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Consequences of Cultural Leadership Styles for Social Entrepreneurship: A Theoretical Framework

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The purpose of this conceptual article is to understand how the interplay of national level institutions of culturally endorsed leadership styles, government effectiveness, and societal trust affects individual likelihood to become social entrepreneurs. We present an institutional framework comprising cultural leadership styles (normative institutions), government effectiveness (regulatory institutions), and societal trust (cognitive institutions) to predict individual likelihood of social entrepreneurship. Using the insight of culture-entrepreneurship fit and drawing on institutional configuration perspective we posit that culturally endorsed implicit leadership theories (CLTs) of charismatic and participatory leadership positively impact the likelihood of individuals becoming social entrepreneurs. Further, we posit that this impact is particularly pronounced when a country’s regulatory quality manifested by government effectiveness is supportive of social entrepreneurship and when there exist high levels of societal trust. Research on CLTs and their impact on entrepreneurial behavior is limited. We contribute to comparative entrepreneurship research by introducing a cultural antecedent of social entrepreneurship in CLTs and through a deeper understanding of their interplay with national level institutions to draw the boundary conditions of our suggested framework.
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sustainability
Article
Consequences of Cultural Leadership Styles for
Social Entrepreneurship: A Theoretical Framework
Etayankara Muralidharan 1, * and Saurav Pathak 2
1School of Business, MacEwan University, Edmonton, AB T5J 4S2, Canada
2
College of Business Administration, Kansas State University, Manhattan, KS 66506, USA; sauravp@ksu.edu
*Correspondence: muralidharane@macewan.ca
Received: 15 December 2018; Accepted: 9 February 2019; Published: 14 February 2019
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Abstract:
The purpose of this conceptual article is to understand how the interplay of national-level
institutions of culturally endorsed leadership styles, government effectiveness, and societal trust
affects individual likelihood to become social entrepreneurs. We present an institutional framework
comprising cultural leadership styles (normative institutions), government effectiveness (regulatory
institutions), and societal trust (cognitive institutions) to predict individual likelihood of social
entrepreneurship. Using the insight of culture–entrepreneurship fit and drawing on institutional
configuration perspective we posit that culturally endorsed implicit leadership theories (CLTs) of
charismatic and participatory leadership positively impact the likelihood of individuals becoming
social entrepreneurs. Further, we posit that this impact is particularly pronounced when a country’s
regulatory quality manifested by government effectiveness is supportive of social entrepreneurship
and when there exist high levels of societal trust. Research on CLTs and their impact on
entrepreneurial behavior is limited. We contribute to comparative entrepreneurship research
by introducing a cultural antecedent of social entrepreneurship in CLTs and through a deeper
understanding of their interplay with national-level institutions to draw the boundary conditions of
our framework.
Keywords:
social entrepreneurship; cultural leadership styles; charismatic; participative; government
effectiveness; societal trust
1. Introduction
Social entrepreneurs operate in organizations ranging from for-profit firms to non-profit firms
with a key focus on bringing about social change in the community that they operate in [
1
,
2
]. Social
entrepreneurship (SE) as a body of knowledge has therefore gained attention due to its promising
potential for alleviating problems such as poverty and illiteracy [
1
8
] and “carries particular relevancy
for sustainability research in entrepreneurship” [
9
] (p.21). Social entrepreneurial processes address
not only economic sustainability, social sustainability, and ecological sustainability [
10
], but also
psychological sustainability [11].
However, the influence of context on SE stands out as an under researched area [
6
,
12
]. In particular,
scholars have suggested theorizing a contextualized perspective of social entrepreneurial behavior [
13
].
To fully understand SE, the influence of the institutional environment on entrepreneurial behavior must
be accounted for to understand determinants of such behavior [
14
]; unfortunately, research in this area
is limited [
15
]. All entrepreneurial behavior is contextually embedded in social, cultural, and political
institutions [
16
21
]; therefore, there is growing recognition that such behavior must be interpreted
in the context in which it occurs [
22
,
23
]. Such behavior is particularly important in the context of
sustainability [
11
,
24
,
25
]. Different contexts can facilitate or constrain key entrepreneurial processes,
such as innovation [
26
,
27
]. While it is observed that SE varies substantially across countries [
28
],
Sustainability 2019,11, 965; doi:10.3390/su11040965 www.mdpi.com/journal/sustainability
Sustainability 2019,11, 965 2 of 19
our knowledge of the factors at the micro (individual) and macro (country) levels that drive these
differences is limited [
29
,
30
]. We attempt to add to this field of scholarship by examining the influence
of macro-level institutions, mainly by elucidating the lesser researched role of cross-cultural leadership
styles on SE and how their effects are moderated by other prevailing institutions in a country.
Studies on social entrepreneurial behavior suggest that such behavior like commercial
entrepreneurial behavior is influenced by leadership skills [
13
]. However, the context of leadership
has received scant attention in SE research [
31
], further limiting our understanding of the links
between leadership and SE [
32
]. Research has yet to find leadership patterns that are specific to
entrepreneurship [
33
]. The entrepreneurial process in general has previously been viewed in the same
vein as leadership [
34
]. SE in particular has been viewed as “catalytic leadership” with the objectives
of social change in areas pertaining to social issues [
35
37
]. The links between leadership styles and
entrepreneurship remain unclear [
34
], as do the links between culturally endorsed leadership styles
and entrepreneurship, both commercial and social. More recently, scholars have begun to examine the
effect of culturally endorsed implicit leadership theories (CLTs) on entrepreneurship [
38
], particularly
SE [25,39,40].
Our framework seeks to address the leadership–entrepreneurship gap by specifically examining
how cultural leadership styles influence SE. As our starting point, we define leadership as
“the nature of the influencing process – and its resultant outcomes – that occurs between a leader and
followers and how this influencing process is explained by the leader’s dispositional characteristics and
behaviors, follower perceptions and attributions of the leader, and the context in which the influencing
process occurs [italics added].” [41] (p. 5)
This definition suggests that the effectiveness of leadership may be contingent upon the context
within which leadership behaviors occur [
42
]. In other words, different leadership styles may be
required in different contextual settings, such as in different cultures.
