Academic journal article Academy of Entrepreneurship Journal

The Influence of the Leader and Led Relationship on the Intrapreneurship Environment in UK Smes

Academic journal article Academy of Entrepreneurship Journal

The Influence of the Leader and Led Relationship on the Intrapreneurship Environment in UK Smes

Article excerpt

INTRODUCTION

An ever-increasing consumer demand for improved products and services has called for a dramatic increase in the speed of innovation. A noteworthy outcome of this has, and will continue to be, an intense effect for the Small or Medium Size Enterprise (SME) in which the risk associated with innovative activities versus the assessment of the potential rewards becomes a critical consideration for an entrepreneur owner/manager. For perspective, the impact of the success/failure of SMEs can be substantial in that out of 5.5 million UK businesses, 99.3% were classified as such (1) and defined by fewer than 250 employees. This paper focuses upon intrapreneurship in SME businesses as employee contribution to innovative thinking can be critical to sustainability and competitiveness. Intrapreneurship can be influenced by many external and internal factors. The direction of the research confines to the internal factors which are all of within the control of the business leader. The aim of the study, therefore, becomes the exploration of the extent to which the relationship between the "leader" (the entrepreneur owner) impacts upon the organizational environment and the ensuing effect on the "led" (the intrapreneur employee). The term "Intrapreneurship'" was coined by Pinchot & Pinchot (1978) as employee engagement in their workplace setting where they may or may not be encouraged to think and act innovatively. Furthermore, although a universally accepted definition is hard to find, it is generally accepted that they will be company employees often with the alternative title of corporate entrepreneurs (Ma et al., 2016). Of note, (Haase et al., 2015) apply the expression "their involvement in the life of the firm is as if it was their own".

Intrapreneurs play a significant role as an integral part of the human capital within any company and there are two fundamental knowledge-intensive considerations that the extant literature proposes underpin the likelihood of intrapreneurship within an organization; human capital in terms of harnessing individual's knowledge, skills, abilities and ideas, and organizational support (Saks, 2006), in terms of providing the appropriate setting, conditions, resources and motivation, and, the potential output of a synergy between them. Rivera (2017) suggests that it is the business leader with a sustained commitment for transferring knowledge into organizational growth who will be skilled in the intrapreneurial concept. Within the SME environment we observed the leader referred to as Founder, Owner, Chairman, Managing Director or Director. For consistency and to avoid confusion, we have adopted an all-embracing title which we define in this research paper as the "Leader".

LITERATURE REVIEW

SME Leadership

In contrast to large organizations, the personal characteristics of the SME Leader generally considered a highly influential factor in the workplace (Irwin & Scott, 2010, Barringer et al., 2005). As such, this study confines entrepreneurial leadership in businesses led and managed by the founder/owner who is actively involved in the business on a day-to-day basis driving the conception, growth, current and future strategy.

We may posit that in the early years of trading, the SME business leader persona and the identity of the business may be indistinguishable. We propose the entrepreneurial leadership approach can materially influence employees to champion or ignore innovation. Kassa & Raju (2015) concur in that advocating or sponsoring new ideas positively influences intrapreneurial engagement. Furthermore, we should consider the findings of Scozzi et al. (2005) which concluded entrepreneurs felt that most innovative initiatives or original ideas came primarily from them, not the workforce or third party collaborations. Todd (2010) proposes that company owners often struggle with accepting new ideas that may threaten the foundations of the business models they invented. …

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