{"id":36,"date":"2015-02-25T23:15:47","date_gmt":"2015-02-25T23:15:47","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/man4030-org-leadership\/chapter\/1-4-leadership-entrepreneurship-and-strategy\/"},"modified":"2023-06-07T15:36:49","modified_gmt":"2023-06-07T15:36:49","slug":"1-4-leadership-entrepreneurship-and-strategy","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/man4030-org-leadership\/chapter\/1-4-leadership-entrepreneurship-and-strategy\/","title":{"raw":"Leadership, Entrepreneurship, and Strategy","rendered":"Leadership, Entrepreneurship, and Strategy"},"content":{"raw":"
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Learning Objectives<\/h4>\r\n
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  1. Know the roles and importance of leadership, entrepreneurship, and strategy in principles of management.<\/li>\r\n \t
  2. Understand how leadership, entrepreneurship, and strategy are interrelated.<\/li>\r\n<\/ol>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    The principles of management are drawn from a number of academic fields, principally, the fields of leadership, entrepreneurship, and strategy.<\/p>\r\n\r\n

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    Leadership<\/h2>\r\n

    If management is defined as getting things done through others, then leadership<\/a><\/span> should be defined as the social and informal sources of influence that you use to inspire action taken by others. It means mobilizing others to want to struggle toward a common goal. Great leaders help build an organization\u2019s human capital, then motivate individuals to take concerted action. Leadership also includes an understanding of when, where, and how to use more formal sources of authority and power, such as position or ownership. Increasingly, we live in a world where good management<\/em> requires good leaders<\/em> and leadership<\/em>. While these views about the importance of leadership are not new (see \u201cViews on Managers Versus Leaders\u201d), competition among employers and countries for the best and brightest, increased labor mobility (think \u201cwar for talent\u201d here), and hypercompetition puts pressure on firms to invest in present and future leadership capabilities.<\/p>\r\n

    P&G provides a very current example of this shift in emphasis to leadership as a key principle of management. For example, P&G recruits and promotes those individuals who demonstrate success through influence rather than direct or coercive authority. Internally, there has been a change from managers being outspoken and needing to direct their staff, to being individuals who electrify and inspire those around them. Good leaders and leadership at P&G used to imply having followers, whereas in today\u2019s society, good leadership means followership and bringing out the best in your peers. This is one of the key reasons that P&G has been consistently ranked among the top 10 most admired companies in the United States for the last three years, according to Fortune<\/em> magazine (Fortune, 2008).<\/p>\r\n

    Whereas P&G has been around for some 170 years, another winning firm in terms of leadership is Google, which has only been around for little more than a decade. Both firms emphasize leadership in terms of being exceptional at developing people. Google has topped Fortune\u2019s<\/em> 100 Best Companies to Work for the past two years. Google\u2019s founders, Sergey Brin and Larry Page, built a company around the idea that work should be challenging and the challenge should be fun (Google, 2008). Google\u2019s culture is probably unlike any in corporate America, and it\u2019s not because of the ubiquitous lava lamps throughout the company\u2019s headquarters or that the company\u2019s chef used to cook for the Grateful Dead. In the same way Google puts users first when it comes to online service, Google espouses that it puts employees first when it comes to daily life in all of its offices. There is an emphasis on team achievements and pride in individual accomplishments that contribute to the company\u2019s overall success. Ideas are traded, tested, and put into practice with a swiftness that can be dizzying. Observers and employees note that meetings that would take hours elsewhere are frequently little more than a conversation in line for lunch and few walls separate those who write the code from those who write the checks. This highly communicative environment fosters a productivity and camaraderie fueled by the realization that millions of people rely on Google results. Leadership at Google amounts to a deep belief that if you give the proper tools to a group of people who like to make a difference, they will.<\/p>\r\n\r\n

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    \r\n\r\n\"1.4\"<\/a>\r\n

    Leaders inspire the collective action of others toward a shared goal.<\/p>\r\n\r\n

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    geralt<\/a> - CC0 public domain.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n

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    Views on Managers Versus Leaders<\/h4>\r\n
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    My definition of a leader\u2026is a man who can persuade people to do what they don\u2019t want to do, or do what they\u2019re too lazy to do, and like it.<\/p>\r\nHarry S. Truman (1884\u20131972), 33rd president of the United States\r\n\r\n<\/div>\r\n

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    You cannot manage men into battle. You manage things; you lead people.<\/p>\r\nGrace Hopper (1906\u20131992), Admiral, U.S. Navy\r\n\r\n<\/div>\r\n

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    Managers have subordinates\u2014leaders have followers.<\/p>\r\nChester Bernard (1886\u20131961), former executive and author of Functions of the Executive\r\n\r\n<\/div>\r\n

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    The first job of a leader is to define a vision for the organization\u2026Leadership is the capacity to translate vision into reality.<\/p>\r\nWarren Bennis (1925\u2013), author and leadership scholar\r\n\r\n<\/div>\r\n

