The Role of Transactional Leadership Style of Owner/Managers in Adopting a Market Oriented Culture: A Case of Manufacturing SME’S

Abstract

The purpose of this study is to examine the possible relationship of transactional leadership style on the three tenets of market orientation, thus, competitor orientation, customer orientation and inter-functional coordination. Questionnaires were used to gather data from 200 owner/managers of manufacturing SME’s in the Accra metropolis of Ghana. The collected data from the questionnaires were analysed through the Structural Equation Modelling using the Partial Least Squares approach (SEM-PLS). The findings showed that transactional leadership style had an inverse but a significant relationship to customer orientation and inter-functional coordination. The implication is that, an owner/manager who expresses positive outcomes to employees for performing their duties in line with instructions and also focuses on employee mistakes and complaints and also emphasizes development of process in setting goals, directing, and striving to manipulate and control the situation inhibits the adoption and practice of a market-oriented culture. Also with the manufacturing, SME's in Ghana, adopting a transactional leadership style will not encourage market-oriented culture. It is therefore recommended that owner/managers to adopt other styles of leadership which can translate in the practice of market-oriented culture.