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What Is Entrepreneurial Leadership: Definition, Skills, Characteristics & Examples

• November 7, 2023

Jeff Bezos, the visionary founder of Amazon, is a prominent entrepreneurial leader of the 21st century. His customer-centric approach, innovation-driven mindset, and long-term vision transformed Amazon from an online bookstore into a global tech giant, redefining e-commerce and pushing the boundaries of technology. Bezos’s impact on business and technology exemplifies the essence of entrepreneurial leadership in the digital era.

Entrepreneurial leadership is an innovative approach to leading a team or organization. It combines the spirit of entrepreneurship with effective leadership skills, creating a powerful combination that can drive success in today’s fast-paced and ever-changing business landscape. In this comprehensive blog post, we will explore entrepreneurial leadership and its key characteristics, helping you understand how to apply it to your leadership style.

What is Entrepreneurial Leadership?

Entrepreneurial leadership is a dynamic and multifaceted leadership style that combines the innovative spirit of an entrepreneur with the skills required to lead a team or organization. While it is often associated with startup founders, this approach to leadership is not confined to the realm of new ventures. It can be adopted and applied effectively by leaders in various settings.

At its core, entrepreneurial leadership skills represent a unique blend of entrepreneurial thinking and traditional leadership skills. This combination enables individuals to foster innovation and adaptability while guiding their team or organization toward defined goals.

Importance of Entrepreneurial Leadership

Entrepreneurial leadership is the ability to become the catalyst for innovation, adaptability, and growth, helping organizations survive and thrive in the face of constant challenges and opportunities.

Fostering Innovation

Entrepreneurial leaders encourage their teams to think outside the box and develop creative solutions. This approach stimulates innovation within the organization, developing new products, services, and processes that can keep the company competitive in a rapidly changing market.

Embracing Adaptability

In a rapidly changing business environment, adaptability is crucial. Entrepreneurial leaders are quick to adapt to new circumstances and make necessary adjustments. This ability to pivot and change direction ensures that the organization remains resilient and responsive to market fluctuations.

Risk Management

While taking risks, they do so in a calculated manner, often leading to calculated success. They understand the fine balance between risk and reward, ensuring their risks are well-thought-out and align with the organization’s overall goals and strategies.

Driving Growth

Entrepreneurial leaders can drive significant growth and expansion for their organizations through their visionary approach. Their ability to identify and seize growth opportunities, along with their commitment to innovation and adaptability, allows their organizations to expand into new markets and reach new heights of success.

Styles Of Entrepreneurial Leadership

Entrepreneurial leadership takes on various forms, each with unique attributes and impact. These l eadership styles  encompass a range of approaches, from visionary and charismatic to servant and transformational, all geared towards fostering a culture of entrepreneurship and achieving remarkable results within organizations.

Visionary Leadership

Visionary leaders are dreamers who inspire their teams with a clear and exciting future vision. They set ambitious goals, provide a sense of purpose and direction, and motivate their teams to achieve them with a shared vision.

Transformational Leadership

These leaders motivate and inspire their teams to achieve great results. They foster an environment of continuous improvement by encouraging creative problem-solving, continuous learning, and growth, driving their organizations toward positive change and evolution.

Charismatic Leadership

Charismatic leaders  use their personal charm and influence to rally teams and make the impossible seem possible. They possess a magnetic charisma that inspires trust and devotion, leading to dedicated and motivated teams eager to follow their lead.

Servant Leadership

Servant leaders prioritize the needs of their team members, aiming to empower and support them to reach their full potential. They lead by example, putting the well-being and development of their teams above all else, resulting in a culture of collaboration and mutual support.

Characteristics of Entrepreneurial Leadership

Entrepreneurial leadership is marked by several key characteristics that set it apart from traditional leadership styles:

Entrepreneurial leaders are innovative thinkers, always looking for creative solutions to problems. They encourage a culture of innovation within their teams, fostering an environment where new ideas are valued.

Steve Jobs, the co-founder of Apple Inc., is an iconic example of an entrepreneurial leader known for innovation. He revolutionized the tech industry with products like the iPhone and iPad, demonstrating an unwavering commitment to innovation.

Proactiveness

These leaders are proactive in identifying and pursuing opportunities. They don’t wait for things to happen; they make things happen. Their ability to seize the initiative is a powerful asset.

Elon Musk, the CEO of Tesla and SpaceX, exemplifies proactiveness in entrepreneurial leadership. He actively pursues ambitious projects like the colonization of Mars and the development of electric vehicles, showing a willingness to make things happen rather than waiting for opportunities to come.

Entrepreneurial  leadership  requires resilience in the face of setbacks. These leaders bounce back from failures, learning from them and using the experience to fuel future success.

Oprah Winfrey, a media mogul and philanthropist, embodies resilience as an entrepreneurial leader. She overcame a challenging childhood and built a media empire. Her journey is a testament to bouncing back from setbacks and using them as stepping stones to success.

Empowerment

They empower their team members, encouraging autonomy and decision-making. This approach fosters a sense of ownership and accountability among employees, which can lead to increased productivity and creativity.

Richard Branson, the founder of the Virgin Group, empowers his employees and encourages autonomy. He delegates decision-making authority to his teams and values their input, creating a culture of ownership and accountability.

Entrepreneurial leaders understand the importance of building strong networks. They actively seek connections and partnerships that can open doors to new opportunities and resources.

Tim Cook, the CEO of Apple Inc., is known for his ability to build strong networks. Cook has established crucial partnerships and collaborations with other technology companies and suppliers, allowing Apple to maintain a competitive edge in the tech industry. His skill in networking has been pivotal in sustaining Apple’s innovation and growth.

Customer-Centric Focus

They put customers at the center of their strategies. Entrepreneurial leaders deeply understand the needs and desires of their customers and continuously seek ways to deliver value and exceed expectations.

Jeff Bezos, the founder of Amazon, strongly emphasizes the customer. His customer-centric approach has made Amazon one of the most customer-focused companies globally, continually seeking ways to enhance the shopping experience.

Resourcefulness

Entrepreneurial leaders are adept at doing more with less. They find creative ways to maximize resources and optimize efficiency, whether it’s in budget allocation or time management.

Ingvar Kamprad, the founder of IKEA, exemplified resourcefulness by creating a global furniture empire known for efficiency and affordability. He found innovative ways to optimize resources and reduce costs in the production and distribution of furniture.

Adaptive Learning

They are continuous learners seeking new knowledge and insights to adapt to changing markets and technologies. This learning extends to both personal development and industry trends.

Warren Buffett, the chairman and CEO of Berkshire Hathaway, is known for his commitment to continuous learning. Over the years, he has adapted his investment strategies by learning from successes and failures and staying current with market trends.

Long-Term Vision

Entrepreneurial leaders don’t focus solely on short-term gains. They have a long-term vision and plan strategically to achieve sustainable success, thinking years ahead rather than just quarters or months.

Mark Zuckerberg, the co-founder and CEO of Facebook (now Meta Platforms, Inc.), demonstrates a long-term vision by focusing on developing technology that will shape the future, such as virtual and augmented reality, rather than short-term profits.

Ethical Integrity

Integrity is a fundamental characteristic. They uphold strong ethical principles, earning trust and respect from both employees and stakeholders. Ethical behavior is non-negotiable in their leadership style.

Bill Gates, the co-founder of Microsoft and a renowned philanthropist, upholds ethical integrity in leadership. His commitment to ethical principles and philanthropic work has earned employees’ and stakeholders’ trust and respect.

In conclusion, entrepreneurial leadership is a vital leadership style that combines the entrepreneurial spirit with effective leadership qualities. By embodying these characteristics, leaders can drive innovation, adapt to change, and inspire their teams to achieve extraordinary results. In the fast-paced, ever-evolving business world, entrepreneurial leadership is a valuable asset that can help organizations thrive.

Rishabh Bhandari

Rishabh Bhandari is the Content Strategist at Kapable. Rishabh likes to transform complex ideas into captivating narratives relatable to the target audience. He loves telling stories through his content. He believes that stories have the power to shift mindsets and move mountains. He has 3 years of experience in educational blog writing and copywriting.

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Skills and Behaviors that Make Entrepreneurs Successful

What makes a successful entrepreneurial leader?

Is it the technical brilliance of Bill Gates? The obsessive focus on user experience of Steve Jobs? The vision, passion, and strong execution of Care.com’s Sheila Lirio Marcelo? Or maybe it’s about previous experience, education, or life circumstances that increase confidence in a person’s entrepreneurial abilities.

Like the conviction of Marla Malcolm Beck and husband Barry Beck that high-end beauty retail stores and spas, tightly coupled with online stores, was the business model of the future, while other entrepreneurs—and the investors who financed them—declared such brick-and-mortar businesses were dinosaurs on their way to extinction. The success of Bluemercury proved the critics wrong.

“We’ve always had a hard time being able to identify the skills and behaviors of entrepreneurial leaders”

Despite much research into explaining what makes entrepreneurial leaders tick, the answers are far from clear. In fact, most studies present conflicting findings. Entrepreneurs, it seems, are still very much a black box waiting to be opened.

A Harvard Business School research team is hoping that a new approach will enable better understanding of the entrepreneurial leader. The program combines self-assessments of their skills and behaviors by entrepreneurs themselves with evaluations of them by peers, friends, and employees.

Along the way the data is also allowing scholars to study attributes of entrepreneurs by gender, as well compare serial entrepreneurs versus first-time founders.

“We’ve always had a hard time being able to identify the skills and behaviors of entrepreneurial leaders,” says HBS Professor Lynda Applegate, who has spent 20 years studying leadership approaches and behaviors of successful entrepreneurs. “Part of the problem is that people usually focus on an entrepreneurial ‘personality’ rather than identifying the unique skills and behaviors of entrepreneurs who launch and grow their own firms.”

Complicating this understanding are the many types of entrepreneurial ventures that exist, says Applegate. These can include small “lifestyle” businesses, multi-generational family businesses, high-growth, venture funded technology businesses, and new ventures designed to commercialize breakthrough discoveries in life sciences, clean tech, and other scientific fields.

