Entrepreneurial Finance is the subject offered to the students opting finance specialization in MBA

1. Entrepreneurial Leadership.

2. Definition
• According to Barnard keys and Thomas Case,” Leadership is the
process of influencing and supporting others enthusiastically towards
achieving objectives.”
• According to David Tansik,” leadership is a social process by which
followers are influenced to willingly engage in cerain behaviours.”

3. Definition
• Entrepreneurial leadership is a mindset that focuses organizations on
turning problems into opportunities that create economic and social value,”
says Babson College President Stephen Spinelli Jr. MBA’92, PhD.
• For Professor Jay Rao, entrepreneurial leadership goes hand in hand with
a relentless optimism about the world. “Entrepreneurial leaders are not just
risk managers; they are ambidextrous and are experts at navigating
uncertainty,” he says. “They have a positive outlook about the future, as
they are always trying to improve things.”
• Like entrepreneurs, entrepreneurial leaders are made, not born. It’s a muscle
that can be developed with time and practice. According to D.R. Widder
MBA’99, Babson’s vice president of innovation “Entrepreneurial leaders are
able to lead from any position. They know leadership doesn’t always come
from the top, and it comes from action, not hierarchy,” says Widder. “These
people are high performance, collaborative problem solvers and are broadly
needed in all industries.”

4. Nature/ characteristics of
Entrepreneurial Leadership
Personal Ability
Following
Influencing Behaviour
Interpersonal Relationship
Mutual Goods
Its essence is performance
Exemplary Conduct
Leadership is situational
Assumption of Responsibility
Importance of communication
Leadership may be formal or informal
Four-Faceted Concept
Process

5. • Personal Ability-It is a personal power which arises out of knowledge, expertise and personality. It is the ability
of entrepreneur to induce subordinates to work with confidence and zeal towards the achievement of
entrepreneurial goals.
• Following-Leadership requires followers, it is inseparable from followers. It involves other people, usually in
the form of subordinates. Therefore the essence of leadership is following.
• Influencing Behaviour-Leadership envisages the power to influence. It involves an attempt to influence others.
• Interpersonal Relationship-Leadership involves group behaviour. It is interaction between a leader and one or
more followers. It is a reciprocal relationship.
• Mutual Goods-Leadership involves a community interest between the leaders and his followers. It exists for the
realisation of common goals.
• Its essence is performance-Leadership depends upon doing. It is something guiding, influencing or mobilizing
actions.
• Exemplary Conduct-Leaders not only tell but also influence by their behaviour. They act as role models to
subordinates.
• Leadership is situational-Leaders are prepared to tackle given situations. Leadership is dynamic art.
• Assumption of Responsibility-The leaders assumes full responsibility for all the actions of his followers and
situations.
• Importance of communication- Communication affects the behaviour and performance of followers
• Leadership may be formal or informal- Entrepreneurs who influence the behaviour of their subordinates are the
formal leaders. Within the enterprise develop informal groups and within those groups develop informal leaders
who influence the behaviour of other subordinates.
• Four-Faceted Concept-Leadership involves four elements-leader, followers, enterprise and environment.
• Process-Leadership is a process engaging certain individuals and is ongoing activity.

6. Functions of Entrepreneur as a leader
Formulate purpose
Inspires and initiates actions
Administers the enterprise
Interprets reasons
Represents the institutions
Group interaction
Goal accomplishment
Develops teamwork
Directs and disciplines the employees
Solve internal conflict
Defends the integrity of enterprise
Maintains stability

7. Styles of
leadership used
by entrepreneur
Style based on
Motivation
Positive
leadership
Negative
leadership
Style based on
use of authority
Autocratic style
Democratic or
participative style
Free-rein style
Style based on
behavior of
leader
Job centered
leadership
Employee
centered
leadership
Two dimensional
Styles of
leadership
Initiative
structure
Consideration
Style based on
management
system
System-I
Management
System 2-
Management
System 3-
management
System 4 -
management
Managerial grid
styles
Impoverished
management
Country club
management
Organisation man
management
Authority-
obedience or task
management
Team
management

8. Styles of leadership used by entrepreneur
Style based on Motivation
• Positive leadership- Entrepreneur emphasis on reward recognition, credit and praise to get the work done. He think
that rewards will make employees satisfied and they will work hard.
• Rise in wages, promotion, delegation of authority, credit for work, welfare etc. This styles achieves higher job
satisfaction and performance.
• Negative leadership- Entrepreneur emphasis on fear, force, threats or penalties.
• Punishments like loss of job, demotion etc. were forced on the people. This style may yield good results in some
situations but human costs are high. It affects loyalty and cooperation.
• Style based on use of authority
• Autocratic style- it is also known as authoritarian or directive style. Entreprenuers makes all the decision without
consulting the employees and assumes full responsibility for all his decisions and actions.
• He initiates all the activity, issues commands and orders to subordinates and expects them to be obeyed.
• Democratic or participative style-The entrepreneurs involve his employees in decision making. They consult the
subordinates on proposed actions or matters and encourage participation by them. He leads by mutual consent.
• Authority is decentralized.
• Free-rein style-The entrepreneurs attempts very little control or influence over employees. He depends upon group
to establish its own goals n solve its own problems.
• Subordinates are given high degree of freedom in their operations.
• The entrepreneur avoids power and responsibility.
• This style is effective when the group members are highly knowledgeable, independent, motivated and fully
dedicated to the enterprise.

9. Style based on behavior of leader
• Job centered leadership- It is also known as task-oriented style. It is concerned with
design of work, planning, scheduling, coordinating work activities, development of
incentives, providing the resources and increasing productivity.
• The leader sets the standards of performance and structure of work. He plans each
worker’s job tasks and job outcomes.
• Employee centered leadership-It is centered with people and their needs. The leader
treats subordinates as persons.
• He focuses on improving performance through better human relations. He allows
maximum participation, listen to group members, have friendly approach and helps
subordinates with personal problems and stands up for group members.
• Two dimensional Styles of leadership
• Initiative structure- This style include scheduling of work, deciding what is to be done,
maintain standards of performance and provide direction to subordinates.
• He defines the role of each member, assigns work, plans ahead and pushes up
production.
• Consideration-It is the relationship-oriented behavior of a leader. It is helpful in
maintaining good relation with subordinates. It includes behavior indicating mutual trust,
respect and warmth between the entrepreneur and his employees.

10. • Style based on management system
• System-I Management-It is exploitive and authoritative. He is highly autocratic, has little trust in
subordinates, avoids upward communication and motivate people through fear.
• System 2- Management-It is also called benevolent authoritative style. Entrepreneurs has a patronizing
attitude towards employees. He invites some ideas from subordinates, allows some delegation and
motivates by rewards and some use of punishment.
• System 3- management- It is known as consultative management. Entrepreneurs usually invites ideas and
opinions, allows decision to be made at lower levels and acts consultatively in various matters.
• System 4 –management-It is known as participative group. Entrepreneur has complete trust in
subordinates in all matters. He is highly employee centered. This management is considered the best one.
• Managerial grid styles
• Impoverished management-It has low concern for people and production. Entrepreneur as leader has
minimum involvement in his job. There is no motivation and inspiration.
• Country club management- Entrepreneur has little or no concern for production but concern for people.
He concentrates on warm human relation.
• Organisation man management-The entrepreneur has more concern for task efficiency and little concern
for people/ subordinates.
• Authority-obedience or task management- The entrepreneurs attains balance between efficiency and
people. He has medium concern for both.
• Team management-The team leader leads to high morale of his team which leads to high efficiency .The
employees are highly considered , mutual understanding and effective guidance.