Entrepreneurial Leadership Styles a Comparative Study of Sweden and China International Business Term Paper

Pages: 48 (13285 words)  ·  Bibliography Sources: 0  ·  Level: College Senior  ·  Topic: Leadership

Entrepreneurial Leadership Styles - Comparative Study of Sweden and China

In recent years, researchers have contributed different causes as responsible for the success of a country's economic system, and as a result, differing models for economic growth suggest multiple possible paths for success. Two countries of notable global success, attributable to each of its' entrepreneurial leadership skills, are Sweden and China. The world is changing fast, and China is now an important part of the global economy. However, cooperation in Europe is growing closer and broader. Sweden is a small nation with a history of major success on the global market, success that has been attributable to the Swedish business sector's strong position and skilled company leaders. This paper will offer a comparative study of the entrepreneurial leadership of both Sweden and China, taking into consideration such factors as their political and economic history, leadership styles, and regulatory changes. It will conclude with an analysis of the factors that both entrepreneur leadership styles have in common.

The fact that entrepreneurship is a catalyst for economic growth and development is well-known. Small businesses in the United States, for example, account for 58% of the private workforce, 51% of GNP and about 75% of net new jobs (Asel, 2003). Entrepreneurship is even more important to the growth of developing economies where small businesses frequently account for 80% or more of employment and virtually all job growth (Asel, 2003). Differing economic, cultural and political circumstances abroad also suggest the need for a better understanding of entrepreneurship with a local context (Asel, 2003). Fortunately, the ability to study entrepreneurship abroad is expanding rapidly as a result of the emergence of global private equity markets and microfinance. International entrepreneurship spans cultural boundaries and involves a variety of stakeholders, including the entrepreneur, investors and policy makers (Asel, 2003).

Entrepreneurs operate at the margins of the economy exploiting opportunities overlooked by incumbents. They innovate to develop promising, but untested markets and flexibly managing scarce resources in an uncertain, often unforgiving environment (Asel, 2003). International entrepreneurship thus offers a rich tapestry to explore many of the issues that are at the heart of business strategy and economic development (Asel, 2003). Companies play a key role with regard to achieving long-term sustainable development based on economic growth, environmental considerations and social commitment. Finally, an economically thriving society with low inflation creates an important base for business growth.

Entrepreneurial Leadership

Entrepreneurial leadership is leadership that is based on the attitude that the leader is self-employed. Leaders of this type take initiative and act as if they are playing a critical role in the organization and energize their people, demonstrate entrepreneurial creativity, search continuously for new opportunities and pursue them, take risk, venture into new areas and provide strategic direction and inspiration to their people (Kotelnikov, 2005). These leaders also take responsibility for the failures of their team, learn from these failures and use them as a step to ultimate success and strategic achievement. Entrepreneurial leadership involves instilling the confidence to think, behave and act with entrepreneurship in the interests of fully realizing the intended purpose of the organization to the beneficial growth of all stakeholders involved (Kotelnikov, 2005). In the new era of rapid changes and knowledge-based enterprises, managerial work becomes increasingly a leadership task. Leadership is the primary force behind successful change, as leaders empower employees to act on the vision (Kotelnikov, 2005). They execute through inspiration and develop implementation capacity networks through a complex web of aligned relationships (Kotelnikov, 2005).

Venture values are different from established corporate shared values. Research indicates that entrepreneurial independence demands space for action and trust, while independence in a corporation implies responsibility and control imposed from above (Kotelnikov, 2005). Entrepreneurship is important because any county's economy demands agility, experimentation, adaptation, and rapid response in order to be first to market. Corporate experimentation comprises analysis, review, somber consideration of facts, and willingness sacrifice speed for thoroughness (Kotelnikov, 2005). Entrepreneurial paranoia, or the impending belief that competitors are catching up, is overshadowed by an essential need to build corporate consensus and minimize perceived risk (Kotelnikov, 2005). Entrepreneurial leadership skills are important because leading innovation is a delicate and challenging process.

