Leadership and growth in entrepreneurial firms

The paper discusses the concept of leadership in entrepreneurial firms. A review of the literature on leadership theory and the importance of leadership in orgnaisations, particularly those that aim for growth through additional markets and innovation, is presented. This is followed by results from a qualitative study of seven firms that have achieved entrepreneurial growth as a result of a deliberate leadership strategy. These firms were all listed on the 2007 Enterprise250 ranking of small entrepreneurial firms by the Scottish business magazine The Scottish Business Insider, and had subsequently submitted for an award for Best Leadership Strategy to the Scottish Business Insider/Scott Moncrieff E250 awards event in November 2007. Results are measured by increases in turnover/profits, but the study of the implementation and operation of the strategy involves qualitative analysis of in-depth case studies of the seven firms. Results suggest that organisational growth has been achieved by charismatic transformational leadership, together with reward structures that provide employees direct financial incentives and return, and monitor their activity closely. Thus, both transactional and transformational leadership strategies are observed in tandem.