The Practical Linkage of Leadership with Entrepreneurship - Essay Example

? Entrepreneurship and Small Business Development Introduction In the theory of economics, it is d that the efficiency of output produced by a firm largely depends on the nature of the inputs used. The four main factors of production used in business are land, labour, capital and entrepreneurship. However, it should be considered that among the four resources, entrepreneurship (organization) is the pivotal factor determining the long term growth perspectives of an organization. An organizer or entrepreneur is the promoter of business, who helps to amalgamate all the other factors of production in business. The returns of an entrepreneur are the profit generated by the corporate organization. Capital in the economic sense is a produced means of production (Iversen, Jorgensen and Malchow-Moller, 2008). However, an entrepreneur in business is termed as the human capital. The economic capital of the organization can only be productive with the benefits of the human capital in its business operations. In 1999, Richard Cantillon had stated that leadership of the entrepreneurs is responsible for the different circulations and changes in the economy (Glover, 2013). However, in the later stage of 2001, Jean Baptiste had stated that an entrepreneur is the primary agent of fabrication in the economy (Glover, 2013). An entrepreneur is the person who has the responsibility to manage, organize and also, forecast the impending risks in a business organization. After the emergence of globalization, the trading activities in nations have largely improved. Each and every country in the world has experienced high growth rates with the rise in the number of new business firms. The rise in the number of small business developments has helped to improve the value of national products and employment opportunities in nations. The context of this essay will show the contribution of entrepreneurs in small business developments, both empirically and theoretically. However, the learnt from the essay will help to understand that today Social Capital substantially helps the entrepreneurs to promote small new business establishments in the market. Literature Review An entrepreneur has a lot of qualities, among which the researcher considers leadership to be the most important attribute of an entrepreneur. It is the leadership quality of an entrepreneur that helps him to facilitate new business developments. Eminent scholars had stated that entrepreneurship in business encompasses a whole new concept (Stryker, 1998). They claimed that the originality and self sufficiency of entrepreneurship is different in business. Entrepreneurship in business helps to convert the technical resources in business to product and services. However, considering the characteristics, it can be concluded that entrepreneurial behaviour develops with time. This paper would primarily concentrate on the Leadership School Of Thought on Entrepreneurship that was first introduced by Cunningham and Lischeron in 1991 (Madsen, Neergaard and Ulhoi, 2008). This concept explains that entrepreneurs are actually the leaders of common people. They assure that their subordinates accomplish the different purposes and objectives in the workplace. Direction and motivation are the other skills of an entrepreneur that is developed from the basic quality of leadership. This School of approach is completely non-technical in nature. It explains that a successful entrepreneur must have the quality of leadership with which he would be able to attract people and convert business vision into reality. It was also proclaimed by Schein in 1983 that an entrepreneur is a leader who is responsible for upgrading the work culture of a firm (Glover, 2013). It is true that the management and leadership attributes are the factors which help in the establishment of small business firms. Cogliser and Brigham had stated in 2004 that leadership theories were established long ago, but the practical linkage of leadership with entrepreneurship is made in the recent years. The main theories of leadership that have been developed over time are: The Traits Theory The Managerial Motivation Theory The Managerial Grid Path-Goal Theory The Contingency Theory All these above theories have explained the value of entrepreneurship, but they were not able show that a good entrepreneur should have efficient leadership skills. In the recent years, the concept of ‘Leadership School of Entrepreneurship’ has been developed. This School of theories has emphasized on the good leadership quality of an entrepreneur. The theories were: Charismatic Leadership Transformational Leadership Visionary Leadership Authentic Leadership Shared Leadership (Gonzalez-Alvarez and Solis-Rodriguez, 2011) All the above theories have explained that a modern entrepreneur in business is the person who is successful in controlling all the subordinates and can also facilitate the growth of the organization. Finally, a new concept had come into the modern economic field which was the concept of ‘Entrepreneurial Leadership’ (Papalexandris and Galanaki, 2009). This concept had explained that an entrepreneur is a leader with the task of framing the visions of an organization. He is also supposed to grab the different types of uncertainties in business and improve the working path of the subordinates. It was also claimed that a leader (entrepreneur) had the duty of making commitments in business and specifying the limits of the subordinates in the workplace. Over time, the concept of ‘Entrepreneurial Leadership’ was transformed into the form of CEO Leadership Theory. This concept had stated that leadership or entrepreneurship in business plays the pivotal or middle role in business. Commitment, motivation, satisfaction and effectiveness are the basic attributes that must be present in a leader or an entrepreneur. In the modern worlds, the primary leader of a private business organization is the CEO. It has been claimed by the researchers that the leadership quality of a CEO primarily includes two important dimensions. Firstly, it includes the concept of Entrepreneurial Leadership Theory and secondly, it includes the concepts of vision, charismatic effects and vision communication. A special survey was made including a random sample of about 70 CEOs of different companies. About 72.86% of them had commented that the quality of Entrepreneurial