“These types of ventures seem to both appeal to and require different types of entrepreneurial leaders and we are hoping that our research will help us understand those differences—if they exist,” says Applegate, the Sarofim-Rock Professor of Business Administration at HBS and Chair of the HBS Executive Education Portfolio for Business Owners & Entrepreneurs.

The answers are already starting to come in, thanks to initial results from a pilot test of “The Entrepreneurial Leader: Self Assessment” survey taken by 1,300 HBS alumni. Results allowed the researchers to refine the self-assessment and to create a second survey, “The Entrepreneurial Leader: Peer Assessment.” Both are being prepared for launch in summer 2016.

The team included Applegate; Janet Kraus , entrepreneur-in-residence; and Tim Butler, Senior Fellow and Senior Advisor to Career and Professional Development at HBS and Chief Scientist and co-founder of Career Leader.

Dimensions of entrepreneurial leadership

A literature review combined with interviews of successful entrepreneurs helped the team define key factors that formed the foundation for the self-assessment. These dimensions were further refined based on statistical analysis of the pilot test responses to create a new survey instrument that defines 11 factors and associated survey questions that will be used to understand the level of comfort and self-confidence that founders and non-founders have with various dimensions of entrepreneurial leadership.

These 11 dimensions are:

• Identification of Opportunities. Measures skills and behaviors associated with the ability to identify and seek out high-potential business opportunities.
• Vision and Influence. Measures skills and behaviors associated with the ability to influence all internal and external stakeholders that must work together to execute a business vision and strategy.
• Comfort with Uncertainty. Measures skills and behaviors associated with being able to move a business agenda forward in the face of uncertain and ambiguous circumstances.
• Assembling and Motivating a Business Team. Measures skills and behaviors required to select the right members of a team and motivate that team to accomplish business goals.
• Efficient Decision Making. Measures skills and behaviors associated with the ability to make effective and efficient business decisions, even in the face of insufficient information.
• Building Networks. Measures skills and behaviors associated with the ability to assemble necessary resources and to create the professional and business networks necessary for establishing and growing a business venture.
• Collaboration and Team Orientation. Measures skills and behaviors associated with being a strong team player who is able to subordinate a personal agenda to ensure the success of the business.
• Management of Operations. Measures skills and behaviors associated with the ability to successfully manage the ongoing operations of a business.
• Finance and Financial Management. Measures skills and behaviors associated with the successful management of all financial aspects of a business venture.
• Sales. Measures skills and behaviors needed to build an effective sales organization and sales channel that can successfully acquire, retain, and serve customers, while promoting strong customer relationships and engagement.
• Preference for Established Structure. Measures preference for operating in more established and structured business environments rather than a preference for building new ventures where the structure must adapt to an uncertain and rapidly changing business context and strategy.

While the 11 factors provided some level of discrimination between founders and non-founders, five factors showed statistically significant differences. For example, founders scored significantly higher than non-founders on “comfort with uncertainty,” “identification of opportunities,” “vision and influence,” “building networks,” and “finance and financial management.” Founders also had significantly lower ratings on their “preference for established structure” dimension.

Entrepreneurial leadership differences between founders and non-founders

Although some of the factors—like comfort with uncertainty and the ability to identify opportunities—seemed like obvious markers for entrepreneurial success, the study built a statistically reliable and valid tool that can be used to deepen understanding, not only of founders versus non-founders, but also of differences and similarities among founders who start and grow different types of businesses, between male and female founders, serial founders and first-time founders and founders from different countries.

In addition, a deeper examination of the individual questions that make up each factor provides richer descriptions of specific behaviors and skills that account for the differences in the profile of entrepreneurs who are launching different types of ventures and from many different backgrounds.

Take vision and influence, for example. Although it is a long-standing belief that great leaders have vision and influence, the researchers found that entrepreneurial leaders have more confidence of their abilities than the average leader on this dimension—and that leaders working within established firms actually rated themselves much lower.

Financial management and governance turned out to be another non-obvious differentiator.

“Financial management is a skill that all of our HBS alumni should feel confident in applying,” Kraus says. “Yet among the alumni surveyed in the pilot, those who had chosen to be founders rated themselves as much more confident in their financial management skills—especially those related to managing cash flow, raising capital, and board governance—than did non-founder alumni.”

Self-confidence in financial management and raising capital was especially strong for male entrepreneurs, she says. “Our future research will broaden our sample beyond HBS alumni to enable us to differentiate between those who graduated with and without an MBA, and to assess confidence in raising capital and financial management and a wide variety of other skills by different types of founders and non-founders.”

Efficient management of operations was another crucial, yet less obvious, factor. “While we often think that employees within established organizations would be more confident in their ability to efficiently manage operations, we were surprised to see that it is a distinguishing and differentiating attribute of entrepreneurs,” says Kraus. “All entrepreneurs know that they must do more with less—which means that they must work faster and with fewer resources.”

Differentiating male and female entrepreneurs

The pilot study allowed researchers to examine gender differences. While men and women rated themselves similarly on many dimensions, women were more confident in their ability to “efficiently manage operations” and in their “vision and influence,” while men expressed greater confidence in their “comfort with uncertainty” and “finance and financial management."

Entrepreneurial leadership differences between male and female founders

These differences rang true for Kraus, herself a serial entrepreneur who founded and grew three successful entrepreneurial ventures.

“Successful women entrepreneurs that I know have lots of great ideas, and are super skilled at creating a compelling vision that moves people to action,” she says. “They are also extremely capable of getting lots done with very little resources so are great at efficient management of operations. That said, these same women are often more conservative when forecasting financial goals and with raising significant rounds of capital. And, even if they have a big vision, they are less confident in declaring at the outset that their goal is to become a billion-dollar business.”

Indeed, research confirms observations that women start more companies than men, but rarely grow them as large.

Based on his earlier research, these results also resonated with Tim Butler: “When it comes to self-rating on finance skills, women are more likely than men to rate themselves lower than ratings given them by objective observers. There are definitely implications for educators when lower self-confidence in skills associated with entrepreneurial careers becomes a significant obstacle for talented would-be entrepreneurs.”

The researchers hope to deepen their understanding of male and female entrepreneurial leaders as they collect more data.

Differentiating serial founders and first-time founders

Not all founders are cut from the same cloth, the study underscores. Analysis of the pilot data also revealed important differences between first-time founders and serial founders—those who launch and grow a number of new ventures, such as Elon Musk (PayPal, Tesla Motors, SpaceX) and research team member Kraus (Circles, Spire; peach).

One key difference the research team discovered: serial founders appear more comfortable with managing uncertainty and risk. That doesn’t mean they enjoy taking risks, Kraus says, “but they appear to be confident that they are adept and capable of knowing how to ‘de-risk’ their venture and manage uncertainty from the very beginning."

Entrepreneurial leadership differences between serial founders and non-serial founders

While the data are not yet robust enough to say so with certainty, Kraus believes that serial entrepreneurs often enjoy launching businesses where the risk is highest because of confidence in their ability to manage uncertainty, and perhaps because they enjoy the process of creating clarity from uncertainty.

Other factors that set serial entrepreneurs apart from one-timers include confidence in their skills at building networks, securing financing and financial management, and generating creative ways to identify and meet market opportunities.

FUTURE OPPORTUNITIES

As more people take the assessment and HBS develops a richer data set, scholars, educators, entrepreneurs and those who support them will be able to develop insights that will have a number of payoffs.

“The entrepreneurial leaders we know are constantly searching for tools that can help them become more self-aware so they can be more effective,” Kraus explains. “This tool is going to be uniquely useful in that it was specifically developed to help entrepreneurs gain a deeper understanding of the skills and behaviors that they need to be successful.”

In addition, researchers will be able to examine the data by age, gender, country, industry, size of company, pace of growth, and type of venture “to understand the full range of entrepreneurial leadership skills and behaviors, and how different types of entrepreneurs are similar and different,” Applegate says. “These insights will enable us to do a better job of educating entrepreneurs, designing apprenticeships and providing the mentorship needed.”

The data will also be useful in identifying skills and behaviors needed to jumpstart entrepreneurial leadership in established firms, and in understanding how an entrepreneurial leader continues to lead innovation throughout the lifecycle of a business—from startup through scale-up.

“Today, I often see that the creativity and innovation that was so prevalent in the early days of an entrepreneurial venture gets squeezed out as the company grows and starts to scale,” says Applegate. “But, rather than replace entrepreneurs with professional managers, we need to ensure that we have entrepreneurial leadership and creativity in all organizations and at levels in organizations. We hope that our research will help clarify the behavior and skills needed and, over time, will help us track the entrepreneurial leadership behaviors and skills of companies of all size, in all industries, and around the world.”

Given the critical importance of entrepreneurial leaders in driving the economy and improving society, shockingly little is understood about them. The data and analysis emerging from HBS will provide important insights that can help answer the questions, “What makes a successful entrepreneurial leader and how can I become a successful entrepreneurial leader?”

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1.4 Leadership, Entrepreneurship, and Strategy

Learning objectives.

• Know the roles and importance of leadership, entrepreneurship, and strategy in principles of management.
• Understand how leadership, entrepreneurship, and strategy are interrelated.

The principles of management are drawn from a number of academic fields, principally, the fields of leadership, entrepreneurship, and strategy.

If management is defined as getting things done through others, then leadership should be defined as the social and informal sources of influence that you use to inspire action taken by others. It means mobilizing others to want to struggle toward a common goal. Great leaders help build an organization’s human capital, then motivate individuals to take concerted action. Leadership also includes an understanding of when, where, and how to use more formal sources of authority and power, such as position or ownership. Increasingly, we live in a world where good management requires good leaders and leadership . While these views about the importance of leadership are not new (see “Views on Managers Versus Leaders”), competition among employers and countries for the best and brightest, increased labor mobility (think “war for talent” here), and hypercompetition puts pressure on firms to invest in present and future leadership capabilities.

P&G provides a very current example of this shift in emphasis to leadership as a key principle of management. For example, P&G recruits and promotes those individuals who demonstrate success through influence rather than direct or coercive authority. Internally, there has been a change from managers being outspoken and needing to direct their staff, to being individuals who electrify and inspire those around them. Good leaders and leadership at P&G used to imply having followers, whereas in today’s society, good leadership means followership and bringing out the best in your peers. This is one of the key reasons that P&G has been consistently ranked among the top 10 most admired companies in the United States for the last three years, according to Fortune magazine (Fortune, 2008).

