Student: Bakr Buji

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EXAMINATION

BED-3030

Entrepreneurial Leadership

Bakr Buji

SUBMITTED:

16th August 2012

Student: Bakr Buji

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Abstract

The purpose of this study is to build a model of entrepreneurial leadership which

combines the concept of entrepreneurial leadership and my opinion as well, and applying it on

a real case. In this paper I make a summary of 4 articles which are relevant to entrepreneurial

leadership, and analyze the articles through by comparing the materials mentioned in each of

the articles. The constructed model is based on the presented information by the articles and

my own understanding. The model illustrates the leader’s traits and skills required to make

him entrepreneurial.

Background

Entrepreneurship is a new topic, but it has a positive relation with the economic

growth1, so it became one of the important topics recently, and needs more research and

study to develop this science further. Leadership is strongly relevant to

entrepreneurship, since is based on the leader who can lead the entrepreneurial

activities correctly and actively. However entrepreneurship is a broad area and has

many definitions in different dimensions, but here I need to go through different

definitions of entrepreneurial leadership. One of definitions defines it as the dynamic

process of presenting vision, making commitments among followers and risk acceptance

when facing opportunities that cause efficient use of available resources, along with

1 http://people.few.eur.nl/thurik/Research/Books/Thurikf.pdf

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discovering and utilizing new resources with respect to leader’s vision. In fact,

entrepreneurial leadership includes all necessary abilities for constant value creation of

managers with respect to company’s goals. Entrepreneurial leaders consider

entrepreneurship as a basis to gain a competitive advantage and to outshine rivals (Lee

& Venkataraman, 2006, pp.114). In other definitions of entrepreneurial; Leadership is

organizing a group of people to achieve a common goal using proactive entrepreneurial

behavior by optimizing the risk, innovating to take advantage of opportunities, taking

personal responsibility and managing change within a dynamic environment for the

benefit of the organization (Roebuck 2004).

The used articles

No. Title Author(s) Year Journal/

Publisher

Reference

Name

1

A theory of

entrepreneurial

opportunity identification

and development

Alexander

Ardichvilia,

Richard

Cardozob,

Sourav Rayc.

2003

Universities of

Illinois,Minneso

ta,Concrodia

(Ardichvilia,20

03)

2

Personality and

Entrepreneurial

Leadership: A Study of

the Heads of the UK’s

Most Successful

Independent Companies

Nigel Nicholson

1998

European

Management

Journal/ Elsevier

(Nicholson,

1998)

3

Designing a Scale for

Measuring

Entrepreneurial

Leadership in SMEs

Seyed Amir

Mousavi Hejazi,

Mohamad

Mehdi Maleki

and Mohammad

Javad Naeiji

2012

Islamic Azad

University –

Tehran North

Branch

(Hejazi,2012)

4

Personality Traits among

Entrepreneurial and

H. Mushtaq

Ahmad

2010

Department of

Management

Sciences, Bahria

(H. Mushtaq

Ahmad, 2010)

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Methodology approach

Different methodological approaches have been used in the used articles. Each

approach serves a different purpose. One kind of research methodology doesn’t fit all

purposes. Purposes of research is classified to four categories, exploratory, descriptive,

explanatory, emancipatory (Robson ,2002).

In the summarized articles, they have been used in many different methodological

researches approach, which enhance their results. Research approaches are classified in

two main categories:

Quantitative research

In this strategy, unstructured flexible design is used. For example in the first article

(Ardichvilia,2003) they have used Dubin’s theory building method to judge the research

method. Dubin is building theory is considered as the most comprehensive method. Dubin’s

theory is still built on translation of a theoretical model to testable hypothesis, and through the

identification of hypothesis 2 .In article (Ardichvilia,2003) entrepreneurial opportunity

identification and development have been used to create the hypothesis . In the article

(Ardichvilia, 2003), the units of theory have been used are; entrepreneurial alertness,

information asymmetry and prior knowledge, social networks, and personality traits.

2

http://www.idheap.ch/idheap.nsf/9a665b63d3a8260cc1256a0800365df0/1b86cf7620a1a808c1257538004a544d/$FILE/Chermack%202005.pdf

Professional CEOs in

SMEs

University

Islamabad

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In the second article (Nicholson, 1998) , they have used the NEO PI-R to measure the

personality through the five major domains of personality and the six facets that define each

domain. ( again try not to use the same words so close in a sentence) The five domain scales

and thirty facet scales of the NEO PI-R facilitate a comprehensive and detailed assessment of

normal adult personality. The NEO PI-R is recognized internationally as a gold standard for

personality assessment3. The purpose here is to create a comparison between; leaders,

Leaders, Managers and NEO Norms. In (Nicholson, 1998), they used a managerial control

sample within a population numbered around 200, and it was quite various - or which varied

in nationality, kind of firms, and function. Also the target leadership sample was around 68

participants, even they offered 116 companies’ chief executives to participate in the study.

