Impact of Leadership Styles on Employee Commitment in SMES

An Analysis of the Impact of Leadership Styles on Employee Commitment in SMES of Pakistan and Russia

Table of Contents

1. Chapter Two: Literature Review

1.1. Leadership

1.1.1. Dimensions of Transformational leadership

1.1.2. Dimensions of Transactional leadership

1.2. Other Leadership Styles

1.3. Comparison of Leadership Styles in Russia and Pakistan

1.4. Employee Commitment

1.5. Small and Medium Enterprises (SMEs)

1.5.1. Role of SMEs in Pakistan

1.5.2. Role of SMEs in Russia

1.6. Leadership and Organizational Commitment

1.7. Research Variables

1.7.1. Leadership and Employee Commitment

1.7.2. Transactional Leadership

1.7.3. Transformational Leadership

1.7.4. Organizational Culture

1.7.5. Employee Values

1.8. Conceptual Framework

1.9. Research Hypotheses

1.10. Conclusion

2. Chapter Three: Research Methodology

2.1. Research Types

2.2. Research Approach

2.3. Research Philosophy

2.4. Methods of Data Collection

2.5. Research Instrument

2.6. Research Population

2.7. Sampling Technique and Sample Size

2.8. Ethical Considerations


1. Chapter Two: Literature Review

1.1. Leadership 

Leadership can be defined as an extremely crucial management skill that allows a person to lead and inspire people towards a desired goal (Sabir, Sohail and Khan, 2011). All managers have different styles of leadership in managing people. Besides from the traditional styles of leadership, namely autocratic, democratic and laissez-faire, many scholars have identified more realistic styles of leadership, among which Bass’s (1998) transactional and transformational style is the most popular. Transformational leaders take their followers along in identifying and setting goals and keep in mind their followers’ development and growth needs. This enables them to drive the workers’ commitment to the organization and the commonly determined goals (Nguyen, Mai and Nguyen, 2014).

According to the research study conducted by Yunus  and Ibrahim (2015) given today’s fast-evolving business environments, transformational leadership style is often deemed the most-effective in leading organizations through tough and uncertain times. On the other hand, transactional leadership style yields short-term and immediate benefits since leaders use reward and compensation for driving their followers towards a goal. The subordinates are motivated by the idea of reward in return of their efforts (Bass, 1998). Many often regard transformational leadership as more effective than transactional leadership, but this assumption is mostly false. All styles of leadership, to some extent, involve an element of transactional leadership because true leaders have to smartly strike a balance between motivating their followers through intrinsic factors, such as personal development, recognition etc., and extrinsic factors such as reward and recompense to ensure fulfillment of organizational goals (Chelliah, S., Sundarapandiyan, N. and Vinoth, B., 2015).

1.1.1. Dimensions of Transformational leadership 

As stated by Abdullah et al (2007); Uchenwamgbe (2013), there are four elements of transformational leadership. The first is idealized influence which refers to the charismatic and idealized personality of the leader, which inspires people to follow him as a role-model. The leaders set high and consistent moral and ethical values, which inspire followers to respect and admire the leader. This element enables the leader to establish stimulating goals for followers, who are motivated enough to put in effort beyond their personal interests.

Similarly, the second element of transformational leadership is inspirational motivation. This refers to the leader’s skill to instigate motivation and confidence in people towards attaining a common vision. Such leaders successfully nurture team spirit and utilize it for achieving the goal. Moving on, the third element is intellectual stimulation. This refers to the leader’s ability to stimulate creativity and autonomy in his followers by using various tactics such as involvement in decision-making process, encouraging innovative problem-solving techniques and questioning assumptions and so on. Lastly, the fourth element is individualized consideration, which is concerned with the leader looking after each group member’s personal growth and needs and desires. The leader knows what motivates each group member and acts as a mentor for every one of his followers (Nanjundeswaraswamy, 2015; Voon et al., 2011).

1.1.2. Dimensions of Transactional leadership 

According to Bass and Avolio (1995), there are three different dimensions to transactional leadership. The first element is contingent rewards. This refers to the rewards that are given to the team member if he attains certain goals or fulfills a particular job. The leader motivates the follower by letting him know his expectations and using rewards as an incentive to motivate the employee. The second dimension, management by expectation passive, is when the leader only interferes with the worker’s job if any problem comes up. Active management by exception, on the other hand, in when the manager continuously monitors his workers and their progress to ensure compliance with his standards (Nguyen, Mai and Nguyen, 2014; Arsawan et al., 2016).

1.2. Other Leadership Styles

As per the research, other than the most commonly used and adopted leadership styles within the organizations, there are other leadership styles that include – autocratic leadership style, democratic leadership style, strategic leadership style, cross-cultural leadership, facilitative leadership, Laissez-faire leadership and lastly, the coaching leadership. Each leadership style has its own pros and cons and every organization adopts the leadership as per the management styles and industry (Eagly et al., 2003).  According to Sosik and Godshalk (2000), the autocratic leadership is authoritative one in which employees do not have any flexibility and the leader controls all the power and exercise authority in decision making.

