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Leadership and Structure

Management Style

The success of an organisation is critically dependent upon the presence of an effective leader. This individual has the potential to exert significant influence over defining and sustaining a vision, performance objectives, organisational culture, morale and employee behaviour. Significant research effort has been expended on identifying the behavioural traits that distinguish an effective leader from an ineffective one—knowledge that could prove invaluable in selecting potential candidates for a leadership position (Keller and Weibler 2014).

Unfortunately the outcome of this type of research is that although important leadership traits have been identified, it has not proved possible to specify a universal model of leadership effectiveness. This is because individuals have been found to exhibit different traits, but are still able to be effective as leaders (Gehring 2007). One solution to this dilemma has been to focus on the more generic issues of attitudes and behaviour as the basis for identifying different leadership styles and how these influence the organisation. A significant difference is between transactional and transformational leadership (Burns 1978). Transactional leadership © The Author(s) 2017

I. Chaston, Technological Entrepreneurship,

DOI 10.1007/978-3-319-45850-2_3

focuses on behaviours related to the basic administrative and management tasks required for groups to function well in stable environments, such as ensuring followers have the knowledge, skills and resources required to accomplish their tasks (Sashkin and Rosenbach 1998). In contrast, transformational leadership is based upon the ability to recognise followers’ needs, demands and motivation, and to satisfy their higher-level needs in a way that utilises their full potential. It follows that transformational leaders are more effective at creating and supporting change, which is why many entrepreneurial leaders exhibit a transformational style.

Sashkin and Rosenbach developed an overall integrative approach known as the Visionary Leadership Theory. They posited that the critical characteristics of a transformational leader are self-confidence and being a visionary. The latter requires an ability to develop intuitive insights about the future based on limited or no information. Commenting on this ability, Steve Jobs (Isaacson 2011, p. 567) explained, ‘The job is to figure what customers are going to want before they do ... People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page. ’

Among the behavioural traits of transformational leaders are creativity and credibility. This latter trait involves trust building, caring, empowerment and creating opportunities for all employees to maximise their contribution to the organisation. This perspective implies transformational leadership should be viewed as a multifaceted meta-construct which has a positive impact on employees’ attitudes, motivation and performance (Ilies et al. 2006)

The transformational leader needs self-confidence in order to transform followers into self-confident employees. Tarabishy et al. (2005) proposed that implementation of a successful entrepreneurial strategy is largely based upon transforming staff into self-directed individuals. Crucially, the leader must also have confidence in their own vision. Creation of a successful vision is based on the ability to picture the future and to define a framework for exploiting the constructed scenario. Visionary leaders appreciate that their vision must align with the organisation’s entrepreneurial capabilities in order that the organisation is able to fulfil the key attributes of being proactive, innovative and risk-taking (Carton 2015).

It is characteristic of a transactional leadership style that authority and accountability reside in the leader who exhibits a controlling, top- down approach. Most entrepreneurship studies conclude this is an inappropriate style for educating, inspiring and energising the workforce. Furthermore it may create an environment where employees fear speaking out and are unwilling to be involved in decision making or to become self-reliant Nevertheless circumstances may arise in which an entrepreneurial organisation unexpectedly faces a crisis that threatens the future of the business. In such cases it may be necessary for the leadership to switch from a transformational to a transactional style to act immediately to avoid business closure (Hamstra et al. 2014).

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