The effect of leadership style on business performance and the mediating effect on organizational culture and the moderating effect of leader’s personality traits. A study of SMEs in the tourism sector in Sri Lanka

Small and Medium Enterprises (SMEs) play a vital role in any given economy and are considered as a driving force. In Sri Lanka SMEs are considered the backbone of the economy. This research explores how leadership styles affect business performance in SMEs in Sri Lanka and the mediating role of organizational culture and moderating role of leader’s personality traits affect play influencing business performance. Leadership styles and business performance are well-researched domains of study. However, limited researches have been conducted on SME context and there is no unanimity on the findings of these researches. In the Sri Lankan context number of researches on this domain is minimum. The present research study is quantitative research that uses a deductive approach based on the positivism research paradigm. 285 SMEs were selected from the tourism industry based on the Krejcie Morgan sampling formula. Primary data was collected based on a structured questionnaire which included multifactor leadership questions, big five personality trait questions, and author developed questions of organizational culture and business performance and assessed with a five-point Likert Scale. The questionnaire was sent to the leaders (owner/manager) of selected SMEs via an online format. The primary data were analyzed by using descriptive statistics, correlation analysis, and regression analysis. Results revealed that leadership styles affect business performance in SMEs. Transformational leadership has a considerable impact on business performance while transactional leadership has a low-level impact and passive avoidance leadership has an insignificant impact. It was revealed that leadership styles can influence business performance through organizational culture. Transformational leadership is indicated to have a significant effect on organizational culture and transactional leadership and passive avoidance leadership are indicated to have a low impact. Leaders with transformational leadership and transaction leadership are associated with extraversion, openness, agreeableness, and conscientiousness personality traits. Transactional leaders and passive-avoidance leaders score high on neuroticism. The research has identified that the transformational leadership style to be adopted for greater business performance in SMEs in Sri Lanka. SME owners are encouraged to hire personal with transformational style leadership and policymakers to use this information for developing training and development programs.

Name dc:type.qualificationname

dba

Level dc:type.qualificationlevel

doctoral

Grantor dc:publisher.institution

University of Wales Trinity Saint David

Year dc:date.issued

2022

Author dc:creator

• Moragolle, Dilan

• DS Asia
• HF Masnach

Dc Identifier Grantnumber

UWTSD

OAI identifier oai:identifier

oai:repository.uwtsd.ac.uk:1977