Enterprise and Small Business Principles
Concepts of leadership and entrepreneurship
To justify the contention proposed above, it is necessary, perhaps, to examine in more detail the concepts of leadership and entrepreneurship. This has been done, already, by Perren (undated) in a working paper prepared for the UK Council for Excellence in Management and leadership. In it he compares the conceptual building blocks between the two terms and concludes that ‘entrepreneurship and leadership are similar notions and there are conceptual overlaps, but there are clearly still conceptual differences. Leadership tends to be more associated with the conceptual building blocks that relate to people (e. g. communication and social skills). Entrepreneurship, on the other hand, tends to be associated with the personal search for independence and identification of market opportunities’ (Perren, undated: 6). In particular, he concludes that leadership and entrepreneurship share the same conceptual building blocks of personal drive, innovation and vision and risk acceptance.
Whilst this analysis does provide some extremely valuable insights into the two concepts, it is not without its limitations as he recognises. Not least it needs to be recognised that the aim of the study was to obtain the broadly accepted building blocks of the terms entrepreneur(ship) and leader(ship), rather than to discover all of the concepts that have been attached to these terms, and that in order to do this ‘a certain level of interpretation of an author’s intention is needed to stop the list of conceptual building becoming unwieldy’. Clearly, this filtering could impact considerably on the outcomes of the analysis. For example, it would no doubt be possible ‘to find texts that have associated the conceptual building blocks in a different way’, as the author recognises, or ‘for other researchers to have different ideas about the terms’. Indeed, it may be for this reason that the research concludes, somewhat surprisingly perhaps, that a key distinction between entrepreneurs and leaders is in terms of their communication and social skills. In many works it is acknowledged that entrepreneurs are good communicators with networking skills that enable them not just to articulate their vision but to persuade others to share in it, thereby enabling them to harness the resources (both human and capital) needed to bring it about. This could, in fact, be a definition of entrepreneurship.
Although there is no standard definition of the term ‘entrepreneurship’, it should be recognised that the term entrepreneur is derived from the French verb entreprendre (to undertake). The entrepreneur is, then, an ‘undertaker’, someone who can make things happen. She may work for herself harnessing the resources to enable her vision to be fulfilled but, increasingly, she works as part of a team either as an owner-manager of a small venture or part of a larger organisation. It is here that the links with leadership emerge.
According to Adair (1986: 116), ‘many of us tend still to believe that “a leader” implies one person dominating another or a group of people’. Indeed, this is implied in the Bjerke and Hultman quotation above where they suggest that entrepreneurs require the social skills to make people work. Good leaders do not do this and while such a strategy can be extremely effective in the short term, it is not sustainable long term. Employees quickly begin to feel exploited, resulting in high levels of staff absenteeism, turnover and even sabotage and aggression. The art of leadership is to hold employees accountable for results while, at the same time, maintaining morale and employee satisfaction. Indeed, according to Wickens (1999: 52) leadership ‘is about getting people to do what you want them to do because they want to do it for you’, and, perhaps, for themselves. This is what the truly successful entrepreneur excels at. He has a vision and is able to ‘sell’ that vision to others in order to ensure fulfilment. In a small firm context, it is contested that vision would be not just survival but growth and development for, as Timmons (1989: 1) has recognised, entrepreneurship is ‘the ability to create and build something from practically nothing. It is initiating, doing, achieving, and building an enterprise or organisation’.
Having considered, then, the links between leadership, entrepreneurship and small firms, it is perhaps necessary to look at some of the traditional theories of leadership and how they might apply in an entrepreneurship/small business context.
