders
Contingent reward is not a significant predictor for satisfaction
of followers
Ensley etal.
66 firms from the ‘Inc. 500-list’,
USA. All firms are currently in an
early development phase. Sales are
US$7,152,000, with an increase of
634%–10,432% within the preceding
years. The firms operate in 38
different industries, are on average 5.7
years old and hire 53 employees
IV: vertical and shared leadership
DV: venture growth (average annual revenue growth
and average annual growth rate in the number of
workers employed)
CV: age, size and TMT size of the firms
Vertical, directive leadership and vertical, transactional
leadership are significant positive predictors for venture growth
Vertical, transformational leadership and vertical, empowering
leadership are significant negative predictors for venture growth
Shared, directive leadership and shared, transactional leadership
are significant positive predictors for venture growth
Shared, transformational leadership and shared, empowering
leadership are significant positive predictors for venture growth.
Ensley etal.
66 firms from the ‘Inc. 500-list’,
USA. All firms are currently in an
early development phase. Sales are
US$7,152,000, with an increase of
634%–10,432% within the preceding
years. The firms operate in 38
different industries, are on average 5.7
years old and hire 53 employees
IV: transactional and transformational leadership
DV: new venture performance (revenue and
employee growth)
MV: environmental dynamism
CV: age, size and TMT size of the firms
Transformational leadership behaviour is a significant negative
predictor for firm performance
Transactional leadership behaviour is a significant negative
predictor for firm performance
Environmental dynamism moderates the relationship between
transactional leadership and firm performance significantly
Environmental dynamism moderates the relationship between
transformational leadership and firm performance significantly
162 International Small Business Journal 35(2)
Authors Sample Variables Main results
Jensen and
62 firms from Midwestern US states
which employ on average 3.6 workers
IV: authentic leadership (leadership behaviours,
future orientation and ethical climate of the
DV: job satisfaction, organizational commitment and
work satisfaction of the employees
CV: age, education, gender, ethnicity, prior
experience, familial relationship between
entrepreneur–leader and associate of the leaders
Authentic leadership is a significant positive predictor for job
satisfaction, work happiness and organizational commitment
and Ilsev
43 Turkish firms operating in the
software development industry. On
average, these firms were founded 5.8
years ago and employ 9.4 workers
IV: transformational leadership
DV: organizational innovation
MV: intrinsic motivation, psychological
empowerment, perception of support for innovation
and creativity
CV: educational level and job tenure of the followers
Transformational leadership is a significant positive predictor
for the creativity of followers
Transformational leadership is a significant positive predictor
for organizational innovation of these firms
Psychological empowerment moderates the relationship
between transformational leadership and employee creativity is
significantly positive
Intrinsic motivation does not mediate the relationship between
transformational leadership and employee creativity
Psychological empowerment partly mediates the relationship
between transformational leadership and creativity
Hmieleski and
Ensley (2007)
66 firms from the ‘Inc. 500-list’,
USA. All firms are currently in an
early development phase. Sales are
US$7,152,000, with an increase of
growth by 634%–10,432% within the
preceding years. The firms operate in
38 different industries, are on average
5.7 years old and hire 53 employees
IV: directive leadership (instruction and command,
assigns goals, active management by exception and
contingent reprimand) and empowering leadership
(encourages opportunity thinking, encourages
self-reward, encourages independent action and
participative goal setting)
DV: new venture performance (revenue and
employee growth)
MV: environmental dynamism (industry revenues,
number of industry establishments, number of
industry employees and research and development
intensity) and TMT heterogeneity (functional
specialization, educational specialization, educational
level and skill level)
CV: age, revenue and TMT size of the firms
Directive leadership is a significant positive predictor for new
venture performance
Empowering leadership is a significant negative predictor for
new venture performance
In a dynamic environment, heterogeneous TMTs report the
highest venture performance if directive leadership is applied
In a dynamic environment, homogeneous TMTs report the
highest venture performance if empowering leadership is
In a stable environment, heterogeneous TMTs report the
highest venture performance if empowering leadership is
In a stable environment, homogeneous TMTs report the highest
venture performance if directive leadership is applied
Table 1. (Continued)
Zaech and Baldegger 163
Authors Sample Variables Main results
Peterson etal.
49 start-ups and 56 established firms
from South-western US states. All
start-ups are currently in the product
development phase, achieve annual
sales of <US$1,000,000 and employ
<100 workers
IV: positive psychological traits (hope, optimism and
DV: firm performance (performance-to-plan,
achieved targeted net income goals for the year)
MV: transformational leadership, firm performance
time 2 and 3
CV: size, age and sales of the firms
Positive psychological traits correlate significantly with
transformational leadership
Positive psychological traits correlate strongly positively with
transformational leadership
Transformational leadership mediates the relationship between
psychological traits and firm performance completely
Transformational leadership has a higher impact on firm
performance in start-ups than in established firms
etal. (2012)
179 firms from the United States,
which operate in 97 different
industries, were founded on average 2
years ago and employed 51 workers
IV: shared authentic leadership and positive team
affective tone
DV: positive team affective tone and firm
performance (revenue growth and employment
CV: age, size, prior growth and environmental
uncertainty, team size, team interdependence, team
conflict, negative team affective tone of the firm
Shared leadership is a significant positive predictor for positive
team affective tone
Shared leadership is a significant negative predictor for firm
Positive team affective tone is a significant positive predictor for
firm performance
Environmental dynamism is no significant predictor for firm
IV: independent variables; DV: dependent variables; MV: moderator variables; CV: control variables; TMT: top management team; SD: standard deviation.
Table 1. (Continued)
164 International Small Business Journal 35(2)
achieve a shared vision and by leading through example’ (Roomi and Harrison, 2011: 7). This leads
to the first hypothesis concerning the relationship between transformational leadership and start-up
Hypothesis 1. The transformational leadership behaviour of the founder-CEOs will be posi-
tively related to start-up performance.