Whereas P&G has been around for some 170 years, another winning firm in terms of leadership is Google, which has only been around for little more than a decade. Both firms emphasize leadership in terms of being exceptional at developing people. Google has topped Fortune’s 100 Best Companies to Work for the past two years. Google’s founders, Sergey Brin and Larry Page, built a company around the idea that work should be challenging and the challenge should be fun (Google, 2008). Google’s culture is probably unlike any in corporate America, and it’s not because of the ubiquitous lava lamps throughout the company’s headquarters or that the company’s chef used to cook for the Grateful Dead. In the same way Google puts users first when it comes to online service, Google espouses that it puts employees first when it comes to daily life in all of its offices. There is an emphasis on team achievements and pride in individual accomplishments that contribute to the company’s overall success. Ideas are traded, tested, and put into practice with a swiftness that can be dizzying. Observers and employees note that meetings that would take hours elsewhere are frequently little more than a conversation in line for lunch and few walls separate those who write the code from those who write the checks. This highly communicative environment fosters a productivity and camaraderie fueled by the realization that millions of people rely on Google results. Leadership at Google amounts to a deep belief that if you give the proper tools to a group of people who like to make a difference, they will.

Leaders inspire the collective action of others toward a shared goal.

geralt – CC0 public domain.

Views on Managers Versus Leaders

My definition of a leader…is a man who can persuade people to do what they don’t want to do, or do what they’re too lazy to do, and like it.

Harry S. Truman (1884–1972), 33rd president of the United States

You cannot manage men into battle. You manage things; you lead people.

Grace Hopper (1906–1992), Admiral, U.S. Navy

Managers have subordinates—leaders have followers.

Chester Bernard (1886–1961), former executive and author of Functions of the Executive

The first job of a leader is to define a vision for the organization…Leadership is the capacity to translate vision into reality.

Warren Bennis (1925–), author and leadership scholar

A manager takes people where they want to go. A great leader takes people where they don’t necessarily want to go but ought to.

Rosalynn Carter (1927–), First Lady of the United States, 1977–1981

Entrepreneurship

It’s fitting that this section on entrepreneurship follows the discussion of Google. Entrepreneurship is defined as the recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures. Perhaps this is obvious, but an entrepreneur is a person who engages in the process of entrepreneurship. We describe entrepreneurship as a process because it often involves more than simply coming up with a good idea—someone also has to convert that idea into action. As an example of both, Google’s leaders suggest that its point of distinction “is anticipating needs not yet articulated by our global audience, then meeting them with products and services that set new standards. This constant dissatisfaction with the way things are is ultimately the driving force behind the world’s best search engine (Google, 2008).”

Entrepreneurs and entrepreneurship are the catalysts for value creation. They identify and create new markets, as well as foster change in existing ones. However, such value creation first requires an opportunity. Indeed, the opportunity-driven nature of entrepreneurship is critical. Opportunities are typically characterized as problems in search of solutions, and the best opportunities are big problems in search of big solutions. “The greater the inconsistencies in existing service and quality, in lead times and in lag times, the greater the vacuums and gaps in information and knowledge, the greater the opportunities (Timmons, 1999).” In other words, bigger problems will often mean there will be a bigger market for the product or service that the entrepreneur creates. We hope you can see why the problem-solving, opportunity-seeking nature of entrepreneurship is a fundamental building block for effective principles of management.

When an organization has a long-term purpose, articulated in clear goals and objectives, and these goals and objectives can be rolled up into a coherent plan of action, then we would say that the organization has a strategy. It has a good or even great strategy when this plan also takes advantage of unique resources and capabilities to exploit a big and growing external opportunity. Strategy then, is the central, integrated, externally-oriented concept of how an organization will achieve its objectives (Hambrick & Fredrickson, 2001). Strategic management is the body of knowledge that answers questions about the development and implementation of good strategies.

Strategic management is important to all organizations because, when correctly formulated and communicated, strategy provides leaders and employees with a clear set of guidelines for their daily actions. This is why strategy is so critical to the principles of management you are learning about. Simply put, strategy is about making choices: What do I do today? What shouldn’t I be doing? What should my organization be doing? What should it stop doing?

Synchronizing Leadership, Entrepreneurship, and Strategy

You know that leadership, entrepreneurship, and strategy are the inspiration for important, valuable, and useful principles of management. Now you will want to understand how they might relate to one another. In terms of principles of management, you can think of leadership, entrepreneurship, and strategic management as answering questions about “who,” “what,” and “how.” Leadership helps you understand who helps lead the organization forward and what the critical characteristics of good leadership might be. Entrepreneurial firms and entrepreneurs in general are fanatical about identifying opportunities and solving problems—for any organization, entrepreneurship answers big questions about “what” an organization’s purpose might be. Finally, strategic management aims to make sure that the right choices are made—specifically, that a good strategy is in place—to exploit those big opportunities.

One way to see how leadership, entrepreneurship, and strategy come together for an organization—and for you—is through a recent (disguised) job posting from Craigslist. Look at the ideal candidate characteristics identified in the Help Wanted ad—you don’t have to look very closely to see that if you happen to be a recent business undergrad, then the organization depicted in the ad is looking for you. The posting identifies a number of areas of functional expertise for the target candidate. You can imagine that this new position is pretty critical for the success of the business. For that reason, we hope you are not surprised to see that, beyond functional expertise, this business seeks someone with leadership, entrepreneurial, and strategic orientation and skills. Now you have a better idea of what those key principles of management involve.

Help Wanted—Chief of Staff

We’re hiring a chief of staff to bring some order to the mayhem of our firm’s growth. You will touch everything at the company, from finance to sales, marketing to operations, recruiting to human resources, accounting to investor relations. You will report directly to the CEO.

Here’s what you’re going to be asked to do across a range of functional areas in the first 90 days, before your job evolves into a whole new set of responsibilities:

• Leverage our existing customer base using best-in-class direct marketing campaigns via e-mail, phone, Web, and print or mail communications.
• Convert our current customer spreadsheet and database into a highly functional, lean customer relationship management (CRM) system—we need to build the infrastructure to service and reach out to customers for multiple users.
• Be great at customer service personally—excelling in person and on the phone, and you will help us build a Ninja certification system for our employees and partners to be like you.
• Build our Web-enabled direct sales force, requiring a lot of strategic work, sales-force incentive design and experimentation, and rollout of Web features to support the direct channel.
• Be great at demonstrating our product in the showroom, as well as at your residence and in the field—plan to be one of the top sales reps on the team (and earn incremental variable compensation for your efforts).

Finance and Accounting

• Build our financial and accounting structures and processes, take over QuickBooks, manage our team of accountants, hire additional resources as needed, and get that profit and loss statement (P&L) rocking.
• Figure out when we should pay our bills and manage team members to get things paid on time and manage our working capital effectively.
• Track our actual revenues and expenses against your own projection—you will be building and running our financial model.
• We are building leading-edge capabilities on returns, exchanges, and shipping—you will help guide strategic thinking on operational solutions and will implement them with our operations manager.
• We are looking for new headquarters, you may help identify, build out, and launch.

HR and Recruiting

• We are recruiting a team of interns—you will take the lead on the program, and many or all of them will report to you; you will be an ombudsman of sorts for our summer program.
• The company has a host of HR needs that are currently handled by the CEO and third parties; you will take over many of these.

Production and Product Development

• The company is actively recruiting a production assistant/manager—in the meanwhile, there are a number of Web-facing and vendor-facing activities you will pitch in on.

The Ideal Candidate Is…

• a few years out of college but is at least two or three years away from going to business or other graduate school;
• charismatic and is instantly likeable to a wide variety of people, driven by sparkling wit, a high degree of extraversion, and a balanced mix of self-confidence and humility;
• able to read people quickly and knows how to treat people accordingly;
• naturally compassionate and demonstrates strong empathy, easily thinking of the world from the perspective of another person;
• an active listener and leaves people with the sense that they are well heard;
• exceptionally detail-oriented and has a memory like a steel trap—nothing falls through the cracks;
• razor sharp analytically, aced the math section of their SAT test, and excels at analyzing and solving problems;
• a perfectionist and keeps things in order with ease.

Key Takeaway

The principles of management are drawn from three specific areas—leadership, entrepreneurship, and strategic management. You learned that leadership helps you understand who helps lead the organization forward and what the critical characteristics of good leadership might be. Entrepreneurs are fanatical about identifying opportunities and solving problems—for any organization, entrepreneurship answers big questions about “what” an organization’s purpose might be. Finally, as you’ve already learned, strategic management aims to make sure that the right choices are made—specifically, that a good strategy is in place—to exploit those big opportunities.

• How do you define leadership, and who would you identify as a great leader?
• What is entrepreneurship?
• What is strategy?
• What roles do leadership, entrepreneurship, and strategy play in good principles of management?

Hambrick, D and J. Fredrickson, “Are You Sure You Have a Strategy?” Academy of Management Executive 15 , no. 4 (2001): 2.

Google.com, http://www.google.com/intl/en/corporate/tenthings.html (accessed October 15, 2008).

Ranking of Most Admired Firms for 2006, 2007, 2008. http://www.fortune.com (accessed October 15, 2008).

Timmons, J. The Entrepreneurial Process (New York: McGraw-Hill, 1999), 39.

Principles of Management Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

Entrepreneurial Leadership: A Conceptual Framework

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Entrepreneurial leadership graduate certificate.

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Entrepreneurship is a challenging, rewarding endeavor rooted in creativity and realized through practical decisions and strategies. This certificate provides advanced knowledge in the wide-ranging aspects of entrepreneurial success: organizational behavior, large-scale entrepreneurship, marketing, accounting, corporate finance, and more. You will learn from accomplished business experts how to expand or transform your organization and manage your entrepreneurial ideas. Course concepts will be applied to real-world situations through teamwork and hands-on projects.