On the other hand, democratic is the participative leadership style that engages employees in the decision making and delegates responsibilities (Egri and Herman, 2000). The research shows that it is one of the most effective leadership styles due to effective communication between employee and management, promote competencies, creativity and ensures honesty as well. Some researchers refer the democratic leadership as transformational leadership style due to similar attributes (Aronson, 2001). On contrary, the other leadership styles use as per the situational basis. This is when, the transactional, autocratic and transformational leaders require they adopt the leadership style as per the need and situation within an organization (Emery and Barker, 2007).  

1.3. Comparison of Leadership Styles in Russia and Pakistan 

In order to identify the practice and implementation of leadership styles in Russia and Pakistan, the 6D Model of Geert Hofstede has been used. This model is useful to understand the cultural aspects of different nationalities based on six dimensions. These six dimensions include – the power distance, individualism, masculinity, uncertainty avoidance, long term orientation and lastly, indulgence. The following graph shows the results of Geert Hofstede 6D Model for Pakistan and Russia (Geert Hofstede, 2018).

Figure 01: Geert Hofstede 6D Model

(Source: Geert Hofstede, 2018)

As the first dimension of power distance shows that Russian organizations have more rigid and hierarchical culture as compare to Pakistan. This is because, the score of power distance of Russia is 93%, whereas, Pakistan has 55%.  Along with this, the culture of Pakistan is collectivist as the score of individualism is highly low, whereas, Russia has also collectivistic culture however, more towards individualistic as compared to Pakistan. On the other hand, Pakistan has patriarchal culture as the score of masculinity is 50 whereas, Russia has 36 (Geert Hofstede, 2018).

On contrary, the uncertainty avoidance in both the countries is similarly, it means leaders and employees are highly uncertain about future and they plan for that in advance to avoid an uncertainty. In contrast, the leaders of Russia plan for the things in advance as the long term orientation score is 81, whereas, Pakistani leaders are mixed as they are long term and short term orientation. This shows the culture of Pakistan and Russia is a combination of wide range of factors. This has also been reflected by the leadership and organizational cultures of both the countries. The Russian organizations have more rigid and hierarchical culture as compare to Pakistan. Along with this, the culture of Pakistan is collectivist as the score of individualism is highly low, whereas, Russia has also collectivistic culture however, more towards individualistic as compared to Pakistan. On the other hand, Pakistan has patriarchal culture as men dominate the leadership position and organization culture (Geert Hofstede, 2018).

1.4. Employee Commitment

As per the research, theorists have defined organizational commitment in various ways. In general, it refers to the feeling of commitment, responsibility and emotional attachment with the company’s goals and values (Avolio, Zhu, Koh and Bhatia, 2004). There are three components to commitment – affective, continuance and normative commitment. Employees who are committed to the organization feel quite attached to the organization’s goals and vision and put in extra effort to achieve these goals (Nguni, Sleegers and Denessen, 2006).

In recent times, the notion of organizational commitment has gained a lot of traction and has attracted the attention of many scholars for examining organizational behaviors Meyer et al (2002). This is because this concept is often linked with two major organizational issues. The first is employee’s intention to leave the organization and the second is his final decision to go (Emery and Barker, 2007). Others have described organizational commitment as employee’s loyalty, eagerness to be associated with the organization and the extent to which they internalize the goals of the organization as their own (Chiok Foong Loke, 2001). Abdullah et al., (2007), on the other hand, refers to it simply as emotional attachment with the company.

The importance of organizational commitment for the organization lies in the fact that it greatly improves organization’s effectiveness and the employees’ willingness to stay with the company. It also results in better performance and higher motivation levels that drive employees to do their level best for the company. Furthermore, it is indicative of many work-related attitudes such as employee satisfaction, involvement levels, creativity etc (Chiok Foong Loke, 2001). As per Lee (2009), organizational commitment is associated with better knowledge sharing, improved performance, lower absenteeism and turnover rates. High employee turnover can be a huge cost to the business in terms of interviews, hiring costs, work left incomplete, termination pay and training and development of new recruits. Therefore, it can be said that highly committed workforce helps organizations enhance competitiveness (Shirokova, G., Vega, G. and Sokolova, L., 2013).

As mentioned earlier, a lot of research and various studies have been conducted over the past few years to comprehend the nature and importance of organizational commitment. It is imperative to drive commitment due to its innumerable benefits to the business (Chiok Foong Loke, 2001). As per a few studies conducted, organizational commitment is found to be negatively associated with absenteeism, turnover and other such unproductive work attitudes. Whereas, commitment is positively associated with motivation and satisfaction (Sabir, Sohail and Khan, 2011).

According to the three-component model of organizational commitment, workers connect with the organization due to their want and desire to be associated with the company, which is called affective commitment; or as a result of some necessity, which is called continuance commitment and lastly by obligation, called normative commitment (Chiok Foong Loke, 2001).  All these types of commitment reflect various reasons why employees may become attached to the business. Achievement of such a psychological position of employees, be it through any reason, is called organizational commitment. This can be a big determinant of the effectiveness of the leadership style and also presents a way to better understand leadership (Nguyen, Mai and Nguyen, 2014).