Qualitative research

In this strategy unstructured flexible design is used, for example, in the study by

(Ardichvilia,2003), the researcher used the survey by Hills et al. (1997) to test hypothesis

about social networks to assert if the entrepreneurs who have extended networks identify

significantly more opportunities more than others. Also they used survey Hills et al. (1997)

about personality traits. In the third article (Hejazi,2012), the researcher used statistical society

of founders and top managers of SMEs in manufacturing and service categories in Tehran

Province. He sent to 34 companies in service and 27 companies in manufacturing category. In

3 http://www.unifr.ch/ztd/HTS/inftest/WEB-

Informationssystem/en/4en001/d590668ef5a34f17908121d3edf2d1dc/hb.htm

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the fourth article (H. Mushtaq Ahmad, 2010), the researcher gathered data in his study from

386 founders and from top managers in the manufacturing and service SMEs Data and tested

by factor analysis. The questionnaire contained 4 different factors: strategic, communicative,

personal, and motivational entrepreneurial leadership. The results explain that demographic,

variables like gender, age, educational level and experience of entrepreneurial activities in

Pakistan. Therefore in total 124 participants were included, 62 entrepreneurial CEOs and 62

professional CEOs. The study was carried out in 2 different cities in Pakistan, and they

selected successful participants in their field.

I believe the various study approaches enhance the study about the entrepreneurial

leadership, even though it might be sort of uncertainties in some studies because of the

number of definitions of entrepreneurial leadership and no accurate in attitude evaluating

tools which used to analysis people perspective- that have been used in many present studies-,

also it is possible for error due to self-expression during the questionnaire or survey.

The summary of the articles

Articles 1: A theory of entrepreneurial opportunity identification and

development (Ardichvilia,2003)

This paper has been talking about identification the entrepreneurial opportunity and it’s

development. While elements of opportunity are recognized, so it needs careful investigation.

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The successful opportunity development process leads to successful businesses. And the most

important part of this article which we focus on it more is about the entrepreneur who conduct

the opportunity until it becomes a business and the elements which influence the entrepreneur

to make him identify business opportunities to create and deliver a value for the stakeholders.

The first unit of theory is entrepreneural alertness which means the recognition of

opportunity, by showing high alertness, and being sensitive to information about everything

relevant to the opportunity like the market, the user problems, unmet needs and interests, and

novel combination of resources. Higher alertness increases the possibility of an opportunity

being recognized. The second unit of theory information asymmetry and prior knowledge,

Entrepreneur will catch the opportunity according to his prior knowledge which allows him to

recognize the opportunity. The prior knowledge can be in the markets and how to serve it, and

the customer’s problem.The third is social network, the strength of weak ties which can

provide unique information more than strong ties. So the entrepreneur who extended his

network can identify more opportunities plus the quality of the network contacts affect others

characteristics like creativity and alertness. The opportunity is evolved by three cognitive

activities, information gathering, thinking through talking, and resources assessing. These

activities can be run through the social network as well. The fourth Personality traits, and here

the most important 2 traits are; the connection between optimism and higher opportunity

recognition –the optimism is inside view of the potential success of the venture-, and the

second traits is the creativity to discover opportunities that others do not see.

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The study also concluded that entrepreneurial alertness appears as a more powerful

concept, and the relationship between opportunity identification and personality traits

except creativity and optimism seems to be weak.

The study also talked about how the opportunity types can be based on the market

needs or value sought if it’s identified or unidentified, and based on value creation

capability if it’s identified or unidentified. And the best opportunity can be found if both

of them are identified.

Article 2 : Personality and Entrepreneurial Leadership (Nicholson, 1998)

This article holds a comparison between leaders, managers and NEO norms through

the five major domains of personality through questionnaire between them to show the

differences in personality traits. The five major domains that were used here in this article are

neuroticism, extraversion, agreeableness, openness, and conscientiousness. Through this study

it concludes that leaders differ from NEO norm in scales lower neuroticism, higher

extraversion, and lower agreeableness. Specifically in the facets of high activity, lower

aesthetics, lower straightforwardness, lower altruism, higher achievement-striving. Also the

study shows that leaders differ from manager in lower gregariousness, higher order, and

higher self discipline.

