Embodying Authentic Leadership in Nascent Entrepreneurship for Sustainable Success


Authentic leadership has emerged as a positive leadership approach that stimulates psychological and ethical safety in the work environment to enhance organizational outcomes. Grounded on authentic leadership and the three- factor model, the purpose of this study was to develop a fuller understanding of authentic leadership from the lived experiences of nascent entrepreneurs. Applying the phenomenological research method, we explored the lived experiences of 10 founder-CEOs of Information Technology startups. The data collection instruments were semistructured interview questions and field notes reflective of the overarching research question: “What are nascent entrepreneurs’ lived experiences and understanding of authentic leadership?” Our research findings indicated that nascent entrepreneurs employ unbiased information sharing, relational openness and transparency, values-centered leadership, people-oriented leadership, and the development of a learning culture as key success strategies in their leadership approach. From a practical standpoint, this study’s findings may help scholars and practitioners develop entrepreneurial leadership policies and programs based on authenticity to improve individual and organizational performance. The key recommendations for further research include exploring authentic leadership across other economic sectors using a more integrative process that recognizes followers as active contributors to entrepreneurial leadership success. The study’s implication for positive social change includes potential authentic leadership strategies for successful entrepreneurship and business practices that could enhance venture outcomes, growth, and sustainability.

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Mukhwana, C. and Levasseur, R. (2023) Embodying Authentic Leadership in Nascent Entrepreneurship for Sustainable Success. Open Journal of Business and Management, 11, 1417-1439. doi: 10.4236/ojbm.2023.114078.

1. Introduction

Leaders in today’s dynamic and changing environment contribute immensely to shaping organizational conditions by promoting innovative practices and reducing uncertainty. In the last decade, the entrepreneurial ecosystem has rapidly scaled up to create new opportunities, particularly in the tech and digitally-enabled stratum, spurring employment opportunities for the youths, to sustain local and global economies (Cucino et al., 2021; Mafimisebi & Ogunsade, 2021) . The global unemployment problem has equally necessitated a boost in entrepreneurial activities to create job opportunities, with entrepreneurship seen as the panacea for solving slow economic growth and persistently high unemployment rate (Ikebuaku & Dinbado, 2018; Onjewu et al., 2021) .

Entrepreneurship, especially at inception, relies greatly on the founder’s leadership skills to communicate the shared vision and support change and innovation climate. Nascent entrepreneurs are individuals in the initial process of venture start-up efforts instrumental in recognizing new trends in the environment as well as championing the desired course of action (Lanivich et al., 2021) . Leadership is equally essential for project success and setbacks to motivate innovators to move on following adverse situations, and to mitigate the erosion of innovative capacity across the organization (Todt et al., 2019) . In Jones and Crompton’s (2009) view, the success of startups is contingent on the ability of founder-CEOs to use their leadership skills to enhance social capital within their firms. Authentic leadership particularly influences employees’ positive behaviors and attitudes such as creativity, innovation, and organizational commitment (Ribeiro et al., 2019) . Walumbwa et al. (2008) emphasized that authentic leadership instills “greater self-awareness, an internalized moral perspective, balanced processing of information, and relational transparency on the leader-follower dyad, fostering positive self-development” (p. 94).

The remainder of this article consists of nine sections. Section two is a discussion of the background of the research problem. Section three is a presentation of the relevant literature. Section four explains the conceptual framework. Section five outlines the research methodology. Data analysis and presentation of the results are in section six followed by a discussion of the results in section seven. Section eight highlights the practical and theoretical implications, limitations, and recommendations based on the findings of the research study. The final section contains a summary of the conclusions of the study.

2. Background of the Problem

Entrepreneurial activity in digitally-enabled sectors is crucial in creating value and opportunities to address youth unemployment’s global challenges and sustain economic development. In Kenya, the slow growth of formal sector jobs has compelled the youths to either engage in entrepreneurial activities or remain unemployed; with the majority who start businesses lacking prior formal entrepreneurship and leadership training necessary to navigate the highly complex and uncertain context in which startups operate (Huxtable-Thomas et al., 2016; Mafimisebi & Ogunsade, 2021; Muchira, 2018) . As a result, startups face the constant threat of failure, with as high as 60% failing each year while most of the remaining do not survive beyond 3 years after inception (Mwangi & Ngugi, 2014) . The reason is that the success and continuance of new ventures are dependent upon the owners’ decisions—outcomes of their beliefs and values. Given this, startup failure reflects the owner’s failure in reasoning and behavior, which influence aspects such as opportunity assessment, value creation, and expansion (Joseph et al., 2021) .

Although entrepreneurship is not a unique research area as scholars from other domains apply their theories and advance knowledge, there is a need to develop native entrepreneurship theories that distinguish it from other fields. Theorists and practitioners have proven that there is a nexus between leadership and entrepreneurship, and the focus now is on integrating the two to achieve entrepreneurial leadership, a paradigm that is a potential countermeasure to current organizations’ volatile, uncertain, complex, and ambiguous nature (Bagheri & Harrison, 2020) . Entrepreneurial leadership, the process of influencing others through effective communication to recognize opportunities that can create value for stakeholders, is essential for startups (Fontana & Musa, 2017) .