1.5. Small and Medium Enterprises (SMEs)

The development of social, economic and industrial sectors of a country are highly influenced by small and medium enterprises that play a vital role in the overall growth and development of a country (Bari, Cheema and ul Haque, 2002). As per Bari and Cheema (2005), SME assists the economic sector of developed countries by determining their development, because it generates the economy and provides employment opportunities to the people as it plays a significant role in assisting the people by increasing their income and providing a standard life to them. The competitiveness and development of a country highly depends upon the small and medium size enterprises (Khurrum et al., 2008).

1.5.1. Role of SMEs in Pakistan

The growth and development of economy, progress of technological innovation, role of cottage industries, progression of large industries, and renewal of social and economic development is based on the role that is played by SMEs in Pakistan.  Reduction of poverty and expanding of national economy is sourced by SMEs. Furthermore, it bases the foundation of social boosting and employment (Bari and Cheema, 2005).  As per Khalique et at (2015), SME sector of Pakistan directly reflects the economy of developing countries like Pakistan. As per the economic census of Pakistan that was held in 2005, (It is also the largest census in Pakistan till now).   

Around 3.2 million businesses are operating in Pakistan. As per PBS, (2011) around seventy eight percent of labour face of non-agriculture sector and more than ninety percent of personal businesses are represented by SMEs. Thirty percent of gross domestic product (GDP) of Pakistan is influenced by SMEs. Furthermore, twenty five percent of manufactured goods exports and value adding in manufactured goods by thirty five percent is also represented by this sector.  Retail trade, hotel sector, wholesale and restaurants are activated by fifty three percent of SMEs. There is twenty two percent of SMEs activity in provision of service and twenty percent in industrial development (Kureshi, Qureshi and Sajid, 2010; Khalique et al., 2015).

Keeping in view the contributions of SME in creating employment opportunities, alleviating poverty, economic diversification and generating income, efforts are being made by the government of Pakistan for promoting the development SMEs (in general) and entrepreneurship.  For instance, for the development of small and medium size enterprise sector, the government of Pakistan established SMEDA (small and medium enterprise development sector) in October (1998). Banking sector was also financed by GoP by establishing SME for this sector. Furthermore, there are specialized departments in SME for financing the private banks in the country (Khalique et al., 2015).

1.5.2. Role of SMEs in Russia

As per a survey taken place in Russia in January 2015, currently operating SMEs and their total number that includes micro, small, medium and private enterprises is 4.5 million, that contributes to the twenty five percent of Russian economy by providing jobs to eighteen million people. Individual entrepreneurs (2.4 million), micro enterprises (1.9) million and small enterprises (5,2 percent) form the basis of SME sector in Russia (94.3 percent). Whereas, SMEs are sourced by 0.3 percent of medium sized enterprises, individual and micro enterprises form 55 percent of jobs in SME sector (Barinova, Zemtsov and Sorokina, 2015).

In the period of 2010 – 2014, microenterprises grew rapidly in number; however, as shown in table 2, the growth rate of microenterprises has been decreased in the last two years.  However, within four years, there has been noticeable increase by twenty eight percent in the number of small and micro businesses, that is from 1644.3 thousand in 2010 to 2103.7 thousand in 2014. As compared to 2010, 1868.2 thousand have been attained and there has been increase by 1/3 in the number of micro enterprises, whereas, as compared to 2013, only 40 thousand has been attained upon the increase in number of micro-enterprises in 2014 (Shirokova, Vega and Sokolova, 2013; Barinova, Zemtsov and Sorokina, 2015).

 The decline in number of medium size enterprises has accompanied the growth of small and micro enterprises in the last five years. In 2013, the number of medium enterprises has been same (13.7 thousand). The new criteria of SME based on sharing of private capital and sales revenues have affected the decline of medium business sector by ½ (13.7 thousand) in 2013, that in 2010 was 25.5 thousand and in terms of application scope the latter one is more complicated, that was applied to organizations that founded the companies and not only to individual or company founders (Volchek, Henttonen and Edelmann, 2013; Shirokova, Vega and Sokolova, 2013).

According to Barinova, Zemtsov and Sorokina (2015), there has been an increase by thirty four percent, 2010 consisting of 3.3 million people and 2014 consisting of 4.4 million people, in employment sector at micro enterprises in the years between 2010 and 2014. The growth in employment sector in micro and small enterprises in four years was by 10.2 percent, from 9.7 million people in year 2010 to 10.8 million people in 2014. The employment number declined from 2.4 billion people in 2010 to 1.6 billion people in 2014 (35 percent) in the medium businesses sector. Within five years, the total sale revenues of small and micro enterprises grew by attaining 26392.3 billion rupees in 2014, that was 40 percent more than 2010 where that was 18933.8 billion rupees.  Within five years, medium size enterprises faced decline in their total sale revenues from 7416.2 billion rupees in 2010 to 5027.8 billion rupees in 2014 (32 percent).

