jsbm12086

Understanding andMeasuring EntrepreneurialLeadership Styleby Maija Renko, Ayman El Tarabishy, Alan L. Carsrud, andMalin Brnnback

Although entrepreneurial leadership is embraced in the popular press and in classrooms,academic knowledge remains underdeveloped. We develop the construct of entrepreneurial lead-ership and argue that it involves influencing and directing the performance of group memberstoward achieving those organizational goals that involve recognizing and exploiting entrepre-neurial opportunities. We discuss environmental, organizational, and follower-specific contin-gencies that may influence the success of entrepreneurial leadership, and we test the reliability andvalidity of an empirical measure for this construct (the ENTRELEAD scale). Using this novelmeasurement tool, we find that entrepreneurial leadership is more prevalent among founder-leaders than nonfounder leaders, which indicates construct validity.

IntroductionEntrepreneurial behaviors are increasingly

important in a variety of contexts. In organiza-tions, these behaviors foster innovation andadaptation to changing environments. As anexample, the reasons for the success of AppleInc.currently the most admired company inthe world (Fortune 2012)are often listed toinclude the innovative and entrepreneurialspirit of its workforce and the late CEO SteveJobs. Even companies in less volatile industriesneed to constantly seize new business oppor-tunities to remain viable. To achieve this,employees at every level of an organizationhave to embrace entrepreneurial behaviors

and attitudes. Reflecting these developments inthe corporate world, researchers have begunto investigate how to champion entrepreneurialbehaviors in organizations. One of theapproaches introduced in the literature is theidea of entrepreneurial leadership.

Entrepreneurial leadership is a distinctivestyle of leadership that can be present in anorganization of any size, type, or age. Leader-ship, in general, involves influencing the activi-ties of an organized group toward goalachievement (House et al. 1999, p. 184; Rauchand Behling 1984, p. 46). It differs from man-agement, which is focused on coordination andplanning (Michael, Storey, and Thomas 2002;Zaleznik 1977). In line with previous work at

Maija Renko is an Associate Professor of Entrepreneurship at the Department of Managerial Studies,University of Illinois at Chicago.

Ayman El Tarabishy is an Associate Teaching Professor at The George Washington University School ofBusiness.

Alan L. Carsrud is a Visiting Research Professor and Docent in Entrepreneurship at the bo Akademi Schoolof Business and Economics, bo Akademi University.

Malin Brnnback is the Vice-rector, Professor and Chair of International Business at the bo AkademiUniversitys School of Business and Economics, and a Visiting Professor in Entrepreneurship at StockholmUniversity School of Business.

Address correspondence to: Maija Renko, University of Illinois at Chicago, Managerial Studies, M/C 243,601 S Morgan St., Chicago, IL 60607. E-mail: [email protected].

Journal of Small Business Management 2015 53(1), pp. 5474

doi: 10.1111/jsbm.12086

JOURNAL OF SMALL BUSINESS MANAGEMENT54

the intersection of leadership and entrepre-neurship (e.g., Becherer, Mendenhall, andEickhoff 2008; Cogliser and Brigham 2004;Fernald, Solomon, and Tarabishy 2005; Gupta,MacMillan, and Surie 2004; Ireland, Hitt, andSirmon 2003; Vecchio 2003), we define entre-preneurial leadership as influencing anddirecting the performance of group memberstoward the achievement of organizational goalsthat involve recognizing and exploiting entre-preneurial opportunities.1 With its explicitfocus on leadership influence toward entrepre-neurial goals, this definition is aligned with, yetdifferent from previous definitions of entrepre-neurial leadership (see Table 1).

Entrepreneurial leadership is importantbecause it recognizes the importance of indi-viduals in the entrepreneurial process, yet it isaligned with the current research in leadershipand entrepreneurship with its emphasis on

doing and actions rather than traits or person-alities (Cogliser and Brigham 2004; Gartner1985; Stogdill 1948). Although recent researchhas explored entrepreneurial leadership style,progress has been hindered by the lack ofconceptual development and adequate tools tomeasure leaders entrepreneurial characteristicsand behaviors. The purpose of our study is toaddress these two critical gaps.

To address the research gap concerningconceptual development, we first provide aframework for entrepreneurial leadership thatdescribes this leadership style, its operation, andoutcomes. Entrepreneurship is increasinglydescribed in terms of actions and processes(McMullen and Shepherd 2006) and our frame-work focuses on actions, processes, and attri-butes that are typical of entrepreneurialleadership style. To address the second researchgap concerning the lack of tools to measure

1Our definition was particularly influenced by the work of Ireland, Hitt, and Sirmon (2003) and Gupta,MacMillan, and Surie (2004) (see Table 1). However, different from Ireland et al, whose definition implies thatentrepreneurial leadership is an ability of an individual, our definition adds that entrepreneurial leadershipis also a specific style of influence (cf. Hunt 2004; Yukl 2008). Compared with Gupta, MacMillan, and Surie(2004), whose definition relies on the leader creating visionary scenarios, our definition relies on less abstractorganizational goals.

Table 1Evolving Definition of Entrepreneurial Leadership

Cunningham andLischeron (1991)

Entrepreneurial leadership involves setting clear goals, creatingopportunities, empowering people, preserving organizationalintimacy, and developing a human resource system.

Ireland, Hitt, andSirmon (2003)

Entrepreneurial leadership entails the ability to influence others tomanage resources strategically in order to emphasize bothopportunity-seeking and advantage-seeking behaviors.

Gupta, MacMillan,and Surie (2004)

Leadership that creates visionary scenarios that are used to assembleand mobilize a supporting cast of participants who becomecommitted by the vision to the discovery and exploitation ofstrategic value creation.

Thornberry (2006) Leadership requires passion, vision, focus, and the ability to inspireothers. Entrepreneurial leadership requires all these, plus amindset and skill set that helps entrepreneurial leaders identify,develop, and capture new business opportunities.

Surie and Ashley(2008)

Leadership capable of sustaining innovation and adaptation in highvelocity and uncertain environments.

Definition developedin this study

Entrepreneurial leadership entails influencing and directing theperformance of group members toward the achievement oforganizational goals that involve recognizing and exploitingentrepreneurial opportunities.

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entrepreneurial leadership, we develop and vali-date an empirical tool (ENTRELEAD) for themeasurement of entrepreneurial leadership.

Our research provides guidance for thosesmall business managers who wonder what theyshould do to promote entrepreneurship at everylevel in their organizations. However, althoughentrepreneurial firms generally are consideredto be new, small firms, we do not limit entrepre-neurial leadership to such firms. Entrepreneurialleadership is relevant for incumbents that aretrying to reinvent themselves through entrepre-neurial initiatives in the ever-changing market-place. Entrepreneurial leadership is alsorelevant for new, small businesses as entrepre-neurs cannot successfully develop new ventureswithout displaying effective leadership behav-iors (Baumol 1968; Cogliser and Brigham 2004).Moreover, with new venture creation, foundersmust lead because there are no standard oper-ating procedures, management practices, ororganizational structures to fall back on(Hmieleski and Ensley 2007).

The paper is structured as follows: We firstreview existing research on entrepreneurialleadership and present the key elements of thisleadership style. We then discuss related con-structs, such as entrepreneurial orientation andother leadership styles. After describing thedomain of entrepreneurial leadership, wepresent ideas on how the process of entrepre-neurial leadership works in practice with afocus on factors that influence the success ofentrepreneurial leadership. We then proposeand empirically test a scale to measure entre-preneurial leadership and conclude with impli-cations for future research and managerialpractice.

