Impact of Leadership Styles on Entrepreneurs\u27 Business Success

Leadership styles play an important role in entrepreneurial businesses in today’s business marketplace. The Full Range Leadership Model provides a framework for transformational, transactional, and laissez-faire leadership styles, as measured by the Multifactor Leadership Questionnaire (MLQ), while the ENTRELEAD scale has been used to assess the entrepreneurial leadership style. A review of the literature reveals limited empirical research focused on the effect of entrepreneurial leadership as applied in the contemporary marketplace. Limited research also exists on the effectiveness of the combination of these leadership styles for entrepreneurs in order to positively affect business performance and business longevity. The problem of this study was to address this gap in the research literature related to transformational, transactional, and laissez-faire leadership styles in combination with the entrepreneurial leadership style in entrepreneurial organizations. Four research questions guided this study: to identify the dominant Full Range Leadership Model leadership style of entrepreneurs; to understand the relationship between transformational and transactional leadership styles and the entrepreneurial leadership style; to describe the relationship between the combination of leadership styles of entrepreneurs and their gender, education level, industry type, and role in business; and to describe the relationship between the combination of leadership styles of entrepreneurs and their gender, education level, industry type, and role in business on years of operation, the change in the number of employees at current organization, and profitability. Data for this study were collected using a leadership survey with three subparts, including demographic and business questions, MLQ Form 5X-Short, and the ENTRELEAD scale. Four hundred and four respondents completed the survey. Descriptive statistics, chi-square, and MANOVA were used to answer the research questions. It was determined that a transformational and entrepreneurial leadership style was the most prevalent combination of leadership styles of entrepreneurs. Chi-square was used to determine that leadership styles and gender had a statistically significant association. The findings of this study from the MANOVA indicated that gender and role in business each had a statistically significant effect on the combined dependent variables of years in operation, current year profitability, profitability over five years, and difference in number of employees since founding. Education, industry, and role in business also had a statistically significant interaction effect on years in operation, current year profitability, profitability over five years, and difference in number of employees since founding. Entrepreneurs can use the findings from this study to identify their leadership style and better understand how individual styles and demographic characteristics relate to their role in their business and its potential success. City planners, members of regional Departments of Economic Development, educators, and practitioners can use the findings from this study to enhance leadership development opportunities for entrepreneurs