Transformational leadership, Transactional leadership, Passive avoidant leadership, Performance, SMEs, Manipur


This quantitative study examined the impact of leadership styles on the performance of small and medium enterprises (SMEs) in Manipur, India. Transformational, transactional, and passive avoidant leadership were measured as independent variables. Firm performance consisted of sales growth, return on investment (ROI), and growth in the number of employees over the past year. A sample of 197 SME leaders participated in the survey. Correlation and regression analyses tested the relationship between leadership styles and aspects of SME performance. Results demonstrated that transformational leadership had robust, significant positive associations with all three performance measures. Transactional leadership also positively predicted sales growth and ROI. In contrast, passive avoidant leadership could have been more inconsequential or mildly detrimental for SMEs. Together, the leadership styles accounted for 19-24% of variation in firm performance. The findings highlight the crucial role of engaged leadership approaches centred on inspiration, rewards, and modelling integrity for enabling Manipuri SMEs to thrive. Practical implications suggest integrating transformational leadership principles into local entrepreneurship training programs.


Afriyie, S., Du, J., & Musah, A. A. I. B. N. (2020). INNOVATION and marketing performance of SME in an emerging economy: The MODERATING EFFECT of TRANSFORMATIONAL LEADERSHIP. International Journal of Innovation Management, 24(4).

Aziz, R. A. (2013). The Effect of Leadership Styles on the Business Performance of SMEs in Malaysia. 2(2), 45–52.

Baig, S. A., Iqbal, S., Abrar, M., Baig, I. A., Amjad, F., Zia-ur-Rehman, M., & Awan, M. U. (2021). Impact of leadership styles on employees’ performance with moderating role of positive psychological capital. Total Quality Management and Business Excellence, 32(9–10), 1085–1105.

C., O. T., T., Okwu, A., O., Akpa, V., & A., Nwankwere, I. (2012). Effects of Leadership Style on Organizational Performance: a Survey of Selected Small Scale Enterprises in Ikosi-Ketu Council Development Area of Lagos State, Nigeria. Australian Journal of Business and Management Research, 01(07), 100–111.

Elenkov, D. S. (2002). Effects of leadership on organizational performance in Russian companies. Journal of Business Research, 55(6), 467–480.

Emmanuel Ayuba Kuwu, Roselyn W. Gakure, P. K. N. (2014). Effects of Marketing Strategies, Marketing Elements (4ps) and Leadership Styles on the Performance of Small and Medium Enterprises in Nigeria. International Policy Brief Series - Education & Science Journal, 4(1), 218–236.

Farooqi, Y. A., Gohar, R., Nazish, A., & Ahmad, M. (2017). Impact of leadership styles on knowledge management practices in small and medium enterprises of Punjab (Pakistan). Information and Knowledge …, 7(2), 15–20.

Fatoki, O. (2014). The causes of the failure of new small and medium enterprises in South Africa. Mediterranean Journal of Social Sciences, 5(20), 922–927.

Gupta, P., Guha, S., & Krishnaswami, S. (2013). Firm growth and its determinants. Journal of Innovation and Entrepreneurship, 2(1), 15.

Gyensare, M. A., Anku-Tsede, O., Sanda, M.-A., & Okpoti, C. A. (2016). Transformational leadership and employee turnover intention. World Journal of Entrepreneurship, Management and Sustainable Development, 12(3), 243–266.

Jyoti, J., & Bhau, S. (2015). Impact of Transformational Leadership on Job Performance : Mediating Role of Leader – Member Exchange and Relational Identification.

Matzler, K., Schwarz, E., Deutinger, N., & Harms, R. (2008). The Relationship between Transformational Leadership, Product Innovation and Performancein SMEs. Journal of Small Business and Entrepreneurship, 21(2), 139–151.

Ministry of Micro, Small and Medium Enterprises, G. of I. (2023). Annual Report 2022-23.

OECD. (2017). Enhancing the contributions of SMEs in a Global and Digitalised Economy. OECD Observer, 313, 3.

Pedraja-Rejas, L., Rodríguez-Ponce, E., Delgado-Almonte, M., & Rodríguez-Ponce, J. (2006). Transformational and Transactional Leadership: a Study of Their Influence in Small Companies. Ingeniare -Revista Chilena de Ingeniería, 14(2), 159–166.

Tajasom, A., Hung, D. K. M., Nikbin, D., & Hyun, S. S. (2015). The role of transformational leadership in innovation performance of Malaysian SMEs. Asian Journal of Technology Innovation, 23(2), 172–188.

Uljanati, P. H., Nazararief, B., Marinda, V. S., Setiawati, I., Risviana, V. R., & Astari, E. A. (2021). Effect of Transformational Leadership and Organizational Learning on Organizational Performance on Embroidery Msmes in Tasikmalaya - Indonesia. Review of International Geographical Education Online, 11(5), 2024–2034.




How to Cite

Heisnam, L., Singh, K., & Laishram, P. (2024). IMPACT OF LEADERSHIP STYLES ON PERFORMANCE IN SMALL AND MEDIUM-SIZED ENTERPRISES IN MANIPUR. International Journal of Management, Public Policy and Research, 3(1), 6–13.