Entrepreneurial LeadershipEntrepreneurial leadership exists at the

intersection of entrepreneurship and leader-ship. Leadership is the process of influence(Hunt 2004; Yukl 2008) and reflects a morecomplex phenomenon beyond an individualactor (Cogliser and Brigham 2004). In a similarway, entrepreneurship focuses not only onthe entrepreneur, but also on the intersectionof that person and opportunities. In thisresearch, we adopt Shane and Venkataramans(2000, p. 218) view of entrepreneurship as theprocess by which opportunities to createfuture goods and services are discovered,evaluated, and exploited. Entrepreneurial lead-ership is one important manifestation of such

opportunity-focused behaviors in a multitudeof organizational contexts.

The existing academic research on entrepre-neurial leadership falls into three categories.First, there are studies focusing on leaders (typi-cally high level corporate executives) thatexhibit entrepreneurial behaviors and attitudes(Covin and Slevin 2002; Gupta, MacMillan, andSurie 2004; Ireland, Hitt, and Sirmon 2003;McGrath and MacMillan 2000; Thornberry2006). Second, there are studies of new businessowners that have to adopt leadership roles inorder for their companies to grow (Baum,Locke, and Kirkpatrick 1998; Ensley, Hmieleski,and Pearce 2006; Ensley, Pearce, and Hmieleski2006; Gupta, MacMillan, and Surie 2004;Hmieleski and Ensley 2007; Jensen and Luthans2006; Peterson et al. 2009; Soriano and Martnez2007; Swiercz and Lydon 2002). Third, existingliterature focuses on distinctions or similaritiesbetween leaders and entrepreneurs (Baumol1968; Ensley, Pearce, and Hmieleski 2006;Vecchio 2003).

We move research forward by integratingelements from all three categories of previousentrepreneurial leadership research into a com-prehensive yet focused conceptualization ofentrepreneurial leadership, described in thenext section (Elements of Entrepreneurial Lead-ership). Furthermore, we develop a measure-ment scale that reflects this conceptualization.This scale takes into account the previousmeasurement approaches in the literature(summarized in the section titled MeasuringEntrepreneurial Leadership) and reflects theresults of empirical tests reported later in thismanuscript.

Elements of Entrepreneurial LeadershipAs overlaps between entrepreneurship and

leadership have been explored, a list of attri-butes has emerged where these two areasconverge: vision, opportunity-focus, influence(on both followers and on a larger constitu-ency), planning, motivating others, achieve-ment orientation, creativity (of the leaderas well as followers), flexibility, patience,persistence, risk-taking, high tolerance forambiguity, tenacity, self-confidence, power-orientation, proactiveness, and internal locusof control (Becherer, Mendenhall, andEickhoff 2008; Cogliser and Brigham 2004;Fernald, Solomon, and Tarabishy 2005;Thornberry 2006). Although our conceptual-ization of entrepreneurial leadership builds on


these characteristics, in line with develop-ments in entrepreneurship as well as leader-ship research (Cogliser and Brigham 2004;Gartner 1985; Stogdill 1948), we adopt awider focus on attributes, behaviors, andactions of entrepreneurial leaders.

These attributes, behaviors, and actions thatcharacterize entrepreneurial leadership and dis-tinguish it from other leadership styles focus onthe entrepreneurial goals for such leadership:opportunity recognition and exploitation(Shane and Venkataraman 2000). Entrepreneur-ial opportunity is the possibility to introduceinnovative (rather than imitative) goods/services to a marketplace (Gaglio 2004). Rec-ognizing an entrepreneurial opportunity entailsperceiving this possibility, whereas exploitationis a separate activity. Exploitation refers tothose activities and investments committed togaining returns from new opportunities (Choiand Shepherd 2004). Hence, opportunity rec-ognition is about perception, exploitation isabout action, and the goals set by entrepreneur-ial leaders involve both.

Entrepreneurial leaders themselves engagein opportunity-focused activities, and in sodoing they also influence their followers, moti-vating and encouraging them to pursue entre-preneurial behaviors (cf. Cunningham andLischeron 1991; Thornberry 2006). Theopportunity-focused actions of leaders areimportant for two reasons. They result in rec-ognition and exploitation of new opportunitiesin an organization, and more importantly, froma leadership perspective, seeing their leadersbehave entrepreneurially creates employeecommitment to do the same. Leaders influenceand direct their followers by acting as rolemodels (Kuratko, Ireland, and Hornsby 2001;McGrath and MacMillan 2000). Hence, animportant part of being an entrepreneurialleader consists of recognizing new opportuni-ties and securing resources for exploitation ofthe opportunities.

Besides acting as role models, entrepreneur-ial leaders also openly encourage followers towork toward entrepreneurial goals (Gupta,MacMillan, and Surie 2004; Hunt 2004; Ireland,Hitt, and Sirmon 2003; Yukl 2008). They chal-lenge and stimulate their followers to think andact in more innovative ways (Thornberry 2006).They articulate a compelling vision for thefuture of the company and the business unitand arouse followers personal involvementand pride in this vision. They empower and

help followers to interpret their identities in thecompany as agents who are responsible for itsfuture innovations and success.

Although this conceptualization of entrepre-neurial leadership is different from other lead-ership styles in its focus, the construct is closelyaligned with two other leadership styles: trans-formational leadership (Bass and Avolio 1995)and creativity enhancing leadership (Makri andScandura 2010). Also, with its focus on entre-preneurship as a phenomenon in organiza-tional and group contexts, entrepreneurialleadership shares similarities with the entrepre-neurial orientation construct.

Entrepreneurial Leadership and Other Leader-ship Styles. Based on Webers work (Weber1924/1947), Bass and Avolio (1995) define thetransformational leadership construct as con-sisting of four components: charismatic rolemodeling, individualized consideration, inspira-tional motivation, and intellectual stimulation.The construct has been widely used in research,including some studies in the entrepreneurshipdomain (Baum, Locke, and Kirkpatrick 1998;Ensley, Hmieleski, and Pearce 2006; Ensley,Pearce, and Hmieleski 2006; Ling et al. 2008;Peterson et al. 2009).

Transformational leaders demonstrate somefeatures and behaviors that also characterizeentrepreneurial leaders. Through intellectualstimulation, they seek new ways of working,seek opportunities in face of risk, and are notlikely to support the status quo. Instead ofadapting to environmental circumstances, trans-formational leaders attempt to create and shapethem (Lowe, Kroeck, and Sivasubramaniam1996). A transformational leader will stimulatefollowers to think about old problems in newways (Bass 1985), which may lead to recogniz-ing novel opportunities. Intellectual stimulationis clearly an area of overlap between entrepre-neurial and transformational leadership.

However, there are important differences,particularly in the areas of charismatic role mod-eling and inspirational motivation. Althoughthey lead with clear purpose and goals, entre-preneurial leaders may not be described ascharismatic or inspirational by others as often astransformational leaders (Podsakoff et al. 1990).Although a transformational leader uses cha-risma, inspirational appeals, dramatic presenta-tions, symbolism, or other forms of impressionmanagement to inspire admiration, respect, andloyalty, an entrepreneurial leadercharismatic

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or notacts as a role model in entrepreneurialbehavior, inspiring imitation.

Though individualized consideration is acentral component of transformational leader-ship, it is not an element of entrepreneurialleadership. Transformational leaders recognizethe unique needs and abilities of their employ-ees, treat employees as individuals, build one-to-one relationships with them, and understandand consider their differing skills (Avolio andBass 1995). Entrepreneurial leaders, first andforemost, consider followers in terms of theirentrepreneurial passion and self-efficacy. Theyenhance followers beliefs in their own entre-preneurial skills and abilities and ignite passionfor innovation and creativity (Bandura 1986;Cardon et al. 2009). The key to understandingentrepreneurial leadership is the focus onopportunity-oriented behaviors, both byleaders themselves as well as by those whofollow them. Though transformational leader-ship contains some elements of such behaviors,they are not endemic.

