ENTREPRENEURIAL LEADERSHIP: A THEORETICAL RESEARCH

Abstract

In today`s business world, having just leadership qualities by business managers is not enough in order to maintain growth, development and sustainability of enterprises. In addition to this, business managers should be able to seek innovations, opportunities around them and take some risks. Managers with these qualities have both leadership and entrepreneurship characteristics. At this point, the concept of entrepreneurial leadership emerges. Entrepreneurial leadership can be defined as a leader, who is also have the skills of entrepreneurship. In other words, entrepreneurial leadership refers to the managers who can take risks, seize opportunities, pursue innovation and be innovative, producing, interchanging and strategic. In addition, entrepreneurial leadership is creating new products, new processes and expansion opportunities in existing businesses, working in social institutions and dealing with ignored social issues, participating in social and political movements, contributing to the change of current services and policies implemented by civil society organizations and governments. Entrepreneurial leaders know themselves and their environment very well and find new opportunities creating value for businesses, stakeholders and society. The main motivation of leaders is their desire to create social, environmental and economic opportunities. Today, the need for entrepreneurial leaders in businesses is increasing every passing day and the subject of entrepreneurial leadership should investigated by researchers. In this regard, in this study, the concepts of leadership and entrepreneurship are briefly defined in accordance with the earlier studies conducted in this field and the concept of entrepreneurial leadership, which has become increasingly important in the business world, is discussed and the characteristics and dimensions of entrepreneurial leadership and its importance for businesses is emphasized.

Full text

06 September 2016, 25th International Academic Conference, OECD Headquarters, ParisISBN 978-80-87927-27-4, IISES
DOI: 10.20472/IAC.2016.025.020
YUSUF ESMER
Sinop University Vocational School,, Turkey
FARUK DAYI
Kastamonu University Tosya Vocational School, Turkey
ENTREPRENEURIAL LEADERSHIP: A THEORETICAL RESEARCH
Abstract:
In today’s business world, having just leadership qualities by business managers is not enough in
order to maintain growth, development and sustainability of enterprises. In addition to this, business
managers should be able to seek innovations, opportunities around them and take some risks.
Managers with these qualities have both leadership and entrepreneurship characteristics. At this
point, the concept of entrepreneurial leadership emerges. Entrepreneurial leadership can be defined
as a leader, who is also have the skills of entrepreneurship. In other words, entrepreneurial
leadership refers to the managers who can take risks, seize opportunities, pursue innovation and be
innovative, producing, interchanging and strategic. In addition, entrepreneurial leadership is creating
new products, new processes and expansion opportunities in existing businesses, working in social
institutions and dealing with ignored social issues, participating in social and political movements,
contributing to the change of current services and policies implemented by civil society
organizations and governments. Entrepreneurial leaders know themselves and their environment
very well and find new opportunities creating value for businesses, stakeholders and society. The
main motivation of leaders is their desire to create social, environmental and economic
opportunities. Today, the need for entrepreneurial leaders in businesses is increasing every passing
day and the subject of entrepreneurial leadership should investigated by researchers. In this regard,
in this study, the concepts of leadership and entrepreneurship are briefly defined in accordance with
the earlier studies conducted in this field and the concept of entrepreneurial leadership, which has
become increasingly important in the business world, is discussed and the characteristics and
dimensions of entrepreneurial leadership and its importance for businesses is emphasized.
Keywords:
Leadership, Entrepreneurship, Administration, Entrepreneurial Leadership
JEL Classification: L26, L20, M10
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1. Introduction
Today, having just leadership or entrepreneurship qualities by business leaders is not
enough for success of enterprises. They need to have both leadership and
entrepreneurship qualities in order to be successful. At this point, the concept of
entrepreneurial leadership emerges. Entrepreneurial leadership is a new type of
leadership that is a combination of leadership qualities and spirit of entrepreneurship.
Entrepreneurial leadership has become a popular topic that needs to be discussed. In
this regard, in this study, the importance of entrepreneurial leadership is emphasized by
examining the concept of entrepreneurial leadership within a theoretical framework.
2. Leadership
In today’s business world, leadership has become increasingly important for businesses.
They must pay attention to leadership in order to achieve their objectives and ensure their
continuity. Leadership is generally defined as the process of influencing employees of an
organization in order to achieve organizational goals (Esmer and Dayi, 2014, p.400). On
the other hand, leadership is the ability of creating support and confidence needed to
achieve organizational goals among the people (Dubrin, 2012, p.2).
There are many definitions about leadership in the literature. There is a common
emphasized point on leadership in these studies. Leadership is the process of influencing
group members and guiding them to the right direction. The leader influence members of
the group by using his/her leadership characteristics in order to achieve the
organizational goals. Steering people to reach a goal requires different persuasion skills.
People with these skills and ability to persuade become leaders. Leadership is a social
phenomenon and has a purpose. Leadership is a power influencing the others. A group is
needed to have a leader. Leaders and groups create a value together and become a
trademark (Esmer, 2011, p.10).