Drawing upon implicit leadership theory (ILT), our framework attempts to elucidate the influence
of CLTs—that is, culturally shared stereotypes of effective and outstanding leaders—on individuals’
engagement in SE. Specifically, the leadership of social organizations has been shown to be intrinsic
to societal culture [
43
]. Our approach is consistent with the full-range leadership theory [
44
,
45
]
that contributes to the research on the topic by moving beyond leaders’ characteristics and traits to
leadership styles, such as transactional, transformational, instrumental, charismatic, visionary, etc., and
how these styles affect the influencing process, in this case engaging in SE. We identify CLTs that are
strongly influenced by societal-level cultural orientations [
46
] as dimensions of a country’s normative
institutional context. We specifically examine CLTs that reflect (1) the ability to inspire and motivate
(charismatic CLT) and (2) the degree to which leaders involve others in making and implementing
decisions (participative CLT).
Contextual factors may influence which leadership styles are effective in inducing desired
behaviors in followers [
47
]. However, such a likelihood is a function of individuals’ feasibility
assessments and the influence of other contextual variables [
48
,
49
]. Therefore, the effects of CLTs
in inducing socially motivated entrepreneurial behaviors may also be influenced by other national
institutions, a factor that leads us to propose the moderating role of the quality of the other formal and
informal institutions in the influence of CLTs on SE. The more these formal and informal institutions
support individual agency, the stronger will be the effects of CLTs on the likelihood of individuals
becoming social entrepreneurs. Specifically, we review literature to understand the role of country-level
government effectiveness and societal trust, two contextual factors that strengthen individuals’ agency
beliefs and make it easier for them to access the resources required for their enterprises [10,30,50].
Government effectiveness, which is a formal institution, ensures that resources are made easily
available for individuals engaging in SE [
10
,
30
]. Similarly, informal institutions, such as generalized
interpersonal trust (societal trust), also form a basis on which these individuals establish credibility
to garner resources for their social enterprises [
50
]. Therefore, in our theoretical framework we
Sustainability 2019,11, 965 3 of 19
accommodate a country’s regulatory institutional context manifested by government effectiveness
and a country’s cognitive institutional context manifested by the post-materialistic societal value of
interpersonal trust. With these three institutions in place, we build on Scott’s [
51
] and North’s [
52
]
institutional theories and posit that culturally endorsed leadership styles are manifestations of
normative institutional contexts that can in isolation and in combination with other institutions
(regulatory and cognitive) influence individuals’ propensity to engage in SE.
The remainder of this article proceeds as follows. In the next section, we review literature on SE,
national institutions, leadership, and CLTs that underlie our conceptual framework. Thereafter, we use
the understanding of culture–entrepreneurship fit and the institutional configuration perspective to
derive propositions regarding the effects of charismatic and participative CLTs as normative institutions
on SE and the moderating effects of government effectiveness (regulatory institution) and societal trust
(cognitive institution). We then present the discussion, report the implications of our framework for
theory and practice, and offer conclusions.
2. Conceptual Framework and Proposition Development
2.1. Social Entrepreneurship
The activities of SE involve the recognition, evaluation, and exploitation of opportunities that result
in addressing the basic and long-standing needs of societies or, in other words, in the creation and
establishment of social values [
53
]. The underlying objective for SE is the creation of social value [
54
].
Such value creation is through developing novel combinations of products, services, organizational
structures, processes or production practices [
55
]. Social entrepreneurs derive their motivation from within,
while primarily pursuing goals that benefit society rather than the entrepreneurs themselves [
56
,
57
].
SE therefore involves the creation of social enterprises, and this emphasis on the creation of social
wealth over economic wealth differentiates social entrepreneurs from commercial entrepreneurs [
58
] and
involves better ways to create and sustain social wealth [
56
]. While SE can be understood as a process
that facilitates social change [
59
], social entrepreneurs address social problems that result from market
shortcomings [
15
]. They operate as change agents, who through social innovation bring about changes in
the social equilibrium [58,60].
Individual-level resources play a very important role in the social entrepreneurial goals of
individuals [
61
]. Financial, human, and social capital have strong influences on both social and
commercial entrepreneurial activity [
62
,
63
]. Social entrepreneurs depend on external resources,
such as funding from individual contributions, foundation grants, member dues, user fees, and
government financing [
53
,
64
]. Such funding sources are community-based; therefore, to a large extent,
social entrepreneurs must depend on their network of contacts in the community and must develop
skills to nurture their relationships within these networks [
53
,
65
]. This is important because social
entrepreneurs develop their enterprises based on a community-oriented vision they share with the
members of their community and with all the stakeholders of the enterprise.
External stakeholders, such as government donors (who share the vision of the social
entrepreneur), would be not apprehensive to donate resources for a social cause. However, these
external agencies “may withhold resources necessary for the functioning of the organization” in case
they do not approve of the social entrepreneur’s strategies [
64
] (p.11). Therefore, as the field of SE
gains legitimacy and as social entrepreneurs increase their efforts, their ability to attract and maintain
resources remains a challenge [
66
]. Such entrepreneurs may therefore broaden their funding model
by “exploiting profitable opportunities” [67] (p.11), thereby blurring the very factors that distinguish
social enterprises from commercial enterprises, such as social mission and values [
68
]. For this reason,
scholars suggest examining the critical role of external institutions in ensuring that the objectives of
SEs are met.
Further, a social entrepreneur’s non-financial resources have a strong influence on how the
venture operates [
64
]. Austin et al. suggest that “political and relationship management skills are
Sustainability 2019,11, 965 4 of 19
of utmost importance to social entrepreneurs because such a large portion of the resources they
rely upon for success are outside their direct control, from board members to donors, partners, and
volunteers” [
53
] (p.13). Through their interactions with the community and government agencies,
social entrepreneurs gather non-financial resources, such as positive reputation, local knowledge and
awareness, and perceived trustworthiness [
65
]. To obtain these resources, social entrepreneurs, must
“focus on building a rich network of contacts and resources, developing skills to manage various
relationships in this network effectively, and seeking out creative arrangements” [
53
] (p.13). They
would need to collaborate well with different stakeholders with varying objectives to access resources
required to run their enterprises [
26
]. Again, such networks can be developed in environments that
are conducive for social entrepreneurs to do so. They can rely on societal institutions that can facilitate
the development of networks.
