Impact Of A Leadership Styles On Entrepreneurs Business Success

Impact Of A Leadership Styles On Entrepreneurs

Business Success

CHAPTER I INTRODUCTION

Effective leaders in business build organizations that withstand uncertainty,

change, and competition. The sustained impact of leaders on business success can

further be realized through examining leadership styles and the types of individuals

operating the businesses. Leaders lead themselves and others using leadership

styles based on personal experience, background, education, or training. Different

styles of leadership impact the level of performance and performance improvement

within an organization (Bass, 1985). How an individual leads a business impacts

its employees, customers, communities, and other stakeholders. Entrepreneurs

operating enterprises function as the leader of their business and need specific

leadership skills to launch, grow, and sustain a successful venture.

As of 2012, over 28 million employer and nonemployer businesses operated

in the United States (United States Census Bureau, 2012a; 2012b). Each business

had a starting point with an individual, partners, or a group of individuals

launching the new venture. Many businesses employ people, contributing to the

health of the economy, but high business failure rates negatively impact

communities and entrepreneurs. All businesses do not succeed (Hann, 2013), and

the behaviors of entrepreneurs influence the growth and development of their

business. A successful business can be measured in terms of financial

performance, such as business revenue, profitability, and return on investment.

Business leaders influence the financial performance of a business by exhibiting

the appropriate leadership styles in the right business context, contributing to

increased firm performance (Bass, 1985).

The Full Range Leadership Model identifies leadership styles on a

continuum of transformational, transactional, and laissez-faire leadership (Bass &

Avolio, 2004). The Multifactor Leadership Questionnaire (MLQ) was developed

to assess the leadership skills exhibited by leaders in order to identify their

leadership style as transformational, transactional, or laissez-faire leadership.

Transformational leadership theory in the Full Range Leadership Model has been

categorized as idealized influence attributed, inspirational motivation, intellectual

stimulation, and individual consideration (Heinitz, Liepmann, & Felfe, 2005).

These categories are related to the appropriate leadership skills demonstrated by

transformational leaders, and they are measured using the MLQ. Transactional

leadership is viewed as on the opposite side of the continuum to transformational

leadership in that the leader focuses on tasks and rewarding behaviors. Heinitz et

al. posited that transactional leaders work well in stable environments. The MLQ

measures transactional leadership under the categories of contingent reward and

management-by-exception (active). Laissez-faire leadership is defined by the

absence of engagement in leading others and avoiding leadership responsibility.

The MLQ also measures passive-avoidant leadership under the categories of

management-by-exception (passive) and laissez-faire leadership behaviors as part

of the instrument.

The entrepreneurial leadership style has also been developed as a leadership

construct to assess leadership behaviors of leaders. Renko, El Tarabishy, Carsrud,

and Brännback (2015) developed the ENTRELEAD scale in order to assess the

entrepreneurial leadership style, including opportunity recognition, risk-taking,

proactive, visionary, innovation, and idea creation behaviors of leaders. Gupta,

MacMillan, and Surie (2004) posited that the basic challenge of the entrepreneurial

leadership style is “to create a willingness in followers to abandon current

conventional but career-secure activities for creative, entrepreneurial action” (p.

245). Entrepreneurial leadership skills can be utilized in startup and established

organizations, which can lead to superior performance.

While there are many popular leadership theories, the leadership styles

identified for this study are based on the leadership styles in the Full Range

Leadership Model assessed by the MLQ and the entrepreneurial leadership style

determined by the ENTRELEAD scale because of their specific implications

within the context of entrepreneurship. Entrepreneurs may use transformational,

transactional, or laissez-faire leadership styles, as well as an entrepreneurial

leadership style, to maximize the profitability of their organization while sustaining

the venture past the initial startup phase. Entrepreneurs, who are business owners,

owner-buyers, or ownerfounders, are leaders within their organizations. However,

the role of an entrepreneur does not necessitate that they use an entrepreneurial

leadership style to develop and grow their business. Visser, de Coning, and Smit

(2005) found that transformational leadership and entrepreneurship had a

significant positive relationship, but how entrepreneurship functions as a subset of

transformational leadership was unresolved. The research focused on transactional

leadership, specifically contingent reward behaviors, has also been inter-correlated

with the transformational leadership of entrepreneurs (Ardichvili, 2001). The

entrepreneurial leadership style has been associated with entrepreneurs because of

the innovative, risk-taking, and recognition of opportunities characteristic of

entrepreneurs (Renko et al., 2015), but it is not required that an entrepreneur

utilizes this style in practice. Renko et al. suggested further research examining

various organizational contexts and the position leaders occupy so as to better

understand how the entrepreneurial leadership style is used in organizations.

Research is inconclusive as to which combination of these leadership styles is

effective for entrepreneurs, and which positively affects business performance and

business longevity. Entrepreneurial leadership theory development over the past

20 years has created a need for additional studies focused on assessing

entrepreneurial leadership skills of leaders. Leaders who are entrepreneurs do not

use the entrepreneurial leadership style solely to inform their leadership behaviors.

Therefore, examining the leadership styles of entrepreneurs is significant to the

research of leadership styles, as the context may affect the leadership style most

utilized to impact organizational outcomes.

Statement of the Problem

The problem of this study is to address a gap in the knowledge of

transformational, transactional, and laissez-faire leadership styles in combination

with the entrepreneurial leadership style leading to successful entrepreneurial

organizations. To solve this problem, this study will describe the relationship

between leadership styles of entrepreneurs as mediated by the variables of gender,

education level, industry type, and role in business with the success factors of

business longevity, profitability, and number of employees.

Research Questions

The research questions that will guide this study included the following:

RQ1: Which of the Full Range Leadership Model leadership styles is

dominant of entrepreneurs who sustain organizations?

RQ2: Which of the Full Range Leadership Model leadership styles is more

prevalent in the identification of leaders who also exhibit an

entrepreneurial leadership style? RQ3: How do leaders with various

combinations of leadership styles relate to the variables of gender,

education, industry type, and role in business?

RQ4: How do various combinations of leadership styles, gender, education,

industry type, and role in business relate to the success factors of years of

operation, profitability, and the difference in the number of employees?

Background and Significance

The study of leadership is an ancient practice. Some trace leadership studies

to the time of Moses, others to ancient Chinese culture, and still others to the

Renaissance period (Grint, 2011; Stogdill & Bass, 1981). Thomas Carlyle, a writer

who focused on leadership studies in the 1800s, associated leadership with the

‘Great Men’ of history who were perceived as influencers and extraordinary

individuals (Grint, 2011, p. 8). Modern leadership studies in the 20th century

developed theories and examined leaders who led in times of challenge, change,

and uncertainty, such as Winston Churchill during World War II (Stogdill & Bass,

1981). The study of leadership has continued to evolve, as leadership has been

noted as a key factor of a successful organization (Landis, Hill, & Harvey, 2014).

Management theory has also been foundational in developing leadership

theories and strategies for a changing business environment. Maslow’s Hierarchy

of Needs, McGregor’s Theory X and Theory Y, and Hersey and Blanchard’s

Situational Leadership Theory challenged traditional management and leadership

theories that focused on tasks and rewards (Grint, 2011; Landis et al., 2014).

Management theory created a foundation to build additional leadership theories

focusing on the self-actualization of workers, context, and environment, as well as

managing change.

Leadership theories have been designated as leader-centric or follower-

centric. However, in examining these two categories of leadership, researchers

have discovered conflicting data about the effects on performance, while other

studies link no significant difference in performance (Stogdill & Bass, 1981).

Therefore, this distinction did not fully reveal the leadership styles relevant to

today’s business marketplace. James Downton first used the term transformational

leadership in 1973, which was later popularized by James McGregor Burns in 1978

(Diaz-Saenz, 2011). The Full Range Leadership Model, credited to Bass and

Avolio, was developed to address transformational and transactional leadership

styles of individuals (Avolio, 2011; Diaz-Saenz, 2011).

Transformational Leadership

Transformational leadership is a leadership style that categorizes leadership

characteristics as idealized influence attributed, inspirational motivation,

intellectual stimulation, and individual consideration (Heinitz et al., 2005). “For

the past 30 years, transformational leadership has been the single most studied and

debated idea within the field of leadership studies” (Diaz-Saenz, 2011, p. 299).

Transformational leaders transform an organization by helping followers reach

their full potential while achieving business goals. Ling, Simsek, Lubatkin, and

Veiga (2008a) conducted a study of 121 firms to determine the impact of a

transformational leadership style on performance of small- and medium-sized

enterprises (SMEs). The results from their study indicated that chief executive

officers’ (CEOs) transformational leadership styles positively impacted

performance because of the CEOs’ direct influence on organizational outcomes in

SMEs. Furthermore, their hypothesis of higher business performance for founder

CEOs was supported for SMEs (Ling et al., 2008a). Therefore, founder CEOs,

who are also entrepreneurs, impact performance when considering the size of the

business.

Business failure rates demand that leaders adapt their leadership style to

manage change and innovation, while helping employees grasp the overall vision

of their businesses. Kouzes and Posner (2012) stated that a leader forms “a

relationship between those who aspire to lead and those who choose to follow… a

relationship characterized by mutual respect and confidence will overcome the

greatest adversities and leave a legacy of significance” (p. 30). These adversities

could be environmental uncertainty, lack of funding, or changes in the industry.

CEOs, top management teams, and entrepreneurs who are transformational leaders

apply their leadership skills by managing organizational or employee changes to

lead employees well in the midst of change (Pawar & Eastman, 1997). Yet,

managing industry instability, economic factors, opportunity recognition, or risk

needed to start and sustain a business may not be fully realized by solely using the

transformational leadership style.

Transactional Leadership

While transformational leadership has been a focus of leadership research,

managers, business owners, and entrepreneurs can influence employees and

organizational outcomes using other leadership styles. Transactional leadership is

a leadership style that focuses on contingent reward, management-by-exception,

and laissez-faire theories (Heinitz et al., 2005). Transactional leadership is an

exchange between leader and follower to achieve a desired outcome (Northouse,

2016). Employees are rewarded for completing tasks, which maintains or

increases overall business performance. Bass and Avolio (1990) developed The

Multifactor Leadership Questionnaire to assess specific leadership behaviors.

Bass posited that leaders should combine both transactional and transformational

leadership behaviors (Diaz-Saenz, 2011). This assertion supports the combination

of leadership styles in order to increase leadership effectiveness. Howell and

Avolio (1993) studied the impact of transformational leadership, transactional

leadership, locus of control, and support for innovation in predicting business unit

performance in 78 top-level managers at a Canadian financial institution. Their

study supported the assertion that transformational leadership was a predictor for

business unit performance, while transactional leadership negatively affected

business unit performance. The results from this study bring into question how the

level of manager or leader and leadership style impacts business performance,

resulting in a need for further research on the level of leader and leadership styles.

Entrepreneurial Leadership

The entrepreneurial leadership style involves projecting a vision to gain

participation of others, while bearing risk, innovating, seizing opportunities, and

managing change (Gupta et al., 2004). This leadership style has been measured by

using the ENTRELEAD scale (Renko et al., 2015). Leaders using an

entrepreneurial leadership style focus on “mobilizing the resources and gaining the

commitment required for value creation” (p. 242). This style of leadership is not

hindered by resource constraints and is characterized by rallying people to join the

individual or organizational efforts. Gupta et al. (2004) conducted a cross-cultural

study of 15,000 middlelevel managers to understand the effectiveness of

entrepreneurial leadership using the Global Leadership and Organizational

Behavior Effectiveness survey on leadership. Out of the 112 leadership attributes

in this survey, 23 leadership behaviors were identified to align with entrepreneurial

leadership. The findings from their study indicated that entrepreneurial leadership

is a universally recognized concept and more prominent in Western cultures.

The concept of entrepreneurial leadership arose out of the need to address

the fast-paced and changing business environment. This environment, also

referred to as a dynamic market, has required leaders to be transformative, as well

as innovative and proactive, while managing risk (Tarabishy, Solomon, Fernald Jr.,

& Sashkin, 2005). The context by which the entrepreneurial leadership style is

activated may impact a leader’s use of this style. If an organization is experiencing

turbulence, attributed to new venture development, industry changes, or

organizational change, an entrepreneurial leadership style could result in the

willingness of a leader to take risks and contribute innovative ideas to lead the

organization to a point of stability. These distinct behaviors of the entrepreneurial

leadership style distinguish it from transformational leadership. Therefore,

demonstrating transformational and entrepreneurial leadership behaviors would

require a leader to use a combination of leadership styles. Individualized

consideration, a key component of transformational leadership, is also not

considered a construct of entrepreneurial leadership, demonstrating differences in

the leadership styles. Individualized consideration is a leadership behavior that

provides support to followers to help them reach self-actualization (Northouse,

2016). The entrepreneurial leadership style focuses on the exploitation of

opportunities for the organization instead of providing this type of ongoing support

to employees. Even so, an organization may require the combination of the

transformational leadership and entrepreneurial leadership styles to be exhibited by

a leader as an organization ages. Business leaders need specific leadership skills to

succeed, while still considering the business environment and organizational

context.

The entrepreneurial leadership style is not a leadership style solely devoted

to entrepreneurs. Studies of corporate entrepreneurship, also known as an

entrepreneurial orientation, have indicated that entrepreneurial behaviors within an

organization lead to increased performance (Engelen et al., 2015; Seong, 2011).

Yang (2008) conducted a study of Taiwanese top-level managers to determine the

impact of entrepreneurial leadership or an entrepreneurial orientation on

performance. The results from the study supported the assertion that

entrepreneurial leadership increased business performance. However, in

comparing transformational, transactional, and entrepreneurial leadership styles,

Yang discovered that transformational leadership style was “the best predictor of

performance” (p. 272) over the other leadership styles. Research on the interaction

of these leadership styles is rather limited, and additional research is needed to

understand how these three leadership styles affect business outcomes.

The leadership styles of entrepreneurs influence the direction of their

business. Entrepreneurs launch and grow businesses, which requires specific

leadership skills. However, the skills and behaviors required to start a business,

such as risk assumption, leveraging financial resources, and the ability to identify

opportunities (Bender, 2007) do not always translate into the needed skill set to

lead a growing organization. With a 75% failure rate for startup companies that

take venture capital (Hann, 2013), there is a need for leadership skills to help

transition a business from the startup stage to a successful business. The stages of

development of an organization also impact a leader’s ability to effectively lead.

Entrepreneurs typically have higher perceived self-efficacy and social skills that

enable them to start businesses (Bender, 2007). However, once a business is

started, entrepreneurs have to sustain the business and transition from the role of

entrepreneur to CEO. Forty-nine percent of privately held businesses started in

2010 were no longer in operation as of 2016 (United States Department of Labor,

Bureau of Labor Statistics, 2016). Therefore, understanding the leadership styles

of entrepreneurs could give insight into how to help entrepreneurs lead their

organizations past this initial five-year threshold. This large percentage of

business failures within the first five years of operation minimizes business

longevity; thus, business longevity is defined as an organization that has exceeded

that five-year point in operations. Businesses that continue to operate over many

years can provide jobs and stability for a local economy. Therefore, creating a

business that lasts beyond the initial five years of operation is significant for

entrepreneurs, and business longevity may also be impacted by the leadership style

of an entrepreneur. Leadership styles have been studied for CEOs, top

management teams, and employees (Engelen, Gupta, Strenger, & Brettel, 2015;

Ling, Simsek, Lubatkin, & Veiga, 2008b; Waldman, Ramirez, House, & Puranam,

2001). The leadership styles exhibited by an individual can influence the level of

output and overall performance of employees (McClesky, 2014). Additionally, the

Development Dimensions International, Inc. 2011 Global Leadership Forecast

Research demonstrated that “organizations with the highest quality leaders were 13

times more likely to outperform their competition in key bottom-line metrics such

as financial performance, quality of products and services, employee engagement,

and customer satisfaction” (Boatman & Wellins, 2011, p. 8). Further research is

needed to discover leadership styles that are most effective at stimulating

organizational performance for businesses operated by entrepreneurs. The

leadership styles of entrepreneurs are critical to the understanding of business

longevity and performance.

Considering the number of businesses in the United States, additional

opportunities for research on entrepreneurial leadership styles exist. Research in

the area of self-management and entrepreneurship indicates that there is a direct

correlation between self-management skills and firm performance (Lucky &

Minai, 2011). Entrepreneurs learn to manage their resources in order to create a

valuable new entity and initially function as technicians in small start-up

businesses. Freeman and Siegfried (2015) suggest that the leadership style during

start-up and the growth phase are different. While some entrepreneurs may have

started their business using an entrepreneurial leadership style, sustaining that

leadership style during subsequent phases of business growth may require a change

in leadership style to achieve business success.

Since transformational leadership behaviors can emerge during

organizational change, the transformational leadership style may be the most likely

style of entrepreneurs (Bass, 1985). Transformational leaders are “characterized as

one who articulates a vision of the future that can be shared with peers and

subordinates, intellectually stimulates subordinates, and pays high attention to

individual differences among people” (Lowe & Galen Kroeck, 1996, p. 386).

However, organizations can grow, develop, and become successful using the

combination of transactional and entrepreneurial leadership styles, as well.

Tarabishy et al. (2005) conducted a pilot study of CEOs, managers, and their

subordinates to determine the relationship between transactional and

transformational leadership styles and an entrepreneurial orientation. Their

findings indicated that leaders with an entrepreneurial orientation demonstrated

both transformational and transactional leadership behaviors. While research has

drawn a distinction between transactional and transformational leadership styles

over the last forty years, research on the combination of leadership styles from the

Full Range Leadership Model, including transactional, transformational, or laissez-

fair leadership, and the entrepreneurial leadership style is needed.

The problem of this study will be significant to research in leadership studies

and businesses because it further applies leadership theory in the context of

entrepreneurs and their businesses. Businesses are operating in dynamic markets,

requiring a new leadership style for tomorrow’s leaders (Tarabishy et al., 2005).

Researching leadership styles that help business owners lead their businesses will

translate the current research on CEO and top management team leadership styles

to a different population. Therefore, examining leadership styles of entrepreneurs

will provide insight into how companies can stay in business and become

successful after the initial five years of operation.

Limitations

The limitations for this study will be established using the following parameters:

1. This study will be a descriptive study that uses a survey to collect data. The

data collected will come from individual entrepreneurs who will voluntarily

participate, and the number of responses can limit the results.

2. The participants will be limited to entrepreneurs whose organizations

operate within the metropolitan service region including a major city and

outlying communities within a 50mile radius of a Midwestern city with a

population less than 500,000 people in the United States.

3. This study will be limited to the leadership styles of transformational,

transactional, and laissez-faire leadership as identified using the MLQ, as

well as the entrepreneurial leadership style as identified using the

ENTRELEAD scale. These leadership styles interact and affect how

individuals lead their businesses.

4. This study will be limited to the demographic factors of gender, education

level, industry type, years of operation, the number of employees at the

organization, current role in business, and profitability.

Assumptions

This study will be based on the following assumptions:

1. Entrepreneurs surveyed lead themselves and others within their

organization.

2. Participants based their responses on their actual experiences and had

adequate understanding of organizational leadership to complete the survey.

3. Participants’ information about their businesses and leadership position is

accurately represented.

4. Leadership styles are learned and can be modified through education, life

experience, and training.

Procedures

The purpose of this study is to investigate the leadership styles of

entrepreneurs who operate successful businesses. Descriptive research using a

survey research design will be used to address this research problem. The

population includes entrepreneurs who operate organizations within the

metropolitan service region of a city with less than 500,000 people in the

Midwestern United States. The region includes the major metropolitan city and

outlying communities within a 50-mile radius. The population of businesses is

40,357 within the metropolitan service area (United States Census Bureau, 2015).

The combination of business lists maintained by the area Chamber of Commerce

organizations and subscribers to the main city’s business journal will be used to

identify the business population for this study. It is estimated that the businesses

represented by these groups reduce the population to approximately 9,000 to

10,000 area businesses. The area Chamber of Commerce organizations in the

primary city and surrounding suburban cities will give the researcher access to

their directory of businesses to invite businesses to participate in this study.

Businesses on lists maintained by area Chamber of Commerce organizations and

subscribers of the main city’s business journal within the metropolitan service

region of the designated city will be invited to participate. A multimethod delivery

of the survey will be used to assist with acquiring adequate numbers of

respondents. Data will be collected from the participants on a password protected

website. The survey will be sent to potential participants, and participants will be

informed of the purpose of the data collection in the cover letter. Paper surveys

will be administered as needed. In the introduction to the survey, participants will

be assured that data from the survey will remain confidential.

Participants will complete a survey divided into three subsections, including

demographic questions, the Multifactor Leadership Questionnaire (MLQ), and the

ENTRELEAD scale. The demographic questions will include the participant’s

gender (Eagly, Johannesen-Schmidt, & van Engen, 2003; Eagly & Johnson, 1990),

education level (Bates, 1990), industry type (Rowold & Heinitiz, 2007), years of

operation (Bates, 1990), the number of employees at current organization (Rowold

& Heinitiz, 2007), current role in business (Drucker, 2002; Ling et al., 2008b;

Ucbasaran et al., 2003), and profitability (Waldman et al., 2001). The remaining

sections of the survey will use the Multifactor Leadership Questionnaire (MLQ)

Form 5X-Short to assess behaviors of transformational, transactional, and laissez-

faire leadership styles (Bass & Avolio, 1990). Questions 1 through 45 correspond

with the MLQ on the survey in Appendix A. Entrepreneurial leadership behaviors

will be assessed using the ENTRELEAD scale, which is identified in Questions 46

through 53 on the survey in Appendix A (Renko et al., 2015).

After data are collected, selecting the participants that met the criteria of an

entrepreneur may reduce the sample, representing a subset of the original sample.

The mean, median, and standard deviation will be used to analyze these data.

Leadership behaviors from the MLQ and ENTRELEAD scale will result in an

interrelated leadership style score by analyzing the results from the corresponding

questions on the survey (Appendix A). These data will be analyzed using a two-

sample chi-square. Furthermore, demographic factors of gender, education level,

industry type, current role in business, and leadership styles will be analyzed using

chi-square to describe the relationship between variables. Then, a Multivariate

Analysis of Variance (MANOVA) will be used to examine the differences among

leadership styles, gender, education level, industry type, and current role in

business with years of operation, the change in number of employees since

founding, and profitability by comparing variances (Leedy & Ormord, 2013).

The research questions from this study will be answered from the results from the

survey and data analyses, resulting in conclusions and recommendations for

practitioners and future research.

Definition of Terms

The following terms are provided to give the reader clarity for this study:

Business performance is defined in terms of the level of business profitability and

percentage change over a period of time.

Business longevity and sustainability is defined as characteristics of an

organization that has operated for five years or longer as a revenue-generating

business. Entrepreneurs are individuals who attempt to create something of value

by assuming risk and investing time, resulting in monetary rewards (Visser et al.,

2005). Entrepreneurial Leadership is a leadership style that focuses on casting

vision, assuming risk, seizing opportunities, and cultivating innovation between the

leader and follower while adapting to change or uncertainty (Gupta et al., 2004).

An individual does not have to be an entrepreneur to demonstrate an

entrepreneurial leadership style. Laissez-Faire Leadership is “the absence of

leadership” (Northouse, 2016). Leadership is “the study of how men and women

guide people through uncertainty, hardship, disruption, transformation, transition,

recovery, new beginnings, and other significant challenges” (Kouzes & Posner,

2010, p. 93). Profitability is “measured as profit relative to assets” (Weiner &

Mahoney, 1981, p. 456). Transactional Leadership is a leadership style that

focuses on exchanges between leader and follower for the purpose of performance

or productivity (McCleskey, 2014).

Transformational Leadership is a leadership style that transforms a leader-follower

relationship through charisma, inspiration, vision, and supportive behavior, which

is further defined as an idealized influence, inspirational motivation, intellectual

stimulation, and individual consideration (Heinitz et al., 2005; McCleskey, 2014).

Sustaining organizations are organizations that are currently in operation for

longer than five years.

Success factors are the combination of profitability, the change in the number of

employees, and the years of operation for a business as used in this study.

Summary and Overview

Studies about leadership styles have been debated in research for the last 30

years (DiazSaenz, 2011). Extending the study of leadership styles to entrepreneurs

will give researchers a better understanding of the relationship between leadership

styles and business success for this population. Research must be conducted to

understand the impact of the leadership styles of entrepreneurs on their business

success, as businesses have a significant impact on families, employees,

communities, and national economies.

This study about leadership styles and business success will be separated

into five chapters. Chapter I discussed the research problem of leadership styles of

entrepreneurs and business performance. The problem is directed by research

questions associated with transformational, transactional, laissez-faire, and

entrepreneurial leadership styles and the demographic information, including

gender, education level, industry type, years of operation, the difference in the

number of employees at since founding, current role in business, and profitability.

Additionally, Chapter I detailed the limitations and assumptions of this study, as

well as the procedures to collect the data using a survey. Chapter II will review the

related literature and cover the following topics: leadership theory,

transformational, transactional, and entrepreneurial leadership styles, business

performance, entrepreneurs, and business longevity. Chapter III will detail the

methodology and procedures to conduct this study, including the surveys used,

population, data collection, and data analysis. Using Bass and Avolio’s (1990)

Multifactor Leadership Questionnaire and the ENTRELEAD scale, the leadership

styles of entrepreneurs will be examined to compare the data to gender, education

level, industry type, years of operation, the change in number of employees since

business founding, current role in business, and profitability. Chapter IV will

describe the statistical analysis and findings from this study related to leadership

styles, entrepreneurs, and business performance. Chapter V will detail the

summary, conclusions, implications for leadership studies, and recommendations

for future research.

CHAPTER II REVIEW OF LITERATURE

Chapter II addresses the research related to leadership and entrepreneurship

to provide a framework for understanding leadership styles in entrepreneurial

contexts. A review of literature has been completed to present the historical

foundations of leadership studies and examine leadership styles, as well as review

leadership’s impact on firm outcomes. The following literature review contains six

subsections: (a) leadership defined through a historical lens, (b) leadership theories

and leadership styles in organizations, (c) the intersection of entrepreneurship and

leadership, (d) gaps in the literature for leadership studies in entrepreneurial

contexts, (e) and a review of leadership studies and leadership’s impact on business

performance. These subsections were included in the review of literature because

the topics narrow the leadership field to specific leadership theories while

understanding the role of entrepreneurship as a function of organizational

leadership. The theoretical framework for this study and conclusions are stated

based on this review of the literature.

Historical Lens in Defining Leadership

The field of leadership has yet to develop one definition for leadership

(Northouse, 2016). Scholars have evolved in their perspective of what constitutes

an effective leader. Influence, power, and accomplishment have been weaved

throughout early definitions of leadership in military, business, and educational

contexts. At a leadership conference in 1927, General M. B. Stuart, superintendent

of the West Point Military Academy, defined leadership “as the ability to impress

the will of the leader on those led and induce obedience, respect, loyalty, and

cooperation” (Moore, 1927, p. 124). Another individual, Arthur H. Young,

categorized leadership “as the ability to get results” (p. 126) at the same

conference. Even early definitions of leadership presented a dichotomy between

influence and accomplishment.

Leadership definitions presented in the 1920s developed into a focus on the

traits of leadership (Northouse, 2016). Stogdill further delineated this focus on the

traits of leadership by conducting two surveys to identify characteristics of leaders

(Stogdill & Bass, 1981). Some of the traits included intelligence, sociability,

persistence, and initiative, which created a broader definition of leadership. The

Big Five Personality Factors, including neuroticism, extraversion, openness,

agreeableness, and conscientiousness, have also been used to address the trait

perspective of leadership. A meta-analysis of leadership and personality studies

indicated that extraversion is most associated with leadership (Judge, Bono, Ilies,

& Gerhandt, 2002). However, this approach to leadership significantly limits

potential leaders based on personality. Introversion does not disqualify people

from leadership positions. Hence, a more diverse perspective on leadership was

needed to understand how to develop emerging leaders. Influence became an

undertone to this shift in leadership studies.

Behavioral and skills approaches to leadership were developed after the trait

approach did not fully answer the question of how individuals can cultivate

leadership skills. Leaders’ actions and behaviors provide an understanding of

patterns in how people respond to situations. The behavioral approach to

leadership can be seen as prescriptive of specific types of responses to inputs. This

approach has also divided leadership into the task and relationship behaviors

required to complete objectives and maintain social relationships (Northouse,

2016). Even so, predetermined behaviors may not give leaders the flexibility to

make decisions as they confront challenges. Katz (1974) developed a skills

approach to leadership by defining the technical, human, and conceptual skills of a

leader. Technical skills reflected an individual’s expertise, but human skills

reflected a leader’s ability to work with people. Conceptual skills were the ability

to see and understand the intricacies of an entire organization at one time.

