THE EFFECT OF LEADERSHIP STYLES ON BUSINESS SUSTAINABILITY: A STUDY OF SMES IN BENIN CITY
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Abstract
This study investigated the effect of leadership styles on business sustainability among SMEs in Benin City, Edo State. It aimed to evaluate the impact of transformational, transactional, and participative leadership styles on the long-term viability and operational stability of these enterprises. The research adopted a descriptive survey design, using structured questionnaires Ministered to 147 employees across four selected SMEs within the Ugbowo axis. Data analysis involved descriptive statistics, correlation, and multiple regression techniques to test relationships and hypotheses at a 0.05 significance level. The fiindings revealed that transformational leadership significantly enhanced business sustainability by promoting vision, motivation, and innovation, thus contributing to long-term growth and adaptability in SMEs. Transactional leadership played an important role in ensuring short-term stability and effective operational control but showed limited influence on sustained business growth. Participative leadership positively affected goal commitment and team involvement, though its impact was more effective when combined with transformational leadership practices. Based on these results, it was recommended that SMEs should prioritize developing transformational leadership competencies to inspire and motivate their workforce and drive innovation crucial for sustained success. Additionally, transactional leadership techniques should be integrated to maintain operational consistency and manage daily business challenges efficiently. Furthermore, fostering participative leadership by encouraging inclusive decision-making and employee engagement was advised to enhance collective responsibility and strengthen overall business sustainability
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