The broad area of study under
which my proposal falls is in the area of Effective Entrepreneurial
Leadership. The thesis will examine what the essential entrepreneurial
leadership qualities to enable a successful enterprise are. Time management
and structure, processes, technology used and personality traits will be
examined to identify the key components. The motivation behind this
research is my personal exposure to being a leader of a German branch within a
globally successful start-up. Recognising many start-ups fail not because of a
bad idea but because of missing guidelines and literature based on practical
knowledge. Start-ups need information that ill assist them in the deployment of
resources to ensure that they are competitive. The lack of this critical
information on an appropriate mix of personnel, technology and structure could
lead to many smaller companies not being able to establish themselves despite
useful products and forward-thinking ideas. Additionally, the study’s
contribution to the extant literature would provide literature on functional
organizational models within a new era of technology and entrepreneurial spirit, which is a process of constant reinvention through
innovation.

Research
Questions and Aim of Study

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The aim of the study is to redefine
leadership in a new world
that asks more of us as leaders than ever before. Success, it seems,
is more dependent on our ability to adapt, to respond to changes in our
environment; than an historical precedent of commanding the environment melded
to our own ambition.

The research questions that the
study would therefore explore are:

1. What
factors are important for a start-up to flourish and does that vary by industry
and/or size?

2. Is
there an optimal mix of creativity and structure in the organizational model of
a start-up and what does this depend on?

3. Are
there certain personality traits that all successful entrepreneurs have?

4. How
much of a factor does the social environment in which the start-up is founded
and established play with regards to the success of the enterprise?

5. How
might the current methods of measuring business success and performance be
improved?

6. How
much impact does organizational culture have on the ability to grow and expand
internationally?

 

Background
and motivation:

 

New challenges, new opportunities,
the paradigm shift in our world necessitates our shift in leadership, Companies
have to remain vital in current hyper competitive environments. Companies have
to rethink their organization and their flexibility to adapt themselves to new
business situations (Volderba, 1996).

We
are witnessing a new phase in economic development that is characterized by continuous
innovation; the spread of digital and communications technologies; the
relevance of network forms of organisations; and the prevalence of soft,
intangible and human factors. The so-called New or Intangible economy is the
environment in which organisations have to cope today. Many researchers and
institutions have turned their attention to economic and business implications
of the intangible economies. This new era presents significant challenges for
survival of new business entrepreneurs.

Working and
innovating in this new environment has created a new research agenda. Over the
years several researchers and authors e.g. John Renesch have collected views
and approaches to leadership in a new era.

However, there
appears a gap in the literature. The researchers have not indicated whether
there is an optimal mix of people, technology and physical capital to achieve
organisational effectiveness in terms of profitability and sustainability. The
purpose of my research is to extent the literature by providing literature on
the development of a model that can be used determining an appropriate mix of
people, technology and structure/processes to achieve organisational
effectiveness.

 

Prior Research:

 

Roos et al 1997
argues that the conceptual roots of intellectual capital can be divided into
two streams of thought: the strategy stream which focuses on developing and
using knowledge and the relationship between knowledge, success and value
creation; and the measurement stream that focuses on the need for developing a
new information system which measures intangibles together with financials. One
of the most important and widely referenced empirical researches is the one by
the Danish Trade and Industry Development Council’s (1998). This study of ten
firms working on measuring intellectual capital found that measuring and
actively managing intellectual capital was important for a company’s long-term
success. Companies measuring and managing their intellectual capital clearly
outperformed other companies. Bontis’ (1998) study shows a valid, reliable,
significant, and substantive causal link between dimensions of intellectual
capital and business performance. This study used statistical analysis of
survey data to investigate the causal relationship between a company’s
investments in intellectual capital and its performance.