There are other leadership styles that arerelated to employee creativity, that is, employ-ees ability to generate insightful ideas, expressunique thoughts, and make breakthrough dis-coveries (Csikszentmihalyi 1997). The literatureon leading for creativity suggests that subordi-nates will be more creative when they perceivetheir immediate supervisors as being supportiveof them and their work (Makri and Scandura2010; Mumford et al. 2002; Tierney and Farmer2004; Tierney, Farmer, and Graen 1999). Tomeasure such support, Tierney and Farmer(2004) developed a Supervisor Creativity-Supportive Behavior scale, which gauges leaderbehaviors such as praising employees creativework and publicly recognizing their innovationefforts. Though creativity is an importantcomponent of the entrepreneurial process(Ardichvili, Cardozo, and Ray 2003; Goss 2007;Schumpeter 1934), it is not a synonym for entre-preneurship. Creativity is required for idea gen-eration, but not all novel and useful ideas qualifyas entrepreneurial opportunities. While leader-ship for creativity is often focused on internaloperations (Makri and Scandura 2010), the cre-ative emphasis of entrepreneurial leadership ison inventing and, more importantly, commer-cializing products, services, or processes.

Entrepreneurial Leadership and Entrepreneur-ial Orientation. Emerging primarily from thestrategic management literature, entrepreneur-

ial orientation refers to the processes, prac-tices, and decision-making activities that lead tonew entry (Lumpkin and Dess 1996, p. 136).Entrepreneurial orientation is a firm-level con-struct (Lumpkin and Dess 1996), sometimesused synonymously with corporate entrepre-neurship, and its measurement involves self-assessments of top managers behaviors andstrategic decision making with regard to inno-vation, proactiveness, and risk-taking. Often,however, these top managers and the corporatestrategy they create remain distant from theiremployees and middle-level and lower levelmanagers (Fulop 1991; Yang, Zhang, and Tsui2010). What an employee of a firm experiencesmore immediately is the leadership styleadopted by their immediate supervisor. Theorientation of a corporation can be related tothe development of entrepreneurial leadershipat various levels of the organization, but thetwo are not synonymous (Dess et al. 2003). Afirms top management team can demonstrateinnovativeness, proactiveness, and risk-takingin its decision making, whereas simultaneouslythere are departments within the firm where noentrepreneurial leadership exists, for example,as a result of a lack of middle-managementsupport (Fulop 1991; Yang, Zhang, and Tsui2010). Also, innovativeness, proactiveness, andrisk-taking can be characteristics of an organi-zations strategic orientation because of histori-cal or contextual reasons, such as dynamicmarkets or cutthroat competition (Simsek,Veiga, and Lubatkin 2007), whereas the orga-nization still lacks entrepreneurial leadership.

To illustrate the difference between acorporate-level strategic orientation and agroup- or person-centric leadership style, wequote descriptions of a major mattress manufac-turer, Simmons, from Casciaro and Edmondson(2007, p. 3):

The company had established a core setof values that dated back to the foundingin 1870. Those core values were asfollows: using the history of thecompany to learn from and inform futuredecisions; maximizing the opportunity tothink creatively about how to solve busi-ness problems; embracing innovation;and keeping customers needs at the topof the priority list.

Simmons had adopted the key values of anentrepreneurial orientation: the company was


focused on innovation, its customer focusshould enable proactive moves in the market-place, and creative thinking should lead toinnovation and risk-taking. However, whendescribing the companys operations in one ofits plants, Casciaro and Edmondson (2007, p. 4)quote the company president as saying:

The culture at Charlotte [plant] washorrid, and it started with the leadership.. . . [T]he leadership was very muchmotivation through intimidation, and itwas an awful environment.

Though the Simmons organization on a cor-porate level had an entrepreneurial orientation,leadership at the production level failed toreflect entrepreneurial values.

Previous research has argued that a firmsentrepreneurial orientation and the prevailingleadership style are likely to be related (Desset al. 2003; Tarabishy et al. 2005), and presum-ably entrepreneurial leadership is more likelyto occur in entrepreneurially oriented organi-zations. However, entrepreneurial orientationis concerned with the strategic posture of thefirm, while entrepreneurial leadership is aboutindividual leaders and their relationships withrelevant group members. It is these individualswho spark entrepreneurial ideas and championthem. By focusing on entrepreneurial charac-teristics of organizations, research on entrepre-neurial orientation has lost sight of the fact thatorganizations are made up of individuals, notorganizational postures.

Factors Affecting the Success ofEntrepreneurial Leadership

The success of entrepreneurial leadership inachieving the goals of opportunity recognitionand exploitation depends not only on the attri-butes, behaviors, and actions of the leadersthemselves, but also on context (Antonakis andAutio 2006). Not all individuals are equallysusceptible to similar leadership (Shin andZhou 2003), so the outcomes of entrepreneurialleadership depend not only on the behaviors ofthe leader, but also on the characteristics oftheir followers as well as environmental andorganizational characteristics (cf. Antonakisand Autio 2006; Shamir and Howell 1999).

Follower Susceptibility to Entrepreneurial Lead-ership. The critical role of followers is increas-ingly recognized in existing leadership theories

(Shin and Zhou 2003). The opportunity-focusedgoals of entrepreneurial leadership areachieved through the interaction of leaders andtheir followers who have differing levels ofsusceptibility to the influences of such a leader.Three factors primarily explain follower sus-ceptibility: the followers entrepreneurial self-efficacy, their empowerment, and their level ofentrepreneurial passion.

The self-regulatory mechanism of self-efficacyan individuals belief that she canaccomplish a task (Bandura 1986)has beenlinked with outcomes such as entrepreneurialintentions (Zhao, Seibert, and Hills 2005).Entrepreneurial self-efficacy is the degree towhich an individual believes that he or she iscapable of performing the roles and tasks ofthe entrepreneur (McGee et al. 2009) and iscentral to his or her susceptibility to entrepre-neurial leadership. This role of entrepreneurialself-efficacy as a moderator affecting thestrength of relationship between entrepreneur-ial leadership and the resulting opportunityrecognition and exploitation is in line with pre-vious studies that have examined the linkbetween follower self-efficacy and their sus-ceptibility to a number of other leadershipstyles (e.g., Walumbwa et al. 2005). In otherwords, entrepreneurial leadership will result inhigher levels of opportunity recognition andexploitation in organizations where followershave higher levels of entrepreneurialself-efficacy.

The topic of employee empowerment contin-ues to receive considerable attention. Empow-erment typically involves the delegation ofauthority from management to employees(Conger and Kanungo 1988); empowerment isthe process by which a leader shares powerwith subordinates. However, not all employeesare equally comfortable with being empowered(Argyris 1998). Empowerment comes withresponsibility, and for some the responsibilitymay be an unwelcomed burden. Because pur-suing entrepreneurial opportunities often fallsoutside of employee responsibilities, employeeempowerment via removing conditions thatfoster a sense of powerlessness is necessary forthe effects of entrepreneurial leadership tomaterialize as employees opportunity-focusedbehaviors. This suggests that employeeempowerment is another moderator that affectsthe strength of relationship between entrepre-neurial leadership and its opportunity-focusedoutcomes.

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Furthermore, emotions and affective statesinfluence entrepreneurship (Baron 2008) aswell as leadership effectiveness (Avolio et al.2004). Cardon et al. (2009) have argued thatpassion for entrepreneurship, defined asintense, positive feelings experienced byengagement in entrepreneurial activities, has astrong influence on entrepreneurial pursuitsand will also influence the outcomes of suchactivities. More simply, individuals who arepassionate about entrepreneurial tasks such asidentifying new opportunities are more likelyto engage in these tasks and therefore achievepositive outcomes such as opportunity recog-nition. So, followers entrepreneurial passionwill positively correlate with their susceptibil-ity to entrepreneurial leadership style, actingas another moderator of the entrepreneurialleadershipopportunity recognition andexploitation relationship.

