Leadership and Entrepreneurship - Assignment Example

LEADERSHIP AND ENTREPRENEURSHIP Introduction The term leadership could be defined as a position of power held by an individual in a group which provides him with an opportunity to exercise interpersonal influence on the members of his group in a bid to mobilize and direct their efforts towards certain pre-defined goals. It is a much studied topic in management as the organizations as well as societies; largely depend on ‘leaders’ for their survival and development. (Henry Tosi and Neal Mero, 2000) Whether the organization is a school or a space research centre, the leadership variable is an indispensable element that makes a difference between its success and failure. Most of the basic organizational problems such as distorted structural design, poor morale of managers and employees, communication gaps, resistance to change, inefficient controls, iniquitous salary structure, scarcity of resources, incompatibility with external environment and so on are attributed to poor leadership. Entrepreneurship on the hand, which is derived from the French word “entrprende”, as defined by the famous economist Adam Smith as, “the economic agents who transform demand into supply for profits”. One of the definitions of the term, includes, the founding of an enterprise which apparently includes all those associated with it such as the decision makers, the stakeholders and the initiators of business or a business idea. In conclusion, entrepreneurs are leaders who develop and grow enterprises. (Stephen Robins, 2004) Bill Gates or McDonald could well be considered as entrepreneurs due to their sheer vision and dedication of converting a business idea into a profitable and economically viable business option. Using suitable evidence, discuss the degree to which entrepreneurship in small and medium organizations is reliant on effective and appropriate leadership The size of the business rarely affects the leadership qualities. For example, a leader of a national or international enterprise / organization, commands wide – spread influence over a large number of people while the influence of the leader of a small work group in an organization is relatively limited in scope. However this does not affect the fact that they leaders in their own right and fulfill all the duties and responsibilities of an entrepreneur. In a formal organizational setting, a leader enjoys a position of command and exercise power over their subordinates in order to get the work done and achieve the entrepreneurial goals laid down by the organization. The larger the group the greater the difficulties in exercising control over their subordinates. In such a situation, the leadership roles are often distributed among the subordinates, chosen by the entrepreneur and further divided into smaller groups. The division of roles and responsibilities is one of the foundations of an efficient leadership, especially in cases of large organizations where the groups of people being handled by the leader is large. The exercise of control over the group is a tedious job and also the leaders are responsible for getting the work done by delegating responsibilities and transferring adequate authorities to managers immediately below their ranks, in an organizational hierarchy. The division of labor and delegation of authority by the entrepreneurs in a small and medium organization largely differs from those of the large organizations. And all this depends on the organizational structure, which in turn is again dependent on several factors such as goals and objectives of the organization, the technology available at their disposal which mainly refers to the system of production in case of a manufacturing unit, the external environment and the people involved, i.e, the human resources. For example in case of a Furniture workshop, which is a small scale business, the delegation of authority could be mainly divided into four sections such as Planning, Designing, Assembling Smoothening and Polishing. This could be represented in the following diagram as follows: The above figure shows the case of a small enterprise, a furniture workshop which has merely 5 departments. Thus to ensure that the enterprise goals are achieved the entrepreneur does not have to partake with his authority and power and delegate some of his authority to his subordinates, as the number of departments is relatively lower and hence ensuring compliance with the organizational goals is a comparatively easier job, especially when compared with large multinational organizations. In a business enterprise, managers at various levels of the organizational ladder, assume the role of leadership in relation to their subordinates in order to get the right things done in a proper and efficient manner so as to achieve the organizational goals. The effectiveness of entrepreneurs as leaders is critical for the survival of the organization and ultimately on its success, irrespective of the size of the organization. The two most significant dimensions of the behavior of leaders are productivity orientation and employee satisfaction orientation. Thus any business that manages to score well on these two behavioral aspects can lead to successful and profitable organization. The small and medium sized organizations / enterprises largely depend on their man power resources rather than technological aids as human resource is the most significant and inevitable part of the small enterprise and medium enterprise. The small scale organizations have relatively smaller groups and the task of the entrepreneur is to manage and motivate the performance of the group as a whole rather than concentrating on a single unit. The success of these kind of organizations mainly depends on the leader’s approach which should be task – oriented, so as to derive the desired results from their group. Also the small scale organizations have an added advantage over the larger and multinational corporations in terms of trade unionism, political conditions and economic and cultural state of the society around it. Identify and evaluate the relationship between entrepreneurship and leadership with reference to two different organizations The term entrepreneurship and