The Impact of Leadership Styles on the Entrepreneurial Orientation of Small and Medium Enterprises in South Africa

Abstract

The critical role Small and Medium Enterprises play in the economic prosperity of nations cannot be understated. SMEs actively contribute towards economic growth and development through their active role as innovators and agents for change. The authors of this paper believe that leadership styles exercised by SME owners have a bearing on the innovative ability of SMEs. Hence, this paper aimed at investigating the impact of leadership styles on the entrepreneurial orientation of SMEs in Polokwane Municipality. A quantitative research method was used and 103 SMEs participated in the survey. The random sampling technique was used. Self-administered questionnaires were utilised to collect data in a survey. Data analysis included descriptive statistics, Pearson’s correlation and regression analysis. Reliability of the data collection instruments was measured using the Cronbach’s alpha. The results indicated that the SMEs display average levels of entrepreneurial orientation. In addition, the results showed that SMEs display average levels of leadership styles inclined towards transformational leadership style. Furthermore, the results showed a significant positive relationship between the independent variables: leadership styles with the dependent variable (EO) of SMEs. SMEs were recommended to provide flexible leadership styles that will make EO to flourish in their businesses. Furthermore, the policy makers and relevant authorities were recommended to devise and implement a consortium of strategies and policies that can increase the level of entrepreneurial orientation among SMEs in South Africa.

The Impact of Leadership Style in Local Government in the Development of Sustainable Micro Entrepreneurship

“…Penelitian lain mengungkapkan bahwa aspek kepemimpinan kewirausahaan menunjukkan pengaruh positif yang signifikan terhadap kinerja usaha mikro; sedangkan akuntabilitas, pemikiran analitis, dan kinerja usaha mikro menunjukkan pengaruh positif yang signifikan terhadap keberlanjutan usaha mikro milik rumah tangga berpenghasilan rendah di Kelantan, Malaysia (Al Mamun & Ibrahim, 2018). Hasil penelitian Dzomonda et al, (2017) juga menunjukkan bahwa terdapat hubungan positif yang signifikan antara gaya kepemimpinan dengan Orientasi Kewirausahaan UKM. UKM disarankan untuk memberikan gaya kepemimpinan yang fleksibel yang akan membuat Orientasi Kewirausahaan berkembang dalam bisnis mereka.…”

“…Sisa dari responden menyatakan bahwa mereka cukup merasakan pengaruhnya (n=6) dan sisa responden lainnya menyatakan tidak merasakan (n=2). Hasil ini menunjukkan bahwa responden menyadari pemimpin dengan gayanya akan bisa mempercepat atau justru memperlambat perkembangan usaha mereka melalui produksi regulasi, kebijakan, maupun program (Dzomonda et al, 2017). Jawaban diatas sangat menarik untuk diteliti lebih lanjut karena pelaku usaha mikro pada umumnya sebagian besar menyadari bahwa tumbuh kembang kemajuan usaha mereka memerlukan kehadiran sosok pemimpin yang peduli, berpihak dan mendukung usaha mereka secara nyata dan konsisten, namun mereka juga sadar bahwa tidak setiap pemimpin akan memenuhi harapan mereka karena karakteristik dan gaya kepemimpinan yang berbeda, belum lagi terkait kepentingan yang ada.…”

Linking Transformational Leadership and Firm Performance: The Role of Entrepreneurial Orientation

“…The transformational leadership style is suitable for firms that adopt an entrepreneurial orientation strategy because it actively promotes innovation and information transfer through the leader's charismatic behavior (Dzomonda et al, 2017). Managers with high levels of transformational leadership can be associated with developing high levels of innovation at work, more significant effort, and the development of certain organizational behaviors among employees (Razavi & Ab Aziz, 2017).…”

Supply chain management antecedents of performance in small to medium scale enterprises

“…Others (Fatoki 2014;Makhitha 2017;Neneh & Van Zyl 2017) have concentrated on the challenges faced by SMEs in South Africa. Also, additional studies (Dzomonda, Fatoki & Oni 2017;Hove-Sibanda, Sibanda & Pooe 2017;Mathu & Tlare 2017) have placed emphasis on entrepreneurship factors determining the success of SMEs in the country. Yet other scholars (Aliyu, Modu & Tan 2018;Chakraborty, Mutingi & Vashishth 2019;Chingwaru 2015 three) have conducted comparative studies involving SMEs in South Africa and those in other parts of the world, such as Zimbabwe, Egypt and Nigeria, India and Namibia.…”

“…Yet conflicting evidence indicates that regardless of their importance, SMEs face numerous challenges, such as lack of capital, fierce competition in most sectors, shortage of skills, corruption, dependence on obsolete management models and negative economic development, among others, that impede their prospects of survival, growth and success (Molefe, Meyer & De Jongh 2018;Moos & Sambo 2018;Muriithi 2017). So pronounced are these challenges that between 70% and 80% of South African SMEs fail to reach their maturity stage (Dzomonda et al 2017;Neneh & Van Zyl 2017; Small Enterprise Development Agency [SEDA] 2018). The existence of these challenges presents opportunities for further research to generate more information on how they may be overcome.…”