Entrepreneurship is a critical activity and driver for the economic growth of a nation. The ability to see an opportunity and the willingness to take risks are fundamental attributes for an entrepreneur. However, these attributes only help in so far as setting up the business, covering the first three stages of the entrepreneurship stages of existence, survival and success (Lewis and Churchill, 1983). In order to sustain and grow further to the latter stages of take-off and resource maturity, a definitive leadership strategy is required.

Leadership is the ability of an individual to influence the behaviour of his/her followers in order to achieve the desired goals. Any business organization is but the organized efforts of numerous people who partake in the creation of goods and services for social consumption and economic rewards. Hence the importance of leadership cannot be over-emphasized in this context. Leadership theories have evolved over time, from the ‘Great Man Theory’ and Trait theories to the Ohio State studies, Managerial Grid, Situational Leadership Theory, to the Charismatic, Transformational and Servant Leadership theories topical today. Leadership has been a critical factor that has determined the success or failure of many an organization.

The Managerial Grid is one of the studies under the behaviourist school of leadership thought that postulates managerial behaviour on two dimensions of ‘concern for production’ and ‘concern for people’. The lack of contextualization in the Managerial Grid is considered by some to be a major drawback of the Grid (Hersey and Blanchard, 1986; Bass, 1990). The Grid however, has been used as a powerful training tool in a multitude of organizations around the globe for helping managers identify their styles of leadership and provide them with a roadmap for superior leadership competence.

Entrepreneurship Orientation (EO) is essentially a firm level phenomenon (Covin and Slevin, 1991; Lumpkin and Dess, 1996) that describes how a firm approaches the various challenges from its environment. It discusses five main dimensions (Lumpkin and Dess, 1996) that examine a spectrum of choices to be made by the entrepreneurial firm in achieving success.

This paper tries to deconstruct the factors of the EO construct to the individual level and see if the Managerial Grid can provide a framework for the implementation of the factors of EO, thereby developing a prescriptive approach for desired leadership behaviour in entrepreneurs for greater levels of performance/ success.

Defining the Models:

Lumpkin and Dess’s (1996) definition of the Entrepreneurial Orientation dimensions are as follows:

(1) Autonomy: the independent action of an individual or a team in bringing forth an idea or a vision. It defines the freedom given to organizational members to seize an opportunity and see it through to completion.

(2) Innovativeness: a firm’s tendency to engage in, and support new ideas, novelty, experimentation,and creative processes which may result in new products, services, or technological processes.

(3) Risk Taking: Incurring heavy debt or making large resource commitments by seizing opportunitiesin the market place in the interest of high returns. It is the willingness of entrepreneurs to commit resources to a cause without the guarantee of success.

(4) Pro-activeness: Taking initiatives by anticipating and pursuing new opportunities and by participatingin emerging markets. It is the ability to seize opportunities in the marketplace and shape the business environment in which they function.

(5) Competitive Aggressiveness: A firm’s propensity to directly and intensely challenge its competitors. It is how firms respond to trends in the marketplace in terms of challenges thrown at them by competitors.

Krauss, Frese, Friedrich and Unger developed a psychological approach to explain the EO model and the dimensions were applied to individual entrepreneurs. Their approach is summarised as under:

Autonomy orientation implies that owners value their owndecision-making and dislike to receive orders. Such a position helps to succeed becausedecisive, self-contained decision making is an important facet of small business owners’ tasks.

Innovative orientation implies that onehas a positive mind-set toward new ideas with regard to products, services, administration, ortechnological processes. New ideas are not necessarily absolute novelties, but should be new tothe relevant group, market, and environment (West and Farr, 1990).

A positive orientation towards risk-taking should help the owner to take on unavoidable and often sought for challenges and risks.

Personal initiative and persistence is a useful extension of proactiveness in the entrepreneurial context.

Competitive aggressiveness is demonstrated by the entrepreneurial business owners’ want to assert themselves, enjoy competition, andstrive for victory (Schumpeter, 1934; Kirzner, 1997).

The Managerial Grid developed by Blake and Mouton classifies leader behaviour on two dimensions of ‘concern for production’ and ‘concern for people’. The Grid is a 9*9 matrix that plots the various leadership styles and shows the path for progression towards the “one best way” of the (9,9) style of team management.

The (1,1) impoverished management style demonstrates exertion of minimum effort to get required work done and is appropriate to sustain organization membership. It signifies the minimal level of focus on task and people. The (9,1) management style focusses on efficiency in operations which results from arranging conditions of work in such a way that human elements interfere to a minimum degree. This is also called the task management style and the concern for people is at the minimal level. The (5,5) management style, or the middle road management style, shows that adequate organization performance is possible through balancing the necessity to get out work while maintaining morale of people at a satisfactory level. The (1,9) management style is also called the country club management style. It demonstrates thoughtful attention to the needs of people for satisfying relationships leading to a comfortable and friendly organizational atmosphere and work tempo. The (9,9) management style or the team management style is the recommended style under the Grid. Work accomplishment is achieved from committed people by building interdependence through a “common stake” in purpose leading to relationships of trust and respect.

