Entrepreneurial Leadership success and New Venture Performance can be viewed as an intentional, planned behavior (Krueger & Carsrud, 1993), the creation of organization (Gartner, 1988) and the creation of wealth via the pursuit of new opportunities that others have not perceived (West & Meyer, 1998; West & Wilson, 1995).
Entrepreneurship is a process by which individuals–either on their own or inside organizations—pursue opportunities without regard to the resources they currently control (Stevenson, Roberts & Grousbeck, 1989). Even the different definitions on entrepreneurship, it can be viewed as the creation of value by seizing or creating opportunities to meet actual or potential market needs (e.g. Kirzner, 1973; Schumpeter, 1934).
Entrepreneurial leadership means that the entrepreneur(s) have high tolerance of ambiguity, persistence, perseverance, are enthusiastic and dynamic leaders with high networking and communication abilities; show creativity (Stuart and Abetti, 1987), and builds entrepreneurial culture and organization (Timmons, 1999). Briefly, the entrepreneur used attributes such as risk taking, proactiveness and innovativeness (Cauthorn, 1989).
Some studies argued that entrepreneurial leadership displayed by the Top Management Team fundamentally drives innovation in firms (Greenberger & Sexton, 1988). In younger or entrepreneurial companies key individuals, such as founders and CEOs, may be particularly influential on performance (Meyer & Dean, 1990; West & Meyer, 1998). Miller (1983) found that the most entrepreneurial firms had the most autonomous leaders.
A democratic collaborative leadership style encourages group innovation (King & Anderson, 1990; West & Wallace, 1988). West and Wallace (1988) found that peer leadership discriminated significantly between highly innovative and less innovative teams in primary health care practices, as reliably rated by independent experts. The highly innovative teams exhibited a higher degree of leadership support, goal emphasis, team building and work facilitation. Ammeter and Dukerich (2002) investigated an international engineering industry research institute based in the U.S. and identified factors that are associated with high or “breakthrough” performance in project teams. In this study, leader behaviors were found to be significant predicators of project cost performance.
In addition, top management can affect the development and implementation of new products by providing the leadership necessary to create a climate that stimulates innovative driven in the organization (Bingham, 1989). Stuart and Abetti (1987) investigated the major factors contributing to success by using 24 new technical ventures and found that entrepreneurial leadership was a positive contributor to subjective success and initial qualified success. Surveying over 190 venture dyads, Watson and his colleagues (1995) found that leadership connected to perceived success. Leadership involved partners who contributed to leadership functions of problem solving, setting quality standards, continually improving, and setting goals.