2.2. National-level Institutions
Institutions can be described as social structures that facilitate and constrain behavior [
51
,
52
,
69
].
They act as implicit guidelines for an individual’s actions [
70
]. These institutions are environmental
factors that help to build, develop, and manage various relationships within the community that
facilitate individuals’ entry into SE [
18
,
30
,
71
,
72
]. The critical role of such institutions, more specifically
formal (regulations and rules) and informal institutions (such as norms and values), is an important
theme in SE literature, for their ability to facilitate or constrain social entrepreneurial behavior (for
detail review on institutions and SE please refer Philips et al. [
2
]). For example, a study on Spanish
social enterprises shows that while both formal and informal institutions are important, informal
institutions are crucial because they influence not only the implementation of the social enterprise but
also its formation [73].
While formal institutions relate to explicit incentives and constraints arising from government
regulation, for example [
51
,
74
], informal institutions are implicit, socially constructed, and culturally
transmitted [
30
]. As an individual’s likelihood of starting a social enterprise is linked to pro-social
interests [
58
,
75
], the influence of formal and informal institutions on commercial and social enterprises
may differ [
30
]. For example, compared to commercial enterprises, social enterprises may receive
more funding from government agencies [
75
]. Further, the influence of cultural values on social
and commercial entrepreneurs may differ as well. While post-materialist values and commercial
entrepreneurship are negatively associated at the country level [
76
] and the individual level [
77
], the
opposite may be true for SE [
30
]. The three-pillar framework of Scott [
51
,
74
] calls formal institutions
regulatory institutions and further differentiates informal institutions as normative and cognitive,
corresponding to the concepts of cultural values and practices respectively [78].
New institutional theorists suggest that behaviors reflect the normative, regulatory, and cognitive
institutions of society and that adherence to these institutions ensures legitimacy [
15
,
74
,
79
]. Scholars
have used this understanding to explain entrepreneurial behaviors. Country institutional environments
have been found to determine and shape the entrepreneurial intentions, desirability, and feasibility of
entrepreneurial ventures [15,80].
Regulatory institutions are “formal rules” that facilitate or constrain entrepreneurial behavior and
control social entrepreneurial processes [
81
]. The existing research suggests that social enterprises are
successful in contexts in which there are favourable perceptions of regulatory institutions [
6
,
81
,
82
].
Normative institutions model themselves on dominant practices (or norms) in a given national
culture [
51
,
78
,
83
], elaborating the social obligations and expectations of actions based on existing norms
or practices [
83
,
84
]. They reflect the generally accepted behaviors that individuals admire, perceive,
and adhere to [
85
,
86
]. They form mechanisms that shape the context of social entrepreneurial ventures
by creating norms of conduct and expected entrepreneurial behavior [
81
]. Cognitive institutions
influence the “schemas, frames, and inferential sets, which people use when selecting and interpreting
information” and reflect the knowledge shared by individuals in a given nation [
87
] (p.180). These
institutions are the culturally shared understandings associated with cultural values [
83
,
84
]. They
Sustainability 2019,11, 965 5 of 19
reflect templates shared among members of a society [
81
]. Cognitive legitimacy is the extent of
alignment of organizational structures, processes, and outcomes with societal beliefs [
88
]. Cognitive
attributes, such as societal trust, have been associated with social entrepreneurial intention and
SE [20,89].
Drawing on the above insights from institutional theory, we develop an understanding of
CLTs of charismatic leadership and participative leadership as normative institutions and discuss
their influence on SE. Further, institutions may not act in isolation but in an interactive fashion
to stabilize social behavior [
51
]. We therefore use the institutional configuration perspective that
suggests human actions are shaped jointly by both formal and informal institutions to understand
the influence of normative, regulatory, and cognitive institutions on SE [
30
]. In our model (Figure 1),
CLTs of charismatic and participative leadership represent normative institutions. Government
effectiveness in a country represents the formal or regulatory institution, and the cultural value of
societal trust represents the cognitive institution. We propose a multilevel theoretical model in which
CLTs, government effectiveness, and societal trust, alone and in combination, affect an individual’s
probability of engaging in SE.
Sustainability2019,11,xFORPEERREVIEW5of19
structures,processes,andoutcomeswithsocietalbeliefs[88].Cognitiveattributes,suchassocietal
197
trust,havebeenassociatedwithsocialentrepreneurialintentionandSE[20,89].
198
Drawingontheaboveinsightsfrominstitutionaltheory,wedevelopanunderstandingof
199
CLTsofcharismaticleadershipandparticipativeleadershipasnormativeinstitutionsanddiscuss
200
theirinfluenceonSE.Further,institutionsmaynotactinisolationbutinaninteractivefashionto
201
stabilizesocialbehavior[51].Wethereforeusetheinstitutionalconfigurationperspectivethat
202
suggestshumanactionsareshapedjointlybybothformalandinformalinstitutionstounderstand
203
theinfluenceofnormative,regulatory,andcognitiveinstitutionsonSE[30].Inourmodel(Figure
204
1),CLTsofcharismaticandparticipativeleadershiprepresentnormativeinstitutions.Government
205
effectivenessinacountryrepresentstheformalorregulatoryinstitution,andtheculturalvalueof
206
societaltrustrepresentsthecognitiveinstitution.Weproposeamultileveltheoreticalmodelin
207
whichCLTs,governmenteffectiveness,andsocietaltrust,aloneandincombination,affectan
208
individual’sprobabilityofengaginginSE.
209
210
211
Figure1.Conceptualframework.
212
2.3.Leadership,CulturallyEndorsedImplicitLeadership,andSocialEntrepreneurship
213
Reviewofleadershiptheoriesrevealsthreekeyareasoffutureresearch.First,althoughitis
214
knownthatthereisnoleadershipwithoutfollowers,researchinthisareaisjustemerging[90].
215
Leadershipisunderstoodtobeaprocesscreatedbysocialinteractionsbetweenindividuals[91].In
216
otherwords,leadershipcanhappenonlyiftherearefollowersand“leadershipcannotbefully
217
understoodwithoutconsideringtheroleoffollowersintheleadershipprocess”[90](p.89).Second,
218
Figure 1. Conceptual framework.