3. Review of the Literature

Technological startups play a vital role in socioeconomic development by escalating the creation of jobs and individual and national wealth and propagating new technology (Jahangir et al., 2018) . Technology is an organizational element that comprises information systems that support people as they carry out their work, communicate, and make decisions. The Global Innovation Index Report (2019) indicated that Nairobi, Kenya’s capital city, is at the heart of East Africa’s technology ecosystem and home to over 90% of IT startups due to its infrastructural development. Considering this, founder-CEOs of IT startups in Kenya could greatly benefit from this research study that sought to provide a comprehensive understanding of authentic leadership. Researchers and practitioners agree that leadership is essential for startups, particularly digital firms, and have extensively explained what constitutes effective leadership in varying contexts (Jones & Crompton, 2009) . However, of the plethora of leadership theories, only a few offer solutions to the leadership challenges presented by globalization, technological advancements, and economic turbulence.

While there is no shortage of advice on how to lead, the validity of this advice varies considerably due to a paucity of a coherent theory among researchers and organizational leaders that predicts success (Latham, 2014; Turner & Baker, 2018) . Besides, the question of what makes leaders effective remains moderately explained and it is uncertain what represents conventional successful leadership strategies for psychological safety whilst motivating the workforce (Kafetzopoulos, 2022) . Armandi et al.’s (2003) and Mello’s (1999) research on leadership theories has centered on components that effectively influence followers to achieve the desired outcomes. These are aspects such as the leader’s behavior, personality traits, work processes, organizational culture, interpersonal relationships, followers’ perception of the leader, and style of leadership, among others. Bolman and Deal (2013) asserted there is no one best way to lead as leaders are more likely to express a leadership style suitable to a particular situation and their relationship with followers. Additionally, the authors argued that a leader’s performance depends on the situation and the degree to which the situation accords them power and influence. Conversely, due to the recent economic crisis and the challenges occasioned by COVID-19 pandemic, there is mounting pressure on leaders to act authentically based on their integrity and moral character, and in alignment with espoused principles and values (Du et al., 2021; Ribeiro et al., 2019) .

Authentic leadership as a concept derives its meaning from ancient Greek philosophers’ timeless admonition of awareness of oneself and exercising self-control (Avolio & Gardner, 2005; Tibbs et al., 2016) . These scholars described authentic leaders as highly virtuous and self-regulated individuals who strive for the utmost moral standards, achievable through self-reflection, self-awareness, training, and leadership development. Moreover, authentic leadership’s quintessence is behavior that pertains to understanding oneself, and departure from such behaviors leads to an inauthentic self. Walumbwa et al. (2008) posited that although authentic leadership theory is in its infancy in terms of conceptual development, it has deep roots in psychology and philosophy and has been used to describe stakeholders’ perceptions of organizational leaders’ values and moral behaviors. The meaning of authenticity was further refined through empirical research and theoretical developments to encompass the advancement of positive behaviors to achieve positive and enduring outcomes.

According to Ford and Harding (2011) , the term authentic leadership was first used by Bass, a leadership scholar, in a discussion to validate the dimensions of transformational leadership theory and claims of authoritarian and narcissistic managers masquerading as transformational leaders. In exploring authentic leadership regarding its purported opposite of pseudo-transformational leadership, Bass and Steidlmeier (1999) argued that the concept rests on legitimate values and a moral foundation, with authentic leaders viewed as agents of morality. In his seminal work, Chester Barnard argued that a leader’s authentic capacity should be used as a measure of executive quality as leadership is the pre-eminence of an individual’s behavior to guide people in an organized effort (Chester, 1938) . Additionally, there is an exigency for future leaders to be competent in the business’s practical elements and at the same time remain thoughtful and introspective in their pursuit of moral excellence (Covelli & Mason, 2017; Schwab & Wolf, 1975) .

Khalili (2017) in his study on creative and innovative leadership applied authentic leadership theory to explain the essence of effective leadership and the impact of change-oriented leaders on organizational processes; arguing that organizations that capitalize on behaviors that enhance individual creativity and innovation can survive the global competitive environment. The concept of authenticity as a critical driver of ethical behavior in the post-Enron era has invoked a resurging interest in authentic leadership, with scholars contending that there is more to this theory than just self-awareness, hence the need to explore it further (Walumbwa et al., 2008) . Moreover, there is consensus among scholars and practitioners that a more authentic leadership approach is necessary in difficult and turbulent times to achieve desired organizational outcomes (Avolio & Gardner, 2005; Du et al., 2021) . Some scholars have argued that authentic leadership originated from transformational leadership and is a root construct underlying other positive leadership forms such as servant, charismatic, and ethical (Costas & Taheri, 2012; Ribeiro et al., 2019) . Although similarities exist among these leadership theories, the researchers highlighted several differences arguing that authentic leaders convey values and principles that advance more open and genuine interactions between leaders and followers in the organization. Du et al. (2021) , Lei et al. (2021) , and Ribeiro et al. (2019) posited that the growing interest in positive leadership forms, including authentic leadership, arose from the upswing in management malfeasance, corporate scandals, and other unethical practices facing private and public organizations. This has intensified calls for leaders who are aware of and exhibit patterns of integrity and transparency, consistent with their values and beliefs. Additionally, research findings have established that an authentic leadership approach is practical for achieving positive organizational outcomes. Ilies et al. (2013) investigated the interconnection between authentic behaviors and emotional expressiveness to explain the influence of leaders’ behavior to internalize values displayed authentically through their emotions toward followers. This concept’s relevance to the research study is that leaders can select effective emotions to influence processes and achieve positive organizational outcomes by understanding the relationship between authentic behaviors and emotional expressiveness.

