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Entrepreneurial Leadership: Developing a Cross-cultural Construct Vipin Gupta and Ian MacMillan

Introduction

As so many authors have observed in the past decade, in many traditional, and most new industries, we have seen an unprecedented increase in the rate of new technology development. This has been accompanied by a general acceleration in the pace of competition, which has brought severe pressures to bear on the type of analytical approaches to management that were the cornerstone of competition in the 1980s. As Brown and Eisenhardt (1998) point out, in many industries it is no longer feasible to think that analytical planning will lead to competitive success, and therefore planning needs to be much more experimental (McGrath,1997). The world has become much too unpredictable, and there has arisen a new competitive landscape in which conventional approaches to strategy are no longer pertinent (Bettis & Hitt, 1995).

In those industries that face substantively increasing uncertainty and competitiveness the power of analytical leadership is diminished and there is emerging an increasing demand for the type of business leader whom McGrath and MacMillan (2000) call the entrepreneurial leader. This is a leader who can operate in a world that is highly unpredictable and in which competitive action inexorably and rapidly erodes whatever advantage the firm may currently enjoy. So instead of trying to develop detailed plans based on accurate predictions (futile in the face of increasing uncertainty) which lead to sustainable advantage (futile in the face of increasing competition) the entrepreneurial leader forges an organizational unit that is constantly repositioning itself to capture opportunistic rents. The unit accomplishes this by adaptive or proactive transformation of its transaction set (Venkataraman & Van de Ven, 1998) to produce new profit model (Slywotsky & Morrison, 1997) that fits or even sets the emergent competitive landscape. Entrepreneurial leadership is a role by which a leader forges in the business unit a capacity to create the requisite variety it needs to attend to, and contend with, its uncertain environment

2 through the conception and realization of new transaction sets. This is not confined only to adaptation, which is the prime focus of population ecologists (e.g. Hannan & Freeman, 1977) and evolutionary economists (e.g. Nelson & Winter, 1982). In the face of uncertainty, entrepreneurial leaders may also pursue enactment (Weick,1979) which is to say they may envision possible outcome scenarios and then forge a social action unit that enacts new profit models and by this very action thereby reduces the uncertainty.

We call this phenomenon entrepreneurial leadership, because it calls for the simultaneous accomplishment of two major and interactive enactment processes (Weick,1979). The first is a leadership challenge - to enact or shape from raw clay a cast of social actors capable of, and committed to accomplishing the adaptive transformation that will lead to the new (albeit transient) profit model. In the discussion below we shall use the term cast enactment to refer to this challenge since the need is to literally create, inspire, mobilize and deploy an appropriate cast of characters that is capable of effecting the envisioned transformation.

The second challenge is an entrepreneurial one to enact a transformation of the business units transaction set by positioning the business unit to exploit or enact Knightian (1921) opportunities as they emerge. In the discussion below we shall use the term transformational enactment to refer to this.

The two enactment challenges are deeply interrelated. In the face of uncertainty the entrepreneurial leader must somehow conceive of a transformation that is enactable by the cast of characters while simultaneously mobilizing of a cast of characters that can enact the transformation.

In this article, we develop this construct of entrepreneurial leadership, and validate it using data from a 60-society cross-cultural sample of over 13,000 middle managers that rated a large number of leadership behaviors on the basis of the respondents judgment regarding the contribution of that behavior to outstanding leadership outcomes.

We turn now to an elaboration of the entrepreneurial leadership construct by identifying and discussing the components of cast enactment and transformational enactment.