2.3. Leadership, Culturally Endorsed Implicit Leadership, and Social Entrepreneurship
Review of leadership theories reveals three key areas of future research. First, although it is known
that there is no leadership without followers, research in this area is just emerging [
90
]. Leadership is
understood to be a process created by social interactions between individuals [
91
]. In other words,
leadership can happen only if there are followers and “leadership cannot be fully understood without
considering the role of followers in the leadership process” [
90
] (p.89). Second, leadership is a complex
phenomenon that cuts across multiple levels of analysis [
92
,
93
]. Results of a review on leadership
articles over a 25-year period have revealed that multi-level data analysis methods are used in less
than twenty percent of all articles published, and hence the need to build leadership theories using
a multi-level perspective [
94
]. Third, is to understand cross-cultural perspectives of leadership [
93
].
Discussions on CLTs and their effect on SE are developed based on the above insights.
Sustainability 2019,11, 965 6 of 19
Before discussing the relevance of CLTs vis-à-vis SE, we first discuss the general idea of ILTs,
of which CLTs are a type. ILTs draw on the follower-centric perspective in which followers are
assumed to have schema to evaluate effective leadership [
90
]. Followers ILTs are formed through past
experiences [
95
,
96
] and these ILTs are activated when followers match leader behavior to the leadership
stereotypes they hold in their memory [
97
]. ILTs are therefore normative institutions that legitimize
the behaviors, attributes, and motivations of leaders, and these theories influence individuals’ choices
in terms of who they will accept and categorize as leaders [
98
,
99
]. Followers’ perceptions of a leader
are embedded in the nation’s cultural values, which are outcomes of repeated behaviors that shape
the cultural expectations and views of ideal leadership, and leaders tend to behave in line with these
expectations [
46
]. Therefore, individuals are more likely to emerge as leaders and be successful in
their leadership role if they demonstrate characteristics that are consistent with the ILTs held by
followers [100].
As ILTs are culturally shared within countries and vary across countries, we can expect different
types of leaders to emerge in different cultures, depending on how strongly certain ILTs are culturally
endorsed. In summary, CLTs build on ILTs [
99
] and are therefore normative institutions, as they refer
to individuals’ stereotypical ideas about the attributes and behaviors of effective leaders [
78
,
101
]. CLTs
elevate the traditional definition of leadership to the societal level and state that societies have implicit
preferences for acceptable characteristics of outstanding leadership [102].
We draw on the culture fit perspective regarding the emergence of social entrepreneurial
leaders [
103
] to propose that individuals are more likely to choose to become social entrepreneurs
in countries where CLTs fit with and are supportive of motives and attributes linked with SE. A
cross-cultural research program called Global Leadership and Organizational Behavior Effectiveness
(GLOBE) conducted a study that extended the understanding of ILT and highlighted the concept
that individuals’ implicit belief systems about ideal leaders are culturally endorsed [
78
,
101
]. In other
words, although these belief systems vary between cultures, there is consensus within a culture on the
attributes of outstanding leaders [101,104].
Although we have addressed CLTs in general terms so far, we point out that the cultural
endorsement of a particular attribute and particular behavior can have a specific cultural impact.
The GLOBE study advanced six different dimensions to describe the content of CLTs (i.e., charismatic,
participative, self-protective, humane-oriented, team-oriented, and autonomous). These dimensions
explain the extent to which leaders are expected to be self-focused and competitive (self-protective
leadership), to display individualistic attributes (autonomous leadership), to encourage and involve
others in decision making (participative leadership), to motivate and inspire others through a
compelling vision and to expect high performance (charismatic leadership), to care for team members
(team-oriented leadership), and to be modest and supportive (humane-oriented leadership) [
38
].
Organizational leadership literature suggests two key conditions required for innovation processes.
Organizations can be more innovative and responsive to change through participative-decision
making and transparency in communications [
105
]. Participative leadership can therefore help
create conditions of participative-decision making for social enterprises in their initiatives to create
social innovation. The other condition to develop processes that support innovation [
106
] is through
charismatic leadership. Charismatic leadership helps set that compelling vision for followers to
achieve that high performance associated with innovation [
107
]. In view of the above, charismatic
and participative CLTs, are conceptually most closely related to entrepreneurship [
38
,
108
], and hold
particular relevance for SE. Further, although cross-cultural research emphasize that different cultures
are likely to have different conceptions of what outstanding leadership should entail, the attributes
of charismatic and participative leadership are believed to prototypical of outstanding leaders in
all cultures [
102
]. The overall dimensions of charismatic and participative leadership have showed
high reliability and meaningful within-country agreement and between-country variation [
109
]. The
other CLTs may have a less compelling theoretical rationale to facilitate implementation of a social
Sustainability 2019,11, 965 7 of 19
enterprise [
73
]. In the next two sections we elaborate on the theoretical rationale that support the role
of charismatic and participative CLTs in facilitating SE.
2.4. Normative Institutional Context: Charismatic and Participative CLTs
Using the notion of culture–entrepreneurship fit [
103
], we propose that individuals are more
likely to become entrepreneurs in countries where CLTs fit with and are supportive of the above social
entrepreneurial attributes and behaviors. In particular, we argue that charismatic and participative
CLTs capture key aspects of entrepreneurial agency and therefore can be seen as important cultural
predictors of individuals’ engagement in SE. We argue that these are normative conditions that support
social entrepreneurial agency.
SE has been viewed in terms of the catalytic leadership provided in areas of social concern with the
specific objective of change [
39
,
40
,
110
]. Charismatic leaders broaden and elevate the interests of their
employees, generate awareness and acceptance of their social organization’s purposes and mission,
and motivate their employees to look beyond their own self-interests to the good of others [
111
]. To
accomplish this objective, charismatic leaders use the key entrepreneurial leadership strategies of
attention through vision, meaning through communication, trust through positioning, and confidence
through respect [
112
]. As charismatic leaders, such entrepreneurs have a vision of how things could
be, and they clearly communicate this vision to their employees and, through their own enthusiasm,
motivate their employees to support it. Dees [
113
] argues that the primary purpose of the social
entrepreneur is to create superior social value for their clients, stating that social entrepreneurs look
for innovative ways to ensure that their enterprises will have access to resources as long as they are
creating social value.