Leaders differ from managers and NEO norms higher conscientiousness domain, and

specifically lower depression, lower self-consciousness, lower vulnerability, higher

assertiveness, lower action, lower compliance, and higher dutifulness facets.

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In this study, they hypothesized that even the assertiveness score was higher than both the

managers and the NEO norm sample, but it still can’t be considered like a strong requirement

for leadership. And activeness score doesn’t differ from managers, so it can be considered

important for being a manager generally.

In the present article (Nicholson, 1998), they divided the leadership for 3 kinds according

to the link between the traits and the role attainment. The first one is the strongest; that the

leader has many traits which make him/her possesses a sufficient psychological profile to

maintain his position. The second is a weaker cause of the presence or absence of certain traits

which makes it difficult to attain the leadership position since some of the traits are essential

to sustain the position. The third is a weaker cause certain traits are desirable for individual to

lead

Article 3: Designing a Scale for measuring entrepreneurial leadership in SMEs

(Hejazi,2012)

The purpose of this article (Hejazi,2012) is to building a new identification of

entrepreneurial leadership and assess how to evaluate it differently than other traditional

evaluation tools. In this study, they combined three theories, transformational leadership, team

oriented leadership, and value oriented leadership, it also considers the expert’s perspectives

as well. They used new scales for the evaluation like firstly; strategic factors, secondly;

communicative factors, thirdly; personal factors, and fourthly; motivational factors which is

the most exclusive in this research and haven’t been used before.

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Demographical variables of the study show that gender has an impact on strategic and

communicative factors, in case of men, the response average was high on a strategic factor,

and in case of women the average response was high on communicative factor. Non one of

the previous studies have taken the demographical side in the consideration. Even researches

shows that men were more successful than women when it comes to strategic management

field. Also the study shows that young entrepreneurs have shown a higher response with

motivational dimension of entrepreneurial leadership.

The study also shows the educational level has a big impact on some strategic factors

like; assigning vision, establishing a system for gathering information and predicting future

problems.

This study also has referred to two important points; entrepreneurial leaders are

affected by organizational systems. For example in bureaucratic structures, there are less

opportunities to exploit the entrepreneurial leader’s capabilities, and social intelligence role in

showing leader’s entrepreneurial behaviors.

Article 4: Personality Traits among Entrepreneurial and Professional CEOs in

SMEs (H. Mushtaq Ahmad, 2010)

The purpose of this study (H. Mushtaq Ahmad, 2010) is to explore what differentiating

what between entrepreneurial CEOs and professional CEO’s or top managers when it comes

to psychological attributes, through examining how the five motivational motives like need

for achievement, locus of control, risk taking propensity, ambiguity tolerance, and type-A

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personality. The study revealed that the entrepreneurial CEOs have higher score on need for

achievement, locus of control, risk taking propensity, ambiguity tolerance, but the study

shows that professional CEOs have higher score on Type-A personality than entrepreneurial

CEOs.

The study concluded that Type-A personality is the strongest variable of professional

CEOs, but the need for achievement is the strongest variable of entrepreneurial CEOs,

followed by locus of control: risk taking propensity, and ambiguity tolerance for

entrepreneurial CEOs.

The present study (H. Mushtaq Ahmad, 2010) categorized all managers in 3 categories

of non-conscious motivational groups; being motivated by achievement, affiliation, power.

Achievement motive distinguishes the entrepreneurial CEOs than others since entrepreneurial

CEOs score better in this point, but others make decisions to increase their popularity.

Affiliation motive leads sometimes to trying to secure job for the family through taking a

decision to build a business. Power motive leads to make a decision in order to feel dominant

over organization or to feel the ability to influence others. The combination of non-conscious

motives creates effective, motivated leaders. Mangers who are motivated by power can be

highly responsible toward the company and the most effective.

Key findings

After going through the present articles, I see there are censuses about entrepreneurial

leadership and an entrepreneurial leader concept. Some articles looked at the entrepreneurial

leadership from a different perspective according to their interest in the study or perhaps for

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societal reason which could give benefit to the society and develop the entrepreneurial

leadership concept.

In the study by (Ardichvilia,2003), I can see that the entrepreneurial alertness is the

most important factor effecting the identification of the opportunity, since the entrepreneur

with high entrepreneurial alertness has more possibilities to recognize more opportunities. In

the third article by (Hejazi,2012), the study concluded that the education level is important for

being entrepreneurial. In my point of view I think the good education will heighten the

entrepreneurial alertness, since it’s about recognizing all the relevant items of the opportunity,

and the recognition comes from having knowledge about all these items which you get

through the education. So after finding out the link between entrepreneurial alertness and the

education level, I believe that the both studies reached to the same point even though they

look to the subject from different dimensions.

