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The Development of Entrepreneurial

Leadership: The Role of Human, Social and
Institutional Capital

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DOI: 10.1111/j.1467-8551.2011.00808.x

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British Journal of Management, Vol. , (2012)
DOI: 10.1111/j.1467-8551.2011.00808.x

The Development of Entrepreneurial

Leadership: The Role of Human, Social
and Institutional Capital
Claire M. Leitch,1 Christel McMullan2 and Richard T. Harrison1
1
Queens University Management School, Queens University Belfast, Riddel Hall, 185 Stranmillis Road,
Belfast BT9 5EE, Northern Ireland, UK, and2Institute of Nursing Research, University of Ulster,
Jordanstown, Shore Road, Newtownabbey BT37 0QB, Co. Antrim, Northern Ireland, UK
Corresponding author email: c.leitch@qub.ac.uk

This paper contributes to the literature on entrepreneurial leadership development.

Leadership studies are characterized by an increasing emphasis given to an individual
leaders social and organizational domain. Within the context of human capital and
social capital theory, the paper reflects on the emergence of a social capital theory of
leadership development. Using a retrospective, interpretivist research method, the
authors present the experience of a cohort of business leaders on an executive develop-
ment programme to uncover the everydayness of leadership development in practice.
Specifically, they explore how entrepreneurial leadership develops as a social process and
what the role of social capital is in this. The findings suggest that the enhancement of
leaders human capital only occurred through their development of social capital. There
is not, as extant literature suggests, a clear separation between leader development and
leadership development. Further, the analysis implies that the social capital theory of
leadership is limited in the context of the entrepreneurial small firm, and the authors
propose that it should be expanded to incorporate institutional capital, that is, the formal
structures and organizations which enhance the role of social capital and go beyond
enriching the human capital stock of individual leaders.

Introduction Three features characterize this emerging litera-

Entrepreneurial leadership is emerging as a criti-
cal issue in our understanding of the dynamics of
economic development in the 21st century (Har-
rison and Leitch, 1994; Kuratko, 2007). As an
ostensibly new paradigm (Fernald, Solomon and
Tarabishy, 2005), it is explored largely in terms of
the leadership traits and behaviours of senior
executives in entrepreneurial companies (Gupta,
MacMillan and Surie, 2004; Nicholson, 1998;
Swiercz and Lydon, 2002), the advocacy of an
entrepreneurial approach to leadership more
generally (Kuratko, 2007) or more specific analy-
ses of issues such as leadership succession (White,
DSouza and McIlwaine, 2007), creativity and
innovation in business development (Chen, 2007).
ture. First, it is atheoretical, drawing variously on
the leadership and entrepreneurship literatures,
but not using these to articulate a theory of entre-
preneurial leadership. In this paper, we contribute
to the debate that frameworks of human capital
(Becker, 1964; Schultz, 1961) and social capital
(Bourdieu, 1986; Coleman, 1988, 1990; Lin, 2001;
Putnam, 2000) can illuminate both the entrepre-
neurship (Debrulle, Maes and Sels, 2010) and lead-
ership (Day, 2000; Iles and Preece, 2006) domains.
Further, we argue that these accounts should
include analysis of the role of institutional capital
(Anderson, 2010) to fully understand the develop-
ment of entrepreneurial leadership in its everyday
practices and discourses (Chia and Holt, 2008;
Garfinkel, 1967; Heidegger, 1962; Taylor, 1985).