As a result, a true leader must encourage expansive thinking in order to generate new ideas, but also filter through these ideas to decide which to commercialize. "Loose tight" leadership alternates the creation of space for idea generation and free exploration with a deliberate tightening that selects and tests specific ideas for further investment and development (Kotelnikov, 2005). Looseness usually dominates the early stages of the innovation process; in the later stages, tightening becomes more important to scrutinize the concepts and bring the selected ones to the market (Kotelnikov, 2005). Those who remain loose too long generate plenty of ideas but have difficulty commercializing them. Those who lock into the tight mode choke off all but most obvious ideas, thus confining innovation to incremental line extensions of existing products that add little value (Kotelnikov, 2005).

An examination of the literature regarding entrepreneurial leadership reveals that creativity is a continuous activity for the entrepreneur, a method of always seeing new ways of doing things with little concern for how difficult they might be or whether the resources are available. But the creativity in the entrepreneur is combine with the ability to innovate, to take the idea and make it work in practice (Kotelnikov, 2005). This seeing something through to the end and not being satisfied until all is accomplished is a central motivation for the entrepreneur. Indeed once the project is accomplished the entrepreneur seeks another mountain to climb because for him or her creativity and innovation are habitual, something that he or she just has to keep on doing (Kotelnikov, 2005).

An "entrepreneur" has been defined as a person who habitually creates and innovates to build something of recognized value around perceived opportunities (Kotelnikov, 2005). The best entrepreneurs have the ability to devise new combinations dependent on their ability to discern relationships between seemingly disparate items. In other words, creativity is the juxtaposition of ideas which were previously thought to be unrelated, and it is the entrepreneurs ability to combine ideas in a unique way or to make useful associations among ideas. Entrepreneurial leadership includes creating an atmosphere where you and others are comfortable expressing new ideas, an atmosphere where ideas are not immediately evaluated and attacked (Kotelnikov, 2005).

The term "entrepreneur" is originally a French word - entreprendre - that means to undertake (Mamede & Davidsson, 2003). According to Casson (1987), it seems to have been introduced into economics by Richard Cantillon in 1755. It was through J.B. Shay in the early 1980's that the expression became recognized, referring to a person who shifted economic resources out an area of lower and into an area of higher productivity and greater yield (Mamede & Davidsson, 2003). The term "entrepreneurship" was coined in the early 1900's, to refer to the actions conducted by the entrepreneur. Wennekers, Thurik and Buis (1997), defined entreprenuership, for research purposes, as the ability and willingness of individuals, both on their own and within organizations: to perceive and create new economic opportunities (new products, new production methods, new organized schemes and new product market combinations); to introduce new ideas in the market, in the face of uncertainty and other obstacles, by making decisions on location, form and the use of resources and institutions; and compete with others for a share of the market.

Entrepreneurial Research and Development and Economic Growth

Although economic growth and development have similar meanings and are sometimes treated interchangeably, there are some distinctions that should be considered. While economic growth mainly refers to the capacity of a nation to become wealthier through the production of more goods and services, economic development ultimately implies that citizens of that nation be better off (Mamede & Davidsson, 2003). Saemundson and Kirchhoff (2002) define economic growth and development as an expression frequently used to refer to improvement in social well being within nations. In economic terms, development has traditionally denoted the capacity of a country, whose initial economic situation has been relatively static for a long time, to generate and maintain growth rates on the order of 5% to 7% or more of its gross national product (Todaro and Smith, 2003). According to Todaro and Smith (2003), before the 1970's, development was normally seen as an economic phenomenon in which rapid increase in the gross national product would trickle down to the population in the form of jobs or other economic opportunities or at least generate the proper conditions for the distribution of the economical and social benefits of growth.

Though different perceptions regarding the concept may exist, the traditional economic vision of development was reconsidered during the 1970's (Mamede & Davidsson, 2003). The experience of developing nations during the 1950's and 1960's, in which the realization of economic growth targets did not mean improvement in the levels of living of their population, indicated that the existing definition of the term was… [END OF PREVIEW]

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