Leadership style, innovative behaviour and performace of small businesses in Kampala.

Abstract

The purpose of the research was to establish the effect of leadership style and innovative behavior on the performance of small businesses in Kampala. The study was guided by three research objectives: (i) to investigate the effect of leadership style on the innovative behavior of small business owners/managers in Kampala, (ii) to examine the effect of the innovative behaviors on small business performance in Kampala and (iii) to examine the effect of the leadership style, on innovative behavior and small business performance. A cross sectional research survey, using disproportionate stratified random sampling design was used in the selection of 306 small businesses under the category of restaurants and bars, furniture and metal fabrication, in Kampala. Small business owners and managers were used as respondents and data was collected using questionnaires.

The data were analyzed using the Statistical Package for Social Scientists (SPSS 17). Results showed that there was a significant positive relationship between innovative behaviors and small business performance. Leadership style had a positive correlation with innovative behavior and small business performance. In addition, transformational leadership style as opposed to the other leadership styles predicted better small business performance. The study therefore, recommended that small business owners should consistently and actively get involved in the practice of transformational leadership style and the different innovative behaviors in their firms in order to improve on their performance. With this, they will be able to satisfy their customers’ needs, tastes and preferences while increasing on their return on sales.