The Effect of Leadership Style on Organisational Performance

Background of the Study

Various researches have already pointed out the importance of leadership. Leadership has been considered important in view of its influence on the success or failure of organizations. This is generally attributed to the fact that the effective leader aids the organizations and its members to fully realize their goals, thereby leading them to the attainment of the latter. However, it has also been recognized that the leaders cannot merely rely on themselves to accomplish the said task (Northouse 2009; Gill 2006; Palestini 2009; Barman 2009). Hence, they must come up with initiatives by which they could foster a climate of leadership within the organization. The latter, in turn, also helps the organization in attaining the desired level of success. Most of the studies conducted in relation to leadership and its effects on the success of the organization have been conducted in the context of private organizations (Gardner, Avolio and Walumbwa 2005; Palestini 2009). Nevertheless, the importance of leadership is also evident as regards the members of the public sector

BACKGROUND OF PROBLEM

A small business is independently owned and operated and not dominant in its field of operation (U.S. SBA, Office of Advocacy, 2004). A small business is a single entity that conducts business transactions, such as services or industrial operations (The U.S. Census Bureau, 2005). Over the past 30 years, the United States has witnessed a powerful emergence of small businesses (Kuratko, 2007). America's small businesses generated more than half of the nation's GDP, served as the principal source of new jobs in the U.S. economy, and employed more than 50% of the private workforce, which grew to 51% (Wong, 2002; Howard, 2006). In 2002, small businesses accounted for 75% of total employment growth in the U.S. ("Vital Role," 2002). Small businesses are essential