In addition to follower attributes, contextualfactors influence the success of entrepreneurialleadership (Antonakis and Autio 2006). Forexample, a crisis may distract followers fromthe discovery and pursuit of entrepreneurialopportunities, reducing the effect of entrepre-neurial leadership (cf. Lord and Emrich 2001).The success of entrepreneurial leadership alsodepends on the hierarchical level of the leader.Lower level leadership has been characterizedas being more task focused (Hunt 1991). Pre-sumably individuals at higher levels of anorganization more readily understand theimportance of entrepreneurial behaviors, so weexpect greater success from entrepreneurialleadership at these levels.

The availability of resources in an organiza-tion will also influence the success of entrepre-neurial leadership. Relevant resources foropportunity exploitation include investments intechnology, human resources, or sales and mar-keting. In the absence of such investments,entrepreneurial leadership will struggle toachieve its goals of opportunity recognition andexploitation. Furthermore, the strategic orien-tation of an organizationparticularly, itsentrepreneurial orientationwill also influencethe success of entrepreneurial leadership (cf.Dess et al. 2003). Even if individual supervisorsin an organization exhibit entrepreneurial lead-ership, a lack of top management support forentrepreneurial initiatives may prevent employ-ees from pursuing entrepreneurial opportuni-ties. Moreover, similarly to previous researchthat has argued for a particularly important role

of entrepreneurial orientation in dynamic envi-ronments (Prez-Luo, Wiklund, and Cabrera2011), dynamic and highly competitive marketsmay corroborate the impact of entrepreneurialleadership, as such environments will promptemployees to behave entrepreneurially.

In summary, the success of entrepreneurialleadership depends on interrelationshipsbetween leaders, followers, and the context.Entrepreneurial leadership is particularly likelyto achieve its goals of opportunity recognitionand exploitation in situations where leadersthemselves act as entrepreneurial role models,where empowered followers have high levelsof entrepreneurial self-efficacy and entrepre-neurial passion and where organizational andenvironmental contexts and available resourcesare favorable. These factors assist entrepre-neurial leaders in achieving the goals that dis-tinguish entrepreneurial leadership from otherleadership styles: recognizing and exploitingentrepreneurial opportunities.

Measuring Entrepreneurial LeadershipEven if previous conceptual research on

entrepreneurial leadership exists, attempts todirectly measure such leadership are scarce.Furthermore, the few previous measurementattempts did not consider the entrepreneurialopportunity focus of our construct. In theirstudy, Gupta, MacMillan, and Surie (2004) usedsecondary data from the GLOBE study todevelop a scale to measure the roles of entre-preneurial leaders; however, the roles and scaledo not feature the goals of opportunity recog-nition and exploitation. The items in the instru-ment asked respondents to rate the degree towhich each behavior contributes to outstand-ing leadership behavior in their organizationsand societies. Hence, rather than assessing theleadership style of any one person, the respon-dents were giving general evaluations of lead-ership styles. It is not obvious how the measureis specific to entrepreneurial leadership. Forexample, items such as sets high standards ofperformance, skilled at interpersonal rela-tions, and able to induce group members towork together have been described as charac-teristics of transformational leadership else-where (Podsakoff et al. 1990).

Chen (2007) translated the components oforganizational entrepreneurial orientation to ameasure of individual entrepreneurs risk-taking, proactiveness, and innovativeness (seealso Kollmann, Lomberg, and Stockmann 2009;


Kuratko 2007). However, it is unclear howstrategy characteristics at the firm level candirectly translate to the individual level(Davidsson and Wiklund 2001). Even if suchcharacteristics did describe entrepreneurs,being a risk-taker, proactive, and innovativehardly makes one a leader; the ability of anindividual to influence, motivate, and enableothers is central to being a leader (Yukl 2008).None of the existing studies of entrepreneurialleadership taps employee perceptions of theirleaders entrepreneurial leadership characteris-tics in a way that corresponds with our entre-preneurial leadership construct. A reliable andvalid measure of employee perceptions ofentrepreneurial leadership is developed in thefollowing sections.

Empirical StudyThe construction and validation of a new

scale for measuring entrepreneurial leadershipwas done with two studies. Study One gathereddata using an instrument with a large numberof items formulated based on literature reviewand theory development (see Table 2). Afterevaluating the reliability and factor structure inStudy One, we limited the entrepreneurial lead-ership, ENTRELEAD, scale to eight items. Weused Study Two to cross-validate the instru-ment while we investigated the empirical rela-tion of ENTRELEAD with a widely usedmeasure for entrepreneurial orientation (Covinand Slevin 1989) and a scale that measurescreativity-supportive leadership (Tierney andFarmer 2004). Typical for leadership measure-ments, the entrepreneurial leadership scaledeveloped here is specific to a context whereemployees of an organization assess their man-agers entrepreneurial leadership qualities. It isempirically different from measures such asentrepreneurial orientation, where often essen-tially one member of top management evalu-ates the perceived orientation of the wholeorganization.

Study One: Scale DevelopmentMaterials. We employed both deductive andinductive approaches for initial scale item gen-eration (Hinkin 1995). First, the authors creatednumerous items to measure characteristics,behaviors, and actions of entrepreneurialleaders. Sixty-three items were drawn from theliterature and based on authors empiricalinvestigations of firms demonstrating entrepre-neurial leadership (site visits, extensive inter-

views with executives). As entrepreneurialopportunities are abstract and perceiving themis a subjective process, the scale items had torely on attributes and behaviors that previousliterature had linked to opportunity recognitionand exploitation.

At the second stage, the items were subjectedto pretesting among experts on entrepreneur-ship and leadership research to further identifyappropriate items. Six experts that we contactedall agreed to screen our initial item pool. Theexperts were selected based on their extensive(over 20 years each) personal experience asentrepreneurs, management scientists, and/orconsultants. After this expert screening, wecreated the final version of the instrument thatincluded 18 items (Table 2). The process ofmatching opportunity recognition dimensionswith entrepreneurial leadership and the result-ing scale items are all listed in Table 2. We alsomatched the items with previous research onentrepreneurial leadership (Table 2 footnotes).Similar to the international leadership studyGLOBE (House et al. 2004), our items com-prised both leader attributes and behaviors, asis commonplace (Antonakis, Avolio, andSivasubramaniam 2003; Waldman et al. 2001).The final stage of Study One was conductedwith working students and university employ-ees to determine final factor structure of thescale, as reported in the following.

Participants. Sample I (Study 1) data werecollected from 381 working students andemployees at three research universities in theUnited States (317 students and 64 universityemployees). Students were enrolled in eitherentrepreneurship or strategy classes, and thesurveys were administered in a classroomsetting in 20072008. The employee survey wasadministered online, and an invitation to par-ticipate in the survey was emailed to 100employees; 64 complete employee responseswere received within 2 weeks. Of the total 381surveys, 367 included complete data for all theentrepreneurial leadership items of interest.The demographics of both Sample I andSample II are listed in Table 3.

Data Collection Procedure. The surveyinstructions were: The next few questions askabout your IMMEDIATE SUPERVISOR theindividual that you report to directly in yourjob. How well do the following statementsdescribe him/her? (If you have many immediate

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Table 2Creation of Item Pool for the Empirical Study

Key elements of the goal ofentrepreneurial leadership,

that is, opportunityrecognition and exploitation

Items created for scale construction

Definition of entrepreneurialleadership: Influencing anddirecting the performanceof group members towardsthe achievement of thoseorganizational goals thatinvolve recognizing andexploiting entrepreneurialopportunities.