Entrepreneurial Leadership and Cast Enactment

There is a huge literature on leadership. Here we draw on only on the major contributions that appear to be most relevant for the entrepreneurial leadership construct. Leadership essentially involves a relationship of mutual commitment between a leader and a group of followers in pursuit of a collective goal. Effective leaders are able to realize outstanding group performances, such as the founding and growing of successful entrepreneurial firms, corporate turnarounds in the face of competitive shocks, military victories in the face of superior forces, and leadership of successful social movements for independence from colonial or autocratic rulers. Such outstanding leaders operate through symbolic behaviors, such as frame alignment, empowering, role modeling, image building, and supportive behaviors, and are adept at cognitively oriented behaviors, such as versatility and environmental sensitivity (House & Aditya, 1997). Factors that support effectiveness of leader in building this follower commitment have been widely researched. The early scholarly writings, reviewed by Stodgill (1948), sought to investigate a wide variety of traits, including both physical characteristics (gender, height, appearance, strength) and psychological motives (need for power, need for achievement, intelligence, authoritarianism) as factors differentiating effective and ineffective leadership. Several traits were found consistently related with effective leadership. The universal traits most relevant for cast reenactment include prosocial assertiveness (leader social influence), selfconfidence, energy activity, and task-relevant knowledge (House & Baetz, 1979). Berlew (1974) was the first to formally identify that follower confidence building and shared values are critical to effective leadership. He related leadership to "the process of instilling in others shared vision, creating valued opportunities, and building confidence in the

4 realization of the shared values and opportunities. Such abilities are equally important for cast enactment. Zlenznik (1977) distinguished leadership from management -- whose behaviors are characterized by impersonal reward or coercive orientation. He emphasized that leadership behaviors appeal to ideological values, motives and self-perceptions of followers, and induce unusual levels of effort on the part of followers above and beyond their normal role or position requirements. The leader often acts as a potent force in inspiring individual contribution to group goals, collaboration and support for co-workers (Hollander, 1964). Leader member exchange (LMX) theory asserts that under conditions of high degree of mutual influence and obligation between superiors and subordinates, there tends to be enhanced effectiveness in forms such as higher subordinate performance, and commitment (Graen & UhlBein, 1995). The new visionary, charismatic, transformational and value-based models of leadership result in a high-level of follower motivation and commitment and well-above-average organizational performance, in a wide variety of culture, situational, and work contexts, cutting across different levels of management (Byrman, 1993; House & Aditya, 1997). From the above discussion two themes emerge for building cast enactment. Remember that cast enactment involves the assembly and effective mobilization of a cast that is critical to accomplish the enactment, when the outcome is highly uncertain. This suggests two cast enactment roles for the entrepreneurial leader to build among them a sense of what they can do, of what is enactable by them, and second to build among the cast the commitment to what they will do. This second challenge is thus inspirational, to build willingness on the part of the cast to come together and commit themselves to the challenge of taking on the transformation. We call this cast enactment role building commitment. The other challenge is to attend to the issue of building a shared sense of what can be done in the face of the uncertainty confronting them. An entrepreneurial leader has an acute sense of the degree to which people resources have not been put to their "best use" -- i.e. are valued "too low," given their potential to contribute and add value (Shane & Venkataraman, 2000). The role of the leader is to reshape and integrate the casts perceptions of what are and what are not the barriers to enactment. This calls for entrepreneurial leaders to deploy their use optimism and

5 confidence in the cast to break down self-imposed perceptual barriers of the individuals and infuse in them a shared perception of what they can accomplish together, and equally importantly what they cannot accomplish together. We call this role defining gravity (McGrath & MacMillan, 2000) an assertive specification of the boundaries of what can and cannot be done by the cast.

Entrepreneurial Leadership and Transformational Enactment

Turning to transformational enactment, this calls for an ability to build a vision of what future transaction sets might emerge, and then exploit whatever opportunities do emerge. The ability to forge opportunities in the face of uncertainty lies at the heart of entrepreneurial ability. Cantillon (1755) in his classic work Essai placed entrepreneur's function at the center of economic progress while Schumpeter (1934) specified entrepreneurship to be the leading driver of economic development: "Entrepreneurship consists in doing things that are not generally done in the ordinary course of business routine." Unfortunately over the years entrepreneurship increasingly became associated with the founding and management of small and medium enterprises. More recently, it has been recognized that entrepreneurship is as much relevant for managing established business as it is for founding new business (Normann, 1971). Transformational enactment enables the firms to move fast to gain first-mover advantage in emerging new products or new markets (Kuratko & Hodgetts, 1989), and firms that pursue transformational enactment are able to adapt their capabilities to emergent competition, through flexible resource deployment that allows the firm use or expand companies' resources and thus raise long-term capacity (Kanter,1982). Transactional enactment allows the firm to translate emergent options into a platform for continuous value creation and corporate transformation (Ghoshal & Bartlett, 1996). Based on McGrath and MacMillan (2000), we suggest that transformational enactment challenge calls for three distinct roles.

