IMPACT OF LEADERSHIP STYLES ON PERFORMANCE IN SMALL AND MEDIUM-SIZED ENTERPRISES IN MANIPUR

Abstract

This quantitative study examined the impact of leadership styles on the performance of small and medium enterprises (SMEs) in Manipur, India. Transformational, transactional, and passive avoidant leadership were measured as independent variables. Firm performance consisted of sales growth, return on investment (ROI), and growth in the number of employees over the past year. A sample of 197 SME leaders participated in the survey. Correlation and regression analyses tested the relationship between leadership styles and aspects of SME performance. Results demonstrated that transformational leadership had robust, significant positive associations with all three performance measures. Transactional leadership also positively predicted sales growth and ROI. In contrast, passive avoidant leadership could have been more inconsequential or mildly detrimental for SMEs. Together, the leadership styles accounted for 19-24% of variation in firm performance. The findings highlight the crucial role of engaged leadership approaches centred on inspiration, rewards, and modelling integrity for enabling Manipuri SMEs to thrive. Practical implications suggest integrating transformational leadership principles into local entrepreneurship training programs.