You Will Learn

• The secrets behind the success of entrepreneurial high-technology companies
• Practical approaches to cultivating entrepreneurial ideas, using case studies and real-world example
• Entrepreneurial strategies focused on creating or responding to change and opportunity
• Insights into topics such as corporate social responsibility, growth hacking, and product management
• Concepts and theories to guide you in marketing, management, finance, long-term planning, teamwork, and more

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• Online, instructor-led

How Much It Will Cost

How long it will take.

• Complete four graduate courses within 3 academic years.
• Your time commitment will vary for each course. You should expect an average of 15-20 hours per week for the lecture and homework assignments.
• Most students complete the program in 1-2 years.

What You Need to Get Started

Before enrolling in your first graduate course, you must complete an online application .

Don’t wait! While you can only enroll in courses during open enrollment periods, you can complete your online application at any time.

Once you have enrolled in a course, your application will be sent to the department for approval. You will receive an email notifying you of the department's decision after the enrollment period closes. You can also check your application status in your my stanford connection account at any time.

Learn more about the graduate application process .

What You'll Earn

You’ll earn a Stanford Graduate Certificate in Entrepreneurial Leadership when you successfully earn a grade of B (3.0) or better in each course in the program.

With each successful completion of a course in this program, you’ll receive a Stanford University transcript and academic credit, which may be applied to a relevant graduate degree program that accepts these credits. If admitted, you may apply up to 18 units to an applicable Stanford University master’s degree program (pending approval from the academic department).

This Stanford Graduate Certificate is accredited by the Western Association of Schools and Colleges Senior College and University Commission (WSCUC).

Graduate Certificates are delivered as a digital credential document, verified on the blockchain. You’ll be able to share your accomplishments, verify your credential, and communicate the scope of your acquired expertise.

What You Need to Apply

• Proficiency in Microsoft PowerPoint, Excel, and Word.
• The calculus requirement is waived for courses in the Entrepreneurial Leadership Graduate Program for students enrolled in the program. The calculus requirement is not waived for any courses outside the program.
• A conferred Bachelor’s degree with an undergraduate GPA of 3.2 or better.

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The world needs entrepreneurial leaders to solve complex challenges that have persisted for decades or longer, as well as future ones we can’t even envision yet. Entrepreneurial leadership is both a skill set and a mindset, and entrepreneurial leaders impact businesses, organizations, and society because they put people first and manage in a relational way. Here, we illustrate the impact of entrepreneurial leadership through inspiring and uplifting stories from the Babson community and beyond.

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1.3 The Entrepreneurial Mindset

Learning objectives.

By the end of this section, you will be able to:

• Explain what it means to have an entrepreneurial mindset
• Describe what is meant by entrepreneurial spirit or passion

Entrepreneurship takes many forms (see Table 1.1 ), but entrepreneurs share a major trait in common: An entrepreneur is someone who identifies an opportunity and chooses to act on that opportunity. Most business ventures are innovative variations of an existing idea that has spread across communities, regions, and countries, such as starting a restaurant or opening a retail store. These business ventures are, in some ways, a lower-risk approach but nonetheless are entrepreneurial in some way. For example, Warby Parker , a profitable startup founded by four graduate students at Wharton, disrupted a major incumbent ( Luxottica ) by providing a more convenient (online initially), affordable, and stylish product line for a large segment of consumers. In this sense, their innovation is about creating something new, unique, or different from the mainstream. Yet they attracted an existing, and in some ways mature, sector of an established industry. In a different way, McDonalds , which is 90 percent owned by franchisees, introduced an “all day breakfast” menu in 2017 that was hugely successful; it also targeted a larger segment (in part younger consumers) and brought back consumers who had chosen other options. In summary, many entrepreneurs start a new venture by solving a problem that is significant, offering some value that other people would appreciate if the product or service were available to them. Other entrepreneurs, in contrast, start a venture by offering a “better mousetrap” in terms of a product, service, or both. In any case, it is vital that the entrepreneur understand the market and target segment well, articulate a key unmet need (“pain point”), and develop and deliver a solution that is both viable and feasible. In that aspect, many entrepreneurs mitigate risks before they launch the venture.

Being aware of your surroundings and the encounters in your life can reveal multiple opportunities for entrepreneurship. In our daily lives, we constantly find areas where improvements could be made. For example, you might ask, “What if we didn’t have to commute to work?” “What if we didn’t have to own a vehicle but still had access to one?” “What if we could relax while driving to work instead of being stressed out by traffic?” These types of questions inspired entrepreneurial ventures such as ride-sharing services like Uber , the self-driving vehicle industry, 21 and short-term bicycle access in the free bike-sharing program in Pella, Iowa ( Figure 1.10 ). 22

These ideas resulted from having an entrepreneurial mindset , an awareness and focus on identifying an opportunity through solving a problem, and a willingness to move forward to advance that idea. The entrepreneurial mindset is the lens through which the entrepreneur views the world, where everything is considered in light of the entrepreneurial business. The business is always a consideration when the entrepreneur makes a decision. In most cases, the action that the entrepreneur takes is for the benefit of the business, but sometimes, it helps the entrepreneur get ready to adopt the appropriate mindset. The mindset becomes a way of life for the entrepreneur. Entrepreneurs often are predisposed to action to achieve their goals and objectives. They are forward thinking, always planning ahead, and they are engaged in “what if” analyses. They frequently ask themselves, “What if we did this?” “What if a competitor did that?”—and consider what the business implications would be.

Most people follow habits and traditions without being aware of their surroundings or noticing the opportunities to become entrepreneurs. Because anyone can change their perspective from following established patterns to noticing the opportunities around them, anyone can become an entrepreneur. There is no restriction on age, gender, race, country of origin, or personal income. To become an entrepreneur, you need to recognize that an opportunity exists and be willing to act on it. Note, however, that the execution of the entrepreneurial mindset varies in different parts of the world. For example, in many Asian cultures, group decision-making is more common and valued as a character trait. In these regions, an entrepreneur would likely ask the advice of family members or other business associates before taking action. In contrast, individualism is highly valued in the United States and so many US entrepreneurs will decide to implement a plan for the business without consulting others.

Entrepreneurial Spirit and Passion

An entrepreneurial spirit allows entrepreneurs to carry a manner of thinking with them each day that allows them to overcome obstacles and to meet challenges with a can-do attitude. What does it mean to have an entrepreneurial spirit? For the purposes of this discussion, it could mean being passionate, purposeful, positive, bold, curious, or persistent.

The founders of Airbnb have a passion for supporting individual rights to rent out unused space. Why should the established model of hotels prevail? Why shouldn’t an individual homeowner have the freedom to rent out unused space and leverage that space into an income? Airbnb has succeeded in creating more flexible and affordable options in the space of the rapidly growing "sharing" economy. At the same time, some states and municipalities have raised issues about the regulations monitoring ventures like this. While entrepreneurial spirit is partly about fighting for individual rights and freedoms, there should be a balance between economic freedom and consumer protection. The entrepreneurial spirit involves a passion for presenting an idea that is worthwhile and valuable, and a willingness to think beyond established patterns and processes, while still keeping in mind local laws and regulations, in the quest to change those established patterns, or at least to offer alternatives to those established patterns.

Passion is a critical component of the entrepreneurial process. Without it, an entrepreneur can lose the drive to run the business. Passion can keep an entrepreneur going when the outside world sends negative messages or less-than-positive feedback. For example, if you are truly passionate about starting an animal shelter because of your love of animals, you will find a way to make it happen. Your internal drive to help animals in need will spur you on to do whatever it takes to make the shelter become a reality. The same is true of other types of startups and owners with similar passions. However, passion needs to be informed by the entrepreneur’s vision and mission—passion of the sake of passion is not enough. A clear mission statement —which details why the business exists and the entrepreneur’s objectives for achieving that mission—will guide an entrepreneur’s passion and keep the business on track. Passion, vision, and mission can reinforce each other and keep the entrepreneur on the right track with next steps for the business.

Some ideas might seem small or insignificant, but in the field of entrepreneurship, it’s important to recognize that for every new startup, someone else may recognize a spin-off idea that expands upon the original idea. The opportunities for identifying new possibilities are endless. Review your work in creating spinoff ideas for Angad Darvani’s projects, or Kevin F. Adler’s Miracle Messages venture. Or consider possible spin-off ideas around the technology used in agriculture. Creating spin-off ideas fits well with our discussion of divergent thinking and brainstorming. Through these processes, we can discover new uses for existing technology, just as Ring did by using video technology to add security by allowing customers to see who is at the door without opening it.

An Entrepreneurial Mindset in Your Discipline or Field

Within your industry of interest or area of study, what are the challenges that create frustration? How can these be turned into opportunities? Earlier in this chapter, we discussed Evernote , a company that focuses on expanding our memories by storing and organizing information. Let’s look at some other examples of entrepreneurial endeavors in specific industries to help you plan your own venture in your own industry.

In the agriculture industry, insects, weeds, weather conditions, and the challenges of harvesting crops are all ripe for entrepreneurial activities. The move toward organic produce has also affected this industry. From an entrepreneurial perspective, what products could you invent to support both organic farming and the problems of insects that damage or destroy crops? The old method was to use chemical sprays to kill the insects, but today, the growing demand for organic foods and increased awareness of the impact of chemical sprays on our environment are changing this scenario. One new idea to solve this problem combines a vacuum cleaner with an agriculture product.

Link to Learning

Watch this video on the creation of a crop vacuum that sucks up insects and bugs to learn more.

A bug vacuum is an example of how using divergent thinking contributed to the solution of removing bugs from crops without using chemicals. In the group activity of creating divergent ideas, this idea may not have been received well. However, in the incubation stage, the idea must have come forward as a viable solution. Entrepreneurs frequently face the challenge of pressure to conform to established habits and patterns within industries.

Often, the entrepreneurial mindset includes futuristic ideas that shake up the normal, conventional processes that are grounded in experience over time. Tried-and-tested processes and products that have a proven history of success can be a formidable obstacle to new ideas. A new idea may even appear as impossible or outlandish, perhaps even an embarrassment to the steady and predictable practices established within an industry. This can create a dilemma: Do we try something new and unproven that lacks documented research? Sometimes, we must disregard our past successes and research to be open to new possibilities for success and failure. An entrepreneurial mindset includes creativity, problem-solving skills, and a propensity to innovation. 23 Open-mindedness is one characteristic that supports creativity, problem solving, and innovation. Taking the time to explore new ideas, dream, reflect, and view situations from a new perspective contribute to the entrepreneurial mindset. Some innovations can lead to disruptions within the industry, or even create a new industry.