6 The first role is to absorb the paralyzing effects that uncertainty has on the cast social actors who are needed to enact the transformation. The role calls for deep insight a capacity to assess the future and then forge a vision of a future state that the entrepreneurial leader deems enactable by the social cast of characters selected because of the leaders confidence that they can effect this enactment. The task of reducing uncertainty for the selected cast is to convince them that this transformational vision is in fact enactable by them. In executing this role the entrepreneurial leaders shoulders the burden of responsibility for being wrong about the future and thereby liberates the cast to act as if he or she were right. We call this role Absorbing uncertainty (McGrath & MacMillan, 2000)

The second role is to frame the scope of what the transformation will accomplish, realistically balancing a desire for aggressive improvement with a need to pragmatically take into account the capabilities of the people who will effect enactment. Guided by his or her intuitive knowledge of the situation, and pressured by the perceived need to continue to enhance the transaction set, the entrepreneurial leader needs to frame a challenge that will push the team to the limits of its abilities without pushing them over their limits (McGrath & MacMillan, 2000) We call this role framing the challenge.

The final role is the creation of a negotiated environment (Cyert and March, 1966) both within the firm and with the firms task environment (Thompson, 1983). This calls for an ability to anticipate and dissolve potential resistence to the reconstruction of the transaction set. The entrepreneurial leader has to negotiate support from key stakeholders within the firm as well as from external players and thereby remove emerging obstacles that could obstruct progress. These actions clear the path so that the cast of characters can actually accomplish transformational enactment. We call this role underwriting/pathclearing. (McGrath & MacMillan, 2000). In summary we have identified two major enactment challenges that call for five leadership roles from an entrepreneurial leader: Cast enactment calls for building commitment and defining

7 gravity; Transformational enactment calls for absorbing uncertainty, framing and underwriting/pathclearing.

Universality issues

At the beginning of the article we suggested that there has emerged an increasing need for entrepreneurial leaders. We feel that this increasing need for entrepreneurial leadership is not confined to the US, or even the so-called Anglo cultures, but is something which pervades all economies in our increasingly global society. We need to explore the extent to which the underlying concepts are similar and where they differ from culture to culture. For instance Hartog et al. (1999: 225) find evidence to the effect that universal endorsement of a leadership prototype does not preclude cultural differences of such a prototype. Leadership prototypes are based on a cognitive categorization process in which the respondents infer the effectiveness of various elements of the prototype based on their perceptions of their environment. The environmental perceptions are moderated by the values and beliefs of the respondents, as well as situational conditions, as is suggested by the information processing perspective (Shaw, 1990). Thus, Jung, Bass, and Sosik (1995) hypothesize that charismatic leadership emerges more naturally and is more effective in collectivist cultures than in individualist cultures. Therefore in the development and validation of the entrepreneurial leadership construct, an important issue is the extent to which it operates across contexts like culture, industry, geography and circumstances.

Model development We developed measures of the construct of entrepreneurial leadership using data from GLOBE (Global leadership and Organizational Behavior Effectiveness Program). (House et al., 1998). GLOBE surveyed about 13,000 middle level managers during 1995-97 in 60 societies worldwide. The middle-level managers represented a total of about 900 different local (i.e. nonforeign) organizations from one or more of three industries (financial services, food processing,

8 and telecommunications) in these societies. At least three societies in each of the following ten cultural clusters are represented in the GLOBE sample: Latin America, Anglo, Germanic Europe, Nordic Europe, Latin Europe, Eastern Europe, Confucian Asia, South East Asia, Arab, and Tribal Africa. In the globe study these managers were asked to rate the degree to which a particular leadership behavior or characteristic contributed to outstanding leadership abilities. We scanned the total of 112 items in the survey for items which we expected would reflect the five entrepreneurial leadership roles identified above, then took the 13,000-odd middle mangerial scores as a measure of the extent to which they endorsed these behaviors as predictive indicators of outstanding leadership.