The recent corporate malfeasance and concerns around unethical executive behavior have increased researchers’ interest in exploring more positive forms of leadership that can restore confidence in governance and promote positive organizational outcomes. Authentic leadership’s underpinning is on the morality and ethics of leaders, and modeling those characteristics to subordinates which could be pivotal in gaining stakeholders’ confidence and achieving desirable employee performance results (Du et al., 2021; Ribeiro et al., 2019) . While scholars have highlighted the nascent stage of entrepreneurship, little scholarly attention has been directed toward understanding authentic leadership characteristics and their contribution to entrepreneurial success. Researchers agree that entrepreneurial behavior is an externality of the person and the environment; hence, the founder-CEOs’ attitudes and behaviors are crucial in instituting a business culture based on the owner’s values and beliefs (Mandhachitara & Allapach, 2017; Noack et al., 2021) . The aforementioned gaps in research form the basis and purpose of this study, to provide a more nuanced understanding of authentic leadership from the lived experiences of founder-CEOs in the technology sector.

4. Conceptual Framework

The conceptual frameworks underpinning this research study were authentic leadership theory and the three-factor model. The authentic leadership model constitutes leadership behavior that espouses positive mental capabilities and a positive ethical climate in the leader-follower dyad (Gatling et al., 2016) . In a meta-analysis to examine authentic leadership behaviors, Miao et al. (2018) articulated the four main dimensions of the theory that foster positive self-development in both the leader and the followers as “self-awareness, relational transparency, internalized moral perspective, and balanced processing of information” (p. 681). This was supported by Ribeiro et al.’s (2019) and Iqbal et al.’s (2020) argument that authentic leaders possess the four aspects that create an open and transparent climate conducive to employees’ growth and fulfillment. Internalized moral perspective denotes a leader’s conformity to moral values and beliefs that set their behaviors and decisions in congruence with internalized values as opposed to societal pressures. This perspective promotes honesty and integrity and could discourage unethical behaviors in the organization. Self-awareness is the degree to which leaders understand their strengths, weaknesses, emotions, values, and beliefs, and how this self-knowledge impresses on others. Balanced processing of information refers to the objective analysis of all relevant data and incorporation of followers’ views before taking a decision; whereas relational transparency is the unbiased presentation of one’s true self to others to build trust and nurture teamwork. Ribeiro et al. further argued that self-awareness, balanced processing of information, and relational transparency are extrospective dimensions that enhance trust and positive interpersonal interactions among followers. Oh et al. (2018) proposed relationship or people-oriented attributes as the fifth dimension of authentic leadership, arguing that authentic leaders are people-oriented, and focus on developing interactive abilities and skills to improve the relationship between them and followers based on authenticity. Sims and Morris (2018) argued that the act of starting a new venture is perceived as an intrinsically motivated and authentic undertaking by the founder-owner and is a strong driver of the leader’s behavior to demonstrate ethical caring.

The three-factor model developed by Beddoes-Jones and Swailes (2015) is based on Novićević et al.’s (2006) conceptualization of authentic leadership’s psychological and physiological factors. According to Beddoes-Jones and Swailes (2015: p. 96) , the factors that define an authentic leader form the model’s three pillars and can be categorized as: “self-awareness, self-regulation, and ethics”. Self-awareness and self-regulation constitute the psychological factors whereas ethical values and successive ethical actions are the philosophical factors. Trust is the foundation of this relational model that is considered the underpinning construct for all positive leadership forms such as transformational, ethical, and servant; modern leadership failure results from leaders lacking in one or more of the three pillars, and the emotional, behavioral, and cognitive traits defined within them. Leaders need to understand their leadership philosophies and the internal compass that successfully guides them through life, as no authentic model is sufficient on its own. This requires an actively reflective process on past, present, and present actions.

5. Research Methodology

In this study, the objective was to provide a more nuanced understanding of authentic leadership behavior from the nascent entrepreneurs’ perspective. The ontological position that guided this research was constructivism, a relativist perspective that presumes reality is relative and results from an individual’s interpretation from their subjective perspective instead of a form of empirical sense-making; whereas the epistemological assumption was that knowledge is constituted by the human experience as lived in everyday life (Burkholder et al., 2020) . Qualitative methodology was the most appropriate inquiry for this constructivist perspective to provide an in-depth understanding of how people experience the world in their everyday lives and the meanings they make from these experiences (Ravitch & Carl, 2021) . To understand the phenomenon of authentic leadership, we adopted hermeneutic phenomenological design, an interpretive perspective grounded in the experience and the meanings that people make from those experiences (Laverty, 2003; Vagle, 2018) .

