Impact of transformational and transactional leadership style on organization performance of SMES

The aim of this study is to explore the relationship between transformational and transactional leadership style and organization performance in the context of Rajasthan small and medium enterprises (SMEs). To achieve this objective, an exploratory study was conducted and data were collected using structured questionnaire based on pretested scale Multi Factor Leadership Questionnaire (MLQ-5X) is used. Data is collected from 373 SME and for analysis multiple regression was employed. The statistics shows the overall reliability of the scale used in the study and the findings indicate a significant relationship in between transformational and transactional leadership style and organization performance of SMEs. It is evident from the findings that although transactional leadership style is predictor of organization performance but fragile then transformational leadership style. The results are in conformance with previous research works (AL-Hussami and Yang 2008). The findings implicate that leadership style by leaders ensure the effectiveness and organizational success.