Below we report the behaviors/attributes items that we expected to contribute to each of the entrepreneurial leadership roles.

Transformational enactment roles

Absorbing uncertainty: the role of shouldering the burden of responsibility for the uncertain outcome. The review of the GLOBE survey suggested that the following items would cluster into an Absorbing Uncertainty factor:

Has extra insight; Has a vision and imagination of the future Anticipates possible future events; Instills others with confidence by showing Confidence

Intuitive Visionary Foresight

confidence in them builder These were entered into the Predicted Items column of Table 1 as predicted items for an exploratory factor analysis.

9 Framing the Challenge: The role of setting forth a challenge that pushes the cast to the limits of their ability but not beyond the limits. The suggested items from the GLOBE survey for the Framing factor were: Seeks continuous performance improvement; Sets high goals, works hard; Knowledgeable, aware of information Sets high standards of performance Improvement Ambitious Informed Performance oriented

These items, (and the others for the other factors discussed below) were entered into the Predicted Items column of Table 1.

Underwriting/pathclearing: The role of negotiating with the potential internal and external opposition and thereby clearing the path for transformational enactment. The GLOBE items that would best align with the Underwriting/pathclearing factor were selected as: Skilled at interpersonal relations, tactful; Is able to negotiate effectively, able to make transactions with others on favorable terms; Bargainer Diplomatic

Unusually able to persuade others of his/her viewpoint Convincing Gives courage, confidence or hope through reassuring and advising Encouraging

Cast enactment roles

Building commitment: The role of building within the cast a common purpose of what will be done. The following GLOBE items were predicted to load on the Building Commitment factor: Inspires emotions, beliefs, values, and behaviors of others, inspires others to be motivated to work hard Demonstrates and imparts strong positive emotions for work; Enthusiastic Inspirational

10 Able to induce group members to work together; Team builder

Defining Gravity: The role of building a common understanding in the group as to what can and cannot be done. For this role the following GLOBE items were predicted to load onto a Defining Gravity factor: Generally optimistic and confident; Makes decisions firmly and quickly; Integrates people or things into cohesive, working whole Encourages others to think and use their minds, challenges beliefs, stereotypes and attitudes of others. Positive Decisive Integrator

Intellectually stimulating

Analysis

Factor analysis The Entrepreneurial Leadership Factor Structure was evaluated by first randomly dividing the individual-level GLOBE sample into two halves.

Then items we predicted would form entrepreneurial leadership factors were used carry out an exploratory factor analysis on the first half of the sample. Five factors were obtained, corresponding to the five entrepreneurial leadership roles developed in the discussion above. The items which fell into the five factors are reported in the right column of Table 1, and the loadings of items are in Table 2.

As can be seen in Table 1, only 2 of the 19 items did not load onto their predicted factors. Not surprisingly ex post, framing calls for insight. More surprisingly building commitment calls for leaders who seek continuous improvement. It may be that the sustained leader driven pressure for improvement evinces a sense of commitment in the followers.

