Democratic Leadership and Performance of Youth-Owned Smes in Ruiru Constituency, Kiambu County, Kenya
Date
2021-07-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
PAC University
Abstract
The notion that democratic leadership style is ideal for realizing the performance of SMEs has been promoted by a number of scholars. However, limited empirical research have been undertaken to validate such claims with respect to performance of youth owned SMEs in Ruiru Constituency. The purpose of the study was to investigate the effects of democratic leadership on performance of youth owned SMEs in Ruiru Constituency. This was broken down to four specific objectives: to explore the extent to which a consultative approach to leadership affects performance of youth owned SMEs in Ruiru Constituency; to determine the effect of participative approach to leadership on performance of youth owned SMEs in Ruiru Constituency; to determine the effect of shared responsibility on performance of youth owned SMEs in Ruiru Constituency; and, to determine whether sense of empowerment explains the relationship between democratic leadership and
performance of youth-owned SMEs in Ruriu Constituency. The study was anchored on four theories: Democratic Leadership Theory, Participatory Leadership Theory, Empowering Leadership Theory and Balanced Scorecard Theory. A combination of both explanatory and descriptive research designs were used. The target population was based on 572 people who were members of 36 youth owned enterprises which received loans from the Youth Enterprise Development Fund. A sample of 86 participants was selected using stratified sampling method. Data was collected using a structured questionnaire. Cronbach’s alpha test yielded reliability coefficients above 0.7. Data was analyzed by generating the mean, standard deviation and percentage frequencies of the dataset. Hypotheses were tested using correlation and regression analysis. Results showed that the overall mean score for the practice of democratic leadership on a 5-point scale was moderately high. Consultative leadership was positively and significantly correlated to member satisfaction but not to profitability. Overall, consultative leadership accounted for 5.2 percent of the variability in performance of youth owned SMEs in Ruiru Constituency but this effect was statistically insignificant. Participative leadership was positively and significantly correlated to member satisfaction but not profitability. Participative leadership accounted for 1.4 percent of the variance in overall SME performance, which was not statistically significant. The composite score of shared responsibility was neither significantly correlated to profitability of SMEs nor to member satisfaction rating. Shared responsibility explained 0.7 percent of the variability in overall SME performance, which was not statistically significant. Democratic leadership was significantly correlated to sense of empowerment. However, neither democratic leadership nor sense of
empowerment was significantly correlated to the aggregate measure of SME performance. While there was no statistically significant indirect effect of democratic leadership on member satisfaction through sense of empowerment, there was a statistically significant direct effect of democratic leadership on member satisfaction. The practical implication of these results is that democratic leadership has more value for the achievement of non- financial objectives like member satisfaction and enhanced sense of empowerment and ownership. A study should be done to establish the conditions under which a high sense of empowerment translate into superior performance for youth owned SMEs.
Description
Masters Degree Thesis
Keywords
Small and Medium Enterprises, Shared Responsibility, Democratic Leadership, Leadership Approaches, Leadership Theories
Citation
Collections
Version History
You are currently viewing version 2 of the item.