Frontiers of Entrepreneurship Research
1997 Edition


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1Inger Boyett
2Mark Casson
3Donald Finlay

1School of Management & Finance
University of Nottingham
Nottingham NG7 2RD, UK

2University of Reading
Department of Economics
Reading RG6 6AA, UK

3 Coventry Business School
Coventry University
Priory Street
Coventry CV1 5FB

Telephones: 44-1734-875123, 44-1159-515486, 44-1203-838474
Faxes: 44-1734-750236, 44-1159-515503, 44-1203-838400

Principal Topics

This paper analyses factors governing the success of public sector organizations in adapting to change through the entrepreneurial activity of the leader.  It takes a general model of leadership in business organizations,  develops it to accommodate the special characteristics of the sector and applies it initially to the education area.  The general model is unusual in being constructed as a model of rational action.  The model encompasses three levels of integrated activity; the stakeholder environment, the entrepreneur and the followers within the organization.

A key feature is that each level can control the preferences, and hence the behavior, of the next through moral rhetoric.  Under certain conditions moral rhetoric is more cost-effective that pecuniary incentives.  These conditions are generally both satisfied and maximized in the public sector. The success of the entrepreneur as the central pivot within the model's relationships is determined by the availability of these qualities.  This prediction has been tested on a pilot sample of head teachers in English schools.


The model is crafted around a simple input/output linear relationship made up of three inter-relating parts. The central core is the potential entrepreneur? The school head teacher, the hospital manager or perhaps prison governor. Upstream lies the Stakeholder Environment, encompassing both micro and macro players providing the inputs to the process. Whilst, downstream are the followers within the organization, those individuals and groups which the potential entrepreneur leads and co-ordinates to achieve his/her desired outputs.

Within each area qualities of activity have been determined. Some generic to entrepreneurial activity in both the business and public sector, others specific to public sector entrepreneurship. The inter-relationship of the identified variables is explored, with particular focus on those unique to the public sector. A pilot testing of the model was undertaken in the English schools sector. From the Ofsted inspection and audit lists three of the particularly successful and three of the failing schools were chosen for trial application. Each school was visited and a structured interview undertaken with the head teacher and followers. The results were analyzed and compared.

Major Findings

The results of the pilot testing support the theory, provide a better understanding of the possible 'entrepreneurial profit' available in non-profit organizations and suggest new avenues for further research.


Recommendations are made as to how organizational culture development, environmental structures and policy decisions can maximize or constrain successful entrepreneurial activity in the public sector. This has implications not only for the entrepreneur and organization, but also those responsible for the policy determining methods of delivery and output monitoring.

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