Conceptual skills are needed more in upper levels of management (Northouse,

2016). The skills-based approach to leadership does offer clarification and hope to

aspiring leaders by reinforcing that leadership skills can be learned and developed.

Leadership is about influence, but it also must lead to the desired end.

Northouse (2016) described leadership as “the process whereby an individual

influences a group of individuals to achieve a common goal” (p. 6). While

concise, Northouse’s definition may not take into account the complexities leaders

face in today’s world. Kouzes and Posner (2010) described leadership as,

the study of how men and women guide people through uncertainty,

hardship, disruption, transformation, transition, recovery, new beginnings, and

other significant challenges. It’s also the study of how men and women, in times of

constancy and complacency, actively seek to disturb the status quo, awaken new

possibilities, and pursue opportunities. (p. 93) Kouzes and Posner’s definition of

leadership integrates the changing dynamics in the 21st century. An individual

cannot exhibit leadership without a challenge and followers who participate in a

journey. Challenge creates the need for leaders to use their skill sets for the benefit

of others and to achieve a goal. Political, environmental, technological, and

organizational forces require leaders to grow, adapt, and ultimately lead. Leaders

may also experience resistance to change as they lead. Kurt Lewin contributed to

the field of change management, which affects leaders as they navigate change.

The Lewin three-step change model includes “unfreezing from the current state,

transitioning to a future state, and refreezing in the new state, which anchors new

behaviors into daily routines and culture of the organization” (Van Tiem, Moseley,

& Dessinger, 2012, p. 63). This model simplifies the process of managing change

despite the internal or external influences. Managing change and uncertainty is an

increasing challenge to leadership. Nevertheless, the underlying traits,

characteristics, skills, or behaviors required of leaders in complex, uncertain

environments may show that while the study of leadership has evolved, the

underlying leadership theories of effective leaders has a significant bearing on

understanding the new paradigm of leadership.

Entrepreneurship and Leadership

Even before entrepreneurship was defined as an activity, barter and

exchange was one of the first mediums by which to obtain goods and services from

others. The French were the first to begin the written discussion about

entrepreneurship and describe entrepreneurial activities in the 18th century (Hebert

& Link, 2009). Richard Cantillon, a French author, published his first work that

included a theory of entrepreneurship in 1775, which connected entrepreneurial

activity with economic theory (Brown & Thornton, 2013). Although Cantillon

propagated the word entrepreneur, Jean Baptiste-Say is most commonly attributed

with first using the term entrepreneur. However, Say’s interpretation of an

entrepreneur focused more on administration than the activity of creating an

enterprise (Hebert & Link, 2009). Entrepreneurs in history have varied from

medieval merchants who were selling their services and wares to military men and

explorers pioneering new territory. These individuals demonstrated

entrepreneurial behaviors in their various contexts and led a specific enterprise.

Entrepreneurship became a core aspect of economic activity in countries.

Swiercz and Lydon (2002) also proposed that an entrepreneurial revolution

has changed the economic landscape of the United States. The study of

entrepreneurship gained popularity in research when large, established

organizations began to see the value in traits associated with entrepreneurs. An

entrepreneurial orientation (EO) was developed as a theory to describe this

phenomenon. Proactiveness, risk-taking, and innovation became the defining

characteristics of EO (Covin & Slevin, 1991). Covin and Slevin proposed an

organizational level model of entrepreneurship where an entrepreneurial posture

and firm performance are mediated by environmental conditions. This model

changed the contemporary conversation of entrepreneurial activity being

sequestrated to small, start-up organizations. One defining characteristic of

entrepreneurial behavior is opportunity recognition (Ucbasaran, Westhead, Wright,

& Binks, 2003). While identifying characteristics of entrepreneurs can help

researchers understand behavior, novice and habitual entrepreneurs start and grow

businesses that have an economic impact on society. Essentially, entrepreneurs are

leaders of organizations, but there has been a lack of research on leadership in

entrepreneurial contexts (Timmons & Spinelli, 2004). Fernald, Solomon, and

Tarabishy (2005) posited that the “organizational archetype of the future will be

entrepreneurial” (p. 4). With paradigm shifts within organizations due to

economic, political, and technological forces, a new type of leadership is needed in

organizations that are managing change. Therefore, research on leadership within

entrepreneurial contexts can give insight into leadership styles that increase or

sustain firm performance in contemporary organizations.

Leadership does impact firm performance. Research indicates a direct

correlation between owner-founders and success (Drucker, 2002; Ling et al.,

2008b; Ucbasaran et al., 2003). Ucbasaran et al. conducted a study to determine

the impact of novice entrepreneurs versus habitual entrepreneurs on opportunity

recognition. Habitual entrepreneurs or serial entrepreneurs are characterized by

repeatedly founding multiple organizations over a period of time. This type of

entrepreneur has higher levels of innovation than novice entrepreneurs and is more

likely to identify opportunities that are problem-based. Meeting market demands

can lead to increased business success by having a target market interested in an

entrepreneur’s product or services. Entrepreneurship, and more specifically

founder characteristics, can impact firm performance. Almus and Nerlinger (1999)

explored the impact of founder characteristics on the growth of technical firms.

Their findings indicated that founder characteristics, such as a technical degree or

human capital of the founder, had a positive impact on firm growth. Other factors

such as vision and vision communication are also positively correlated with

organizational performance (Baum, Locke, & Smith, 2001). Leaders who are able

to effectively communicate a vision to their organizations had a greater impact on

organizational outcomes in comparison to the impact of organizational age or size

(Baum et al., 2001).

Leadership holds direct significance for novice and habitual entrepreneurs.

An entrepreneur’s ability to adapt their leadership competencies to the life cycle of

the organization impact the sustainability of their leadership and ultimately the

organization (Swiercz & Lydon, 2002). Studies on entrepreneurship and

leadership began by examining entrepreneurs’ biographical and psychological

profiles to determine how the person’s characteristics impacted their ability to lead

and grow an organization. However, focusing on entrepreneurial characteristics

did not fully answer the question of how the leadership styles of entrepreneurs

impact business growth and performance. The lack of understanding of the

intersection of entrepreneurship and leadership created the need for a new

paradigm to explain this phenomenon (Fernald et al., 2005). Fernald et al.

explored the similar characteristics of both entrepreneurs and leaders. Their study

proposed a new paradigm to combine these two areas as entrepreneurial leadership.

Entrepreneurial leadership could then be defined as a distinct leadership style,

which created opportunity for future research studies.

Leadership Theory and Leadership Styles

Leadership theory has used different types of leadership styles to describe

different perspectives toward leadership. The Full Range Leadership Model

describes transformational, transactional, and laissez-faire leadership as a

continuum in that an individual’s leadership skills may fall at different points on

the continuum. The entrepreneurial leadership style is also a distinct leadership

style that has challenged the contemporary discussion about how leaders can lead

within change and uncertainty. The following section details the development of

these leadership theories.

Transformational and Transactional Leadership Theory

Since its inception, transformational leadership theory remains a

predominant paradigm in leadership research (Ghasabeh, Soosay, & Reaiche,

2015). Burns (1978) defined leadership as “the reciprocal process of mobilizing by

persons with certain motives and values, various economic, political, and other

resources, in a context of competition and conflict, in order to realize goals

independently or mutually held by both leaders and followers” (p. 425). This

researcher was the first to make the distinction between transformational

leadership and transactional leadership. Transformational leadership requires a

leader to lead in such a way that the individual, their followers, and organization

are positively transformed. The original development of transformational

leadership theory aligned with Maslow’s Hierarchy of Needs in that leaders were

challenged to move followers to the point of self-actualization (McClesky, 2014).

Bass (1985) conducted a study to determine the components of

transformational leadership. Three components, including charismatic leadership,

intellectual stimulation, and a focus on development of followers, were correlated

with transformational leadership. Bass’s initial research on this leadership style

was later conceptualized as the Full Range Leadership Model. In this model,

transformational leadership and transactional leadership were viewed on a

continuum. The key elements of transformational leadership are defined as

idealized influence, inspirational motivation, intellectual stimulation, and

individualized consideration (Avolio, 2011). The focus of transformational

leadership in this model was on improving performance and developing followers.

Conversely, transactional leadership was a leadership style that was characterized

by Contingent Reward and Management-by-Exception theories. It focused on the

completion of tasks and accomplishment of goals with rewards and negative

consequences for not meeting objectives. Essentially, transactional leadership

represents an exchange relationship between leader and follower.

Within the Full Range Leadership Model, Laissez-Faire leadership is the

final leadership style that represents the absence of leadership. This model has

been used as a foundational theory in transformational leadership research using

the Multifactor Leadership Questionnaire as the corresponding instrument to

gather data. Laissez-Faire leadership assumes that a leader is not exercising

leadership behaviors. Therefore, the emphasis of this review of literature is on

leadership behaviors demonstrated using the transformational and transactional

leadership theories within the Full Range Leadership Model.

However, transformational leadership theory has not been without criticism.

Yukl (1999) challenged previous research on transformational leadership by

articulating conceptual weaknesses within this construct. This researcher posited

that the focus of research on transformational leadership was too encompassing of

individual influence without adequate focus on organizational processes.

Additionally, he challenged that the Full Range Leadership Model did not provide

distinct constructs of transformational leadership because intellectual stimulation

tends to overlap in some capacity with individualized consideration and

inspirational motivation. This argument has also been refuted by the

interdependent relationship of all the transformational leadership elements

(Northouse, 2016). Yukl (1999) also posited that more empirical studies were

needed to determine how transformational leadership was related to leadership

effectiveness. Additional research in transformational leadership since the

criticisms published by Yukl has increased the validity of transformational

leadership as a distinct leadership style that influences individual and

organizational outcomes (Engelen et al., 2015; Ling et al., 2008a; Ling et al.,

2008b; Waldman et al., 2001). Even so, these points reinforce the need for

additional studies on leadership styles in various contexts.

Entrepreneurial Leadership Theory

Entrepreneurial leadership is in its initial stages of formation as a distinct

leadership style. The definitions of entrepreneurial leadership have evolved over

the past two decades. Cunningham and Lischeron (1991) defined entrepreneurial

leadership as setting goals and empowering people to describe entrepreneurial

activity. This definition did not adequately describe the environment or behaviors

of entrepreneurial leaders. Renko et al. (2015) described entrepreneurial

leadership as “influencing and directing the performance of group members toward

the achievement of organizational goals that involve recognizing and exploiting

entrepreneurial opportunities” (p. 55). The ENTRELEAD scale was developed to

assess this leadership style. The foundations of the entrepreneurial leadership style

related to influencing others align with the transformational leadership style.

However, entrepreneurial leadership theory should consider context within its

framework. This context could be a new venture, established corporation, or

family firm, while accounting for the individual entrepreneur’s ability to take risks,

innovate, identify new opportunities, and manage uncertainty.

Examining the definitions of entrepreneurial leadership in the literature is

only the beginning to understanding how it is characterized and fits within an

organization. Similar to the research on leadership, entrepreneurship has also been

described in terms of traits within the supply-side perspective of entrepreneurship.

The Big Five Personality dimensions within entrepreneurship are risk-taking, need

for achievement, need for autonomy, self-efficacy, and locus of control (Vecchio,

2003). These traits could also be descriptive of the entrepreneurial leadership

style. The other side juxtaposed to entrepreneurial trait theory is examining

entrepreneurial rates. Entrepreneurial rates account for the environments in which

entrepreneurial activity occurs and aligns with the demand-approach to

entrepreneurship. The entrepreneurial leadership style has also been described

using a work-oriented approach or a socio-cultural and situated approach. Under

the work-oriented approach, entrepreneurs are perceived to have specific

competencies needed to be successful. Swiercz and Lydon (2002) identified

entrepreneurial leadership competencies that were necessary for the start-up and

maturity stages of an organization, as entrepreneurs are managing the complexities

surrounding new venture creation. These functional competencies of

proactiveness, risk-taking, and innovativeness align with other research on

entrepreneurial behaviors (Covin & Slevin, 1991). The socio-cultural and situated

approach to entrepreneurial leadership considers the context and social network

around which the entrepreneurial activity occurs (Bagheri & Pihie, 2011). These

approaches to entrepreneurial leadership provide different lenses with which to

view entrepreneurial activity.

A comparison of entrepreneurial leadership, transformational leadership, and

transactional leadership styles reveals distinct differences between these three

leadership approaches. Leaders using the entrepreneurial leadership style may lack

inspiration or charisma that typically characterizes transformational leaders (Renko

et al., 2015). They may also motivate and inspire subordinates to achieve

organizational goals through imitation by role modeling instead of inspiring others

to personal achievements. Since the entrepreneurial leadership style lacks

individualized consideration as a construct, it becomes apparent that these

leadership styles are distinct. Transformational leadership inspires people to

achieve organizational goals but also accomplish personal goals. Renko et al.

(2015) proposed that the entrepreneurial leadership style does not include

individualized consideration, which is a foundational element of transformational

leadership in the Full Range Leadership Model. However, in comparing

transactional leadership style to the entrepreneurial leadership style,

entrepreneurial leadership is more transformational than transactional (Yang,

2008). The research is inconsistent on the relationship between the leadership

styles in the Full Range Leadership Model and the entrepreneurial leadership style.

Therefore, the lack of research on the combination of leadership styles presents a

gap in the literature, as well as a need for additional research in describing the

relationship between these leadership styles.

Gaps in Leadership Studies

Leadership styles have been studied in various contexts; however, research

about leadership styles and entrepreneurship has been limited. Transformational

leadership is the most common leadership style that has been studied over the last

30 years (Dionne et al., 2014). Executives in organizations can exhibit a variety

of leadership styles, but research has yet to provide data on of the combination of

the transformational, transactional, or laissez-faire leadership styles and the

entrepreneurial leadership style.

Leadership styles within entrepreneurial contexts are important to the study

of leadership, as the context has a substantial impact on future training and

development of leaders. Founders of new organizations have to take an idea from

conception to implementation, followed by growing and developing an

organization. This life cycle of an organization can impact leadership skills

exhibited by the entrepreneurs (Vecchio, 2003). Vecchio proposed a model of

entrepreneurial leadership that defines the life cycle of a start-up organization in

the following three phases: prelaunch and launch, ongoing concern, and exiting.

Each phase requires leaders to focus on different actions while managing

psychological and economic factors. High business failure rates within the first

few years of business operations present an area within leadership studies that

needs to be explored (Hann, 2013). In addition to entrepreneurial contexts,

transformational leadership has also been examined as it relates to CEOs, top

management teams, and entrepreneurs. Current research related to leadership

styles within a CEO or top management team context, as well as corporate

entrepreneurial activities defined as an entrepreneurial orientation, gives insight

into how executives use leadership styles to engage employees and increase

productivity. Leadership styles in relationship to gender, emotional intelligence,

innovation, and employee performance have also been areas of research that have

demonstrated the positive impact of leadership on organizational outcomes.

However, current research indicates the need for leadership research in other

organizational contexts, as well.

The following sections will demonstrate the gaps in research in

transformational leadership studies and entrepreneurial leadership studies by

identifying the current areas of research. To further examine the current research,

the following analysis is divided into transformational and entrepreneurial

leadership styles in order to better understand gaps in the current literature and

areas for future inquiry. Gender, emotional intelligence, organizational innovation,

and performance’s relationship with the transformational leadership style will be

examined. The section following transformational leadership will explore an

overview of the current and future research opportunities for the entrepreneurial

leadership style, including entrepreneurial contexts, gender, organizational

innovation, and performance.

Transformational Leadership Style

Research related to transformational leadership has evolved since the 1970s

from its original conception by Burns (1978). Burns identified transformational

leadership as a type of leadership that engages followers and distinguished it from

transactional leadership. Researchers continue to study this leadership theory,

making it the most frequently studied leadership style (Dionne et al., 2014). The

concept of transforming organizations and people was initially characterized as

charismatic leadership. The definition has expanded to transformational

leadership, where a leader’s personality is not solely the requisite to transform

organizations. The development of followers is an essential component of

transformational leadership, whereas charismatic leadership focuses on the leader

and organization. However, there is contradictory research on charismatic

leadership. The Conger–Kanungo Scales for charismatic leadership measures

sensitive to the environment, sensitive to members’ needs, strategic vision and

articulation, personal risk, and unconventional behavior (Rowold & Heinitiz,

2007). For the purpose of this analysis, charismatic is only one attribute of

transformational leadership under the idealized influence component, but

transformational leadership is defined as part of the Full Range Leadership Model,

including idealized influence, inspirational motivation, intellectual stimulation, and

individualized consideration (Northouse, 2016). This framework is consistently

used in research studies and evaluated using the Multifactor Leadership

Questionnaire, the most widely used assessment tool to evaluate transformational

and transactional leadership styles. Some scholars contend that transformational

leadership lacks conceptual clarity in defining it as a separate leadership style from

other leadership theories. However, the consistency of using this framework in

previous studies supports the validity of this model. Transformational leadership

has been found to be an effective leadership style in the analysis of leadership and

organizational outcomes (Nemanich & Keller, 2007; Quintana, Park, & Cabrera,

2015; Rowold & Heinitiz, 2007). Therefore, the following review of studies about

transformational leadership will examine it as a leadership style and its relationship

with CEO contexts, gender, emotional intelligence, organizational innovation, and

performance to identify gaps in the literature for future inquiry.

CEO context. CEO leadership skills are studied to determine the impact of

organizational leadership on business outcomes. Strategic management theory and

the upper echelon theory support this assertion that CEO characteristics impact

organizational effectiveness (Waldman et al., 2001). The upper echelon theory, in

combination with leadership literature, posits that organizational context does

impact the correlation between CEO behavior and firm performance. CEO

leadership styles provide a specific framework in which to examine the impact of a

CEO on their organization. Examining the literature on transformational and

transactional leadership styles informs researchers of areas needing additional

exploration.

CEO transformational leadership impacts firm performance, managing

uncertainty, and the leader/follower relationship (Ling et al., 2008a; Ling et al.,

2008b; Waldman et al., 2001). Transactional leadership and charismatic leadership

behaviors can also impact the direction of a company. Furthermore, environmental

uncertainty, combined with these leadership behaviors, may impact firm

performance. Environmental uncertainty involves economic, political, social, and

technological elements that create high stress and anxiety for management and

employees. Waldman et al. (2001) conducted a study addressing CEO leadership

behaviors in uncertain environments. This study included 210 executives from

Fortune 500 companies who completed a questionnaire about transactional and

charismatic leadership styles. Charismatic leadership style was defined as “a

relationship between an individual (leader) and one or more followers based on

leader behaviors combined with favorable attributions on the part of followers” (p.

135). This style of leadership explored in the Waldman et al. study was under the

premise that charismatic leadership includes leaders generating feelings of

admiration from their followers. Although this type of leadership is not

synonymous with transformational leadership, charismatic leadership, as defined in

this study, resembles the visionary, inspirational, and high expectations associated

with transformational leadership. Uncertainty was defined as “an individual's

perceived inability to understand the direction in which an environment might be

changing, the potential impact of those changes on that individual's organization,

and whether or not particular responses to the environment might be successful”

(p. 136). The findings from the Waldman et al. study indicated that charismatic

leadership is positively correlated with firm performance and environmental

uncertainty. This research indicated that uncertain environments would affect

charismatic leadership, which can be defined as a construct of transformational

leadership under the Full Range Leadership Model. Strategic leadership skills are

needed in times of uncertainty and change. While an organization may not

experience an external influence, such as the economy creating uncertainty,

organizations continually have to adapt to technology and innovations within their

respective industries and organizations. Due to limited research related to CEO

leadership behavior and profitability, the Waldman et al. study confirms the need

for additional research in the area of leadership behavior and uncertainty. While

this study was conducted in a CEO context, entrepreneurs face uncertainty in the

different phases of operation. The moderating effect of uncertainty could affect

leadership styles in other contexts besides the CEO context. The impact of various

leadership styles on performance with uncertainty as a moderating variable has

also yet to be studied.

Additionally, Ling, Lubatkin, Simsek, and Veiga (2008b) sought to explore

the impact of a CEO’s transformational leadership behaviors in promoting

corporate entrepreneurship by shaping the behaviors or characteristics of the top

management team (TMT). This study included 152 small- to medium-sized

enterprises (SMEs), their CEOs, and 416 TMT participants from within those

organizations, who completed a survey about transformational leadership,

behavioral integration, risk propensity, decentralization of responsibility, corporate

entrepreneurship, and executive compensation. The findings indicated TMTs

would be an intervening mechanism between CEOs demonstrating

transformational leadership behaviors and the rise of corporate entrepreneurship in

a firm. Therefore, these results are in alignment with the upper echelon theory in

that top executives affect organizational goals and outcomes.

CEO’s were also found to positively impact firm performance in SMEs,

especially when demonstrating transformational leadership behaviors (Ling et al.,

2008a). Ling et al. explored how organizational context related to performance

and leadership style. One hundred twentyone firms were represented in this study,

which included a total of 330 participants. The upper echelon theory was also used

as the conceptual framework for this study, as this theory is commonly used as a

framework for leadership studies involving CEOs or top management teams as

participants. Findings indicated that more experienced CEOs increased firm

performance in comparison to less experienced CEOs, and CEOs using a

transformational leadership style had a greater effect on performance in smaller

organizations. The CEO context is not the only variable that affects organizational

outcomes, and additional research in various organizational contexts is needed.

Entrepreneurial orientation. Organizational culture can also impact

leadership styles. One specific aspect of organizational culture that is relatively

new in the literature is an entrepreneurial orientation. Entrepreneurial orientation

(EO) within organizations is a strategic organizational position that focuses the

organization and its people on innovation, new opportunities, proactivity, and risk-

taking (Engelen et al., 2015). Essentially, an entrepreneurial orientation focuses on

entrepreneurship within corporate settings. Organizations must be open and

receptive to feedback and improvement in order for an entrepreneurial orientation

to be fostered and not squelched. Hostile environments, where new and creative

ideas are not wanted, can stifle organizational innovation. The resource-based

theory of a firm and the upper echelons theory are key theoretical constructs in

which to understand the impact of transformational leadership on EO. The

resource-based theory suggests that tangible and intangible resources strategically

impact an organization’s performance (Barney, 1991). Through this lens, the

resource-based view identifies an EO as a dynamic capability, resulting in a

potential competitive advantage for an organization (Todorovic & Schlosser,

2007). The upper echelons theory posits that executives influence the movement

of an organization and its adoption of innovation and change. In combination with

the upper echelons theory, the adaptive leadership theory focuses on “adaptions

required of people in response to changing environments and how leaders can

support them during these changes” (Northouse, 2016, p. 274). Since adaptive

challenges are not easy to define, these challenges could resemble the uncertainty

experienced by executives and entrepreneurs as they lead their organizations.

However, the lack of established research using the adaptive leadership theory that

relies on ideas and assumptions made the other three selected leadership theories

more suitable for entrepreneurial contexts in this study

(Northouse, 2016). Even so, the combination of the upper echelons theory and

resource-based theory of a firm suggests that the intangible leadership style of

executives contributes to organizational performance and development (Engelen et

al., 2015).

Transformational leadership behaviors can help facilitate open and receptive

organizational cultures to innovation and change because this leadership style

emphasizes building trust and empowering employees. In examining leadership

behaviors within this context, Engelen et al. (2015) examined the impact of

transformational leadership behaviors on EO and firm performance. These

researchers conducted a study with 790 executives at SMEs who completed a

survey studying transformational leadership styles, entrepreneurial orientation, and

firm performance. The findings indicated that EO is positively correlated with

firm performance, and transformational leadership behaviors did impact EO.

Kouzes and Posner (2012) suggest that transformational leadership needs to

be modeled through practice in their transformational leadership theory.

Transformational leadership, combined with an entrepreneurial orientation,

requires active modeling through individual pursuit of becoming entrepreneurial in

order to inspire employees to embrace this type of behavior. An entrepreneurial

orientation has been suggested as a resource for established organizations;

however, research has yet to indicate how these types of behaviors translate into

helping a developing business become profitable.

Gender. Leadership styles and gender have also been a focus of research to

delineate gender differences in leadership styles (Eagly, Johannesen-Schmidt, &

van Engen, 2003; Eagly & Johnson, 1990). Powell (1990) explored the claim

about differences in leadership styles in reviewing research on gender and

managerial style, indicating there was no meaningful difference in how gender

influences managers. A meta-analysis of 161 studies on gender and leadership

from 1961-1987 challenged this perception that men and women do not differ in

their leadership styles (Eagly & Johnson, 1990). Eagly and Johnson analyzed the

studies, and their findings categorized women as participatory leaders where

subordinates have a voice in decisions, but men tend to be directive leaders who

discourage participation in decision-making by subordinates. Women could also

be described as having an interpersonal-oriented leadership style, while men had a

task-oriented leadership style. Eagly, Johannesen-Schmidt, and van Engen (2003)

later described these initial findings by Eagly and Johnson (1990) using the Full

Range Leadership Model in an additional meta-analysis to understand how gender

impacts transformational leadership behaviors. These researchers completed a

meta-analysis of 45 studies on transformational, transactional, and laissez-faire

leadership styles. The studies conducted on gender and leadership styles revealed

that women are more likely to demonstrate transformational leadership behaviors

and men more frequently demonstrate transactional leadership behaviors (Eagly et

al., 2003). The interpersonal-oriented leadership style of women, described by

Eagly and Johnson (1990) over a decade before, aligns with the transformational

leadership style described in this meta-analysis. However, the effect size between

men and women’s leadership styles was small. Further research is needed to

clarify how gender affects leadership style. Transformational leadership behaviors

exhibited by both women and men led to leadership effectiveness. While gender

can impact leadership behaviors, it was not a reliable predictor of leadership style

(Eagly et al., 2003).

Finally, recent research has reinforced the differences between men and

women’s leadership styles (Paustian-Underdahl, Walker, & Woehr, 2014).

Paustian-Underdahl et al. completed a meta-analysis of 99 studies examining

gender and leadership effectiveness as a follow-up to the meta-analysis by Eagly,

Karau, and Makhijani (1995). The findings from this analysis indicated

differences in men and women’s perceived leadership effectiveness depending if

the study used self-reported data or ratings by others. In 64 of the studies, women

were found to be more effective leaders when using ratings reported by others in

organizational contexts but not in laboratory settings (Paustian-Underdahl et al.,

2014). Studies with self-reported data found men to be perceived as more effective

leaders. This meta-analysis also found that the number of male and female

subordinates also impacted leadership ratings. These findings show how context

impacts research on leadership styles and gender.

Emotional intelligence. A transformational leader helps employees

overcome frustrations, stress, and burnout by being aware of the emotions of others

and redirecting those emotions and feelings to constructive behaviors. Mayer and

Salovey (1993) developed the emotional intelligence theory as “a type of social

intelligence that involves the ability to monitor one's own and others' emotions, to

discriminate among them, and to use the information to guide one's thinking and

actions” (p. 443). The four facets of the emotional intelligence model are

perceiving, using, understanding, and managing emotions (Salovey & Grewal,

2005). The ability to perceive emotions enables leaders to detect outward

expression in others and for a leader to identify their own emotions. Using

emotions moves beyond the recognition phase into the implementation phase of

applying those emotions to problem solve. Understanding emotions requires an

intuitive approach to delineate between small emotional changes. Finally,

managing emotions addresses one’s ability to regulate their emotions and other’s

emotions. Leaders cannot overlook emotional intelligence in the employee hiring,

promotion, and retention process (Goleman & Boyatzis, 2008).

Goleman (1998) described emotional intelligence as a broad construct

composed of personal and social competencies. The different competencies are

identified as self-awareness, self-regulation, motivation, empathy, and social skills.

Managing emotions has significant implications for leaders, as it can directly

impact productivity and achievement of goals (Salovey & Grewal, 2005). In high-

complexity jobs, emotional intelligence distinguishes between low and high

performers (Goleman, 1998). A leader’s capability to channel others’ emotions is

vital in executive positions within an organization and could be viewed as a

personal competitive advantage. Emotional intelligence is an ability that sets

effective leaders apart from their peers. The ability of a leader to regulate their

emotions, as well as monitor the emotions of the people around them, can also lead

to leadership effectiveness in conjunction with a transformational leadership style

(Hur, van den Berg, & Wilderom, 2011).