Innovativeness (Schumpeter1934; Vaghely and Julien2010)

Role model: Often comes up with radicalimprovement ideas for theproducts/services the company isselling1,8

Role model: Often comes up with ideas ofcompletely new products/services thatthe company could sell1,8

Influence: Wants me to challenge thecurrent ways we do business1,9

Influence: Challenges and pushes me toact in a more innovative way1,3,5,6,9

Creativity (Ardichvili, Cardozo,and Ray 2003; Goss 2007)

Role model: Is creative2,3,5,6,8,9

Influence: Creates processes that enableus to bypass the unnecessary rules,regulations, and bureaucratic nonsenseof the company (R)1,4,8,10

Influence: Creates a culture in whichpeople are rewarded for trying new anddifferent things even if they do notwork out in the end1,3,6,10

Passion, motivation (Adler andObstfeld 2006; Cardon et al.2009; Dimov 2007; Lee andVenkataraman 2006)

Role model: Is passionate about hiswork1,2,6

Influence: Is able to motivate me (R)2,4,6

Tenacity, persistence (Dimov2007; Ucbasaran, Westhead,and Wright 2009)

Role model: Is persistent in whatever taskhe undertakes2,5,6

Influence: Is flexible2,6

Influence: Is patient2,4,5

Bootstrapping (Alvarez andBusenitz 2001; Baker andNelson 2005)

Role model: Likes to do more with less toprove his / her cleverness1,4,10

Role model: Often looks for lessexpensive ways to run the businesswhile creating better value for thecustomer1,4,10

Influence: Would rather like to hire keyplayers because of personality, not onlybecause of impressive credentials orresumes (R)1,2

Influence: Understands the importance ofprocuring funds and other resourcesoutside the normal channels1,3,10

Vision of future (Ardichvili,Cardozo, and Ray 2003;Schumpeter 1934)

Role model: Is a visionary1,2,4,5,6,7,9

Taking risks (Lee andVenkataraman 2006; Mitchelland Shepherd 2010)

Role model: Is a risk taker1,2,5,6,7

1Thornberry (2006); 2Fernald, Solomon, and Tarabishy (2005); 3Tierney and Farmer (2004); 4Gupta, MacMillan, andSurie (2004); 5Becherer, Mendenhall, and Eickhoff (2008); 6Chen (2007); 7DIntino et al. (2008); 8Mumford et al.(2002); 9Cogliser and Brigham (2004); 10McGrath and MacMillan (2000). (R) = item reverse worded- and coded in thequestionnaire.


Table 3Demographics of Samples I and II

Study 1Sample I (n = 367)

Study 2Sample II (n = 208)

Response rates Students 89 percent Working adults, United States 55 percentOther participants 64 percent Working adults, Finland 46 percent

Gender, self Male 50 percent Male 58 percentFemale 50 percent Female 42 percent

Gender,immediatesupervisor

N/A Male 77 percentFemale 23 percent

Age, self Range 1953 Range 2371Mean 27 Mean 43

Tenure with thecurrentemployer(company)

01 years 34 percent 01 years 9 percent23 years 36 percent 23 years 25 percent45 years 14 percent 45 years 13 percent6 years + 16 percent 6 years + 53 percent

Tenure with thepresentimmediatesupervisor

01 years 52 percent 01 years 18 percent23 years 35 percent 23 years 37 percent45 years 8 percent 45 years 14 percent6 years + 4 percent 6 years + 31 percent

Education High school 2 percent High school 4 percentSome college 22 percent Some college 13 percentBachelors 55 percent Bachelors 43 percentMasters 20 percent Masters 29 percentPh.D. 1 percent Ph.D. 7 percent

Occupationallevel, self

Entry level 8 percent Entry level 2 percentClerical 1 percent Clerical 2 percentAssistant 9 percent Assistant 8 percentSupervisory/managerial 29 percent Supervisory/managerial 32 percentUpper management 5 percent Upper management 36 percentStudent, full-time work 19 percent Student, full-time work 2 percentStudent, part-time work 11 percent Student, part-time work 0.5 percentOther 18 percent Other 17.5 percent

Occupationallevel,immediatesupervisor

Entry level 0 percent Entry level 0 percentClerical 2 percent Clerical 0 percentAssistant 3 percent Assistant 1 percentSupervisory/managerial 47 percent Supervisory/managerial 13 percentUpper management 43 percent Upper management 67 percentStudent, full-time work 0 percent Student, full-time work 0 percentStudent, part-time work 0 percent Student, part-time work 0 percentOther 5 percent Other 19 percent

Immediatesupervisor iscompanyfounder

N/A Yes 29 percentNo 71 percent

Industry, topfour listed

Services 36 percent Finance and insurance 18 percentFinance and insurance 21 percent Professional, scientific, and 16 percentRetail 6 percent technical services 12 percentManufacturing 5 percent Manufacturing

Arts, entertainment, andrecreation

8 percent

RENKO ET AL. 63

supervisors, please pick one supervisor) Pleasecircle one number for each statement. Respon-dents were asked to rate each scale item on afive-point Likert scale, with higher scores indi-cating that employees rate their supervisorhigher on that item.

Analysis and Results. Following the standardprocedures of scale development studies(DeVellis 2003; Hinkin 1995), we conducted anexploratory factor analysis (principal compo-nent analysis, or PCA) to analyze the factorstructure of the scale (eigenvalue loading > 1.0and the elbow bend in the scree plot) and toidentify the factors that match our conceptual-ization. We analyzed the reliability of thefactor(s) using Cronbachs alpha, after whichwe further confirmed the factors using confir-matory factor analysis (CFA) in AMOS.

The result of the PCA was a four-factor solu-tion. The first factor accounted for 37 percent ofvariance with six items. The second factor of twoitems accounted for an additional 8 percent ofvariance in the data. Many items had trouble-some cross-loadings on multiple factors, andfactors three and four only explained 7 and 6percent of variance, respectively. Overall, theseresults showed that some of our initial scaleitems should be disregarded, but others showedmeaningful variance.

Internal consistency was tested using reli-ability analysis with Cronbachs alpha inSample I data. The 10 items that showed mean-ingful loadings on factors one and two in thePCA were retained in the reliability analysis.The item-to-total correlations for all variablesare consistent, exceeding 0.50 in all casesexcept one, Is patient (see Table 4). The10-item scale in Table 4 shows a Cronbachsalpha of 0.89.

Next, we examined two alternative modelsemerging from PCA using AMOS maximumlikelihood factor analysis (CFA). The modelswere evaluated by a variety of goodness-of-fitmeasures classified as absolute, relative, parsi-monious, and population discrepancy. Themeasure of absolute fit used in this study isthe 2 test. Measures of relative fit comparethe hypothesized model to the null model. Therelative fit measures employed in this study arethe Comparative Fit Index (CFI) (Bentler 1990)and the Tucker-Lewis Index (TLI) (Bentler andBonett 1980). Measures of parsimonious fitillustrate whether the overall fit of the modelhas been accomplished by overfitting the data.The parsimonious fit measure used is the 2divided by the degrees of freedom. Finally, thepopulation discrepancy measure used is theroot mean square error of approximation(RMSEA) (Browne and Cudeck 1993).

