EFFECT OF STRATEGIC LEADERSHIP STYLES ON INNOVATIVE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISE IN UASIN GISHU COUNTY KENYA

Abstract

Small and medium size enterprises are an integral part of a growing economy; According to Uasin Gishu County records there are 1611 registered SMEs in Eldoret Town. The focus therefore, should be directed at the establishment of the growth of the sector; hence the need to establish the effect of strategic leadership styles on innovative performance for small and medium enterprises in Uasin Gishu County. Proper strategic leadership is an essential part of decision making to ensure short term success and long-term sustainability, given the current volatile business environment. The study was guided by the following objectives; to establish the effect of transformational leadership style, transactional leadership style, inspiration leadership style and paternalistic leadership style on SME innovation performance within Uasin Gishu County. The population of study comprised 1611 registered SMEs in Uasin Gishu County. Cluster sampling technique to select the SMEs was used to select a sample of 290 respondents. Collection of primary data was done through a structured questionnaire. Data analysis was facilitated by use of Statistical Package for Social Science (SPSS) version 24 to generate the means, standard deviation and variances which were presented using tables, frequencies and percentages. A descriptive method was employed in analyzing qualitative data where frequencies and proportions were used in interpreting the respondent’s perception of issues that were raised in the questionnaires. Correlation analysis was used to establish the strength of association between variables and regression to determine the relationship between variables. The study findings revealed that there was positive linear effect of transformational leadership style on innovation performance in small and medium enterprises within Uasin- Gishu County (β1=.119, p=0.041). Transactional leadership style has a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β2=.157, p=0.002). Inspirational leadership style was found to have a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β3=.258, p=0. 000). Paternalistic leadership style was found to have a positive and significant effect on innovation performance in small and medium enterprises within Uasin- Gishu County (β4=.271, p=0.000). The study concluded that transactional, inspiration and paternalistic leadership style had a positive influence on SME innovation performance within Uasin Gishu County. The study recommends that SMEs within Uasin Gishu County adopt leadership style which allows managers to make employees feel valued and comfortable in their respective duties which helps bring out the best in them to achieve their goals and personal growth.