| The topic of corporate leadership has attracted considerable interest from bothacademics and practitioners. Its study dates back to the late19th Century during theWestern Industrial Revolution. Currently, there is important scholarly works beingdone on the concept of leadership. Leadership is defined from different angles. Itinvolves character, style, behavior, influence, interaction patterns, role,relationships etc... These skills are inherently within humans. Different leadershipstyles can affect effectiveness and performance. Most researchers, despite theirvarying circumstances and organizational backgrounds, tend to focus on tasks,effective corporate leadership, and the behavior of leaders.In the context of this study, corporate leadership is comprehended as the abilityof an individual or group to inspire and to influence subordinates by directing them toachieve the targeted objectives within a given context. It can be demonstrated thatleadership styles and characteristics of a good leader can influence teamwork andimprove an enterprise’s performance. From this perspective, it is worthwhile to knowwhich kind of leadership style affects the performance of enterprises and howvaluable teamwork and discussion are for the improvement of the enterprise’s success.From the literature there appears to be a plethora of leadership styles, severaldefinitions on leadership, numerous theories and research in corporate leadership,and multiple classifications of this concept, etc. Since the late1980’s, much of theleadership research has focused on the characteristics and effects of charismatic andtransformational leadership （Bass，1985; Kanungo，1990; Sashkin，1988; Tichyand Devanna，1990）. Until today, leadership styles have an impact on entrepreneurial orientation and this catches the interest of many scholars. Scholarsconducted numerous studies about the antecedents and consequences of corporateentrepreneurship within the three entrepreneurial orientation dimensions ofinnovativeness, risk-taking, and pro-activeness. Based on the study of therelationships among leadership styles, entrepreneurial orientation, and theentrepreneurial performances of the SMEs in the North-east of China, the theory ofentrepreneurship research has developed to its present stage.Entrepreneurship is becoming more and more important for enterprises as a mainway for change and sustainable growth. The past decades witnessed high rates ofchange in the market environment. For sustained competitive advantage, firms mustbe more creative, they must be willing to take more risks, and more proactive thantheir competitors in order to implement corporate entrepreneurship activitiessuccessfully. Leadership style, as it impacts entrepreneurial orientation, is one of thekey factors that have caused more and more scholars concern. In the theoretic circles,a lot of the fruits of studies have been implemented in terms of leadership style. Thesestudies, however, have hardly touched the subject of the link betweenentrepreneurial orientation and business performance.Entrepreneurial orientation and its dimensions can positively influence theperformance of enterprises. So many studies still mention the fact thatentrepreneurship venture is quite important contribution directing the varying internaland external environmental factors that can affect the firm and impact its performance.In other studies it is believed that entrepreneurship is a reaction to environmentalvariables. As environments become more complex and dynamic, enterprises that areconnected to such environments become more complicated and diversified,eventually adopting entrepreneurial orientation strategies in order to sustaincompetitive advantage. Even at the planning stage, it is the interaction between theentrepreneur and his or her environment that decides the different types of businessactivities, which in turn, affects the result of the enterprise’s performance. From thiswe can see that the relationship between a firm’s entrepreneurial orientation and that same firm’s performance has been the key issue of theoretical and empirical researchin the field of corporate entrepreneurship since the1980’s.This study reviews the development stages of leadership styles in small andmedium-sized enterprises and analyzes the interaction between leadership style andsubordinate behavior, the internal factors of the working environment, and takes alook the management level and the other related factors that affect subordinates’behavior vis a vis the corporate performance relationship.Used in this research is a version of the transformational leadership theoryformulated by Bass and his colleagues （Bass，1985,1996; Avolio et al.1995）.According to Bass （1985） transformational leaders motivate their subordinates byinspiring them, challenging them, and encouraging individual development. Thistransformational leadership further stresses achievement of a higher collectivepurpose—that of a common mission and vision. The second leadership style istransactional leadership. It stresses specific benefits that the subordinates wouldreceive by accomplishing agreed-upon tasks. A transactional leadership