Using purposive convenience sampling, we identified and recruited 15 participants from a group of entrepreneurs between 18 and 29 years, with at least 2 years of experience in technology startups, and who were readily available to participate in the research study. Purposive convenience sampling is the selection of participants who meet certain characteristics and are also available to participate (Burkholder et al., 2020) . The data collection instruments were semistructured interview questions and field notes reflective of the overarching research question “What are nascent entrepreneurs’ lived experiences and understanding of authentic leadership?” Ravitch and Carl (2021) contended that the primary data collection technique for phenomenological studies is an interview; a view shared by Vagle (2018) who asserted that researchers use interviews as the primary data collection instruments in phenomenological studies to move from the natural conversation to the phenomenological space. To capture the lived experiences of authentic leaders and understand the phenomenon, we based the interview questions on the dimensions of the authentic leadership framework: self-awareness, balanced processing of information, relational transparency, and internalized moral perspective; and the three-factor model that articulates characteristics of authentic leadership as cognitive, emotional, and behavioral traits built on the foundation of trust.

We proposed to interview 15 participants as recommended by Burkholder et al. (2020) and Smith et al. (2009) as a suitable sample size to generate a detailed account of individual experience in interpretive phenomenology. However, we reached data saturation at 10, based on the constant comparison method and the lack of emergence of any new themes. The participants received the interview protocol synopsis one month before the interview date to allow ample time to reflect and understand the questions. All the participants opted for an online interview that lasted for about an hour and entailed answering nine interview questions purposely selected to ensure standardization while allowing interviewees to tell their stories in their own fashion. We used a digital audio recorder to record the interviews for transcription purposes. Transcription was subsequently followed by member checking, a technique to assess the accuracy with which the researcher has presented the participants’ data and which also allows the participant to interrogate initial findings from the study (Ravitch & Carl, 2021) . Table 1 shows the demographics (age, gender, number of years in business, and level of education) of the 10 IT founder-CEOs who participated in the study.

The phenomenological thematic analysis involved the co-construction of data with the participants through the hermeneutic circle to unearth themes and concepts. The hermeneutic circle is a concept of continuous interpretation of the text within the context of the phenomenon (Vagle, 2018 ). In analyzing the qualitative data from the transcribed interviews, notes, and reflective memos, we employed the constant comparison method to generate patterns, categories, themes, concepts, and assertions as recommended by Saldana (2016) , using two main approaches: 1) hermeneutic phenomenology (Van Manen, 2016) and 2) Burkholder et al.’s (2020) recommended approach of open, axial, and selective coding. Hermeneutic phenomenology is a method of investigating a phenomenon

Table 1. Demographics of study participants.

Source: Authors’ compilation.

with the realization that insights happen through reflective interrogation, musing, and obsession, with the meanings derived from lived experiences (Van Manen, 2016) . The three approaches to hermeneutic phenomenology are: wholistic, selective, and detailed. Wholistic involves examining the whole interview transcript to identify “catchy phrases” while selective is scrutinizing individual paragraphs, which then culminates in a detailed assessment of individual sentences to uncover meanings embodied in the lived experiences (Van Manen, 2016) . In Burkholder et al.’s open coding, a participant’s transcript is examined to identify emerging themes, followed by an iterative process that entails identifying interconnections between transcripts, and finally, the selective coding which involves synthesizing the previous phases to develop a comprehensive statement of findings from the lived experiences. The final stage of analysis and coding in both approaches served to identify themes that provided a deeper understanding of founder-CEOs’ experiences regarding authentic leadership.

6. Results

The data collection process entailed transcription of the recorded interviews into text, which generated a word-for-word rendition of the interview responses for each participant. Five major recurring themes emerged as a result of the analysis of the study data collected from the 10 study participants.

6.1. Theme 1: Unbiased Information Sharing

All the participants mentioned that unbiased information sharing was a key leadership strategy to achieve positive outcomes. Balanced information sharing entails communicating all relevant information to enhance decision-making at the various levels of the organization. The participants mentioned that a proper flow of information across all functions by sharing all relevant information with stakeholders helps build trust. Additionally, aligning communication and transparency is an essential leadership behavior and a means of preserving organizational values. A transparent flow of information on a need-to-know basis helps create an enabling culture and empowers employees to achieve their individual goals as they work toward the organizational goals. Besides sharing all relevant information with employees, the participants avoid overburdening them with irrelevant information. This finding supported Agote et al.’s (2016) and Iqbal et al.’s (2020) research that authentic leaders share information in their possession and consider all relevant information from a vast pool before making decisions in their organizations; an act that employees and external shareholders perceive as fair and inclusive. Similarly, Jones and Crompton’s (2009) argued that authentic leaders prioritize data analyses before making decisions to enhance the quality of the decision and improve the organization’s performance through fair information sharing, which also creates an environment that enhances trust, value-addition, problem-solving, and innovation, critical for entrepreneurial success.

