Leadership dimensions & organizational commitment in small scale enterprises in Delhi.

AuthorPyngavil, Rajesh S.


Small scale enterprises play an important role in developing economies like India. Apart from providing employment, they help in reducing regional disparities and in improving the living standards of the lower strata of population. In India, after agriculture, the MSME sector provides the maximum opportunities for both self-employment and employment in the country. In fact, the employment potential of this sector is unmatched by any other sector of the economy. The MSME sector has consistently registered a higher growth rate (18%) as compared to the overall industrial sector in the last five years (Kumar, 2012). The SMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports (UNIDO, 2010). In India too, the SMEs play a pivotal role in the overall industrial economy of the country. In recent years the SME sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession.

Keeping this in view, various policies, provisions, procedures, schemes and programs have been initiated from time to time. But the performance of small scale enterprises could not be improved. There is a growing tendency of small scale enterprises becoming sick. The reasons for the low productivity and slow growth of SMEs are numerous. One of the causes for industrial sickness in small scale industrial sector in India is the ineffective leadership. Bigger industries can afford to hire the services of professionals whereas the small industries cannot do so because their economics do not permit them to employ professionals who have to be paid large sums as salaries.

SME's in India largely adopt autocratic style of leadership which negatively affects the level of employee commitment in small enterprises. Autocratic style depicts a dominating and ineffective working environment in the workplace, leaving the employees dissatisfied with their jobs leading to larger labor turnover and inefficient performance of SME's.

Organizational Commitment

It is very important for employees to be motivated not only to increase in-role performance but also to engage in citizenship behaviors that are important to the well being of the organization. Paternalistic leadership has positive impact on increased commitment of the employees as well as improved citizenship behaviors (Rehman & Afsar, 2012). On the other hand, position of the leader also influences the level of commitment. Positional identity has been found to significantly impacting on leadership style perception and organizational commitment (Raja & Palanichamy, 2012). Moreover, management styles have significant impacts on employee's performance that is associated with firm's financial performance (Gul, et.al, 2012). Sabir, et.al, (2011) suggested that the leadership style is a strong dimension of organization commitment. Employees would be more satisfied if the organization meets their expectations so that they are more committed with the organization. Chiun et.al (2009) examined the leadership style and employees' organizational commitment and indicated that several dimensions of transactional and transformational leadership have positive relationship with organizational commitment but the impacts are stronger for transactional leadership style. Transformational leadership style and affective and normative employee commitments are related and laissez-faire leadership style is negatively associated with employees' affective commitment (Buciuniene & Skudiene, 2008).

Literature Review

There have been abundance of studies in the areas of leadership behavior (Shankar & Sayeed, 2012; Obiwuru et al, 2011; Patwardhwan & Rangnekar, 2009; Ghosh, 2009; Colbert et al. 2008; Dannhauser & Boshoff, 2006; Bass & Avolio, 1990; Patrick, 2011; Mallik et al, 2010; Yilmaz & Bokeoglu O.C., 2008; Salami, 2008;Youssef & Luthans, 2007; Gupta, & Agarwal, 2006; Bennett et al, 2003; Cooper, 2002; Allen & Meyer, 1991). There are numerous studies which relate the leadership behavior and employee commitment (Rustogi, 2011; Ekaterini, G., 2010; Cardona & Rey, 2009; Poon et al, 2006).

Leadership is often seen as the premier force behind the success and failure of enterprises and the well-being of the personnel. In spite of the vast amount of studies, leadership in small enterprises has seldom been in focus in leadership research. The increasing importance of small firms to the economic growth and competitiveness raises questions about the role and practice of leadership in small enterprises. Mitonga et.al (2012) examined the relationship between the perceived leadership style and employee participation. They found that participants' perceptions of a leader's behavioral style have significant influence on the employee participation. Leadership styles also significantly affect and predict individual and organizational performance (Ojokuku et.al, 2012). Out of the leadership styles viz, transformational, transactional, laissez faire leadership styles, transformational leadership style is related with performance outcomes (Pradeep & Prabhu, 2011; Javed et.al, 2012; Boerner et.al, 2007; Raja & Palanichamy, 2012; Gul et.al, 2012). These results were contradicted by the Chiun et.al (2009) and it was proved that transactional leadership style influences the commitment of employees as compared to transformational leadership style.

Organizational commitment predicts work variables such as turnover, organizational citizenship behavior, and job performance. It has been reviewed that organizational commitment is the individual's psychological attachment to the organization. Some researchers argued that there exist differences among male and females employees and females are more committed to organization than their counterparts in SMEs (Khalili & Asmawi, 2012). Many research studies proved that organizational commitment leads to job satisfaction (Javad & Davood, 2012).

Leadership styles create a strong foot print on the level of organizational commitment. Rehman & Afsar (2012) concluded that paternalistic leadership has positive impact on increased commitment of the employees as well as improved citizenship behavior in various SMEs. Leader's behavior is more important than organizational climate in small scale enterprises (Pyngavil et.al, 2011). Bakshi et.al, (2011) explored the linkages between Allen and Meyer's (1991) three component model of organizational commitment and organizational citizenship behavior. Analysis showed that affective commitment, continuance commitment and normative commitment were positively correlated with aggregate measure of oCb. Sabir et.al (2011) concluded that leadership style is a strong dimension of organization commitment.

Methodology & Design

To explore how the entrepreneur's leadership dimensions create a strong footprint on the level of organizational commitment in the context of selected SME clusters in Delhi, we framed the following objectives for the research:

  1. To identify the various leadership dimensions adopted by entrepreneurs in SMEs in Delhi.

  2. To understand the various dimensions of organizational commitment.

  3. To examine the relationship between entrepreneur's leadership dimensions and employees organizational commitment

  4. To study the impact of leadership dimensions adopted by entrepreneurs on the level of commitment of the employees.

  5. To open new vistas of research.

Scope of the Study

This research is limited to 4 clusters in West, South and Northern districts in Delhi region...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT