The Research On The Influence Mechanisms Of Entrepreneurial Leadership On New Venture Performance

Chinese economy increases at a high speed, and one of the important reasons is the booming and thrives of entrepreneurial activity. In fact, new ventures generally face two challenges as compared with established larger firms. On the one hand, new ventures often encounter scarce resources, imperfect organizational structure, and inefficient workflow. In this event, entrepreneurs are required to display effective leadership to provide the new venture with a capacity of efficiently and effectively managing resources. Consequently, new ventures could create sustainable competitive advantages through effective strategic management. On the other hand, new ventures are generally under high environmental pressure such as sophisticated competitors, rapidly changed preference of customers, and technology turbulence. This highlights the role of entrepreneurs in identifying market opportunity, and improving the adaptability of new ventures to dynamic and competitive environment. Such concerns on discovering opportunities will benefit for the growth of new ventures. Overall, entrepreneurial leaders of new ventures are required to play the roles of entrepreneurs and leaders.In the late1990s, entrepreneurial leadership emerged as a new type of leadership. Entrepreneurial leadership embodies the characteristics of both entrepreneurs and successful leaders. It not only focused on guide and encourage employees’ behaviors to efficiently and effectively allocate scarce resources, but also emphasizes discovering and creating opportunities for helping firms adapt to external environment. Although scholars have highlighted the importance of entrepreneurial leadership in managing new ventures, few studies have investigated the performance mechanism of entrepreneurial leadership. Therefore, the aim of the current research is to explore the effects of entrepreneurial leadership on new venture performance.First of all, by one dividing into three, we shall investigate three sub-questions:1) whether or not entrepreneurial leadership affects new venture performance;2) how entrepreneurial leadership affects innovation strategies, which in turn, affects new ventures performance;3) how entrepreneurial leadership select appropriate innovation strategies to pursue sustainable development of new ventures, according to the characteristics of the external environment. Secondly, we review in the theories and literature which are relevant to the three research problems. Following the existing studies, we propose a complex model as well as the hypotheses. Thirdly, responses were collected from168Chinese new ventures, and analyzed with SPSS for data reliability and validity, correlation analysis and regression analysis. We have three main findings through empirical analysis.1) Entrepreneurial leadership is positively related to new venture performance. Based on the theoretical framework of entrepreneurial leadership developed by Gupta, this research teases out a nuanced understanding of the influence of the five dimensions of entrepreneurial leadership (i.e., framing the challenge, absorbing uncertainty, underwriting, building commitment, defining gravity) on the new venture performance. We find that the five dimensions of entrepreneurial leadership are positively related to new venture performance.2) Exploratory and exploitative innovations mediate the effect of entrepreneurial leadership on new venture performance. Drawing on the strategic entrepreneurship view, entrepreneurial leadership is the ability to influence others to manage resources strategically to emphasize both advantage-seeking (i.e., strategic management) and opportunity-seeking (i.e., entrepreneurship) behaviors, which can foster new venture performance. We find that exploratory and exploitative innovations mediate the relationship between entrepreneurial leadership and new venture performance.3) Environmental dynamism and competitiveness moderate the effect of entrepreneurial leadership on new venture performance. Based on the contingency theory and multi-level perspective, we consider the potential moderating role of entrepreneurial environment. Taking into account the main characteristics of entrepreneurial environment during Chinese economic transition period, we investigate two aspects of the entrepreneurial environment, namely, environmental dynamism and competitiveness. We find that environmental dynamism and competitiveness can both moderate the relationship between entrepreneurial leadership and two types of innovation (i.e., exploratory and exploitative). Specifically, the relationship between entrepreneurial leadership and exploratory innovations will become stronger under dynamic environment; the relationship between entrepreneurial leadership and exploitative innovations will become weaker under dynamic environment. Moreover, the relationship between entrepreneurial leadership and exploitative innovations will become stronger under competitive environment; the relationship between entrepreneurial leadership and exploratory innovations will become weaker under competitive environment. However, we find no evidence that environmental dynamism and competitiveness can moderate the relationship between two types of innovation and new ventures performance.