Entrepreneurial leadership
Jeffrey G. Covin and Dennis P. Slevin
Entrepreneurial leadership can be defined as a social influence process intended to facilitate the discovery, evaluation, and exploitation of entre preneurial opportunities. This definition recog nizes that, consistent with myriad writings on the topic, leadership is inherently a social influ ence process (e.g., Bass, 1985; Finkelstein and Hambrick, 1996; Kotter, 1990). It also recog nizes that entrepreneurship is a process defined by the discovery, evaluation, and exploitation of entrepreneurial opportunities (Shane and Ven kataraman, 2000), or ‘‘situations in which new goods, services, raw materials, markets, and or ganizing methods can be introduced through the formation of new means, ends, or means–ends relationships’’ (Eckhardt and Shane, 2003: 336).
The preceding definition suggests that entre preneurial leadership is a specific type or dimen sion of leadership and not simply a context in which leadership is exercised. Regarding this latter point, the term entrepreneurial leadership is often used loosely to refer to leadership within the context of an ‘‘entrepreneurial firm,’’ where entrepreneurial firm is variously defined, for example, as an independent company (e.g., Nicholson, 1998), a start up firm/new venture (e.g., Swiercz and Lydon, 2002), or an innova tive, established firm (e.g., Clifford and Cava nagh, 1985). Used in this latter sense, the term entrepreneurial leadership implies nothing in herently unique about the nature of the leader ship being exhibited; only that leadership is being exhibited in a particular type of firm. To define entrepreneurial leadership as leadership within an entrepreneurial firm context is an in sufficient representation of the concept.
The proposed definition is also broader in scope than the definitions offered by others. Ireland, Hitt, and Sirmon (2003), for example, define entrepreneurial leadership as ‘‘the ability to influence others to manage resources stra tegically in order to emphasize both opportun ity seeking and advantage seeking behaviors.’’ entrepreneurial leadership 95 This definition contains the two essential elem ents of entrepreneurial leadership as proposed in the current conceptualization (i.e., social influ ence and entrepreneurial opportunity), but adds ‘‘advantage seeking behaviors’’ to the list of de fining elements. Thus, these authors adopt a definition of entrepreneurial leadership that is part of the concept as proposed herein, but that layers additional qualifications onto the concept as currently defined.
In the interests of further delineating the con ceptual domain of entrepreneurial leadership, this phenomenon will be contrasted with the phenomenon of entrepreneurial management and observations will be offered concerning how entrepreneurial leadership can be exhibited as a pre organization phenomenon, a phenom enon that occurs throughout the organizational hierarchy, and a phenomenon that is exhibited by multiple levels or units of analysis.
Differentiating Entrepreneurial Leadership from Entrepreneurial Management
Just as it is appropriate to differentiate between leadership and management (see House and Adi tya, 1997; Kotter, 1990), it is appropriate to differentiate between entrepreneurial leadership and entrepreneurial management. As men tioned, the two essential elements of entrepren eurial leadership as proposed in the current conceptualization are social influence and entre preneurial opportunity. Entrepreneurial oppor tunity is also core to many definitions of entrepreneurial management. Social influence is not. Rather, the acquisition and management of entrepreneurial resources, broadly defined to include those human, social, financial, physical, technological, and organizational resources that enable the pursuit of entrepreneurial opportun ity (see Brush, Greene, and Hart, 2001), are elements more typically acknowledged in defin itions of entrepreneurial management. Steven son (1983: 3) linked opportunities and resources in his early definition of entrepreneurial man agement: ‘‘the pursuit of opportunity without regard to resources currently controlled.’’ Others have more directly suggested that re source acquisition and management are central to the concept of entrepreneurial management (e.g., Alvarez and Barney, 2002; Amit, Brigham, and Markman, 2000; Ireland, Hitt, and Sirmon, 2003). Consistent with this view of entrepren eurial management, Thompson (1999: 286) has described entrepreneurial managers as those who ‘‘obtain resources and exploit organizational competencies and capabilities to seize or even open windows of opportunity in their selected environments.’’
Thus, while entrepreneurial leadership can be defined as a social influence process intended to facilitate the discovery, evaluation, and exploit ation of entrepreneurial opportunities, entre preneurial management is more appropriately conceptualized as a style, process, or system of operating through which entrepreneurial re sources are identified, acquired, configured, and/or deployed in the interests of facilitating the discovery, evaluation, and exploitation of entrepreneurial opportunities.
