Small and medium business transformational leadership and supply chain management

Abstract

The performance-related problems facing small and medium enterprises (SMEs) in South Africa are well known. Efforts to find lasting solutions are ongoing and include empirical research focusing on various business practices and models. Applying leadership practices and supply chain management to SMEs provides fertile ground for groundbreaking solutions. This study tested the relationship between transformational leadership, supply chain execution and supply chain performance in manufacturing SMEs in South Africa. The study uses structural equation modelling to examine this empirical connection using data collected from 411 professional employees drawn from SMEs in three South African provinces. The study found that idealised influence and intellectual stimulation exert a positive impact on supply chain execution. Supply chain execution is positively linked to four supply chain performance factors, namely agility, reliability, cost optimisation and responsiveness.

Transdisciplinary contribution: The study connects transformational leadership, which is an organisational behaviour construct to supply chain management, the latter of which is an emerging business discipline. The study recognises that business strategy is implemented by people whose conduct and practices are pivotal to strategic success. In addition, the study has an entrepreneurship orientation as it addresses the challenges facing manufacturing SMEs in South Africa.