It is well supported in the literature that a positive relationship exists between effective leadership and business success. Given the importance of SMEs in South Africa, their large numbers, and the extent to which they positively influence the economy of the country, it is important to study leadership behaviour in the context of small and medium-sized businesses in an attempt to reduce their high failure rates. More specifically a need has been identified to research, develop, and implement more ethical and relational leadership styles among business owners. The focus of this study is therefore on several people-centred leadership styles, and their influence on selected outcomes among the owners of small and medium-sized businesses. Against this background, the primary objective is to assess the level of Servant, Authentic, Ethical and Participative leadership exhibited by SME owners in the Eastern Cape, and to establish whether exhibiting these people-centred leadership styles influences their Job satisfaction and the Perceived financial performance of their businesses. A quantitative research paradigm was adopted for this study. More specifically, an explanatory and descriptive study of a cross-sectional nature was undertaken. A comprehensive literature study was conducted using existing secondary sources. The primary data collection procedures involved selecting the population, the sample, and the sampling method, as well as the sample size for the study. For the purpose of this study, the population consisted of all small and medium-sized business owners operating businesses within the boundaries of the Eastern Cape Province. A sample of 500 of these businesses was selected by means of convenience sampling. In total 246 usable questionnaires were returned, on which to undertake the statistical analyses. A survey was undertaken, and a structured, self-administered questionnaire was used to gather the necessary data. The scales for measuring the constructs under investigation were developed based on previous research. To assess the validity of the scales measuring the constructs in this study, an exploratory factor analysis was undertaken, and its reliability was tested by calculating Cronbach’s alpha coefficients. Statistical analysis included descriptive statistics, Pearson’s product moment correlation, regression analyses (simple and multiple) and analyses of variance. Five usable factors were extracted from the exploratory factor analysis; these corresponded with the theoretical dimensions of Participative leadership, Perceived financial performance, Ethical leadership, Servant leadership, and Job satisfaction. The items measuring Authentic leadership did not load as expected, and this construct was thus no longer included in empirical testing in this study. Satisfactory evidence of validity and reliability were provided for the other factors extracted. The independent variables reported mean scores of between 3.760 and 4.548, with the majority of respondents agreeing with the statements measuring these leadership styles. The dependent variables Job satisfaction and Perceived financial performance returned mean scores of 4.508 and 3.962 respectively, with the majority of the respondents agreeing with the statements measuring these factors. All the independent variables (Servant leadership, Ethical leadership and Participative leadership) reported significant and positive relationships with each another. The correlation between the dependent variables (Perceived financial performance and Job satisfaction) was found to reflect a moderate positive association. Job satisfaction and Perceived financial performance both reported significantly positive associations with all the independent variables. The simple regression analyses undertaken revealed a significant positive linear relationship between Perceived financial performance and Job satisfaction, as well as between Perceived financial performance and the Job satisfaction of SME owners. The multiple regression analysis undertaken revealed that significant positive linear relationships existed between two independent variables, Servant leadership and Ethical leadership, and the dependent variable Job satisfaction. A significant positive linear relationship was also reported between Ethical leadership and Perceived financial performance. No relationships were found between the independent variables Servant leadership and Participative leadership and the dependent variable Perceived financial performance. No relationship was found between the independent variable Participative leadership and the dependent variable Job satisfaction. The analysis of variance results revealed that Gender, Qualification and the Nature of the business exerted a significant influence on Servant leadership. The results also showed that Generation exerted a significant influence on the perceived level of Ethical leadership displayed by the SME owner. In addition, the findings of the present study showed that the demographic variable Nature of the business exerted a significant influence on Participative leadership. Investigating leadership styles among SMEs is a topic of significance and growing interest among researchers. Given the importance of SMEs to the economies of countries, investigating factors that influence their success is vital. The findings of this study showed that by adopting more people-centred leadership styles, the job satisfaction of SME owners was increased, and the financial performance of their businesses improved. It is hoped that the findings of this study will provide SME owners with practical suggestions on how to increase their levels of job satisfaction and the financial performance of their businesses, and that the suggestions for future research will inspire future researchers to further investigate the issue of leadership among SMEs.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:9307 |
| Date | January 2015 |
| Creators | Silwana, Hlumela Zukiswa |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MCom |
| Format | xv, 199 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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