Table 4Results of Reliability Analysis, Sample I

Items N = 367, 10 itemsCronbachs alpha 0.885

Item-to-totalcorrelation

Alpha if itemdeleted

Often comes up with radical improvement ideas for theproducts/services we are selling

0.662 0.871

Often comes up with ideas of completely newproducts/services that we could sell

0.643 0.872

Is a risk taker 0.609 0.875Is creative 0.796 0.862Is passionate about his/her work 0.613 0.875Is a visionary 0.781 0.865Challenges and pushes me to act in a more innovative way 0.666 0.871Wants me to challenge the current ways we do business 0.595 0.876Is patient 0.337 0.895Is flexible 0.522 0.881


The 2 tests in Sample I data revealed thatthe one general factor model with eight itemsis superior to the 10-item model (Table 5).Wheaton et al. (1977) suggest that a 2/df ratioof approximately five or less is reasonable,whereas others suggest that degrees of freedomratios in the range of 2:1 or 3:1 are indicative ofan acceptable fit (Arbuckle 2006). Thus, weaccepted the final 2/df ratio of 1.71. This eight-item, one-factor model also yields goodness-of-fit indices of >0.90 for both the CFI and the TLI.The RMSEA achieved a value of 0.08 (0.04 inthe final model) indicating an acceptably closefit between the sample coefficients and theestimated population coefficients (Arbuckle2006; Browne and Cudeck 1993; Hair et al.2006). Because the data were collected fromsingle informants at one point of time, the finalstep of analysis included two correlated errorterms within the eight-item factor solution, asper Byrne, Shavelson, and Muthen (1989). Thisstep further improved the fit indexes in SampleI data (see Table 4): 2 (16, N = 367) = 27.4, a2/df ratio of 1.71, a CFI of 0.99, a TLI of 0.99,and an RMSEA of 0.04. Based on the fit indicesobtained from Sample I data, the one-factormodel of eight variables provides a good fit tothe data (Table 5).

Study Two: Scale Validation andDiscriminant Validity

The results of Study One were replicatedand extended in Study Two. Although StudyOne provided important evidence regardingthe factor structure of the entrepreneurial lead-ership scale, several limitations needed to beaddressed (Hinkin 1995). First was the lack of

an independent confirmation of the eight-itemmodel. Second, Study One did not allow adirect comparison between entrepreneurialleadership and other relevant constructs, suchas entrepreneurial orientation and creativity-supporting leadership. To address these limita-tions and to provide evidence of discriminantvalidity in Study Two, we compared the entre-preneurial leadership scale items with entrepre-neurial orientation (Covin and Slevin 1989)and Supervisor Creativity-Supportive Behavior(Tierney and Farmer 2004) scales. Finally, thevalidity of the scale could be improved if itwere demonstrated that company foundersreceive higher scores on entrepreneurial lead-ership so this was assessed.

Materials. The survey included the eight itemsderived from Study One. After expert review, thewording of some items was changed to reflectuniformity (e.g., Is a visionary was rephrasedas Has a vision of the future of our business).A seven-point Likert scale was used, and we alsoasked the respondents demographic questions(see Table 3) and included a yes/no question ofwhether their immediate supervisor (the onethey assessed with the eight entrepreneurialleadership items) was also the founder of theirfirm. To test construct validity, we included theCovin and Slevin (1989) nine-item scale forentrepreneurial orientation (Cronbachs alpha0.85), and the Tierney and Farmer (2004)16-item Supervisor Creativity-Supportive Behav-ior scale (Cronbachs alpha 0.97), both on aseven-point Likert scale. Finally, we includedthe 23 transformational leadership items fromPodsakoff et al. (1990).

Table 5Indexes Obtained in Confirmatory Factor Analysis

Analysis 2 df 2/df CFI TLI RMSEA

Sample I (n = 367)One general factor model, 10 items 213.76 35 6.11 0.90 0.87 0.12One general factor model, 8 items 86.37 20 4.32 0.96 0.94 0.08One general factor model, 8 items, two

correlated error terms27.38 16 1.71 0.99 0.99 0.04

Sample II (n = 208)One general factor model, 8 items 108.26 20 5.41 0.93 0.91 0.10One general factor model, 8 items, two

correlated error terms47.88 16 2.99 0.97 0.96 0.08

RENKO ET AL. 65

Participants. Sample II data were collectedfrom working adults in the United States andFinland. Seventeen companies of various sizesand industries in the United States agreed toparticipate as survey sites, and 166 completeresponses were collected from their employees(55 percent response rate). Forty-two completesurveys were collected from working adultsin Finland (46 percent response rate); therespondents in Finland worked for a variety oforganizations in different industries. The demo-graphics of Sample II are listed in Table 3.

Data Collection Procedure. Data collectionwas completed online using Questionpro(http://www.questionpro.com), which allowedrandomization of items within the survey. Alink to the online survey was embedded in aninvitation email that was sent to employees ofparticipating organizations.

Analysis and Results. We conducted threeexploratory factor analyses (PCA) to investigatethe factor structure and discriminant validity of(1) entrepreneurial leadership and entrepre-neurial orientation (Covin and Slevin 1989);(2) entrepreneurial leadership and SupervisorCreativity-Supportive Behavior Scale (Tierneyand Farmer 2004); and (3) entrepreneurialleadership and transformational leadershipscale (Podsakoff et al. 1990) (eigenvalueloading > 1.0 and the elbow bend in the screeplot). We then replicated the CFA from StudyOne to confirm the factor structure of entrepre-neurial leadership. Finally, we assessedwhether having a firm founder as a leaderinfluences respondents assessment of entre-preneurial leadership.

The results of the PCAs, using Varimax rota-tion and incorporating entrepreneurial leader-ship items with the Tierney and Farmer (2004)scale as well as Covin and Slevin (1989) scale,are shown in Table 6. As expected, based onour earlier description of construct domains,entrepreneurial leadership items load on afactor of their own, and this happens bothwhen analyzed with entrepreneurial orientationor creativity supportive leadership scale items.The only overlap occurs when one of the cre-ativity supportive behavior items (Serves as agood role model for creativity) cross-loads onthe same factor with entrepreneurial leadershipitems. Because role-modeling is an essentialcomponent of being an entrepreneurial leader,this overlap actually further supports the valid-

ity of our new scale as a measurement of entre-preneurial leadership. Supervisor Creativity-Supportive Behavior factor (factor 1) explains42 percent of variance, whereas entrepreneur-ial leadership items (factor 2) explain 29percent of variance.

With regard to entrepreneurial orientation(Table 6) and consistent with our conceptualdevelopment, entrepreneurial leadership itemsload on factor 1 (which explains 32 percent ofvariance), whereas entrepreneurial orientationitems are divided between factors 2 and 3(explaining 19 and 13 percent of variance,respectively). Similar loadings of entrepreneur-ial orientation items have been found(Chadwick, Barnett, and Dwyer 2008; Knight1997). Combined, these findings providesupport for discriminant validity of the entre-preneurial leadership construct. It is differentfrom entrepreneurial orientation of the organi-zation and from supervisor creativity-supportive behavior. Though PCA suggests thatentrepreneurial orientation and entrepreneurialleadership are two separate constructs, thepositive correlation coefficient (0.472) betweenthe mean value of the two scales is significantat p < .001. Also, the correlation between thescale mean for entrepreneurial leadership andsupervisor Creativity-Supportive Behavior Scaleis significant (0.812; p < .001). Because of theconceptual differences and overlap previouslydiscussed, we anticipated that entrepreneurialleadership would be positively related tocreativity-promoting leadership and entrepre-neurial orientation while being empirically dis-tinct. Study 2 confirms these patterns.

We also used PCA to analyze entrepreneurialleadership items together with the 23 transfor-mational leadership items from Podsakoff et al.(1990). This analysis is problematic becauseour sample size (n = 208) limits the statisticalconclusion validity of these results. Hence,these results are only provided as initialevidence of construct validity, and furthertesting is needed. When a PCA was run thatincluded both transformational leadershipitems (Podsakoff et al. 1990) and entrepreneur-ial leadership items, all eight entrepreneurialleadership items loaded on the first factor,which explains 23 percent of variance. In addi-tion to the entrepreneurial leadership items,this factor also includes the following twointellectual stimulation items from the trans-formational leadership scale: His/her ideaschallenge members of the organization to


Tab

le6

Exploratory

FactorAnalysis

Results,

Varim

axRotation.(Sam

ple

II,n=208)

Scale

Item

sFactorload

ings

Scale

Item

sFactorload

ings

F1

F2

F1

F2

F3

SupervisorCreativity-SupportiveBehavior(Tierneyand

Farmer2004)

Bols

ters

my

confiden

cein

my

crea

tive

pote

ntial

.0.