6.2. Theme 2: Relational Openness and Transparency

All the participants responded that relationship openness and transparency help disseminate information and communicate employees’ job expectations. A transparent relationship with employees is also essential in clearly communicating the organization’s vision and goals and setting job expectations. In contrast, a lack of transparency in the leader-and-follower relationship causes mistrust and dysfunctional teams, destabilizing the organization. Iqbal et al. (2020) posited that relational transparency, an aspect of authentic leadership boosts trust and cooperation necessary for team collaboration and subsequent business success. Additionally, possessing credence that inculcates optimism, trust, and hope in employees fosters organizational performance. According to the participants, trust is the key pillar and enabler of transparent relationships. Further, robust communication systems that enhance decision-making and information sharing, coupled with honesty, can help founder-CEOs build trust in their business relationships and propel the firm toward success. One participant stated that trust is essential in building lasting relationships with stakeholders and adopting strategies that maintain high moral values such as honesty, integrity, and being true and consistent (i.e., authentic) can strengthen shareholders’ trust and help achieve business success. The participants’ views are consistent with Beddoes-Jones and Swailes’ (2015) three-factor model that outlines three traits—cognitive, emotional, and behavioral—that influence leaders’ values and beliefs, the lack of which could result in leadership failure.

6.3. Theme 3: Values-Centered Leadership

All the participants viewed leadership that emphasizes positive morals as a critical strategy for achieving business success. They demonstrated that aligning a leader’s moral convictions with the organization’s stipulated moral values promotes successful and authentic leadership in line with Novićević et al. (2006) and Badaracco’s (2014) argument that effective leadership is increasingly revolving around the dimensions of moral courage, honesty, and a deep sense of personal identity. Similarly, Walumbwa et al. (2008) argued that an internalized moral perspective condition authentic leader to act based on their values, strength, and beliefs, thus helping employees achieve a higher level of well-being that enhances organizational performance. In concurrence, Lei et al. (2021) posited that authentic leaders are transparent and consistent in their disclosure and enactment of motives, personal values, and beliefs.

The participants’ views are also in alignment with Yadav and Dixit’s (2017) argument that ethics and morality are increasingly becoming guiding principles for leaders who need to assert themselves as honest and trustworthy due to the recent surge in corporate scandals and malfeasance. Du et al. (2021) contended that organizational stakeholders now require leaders to be consistent in their espoused values and beliefs to raise a crop of authentic leaders, well-equipped to handle the challenges occasioned by the COVID-19 pandemic and global inflation. Walumbwa et al. (2008) added that an authentic individual makes an authentic leader; so, in essence, leadership is about the leader’s deeply held values and beliefs in congruence with their actions.

6.4. Theme 4: People-Oriented Leadership

As all participants mentioned, being “other-people oriented” and altruistic is essential leadership credence to boost business success. Two participants emphasized the need to prioritize employees over customers, arguing that contented employees will care for the customers and the business overall. In their argument, they contended that a people-oriented strategy helps build strong teams and spur higher job commitment among employees who will subsequently deliver higher value to the organization. Another participant added that developing a solid working relationship with stakeholders is essential to create a positive working environment for employees to learn and improve through coaching and mentorship. Further, working with people entails exercising patience, resolving misunderstandings, and developing a work culture that promotes shared responsibility with employees and clients. Yet another participant emphasized the importance of “valuing” employees, empathizing, and celebrating their wins. This study’s findings align with Jones and Crompton’s (2009) research that authentic leaders recognize that employees are key stakeholders and are keen to involve them in developing new products and services. Such leaders encourage employees to develop their strengths through positive influence and role-modeling, fostering organizational commitment. Moreover, Du et al. (2021) postulated that a positive leader-member exchange is a crucial precursor for positive employee performance results such as work engagement and organizational commitment. The dimensions of authentic leadership, namely relational transparency and internalized moral perspective, influence the positive leader-member dyad directly, whereas self-awareness and balanced processing of information have an indirect effect on the relationship, particularly in environments that require team collaboration.

6.5. Theme 5: Learning Culture

Nine of the participants identified that developing a learning culture is a critical leadership strategy to enhance organizational members’ skills through knowledge sharing and learning new aspects that ameliorate adaptability and innovation. Entrepreneurial learning is essential for nascent entrepreneurs particularly in the formation phase to evolve a complete understanding of the leader’s actions and strategies for firm success (Kubberod et al., 2020) . The participants recognized that leadership is a work in progress, with numerous learning lessons. It is imperative to understand team members’ strengths and weaknesses and hone their skills through accelerator programs to improve service delivery. In addition, participants observed that learning is particularly crucial in tackling new and turbulent situations, creating an environment where the team members can learn from their own mistakes, strengths, and capabilities. This view is supported by Cucino et al.’s (2021) research that entrepreneurial leadership is especially important in volatile and uncertain environments to recognize emerging opportunities and drive innovation and expansion. In the participants’ view, ensuring organizational fit by having the right people in the team who positively embrace challenges to develop their problem-solving skills and, subsequently, organizational culture enhances learning. The participant adapts guidance and coaching to provide continuous learning and create an environment that motivates employees to be more engaged and committed to their work, engendering positive organizational outcomes such as innovation and creativity. Delić et al. (2017) concurred with this view that authentic leaders positively affect employees, encouraging them to improve continuously, acquire new skills, and adopt a learning culture.