Research on leadership and emotional intelligence supports the necessity for

leaders to develop this ability. Hur et al. (2011) addressed the topic of emotional

intelligence, transformational leadership, and team outcomes by conducting a study

of 859 employees who were employed by a public sector organization in South

Korea. The study sought to discover the connection between leadership skills and

emotional intelligence to determine how these factors impacted leadership

effectiveness, team effectiveness, and the service climate of an organization. The

findings revealed that transformational leadership mediates emotional intelligence

and leader effectiveness. Therefore, leaders with high emotional intelligence have

a greater propensity to becoming a transformational leader. Additional research on

leadership and emotional intelligence, including a representative sample of

multiple companies, would add to this research.

Emotional intelligence has also been studied in entrepreneurial contexts.

Yitshaki (2012) conducted a study to discover the connection between emotional

intelligence and transformational leadership behaviors to firm growth. The

participants represented 99 entrepreneurial firms. The findings correlated

emotional intelligence with the intellectual stimulation and individualized

consideration aspects of transformational leadership theory. However, the

charismatic-inspirational behaviors of transformational leadership were the only

construct that directly impacted firm growth in this study. These findings represent

an initial correlation between emotional intelligence of entrepreneurs and

transformational leadership behaviors in emotional intelligence research.

A meta-analysis of studies on emotional intelligence and transformational

leadership proposed a more moderate relationship between emotional intelligence

and transformational leadership after assessing data collection methods and

assessment tools (Harms & Credé, 2010). Since studies have not consistently used

the same assessment tools to evaluate emotional intelligence, a multi-method

framework would provide clarity to inconsistencies in this area of research.

Implying that emotional intelligence is at the core of a transformational leadership

style may not reflect the actual research; however, evidence exists for the effect of

emotional intelligence when examining the inspirational motivation and

individualized consideration components of the transformational leadership style

(Palmer, Walls, Burgess, & Stough, 2001). Emotional intelligence and its

relationship with leadership is a more recent area of research that has developed

over the past 30 years, and continued research is warranted to better understand

how leaders can use emotional intelligence in various contexts.

Organizational innovation. Innovation and creativity are no longer

optional characteristics of leadership within an organization. Innovation can be

defined “as the introduction of new and beneficial ideas, process or products” (Li,

Mitchell, & Boyle, 2016, p. 67), and creativity is at the core of innovation.

Previous research indicates that leadership is one of the most influential factors

impacting employee creativity and performance (Jung, Chow, &

Wu, 2003; Mumford, Scott, Gaddis, & Strange, 2002). Examining how employee

creativity can be maximized through specific leadership behaviors can provide

insight into developing organizational cultures with high levels of employee

creativity and innovation. Jung et al. (2003) studied the impact of transformational

leadership on innovation in 32 electronics/ telecommunications companies. A

finding from this study indicated that transformational leadership behaviors are

positivity related to support for innovation. This finding is significant in that

organizations can train managers and leaders to become transformational leaders in

order to stimulate an organizational culture open to creativity and innovation.

Innovative organizations need leaders that can define parameters, while guiding

others through ambiguity, in order to balance producing and exploring (Mumford

et al., 2002). The study of transformational leadership that inspires and empowers

others has resulted in increased popularity in current research on innovation and

creativity (Gong, Huang, & Farh, 2009; Jung et al., 2003; Li et al., 2016; Mumford

et al., 2002).

Li et al. (2016) studied the impact of group-level transformational leadership

behaviors on group innovation. Group-level transformational leadership behaviors

were positively correlated with group innovation, but it had an inverse effect on

individual innovation. Differentiating group-level and individual-level

transformational leadership behaviors also take context into consideration instead

of defining a leadership style as static. Studies related to transformational

leadership have resulted in positive correlations between employee performance

and specific leadership behaviors (Gong et al., 2009). However, the relationship

between transformational leadership, creativity, and a learning orientation has

shown weak correlations in previous studies. Cultivating employee creativity and

assessing its impact on performance requires a long-term evaluation. Gong et al.

provided evidence indicating a positive relationship between transformational

leadership behaviors, employee creativity, and self-efficacy as a mediator. These

researchers concluded that a high learning orientation would help promote

employee creativity, and transformational leadership would enhance this creativity

through interactions with subordinates over an extended period of time. Creating

an organizational culture that values creativity and innovation can be reinforced by

transformational leadership behaviors.

Research about leadership and its relationship to creativity and innovation

continues to expand in support of leadership positively affecting innovation

(Mumford et al., 2002). Studies have also shown creativity and innovation’s

positive effect on organizational performance, while limitations in studies still exist

in comparing leadership of creative people in “cross-field content differences” (p.

736). Expanding research to explore different leadership styles’ effect on

innovation and how the leadership of creative people differs by industry could

broaden this area of inquiry.

Performance. Employee and organizational performance are outcomes

influenced by organizational practices. Current research related to

transformational and transactional leadership suggests that organizational

performance and the leader/follower relationship are two distinct outcomes of

these leadership styles (Quintana, Park, & Cabrera, 2015). The contextual

variables such as the industry, size of the organization, and organizational structure

can impact the relationship between leadership styles and performance (Rowold &

Heinitiz, 2007). Performance measures such as productivity, revenue, profit, or

return on investment are measures that can be used to indicate how leadership

styles impact organizational outcomes. Distinguishing between the unique

constructs of transactional and transformational leadership is also required to

research them as independent or interdependent leadership styles. Rowold and

Heinitz (2007) studied 220 employees at a public transport company in Germany

to determine how transactional, transformational, and charismatic leadership styles

were related to employee performance and profit. This study was significant to the

research on transformational leadership, as charismatic leadership was not studied

as a part of transformational leadership. Charismatic leadership was studied using

the Conger–Kanungo Scales, which identifies the components of charismatic

leadership as sensitive to the environment, sensitive to members’ needs, strategic

vision and articulation, personal risk, and unconventional behavior. Individualized

consideration, individualized influence attributed and behavior, intellectual

stimulation, and individualized consideration were the components of

transformational leadership explored in this study. The findings from their study

indicated that transformational leadership strengthened the impact of charismatic

and transactional leadership on profit.

The organizational context has also been deemed an important factor in

evaluating the effect of transformational leadership behaviors. Uncertain

environments, such as organizational change, mergers, or acquisitions, have

received limited attention in leadership research. Nemanich and Keller (2007)

sought to address this gap in leadership literature by studying the effect of

transformational leadership behaviors using the mediating mechanisms of goal

clarity and support for creative thinking to determine its impact on employees who

experienced an organizational merger. The performance was evaluated in terms of

employee output, given the negative impact organizational uncertainty can have on

output. Transformational leadership was positively associated with job satisfaction

and employee output, indicating that transformational leadership behaviors can

minimize the potential negative productivity effects resulting from a changing

environment. As evident in this study, continued research of transformational

leadership, performance, and other mediating variables will clarify the relationship

between performance and leadership. Nevertheless, transformational leadership’s

effect on productivity and performance is noteworthy in training and developing

business leaders.

Entrepreneurial Leadership Style

Some scholars have posited that entrepreneurial leadership research lacks

clarity and assessment tools (Harrison, Leitch, & McAdam, 2015). The literature

related to entrepreneurial leadership has been examined using psychological and

disciplinary research as a categorical divide between internally focused studies

using a trait approach to theory development and externally focused studies based

on observed behaviors in specific contexts. The past 20 years of research have

presented inconsistencies in studying entrepreneurship as a subdomain of

leadership and studying entrepreneurial leadership as one domain of an essential

element of leadership literature. Some scholars propose entrepreneurial leadership

to be studied as a leadership construct as part of the larger domain of leadership

(Renko et al., 2015).

Entrepreneurial leadership research cannot solely look at traits and behaviors

and ignore the context in order to have a holistic approach to research. The risk,

uncertainty, and unique environmental constraints surround the context of

entrepreneurship set it apart from other disciplines. However, Harrison et al.

(2015) argue that leadership theories grounded in large corporate contexts should

not be directly applied to entrepreneurial contexts. Entrepreneurial leadership

theory within corporate contexts tends to address the issue of leading through

change and innovation as an entrepreneurial orientation and its association with

other leadership styles (Engelen et al., 2015; Todorovic & Schlosser, 2007). Some

researchers have argued that entrepreneurial leadership is not solely limited to new

small businesses, and it is a leadership style that can be used to turn around

organizations (Renko et al., 2015). Therefore, the following review of studies on

entrepreneurial leadership will examine it as a broad leadership style that can be

applied to a variety of domains such as entrepreneurial contexts, gender,

organizational innovation, and performance to identify gaps in the literature for

future inquiry.

Entrepreneurial contexts. Influences impacting entrepreneurs exhibiting

an entrepreneurial leadership style are human capital, organizational stakeholders,

industry, nature of competition, and customer relationships (Jones & Crompton,

2009). The size of the organization also impacts entrepreneurs’ direct influence on

employees and organizational outcomes. Jones and Crompton examined these

factors by taking a sample of eight manufacturing owner-managers out of a larger

study of 90 small- to medium-sized enterprises (SMEs) in various industries.

These owner-managers heavily influenced the daily activities of the organization

and exhibited a leadership style focusing on developing the business. However,

contradictory findings have suggested that the leadership styles of entrepreneurs

and managers differ, presenting a need to further delineate between founders,

business owners, and business managers (Ardichvili, 2001). The research on

entrepreneurs leading SMEs also shows the development of leadership style based

on organizational and environmental constraints (Kempster & Cope, 2010).

However, an emphasis on qualitative, exploratory studies of SMEs presents an

opportunity for leadership within an entrepreneurial context to be further explored

using other methodologies.

Gender. Management and leadership theorists have also studied gender to

ascertain its role in interpersonal relationships and the workplace (Powell, 1990).

In translating current management and leadership theory to entrepreneurial

leadership, gaps exist in the theoretical underpinnings in applying it to

entrepreneurial leadership. Social constructivism and critical management studies,

as a theoretical framework, can address how women in entrepreneurial leadership

affect society as a whole (Harrison et al., 2015). However, the lack of studies

related to gender and the entrepreneurial leadership styles presents an opportunity

for future research. Yordanova and Tarrazon (2010) examined gender

differences in entrepreneurial intentions and determined that gender did affect the

pre-venture process and attitudes about entrepreneurship. Women had lower

entrepreneurial intentions than men, yet the difference began to diminish if females

had higher perceived behavioral control and a supportive network of people.

While these researchers did not specifically study entrepreneurial leadership, it

represents the gap in the literature on gender and entrepreneurial leadership.

Studies focusing on women entrepreneurs in international contexts provide

the foundation for future research addressing gender differences. In studying the

leadership styles of Chinese women entrepreneurs, Li, Bao, and Jiang (2013)

discovered that the majority of the women demonstrated an achievement-oriented

leadership style, which is inconsistent with previous literature on women in

Chinese culture. Chinese women tend to demonstrate supportive leadership

behaviors that have been deemed feminine in comparison to more masculine

qualities, such as boldness and independence. This change in gender roles in

Chinese women entrepreneurs reveals that context impacts the way in which

women operate in business, even if it is contrary to cultural norms. However, one

cultural setting cannot be used as the standard for evaluating women’s leadership

as entrepreneurs.

A qualitative study of 35 women entrepreneurs in Kenya, Mexico, Nigeria,

and the United States of America endeavored to show the correlation between

entrepreneurial leadership and cognitive ambidexterity in women entrepreneurs

(Onyemah, & Pesquera, 2015). Cognitive ambidexterity has two dimensions of

prediction and creation logic, which was applied to finding new customers in the

study by Onyemah and Pesquera. Prediction logic results in using the past as a

standard for future engagement; however, creation logic is employed when the

future is uncertain, unknown, or different than past experiences. Women

entrepreneurs in emerging economies using creation logic in comparison to

entrepreneurs in developed countries used both creation and prediction logic to

obtain customers. Cultural constraints and changing dynamics within the

marketplace could account for these differences. Even so, this study developed an

additional area within entrepreneurial leadership and gender studies to be further

examined. Finally, the age of women engaging in new ventures can impact their

entrepreneurial leadership, as well. An exploratory, qualitative study of 18 young

women entrepreneurs revealed the gender and age obstacles in certain industries

can present challenges for these new entrepreneurs (McGowan, Cooper, Durkin, &

O’Kane, 2015). However, human capital identified in the entrepreneurs’ own

work experiences and education were key variables in their success as emerging

entrepreneurial leaders.

Gender studies using the entrepreneurial leadership style tend to focus on

women entrepreneurs instead of studying gender differences in leadership in an

entrepreneurial context. Examining how this context affects men and women’s

leadership styles would add to the current literature on gender and leadership.

However, the more recent focus of inquiry on the entrepreneurial leadership style

explains this gap in gender studies and provides a foundation and framework for

future research.

Organizational innovation. The previous discussion of leadership’s effect

on innovation and creativity can also be applied to a variety of leadership

constructs. However, a new venture requires a different level of innovation and

creativity to be exhibited by the entrepreneur in order to establish the organization

(Chen, 2007). Research that examined entrepreneurial leadership’s effect on team

creativity within Taiwanese business incubators supported entrepreneurial

leadership’s positive relationship with team creativity. Team creativity moderated

the relationship between the entrepreneur’s leadership style and innovation. It is

unclear how venture funding mediates the relationship between entrepreneurial

leadership and innovation, as the Taiwanese government funded the business

incubators providing start-up funding for these new high-tech ventures. Funding

and the industry could have directly impacted the innovation within the high-tech

firms, making the findings not transferrable to other industries lacking innovative

practices.

Furthermore, leadership, innovation, and entrepreneurship have been studied

simultaneously where the role of manager and entrepreneur were not delineated as

separate functions (De Jong & Den Hartog, 2007). Some of the behaviors

associated with innovation include intellectual stimulation, providing vision,

modeling, providing support for innovation, and feedback. These behaviors have

also been linked with entrepreneurial leadership behaviors and transformational

leadership behaviors. Current research related to innovation and the

entrepreneurial leadership style is certainly limited, requiring a research agenda to

be developed by scholars in those fields of study.

Performance. Recent attention focused on entrepreneurial leadership

research has provided limited research investigating how entrepreneurial

leadership as a distinct leadership style affects organizational performance.

Leadership behaviors have a positive relationship with organizational outcomes,

but other leadership styles have predominately been the focus of research in this

area (Dvir, Eden, Avolio, & Shamir, 2002). Examining studies on entrepreneurial

orientation can give insight in that entrepreneurial behaviors positively impact

performance (Engelen et al., 2015). Studies on entrepreneurial orientation,

leadership, and performance indicate a positive relationship between these

variables. However, the entrepreneurial leadership style is not the same as an

entrepreneurial orientation adopted by an organization, and limited research on this

leadership style and performance from a leadership perspective provides an area of

future inquiry for researchers.

Research related to CEO charismatic leadership behaviors and its positive

relationship to performance in unstable environments gives a preliminary

understanding of how the entrepreneurial leadership style may positively impact a

firm’s performance (Waldman et al., 2001). Hmieleski and Ensley (2007) studied

how entrepreneurial leadership behaviors, in conjunction with the top management

team (TMT) heterogeneity and industry environmental dynamism, affected new

venture performance. Industry environmental dynamism took into account the

degree of change within the industries of the participants. In high industry

environmental dynamism, entrepreneurs with directive leadership behaviors were

positively related to firm performance and TMT heterogeneity in comparison to

empowering leadership, which had a positive relationship with homogenous

TMTs. Entrepreneurial leadership tends to be more dynamic than other leadership

styles, as changing and unstable environments perpetuate the need for leaders to

respond quickly in making decisions.

Performance metrics could also be interpreted as employee performance or

development. Human capital development by means of entrepreneurial leadership

impacts global competitiveness. In multinational companies, international human

capital management practices, defined as global selection, human capital

investment, global leadership development, and normative integration, mediate the

relationship between global competitiveness and entrepreneurial leadership (Ling

& Jaw, 2011).

Finally, Baum, Locke, and Kirkpatrick (1998) explored the impact of vision

and communicating vision by entrepreneurs on their respective firm’s

performance. Vision has been associated with charismatic, transformational, and

entrepreneurial leadership styles. Effectively communicating vision in spoken and

written communication has positive effects on new venture growth (Baum et al.,

1998). As evident from this study, studying entrepreneurial leadership and

performance and other mediating variables would bring insight to the relationship

between performance and this leadership style as a distinct style in leadership

research.

Conclusion

Research that examines leadership styles has largely focused on

transformational leadership and its relationship to entrepreneurial orientation,

gender, emotional intelligence, innovation, and performance. Studying leadership

styles within various contexts is more limited, and new leadership styles are

emerging. The entrepreneurial leadership style represents a more recent

development in leadership studies, and it has gained recognition because of its

overlap in behavioral characteristics to transformational leadership while operating

within changing or uncertain environments. The entrepreneurial leadership style

has yet to be studied in depth using the same variables, such as entrepreneurial

orientation, gender, emotional intelligence, innovation, and performance (Renko et

al., 2015). Additional research is needed to understand how context impacts

leadership style, as well as the relationship between transformational leadership,

transactional leadership, or laissez-faire leadership and the entrepreneurial

leadership style. Discovering the relationship between these leadership styles will

result in a significant contribution to the leadership literature through developing a

new understanding of how the combination of leadership styles can facilitate

organizational performance. Examining leaders’ positional and organizational

contexts could also provide insight into the transferability of leadership styles to

different environments, as well as how leadership style impacts entrepreneurial

organizations while navigating through environmental uncertainty.

Organizational competitiveness is an essential component of modern

businesses. Organizations continue to focus on increased performance and

productivity, as it affects profitability. Businesses no longer have the luxury of

relying on mediocre leaders to move their organization forward and increase

profitability. Previous evidence of leadership’s relationship with employee and

organizational performance reinforces that the leadership styles of executives

cannot be overlooked by their organizations, as they confront change, manage

employees, and maintain a competitive advantage.

Leadership’s Impact on Business Performance

Leadership is related to performance (Dvir et al., 2002; Engelen et al., 2015;

Hmieleski & Ensley, 2007; Rowold & Heinitiz, 2007). Idris and Ali (2008) also

confirmed this assertion by studying the impact of best practice management as a

mediating variable between leadership style and performance. However, in

examining CEO and performance relationships, research on founder- and non-

founder-owner impact on performance has been inconclusive (Daily & Dalton,

1992; Jayaraman, Khorana, Nelling, & Covin, 2000). Founder CEOs may function

more like entrepreneurs and nonfounder CEOs may have a more distinct

managerial style (Daily & Dalton, 1992). Research focusing on founder

characteristics has also resulted in an incomplete understanding of which

characteristics make a difference within the founder’s human capital and previous

experience to start and sustain a successful venture (Sapienza & Grimm, 1997;

Westhead, 1995). Furthermore, Jayaraman, Khorana, Nelling, and Covin (2000)

conducted a study of founder and nonfounder CEOs and their findings indicated

that the age and size of the organization mediated the effects of founder

management. Owner-founders had a greater impact on the stock performance of

younger businesses in comparison to older, more developed organizations.

Therefore, an entrepreneur’s duration at a business could impact business

performance.

Understanding the leadership styles of entrepreneurs that help sustain an

organization is another lens through which to understand business life cycles and

entrepreneurial endeavors. A transition between leadership styles may be required

to create business growth for an organization in operation for over five years

(Swiercz & Lydon, 2002). Examining the relationship between performance and

leadership styles changes the focus from unchangeable characteristics of a founder

to a set of leadership skills that could be honed and developed. Therefore,

leadership styles provide a more robust framework through which to understand

this relationship between leadership and performance. Swiercz and Lydon (2002)

identified a gap in the research on how an entrepreneurial CEO transitions their

leadership competencies to move an organization from start-up to a sustained

venture. Leadership style may impact business failure rates in that entrepreneurs

do not have the leadership skills needed to move from founder to managing

executive. Examining how leadership skills of entrepreneurs after the initial five

years of operation could give insight into how to create a sustainable company in

order to decrease the new business failure rate. Furthermore, founder CEOs’ with

transformational leadership behaviors had a greater impact on firm performance

than nonfounder CEOs (Ling et al., 2008a). Additionally, Ling et al. found that

CEOs with longer tenures were more effective in leading in small to medium

enterprises (SME) in using a transformational leadership style. These data provide

evidence for the effectiveness of transformational leader CEOs, but their study did

not examine the impact of entrepreneurial leadership within the SME context.

Additional research is needed to clarify the relationship between performance and

leadership styles.

Theoretical Framework

This review of literature points to key theoretical constructs on which to

examine leadership styles and business performance. The theoretical framework

for this study is based on transformational, transactional, and laissez-faire

leadership styles from the Full Range Leadership Model and the entrepreneurial

leadership style. These theories provide the basis for the conceptual framework of

using leadership theories, entrepreneurship theory, and upper echelons theory as a

lens through which to examine leadership within entrepreneurial contexts. The

upper echelons theory should be extended to research on leadership styles, as

personal qualities have correlated with firm outcomes (Waldman et al., 2001).

This theory posits that leadership impacts firm outcomes. Furthermore, examining

leadership styles of entrepreneurs builds on previous literature about how

environmental uncertainty moderates the relationship between leadership and

performance. Therefore, grounding this study in strategic management, leadership,

and entrepreneurship theory gives a basis for understanding how specific styles of

leadership can impact organizational outcomes in the 21st century.

Conclusion

The literature indicates that leadership will remain a primary area of research

in understanding how executives in organizations impact organizational outcomes.

Moderating variables, such as emotional intelligence, innovation, and

organizational contexts, provide a more distinct picture of how leaders can use

leadership styles as a pathway for organizational growth. Leadership research has

largely focused on large organizations, providing limited understanding to how

leadership in start-up organizations and SMEs impact firm outcomes. Most

organizations start as a small business with less than 500 employees. Research on

leadership within entrepreneurial organizations is burgeoning, as small businesses

comprise 99.7% of U.S. employer firms (U.S. Small Business Administration,

2012). Discounting this sect within business and leadership research provides an

insufficient view of leadership in a changing business environment.

Leadership styles have been positively correlated with business success;

however, understanding how the age of the business impacts the leadership styles

of entrepreneurs could also provide insight. This current study will fill a gap in the

current literature by addressing the leadership styles of transformational,

transactional, and laissez-faire leadership in combination with the entrepreneurial

leadership style, while examining firm characteristics as moderating variables

between leadership style and performance. Chapter III describes the methods and

measures to be used in this research study.

CHAPTER III METHODS AND PROCEDURES

The purpose of this study is to describe the leadership styles of entrepreneurs

who operate successful businesses as determined by the success factors of business

longevity, profitability, and number of employees. Specifically, this study will

investigate the combination of leadership styles to ascertain the styles most

frequently correlated with the building, growing, and sustaining of a business. A

review of the literature exposed a gap in the research related to the leadership

styles of entrepreneurs. Research related to the relationship between leadership

styles from the Full Range Leadership Model, including the transformational,

transactional, and laissez-faire leadership, and the entrepreneurial leadership style

in entrepreneurial organizations is limited. This chapter includes sections on

research design, research variables, participants, measures, procedures, and data

analysis.

Research Design

This study will include a descriptive research methodology by employing a

survey data gathering technique. Survey research is an appropriate design when

describing “the attitudes, opinions, behaviors, or characteristics of the population”

(Creswell, 2012, p. 376). This research design has often been used in social

science research. For this study, a cross-sectional survey design will be used to

gather data to “examine current attitudes, beliefs, opinions, or practices” (p. 377).

Participants will identify characteristics of their leadership styles and provide

demographic information by answering survey questions. Additional data analysis

will employ quasi-experimental research measures to determine the degree of

association between variables (Creswell), and data collected from the survey will

be used to measure the relationships between variables in the data analysis. Survey

research coincides with descriptive research designs, which align with the

statistical analysis to be used to treat data collected for this study. Further analyses

will include chi-square and MANOVA. In this study, the main research questions

to be explored include the following questions:

RQ1: Which of the Full Range Leadership Model leadership styles is

dominant of entrepreneurs who sustain organizations?

RQ2: Which of the Full Range Leadership Model leadership styles is more

prevalent in the identification of leaders who also exhibit an

entrepreneurial leadership style? RQ3: How do leaders with various

combinations of leadership styles relate to the variables of gender,

education, industry type, and role in business?

RQ4: How do various combinations of leadership styles, gender, education,

industry type, and role in business relate to the success factors of years of

operation, profitability, and the difference in the number of employees?

These research questions will guide the process of defining the independent and

dependent variables, measures, data collection procedures, and data analysis.

Further statistics will be used to see if there are relationships between the

leadership styles and other variables.

Research Variables

Weiner and Mahoney (1981) proposed that business performance could be

studied as profit, profitability, or stock prices as performance metrics. The profit

metric creates a challenge in comparing organizations of various sizes, considering

that profit is relative to the revenue of the organization. However, business

profitability is calculated by comparing profits to organizational assets, and it is

stated as a percentage. Profitability has been deemed a preferred method of

comparison for organizations instead of profit. Finally, stock prices are available

for publicly traded companies. Considering that the majority of organizations in

this study will be privately held, this metric will not be available for these

businesses. In analyzing small firm performance, the change in the number of

employees has also been used as a performance metric (Runyan, Droge, &

Swinney, 2008). Profitability and the change in the number of employees will be

used as measures of performance in this study.

Business longevity has been defined as sustaining a business for a period of

time. Previous research on business longevity determinants indicated that

entrepreneurs with college degrees and beyond, as well as financial inputs at start-

up, were more likely to create organizations that prevailed (Bates, 1990).

However, the age of the entrepreneur also impacted business longevity. Bates

indicated that entrepreneurs over 55 years old were more likely to have a business

that did not exist for a long period of time (Bates, 1990). In this study,

demographic and business information, including gender (Eagly, Johannesen-

Schmidt, & van Engen, 2003; Eagly & Johnson, 1990), education level (Bates,

1990), industry type (Rowold & Heinitiz, 2007), years of operation (Bates, 1990),

the number of employees at current organization (Rowold & Heinitiz, 2007),

current role in business (Drucker, 2002; Ling et al., 2008b; Ucbasaran et al., 2003),

and profitability (Waldman et al., 2001), will be variables. Business longevity will

be explored by examining the years in operation for each business represented by

each participant. The success factors included in this study are profitability,

business longevity, and the change in number of employees. Success factors, as

defined for this study, were coined based on the literature.

Data for the education level of entrepreneurs will also be collected to further

understand the relationship between education and leadership styles. Inspirational

motivation, idealized influence (attributed), idealized influence (behavior),

intellectual stimulation, individualized consideration, contingent reward, and

management-by-exception (active), management-byexception (passive), and

laissez-faire will be the independent variables in RQ1. Leadership styles, including

transformational, transactional, and laissez-faire leadership styles from the Full

Range Leadership Model, will be the dependent variables in RQ1. The

transformational, transactional, and laissez-faire leadership styles from the Full

Range Leadership Model will be the independent variables in RQ2. The

entrepreneurial leadership style or non-entrepreneurial leadership style will be the

dependent variable in RQ2. The combination of leadership styles will be the

independent variables in RQ3. Gender, education level, industry type, and role in

business will be the dependent variables in RQ3. The combination of leadership

styles, gender, education level, industry type, and role in business will be the

independent variables in RQ4. Success factors including years of operation, the

change in number of employees since founding, and profitability, will be the

dependent variables in RQ4. Table 1 lists the variables that correspond with each

research question.

Table 1

Research Questions and Variables

Research

Questions

Independent Variables Dependent Variables

RQ1 Inspirational motivation,

idealized influence

(attributed), idealized

influence (behavior),

intellectual stimulation,

individualized

consideration, contingent

reward, and management-by-

exception (active),

management-by-exception

(passive), and laissez-faire

Transformational, transactional,

and laissezfaire leadership styles

RQ2

Transformational,

transactional, and laissez-

faire leadership

Entrepreneurial leadership style

and nonentrepreneurial leadership

style

RQ3

Combination of the

dominate leadership style

and entrepreneurial

leadership style

Gender, education level, industry

type, and role in business

RQ4 Gender, education level,

industry type, role in

business, and combination of

leadership styles

Years of operation, the change in

number of employees since

founding, and profitability

Participants

A homogenous sample of entrepreneurs will be selected for this study using

purposive sampling. Purposive sampling selects people to participate in research

based on a particular purpose (Leedy & Ormord, 2013). Purposive sampling

differs from random sampling in that the entire population is not contacted.