The innovator’s dilemma was presented by Clayton Christensen to explain disruptive technology , which are technologies that, once introduced, displace established patterns, processes, and systems previously accepted as normal or accepted. One example of a disruptive technology is Airbnb , a company that threatens the established hotel industry by connecting personal resources to people who desire those resources. If you have a spare bedroom that you aren’t using, why not sell that space to someone who wants and needs the space?

Airbnb has become a significant threat to the established hotel industry’s business model of building large hotels and renting rooms within those hotels to their customers. Airbnb has reconfigured that model, and since its 2008 launch, 150 million travelers have taken advantage of 3 million Airbnb listings in more than 191 countries. Airbnb has raised more than $3 billion (plus a $1 billion credit line) and is considering selling stocks to support significant expansion. The value of Airbnb is approximately $30 billion. Compare this market value to Hilton ’s market capitalization of $19 billion and Marriott ’s of $35 billion. If you were the CEO of Hilton or Marriott, would you be worried? The hotel industry recognized Airbnb as a threat, and in 2016, began a campaign to create legislation to rein in Airbnb’s growth and popularity. From the hotel industry’s perspective, Airbnb is not playing by the same rules. This is the definition of disruptive technology, the focus on creating a new idea or process that negates or challenges established process or products. 24

Sometimes disruptive technologies result from not listening to customers. Customers don’t always know what they want. Customer groups might need to be redefined by the entrepreneurial team on the basis of better models, knowing when to invest in developing lower-performance products that promise lower margins while still satisfying the need, and knowing when to pursue small markets at the expense of larger or established markets. Basically, disruptive technologies occur through identifying new and valuable processes and products.

The founders of Airbnb recognized that some people have unused resources, bedrooms, that other people need. We can apply this idea to other unused resources such as vehicles and motor homes. We see this model reproduced in short-term car rental and bike-sharing programs.

• 21 Matthew DeBord. “Waymo Could Be Worth as Much as $75 Billion—Here’s a Brief History of the Google Car Project.” Business Insider . September 9, 2018. https://www.businessinsider.com/google-car-project-history-2018-8
• 22 Ethan Goetz. “Bike Share Program Launched Monday.” The Chronicle . July 2, 2018. https://www.pellachronicle.com/gallery/bike-share-program-launched-monday/article_950cebac-7e49-11e8-97a0-8fd615410188.html
• 23 Emma Fleck. “Needed: Entrepreneurial Mindset.”  Central Penn Business Journal ,  34 (12), 10. http://pageturnpro2.com.s3-website-us-east-1.amazonaws.com/Publications/201803/15/83956/PDF/131668002208352000_CPBJ033018WEB.pdf
• 24 Katie Benner. “Inside the Hotel Industry’s Plan to Combat Airbnb.” New York Times . April 16, 2017. https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html

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Leadership as a driver of entrepreneurship: an international exploratory study

Journal of Small Business and Enterprise Development

ISSN : 1462-6004

Article publication date: 11 September 2018

Issue publication date: 20 May 2019

The purpose of this paper is to examine the influence of cultural leadership factors (charismatic/value-based, team oriented, participative, humane, autonomous and self-protective) on the rates of opportunity and necessity entrepreneurship.

Design/methodology/approach

The study integrates insights from institutional and cultural leadership theories to provide a fresh perspective to advance comparative entrepreneurship research. To test the hypotheses, the authors conduct a multiple regression analysis with observations from 34 countries, using data (from the year 2013) from the Global Entrepreneurship Monitor for the dependent variable and from Global Leadership and Organizational Behavior Effectiveness to create leadership factors as independent variables.

The results show that all the types of leadership considered in the study have a relevant effect on entrepreneurial activity. However, charismatic leadership has a greater effect on entrepreneurial activity, particularly on opportunity entrepreneurship. The research also shows that autonomous leadership has a negative impact on entrepreneurial activity, although, when it is moderated by the humane dimension, this relationship changes.

Practical implications

Since the alternative dimensions facilitate or inhibit the generation of new firm creation, it is critical for researchers, teachers and leaders to learn about and to foster such leadership types.

Originality/value

This research covers a gap in the cross-cultural evidence presented in the literature and suggests the integration of the concepts leadership and entrepreneurship.

• Institutional theory
• Entrepreneurship
• International study

Felix, C. , Aparicio, S. and Urbano, D. (2019), "Leadership as a driver of entrepreneurship: an international exploratory study", Journal of Small Business and Enterprise Development , Vol. 26 No. 3, pp. 397-420. https://doi.org/10.1108/JSBED-03-2018-0106

Emerald Publishing Limited

Copyright © 2018, Claudia Felix, Sebastian Aparicio and David Urbano

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

Introduction

The cross-country differences in the levels of entrepreneurship are persistent and cannot be explained by economic factors alone ( Freytag and Thurik, 2010 ). Scholars have turned to national cultures as a possible explanation, but the results have been mixed (e.g. Hayton and Cacciotti, 2013 ; Stephan and Pathak, 2016 ). Stephan and Pathak (2016) suggested that these mixed results could be explained by cultural values being very broad and general concepts. Some authors have attempted to explore how different cultural characteristics affect entrepreneurship. For instance, Hechavarria and Reynolds (2009) approached culture through authority and well-being using information from the World Values Survey (WVS). These authors found that these two variables affect opportunity entrepreneurship positively but entrepreneurial activity driven by necessity negatively. Similar to these authors, Urbano et al. (2016) used the WVS to understand culture as a predictor of entrepreneurship. They found that those countries with a greater social progress orientation stimulate productive entrepreneurial activity (e.g. innovative and opportunity entrepreneurship). This kind of orientation contains elements such as those explored by Hechavarria and Reynolds (2009) , namely voluntary spirit, survival vs self-expression values and power distance. The first two factors are beneficial for innovative and opportunity entrepreneurship and reduce necessity entrepreneurial activity, whereas the third element is harmful for productive entrepreneurship and increases necessity-driven entrepreneurship. Stephan and Uhlaner (2010) obtained parallel results, though in this case they emphasized the importance of a socially supportive culture for entrepreneurship. These works may serve to illustrate that culture can be approached from various perspectives. However, they all suggest one common factor, which can be negative or positive for entrepreneurship. Hechavarria and Reynolds (2009) explored authority as a value represented by rationality (which encourages opportunity entrepreneurship), whereas Stephan and Uhlaner (2010) and Urbano et al. (2016) found that the power distance in a society characterized by a strict vertical hierarchy destroys innovative and opportunity entrepreneurship. This evidence might suggest that, depending on the type of leadership that characterizes the people in a society, entrepreneurial activity could be encouraged or discouraged in a given country ( Ensley et al. , 2006 ).

Considering all the coincidences between leadership and entrepreneurship ( Van Hemmen et al. , 2013 ), this study links these two concepts and introduces different types of cultural leadership (e.g. charismatic/value-based, team oriented, participative, humane, autonomous and self-protective) as specific and more relevant proximal aspects of culture that explain the cross-national differences in opportunity and necessity entrepreneurship. Previous research has identified leadership as one of the most important organizational factors that influence entrepreneurial activity ( Elenkov and Manev, 2005 ; Ensley et al. , 2006 ; Harrison et al. , 2018 ; Hornsby et al. , 2002 ); however, a few authors have specifically linked leadership and entrepreneurship ( Cogliser and Brigham, 2004 ; Ensley et al. , 2006 ; Gupta et al. , 2004 ; Van Hemmen et al. , 2013 ; Vecchio, 2003 ). Drawing from institutional economics and leadership theories, this paper addresses this gap by examining the effect of cultural leadership factors on the rates of opportunity and necessity entrepreneurship across countries. On the one hand, institutional economics ( North, 1990 ) is used, since the authors believe that both leadership and entrepreneurship emerge according to the context. On the other hand, the theory of social and economic organization ( Weber, 1947 ) and the implicit leadership theory (ILT) are considered in the study of leadership, basically because they provide an understanding of social cognition foundations applied to leadership.

This study is based on a quantitative methodology and fundamentally uses data from international databases such as the Global Entrepreneurship Monitor (GEM) and Global Leadership and Organizational Behavior Effectiveness (GLOBE), considering a sample of 34 countries. Hence, the paper empirically investigates whether leadership has a strong effect on entrepreneurial activity. Of all the types of leadership, the charismatic dimension could have the greatest effect on entrepreneurship, especially opportunity entrepreneurship. It also establishes that the autonomous leadership dimension may have a negative influence on entrepreneurial activity; however, this relationship changes when it is moderated by the humane leadership dimension. The research contributions are expected to be both conceptual and practical for the fields of business and education. On the one hand, the findings support the idea that cultural leadership and entrepreneurial activity are linked to each other. In this regard, institutions matter for both leaders and entrepreneurs. On the other hand, the practical implications stem from the fact that the types of creative leadership are beneficial for organizations, companies and governments and therefore should be studied and promoted. This could imply the inclusion of related topics, such as creativity, the analysis of risk, anger management and so on, in elementary and secondary school programs as well as in tertiary education.

The paper is structured as follows. The next section reviews some of the major research works into leadership and entrepreneurship; then, it explores the method followed, describes the sample and data sources and outlines the measurement of the variables used in the analysis. Afterwards, the results obtained are presented and described; finally, the main implications, conclusions and limitations of this study for future research and policy makers are discussed.

Theoretical background and hypothesis development

Institutional economics, developed mainly by North (1990) , has proven to be a popular theoretical foundation on which to understand how individuals and organizations interact and make decisions. North (1990 , p. 3) proposed that “institutions are the rules of the game in a society, or more formally, institutions are the constraints that shape human interaction.” In this sense, institutions can be either formal – such as political rules, economic rules and contracts – or informal – such as codes of conduct, attitudes, values, norms of behavior and conventions, or rather the culture of a society.