Leadership is highly dominant in the working behaviour of a CEO (Papalexandris and Galanaki, 2009). Figure 1: Leadership Attributes of Entrepreneurs in the Survey (Source: Papalexandris and Galanaki, 2009) The above table explains the various leadership qualities that were found to exist in the entrepreneurs in the survey. All the above mentioned attributes are statistically significant, which shows that leadership is a strong and perhaps, the most important quality of an entrepreneur. Practical Evidence This context of the paper will explain the brilliant business entrepreneurial activities of Steven Paul (1995-2011). Steven Paul was better known as Steve Jobs in the business world. He was a famous American marketer, inventor and entrepreneur. He was also the co-founder, CEO and the chairman of Apple Inc. From his working activities in the famous technological hardware and Software Company Apple Inc., Steve Jobs was considered to be a charismatic pioneer of the world of personal computer revolution. In the modern world, the segment of computers is linked to computer and customer electronic fields. Further, the computer and the electronic fields are related to Smartphones, which finally ends in movies and videos. This explains that technology in the software and hardware industry is now used by the households for the purpose of entertainment. This depicts the improvement in the quality of lifestyle of the individuals. Steve Jobs has a substantial contribution in this improvement. He was also the co-founder of Pixar Animation Studios, where he was the chief executive, thereby undertaking all the important business decisions and strategic options in the business. Steve Jobs had also become a part of the famous entertainment organization, The Walt Disney Company, in 2006 and undertook the important decisions of the organization as one among the board of directors (Entrepreneur Staff, 2012). This was the time when the organization of Pixar Animation Studio was acquired by The Walt Disney Company. Steve Jobs as a good leader in the technological industry had first recognized the commercial potential of Graphical User Interface in the computers. He, with the help of this invention, had facilitated the launching of a famous personal computer named Apple Lisa. However, Steve Jobs quit Apple in 1985 and went on to found the organization, Next. This was a company that had facilitated a computer platform development and had specializations in the business markets and higher education. Around 1986, Steve Jobs undertook the computer graphics business segment of Lucasfilm. The contribution of the great business entrepreneur, Steve Jobs, was not confined to the leadership of electronic companies. He had also undertaken the initiative of becoming a creative film producer. He was the producer of Toy Story in 1995. Finally, in 1996, it was found that Apple Inc.’s operating system had failed with several other software problems. It was also true that the company was facing a lot of problems in framing certain strategic business decision. Apple Inc. was almost bankrupt in the market, when Steve Jobs had joined the company for the second time. He joined Apple Inc as an interim CEO and as a business advisor. Steve Jobs provided his excellent business entrepreneurial capabilities and revised the bankrupt situation of Apple Inc. into profitability by 1998. As the new CEO of Apple Inc. for the second time, Steve Jobs had initiated various types of product development. iPod, iTunes, iPad and iMac were the different software’s and products launched by Apple Inc. in the market under the authorities of Steve Jobs. The aggregate service in business provided by Apple Inc. was also improved through the business directions of Steve Jobs. The company introduced more service branches in the form of App Store, iTunes Store and Apple Retail Store, in the different marketplaces. It was due to the expert entrepreneurial capabilities of Steve Jobs which had made Apple Inc. the most worthy publicly traded company in 2011. Steve Jobs had also received various awards for his priceless contribution in the music and electronic industry. He died in October 5, 2011 and the entire business world had lamented for his death. It was claimed that the loss of Steve Jobs was a pricy loss for the corporate world (Lin, Cook and Burt, 2001). However, it is believed that the lessons of entrepreneurship taught by him would be used appropriately by the new budding organizers in the corporate world. Beginning his working life as a simple technician in 1973 in Atari Inc., Steve Jobs had ended his working life as a great business entrepreneur. After the business success of Apple Inc., Steve Jobs had stated that “We started out to get a computer in the hands of everyday people, and we succeeded beyond our wildest dreams” (Kendall, 2013). Apple Inc. was made an iconic business operator with the exclusive cooperation of Steve Jobs. The market of personal computers had experienced a remarkable revolution with the contribution of Steve Jobs. After ten years of business operation, Apple Inc. was experiencing heavy losses in business. However, Steve Jobs after his comeback in the company, as the interim CEO, had helped the organization to achieve extraordinary surplus in the 20th century. Early in his high school days, Steve Jobs did his first internship in Hewlett-Packard. Right from a very young age, Steve Jobs used to design video games for Atari as a part time job. At the very beginning of his working life, Jobs had desired to make a mini computer. He with his friend Steve Wozniak had founded the famous multinational organization merely in a garage. About $1350 was generated as profit in Apple inc. then, owing to the extraordinary leadership skills of Steve Jobs. The invention of the first personal computer by Apple had generated a profit of about $3 million. It would be surprising to note that just after two years, the sales of personal computers was seen to generate revenue of $200 million (McNally, 1995). At the initial stage, Apple Inc. was seen to lose a substantial amount of market share to IBM. In 1984, Macintosh which was introduced by Jobs was a personal computer with mouse controlled graphical user interface (Harvey, 2001). In his entire working life, Steve Jobs has contributed a lot to the field of computer science and technology. He was not only a good business entrepreneur, but also an efficient marketer