The Synergy of Entrepreneurial Leadership and Team Diversity: Pathways to Entrepreneurial Success in Pakistan’s SMEs

Khalid Rehman, Kah Boon Lim (), Sook Fern Yeo, Muhammad Ameeq () and Muhammad Asad Ullah
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Khalid Rehman: Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, Melaka 75450, Malaysia
Kah Boon Lim: Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, Melaka 75450, Malaysia
Sook Fern Yeo: Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, Melaka 75450, Malaysia
Muhammad Ameeq: Faculty of Computing, The Islamia University Bahawalpur, Bahawalpur 63100, Pakistan
Muhammad Asad Ullah: Faculty of Business, Multimedia University, Jalan Ayer Keroh Lama, Melaka 75450, Malaysia

Sustainability, 2025, vol. 17, issue 5, 1-22

Abstract: Small and medium-sized enterprises (SMEs) play a crucial role in fostering economic growth and sustainability, requiring a deliberate emphasis on innovation and applying knowledge to navigate ever-changing markets. This study, grounded in resource-based view (RBV) theory, explores the synergy of entrepreneurial leadership and team diversity, exploring pathways to entrepreneurial success in Pakistan’s SMEs. This study employed a cross-sectional design, utilizing a non-probability convenience sampling approach to survey 350 owners, supervisors, managers, and employees of SMEs in Khyber Pakhtunkhwa, Pakistan. Data were gathered through a survey questionnaire and subsequently analyzed using SPSS and SMART-PLS to validate the measurement model and examine the hypotheses for moderated analysis. The results indicated a significant moderating influence. Entrepreneurial leadership accounted for 15.8% of the variation in entrepreneurial success, while team diversity contributed 8.5%. Moreover, the moderating influence of team diversity substantially affected ES (59.7%), underscoring the pivotal role of team diversity in the interplay between EL and ES. Drawing from RBV theory, this study advances the framework by acknowledging that team diversity is a crucial element that strengthens the connections between EL and ES. This study enhances the existing literature by clarifying the mechanisms by which leadership and diversity collaboratively promote entrepreneurial outcomes. This highlights the necessity for SME leaders and policymakers to utilize team diversity as a strategic asset to improve competitive advantage and ensure sustainable success.

Keywords: entrepreneurial success; entrepreneurial leadership; SMEs; team diversity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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