The CLTs of charismatic leadership capture the kind of proactive leadership required for SE.
They characterize effective leaders as visionary, performance- and future-oriented, and as being
able to motivate their employees based on core values, integrity, and vision [
101
]. Such leaders
therefore provide the necessary direction through visioning, setting high performance expectations,
and motivating individuals to create and implement social innovations. Therefore, cultures that
endorse charismatic leadership provide the required environment within which social entrepreneurs
are likely to thrive, as their entrepreneurial actions (initiatives to bring about social change) are more
likely to be accepted by others in their culture. Therefore:
Proposition 1a (P1a).
Charismatic CLT is positively associated with the likelihood of individual-level social
entrepreneurship.
Entrepreneurs take initiative and shape the future of their organizations to achieve their mission
of social change, often working cooperatively with other like-minded individuals [
114
]. While social
entrepreneurs, like traditional entrepreneurs, believe in the centrality of their role, the former must
take care to include the collective of volunteers in the decision making and in the operations of the
enterprise [
115
]. CLTs of participative leadership therefore capture the followers’ expectations that
leadership should be non-autocratic [
101
], and participative leaders strive to motivate and facilitate
the involvement of their subordinates in making decisions since doing so promotes approval and
commitment [
116
]. The highest level of participative leadership is delegation of decision making,
which includes power-sharing, empowerment, and reciprocal influence processes [117].
Participation is achieved through various means. Extant research has shown that participative
leaders extensively use groups, which increases the interpersonal interactions among and the members
of the organization [
116
]. These leaders also tend to use formal or informal meetings to facilitate
subordinate participation in decision making, which improves communication, promotes collaboration,
and facilitates conflict resolution [
118
]. An open work environment characterized by collaboration
will minimize the negative effects of task conflict on performance of social enterprises [
119
]. In these
ways, the participative leadership style of an entrepreneur can create the necessary cooperative work
Sustainability 2019,11, 965 8 of 19
environment inside and outside a social enterprise. This nature of this CLT is a cooperative virtue that
could distinguish social entrepreneurs from commercial entrepreneurs by emphasizing the positive
community endeavor of SE [120].
Participative leaders therefore provide the required transparency and create the necessary
conditions for individuals to participate in the decision making on initiatives that lead to social
innovations. Consequently, cultures that endorse participative leadership provide the required
environment within which social entrepreneurs are likely to thrive since their entrepreneurial actions
are likely to be accepted by others. Therefore, individuals within cultures that endorse participative
leadership are more likely to be motivated to start a social enterprise. Hence:
Proposition 1b (P1b).
Participative CLT is positively associated with the likelihood of individual-level social
entrepreneurship.
2.5. Regulatory Institutional Context: Government Effectiveness
Government effectiveness can be viewed as the extent to which governments implement policies
and regulations that promote and support entrepreneurship and businesses [
121
]. When we specifically
address the levels of government effectiveness, we refer to differences in the levels of government
effectiveness in countries that either facilitate or constrain social entrepreneurial activity. These
differences can determine the extent of government support for SE [
122
]. Scholars argue that
government support in the form of providing tangible and intangible resources can enhance SE [
10
,
72
].
Tangible resources include grants, subsidies, and funding [
30
], and intangible resources include
assistance with completing grant applications, providing endorsements, and sponsoring activities
that facilitate networking between like-minded entrepreneurs or with other stakeholders in the
environment [
123
]. Such support takes the form of governmental assistance in providing public
goods and looking after the welfare of the citizens, while social entrepreneurs set up organizations to
address social needs and issues [30].
Over and above the access to resources for social entrepreneurs that government support can
provide, the availability of strong institutions facilitates the smooth operations of social ventures.
Examples of such institutions include sophisticated banking systems and financial institutions, strong
and stable public equity markets, and strong venture capital industries [
124
]. These institutions can
also provide operational support for new social ventures and reduce the risks for individuals starting
a new enterprise [
75
]. Countries with such institutions also have well-established legal systems
and effective governance and enforcement mechanisms, all of which facilitate growth and provide
protection to entrepreneurial firms and their stakeholders. Therefore:
Proposition 2 (P2).
A country’s governmental effectiveness is positively associated with the likelihood of
individual-level social entrepreneurship.
2.6. CLTs, Governmental Effectiveness, and Social Entrepreneurship
Entrepreneurial action has often been suggested to be a product of an individual’s social-minded
goals combined with a context that provides both the opportunity and the support required to achieve
those goals [
125
]. On their own, CLTs of charismatic and participative leadership in a given country
may therefore not be sufficient to motivate a large number of individuals to become entrepreneurs.
Within the environment itself, there must be support for these activities. As noted in Proposition 1, the
prevalence of the CLTs of charismatic and participative leadership motivates individuals to become
social entrepreneurs. However, the government’s active support through the effectiveness of its various
national policies and institutions reinforces the support that social entrepreneurs already have in the
country. Effective government systems facilitate charismatic leadership towards individual agency
when individuals realize that they will face no hindrances in terms of resource acquisition and that
their efforts will be adequately rewarded.
Sustainability 2019,11, 965 9 of 19
Similarly, involving others in participative-decision making for a social entrepreneurial activity
will result in lower transaction costs when effective government systems are in place. This synergy
between government involvement and private-sector efforts has been debated by political scientists
and development economists [
30
,
126
]. We argue that the positive effects of the CLTs of charismatic and
participative leadership are reinforced by the country’s government effectiveness, and consequently,
these effects enable SE. Therefore:
Proposition 3a (P3a).
A country’s government effectiveness positively moderates the effect of charismatic CLT
on the likelihood of individual-level social entrepreneurship such that the greater the government effectiveness,
the stronger will be the effect of charismatic CLT.
Proposition 3b (P3b).
A country’s government effectiveness positively moderates the effect of participative CLT
on the likelihood of individual-level social entrepreneurship such that the greater the government effectiveness,
the stronger will be the effect of participative CLT.