11 ---------------------------------Insert tables 1 and 2 about here ---------------------------------A confirmatory factor analysis was then conducted on the second half of the sample using the EQS software. The results are reported in Table 3. The standardized loadings in the confirmatory factor analyses were lower than the loadings in exploratory factor analyses, but each of the loadings was significant at 0.001 level. We used six indices to test the overall fit of the factor model: root mean squared residual (RMSR), standardized RMSR (SRMSR), Normed fit index (NFI), comparative fit index (CFI), Lisrel goodness of fit index (GFI), and adjusted GFI (AGFI) All six fit indices met the recommended norms for four of the five factors. The only exception was the framing factor, where four of the six fit indices fit, but where the root mean squared residual (RMSR) index exceeded the norm of 0.05 at 0.064, and the adjusted goodness of fit (AGFI) index was lower than the threshold value of 0.90 but was at 0.889. There appears to be a modest degree of covariance among the items identified with framing factor. ---------------------------------Insert table 3 about here ---------------------------------Correlation analysis We argued above that cast and transformational enactment are deeply interrelated, since the transformation of the transaction set is deeply dependent on enacting a cast which in turn must be able to enact the transformation. Table 4 reports correlation among the five role factors of entrepreneurial leadership, using the complete data set of individual responses. The five role factors are strongly correlated. The correlation ranges from 0.547 to 0.652, and is significant at p<0.001 for a N of 13,568. ---------------------------------Insert table 4 about here ----------------------------------

12 Cross-Cultural Universality of the Entrepreneurial Leadership Construct

To examine if the two-dimensional construct of entrepreneurial leadership holds across cultures, we conducted multi-group confirmatory analyses of transformational and cast enactment dimensions. The cross-cluster averages, and minimum-maximum range, of loading of the five functional factors on the two enactment factors is given in Table 5. The average loading exceeds the recommended norm of 0.70 for all the five role factors. ---------------------------------Insert table 5 about here ---------------------------------Table 6 presents the goodness of fit indices for the multi-group factor analyses by clusters of countries for cast and transformational enactment. All the indices meet the required criteria. Furthermore in the majority of the clusters the latent construct reliability of the two enactment factors exceeds the recommended norm of 0.70. The exceptions are transformational enactment factor in Germanic and Nordic Europe, and both cast and transformational factors in the Eastern Europe, though the Eastern Europe scores are very close to 0.7. In Germanic and Nordic Europe, transformational enactment does not entail an even emphasis on absorbing uncertainty, framing, and path clearing/underwriting. The construct correlation between transformational and cast enactment ranges from 0.845 (Nordic cluster) to 0.972 (Latin Europe). ---------------------------------Insert table 6 about here ---------------------------------Finally, Hartog et al (1999) have proposed two criteria for attributes to be considered universally endorsed as contributors to effective leadership. These criteria are: (1) 95% of scores must exceed a mean of 5 on a 7-point scale for that attribute; and (2) grand mean score should exceed 6 for the attribute. In Table 7, we evaluate the universality of the twodimensional entrepreneurial leadership construct, using data aggregated at the organizational level.

13 As you can see in the rightmost column for the top 95% of the respondents reported average value ranges from 5.00 to 5.17 across the five role factors. Moreover the mean scores range from 5.92 to 6.13. Only the framing factor falls significantly short of the 6.0 threshold. Thus, the two-dimensional entrepreneurial leadership construct appears to be universal across cultures. ---------------------------------Insert table 7 about here ----------------------------------

Discussion of the Findings

We identified two major, deeply connected, enactment challenges for the entrepreneurial leader, with associated roles. Cast enactment involves the enactment of a cast of characters capable of effecting a transaction set transformation by building commitment and defining gravity, while transformational enactment involves enacting the transformation of the business model by absorbing uncertainty, framing and pathclearing//underwriting for the cast. We identified items from the GLOBE project that we expected would coincide with these roles (Table 1). An exploratory factor analysis on the first half of a split-half sample yielded a set of entrepreneurial leadership factors that closely paralleled our item selection (Table 2) The confirmatory factor analysis conducted on the second half of the split-half sample confirmed the factor structure for all items at the 0.001 level of confidence (Table 3). We demonstrated via correlation analysis that there is a deep interrelation among the factors of the two enactment challenges (Table 4). We also demonstrated that the correlation among the cast and transformational enactment scores were significant and greater than 0.7 for the ten clusters of cultures in the GLOBE sample (Tables 5 and 6). Finally we demonstrated that these five role factors are persistent and consistent across ten archetypes of cultures (Tables 6 and 7).