In contrast to transformational leadership, transactional leadership is focused on exchange
relationships between leaders and their followers (Burns, 1978). In this exchange process, lead-
ers appeal to the self-interest of their followers as a means of motivating them towards the
achievement of specific tasks. Primary transactional leadership behaviour includes contingent
reward behaviour and management by exception (Pearce and Sims, 2002). Contingent reward
behaviour can be described as clarifying expectations and administering rewards and punish-
ments according to specific performance criteria. Management by exception involves the close
monitoring of subordinates in order to ensure that goals are met (Bass and Riggio, 2006). Under
these circumstances, corrective action, usually in terms of punishment, is used to address perfor-
mance deficiencies.
Transactional leadership and laissez-faire leadership are associated with less activity and
involvement of the leader than in transformational leadership. Founder-CEOs playing a less
active role in the running of their venture might have negative consequences on work perfor-
mance and overall success: a start-up that lacks a CEO who creates and propagates a vision,
inspires and coaches their employees and does not intervene in business processes and procedures
when required is more likely to fail. Due to their newness and smallness, start-ups are more likely
to have less developed structures and processes to compensate for this lack of leadership capabil-
ity (Ensley et al., 2006b; Kerr and Jermier, 1978). However, the development of structures and
culture is time intensive and requires the constant interaction of the founder-CEO with both the
start-up and its employees.
Another explanation for the ineffectiveness of transactional and laissez-faire leadership in
start-up performance can be found in the need for future oriented and proactive leadership behav-
iour. A ‘watch and wait’ strategy is not expedient and can hamper a firm’s performance or even its
survival; for instance, if a single mistake is not discovered and corrected quickly. Small and
young ventures require any resources they can obtain, and belonging to networks can be of crucial
importance for their performance. Transactional and laissez-faire leadership are also based on the
legitimate power given to the leader within a firm’s bureaucratic structure (Kotter, 1990) and
generally tend to be concerned with final results such as work effectiveness, rewards and punish-
ments. A focus on outcomes is associated with managing workers by means of strict rules and
regulations to avoid change as far as possible and prevent decisions that could alter the status quo
of the organization. Such leadership behaviour, thus, prevents employees in start-ups from acting
as co-entrepreneurs or contributing proactively to its success. Therefore, we hypothesize the fol-
lowing hypothesis:
Hypothesis 2. The transactional and laissez-faire leadership behaviour of the founder-CEOs will
be negatively related to start-up performance.
In many leadership studies, company size has been incorporated as a descriptive variable of the
sample (Jung et al., 2003; Tosi et al., 2004; Tuan, 2010). However, there are also indications that
company size can have a moderating effect. For example, Bass and Bass (2008) suggest that a
venture’s size in itself does not make a difference. Instead, what counts are the various aspects
Zaech and Baldegger 165
related to company size, including a low degree of specialization or limited resources. In other
words, size influences the organization of a firm, its processes and culture (Koene et al., 2002).
The explanation of this assumption follows the pure substitution of the leadership argument
suggested by Kerr and Jermier (1978) and later expounded by Howell et al. (1990) and Podsakoff
et al. (1993). Formalization and standardization, which can be associated with the development of
start-ups, may have a substituting or neutralizing effect on the impact of transformational leader-
ship behaviour. By contrast, the development of structures and processes may have a supporting
effect on transformational leadership behaviour. According to Melcher (1976), smaller organiza-
tions represent a simpler and more integrated social system, with fewer people, fewer levels of
organizational hierarchy and less subdivision of work. To compensate for some of the problems of
increasing size, larger organizations seem to organize themselves differently showing more spe-
cialization, more formalization and less centralization (Osborn et al., 1980). Thus, the scope of
necessary organization seems to increase with organizational size (Jaques, 1989). These considera-
tions may have implications for the effectiveness of leadership styles in organizations of different
sizes, as larger start-ups may make more use of formal structures, systems and procedures, creating
a different internal context for leadership than those in smaller start-up ventures.
The moderating effect of company size on firm performance is supported by several prior stud-
ies (Koene et al., 2002; Ling et al., 2008; Peterson et al., 2009). For instance, Peterson et al. (2009)
showed a higher impact of transformational leadership on firm performance in small enterprises
than in larger ones, while Koene et al.’s (2002) research demonstrated that charismatic leadership
has a substantial effect on the working atmosphere and financial performance in small supermarket
stores, whereas the effect was smaller or did not exist in big supermarkets. These findings lead to
the following two hypotheses:
Hypothesis 3. Start-up size will negatively moderate the relationship between transformational
leadership and start-up performance.
Hypothesis 4. Start-up size will positively moderate the relationship between transactional lead-
ership and laissez-faire leadership and start-up performance.
Figure 1 presents the hypotheses of this study. As can be seen, in accordance with prior theoreti-
cal and empirical research (Ardichvili, 2001; Baum et al., 1998; Peterson et al., 2009), direct rela-
tionships between leadership behaviours and start-up performance have been included in this model.
Figure 1. The effect of leadership behaviour on start-up performance and the moderation effect of start-
up size.
166 International Small Business Journal 35(2)
In summary, we expect the main effects of transformational leadership to be positive (+H1),
whereas transactional leadership and laissez-faire leadership will probably have a negative effect
(−H2). For the moderation effect of start-up size, we anticipate that transformational leadership
will be less effective in larger sized start-ups than in smaller sized start-ups (−H3) and that trans-
actional leadership and laissez-faire leadership will be more effective in larger sized start-ups than
in smaller sized start-ups (+H4). The direct effect of the leadership behaviour on the start-up per-
formance and the moderating effect of the start-up size on the relationship between leadership
behaviour and start-up performance are shown in Figure 1.
