International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

The Relationship between Transactional Leadership Style and SMEs Growth in the Top 100 SMEs in Kenya
Judith Bijurenda Asiimwe, Dr. Teresia kavoo-linge, Dr. Damary Sikalieh

The general objective of this study was to investigate the relationship between transactional leadership style and Small and Medium Enterprise growth in the top 100 SMEs in Kenya. This was a mixed method study targeting the KPMG top 100 SMEs of 2013.A causal research design was employed to investigate the relationship between the independent variable transactional leadership style with key constructs being contingent reward, Active management by- exception, and cohesion and team performance which all together had 16 items and the dependent variable SMEs growth whose constructs where workforce growth, sales growth, and return on assets with 15 items. Stratified proportionate random sampling and purposive sampling techniques where used to obtain a sample of 227 out of a target population of 553 CEOS and Managers. Data was collected using a closed ended questionnaire and a structured interview guide. Pearson’s correlation, multiple regression and Pearson’s chisquare techniques where used to analyse the data. The analysis indicated that transactional leadership style and SMEs growth had a strong positive and significant correlation (r= 0.702, p =0.007), and a positive and significant relationship (β1 = 0.128, t = 1.470, p> 0.023). The study concluded that the effectiveness of transactional leadership style is dependent on the nature of the enterprise and recommended that where employees are hired on short term contracts to deliver on specific assignments, small and Medium enterprise leaders should adopt a transactional leadership style, in order to facilitate growth of their enterprises.

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