Abstract
Numerous studies indicated a tremendous need of a competent leadership to lead transformation process within the South African small and medium enterprises (SMEs), especially after 1994. Over the past years, a number of SMEs failed in innovation due to lack of innovative culture. Leadership has been proven as a critical factor to create an innovative culture within organisations. Thus, this paper proposes a theoretical model to emphasize the impact of innovative leadership on organisational culture. Data were collected through a semi-structured questionnaire from a group of SMEs (n = 15) within the manufacturing sector from the Western Cape. A descriptive analysis was carried out through the SPSS 19 program. Both alternative (H 1) and null (H 0) hypothesis were used to test the relationship between leadership characteristics and organisational culture. The results revealed that the key factors such as lack of business management skills, knowledge of leadership transition, education and training, market and technological know-how, entrepreneurial drive, and resistance of changes remained the primary determinants for leaders to manage innovation successfully in SMEs. The model provided a guideline for leaders to influence employees to be creative and innovative to ensure the success of innovation within their organisations.
Highlights
Small and medium enterprises (SMEs) contribute to the world economy significantly (Reddy, 2007)
The results revealed that the key factors such as lack of business management skills, knowledge of leadership transition, education and training, market and technological know-how, entrepreneurial drive, and resistance of changes remained the primary determinants for leaders to manage innovation successfully in small and medium enterprises (SMEs)
Tukey's estimate of power to which observations must be raised to achieve additivity = 0.178. This indicated that all the tested variables were highly internal consistent. Innovative leadership characteristics such as visionary, passionate, fast and action oriented, and ability to ascertain external factors have a positive impact on organisational culture
Summary
Small and medium enterprises (SMEs) contribute to the world economy significantly (Reddy, 2007). There are considerable factors that affect the creation of innovation in the SMEs, both internally and externally. These factors were identified by a number of researchers such as McMullen and Adobor (2011), Olawale and David (2010), Lindegaard (2009) and Mosia and Veldsman (2004) in the respective areas of new product development, creativity and innovation, and leadership in both SMEs and large enterprises. Leaders with a strong influence on innovation processes in organisations have substantial leadership competence (Bossink, 2004). SMEs require an innovative leadership to spearhead new developments and change to remain competitive. According to Sloane (2006), innovative leadership first get people excited, committed, and move swiftly to foresee to the organisational goals in order to maintain customer’s satisfaction
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