To address participating start-ups and increase their willingness to be part of our study, a multi-
stage approach was employed. The following process was adopted. First, start-up centres in
Switzerland, Liechtenstein, Southern Germany and East Austria were contacted by mail and/or
phone. In collaboration with these centres, we identified potential start-ups for investigation.
Second, founder-CEOs of start-up ventures were asked whether they wish to participate in the
study. When they consented, the relevant information on the start-up, such as the date of founda-
tion, the number of employees and their field of business, was collected by browsing their home-
pages or short telephone interviews. In addition, their motivations for founding the start-up were
sought. According to the definition employed in this study, firms were aged between 5 and 12 years
and had a minimum of three employees. To guarantee the accuracy of the data, we collected this
information again in the online survey. Additionally, the founder-CEOs received an e-mail contain-
ing instructions on the method of the study, comprising an information letter, a leaflet with guide-
lines, the link to the online survey and a pre-composed e-mail for distributing the survey to the
firm’s employees. To guarantee the anonymity of the employees and facilitate the correct alloca-
tion to the respective leader, each individual was assigned an individual tracking number. This was
passed on to the employees and allowed the participants to be identified. This procedure started in
2012 and was completed 18 months later. Both authors were involved in the research, and the
start-up centres helped only by providing addresses of potential survey participants.
In total, 516 start-ups were invited to participate in the study and 124 firms were willing to take part
in the project. Out of these 124 firms, 22 had to be eliminated due to the fact that they either had
already passed the start-up phase (6 firms), they had not yet hired any employees (8 firms) or the
questionnaires were not answered completely or correctly. This resulted in a total sample of 102 start-
ups, implying a response rate of 24%. After the survey had been circulated by the founder-CEOs to
their employees, 372 completed questionnaires could be incorporated into the data analysis. The
geographical area of analysis was limited to Switzerland (56 firms, 54.9%), Liechtenstein (18 firms,
17.6%), Southern Germany (18 firms, 17.6%) and East Austria (10 firms, 9.8%). Restriction to these
areas has the advantage that possible cultural influences are minimized. At the time of the survey, the
average age of the start-ups was 8.03 years (standard deviation (SD) = 2.57 years), and the number of
employees was 32 (SD = 75.75); 80.4% of the start-ups had less than 20 employees, whereas 5.9%
had between 20 and 30 employees. A total of 13.7% of the firms had more than 30 and less than 220
employees. The questionnaire enabled the participating firms to indicate their field of business on a
wide scale of 17 different categories. According to this categorization, most start-ups were service
Zaech and Baldegger 167
firms (18.6%), followed by software and IT firms (16.7%) and mechanical and engineering firms
(14.7%). In total, these represented 50% of the questioned start-ups with the other 50% being allo-
cated to 14 different industries. Concerning the employee sample, we found that 3.65 employees per
start-up (SD = 1.22) participated in the survey. On average, these employees were 42.71 years old
(SD = 8.75 years), and 32.00% were female (n = 119), while 68% (n = 253) were male. The employ-
ees had been hired on average for 4.42 years at the time of the survey (SD = 5.00 years) and had
cooperated with their leaders for 3.53 years (SD = 3.98 years).
Two online surveys were compiled, one version for the founder-CEOs and another for the employ-
ees. The survey for the founder-CEOs covered questions about the performance of the start-up and
the firm in general as well as some personal questions. The employee survey was designed to
gather information on the leadership behaviour of the founder-CEO and personal data. The varia-
bles used for the underlying study are explained below.
Independent variable: leadership behaviour. To operationalize the leadership behaviour of the founder-
CEOs and that of the employees, we utilized the MLQ. Developed by Bass (1985), the question-
naire has been elaborated to measure the FRL model. On the basis of the original versions of the
MLQ published in 1985, several different versions have been developed and empirically tested.
Today, the most frequently used version is the MLQ Form 5X-Short which has proven statistical
reliability in several studies (Bass and Avolio, 1997; Kirkbride, 2006; Tejeda, 2001). This survey
comprises 36 items that examine transformational, transactional and laissez-faire leadership.
Respondents are required to assess items on a Likert-scale of 1 (never) to 5 (almost always). Five
factors represented by 20 items are integrated into the questionnaire to measure transformational
leadership: idealized influence – attributes (e.g. I go beyond self-interest for the good of the group),
idealized influence – behaviour (e.g. I consider the moral and ethical consequences of decisions),
inspirational motivation (e.g. I talk optimistically about the future), intellectual stimulation (e.g. I
re-examine critical assumptions to question whether they are appropriate) and individualized con-
sideration (e.g. I help others to develop their strengths). Transactional leadership is represented by
12 items and includes contingent reward (e.g. I make clear what one can expect to receive when
performance goals are achieved), management by exception, which can be divided into manage-
ment by exception active (e.g. I keep track of all mistakes) and management by exception passive
(I wait for things to go wrong before taking action), while laissez-faire leadership is operational-
ized with four additional items (e.g. I avoid making decisions).
For our research, we used the German version of the MLQ Form 5X-Short provided by Mind
Garden and developed by Bass and Avolio (1995). It has been used in a series of other studies in
which its validity and reliability have been verified. For example, Avolio et al. (1999) and later
Antonakis et al. (2003) have reported good values for its convergent as well as its discriminant
validity. In the context of young enterprises, particular parts of the questionnaire were used and
indicated good psychometric validity (Ardichvili, 2001; Ensley et al., 2006b; Peterson et al., 2009).
The questionnaire used in this study was elaborated in the German-speaking area and was tested
using a confirmatory factor analysis with orthogonal, oblimin rotation (Zäch, 2014). Indicators for
validity and reliability showed good to very good values (measure of sampling adequacy: .687–
.947, Kaiser–Meyer–Olkin: .889 and explained variance: 69.527%).