14 In sum, we have found that the construct of entrepreneurial leadership is a cross-cultural universal. Entrepreneurial leadership can, thus, form a constructive basis for enacting transformations in many and multiple cultures.

Conclusions

In this article, we developed and validated the construct of entrepreneurial leadership. Our findings support the argument that entrepreneurial leadership comprises the two enactment challenges that break down into five roles. This is supported across ten clusters of cultures, demonstrating a deep universality of the construct. One of the limitations of the study is the need for further validation of the construct of entrepreneurial leadership within specific cultures. There may be differences in the ethical approaches across cultures, the nature of competition among competitors could be different, the recognition and rewards for the entrepreneurial leaders might differ, or there may simply be differences in the access to knowledge, technology, and finance. The differences in the cultural climate could translate into differences in the perceptions about the link between transformational action and success, and consequently entrepreneurial leadership be enacted more or less vigorously depending on the culture. There is evidence in table 7 that this may be the case.. We believe that the construct of entrepreneurial leadership allows adaptive execution across varying cultural climates. A critical hallmark of entrepreneurial leadership is its emphasis on discovery-driven action the propensity to stop over-analyzing and get started, aggressively using the outcomes of their early efforts to redirect and learn their way to the real opportunity. (McGrath & MacMillan, 2001: 232). It is the discovery-driven mindset that distinguishes entrepreneurial leadership from the concept of transformational leadership (Burns, 1978; Bass, 1985), which became popular in the leadership literature late last century. The transformational leadership theory is based on the belief that the leader can evoke superordinate performance from the subordinates by addressing their sense of self-actualization and other deeply held personal values or implicit motivations. The transformational leadership

15 perspective has evolved in response to the traditional transactional leadership theory. In the transactional leadership theory, the thrust was on the instrumental role of the leader based on the principle of give-and-take the leader clarifies the path, the incentives and the monitoring system, and the followers become committed to the cause of the organization to earn these incentives. Both transformational, and its predecessor transactional, models of leadership depict leader as someone entrusted with an organizational task that needs to be accomplished within a given organizational context. The concept of entrepreneurial leadership, in contrast, is founded on assumption that any leader has to enact an entirely emergent organizational task, not one which is carefully planned, and to uncover an entirely emergent transaction set, not originally visualized.

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Table 1: Predicted and Actual Factor Items from First Split-Half Exploratory Factor Analysis Predicted items Absorbing uncertainty Foresight Visionary Confidence builder Intuitive Ambitious Informed Performance oriented Improvement oriented -Diplomatic Bargainer DESCRIPTION Transformational enactment roles Anticipates possible future events Has a vision and imagination of the future Instill others with confidence by showing confidence in them Has extra insight Sets high goals, works hard Knowledgeable, aware of information Sets high standards of performance Seeks continuous performance improvement Has extra insight Skilled at interpersonal relations, tactful Is able to negotiate effectively, able to make transactions with others on favorable terms Unusually able to persuade others of his/her viewpoint Gives courage, confidence or hope through reassuring and advising Social enactment roles Inspires emotions, beliefs, values, and behaviors of others, inspires others to be motivated to work hard Demonstrates and imparts strong positive emotions for work Able to induce group members to work together Gives courage, confidence or hope through reassuring and advising Seeks continuous performance improvement Makes decisions firmly and quickly Integrates people or things into cohesive, working whole Generally optimistic and confident Encourages others to think and use their Actual items

Foresight Visionary Confidence builder Ambitious Informed Performance oriented

Framing

Underwriting

Intuitive Diplomatic Bargainer

Convincing --

Convincing Encouraging

Building commitment

Inspirational

Inspirational

Enthusiastic Team builder Encouraging -Defining gravity Decisive Integrator Positive Intellectually

Enthusiastic Team builder

Improvement oriented Decisive Integrator Positive Intellectually

21
stimulating minds; challenges beliefs, stereotypes and attitudes of others stimulating