and planner. Analysis From the above analysis, it can be stated that Steve Jobs was an excellent business entrepreneur. He had all those skills and qualities of entrepreneurship that reflect the true meaning of the word. The entrepreneurial leadership qualities of Steve Jobs can be explained with the help of the Trait Theory of Leadership. Focus: In 1997, Apple Inc. had engaged in the production of various types of computers and computer peripherals. Inspite of producing a wide range of products, the company was incurring a huge loss in the market. When Steve Jobs had joined the company for the second time, as the interim CEO, he had strict instructions for the company to end the practice of extensive product diversification. A true leader should have the capability to focus on the core competencies of the workplace. Steve Jobs, as a good leader, had instructed Apple to focus only on its four important products. It was found that with the focus only on the production of the four main computers, its loss in the market had started to offset with profit. He had claimed that one of the primary tasks of any business organization is to recognize the functions that are not to be executed in the course of the business operations. Simplify: Steve Jobs could easily adopt the policy of focussing with the help of the simplicity in his entrepreneurial skills. In the first marketing campaign of Apple, the catchphrase was ‘simplicity is the ultimate sophistication’. As a good leader, Jobs only concentrated on building a simple workplace. He believed that extra complications in the state of product or business operations can reduce the level of productivity and profit in the firm. Responsible: The theory of leadership states that a leader should be responsible for all the actions directed or controlled by him in an organization. All the activities undertaken by the business organization of Apple is highly integrated. Steve Jobs had realized his responsibility and monitored every detail of the business operations of Apple Inc., from the ARM microprocessor performance in iPod to selling a phone in the Apple Store (Ferri, Deakins and Whittam, 2009). Innovative: Steve Jobs was a highly innovative and creative entrepreneur. He believed in the notion of ‘when behind, leapfrog’ in business (Sobel, 2008). Steve Jobs was the creator of iMac. This equipment (iMac) could easily manage the photos and videos, but it could not synchronize the music operations in its software system. Its driver could not burn out or copy the compact discs. Steve Jobs had retaliated to this situation in a highly creative pattern. Instead of revising the software system of iMac, he went on to invent a new integrated system that had completely transformed the music and entertainment industry. He introduced a series of new products named iTunes, iPod and iTunes Store, which had certain new functions for the users to share, store, manage or play music with a much better experience than ever before (Rivera-Vazquez, Ortiz-Fournier and Flores, 2009). Ethical: It is always believed that a good leader must work for the profit generation and growth of the organization on the basis of ethical principles in business. Steve Jobs had always given more importance to enhancing the quality of products than generating higher profit. In 1980, when Steve Jobs had first introduced Macintosh computers, the product was of excellent quality but the cost of production was very high. However, in the long run, the excellent experience delivered from the usage of such computer had augmented the brand value of Apple Inc in the market. Dynamic and Brave: In the modern world, the states of business affairs have become highly complex in nature. At this juncture, a leader in the business should be dynamic, flexible and brave in order to initiate new changes in business. Steve Jobs had never given extraordinary importance to the focus groups. According to him, the customers would never realize their actual requirements until they are shown the prerequisites by the company itself. All the strategic business decisions undertaken by Steve Jobs in Apple Inc. were completely based on market forecast and intuition. Humble: Steve Jobs had believed in the notion of ‘stay hungry, stay foolish’ (Guo, Zhao and Tang, 2013). Similarly like the famous religious leader, Prophet Mohammad, Steve Jobs was a highly humble business or entrepreneurial leader. He had realized that by being humble, he could not only communicate with the needs of the workers, but also understand the tastes and preferences prevailing in the market. It was perhaps the good leadership skills in the greater business entrepreneur that had rendered him much needed in Apple Inc, for the second time. From the above analysis, it is very clear that Steve Jobs was an outstanding leader in the business world. Conclusion The state of business affairs have become so complex today that economic or non-economic success of an organization cannot be achieved without the active contribution of an entrepreneur. Right from the ruling regime of Genghis Khan in history, business and all segments of society have empirically proved that great leaders can actually bring about great changes. In the context of the literature review, we have found that entrepreneurs play a pivotal role in the development of a new business. The secondary survey has proved that good entrepreneurs possess the attribute of leadership. The researcher has empirically established the result of the survey by explaining the corporate organizing behaviour of the famous American entrepreneur, Steve Jobs. The learnt from the paper explains that leadership attribute in entrepreneurship can bring miraculous changes in business, as seen in the case of Apple Inc. The example of Steve Jobs has shown that a good entrepreneur must also be a good leader. By becoming a good leader, the organizer must remain humble, innovative, brave, flexible, dynamic, responsible and ethical. Also, he should only concentrate on the business growth factors (Kuran, 2013). It not only helps the business organizations to be successful, but also helps the non-profit organization to accomplish their mission. In the long run, it should be understood that good entrepreneurial activity accompanied with effective leadership can help in the growth of the entire economy of a nation, even at the perilous times (Spich, 1995). 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