1.6. Leadership and Organizational Commitment

According to Sabir, Sohail and Khan (2011), the Efficiency of an organization is based on its leadership style and qualities that facilitates the employees, clients and overall organization in a positive way through its communicating plans and policies, offering the incentives, rules and regulations, co-operation, building efficient work environment and instructions. Bass, the pioneer of transactional leadership (1998), explains the transactional leadership as an exchanging relationship between the subordinates and leaders by providing advantages related achieving their goals and giving penalties if targets are not achieved. There are three subscales of transactional leadership; that are contingent rewards, active management by exception and passive management by exception. The transformational theory of leadership by Burn states that it’s the leader who can sacrifice his personal interests over group interests and he is more qualified morally. This theory is based on leader’s power to motivate the subordinates for achieving their targeted goals.  Leadership skills have been classified into 4 I’s by Sabir, Sohail and Khan (2011); Yunus and Ibrahim (2015), that include idealized influence, inspirational motivation, intellectual stimulation and individual consideration. However, more attention has been paid by researchers on transformational and transactional leadership. Both leaderships determine the behavior by ensuring the success of the organization. Transformational leadership helps the subordinates to more critical in their thinking by encouraging them, this affects the commitment of employees with the organization (bass, 1994 and Avolio).

Transformational leadership plays an important role by positively influencing the employees on their commitment with the SMEs in Russia. Leadership style has been examined by conducting various studies that shows a positive and strong relationship between leadership and their commitment with the organization as it enhances the confidence of subordinates by encouraging them to trust their leaders that in turn increases their level of commitment with the organization, Sabir, Sohail and Khan (2011); Yunus and Ibrahim (2015) states that employees are influenced by leadership in building their commitment and trust level, this is done by transformational leadership. Solutions to problems are problems are proposed by transformational leaders due to which commitment and motivation of employees is enhanced.

According to Chelliah, Sundarapandiyan and Vinoth (2015) the commitment of employees will automatically increase and they will become more loyal towards the organization if the organization’s management play its role effectively in satisfying the needs of their employees. Leadership style holds great importance and it is known as the forefather of commitment, for increasing employee’s commitment. Transactional and transformational leadership are positively playing their part together by ensuring the satisfaction and job success, however, transformational leadership holds a strong relationship with job satisfaction and job success as compared to the transactional leadership.  

As compared to transnational leaders, transformational leaders influence the employees strongly. Normative commitment and organizational effectiveness is highly correlated with the sub elements of transformational leadership such as inspiration, influenced idealization and intellectual stimulation. Idealized consideration and inspirational motivation are not significantly correlated with continuous commitment whereas these both have a positive relationship and significant impact on continuous commitment with organization (Abdullah et al., 2007).

Recent researches on organizational commitment and leadership style shows that transactional and transformational leadership hold a positive and strong relationship with the organizational commitment of their employees. However, transformational leadership influences the Pakistan’s and Russian organizations employee’s more than transactional leadership. Another significant determinant of employee commitment and motivation is the organizational culture that plays an important role in improving the organizational performance. The relation of culture and leadership in the past literature reflects different forms of attitude and behavior that is based on cultural environment. This variation is due to the different leadership styles that vary from culture to culture and on different workforce objectives (Chelliah, Sundarapandiyan and Vinoth, 2015).

Link between leadership and organizational culture has been explained by many researchers. A study conducted by Bass in (1998) on leadership style and how culture is influenced by it, explains that transactional leaders work on the existing culture, whereas transformational leaders align the vision and culture of organization. Organizational culture and leadership is corelated by Sabir, Sohail and Khan (2011); Yunus and Ibrahim (2015), organizational culture shows the beliefs and visions of leaders and shapes the norms of organization. The linkage explained by Sabir, Sohail and Khan (2011); Yunus and Ibrahim (2015) between transformational and transactional leadership with organizational culture forms the basis of organizational culture and leadership style. Leadership and organizational culture are dependent on each other based on values, behaviors and norms of culture. when the organizational culture changes, the leadership style also changes, as per Sabir, Sohail and Khan (2011); Yunus and Ibrahim (2015), transformational and transactional leadership have a constructive relationship with adhocracy and clan culture. an exploratory study was conducted by Jaskyte (2018) that was based on organizational culture and leadership of non-profit organizations, the development of organizational culture is strongly influenced by transformational leadership as it enhances the culture values and norms of the organization.

1.7. Research Variables

1.7.1. Leadership and Employee Commitment

Similarly, as per the study of Uchenwamgbe (2013) it has been examined that with the passage of time, we have seen change in the definition of commitment and its computation. Some definitions explain commitment as a process in which person’s tangential interests tend to exist at equilibrium line, the degree at which at which attachment takes place with an organization is also termed as commitment. There are two views that explain the basis of organizational employee commitment. They are commitment based on attitude and commitment based on behavior. Commitment based on attitude shows the thinking and feelings of an employee towards the organization and commitment based on behavior shows the behavioral patterns of an employee. Several models have been proposed by various authors, for instance, Allen and Meyer introduced three component models, multidimensional model and Chatman and Reilly’s model. Organization gets affected in different ways due to the various dimensions of commitment.  Identification complains and moral are the three prime dimensions of commitment (Nanjundeswaraswamy, 2015).

