Firm Leadership Style, Innovative Behaviour and Performance of SMES in Kampala District

Abstract

The purpose of the study was to investigate Firm leadership style, innovative behavior and performance of SMES in Kampala district. The study was guided by the following research objectives: To establish the relationship between the innovative behaviors and performance of SMES, to establish the relationship between firm leadership style behaviors and performance of SMEs and to find out the relationship between the firm leadership, innovative behavior and performance of SMES. A cross sectional and quantitative survey, was used in the selection of 217 SMES from Kampala. Data was collected using questionnaires. The data was analyzed using the Statistical Package for Social Scientists (SPSS 17). Results from the finding confirmed that innovative behavior has a significant and positive relationship with performance of SMES, firm leadership has a significant and positive relationship with performance of SMES and Leadership Style and Innovative Behavior accounts for 12.8% (R squared =.128) variance in the performance of SMEs in Kampala. The study therefore recommended that, it is crucial for the SMEs in Kampala District to practice good leadership in their businesses as this will help in motivating their staff to work well and also serve their clients when they are happy, SMEs in Kampala have to be flexible in their operations for example giving time off to staff to think about new better ways of improving their respective activities as this will bring in more innovations in the business and thus improve performance and SMEs also should take into consideration applying new ideas that come on board in their respective businesses as this will help them to be in line with the changing tastes and preferences for the clients.