Businesses within the sample will initially be contacted using business directories

maintained by local Chamber of Commerce organizations and/or businesses that

are subscribers of a local business journal. The population for this study will be

entrepreneurs who are business owners whose organizations operate in the broader

metropolitan service area of a city with a population less than 500,000 people in

the Midwestern United States. This region is primarily characterized by small- to

medium-sized enterprises (SME) with 95% of businesses operating their

organization with less than 50 employees (Springfield Regional Economic

Partnership, 2016), and the total commerce annually in the area is $34 billion

dollars (United States Census Bureau, 2015). Additionally, over one million

people in surrounding counties experience the economic influence of the economic

activity in the metropolitan service area (Springfield Regional Economic

Partnership, 2016). The metropolitan service area includes 40,357 businesses with

52.65% of businesses being male-owned (United States Census Bureau, 2015).

The area has experienced a 1.6% annual growth rate in population (Springfield

Regional Economic Partnership, 2016). In comparison to 2012 data, the number of

businesses in the area decreased by 3.47% from 2007 (United States Census

Bureau, 2015). Therefore, the national recession in 2008 may have had an impact

on area businesses.

Given the significant presence of SMEs, the metropolitan service area in this

study may be representative of the national data on the majority of businesses in

the United States being small businesses with less than 500 employees. Therefore,

using this population for the sample may increase the generalizability of the

findings. The sample will be initially divided into entrepreneur and non-

entrepreneur categories based on the response to the role held by the participant

(CEO/President, Owner-founder, Owner-buyer, and Other). The role held by the

participant in the organization will be identified in the demographic information on

the survey. This subsample addresses the research questions. Furthermore,

participants’ number of years of business operations will be accounted for in the

data analysis process.

The researcher for this study obtained approval from the Institutional

Review Board (IRB) in order to protect participants. The number of businesses

operating in the greater metropolitan service area included in this study is 40,357,

which represents the population for this study (United States Census Bureau,

2015). From this population, purposive sampling will be used as the sampling

strategy, since all area businesses will not be contacted. Purposive sampling is also

appropriate to answer the research questions because entrepreneurs within the

constraints of the population for this study are representative of typical

entrepreneurs (Leedy & Ormrod, 2013). The number of participants required for a

statistically significant sample, based on the projected size of the qualified

population, is 381 (Krejcie & Morgan, 1970). Participants will be initially

contacted through the local area Chamber of Commerce organizations using

business lists maintained by these organizations. Businesses that are subscribers to

the area business journal will also be invited to participate in this study. These

groups are estimated to have 9,000 to 10,000 area businesses. Chamber of

Commerce events, website postings, email, mail, phone, and in-person contact will

be the means of contacting the participants. Results are reported in aggregate, and

data will be stored on a password-protected computer to ensure the protection of

the participants. Subjects will be voluntary participants and will not receive

compensation for participation in this study. Threats to external validity will be

addressed in the selection of participants.

Measures

The designated research design results in the use of a three subpart survey.

The first subpart of the survey will collect demographic information. The second

and third subparts of the survey will use the Multifactor Leadership Questionnaire

(MLQ) (Bass & Avolio, 1990) and the ENTRELEAD scale (Renko et al., 2015).

Initial procurement of licenses for the MLQ and permission from the researchers

who developed the ENTRELEAD scale was obtained. Dividing the survey into

three parts facilitates addressing all four research questions. Validity and reliability

will be increased by the instrument selection and research studies that tested the

instruments for reliability and validity (Antonakis, Avolio, & Sivasubramaniam,

2003; Avolio & Bass, 2004; Heinitz et al., 2005; Muenjohn & Armstrong, 2008;

Renko et al., 2015).

The first part of the survey will collect information on (a) gender, (b)

education level, (c) industry type, (d) years of operation, (e) number of employees

at a current organization, (f) current role in business, and (g) profitability. Gender

categories will include (a) male, (b) female, or (c) do not elect to report. Education

level will be designated by the following categories on the survey: (a) no diploma;

(b) high school diploma or equivalency; (c) associate degree, junior college, or

trade school; (d) bachelor’s degree; (e) master’s degree; (f) doctoral or professional

degree; or (e) do not elect to report. Industry will be categorized using the North

American Industry Classification System (NAICS), including (a) manufacturing,

(b) wholesale trades, (c) retail trades, (d) information trades, (e) real estate, (f)

profession and/or technical services, (g) administrative and/or support services, (h)

educational services, (i) healthcare and/or social services, (j) arts and/or recreation,

(k) accommodations, or (l) other. Participants will numerically identify years of

operation and the number of employees at the current organization. The

participants’ current roles in their businesses will be designated by the following

categories on the survey: (a) CEO/President, (b) Owner-founder, (c) Owner-buyer,

or (d) Other. Profitability will be reported as a percentage based on the profit

margin divided by revenue for the past year of business operations, as well as the

cumulative percentage of profitability over the past five years.

This study will use the Multifactor Leadership Questionnaire (MLQ) to

assess differences in transformational, transactional, and laissez-faire leadership

styles (Bass & Avolio, 1990). Bass originally developed this instrument, and it

was based on qualitative interviews with 70 executives in South Africa (Bass &

Avolio, 2004). It assesses transformational leadership, transactional leadership,

and laissez-faire (passive/avoidant) leadership styles. Multiple revisions have

resulted in improving the instrument. The purpose of the MLQ is to differentiate

between effective and ineffective leaders by classifying leaders under specific

leadership styles and to understand how varying leadership behaviors affect

employee satisfaction, effectiveness, and organizational performance. MLQ Form

5X was tested for reliability and validity by Bass and Avolio (2004). Their

findings suggested that using self-reported data from the MLQ does not mitigate

reliability. The self-reported data from participants in this study is supported by

the research of Bass and Avolio. Using standardization of the instrument

employed in this study will increase the reliability of this study. The internal

reliability of the MLQ was assessed using Cronbach’s alpha, which resulted in .85

and .86 for goal orientation and passive-avoidant leadership, respectively (Heinitz

et al., 2005). The construct validity of the MLQ is -.53 for passive-avoidant

leadership and .20 for management by exception. Antonakis, Avolio, and

Sivasubramaniam (2003) assessed the validity of the MLQ Form 5X-Short through

a confirmatory factor analysis to test the validity within a large homogeneous

sample. The sample included a homogenous sample of business professionals (n =

3,368). The comparison of men and women in the sample supported construct

reliability. Additionally, construct validity was examined in large and small

samples (Muenjohn & Armstrong, 2008).

For this study, a modified MLQ Form 5X-Short will be used, as it details

adequate information to answer the research questions concerning

transformational, transactional, and laissez-faire leadership styles. This study will

use the data from the transformational, transactional, and laissez-faire leadership

style scores. Questions 1 through 45 on the survey under the Leadership Styles

heading in Appendix A correspond with the MLQ. Participants will complete this

portion of the survey and results will be analyzed to determine their leadership

style according to the MLQ.

In selecting this instrument, criticism of the MLQ has implied that the

leadership dimensions within the Full Range Leadership Model are not distinct

measures of the constructs. The Full Range Leadership Model, which correlates

with the MLQ, was based on interrelationships between individualized influence,

inspirational motivation, intellectual stimulation, and individualized consideration.

Therefore, the interrelationships between the constructs in the MLQ support the

overlap of leadership behaviors and characteristics within transformational

leadership. Inconsistencies in the multidimensionality may occur when using a

non-homogenous sample with the MLQ to assess leadership dimensions

(Antonakis et al., 2003). Antonakis et al. supported maintaining the distinct

constructs within the MLQ when context is part of the model using a homogenous

sample. A study by Muenjohn and Armstrong (2008) supported the concept that

these leadership constructs are distinct and confirmed construct validity in a

smaller sample.

The final part of the survey will use the ENTRELEAD scale (Renko et al.,

2015). The ENTRELEAD scale measures entrepreneurial leadership behaviors.

Questions 46 through 53 on the survey under the Leadership Styles heading in

Appendix A correspond with the ENTRELEAD scale. This survey was developed

from an empirical study where 63 characteristics of entrepreneurship were

selected. An expert panel screened the characteristics to reduce it to 20 items. A

principal component analysis reduced the set further to eliminate overlap between

constructs. Exploratory factor analysis and Cronbach’s alpha were used to assess

the reliability of the scale. Cronbach’s alpha was 0.9, which indicated internal

consistency. A follow-up study with eight constructs using exploratory factor

analyses supported the validity of the scale. The ENTRELEAD scale resulted in

eight constructs that correspond with entrepreneurial leadership behaviors. The

ENTRELEAD scale was compared to entrepreneurial orientation, Supervisor

Creativity-Supportive Behavior Scale, and a transformational leadership scale to

assess discriminant validity. The role model construct in the entrepreneurial

orientation and Supervisor Creativity-Supportive Behavior Scale were the only

overlap with entrepreneurial leadership in the analysis of these two scales. This

finding supports the validity of the ENTRELEAD scale, as role modeling is part of

the entrepreneurial leadership style. Overlap with the intellectual stimulation

aspect of transformational leadership was also an indicator that this leadership

scale assessed common leadership behaviors of leaders. Research by Renko et al.

(2015) also supported that founder-leaders exhibited more entrepreneurial

leadership behaviors than non-founder leaders, which supported previous research

on founder influences on an organization and confirmed construct validity.

The purpose of the ENTRELEAD scale is to identify the extent to which perceived

entrepreneurial leadership behavior is exhibited in the workplace (Renko et al.,

2015). This scale was modified for this study with the permission of the original

researchers who developed the scale to obtain self-reported data from participants

using a five-point Likert-type scale. In conversation with the scale developer,

either a five-point or seven-point Likert-type scale was considered appropriate (M.

Renko, personal communication, January 7, 2017). Appendix A details the

questions included in the survey.

Procedures

Data will be collected using the component instruments described. A pilot

study of five entrepreneurs was used to determine if the survey had validity for its

purpose (Leedy & Ormrod, 2013). Five entrepreneurs, who had businesses that

operated in the greater metropolitan service area of the designated city and known

by the researcher, were selected for this pilot study in January 2017. They were

asked to complete the survey and provide feedback regarding the clarity of the

questions, ease of completing the survey, and feedback on additional questions that

should be asked of participants, as listed in Appendix B. The feedback from the

pilot survey resulted in the need to clarify the questions regarding profitability on

the survey. Three of the five participants made recommendations to clarify the

questions regarding profitability. The revisions to these questions on the survey

are listed below.

Pilot Survey: Over the last year, how much has the company’s profit

increased?

Revision: What is the percentage of profitability of the company this past

year? (Best Estimate Appreciated)

Pilot Survey: What is the company’s cumulative percentage of profitability

over the last five years?

Revision: What is the company’s cumulative percentage of profitability over

the last five years? (If you had a 5% profit for each of the last five years,

then the cumulative percentage of profit would be 25%. Best Estimate

Appreciated)

For the online version of the survey, the key for the leadership styles section will

be given multiple times to reduce the amount of scrolling on the screen. “You have

now completed the survey. Please click submit to finalize your submission!” was

added to the end of the online survey for clarification and direction. The paper

survey will also include the key at the top of each page in the MLQ and

ENTRELEAD subparts of the survey. The email address of each participant was

also added for follow-up as needed to clarify responses and prevent the researcher

from asking a survey completer to complete the survey again. The researcher will

only have access to this information, and it will be held in confidence. After the

data are collected, the email addresses will be replaced with numbers for data

analysis. Question 30 in the leadership styles subpart of the survey also had a typo,

so form was changed to from on the survey. This feedback was used to finalize the

survey for this study.

The survey will then be administered to the population through several area

Chamber of Commerce organizations within the metropolitan service area of the

designated city. In addition, businesses that are subscribers to the major city’s

business journal will also be invited individually by email, mail, or phone to

participate in this study. This study will follow the recommended protocols of

protecting human subjects to ensure data collected will remain protected and

confidential. ID numbers will be substituted for email addresses in the data

analysis. Participants will be informed about the details of the study, the purpose,

and the reason for participating. Participants will be assured the confidentially of

their submissions, and the cover letter (Appendix C) will reinforce that

participation is voluntary. The risk of participation will be minimized through

these steps. A unique ID number will be assigned to each respondent and will be

used to keep data confidential.

Survey instructions will be standardized and presented to all participants

before the completion of the survey. A multi-method delivery of the survey can

increase the number of responses to a survey, and utilizing a multi-method delivery

for survey research has been documented as increasing response rate (Creswell,

2012). The survey will be initially conducted online. Participants will be made

aware of the nature of the study and review the cover letter to understand the

voluntary nature of their participation in accordance with research standards for

online surveys (Leedy & Ormrod, 2013). Follow-up mail surveys will be

administered as needed. The results from the survey will be collected and held in

confidence. To minimize threats to validity, participants will not be informed of

the research questions for this study to avoid reactivity (Leedy & Ormrod, 2013).

After the data are collected, statistical analyses will be used to treat the data.

Data Analysis

Data collected from participants will be analyzed based on entrepreneurs’

identified position within their organization. Entrepreneurs will be grouped from

the sample by the position held in the organization. Nominal data including

gender, education, and industry will be coded and analyzed. To determine the

change in the number of employees, the current number of employees will be

subtracted from the founding number of employees. Mean, median, and standard

deviation will be used to draw conclusions about the population. The results from

the MLQ will be analyzed by identifying the averages of each component of

transformational, transactional, and laissez-faire leadership from each respondent.

The factors of transformational leadership in the MLQ are inspirational motivation,

idealized influence (attributed), idealized influence (behavior), intellectual

stimulation, and individualized consideration (Bass & Avolio, 2004). Inspirational

motivation is measured by Questions 9, 13, 26, and 36 on the leadership styles

survey. Idealized influence (attributed) is measured by Questions 10, 18, 21, and

25 on the leadership styles survey. Idealized influence (behavior) is measured by

Questions 6, 14, 23, and 34 on the leadership styles survey. Intellectual

stimulation is measured by Questions 2, 8, 30, and 32 on the leadership styles

survey. Individualized consideration is measured by Questions 15, 19, 29, and 31

on the leadership styles survey.

The MLQ also measures transactional leadership as contingent reward and

managementby-exception (active). Contingent reward corresponds with Questions

1, 11, 16, and 35 on the leadership styles survey. Management-by-exception

(active) corresponds with Questions 4, 22, 24, and 27 on the leadership styles

survey. Additionally, the MLQ measures management-byexception (passive) and

laissez-faire leadership, which are considered to have negative impacts on

organizational outcomes (Bass & Avolio, 2004). Management-by-exception

(passive) corresponds with Questions 3, 12, 17, and 20 on the leadership styles

survey. Laissez-faire leadership corresponds with Questions 5, 7, 28, and 33 on

the leadership styles survey. The remaining questions on the survey measure extra

effort, effectiveness, and leadership satisfaction. The score for each factor will be

calculated by summing the responses from the corresponding questions and

dividing by the number of items that make up that specific scale for each

leadership factor. Questions 46 through 53 on the leadership styles survey

correspond with the ENTRELEAD scale and summing the responses to those

questions will result in the entrepreneurial leadership style outcome. The

researcher selected to categorize the leadership styles scores from the participants

for the entrepreneurial leadership style based on a score of 51% or higher as having

an entrepreneurial leadership style after conversing with the developer of the

ENTRELEAD scale (M. Renko, personal communication, January 7, 2017).

Scores below this percentage will be categorized as a non-entrepreneurial

leadership style.

Descriptive statistics will be used to understand the mean, median, and

frequency of gender, education level, industry type, years of operation, the number

of employees at current organization, and current role in business from data

collected from the survey. Chi-square will be used to measure the relationship

between the Full Range Leadership Model leadership styles, including

transformational, transactional, and laissez-faire leadership, and an entrepreneurial

leadership or non-entrepreneurial leadership style to determine which leadership

style, as described by the Full Range Leadership Model, is more prevalent in the

identification of leaders who also exhibit an entrepreneurial leadership style. Chi-

square analysis will allow these categorical independent variables to be analyzed.

Chi-square will also be used to test for the relationship between the categorical

variables of education, industry, role in business, and gender and the combination

of leadership styles. MANOVA will be used to examine the independent variables

of gender, education level, industry type, current role in business, and combination

of leadership styles with the dependent variables of years of operation, the change

in number of employees since founding, and profitability to determine the mean

differences between these independent and dependent variables. F-tests will be

used to determine the statistical significance of the MANOVA. The following

section details the research questions followed by an explanation of how the data

will be collected and statistically treated.

RQ1: Which of the Full Range Leadership Model leadership styles is

dominant of entrepreneurs who sustain organizations?

Data will be collected from the survey using the MLQ Form 5X-Short to

obtain data about transformational, transactional, and laissez-faire leadership styles

from the participants. Data from the MLQ will be analyzed by summing the

responses and dividing by the number of questions that correspond with

transformational, transactional, and laissez-faire leadership styles.

This process will result in a score for these leadership styles for each participant.

The cut scores for analyzing leaders that exhibit the specified leadership style will

be based on the average score for each leadership style being compared to the 40th

percentile or higher on the norms for selfreported data from the MLQ (Bass &

Avolio, 2004). The mean, median, and standard deviation will be used to

understand the frequency of these leadership styles exhibited by entrepreneurs.

RQ2: Which of the Full Range Leadership Model leadership styles is more

prevalent in the identification of leaders who also exhibit an entrepreneurial

leadership style?

Data from the MLQ will be used to determine if each participant falls into

the transformational, transactional, and laissez-faire leadership styles based on the

leadership style scores. Data from the ENTRELEAD scale will be used to measure

the entrepreneurial leadership style. Summing the responses from the participants

that correspond with the ENTRELEAD scale will result in an entrepreneurial

leadership style score. The leadership styles scores from the participants for the

entrepreneurial leadership style will be categorized based on a score of 51% or

higher as having an entrepreneurial leadership style. The researcher elected to use

this percentage after conversing with the scale developer (M. Renko, personal

communication, January 7, 2017). Transformational, transactional, and laissez-

faire leadership will be compared to whether or not a participant also has an

entrepreneurial leadership style or does not have an entrepreneurial leadership

style. Chi-square will be used to treat these data to test for a difference between

the independent variables of transformational, transactional, and laissez-faire

leadership styles and the dependent variable of an entrepreneurial leadership style

or non-entrepreneurial leadership style.

RQ3: How do leaders with various combinations of leadership styles relate

to the variables of gender, education, industry type, and role in business?

The results from the third research question will provide data to understand

how leadership styles relate to the demographic questions. If insufficient data

exists for any of the leadership styles, outliers will be removed from the data set.

Data will be collected through the survey asking participants to identify their (a)

gender, (b) education level, (c) industry type, and (d) current role in business. Chi-

square will be used to test for the relationship between the independent variable of

the combination of leadership styles with the dependent variables of education,

industry, role in business, and gender.

RQ4: How do various combinations of leadership styles, gender, education,

industry type, and role in business relate to the success factors of years of

operation, profitability, and the difference in the number of employees?

Data will be collected through the survey asking participants to identify their

(a) gender, (b) education level, (c) industry type, (d) years of operation, (e) the

number of employees at the current organization, (f) current role in business, and

(g) profitability. Descriptive statistics will be used to understand the

characteristics of these data. The mean, median, and standard deviation will be

used to treat these data. The covariates will be carried to the final analysis, as the

variables were selected from the literature. MANOVA will be used to determine

the mean difference in the combination of leadership styles, gender, education

level, industry type, and role in business on the success factors including years of

operation, current year profitability, profitability over five years, and the change in

the number of employees since founding. Transformational and entrepreneurial

leadership, transactional and entrepreneurial leadership, and laissez-faire and

entrepreneurial leadership will represent the leadership styles in this MANOVA.

Years of operation, profitability, and the change in the number of employees since

founding will be the dependent variables for the MANOVA. Univariate ANOVAs

will be used as follow-up analyses for statistically significant independent

variables. Post-hoc tests using Tukey’s HSD will be used to understand the

findings. Table 2 lists the statistics and variables used in the data analysis.

Table 2

Statistical Analysis and Variables

Statistics Variables

Mean, Median, and

Standard

Deviation

Full Range Leadership Model styles including

transformational, transactional, and laissez-faire

leadership

Gender, education level, industry type, years of

operation, number of employees, role in business, and

profitability

Chi-square

Full Range Leadership Model styles including

transformational, transactional, and laissez-faire

leadership

Entrepreneurial leadership style and non-

entrepreneurial leadership style

Chi-square Transformational and entrepreneurial leadership style,

transactional and entrepreneurial leadership style,

laissez-faire and entrepreneurial leadership style

Gender, education level, industry, and role in business

MANOVA Transformational and entrepreneurial leadership style,

transactional and entrepreneurial leadership style,

laissez-faire and entrepreneurial leadership style;

gender; education level; industry type; role in business

Years of operation, the change in the number of

employees since founding, and profitability

Descriptive and inferential statistics are appropriate statistical analyses to

describe the data and sample and analyze the relationships between leadership

styles and gender, education level, industry type, years of operation, the number of

employees at current organization, current role in business, and profitability in

entrepreneurial contexts (Leedy & Ormrod, 2013). Table 3 describes the research

questions, scales, and statistics used to analyze these data.

Table 3

Data Analyses for Research Questions

Research Question Instrument Survey Questions Statistics

RQ1: What is the dominant

leadership style of

entrepreneurs in sustaining

organizations?

MLQ Form 5X-

Short, Survey

Questions 1-45

Transformational Leadership:

a. Inspirational Motivation: Questions 9, 13,

26, 36

b. Idealized Influence (Attributed): Questions

10, 18, 21, 25

c. Idealized Influence (Behavior): Questions 6,

14, 23, 34

d. Intellectual Stimulation: Questions 2, 8, 30,

e. Individualized Consideration: Questions 15,

19, 29, 31

Transactional Leadership:

a. Contingent Rewards: Questions 1, 11, 16, 35

b. Management by Exception (Active):

Questions 4, 22, 24, 27

Laissez-Faire Leadership:

a. Laissez-Faire: Questions 5, 7, 28, and 33

Mean,

median,

frequency,

and

standard

deviation

RQ2: Which of the Full Range MLQ Form 5X- Chi-square

Leadership Model leadership

styles is more prevalent in the

identification of leaders who

also exhibit an entrepreneurial

leadership style?

Short

ENTRELEAD

scale

Transformational, transactional, and laissez-faire

leadership styles compared to entrepreneurial

leadership style or non-entrepreneurial leadership

style

RQ3: How do leaders with

various combinations of

leadership styles relate to the

variables of gender, education,

industry type, and role in

business?

MLQ Form 5X-

Short

ENTRELEAD

scale

Demographic

Questions

Dominate leadership style and entrepreneurial

leadership style compared to gender, education

level, industry type, and role in business

Chi-square

RQ4: How do various

combinations of leadership

styles, gender, education,

industry type, and role in

business relate to the success

factors of years of operation,

profitability, and the difference

in the number of employees?

MLQ Form 5X-

Short

ENTRELEAD

scale

Demographic

Questions

Dominate leadership style and entrepreneurial

leadership style, gender, education level, industry

type, and role in business compared to years of

operation, the change in number of employees

since founding, and profitability questions on the

leadership survey

MANOVA

Summary

The research design using a descriptive methodology employing survey

research will facilitate the collection of data to answer questions concerning an

effective leadership style of entrepreneurs. The quantitative research design also

will facilitate multiple independent variables to be compared to the dependent

variables. This study will also contribute new research to the literature addressing

leadership styles of entrepreneurs. The participants will be entrepreneurs who

operate their business within the metropolitan service area of the designated city in

the Midwestern United States. The participants in this study will be representative

of the group as a subsample of the sample. The instrumentation using the MLQ

Form 5X-Short and the ENTRELEAD as validated instruments will strengthen this

study. Obtaining descriptive research data, including demographics information,

increases the variables in this study. Using a researched data collection

methodology and data analysis will enhance reliability. Measures of central

tendency, variability, chi-square, and MANOVA will be used to analyze the data.

Chapter IV will describe the data collection and statistical analysis used to treat the

data.

CHAPTER IV FINDINGS

The problem of this study was to address a gap in the knowledge of

transformational, transactional, and laissez-faire leadership styles in combination

with the entrepreneurial leadership style leading to successful entrepreneurial

organizations. To solve this problem, this study described the relationship between

leadership styles of entrepreneurs as mediated by the variables of gender, education

level, industry type, and role in business with the success factors of business

longevity, profitability, and number of employees. This quantitative study was

guided by four research questions.

RQ1: Which of the Full Range Leadership Model leadership styles is

dominant of entrepreneurs who sustain organizations?

RQ2: Which of the Full Range Leadership Model leadership styles is more

prevalent in the identification of leaders who also exhibit an

entrepreneurial leadership style? RQ3: How do leaders with various

combinations of leadership styles relate to the variables of gender,

education, industry type, and role in business?

RQ4: How do various combinations of leadership styles, gender, education,

industry type, and role in business relate to the success factors of years of

operation, profitability, and the difference in the number of employees?

Chapter IV addresses the results from this quantitative study. This chapter is

divided into four subsections: (a) response rate for the population, (b) an

explanation of the coding process for the data, (c) findings related to each research

question, and (d) a summary of the findings.

Response Rate

The purpose of this study was to investigate the leadership styles of

entrepreneurs who operate successful businesses. Using a survey, purposive

sampling was used to contact organizations within the targeted population. The

data collection resulted in 449 total responses. These data were reviewed, and 37

respondents did not meet the position requirement of being a company head.

Additionally, seven respondents were outside the designated area for the study, and

one respondent indicated that his/her organization was a non-profit organization.

These respondents were discarded. Therefore, the resulting sample size was 404.

Given the population of 40,357 businesses of all sizes within 50 miles of the

metropolitan service area of the designated city (United States Census Bureau,

2015), 381 responses were required to achieve statistical significance at the p = .05

significance level (Krejcie & Morgan, 1970). Businesses were contacted via email,

phone, and events. Approximately 3,400 businesses were contacted within the

targeted population, resulting in a response rate of approximately 12%. The sample

size met the criteria to provide statistically significant data.

Coding

Data were collected using electronic and paper surveys. The position held by

the participant was categorized by CEO/President, owner-founder, owner-buyer, or

other. The other category from the survey included ten participants who identified

themselves simply as an owner, co-owner, or partner. Therefore, this category was

relabeled as “owners” without the differentiation of owner-buyer or owner-founder.

This category was included in the analysis of entrepreneurs. The age of the

company was calculated by subtracting the founding date from the current year.

Seven respondents included a range for the profitability questions, so an average

was calculated to use one number in the data analyses. Additionally, nineteen

respondents indicated that there were zero employees at the start of the business,

indicating that they did not include themselves in the count. Therefore, these 19

respondents had one added to the number of employees at the start of the business

and the current number of employees for consistency. For the industry category,

six respondents that marked the other category also included the type of business.

These respondents were then categorized based on their business type.

Respondents who marked the other category without including the business type

were left unchanged. Nine respondents differentiated between full-time and part-

time employees in their response. Only full-time employees were included in the

analyses for these respondents. For the profitability questions, six respondents

responded with zero for the percentage of profitability for the current year, and four

respondents answered with a negative percentage for profitability for the current

year. Three respondents responded with zero for the percentage of profitability

over five years. Given that not all respondents answered the profitability questions,

respondents who did not answer may have had a positive or negative percentage of

profitability that they elected to not report.

Gender, industry, education level, and role held in the business were coded

by the highest number of responses within each variable for the data analyses.

Gender was coded at three levels, including male (1), female (2), and do not elect to

report (3). Industry was coded at thirteen levels, including profession and/or

technical services (1), other (2), retail trades (3), healthcare and/or social services

(4), real estate (5), manufacturing (6), educational services (7), administrative

and/or support services (8), wholesale trades (9), information trades (10),

accommodations (11), arts and/or recreation (12), and combined retail trades &

profession and/or technical services (13). Education level was coded at seven

levels, including bachelor’s degree (1); high school diploma or equivalency (2);

associate degree, junior college, or trade school (3); master’s degree (4); doctoral or

professional degree (5); do not elect to report (6); and no diploma (7). Position held

in the business was coded at four levels including owner-founder (1), owner-buyer

(2), CEO/President (3), and owner (4). Change in the number of employees was

calculated by subtracting the number of employees at business founding from the

current number of employees.

Results

This study was guided by four research questions to examine leadership

styles that contribute to entrepreneurs’ business success. The Full Range

Leadership Model leadership styles and entrepreneurial leadership style were used

in the analyses. This section details the results related to each research question by

describing the findings for each question.