Entrepreneurial Leadership as a Pre- Organization Phenomenon
Entrepreneurial leadership can be exhibited in any form of enterprise including, for example, profit seeking and not for profit organizations, small sole proprietorships to large, global cor porations, and recently founded ventures to mature business organizations. Such leadership can also be exhibited before a venture’s operat ing organization has been formally created. That is, a formal organization need not exist as a prerequisite to the conduct of entrepreneurial leadership. During the processes of entrepren eurial opportunity discovery, evaluation, and exploitation, entrepreneurial actors will charac teristically exert social influence over prospect ive venture stakeholders in an effort to effect conditions favorable to the formation of the ven ture organization. The creation and manage ment of a social network, for example, is critical to the establishment of an enterprise system whose viability depends upon informa tion and other resources accessible through that network (Johannisson, 2000). Significantly, networking tasks undertaken to align resources and stakeholder commitment with the entre preneur’s vision and enterprise agenda will often require the exhibition of entrepreneurial leadership. Thus, entrepreneurial leadership is exercised in the pre organization as well as the post organization stages of venture development.
Entrepreneurial Leadership as a Phenomenon Exhibited throughout the Organizational Hierarchy
Entrepreneurial leadership has been described as ‘‘the most important job’’ in an organization (McGrath and MacMillan, 2000). However, this job is not the sole responsibility of any given individual or set of individuals. Rather, entrepreneurial leadership can be exercised throughout the organizational hierarchy by man agers and non managers at any organizational level. A common result of such leadership is the emergence of an entrepreneurial orientation (Covin and Slevin, 1991) or a high level of entre preneurial intensity (Morris, 1998) as reflected in the behavior of the organization’s member ship. While it is, perhaps, most common to con ceive of senior executives as potentially or ideally exhibiting entrepreneurial leadership (Nadler and Tushman, 1999), the exhibition of such leadership is increasingly depicted as a collective responsibility of the organization’s membership (e.g., Miles et al., 2000). As argued by Cohen (2002: 8): ‘‘Entrepreneurial contributors do not have to be appointed and designated as leaders; they can be at any level or in any job and spot an opportunity that they help to bring to fruition, no matter how the organization is arranged.’’
Entrepreneurial Leadership as a Multi- Level/Unit of Analysis Phenomenon
Entrepreneurial leadership is frequently evident in the actions of venture founders as well as established firm CEOs. However, other units of analysis beyond the individual can also exhibit strategic leadership. Groups or teams of indi viduals, organizational subunits, and entire organizations can exercise entrepreneurial lead ership as this phenomenon is herein defined. The adoption of technological standards within industries often occurs, for example, as a result of what can be accurately described, using the current definition, as entrepreneurial leadership by the pioneering firm (Hill, 1997). It may even be meaningful to conceive of entire industries or other collective entities as potentially exhibiting entrepreneurial leadership. In short, the domain of entrepreneurial leadership is not bound within a particular unit of analysis.
In summary, entrepreneurial leadership is not simply leadership within an entrepreneurial firm, nor is it the conceptual equivalent of entre preneurial management. Rather, entrepreneurial leadership – as a social influence process intended to facilitate the discovery, evaluation, and exploitation of entrepreneurial opportun ities – is a distinct phenomenon that is mani fested by a wide variety of actors and observable in a wide variety of contexts, both within and beyond the bounds of organizations.
Given the frequency with which anecdotal evidence has suggested a positive effect of entre preneurial leadership on such desirable out comes as wealth creation (e.g., Ireland et al., 2002), the enhancement of firm competitiveness (e.g., Hamel, 2000), and social welfare improve ment (e.g., Oliver and Paul Shaheen, 1997), the continued conduct of research into the phenom enon of entrepreneurial leadership is certainly warranted. Of particular importance will be the development and validation of measures of entrepreneurial leadership. Being able to exam ine entrepreneurial leadership not only as a the oretical concept but also as an empirically measurable research variable will open many avenues of potentially promising inquiry. Three questions suggested for further research consideration are: Can organizations systematic ally foster and sustain entrepreneurial leadership as a ‘‘normal,’’ ubiquitous phenomenon and, if so, how? What are the effects of entrepreneurial leadership as exhibited by various levels of an organization’s membership on measures com monly used to assess organizational perform ance? How is entrepreneurial leadership typically manifested in the words and actions of those parties who use this type of leadership to greatest effect?
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