Impact of Transformational and Transactional Leadership on Organizational Commitment and SMEs Firm Performance: A Comparative Analysis
Wayan Edi Arsawan,
Ketut Pasek and
Putu Santi Suryantini
Additional contact information
Wayan Edi Arsawan: International Business Management, State Polytechnic of Bali, Indonesia
Wayan Sumetri: Business Administration Department, State Polytechnic of Bali, Indonesia
Ketut Pasek: Faculty of Economic and Business, University of Udayana, Indonesia
Abstract of Economic, Finance and Management Outlook, 2016, vol. 6, 3
The success of SMEs business is contingent upon a number of variables either internal or external. Many studies have been conducted to investigate the success variables, either empirically or theoretically. One of the most essential variables are leadership styles especially transformational leadership and also transactional leadership. This study has investigated the effects of leadership styles on organizational commitment and firm performance and organizational commitment on firm performance of SMEs in Bali Province Indonesia. Transformational leadership considered relevant in the study were idealized influenced, inspirational motivation, intellectual stimulation, individualized consideration. Transactional leadership were constructive/contingent reward and corrective/management by exception, organizational commitment were affective commitment, normative dan continuance and firm performance variables were sales growth, consumer service, success of new product and investment. The study followed a survey design using quitionaire Likert Scale to manager and asisten manager of 59 SMEs. The research method is quantitative using SEM -PLS. The result showed that leadership style had significant positive effect on organizational commitment and SMEs firm performance. The study concluded that transformational leadership style was more appropriate in inducing performance in small medium enterprises than transactional leadership style and, therefore, recommended transformational leadership style for the small enterprises with inbuilt strategies for transition, the enterprises developed, grew and sustainability.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pkp:ecfmao:2016:p:3:vol:6
Access Statistics for this article
Abstract of Economic, Finance and Management Outlook is currently edited by Sanele Phillip (Editorial Office)
More articles in Abstract of Economic, Finance and Management Outlook from Conscientia Beam 2637 E Atlantic Blvd #43110 Pompano Beach, FL 33062, USA.
Bibliographic data for series maintained by Editorial Office ().