Results Related to Research Question 1

RQ1 was written as follows: Which of the Full Range Leadership Model

leadership styles is dominant of entrepreneurs who sustain organizations? The Full

Range Leadership Model measured transformational leadership, transactional

leadership, and passive/avoidant leadership including laissez-faire leadership using

the MLQ Form 5X-Short, which included Questions 1 through 46 on the leadership

styles survey. Descriptive statistics were calculated for the Full Range Leadership

Model leadership styles for all participants. The factors of transformational

leadership included inspirational motivation, idealized influence (attributed),

idealized influence (behavior), intellectual stimulation, and individualized

consideration. Scores for each factor were calculated based on the protocol

outlined by Bass and Avolio (2004) using the MLQ Form 5X-Short Scoring Key.

The corresponding questions with each factor were totaled and divided by the

number of corresponding questions to each factor.

Inspirational motivation was measured by Questions 9, 13, 26, and 36 on the

leadership styles survey (n = 402; M = 3.24, SD = 0.64). Idealized influence

(attributed) was measured by Questions 10, 18, 21, and 25 on the leadership styles

survey (n = 402; M = 3.16, SD = 0.58). Idealized influence (behavior) was

measured by Questions 6, 14, 23, and 34 on the leadership styles survey (n = 402;

M = 3.22, SD = 0.65). Intellectual stimulation was measured by

Questions 2, 8, 30, and 32 on the leadership styles survey (n = 402; M = 3.02, SD =

0.61). Individualized consideration was measured by Questions 15, 19, 29, and 31

on the leadership styles survey (n = 402; M = 3.22, SD = 0.59). The scores for the

questions corresponding with each transformational leadership factor were

calculated in order to compute a final transformational leadership style score for all

participants (n = 402; M = 3.17, SD = 0.50). Table 4 includes the descriptive

statistics for each of the transformational leadership style factors for all participants.

Table 4

Descriptive Statistics of Transformational Leadership Factors

Descriptive Statistics M Mdn SD

Total Participants (n = 402)

Inspirational Motivation

3.24

3.25 0.64

Idealized Influence (attributed) 3.16 3.25 0.58

Idealized Influence (behavior) 3.22 3.25 0.65

Intellectual Stimulation 3.02 3.00 0.61

Individualized Consideration 3.22 3.25 0.59

Transformational Leadership

Total

3.17 3.20 0.50

The factors of transactional leadership included contingent reward and

management-byexception (active). Contingent reward corresponded with

Questions 1, 11, 16, and 35 on the leadership styles survey (n = 402; M = 3.06, SD

= 0.63). Management-by-exception (active) corresponded with Questions 4, 22, 24,

and 27 on the leadership styles survey (n = 402; M = 1.95, SD = 0.78). The scores

for the questions corresponding with both transactional leadership factors were

calculated to compute a final transactional leadership score for all participants (n =

402; M = 2.50, SD = 0.56). Table 5 includes the descriptive statistics for each of

the transactional leadership style factors for all participants.

Table 5

Descriptive Statistics of Transactional Leadership Factors

Descriptive Statistics M Mdn SD

Total Participants (n = 402)

Contingent Reward

3.06

3.00 0.63

Management-by-exception

(active)

1.95 1.88 0.78

Transactional Leadership Total 2.50 2.50 0.56

Passive/avoidant leadership measured management-by-exception (passive)

and laissezfaire leadership, which are considered to have negative impacts on

organizational outcomes (Bass & Avolio, 2004). Management-by-exception

(passive) corresponded with Questions 3, 12, 17, and 20 on the leadership styles

survey. The mean score of management-by-exception

(passive) was 1.14 with a standard deviation of 0.63. Laissez-faire leadership

corresponded with Questions 5, 7, 28, and 33 on the leadership styles survey. The

mean score of laissez-faire leadership was 0.57 with a standard deviation of 0.60.

The scores for the questions corresponding with both passive/avoidant leadership

factors were calculated. The mean passive/avoidant leadership style score for all

participants was 0.85 with a standard deviation of 0.51. Table 6 details the

descriptive statistics for each of the passive/avoidant leadership style factors for all

participants.

The factors for each leadership style assessed using the MLQ resulted in a

leadership style score for transformational, transactional, passive/avoidant

leadership. Leadership style Table 6

Descriptive Statistics of Passive/Avoidant Leadership Factors

Descriptive Statistics M Mdn SD

Total Participants (n = 402)

Management-by-exception

(passive)

1.14

1.00 0.63

Laissez-faire Leadership 0.57 0.50 0.60

Passive/Avoidant Leadership

Total

0.85 0.75 0.51

scores were also calculated based on the protocol outlined by Bass and Avolio

(2004) using the MLQ Form 5X-Short Scoring Key. Transformational leadership

was calculated based on the scores from five factors, including inspirational

motivation, idealized influence (attributed), idealized influence (behavior),

intellectual stimulation, and individualized consideration. These scores were added

and divided by five, which resulted in a transformational leadership style score for

participants. Transactional leadership was calculated based on the scores for two

factors, including contingent reward and management-by-exception (active). These

scores were added and divided by two, which resulted in a transactional leadership

style score for participants. Passive/Avoidant leadership was used to calculate

laissez-faire leadership. Passive/Avoidant leadership was calculated based on the

scores from two factors, including management-by-exception (passive) and laissez-

faire leadership. These scores were added and divided by two, which resulted in a

passive/avoidant leadership style for participants. Following this process for the

three leadership styles enabled the researcher to compare results from each

leadership style for each participant. The highest score of the three leadership

styles was used to determine the leadership style of each participant.

Of the 402 respondents, a transformational leadership style was characteristic

of 373 leaders (92.79%). Twenty-one respondents (5.22%) had a transactional

leadership style. Four respondents (1.00%) had a tie between their transformational

and transactional leadership style scores. Only three respondents (0.75%) had a

dominant leadership style of the passive/avoidant (laissez-faire) leadership, and one

respondent (0.25%) tied between laissez-faire leadership and transformational

leadership. Within the passive/avoidant leadership category, two participants were

owner-founders, one respondent was an owner-buyer, and one participant was a

CEO/President. Respondents who had scores that were tied or a passive/avoidant

leadership defined as laissez-faire leadership were not carried forward to the final

analysis. They were considered outliers within the dataset and did not give a clear

distinction of the participant’s leadership style. Table 7 includes the numbers and

percentages for the leadership styles.

Table 7

Frequencies of the Full Range Leadership Model Leadership Styles (n = 402)

Leadership Style Number Percentage

Transformational Leadership 373 92.79%

Transactional Leadership 21 5.22%

Transformational and Transactional

Leadership Tie

4 1.00%

Passive/Avoidant (Laissez-faire)

Leadership

3 0.75%

Laissez-faire and Transformational

Leadership Tie

1 0.25%

This study sought to analyze the dominant leadership style of participants. It

was determined before data collection to establish the cut off scores for the

dominant leadership styles using the 40th percentile for individual scores based on

the total of all rating levels from a normative sample with 27,285 participants in the

United States conducted by the researchers responsible for the MLQ (Bass &

Avolio, 2004). Research conducted by Bass and Avolio (2004) led to a table with

corresponding scores for their sample. The 40th percentile for individual scores

based on the total of all rating levels for the MLQ represented that 40% of the

normed population from the 27,285 participants scored lower than 2.75 for

transformational leadership and 2.12 for transactional leadership based on a 0 to 4

Likert-type scale. These scores from the research by Bass and Avolio (2004) were

used as criterion in this study. After the initial assessment of the leadership styles

of all participants in this study, cut scores for the MLQ leadership styles using the

40th percentile for individual scores based on the total of all rating levels

established by Bass and Avolio resulted in a cut score of 2.75 for transformational

leadership and a cut score of 2.12 for transactional leadership, and these scores

were used to reduce data (Bass & Avolio, 2004). Total leadership style scores of

participants that were greater than or equal to the established cut score for their

dominant leadership style remained in the data set. Using this criterion, data were

reduced to 335 participants with 315 participants having a transformational

leadership (94.03%) and 20 participants having a transactional leadership style

(5.97%). These data were carried forward to the next analysis. Descriptive

statistics were calculated based on participants with a dominant transformational

leadership (n = 315) or transactional leadership (n = 20) style. Table 8 details the

frequency of these leadership styles.

Table 8

Frequencies of the Dominant Leadership Styles (n = 335)

Leadership Style Number Percentage

Transformational Leadership 315 94.03%

Transactional Leadership 20 5.97%

Based on the dominant leadership style of these participants (n = 335), the

factors of transformational and transactional leadership were analyzed. Three

hundred and fifteen participants had a transformational leadership style as their

dominant style from the MLQ (M = 3.34, SD = 0.33). For the factors of

transformational leadership, idealized influence (behavior; M = 3.26, SD = 0.47)

and inspirational motivation (M = 3.43, SD = 0.48) had higher mean scores than

individualized consideration (M = 3.38, SD = 0.47), idealized influence (attributed;

M = 3.31, SD = 0.45), and intellectual stimulation (M = 3.17, SD = 0.52) for

participants with a transformational leadership style. Twenty participants had a

transactional leadership style as their dominant style from the MLQ (M = 3.31, SD

= 0.54). For the factors of transactional leadership, contingent reward (M = 3.49,

SD = 0.53) had a higher mean score than managementby-exception (active; M =

3.14, SD = 0.72) for participants with a transactional leadership style.

Table 9 details the descriptive statistics for the dominant leadership style scores.

Table 9

Descriptive Statistics of Dominant Leadership Styles

Descriptive Statistics M Mdn SD

Transformational Leadership Dominant

Style (n = 315) Inspirational Motivation

3.43

3.50 0.48

Idealized Influence (attributed) 3.31 3.25 0.45

Idealized Influence (behavior) 3.43 3.50 0.47

Intellectual Stimulation 3.17 3.25 0.52

Individualized Consideration 3.38 3.50 0.47

Transformational Leadership Total 3.34 3.35 0.33

Transactional Leadership Dominant Style

(n = 20) Contingent Reward

3.49

3.50

0.53

Management-by-exception (active) 3.14 3.25 0.72

Transactional Leadership Total 3.31 3.38 0.54

Note. Scores are based on a 5-point Likert-type scale with 0 meaning “not at

all” and 4 meaning “frequently, if not always”

Results Related to Research Question 2

RQ2 was written as follows: Which of the Full Range Leadership Model

leadership styles is more prevalent in the identification of leaders who also exhibit

an entrepreneurial leadership style? Results from RQ1 of the dominant leadership

styles of participants were used to analyze transformational and transactional

leadership styles in relation to the entrepreneurial leadership style. Questions 46

through 53 on the leadership styles survey corresponded with the

ENTRELEAD scale and were used to calculate an entrepreneurial leadership style

score for each participant. The researcher selected to categorize participants for the

entrepreneurial leadership style based on a score of 51% or higher as having an

entrepreneurial leadership style after conversing with the scale developer (M.

Renko, personal communication, January 7, 2017). Scores below this percentage

were categorized as a non-entrepreneurial leadership style. The combination of

leadership styles was analyzed using frequencies and chi-square.

Transformational and entrepreneurial leadership styles were the most

frequent in the sample (n = 335) with 307 participants (91.64%) representing both

leadership styles. Eight participants had a transformational leadership and non-

entrepreneurial leadership style (2.39%). Transactional and entrepreneurial

leadership styles were the dominant leadership styles for 19 participants (5.67%),

while one participant had a transactional and non-entrepreneurial leadership style

(0.30%). Table 10 details the numbers and percentages for the combination of

leadership styles.

Table 10

Frequencies of the Combination of Leadership Styles (n = 335)

Leadership Style Number Percentage

Transformational and Entrepreneurial Leadership 307 91.64%

Transformational Leadership and Non-

Entrepreneurial Leadership

8 2.39%

Transactional and Entrepreneurial Leadership 19 5.67%

Transactional Leadership and Non-Entrepreneurial

Leadership

1 0.30%

The Full Range Leadership Model leadership styles results from RQ1 were

used in a chisquare analysis to test for a difference between the independent

variables of transformational and transactional leadership styles and the dependent

variable of an entrepreneurial leadership style or non-entrepreneurial leadership

style. The association between the MLQ leadership styles and whether or not a

participant had an entrepreneurial leadership style was χ2 (1) = .435, p = .509.

Based on the odds ratio, the odds of participants having a entrepreneurial leadership

style was 2.02 times higher if they had a transformational leadership style instead of

a transactional leadership style. Furthermore, when a participant had a

transformational leadership style, the standardized residual was not significant for

both those who had an entrepreneurial leadership style (z = 0.00) and those who did

not have an entrepreneurial leadership style (z = -0.20). When a participant had a

transactional leadership style, the standardized residual was not significant for both

those who had an entrepreneurial leadership style (z = -0.10) and those who did not

have an entrepreneurial leadership style (z = 0.60). Therefore, the association

between leadership styles was not driven by an entrepreneurial leadership style.

Table 11 details the results from the chisquare analysis.

Table 11

Chi-square Analysis for Leadership Styles (n = 335)

Entrepreneurial leadership MLQ leadership styles

style

Transformational Transactional

leadership leadership χ2 Φ

Yes 307 19 .435* -.036

No 8 1

Note. *p = .509

Results Related to Research Question 3

RQ3 was written as follows: How do leaders with various combinations of

leadership styles relate to the variables of gender, education, industry type, and role

in business? The first subsection of the survey asked participants demographic and

business questions, including (a) gender, (b) education level, (c) industry type, and

(d) current role in business. Chi-square was used to test for the relationship

between the categorical variables of education, industry, role in business, and

gender and the variable of the combination of leadership styles. The combination

of leadership styles in these analyses was transformational and entrepreneurial

leadership, transactional and entrepreneurial leadership, and transformational

leadership. The transactional leadership category only had one case, and it was

excluded from this analysis and considered an outlier. The association between the

combination of leadership styles and education was χ2 (12) = 8.256, p = .765. The

association between the combination of leadership styles and industry was χ2 (26) =

29.029, p = .310. The association between the combination of leadership styles and

role in business was χ2 (6) = 6.403, p = .380. For gender, three participants that did

not elect to report their gender and were excluded from the analysis. The

association between the combination of leadership styles and gender was

statistically significant, χ2 (2) = 6.653, p = .036. Cramer’s V was .142 for the

combination of leadership styles and gender, indicating that the effect size was

small. Furthermore, standardized residuals were used to analyze these findings.

When a participant had a transformational leadership style, the standardized

residual was not significant for both males (z = -0.5) and females (z = 0.9) at p

< .05. When a participant had a transactional and entrepreneurial leadership style,

the standardized residual was not significant for males (z = 1.1), but it was

significant for females (z = -2.0) at p < .05. When a participant had a

transformational and entrepreneurial leadership style, the standardized residual was

not significant for both males (z = -0.2) and females (z = 0.4) at p < .05. Table 12

details the results from the chi-square analysis.

Table 12

Chi-square Analyses Applied to Leadership Styles Related to Education, Industry,

Role in Business, and Gender

Variable χ2 df p

Education 8.256 12 .765

Industry 29.029 26 .310

Role in Business 6.403 6 .380

Gender 6.653 2 .036

Results Related to Research Question 4

RQ4 was written as follows: How do various combinations of leadership

styles, gender, education, industry type, and role in business relate to the success

factors of years of operation, profitability, and the difference in the number of

employees? The first subsection of the survey asked participants demographic and

business questions, including (a) gender, (b) education level, (c) industry type, (d)

years of operation, (e) number of employees at current organization, (f) current role

in business, and (g) profitability. Frequencies were calculated for the demographic

and business questions. The male participants provided 77.31% of the responses (n

= 259), and female participants provided 21.79% of the responses (n = 73). Three

participants (0.90%) elected to not report their gender. The education level of

respondents was divided between bachelor’s degree (n = 133, 39.70%), high school

diploma or equivalency (n = 70, 20.90%), associate degree, junior college, or trade

school (n = 49, 14.63%), master’s degree (n = 40, 11.94%), doctoral or professional

degree (n = 37, 11.04%), no diploma (n = 3, 0.90%), and do not elect to report (n =

3, 0.90%). Industries represented in this sample were manufacturing (n =

16, 4.78%), wholesale trades (n = 7, 2.09%), retail trades (n = 54, 16.12%),

information trades (n = 5, 1.49%), real estate (n = 23, 6.87%), profession and/or

technical services (n = 104, 31.04%), administrative and/or support services (n = 7,

2.09%), educational services (n = 8, 2.39%), healthcare and/or social services (n =

30, 8.96%), arts and/or recreation (n = 2, 0.60%), and other (n = 76, 22.69%).

Two hundred and five owner-founders provided 61.19% of responses, while

78 ownerbuyers provided 23.28% of responses. CEO/Presidents provided 43

responses, which was 12.84% of responses, and nine owners who did not designate

if they were a founder or buyer comprised 2.69% of responses. When asked about

the diversification of products and services since 2008, 315 responses of the 335

participants responded, as all participants did not elect to answer this question. One

hundred and seventy-four respondents (55.24%) indicated that their products and

services had diversified, while 133 respondents (42.22%) indicated that their

products and services had not diversified. The other category was comprised of

eight respondents (2.54%) who indicated that their businesses have changed

somewhat or they left an explanation that did not clearly categorize their response

as a “yes” or “no.” Table 13 details the demographic characteristics of the survey

participants.

Table 13

Demographic Characteristics of Survey Participants

Demographic Characteristic Frequency

Percentage

Gender (n = 335)

Male 259 74.31%

Female 73 21.49%

Do not elect to report 3 0.90%

Education Level (n = 335)

No diploma 3 0.90%

High school diploma or equivalency 70 20.90%

Associate degree, junior college, or

trade school

49 14.63%

Bachelor’s degree 133 39.70%

Master’s degree 40 11.94%

Doctoral or professional degree 37 11.04%

Do not elect to report 3 0.90%

Industry Type (n = 335)

Manufacturing 16 4.78%

Wholesale trades 7 2.09%

Retail trades 54 16.12%

Information trades 5 1.49%

Real estate 23 6.87%

Profession and/or technical services 104 31.04%

Administrative and/or support services 7 2.09%

Educational services 8 2.39%

Healthcare and/or social services 30 8.96%

Arts and/or recreation 2 0.60%

Accommodations 3 0.90%

Other 76 22.69 %

Current Role in Business (n = 335)

CEO/President (but not owner) 43 12.84%

Owner-founder 205 61.19%

Owner-buyer 78 23.28%

Owner 9 2.69%

Diversification of Products and

Services (n = 315)

Yes 174 55.24%

No 133 42.22%

Other 8 2.54%

Note. Not all 335 participants responded to all survey questions, hence

the differences in n for each question in this table.

In addition to the demographic questions, participants were asked the years

of operation of their business, the number of employees at the founding of their

business, and the number of current employees. Each of their responses was

written in numerical format. Not everyone within the 335 participants answered

these questions, hence the difference in n for years of operation, the number of

employees at founding, and the number of current employees. The years of

operation had 334 responses (M = 21.69, SD = 21.45). The number of employees at

the founding of the business had 330 responses (M = 4.79, SD = 13.01). The

number of current employees at the business had 335 responses (M = 94.43, SD =

563.92). These statistics are detailed in Table 14.

Table 14

Descriptive Statistics of Business Characteristics

Business Characteristics M Mdn SD

Years of Operation (n = 334) 21.69 16.00 21.45 Number of Employees at

Founding (n = 330) 4.79 2.00 13.01

Number of Current Employees ( n = 335) 94.43 8.00 563.92

Note. Not all 335 participants responded to all survey questions, hence the

differences in n for each question in this table.

Participants also answered the questions related to the profitability of their

business over the last year and over five years on the survey. The percentage

indicated by the participant was used in the data analysis, but an average was

calculated for the respondents that indicated a range of profitability. Two hundred

and ninety respondents answered the business profitability over the last year (M =

27.91%, SD =57.45), and 277 respondents answered the business profitability over

the last five years of the total 335 participants (M = 34.77%, SD = 48.29).

Responses were reported as a percentage, and the mean percentage represented the

average percentage of business profitability for respondents. These statistics are

detailed in Table 15.

Table 15

Descriptive Statistics of Profitability Variables

Profitability M% Mdn SD

Profitability from Current Year (n =

290)

27.91% 15.30% 57.45

Profitability over 5 Years (n = 277) 34.77% 20.00% 48.29

Note. Not all 335 participants responded to all survey questions, hence the

differences in n for each question in this table.

Frequencies and descriptive statistics were then calculated for the variables

based on the Full Range Leadership Model. Frequencies of the dominant

leadership style of participants from the Full Range Leadership Model were

analyzed. Three hundred and thirty-five participants had complete data for gender,

industry, education, and role in business. Two hundred and thirty-nine male

(72.34%) and 73 female (21.79%) participants had a transformational leadership

style, while 20 male (5.97%) participants had a transactional leadership style.

Three participants (0.90%), who did not elect to report their gender, had a

transformational leadership style. No female participants had a transactional

leadership style. A dominant transformational leadership style was characteristic of

127 participants with a bachelor’s degree (37.91%), 64 participants with a high

school diploma or equivalency (19.10%), 44 participants with an associate degree,

junior college, or trade school (13.13%), 37 participants with a master’s degree

(11.04%), 37 participants with a doctoral or professional degree (11.04%), three

participants with no diploma (0.90%), and three participants who did not elect to

report (0.90%). A dominant transactional leadership style was characteristic of six

participants with a bachelor’s degree (1.79%), six participants with a high school

diploma or equivalency (1.79%), five participants with an associate degree, junior

college, or trade school (1.49%), and three participants with a master’s degree

(0.90%).

A dominant transformational leadership style was also characteristic of 98

participants with businesses in professional and/or technical services (29.25%), 69

participants with businesses in the other industry category (20.60%), 51 participants

with businesses in retail trades (15.22%), 30 participants with businesses in

healthcare and/or social services (8.96%), 23 participants with businesses in real

estate (6.87%), 15 participants with businesses in manufacturing (4.48%), eight

participants with businesses in educational services (2.39%), seven participants

with businesses in wholesale trades (2.09%), five participants with businesses in

information trades (1.49%), five participants with businesses in administrative

and/or support services (1.49%), two participants with businesses in arts and/or

recreation (0.60%), and two participants with businesses in accommodations

(0.60%). A dominant transactional leadership style was characteristic of seven

participants with businesses in the other industry category (2.09%), six participants

with businesses in professional and/or technical services (1.79%), three participants

with businesses in retail trades (0.90%), two participants with businesses in

administrative and/or support services (0.60%), one participant with a business in

manufacturing (0.30%), and one participant with a business in accommodations

(0.30%). Frequencies for the Full Range Leadership Model leadership styles by

current role in business indicated that 190 owner-founders (56.72%), 75 owner-

buyers (22.39%), 41 CEOs/Presidents (12.24%), and nine owners (2.69%) had a

transformational leadership style. Fifteen owner-founders (4.48%), three owner-

buyers (0.90%), and two CEOs/Presidents (0.60%) had a transactional leadership

style.

Only three hundred and fifteen participants of the 335 participants answered

the survey question about the diversification of their products and services as a

business since 2008. The other participants elected to not respond to this question.

The participants that responded to this question were included in calculating

frequencies for this survey question. Representing 52.06% of the sample (n = 315),

164 participants with a dominant transformational leadership style indicated that

their products and services had diversified since 2008; however, 124 participants

with a transformational leadership style (39.37%) indicated that their products and

services had not diversified since 2008. Ten participants with a transactional

leadership style (3.17%) indicated that their products and services had diversified

since 2008, but 10 participants with a transactional leadership style (3.17%)

indicated that their products and services had not diversified since 2008. Finally,

seven participants with a transformational leadership style

(2.22%) indicated that their products and services had somewhat diversified,

representing the “other” category. Table 16 details the frequencies of the dominant

transformational or transactional leadership styles of participants, which is

categorized by gender, education level, industry, role in business, and

diversification of product and services in the business.

The mean, median, and standard deviation were analyzed for participants for

each factor of the dominant transformational or transactional leadership style, as

defined in the Full Range Leadership Model. The 335 participants with complete

data for gender, industry, education, and role in business questions were included in

the analysis. The factors of transformational leadership were inspirational

motivation, idealized influence (attributed), idealized influence (behavior),

intellectual stimulation, and individualized consideration. The factors of

transactional leadership were contingent reward and management-by-exception

(active). Two hundred and fifty-nine male (M = 3.32, SD = 0.33) and 73 female (M

= 3.42, SD = 0.32) participants had a transformational leadership style, while 20

male (M = 3.31, SD = 0.54) participants had a transactional leadership style. Three

participants elected to not report their gender and had a transformational leadership

style (M = 3.20, SD = 0.26). For males with a transformational leadership style,

idealized influence (behavior; M = 3.42, SD = 0.47) had a higher mean score than

inspirational motivation (M = 3.41, SD = 0.48), individualized

Table 16

Frequencies of the Dominant Transformational and Transactional Leadership

Styles and Demographic Variables

Transformational Transactional Leadership Leadership

Frequency Frequency Total

(Percentage) (Percentage)

(Percentage)

Gender (n = 335)

Male 239 (72.34%) 20 (5.97%) 259

(77.31%)

Female 73 (21.79%) 0 (0.00%) 73

(21.79%)

Do not elect to report 3 (0.90%) 0 (0.00%) 3

(0.90%)

Total 315 (94.02%) 20 (5.97%) 335

(100.00%)

Education Level

(n = 335) No diploma 3 (0.90%) 0 (0.00%) 3

(0.90%)

High school diploma or equivalency 64 (19.10%) 6 (1.79%) 70

(20.90%)

Associate degree, junior college, or trade school 44 (13.13%) 5

(1.49%) 49 (14.63%) Bachelor’s degree 127 (37.91%) 6 (1.79%) 133 (39.70%)

Master’s degree 37 (11.04%) 3 (0.90%) 40

(11.94%)

Doctoral or professional degree 37 (11.04%) 0 (0.00%) 37

(11.04%)

Do not elect to report 3 (0.90%) 0 (0.00%) 3

(0.90%)

Total 315 (94.02%) 20 (5.97%) 335

(100.00%)

Industry (n = 335)

Manufacturing 15 (4.48%) 1 (0.30%) 16

(4.78%)

Wholesale trades 7 (2.09%) 0 (0.00%) 7

(2.09%)

Retail trades 51 (15.22%) 3 (0.90%) 54

(16.12%)

Information trades 5 (1.49%) 0 (0.00%) 5

(1.49%)

Real estate 23 (6.87%) 0 (0.00%) 23

(6.87%)

Profession and/or technical services 98 (29.25%) 6 (1.79%) 104

(31.04%)

Administrative and/or support services 5 (1.49%) 2 (0.60%) 7

(2.09%)

Educational services 8 (2.39%) 0 (0.00%) 8

(2.39%)

Healthcare and/or social services 30 (8.96%) 0 (0.00%) 30

(8.96%)

Arts and/or recreation 2 (0.60%) 0 (0.00%) 2

(0.60%)

Accommodations 2 (0.60%) 1 (0.30%) 3

(0.90%)

Other 69 (20.60%) 7 (2.09%) 76 (22.69%) Total 315 (94.02%) 20 (5.97%) 335

(100.00%)

Role in Business

(n = 335) CEO/Presidents 41 (12.24%) 2 (0.60%) 43

(12.84%)

Owner-Founder 190 (56.72%) 15 (4.48%) 205

(61.19%)

Owner-Buyer 75 (22.39%) 3 (0.90%) 78

(23.28%)

Owner 9 (2.69%) 0 (0.00%) 9 (2.69%) Total 315 (94.02%) 20 (5.97%) 335

(100.00%)

Diversification of

Products and

Services (n = 315) Yes 164 (52.06%) 10

(3.17%) 174 (55.24%)

No 124 (39.37%) 10 (3.17%) 134 (42.54%) Other 7 (2.22%) 0 (0.00%) 7

(2.22%)

Total 295 (93.65%) 20 (6.35%) 315

(100.00%)

Note. Not all 335 participants responded to all survey questions, hence the

differences in n for each question.

intellectual stimulation (M = 3.15, SD = 0.52). For females with a transformational

leadership consideration (M = 3.36, SD = 0.48), idealized influence (attributed; M =

3.28, SD = 0.44), and style, inspirational motivation (M = 3.52, SD = 0.47) had a

higher mean score than idealized influence (behavior; M = 3.47, SD = 0.46),

individualized consideration (M = 3.44, SD = 0.45), idealized influence (attributed;

M = 3.41, SD = 0.44), and intellectual stimulation (M = 3.23, SD = 0.50).

Contingent reward (M = 3.49, SD = 0.53) had a higher mean score than

managementby-exception (active; M = 3.14, SD = 0.72) for the 21 males with a

transactional leadership style.