Researchers have made an important endeavor to comprehend the cross-country variations of entrepreneurship by analyzing the way in which it is influenced by both formal (e.g. regulations) and informal institutions (e.g. culture) ( Bruton et al. , 2010 ). In this regard, it has been proven that institutional economics is a solid foundation for understanding the dynamics of entrepreneurial activity ( Bruton et al. , 2010 ; Thornton et al. , 2011 ; Urbano et al. , 2018 ; among others). Particularly, Urbano et al. (2018) found, through a literature review, that informal institutions, though less explored, may exert a stronger influence on entrepreneurial activity than formal institutions. Among the informal factors, these authors suggested that cognitive aspects, such as leadership, can be a worthy element for future research. Since risk and uncertainty caused by institutional differences exist, it has been suggested that leadership, as a particular institutional characteristic ( Biggart and Hamilton, 1987 ), serves to address entrepreneurial activity better ( Amrita et al. , 2018 ; Harrison et al. , 2016 ).

Although new business activity can be found in all countries, there are significant and stable differences over time in the levels of entrepreneurial activity ( Acs et al. , 2008 ). There are even differences in the way in which entrepreneurship is approached and understood ( Audretsch et al. , 2015 ). For instance, Shane (2012) highlighted a debate about entrepreneurship as a process or event. The former sets up conceptual bases ( Shane and Venkataraman, 2000 ), and the latter enables a measurement ( Acs et al. , 2008 ). Bosma (2013) suggested that, by understanding entrepreneurship as an event, it is possible to contribute massive evidence-based results to the field. This author, drawing on Reynolds et al. (2005) , discussed the importance of comprehending how certain motives (i.e. opportunity and necessity) may drive the decision to become an entrepreneur and then understanding how each country is characterized in terms of entrepreneurship. Acs et al. (2008) , by comparing entrepreneurship rates between two different data sets (the GEM and the World Bank Group Entrepreneurship Survey) concluded that an evidence-based analysis opens up the possibility to explore further the differences between developed and developing countries based on their institutional configuration. Stephan and Pathak (2016) regressed this type of entrepreneurial activity (particularly TEA) on different cultural factors, in which leadership was identified as a particular characteristic that drives individuals’ decision to become an entrepreneur.

Even though Weber (1947) did not use the term “institution,” his notion of cultural rules or systems is close to the current understanding of the concept of an institution ( Biggart and Hamilton, 1987 ). The interpretive approach of Weber highlighted the idea that action is social because the actor attaches a subjective meaning to it ( Wolfgang, 2008 ). Weber (1947) conceptualized ideas about legitimate rule to define charismatic leadership as a form of legitimate authority derived from ecclesiastic divinity. Similar streams have also been suggested in the seminal literature. For example, Lewin et al. (1939) experimentally explored how groups react depending on the manner in which leaders behave in terms of authoritarianism or participative decisions. Likert and Kahn (1956) reached a similar conclusion, suggesting that firm performance increases even more when participative leaders are present. Hersey and Blanchard (1969) proposed that, as leaders become older, the leadership should engage in more inclusive and participate action rather than task orientation. Although the concept of charisma has been integrated with leadership, it did not gain noteworthy attention in the organizational discipline until Bass (1985) , Bennis and Nanus (1985) and Burns (1978) drew attention to the construct. Since the late 1980s, theories of transformational and charismatic leadership have been in the ascendant. Bass (1985, 1996) suggested the version of transformational leadership theory that generates most of the research nowadays (cf. Braun et al. , 2013 ; Dionne et al. , 2004 ; Messersmith and Yi-Ying, 2017 ; Vaccaro et al. , 2012 ; among others). They defined transformational leadership primarily in terms of the leader’s effect on the followers and the behavior adopted to achieve this effect. This theory presents leadership through three higher-order factors: transformational leadership, transactional leadership and corrective leadership ( Avolio et al. , 1999 ).

It has also been suggested that most individuals have their own ideas about the nature of leaders and leadership. This approach has been studied under the rubric “implicit leadership theory or social cognition theory applied to leadership” ( House et al. , 2004 ). Hence, the ILT deals with the constraints and guidance of leadership, the acceptance of leaders and the perception of leaders as influential, acceptable and effective ( House et al. , 2004 ). The ILT has also been used in attempts to explain different types of leadership and perceptions ( Pekerti and Sendjaya, 2010 ). This theory therefore extends to the cultural level by arguing that the structure and content of these belief systems will be shared among individuals in common cultures.

House et al. (2004) identified six global leadership dimensions. First, the team-oriented dimension emphasizes effective team building and the implementation of a common purpose or goal among team members. Second, the participative dimension reflects the degree to which managers involve others in making and implementing decisions. Third, the humane dimension stresses supportive and considerate leadership. Fourth, the autonomous dimension is characterized by an independent, individualistic and autonomous approach to leadership. Fifth, the self-protective dimension emphasizes procedural, status-conscious and “face-saving” behaviors and focuses on the safety and security of the individual and the group. Finally, the charismatic/value-based dimension reflects the ability to inspire, to motivate and to expect high performance outcomes by holding firmly onto core values. Den Hartog et al. (1999) supported the hypothesis that specific aspects of charismatic/transformational leadership are strongly and universally endorsed across cultures. This research focuses specifically on charismatic and autonomous leadership behaviors, believing that these types are conceptually the most closely related to entrepreneurship ( Stephan and Pathak, 2016 ). Authors such as Coker et al. (2017) , Gupta et al. (2004) , Ling et al. (2008) and Muralidharan and Pathak (2018) conducted studies in a similar direction, as they provided evidence on the association between leadership (particularly charismatic and autonomous) and entrepreneurship. Although these authors focused their analysis on social and corporate entrepreneurship, this evidence may suggest that entrepreneurs are characterized by these types of values and therefore their outcome can be differentiated in terms of either charisma or autonomy.

Thus, grounded on institutional economics, the intersection between leadership and entrepreneurial activity enables us to raise questions concerning, first, how these two factors are related across countries and, second, which of the different leadership types positively and negatively relate to entrepreneurship driven either by opportunity or by necessity. Drawing on Braun et al. (2013) and Stephan and Pathak (2016) , who applied different quantitative techniques, this paper starts by analyzing leadership and entrepreneurship as general concepts. Afterwards, supported by the extant literature, it delves into the different nuances of leadership and entrepreneurial activity. While being useful within the conceptualization of entrepreneurial leadership, the interaction between charismatic and autonomous values is broad and undefined. With the aim of addressing this issue, the paper explores theoretically how these interactions affect entrepreneurship to test empirically whether the hypotheses can be rejected across countries. The next subsections address the possible influence that leadership types might exert on entrepreneurial activity.

Leadership and entrepreneurship

Leadership is positively related to entrepreneurship.

The prior literature has shown that leadership is an important characteristic and value with which entrepreneurs are equipped. Some seminal works, such as those by Lewin et al. (1939) and Likert and Kahn (1956) , have suggested that participative and team-oriented leaders bring important benefits for companies, which will tend to grow faster than other firms with different leadership styles. Hisrich et al. (2017) stated that those strategies proposed within a company respond quite often to the type of entrepreneur and his or her leadership paradigm toward a participative or individual view. In this regard, it is possible to think that leaders and managers vary in the way in which they deal with the dilemma of autonomous leadership at one extreme and democratic or participative leadership at the other. The distribution of power can be measured indirectly by calculating how much is delegated to the less powerful and how much autonomy and freedom leaders have to choose how to operate in the work setting ( Bass and Bass, 2008 ). Autonomous leadership means taking full and sole responsibility for decisions and full control over followers. Although investigations use many terms with meanings that do not entirely overlap, the correlations are generally high among the descriptions of various autonomous or authoritarian ways of organizing tasks ( Bass and Bass, 2008 ). This behavior has also been described as directive ( Bass and Barrett, 1981 ). Autonomous or directive leadership implies that leaders play an active role in problem solving and decision making and that they expect their followers to be guided by their decisions. Stephan and Pathak (2016) provided evidence on self-productive leadership and entrepreneurial activity. According to these authors, these kinds of leaders tend to work individually and support low levels of risk and uncertainty: characteristics that ultimately affect entrepreneurial activity. Gupta et al. (2004) and Muralidharan and Pathak (2018) also suggested that autonomous leadership might affect entrepreneurial activity negatively, though they excluded this variable from their analysis precisely because of this negative influence and its low explanatory capacity. Coker et al. (2017) , at the theoretical level, concluded that societies characterized by autonomous leadership tend to decrease the level of entrepreneurial activity oriented toward social purposes.

Autonomous leadership has a negative effect on entrepreneurial activity.

Participative styles of leadership have a positive effect on entrepreneurial activity.

Charismatic leadership has a positive influence on entrepreneurial activity.

Charismatic leadership has a more strongly positive relationship with opportunity entrepreneurial activity than necessity entrepreneurship.

The interaction effect of charismatic leadership on the relationship between autonomous leadership and entrepreneurship

Charismatic leadership moderates the relationship between autonomous leadership and entrepreneurship.

Methodology

Data and variables.

As noted earlier, this paper analyses the relationship between leadership and entrepreneurship. The source of data to measure the dependent variable is the GEM database for 2013, and the independent variables come from GLOBE.

Variables utilized

Dependent variable.

The GEM data provide an indicator of a country’s entrepreneurial activity in the form of total early stage entrepreneurial activity (TEA) at the individual and national levels. Regarding the latest version, the TEA measures the percentage of the adult population members of a country (18–64 years old) who either are actively involved in starting a new venture or are the owner/manager of a business that is less than 42 months old ( Reynolds et al. , 2002 ). Reynolds et al. (2005) provided empirical support for the validity of the TEA index. The GEM’s classification differentiates between “necessity” and “opportunity” motivations ( Reynolds et al. , 2002 ). These subtypes of TEA rates are used to assess the influence of different types of leadership on new business creation. As mentioned before, the opportunity and necessity TEA rates differentiate between entrepreneurs who are motivated to pursue perceived business opportunities and those who are driven to become entrepreneurs as a last resort, when other options for economic activity are absent or unsatisfactory ( Urbano and Aparicio, 2016 ).

