Transformational leadership as an antecedent and SME performance as a consequence of entrepreneurial orientation in an emerging market context

Abstract

The purpose of this paper is to explore the antecedent and consequence of entrepreneurial orientation. The study, anchored on Resource-Based View focuses on how transformational leadership as an antecedent influences entrepreneurial orientation, which consequently contributes to SME performance. A cross-sectional quantitative research approach was used to answer the study’s research question. An online survey data was collected from 158 SMEs originating from South Africa in sub-Saharan Africa. The results show that, transformational leadership is positively associated with entrepreneurial orientation. Both transformational leadership and entrepreneurial orientation contributed to SME performance. Lastly, entrepreneurial orientation acting as both dependent (on the antecedent) and independent (for the consequence), showed that it is a partial mediator between transformational leadership and SME performance. Since transformational leadership was found to be an important contributor to entrepreneurial orientation. Thus, entrepreneurs should use a transformational leadership style to lead and encourage entrepreneurship within their firms. Entrepreneurship training institutions should incorporate leadership development into their programs.