Table of Contents
An unprecedented increase in the new technological development has been observed over the past two decades in both traditional and modern industries. The development have been accompanied by an increase in the pace of competition, this has complicated the nature of analytical approaches to the management, which were the key for competition in early 1980s. Currently, in most businesses, it is no longer viable to consider that an analytical strategic plan would lead to success in competition; therefore, in the current business, world planning should be more experimental. The world has become unpredictable, and there has emerged a different competitive perspective, where conventional approaches to the strategy are not accommodated. In the industries facing a substantively high competition and uncertainty, the effectiveness of analytical leadership has reduced significantly. Consequently, there has been a developing demand for the form of business leadership also known as an entrepreneurial leadership (Derr, Roussillon, & Bournois, 2002).
Entrepreneurial leader is seen as a leader, who would operate in an unpredictable business environment, where competitive factors are rapidly eroding all the advantage the business may be having. Therefore, instead of creating detailed strategic plans that are based on dependable estimates that would lead to a sustainable competition advantage, the entrepreneurial leader establishes organizational units that are constantly repositioning themselves in order to benefit from opportunistic charges. The units achieve this through the proactive and adaptive transformation of transactions to create a new profit model that seta the competitive environment. Entrepreneurial leadership is a function, through which leaders forge in their professional capacity to develop the essential variety needed to compete in an uncertain business environment. Entrepreneurial leadership is not confined to the adaptation as it is for evolutionary economists or populace ecologists. In the presence of uncertainty, this form of leadership tends to pursue enactment, envisaging possible developments and then forging a social strategic unit to enact a new profit model with the purpose of reducing the uncertainty (Nahavandi, 1997).
The following section of the paper is an elaboration of the entrepreneurial leadership, the component of transformational enactment is discussed.
Entrepreneurial Leadership and Cast Enactment
There is a massive literature on business leadership. However, in the current work the attention is drawn to the significant contributions that are more applicable for the entrepreneurial leadership paradigm. Essentially, leadership comprises a relationship of shared commitment between a leader and his or her followers pursuing a common beneficial goal. Operative leaders have the capability to realize unresolved collective performances, such as the growing or establishing successful entrepreneurial establishments, corporate shifts in a competitive business environment. Such effective leaders function through figurative behaviors, where they are proficient at the cognitively informed behaviors such as environmental sensitivity and resourcefulness. Factors regarding the maintenance and effectiveness of an entrepreneurial leader in the team’s commitment have been intensively researched. Various traits, including, but not limited to physical characteristics and psychological motives, have been investigated as some of the factors that distinguish an effective from ineffective leadership (Derr et al., 2002).
There are specific traits that were found to be consistently linked to the effectiveness of leadership. The universal traits that are most relevant for the cast enactment included self-confidence, leader social influence (pro-social assertiveness), and task-relevant knowledge. According to Berlew (1974), follower confidence development and value sharing are some of the critical aspect to effective business leadership. Berlew states that leadership may be defined as a process of inspiring other to a shared vision, establishing valued opportunities, while developing confidence in the recognition of the shared opportunities and values. These traits are equally applicable to the entrepreneurial leadership and cast enactment. The difference between leadership and management, is that managers are categorized by impersonal rewards and intimidating orientation. Leadership behaviors appeal to the ideological motives, values and self-perceptions of the followers, while inducing an unusual effort on the part of the followers above their normal positional requirements and roles (House, Hanges, Javidan, Dorfman, & Gupta, 2004).
Leader is expected to act as a potential force of inspiring individual members of society to contribute towards achievement of a common goal or objective. According to Leader-member-exchange theory, given conditions of a high degree of the mutual inspiration and commitment between leaders and their followers, there ought to be an enhanced effectiveness in form of the improved performance and sense of duty among the followers.
The new visionary, transformational, charismatic, and value oriented models of leadership will result from highly motivated and duty bound followers and the overall organizational performance, which cuts across all levels of management. In terms of this discussion, there are two outstanding themes for the development of cast enactment. Cast enactment entails the assembling and active mobilization of the cast that are required in accomplishing the enactment, when the result is highly uncertain. Therefore, there are two cast enactment functions for the entrepreneurial leader. First, the entrepreneurial leader is supposed to build a sense of what can be enacted, and they are able to accomplish. Second part of their leadership in business is to share, inspire, and instill a willingness on their followers to commit their effort to the challenge of transformation. This cast enactment function would be referred to as the establishment of commitment. The other challenge that entrepreneurial leader has to face, after establishing a shared interest on what is attainable, is to address the rising issues from the uncertain business environment (Earley & Ang, 2003).
The entrepreneurial leader should have a significant level of knowledge that human resources have been used appropriately, considering their potential to add value to the services. The function of the leader is to integrate and reshape the cast’s perceptions of the barriers and supports of the enactment. These functions demand the entrepreneurial leaders to apply their confidence and optimism in the group, with aim of breaking down self-imposed perceptual barriers. while advocating for the shared perception of the goal that needs to be accomplished by the team. They are also supposed to highlight the issues that they not be able to accomplish. This role of a leader is referred as defining the gravity, which is an assertive specification of the limitations of what is attainable and which lies outside the scope of the team (Ellis & Carlson, 2009).
