Transactional leadership, supply chain quality and business performance in the fast-moving consumer goods industry

Abstract

Background: Literature provides evidence of how the fast-moving consumer goods (FMCG) industry has become a strategically important contributor to economic growth and competitiveness globally. However, this industry in South Africa faces consistent challenges that demand immediate attention and solutions. A potential area of intervention relates to how leadership practices can be applied to improve the quality and performance of FMCG supply chains in South Africa. Objectives: This study examined the link between transactional leadership, supply chain quality (SCQ) and business performance in the FMCG industry within Gauteng province, South Africa. Method: The research followed a quantitative approach in which data were collected through a survey targeting managers and professional employees of the FMCG industry in the Gauteng province. The collected data were analysed through descriptive statistics, exploratory factor analysis, Pearson correlations and regression analysis. Results: Two transactional leadership styles, namely contingent reward and management by expectation (active), were statistically significant in influencing SCQ. Passive-avoidant leadership did not predict SCQ. Supply chain quality was statistically significant in influencing both financial and non-financial business performance. Conclusion: The transactional leadership style is an important driver of SCQ within the FMCG industry. Supply chain quality is essential in stimulating optimum business performance within the FMCG industry.