83

EntrepreneurialOrientation(CovinandSlevin1989)

Inge

ner

al,

the

top

man

ager

sof

my

firm

favo

r..

.St

rong

emphas

ison

R&

D,

tech

nolo

gica

lle

ader

ship

,an

din

nova

tions.

0.42

Tak

espri

de

inm

yw

ork

and

acco

mplish

men

ts.

0.83

Pra

ises

my

crea

tive

work

.0.

80H

ow

man

ynew

lines

of

pro

duct

sor

serv

ices

has

your

firm

mar

ket

edin

the

pas

t5

year

s?..

.V

ery

man

y.0.

81Enco

ura

ges

me

toco

llab

ora

tew

ith

oth

ers

atw

ork

.0.

80Publicl

yre

cogn

izes

my

innova

tion

effo

rts.

0.80

Chan

ges

inpro

duct

/ser

vice

lines

hav

ebee

n..

.U

sual

lydra

mat

ic0.

78

Sta

nds

up

for

my

innova

tive

effo

rts.

0.77

Indea

ling

with

com

pet

itors

my

firm

...

Isve

ryoften

the

firs

tbusi

nes

sto

intr

oduce

new

pro

duct

s/se

rvic

es,

oper

atin

gte

chnolo

gies

,ad

min

istr

ativ

ete

chniq

ues

,et

c.

0.60

Pra

ises

my

crea

tive

effo

rts

even

ifth

eyar

enot

succ

essf

ul.

0.76

Work

sper

sist

ently

tose

cure

reso

urc

esI

nee

dto

be

innova

tive

inm

yw

ork

.0.

74In

dea

ling

with

com

pet

itors

my

firm

...

Typ

ical

lyin

itia

tes

actions

whic

hco

mpet

itors

then

resp

ond

to.

0.70

Tri

esto

obta

inw

ork

-rel

ated

info

rmat

ion

nec

essa

ryfo

rm

yjo

b.

0.73

Indea

ling

with

com

pet

itors

my

firm

...

Typ

ical

lyad

opts

ave

ryco

mpet

itiv

e,undo-the-

com

pet

itors

post

ure

.0.

70

Enco

ura

ges

me

toco

mm

unic

ate

open

lyw

ith

peo

ple

inoth

erdep

artm

ents

.0.

73In

gener

al,

the

top

man

ager

sof

my

firm

hav

e..

.A

stro

ng

pro

cliv

ity

for

hig

hri

skpro

ject

s(w

ith

chan

ces

of

very

hig

hre

turn

s).

0.72

Stre

sses

the

import

ance

of

idea

shar

ing

among

collea

gues

.0.

72In

gener

al,

the

top

man

ager

sof

my

firm

bel

ieve

that

...

Ow

ing

toth

enat

ure

of

the

envi

ronm

ent,

bold

,w

ide-

rangi

ng

acts

are

nec

essa

ryto

achie

veth

efirm

sobje

ctiv

es.

0.63

Enco

ura

ges

me

tose

tin

nova

tion

goal

s.0.

71Pro

vides

valu

edre

war

ds

for

my

crea

tive

work

.0.

71W

hen

confr

onte

dw

ith

dec

isio

n-m

akin

gsi

tuat

ions

invo

lvin

gunce

rtai

nty

,m

yfirm

...

Typ

ical

lyad

opts

abold

,ag

gres

sive

post

ure

inord

erto

max

imiz

eth

epro

bab

ility

of

explo

itin

gpote

ntial

opport

unitie

s.

0.68

He

atte

mpts

toge

tm

ater

ials

Inee

dto

do

my

job.

0.70

Act

ivel

yse

arch

esw

ork

inte

ract

ion

with

outs

ide

mem

ber

s.0.

63

Serv

esas

ago

od

role

model

for

crea

tivi

ty.

0.62

0.62

EntrepreneurialLeadership

Often

com

esup

with

radic

alim

pro

vem

ent

idea

sfo

rth

epro

duct

s/se

rvic

esw

ear

ese

llin

g.0.

84

EntrepreneurialLeadership

Often

com

esup

with

radic

alim

pro

vem

ent

idea

sfo

rth

epro

duct

s/se

rvic

esw

ear

ese

llin

g.0.

78

Often

com

esup

with

idea

sof

com

ple

tely

new

pro

duct

s/se

rvic

esth

atw

eco

uld

sell.

0.83

Often

com

esup

with

idea

sof

com

ple

tely

new

pro

duct

s/se

rvic

esth

atw

eco

uld

sell.

0.80

Tak

esri

sks.

0.77

Tak

esri

sks.

0.73

Has

crea

tive

solu

tions

topro

ble

ms.

0.74

Has

crea

tive

solu

tions

topro

ble

ms.

0.85

Dem

onst

rate

spas

sion

for

his

/her

work

.0.

70D

emonst

rate

spas

sion

for

his

/her

work

.0.

78H

asa

visi

on

of

the

futu

reof

our

busi

nes

s.0.

70H

asa

visi

on

of

the

futu

reof

our

busi

nes

s.0.

82Chal

lenge

san

dpush

esm

eto

act

ina

more

innova

tive

way

.0.

68Chal

lenge

san

dpush

esm

eto

act

ina

more

innova

tive

way

.0.

83

Wan

tsm

eto

chal

lenge

the

curr

ent

way

sw

edo

busi

nes

s.0.

65W

ants

me

toch

alle

nge

the

curr

ent

way

sw

edo

busi

nes

s.0.

74

RENKO ET AL. 67

re-examine some of the basic assumptions oftheir work, and Challenges people to thinkabout old problems in new ways. Clearly,intellectual stimulation plays a role in entrepre-neurial leadership. Also, this first factorincludes one item from the articulating visionsubscale of Podsakoff et al. (1990) transforma-tional leadership: Is always seeking newopportunities for the organization. Suchbehavior is aligned with our entrepreneurialleadership construct, and hence its loadingwith entrepreneurial leadership items is notunexpected. Though these results from PCA arenot a rigorous test of our entrepreneurial lead-ership scale validity because of the smallsample size, they do seem to confirm ourexpectation that the intellectual stimulationcomponent of transformational leadershippartly overlaps with entrepreneurial leadership.Besides this overlap, transformational andentrepreneurial leadership are distinctconstructs.

Cross-validation of the entrepreneurial lead-ership scale using CFA in Sample II yieldsindexes of fit similar to those found in SampleI (see Table 5). Though the high RMSEA value(0.10) warrants caution when interpreting theresults from this sample, goodness-of-fit mea-sures may vary from acceptable to unaccept-able depending on the index used (Hair et al.2006). Similar to Study One, when two corre-lated error terms are included, the fit indexesare improved (see Table 5): 2 (16,N = 208) = 47.88, a 2/df ratio of 2.99, a CFI of0.97, a TLI of 0.96, and an RMSEA of 0.08.Overall, the model fit in Sample II is acceptableand validates the one factor entrepreneurialleadership model. An eight-item scale best mea-sures employees perceptions of their supervi-sors entrepreneurial leadership and shows areliability Cronbachs alpha of 0.90 in Sample Idata and 0.93 in Sample II data.2 The eightitems of the ENTRELEAD scale are listed in theAppendix.

The construct validity of our ENTRELEADscale would be improved if business foundersactually received higher scores on the scale

than nonfounder managers. On the seven-pointENTRELEAD scale, founder-leaders (n = 60)receive a mean of 5.59 (standard deviation[S.D.] = 0.98) and nonfounder leaders (n = 148)received a mean of 4.84 (S.D. = 1.42), t-testp-value < .001. Founders exhibit more of thoseattributes and behaviors that typify entrepre-neurial leaders than other managers.