Although there are many approaches trying to define leadership, studies conducted on
leadership classified leadership in three categories as Great Man Theory, Traditional
Leadership Theories and New Leadership Theories. These theories are summarized in
Table 1 given below (Aksel, 2008, p.34).
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Table 1: Leadership Theories
The Theory
Period
Summary of the Theory
Great Man Theory
Before 1950
Leader decides course of the
history.
Traditional
Leadership
Theories
Trait
Approach
Between
1910-1940
General and common
characteristics of the leader is
explained.
Behavioral
Approach
Between
1940-1960
Behaviors of the leaders are
told.
Contingency
Approach
Between
1960-1980
There is not a certain leadership
behavior that suits every
situation. It varies depending on
the situation.
New Leadership Theories
Authentic Leadership
Transformational Leadership
Spiritual Leadership
Charismatic Leadership
Ethical Leadership
Servant Leadership
Entrepreneurial Leadership
From 1980s
till today
It varies depending on the
direction of change of the
society.
Source: Aksel, 2008, p.34
As it can be seen in the above table, entrepreneurial leadership is one of the modern and
new leadership theories emerged recently.
3. Entrepreneurship
Entrepreneurship is a concept that is considered to be the driving power behind economic
growth, economic development, employment and social welfare in recent years. The
earlier studies conducted on entrepreneurship show that entrepreneurship is the fourth
factor of science of economy after labour, nature and capital factors. Entrepreneurship is
considered as the most important factor of production. Because entrepreneurship
includes goods or service creating actions by bringing production factors labor,
technology, capital and natural resources together. The entrepreneur is the person who
evaluates the opportunities in the market and bears the risk of profit and loss by bringing
production factors such as capital, natural resources and labour in order to produce
goods or services (Yilmaz and Sunbul, 2009, p.195).
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Although entrepreneurship is defined in different ways by many authors in the literature,
the common point of all definitions appears to be evaluating the opportunities. According
to the study of Andrew Bernstein (2011), some of the definitions of entrepreneurship are
shown in Table 2 (Kilic et al., 2012, p.425).
Table 2: Definitions of Entrepreneurship
Definition
Source
Entrepreneurship is defined as pursuit of opportunities
other than the resources currently under control.
Stevenson and Sahlman
(1989)
Entrepreneurship is defined as the relationship between
the presence of profitable opportunities and existence of
entrepreneurial individuals.
Shane and Venkataraman
(2000)
Entrepreneurship is defined as the occurrence process of
something new and estimations of risks and gains.
Robert D. Hisrich and
Peters (1998); Kinicki,
(2003)
Entrepreneurship is defined as employing anything in
itself.
Cantillon (1755)
Entrepreneurship is the ability of correctly estimating
deficiencies and imbalances in the market and exploring
the opportunities.
Kirzner (1973)
Entrepreneurship is the dynamic process of an
established and constantly increasing wealth.
Ronstadt (1984)
Entrepreneurship is the process of a valuable difference
created by time and effort and prediction of
accompanying financial, psychological and social risks as
well as financial rewards and personal satisfaction.
Hisrich (1989)
Entrepreneurship is defined as pursuit of opportunities by
individuals other than the resources currently under
control of them or their organization.
Stevenson et al. (1985)
Source: Kilic et al., 2012, p.425
According to the earlier studies in the literature, the personal characteristics of a
successful entrepreneur are self-confidence, determination, communication and
persuasion skills, openness to new ideas, having vision, using initiative, reliability,
positive thinking, flexibility, risk-taking, hard work, organizational ability, the ability to
control, knowledge, reconciled with the environment, persistence, rationality, seizing
opportunities and continuous self-renewal (Kucuk, 2014, pp.46-47).
4. Entrepreneurial Leadership
In this section, first entrepreneurial leadership is defined and the characteristics,
dimensions and importance of entrepreneurial leadership are discussed.
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4.1. Definition of Entrepreneurial Leadership
The success of the businesses depends on effective leadership skills of the
management. Entrepreneurial leadership is one of these effective leadership skills.
According to Alvarez and Barney (2002), entrepreneurial leadership is a type of
leadership that consists of actions towards establishment of a business at the individual
level, actions towards following the innovations at the organizational level and actions
towards benefiting from the opportunities that are distinguished at the market level
(Altuntas, 2014, p.11). Entrepreneurial leadership is a concept appeared by blending the
leadership potential with entrepreneurial spirit. When finer points and spirit of
entrepreneurship is added to the variable nature of leadership, entrepreneurial leadership
arises and it can change the course of the world (Kuru, 2016).
In the literature, sometimes entrepreneurship and leadership are used as interchangeable
terms. Then, entrepreneurial leadership is introduced. In entrepreneurial leadership, the
leader also has the entrepreneurial qualities (Gunduz, 2010, p.214). Entrepreneurial
leaders may adopt a completely independent and guiding role as well as a strategy
intertwined with the organization, which is a complex system (Gunduz, 2010, p.212).