2012 The Author(s)

British Journal of Management 2012 British Academy of Management. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
2 C. M. Leitch, C. McMullan and R. T. Harrison
Second, it does not formally define the concept
itself. Here, we understand entrepreneurial lead-
ership as the leadership role performed in entre-
preneurial ventures, rather than in the more
general sense of an entrepreneurial style of lead-
ership (Mintzberg, Ahlstrand and Lampel, 1998).
An entrepreneurial venture is a business based on
the systematic identification and exploitation of
opportunities (Shane and Venkataraman, 2000),
in which the presence of an entrepreneurial vision
(Hitt et al., 1999), processes that nurture inno-
vation (Quinn, 1985) and generate and secure
resources (Daily and Dalton, 1993), and the
capacity to undertake continuous exploration and
idea generation (Jelinek and Litterer, 1995) are
evident (Gupta, MacMillan and Surie, 2004).
Third, it does not specifically address the
implications of organizational scale, that is, the
institutional context, on its practice and develop-
ment. Indeed, much of this research takes as its
focus the larger organization, for example in
studies of successful, independent, UK organiza-
tions (Nicholson, 1998), growing VC-backed com-
panies (White, DSouza and McIlwaine 2007),
high-tech ventures (Swiercz and Lydon, 2002) and
corporate entrepreneurship behaviours of middle
managers (Gupta, MacMillan and Surie, 2004).
Accordingly, we explicitly focus on the challenge
of understanding entrepreneurial leadership in the
context of the smaller entrepreneurial company, a
relative terra incognito in contemporary leadership
research (Jensen and Luthans, 2006).
While the link between the quality of leadership
and the management of the smaller entrepre-
neurial firm is becoming more widely understood
(Thorpe et al., 2009), there is still much less atten-
tion given to the analysis of leadership and lead-
ership development in this context (Coglister and
Brigham, 2004; Jensen and Luthans, 2006; Leitch,
McMullan and Harrison, 2009; Vecchio, 2003).
For some, there is nothing distinctive about the
smaller entrepreneurial firm and therefore it
is possible to simply extend existing leadership
research into this domain (Vecchio, 2003).
However, exploring the founder/entrepreneur of
a small emerging firm as a leader has yet to be a
major area of study (Jensen and Luthans, 2006,
p. 650). This reflects the fact that the development
and challenge requirements in the small entrepre-
neurial firm are different from larger organiza-
tions. Indeed, it is now almost a tautology to
point out that a small business is not just a scaled-
British Journal of Management 2012 British Academy of Management.
Table 1. Constraints and facilitators on the role of the leader in
entrepreneurial ventures
Constraints Facilitators
Small management team Closeness of managerial
Stretched multifunctional group
management and Wider potential for all staff
overlapping roles to know business and all
Fewer specialist managerial stakeholders
personnel Wider scope of informal
Limited control over ways of doing things
external environment Wider scope for domination
Wider scope for domination by leader (vision and
by leader (inflexibility) implementation)
Limited capacity for Greater ability to use
scanning environment personnel observation
Relatively limited resource rather than systems for
and power to raise control
resource
Adapted from Gibb (2009, p. 213).
down version of a large unit, and it is thus
necessary to explore more fundamentally the
potential differentiated behaviour of something
that is small from something that is larger (Gibb,
2009, pp. 211, 212). Some of the implications of
independent smallness (Gibb, 2000) for leadership
development are set out in Table 1.
Even though a leaders role can vary in different
stages (gestation, development and growth) and
in different types of business (for example, part-
nerships, family businesses, social enterprises),
our concern here is to focus explicitly on the chal-
lenge of understanding entrepreneurial leadership
in the smaller entrepreneurial company. We
review the emergence of a social capital theory of
leadership development (Day, 2000; Hitt and
Ireland, 2002; Iles and Preece, 2006; McCallum
and OConnell, 2009) within the context of the
evolution of both human capital (Becker, 1964)
and social capital theory (Lin, Cook and Burt,
2001). We apply this in an investigation of the
process of entrepreneurial leadership develop-
ment (Leitch, McMullan and Harrison, 2009; Pit-
taway et al., 2009; Smith, 2009; Stewart, 2009;
Terrion and Ashforth, 2002) and add to the small
number of such studies (Gordon, Hamilton and
Jack, forthcoming; Kempster and Cope, 2010).
Specifically, our research is structured around
three questions. First, what is the role of human
capital in leadership development? Second, how
is leadership development as a social process
enacted in the entrepreneurial domain? Third,
what is the role of the social and organizational
2012 The Author(s)
Development of Entrepreneurial Leadership
context in entrepreneurial leadership develop-
ment? In this investigation, we build on an emerg-
ing tradition of research taking a process
relational perspective on entrepreneurship and
leadership development. Entrepreneurial leader-
ship is viewed as a social process enacted through
everyday active encounters as a practice of rela-
tional learning (Anderson, 2005; Cope, 2005;
Fuller and Tian, 2006; Hjorth, 2003; Pittaway and
Thorpe, 2012; Steyaert and Katz, 2004).
Using a retrospective and interpretivist research
methodology (Leitch, Hill and Harrison, 2010),
which is focused on uncovering the everyday prac-
tices of entrepreneurial leadership development
(Alvesson and Spicer, 2011a), we present the expe-
riences of one cohort of business leaders from an
executive development programme. From the
analysis, we conclude that, in the situational
context of the entrepreneurial firm, at least, the
social capital theory of leadership development,
while valuable in understanding the process, is
limiting. In such firms, the current distinction
between leader development as the acquisition of
skills and abilities and leadership development as a
socially situated process is difficult to maintain.
Thus, an expanded theory of leadership develop-
ment in this context, which incorporates recent
thinking on the role of institutional capital, that is,
formal structures and organizations, is proposed
(Anderson, 2010).
Towards a social capital theory of
leadership development
As the field of leadership studies has evolved
(Yukl, 2010), there have been two key shifts in
focus. First, with respect to role, there has been a
shift of interest, from the personal characteristics
of the leader to the role of leadership: that is, from
an individualistic and decontextualized conceptu-
alization of the leader as a reified heroic individual
to one which emphasizes leadership as a role
defined by the interaction of a leader with his/her
social and organizational context (Day, 2000;
Fiedler, 1996; Iles and Preece, 2006; Thorpe et al.,
2009). In short, it is recognized that individuals
alone do not create successful firms (Thorpe
et al., 2009, p. 202).
Second, in terms of process, there has been a
shift from leadership as a set of traits, behaviours
and actions to leadership as a social process that
2012 The Author(s)
British Journal of Management 2012 British Academy of Management.
3
engages everyone in a community, which requires
leadership capacity to be built throughout an
organization involving both individual leader and
collective leadership development (Day, 2000, p.
583). This shift reflects the fact that most defini-
tions of leadership imply development, involving
a process whereby intentional influence is exerted
over people to guide, structure and facilitate activi-
ties and relationships in a group or organisation
(Yukl, 2010, p. 21). This represents a move from
the individual to the group, from the human to the
social (Day and OConnor, 2003; Locke, 2003;
McCallum and OConnell, 2009). Indeed, the most
effective leader is attentive to both the task and
socio-emotional/relationship dimensions of lead-
ership (Iles and Preece, 2006, p. 318). The contex-
tual element of leadership (Fiedler and Chemers,
1974) is important: concentrating on developing
just human capital seems a lopsided investment
strategy which undervalues the current and
future social capital needs of organizations
(McCallum and OConnell, 2009, p. 153). From a
human capital perspective, the focus is on improv-
ing an individuals knowledge, skills and capabili-
ties; in social capital theory emphasis is on the
relational dynamics of establishing relationships
among individuals to enhance cooperation and
resource exchange, leading to the creation of
organizational value (Bouty, 2000; Day, 2000; Tsai
and Ghoshal, 1998).
Human capital and social capital
The development of leadership, to build company
resources and capabilities, rests on the availability
of both human capital (the repository of valuable
knowledge and skills) and social capital (the rela-
tionships between individuals and organizations
that facilitate action and create value) (Hitt and
Ireland, 2002). While Hitt and Ireland (2002) call
for more research into the integration of human
and social capital as a priority for 21st century
leadership research, this is in the context specifi-
cally of the link between leadership and perform-
ance, not in understanding the process of
leadership development. However, both Day
(2000) and Iles and Preece (2006) have argued that
their integration provides a foundation for bridg-
ing the gap between the development of leaders
and of leadership development as a socially situ-
ated process.
4 C. M. Leitch, C. McMullan and R. T. Harrison
Table 2. Theories of capital
Explanation
Classical theory Social relations
(Marx) Exploitation by the capitalists
(bourgeoisie) of the proletariat
Neoclassical theories
Human capital Accumulation of surplus value by
(Schultz, Becker) labourer
Cultural capital Reproduction of dominant symbols
(Bourdieu) and meanings (values)
Symbolic capital Reputation and value as perceived as
(Bourdieu) others
Social capital Social relations
(Lin, Burt, Marsden, Access to and use of resources
Flap, Coleman) embedded in social networks
(Bourdieu, Coleman, Solidarity and reproduction of group
Putnam)
Adapted from Lin, Cook and Burt (2001, p. 5).
If we recognize knowledge, skills and relation-
ships as social capital, we can see this as an exten-
sion of the original economic concept of capital
(Table 2). For Marx, for example, capital repre-
sented the surplus generated by the labouring
class which was appropriated by capitalists. This
economic capital was an essential resource for
building society, the basis for exploitation of the
workers by the capitalists, and a group phenom-
enon that resulted from the group efforts of many
but belonged to no single individual in particular
(Anderson, 2010, p. 3). As human capital theory
developed in economics, this Marxian emphasis
on capital as a group phenomenon was replaced
by the notion of human capital as an individual
one. This consists of knowledge, skills, talents
and intelligence, as well as acquired or inherited
attributes that an individual brings to bear in the
world (Fernandez and Castilla, 2001). These they
can enhance and use of their own volition and are
associated with identifiable returns (Becker, 1964;
Gupta, 2009; Mincer, 1974; Piazza-Georgi, 2002;
Schultz, 1959; Zhu, Chew and Spangler, 2005). At
an organizational level, Hitt and Ireland (2002)
have adopted this theory of human capital to
argue that it is a significant resource, owing to its
intangibility, uniqueness and being difficult to
imitate and replicate (Teece, 2001). Thus, it
affords an opportunity for conferring competitive
advantage to a firm reflected in greater capacity to
British Journal of Management 2012 British Academy of Management.
Capital Level of analysis
A. Part of surplus value between the Structural (classes)
use value (in consumption market)
and the exchange value (in
production-labour market) of the
commodity
B. Investment in the production and
circulation of commodities
Investment in technical skills and Individual
knowledge
Internalization or misrecognition of Individual/class
dominant values
Mediating power through prestige Individual
Investment of social networks Individual
Investment in mutual recognition Group/individual
and acknowledgement
exploit opportunities (Davidsson and Honig,
2003) and higher levels of performance (Hitt
et al., 2001).
The development of a social capital theory,
initially in sociology and political science,
focused specifically on that subset of resources
that an individual could access, not through
their own inheritance or acquisition, but through
interaction with others (Lin, Cook and Burt,
2001). While this social capital perspective still
includes economic goods, the core of the theory
is embodied in two linked but distinctive per-
spectives: the external, individual resources view
and the internal, collective characteristics view
(Alder and Kwon, 2000). In the former, the
focus is primarily on social capital as a resource
facilitating action by a focal actor, a resource
that inheres in the social network tying that focal
actor to other actors (Alder and Kwon, 2000, p.
90). These networks are central to the develop-
ment of capital, and they and the resources they
bring to the individual, comprise personal con-
nections, enhanced knowledge and wherewithal
and inside information (Anderson, 2010, p. 3).
In the latter, more common among political sci-
entists and development economists, the stress is
on social capital as a signal of group or commu-
nity cohesion (Putnam, 2000), and specifically as
a feature of the internal linkages that character-
ise the social structures of the actor (groups,
2012 The Author(s)
Development of Entrepreneurial Leadership
organisations, communities, regions, nations etc
as distinct from individual actors) and give them
cohesiveness and its associated benefits (Alder
and Kwon, 2000, p. 92; see also Alder and
Kwon, 2002; Schuller, n.d.).