2.7. Cognitive Institutional Context: Societal Trust
The existing research on career decision making reveals that individuals’ values serve as the key
determinants of their occupational choices [
127
,
128
]. These choices are argued to be deliberate decisions
predicted by personal values [
129
], and they reflect the importance of beliefs for a society’s inhabitants
that are an aggregate of personally important goals these individuals hold [
130
]. The aggregate trait
hypothesis has been used in existing research to explain why cross-cultural differences in values give
rise to differences in individual choices for commercial entrepreneurship. Stephan et al. [
30
] use the
aggregate trait hypothesis to maintain that the greater the number of inhabitants in a society who hold
values consistent with SE, the greater the number of individuals who engage in SE.
Scholars have identified two forms of societal-level trust [
131
], particularistic trust and general
trust. Particularistic trust involves a narrow circle of familiar others, and general trust relates to a
wider circle of unfamiliar others and is important in daily interactions with unknown others [
132
]. We
focus on general trust, which is termed societal trust in our framework and which can be defined as
the trust extended to unknown others within society [
133
]. It is a societal-level construct that defines
the extent to which a community shares a set of moral values in a manner that creates expectations of
honest behavior [134,135].
According to Kramer [
136
], societal trust consists of the general disposition to trust others within
a given country. It is based on the expectation that others are trustworthy [
137
], and the construct
captures a general tendency to trust others [
138
]. Muethal and Bond [
139
] argue that in countries
whose citizens have a high propensity to trust, individuals are likely to trust not only people they
know but also strangers.
Scholars have argued that societal trust has long been considered an essential component of
social transactions and that the willingness to interact with others in a society is contingent on
the prevalence of such trust [
140
]. Cooperative behavior within a society represents an imperative
condition for supporting social efforts [
141
], and successful social entrepreneurs are more likely to be
those who can build on networks of trust that help them create the necessary legitimacy in society [
142
].
Social entrepreneurs must build and maintain trust among stakeholders and other participants in the
environment to gain access to the various resources that are of primary importance to the sustainability
of their social ventures [
141
]. Further, they require the trust of their followers to successfully share
their mission, their vision, and the risks associated with the sustainability of the social venture.
Participants who trust (the various stakeholders) and those who are trusted (social entrepreneurs)
give and receive information and provide and receive resources freely without fear of being cheated
or misled [
143
]. In summary, if a society has a significant number of individuals who value trust,
according to the aggregate trait hypothesis we would expect societal trust to be an important antecedent
to SE. Therefore:
Sustainability 2019,11, 965 10 of 19
Proposition 4 (P4).
Societal trust is positively associated with the likelihood of individual-level social
entrepreneurship.
2.8. CLTs, Societal Trust, and Social Entrepreneurship
Leadership is a continuous process of influencing between leaders and followers and one that
is affected by the context in which this process takes place [
41
]. Societal trust, which is a contextual
influence, can predict the degree of success that leaders can achieve in gaining followers for their cause.
Similarly, for participative leaders who operate through participative-decision-making processes, the
level of success would be enhanced when the trust that exists between such leaders and their followers
reduces the uncertainties that may arise in transactions between them. Further, conflicts and disputes
may occur during the development of a new enterprise [
144
], and because strong trust enables joint
problem solving [
145
], a high level of societal trust can promote conflict resolution between followers
and leaders in the participative processes. Therefore, the higher the level of societal trust, the easier it
is for charismatic and participative leadership to successfully lead social enterprises.
Another challenge stems from the fact that when compared to commercial entrepreneurs, social
entrepreneurs have a greater challenge in gaining access to resources [
53
]. Commercial enterprises,
which have the potential for generating a profit, likely represent attractive prospects for obtaining
financial loans or investment funds, whereas the not-for-profit nature of social enterprises means that
they have far less access to such forms of funding [
146
]. The social objectives of a social entrepreneur
create greater challenges for measuring performance than in the case of the commercial entrepreneur,
who can rely on relatively quantifiable measures of performance, such as financial performance and
market-share indicators [
31
,
53
]. Social entrepreneurs must therefore depend on social capital (e.g.,
trust) to gain access to the resources they require.
Higher levels of interpersonal trust are associated with ease of accessing resources—particularly
information but also financing—as transaction costs become lower [
147
]. If individuals trust each other,
there is less need for monitoring and devising long contracts [
133
]. Further, it has also been suggested
that high levels of trust in society strengthen the motivation of individuals to engage in initiatives to
solve societal problems [148]. Therefore:
Proposition 5a (P5a).
Societal trust positively moderates the effect of charismatic CLT on the likelihood of
individual-level social entrepreneurship such that the greater the extent of societal trust, the stronger the effect of
charismatic leadership.
Proposition 5b (P5b).
Societal trust positively moderates the effect of participative CLT on the likelihood of
individual-level social entrepreneurship such that the greater the extent of societal trust, the stronger the effect of
participative leadership.
3. Discussion
Leadership is a social process that helps achieve organizational goals [
149
]. In a social enterprise,
leaders have to motivate and facilitate followers to foster and support innovation through the creation
of new products, services, processes and practices that enable social change. Entrepreneurs in general
and social entrepreneurs in particular have to constantly influence others around them including
investors, customers, suppliers, and other stakeholders to launch and manage their businesses
successfully. Besides recent literature has referred to the strong influence that leadership has on
entrepreneurship. For example, CLTs have been found to influence commercial entrepreneurship [
38
];
authentic leadership, positive leadership initiatives that focus on developing follower capabilities, has
been found to have the strongest impact on the psychological capital of entrepreneurs [
150
]. However,
entrepreneurship and leadership have generally been treated as separate fields of study [
33
,
34
].
Although there have been arguments for the convergence of research in entrepreneurship and
leadership arenas to enable an interchange of ideas between the two fields [
33
,
34
,
151
], there has
Sustainability 2019,11, 965 11 of 19
been little linkage made between entrepreneurship and leadership research [152]. In particular, there
are calls to find leadership patterns that are specific to entrepreneurship [
33
]. In light of the above we
elaborate the potential contributions that our framework can make to extant literature as follows.
3.1. Contributions
We draw on gaps in SE literature and leadership literature to develop our conceptual framework.