In the first article by (Ardichvilia,2003), the study concluded that the creativity is

important trait and relevant to being entrepreneurial, and in the second article by (Nicholson,

1998), the study concluded that creativity is important trait for being entrepreneurial, but it’s

irrelevant for being managers. I agree with the 2 articles about that because if we look to the

definition of being an entrepreneurial leader and a traditional manager, we see that the

entrepreneurial leader should come up with new strategies or new ideas continuously, and that

is exactly what the creativity brings.

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In the first article by (Ardichvilia,2003), it’s mentioned that the entrepreneurial is

continuously looking for new opportunities. And in the second article (Nicholson, 1998), we

can see Excitement seeking scores a high level amongst the CEO’s. So both studies enhance

the same concept as we can see.

The articles talked about the taking risk trait in the entrepreneurial leader, they almost

agreed about that the entrepreneurial leader should take the risk carefully. I completely agree

with that, but I would agree more with the first study by (Ardichvilia,2003), when it talked

about taking the calculated risk.

My entrepreneurial leadership model

Here I build this model (figure1) according to the present articles. My model is

divided into 3 domains; the first domain is a psychological profile which includes all the

important traits which s/he is born with- for being an entrepreneurial leader. The second

domain includes all the external factors which help to create entrepreneurial leaders, and it

can be gained through education or through the social life or through the cultural influence.

Between the first and second elements, I find that the most important area is entrepreneurial

alertness and the model clarifies- from my point of view- the most important traits or elements

which associated directly to the entrepreneurial alertness. The third domain is a

complementary domain in this model which includes the tangible elements that help him/her

to show the entrepreneurial skills. So if the elements in the first and second domain are able to

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create the entrepreneurial alertness, then the entrepreneurial leader will have the capability to

see the opportunity.

figure1: The entrepreneurial leadership model from my point of view.

Conclusion

During my reading of the present studies, I believe that the entrepreneurial leader has

some traits which s/he born with that help him/her, such as; creativity, optimism, activity, and

some other- please refer to the model- to be entrepreneurial, but also the natural traits can’t be

enough and don’t make that professional entrepreneurial leader without the external factors

which can be through the education, culture’s influence, or practicing. The atmosphere

around the person plays an important role to motivate for being an entrepreneurial leader, like

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the affiliation motive, which leads to seek for something that can save the future for the

family for example, or being in competitive environment which motives one to achieve

something new.

Implication of the model on my business future

After building the model as how I think the entrepreneurial leadership can be, I then

set a comparison between the traits in each domain in the model, and what I have and I should

have. I conclude that I have to focus on the second domain which contains the external factors

like education. So since I have background in I.T. and I’m planning to do another course in

another subject which is going to increase my knowledge. And other interests coupled with

my prior work/life experience is to having the social network in the area where I’m going to

settle in, I have small social network during the university, work, and social life. I still need to

improve my communicative skills which I think can be achieved through practice and

education.

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References

1. Ardichvili, Alexander, Richard Cardozo, and Sourav Ray. "A Theory of

Entrepreneurial Opportunity Identification and Development." Journal of Business

Venturing 18.1 (2003): 105-23. Print.

2. Nicholson, Nigel. "Personality and Entrepreneurial Leadership: A Study of the Heads

of the UK’s Most Successful Independent Companies." (1998)

3. Hejazi, Seyed, Mohamad Maleki, and Mohamad Naeiji. "Designing a Scale for

Measuring Entrepreneurial Leadership in SMEs." (2012): 71-77. Print.

4. Ahmad, H. Mushtaq. "Personality Traits among Entrepreneurial and Professional

CEOs in SMEs." (2010): 203-13. Print.

5. Acs, Zoltan, and David Audretsch. "The Impact of Entrepreneurship on Economic

Growth." The Impact of Entrepreneurship on Economic Growth (July 2002)

6. Chermack, Thomas J. "Studying Scenario Planning: Theory, Research Suggestions,

and Hypotheses." Technological Forecasting and Social Change 72.1 (2005): 59-73.

Print.

7. Costa, Paul T. "NEO-PI-R - Manual." NEO-PI-R - Manual. Hogrefe Testsystem,

2007. Web. 14 Sept. 2012. <http://www.unifr.ch/ztd/HTS/inftest/WEB-

Informationssystem/en/4en001/d590668ef5a34f17908121d3edf2d1dc/hb.htm>.