7. Discussion

The findings in this study comprise four main strategies derived from the emergent themes that founder-CEOs adapt to achieve positive venture outcomes and are consistent with extant literature and research findings on authentic leadership. This study’s key results represent the understanding and lived experiences of the participants, revealing that the participants adopt transparent communication, values-based leadership, people-oriented leadership, and business agility in their ventures to achieve success. Transparent communication through unbiased information sharing and transparent relationships is essential strategies to achieve positive organizational outcomes such as innovation, job satisfaction, and employee commitment. Unbiased information sharing is the process of carefully and objectively balancing all relevant information to arrive at a “fair” decision. On the other hand, relational transparency is a conscious process of self-disclosure that involves expressing one’s true self and authentic thoughts and feelings to followers to develop trust that enhances leader-follower dyads (Feng et al., 2018) . The study’s findings also revealed that participants considered a transparent relationship essential to achieve business success. Effective leaders understand that committed followers are critical in achieving business success and hence focus on building social exchange relationships through transparent communication (Iqbal et al., 2020; Monzani et al., 2014) . In addition, a genuine and open relationship with organizational members is likely to enhance organizational outcomes such as employees’ creativity, affective commitment, and organizational performance (Lei et al., 2021; Semedo et al., 2016) .

Founder-CEOs of IT startups who participated emphasized they are self-regulated, anchored by their deep-rooted beliefs and values to make a difference by pursuing opportunities that solve societal problems. This result supports the findings of several studies included in the literature review. Leavy (2016) observed that a leader unsure of his fundamental values, purpose, and sense of self-leadership is in a precarious position to resist external pressures and is more likely to compromise his or her values for short-term gains. Authentic leaders convey principles and values that promote transparent interactions between leaders and followers in the organization. Moreover, an authentic leader’s behavior can influence followers to internalize the principles and values they display (Du et al., 2021; Ilies et al., 2013) . In contrast, this study’s result contradicts Alvesson and Einola’s (2019) and Nyberg and Sveningsson’s (2014) findings that possessing high moral and ethical values is unattainable, and leaders who claim to act authentically could be inviting narcissism. Further, the authors claimed that organizations operate in a culturally dynamic environment as such, leaders cannot consistently act authentically and uphold morality. Kafetzopoulos (2022) proposed ambidextrous leadership due to the ambidexterity of 21st-century organizations and the workforce. The author argued that leading with flexibility and sensitivity to the employee’s well-being, and in congruence with the organizational goals creates a positive psychological environment that in turn enhances creativity and innovation.

In line with values-based leadership, nascent entrepreneurs are also purpose-driven in leading their organizations to achieve entrepreneurial success. This result aligned with Badaracco’s (2014) research finding that although rules and processes are essential, authentic leaders focus more on aligning the organization’s mission and values and motivating employees to lead. They operate more in pursuit of the greater good for society and less in their interests and those of short-term stakeholders. In concurrence, Schoemaker et al. (2018) argued that entrepreneurial leaders aspire to make a difference globally, are purpose-driven, and feel a sense of stewardship, particularly in turbulent times that inspires a sense of commitment to keep the organization afloat.

People-oriented leadership resulted from the analysis and interpretation of data collected, which captured the lived experiences and perspectives of founder-CEOs based on the authentic leadership model. The founder-CEOs are people-oriented as they care deeply about their followers’ welfare, value teamwork, and ensure that employees are motivated to enhance productivity and attain entrepreneurial success. This finding supported Oh et al.’s (2018) proposal of including the people-oriented aspect as the fifth dimension of authentic leadership, arguing that authentic leaders focus on developing their interactive abilities and skills to improve their relationships with followers. Jones and Crompton’s (2009) study finding established that authentic leaders recognize that employees are key stakeholders and involve them in new products and services development. Further, the leaders promote psychological safety resulting in intrinsic motivation for followers thus advancing organizational outcomes such as innovation, efficiency, and enhanced job commitment (Du et al., 2021; Liu et al., 2018) . The theme also supports Beddoes-Jones and Swailes’s (2015) argument that authentic leaders value interactions with people and consider trust fundamental in enhancing relationships.

Business agility is the ability of an organization to rapidly change and adapt to new environments in a swift but flexible manner, and this encompasses future orientation and organizational learning (Couto et al., 2015) . The participants in this study employ a learning culture as a key strategy to achieve success in their businesses. Learning entails viewing success and failures as the provenance of vital insight, embracing and encouraging employees to share feedback, and staying agile to quickly correct any eventualities that could cause failure (Schoemaker et al., 2018) . It is also the ability to draw lessons from situations and experiences, which begins with self-awareness and develops further through interpersonal relationships. A leader high on learning agility could succeed even in turbulent and dynamic environments and create the relevant condition for adopting and edifying the shared basic assumptions learned, with new employees (Yadav & Dixit, 2017) . Mododchik and Jardon (2015) contended that leaders of organizations that facilitate a learning culture are agile, innovative, and proactive in embracing continuous learning and improvement. Founder-CEOs of IT startups can adopt continuous learning and learning culture in response to challenges posed by globalization, technological changes, shifting customer needs, and the high degree of uncertainty in the IT sector. Ugoani (2015) posited that firm survival and success depend on innovation, flexibility, adaptability, and continuous organizational change. Dimensions of authentic leadership such as self-awareness, balanced information sharing, and relational transparency allow a leader to deal with the future effectively. This study’s findings supported Gill and Caza’s (2018) research that suggested authentic leaders are change-oriented, adaptable, and possess several distinct behaviors that eliminate negative emotions such as fear, anxiety, and general discomfort in new and challenging environments. The negative emotions are then replaced with a positive psychological environment that fosters creativity and innovation among followers.