In social capital theory, therefore, the network
of relations enables social capital affairs to be
conducted and provides network members (Naha-
piet and Ghoshal, 1998) with the collectivity-
owned capital, a credential, which entitles them
to credit in the various senses of the word
(Bourdieu, 1986, p. 249). It is the social capital or
assets that are embedded in those relationships
that can contribute to developing value outcomes
(Dess and Shaw, 2001). In essence, social capital
supplements the effects of other types of capital,
including human and financial capital (Bourdieu,
1986; Coleman, 1988, 1990; Loury, 1987).
However, there are some elements in which
social capital does not share the same character-
istics of economic types of capital. First, even
though it might depreciate with non-use, it does
not depreciate with use, unlike physical capital.
In fact, as with human capital, it normally
grows and develops with use. Second, social
capital is a collective good in that it is not the
private property of those who benefit from it.
Third, it is located not in individual actors but
in their inter-relationships, so that no one actor
has exclusive rights to it. The inclusion of non-
economic aspects in describing social capital fits
well with Bourdieus (1986) expanded view of the
concept of capital, which he believed included
both material (that is, physical capital) and non-
material phenomena. Indeed, he identified two
additional forms of capital: cultural capital, as
knowledge and experience gained through educa-
tion and training (which is of course closer to
human than social capital); and symbolic capital,
which relates to ones reputation and value as
perceived by others (Fuller and Tian, 2006, p.
290), and refers to any property (any form of
capital whether physical, economic, cultural or
social) when it is perceived by social agents
(Bourdieu, 1998, p. 47; see also De Clercq and
Voronov, 2009a, 2009b; Karatas-Ozkan and
Chell, 2010; zbiligin and Tatli, 2005).
As Svendsen and Svendsen (2004, p. 12)
observe, this expanded concept is most rele-
vant to interdisciplinary social science where a
myriad of more or less exotic forms of capital
exist. Nevertheless, what links the neoclassical,
2012 The Author(s)
British Journal of Management 2012 British Academy of Management.
5
sociological and political science perspectives is
that, although the focus is on the role of the social
interconnectedness in the development of
capital, it is still the individual who is central to
the theory and who accesses, controls and
increases social capital resources. As in concepts
of human capital, social capital theory is a theory
of individualism.
The definition of social capital implied in this is
something less tangible and less measurable than
the more common emphasis on the networks
approach to social capital used in entrepreneur-
ship research (Kim and Aldrich, 2005). Indeed,
the Putnam-esque identification of social capital
as something that accrues to society as a whole,
as well as to the individuals dyadically conne-
cted in a network, draws attention to two further
features that are important for understanding
entrepreneurial leadership development. First, it
is through these relationships that individuals
develop mutuality in terms of trust, respect and
collaborative working; mutuality which under-
pins the development of a democratic society. In
other words, the strength of social capital lies
primarily in the group, namely, in group coopera-
tion (Anderson, 2010, p. 5). Second, social
capital, as with other forms of capital, is devel-
oped and built slowly and incrementally over time
in an ongoing process of learning from experi-
ence, in this case the experience of interacting with
others in associational relationships.
Social capital and leadership development
This underpins the attempt to use social capital as
the basis for differentiating between the develop-
ment of leaders and of leadership in organizations
(Day, 2000; Iles and Preece, 2006). Leader devel-
opment refers to the enhancement of an indivi-
duals skills and capabilities as a form of human
capital. It is based on the development of social
capital by expanding the collective capacity of
organizational members to engage effectively in
leadership roles and processes (Day, 2000, p.
582). This rests on also building and using inter-
personal capability which stresses the importance
of being able to understand people and incorpo-
rates both social awareness and social skills
(Goleman, 1995). In other words, for organiza-
tional development to occur, an effective interac-
tion must take place in an interpersonal or social
context, that is, between a leader and his/her
6 C. M. Leitch, C. McMullan and R. T. Harrison
social and organizational environment. It is the
relationships that connect individuals, rather than
an individuals attributes, which take centre stage
(Balkundi and Kilduff, 2005).
Given the relational aspect of social capital,
leadership development should focus on how
to build social networks and relationships to
access resources and coordinate activities. In this
sense, leadership is an effect, rather than a cause,
an emergent property of social interaction in
context (Iles and Preece, 2006, p. 324). For
Balkundi and Kilduff (2005, p. 943) leadership
can be understood as social capital that collects
around certain individuals where formally des-
ignated as leaders or not based on the acuity of
their social perceptions and the structure of their
social ties. As social capital exists in connections,
this suggests that inter- and intra-organizational
relationships are both essential (McCallum and
OConnell, 2009). This shift in focus from the
individual to the collective, whether a top team,
teams or groups within and between an organiza-
tion or the organization as a whole, introduces
complexity into leader and leadership develop-
ment and presents challenges for both academics
and practitioners.
While this discussion recognizes that human
and social capital are not in direct opposition to
each other, they are in a relationship of tension,
theoretically and pragmatically (Field, Schuller
and Baron, 2000, p. 250). In this context a social
capital theory of entrepreneurial leadership devel-
opment will have a focus on relationships rather
than individual leaders, will emphasize measures
such as participation, engagement and trust
rather than qualifications, will identify outcomes
in terms of social cohesion and further social
capital development rather than income and pro-
ductivity, will follow an interactive and cumula-
tive rather than linear model of development, and
will support policy and practice implications
based on capacity building and empowerment
rather than skill enhancement and rates of return
(Table 3).
Methodology
Given the acknowledged problems of measuring
social capital and its impacts (Anderson 2010;
Fine, 2001, 2010), we have adopted a rather dif-
ferent methodological approach from the count
British Journal of Management 2012 British Academy of Management.
Table 3. The relationship between human capital and social
capital
Human capital Social capital
Focus Individual Relationships
Measures Duration Membership/
participation
Qualifications Trust levels
Outcomes Direct: income, Social cohesion
productivity Economic
Indirect: health, achievement
civic activity More social capital
Model Linear Interactive/circular
Policy Skilling, accessibility Citizenship,
and rates of return capacity-building and
empowerment
Source: Field, Schuller and Baron (2000, p. 250).
and classify one of network analysis. In applying
this within the context of entrepreneurial leader-
ship, we broadly follow the position articulated
by Alvesson and Spicer (2011a). First, leader-
ship is not a physical object like a rock or flower
that can be carefully measured using carefully
calibrated instruments. Leadership is something
that requires human understanding and interpre-
tation . . . [it] . . . is all about meaning, under-
standing, performances, and communication
(Alvesson and Spicer, 2011b, pp. 34). Second,
leadership is a practice, carried out in everyday
settings, involving the attribution of meaning and
significance to actions (Alvesson and Spicer
2011b, pp. 45; Ladkin, 2010). Third, leadership
is enacted in the real world, which involves rec-
ognizing that the real world of everyday practice
is ambiguous, messy and provides significant
challenges for research that is more difficult and
time consuming to conduct (Gephart, 2004;
Leitch, Hill and Harrison, 2010).
The implications are as follows. First, most
prior research has involved quantitative studies
using behaviourally based leadership question-
naires and assessment tools. Second, these
methods provide limited understanding of the
practice of leadership, as they are static and
backward-looking. Third, leadership develop-
ment is a complex social phenomenon made up of
exchanges and activities which vary over time and
by context. Fourth, a more interpretivist view of
leadership development focuses attention on the
contextual and situationally embedded nature
of the leadership development process (Leitch,
McMullan and Harrison, 2009).
2012 The Author(s)
Development of Entrepreneurial Leadership
Methodologically, traditional approaches (that
is, the so-called, standard, often quantitative,
research methodologies) are badly adapted to
the study of the ephemeral, the indefinite and
the irregular (Law, 2004, p. 4). Accordingly, the
choice of methodology becomes a matter of
aptness: different types of research question
are best answered by different types of study
employing appropriate methods (Leitch, Hill
and Harrison, 2010, p. 71). Given that our analy-
sis of entrepreneurial leadership development is
grounded in the understandings and personal
experiences of the research participants, an
interpretivist approach is the most appropriate
(Gordon, Hamilton and Jack, forthcoming):
interpretivism is based on a lifeworld ontology
which argues that all observation is theory- and
value-laden and that investigation of the social
world is not, and cannot, be the pursuit of
detached objective truth (Leitch, Hill and Harri-
son, 2010, p. 69). Rather, a research approach
which focuses on the development of rich descrip-
tions and is sensitive to the subtleties and situ-
ated nuances of leadership practice (Kempster
and Cope, 2010, p. 11) has been adopted.
However, small-scale, qualitative studies in the
interpretivist tradition do not allow for general-
izability; their strength lies in their capacity to
provide insights, rich details and thick descrip-
tions (Jack and Anderson, 2002, p. 473). From
an interpretivist standpoint, developing an under-
standing of entrepreneurial leadership requires
recognition that any insights developed will nec-
essarily be uncertain and preliminary: eternal
and robust truths are almost impossible to come
by in a complex, situation-specific and dynamic
area like leadership. All we can do is to expand
the range of ways we can interpret leadership and
hopefully provide some useful and engaging
insights that we did not have before (Alvesson
and Spicer, 2011b, p. 4).
Given the repeated calls for ontologically and
epistemologically coherent qualitative leadership
research (Alvesson, 1996; Bryman, Stevens and
Campo, 1996; Conger, 1998; Kempster and
Cope, 2010; Parry, 1998), our focus is to under-
stand the everyday practices of entrepreneu-
rial leadership development. In this, we follow
Heideggers (1950/1971) distinction between two
related ways in which we may make sense of our
apprehension of phenomena in the world, build-
ing and dwelling modes of being, which provides
2012 The Author(s)
British Journal of Management 2012 British Academy of Management.
7
the relevant ontological and epistemological
context (Chia and Holt, 2008, p. 477).
In the building mode of being there is an
initial precognitive separation between an actor/
perceiver and the world, so that he/she has to
construct mental representations and models of it
in order to actually engage with it (Ingold, 2000).
Essentially, the actor is presumed to be a disinter-
ested observer who uses the constructed model or
representation as an ideal or goal, which guides
the creation of a conceptual plan or map, from
which action can follow. This separation distin-
guishes between theory, the ideal and practice,
the approximation, and privileges the former.
This, produces knowledge that is rigorous, schol-
arly and uninvolved with the phenomenon it
surveys (Chia and Holt, 2008, p. 477).
While for Heidegger (1950/1971) the building
and dwelling modes of being should be held in
mutual sympathy (Chia and Holt, 2008, p. 477),
the perspective of the dwelling mode is central to
his approach to a hermeneutics of everydayness
(Heidegger, 1962). This everydayness is the under-
standing in everyday practices and discourses. In
other words, as a mode of being in the world, this
dwelling or inhabiting defines how we feel at
home in and relate to the world: when we inhabit
something, it is no longer an object for us but
becomes part of us and pervades our relation to
other objects in the world (Dreyfus, 1991, p. 45).1
In this dwelling mode, it is assumed that actors are
inextricably immersed and intertwined with their
surroundings in all its complex interrelatedness
(Chia and Holt, 2008, p. 477). As actors do not
have an overarching view of their situation, they
must instead feel their way through a world that is
itself . . . continually coming into being (Ingold,
2000, p. 155). As such, actions and decisions arise
from being in situ, occur spontaneously and are
characterized by ongoing adjustment and adapta-
tion instead of resulting from some predesigned
plan. It is this prioritization of integration (rather
than separation) of a subject and their context,
and the attention it therefore places on practition-
ers being immersed in, coping with and adapting
to emerging situations, that provides the wider
justification for our interpretivist approach to this
research.
1
This dwelling perspective is also reflected in approaches
to the analysis of social and political practices by Polanyi
(1962), Garfinkel (1967) and Taylor (1985).
8 C. M. Leitch, C. McMullan and R. T. Harrison