Table 17 details the dominant leadership style by gender.

The mean, median, and standard deviation were analyzed for the education

level of each participant and the dominant transformational or transactional

leadership styles of participants. A dominant transformational leadership style was

characteristic of 127 participants with a bachelor’s degree (M = 3.33, SD = 0.31),

64 participants with a high school diploma or equivalency (M = 3.35, SD = 0.33),

44 participants with an associate degree, junior college, or trade school (M = 3.45,

SD = 0.35), 37 participants with a master’s degree (M = 3.34, SD = 0.36), 37

participants with a doctoral or professional degree (M = 3.24, SD = 0.32), three

participants with no diploma (M = 3.42, SD = 0.53), and three participants who did

not elect to report (M =

3.32, SD = 0.10).

Idealized influence (behavior; M = 3.44, SD = 0.44) had a higher mean score

than inspirational motivation (M = 3.40, SD = 0.48), individualized consideration

(M = 3.36, SD = 0.45), idealized influence (attributed; M = 3.28, SD = 0.45), and

intellectual stimulation (M = 3.18, SD = 0.45) for participants with a

transformational leadership style and bachelor’s degree. Inspirational motivation

(M = 3.53, SD = 0.47) had a higher mean score than individualized consideration

(M = 3.42, SD = 0.46), idealized influence (behavior; M = 3.43, SD = 0.49),

Table 17

Full Range Leadership Model Leadership Dominant Style Scores by Gender (n =

335)

Descriptive Statistics

M Mdn SD Number

Gender

Male (n = 259)

Inspirational Motivation 3.41 3.50 0.48 239

Idealized Influence (attributed) 3.28 3.25 0.44 239

Idealized Influence (behavior) 3.42 3.50 0.47 239

Intellectual Stimulation 3.15 3.25 0.52 239

Individualized Consideration 3.36 3.50 0.48 239

Transformational Leadership Score3.32 3.30 0.33 239

Contingent Reward 3.49 3.50 0.53 20

Management-by-exception (active) 3.14 3.25 0.72 20

Transactional Leadership Score 3.31 3.38 0.54 20

Female (n = 73)

Inspirational Motivation 3.52 3.50 0.47 73

Idealized Influence (attributed) 3.41 3.50 0.44 73

Idealized Influence (behavior) 3.47 3.50 0.46 73

Intellectual Stimulation 3.23 3.25 0.50 73

Individualized Consideration 3.44 3.50 0.45 73

Transformational Leadership Score3.42 3.40 0.32 73

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Do Not Elect to Report (n = 3)

Inspirational Motivation 2.92 3.00 0.38 3

Idealized Influence (attributed) 3.00 3.50 0.87 3

Idealized Influence (behavior) 2.92 3.00 0.38 3

Intellectual Stimulation 3.08 3.25 0.29 3

Individualized Consideration 3.58 3.50 0.14 3

Transformational Leadership Score3.20 3.30 0.26 3

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

idealized influence (attributed; M = 3.30, SD = 0.44), and intellectual stimulation

(M = 3.08, SD = 0.63) for participants with a transformational leadership style and a

high school diploma or equivalency. Idealized influence (behavior; M = 3.54, SD

= 0.44) had a higher mean score than individualized consideration (M = 3.48, SD =

0.42), idealized influence (attributed; M = 3.44, SD = 0.47), inspirational

motivation (M = 3.48, SD = 0.52), and intellectual stimulation (M = 3.31, SD =

0.54) for participants with a transformational leadership style and an associate

degree, junior college, or trade school. Inspirational motivation (M = 3.39, SD =

0.49) had a higher mean score than idealized influence (behavior; M = 3.34, SD =

0.48), intellectual stimulation (M = 3.34, SD = 0.39), individualized consideration

(M = 3.36, SD = 0.56), and idealized influence (attributed; M = 3.26, SD = 0.49) for

participants with a transformational leadership style and a master’s degree.

Inspirational motivation (M = 3.34, SD = 0.43) also had a higher mean score than

idealized influence (behavior; M = 3.33, SD = 0.51), individualized consideration

(M = 3.23, SD = 0.51), idealized influence (attributed; M = 3.28, SD = 0.39), and

intellectual stimulation (M = 3.03, SD = 0.53) for participants with a

transformational leadership style and a doctoral or professional degree.

Individualized consideration (M = 3.83, SD = 0.14) had a substantially higher

mean score than inspirational motivation (M = 3.42, SD = 0.52), idealized

influence (attributed; M = 3.42, SD = 0.63), idealized influence (behavior; M =

3.25, SD = 0.66), and intellectual stimulation (M = 3.17, SD = 1.01) for

participants with a transformational leadership style and no diploma. For the

three participants who had a transformational leadership style and elected to not

report their education level, inspirational motivation (M = 3.92, SD = 0.14) had a

higher mean score than idealized influence (behavior; M = 3.33, SD = 0.63),

individualized consideration (M = 3.08, SD = 0.38), idealized influence

(attributed; M = 3.33, SD = 0.63), and intellectual stimulation (M = 2.92, SD =

0.29).

A dominant transactional leadership style was characteristic of six

participants with a bachelor’s degree (M = 3.17, SD = 0.60), six participants with a

high school diploma or equivalency (M = 3.48, SD = 0.38), five participants with an

associate degree, junior college, or trade school (M = 3.38, SD = 0.77), and three

participants with a master’s degree (M = 3.17, SD = 0.44). For the six participants

who had a transactional leadership style and a bachelor’s degree, contingent reward

(M = 3.21, SD = 0.49) had a higher mean score than management-byexception

(active; M = 3.13, SD = 0.75). Contingent reward (M = 3.50, SD = 0.85) had a

higher mean score than management-by-exception (active; M = 3.25, SD = 0.77) for

participants with a transactional leadership style and an associate degree, junior

college, or trade school. Contingent reward (M = 3.50, SD = 0.25) also had a

higher mean score than management-by-exception (active; M = 2.83, SD = 0.63) for

participants with a transactional leadership style and a master’s degree. Table 18

details the dominant transformational and transactional leadership styles

categorized by education level.

The mean, median, and standard deviation, were analyzed for the industry of

each participant’s business and the dominant transformational or transactional

leadership styles of participants. Ninety-eight participants with businesses in

profession and/or technical services (M = 3.32, SD = 0.33), 69 participants with

businesses in the other industry category (M = 3.42, SD = 0.30), 51 participants

with businesses in retail trades (M = 3.32, SD = 0.39), 30 participants with

businesses in healthcare and/or social services (M = 3.32, SD = 0.33), 23

participants with businesses in real estate (M = 3.27, SD = 0.36), 15 participants

with businesses in manufacturing (M = 3.26, SD = 0.30), eight participants with

businesses in educational services (M = 3.49, SD = 0.33), seven participants with

businesses in wholesale trades (M = 3.31, SD = 0.12), five participants with

businesses in information trades (M = 3.56, SD = 0.33), five participants with

businesses in administrative and/or support services (M = 3.20, SD = 0.29), two

participants with businesses in arts and/or recreation (M = 3.32, SD = .33), and two

participants with businesses in Table 18

Full Range Leadership Model Leadership Dominant Style Scores by Education

Level (n = 335)

Descriptive Statistics M Mdn SD Number

Education

Level

No Diploma (n = 3)

Inspirational Motivation 3.42 3.25 0.52 3

Idealized Influence (attributed) 3.42 3.50 0.63 3

Idealized Influence (behavior) 3.25 3.00 0.66 3

Intellectual Stimulation 3.17 3.75 1.01 3

Individualized Consideration 3.83 3.75 0.14 3

Transformational Leadership Score 3.42 3.40 0.53 3

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

High school diploma or equivalency (n

= 70)

Inspirational Motivation 3.53 3.63 0.47 64

Idealized Influence (attributed) 3.30 3.25 0.44 64

Idealized Influence (behavior) 3.43 3.50 0.49 64

Intellectual Stimulation 3.08 3.25 0.63 64

Individualized Consideration 3.42 3.50 0.46 64

Transformational Leadership Score 3.35 3.33 0.33 64

Contingent Reward 3.75 3.75 0.22 6

Management-by-exception (active) 3.21 3.38 0.84 6

Transactional Leadership Score 3.48 3.50 0.38 6

Associate degree, Junior College, or Trade

school (n = 49)

Inspirational Motivation 3.48 3.75 0.52 44

Idealized Influence (attributed) 3.44 3.50 0.47 44

Idealized Influence (behavior) 3.54 3.75 0.44 44

Intellectual Stimulation 3.31 3.50 0.54 44

Individualized Consideration 3.48 3.50 0.42 44

Transformational Leadership Score 3.45 3.53 0.35 44

Contingent Reward 3.50 3.75 0.85 5

Management-by-exception (active) 3.25 3.25 0.77 5

Transactional Leadership Score 3.38 3.50 0.77 5

Bachelor's degree (n = 133)

Inspirational Motivation 3.40 3.50 0.48 127

Idealized Influence (attributed) 3.28 3.25 0.45 127

Idealized Influence (behavior) 3.44 3.50 0.44 127

Intellectual Stimulation 3.18 3.25 0.45 127

Individualized Consideration 3.36 3.50 0.45 127

Transformational Leadership Score 3.33 3.35 0.31 127

Contingent Reward 3.21 3.38 0.49 6

Management-by-exception (active) 3.13 3.25 0.75 6

Transactional Leadership Score 3.17 3.31 0.60 6

Master's degree (n = 40)

Inspirational Motivation 3.39 3.50 0.49 37

Idealized Influence (attributed) 3.26 3.25 0.49 37

Idealized Influence (behavior) 3.34 3.25 0.48 37

Intellectual Stimulation 3.34 3.50 0.39 37

Individualized Consideration 3.36 3.50 0.56 37

Transformational Leadership Score 3.34 3.30 0.36 37

Contingent Reward 3.50 3.50 0.25 3

Management-by-exception (active) 2.83 2.75 0.63 3

Transactional Leadership Score 3.17 3.13 0.44 3

Doctoral or professional degree (n = 37)

Inspirational Motivation 3.34 3.25 0.43 37

Idealized Influence (attributed) 3.28 3.25 0.39 37

Idealized Influence (behavior) 3.33 3.50 0.51 37

Intellectual Stimulation 3.03 3.00 0.53 37

Individualized Consideration 3.23 3.25 0.51 37

Transformational Leadership Score 3.24 3.15 0.32 37

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Do not elect to report (n = 3)

Inspirational Motivation 3.92 4.00 0.14 3

Idealized Influence (attributed) 3.33 3.25 0.63 3

Idealized Influence (behavior) 3.33 3.75 0.72 3

Intellectual Stimulation 2.92 2.75 0.29 3

Individualized Consideration 3.08 3.00 0.38 3

Transformational Leadership Score 3.32 3.35 0.10 3

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Table 18 (continued)

Accommodations (M = 3.58, SD = 0.25). For participants with a

transformational leadership style and businesses in profession and/or technical

services, inspirational motivation (M = 3.42, SD = 0.52) had a higher mean score

than idealized influence (behavior; M = 3.37, SD = 0.45), idealized influence

(attributed; M = 3.27, SD = 0.47), individualized consideration (M = 3.30, SD =

0.51), and intellectual stimulation (M = 3.23, SD = 0.48). Idealized influence

(behavior; M = 3.57, SD = 0.43) had a higher mean score than inspirational

motivation (M = 3.51, SD = 0.42), individualized consideration (M = 3.42, SD =

0.47), idealized influence (attributed; M = 3.37, SD = 0.40), and intellectual

stimulation (M = 3.23, SD = 0.49) for participants with a transformational

leadership style and businesses in the other industry. Individualized consideration

(M = 3.42, SD = 0.47) and inspirational motivation (M = 3.42, SD = 0.49) had

higher mean scores than idealized influence (behavior; M = 3.36, SD = 0.52),

idealized influence (attributed; M = 3.26, SD = 0.51), and intellectual stimulation

(M = 3.12, SD = 0.59) for participants with a transformational leadership style and

businesses in retail trades.

Idealized influence (behavior; M = 3.45, SD = 0.48) had higher mean score

than idealized influence (attributed; M = 3.40, SD = 0.39), inspirational motivation

(M = 3.39, SD = 0.40), individualized consideration (M = 3.35, SD = 0.50), and

intellectual stimulation (M = 3.03, SD = 0.53) for participants with a

transformational leadership style and businesses in healthcare and/or social

services. Inspirational motivation (M = 3.42, SD = 0.52) had a higher mean score

than individualized consideration (M = 3.37, SD = 0.41), idealized influence

(attributed; M = 3.30, SD = 0.41), idealized influence (behavior; M = 3.29, SD =

0.49), and intellectual stimulation (M = 2.97, SD = 0.59) for participants with a

transformational leadership style and businesses in real estate. Idealized influence

(behavior; M = 3.37, SD = 0.50) had a higher mean score than individualized

consideration (M = 3.30, SD = 0.46), inspirational motivation (M = 3.25, SD =

0.47), idealized influence (attributed; M = 3.20, SD = 0.37), and intellectual

stimulation (M = 3.18, SD = 0.50) for participants with a transformational

leadership style and businesses in manufacturing. Idealized influence (behavior; M

= 3.69, SD = 0.37) had a higher mean score than individualized consideration (M =

3.59, SD = 0.35), inspirational motivation (M = 3.50, SD = 0.61), idealized

influence (attributed; M = 3.47, SD = 0.60), and intellectual stimulation (M = 3.19,

SD = 0.50) for participants with a transformational leadership style and businesses

in educational services. Individualized consideration (M = 3.43, SD = 0.31) had a

higher mean score than inspirational motivation (M = 3.39, SD = 0.35), idealized

influence (attributed; M = 3.29, SD = 0.17), intellectual stimulation (M = 3.29, SD =

0.60), and idealized influence (behavior; M = 3.14, SD = 0.38) for participants with

a transformational leadership style and businesses in wholesale trades.

Idealized influence (behavior; M = 3.80, SD = 0.21) had a higher mean score

than individualized consideration (M = 3.75, SD = 0.18), inspirational motivation

(M = 3.70, SD = 0.33), idealized influence (attributed; M = 3.35, SD = 0.38), and

intellectual stimulation (M = 3.20, SD = 0.33) for participants with a

transformational leadership style and businesses in information trades. Idealized

influence (behavior; M = 3.35, SD = 0.29) had a higher mean score than intellectual

stimulation (M = 3.30, SD = 0.21), inspirational motivation (M = 3.20, SD =

0.54), individualized consideration (M = 3.20, SD = 0.27), and idealized influence

(attributed; M = 2.95, SD = 0.69) for participants with a transformational leadership

style and businesses in administrative and/or support services. Intellectual

stimulation (M = 3.88, SD = 0.18) had a higher mean score than inspirational

motivation (M = 3.63, SD = 0.53), idealized influence (attributed; M = 3.50, SD =

0.00), individualized consideration (M = 3.50, SD = 0.35), and idealized influence

(behavior; M = 3.38, SD = 0.88) for participants with a transformational leadership

style and businesses in arts and/or recreation. Idealized influence (behavior; M =

4.00, SD = 0.00) had a higher mean score than individualized consideration (M =

3.63, SD = 0.53), idealized influence (attributed; M = 3.50, SD = 0.71), inspirational

motivation (M = 3.50, SD = 0.71), and intellectual stimulation (M = 2.75, SD =

0.35) and for participants with a transformational leadership style and businesses in

accommodations. Individualized consideration (M = 3.50, SD = 0.00), inspirational

motivation (M = 3.50, SD = 0.00), idealized influence (behavior; M = 3.50, SD =

0.00), idealized influence (attributed; M = 3.50, SD = 0.00) had the same mean

scores, while intellectual stimulation (M = 3.25, SD = 0.63) had a lower mean score

for the participant with a transformational leadership style and businesses retail

trades and professional and/or technical services industries.

A dominant transactional leadership style was characteristic of seven

participants with businesses in the other industry category (M = 3.36, SD = 0.63),

six participants with businesses in profession and/or technical services (M = 3.23,

SD = 0.76), three participants with businesses in retail trades (M = 3.33, SD = 0.14),

two participants with businesses in administrative and/or support services (M =

3.31, SD = 0.44), one participant with a business in manufacturing (M =

3.38, SD = 0.00), and one participant with a business in accommodations (M = 3.13,

SD = 0.00). For the seven participants who had a transactional leadership style and

a business in the other industry category, contingent reward (M = 3.46, SD = 0.57)

had a higher mean score than management-by-exception (active; M = 3.32, SD =

0.77). Contingent reward (M = 3.33, SD = 0.74) had a higher mean score than

management-by-exception (active; M = 3.13, SD = 0.88) for participants with a

transactional leadership style and businesses in professional and/or technical

services. Contingent reward (M = 3.58, SD = 0.29) had a higher mean score than

managementby-exception (active; M = 3.08, SD = 0.29) for participants with a

transactional leadership style and businesses in retail trades. Contingent reward (M

= 3.75, SD = 0.35) had a higher mean score than management-by-exception (active;

M = 2.88, SD = 1.24) for participants with a transactional leadership style and

businesses in administrative and/or support services. Contingent reward (M = 3.50,

SD = 0.00) had a higher mean score than management-byexception (active; M =

3.25, SD = 0.00) for the participant with a transactional leadership style and

business in manufacturing. Contingent reward (M = 3.75, SD = 0.00) had a higher

mean score than management-by-exception (active; M = 2.50, SD = 0.00) for the

participant with a transactional leadership style and business in accommodations.

Table 19 details the dominant leadership styles scores by industry.

Table 19

Descriptive Statistics M Mdn SD Frequency

Industry

Manufacturing (n = 16)

Inspirational Motivation 3.25 3.25 0.47 15

Idealized Influence (attributed) 3.20 3.25 0.37 15

Idealized Influence (behavior) 3.37 3.50 0.50 15

Intellectual Stimulation 3.18 3.00 0.50 15

Individualized Consideration 3.30 3.25 0.46 15

Transformational Leadership Score 3.26 3.20 0.30 15

Contingent Reward 3.50 3.50 0.00 1

Management-by-exception (active) 3.25 3.25 0.00 1

Transactional Leadership Score 3.38 3.38 0.00 1

Wholesale trades (n = 7)

Inspirational Motivation 3.39 3.50 0.35 7

Idealized Influence (attributed) 3.29 3.25 0.17 7

Idealized Influence (behavior) 3.14 3.00 0.38 7

Intellectual Stimulation 3.29 3.25 0.60 7

Individualized Consideration 3.43 3.50 0.31 7

Transformational Leadership Score 3.31 3.30 0.12 7

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Retail trades (n = 54)

Inspirational Motivation 3.42 3.50 0.49 51

Idealized Influence (attributed) 3.26 3.25 0.51 51

Idealized Influence (behavior) 3.36 3.50 0.52 51

Intellectual Stimulation 3.12 3.00 0.59 51

Individualized Consideration 3.42 3.50 0.47 51

Transformational Leadership Score 3.32 3.25 0.39 51

Full Range Leadership Model Leadership Dominant Style Scores by Industry

Table 19 (continued)

Contingent Reward 3.58 3.75 0.29 3

Management-by-exception (active) 3.08 3.25 0.29 3

Transactional Leadership Score 3.33 3.25 0.14 3

Information trades (n = 5)

Inspirational Motivation 3.70 3.75 0.33 5

Idealized Influence (attributed) 3.35 3.50 0.38 5

Idealized Influence (behavior) 3.80 3.75 0.21 5

Intellectual Stimulation 3.20 3.00 0.33 5

Individualized Consideration 3.75 3.75 0.18 5

Transformational Leadership Score 3.56 3.50 0.33 5

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Real estate (n = 23)

Inspirational Motivation 3.42 3.50 0.52 23

Idealized Influence (attributed) 3.30 3.25 0.41 23

Idealized Influence (behavior) 3.29 3.25 0.49 23

Intellectual Stimulation 2.97 3.00 0.59 23

Individualized Consideration 3.37 3.25 0.41 23

Transformational Leadership Score 3.27 3.15 0.36 23

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Profession and/or technical services (n = 104)

Inspirational Motivation 3.42 3.50 0.52 98

Idealized Influence (attributed) 3.27 3.25 0.47 98

Idealized Influence (behavior) 3.37 3.25 0.45 98

Intellectual Stimulation 3.23 3.25 0.48 98

Individualized Consideration 3.30 3.25 0.51 98

Transformational Leadership Score 3.32 3.35 0.33 98

Contingent Reward 3.33 3.38 0.74 6

Management-by-exception (active) 3.13 3.13 0.88 6

Transactional Leadership Score 3.23 3.25 0.76 6

Administrative and/or support services (n = 7)

Inspirational Motivation 3.20 3.25 0.54 5

Idealized Influence (attributed) 2.95 3.25 0.69 5

Idealized Influence (behavior) 3.35 3.25 0.29 5

Intellectual Stimulation 3.30 3.25 0.21 5

Individualized Consideration 3.20 3.25 0.27 5

Transformational Leadership Score 3.20 3.10 0.29 5

Contingent Reward 3.75 3.75 0.35 2

Management-by-exception (active) 2.88 2.88 1.24 2

Transactional Leadership Score 3.31 3.31 0.44 2

Educational services (n = 8)

Inspirational Motivation 3.50 3.75 0.61 8

Idealized Influence (attributed) 3.47 3.50 0.60 8

Table 19 (continued)

Idealized Influence (behavior) 3.69 3.75 0.37 8

Intellectual Stimulation 3.19 3.25 0.50 8

Individualized Consideration 3.59 3.63 0.35 8

Transformational Leadership Score 3.49 3.60 0.33 8

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Healthcare and/or social services (n = 30)

Inspirational Motivation 3.39 3.50 0.40 30

Idealized Influence (attributed) 3.40 3.50 0.39 30

Idealized Influence (behavior) 3.45 3.50 0.48 30

Intellectual Stimulation 3.03 3.00 0.53 30

Individualized Consideration 3.35 3.25 0.50 30

Transformational Leadership Score 3.32 3.30 0.33 30

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Arts and/or recreation (n = 2)

Inspirational Motivation 3.63 3.63 0.53 2

Idealized Influence (attributed) 3.50 3.50 0.00 2

Idealized Influence (behavior) 3.38 3.38 0.88 2

Intellectual Stimulation 3.88 3.88 0.18 2

Individualized Consideration 3.50 3.50 0.35 2

Transformational Leadership Score 3.58 3.58 0.25 2

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Accommodations (n = 3)

Inspirational Motivation 3.50 3.50 0.71 2

Idealized Influence (attributed) 3.50 3.50 0.71 2

Idealized Influence (behavior) 4.00 4.00 0.00 2

Intellectual Stimulation 2.75 2.75 0.35 2

Individualized Consideration 3.63 3.63 0.53 2

Transformational Leadership Score 3.48 3.48 0.46 2

Contingent Reward 3.75 3.75 0.00 1

Management-by-exception (active) 2.50 2.50 0.00 1

Transactional Leadership Score 3.13 3.13 0.00 1

Other (n = 76)

Inspirational Motivation 3.51 3.50 0.42 69

Idealized Influence (attributed) 3.37 3.38 0.40 69

Idealized Influence (behavior) 3.57 3.63 0.43 69

Intellectual Stimulation 3.23 3.25 0.49 69

Individualized Consideration 3.42 3.50 0.47 69

Transformational Leadership Score 3.42 3.45 0.30 69

Contingent Reward 3.46 3.50 0.57 7

Management-by-exception (active) 3.32 3.50 0.77 7

Transactional Leadership Score 3.36 3.63 0.63 7

Descriptive statistics were analyzed for the role in business held by each

participant and the dominant transformational or transactional leadership styles of

participants. Forty-one CEOs/Presidents, 190 owner-founders, 75 owner-buyers,

and nine owners had a transformational leadership style. For CEOs/Presidents with

a transformational leadership style (M = 3.38, SD = 0.29), idealized influence

(behavior; M = 3.49, SD = 0.36) had a higher mean score than inspirational

motivation (M = 3.47, SD = 0.45), individualized consideration (M = 3.35, SD =

0.40), intellectual stimulation (M = 3.31, SD = 0.46), and idealized influence

(attributed; M = 3.26, SD = 0.44). For owner-founders with a transformational

leadership style (M = 3.37, SD = 0.33), inspirational motivation (M = 3.48, SD =

0.45) had a higher mean score than idealized influence (behavior; M = 3.45, SD =

0.48), individualized consideration (M = 3.40, SD = 0.49), idealized influence

(attributed; M = 3.36, SD = 0.43), and intellectual stimulation (M = 3.18, SD =

0.53). For owner-buyers with a transformational leadership style (M = 3.25, SD =

0.33), idealized influence (behavior; M = 3.35, SD = 0.49) had a higher mean score

than individualized consideration (M = 3.32, SD = 0.46), inspirational motivation

(M = 3.32, SD = 0.52), idealized influence (attributed; M = 3.20, SD = 0.48), and

intellectual stimulation (M = 3.07, SD = 0.50). For owners with a transformational

leadership style (M = 3.33, SD = 0.44), individualized consideration (M = 3.39, SD

= 0.50) and inspirational motivation (M = 3.39, SD = 0.56) had higher mean scores

than idealized influence (behavior; M = 3.33, SD = 0.50), idealized influence

(attributed; M = 3.28, SD = 0.51), and intellectual stimulation (M = 3.25, SD =

0.57). Two CEOs/Presidents, 15 owner-founders, and three owner-buyers had a

transactional leadership style. Contingent reward (M = 3.75, SD = 0.35) had a

higher mean score than management-byexception (active; M = 3.38, SD = 0.88) for

the two CEOs/Presidents with a transactional leadership style (M = 3.56, SD =

0.62). Contingent reward (M = 3.53, SD = 0.44) had a higher mean score than

management-by-exception (active; M = 3.17, SD = 0.73) for the 15 ownerfounders

with a transactional leadership style (M = 3.35, SD = 0.50), and contingent reward

(M = 3.08, SD = 0.95) also had a higher mean score than management-by-exception

(active; M = 2.83, SD = 0.80) for the three owner-buyers with a transactional

leadership style (M = 2.96, SD = 0.76). Table 20 includes the descriptive statistics

for each of the transformational and transactional leadership style factors, which is

categorized by the role held by participants.

Participants were asked whether or not their products and services in their

business had diversified since 2008. One hundred sixty-four participants with a

transformational leadership style indicated that their products and services had

diversified, and 124 participants with a transformational leadership style indicated

that their products and services had not diversified (n = 303). For the 164

participants with a transformational leadership style and business diversification (M

= 3.38, SD = 0.34), idealized influence (behavior; M = 3.50, SD = 0.44) had a

higher mean score than inspirational motivation (M = 3.45, SD = 0.48),

individualized consideration (M = 3.40, SD = 0.47), idealized influence (attributed;

M = 3.30, SD = 0.44), and intellectual stimulation (M = 3.22, SD = 0.49). For the

124 participants with a transformational leadership style with no business

diversification (M = 3.29, SD = 0.31), inspirational motivation (M = 3.39, SD =

0.48) had a higher mean score than idealized influence (behavior; M = 3.34, SD

= 0.48), individualized consideration (M = 3.33, SD = 0.47), idealized influence

(attributed; M = 3.28, SD = 0.46), and intellectual stimulation (M = 3.10, SD =

0.55). Ten participants with a transactional leadership style (M = 3.54, SD = 0.37)

indicated that their products and services had diversified, while nine participants

with a transactional leadership style (M = 2.99, SD = 0.55) indicated that their

products and services had not diversified. For the 10 participants with a

transactional leadership style and business diversification, contingent reward (M =

3.60, SD = Table 20

Descriptive Statistics M Mdn SD Number

Role in

Business

CEO/ Presidents (n = 43)

Inspirational Motivation 3.47 3.50 0.45 41

Idealized Influence (attributed) 3.26 3.25 0.44 41

Idealized Influence (behavior) 3.49 3.50 0.36 41

Intellectual Stimulation 3.31 3.25 0.46 41

Individualized Consideration 3.35 3.25 0.40 41

Transformational Leadership Score 3.38 3.35 0.29 41

Contingent Reward 3.75 3.75 0.35 2

Management-by-exception (active) 3.38 3.38 0.88 2

Transactional Leadership Score 3.56 3.56 0.62 2

Owner-Founder (n = 205)

Inspirational Motivation 3.48 3.50 0.45 190

Idealized Influence (attributed) 3.36 3.50 0.43 190

Idealized Influence (behavior) 3.45 3.50 0.48 190

Intellectual Stimulation 3.18 3.25 0.53 190

Individualized Consideration 3.40 3.50 0.49 190

Transformational Leadership Score 3.37 3.40 0.33 190

Contingent Reward 3.53 3.50 0.44 15

Management-by-exception (active) 3.17 3.25 0.73 15

Transactional Leadership Score 3.35 3.38 0.50 15

Owner-Buyer (n = 78)

Inspirational Motivation 3.32 3.50 0.52 75

Idealized Influence (attributed) 3.20 3.25 0.48 75

Idealized Influence (behavior) 3.35 3.25 0.49 75

Intellectual Stimulation 3.07 3.00 0.50 75

Individualized Consideration 3.32 3.50 0.46 75

Transformational Leadership Score 3.25 3.25 0.33 75

Contingent Reward 3.08 3.50 0.95 3

Management-by-exception (active) 2.83 2.50 0.80 3

Transactional Leadership Score 2.96 3.13 0.76 3

Owner (n = 9)

Inspirational Motivation 3.39 3.50 0.56 9

Idealized Influence (attributed) 3.28 3.25 0.51 9

Idealized Influence (behavior) 3.33 3.25 0.50 9

Intellectual Stimulation 3.25 3.50 0.57 9

Individualized Consideration 3.39 3.50 0.50 9

Transformational Leadership Score 3.33 3.25 0.44 9

Contingent Reward 0.00 0.00 0.00 0

Management-by-exception (active) 0.00 0.00 0.00 0

Transactional Leadership Score 0.00 0.00 0.00 0

Full Range Leadership Model Leadership Dominant Style Scores by Role in

Business (n = 335)

0.27) had a higher mean score than management-by-exception (active; M = 3.48,

SD = 0.56). For the nine participants with a transactional leadership style and no

business diversification, contingent reward (M = 3.31, SD = 0.70) had a higher

mean score than management-byexception (active; M = 2.67, SD = 0.64). Ten

participants with a transformational leadership style (M = 3.47, SD = 0.31), and one

participant with a transactional leadership style (M = 4.00, SD = 0.00), indicated

that their business had diversified somewhat and comprise the “other” category.