There are three levels of model of organizational commitment that have been proposed by Voon et al (2011) and Mayer, these levels include affective commitment, continuous commitment and normative commitment. The relationship of workers with an organization varies workers to workers, in which their level of attachment with the organization is reflected.  As the relationship varies employee to employee so there is a possibility that one employee has more attachment while other employee does not have the same level of attachment. In the same way, employees can have any two kinds of attachment with the organization; they can have normative or affective commitment but not continuous commitment. That is why the attachment of employees with the organizational varies individual to individual. Affective commitment refers to the willingness, desire and beliefs that show the degree of employee’s attachment with its organization by focusing on their organizational performance and goals (Bass and Avolio, 1995).

According to Nguyen, Mai and Nguyen (2014) affective commitment shows the level of employee attachment with the organization including beliefs, willingness and desire regarding organizational goal achievements. This commitment based on affection comes in three shapes including recognition, modification and maintaining. The effective commitment shows the beginning of emotions of employees with the organization, after this stage, emotions are identified with the objectives and goals of organizations that show the degree of attached emotions with the organization. As per Abdullah et al (2011), the effective commitment shows the psychological attachment of employees with organization because it focuses on the personal attributes such as gender, tenure, age and characteristics of organization.  Second type of commitment known as normative reflects the degree of loyalty and his feelings towards the organization.

Employee develops the levels of obligation based on their interests of investment in the organization and vice versa.  The initial feelings of obligation, make the employee to know about the monetary and time investment of organization that is spent on his training. They feel morally obliged to feel committed with the organization, this also highlights the interests of employees attached with the organization that they are to be given when they get retire, this phenomenon is termed as emotional or continuous attachment of employees with the organization. Becker’s bet theory explains the continuous commitment, that employees are committed with the organization for a long time and when they leave the organization faces loss therefore they intend to be committed with the organization (Avolio, Zhu, Koh and Bhatia, 2004). The investment that employees made with the organization is based on their efforts, abilities and relationship with organization and co employees that they cannot get in their next job. It is therefore that employees choose to stay loyal with their organization that in turn enhances the organizational performance. The perception of loss of job makes the employees psychologically attached with the organization. Alternative employment and investment are the basic known variables that are linked to the continuous commitment (Nguni, Sleegers and Denessen, 2006).  

1.7.2. Transactional Leadership

The type of leadership used in behavioral sciences is known as transactional leadership. Bass (1998) was the founder of transactional leadership who describes it as, the exchanging of relationship between subordinates and leaders, transactional leaders focus on clarification of roles related the needs of the employees for meeting the organizational requirements and goals. There are two attributes of transactional leadership that follow two ways i.e. contingent privileges and administration by exception. As per Sabir, Sohail and Khan (2011); Yunus and Ibrahim (2015), there are three primary components of transactional leadership i.e. contingent privileges, active administration and passive administration by exception. When targets are achieved, rewards are exchanged by transactional leaders in contingent reward. Subordinate’s performance is monitored by leader in active management along with the elimination of subordinate’s deviation from their goals and when subordinate performs satisfactory, transactional leader then interfaces in employee’s matter, this is done in passive management by exception. Transactional leadership switches interaction in subordinates in increasing poverty and rewards. Hence, goals are achieved with the help of transactional leadership and put sanctions if targets are not achieved.

1.7.3. Transformational Leadership

The development of transformational leadership’s theory during 1978 gave rise to the transformational leadership that have different aspects with passing time. A book for explaining the difference between transformational leadership from conventional leadership was published by Burns in 1978. This theory of transformational leadership as per explained by Burn explains the giving up of personal interests by leaders for the sake of group interests shows their moral quality. Bass (1985) enhanced the burn’s theory by using formal theory to explain transformational leadership along with its factor measurement and model.

The characteristics of transformational leadership includes courage, values, learning, openness visionary ability and courage, all these transformational qualities have their own attributes, however, leadership skills have been classified into 4 I’s that includes idealized influence, motivation based on inspiration, intellectual encouragement and individualized deliberation.  Leader’s power to motivate the subordinates for achieving their goals is explained by transformational leadership. Other researchers classify transformational leadership into four elements that include the above mentioned 4 I’s (Emery and Barker, 2007).

Transformational leadership has another ability named as managerial ability that is important for leader. Without leadership attributes, transformational leadership cannot be implemented effectively, these attributes include appreciation, teaching power, team orientation, creativity, recognition and responsibility. Management success can be ensured by attributes of transformational leadership. There should be respect, faith and trust in leader’s behavior towards employees. The actions of leaders show how responsible and respectful they are towards others by removing all the obstacles in progress of subordinates (Chiok Foong Loke, 2001).

