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1.2 Leadership, Entrepreneurship, and Strategy
LEARNING OBJECTIVES
1. Know the roles and importance of leadership, entrepreneurship, and
strategy in principles of management.

2. Understand how leadership, entrepreneurship, and strategy are
interrelated.
The principles of management are drawn from a number of academic fields,
principally, the fields of leadership, entrepreneurship, and strategy.
Leadership
If management is defined as getting things done through others,
then leadership should be defined as the social and informal sources of influence that
you use to inspire action taken by others. It means mobilizing others to want to
struggle toward a common goal. Great leaders help build an organization’s human
capital, then motivate individuals to take concerted action. Leadership also includes
an understanding of when, where, and how to use more formal sources of authority
and power, such as position or ownership. Increasingly, we live in a world where
good management requires good leaders and leadership. While these views about the
importance of leadership are not new (see “Views on Managers Versus Leaders”),
competition among employers and countries for the best and brightest, increased
labor mobility (think “war for talent” here), and hypercompetition puts pressure on
firms to invest in present and future leadership capabilities.
P&G provides a very current example of this shift in emphasis to leadership as
a key principle of management. For example, P&G recruits and promotes those
individuals who demonstrate success through influence rather than direct or coercive
authority. Internally, there has been a change from managers being outspoken and
needing to direct their staff, to being individuals who electrify and inspire those
around them. Good leaders and leadership at P&G used to imply having followers,
whereas in today’s society, good leadership means followership and bringing out the
best in your peers. This is one of the key reasons that P&G has been consistently
ranked among the top ten most admired companies in the United States for the last
three years, according to Fortune magazine.
[1]
Whereas P&G has been around for some 170 years, another winning firm in
terms of leadership is Google, which has only been around for little more than a
decade. Both firms emphasize leadership in terms of being exceptional at developing
people. Google has topped Fortune’s 100 Best Companies to Work for the past two
years. Google’s founders, Sergey Brin and Larry Page, built a company around the
[2]
idea that work should be challenging and the challenge should be fun. Google’s
culture is probably unlike any in corporate America, and it’s not because of the
ubiquitous lava lamps throughout the company’s headquarters or that the company’s
chef used to cook for the Grateful Dead. In the same way Google puts users first
when it comes to online service, Google espouses that it puts employees first when it
comes to daily life in all of its offices. There is an emphasis on team achievements
and pride in individual accomplishments that contribute to the company’s overall
success. Ideas are traded, tested, and put into practice with a swiftness that can be
dizzying. Observers and employees note that meetings that would take hours

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