Dependent variable: start-up performance. The founder-CEOs were required to evaluate the success
of their start-up firm. In this context, sales growth is often used as a performance indicator
168 International Small Business Journal 35(2)
in entrepreneurship research (Gilbert et al., 2006). Therefore, sales growth was included in the
survey, supplemented by the relationship between sales growth and pre-established goals, that is,
sales growth and entrepreneurial behaviour. The comparison of sales growth with the pre-estab-
lished goals has already investigated by Peterson et al. (2009) and Ling et al. (2008). This issue was
assessed on a scale of 1 (much lower than expected) to 5 (much higher than expected). Comparison
with the leader in the respective field of business is also a widely applied method of operational-
izing performance (e.g. Choi et al., 2008; Garcia-Morales et al., 2012; Murray and Kotabe, 1999).
For this, the five-scale anchors ranged from 1 (much lower than industry leader) to 5 (much higher
than industry leader).
Moderator variable: start-up size. The company size was collected as a moderator variable and was
defined as the number of employees at the time of the survey.
Analytic approach
In this study, regression analysis was applied as the primary statistical procedure for answering
hypotheses 1 and 2. With our sample size of 372, we are in line with Green’s (1991) recommenda-
tion. For testing the interaction effects of hypotheses 3 and 4, moderated regression analysis was
used. In addition, all interactions were graphed using a procedure proposed by Cohen et al. (2003).
Following this, the slope of each graph was tested using Dawson’s (2014) procedure. The signifi-
cance of each graphed interaction slope was tested. Aiken and West (1991) recommend a test for
the simple slopes of the graphed interactions to identify whether they deviate significantly from
zero. As they argue, it is simply not enough to assume that the interaction graph demonstrates that
the change in performance is significantly different from zero without testing for the significance
of the slope. These tests allow both the importance and the meaningfulness of the interaction to
be expanded.
In the first step of data analysis, the scales of the MLQ Form 5X-Short were tested for internal
consistency. To test for reliability, we took the sample of 372 questionnaires gathered from the
followers and calculated Cronbach’s alpha. In line with previous research (Antonakis et al., 2003;
Ensley et al., 2006b), we used the five dimensions of transformational leadership as indicators
(α = .918). In the original questionnaire, contingent reward (α = .802) was defined as a sub-
dimension of transactional leadership. However, no high correlation between contingent reward
and management by exception was found (r = .101, p < .05). In a further step, as proposed by
several authors (Barling et al., 2000; Densten and Gray, 1999), the active and passive management
by exception behaviour style scales (α = .843) were treated as an indicator of management by
exception. The remaining four items referred to the dimension of laissez-faire leadership (α = .823).
In the next step, the indicators of the dependent variable were tested. Based on these results, we
composed the factor start-up performance. This factor includes four items, which constitute
Cronbach’s alpha of .770. To obtain normal distribution, start-up size was measured as the natural
log of the number of employees.
Table 2 presents the means, standard deviations, zero-order correlations and reliabilities of both
leadership behaviour and start-up performance. Additionally, scale reliability estimates are pro-
vided along the diagonal within Table 2.
Table 3 provides the results of hierarchical moderated regression analyses for start-up perfor-
mance. Hypothesis 1 stated that transformational leadership behaviour would be positively
Zaech and Baldegger 169
related to start-up performance. Our results support this hypothesis, as transformational leader-
ship was positively related to start-up performance (β = .152, t < .05). Hypothesis 2 specified
that the transactional and laissez-faire leadership behaviours of the founder-CEOs would be
negatively related to start-up performance. However, no significant effects on either type of
leadership behaviour were found (contingent reward: β = .087, t < .05; management by excep-
tion: β = −.006, t > .05; laissez-faire leadership: β = .103, t > .05); thus, hypothesis 2 could not
be supported.
Hypothesis 3 advanced that start-up size would negatively moderate the relationship between
transformational leadership and start-up performance. Although the main effect of transforma-
tional leadership was supported, no significant interaction effect was found (β = −.027, t > .05).
Accordingly, hypothesis 3 is not supported by our results.
Table 3. Results of hierarchical moderated regression analyses for start-up performance.
Dependent variable Start-up performance
Model 1 Model 2
Control variables
Start-up age −.110* −.121*
Start-up size log .432*** .429***
Leadership behaviour
Laissez-faire leadership .103 .075
Management by exception −.006 .019
Contingent reward .087 .101
Transformational leadership .152* .152*
Laissez-faire leadership × start-up size .193***
Management by exception × start-up size .111*
Contingent reward × start-up size .020
Transformational leadership × start-up size −.027
Explained variance (R2) .203*** .243***
Standardized regression coefficients are shown. N = 102 start-ups.
*p < .05, **p < .01, ***p < .001.
Table 2. Means, standard deviations, zero-order correlations and reliabilities of study variables.
MSD 1 2 3 4 5 6 7
1. Start-up age 8.19 2.48
2. Start-up size log 1.07 .52 .389***
3. Laissez-faire leadership 1.99 .63 .166*** .072 .823
4. Management by exception 2.80 .39 .164*** .044 .346*** .843
5. Contingent reward 3.93 .61 −.074 −.061 −.311*** .101* .802
6. Transformational
3.98 .51 −.058 −.004 −.376*** −.050 .657*** .918
7. Start-up performance 3.43 .90 .059 .390*** .030 .032 .136** .176** .779
SD: standard deviation.
*p < .05, **p < .01, ***p < .001, two tailed.
170 International Small Business Journal 35(2)
Hypothesis 4 postulated a positive moderating effect of start-up size on the relationship between
transactional leadership and laissez-faire leadership and start-up performance. Support was found
for negative interaction between management by exception and start-up size (β = −.111, t < .05)
and laissez-faire leadership and start-up size (β = .193, t < .001). However, no support was found
for an interaction effect of contingent reward and start-up size (β = .020, t > .05). Therefore,
hypothesis 4 is not supported.