Discussion and ConclusionsGiven the common occurrence of entrepre-

neurial leadership in academic writings,3 wewere surprised to find that the literature haslacked a clear definition and has paid littleattention to measurement issues. In this study,we have addressed these research gaps bydefining the entrepreneurial leadership con-struct and by showing its relationship withclosely related constructs such as entrepre-neurial orientation, transformational leader-ship, and creativity-supportive leadership. Wehave also introduced a model that focuses onthe factors that moderate the effects ofentrepreneurial leadership in an organization.Specifically, both environmental and organiza-tional contexts as well as follower susceptibil-ity to entrepreneurial leadership affect therelationship between this leadership style andits opportunity-focused outcomes. We havebuilt and empirically tested a measurementscale, ENTRELEAD, for assessing entrepreneur-ial leadership.

Implications for ResearchEntrepreneurial leadership is a leadership

style so we have treated it as a leadershipconstruct, rather than as a strategic manage-ment construct (Covin and Slevin 2002; Ireland,Hitt, and Sirmon 2003; McGrath and MacMillan2000) or as a new venture phenomenon(Ensley, Hmieleski, and Pearce 2006; Jensenand Luthans 2006; Swiercz and Lydon 2002).Entrepreneurial leadership is not specific to anyone type of organization, industry, or cultureand can flourish in new or established firms,for-profit or not-for-profit organizations, andformal or informal groups. Entrepreneurial

2We also assessed the factor structure with regard to possible differences between the Finnish and Americanrespondents in Sample II but found no significant differences. ENTRELEAD scale has Cronbachs alphareliability of 0.91 among the American respondents in Sample II and 0.95 among the Finnish respondents.3A keyword search for entrepreneurial leadership in over 1,800 scholarly journals since 1990 returned 585results, with 50 including entrepreneurial leadership in the abstract, indicating that the term was central tothe paper. The titles of 23 academic papers contained entrepreneurial leadership.


leadership draws attention to enterprising indi-viduals, even when the outcomes of this lead-ership style are assessed at the group andorganizational levels.

Entrepreneurial leaders directly contributeto opportunity recognition and exploitation intheir organizations, as well as influence theirfollowers by acting as role models. They directfollowers attention to entrepreneurial goalsand motivate and encourage them to pursuethese goals. The eight-item ENTRELEAD scale(see Appendix) measures the perceptions ofthose who are being directly influenced by aleader. Similar to other leadership instruments,(e.g., Antonakis, Avolio, and Sivasubramaniam2003; House et al. 2004; Waldman et al. 2001),the items of the scale comprise both leaderattributes and behaviors. Our empirical resultsshow that ENTRELEAD is both reliable andvalid. Our validity tests have shown that found-ers receive higher scores in entrepreneurialleadership when rated by their employees thannonfounders. This is encouraging as it demon-strates content validity as the instrument cap-tures opportunity-focused leadership. Weencourage further use and validation of thescale in any setting where subordinates canevaluate their supervisors along the scaledimensions.

Though entrepreneurial leadership differsfrom a more general transformational leader-ship style through its focus on those leaderattributes and behaviors that can contribute toentrepreneurial behaviors (opportunity recog-nition and exploitation), the two leadershipstyles share some common ground in the areaof intellectual stimulation. In transformationalleadership literature, intellectual stimulationhas been described as those leader behaviorsthat challenge followers to reexamine some oftheir assumptions about their work and rethinkhow it can be performed (Podsakoff et al.1990). To the extent that these behaviors cancontribute to recognizing new business oppor-tunities, entrepreneurial and transformationalleadership overlap. Entrepreneurial leadershipalso shares some conceptual similarities withcreativity-supportive leadership. Specifically,creativity is one factor in the opportunity rec-ognition process (Ardichvili, Cardozo, and Ray2003; Schumpeter 1934).

Implications for PracticeIn terms of leadership practice, managers

can benefit from this research by adopting the

identified roles of an entrepreneurial leader.Bold, innovative, entrepreneurial behaviors areincreasingly recognized as those that canrevitalize organizations and provide a competi-tive advantage in dynamic markets. Economicand societal challenges have elicited calls formore entrepreneurial attitudes and behaviorseven in areas previously thought of asantientrepreneurial, such as government, edu-cation, and military. The conceptualization ofentrepreneurial leadership provided hereshould guide individual leaders toward entre-preneurship. An entrepreneurial leader ener-gizes followers by providing them with anexciting, opportunity-focused vision ratherthan by giving rewards and punishmentsbased on past performance. By living thatvisionthrough opportunity recognition andexploitationentrepreneurial leaders demon-strate their own empowerment. Effects of suchopportunity-focused behavior and examples ofempowerment should make followers feelmore in control of the organizations entrepre-neurial future (and their own).

Ideas for Future ResearchThough we have outlined the key elements

of entrepreneurial leadership, we have notfocused on the individual or contextual ante-cedents of entrepreneurial leadership. Researchon other forms of leadership has exploredindividual-level antecedents, such as leaderdemographics, cognitive ability, personality,attitudes and values, affect, and emotional intel-ligence. These factors may also prove importantfor the development of entrepreneurial leader-ship. We also encourage future research toexamine leaders positional and organizationalcontext; particularly, the position leadersoccupy within the organization may shape theirentrepreneurial leadership style, and it may bethat such leadership occurs more frequentlyhigher in the hierarchy. Previous research sug-gests that leaders located at higher levels ofmanagement or in decentralized, organic orga-nizations may enjoy higher discretion (Shamirand Howell 1999), enabling them to engage inentrepreneurial leadership. Finally, previous lit-erature suggests that leaders have a key role infacilitating the adaptation of teams and indi-viduals (e.g., Kozlowski et al. 2009). The role ofan entrepreneurial leader as someone whofacilitates the adaptation of followers entrepre-neurial passion and self-efficacy is worthy offuture research.

RENKO ET AL. 69

LimitationsA limitation of our empirical approach is

reliance on single-informant data at a singlepoint of time. We were unable to assess, forexample, the consequences of entrepreneurialleadership over time. Future research shouldvalidate the instrument in a longitudinal settingwhere outcomes such as recognized andexploited opportunities can be assessed.Research will benefit from having multiple fol-lowers assess one leader (interrater reliability)and from the development of a self-assessmenttool for leaders to evaluate their own entrepre-neurial leadership. Finally, our small samplesize prevented us from running factor analysesthat would have simultaneously included all thescales we wanted to assess for discriminantvalidity. Larger sample sizes in the future willallow more rigorous tests of the factor structureof ENTRLEAD in comparison with relatedconstructs.

ConclusionEntrepreneurial leaders focus on promoting

opportunity recognition and exploitationthrough their own actions and through theirinfluence on others. By setting an examplethrough engaging in entrepreneurial behaviors,they encourage others to emulate their behav-ior and challenge the status quo. The entrepre-neurial leaders passion, creativity, and visionmotivate others to experiment and learn forthemselves. Such leadership is an integratedcharacteristic of organizations that seize andprofit from new opportunities as they arise.

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AppendixENTRELEAD scale items

In the following set of questions, think ofyour immediate manager (or team leader). Howwell do the following statements describe him/her? (If you have many immediate managers,please pick one).

1 Often comes up with radical improvementideas for the products/services we areselling

2 Often comes up with ideas of completelynew products/services that we could sell

3 Takes risks4 Has creative solutions to problems5 Demonstrates passion for his/her work6 Has a vision of the future of our business7 Challenges and pushes me to act in a more

innovative way8 Wants me to challenge the current ways we

do business


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