Entrepreneurial leadership refers to the entrepreneurship status of a leader. In other
words, entrepreneurial leadership can be used for a leader who has the characteristics
such as taking risks, evaluating the opportunities, being innovative, productive,
interchanging and strategic.
4.2. Characteristics of Entrepreneurial Leadership
Cover and Slevin (2002) suggest that there are six main characteristics of the
entrepreneurial leadership. These main characteristics are described below (Yilmaz and
Gormus, 2012, p.4487) (Altuntas, 2010, pp.116-117):
 Supporting entrepreneurial skills: Effective entrepreneurial leaders consider the
human element as the source of entrepreneurial behavior and support
development of these behaviors.
 Interpretation of the opportunities: Entrepreneurial leaders can transmit the
value of an opportunity to general goals of an organization or a person benefiting
from the opportunity.
 Protecting the innovations threatening the current business model:
Individuals perceive disruptive innovation as a personal and organizational threat.
An entrepreneurial leader can inform others about potential benefits of the
disruptive innovation.
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 Questioning the current business logic: Entrepreneurial leadership requires
continuous questioning of the assumptions underlying the dominant logic in order
to identify a new value-creating opportunity and make sure that the organization is
positioned in a successful way.
 Reviewing the simple questions: Entrepreneurial leaders review the questions
about identification of the opportunities and employment of the resources needed
to sustain the life of the organization, definition type of organizational goals and
achievements and relationships developed with the stakeholders in a continuous
manner.
 Associating entrepreneurship with strategic management: Effective
entrepreneurial leaders believe that an organization should have the skills of
entrepreneurship strategically in order to create the highest value.
Besides, according to a study in Young Entrepreneur Council, there are 12 major
characteristics that are needed for a successful entrepreneur leader. These
characteristics are as follows (Young Entrepreneur Council, 2016):
Flexibility,
Humility,
Focus,
Determination,
Staying connected,
Vision,
Paranoid trust,
Ownership,
Positivity,
Marketing,
Self-awareness and
Listening others.
4.3. Dimensions of Entrepreneurial Leadership
Karcioglu and Yucel (2004) have conducted a study in order to identify personality
characteristics of entrepreneurial leaders and suggested that there are nine dimensions
of entrepreneurial leadership. These dimensions are as follows (Karcioglu and Yucel,
2004, p.418):
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Being a team player,
Vision,
Innovation,
Problem solving,
Being persistent,
Taking risks,
Adapting to changes,
Knowing the consumer needs and
Decisiveness.
4.4. Importance of Entrepreneurial Leadership
Entrepreneurial leadership is an important factor affecting the performance of the
company. Therefore, in today’s intense and dynamic competitive business environment,
leaders of companies and especially leaders of small-scale family companies should
have and use the qualities of entrepreneurial leadership in order to continue their lives,
compete with their competitors and develop themselves (Karcioglu and Yucel, 2004,
p.417).
5. Conclusion and Recommendations
Entrepreneurial leadership is one of the factors that are critical for companies in enabling
the success of reaching their business objectives. Therefore, entrepreneurial leadership
characteristics of people in the leading position affect performance, continuity,
effectiveness and productivity of the companies. These people should have
entrepreneurial leadership characteristics in order to gain competitiveness advantages,
grow and develop their companies and survive in this competitive environment. In
addition to leadership qualities, having an entrepreneurial spirit shows that the person in
the leading position is an entrepreneurial leader. Entrepreneurial leader characteristics
such as influencing others, vision, originality and courage as well as entrepreneurial
characteristics such as risk taking, seizing opportunities, pursuing innovations, being
innovative, productive, interchanging and strategic.
Entrepreneurial leaders know themselves and their environment very well and find new
opportunities creating value for businesses, stakeholders and society. The main
motivation of leaders is their desire to create social, environmental and economic
opportunities. The lack of resources or uncertainties don’t discourage them, instead these
problems motive them and lead them to search for new solutions to overcome these
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problems. Entrepreneurial leaders don’t sink into skepticism and they don’t remain under
pressure of problems. They direct people to fight against problems that seem impossible
to solve by making analyses and finding solutions with their productive thinking skills.
Entrepreneurial leadership is considered as referring to entrepreneurship. It is one of the
new and modern leadership types. Entrepreneurship is about establishing a new
business. On the other hand, entrepreneurial leadership is creating new products,
processes and expansion opportunities in the companies, working in social institutions
and stepping into participating in neglected social problems, social and political
movements, contributing to the transformation of existing services and policies of non-
governmental organizations and governments.
As a result; the need for entrepreneurial leaders in today’s companies is increasing day
by day. Therefore, applied trainings, seminars, conferences can be organized and
projects can be implemented in companies in order to increase the number of
entrepreneurial leaders.
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