Like Jones and Crompton’s (2009) , Lei et al.’s (2021) , and Walumbwa et al.’s (2008) findings, this study’s findings that transparent communication, values-based leadership, people-oriented leadership, and business agility are essential strategies for nascent entrepreneurs informed the research problem and confirmed the essentiality of authentic leadership behavior in IT startups in promoting a positive psychological and ethical environment that enhances continuity and success. The findings also support Mafimisebi and Ogunsade’s (2021) view that augmenting entrepreneurship in tech-enabled sectors is essential for generating job opportunities for the youth to sustain national and global economic development and Nair et al.’s (2021) research that stakeholders require that leaders generate profits, guide the organization from a moral and ethical perspective, as well as evolve authentic followers.

8. Implications, Limitations, and Recommendations

8.1. Implications

This study supports critical practical implications in the technology sector within Kenya. The study’s findings confirm that authentic leaders play a crucial role in enhancing organizational outcomes, such as creativity, innovation, job commitment, job resourcefulness, and organizational commitment (Xu et al., 2017) , and employees’ effectiveness by promoting a positive ethical and psychological climate (Iqbal et al., 2020; Walumbwa et al., 2008) . From a practical standpoint, these findings may help policymakers, scholarly communities, and practitioners develop policies and entrepreneurial leadership programs to improve individual and organizational performance. One way to minimize new venture failures is to foster employees’ creativity and innovation by creating psychological safety and an ethical environment.

The study’s results may contribute to developing and adapting authentic leadership theory to promote an ethical climate that fosters positive self-development among nascent entrepreneurs. By focusing on positive achievements, founder-CEOs of new ventures with authentic leadership behaviors promote trust, enhancing emotional safety and creativity among employees (Xu et al., 2017) . The study’s contribution to theory is in response to Semedo et al.’s (2016) recommendation to explore newer forms of leadership theories such as authentic leadership and Walumbwa et al.’s (2008) assertion that research studies on leadership with an authentic approach are still scarce despite the approach being beneficial in promoting a positive psychological and ethical climate. Hence, the study’s results may be vital in developing creative and innovative leadership behaviors within new ventures, thus enhancing theory.

The study findings have methodological implications as recommended by Jahangir et al. (2018) that due to entrepreneurship dynamism, it is essential to adopt the qualitative phenomenological method to understand the meanings from the participants’ lived experiences. The few published qualitative studies on authentic entrepreneurial leadership mainly use sample data. Thus, exploring nascent entrepreneurs’ lived experiences through semistructured interviews offers an in-depth account of authentic leadership behavior from the meanings of their everyday existence rather than merely describing their perspective.

The findings of this research also suggest potential implications for social change. This research makes a significant contribution by way of enhancing the understanding of founder-CEOs’ best practices and strategies to manage their businesses and minimize failure. Identifying essential competencies and strategies could help nascent entrepreneurs boost growth and venture outcomes. Another implication for social change is in light of entrepreneurship’s potential benefits and subsequent government efforts to stimulate entrepreneurial activities through intervention programs. The government’s efforts to promote entrepreneurial activities and reduce trade barriers include strengthening enterprise management through training (Robb et al., 2014) . Exploring startup founders’ leadership behaviors may help governments conduct effective interventions to improve entrepreneurial leadership and business practices that enhance firms’ outcomes, growth, and sustainability (Khalili, 2017) . The outcome of successful interventions could be a positive social change for individual entrepreneurs, organizations, and communities.

The formal sector cannot generate adequate jobs for the vast number of youths joining the job market. Hence, startups’ growth and survival may benefit youths in gaining meaningful employment and reducing social problems engendered by unemployment. Developing entrepreneurial skills enhances economic growth by creating jobs that help minimize lost revenue from indirect taxes—health costs due to drug abuse and inadequate health care and insecurity occasioned by crimes, especially in urban centers (Nafukho & Machuma, 2010; Onjewu et al., 2021) . Reducing the unemployment rate could improve individuals’ livelihoods and boost local and national economies.