To illustrate the moderating effect of the start-up size on the efficacy of leadership behaviour
more clearly, we graphed the interaction effects, following the procedures proposed by Dawson
(2014). The interaction graphs for management by exception and laissez-faire leadership are pre-
sented in Figures 2 and 3. In Figure 2, the graphs indicate that high levels of management by
Figure 3. Interaction graph of management by exception with start-up size.
Figure 2. Interaction graph of laissez-faire leadership with start-up size.
Zaech and Baldegger 171
exception in large start-ups were associated with higher start-up performance, rather than low per-
ceptions of management by exception under similar conditions of start-up size.
Figure 3 shows that high levels of laissez-faire leadership in large start-ups were associated with
higher start-up performance, rather than low laissez-faire leadership under similar conditions of
start-up size. Furthermore, tests were run to identify whether the simple slopes of the graphed
interactions were significantly different from zero. Significance of the interaction graphs was
found for both types of leadership behaviour.
This study examined the effects of leadership behaviour of the founder-CEOs on start-up perfor-
mance. Based on our results, we are able to draw three main conclusions. In short, we find evidence
that transformational leadership behaviour has a significant and positive effect on start-up perfor-
mance. Furthermore, in larger start-ups, laissez-faire leadership has a significant and positive effect
on the performance, while in smaller start-ups, it shows a negative effect. Similar results were
found for the management by exception leadership style. High transactional leadership has a sig-
nificant positive effect on performance in larger start-ups, while transactional leadership shows
negative effects in smaller start-ups.
As stated in hypothesis 1, the main effect of transformational leadership on start-up perfor-
mance was positive, which is in line with earlier research (Baum et al., 1998; Peterson et al., 2009).
In his first presentation of the FRL model, Bass (1985) had already found that intellectual stimula-
tion is most valuable in unstable environments such as start-ups. In fact, start-ups operate in a
context that is highly risky (Ouimet and Zarutskie, 2014), complex and uncertain (Sommer et al.,
2009) as well as open, flexible and unstructured (Shamir and Howell, 1999). Therefore, the quali-
fications and experiences of a founder-CEO to guide the organization and its members through this
stage are decisive. Through transformational leadership, the founder-CEO can communicate his
vision, which may motivate the employees and provide them with a deeper understanding of their
contribution to the firm’s success. Through transformational leadership, teamwork and team spirit
are stimulated, and optimism is generated. Employees feel supported, and their confidence in the
founder-CEO and in the company and its chance of success is reinforced. A transformational
leader, however, does not only create and communicate a vision but also presents his belief that the
vision can be achieved through common effort and with great conviction (Bass and Riggio, 2006).
Hypotheses 2 and 3 could not be supported. An explanation may be found in Ensley et al.’s
(2006b) study in which they measured the impact of directive leadership, consisting of instruction
and command, assigning goals, active management by exception and contingent reprimand.
Results showed that in a dynamic environment, heterogeneous top management teams (TMTs)
achieved the highest venture performance if directive leadership is applied. In another study,
Hmieleski and Ensley (2007) concluded that environmental dynamism moderates the relationship
between transactional leadership and firm performance significantly negatively, suggesting that
there are many other variables which might influence the effectiveness of leadership behaviour in
start-ups. An overview of different contextual factors that can influence the effectiveness of leader-
ship behaviour was conducted by Porter and McLaughlin (2006). Specifically, they found that
leadership is likely to have only an indirect effect on firm performance and suggest that factors
such as commitment or motivation might be the missing link.
Hypothesis 4 proposes the positive moderating effects of start-up size on the relationship
between laissez-faire leadership and start-up performance and transactional leadership and start-up
performance. The results do not support the hypothesis. A positive moderating effect has been
shown only for laissez-faire leadership and management by exception leadership behaviours. This
172 International Small Business Journal 35(2)
supports the findings of prior studies on the moderating effect of company size on the relationship
between leadership behaviour and firm performance (Koene et al., 2002; Ling et al., 2008; Peterson
et al., 2009).
In the early stages of a start-up, the firm’s internal development is of vital importance because
existing structures and processes influence its future (Ardichvili, 2001; Kotey and Slade, 2005;
Leitch et al., 2010). In this context, the pure substitution of leadership argument was introduced,
which suggests that formalization and standardization implemented during the development of
new ventures can at least partly substitute for or neutralize the potential effects of transformational
leadership (Kerr and Jermier, 1978). Following our arguments, growing start-up ventures risk los-
ing their open context through the implementation of processes, structures and routines, which may
substitute or complement the founder-CEO’s leadership activity (Kerr and Jermier, 1978; Podsakoff
et al., 1993). Standardized and recorded processes allow the founder-CEO to successfully adopt a
more passive leadership behaviour. Intervention in working procedures can be reduced and instead
processes, structures and routines provide employees with guidance enabling them to act accord-
ingly. As a result, the founder-CEO can focus on his/her role as a leader concerned with more
strategic issues.
This study can offer important insights for practitioners. Its results indicate that there is no sin-
gle type of leadership behaviour to guarantee success. In different contexts, leaders need to be able
to utilize different leadership behaviours and evaluate their effectiveness and, furthermore, that
these have to be authentic. While transformational leadership was found to be an important predic-
tor of the success of start-up performance, an effect on transactional leadership was also found. To
summarize, founder-CEOs cannot display one single type of leadership behaviour for all situa-
tions. They need to adapt their behaviour to the respective situation and context to be most success-
ful. Therefore, they need a variety of abilities and skills in addition to the basic competence
necessary for founding and running a business. Leadership is an interpersonal process that requires
more sophisticated capabilities than developing a product and attracting the first customers.