Table 21 includes the descriptive statistics for each of the transformational and

transactional leadership style factors, which is categorized by whether or not the

business had diversification of its product and services.

Three hundred businesses had been operating for five years or longer. Two

hundred and eighty-nine participants with a dominant transformational leadership

style (M = 3.12, SD = 0.84) and 11 participants with a dominant transactional

leadership style (M = 3.36, SD = 0.49) had been operating their business for five

years or longer. Table 22 details the dominant leadership style based on the MLQ

by businesses that have been operating for five years or longer.

The combination of leadership styles examined in RQ2 was also used to

determine the frequency of the combination of leadership styles including

transformational/entrepreneurial leadership, transactional/entrepreneurial

leadership, transformational, and transactional leadership. Three hundred and

thirty-five participants had complete data for the gender, industry, education, and

role in business. Five male (1.49%) and three female (0.90%) participants had a

transformational leadership style, while one male (0.30%) participant had a

transactional leadership style. Two hundred and thirty-four male participants

(69.85%), 70 female participants (20.90%), and three participants (0.90%) who did

not elect to report their Table 21

Descriptive Statistics M

Mdn

SD Number

Diversification of Products

and Services

Yes (n = 174)

Inspirational Motivation 3.45 3.50 0.48 164

Idealized Influence (attributed) 3.30 3.25 0.44 164

Idealized Influence (behavior) 3.50 3.50 0.44 164

Intellectual Stimulation 3.22 3.25 0.49 164

Individualized Consideration 3.40 3.50 0.47 164

Transformational Leadership Score 3.38 3.40 0.34 164

Contingent Reward 3.60 3.50 0.27 10

Management-by-exception (active) 3.48 3.63 0.56 10

Transactional Leadership Score 3.54 3.63 0.37 10

No (n = 133)

Inspirational Motivation 3.39 3.50 0.48 124

Idealized Influence (attributed) 3.28 3.00 0.46 124

Idealized Influence (behavior) 3.34 3.25 0.48 124

Intellectual Stimulation 3.10 3.00 0.55 124

Individualized Consideration 3.33 3.50 0.47 124

Transformational Leadership Score 3.29 3.30 0.31 124

Contingent Reward 3.31 3.50 0.70 9

Management-by-exception (active) 2.67 2.50 0.64 9

Transactional Leadership Score 2.99 3.13 0.55 9

Other (n = 8)

Inspirational Motivation 3.46 3.25 0.51 7

Idealized Influence (attributed) 3.54 3.50 0.44 7

Idealized Influence (behavior) 3.46 3.50 0.49 7

Intellectual Stimulation 3.39 3.50 0.38 7

Individualized Consideration 3.50 3.50 0.32 7

Transformational Leadership Score 3.47 3.60 0.31 7

Contingent Reward 4.00 4.00 0.00 1

Management-by-exception (active) 4.00 4.00 0.00 1

Transactional Leadership Score 4.00 4.00 0.00 1

Full Range Leadership Model Leadership Dominant Style Scores by Diversification

of Services (n = 315) Note. The sample was smaller for this analysis due to only

315 participants responding to this survey question.

Table 22

Full Range Leadership Model Leadership Dominant Style Scores in Business Five

Years or Longer (n = 300)

Descriptive Statistics M Mdn SD Number

Transformational leadership

in business five years or

longer

3.12 3.25 0.84 289

Transactional leadership in

business five years or longer 3.36 3.38 0.49 11

Note. The sample was smaller for this analysis due to examining businesses that

had been operating for five years or more at the time of this study.

gender, had a transformational and entrepreneurial leadership style. Nineteen male

participants (5.67%) had a transactional and entrepreneurial leadership style. A

transformational and entrepreneurial leadership style was characteristic of 124

participants with a bachelor’s degree (37.01%), 63 participants with a high school

diploma or equivalency (18.81%), 42 participants with an associate degree, junior

college, or trade school (12.54%), 37 participants with a master’s degree (10.91%),

40 participants with a doctoral or professional degree (11.04%), three participants

with no diploma (0.90%), and three participants who did not elect to report

(0.90%). A transformational leadership style was characteristic of three

participants with a bachelor’s degree (0.90%), two participants with an associate

degree, junior college, or trade school (0.60%), two participants with a doctoral or

professional degree (0.60%), and one participant with a high school diploma or

equivalency (0.30%). A transactional and entrepreneurial leadership style was

characteristic of six participants with a bachelor’s degree (1.79%), six participants

with a high school diploma or equivalency (1.79%), four participants with an

associate degree, junior college, or trade school (1.19%), and three participants with

a master’s degree (0.90%). A transactional leadership style was characteristic of

one participant with an associate degree, junior college, or trade school (0.30%).

A transformational leadership style was also characteristic of two participants

with businesses in the other industry category (0.60%), one participant with

businesses in professional and/or technical services (0.30%), two participants with

businesses in real estate (0.60%), one participant with businesses in retail trades

(0.30%), one participants with businesses in manufacturing (0.30%), and one

participant with a business in wholesale trades (0.30%). A transactional leadership

style was characteristic of one participant with a business in professional and/or

technical services (0.30%). A transformational and entrepreneurial leadership style

was characteristic of 97 participants with businesses in professional and/or

technical services (28.96%), 67 participants with businesses in the other industry

category (20.00%), 50 participants with businesses in retail trades (14.93%), 30

participants with businesses in healthcare and/or social services (8.96%), 21

participants with businesses in real estate (6.27%), 14 participants with businesses

in manufacturing (4.18%), eight participants with businesses in educational services

(2.39%), six participants with businesses in wholesale trades (1.79%), five

participants with businesses in information trades (1.49%), five participants with

businesses in administrative and/or support services (1.49%), two participants with

businesses in arts and/or recreation (0.60%), and two participants with businesses in

accommodations (0.60%).

A transactional and entrepreneurial leadership style was characteristic of

seven participants with businesses in the other industry category (2.09%), five

participants with businesses in professional and/or technical services (1.49%), three

participants with businesses in retail trades (0.90%), two participants with

businesses in administrative and/or support services (0.60%), one participant with a

business in manufacturing (0.30%), one participant with a business in real estate

(0.30%), and one participant with a business in accommodations (0.30%).

Frequencies for the role held in the business were also analyzed. Four

owner-buyers (1.19%), three owner-founders (0.90%), and one CEOs/Presidents

(0.30%) had a transformational leadership style. One owner-buyer (0.30%) had a

transactional leadership style. One hundred an eighty-seven owner-founders

(55.82%), 71 owner-buyers (21.19%), 40 CEOs/Presidents (11.94%), and nine

owners (2.69%) had a transformational and entrepreneurial leadership style.

Fifteen owner-founders (4.48%), two CEOs/Presidents (0.60%), and two owner-

buyers (0.60%) had a transactional and entrepreneurial leadership style.

Three hundred and fifteen participants answered the survey question about

the diversification of their products and services as a business since 2008.

Representing 0.95% of the sample, three participants with a transformational

leadership style indicated that their products and services had diversified since

2008; however, five participants with a transformational leadership style (1.59%)

indicated that their products and services had not diversified since 2008. One

participant with a transactional leadership style (0.32%) indicated that their

products and services had not diversified since 2008. Representing 51.11% of the

sample, 161 participants with a transformational and entrepreneurial leadership

style indicated that their products and services had diversified since 2008; however,

119 participants with a transformational and entrepreneurial leadership style

(37.78%) indicated that their products and services had not diversified since 2008.

Ten participants with a transactional leadership style (3.17%) indicated that their

products and services had diversified since 2008, but eight participants with a

transactional leadership style (2.54%) indicated that their products and services had

not diversified since 2008. Finally, seven participants with a transformational and

entrepreneurial leadership style (2.22%) and one participant with a transactional

and entrepreneurial leadership style (0.32%) indicated that their products had

somewhat diversified, representing the “other” category. Table 23 details the

numbers and percentages of these leadership styles, which is categorized by gender,

education level, industry, role in business, and diversification of products and

services.

Descriptive statistics were also analyzed for the variables of years of

operation, the number of employees at founding, the number of current employees,

profitability for current year, and profitability over five years. Years of operation

consisted of 334 participants, and the leadership styles included 307 participants

with a transformational/entrepreneurial leadership style (M = 21.16, SD = 20.55),

18 participants with a transactional/entrepreneurial leadership style (M = 24.61, SD

= 33.30), eight participants with a transformational leadership style (M = 28.13, SD

= 11.83), and one participant with a transactional leadership style (M = 81.00, SD =

0.00). The number of employees at business founding consisted of 330

participants, and the leadership styles included 302 participants with a

transformational/entrepreneurial leadership style (M = 4.78, SD = 13.11), 19

participants with a transactional/entrepreneurial leadership style (M = 6.05, SD =

14.66), eight participants with a transformational leadership style (M = 2.25, SD =

1.58), and one participant with a transactional leadership style (M = 3.00, SD =

0.00). Number of current employees consisted of 335 participants, and the

leadership styles included 307 participants with a transformational/entrepreneurial

leadership style (M = 99.42, SD = 588.27), 19 participants with a

transactional/entrepreneurial leadership style (M = 54.63, SD = 109.58), eight

participants with a transformational leadership style (M = 8.75, SD = 9.47), and one

participant with a transactional leadership style (M = 2.00, SD = 0.00).

Profitability for current year consisted of 290 participants, and the leadership styles

included 266 participants with a transformational/entrepreneurial leadership style

(M = 28.09, SD = 59.46), 17 participants with a transactional/entrepreneurial

leadership style (M = 28.17, SD = 29.76), and seven participants with a

transformational leadership style (M = 20.43, SD = 20.94). Profitability over five

years consisted of 276 participants, and the leadership styles included 253

participants with a transformational/entrepreneurial leadership style (M = 65.19, SD

= 292.30), 15 participants with a transactional/entrepreneurial leadership style (M =

23.09, SD = 21.94), and eight participants with a transformational leadership style

(M = 34.63, SD = 26.58). Table 24 details the descriptive statistics for these

variables.

Table 24

Descriptive Statistics for the Combination of Leadership Styles

Business

Characteristics Leadership Style n M SD

Years of Operation (n = 334)

Transformational Leadership 8 28.13 11.83

Transactional Leadership 1 81.00 0.00

Transformational/Entrepreneurial Leadership 307 21.16 20.55

Transactional/Entrepreneurial Leadership 18 24.61 33.30

Number of Employees at Founding (n = 330)

Transformational Leadership 8 2.25 1.58

Transactional Leadership 1 3.00 0.00

Transformational/Entrepreneurial Leadership 302 4.78 13.11

Transactional/Entrepreneurial Leadership 19 6.05 14.66

Number of Current Employees (n = 335)

Transformational Leadership 8 8.75 9.47

Transactional Leadership 1 2.00 0.00

Transformational/Entrepreneurial Leadership 307 99.42 588.27

Transactional/Entrepreneurial Leadership 19 54.63 109.58

Profitability over 1 year (n = 290)

Transformational Leadership 7 20.43 20.94

Transactional Leadership 0 0.00 0.00

Transformational/Entrepreneurial Leadership 266 28.09 59.46

Transactional/Entrepreneurial Leadership 17 28.17 29.76

Profitability over 5 years (n = 276)

Transformational Leadership 8 34.63 26.58

Transactional Leadership 0 0.00 0.00

Transformational/Entrepreneurial Leadership 253 65.19 292.30

Transactional/Entrepreneurial Leadership 15 23.09 21.94

Note. Not all 335 participants responded to all survey questions, hence the

differences in n for each question in this table.

Multivariate Analysis of Variance (MANOVA) was used to determine the

mean difference between leadership styles, gender, education level, industry, and

role in business on years in operation, current year profitability, profitability over

five years, and the difference in number of employees since founding.

Transformational and entrepreneurial leadership style, transactional and

entrepreneurial leadership style, and transformational leadership style represented

the leadership styles. Transactional leadership was considered an outlier as it only

had one case. It was not used in the MANOVA. The independent variables in this

MANOVA were leadership styles, gender, education level, industry, and role in

business. The dependent variables were years in operation, current year

profitability, profitability over five years, and difference in number of employees

since founding. The results indicated that there was a statistically significant effect

of role in business, F(12, 349.531) = 1.983, p = .025, Wilks’ Λ =

.840, partial 𝜂𝜂2 = .056; and gender, F(4, 132) = 2.743, p = .031, Wilks’ Λ = .923,

partial 𝜂𝜂2 = .077 on the combined dependent variables. There was also a

statistically significant interaction effect between education level, industry, and role

in business on the combined dependent variables,

F(40, 502.384) = 1.440, p = .043, Wilks’ Λ = .663, partial 𝜂𝜂2 = .098.

Results from the MANOVA also indicated that there was not a statistically

significant effect of leadership styles, F(8, 264) = .933, p = .490, Wilks’ Λ = .946,

partial 𝜂𝜂2 = .027; education level, F(28, 477.355) = .632, p = .930, Wilks’ Λ

= .877, partial 𝜂𝜂2 = .032; industry, F(52, 513.345) = .598, p = .988, Wilks’ Λ

= .796, partial 𝜂𝜂2 = .055 on the combined dependent variables. There was also

not a statistically significant interaction effect between leadership styles and

education, F(12, 349.531) = .477, p = .943, Wilks’ Λ = .961, partial 𝜂𝜂2 = .013;

leadership styles and industry, F(8, 264) = .168, p = .995, Wilks’ Λ = .990, partial

𝜂𝜂2 = .005; leadership styles and role in business, F(4, 132) = .810, p = .521,

Wilks’ Λ = .976, partial 𝜂𝜂2 = .024; education and gender, F(16, 403.904) = .244, p

= .999, Wilks’ Λ = .971, partial 𝜂𝜂2 = .007; education and role in business, F(32,

488.387) = 1.404, p = .073, Wilks’ Λ = .723, partial 𝜂𝜂2 = .078; industry and role

in business, F(48, 510.516) = 1.058, p = .372, Wilks’ Λ = .694, partial 𝜂𝜂2 = .087;

industry and gender, F(24, 461.703) = .362, p = .998, Wilks’ Λ = .937, partial 𝜂𝜂2

= .016; role in business and gender, F(8, 264) = .375, p = .933, Wilks’ Λ = .978,

partial 𝜂𝜂2 =.011; leadership styles, education, and industry, F(8, 264) = .725, p

= .669, Wilks’ Λ = .957, partial 𝜂𝜂2 = .022; education, industry, and gender, F(24,

461.703) = .381, p = .997, Wilks’ Λ = .934, partial 𝜂𝜂2 = .017; and industry, role in

business, and gender, F(4, 132) = .209, p = .933, Wilks’ Λ = .994, partial 𝜂𝜂2

= .006; on the combined dependent variables. Table 25 details the results from the

MANOVA.

Table 25

MANOVA of Business and Demographic Variables on the Combined Dependent

Variables

Effect Λ F

df1 df2 p

Partial

𝜂𝜂2

Leadership styles .946 .933 8 264 .490 .027

Gender .923 2.743 4 132 .031* .077

Education .877 .632 28 477.355 .930 .032

Industry .796 .598 52 513.345 .988 .055

Role in Business .840 1.983 12 349.531 .025* .056

Leadership styles x Education .961 .447 12 349.531 .943 .013

Leadership styles x Industry .990 .168 8 264 .995 .005

Leadership styles x Role in

Business

.976 .810 4 132 .521 .024

Education x Gender .971 .244 16 403.904 .999 .007

Education x Industry .661 .629 92 524.968 .997 .098

Education x Role in Business .723 1.404 32 488.387 .073 .078

Industry x Role in Business .694 1.058 48 510.516 .372 .087

Industry x Gender .937 .362 24 461.703 .998 .016

Role in Business x Gender .978 .375 8 264 .933 .011

Leadership styles x Education x

Industry

.957 .725 8 264 .669 .022

Education x Industry x Role in

Business

.663 1.440 40 502.384 .043* .098

Education x Industry x Gender .934 .381 24 461.703 .997 .017

Industry x Role in Business x

Gender

.994 .209 4 132 .933 .006

Note. * = statistical significance at p = .05, representing the 95% confidence

interval.

For each of the statistically significant variables, a separate ANOVA was

conducted to determine how the independent variables affected each dependent

variable as follow-up tests to the MANOVA. Gender, role in business, and the

combination of education level, industry, and role in business were examined. The

results form the univariate analysis for gender on the differences in the number of

employees since founding was F(1) = 4.953, p = .028, partial 𝜂𝜂2 = .035; on

profitability over one year, F(1) = .499, p = .481, partial 𝜂𝜂2 = .004; on

profitability over five years, F(1) = .140, p = .709, partial 𝜂𝜂2 = .001; on years of

operation, F(1) = 2.695, p = .103, partial 𝜂𝜂2 = .020.

The results from the univariate analysis for role in business on years of

operation was F(3) = 6.269, p = .001, partial 𝜂𝜂2 = .122; on profitability over one

year, F(3) = .470, p = .704, partial 𝜂𝜂2 = .010; on profitability over five years, F(3)

= .045, p = .987, partial 𝜂𝜂2 = .001; on differences in the number of employees

since founding, F(3) = 1.300, p = .277, partial 𝜂𝜂2 = .028. The results from the

univariate analysis for education level, industry, and position on differences in the

number of employees since founding was F(10) = 2.312, p = .015, partial 𝜂𝜂2

= .146; on profitability over one year, F(10) = .454, p = .916, partial 𝜂𝜂2 = .033; on

profitability over five years, F(10) = 1.180, p = .310, partial 𝜂𝜂2 = .080; on years of

operation, F(10) = 1.372, p = .200, partial 𝜂𝜂2 = .092. Post-hoc analyses using

Tukey’s HSD on role in business indicated that owner-founders (M = 14.064, SD =

9.924, p < .001) had a significantly lower years of operation for their businesses

compared to owner-buyers (M = 31.221, SD = 26.404, p < .001) and

CEO/Presidents (M = 39.744, SD = 31.3301, p < .001). Furthermore, owners who

did not differentiate their role in the business (M = 20.333, SD = 17.930, p < .027)

had significantly lower years of operation for their business compared to

CEO/Presidents.

Summary

The purpose of this study was to examine the effect of entrepreneurs’

leadership styles as it relates to business success. A survey was administered to the

selected population in order to further examine this issue. The study sought to

answer research questions related to the relationship between leadership styles and

business success. The data analysis included 335 CEOs/Presidents, owner-

founders, owner-buyers, and owners who participated by completing either an

online or paper survey about their business and leadership behaviors. The findings

from this survey were detailed in Chapter IV.

The MLQ Form 5X-Short, representing Questions 1 through 45 on the

leadership styles survey, measured the leadership styles associated with the Full

Range Leadership Model. The results from RQ1, which addressed the dominant

Full Range Leadership Model leadership of entrepreneurs, indicated that

transformational leadership was the dominant style of participants. Three hundred

and fifteen participants (94.03%) had a dominant transformational leadership style,

while 20 participants (5.97%) had a dominant transactional leadership style from

the analysis (n = 335). The mean score of transformational leaders was 3.34 with a

standard deviation of 0.33, and the mean score of transactional leaders was 3.31

with a standard deviation of 0.54. The five factors of transformational leadership

were analyzed, and idealized influence (behavior; M = 3.43, SD = 0.47) and

inspirational motivation (M = 3.43, SD = 0.48) were the highest scored factors by

participants with a dominant transformational leadership style over individualized

consideration (M = 3.38, SD = 0.47), idealized influence (attributed; M = 3.31, SD

= 0.45), and intellectual stimulation (M = 3.17, SD = 0.52). The two factors of

transactional leadership were analyzed, and the mean score for contingent reward

(M = 3.49, SD = 0.53) was greater than the mean score of management-by-

exception (active; M = 3.14, SD = 0.72) for participants with a dominant

transactional leadership style.

The results from RQ2, which examined the relationship of transformational

and transactional leadership with the entrepreneurial leadership style, indicated that

the combination of transformational and entrepreneurial leadership styles was the

most prevalent among participants (91.64%), but the chi-square analysis did not

result in a statistically significant association between transformational,

transactional, entrepreneurial, and non-entrepreneurial leadership styles. RQ3

required analyses to determine the relationships between the participants’

leadership styles and the demographic and business data. Chi-square was used to

analyze the relationship between leadership styles and the categorical variables of

gender, industry, education, and role in business. The results from RQ3 indicated

that there was a statistically significant relationship between gender and leadership

styles. The results from RQ4 provided separate analyses of the frequency of the

dominant transformational or transactional leadership styles of participants for the

MLQ Form 5X-Short and the combination of leadership styles, which were both

categorized by gender, education level, industry type, years of operation, the

number of employees at business founding, the number of current employees at

business, current role in business, and profitability. MANOVA was performed to

determine the effect of the combination of leadership styles, gender, industry,

education, and role in business on the success factors of years of operation, the

change in the number of employees since founding, profitability for current year,

and profitability over five years. The results from the MANOVA indicated that

there was a statistically significant effect of gender and role in business on the

combined dependent variables. There was also a statistically significant interaction

effect between education, industry, and role in business on the combined dependent

variables. Post-hoc analyses were used to follow-up the MANOVA. Chapter V

will provide a summary of this study and conclusions based on the findings.

Chapter V will also include recommendations for future research.

CHAPTER V SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

This study examined the relationship of leadership styles to business success.

Four research questions were identified examining the effects of the Full Range

Leadership Model leadership styles and entrepreneurial leadership style on business

success. This chapter presents a summary of the study, detailing the purpose of this

study, the research questions, limitations, data collection, and data analyses.

Conclusions based on the findings are described following the summary. Based on

the findings and conclusions, recommendations for implementation of the study

findings and future research are detailed.

Summary

The problem of this study was to address a gap in the knowledge of

transformational, transactional, and laissez-faire leadership styles in combination

with the entrepreneurial leadership style leading to successful entrepreneurial

organizations. To solve this problem, this study described the relationship between

leadership styles of entrepreneurs as mediated by the variables of gender, education

level, industry type, and role in business with the success factors of business

longevity, profitability, and number of employees. Four research questions guided

this qualitative study.

RQ1: Which of the Full Range Leadership Model leadership styles is

dominant of entrepreneurs who sustain organizations?

RQ2: Which of the Full Range Leadership Model leadership styles is more

prevalent in the identification of leaders who also exhibit an

entrepreneurial leadership style? RQ3: How do leaders with various

combinations of leadership styles relate to the variables of gender,

education, industry type, and role in business?

RQ4: How do various combinations of leadership styles, gender, education,

industry type, and role in business relate to the success factors of years of

operation, profitability, and the difference in the number of employees?

This study is significant to research in leadership because it translates

leadership theory to the context of entrepreneurs. This study also described the

relationship between leadership styles of entrepreneurs and their relationship to the

variables of gender, education level, industry type, years of operation, the number

of employees at current organization, current role in business, and profitability for

better understanding of long-term business success. Examining leadership styles of

entrepreneurs provided insight into how leadership styles may impact the duration

and success of a business.

The limitations related to this study included:

1. This study was a descriptive study that used a survey to collect data. The

data collected came from individual entrepreneurs who voluntarily

participated, and the number of responses limited the results.

2. The participants were limited to entrepreneurs whose organizations operated

within the metropolitan service region including a major city and outlying

communities within a 50mile radius of a Midwestern city with a population

less than 500,000 people in the United States.

3. This study was limited to the leadership styles of transformational,

transactional, and laissez-faire leadership as identified using the MLQ, as

well as the entrepreneurial leadership style as identified using the

ENTRELEAD scale. These leadership styles interact and affect how

individuals lead their businesses.

4. This study was limited to the demographic factors of gender, education level,

industry type, years of operation, the number of employees at current

organization, current role in business, and profitability.

These limitations provided parameters for identifying participants from the

population and collecting data. The population was comprised of 40,357

businesses of all sizes within a 50-mile radius of a Midwestern city with a

population less than 500,000 people in the United States. Purposive sampling was

used to contact businesses within this population. Approximately 3,400 businesses

were contacted within the targeted population. The sample size for this study was

404 participants, resulting in a response rate of approximately 12%.

The literature review began with viewing leadership theory through a

historical lens. Leadership theory evolved from understanding leadership as power

to trait and behavioral approaches to leadership. Leadership styles are also one way

to understand leadership theory. The Full Range Leadership Model identifies

leadership styles on a continuum of transformational, transactional, and laissez-

faire leadership (Bass & Avolio, 2004). The Multifactor Leadership Questionnaire

was developed to assess leadership behaviors, which result in a leadership style

score. Entrepreneurial leadership is a leadership style where individuals use the

skills of opportunity recognition, risk-taking, proactivity, vision, innovation, and

idea creation to lead others within an organization. The ENTRELEAD scale was

developed to assess entrepreneurial leadership behaviors (Renko et al., 2015). The

theoretical framework for this study was based on transformational, transactional,

laissez-faire leadership styles from the Full Range Leadership Model and the

entrepreneurial leadership style. Previous research on transformational,

transactional, and entrepreneurial leadership styles and their relationship with

CEO contexts, gender, emotional intelligence, organizational innovation, and

performance were examined to identify gaps in the literature. Leadership impacts

firm performance, but research had yet to provide data on the combination of the

transformational, transactional, or laissez-faire leadership styles and the

entrepreneurial leadership style.

The research design consisted of a quantitative study using a survey data

gathering technique. A survey was developed with three subparts, including

business and demographic questions, MLQ Form 5X-Short, and the ENTRELEAD

scale. The first subpart of the survey collected information on gender, education

level, industry type, years of operation, the number of employees at founding of the

business, the number of current employees at the business, current role in business,

diversification of products and services since 2008, profitability for the current

year, and profitability over five years. The MLQ Form 5X-Short assessed the

leadership behaviors of participants based on the Full Range Leadership Model

(Bass & Avolio, 2004). The MLQ Form 5X-Short resulted in a leadership style

score for transformational, transactional, or laissez-faire leadership for participants.

Questions 1 through 45 on the second subpart of the leadership styles survey

corresponded with the MLQ Form 5X-Short. The ENTRELEAD scale assessed

leadership behaviors of participants, resulting in an entrepreneurial leadership style

score (Renko et al., 2015). Questions 46 through 53 on the third subpart of the

leadership styles survey corresponded with the ENTRELEAD scale. Questions 1

through 53 on the survey consisted of Likert-scale questions. A pilot study with

five entrepreneurs was conducted to ensure clarity of questions and reliability of

responses. Feedback from the pilot study was used to finalize the survey for this

study.