1.7.4. Organizational Culture

As per, Hofstede culture is the software of mind, that helps us in our routine interactions.  Culture has different aspects based on the thinking and feelings of each person. There are three subsets of Lewis’s cultural model that are multi active, linear active and reactive.  Family loyalty, emotions and relationships are included in the first subset.  Facts, product, law and planning are a part of the second subset.  whereas, collective harmony, face, common obligation and courtesy are included in the third subset.  The culture of Edgar Schein’s model includes, espouse values three-layer artifacts and assumptions. These are also defined as artifacts, assumptions and justification level by the researchers. Iceberg’s cultural model also explains the behavior (Shirokova, Vega and Sokolova, 2013).

According to Roy D’ Andrade, Culture has variation in its nature that is based on non-declarative knowledge based on society.  Power is maximized using the principle of self-organization with fine results. Increase in inflow, stable system and high quality maximizes the power. For increasing turnover, varied input, exploration ability and feedback is there to improve the employee’s commitment with the organization that also enhances the organizational performance. As per Kennedy (2018) cultural model, corporate culture ensures the success or failure of an organization, it also depends upon the organizational culture. Kennedy and Terrence deal presented their model of organizational culture in a book in 1882 that has the following points:

  • Historical traditions of past beliefs and values
  • Meaning of organization and its important ceremonies
  • Activities of employees  
  •  better understanding Heroic Figure for employees
  •  Cultural Network as a role model for others
  • Organizational culture

The concept of culture revolves around organizational culture and the basis of strong and weak culture. Culture affects the employee’s behavior in a positive way that also enhances the performance and commitment of the employees with the organization that also shows how weak or string the culture is. Weak culture has a negative impact on employee’s behaviors; it can be improved by the expression and behavior of direction in organization (Emery and Barker, 2007).

1.7.5. Employee Values

Expectations of employee from the employers against performance and contribution are referred as employee value. Effectiveness in employee values enables the organization to maximize the performance of its employees along with retaining the workforce and loyalty of employees and focusing on new talent for the organization. Employees are motivated by the benefits and attributes that increase their motivation level so that employees can perform in the best of their abilities. As per Corporate leadership council, the proposition of employee’s values depends upon the following attributes. The opportunities of compensation stability development increase career opportunities for their future by providing a positive environment (Chiok Foong Loke, 2001).

  • Compensation Solidity
  • Developmental opportunities
  •  Opportunities related future career
  • Collegial work environment
  • Respect manager quality

1.8. Conceptual Framework

1.9. Research Hypotheses

Consistent with the objectives of the study, two hypotheses have been developed for testing:

  • H1: There is a significant relationship between transactional leadership style and employee commitment in the SMEs operating in Russia.
  • H2: There is a significant relationship between the transformational leadership style and employee commitment in the SMEs of Russia.
  • H3: There is a significant relationship between transactional leadership style and employee commitment in the SMEs operating in Pakistan.
  • H4: There is a significant relationship between the transformational leadership style and employee commitment in the SMEs of Pakistan.

1.10. Conclusion

It has been determined from the above reviewed literature that leadership styles including transformational and transactional has direct influence on the employee commitment within an organization. However, the literature shows that organization culture and employees’ values play critical role in the development of an employee commitment with the organization. In addition to that, for ensuring the organizational success, small and medium enterprises need to from strong organizational culture.  Various SMEs operating in Russia and Pakistan have been the problems related employees that can be solved if there is a strong culture that encourages the employee’s motivation and commitment. Leadership plays an important role in increasing the organizational commitment by ensuring strong culture, effective monitoring and planning, employees commitment can be controlled because employees are the main elements of organizational culture and their loyalty towards organization can bring a lot of benefits to the organization, if the proposition of employee’s value and organizational culture is same, the commitment of employees will be increased, The corporate leadership council also supports this idea. The mediating role of organizational culture and employee’s values and their relationship with the organizational commitment and leadership style helps to increase their commitment towards the organization.

2. Chapter Three: Research Methodology

The research methodology chapter will include the types of research method that has been applied in this research study, the research approaches, research philosophies, sampling techniques and sample size as well. In the end, this chapter will address the ethical considerations of the research as well.   

2.1. Research Types

Mainly, there are various types of research methods though the key research types include the qualitative and quantitative. In the underlying research, only quantitative research research method has been used. The quantitative data will be collected from the employees working in SMEs of Pakistan and Russia in order to identify the impact of leadership styles on the employee commitment. For this purpose, the survey questionnaire research tool has been developed and used. The research questionnaire is based on five points Likert Scale questions including the section of demographics in the beginning (Zikmund et al., 2013; Saunders, 2011). Along with this, the qualitative analysis will be supported with the wide range reviewed of literature (Cooper, Schindler and Sun, 2006; Zikmund et al., 2013; Saunders, 2011).

2.2. Research Approach

This research study has followed the deductive research approach. The deductive approach is useful to test the developed hypotheses and verify the theories on the basis of quantitative data analysis (Cooper, Schindler and Sun, 2006).