In the German-speaking part of Europe, entrepreneurship is mostly understood to be the crea-
tion of a new business (Fuchs et al., 2008). The growth of firms and leadership potential are not
seen as important aspects of entrepreneurship. However, as soon as the first employee is employed,
the founder-CEO will have to focus on leadership tasks. Accordingly, we recommend that leader-
ship should be integrated into entrepreneurship education. This is especially important as potential
founders do not consider leadership to be a requirement when considering starting a new venture
creation (e.g. Sieger et al., 2014).
Limitations and future research needs
The reported findings should be viewed in the light of some limitations of the investigation, which
suggest directions for future research.
First, the leadership behaviour of the founder-CEOs was evaluated only by their employees,
which might have led to biased ratings. Future studies are advised to also incorporate self-assess-
ments of the founder-CEOs in order to reduce this bias.
Second, although we have based our research model on the FRL model, other conceptual mod-
els and related definitions of leadership dimensions should be considered in future research. We
also suggest the inclusion of shared leadership in the research design. Shared leadership is based
on the concept of vertical leadership (Pearce et al., 2007; Pearce and Sims, 2002) and implies that
the leadership task is not focused on one particular leader but shared by a group of individuals
(Pearce and Conger, 2003). Since in start-ups, the founder-CEO frequently represents the only
existing leadership level (Melcher, 1976), shared leadership could be a possible remedy to this
Zaech and Baldegger 173
problem. Moreover, shared leadership could increase identification of the employees with the start-
up, which can have a positive effect on firm performance.
Third, future research should include the perspective of the employees more clearly. For
instance, the FRL model could be extended by the concept of super-leadership in order to integrate
the self-leadership perspective of the follower (e.g. Manz, 1986; Manz and Sims, 1990). In this
way, the influence of the founder-CEOs on their followers could be explored and possible impacts
on the individuals, such as their self-leadership behaviour on the organizational level (start-up
performance), could be recorded. Furthermore, self-leadership of the founder-CEO can have an
impact on the effectiveness of their leadership behaviour. Empirical support is given for the
assumption that effectively leading oneself is associated with effectively leading others (Furtner
et al., 2013).
Fourth, this research does not include additional individual characteristics or processes such as
group composition, cohesiveness and homogeneity. This may have made understanding the com-
plexity of the relationship between founder-CEOs and followers difficult. In team research, for
instance, it has been found that homogeneous groups work together more efficiently due to their
similar character traits, which in turn leads to a higher degree of team cohesiveness (Horwitz and
Horwitz, 2007; Turner et al., 1992). On the other hand, Hmieleski and Ensley (2007) show that in
dynamic industry environments, heterogeneous teams achieve better firm performance when led
by a directive leader, while homogeneous new venture teams show best results when led by an
empowering leader. Even if results in this field of study are inconsistent (Klotz et al., 2014), they
reveal possible effects of the team composition on the company’s performance. This, in turn, can
have a positive effect on start-up performance, even though empirical results may be inconsistent.
The author(s) received no financial support for the research, authorship and/or publication of this article.
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Author biographies
Simon Zaech obtained his PhD from the University of Liechtenstein. He works as a consultant at GS1
Urs Baldegger holds the Van Riemsdijk Chair in Entrepreneurship at the University of Liechtenstein.
... Comparable to the literature in the field of business model research, there is no common sense regarding a universal definition of "start-up" (Zaech and Baldegger, 2017). Following Kollmann et al. (2022), criteria for the designation as a start-up are required to distinguish start-ups from large companies and conventional company foundation processes in particular. ...
... Luger and Koo's (2005) criterion of "new" may be specified by Kollmann et al. (2022) with their criterion of "recently founded" as start-ups that are not older than ten years. In particular, the start-up age is often used as the most decisive definitional criterion (Zaech and Baldegger, 2017). In contrast, Luger and Koo's (2005) criterion of "independent" is not part of Kollmann et al.'s (2022) more recent delineation criteria. ...
Conference Paper
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As the number of security incidents increases, a market is emerging for established and new providers of security measures. However, we lack an idea of the business models of cyber security start-ups, which are seen as innovation and security drivers, to protect the economy from existence-threatening incidents. Due to the intangible nature of the cyber threats that security solutions aim to address, previous research on business models cannot be fully transferred. We address this research gap by developing a taxonomy following Nickerson et al. (2013) based on 90 cyber security start-ups and performing a cluster analysis to understand the business activities of cyber security start-ups concerning the protection of critical infrastructures. Our taxonomy will benefit interested decision-makers such as CISOs who want to identify custom-fit cyber security solutions for their organizations. Furthermore, investors and cyber security providers understand the market holistically and can identify innovative product approaches to adopt themselves.
... We replace the numerator of equation (1) In the current research context on the attention allocation between home and overseas markets, the chairman of the board and CEO of INVs possess holistic knowledge of the characteristics of the organisation and firms' strategy. Thus, they play decisive roles in these critical issues at the entrepreneurial stage despite the presence of other board members (Hambrick, 1981;Zaech and Baldegger, 2017). Therefore, following the practice adopted in the previous literature (Gao et al., 2019), we define the political connections of an INV if the chairperson of the board or CEO has worked or currently serves in public administration or as a member of the National People's Congress or the Chinese People's Political Consultative Conference at the municipal-level or higher levels. ...
Drawing upon the attention-based view, we examine whether political connections facilitate or hinder the speed of new venture internationalisation. Given the limited managerial attention and information-processing capacities of decision-makers, international new ventures (INVs) need to make a trade-off between domestic business activities and rapid foreign expansion. We hypothesise that INVs with political connections, being embedded in political networks in their home market, tend to focus their attention on domestic business activities rather than rapid internationalisation. We also hypothesise that a high level of subnational trade openness mitigates the baseline negative relationship. Analyses based on the longitudinal data of INVs publicly listed in China support the hypotheses. Our study contributes to the literature by unveiling the dilemma of INVs which are developing board political connections at home and seeking rapid internationalisation abroad.
