Abstract

Leadership style is an important factor that affects the enhancement of organizational performance and employee’s job performance, and what objectives they should pursue, which also makes a profit for their employees or makes another social and economic contribution to society. The present study was developed to observe the impact of transformational leadership on job performance and to investigate the mediating mechanism of corporate social responsibility (CSR). Primary data were collected from the employees by using a cross-sectional design method. Employees who participated in the study are working in the Small and Medium Enterprises (SMEs) of Pakistan. A total of 300 questionnaires were circulated, and 130 were received. The Regression analysis was executed to examine whether CSR mediated the correlation among transformational leadership and job performance. The results of the study suggest that transformational leadership positively and completely predicts job performance. Particularly, the study finds that CSR significantly mediated the effect of transformational leadership on job performance. On the basis of these findings, it can be explicated that transformational leadership, job performances, and CSR are important elements of an organization. These elements can improve organizational performance. Theoretical implications of the recent study are discussed, and offer directions for future research in the area.

Highlights

  • Small and Medium Enterprises (SMEs) play a markable role in the economic growth of both developed and developing countries

  • SMEs have contributed significantly to achieve the sustainable development goals (SDGs) by creating employment opportunities, reducing poverty, and boosting innovation and the development of the country’s economic growth

  • Many studies have been conducted about corporate social responsibility (CSR) in the large firms and companies but have less attention in SMEs in the developing countries like Pakistan

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Summary

Introduction

Small and Medium Enterprises (SMEs) play a markable role in the economic growth of both developed and developing countries. SMEs contribute towards achieving sustainable development goals (SDGs) by generating employment opportunities, fostering innovation, promoting sustainable industrialization, and reducing income inequalities. SMEs provide job opportunities to many segments of society across different sectors and geographical areas such as low-skilled labor in rural areas and, provide opportunities for skill development. The essential role of SMEs toward overall economic growth has been documented extensively in the literature [1]. SMEs become one of the key instruments that drive a country’s financial, economic, political, and social growth, and the main source of poverty alleviation in developing nations [2].These organizations are facing many challenges, and leaders of organizations have become more sensitive about workforce and organizational performance [3]. Organizational performance and employee performance has gained greater attention for organizations (profit or non-profit), and the top management is interested in figuring out the factors which manipulate employees and organizational performance for taking appropriate actions [4]

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