Participative Leadership Style and Performance of Manufacturing Small and Medium Enterprises (SMEs) in Nairobi County, Kenya

Abstract

The study sought to determine the influence of participative leadership style on organizational performance of manufacturing Small and Medium Enterprises in Nairobi County, Kenya. Anchored on Path Goal Leadership Theory, the study used positivism research philosophy and descriptive correlational research design. The target population consisted of managers/owners from 425 SMEs listed members of the Kenya Association of Manufacturers Nairobi Region. A sample of 369 managers/owners was drawn from the total population using stratified random sampling technique and data was collected using self-administered questionnaires. The descriptive statistics covered were mean, standard deviation, skewness and kurtosis while inferential statistics used for data analysis included: pearson’s correlation, chi-square and binary logistic regression. Binary logistic regression (Cox and Snell R squared) revealed that 6.9 % of the probability of organizational performance was explained by participative leadership style. Parameter estimates results indicated that participative leadership style positively and significantly predicted organizational performance, β= 2.901, p = .000, p < 0.05. Consequently, the null hypothesis that “participative leadership style does not influence organizational performance in manufacturing SMEs in Nairobi” was rejected. The study concluded that participative leadership style significantly influenced organizational performance in manufacturing SMEs in Nairobi County. These study findings are significant to the owners/managers of SMEs, Policy makers/Industry regulators and Academic Researchers as they provide a new dimension on the effect of participative leadership on organizational performance. Since the study was limited to SMEs within Nairobi, further studies could be carried out on participative leadership and the influence it has on the organizational performance of manufacturing SMEs in Kenya at large. The inclusion of demographic variable, the application of a longitudinal research design and other data analysis methods could offer new insights in the SME sector.