Data were collected through a multi-method delivery of a survey that was

presented at local Chamber of Commerce organizations and business meetings, as

well as sent via email to businesses within the population. Purposive sampling was

used to solicit participants to complete the survey. The targeted population was

invited to participate in the study by either an invitation to participate with an

introduction and purpose of the study with an electronic link to complete the survey

or an invitation to participate with an introduction, purpose of the study, and a

paper survey. Participants were assured of the confidentiality of their responses,

and the researcher coded the responses to remove identifiers before data analysis.

The minimum sample sizes required were exceeded, resulting in a statistically

significant sample size for this study.

The methods and procedures to answer the research questions consisted of

mean, median, standard deviation, chi-square, and MANOVA to analyze the data.

Numbers and percentages were used for the demographic and business data, as well

as the leadership styles. The mean, median, and standard deviation were used to

understand the leadership styles from the Full Range Leadership model to answer

RQ1. Four hundred and two respondents were initially in the data set. Cut scores

were established at the 40th percentile for individual scores based on total of all

rating levels (Bass & Avolio, 2004) to determine the dominant leadership style.

This criterion reduced the data set to 335 participants, and these data were carried

forward to the subsequent chi-square and MANOVA analyses. Chi-square was

used to test the association between transformational and transactional leadership

and whether or not respondents had an entrepreneurial leadership style or non-

entrepreneurial leadership style to answer RQ2. Chisquare was also used to test the

association between the combination of leadership styles and gender, education

level, industry type, and current role in business for RQ3. MANOVA was used to

determine the mean difference in leadership styles, gender, education level,

industry type, and role in business on the success factors of years in operation,

current year profitability, profitability over five years, and the difference in number

of employees since founding to answer RQ4.

Conclusions

This study examined how leadership styles impacted business longevity and

business success. The findings from the data analyses using mean, median,

standard deviation, chisquare, and MANOVA provided data to answer RQ1, RQ2,

RQ3, and RQ4. The following conclusions emerged from the findings from the data

analyses as related to each research question.

Research Question 1 was, “Which of the Full Range Leadership Model

leadership styles is dominant of entrepreneurs who sustain organizations?”

Descriptive statistics from the study findings indicated that transformational

leadership was the dominant style of entrepreneurs in this study. Three hundred

and fifteen participants (94.03%) had a dominant transformational leadership style

(M = 3.34, SD = 0.33). Furthermore, descriptive statistics of leaders with a

dominant transformational leadership indicated that the factors of transformational

leadership were ranked as follows: idealized influence (behavior; M = 3.43, SD =

0.47), inspirational motivation (M = 3.43, SD = 0.48), individualized consideration

(M = 3.38, SD = 0.47), idealized influence (attributed; M = 3.31, SD = 0.45), and

intellectual stimulation (M = 3.17, SD = 0.52). Northouse (2016) proposed that a

strong transformational leadership style included high scores on inspirational

motivation and individualized consideration. The results from this study are

consistent with this assertion for entrepreneurs with a dominant transformational

leadership style. From the study data, it was concluded that entrepreneurs more

frequently demonstrate a transformational leadership style in leading others in their

organizations when examining transformational, transactional, and laissez-faire

leadership from the Full Range Leadership Model using the MLQ Form 5X-Short.

Data from this analysis about the dominant Full Range Leadership Model

leadership style corresponds with previous studies indicating that CEOs’

transformational leadership style positively impacted organizational outcomes

(Ling et al., 2008a).

One explanation for this conclusion is that transformational leaders are

visionary, inspirational, and provide supportive behavior to others (Heinitz et al.,

2005; McCleskey, 2014). The definitions of inspirational motivation as motivating

others and idealized influence as charisma or the emotional element of

transformational leadership scored high for leaders with a dominant

transformational leadership style. Effectively communicating vision would be

accentuated by these behaviors, and communicating vision has been found to

elevate organizational performance (Baum et al., 2001). Leading a business

requires motivating employees to reach organizational goals, and leaders with a

transformational leadership style tend to focus on the bigger picture of the business

rather than a transactional approach to accomplishing goals. Therefore, various

leadership styles may be more widespread throughout an organization to meet

organizational objectives, but this study indicated that entrepreneurs most

frequently demonstrate a transformational leadership style in business contexts.

Although transactional leadership was not the dominant style of leaders in

this study, 20 participants (5.97%) were identified as having a transactional

leadership as their dominant style (M = 3.31, SD = 0.54). Analyzing the data for

the factors of transactional leadership, including contingent reward and

management-by-exception (active), indicated that contingent reward (M =

3.49, SD = 0.53) was used more predominantly by leaders than management-by-

exception (active) behaviors (M = 3.14, SD = 0.72) within this leadership style.

Contingent reward takes a positive approach to the exchange relationship between

leaders and followers to accomplish goals (Northouse, 2016). Management-by-

exception (active) may materialize in the workplace in the form of negative

reinforcement or criticism. Data from this study are consistent with previous

research about contingent reward, and research has also indicated that positive

reinforcement in the form of contingent reward behaviors is the most important

factor related to positive effects for transactional leaders (Northouse, 2016).

Research Question 2 was, “Which of the Full Range Leadership Model

leadership styles is more prevalent in the identification of the entrepreneurial

leadership style as contributing to the development of businesses?” Descriptive

statistics from the study findings indicated that the combination of transformational

and entrepreneurial leadership styles was the most prevalent combination of

leadership styles for entrepreneurs. Transformational and entrepreneurial

leadership styles were the most frequent in the sample (n = 335) with 307

participants (91.64%) representing both leadership styles. Eight participants had a

transformational leadership and non-entrepreneurial leadership style (2.39%).

Transactional and entrepreneurial leadership styles were the dominant leadership

styles for 19 participants (5.67%), while one participant had a transactional and

non-entrepreneurial leadership style (0.30%). Chi-square was used to test the

association between the MLQ leadership styles and whether or not a participant had

an entrepreneurial leadership style, resulting in χ2 (1) = .435, p = .509. Based on

the odds ratio, the odds of participants having a entrepreneurial leadership style was

2.02 times higher if they had a transformational leadership style instead of a

transactional leadership style. Even so, the chisquare was not statistically

significant based on the p = .05 significance level, indicating that the association

between leadership styles was not driven by an entrepreneurial leadership style.

These findings led to the conclusion that transformational leadership and

entrepreneurial leadership are independent leadership styles without a causal

relationship. Research has provided initial evidence that transformational and

entrepreneurial leadership styles are distinct constructs with the exception of an

overlap of intellectual stimulation as evident in both leadership styles (Renko et al.,

2015). However, intellectual stimulation tends to be used for opportunity

recognition within the entrepreneurial leadership style (Renko et al., 2015), which

differs from the creativity and innovative component of intellectual stimulation

within the transformational leadership style (Northouse, 2016).

One explanation for this conclusion is that dynamic business environments

require leaders to use a myriad of skills to maintain operations, as well as sustain a

business over time. High scores on both transformational and entrepreneurial

leadership scales for participants in this study led to the conclusion that leaders may

use a transformational and entrepreneurial leadership style simultaneously within

their business or they match the given situation to the needed leadership style.

Research Question 3 was, “How do leaders with various combinations of

leadership styles relate to the variables of gender, education, industry type, and role

in business?” The results from the chi-square indicated that there was a statistically

significant relationship between the combination of leadership styles and gender.

When participants were identified with a transactional and entrepreneurial

leadership style, significantly more males than expected and fewer females than

expected identified those leadership styles. When participants were identified with

a transformational or a transformational and entrepreneurial leadership style, as

many males and females as expected identified those leadership styles. In previous

research on only transformational and transactional leadership styles, gender was

found to impact leadership behaviors, but it was not a reliable predictor of

leadership style (Eagly et al., 2003). The results from the chi-square indicated a

relationship, but did not indicate that gender was a predictor of leadership style.

The conclusion can be made from this data set that transformational and

transformational and entrepreneurial leadership styles are more prevalent among

female entrepreneurs in this study. A meta-analysis of 45 studies on gender and

leadership styles using the Full Range Leadership Model found that females more

frequently demonstrated transformational leadership behaviors (Eagly et al., 2003).

Therefore, this finding from this study is consistent with previous research.

Research Question 4 was, “How do various combinations of leadership

styles, gender, education, industry type, and role in business relate to the success

factors of years of operation, profitability, and the difference in the number of

employees?” Using frequencies to analyze the data, the findings for gender,

education level, industry type, and role in business led to the following conclusions.

Two hundred and thirty-four male participants (69.85%), 70 female participants

(20.90%), and three participants who did not elect to report their gender (0.90%),

had a transformational and entrepreneurial leadership style. Nineteen male

participants (5.67%) had a transactional and entrepreneurial leadership style. Five

male (1.49%) and three female participants (0.90%) had a transformational

leadership style, while one male participant (0.30%) had a transactional leadership

style. The findings indicated that all females in this study had a transformational or

transformational and entrepreneurial leadership style (n = 70). Previous research

indicated that female leaders tend to exhibit transformational leadership behaviors

more frequently (Eagly et al., 2003).

In examining the education level of entrepreneurs (n = 335), a bachelor’s

degree was characteristic of 124 participants with transformational and

entrepreneurial leadership styles (37.01%), three participants with a

transformational leadership style (0.90%), and six participants with a transactional

and entrepreneurial leadership style (1.79%). An associate’s degree, junior college

or trade school was characteristic of 42 participants with a transformational and

entrepreneurial leadership style (12.54%), four participants with a transformational

leadership style (1.02%), two participants with a transactional and

entrepreneurial leadership style (0.60%), and one participant with a transactional

leadership style (0.30%). A master’s degree was characteristic of 37 participants

with a transformational and entrepreneurial leadership style (11.04%) and three

participants with a transactional and entrepreneurial leadership style (0.90%). A

doctoral or professional degree was characteristic of 35 participants with a

transformational and entrepreneurial leadership style (10.45%) and two participants

with a transformational leadership style (0.60%). A high school diploma or

equivalency was characteristic of 63 participants with a transformational and

entrepreneurial leadership style (18.81%), six participants with a transactional and

entrepreneurial leadership style (1.79%), and three participants with a

transformational leadership style (0.90%). Only three participants (0.90%) in this

study with a transformational and entrepreneurial leadership style had no diploma,

and three participants elected to not report their education level (0.90%). Of the

335 participants in this analysis, 77.61% of participants had at least some college

education. These findings led to the conclusion that education is an important

factor in initiating entrepreneurial activities. One explanation for this conclusion

for this sample may be the university opportunity represented by the geographical

location of this study. Large metropolitan areas or different parts of the United

States may result in different conclusions for the education level of entrepreneurs.

However, education is considered part of the human capital of entrepreneurs.

Aldrich and Martinez (2001) posited that human capital of entrepreneurs is an

essential element of entrepreneurial success. Furthermore, research in high tech

industries has indicated that education in the form of a technical degree can impact

business growth (Almus & Nerlinger, 1999). Therefore, education can give

entrepreneurs competencies, knowledge, and skills to successfully start a new

business.

The three most represented industries in this study (n = 335) were 104

businesses in the profession and/or technical services category (31.04%), 76

businesses in the other industry category (22.69%), and 54 businesses in the retail

trades category (16.12%). Profession and/or technical services included 97

participants with a transformational and entrepreneurial leadership style (28.96%),

five participants with a transactional and entrepreneurial leadership style (1.49%),

one participant with a transformational leadership style (0.30%), and one

participant with a transactional leadership style (0.30%). The other industry

category included 67 participants with a transformational and entrepreneurial

leadership style (20.00%), seven participants with a transactional and

entrepreneurial leadership style (2.09%), and two participants with a

transformational leadership style (0.60%). Retail trades included 50 participants

with a transformational and entrepreneurial leadership style (14.93%), three

participants with a transactional and entrepreneurial leadership style (0.90%), and

one participant with a transformational leadership style (0.30%). The conclusion

drawn from the data in this study is that more entrepreneurs operating businesses in

the profession and/or technical services industry use transformational and

entrepreneurial leadership or transformational leadership. Due to the nature of

service-based businesses, there is a continual need to interact with employees and

customers to accomplish business goals. Transformational leadership behaviors

motivate and inspire followers to achieve goals. Therefore, a conclusion can be

made that transformational and entrepreneurial behaviors are most frequently

represented in businesses that are serviceoriented. Additionally, this finding could

be applied to new entrepreneurs in that knowledge of their leadership style could

also be helpful in deciding which industry to start a business.

Mean, median, and standard deviation were also used to analyze the number

of employees at the businesses represented in this study. When businesses

represented in this sample (n = 330) were founded, they had an average of 4.79

employees (SD = 13.01). During this study, the participants that reported data on

their businesses (n = 335) had progressed to an average of 94.43 employees (SD =

563.92). However, when simply examining the number of employees based on the

leadership styles data, 302 leaders with a transformational and entrepreneurial

leadership style had a mean of 4.78 employees (SD = 13.11), and 19 transactional

and entrepreneurial leaders had a mean of 6.05 employees (SD = 14.66). These two

categories were greater than transformational leadership (n = 8, M = 2.25, SD =

1.58) and transactional leadership (n = 1, M = 3.00, SD = 0.00) for the number of

employees at the founding. Additionally, this pattern was consistent with the

number of current employees at businesses represented in this study. Three

hundred and seven leaders with a transformational and entrepreneurial leadership

style had a mean of 99.42 current employees (SD = 588.27), and 19 transactional

and entrepreneurial leaders had a mean of 54.63 employees (SD = 109.58). These

two categories were also greater than transformational leadership (n = 8, M = 8.75,

SD = 9.47) and transactional leadership (n = 1, M = 2.00, SD = 0.00) for the number

of current employees at the business. By examining the mean from the founding

number of employees and the current number of employees, it can be concluded

that businesses with a leader who had a transformational and entrepreneurial or

transactional and entrepreneurial leadership style had business growth that

necessitated employing more people. However, this conclusion is limited by the

standard deviation of current employees of businesses represented in this study.

Owner-founders represented the majority of participants in this study.

Owner-founder participants represented 187 participants with a transformational

and entrepreneurial leadership style (55.82 %), 15 participants with a transactional

and entrepreneurial leadership style (4.48%), and three participants with a

transformational leadership style (0.90%). Owner-buyer participants represented

71 participants with a transformational and entrepreneurial leadership style

(21.19%), four participants with a transformational leadership style (1.19%), two

participants with a transactional and entrepreneurial leadership style (0.60%), and

one participant with a transactional leadership style (0.30%). CEO/President

participants represented 40 participants with a transformational and entrepreneurial

leadership style (11.94%), two participants with a transactional and entrepreneurial

leadership style (0.60%), and one participant with a transformational leadership

style (0.30%). Nine owners who did not designate if they were an owner-founder

or owner buyer had a transformational and entrepreneurial leadership style (2.69%).

These findings led to the conclusion that participants in this study were more

transformational than transactional in their leadership style. Furthermore, previous

research indicated that owner-founders are more stable and independent than

owner-buyers (Rauch & Frese, 2000). This assertion could align with the factors of

the transformational and entrepreneurial leadership styles. However, additional

research is needed before a casual relationship can be concluded from an

entrepreneurs’ role in a business and their leadership style.

The results from the MANOVA indicated that there was a statistically

significant difference in gender, F(4, 132) = 2.743, p = .031, Wilks’ Λ = .923,

partial 𝜂𝜂2 = .077; and role in business, F(12, 349.531) = 1.983, p = .025, Wilks’ Λ

= .840, partial 𝜂𝜂2 = .056; on the differences in years of operation, the change in

the number of employees from business founding, profitability for current year, and

profitability over five years. A follow-up univariate ANOVA indicated that gender

had a statistically significant difference in the change in the number of employees

from the business founding, F(1) = 4.953, p = .028, partial 𝜂𝜂2 = .035. The

conclusion can be made that males (M = 97.831) had a greater positive difference in

the number of employees since founding than females (M = 89.825). One

explanation for this conclusion may be males tend to be higher risk takers, which

creates higher potential to grow a business. Females have also been found to have

lower entrepreneurial intentions (Yordanova & Tarrazon, 2010). While

entrepreneurial intention primarily addresses the pre-venture stage of a business, a

study in Finland and Scotland suggested that females maintain traditional domestic

roles in addition to their professional roles (Galloway, Brown, & Arenius, 2002).

This balance of domestic and professional roles may impact business goals. Males

and females may differ in their business goals, which could impact the growth in

the number of employees.

There was also a statistically significant interaction effect between education

level, industry, and role in business on the combined dependent variables, F(40,

502.384) = 1.440, p = .043, Wilks’ Λ = .663, partial 𝜂𝜂2 = .098. The results from

the univariate analysis for education level, industry, and role in business on

differences in the number of employees since founding was F(10) = 2.312, p

= .015, partial 𝜂𝜂2 = .146. The conclusion can be made that the interaction effect

between education level, industry, and the entrepreneur’s role in the business could

be a contributor to growing a business in terms of the number of employees.

Follow-up univariate ANOVA also indicated that role in business had a

statistically significant difference in the change in number employees from the

business founding, F(3) = 6.269, p = .001, partial 𝜂𝜂2 = .122. Post-hoc analyses

using Tukey’s HSD on role in business indicated that owner-founders (M = 14.064,

SD = 9.924, p < .001) had a significantly lower years of operation for their

businesses compared to owner-buyers (M = 31.221, SD = 26.404, p < .001) and

CEO/Presidents (M = 39.744, SD = 31.3301, p < .001). Furthermore, owners who

did not differentiate their role in the business (M = 20.333, SD = 17.930, p < .027)

had significantly lower years of operation for their business compared to

CEO/Presidents. The conclusion can be made that owner-founders did not operate

their businesses as long as other categories of entrepreneurs. One explanation for

this conclusion may be that the owner-founders represented in this study might be

serial entrepreneurs and build businesses to sell and repeat the process. Another

explanation may be that particular category in this data set had more new

businesses than the other categories. The goals of the entrepreneurs were also not

explored in this study, which could have an effect on whether or not these

entrepreneurs were using their businesses to simply act as an income for their

family or as a business venture to sell.

The F value for education level, industry type, and leadership styles did not

meet the criteria for significance at p = .05. The conclusion can be made

statistically that the three leadership style groups of transformational and

entrepreneurial leadership, transformational leadership, and transactional and

entrepreneurial leadership did not differ significantly in their effect on years of

operation, the change in number of employees since founding, profitability for

current year, and profitability over five years. The significance level of the

combination of leadership styles effect on years of operation was p = .051.

Therefore, this effect could be explored in follow-up studies. Research provides

evidence that executives who demonstrate transformational leadership behaviors

impact firm outcomes (Ling et al., 2008a). Furthermore, leadership styles have

been reported to impact profitability. One explanation for this result from this

study could be that profitability can be low for a company that is reinvesting in

growing their business or profitability may be low for start-up companies. A

company can have increasing revenue from year to year without having an increase

in profitability. The size of businesses represented in this study could also be a

contributor to this finding. Exploring other financial metrics, such as revenue or

initial outside capital at the start of the business, could bring insight to how the

combination of leadership styles impact the financial health of a business.

Recommendations

Leadership literature is continuing to expand with the addition of new

leadership styles and theories. Effective leadership can be a competitive advantage

for an individual and organization. An entrepreneurial orientation where leaders

exhibit entrepreneurial behaviors in corporate settings has been found to be a

dynamic capability for an organization (Todorovic & Schlosser, 2007). Applying

previous research surrounding entrepreneurial behaviors as the entrepreneurial

leadership style in the context of entrepreneurial organizations provided the basis

for this study. Dynamic markets challenge previously established methods of

leadership, requiring entrepreneurs, business owners, and executives to be

innovative and adaptable. The findings and conclusions from this study may be of

interest to practitioners, entrepreneurs, and academia. Based on the findings from

this study, the following recommendations were made for practical application of

the findings.

1. Leadership styles had a statistically significant relationship with

gender. For city planners commissioned with developing training programs or

workforce development programs to stimulate new businesses in a region, these

conclusions could provide meaningful data to support leadership development to be

integrated as part of business start-up programs. Providing gender-specific training

customized to male or female entrepreneurs may help address deficiencies in their

leadership styles. If a city desires to stimulate entrepreneurship within their

community, offering leadership development, training courses, mentoring, or

coaching through local Chamber of Commerce organizations could provide

additional support for new entrepreneurs who are intimidated by business failure

rates when considering starting a new venture. Transformational leadership is a

skill set that can be taught because it is not a prescribed set of behaviors but rather a

way of thinking and acting to inspire, motivate, and transform an organization, as

described in the Full Range Leadership Model (Northouse, 2016).

Charisma is part of the idealized influence component of transformational

leadership, but the Conger–Kanungo Scales for charismatic leadership

differentiates transformational and charismatic leadership. This scale measures

sensitivity to the environment, sensitivity to members’ needs, strategic vision and

articulation, personal risk, and unconventional behavior (Rowold & Heinitiz, 2007).

For the purpose of this analysis, charismatic was only one attribute of

transformational leadership under the idealized influence component. Therefore,

while it may be challenging for individuals to change their personality, learning

new behaviors of how to effectively articulate vision and act as role models for

followers is possible. Entrepreneurial leadership skills can also be useful in helping

individuals who are not yet entrepreneurs become prepared to start new ventures.

Entrepreneurial development programs could use the MLQ and/or ENTRELEAD

scale to initially assess leaders’ leadership style and identify areas of improvement.

Training leaders to effectively create and communicate vision could enhance

their transformational leadership behaviors (Northouse, 2016). Training curriculum

that focuses on transformational leadership should also include the book, Full

Range Leadership Development: Pathways for People, Profit, and Planet, by Sosik

and Jung (2010), which details each of the transformational leadership factors in the

Full Range Leadership Model with case studies, practical application, and reflective

exercises for leaders. This book provides a process model for a Full Range

Leadership Development Program using a systems thinking approach to assess

individual leadership situations in order to apply the appropriate leadership skills

aligning with the Full Range Leadership Model. Research has indicated that

training sessions and on-the-job practice has been effective at enhancing

transformational leadership skills within a Full Range Leadership Development

Program (Chaimongkonrojna & Steane, 2015). Strengths-based coaching could

also be implemented as part of training for cities wanting to promote

entrepreneurship and provide opportunities to enhance transformational leadership

behaviors of entrepreneurs (Mackie, 2014).

2. Entrepreneurs who are starting a business or sustaining a business

should seek out development opportunities to enhance their transformational

leadership and entrepreneurial leadership skills before and during a business

venture. Business failure rates should not deter individuals interested in starting a

business from taking the necessary steps to create a new enterprise or buy an

established business. It is recommended that entrepreneurs use the findings from

this study to develop their ability to inspire followers and act as role models for

followers, as well as refine their opportunity recognition, innovation, and creativity

skills (Renko et al., 2015). Entrepreneurs should check with their city’s economic

development committee or Chamber of Commerce organization to become aware

of local leadership development opportunities. Mentoring and coaching are also

effective means of enhancing leadership skills and may be an appropriate option if

limited opportunities exist within their city. Furthermore, an entrepreneur could

use an assessment, such as the MLQ or ENTRELEAD scale, to assess their

leadership styles before starting or purchasing a business. Their individual results

could be used to develop areas of weakness in their leadership styles in order to

increase the possible success from their new venture.

3. It is recommended that the academic community use the findings from

this study to develop course curricula that emphasize transformational and

entrepreneurial leadership behaviors for students pursuing entrepreneurship or who

desire to start their own business within their field of study. Operating a business

requires technical expertise, but it also requires leadership skills in order to manage

employees, communicate vision, and meet business goals. Therefore, leadership

training should be used as part of university business programs to ensure

entrepreneurs have the needed skills to lead successful businesses. Based on the

findings from this study, educators may choose to develop more robust

entrepreneurial and transformational leadership assessment tools to evaluate

leadership behaviors among entrepreneurs.

4. Lastly, regional officials involved in Departments of Economic

Development and desiring to stimulate local economies through entrepreneurship

should invest resources into developing research-based entrepreneurial

development programs. Education has been found to be a significant contribution

by the public sector to help facilitate the starting of new businesses (Motoyama &

Bell-Masterson, 2014). Reducing the barriers to entry may also entice new

entrepreneurs interested in starting their own business. Even so, supporting

entrepreneurs currently operating businesses could provide economic stability to a

region by elevating the work of entrepreneurs through development programs.

Local, state, and regional economies can be positively impacted by increases in

entrepreneurship by providing support of entrepreneurial activity (Acs, 2006).

In addition to practical implications from the findings from this study, the

following recommendations for future research pertaining to leadership styles are

presented. Limited research exists on entrepreneurial leadership as a distinct

leadership style and its interaction with other leadership styles. Researchers may

use these recommendations as a resource in identifying future research

opportunities.

1. Entrepreneurial leadership as a leadership style needs to have

continued research to develop the base of literature for this leadership style. A

replication of this study in other regions, as well as including demographic

variables and in other occupational areas not featured in this study, would add to

the growing body of work on entrepreneurship and leadership. Adding variables,

such as age of the entrepreneur, number of businesses started, and structure of the

current organization, to a replication of this study could also give insight into how

entrepreneurial characteristics and organizational environments impact leaders’

leadership styles.

First, it would ensure that the impact of geographical locations on businesses would

be analyzed. Selecting a large metropolitan area to conduct a version of this study

may generate new results in how entrepreneurs utilize leadership styles in their

businesses, and it would allow for comparison of data from entrepreneurs in

multiple geographical locations. These data could be used to enhance the

generalizability of the findings from this study.

2. The development of a new scale to measure transformational and

entrepreneurial leadership behaviors is recommended to provide a clearer

delineation between the behaviors associated with each style. The MLQ has been

used as the most commonly used tool to measure transformational leadership

(Northouse, 2016). The Full Range Leadership Model may have limitations within

the current business environment with continuous technological advancements

creating change in the marketplace. Therefore, exploring leadership styles outside

of the traditional Full Range Leadership Model is recommended. The

ENTRELEAD scale to measure entrepreneurial leadership was a more recent

development and has yet to proliferate the leadership literature on the topic (Renko

et al., 2015). Therefore, the findings and conclusions from this study support the

need for the development of a new measurement tool to be able to directly compare

scores for transformational and entrepreneurial leadership styles.

3. Further research to clearly define the entrepreneurial leadership

constructs as has been done for transformational and transactional leadership in the

Full Range Leadership Model is warranted. A previous study did present evidence

of an overlap in intellectual stimulation between the transformational and

entrepreneurial leadership constructs (Renko et al., 2015). Additional research on

the interaction of the behaviors of entrepreneurial and transactional leadership is

needed to understand how entrepreneurial leadership behaviors mediate the effects

of transactional leadership. Instead of approaching a leadership style with an

“either/or” perspective, understanding how two leadership styles could complement

one another could enhance leadership development and training for a wide variety

of entrepreneurs, business owners, and organizational executives.

4. Further research is recommended to better understand the relationship

between entrepreneurial leadership and other leadership types. This study focused

on the Full Range Leadership Model leadership styles and entrepreneurial

leadership style. Conducting this study to include other leadership styles could

serve to provide a benefit to business owners and entrepreneurs as they start and

grow businesses. While this study’s findings indicated that there was not a

statistically significant difference between whether or not a participant had a

transformational or transactional leadership style and entrepreneurial or non-

entrepreneurial leadership styles, studying entrepreneurial leadership with authentic

or adaptive leadership styles may provide new findings for the growing body of

research in leadership styles. This study affirmed that more research on the

entrepreneurial leadership style as a distinct leadership construct is recommended.

5. This study’s results indicated that there was not a statistically

significant relationship between the combination of leadership styles and

profitability. However, research has indicated that leadership styles do impact

performance (Ling et al., 2008a). Therefore, investigating the financial component

of new businesses in a different way by comparing businesses that are

undercapitalized and well capitalized to the leadership style of the entrepreneurs is

needed. The results from this proposed research could give insight into how access

to capital impacts business longevity for entrepreneurs who are owner-founders or

owner-buyers.

6. Research on the stage of business development and leadership styles

over a period of time could also give insight into how leadership styles may or may

not change over a lifespan of a new venture. It was not known in this study if

entrepreneurs had the specified leadership style that resulted from the MLQ and

ENTRELEAD scale at the time of the business founding. Since the average

business age was 22.21 years (SD = 21.66) with a median of 16 years for all

participants in this study, the study represented a broad range for the years of

operation for a business. Examining leadership styles of entrepreneurs in the first

one to five years of operation may provide necessary data to understand the role of

leadership styles in a business founding. New entrepreneurs may require different

leadership skills to start and launch a new venture. A follow-up longitudinal study

with new businesses is recommended to account for the changes that occur

throughout the business life cycle.

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