Table 4. Biographical information about the research participants and their businesses

Name* Sex Age Highest level Title Turnover Ownership Family No. of Sector
band of educational () stake (%) business full-time
qualification employees

Bob M 4145 BSc Managing Director 4m 0 No 65 Retail

Dan M 4145 BSc General Manager 5m 0 No 101 Printing
Ken M 4145 None Director 25m 100 Yes 75 Manufacturing
Kevin M 4145 BSc Managing Director 1.5m 0 No 10 Manufacturing
Mark M 4650 None Managing Director 2.5m 100 No 20 Retail
Philip M 5155 BSc Technical Director 3m Not No 25 Engineering
available
Simon M 4650 BSc Director 7.5m 33 No 105 Environmental
services
Tim M 3135 BSc General Manager 1.5m 0 Yes 26 Software
Tony M 4650 O-levels Director 9.1m 30 Yes 56 Retail

*Names of research participants have been altered to ensure anonymity.

The research process gent businesses need to be replaced by more formal

ones as they grow (Perrin and Grant, 2001). From
In this research, we have captured this integration
a life-cycle perspective, this transition from owner
by obtaining leaders dwelling view of their world,
micro-management to larger-scale professional
by accessing their immersed doing of trying to
management structures represents a significant
effect change in practice (Gordon, Hamilton and
transformation in the nature of the business. Fol-
Jack, forthcoming; Iles and Preece, 2006; Kemp-
lowing Phelps, Adams and Besant (2007), the need
ster and Cope, 2010). Data for this project were
for leadership development can be seen as a unique
collected during the period May 2009April 2010
path-dependent situational tipping point chal-
from a cohort of eight business leaders who took
lenge. While we acknowledge that there is impor-
part in a leadership development programme held
tant research to be done exploring the role of the
between November 2007 and May 2008 (Table 4).
entrepreneurial leader in different entrepreneurial
Their selection was based on a purposive sampling
organizational contexts (e.g. stage of development
strategy (Patton, 1990). First, we wished to include
or type of business), in this study we specifically
entrepreneurial leaders who were consciously
concentrate on the analysis of the leadership devel-
attempting to develop their leadership capabi-
opment process at this transition.
lity. Therefore, participants were selected from
The programme was structured around seven
an entrepreneurial leadership development pro-
two-day workshops supplemented by inter-
gramme.2 Second, in order to ensure commonality
sessional, one-on-one coaching sessions and
of experience and allow for differential develop-
action-learning sets (Leitch, McMullan and
ments over time of the impacts from a common
Harrison, 2009). The sample of eight reflects
learning intervention (Powells and Houghton,
the size of the cohort to which we were given
2008), all participants came from a single cohort.
access for research purposes.
In so doing, we recognize that the role of the
Each participant was interviewed individually
leader changes as an organization grows in size and
at their place of work; these interviews lasted
complexity. If entrepreneurial leadership increas-
between 90 minutes and two hours and were
ingly becomes a distinct form of leadership during
undertaken 12 months after the end of the pro-
the growth process (Kempster and Cope, 2010), it
gramme. This allowed them time to reflect on
does so because the informal management and
and implement what they had learnt (Downs,
leadership practices that are most effective in emer-
Hydeman and Adrian, 2000; Millar and Tracey,
2
2006) and to provide a detailed account of their
It should be noted that this programme was designed
and led by an external leadership programme provider. experience through a process of guided extended
None of the authors was involved at any stage in the conversations (Ruben and Ruben, 2005). These
delivery of the programme. interviews were audio-recorded for subsequent

