Leadership Styles and Performance of Small and Medium Enterprises (SMEs) a Case of Selected Small and Medium Enterprises in Bushenyi District. Uganda.

Abstract

This study employed a cross-sectional descriptive research design using a mixed-methods approach to investigate the effect of leadership styles on the performance of Small and Medium Enterprises (SMEs) in Bushenyi District, Uganda, on a sample size of 145 respondents. Specifically, it examined the influence of transformational, autocratic, and laissez-faire leadership styles on SME performance Quantitative data were analyzed using descriptive statistics, correlation, and regression analyses, while qualitative data were thematically analyzed. The findings revealed that transformational leadership positively and significantly enhances SMEs performance by inspiring employees, fostering innovation, and promoting teamwork. Conversely, autocratic and laissez-faire leadership styles were found to negatively impact SME performance, as they limit employee involvement, reduce morale, and create organizational inefficiencies. The study concludes that adopting transformational leadership practices is crucial for SMEs growth and sustainability. The study recommended that capacity-building programs for SME leaders and targeted policy interventions should be encouraged to encourage more participative and supportive leadership styles.