22 Table 2: Split First-half Exploratory Analysis Loading on Entrepreneurial Leadership Factors FACTOR DESCRIPTION SPLIT HALF 1 Underwriting/Path clearing * Diplomatic Skilled at interpersonal relations, tactful 0.652 * Encouraging Gives courage, confidence or hope through 0.696 reassuring and advising * Effective bargainer Is able to negotiate effectively, able to make 0.720 transactions with others on favorable terms * Convincing Unusually able to persuade others of his/her 0.623 viewpoint Framing * Informed Knowledgeable, aware of information 0.659 * Intuitive Has extra insight 0.672 * Performance-oriented Sets high standards of performance 0.740 * Ambitious Sets high goals, works hard 0.709 Absorbing Uncertainty * Foresight Anticipates possible future events 0.789 * Confidence builder Instills others with confidence by showing 0.741 confidence in them * Visionary Has a vision and imagination of the future 0.754 Building Commitment * Improvement oriented Seeks continuous performance improvement 0.728 * Inspirational Inspires emotions, beliefs, values, and behaviors 0.765 of others, inspires others to be motivated to work hard * Enthusiastic Demonstrates and imparts strong positive 0.637 emotions for work * Team builder Able to induce group members to work together 0.667 Defining Gravity * Positive Generally optimistic and confident 0.666 * Integrator Integrates people or things into cohesive, 0.676 working whole * Decisive Makes decisions firmly and quickly 0.693 * Intellectually stimulating Encourages others to think and use their minds; 0.673 challenges beliefs, stereotypes and attitudes of others Note: The total sample of 13,568 respondents was randomly split into two halves, and exploratory factor analysis was conducted on the first half. The confirmatory factor analysis was conducted on the second half.

23 Table 3: Split Second-half Confirmatory Analysis Standardized Loading on Entrepreneurial Leadership Factors Factor Loading RMSR SRMSR NFI CFI GFI AGFI Underwriting/Path clearing 0.020 0.013 0.990 0.991 0.999 0.994 * Diplomatic 0.458 * Encouraging 0.656 * Effective bargainer 0.353 * Convincing 0.353 Framing 0.064 0.049 0.922 0.923 0.978 0.889 * Informed 0.479 * Intuitive 0.479 * Performance-oriented 0.636 * Ambitious 0.682 Absorbing Uncertainty 0.000 0.000 1.000 1.000 1.000 999.0 * Foresight 0.667 * Confidence builder 0.622 * Visionary 0.561 Building Commitment 0.031 0.024 0.982 0.982 0.995 0.973 * Improvement oriented 0.630 * Inspirational 0.726 * Enthusiastic 0.490 * Team builder 0.486 Defining Gravity 0.017 0.011 0.993 0.994 0.999 0.994 * Positive 0.516 * Integrator 0.540 * Decisive 0.503 * Intellectually stimulating 0.536 Note: The total sample of 13,568 respondents was randomly split into two halves, and separate exploratory factor analysis was conducted on each of the halves.

24 Table 4: Correlation among Role Factors of Entrepreneurial Leadership Underwriting & Path clearing .590** .579** Framing Absorbing uncertainty Building commitment

Framing Absorbing .580** Uncertainty Building .621** .575** commitment Defining .600** .556** gravity Note: N is 13,568. *: p<0.05; **: p<0.001.

.580** .547** .652**

25 Table 5(a): Average Factor Loading on Two Dimensional Entrepreneurial Leadership: Multi Group Confirmatory Factor Analysis Average Minimum Maximum Transformational Enactment * Underwriting & Path clearing 0.767 0.604 0.930 * Framing 0.736 0.610 0.854 * Absorbing uncertainty 0.737 0.632 0.850 Cast Enactment * Building commitment 0.802 0.730 0.887 * Defining gravity 0.749 0.682 0.814