2012 The Author(s)

British Journal of Management 2012 British Academy of Management.
Development of Entrepreneurial Leadership
transcription and analysis. On the basis of this
analysis, further data were collected from two
focus groups held four months apart. These
involved all eight participants and explored in
more detail their experience of the dynamics of
leadership development during and after the pro-
gramme. As with the individual interviews, the
focus groups were audio-recorded. For both
the interviews and focus groups, participants
were advised of the broad theme of the research,
that is: How does entrepreneurial leadership
develop as a social process and what is the role of
social capital in this? The specific research ques-
tions were not provided, in order to reduce
respondent bias and allow participants stories to
emerge (Kempster and Cope, 2010).
The analysis of qualitative data is a difficult,
intuitive, creative and dynamic process, the out-
come of which is to understand the assumptions,
categories and relationships that constitute the
situated experiences, or everydayness, of the
participants (Basit, 2003). However, very few
interpretivist research studies elaborate on the
principles of data analysis (Bryman, 2004). Draw-
ing on guidelines for the practice of interpretivist
research in entrepreneurship (Leitch, Hill and
Harrison, 2010), in Table 5 we set out the
approach to analysis and interpretation adopted
in this study.
Human and social capital in
entrepreneurial leadership development
Our findings in this section are structured around
two of the three research questions articulated
in the Introduction. First, what is the role of
human capital in leadership development?
Second, how is leadership development as a
social process enacted in the entrepreneurial
domain, and what is the place of social capital
in this? We concentrate here on identifying the
everyday practice of entrepreneurial leadership
development. In this we reiterate the importance
of understanding the entrepreneurial context,
the implications of independent smallness that
distinguish the entrepreneurial from the corporate
(see Table 1). Specifically, we frame the analysis
within Heideggers dwelling mode of being, which
emphasizes the inextricable immersion and inter-
twining of the actor and his/her world, as a reflex-
2012 The Author(s)
British Journal of Management 2012 British Academy of Management.
9
ive process in which the entrepreneurial leader
both shapes and is shaped by this domain as
he/she enacts leadership.
Leadership development as human capital
For most of the participants, their justification
for enrolling on a leadership development pro-
gramme was to enhance their human capital in
terms of their knowledge, skills and capabilities in
the context of the need for significant change
(Phelps, Adams and Besant, 2007). For some, the
driver was the nature of the challenges facing
the business (Table 6, A1A2). Clearly, these are a
manifestation of some of the constraints of the
entrepreneurial context, in terms of small and
over-stretched management teams with limited
resources. For others, the impetus was articu-
lated much more in terms of the challenges facing
them as individuals (Table 6, B1). In some cases,
this was expressed as seeking to gain an overall
view of their business, to rise above the day-to-
day concerns of managing to take a leadership-
based view. In other cases, the motivations were
more specifically grounded in management chal-
lenges, particularly around a desire to free up time
through improved delegation skills and enhanced
team-working within the management group
(Table 6, C1C3), one of the key tipping points
identified by Phelps, Adams and Besant (2007).
Participants recognized that their actions and
decisions arise from being in situ, require ongoing
adjustment and adaptation, and the programme
provided an opportunity to share and learn from
the experiences of others in a similar situation
in a way which was not possible in their indivi-
dual businesses (Table 6, C2C3, D1D2). This
emphasis on networking and sharing highlights
that the development of human capital relies in
practice on the capacity and opportunity to
engage relationally with others in leadership
development, as in other areas (Brown and
Lauder, 2000). In other words, individual actions
are embedded in a social context: if . . . human
capital is less tangible, being embodied in the
skills and knowledge acquired by an individual,
social capital is less tangible yet, for it exists in the
relations among persons (Coleman, 1997, p. 83).
As will become evident, the leadership develop-
ment process in entrepreneurial firms is funda-
mentally predicated on the development of
relational social capital, which appears in practice
10 C. M. Leitch, C. McMullan and R. T. Harrison

Table 5. Levels of interpretive data analysis

Process of analysis Level of analysis Description

Familiarization and Reading the case We began with a close reading and re-reading of the text (the interview and
gaining insight focus group transcripts) to develop an appreciation of each case and become
intimate with the material both cognitively and affectively
Immersion and Diagnosing the case We identified a number of broad categories of themes through a process of
sense-making open-coding (Strauss and Corbin, 1990). Each transcript was independently
scrutinized by two coders and verified by a third. Based on this pawing
of the text (Ryan and Bernard, 2003), potentially significant segments
were highlighted for each cluster and grouped to form common meaning
clusters which were colour-coded for subsequent analysis
Categorization Developing intra-case Having broken the raw data down into manageable bits (Dye et al., 2000),
themes coded these bits and assigned them to provisional meaning clusters we
linked this to the holistic understanding derived from reading the case to
identify emerging themes from each particular interview in terms of
leadership development. As a result we developed a master-theme list
(Smith, Jarman and Osborne, 1999)
Association and pattern Developing inter-case Having completed the first three stages for all transcripts we refined the start list
recognition themes of categories through a process of axial coding (Strauss and Corbin, 1990) on
the basis of which we developed sub-categories and determined how these
related to each other in terms of shared aspects of experience that
transcended the case specific
Replication and Elaboration Identification of common emerging themes across the transcripts prompted a
extension and extension second round of data collection, using focus groups rather than interviews, to
of themes tap into shared experiences. These transcripts were in turn subject to the same
process of analysis
Interpretation and Writing-up We adopted as a formal process the writing-up of a narrative account of the
representation interplay between the interpretative activity of the researcher and the
participants account of her experience in her own words (Smith and
Eatough, 2006, p. 338). In interpreting the outcomes of the analysis we
developed a small number of summary categories to capture the key
themes in the raw data considered to be most important in term of the
objectives of the research. Our aim was to structure the outcomes of
the analysis according to the issues and topics identified as important by
the participants, that is a grounded understanding derived from the
concepts and categories that social actors employ to interpret and
understand their worlds (Jones, 1985; Shaw, 1999)
Explanation and Contribution to theory Finally, in signalling the validation of the interpretation of the outcomes of this
abstraction development process of analysis we identify the generative potential of the research in
terms of opening new questions and possibilities, in an iterative and
comparative process of dialogue between existing theory and the data while
always remaining sensitive to the unique situated experiences of the
participants

Source: Adapted from Kempster and Cope (2010, p. 1); Leitch, Hill and Harrison (2010, p. 78).

