Importance of Leadership in Smes

Added on -2020-02-05

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Running Head:LEADERSHIP AND IMPORTANCE OF LEADERSHIP IN SMEsLITERATURE REVIEW ON LEADERSHIP AND IMPORTANCE OF LEADERSHIP INSMEsStudent’s Name:Professor’s Name:Course Title:Date:
LEADERSHIP AND IMPORTANCE OF LEADERSHIP IN SMEsTABLE OF CONTENTSIMPORTANCE OF LEADERSHIP AND LEADERSHIP IN SMES............................................3INTRODUCTION...........................................................................................................................3LITERATURE REVIEW................................................................................................................3CONCLUSION................................................................................................................................7CRITICAL REFLECTION.............................................................................................................8REFERENCES..............................................................................................................................132
LEADERSHIP AND IMPORTANCE OF LEADERSHIP IN SMEsIMPORTANCE OF LEADERSHIP AND LEADERSHIP IN SMES.INTRODUCTIONLeadership is an important phenomenon which has been researched on very extensively byscholars. Leadership is a very crucial aspect in an organization which influences how anorganization performs and its reputation to the society. This report will critically analyze theconcept of leadership in Small and medium-sized enterprises. The literature will emphasize theleadership and importance of leadership in SMEs. It will also discuss the leadership styles whichhave been used by different leaders in the small and medium-sized enterprises to ensure that theyperform well.LITERATURE REVIEWOver the years it has been difficult for researchers and scholars to define the term leadership.Leadership can be defined according to the situation, the perspective of the researcher and thephenomenon of their interest. Beck, Demirguc-Kunt and Levine(2005), stated that the definitionsof leadership are as many as the people who have tried to define the concept.One of thedefinitions of leadership is that it is the process of influencing and facilitating the process ofknowledge implementation in an organization in a manner that will lead to the achievement ofset goals and objectives of the organization. It can also be defined as group processes,compliance, personality, influences, power, persuasion, particular behaviors, goal achievement,and interaction role differentiation (Baum, Locke and Kirkpatrick, 1998). In establishing leadership, the significant difference occurs in identifying the source of influenceand the outcome of the impact, and this is what has made it difficult for researchers to come upwith a standard definition of the term. For instance, Burns (1978 p. 2) defined leadership as the3
LEADERSHIP AND IMPORTANCE OF LEADERSHIP IN SMEsmanner in which a person behaves when he or she is directing the different activities towards aparticular set goal. Robbins (2001) on the other hand states that leadership is the ability toinfluence other people towards a goal. It is also the “influence which one person gainscompliance from other people in the direction of the goals they desire.Yukl(2002) defines leadership as a process of structuring, guiding, inspiring and facilitatingrelationships and activities in a given organization.Armstrong is a great management scholarwho defined the term leadership as the process of getting things done through other people. Heemphasized that in leadership there must be set objectives which need to be achieved in aspecific period. It is all about encouraging and inspiring people to try their best in ensuring thatthey achieve the firm's goals.All organizations require leadership and the leaders have different roles, and they performdifferent functions for an organization to achieve its goals. Leaders are different regarding theirleadership styles, talents, competence, knowledge skill, and training(Bouchard and Basso, 2011).A good leader is effective and works towards achieving the goals and objectives of theorganization. SMEs need good leadership which can offer direction and strive to achieve thevisions, mission, and objectives of the organization(Bell andMjoli, 2014). Effective leadership iscrucial in the small and medium-sized organizations because it can recognize people’s abilities,talents, knowledge, skills and attitudes efficiently and help the whole organization inaccomplishing the goals they set(Bass andAvolio,1994).Leadership in SMEs has a direct relationship with the organization performance. This means thatgood leadership will result to good performance while poor leadership will result in poorperformance (Bouchard and Basso, 2011). With this in mind, SMEs have begun to put muchemphasis on the need of having effective leadership in the organizations so that the organizations4

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