REFLECTIONS ON CHARACTER AND LEADERSHIP

36 REFLECTIONS ON CHARACTER AND LEADERSHIP

carries a high risk. The entrepreneur has no sense of priorities and may

spend as much time on trivia as on major strategic decisions.

Within the organization, power depends on proximity to the entre-

preneur, is constantly changing, and creates a highly uncertain organi-

zational environment. This state of affairs contributes to a highly

politically charged atmosphere where changing coalitions and collusions

are the order of the day. The formal organization chart is either non -

existent or outdated by the time it is drawn up. It would be represented

most accurately by a spider ’ s web with the entrepreneur in the centre.

The organization usually has a poorly designed or poorly used control

and information system (with no information sharing); there is an

absence of standard procedures and rules and a lack of formalization.

Instead, subjective, personal criteria are used for the purpose of measure-

ment and control. Job descriptions and job responsibilities are poorly

delineated or non - existent. The number of people reporting to the

entrepreneur will be large, adding to a general sense of confusion.

Although entrepreneurs, in the initial stages of developing the busi-

ness, might have had the ability to inspire their subordinates, the mere

fact of growth has complicated this process. Their aversion to structure,

their preference for personalized relationships, and their reluctance to

accept constructive criticism makes growth, with its implicit need for a

more sophisticated infrastructure and suprastructure and greater decen-

tralization, increasingly diffi cult to handle. And if this pattern prevails,

few capable subordinates will remain in the organization; the ones left

will usually be poor caliber and spend a great part of their effort on

political infi ghting.

Decline in the Enterprise

I am describing here the potential danger of the entrepreneurial mode;

that given the nature of the entrepreneurs ’ personal confl icts and their

peculiar leadership style — useful as these qualities might be initially —

growth may lead to the eventual destruction of the enterprise if the

entrepreneur ’ s attitudes remain rigid and he or she refuses to formalize

the organization or change decision - making patterns.

If the enterprise continues to grow, the effectiveness of the organi-

zational structure and the means of decision - making will be increasingly

inadequate to cope with the complexities of the external environment.

The degree of environmental dynamism (changes in technology, market

behavior, and competitors ’ reactions), heterogeneity (differences in the

needs and behavior of organizational constituents), and hostility (cut -