2.3. Research Philosophy

The research has applied positivism research philosophy; this is because it provides factual knowledge and information based on primary data collection. This type of research philosophy is beneficial in data analysis on the basis of statistical data (Cooper, Schindler and Sun, 2006; Zikmund et al., 2013).   

2.4. Methods of Data Collection

There are primarily two types of data collection techniques that include primary and secondary methods. In the research, both the methods of data gathering have been used. The primary data has been gathered from the employees working at the SMEs of Pakistan and Russia in the form of interviews and questionnaire. On the other hand, the secondary data has been gathered online through the use of secondary sources of data gathering from diverse range of journal articles, books, official websites and other authentic and reliable sources in order to identify the impact of leadership style on the employee commitment in the SMEs of Russia and Pakistan (Cooper, Schindler and Sun, 2006; Saunders, 2011).   

2.5. Research Instrument

In the following research, two types of research instruments have been used. One is the open ended questions for the interview purpose from the employees working in SMEs in both the selected countries that are Pakistan and Russia. Whereas, the other research instrument is the survey questionnaire that has been developed through the use of five points Likert scale (Cooper, Schindler and Sun, 2006).

2.6. Research Population

The research population of the underlying research includes the employees working in SMEs of Pakistan and Russia.

2.7. Sampling Technique and Sample Size

In the research, the convenience sampling technique has been used and employees have been targeted as per the convenience and access of the researcher. The sample size of the research questionnaire is 400 numbers of employees working in SMEs of Pakistan and Russia. The total sample size was equally divided among the employees of both the selected countries which means 50 employees from SMEs working in Pakistan and 20 questionnaires were filled form the employees of Russia working in SMEs. The questionnaire was shared online with the employees and responses were collected. Similarly, online interviews have been conducted with different employees working in SMEs of Pakistan and Russia. The size of the interviews from was 10 employees from each country’s SMEs (Zikmund et al., 2013; Saunders, 2011).

2.8. Ethical Considerations

The research has followed all the ethical considerations that include – the use of secondary material that has been used in the research has been properly cited and work of others’ has not been copied, though it has been completely paraphrased and acknowledged with proper referencing. Along with this, in the primary data collection the confidentiality of the respondents has been ensured as the information shared by the respondents has not been shared with any third party.


Abdullah, M.A., Shuib, M., Muhammad, Z., Khalid, H.N., Nor, N.M. and Jauhar, J., 2007. Employee organisational commitment in SMEs: evidence from the manufacturing sector in Malaysia. International Review of Business Research Papers3(2), pp.12-26.

Abdullah, M.A., Shuib, M., Muhammad, Z., Khalid, H.N., Nor, N.M. and Jauhar, J., 2007. Employee organisational commitment in SMEs: evidence from the manufacturing sector in Malaysia. International Review of Business Research Papers3(2), pp.12-26.

Aronson, E., 2001. Integrating leadership styles and ethical perspectives. Canadian Journal of Administrative Sciences/Revue Canadienne des Sciences de l’Administration18(4), pp.244-256.

Arsawan, W.E., Sumetri, W., Pasek, K. and Suryantini, P.S., 2016. Impact of Transformational and Transactional Leadership on Organizational Commitment and SMEs Firm Performance: A Comparative Analysis. Abstract of Economic, Finance and Management Outlook6, pp.1-3.

Avolio, B.J., Zhu, W., Koh, W. and Bhatia, P., 2004. Transformational leadership and organizational commitment: Mediating role of psychological empowerment and moderating role of structural distance. Journal of organizational behavior25(8), pp.951-968.

Bari, F. and Cheema, A., 2005. SME Development in Pakistan Analyzing the Constraints to Growth.

Bari, F., Cheema, A. and ul Haque, E., 2002. Barriers to SME growth in Pakistan: An analysis of constraints. A study conducted for the Asian Development Bank, Lahore University of management sciences (LUMS).

Barinova, V., Zemtsov, S. and Sorokina, A., 2015, October. Role of SMEs in regional innovation systems in Russia. In ERSA conference papers (No. ersa15p600). European Regional Science Association.

Bass, B. and Avolio, B., 1995. MLQ multifactor leadership questionnaire. Mind Garden.

Bass, B.M., 1998. The ethics of transformational leadership. Ethics, the heart of leadership, pp.169-192.

Bengtsson, F., Fredholm, N. and Karlsson, J., 2017. Click yes to enter e-commerce success: A qualitative study of the barriers faced by Swedish e-commerce SMEs in Russia and China.

Chelliah, S., Sundarapandiyan, N. and Vinoth, B., 2015. A Research on Employees’ Organisational Commitment in Organisations: A Case of Smes in Malaysia. International Journal of Managerial Studies and Research (IJMSR)3(7), pp.10-18.

Chiok Foong Loke, J., 2001. Leadership behaviours: effects on job satisfaction, productivity and organizational commitment. Journal of nursing management9(4), pp.191-204.

Cooper, D.R., Schindler, P.S. and Sun, J., 2006. Business research methods (Vol. 9). New York: McGraw-Hill Irwin.

