Effects of Leadership Style on Organizational Performance: A Survey of Selected Small Scale Enterprises in Ikosi-Ketu Council Development Area of Lagos State, Nigeria

Abstract

This study has investigated the effects of leadership style on organizational performance in small scale enterprises. The major objective was to determine effect of leadership styles on performance in small scale enterprises. Transformational and transactional leadership styles were considered in this study. Transformational leadership behaviours and performance/outcome considered relevant in the study were charisma, inspirational motivation and intellectual stimulation/individual consideration; and effectiveness, extra effort and satisfaction, respectively. Transactional leadership bahaviours and performance/outcome variables were constructive/contingent reward and corrective/management by exception; and effort, productivity and loyalty/commitment, respectively. The study followed a survey design, and employed evaluative quantitative analysis method. Analysis was based on primary data generated through a structured Multifactor Leadership Questionnaire (MLQ) administered on respondents. Responses to research statements were scaled and converted to quantitative data via code manual developed for the study to enable segmentation of the data responses into dependent and independent variables based on leadership behaviours and associated performance variables. OLS multiple regression models were specified, estimated and evaluated. The result showed that while transactional leadership style had significant positive effect on performance, transformational leadership style had positive but insignificant effect on performance. The study concluded that transactional leadership style was more appropriate in inducing performance in small scale enterprises than transformational leadership style and, therefore, recommended transactional leadership style for the small enterprises with inbuilt strategies for transition to transformational leadership style as the enterprises developed, grew and matured.

Leadership styles and sustainable organizational energy in family business: modeling non-compensatory and nonlinear relationships

“…As a result, leaders may use a transactional leadership style that relies on expectations (Ojokuku et al, 2012). The leader can also lead in an autocratic style, which means all organization members follow orders (Obiwuru et al, 2011). Leadership can focus on values, ethics, skills, or motivation by embracing transformational leadership.…”

Corporate sustainability commitment and cash holding: evidence from Islamic banks in Malaysia

“…Thus, inconsistent with the competency theory and stewardship theory, the results show that the leadership competency of the board does not influence the sustainability practice that could enhance the cash holding of the firms. However, it is probable that the competency of the board focuses more on the mobilisation of corporate resources in strategizing for cash holding (Obiwuru et al , 2011).…”

“…Further, we consider the variations by which CSC can explain CCH given the important role of the corporate board in setting the tone for corporate sustainability. As leaders can influence the effectiveness of the mobilisation of corporate resources (Obiwuru et al , 2011), the most basic scenario would be the tendency of the board to influence CSC adaptation. From a stewardship perspective, the leaders own ethical duties to more than just the shareholders or principal and sought to balance those interests with the multiple interests of other stakeholders.…”

A leadership-organisational performance model for state-owned enterprises in emerging economies

“…< 0.05) (Desderio, 2016). The positive influence of TL on OP results from transformational leaders' ability to motivate followers to make extra effort and focus on the whole organisation rather than self-interests alone, and to encourage innovation, goal achievement, pride and optimism about the future, thereby achieving better OP (Avolio, 2007;Desderio, 2016;Obiwuru et al, 2011;Wahab et al, 2016). Besides the above reasons for improved performance, the transformational leaders' development of organisational goals and empowerment of followers also aids in improving OP (Dhanphat et al, 2015).…”

“…Transformational leadership is usually conceptualised as consisting of four dimensions: charisma or idealised influence, inspirational motivation, intellectual stimulation and individualised consideration through which leaders ensure individuals transcend personal interests and pursue the interests of the organisation and group (Bass & Riggio, 2006;Cavazotte et al, 2013). Transformational leaders foster innovation that boosts performance and motivates followers to go beyond self-interest and focus on higher organisational goals (Noruzy et al, 2013;Obiwuru et al, 2011). In both developed and developing countries, a positive relationship between TL and OP is apparent (Desderio, 2016;İşcan et al, 2014;Koech & Namusonge, 2012;Omira, 2015;Peterson et al, 2009).…”