Table 5(b): Reliability of the Two-Dimensional Entrepreneurial Leadership: Multi Group Confirmatory Factor Analysis Cluster Transformational Cast Enactment Correlation between Enactment (1) (2) (1) and (2) Eastern Europe 0.687 0.678 0.898 Latin America 0.799 0.784 0.950 Latin Europe 0.733 0.713 0.972 Confucian Asia 0.842 0.833 0.939 Nordic 0.670 0.704 0.845 Anglo 0.765 0.715 0.883 Tribal Africa 0.804 0.766 0.924 Southeast Asia 0.774 0.764 0.908 Germanic 0.640 0.700 0.864 Arabic 0.859 0.834 0.956 Root Mean squared residual 0.015 (RMSR) Standardized RMSR 0.020 Normed Fit Index 0.987 Comparative Fit Index 0.988 Goodness of Fit Index 0.989 (GFI) Adjusted GFI 0.959

26 Table 6: Evaluating Universality of Entrepreneurial Leadership Constructs Organization Level Mean 5% Transformational Enactment 6.01 5.17 * Underwriting & Path clearing 6.02 5.00 * Framing 5.92 5.00 * Absorbing uncertainty 6.08 5.10 Cast Enactment 6.06 5.13 * Building commitment 6.13 5.05 * Defining gravity 5.99 5.00 N 900

27 Table 7: Tukey's HSD Test for Equality of Cluster Means in Enactment Factors of Entrepreneurial Leadership Cluster Number of Transformational Cast respondents enactment enactment c Eastern Europe 1748 5.88 5.89d Latin America 1560 6.05b 6.18bc b Latin Europe 1681 6.05 6.10c Confucian Asia 1213 5.81cd 5.77e Nordic Europe 1649 6.03b 6.26ab Anglo Cultures 1532 6.22a 6.30a Tribal Africa 811 5.78d 5.73e Southeast Asia 1415 6.14a 6.11c Germanic Europe 1234 6.03b 6.23ab Arabic Cultures 794 5.65e 5.50f Note: The clusters with same superscript in a column have mean scores that are not significantly different at 0.05 level. The higher mean categories are superscripted with higher alphabets, and lower mean categories are superscripted with later alphabets.

28 Table 8: Major 20th Century Perspectives on Entrepreneurship Investigator(s) Perspectives on Entrepreneurial roles Knight Entrepreneurs are defined by their ability to predict future, and they enjoy residual reward for the uninsurable risks Weber Entrepreneurship is caused by Protestant ethic - hard work, thrift, and desire for material advancement Keynes Entrepreneurship is a function of government investments which stimulate supply and demand Cole Entrepreneur is the individual/group who initiates, manages and/or develops a profit-oriented organization for the production and distribution activities Gadgil Economic opportunities, or removal of constraints, rather than religion or ideology are the cause of entrepeneurship McClelland Achievement motivation is the critical trait of the entrepreneur Hagen Status withdrawal in one generation is the cause of entrepreneurship in a subsequent generation Cochran Entrepreneurship is promoted in cultures that infer high status on entrepreneurs Levin Entrepreneurship flourishes in meritocratic culture Collins & Moore Entrepreneurs are distinguished by their desire for independence Kirzner Entrepreneurs are distinguished by their ability to anticipate market imperfections and imbalances Nandy Entrepreneurs are distinguished by sense of efficacy and overall modernity Liles Risk perception, not actual reality, determines entrepreneurship McClelland & Burnham Key entrepreneurial characteristics are a high need for power, a low need for affiliation, and an ability to discipline oneself Kourilsky Entrepreneurial success is a function of persistence Peterson Entrepreneurship is not an attribute of an individual, but a process that can flourish in any society under appropriate environment conditions Schere Tolerance of ambiguity distinguishes entrepreneurs MacMillan Networking is critical for entrepreneurial success Kets de Vries Entrepreneurs are social deviates with a high need for control, sense of distrust, and desire for applause

Year 1. 1921

2. 1930 3. 1936 4. 1959

5. 1959

6. 1961 7. 1962 8. 1965 9. 1969 10. 1970 11. 1973 12. 1974 13. 1974 14. 1976

15. 1980 16. 1981

17. 1982 18. 1983 19. 1985

29 20. 1991 Miles & Arnold Entrepreneurial orientation is distinguished by marketing orientation