Eagly, A.H., Johannesen-Schmidt, M.C. and Van Engen, M.L., 2003. Transformational, transactional, and laissez-faire leadership styles: a meta-analysis comparing women and men. Psychological bulletin129(4), p.569.

Egri, C.P. and Herman, S., 2000. Leadership in the North American environmental sector: Values, leadership styles, and contexts of environmental leaders and their organizations. Academy of Management journal43(4), pp.571-604.

Emery, C.R. and Barker, K.J., 2007. The effect of transactional and transformational leadership styles on the organizational commitment and job satisfaction of customer contact personnel. Journal of organizational culture, communications and conflict11(1), p.77.

Emery, C.R. and Barker, K.J., 2007. The effect of transactional and transformational leadership styles on the organizational commitment and job satisfaction of customer contact personnel. Journal of organizational culture, communications and conflict11(1), p.77.

Geert Hofstede (2018). Online. Available at <.,russia/>.

Jaskyte, K., 2018. Board Attributes and Processes, Board Effectiveness, and Organizational Innovation: Evidence from Nonprofit Organizations. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, pp.1-14.

Kennedy, J.C., 2018. Forbearance of culturally inappropriate leadership behaviors: a conceptual model. Journal of Global Mobility: The Home of Expatriate Management Research6(1), pp.4-19.

Khalique, M., Bontis, N., Abdul Nassir bin Shaari, J. and Hassan Md. Isa, A., 2015. Intellectual capital in small and medium enterprises in Pakistan. Journal of Intellectual Capital16(1), pp.224-238.

Khurrum S. Bhutta, M., Rana, A.I. and Asad, U., 2008. Owner characteristics and health of SMEs in Pakistan. Journal of Small Business and Enterprise Development15(1), pp.130-149.

Kureshi, N., Qureshi, F. and Sajid, A., 2010. Current health of quality management practices in service sector SME: A case study of Pakistan. The TQM Journal22(3), pp.317-329.

Meyer, J.P., Stanley, D.J., Herscovitch, L. and Topolnytsky, L., 2002. Affective, continuance, and normative commitment to the organization: A meta-analysis of antecedents, correlates, and consequences. Journal of vocational behavior61(1), pp.20-52.

Nanjundeswaraswamy, T., 2015. Leadership styles and quality of work life in SMEs. Management Science Letters5(1), pp.65-78.

Nguni, S., Sleegers, P. and Denessen, E., 2006. Transformational and transactional leadership effects on teachers’ job satisfaction, organizational commitment, and organizational citizenship behavior in primary schools: The Tanzanian case. School effectiveness and school improvement17(2), pp.145-177.

Nguyen, T.N., Mai, K.N. and Nguyen, P.V., 2014. Factors affecting employees’ organizational commitment–A study of banking staff in Ho Chi Minh City, Vietnam. Journal of Advanced Management Science Vol2(1), pp.7-11.

Nguyen, T.N., Mai, K.N. and Nguyen, P.V., 2014. Factors affecting employees’ organizational commitment–A study of banking staff in Ho Chi Minh City, Vietnam. Journal of Advanced Management Science Vol2(1), pp.7-11.

Sabir, M.S., Sohail, A. and Khan, M.A., 2011. Impact of leadership style on organization commitment: In a mediating role of employee values. Journal of Economics and Behavioral Studies3(2), pp.145-152.

Saunders, M.N., 2011. Research methods for business students, 5/e. Pearson Education India.

Shirokova, G., Vega, G. and Sokolova, L., 2013. Performance of Russian SMEs: exploration, exploitation and strategic entrepreneurship. Critical perspectives on international business9(1/2), pp.173-203.

Shirokova, G., Vega, G. and Sokolova, L., 2013. Performance of Russian SMEs: exploration, exploitation and strategic entrepreneurship. Critical perspectives on international business9(1/2), pp.173-203.

Sosik, J.J. and Godshalk, V.M., 2000. Leadership styles, mentoring functions received, and job-related stress: A conceptual model and preliminary study. Journal of organizational behavior, pp.365-390.

Uchenwamgbe, B.B.P., 2013. Effects of leadership style on organizational performance in small and medium scale enterprises (SMEs) in Nigeria. European Journal of Business and Management5(23), pp.53-73.

Volchek, D., Henttonen, K. and Edelmann, J., 2013. Exploring the role of a country’s institutional environment in internationalization: strategic responses of SMEs in Russia. Journal of East-West Business19(4), pp.317-350.

Voon, M.L., Lo, M.C., Ngui, K.S. and Ayob, N.B., 2011. The influence of leadership styles on employees’ job satisfaction in public sector organizations in Malaysia. International Journal of Business, Management and Social Sciences2(1), pp.24-32.

Yunus, N.H. and Ibrahim, W.N.W., 2015. Employees’ Organizational Commitment: The Effect of Leaders’ Transformational Leadership and Leader-Member Exchange As Moderator.

Zikmund, W.G., Babin, B.J., Carr, J.C. and Griffin, M., 2013. Business research methods. Cengage Learning.

Leadership Styles

Is this question part of your assignment?

Place order