An Empirical Analysis of the Relationship between Leadership and Organizational Performance

Patrick Obeng Danso, Yusheng Kong, Michael Owusu Akomeah, Stephen Owusu Afriyie


The concept and definition of leadership style may differ from one person, or situation, to the other. The word “leadership” has been used in various aspects of human endeavor such as politics, businesses, academics, social works, etc. Previous views about leadership show it as personal ability. Messick & Kramer, (2011) argued that the degree to which the individual exhibits leadership traits depends not only on his characteristics and personal abilities, but also on the characteristics of the situation and environment in which he finds himself. Among the objectives of any small enterprise are profit making and attainment of maturity and liquidity status. In the pursuit of these objectives, enterprises allocate scarce resources to competing ends. In this regard the objective of this study was to evaluate the relationship between leadership and organizational performance. For the purpose of the study, transactional and transformational leadership were the main focus. The study used 10 SMEs which include 5 small scale enterprises and 5 medium scale enterprises excluding manufacturing enterprises. It was found in the study that leadership plays a key role in organizational performance. The study revealed that though both transactional and transformational leadership plays a key role in organizational performance, transformational leadership is more effective on organizational performance than that of transactional leadership

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