Leadership and Management are key concepts of entrepreneurship as a field of discipline. Entrepreneurship as a way of life probably started thousands of years ago when human interaction in their environment for economic survival was set on a trajectory of developing complex organisations and the use of sophisticated technology from subsistence farming which depended mainly on the use of simple stone and iron tools.
Before the end of the first industrial revolution, the French had already coined the word, entreprendre, to espouse the influence of human creative energy on economic growth and development. Entreprendre which translates as enterprise or entrepreneurship originally means to undertake or to start something.
The meaning and usage of the word later expanded when Richard Cantillon, an 18th Century French economist, reflected on the integration of economic forces to drive economic growth and development. Cantillon also describes the entrepreneur as someone who uses judgement without being able to foresee which (product) will pay the best price.
Essentially, the entrepreneur could be described as the leader who takes initiative and economic risk in combining and allocating other economic resources towards creating the best products that brings the greatest profit. Explicit in this definition is the capacity for strategic leadership and management especially under uncertain conditions. It is commonly believed that the success of a business depends on the quality of its leadership and management or the strength of the entrepreneur.
Leadership Vs Management
Leadership and management are often loosely used or interchangeably deployed in layman’s perspective. However, several technical analyses of the concepts unveil the relevance of each for attaining entrepreneurial success and economic development.
Leadership is the ability to take initiative and exert motivational influence towards achieving a common goal or a set of objectives. Koontz and O’Donnell defined leadership as the ‘’process of influencing people so that they strive willingly towards the achievement of group goals’’. For C.I Bernard, leadership is the ‘’quality of behaviour of the individuals whereby they guide people or their activities in organized efforts’’.
Management on the other hand is the ability to maximize scarce resources. ‘’Management is the design and implementation of new strategies to help organisations cope with rapid changes and uncertainties in their industry and general environment’’ (Hitt et al 2010).
Management is a continuous process of setting organisational goals as well as developing actionable plans and effectively allocating resources to execute those plans for the attainment of the organisational goals. In other words, management involves setting objectives, analyzing the competitive environment and the internal organization, evaluating strategies and ensuring that management rolls out the strategies across the organisation.