8.2. Limitations

This study was not free of limitations. Hence, further research is warranted to discover more knowledge regarding authentic leadership in nascent entrepreneurship. The first limitation concerns the generalizability of the results as the participants were founder-CEOs of tech startups based in Kenya. The findings do not directly apply to other settings in terms of statistical generalization from a positivist approach. In contrast, from a constructivist viewpoint, the intensity of the study and the potentially informed nature of the findings makes it particularly suitable for application in similar settings. The primary goal of this study was to produce a deep, rich, contextualized understanding of nascent entrepreneurs’ lived experiences through the in-depth study of a phenomenon that may not be unique to this setting. By applying rigorous analysis and interpretation, combined with the use of confirmatory strategies that address the credibility of the results, the researchers reached inductive generalizations regarding the phenomenon under study (Carminati, 2018; Polit & Beck, 2010) . To further understand the phenomenon, research needs to be conducted in different industry settings to examine the general applicability of the present findings since the leadership problem affects other business sectors as well. Second, this study’s focus was to understand authentic leadership from the founder-CEOs’ perspectives and lived experiences, as a predictor of entrepreneurial success. Future research should explore other forms of leadership and their effect on entrepreneurial success. Third, although we ensured confidentiality in the data collection phase to encourage participants to share their experiences candidly (Simon & Goes, 2013) , the findings of the study were based on 10 participants’ lived experiences; a sample size that is negligible compared to the population of nascent entrepreneurs. Lastly, through this research, we sought to understand authentic leadership from founder-CEOs’ experiences and perspectives. Future research may consider the followers’ perspective, to explore their views on their leaders, and whether they consider them to have an authentic leadership style.

8.3. Recommendations

New technology-based ventures face complexities and uncertainty, particularly in the formative stages. This study demonstrated that transparent communication, values-based leadership, people-oriented leadership, and business agility are vital strategies that participants use to achieve business success. Founder-CEOs could adopt self-awareness, self-management, relationship management, and self-efficacy; behaviors that enhance interpersonal relationships, especially with employees to survive the complex and uncertain global business environment. Open and transparent interaction between leaders and followers fosters an environment of trust that is fundamental in communicating information and exchanging ideas, thoughts, and opinions, to help leaders effectively articulate organizational processes and goals to the followers. This positive leader-member dyad produces desired venture outcomes such as creativity and innovation (Beddoes-Jones & Swailes, 2015) .

Future orientation encompasses aspects such as risk-taking, innovation, adaptability, and agility, essential for nascent entrepreneurs to survive global challenges. It further entails learning which starts from within through the concept of self-awareness and extends outward through connectedness (Yadav & Dixit, 2017) . Based on this study’s results, the recommendation for founder-CEOs is to adopt a futuristic mindset to gain a competitive advantage and fulfill the changing customer demands through innovation. In support of this recommendation, Dabic et al. (2021) asserted that leaders should create learning organizations where employees continuously improve their competencies by learning, modifying existing structures, adapting, and creating innovative strategies to achieve business agility.

Authentic leaders have to consistently balance their actions and deeply held beliefs and values, shepherded by sound moral precepts and without giving in to external pressures to act otherwise (Feng et al., 2018) . Values-based leadership helps founder-CEOs balance the various stakeholders’ interests and attain organizational outcomes. The recommendation for founder-CEOs is to create an ethical environment based on Sims et al.’s (2017) view that creating a successful new venture entails authenticity and a confluence of values and leadership skills. Moreover, being aware of, and exhibiting openness and transparency particularly, in sharing information provides emotional safety to employees that in turn inspires unconventional thinking (Lei et al., 2021) . Founder-CEOs of small ventures possess the unique opportunity to define their businesses according to their personal beliefs and values.

The last recommendation for practice is for founder-CEOs to build strong relationships with followers and other stakeholders by adopting behavioral, emotional, and cognitive traits that foster trust (Beddoes-Jones & Swailes, 2015) . A people-centered leadership strategy can positively influence employees to stay motivated and continuously improve their skills and competencies to enhance entrepreneurial success. This recommendation’s basis is Delić et al.’s (2017) argument that followers tend to meet their part of the social exchange in achieving the organizational goals when the leader is competent and considerate of employees’ well-being. Leadership is a critical function and an essential driver of innovation, growth, and sustainability within the business landscape. Authentic leadership specifically promotes positive values and beliefs that inculcate trust, hope, and optimism in subordinates (Iqbal et al., 2020) .

While research has supported authentic leadership’s essentiality in enhancing positive venture outcomes, there is a paucity of research on authentic leadership’s significance in founder-led ventures and startups. Although the technology sector represents many dynamic settings, a quantitative approach is imperative to measure the efficacy of authentic leadership behavior among nascent entrepreneurs in other sectors and allow for broader generalization. Another recommendation is to explore authentic leadership behavior from the followers’ perspective. Capturing the followers’ lived experiences concerning authentic leadership behaviors and their impact on the leader-follower dyads may provide a deeper understanding of the phenomenon from the followers’ perspective. The basis for this recommendation is the argument that leaders tend to exaggerate their capabilities (Gill & Caza, 2018) and that followers play a critical role in achieving entrepreneurial success (Monzani et al., 2014) . Lastly, due to the incongruence between the genders and leader role expectations, researchers could examine authentic leadership in the context of gender, as recommended by Yadav and Dixit (2017) .

9. Conclusion

The findings of this study have shown that authentic leadership is a crucial contextual factor in achieving positive outcomes such as organizational commitment, creativity and innovation, and work engagement, beneficial for new ventures to scale and survive the highly competitive business world. In addition, this study has highlighted key strategies to achieve entrepreneurial success based on unbiased information sharing, relational openness and transparency, values-centered leadership, people-oriented leadership, and the development of a learning culture. Today’s organizations could benefit from authentic leaders’ ability to create ethical and psychologically safe environments while swiftly adapting to the challenging and volatile business landscape.

Conflicts of Interest

The authors declare no conflicts of interest.


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