Independent variables

Over time, GLOBE has developed an empirically based theory to describe, understand and predict the impact of cultural variables on leadership, organizational processes and the effectiveness of the leader and the processes ( House et al. , 2002 ). This study revealed 21 characteristics of leadership; therefore, a second-order maximum likelihood exploratory factor analysis was conducted. As a result, six factors with eigenvalues greater than 1 were obtained (i.e. average internal consistency reliability =0.84; and average interrater reliability y =0.95). The factors identified are: charismatic (visionary, inspirational, self-sacrifice, integrity, decisive and performance-oriented), team oriented (emphasizing effective team building and the implementation of a common purpose), participative (the degree to which others are involved in making and implementing decisions), humane (supportive and considerate leadership, including compassion and generosity), self-protective (ensuring the safety and security of the individual and group) and autonomous (individualistic, independent attributes) (see House et al. , 2004 for details).

According to the literature analyzed in the previous section, the first four factors listed above have been associated with transformational leadership and the last two with transactional leadership. Drawing on the ILT, it is possible to suggest that people within cultural groups agree in their beliefs about leadership such that there are statistically significant differences among cultures in leadership beliefs. This agreement within cultural groups validates the aggregation of individual ratings to the organizational and societal levels of analysis. Even though the information used to measure values ​​in terms of leadership is from the year 2004, as this is the last available cross-cultural study, the broad cultural heritage of a society leaves an imprint on values that endure despite modernization ( Inglehart and Wayne, 2000 ).

Control variables

The paper includes the gross domestic product (GDP) at purchasing power parity (PPP) and the control of corruption as control variables, given that the level of development of countries is a key factor in explaining entrepreneurial activity ( Carree et al. , 2007 ). Hence, the natural logarithm of the gross domestic product (lnGDP) at PPP per capita is included. The data source used for the GDP PPP variable was the International Monetary Fund World Economic Outlook database for 2013. Control of corruption was obtained from the Worldwide Governance Indicators project. This variable captures the perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption as well as the “capture” of the state by elites and private interests. Here, it ranges from −2.5 to 2.5, with higher scores corresponding to better outcomes of the institutions. The final sample contains 34 countries, because those countries that were not included in the survey’s data for the research were eliminated.

Statistical techniques and models

All the hypotheses were tested using regression analysis by estimating two equations separately. The first one tests H1 – H4 , whereas the second one tests H5 . The equations are as follows: (1) Y i = α + β 1 L i + β 2 C i + ε i , i = 1 , 2 , … , 34 countries , where Y i is the total early stage entrepreneurial activity of country i , α is a constant term, β n is a vector of parameters to be estimated for the n th independent variables, L i collects the leadership dimension of country i , C i represents the control variables of country i and ε t is a random disturbance. The following equation assesses the remaining hypotheses: (2) Y i = α + β 1 L C H i + β 2 L A u t o i + β 3 L C H i × L A u t o i + β 4 C i + ε i , i = 1 , 2 , … , 34 countries , where Y i is the total early stage entrepreneurial activity of country i , α is a constant term, β n is a vector of parameters to be estimated for the n th independent variables, LCH i collects the dimension related to the charismatic leadership of country i , LAuto i collects the autonomous leadership dimension of country i , C i represents the control variables of country i and ε t is a random disturbance.

The summary statistics and the correlation matrix of the variables used in this analysis are reported in Table I . As can be seen, almost all the variables considered are significantly correlated with entrepreneurship. The charismatic, humane and self-protective types of leadership have a positive and significant correlation with entrepreneurship, and autonomous leadership is negatively and significantly correlated with entrepreneurship, which meets the authors’ expectations. Although team-oriented leadership has the expected sign, there is no significant correlation with entrepreneurship. Additionally, participative leadership shows a negative and non-significant correlation. The correlation matrix also indicates that the GDP PPP and control of corruption have a negative and significant relationship with entrepreneurship. Several authors have identified a negative relationship between the level of new business activity and economic development, as measured by income per capita ( Carree et al. , 2007 ; Wennekers et al. , 2005 ). In line with these results, the literature has also suggested that the control of corruption can help entrepreneurship and economic growth (e.g. Aparicio et al. , 2016 ; Dreher and Gassebner, 2013 ).

Table II shows the results of the regression analysis. This table shows six models testing the factors of leadership that determine entrepreneurial activity. Given the correlations among the several independent and control variables, the study tested the problem of multicollinearity through variance inflation factor (VIF) computations. The maximum VIF found within the models is 3, which is below the commonly used standard of 10 ( Cohen et al. , 2003 ). Thus, this indicates that multicollinearity is not problematic in the analyses.

With regard to Model 1, the control variables were entered. This model explains 29 percent of the entrepreneurship variation across countries. The estimated coefficients are consistent with the existing literature, which has indicated negative and significant correlations between entrepreneurial activity and development indicators. Research using GEM data has consistently revealed a particular pattern in the association between the GDP per capita and the level and nature of entrepreneurial activity in an economy ( Urbano and Aparicio, 2016 ). In economies with a low GDP per capita, the TEA rates tend to be high, with a relatively large proportion of necessity-motivated entrepreneurship. High-income economies, instead, are characterized by the greater availability of resources and more affluent markets, which may stimulate an increase in opportunity-motivated entrepreneurship. This negative association could be explained by people usually starting their own business by necessity in less developed countries ( Reynolds et al. , 2001 ). As mentioned before, Aparicio et al. (2016) and Dreher and Gassebner (2013) found that corruption is beneficial in highly regulated economies (specifically those with a higher number of procedures required to start a business and a larger minimum capital requirement). Their conclusion was that corruption has a positive impact on entrepreneurship in countries with bad business climates.

Leadership as an antecedent of entrepreneurship

In Model 2, the authors added the independent variables (i.e. six leadership factors), finding that they significantly increase the ability to explain entrepreneurship. This model explains 53 percent of the entrepreneurship variation across countries. The results obtained support H1 , which proposes that leadership has a significant relationship with entrepreneurial activity. Cogliser and Brigham (2004) pointed out that leadership makes a difference (despite those few studies to the contrary). This could suggest that effectively being characterized by a type of leadership induces an individual to create a new venture that may be different from those of other entrepreneurs with different leadership styles. Similar to Gupta et al. (2004) and Stephan and Pathak (2016) , the paper’s findings serve as evidence for the discussion regarding whether leadership is a conducive factor for entrepreneurship. In such a case, as shown, this is a type of characteristic that needs to be promoted. However, further research is needed on the mechanisms by which leaders influence, challenge and inspire people to achieve the best results and the best performance, specifically in entrepreneurship.

Byrne and Bradley (2007) supported the hypothesis that leadership needs to be pluralistic. Nonetheless, only three types of leadership show a significant relationship with entrepreneurial activity. As expected, charisma has a significant and positive coefficient. On the contrary, being team oriented and autonomous shows negative and significant signs. The participative, self-protective and humane leadership styles are positive but do not show a significant relationship with entrepreneurship. These findings can potentially be attributable to the lack of statistical power in the sample rather than the absence of a true relationship between different forms of leadership and entrepreneurship. Similar results can be found in Dunne et al. (2016) .

Explaining entrepreneurship through autonomous and participative leadership

H2 predicts that autonomous leadership has a negative impact on entrepreneurial activity. The results support the proposed H2 . Warren (1998) argued that a leader finds greatness in the group and helps members to find it by themselves. Contrary to expectations, participant leadership is positive but not statistically significant, but team-oriented leadership is negative and significant. These results may be interpreted as relating to those teams in which the skills of cooperation and diplomacy and, above all, the consideration of all the team members affect the entrepreneurship decision-making process. There are also teams that are resistant to change and decision making to avoid affecting their organization’s status quo. Research on teams has presented contradictory findings regarding the effects of diversity on team and performance (cf. Williams and O’Reilly, 1998 ). Heterogeneous teams can contribute to solving complex problems because of the existence of diversity in perceptions, skills and knowledge ( Stasser et al. , 1995 ). Nevertheless, heterogeneity can produce relationship conflicts among team members, resulting in poor performance. Amason and Sapienza (1997) and Dunne et al. (2016) found that a collaborative style is negatively and not significantly related to innovativeness. This result could be aligned with the idea that, in general, entrepreneurs have a greater need for autonomy and independence ( Knörr et al. , 2013 ). Entrepreneurs value individualism and freedom, and they can experience difficulty relating to others ( Kirby, 2004 ). Given this ambiguity, H2a is not supported. Zhou and Rosini (2015) pointed out that, although the volume of entrepreneurial team research has been increasing, the empirical results are often controversial and inconclusive. Those outcomes may stem from the variety of theoretical frameworks as well as methodological problems.

Charismatic leadership and entrepreneurial activity

In Model 3, only the significant independent variables were introduced. Compared with Model 2, the R 2 shows a slight reduction, suggesting that Model 2 is better than Model 3. Through this estimation, the study finds that H3 , which predicts that charismatic leadership has a positive influence on entrepreneurial activity, is supported. The findings obtained in previous research have also shown a positive relationship between transformational leadership and performance ( Sparks and Schenk, 2001 ) and charismatic leadership and entrepreneurship ( Stephan and Pathak, 2016 ). Complementarily, other findings have indicated the importance of leadership for entrepreneurship as a moderator variable; regardless of the national setting, transformational behavior, such as articulating a vision, providing an appropriate model, having high performance expectations and showing supportive leader behavior, positively affects the relationship between entrepreneurial orientation and firm performance ( Engelen et al. , 2015 ).