The
literature has identified a number of classification schemes, which divide
intellectual capital into the categories of external (customer-related)
capital, internal (structural) capital, and human capital (e.g. Sveiby, 1997;
Roos et al., 1997; Stewart, 1997; and Edvinsson and Malone, 1997). One
aspect of Intellectual capital that has received significant attention over the
years is the area of human capital. Likert (1961) and Odiorne (1963) were
concern with leadership effectiveness and the human resource perspective that
as based on the premise that people were valuable organizational resources.

Literature
identified the second element of intellectual capital is the internal
structure, which includes such things as organizational structure, legal
parameters, manual systems, research and development and software systems all
relate to the processes and procedures within the firm. This organizational
capital is responsible for the company’s renewal and value creating processes.

The third element
is the external structure, which includes items such as brands and
customer-supplier relationships and any market assets. These elements are part
of the literature on the management of intellectual capital. The literature has
been focusing on the valuation issues and the management of Intellectual
Capital. Dzinkowski 2000 asserts that Intellectual capital management (ICM)
attempts to grow, extract, and measure a firm’s intangible assets through
assessments of systems, processes, procedures and other organizational wealth
not typically quantified under standard management and accounting practices.

ICM is based on the assumption that value is created through the integration of
human, organizational and customer capital. However, the literature is silent
on the appropriate mix of the components.

The literature
has identified a number of methods for calculating intellectual capital in
organisations. The Direct Intellectual Capital Methods, which are based on an
estimation of the monetary value of intangible assets by identifying its
various components; Scorecard Methods for example Kaplan and Norton’s Balance
Scorecard; Market Capitalization Methods for example Tobin’s Q. and the Return
on Assets Methods. The link between intellectual capital management and
performance measurement can be achieved through the use of these methods. Key
examples of the recent developments of performance measurement frameworks are
Fitzgerald et al (1991) Results and Determinants Model and Kaplan and Norton
1992 Balance Scorecard. Results and determinants Model – by using six key
performance dimensions, the model specifically incorporates both financial and
non-financial metrics while also balancing internal and external perspectives.

Most significantly though it combines results measures which reflect the
success of an organisation’s chosen strategy with determinant measures which
focus on those activities and factors necessary to achieve the organisation’s
strategic goals. The balance scorecard provides a multifaceted view of an
organisation’s

includes
financial measures, which again highlight the results of actions already taken
by an organisation but it balances these with operational measures concerning
customer satisfaction, internal processes and the organisation’s innovation and
improvement activities.

There is apparent
however a considerable degree of concern that despite the progress taking place
with regard to the design of more effective performance measurement systems.

Hotels organisations are still focusing on more traditional forms of
performance measures. Such measures are associated with a number of fundamental
weaknesses, including limitations in their accuracy and neutrality; a dominance
of lag/result over lead/determinant measures; an emphasis on the short term
often at the expense of strategic issues; little appreciation of the links and
relationships between key areas and aspects of an organisation and an overall
lack of balance (Kaplan and Johnson 1987). There is a concern that in using
inappropriate measures hotel managers may be ignoring issues that really
matter, potentially to the serious detriment of their organisation (Brander
Brown and McDonnell 1995). It is also necessary for the performance measurement
systems to reflect the complex nature of the service delivery process within
hotels – including as it does such typical characteristics as high degrees of
perishability, intangibility, heterogeneity and simultaneity as well as outputs
which combine pure service elements with retailing and manufacturing functions.

The literature
has identified a number of methodologies for measuring intellectual capital.

The five more popular methodologies are The Technology Broker, The IC-Index,
The Intangible Assets Monitor, The Skandia Navigator, and the ICAP Methodology.