The Managerial Grid fails in its attempt to relate to the present world scenario where the contingencies theories are more relevant. Today’s managers need to be equipped with a knowledge of all leadership styles and have the adaptability to demonstrate various styles depending on the situations that they face. This study would like to use this model to demonstrate how the various styles may be made relevant for entrepreneurs in various scenarios.

The EO construct defines certain competencies essential for an entrepreneur. The managerial grid proposes various leadership styles. This paper essentially tries to marry the competencies to the leadership styles to demonstrate the appropriate leadership style that a leader may adopt in the entrepreneurial journey.

Linking the Managerial Grid and the Entrepreneurial Orientation Construct:

The following are the various scenarios wherein the different leadership styles proposed by the Grid may be relevant in the entrepreneur’s role.

As an entrepreneur starts his/her business, there is a need to get like-minded individuals who are committed to the vision, mission and values of the organization, on board. These initial members of the organization are likely to form a highly cohesive unit and will bring complementary skills to the table. These individuals will be leaders in their area of expertise. In this scenario, a (1,1) style of leadership by the entrepreneur is most suitable in guiding the efforts of the organization, signified by a great degree of Autonomy.

The next stage is signified by a fight for survival in the marketplace. The organization would see the number of members increasing and the culture established by the entrepreneur and the lead team may see slight modifications as more number of people start working within its boundaries. The challenges posed by an organization in this phase will lead to working conditions that are focussed on churning out maximum production at the highest levels of efficiency. Task management style (9,1), characterized by proactiveness and competitive aggression would be suitable for this phase as an unwavering focus on task accomplishment is critical for the firms survival through this phase. The challenge faced here in terms of people management would be to ensure that the selection processes of the firm are focussed on getting task driven people on board. The spirit of proactiveness and competitive aggression must be prevalent in the employees as well, thereby bringing about a culture thriving on productivity and goal achievement.

Having established itself, the firm now moves into the growth phase. Here, the initial employees who have worked with the organization in the survival phase, move into managerial positions and it is critical for the entrepreneur to engage with them on a personal level as well. Relationships in the workplace start becoming more important for these mature employees and the middle road style (5,5), will be an appropriate approach to leading the workforce. Risk taking, proactiveness and competitive aggression competencies are emphasised in this phase as the organization is growing at a rapid pace in a dynamic business environment.

The maturity period in the organizational lifecycle signifies smooth operations through well-defined standard operating procedures. This is a time when the entrepreneur can look at embracing a (1,9) country club leadership style with high focus on people. Employees would need to feel engaged at work to keep their motivation levels high. Opportunities for learning and higher order needs of the employees need to be satisfied. Inculcating Innovativeness in the organization becomes critical if the organization is to avoid a decline after this phase. The entrepreneur must create an environment in the organization that encourages new ideas, novelty, experimentation,and creative processes which may result in new products, services, or technological processes.

Diversification is the next step for the entrepreneur. Having built a sustainable business, he/she identifies new opportunities in the market place and needs to move quickly to seize those chances. During this phase, the entrepreneur must not lose focus on the established business. The key players in the established business may be identified as the leaders for the new opportunity and the shuffling of the established order will require the entrepreneur to sustain his/her focus on people as well as revive a key focus on task as well. The team management style (9,9) would be appropriate in this situation. The entrepreneur has the challenge of finding the right mix of all the five EO competencies based on the business environment that the firm operates in. Highly proactive and risk-taking behaviours allowed firms the flexibility to seize environmental opportunities to exhibit a "rapid organizational response to changing external forces in unpredictable environments”, while high degree of Autonomy are better suited to predictable environments where rapid organizational responses are not typically required" (Covin and Slevin, 1989: 77). “Unless management is flexible, the organization will not be able to adapt itself to the evolving situation" (Khandwalla, 1977).

CONCLUSION:

The Managerial Grid may not be a relevant ‘theory’ in itself, to be taught to aspiring entrepreneurs, as in the dynamic world of today, we cannot preach ‘one best way’ of leading a business. However, as a roadmap to guide the decision of which style to use in which situation, it provides valuable insights. The journey of an entrepreneur is peppered with risk, competition and the constant need for innovation. The judicious decisions on empowerment, autonomy and proactiveness can greatly influence the success of an entrepreneur (Krauss et al).

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Received on 29.09.2016 Modified on 13.10.2016

Asian J. Management. 2016; 7(4): 293-296.

DOI: 10.5958/2321-5763.2016.00046.9