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    A manager takes people where they want to go. A great leader takes people where they don\u2019t necessarily want to go but ought to.<\/p>\r\nRosalynn Carter (1927\u2013), First Lady of the United States, 1977\u20131981\r\n\r\n<\/div>\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

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    Entrepreneurship<\/h2>\r\n

    It\u2019s fitting that this section on entrepreneurship follows the discussion of Google. Entrepreneurship<\/a><\/span> is defined as the recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures. Perhaps this is obvious, but an entrepreneur<\/a><\/span> is a person who engages in the process of entrepreneurship. We describe entrepreneurship as a process because it often involves more than simply coming up with a good idea\u2014someone also has to convert that idea into action. As an example of both, Google\u2019s leaders suggest that its point of distinction \u201cis anticipating needs not yet articulated by our global audience, then meeting them with products and services that set new standards. This constant dissatisfaction with the way things are is ultimately the driving force behind the world\u2019s best search engine (Google, 2008).\u201d<\/p>\r\n

    Entrepreneurs and entrepreneurship are the catalysts for value creation. They identify and create new markets, as well as foster change in existing ones. However, such value creation first requires an opportunity. Indeed, the opportunity-driven nature of entrepreneurship is critical. Opportunities are typically characterized as problems in search of solutions, and the best opportunities are big problems in search of big solutions. \u201cThe greater the inconsistencies in existing service and quality, in lead times and in lag times, the greater the vacuums and gaps in information and knowledge, the greater the opportunities (Timmons, 1999).\u201d In other words, bigger problems will often mean there will be a bigger market for the product or service that the entrepreneur creates. We hope you can see why the problem-solving, opportunity-seeking nature of entrepreneurship is a fundamental building block for effective principles of management.<\/p>\r\n\r\n<\/div>\r\n

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    Strategy<\/h2>\r\n

    When an organization has a long-term purpose, articulated in clear goals and objectives, and these goals and objectives can be rolled up into a coherent plan of action, then we would say that the organization has a strategy. It has a good<\/em> or even great<\/em> strategy when this plan also takes advantage of unique resources and capabilities to exploit a big and growing external opportunity. Strategy<\/a><\/span> then, is the central, integrated, externally-oriented concept of how an organization will achieve its objectives (Hambrick & Fredrickson, 2001). Strategic management<\/a><\/span> is the body of knowledge that answers questions about the development and implementation of good strategies.<\/p>\r\n

    Strategic management is important to all organizations because, when correctly formulated and communicated, strategy provides leaders and employees with a clear set of guidelines for their daily actions. This is why strategy is so critical to the principles of management you are learning about. Simply put, strategy is about making choices: What do I do today? What shouldn\u2019t I be doing? What should my organization be doing? What should it stop doing?<\/p>\r\n\r\n<\/div>\r\n

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    Synchronizing Leadership, Entrepreneurship, and Strategy<\/h2>\r\n

    You know that leadership, entrepreneurship, and strategy are the inspiration for important, valuable, and useful principles of management. Now you will want to understand how they might relate to one another. In terms of principles of management, you can think of leadership, entrepreneurship, and strategic management as answering questions about \u201cwho,\u201d \u201cwhat,\u201d and \u201chow.\u201d Leadership helps you understand who helps lead the organization forward and what the critical characteristics of good leadership might be. Entrepreneurial firms and entrepreneurs in general are fanatical about identifying opportunities and solving problems\u2014for any organization, entrepreneurship answers big questions about \u201cwhat\u201d an organization\u2019s purpose might be. Finally, strategic management aims to make sure that the right choices are made\u2014specifically, that a good strategy is in place\u2014to exploit those big opportunities.<\/p>\r\n

    One way to see how leadership, entrepreneurship, and strategy come together for an organization\u2014and for you\u2014is through a recent (disguised) job posting from Craigslist. Look at the ideal candidate characteristics identified in the Help Wanted ad\u2014you don\u2019t have to look very closely to see that if you happen to be a recent business undergrad, then the organization depicted in the ad is looking for you. The posting identifies a number of areas of functional expertise for the target candidate. You can imagine that this new position is pretty critical for the success of the business. For that reason, we hope you are not surprised to see that, beyond functional expertise, this business seeks someone with leadership, entrepreneurial, and strategic orientation and skills. Now you have a better idea of what those key principles of management involve.<\/p>\r\n\r\n

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    Examples<\/header>\r\n
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    Help Wanted\u2014Chief of Staff<\/h4>\r\n

    We\u2019re hiring a chief of staff to bring some order to the mayhem of our firm\u2019s growth. You will touch everything at the company, from finance to sales, marketing to operations, recruiting to human resources, accounting to investor relations. You will report directly to the CEO.<\/p>\r\n

    Here\u2019s what you\u2019re going to be asked to do across a range of functional areas in the first 90 days, before your job evolves into a whole new set of responsibilities:<\/p>\r\nMarketing\r\n