... The leadership of human resource management in start-ups play a prominent role in the company's success. Many companies face challenges in overcoming the various administrative difficulties among team members, which threatens its continuity and expansion (Zaech and Baldegger, 2017). DEs in their early stages execute many changes to their business models. ...
Purpose-Digital entrepreneurship is the key to economic survival and the lantern of jobs in developing countries. The debate about the challenges facing early digital entrepreneurs (DEs) in developing countries is still ambiguous. This study attempts to fulfill the gap with an in-depth examination of Jordan. Design/methodology/approach-Referring to a digital start-up database hosted by the Ministry of Digital Economy and Entrepreneurship in Jordan, the study interviews a random sample of (n 5 45) early (less than one-year seniority) DEs. Thematic analysis is carried out facilitated by NVivo 20 software. E-Commerce, agriculture technology, data and artificial intelligence and entertainment were at the top of the interviewed start-ups. Findings-Nine challenges were observed, critically analyzed and discussed. The challenges are (1) the lack of realistic funding in terms and guarantees; (2) the negligence of guidance and advisory of incubators and entrepreneurship centres; (3) the emergence of unexpected risks; (4) the stringent economic situation; (5) competition; (6) legal and legislative obstacles; (7) obstacles to accessing markets; (8) team management and finally (9) disorganization in the entrepreneurial environment. The study sets recommendations to support early DEs in their journey. Practical implications-This study highlights the significant implications for aspiring DEs by focusing on some challenges that might face their start-ups such as institutional, technology and local dimensions of context and measures to develop the entrepreneurial and digital competencies. This includes sustainable funding, poor direct guidance and advisory, unexpected failures/risks, and economic obstacles. This study might be considered a road map for the decision-makers to build their strategies for eliminating the main barriers for early DEs and start-ups. Originality/value-Although recent literature discussed the challenges of entrepreneurs in Jordan, this is the first that identifies early DEs' challenges and uses 45% samples of the community.
... Small businesses and start-up enterprises (SUEs) try to reach the market faster, and grow with the support of business alliances and government programs. SUEs are developed in team leadership with objectives of short-run business performance (Zaech and Baldegger, 2017). Start-up face high environmental uncertainty and also experience high failure rates, but the minority that cross these dams will have the potential to grow and thrive (Griffith, 2014). ...
In the new economy, due to increasing competition among e-businesses, it is important to have a proper business model in e-businesses for success in your career. The purpose of this study is to investigate the factors affecting e-business model in Iranian startups. The statistical population of this study consisted of ten Iranian startups. The main variables of this study include key partners, key activities, key resources, value proposition, customer relationship, communication channels, cost structure, revenue streams, e-business culture and supply chain. Data were collected through interviews, questionnaires and documentations. Delphi hourly method was used to determine validation of questionnaire and Cronbach's alpha method was used to determine the reliability. Data analysis technique was performed through structural equations. In this study, the impact of key dimensions of research model mentioned above, on e-businesses was proven. Dimensions of e-business model increase productivity in Iranian startups and affect their success.
... Sevilla-Bernardo, Sanchez-Robles, and Herrador-Alcaide (2022) argue that the core seven success factors of YICs include the Entrepreneurial Team, which includes lower and middle managers. The Entrepreneurial Team often performs a multiplicity of crucially strategic leadership tasks outside their core job functions because YICs often don't have the funding for large, robust teams with clearly defined responsibilities (Zaech and Baldegger 2017). In YICs, middle managers often move beyond just implementing their firm's tightly prescribed strategy but instead help orchestrate an emergent process (Boyett and Currie 2004;Dasgupta 2015). ...
Purpose This paper examines the impact of leadership behaviors on startup's entrepreneurship in Vietnamese southern areas in the time of Covid-19. Design/methodology/approach The paper uses OLS regression model to evaluate the impact of leadership behaviors on startup's entrepreneurship in Vietnamese southern areas. Besides, the paper also uses AHP method to identify the factors that influence leadership behaviors in startups in the context of economic shock like the Covid-19 pandemic. Findings Results reveal that the transformational leadership behavior has a positive correlation with startup's entrepreneurship while the transactional and laissez-faire leadership behaviors are negatively related to startup's entrepreneurship. In addition, using AHP method, certain determinants of leadership behaviors in startups have been specified; among which, the most profound influencing factors are respectively hi-tech use (0.081), training policy (0.079) and check (0.78). In contrast, the factors with negligible impacts include recruitment policy (0.004) and culture (0.037) in startups in the context of economic shock like the Covid-19 pandemic. Research limitations/implications This research only evaluates this impact in the Covid-19 times. In the future, comparisons between the time after the Covid-19 at traditional enterprises and state enterprises are to be done to clarify the difference of this impact. Practical implications By using OLS model and AHP model with the data collected from 209 start-ups, the paper examines the impact of leadership behaviors on start-up's entrepreneurship in the time context of economic shock like the Covid-19 pandemic and propose some recommendations to enhance entrepreneurship in startups in the developing countries. Social implications This study is a step forward in the entrepreneurship research branch that investigates the entrepreneurship issue from the perspectives of social and interpersonal processes. With the identification of the leadership behaviors’ role in shaping start-up's entrepreneurship come highly applicable implications towards the emergence of more effective entrepreneurial startups in the time of Covid-19 and this prevalent digital context. Originality/value With the identification of the leadership behaviors' role in shaping startup's entrepreneurship come highly applicable implications toward the emergence of more effective entrepreneurial startups in the time of Covid-19 and this prevalent digital context. This study is conducted to analyze the impact of leadership behaviors on startup's entrepreneurship in the southern areas of Viet Nam having the most startups but affected the most seriously by the Covid-19 pandemic, which has not research on this topic for startups in a developing country like Vietnam in the context of an economic shock.