style involvesnegotiations between leaders and their subordinates and an exchange of experiencebetween them.Preceding research shows that different behaviors are involved in thetransformational and transactional leadership styles. The behaviors are measured withthe Multifactor Leadership Questionnaire （MLQ）（Avolio et al.1995）.Transformational leadership includes individualized consideration （IC）,intellectual stimulation （IS）, charisma （CHA）, and inspirational motivation（IM）. Transactional leadership includes contingent reward （CR） behavior andmanagement by exception （ME）. A series of studies reviewed by Bass （1996）supports the distinction between transformational and transactional leadership. Thereis also considerable evidence that transformational leadership is effective and ispositively related to subordinate satisfaction, motivation, and performance （Loweet al.1996）. Transactional and transformational leadership styles are contrasted withlaissez-faire leadership. Laissez-faire leaders abdicate their responsibility and avoidmaking decisions （Bass，1990）. Subordinates working under this kind of supervisor are basically left to their own strategies to execute their job responsibilities.Although laissez-faire leadership is observed infrequently in the United States（US） businesses （Bass and Avolio，1989）, managers still exhibit it in varyingamounts （Bass，1990）. Prior research has found that laissez-faire leadership hasan adverse effect on work-related outcomes of employees’（Bass，1990;Yammarino and Bass，1990）.This research focuses on the SMEs in Northeast China. This study uses acombination of analysis （quantitative&qualitative） to bring successful issue onthe empirical and experiential tests. At the same time, it also carries out somedimensions of innovation within performance together with the financial performanceand growth is also measured.The outstanding issue remaining to be seen is how companies enhance theirentrepreneurial performance. To answer that question, this study assesses leadershipstyle, using entrepreneurial orientation as the intermediate variable. Through casestudies, questionnaires, and other management research methods, such as the SPSS16.0and other statistical software for analyzing the data collected by questionnaire,this study discusses the impact of different types of leadership on the entrepreneurialorientation and entrepreneurial performance of SMEs in Northeast China in detail. Inthis research, we proposed twenty-two hypotheses based on the model of the threevariables. The datum that we are used to this empirical research was collected byquestionnaire. Based on the literature review and interviews, some relevant researchhypothesis are put forward and validated through empirical study. In the context ofChinese entrepreneurial orientation and entrepreneurial performance, this studyverifies whether transformational leadership, transactional leadership, and laissez-faire leadership have had different effects within different types of small and middle-size enterprises on the grounds of the managerial analysis of validity and reliabilityabout the measurement of scale through the datum we collected using the analysis offactor, correlation and regression on leadership style, entrepreneurial orientation,and business performance relationships. After the empirical test analysis was carried out, eighteen hypotheses are proven right and four hypotheses are not verified.The study comes up with the following preliminary conclusions:First,leadership styles in Northeast of China`s small and middle-size enteprisesengage an great role in the process of entrepreneurial field. Some studies on therelationship between leadership styles and entrepreneurial performance have showndifferent conclusions. Significant findings from this study demonstrate thattransformational and transactional leadership not only enhance the effectiveness ofleadership, but they also promote the entrepreneurial performance of enterprises.Second, transformational and transactional leadership have a significantlypositive impact on entrepreneurial orientation and its dimensions. The laissez-faireleadership does not have a great impact on entrepreneurial orientation andentrepreneurial performance. It is further demonstrated that entrepreneurialorientation significantly impacts on the capital knowledge of accumulation andentrepreneurial performance of the Northeast of China`s small and middle-sizeenterprises. At the same time, financial performance of SMEs is impacted by thedegree of corporate entrepreneurship innovation, not only by risk investment but alsoon the strategic reconstruction of corporate entrepreneurship.This thesis shapes the research model on Northeast China’s leadership style,entrepreneurial orientation, and entrepreneurial performance based on theoreticalresearch and proposed hypotheses that will be verified in detail. The empiricalresearch based on the collected data by questionnaires demonstrates the conclusionsof this research. Finally, a summary of better management practices is given withsome advice and recommendations for future research. |
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