Specifically, our conceptual framework integrates leadership and entrepreneurship research by
introducing a cultural leadership paradigm that advances our understanding of the emergence of
social entrepreneurial leaders across different cultures. In doing so, we contribute to the development
of multidisciplinary research to advance the application and understanding of leadership theory [
93
].
Our conceptual framework contributes to research on leadership and comparative SE in that the
motivations to become social entrepreneurs are embedded in and shaped by the wider national context,
including not only CLTs but also other national-level institutions. Our conceptual framework thus
adds to the emerging comparative perspective in SE research [84] in the following ways.
First, our contextual perspective highlights the role of the national context in the motivation of
individuals to lead social enterprises, in contrast to individual differences that are believed to drive
such motivations [
153
]. Second, our conceptual framework adds to the comparative perspective in
leadership research by integrating predictions based on institutional theory [
51
,
52
] to arrive at more
comprehensive explanations of leadership. We establish the value of CLTs as normative institutions
and suggest their standalone explanatory role in the individual agency of SE but also suggest that
its influence is contingent upon other national institutions. Third, although researchers have used
specific national cultural values as possible factors to explain cross-country differences in levels
of entrepreneurship, the findings are mixed [
38
]. Scholars have therefore suggested that national
cultural values impact entrepreneurship only indirectly [
83
], and hence implying the existence of
mechanisms linking national cultural values and entrepreneurship [
154
]. CLTs have shown to be
such mechanisms through which national cultural values influence entrepreneurship. For example,
national cultural values of uncertainty avoidance and collectivism have been shown to influence
entrepreneurship indirectly, through CLTs [
38
]. Since national cultural values are broad and general
concepts and entrepreneurship (and SE in our framework) is a specific behavior our conceptual
framework emphasizes a greater focus on CLTs that are more proximal to SE [38].
We also suggest that the effects of normative institutions of charismatic and participative CLTs on
leaders’ aspirations may be contingent upon cognitive and regulatory institutions, such as societal trust
and government effectiveness, respectively. Leadership researchers have predominantly focused on
the role of culture [
101
], economists have predominantly focused on the role of formal institutions [
6
],
and sociologists and political scientists have predominantly focused on trust [
133
]. We have attempted
to combine the above three perspectives in our framework.
Our multilevel theorizing, while addressing the calls for using multilevel designs in leadership
theorizing, contributes to the understanding of national contexts facilitating individuals’ entry into SE by
using the explanatory power of joint institutional configurations. The configuration perspective provides
a greater integration of research on formal and informal institutions [
30
], and the practice of theorizing
and using configurations is well established in strategic management and psychology [
155
], but it has
received little attention in institutional theory [51] and comparative entrepreneurship research [84].
Third, our conceptual framework contributes to calls for increased consideration of context
in examining entrepreneurial behavior [
72
]. In particular, our conceptual framework stresses the
importance of a socially supportive culture for entrepreneurial behaviour, as identified in past
research [
83
,
156
], by suggesting that CLTs may need to be supported by formal institutions (such as
government effectiveness) and informal institutions (such as societal trust) for individuals to become
social entrepreneurs. Specifically, it contributes to the call for attention to cultural leadership styles as
salient predictors of cross-cultural differences in entrepreneurship [157].
Sustainability 2019,11, 965 12 of 19
3.2. Implications for Practice and Future Research
To overcome the various socio-economic and environmental challenges that exist in society, both
scholars and practitioners agree that firms and individuals can address these challenges by adopting
social value creation goals in their activities [
24
,
61
,
120
]. Further, societal-level leadership styles and
sustainability conditions also have a bearing on the demand and supply of social entrepreneurs [
25
,
39
,
40
].
Our present conceptual framework adds to the above research that emphasizes the importance and the
role of leadership context in facilitating social value-creating activities.
Our conceptual framework may have implications for social entrepreneurs, educational
institutions and policy makers. Since leadership ideals are more proximal than cultural values, they
are more malleable [
38
]. Social entrepreneurs would benefit from being aware of the CLTs endorsed
in the cultures in which they are operating in, enabling them to take account of their stakeholders’
(donors, customers, suppliers, community, employees) expectations of them. Social entrepreneurs’
own ILTs can be reflected upon [
158
] in the context of the culture’s CLTs [
46
,
101
] in which they operate
in to bring about social innovations. Educational institutions can develop training strategies to align
social entrepreneur’s behaviors with their culture’s expectations of effective leaders and ultimately
increase the legitimacy and success of their enterprises [
38
]. Further, effectiveness of the government
in facilitating leaders to become successful entrepreneurs as suggested by our framework, implies
the increased role of government to legislate and implement social entrepreneur friendly policies. In
societies where lack of interpersonal trust could constrain social innovation activities, public education
initiatives and assurance services could help build the legitimacy of social entrepreneurial leaders.
Awareness of the challenges due to the lack of trust in such societies will also help social entrepreneurial
leaders to proactively plan to address them.
Another important implication is that CLTs and SE may have a strong bearing on the sustainable
development of societies. We add to the literature that examines the implication of the role of leadership
on the sustainability of societies [
159
]. Cultures differ in the way human, economic, and environmental
well-being are prioritized [25], leading to different sustainability conditions across societies. The lack
of sustainability conditions in society increases the demand of social entrepreneurs, and their supply is
again facilitated by CLTs [
25
]. Our conceptual framework suggests additional institutional drivers such
as government effectiveness and societal trust that are important for the supply of social entrepreneurs.
In the future, researchers can theorize using these additional drivers to understand how they can
address the demand for social entrepreneurs under conditions of low societal sustainability.
Our framework and propositions may be empirically tested by constructing a cross-national
data set consisting of country wise population-representative surveys potentially from the Global
Entrepreneurship Monitor (GEM) for social entrepreneurs. The GEM data set can provide data on
individual-level responses by social entrepreneurs. This information can be combined with country
data on leadership styles, government effectiveness, and societal trust from the GLOBE study, World
Governance Index (WGI) study, and World Values Survey (WVS), respectively for empirical testing.
While the above are suggested secondary sources of data that may be used for testing the framework
which is based on extant research for similar frameworks [
38
], researchers may also use other sources
of secondary data and also primary data (through case studies and semi structured interviews of social
entrepreneurs in country-specific contextual settings) to validate the findings.
