Show Menu

Back to Scott Davey

Entrepreneurship as an activity

I'm now midway through an in-depth exploration of entrepreneurship and its relationship to leadership. In the last article I explored entrepreneurship as a leadership style. In this article in the series, I explore entrepreneurship as a series of activities.

Leibenstein (1968) defined an Entrepreneur as an individual who can "innovate, identify and create business opportunities, assemble and co-ordinate new combinations of resources [...] so to extract the most profits from their innovations in an uncertain environment", while Schumpeter states "Entrepreneurship consists in doing things that are not generally done in the ordinary course of business routine" (McGrath & MacMillan, 2000 citing Schumpeter, 1934) - these statements do well to describe breadth of activities of an entrepreneur.

There is broad agreement that the start-up phase of a business is a key time where entrepreneurial activities are required to guide, nurture and build the organisation (Quinn & Cameron, 1983; Smith & Miner, 1983; Ward, 2003). However, entrepreneurial leaders are also effective in other phases of a company's lifecycle, such as in times of transformation, turnaround and renewal (Stace & Dunphy, 1998), and in new product development (Cannon, 1993).

In recent years, entrepreneurial activities are encouraged in established businesses in order to maintain continuous innovation (e.g. Antoncic & Hisrich, 2001; Kawazaki, 1999) in the face of hyper-competitiveness (Porter, 1996). Honda is one example of an established company with non-entrepreneurial leaders, yet their new product development initiatives are encouraged to embrace entrepreneurial values and activities, to invent the next generation of their company's products. Top management creates an element of tension in the project team by giving it the freedom to carry out a project of strategic importance to the company and by setting very challenging requirements. The freedom away from the company's bureaucracy encourages entrepreneurial activity, yet it comes with a high chance of failure for the project team. If successful, executives in charge of these teams are often promoted to vice presidential positions to provide ongoing management of the product into production as if it is their own business, matching the risk and reward of a start-up enterprise. "The project team begins to operate like a start-up company - it takes initiatives and risks, and develops an independent agenda. At some point, the team begins to create its own concept." (Takeuchi & Nonaka, 1986)

And the story of Apple and Steve Jobs is well-enough known not to delve too deeply, and illustrates how the return of the entrepreneur was critical in turning around that company (Cruikshank, 2006).

For another perspective that makes the case that entrepreneurism is something one does rather than something one is, consider economic modelling (Hagedoorn, 1996) and network theory (Miller & Friesen, 1984), both of which show that entrepreneurial enterprise has environmental requirements in terms of supply, demand, population, capital market structure and network interconnectedness. This means that less entrepreneurial activity is possible in developing countries where such requirements are not met, than in mature environments that support new venture creation and risk-taking. This means entrepreneurship is influenced by environmental factors, and not simply by one's traits.

When reconciling activity-based entrepreneurship with leadership theory, the two become non-overlapping and complimentary. Under this model, leaders can perform these entrepreneurial activities when their organisation requires them to do so, and the activities themselves have more in common with strategy, innovation and change management theory than with leadership theory. 

Read part five: Entrepreneurship as Corporate Culture


This is the part of a series of articles exploring the relationship between entrepreneurship and leadership, adapted from research I performed for my Master of Business.

The complete series is listed below:

  1. Is Entrepreneurship merely a special case of leadership?
  2. Entrepreneurship as a personality trait
  3. Entrepreneurship as a leadership style
  4. Entrepreneurship as an activity
  5. Entrepreneurship as a skill
  6. Entrepreneurship as corporate culture
  7. The rise of the Entrepreneurial Leader