to be more important than the direct acquisition
of knowledge and skills per se. In essence, we
argue, following Nahapiet and Ghoshal (1998),
that social capital is appropriable, and that devel-
oped in one context can be transferred to another.
Leadership development as social capital
Based on the evidence from this research, the lead-
ership development process relies on social capital
at two levels. The first of these is the participant-
to-participant (peer-to-peer) relationships built up
within the programme. The second is developed
through the bridging social capital facilitated via
the programme directors links to other cohorts
and courses (peer-to-other interaction). The
importance of interaction during the course was
identified by the majority of these leaders as key to
their experience of leadership development.
Most of the effective interaction occurred
during the residential sessions but outside the
formal workshops. This is clearly consistent with
a social capital theory of leadership development
(see Table 3). Participants valued the opportunity

2012 The Author(s)

British Journal of Management 2012 British Academy of Management.
 Table 6. Human and social capital in entrepreneurial leadership development
Human capital: its role in leadership development
A: Challenges facing the business
A1: Before the course, there were some changes in the company (in
management). I could see change happening, there was some
friction in the company for one reason or another. I needed
2012 The Author(s)
tools to deal with this (Dan)
A1: A2: The growth and expansion we were going through at the
time. Thought it might be useful it would give me more of an
overview on how to do the business, rather than getting involved
in it every day (Simon)
B: Challenges facing the individual
B1: I wanted to try and get an aerial view of what I should have
been doing, step back far enough, like a helicopter looking
down, I wanted to change but I wasnt entirely sure how to go
about it. I wanted to find the correct way of doing that (Ken)
C: Management challenges
C1: Basically, I was expecting to get more free time by delegating,
whatever part it should take (Tony)
C2: I was doing a lot of technical stuff plus some management. I
had a lot on my shoulders. I didnt have the right structure
underneath me to help me . . . I wanted to hand back [technical
manager] traits (Bob)
C3: A lot of the staff we have here have been here a long time, were
given responsibilities and challenges, but we were starting to
British Journal of Management 2012 British Academy of Management.
encounter more . . . challenges in how we managed staff . . . I
was trying to create a situation where managers could get the
best out of themselves and the best out of their staff (Bob)
D: Challenge of learning
D1: When you are at the top, you dont share your qualities with
the management below you. So Id hoped to share some of that
and get some directions from others (Bob)
D2: I guess probably to build on management skills, a bit of
networking. The guys that went on it previously found it very
useful from the point of view of a leadership programme (Bob)
Social capital: the process of leadership development
E: Peer-to-peer interaction
E1: I think we all interacted really well. That was one of the things people enjoyed the most, everybody
contributed and was keen to have a laugh as well. It was done very constructively. Dont think
there was any negative in that area. Usually you would come away with wee tips that you could
pick up from people. Then Ive had some people recommended by the guys on the course, Ive sent
people to them as well (Simon)
E2: There was a good team. It thrives on camaraderie, on the fact that all businesses had more or less
the same problems, regardless of the industry. Solidarity issues. We were all able to share our
difficulties, we worked privately and publicly with each other. Everything was confidential. People
felt very comfortable (Dan)
E3: And I find most of these things happen . . . you know youre having a few beers and a chat, you
get the interaction . . . you generally discuss these things over a few beers and you get the right
answers. I learned as much if not more in the evenings than in the classroom. In a classroom, you
dont get the same view on it. You might not get the same answers in the classroom. Further down
Development of Entrepreneurial Leadership
in the course, the guys were more relaxed they dont open up as much at the beginning (Bob)
E4: Common sense isnt common you know . . . you can pick it up if you are comfortable in that
environment . . . in this classroom environment, really what it is doing is poking me, saying admit
to your failings, admit why you didnt do this, speak to these people etc, if you were open enough
at that point, youre taking that poking home with you to sort of say, right, I need to move and
its very difficult to move from your normal zone into doing something that wasnt coming
naturally in the first place and I think you have to keep working at that. Its all common sense but
you dont capitalize on common sense as much as you should, when you should, but you do need
an environment of like-minded people who are in the same lack of confidence to keep pushing
yourself to do something different (Dan)
F: Peer-to-other interaction
F1: And I think [the programme leader] managed to hand pick the right people, it was a very close
group. OK, [the programme leader] was not going to pick my local rival, hes got to make sure that
were far apart from each other so that we can share (Dan)
F2: [The programme leader] came here, there was a good chemistry, he had a no nonsense approach
and is a very charming individual (Bob)
F3: Very useful. [The programme leader] is key to the programme. He sees all these different
personalities coming through. He would encourage interaction and you need somebody to do this,
[the programme leader] is good at that (Dan)
F4: He always sat down with us in the evenings to the end of those sessions. That gave him a better
understanding of us too (Tony)
F5: Doing the overnight stuff was very important, we could relax, we could understand each other
better. A bite to eat, something to drink, people opened up. I probably got as much out of these
evenings as the sessions. It opened up debate and arguments (Tony)
F6: The off-topic discussions were very important. Its comforting (Tim)
11
12
of developing relationships, reflected in their sense
of participation in and membership of the group
(Table 6, E1E4). As a result, they reported the
development of higher levels of social cohesion in
terms of their interaction, team spirit and cama-
raderie (Table 6, E2E4). In other words, partici-
pants see the leadership development process as a
way of compensating for the constraints of small
non-specialist management teams. This, in turn,
supports the development of more social capital
and re-emphasizes the ongoing, interactive and
circular nature of social capital development. In
other words, social capital breeds social capital.
This peer-to-peer interaction is complemented
by peer-to-other interaction. In terms of leader-
ship development as social capital, the role of
the programme director seems to be critical.
Indeed, the development of social capital is stimu-
lated by his catalytic role, consciously or uncon-
sciously, orchestrating the composition of the
cohort to maximize the opportunities for interac-
tion, shared learning and the development of trust
and cohesion. This is reinforced throughout the
programme by his presence at the workshop
sessions and informal evening discussions, and
through his ongoing contact with participants
after the programme has finished (Table 6,
F1F6). The fact that he is so involved with the
participants means that he knows them and their
businesses extremely well. This knowledge is used
to stimulate debate and relate theory to each of
the participants and help them transfer it into
practice more easily.
Social capital, therefore, does not develop just
from the interaction among participants in a
group as a process of mutual exchange, but can be
mediated by the overarching bridging social
capital of a group facilitator, in this case the pro-
gramme leader. This role is not dissimilar to the
development of social capital relations described
by Coleman (1988) as primordial: the role of the
programme director in leadership development is
the creation of a defined set of networks and rela-
tions in which close, bounded ties and strong
levels of trust appear to promote a propensity to
share information, ideas, and skills (Field,
Schuller and Baron, 2000, p. 261). By establishing
these boundaries and defining the domain within
which social capital develops, the programme
director is also delineating the extent of the learn-
ing arena (Limerick and Moore, 1991) in which
leadership development occurs. In other words,
British Journal of Management 2012 British Academy of Management.
C. M. Leitch, C. McMullan and R. T. Harrison
the leadercontext nexus, as in Heideggers frame-
work, is more properly construed not simply as
the leader embedded in the context of their entre-
preneurial firm, but as them embedded in a less
formalized context of peer-to-peer and peer-to-
other relationships. Thus, the development of this
reservoir of social capital that transcends the
boundaries of each individual firm provides the
platform for the development of institutional
capital. The implications of this complex interre-
latedness for the development of an institutional
view of capital are now considered.
Entrepreneurial leadership development
as institutional capital
This final section addresses our third research
question: What is the role of social and organi-
zational context in entrepreneurial leadership
development? It is clear for this cohort of entre-
preneurial leaders that the development of social
capital extends beyond their interaction on the
programme itself (Table 7).
Following completion of the programme, this
group decided to reconvene for formal, rather
than social, sessions on a quarterly basis to
provide ongoing peer group support for each
other. These sessions have taken the form of an
organized forum where the leaders share ideas
and learn from each other, with a set agenda and
an appointed coordinator/forum chair, a rotating
role. One of the consequences of this has been the
further development of social cohesion within the
group (Table 7, A2, A6), with particular emphasis
being placed on issues such as confidentiality,
re-motivation, sharing and trust (Table 7,
A3A5). The importance attached to confidenti-
ality and trust during the course was central to
their decision to create this ongoing forum within
which they could share experiences.
From the programme, they realized that they
shared the same problems in the development of
their leadership capabilities and that they could
discuss these and learn from each other (Table 7,
A3, A6). The driver for establishing a regular
forum following the programme was to replicate
the conditions of confidentiality, sharing and
trust. Indeed, it is a means of providing a release
valve for them (Table 7, A4). There was also a
sense that participating in this forum helped them
realize things that they may not have appreciated
2012 The Author(s)
Development of Entrepreneurial Leadership 13

