How do transformational leaders transform organizations? A study of the relationship between leadership and entrepreneurship

The aim of this study is to discover the relationship between different leadership styles and alternative entrepreneurial strategies in the not-for-profit public school system. We develop a conceptual framework for understanding various strategies of corporate entrepreneurship. Accordingly, we hypothesize that transformational leadership can promote a "vigorous entrepreneurial strategy" that encourages radical change, whereas monitoring leadership can only promote limited change by means of an incremental "calculated entrepreneurial strategy." Passive-avoidant leadership restricts organizational entrepreneurship to the boundaries of existing constraints, mainly using a "conservative strategy." These relationships were tested using a sample of 1,395 teachers working under 140 elementary school principals. The results partially support the expected relationships. It was found that although transformational leadership provides the most accommodating managerial background for radical entrepreneurship, the relationship is complex. We discuss the implications of these findings for both theory and practice.