Small Business

Traditional View of Small Business and Leadership

Small business can be viewed from a number of perspectives. In some cases, small business represents a family or partnership venture and serves simply as an alternative income source for individuals or partners who undertake the business. This alternative income source can be viewed as a substitute for traditional sources of income from employment with public or private enterprises. For these types of sole proprietorships or partnerships, leadership is defined through the actions of the individual small business owner, who typically has total control over the tactical and strategic actions of the business. The vast majority of businesses in the United States, which are typically defined as sole proprietorships, are this class of business.

The demonstration of leadership within income-substitution businesses follows traditional leadership theories, which focus on instilling vision and exerting influence over others to create purpose and, ultimately, better performance. This leadership capability rests solely with the entrepreneurs and helps support the perception of small business entrepreneurs as “rugged individualists,” using their leadership capabilities to create opportunity for themselves. In fact, when prompted to identify entrepreneurial leadership successes of the nineteenth and twentieth centuries, we often create mental images of individuals such as Andrew Carnegie, Henry Ford, John D. Rockefeller, and Bill Gates, all giants of business who influenced the development of whole industries through their individual perseverance, vision, and business leadership.

Contemporary viewpoints of small business entrepreneurship and leadership have shifted from a focus on individual leadership styles and entrepreneurial success to a team approach. The concept of the high-potential new venture (start-ups based on technological innovation) and the recognition of the new venture top management team (NVTMT), which uses shared leadership and collective vision to achieve business survival and success, have replaced the “rugged individualist.”

Contemporary View of Small Business and Leadership

Small businesses of the twenty-first century face pressures and obstacles that were smaller in scope or unknown in previous times. For many small businesses, survival and success are thwarted by several broad and industry-level environmental forces.

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