Academic journal article Academy of Entrepreneurship Journal

Leadership, Organizational Effectiveness and Entrepreneurship in Small and Medium Enterprises-A Study in Indian Context

Academic journal article Academy of Entrepreneurship Journal

Leadership, Organizational Effectiveness and Entrepreneurship in Small and Medium Enterprises-A Study in Indian Context

Article excerpt


There has been a great deal of attention paid to the subject of entrepreneurship over the past few years, stemming primarily from the discovery by economic analysts that small firms contribute considerably to economic growth and vitality. Moreover, many people have chosen entrepreneurial careers because doing so seems to offer greater Economic and psychological rewards than does the large company route. Yet, despite all of the discussion and attention paid to this issue, two fundamental questions remain unanswered: What is entrepreneurship? And can you measure it?

The role of the entrepreneur is difficult to establish if the concept of entrepreneurship is inadequately defined. This lack of a clear entrepreneurship paradigm poses problems for both policy makers and for academics. Entrepreneurship is the pursuit of a discontinuous opportunity involving the creation of an organization (or sub-organization) with the expectation of value creation to the participants. The entrepreneur is the individual (or team) that identifies the opportunity, gathers the necessary resources, creates and is ultimately responsible for the performance of the organization. Therefore, entrepreneurship is the means by which new organizations are formed with their resultant job and wealth creation. Considerable effort has also gone into trying to understand the psychological and sociological wellsprings of entrepreneurship. These studies have noted some common characteristics among entrepreneurs with respect to need for achievement, perceived locus of control, orientation toward intuitive rather than sensate thinking, and risk-taking propensity. In addition, many have commented upon the common, but not universal, thread of childhood deprivation, minority group membership and early adolescent economic experiences as typifying the entrepreneur.

Objectives of the Study

The objective of the studies is as follows:

(1) To identity the extent of success in creation of new firms related with the demographic and Socioeconomic factors like parental background, level of education, age and stage in family's life cycle and financial background.

(2) To find out the key indicators of entrepreneurial success as perceived by the entrepreneurs selected in the study.

What is Entrepreneurship?

The earliest definition of entrepreneurship, dating from the eighteenth century, used it as an economic term describing the process of bearing the risk of buying at certain prices and selling at uncertain prices. Other, later commentators broadened the definition to include the concept of bringing together the factors of production. This definition led others to question whether there was any unique entrepreneurial function or whether it was simply a form of management. Early this century, the concept of innovation was added to the definition of entrepreneurship. This innovation could be process innovation, market innovation, product innovation, factor innovation, and even organizational innovation. Later definitions described entrepreneurship as involving the creation of new enterprises and that the entrepreneur is the founder.

Leadership style in Entrepreneurship

Leadership guru Warren Bennis gives the title "The End of Leadership'" to make his point that effective leadership cannot exist without the full inclusion, initiatives, and the cooperation of employees. In other words, one cannot be a great leader without great followers (Bennis, Winter 2001). Another leadership guru, Barry Posner, makes the following observations about the needed change in how business leadership is viewed: In the past, business believed that a leader was like the captain of a ship: cool, calm and collected. Now, we see that leaders need to be human. They need to be in touch, they need to be with people. Leaders need to be a part of what's going on, not apart from what's going on (Tricia Bisoux quote, 2002). …

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