Models 4 and 5 analyze opportunity entrepreneurship and necessity entrepreneurship as the dependent variables, respectively. In Model 4, which explains 50 percent of the opportunity entrepreneurship variation across countries, all the leadership styles were introduced. Here, only charismatic leadership shows a positive and significant influence on the dependent variable, and autonomous leadership and team-oriented leadership have a significant and negative influence on opportunity entrepreneurship. Similarly, in Model 5, the authors introduced all the kinds of leadership analyzed throughout this paper. In this case, autonomous leadership and team-oriented leadership again demonstrate a significant and negative relationship with necessity entrepreneurship. Charismatic leadership, as in previous models, shows a positive and significant relationship with opportunity entrepreneurship, which may indicate that this relationship is highly robust. According to H4 , charismatic leadership has a positive and greater effect on opportunity entrepreneurship than necessity entrepreneurship, which is totally supported by the paper’s findings. This result is in line with other empirical findings, such as those of Van Hemmen et al. (2013) , who confirmed that charismatic leadership has a significant and positive impact on the number of entrepreneurs driven by opportunity. Moreover, this result is aligned with Bass’s (1998) study. The relative prevalence of opportunity-motivated vs necessity-motivated entrepreneurial activity can provide useful insights into the quality of early stage entrepreneurial activity in a given economy. The GEM 2010 Global Report ( Kelley et al. , 2011 ) highlighted a number of factors that can have a marked impact on the level of improvement-driven opportunity motivation within an economy. It seems that innovation-driven economies can require more transformational leadership to generate opportunity entrepreneurship.

The last model (Model 6) presents the interaction effect between autonomous leadership and all the characteristics related to transformational leadership. As mentioned before, the charismatic, team oriented, participative and humane factors are related to transformational leadership. It is apparent that the only moderation effect that is significant in the relationship between entrepreneurship and transformational leadership is humane leadership. In this regard, it can be seen that a change in the level of humane leadership (from low to high) produces a decrease in the differential effect exerted by autonomous leadership on entrepreneurship. According to these results, H5 is only partially supported.

Discussion and conclusions

Although the extant research has shown the importance of leadership and entrepreneurship, there is little evidence showing how the leadership dimension influences entrepreneurial activity across countries. Using data from the GEM and GLOBE research projects, the paper analyzed the influence of leadership on entrepreneurship in the light of institutional economics ( North, 1990 ), the theory of social and economic organization ( Weber, 1947 ) and the cultural ILT as conceptual frameworks. The institutional approach argues that the beliefs, values and attitudes of a society determine the behavior of its members, which can significantly affect decisions, such as the decision to become an entrepreneur ( Aldrich and Zimmer, 1986 ; Steyaert, 2007 ; among others). Leadership seems to be an influential process between individuals, and, in a more advanced conceptualization, leadership is the shared property of a social system including interdependencies among individuals and organizations ( Day and Harrison, 2007 ).

The study finds general support for the main thesis that all the leadership styles have a strong effect on the total national entrepreneurial activity of countries, indicating that charismatic leadership has an effect on entrepreneurial activity, which turns out to be greater than other leadership types, and even more on opportunity entrepreneurship. This study also shows that autonomous leadership has a negative impact on entrepreneurial activity, although, when it is moderated by the humane dimension, this relationship changes. This study provides evidence that differences in the level of entrepreneurship across countries could be attributable to cultural leadership and offers a framework to enable a better understanding of this essential aspect of opportunity and necessity entrepreneurship. Considering that charismatic leadership is widely endorsed across cultures, this study suggests incorporating the role modeling of charismatic behaviors into entrepreneurship training ( Stephan and Pathak, 2016 ). With regard to other styles, tailoring research and training to specific cultures may be useful, since the relative acceptance of leadership varies greatly across cultures, particularly if those cultures differ markedly in their endorsement of charismatic and autonomous styles. Some of the results also appear to be counterintuitive and therefore raise intriguing questions, which the authors hope will encourage additional work on the dynamic links between leadership and new business activity in various types of economies and in different cultural settings.

Entrepreneurs are an important type of strategic leader. Understanding entrepreneurship and leadership as drivers in different cultural contexts is essential for the development of societies. This work demonstrates the complexity of entrepreneurship, highlighting important connections between culture and leadership styles. In this way, this study challenges others to develop and test further contextual leadership models, using a more complete spectrum of personal, social and cultural variables. This is a modest study but an important research effort to help leadership and entrepreneurial scholars as well as strategic leaders to grapple with the enormous uncertainty posed by a varied and competitive global market. In short, this study contributes to a better understanding of the mechanisms through which cultural leadership values influence entrepreneurship.

Contribution to theory and practice

From a conceptual perspective, this study reinforces the idea of the importance of understanding cultural leadership and entrepreneurship as a collaborative process for the development of societies. This study is in line with the increasing research that explicitly acknowledges the socio-cultural context in which leadership and entrepreneurship exist ( Lewis, 2015 ). The results confirm what scholars have long pointed out, which is the importance of socio-cultural factors in the decision to create new businesses ( Hofstede, 2001 ), arguing that entrepreneurship is embedded in a social context ( Aldrich and Zimmer, 1986 ).

Additionally, in line with the recent literature, this study’s results may serve as evidence of entrepreneurial leadership. According to Harrison and Roomi (2018) , Leitch and Harrison (2018) , and Leitch and Volery (2017) , leadership and entrepreneurial activity are recursively linked. These authors suggested that entrepreneurs should learn leadership and the other way around (i.e. entrepreneurs should be leaders). Stephan and Pathak (2016) provided similar evidence on the basis that leadership, as a cultural value, explains entrepreneurial behavior. Roomi and Harrison (2011) , by thoroughly comprehending the extant literature about the broad area of entrepreneurial leadership, analyzed the way in which different approaches have been used to build up a landscape to understand the interaction between these concepts. Among the approaches identified in the literature, these authors suggested that the analysis of the (institutional) context must be taken into consideration to explore and understand better the charismatic and related types of leadership influencing entrepreneurial activity. Following this line of thought, Stephan and Pathak (2016) offered evidence in the sense that leadership may belong to those values that characterize a society. With the modest intention to complement this view, the findings might be relevant to the debate in which leadership is considered not only to be an important characteristic of entrepreneurial activity in a traditional way but also to embrace diversity in entrepreneurship (e.g. opportunity and necessity TEA).

Practical implications can be drawn for business and education. These may concern the style of leadership that will be better received in organizations, companies or governments and must therefore be studied and promoted. Harrison and Roomi (2018) , Harrison et al. (2016) and Roomi and Harrison (2011) claimed that perhaps the lack of consensus regarding the concept of entrepreneurial leadership led to both theory and practice being barely encouraged in British universities and the Islamic context. These authors provided a complete set of material aiming at the promotion of leadership and entrepreneurship. The results might serve as an example of such material while complementing the idea that the national context matters for leaders, entrepreneurs and the intersection between them. On a similar line, Ulrich (1996) argued that future leaders will need to be pioneers who take risks, create new paths, shape new approaches, have strong values that drive their actions and master the art of forming teams. Bass (1998) argued that parents should teach their children to accept responsibility for their own actions, to be confident and willing to accept challenges and to question authority when necessary. Although Maslow (1954) postulated that there is a hierarchy of needs, it seems to be important now to move beyond this idea. It could mean that a charismatic and transformational stage can be achieved as well as transcendental organizational behavior, such as altruism, conscientiousness, collectivism and civic virtues. Along the same lines, Humphrey (2013) pointed out the importance of empathy and the emotional intelligence that leaders must develop for entrepreneurship.

Limitations and directions for future research

This study should be interpreted in light of its key limitations. It is evident that the charismatic and transformational leadership concepts provide important insights. However, some conceptual weaknesses need to be addressed to make the perspectives more useful ( Yukl, 1999 ). Although the literature has consistently supported charismatic and transformational leadership’s positive impact on attitude and performance, less is known about how this leadership factor actually achieves the transformation of followers ( Sparks and Schenk, 2001 ). This study uses GLOBE items that rate the degree to which each behavior contributes to “outstanding leadership behavior” in organizations and societies. Further, the effectiveness of leadership attributes reflects the perceptions of the respondents rather than performance data or observed behaviors. Nevertheless, despite its limitations, the GLOBE instrument is robust, as it has been validated extensively for cross-cultural relevance of the leadership items included. The data are cross-sectional in nature, so causality is theoretically implied. It would perhaps be necessary to test the results with samples from other countries or with samples that might permit the period of analysis to be widened. This analysis was conducted at the country level, so future research might motivate an integrative multilevel analysis ( Day and Harrison, 2007 ). Stephan and Pathak (2016) filled this gap by analyzing a wide sample of individuals and countries, which allowed them to apply a multilevel approach. In line with these authors, this paper also suggests that there is still more room to enhance the analysis. In this regard, future avenues motivated by these types of data sets might consider the differences between developed and developing countries ( Harrison et al. , 2016 ) as well as the interaction between leadership factors to explain entrepreneurial activity across individuals and countries.

Furthermore, future studies may provide more knowledge by studying the impact of leadership not only on the total entrepreneurial activity of a country but also on other types of entrepreneurship, such as social entrepreneurship, intrapreneurship or corporate entrepreneurship and female entrepreneurship. In the latter regard, for instance, Dean and Ford (2017) and Harrison et al. (2015) analyzed qualitatively how entrepreneurial leadership differs between female and male entrepreneurs. These authors claimed that further developments should be conducted to hypothesize whether leadership and entrepreneurial activity are equally linked regardless of the country or region, industrial sector, gender, ethnicity and so on. The exploration of leadership as an antecedent of diversity in entrepreneurship from a quantitative point of view might generate new opportunities for scholars to contribute to the research field. For example, future research should explore the complex effects of social culture and entrepreneurship as well as the way in which leadership can drive social economic development, such as jobs, innovation and social value. Leadership research will be advanced by a continued focus on how leadership behaviors operate in very different cultures and by identifying the optimal leadership profiles that are specific to particular cultures ( Brodbeck et al. , 2000 ). While research on leadership has identified an extensive list of key leadership styles, it is proposed that exploring the context of leadership by explicitly incorporating the role of social culture will be a more appropriate way of searching for effective leadership factors than trying to identify attributes that may (or may not) be universally endorsed or effective. Further, cross-cultural research is thus imperative to gain an improved understanding of leadership as a global concept and its effects on entrepreneurship. Future studies could be considered in the light of institutional economics, analyzing the relationships among the normative factors ( Scott, 2007 ) and leadership and entrepreneurship. Given the importance of leadership development, it is critical that leadership models are as comprehensible, complete and coherent as possible ( Cox et al. , 2003 ).

Descriptive statistics and correlation matrix