Future research may also examine the effects of other cultural values and norms studied by
comparative entrepreneurship researchers [
160
]. As mentioned earlier, national cultural values have
been observed to influence entrepreneurial behavior only indirectly, and that they do so via CLTs.
For example, national cultural values of uncertainty avoidance and collectivism have been shown
to influence entrepreneurship through charismatic and self-protective CLTs [
38
]. These CLTs have
been considered as mechanisms through which national cultural values influence entrepreneurship.
Further, participative and charismatic CLTs may not have the same effect on the individual-level
likelihood of SE in all the cultures. Variations may be accounted for differences in the dimensions
of national cultural values. For example, participative CLTs could have a more positive impact in
Sustainability 2019,11, 965 13 of 19
low power distance cultures, while charismatic CLTs could have a more positive impact in high
power distance cultures. Future research may need to theorize and empirically examine whether
such dimensions of national cultural values have a moderating effect on SE propensity or whether
the CLTs suggested in our framework mediate their effect on SE propensity. While our framework
focuses on the proximal aspects of culture, i.e., conceptually closer to SE, future research may extend
our framework by incorporating other national institutions in it to present a more eclectic view on
how CLTs interact with other national-level institutions to influence SE. Finally, future research may
investigate SE as a process across countries [
161
], thereby addressing questions about the CLTs and the
sustainability of social entrepreneurial processes, such as whether CLTs play a role in the sustainability
of social entrepreneurial processes.
We consistently observe, specifically in the context of developing nations, that multi-national
non-government organizations (MNNGOs) work with local social workers and social entrepreneurs.
MNNGOs could be effective in their mission of service if their leadership styles align with local
CLTs that are reflective of the styles of local social entrepreneurs. Research on how MNNGOs adapt
their leadership styles to match with local contexts in order to work synergistically with local social
entrepreneurs would be another area for future research.
4. Conclusions
Our suggested conceptual framework contributes to the research on societal-level leadership
styles and to comparative SE research. It addresses the gaps in SE and leadership literatures at the
interface of entrepreneurship and leadership, in contextualizing social entrepreneurial behaviour
and understanding cross-cultural perspectives of leadership through a multilevel framework. The
framework is based on the assumption that individuals are more likely to choose to become
entrepreneurs where CLTs fit with and are supportive of motives and attributes linked with SE.
In other words, it is assumed that SE will flourish where cultural leadership ideals align with social
entrepreneurial behaviors, or where there is a ‘CLT-Social Entrepreneurship fit’. We believe our
conceptual framework adds to the ongoing discussions on the emergence of social entrepreneurs and
to the growing stream of research on the consequences of CLTs.
Author Contributions:
The two authors have contributed equally in the conceptualization, investigation, analysis,
and writing of the paper.
Funding: This research was funded by the Social Sciences and Humanities Research Council of Canada.
Acknowledgments:
The authors thank the Guest Editor, Fu-Sheng Tsai. and the Assistant Editor for the support
given during the review process. The authors also thank the anonymous reviewers for the excellent developmental
feedback provided during the three rounds of the review process to improve the paper.
Conflicts of Interest: The authors declare no conflicts of interest.
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Leaders of high schools in the context of the fourth industrial revolution face many challenges and new opportunities. Schools need to become smarter, more flexible, and more secure, and, therefore, the principal’s leadership competencies are likely to have new elements and be affected by new influencing factors. The aim of this study was to identify the factors that influence the competencies of school leadership in today’s increasingly smarter school landscape. Research was conducted using qualitative and quantitative research methods. The research sample consisted of 295 high school principals from five provinces and cities in Vietnam. The results showed that smart school leadership competencies depend on individual factors, school-level factors, and educational community-level factors. Smart school development policy and innovation of smart school infrastructure and facilities were identified as the most important factors.
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Resumen El liderazgo en el emprendimiento es supremamente importante, puesto que hace que el emprendedor tenga más facilidades al momento de lanzarse al universo del emprendimiento. Aunque este tema es muy importante, actualmente no se encuentra una revisión bibliográfica. Por lo tanto la metodología a utilizar es hacer una revisión cronológica de los temas de liderazgo y emprendimiento y así poder identificar los posibles vacíos científicos que existen en cuanto al tema. Para desarrollar la revisión se buscó la bibliografía en bases de datos como web of science, posteriormente se realizó un análisis de la información a través de co-citaciones para identificar los artículos más importantes. En los resultados se encontró que de liderazgo y emprendimiento existe mucha bibliografía, pero por separado; además se pudo evidenciar el vacío que existe en la bibliografía que trate de los dos temas como complemento uno del otro. Los emprendedores deben ser autodidactas y estudiar varios temas, en especial de liderazgo para que les sea más fácil iniciar el escabroso camino del emprendimiento. Palabras clave: Emprendimiento y liderazgo, tendencias, Responsabilidad Social.
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... The influence of context on entrepreneurship has been recognized well by academics, practitioners, and policy makers (Welter and Gartner, 2016;Muralidharan and Pathak, 2017;Ratten and Dana, 2019). Institutional contexts both formal and informal have been found to influence entrepreneurial activity i.e., these contexts either facilitate or constrain entrepreneurial activity (Muralidharan and Pathak, 2019), and hence the role of context in disadvantaged entrepreneurship is important to understand (Maalaoui et al., 2020). In particular disadvantaged individuals are embedded in contexts and communities that are based on social interactions and social dialogues (Ferreira et al., 2017). ...
... Social entrepreneurs are like "a messenger of the change" in the social sphere [13]. A social entrepreneur can risk in the name of people in need [14]. They can lead, organize a team and solve social problems in the most effective way [15]. ...
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... Even though private and public sectors are working for a long time to meet social needs, inequalities still prevail in developing countries like Bangladesh (Tiwari et al., 2017). The pursuits of social entrepreneurship consist of realisation, assessment and leveraging opportunities that would lead to addressing the long-awaited social problems to enhance societal welfare and value (Muralidharan and Pathak, 2019). Social entrepreneurship strives to solve social problems and create social value for making financial returns. ...
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