The technology broker by Annie Brooking (1996) makes a practical contribution
to intellectual capital measurement by offering three measurement models to
help calculate the dollar value of intellectual capital as identified through
the Technology Broker’s intellectual capital audit. Roos et al 1997 IC-Index is
an example of “second generation” practices that attempt to consolidate all the
different individual indicators into a single index, and to correlate the
changes in intellectual capital with changes in the market (Bontis, 2001). Leif
Edvinsson, the chief architect behind Skandia’s initiatives developed a dynamic
and holistic intellectual capital reporting model called the Navigator with
five areas of focus: financial, customer, process, renewal and development, and
human capital. This new accounting taxonomy sought to identify the roots of a
company’s value by measuring hidden dynamic factors. The Teleplan’s ICAP
methodology does not strive to measure but to evaluate intellectual capital
based on the organization’s value chain. An analysis of the intellectual
capital needed for that value chain to work the best and generate the most
income. By focusing on the value chain, the ICAP method emphasizes the strong
link between intellectual capital and business performance.

 

Methodology

 

The literature
has identified a variety of research methodologies, which were used (interview,
case study, questionnaire, survey of annual reports, focus groups). Interviews
and questionnaires were often used to supplement each other. Given this
background I proposed to use an approach drawing on qualitative and
quantitative research methods. The ultimate objective could be a qualitative
score or index that can be manipulated, however the process of building the
index would require that components of leadership and associated firm success
would be measured and valued and this is often a highly subjective exercise
requiring input from several different perspectives.

The steps that
would be taken would include a series of qualitative interviews to identify the
components. Using the information provided

provided
from the interviews together with indicators suggested by Roos et al (1997),
Sveiby (1997) and Edvinsson and Malone (1997) develop a set of constructs that
would be incorporated into a questionnaire using a seven point Likert scale.

This questionnaire that would be used to evaluate intellectual capital would
consist of statements that aim to operationalize and reflect the constructs
mentioned. In addition, these statements would be weighted according to their
importance and relevance for optimizing the value creating activities in the
hotel chain. This questionnaire would be piloted, refined and administered.

The data would be
recoded to reflect scores and indices using some form of weighting according to
their relative importance in the value chain. The proposed indices would be
presented to a range of stakeholders for comments and refinement.

 

Conclusion:

 

The contribution
that this research should make is extending the literature on small companies
and hotels in developing regions such as the Caribbean as they compete with
international companies in the advent of globalization. This research finding
should also assist them in their recruiting of personnel, acquisition of fixed
assets and deployment of other resources to ensure that they are competitive.

This research should also contribute to the extant literature by providing a
model for evaluating intellectual capital in the hospitality industry as well
as on the appropriate mix of people, technology and physical assets in the
organisation.

 

References:

 

1.     Bontis,
Nick (1996), “There is a price on your head: managing intellectual capital
strategically”, Business Quarterly, Vol. 60 No. 4, pp. 40-47.

2.     Bontis,
Nick (1998a), “Intellectual Capital: an exploratory study that develops
measures and models.” Management Decision, Vol. 36 No. 2, pp. 63-76.

3.     Bontis,
Nick (1998b), “Managing Organizational Knowledge by Diagnosing Intellectual
Capital: Framing and advancing the state of the field”, Journal of
Technology Management, Vol. 18 No. 5/6/7/8, pp. 433-462.

4.     Brooking,
Annie (1996), Intellectual capital: Core Asset for the Third Millennium
Enterprise, International Thomson Business Press, London.

5.     Crawford
Richard (1991), “The changing economic and business environment. Harper
Collins

6.     Danish
Agency for Trade and Industry (1998), “Intellectual Capital Accounts –
Reporting and managing intellectual capital”, Available online at: http://www.efs.dk/publikationer/rapporter/engvidenregn

7.     Demas
William (1965), The Economics of development in small countries with special
reference to the Caribbean. Centre for Developing Area Studies. Mc Gill
University

8.     Dzinkowski
Ramona (2000), “The value of intellectual Capital” Journal of Business
Strategy

9.     Dzinkowski
Ramona (1999), “Mining Intellectual Capital Strategic Finance.

10.  Edvinsson
L. and M.S Malone (1997), Intellectual Capital: Realizing your company’s
true value by finding its hidden brainpower. Harper Collins. New York. NY.

Author