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In modern business, personal branding (PB) is perceived as a ‘leadership imperative’. The main purpose of the present article is to analyse last-year students, often being professionals and market-entrant entrepreneurs, at the same time, attitudes towards PB’s role in business. Primarily, it is investigated whether they need to be taught principles, rules and tools of PB in the course of their studies. To achieve this goal, a qualitative, in-depth interview method is used. The data are analysed using the thematic analysis method. The results obtained supplement the knowledge of management sciences with issues concerning the perception of PB and state a significant set of practical implications for the authorities of universities and the authors of academic curricula.
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Strategic leadership and knowledge transfer are a vital part of multinational companies. Although there is research on leadership and knowledge, few research studies comprehensively study the relationship of transformational, transactional, and passive/avoidance leadership with the transfer of tacit and explicit knowledge in the context of multinational companies. To test the hypothesis of the incidence of strategic leadership on knowledge transfer, there were surveys answered by forty managers of medium and high level and nine interviews answered by expatriate managers working in multinational companies located in the Republic of Panama. The results show that there is a significant incidence of strategic leadership on the transfer of knowledge. Finally, the study provides a model and three axioms for understanding the relationship of strategic leadership and knowledge transfer in the context of multinational companies.
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This study investigated vertical versus shared leadership as predictors of the effectiveness of 71 change management teams. Vertical leadership stems from an appointed or formal leader of a team, whereas shared leadership (C. L. Pearce, 1997; C. L. Pearce & J. A. Conger, in press; C. L. Pearce & H. P. Sims, 2000) is a group process in which leadership is distributed among, and stems from, team members. Team effectiveness was measured approximately 6 months after the assessment of leadership and was also measured from the viewpoints of managers, internal customers, and team members. Using multiple regression, the authors found both vertical and shared leadership to be significantly related to team effectiveness (p < .05), although shared leadership appears to be a more useful predictor of team effectiveness than vertical leadership.
Technical Report
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What are students’ entrepreneurial intentions and activities across the world? This question is of highest social and economic relevance. Students represent the entrepreneurs of tomorrow; their entrepreneurial plans and activities will shape tomorrow’s societies and the overall economic well-being. Hence, it is of highest interest for different stakeholders such as academics, practitioners, educators, policy-makers, and last but not least students how many students intend to pursue an entrepreneurial career and how those entrepreneurial intentions come into being. The GUESSS project (Global Universiy Entrepreneurial Spirit Students' Survey) addresses this question on a global level. For that purpose, the 6th data collection wave in the history of GUESSS was conducted in 34 countries at more than 700 universities between October 2013 and March 2014. This led to a dataset with more than 109’000 complete student responses. This report provides an in-depth analysis of this unique dataset, shedding a nuanced light on students’ entrepreneurial intentions and concrete activities. We focused in particular on crosscountry comparisons, whereby we also consider numerous other relevant aspects, such as gender and specific social and cultural determinants. Importantly, we also compare our results to those based on the GUESSS data collection in 2011 which allows us to recognize important trends and developments. Most importantly, we see that entrepreneurial intentions in most countries seem to be stagnating or have even declined compared to 2011.
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Issues related to leadership theory, research, and practices within the field of industrial/organizational (I/O) psychology are examined. Several special circumstances with regard to leadership are first considered, including the varied domains in which leadership is relevant, its multilevel nature, the multiple sources of origin for leadership, and the multiple outcomes in terms of leader emergence and effectiveness. Various leadership theories and frameworks are reviewed, organized around classical theories (evolutionary, trait, behavior, and contingency), bridging theories (charismatic/ transformational, leader-member exchange, and leadership perceptions), and emerging approaches (team, shared, and capacity approaches). Future directions in terms of leadership theory, research, and practice are proposed, concluding with a summary of what I/O psychologists know about leadership and speculation as to what has yet to be learned.
Young firms disproportionately employ young workers, controlling for firm size, industry, geography and time. The same positive correlation between young firms and young employees holds when we look just at new hires. On average, young employees in young firms earn higher wages than young employees in older firms. Further, young employees disproportionately join young firms with greater innovation potential and that exhibit higher growth, conditional on survival. These facts are consistent with the argument that the skills, risk tolerance, and career dynamics of young workers are contributing factors to their disproportionate share of employment in young firms. Finally, we show that an increase in the regional supply of young workers is positively related to the rate of new firm creation, especially in high tech industries, suggesting a causal link between the supply of young workers and new firm creation.
Shared Leadership: Reframing the Hows and Whys of Leadership brings together the foremost thinkers on the subject and is the first book of its kind to address the conceptual, methodological, and practical issues for shared leadership. Its aim is to advance understanding along many dimensions of the shared leadership phenomenon: its dynamics, moderators, appropriate settings, facilitating factors, contingencies, measurement, practice implications, and directions for the future. The volume provides a realistic and practical discussion of the benefits, as well as the risks and problems, associated with shared leadership. It will serve as an indispensable guide for researchers and practicing managers in identifying where and when shared leadership may be appropriate for organizations and teams.
Transformational Leadership, Second Edition is intended for both the scholars and serious students of leadership. It is a comprehensive review of theorizing and empirical research that can serve as a reference and starting point for additional research on the theory. It can be used as a supplementary textbook in an intense course on leadership--or as a primary text in a course or seminar focusing on transformational leadership. New in the Second Edition: New, updated examples of leadership have been included to help illustrate the concepts, as well as show the broad range of transformational leadership in a variety of settings. New chapters have been added focusing specifically on the measurement of transformational leadership and transformational leadership and effectiveness. The discussion of both predicators and effects of transformational leadership is greatly expanded. Much more emphasis is given to authentic vs. inauthentic transformational leadership. Suggestions are made for guiding the future of research and applications of transformational leadership. © 2006 by Lawrence Erlbaum Associates, Inc. All rights reserved.