In Chapter Six the leadership styles identified as having a significant influence on the Job satisfaction of SME owners and the Perceived financial performance of their small businesses were reported on. These relationships were summarised in Figure
7.1. In the sections to follow, these significant relationships will be interpreted and recommendations will be made.
7.3.2.1 Servant leadership
The findings of this study revealed a significant positive linear relationship between Servant leadership and the dependent variable Job satisfaction. As such, the more the business owner perceives himself as being approachable, as making personal sacrifices, as going out of his way to serve and help subordinates, as caring for their welfare and as paying attention to their personal needs, the more likely he is to experience his involvement in the business as rewarding, enjoyable and fulfilling. This finding is somewhat supported by the literature which suggests that servant leaders are less interested in economic incentives and position than in deriving satisfaction from developing and maintaining relationships with followers (Liden et al. 2008:163). According to Fernandez (2008:181) and Brown and Treviño (2006:608), business owners who show high levels of servant leadership, experience higher levels of job satisfaction.
No relationship was found between the independent variables Servant leadership and the dependent variable Perceived financial performance. In other words, whether the business owner perceives himself as being a servant leader or not has no influence on the growth in employee numbers, profits and turnover, on the business being profitable, financially successful and secure, as well as the business achieving its planned financial goals and growth rate. This finding contradicts the literature in that several literature sources support a positive relationship between servant leadership and financial performance (Ding et al. 2012:210; Melchar & Bosco 2010; Joseph & Winston 2005:16). For example, Mishler (2012:27) contends that servant leaders give their subordinates their full attention, which in turn results in increased levels of employee job satisfaction and ultimately business success. A study conducted by Van Dierendonck (2011:23) reports that leaders who display servanthood assist in building a business climate that generates employee empowerment and ultimately improves business performance (Liden et al. 2008:163). A possible reason for no relationship being reported between Servant leadership and Perceived financial performance in this study is that the level of
servant leadership was self-reported by the business owners, and could therefore be biased and not reflect the true level of servant leadership. Business owners could perceive themselves as being servant leaders, whereas in fact they might not be.
Given the relationship between an SME owner perceiving him or herself as a servant leader and his or her Job satisfaction, the following recommendations are suggested to enhance the level of servant leadership among SME owners:
SME owners should consider the needs of their employees above their own. This could be done by interacting with each employee at least once a year on a personal basis, and finding out what their needs are.
SME owners should be good listeners, and a possible way of doing this is by continuously working on their listening skills and adapting what they learn from their employees with regard to the business. Also, SME owners should request regular feedback from their employees regarding their listening skills.
SME owners should be approachable. This can be achieved by having an open-door policy as well as open communication lines between themselves and employees. Employees can thus approach SME owners with both work and personal problems.
SME owners should focus on building long-term relationships with their employees and should make a conscious effort to get to know them. Having company getaways and regular interactions with their employees outside of the working environment is a possible way of building these relationships.
SME owners should ensure that both the personal and business goals of their employees are being met. The owners need to identify the goals of each employee on an annual basis, and assist them in developing a strategy to achieve these goals. At the end of each year, owners need to assess whether these goals have been achieved, and if not, establish reasons why.
SME owners should build relationships not only with their employees but also with the communities in which their businesses operate. A possible
way of doing this is by being involved in community projects and making donations where they are needed.
SME owners should help their employees grow, and provide opportunities for them to develop. This can be done by providing employees with continuous training, or encouraging and paying for them to enrol in courses that can help them grow and move to higher positions within the business.
7.3.2.2 Ethical leadership
The results of this study show a significant positive linear relationship between the independent variable Ethical leadership and Job satisfaction. In other words, the more a business owner perceives himself to be trustworthy, to be honest in his business dealings, to be genuine and act candidly when interacting with subordinates and stakeholders, and as having a strong concern for ethical and moral values, the more likely he will experience his involvement in the business as rewarding, enjoyable and fulfilling. Yur (2012:60) and Yates (2011:68) support this finding by stating that ethical leaders show characteristics of honesty, fairness, responsibility and integrity, thus influencing levels of job satisfaction. The findings of this study also concur with those of Ghahroodi et al. (2013:93) who report that business owners who show ethical leadership experience higher levels of job satisfaction.
The findings of this study also show a strong positive linear relationship between Ethical leadership and the dependent variable Perceived financial performance. In other words, the more the business owner perceives himself to be trustworthy, honest, genuine and candid, and as having a strong concern for ethical and moral values, the more likely to the business is to show growth in employee numbers, profits and turnover, for the business to be profitable, financially successful and secure, as well as for the business to achieve its planned financial goals and growth rate. Yur (2012:15-16) lends support to the findings of this study by stating that ethical leadership leads to increased efficiency in decision-making processes and ultimately business financial performance. As in the case of this study, Valdiserri and Wilson (2010:59) as well as Resick et al. (2006:357) also report positive
relationships between Ethical leadership and Perceived financial performance in their studies.
Given the relationship between an SME owner perceiving him or herself as an ethical leader and his Job satisfaction as well as the Perceived financial performance of his or her business, the following recommendations are suggested to enhance the level of ethical leadership among SMEs:
SME owners must act with integrity. Acting with integrity can be achieved by behaving in a consistent and predictable manner and following through on promises made.
SME owners must be honest with others. Business owners must be truthful in all their dealings with employees and other stakeholders so that trust relationship can be built.
SME owners must maintain high moral standards in all business activities. Business owner must make morally correct choices for the business and carry themselves in a way that shows their values and that of the business in all their endeavours.
SME owners must exhibit fairness in their business at all times. Business owners must treat all their employees in the same manner and must not show favouritism or bias towards anyone in particular.
SME owners must work on developing a high level of trust between themselves and their employees. Trust can be built by doing what one says one is going to do, assigning the responsibility for certain job aspects to employees, and building personal relationships with them.
7.3.2.3 Participative leadership
The empirical findings of this study show that no significant relationship is reported between the level of Participative leadership displayed by SME owners and their level of Job satisfaction. In other words, whether SME owners involve subordinates in planning, goal-setting and decision-making, share power with and learn from their subordinates, or give them a sense of ownership, or not, has no influence on their
experiencing their involvement in their business as rewarding, enjoyable and fulfilling. This finding is in line with that of Jar-Allah (2000) who also reports no relationship between participative leadership and job satisfaction but contradicts several studies (Letele-Matabooe 2012:112; Barling et al. 1996) that provide evidence of a positive relationship between these two constructs. A possible reason why no relationship is reported between participative leadership and job satisfaction in this study is that the level of participative leadership is self-reported by the business owners and could therefore be biased and not reflect the true level of participative leadership. In addition, the studies referred to above relate to the job satisfaction of employees and not to the job satisfaction of the employer, as was the case in this study.
No relationship was found either between Participative leadership and the dependent variable Perceived financial performance. In other words, whether SME owners involve subordinates in planning, goal-setting and decision-making, share power with and learn from their subordinates, or give them a sense of ownership, or not, has no influence on the business showing growth in employee numbers, profits and turnover, being profitable, financially successful and secure, as well as achieving its planned financial goals and growth rate.
This finding corresponds with the literature of Mulki et al. (2014:9) who also report no significant relationship between participative leadership and business performance. However, a study conducted by Ashraf et al. (2014:430) as well as one by Yusuf et al. (2014:530) contradicts the finding in this study, as they report a positive association between participative leadership and budget performance of businesses. A possible reasons for the finding in this study is that both the study conducted by Ashraf et al. (2014:430) and Yusuf et al. (2014:530) investigated employees’ perceptions of participative leadership and perceptions of the business owners, as was the case in this study.