Table 7. Entrepreneurial leadership development as institutional capital

Institutional capital: the context for leadership development

A1: Its interesting to hear the craic, but I always pick up something from it (Tony)
A2: I think it is important to keep in touch with people. I think it needs to have a structure. It needs to be like a board meeting
almost (Ken)
A3: I suppose the confidentiality, from my point of view, I had no intention to do the course, I wanted to get the staff to do
what I wanted and to get them motivated . . . I think from the first session . . . she [the facilitator of that session] got us to
open up on the first day and it was very clear that it was a confidential thing, that all of us had similar problems but hadnt
discussed, as there was no forum for us to share (Peter)
A4: I think everybody needs a release valve, I find it helps considerably . . . I think the fact that we knew we had the same
problems and we were able to air them, I know the confidentiality was there, thats been a big plus and obviously weve been
able to feed off each other and throw ideas into the hat for each other (Peter)
A5: I think, it is really useful. It helps re-motivate you. It makes you think things could be worse . . ., it helps you put things
into perspective . . . Senior management is a very lonely place to be. You may not have the confidence to, say, to be honest
with the others. But this group gives you that outlet. Theres this sincerity, you did trust everybody, everybody is confident
that whats discussed within these four walls is confidential (Dan)
A6: We can share things together. It is pretty hard to get that in a group. Ive been involved in a couple of groups . . . and Ive
never had this feeling with the other group. I wouldnt share as much in the other groups. Business functions around people
and people are very important here (Bob)

otherwise and put things in perspective, within a
trust-based environment (Table 7, A5). Without
exception, the leaders were all highly positive
about their relationship as a group. Although
they had no formal contact with each other
outside these meetings, they gained a lot from
them, and preferred to and gained greater value
from meeting in a group situation rather than on
a one-to-one basis. As the programme director
describes it, these leaders are now benefiting from
the board they cannot afford. In other words, for
these participants the opportunity to develop
social capital is significantly enhanced to the
extent that they are able to institutionalize and
formalize the opportunity of developing a peer
support community. The development of this
forum as a social institution appears to be funda-
mental to their ability to realize their aims and
expectations from the programme, and to address
the challenges of developing their leadership at a
critical juncture in the growth of their business
(Phelps, Adams and Besant, 2007). Reflecting the
constraints on leadership in entrepreneurial ven-
tures (Table 1), the establishment of this commu-
nity has provided a hitherto unavailable forum
for sharing experience (Table 7, A3), which rede-
fines how these leaders feel at home in and relate
to the world.
Accordingly, even by understanding the devel-
opment of social capital in this context, this does
not provide a full account of the process of entre-
preneurial leadership development through
executive education programmes. A key resource
for entrepreneurial leadership development ap-
pears to be strong institutional development,
where we define institutions as organizations or
associations, in a more restrictive sense than the
new institutionalism definition as sets of rules or
the rational choice definition of institutions as
sets of rules within organizations (Bunce, 1999;
Thelen, 2004). It is important for entrepreneurial
firms to be part of cohesive network structures
(Hite and Hesterly, 2001), not least because cohe-
sion is associated with performance (Aarstad,
Haugland and Greve, 2010), and networking and
political skill are important moderators in this
(Blickle, Wendel and Ferris 2010; Blickle et al.,
2009; Prieto, 2010). This is also vital to address
the attenuated leadership and management struc-
tures within the entrepreneurial firm which, while
they provide the context for the enactment of
leadership, appear not to provide a full context
for its development.
On this basis, it is therefore possible that an
individual lacking social capital may gain spillo-
ver effects through cohesion from a colleague
better endowed with social capital. This can be
extended, following Salanick (1995, p. 348), into a
network theory of organization which describes
how structures of interactions enable coordi-
nated interaction to achieve collective and indi-
vidual interests. Social capital is a relational
phenomenon which, as we have argued above, is
primarily understood as something that belongs
or attaches to the individual. However, our
research also suggests that social capital can be