Transformational Enactment and Entrepreneurial Leadership
Investigating the transformational enactment, it requires a capacity to establish a vision of what the future transactions would emerge, and ability to exploit the opportunities that would emerge. The skill to forge the opportunities in the midst of an uncertain transaction environment is the core of entrepreneurial ability. Entrepreneurial leadership is based on performing duties and taking responsibilities that are rarely done in the conventional course of business transaction. Regrettably, over the last two decades, entrepreneurial leadership has increasingly been associated with the management and founding of MSEs. Recently, it has been acknowledged that entrepreneurial leadership is more relevant for the establishment of business, just as it is significant in terms of founding of a new business. The transformational enactment allows the companies to move fast in gaining the first mover advantages in the upcoming new products and services in the market that pursue the transformational enactment and are able to adjust their abilities to the emerging competition through a flexible allocation of resources. This enables business firms to utilize and expand the resources of a company as they raise the long-term capacity. The transactional enactment provides organizations with an opportunity to translate the emergent options into a stage for a constant value establishment and corporate transformation (Derr et al., 2002). The transformational enactment challenges the demand’s three distinct functions.
The first function of the transformational enactment is to absorb the paralyzing impacts that uncertainty of the market has on the team social participants, who are required to enact the transformation. The function requires for the deep understanding of the capacity to evaluate the future and forge a vision for the future state that the entrepreneurial leaders have identified as enacted by the team of people selected, since the leader should be confident that they have the ability to effect the enactment. The role of lowering the uncertainty for the selected cohorts is to convince them that the transformational vision is acceptable and achievable. In carrying out this function, the entrepreneurial leaders are accountable for the eventuality of wrong forecast about the future state of their business. Therefore, entrepreneurial leaders should liberate the team to act with confidence of an optimal future; this function of the leader may be referred to as the absorption of uncertainty.
The second function of the transformational enactment is to develop a scope of what the transformation leadership will accomplish. This knowledge helps in balancing the desire for aggressive enhancement with a need to practically account for the capacities of the people assigned the duty of implementing the enactment. Guided by the intuitive knowledge of the scenario and pressured by the apparent demand to continue in enhancing the business transaction, the entrepreneurial leader should frame the challenges that would push their teams to their limitation of capacity, though not throwing them off-board. The function of pushing the team to the realization of a full potential by the leader is referred to as framing of challenges.
Finally, the third role of the entrepreneurial leader is to create a negotiated business environment within the organization. The negotiation for such environment would require the ability to dissolve and anticipate the potential resistance to the restructuring of the business transaction. The entrepreneurial leader is expected to provide support for all significant shareholders within their organization. In addition, they are supposed to extend their consolidation of support to the external players; this would remove the obstacles against the business progress in an uncertain environment. This effort would clear the path for team to accomplish the intended transformational enactment (McCauley, Moxley, & Van, 1998).
In the introduction of this paper, it is suggested that there is an emerging demand for entrepreneurial leaders in the current business world. Therefore, this increased demand for entrepreneurial leadership is global, far beyond the confinement of the developed economies, it permeate all economies in the global society. Thus, there is a need to explore the extent, to which all underlying concepts are similar, and the level, at which they differ from one culture to another.
There are significant evidences that global authorization of the leadership models does not disqualify the cultural differences of those models. Leadership models are based on the understanding of the categorization process, under which respondents deduce the efficiency of various components of the model, based on their environmental perceptions. The environment aspects are moderated by the beliefs and values of the consumers of goods and services provided and situational conditions. Thus, the charismatic leadership is established more naturally, and it tends to be more effective in the collectivistic environment as compared to individualistic environments. Therefore, in establishing and validating the entrepreneurial leadership construct, the significant factor of consideration is the extent, to which such leadership functions across contexts such as industry, culture, and geographical circumstances.
There can be significant differences in the ethical approach of leadership across the cultures, and the nature of competition among the participants may differ. In addition, rewards and recognition for the entrepreneurial leaders can take different path, and there may be an inconsistency in access to technology, knowledge and finances. The differences from the cultural environment may translate into differences in the perceptions regarding the connection between the transformational success and operation. Consequently, the entrepreneurial leadership may be established aggressively or reluctantly, depending on the culture (Ellis & Carlson, 2009).
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The construct of entrepreneurial leadership in the global market provides for an adaptive execution across differing cultural environments. The critical assurance of entrepreneurial leadership is the emphasis on the invention-driven operation and drive to stop over-analyzing the business environment and start working aggressively, while applying the generated resources from the early efforts to learn and redirect their way to the actual opportunity. It is the invention-bound schools of thought that differentiate the entrepreneurial leadership from the transformational form of leadership in business. As illustrated in the introduction of the current work, the transformational leadership was a popular form of leadership towards the end of the 20th century. Theory of the transformational leadership is based on the belief that a leader may evoke the superordinate performance of their teams by addressing the sense of self-esteem and other forms of deeply assumed personal values among the team members.
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The transformation leadership perception has significantly evolved in response to the cultural transactional theory. In transaction leadership theory, the push was from the instrumental function of the leader that was based on a give-and-take model, where the leader is supposed to show the path, monitor and provide incentives, while their teams remain committed to the path of the organization to continue earning the incentives.
Both the transformational leadership and transactional leadership models depicted a leader as an individual, who was entrusted with the organizational responsibility that required to be met within a stipulated organizational perspective. On the other hand, the aspect of entrepreneurial leadership is founded on the assumption that a leader has to ratify an emergent organizational responsibility, but not the one that is strategically planned.