The role of transformational leadership,entrepreneurial competence and technical competence on enterprise success of owner-managed SMEs

Abstract

As small and medium-sized enterprises (SMEs) are regarded as the engine of job creation and economic growth, their development is still a primary focus for governments concerned with sustainable development. Although there is a plethora of literature on transformational leadership and competencies, the conceptualisation of transformational leadership, entrepreneurial competence, and technical competence for owner-managed SMEs remains elusive and under-researched. The possible impact of the combined effect of those factors on SMEs is also given little attention. This study hypothesises that three factors are crucial to the success of SMEs. Self-reported questionnaires were deployed to gather data from Malaysia SMEs using purposive sampling. Both the Statistical Package for Social Sciences (SPSS) and the Partial Least Squares Structural Equation (SmartPLS) were used for data analysis and hypothesis testing. The findings revealed that the transformational leadership, entrepreneurial competence, and technical competence of owner-managers have a positive, significant and substantial impact on the success of SMEs. The theoretical and managerial implications are highlighted and discussed.

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