2012 The Author(s)

British Journal of Management 2012 British Academy of Management.
14
understood as a collective property which requires
us to move beyond previous studies of it as an
actor-level characteristic and at the dyadic level of
analysis (Aarstad, Haugland and Greve, 2010).
The very notion of social capital has, of course,
been subject to criticism on the basis of concep-
tual incoherence among others (Fine, 2010).
Indeed, some have asked whether it is time to
divest ourselves of stock in the social capital
concept, but have rejected this on the proviso that
the context-dependent and social structural/
relational approaches of Bourdieu and Coleman
are adopted (Foley, Edwards and Diani, 2001, p.
274). Based on the analysis in this paper, we
suggest that the context-dependent and relational
approach to social capital as a collective property
can be understood as being embedded in a
broader notion of institutional capital. This can
be defined as comprising institutions (in terms of
both organizations or associations and the rules
of the game in society: North, 1990), institutional
governance (organizational structures that create
and enforce the rules of the game) and more
general governance structures (structures that
effectively reduce uncertainty and stimulate adap-
tive efficiency) (Platje, 2008).
The ongoing leadership development process in
which our participants are engaged appears to be
developing the characteristics of institutional
capital. The regular meetings now constitute an
institution, in terms of being governed by a set of
rules and norms that are accepted by all the
members. There are emerging strong organiza-
tional structures, in terms of agendas and proce-
dures, which provide institutional governance
through which the rules of the game are created
and enforced. Finally, the institutional capital and
the more general governance structures that
encourage sharing, collaboration and learning
provide a means for participants to reduce their
uncertainty in their leadership role and improve
their capacity to adapt to changing circumstances
(Debrulle, Maes and Sels, 2010). In other words,
the emergence of a strong resilient institution that
can provide space and support for its members
becomes an alternative resource for problem-
solving which can complement or provide an alter-
native to social capital (Anderson, 2010, p. 18).
In terms of this relationship between social
capital and a broader view of institutional capital
there are two perspectives. First, social capital
(and the development on that basis of social trust)
British Journal of Management 2012 British Academy of Management.
C. M. Leitch, C. McMullan and R. T. Harrison
is essential for the development of institutional
capital (Putnam, 2000); that is, strong social
capital will develop strong institutions by virtue
of the fact that individuals have already learned
to cooperate (Anderson, 2010, p. 271). Second,
institutionalization is necessary for the emergence
of social capital and the creation of a capacity to
cooperate (see, for example, Huntington, 1968).
Accordingly, the creation of institutional capital
can itself help create trust and build social capital.
However, it remains the case that the question of
exactly how the presence of strong social . . .
capital can help institutions to develop and vice
versa remains an unanswered question (Ander-
son, 2010, p. 271: Fukuyama, 2002).
This study has suggested that there is a place in
entrepreneurial leadership development for social
capital that goes beyond the enhancement of the
human capital stock of the individual leaders. The
emerging role of institutional capital in further
supporting this has also emerged. What is not yet
apparent though, and requires further detailed
longitudinal research, is the dynamic interplay
between social capital and institutional capital,
and the extent to which the development of entre-
preneurial leadership contributes to addressing
the significant challenges facing businesses at a
critical stage in their growth (Kempster and Cope,
2010; Phelps, Adams and Besant, 2007). As such,
this will require research focused on systemati-
cally identifying the impact of entrepreneurial
leadership development initiatives on the indi-
viduals and the companies they lead (Leitch,
McMullan and Harrison, 2009). In this case at
least, the emergence of institutional capital seems
to be based on the development of a strong plat-
form of social capital, and this, in turn, is associ-
ated with a strengthening of that social capital.
Conclusion
In this paper, we have examined how entrepre-
neurial leadership development can be seen as a
social process and the role of social capital in this.
We have done so in the specific context of the lived
experience of entrepreneurial leadership develop-
ment in a cohort of leaders in growing small busi-
nesses facing a major challenge or tipping point in
their development. Thus, we have contributed to
the literature on leadership development in small
entrepreneurial firms (Anderson and Gold, 2009;
2012 The Author(s)
Development of Entrepreneurial Leadership
Leitch, McMullan and Harrison, 2009; Pittaway
et al., 2009; Rae, 2009; Ram and Trehan, 2009;
Smith, 2009; Stewart, 2009). In the context of
an action-learning-based approach to leadership
development, which provides an important vehicle
for the generation, articulation and dispersion of
domain specific knowledge (Enos, Kehrhahn and
Bell, 2003), we have recognized the role of human
capital and social capital in entrepreneurial lead-
ership development. Specifically, entrepreneurial
leadership is a social process, and entrepreneurs
are engaged in the practice of relational learning
derived from active encounters (Burgoyne, 1995;
Taylor and Thorpe, 2004). For Terrion and Ash-
forth (2002), ongoing peer-to-peer interaction
through group members communication with
each other on an executive development pro-
gramme has been identified with the development
of a sense of belonging (communitas) and cohe-
siveness within the group, in other words the devel-
opment of a reservoir of social capital.
This peer-to-peer interaction on such pro-
grammes is associated with the development of
social capital (Terrion, 2006), the personal reserves
which individuals derive from membership of a
group that allows access to others with consider-
able stocks of relevant resources (Bourdieu, 1986),
and the capital that is the property of inter-
personal relationships (Burt, 1992; Coleman
1988). However, reflecting the predominant
emphasis in leadership research on traits, charac-
teristics, behaviours and styles, that is, human
capital, the social capital of leaders is perhaps the
most ignored, under-researched aspect of leader-
ship (Brass and Krackhardt, 1999, p. 180; McCa-
llum and OConnell, 2009). This is especially true
in the study of entrepreneurial leadership in the
smaller firm, where the human and social capital
aspects of development are far less well under-
stood, yet . . . it is these that are often critical in
creating the opportunities for organisational
success (Thorpe et al., 2009, p. 201).
What we conclude from this analysis of entre-
preneurial leadership development is that the
primary focus of these leaders at the outset was on
the enhancement of their skills, knowledge and
abilities their human capital. This was largely
based around their understanding of the develop-
ment of their leadership role through their
response to challenges facing the business, chal-
lenges facing them as individuals, management
challenges and the challenge of learning how
2012 The Author(s)
British Journal of Management 2012 British Academy of Management.
15
to lead (Kempster and Cope, 2010). In practice
this human capital enhancement only occurred
through the development of their social capital. In
this, a central role was played by the development
of peer-to-peer interaction and trust-building
within the group as well as peer-to-other interac-
tion based around the role of the programme
director. While we acknowledge that there is a
potential tension between human and social
capital theoretically and pragmatically (Field,
Schuller and Baron, 2000), they cannot in practice
be discussed separately. In the specific context
analysed in this paper, leadership development
inevitably shows in the enhancement of the skills
and abilities of the leader; leadership develop-
ment, in turn, requires and relies on a social
capital-based leadership development process.
Beyond this, however, the context for leader-
ship development in the entrepreneurial domain
requires the development of institutional capital
formal structures and organizations which
enhances the role of social capital. As such, the
development of institutional capital provides the
basis for creating, enhancing and encouraging
horizontal ties among the members, where they
view each other as peers and partners, look toward
each other, build awareness of each other and
consider each other as resources: horizontal ties
among them become part of the strength and
resources of the organisation itself. Members learn
that together they can do things that they would be
unable to do alone (Anderson, 2010, p. 10).
In this paper, we have concentrated on analys-
ing entrepreneurial leadership development in
one specific context, that of businesses and their
leaders facing significant growth and development
challenges. This is, of course, not the only context
within which leadership can be identified and
analysed. Future research on the process of
leadership development could, therefore, take
four directions. First, the concept of institutional
capital and its relationship to theories of human
and social capital could be further explored
as a basis for developing a deeper understanding
of capital as a collective property. Second, this
focus on social and institutional capital outside
the organization could be complemented with
a similar analysis of the dynamic relation-
ships underlying leadership within each specific
company, which could take full account of the
firm-specific constraints and facilitators. Third,
our analysis of leadership development in an
16
entrepreneurial, rather than corporate, context
could be complemented by a more disaggregated
consideration of the role of the entrepreneurial
leader and of leadership development in different
types and stages of entrepreneurial businesses.
This would address Vecchios (2003, p. 322) call
for the integration of the dynamic process aspects
of entrepreneurial activity (from pre-launch
through exit) . . . with individual and contextual
factors when attempting to explain entrepre-
neurial activity and success. Finally, while this
research has been based on the study of entrepre-
neurial leadership development, there is scope to
investigate the dynamic interrelationship between
social capital and institutional capital in other
organizational contexts. Only in developing these
insights will it be possible to obtain a full under-
standing of the everydayness of entrepreneurial
leadership development across all relevant
domains.
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 20 C. M. Leitch, C. McMullan and R. T. Harrison

Claire Leitch is a Senior Lecturer at Queens University Management School, Belfast. The focus of
her research is individual and organizational development, enhancement and growth within an
entrepreneurial context. Specifically, she is interested in the dynamics of leader and leadership
development in the process of organizational transformation. As such, she is also concerned about
the future of executive education and the role which universities might play in this.

Christel McMullan is currently a researcher in the Institute of Nursing Research, University of

Ulster. She previously was a Research Fellow at Queens University Management School, Belfast,
where she investigated issues of leadership development and entrepreneurial leadership, using quali-
tative research methods. Her professional experience includes social and health sciences research,
qualitative research methods and computer-aided qualitative data analysis software.

Richard Harrison is Director of the Leadership Institute at Queens University Management School,
Belfast, where he was previously Dean. His recent research interests cover the investigation of
learning and leadership processes in entrepreneurial contexts, the formation and exploitation of
capital (financial, human, social, intellectual and institutional) in entrepreneurial ventures, and
sustainable enterprise in emerging economies.

2012 The Author(s)

British Journal of Management 2012 British Academy of Management.

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