leadership are inter-related and can often be used inter changeably. While the term leadership largely deals with the delegation of authority and influencing those under their control to work towards the achievement of the desired goals of the organization, entrepreneurship on the other hand is mostly related to the setting up of an enterprise and directing it towards growth by aiming to increase and improve its profitability and credibility through sustained efforts and exercising exceptional leadership qualities. Leaders, just like entrepreneurs are visionaries who have a set of goals in mind and strive to achieve those goals by exercising control over their subordinates and groups and constantly motivating them to perform better and better and hence ultimately succeed in achieving the goals of the organization. Bill Gates and Jack Welch were exceptional entrepreneurs who conceived a business idea and then channelized their energy towards achievement of their goals, which was popularizing their business concept and transforming a dormant business idea into a profitable and economically viable business option. These entrepreneurs further go on to become leaders in their respective fields where they lead their groups / organizations towards newer heights and thereby attain a position of imminence. The Toyota Motor Corporation, for example is a glaring example of exceptional leadership qualities where the owner started off with humble beginnings as a textile owner to the worlds number one car manufacturing giants. The leaders are thus entrepreneurs with a vision and foresight towards taking their organization from a small enterprise to newer heights and achieve stupendous success as is clearly visible from the case studies of some of the worlds most successful business enterprises, such as McDonalds, Toyota Motor Corporation and Bill Gate’s Microsoft Corporation. Effects of leadership on entrepreneurship As defined above entrepreneurship is mainly concerned with the conception of a novel business idea and the subsequent growth towards an economically viable and profitable business venture. But to achieve all this, it needs a leader, who possesses skills such as interpersonal relationship qualities which helps them deal with the human resources such as suppliers, clients, retailers, bankers, creditors and customers of the business. An effective leadership leads to a further enhanced entrepreneurship qualities. Some of the effective leadership traits include intelligence, personality and other similar qualities. Good leaders need to be intelligent enough to understand the various complexities involved in running an enterprise successfully and understand the content and context of their position and function, as well as grasp the dynamics of their environment variables, both internal as well as external which affects their activities. A good perspective of the present and future dimensions of the organization further enhances the entrepreneurship abilities. ( Marshall Goldsmith, Vijay Govindrajan, Beverly Kaye, 2002) Besides, the personality of the leader also contributes to a great extent towards better entrepreneurship. The leaders possess certain inherent characteristic traits such as emotional stability, self confidence, foresightedness, decisiveness, achievement orientation, integrity in character, and a strong tendency to be co-operative and patient in dealing with human resources. Apart from these qualities, some of the good leadership qualities also include open mindedness, social sensitivity, and ability to communicate ideas and expressions, an abiding interest in people, pragmatism and a strong sense of realism. Although the existence of such qualities does not warranty a good leader, however it does significantly affect the manner in which the leaders and entrepreneurs deal effectively with the situations around them. (Peter Drucker, 2007) Benefits to the society The society benefits largely due to the presence of such exceptional leaders and entrepreneurs. The history of great visionaries in almost all the fields that brought about revolutionary changes in the way we perceive the world around as is largely due to the contribution of visionary leaders and entrepreneurs of those times such as Einstein, Thomas Alva Edison, Louis Pasteur and those of the relatively modern era such as Bill Gates, Jack Welch and Warren Buffet of the recent times. The visionary ideas conceived by these leader and entrepreneurs have made a significant difference in the way we lead our lives today. Thus the contribution of such leaders is appreciable and the benefits to the society at large are unmistakably significant. (Raymond Smilor and Donald Sexton,1996) Conclusion In conclusion the leadership aspect of management plays a significant role in shaping up of an organization and leads to widespread economic and socio cultural developments in our surrounding environment. Good leaders are both task oriented and people oriented and it is this combination inherent in the leadership aspect that helps in contributing towards the success of any organization. For the society to develop and prosper, it needs efficient entrepreneurs who conceive an idea with a goal to transforming it into a profitable business venture and good leaders to steer the organization towards rapid growth and development through foresight and sheer business acumen. “Most important, leaders can conceive and articulate goals that lift people out of their petty preoccupations and unite them in pursuit of objectives worthy of their best efforts” – John Gardner. REFERENCES Neal Tosi, Henry Mero: The Fundamentals of Organizational Behavior, Blackwell Publication, chapter 13: Leadership, p.247-262 Stephen Robins, The Essentials of Organizational Behavior, 2004, Pearson Education Publication. Peter Drucker, Innovation and Entrepreneurship: Practice and Principles, Part II, the practice of Entrepreneurship, p-131 – 170. Raymond Smilor and Donald Sexton, Leadership and Entrepreneurship: Personal and Organizational Development,1996, chapter 2: Leadership Skills of Entrepreneurs, p-4 – 15. Marshall Goldsmith, Vijay Govindrajan, Beverly Kaye,The Many Facets of Leadership, 2002, chapter 9, Entrepreneurial Leadership, p- 99 – 111. Read More