Sara

Sara, Savannah, Cecilia, Christine

 Large component of the economy stems from small business.

› › Produces more than half of Gross Domestic Product (GDP) and principal source of new jobs Accounted for 75% of job growth in United States in 2002  Small business is independently owned and operated, but have had the largest amount of growth from 2000 2004.

 Small business growth is essential for economic growth, such as, increased sales and profits and competition.

Sara

Sara

Statement of the Problem

• • • • Small business failures are continuing to increase.

• 9/10 small businesses fail within the first three years Small businesses without organizational goals exist for approximately 2-3 years 2002 – 21,078 small businesses closed because of failure Primary cause of failure in small business is management incompetence Therefore, need for leadership and personal commitment is critical for organizational success.

Purpose and Significance of the Study

•

Purpose - To examine how leadership styles influence small businesses’ profitability and success

• Transformational or Transactional Leadership lead to success?

•

Significance – Focused on leadership style in small specialty construction businesses in Pennsylvania and West Virginia

• Economic projections were uncertain • Small construction companies struggle to find leaders with qualities to successfully operate their organization

Sara

      Needed for future economic growth, consumer stability and full employment Small construction business industry = 5.66% of all Major drop 2000-2003 and 2006 rate of SCC startups falls 3% Failures come from management making decisions without business knowledge Human + internal factors = 46.73% reason for failure Number of construction projects increase creates need for establishing robust leadership

     Success or failure depends on character of the leader Small business leaders need better understanding of leadership styles Leadership is crucial to hold together a healthy work environment Small business leaders should:  Manage all business and operational functions    Empower employees Give employees decision making opportunities Inspire them to achieve personal satisfaction Not doing these tasks leads to inability to achieve profit and success

    WV=279,742 and PA=233,331 WV=9.5% (4,177) and PA=3.6% (8,440) SCC deeply embedded in overall economy and codependent with large corporations Qualities needed:  Helps other before himself/herself         Stays accountable for decisions made Responsible Accept responsibility for mistakes and weaknesses Utilize effective communication Resolve unethical conflicts Utilize HR properly Lead by example Encourage employees to be efficient

The research questions were: 1- Is there a relationship between transformational, transactional, and laissez-faire leadership styles and profitability and success of small construction businesses? 2- How does the relationship between laissez-faire leadership and employee effectiveness and satisfaction affect profitability and success?

Null and Alternative Hypotheses

H1 null: There is no H1 alternative: There is a H2 null: There is no H2 alternative: There is a H3 null: There is no H3 alternative: There is a H4 null: There is no H4 alternative: There is a

Part of the statement

relationship between transformational or transactional leadership style and organizational profitability.

relationship between transformational or transactional leadership style and organizational success.

relationship between laissez-faire leadership style and organizational profitability.

relationship between laissez-faire leadership style and organizational success.

Independent Variable is: Leadership Style Dependent Variables are: Profitability and Organizational Success

Cecilia

Administration and Procedures

*Quantitative research study was Correlational. *Used state and local Chambers of Commerce, the Yellow Pages, and the Internet.

*6 from Pennsylvania and 5 from West Virginia; both employed a total of 120 people.

*Finally, in the study participate 6 organizations; 3 from Pennsylvania and 3 from West. Virginia, with 48 eligible employees.

*The study sample contained 8 leaders and 40 employees (male and female).

*Five companies returned the survey packets without allowing employees to complete it.

Validity of Sampling Size: N=(z*S/E)^2

*Acceptable margin of error was +/- 0.2 *Level of confidence desired was 95%

Instrumentation

*Three survey with 135 questions from Bass and Avolio’s (2000) MLQ impact they had on employee performance.

satisfaction.

3=fairly often, 2= sometimes, 1= once in a while, and 0=not at all

(Multifactor Leadership Questionnaire) *MLQ Rader Form – to collect data from employees rating the leaders’ leadership style.

*MLQ Leader Form – to collect data from leaders describing their leadership style and the *MLQ Scoring key Form 5X– to score data for measuring employee effectiveness and *5-point Likert-type scale to measure the data collected for the impact of leadership styles on profitability and organizational success, as follow: 4= frequently if not always,

Cecilia

Research question one – Is there a relationship between transformational, transactional, and laissez-faire leadership styles and profitability and success of small construction businesses?

Research question two – How does the relationship between laissez-faire leadership and employee effectiveness and satisfaction affect profitability and success?

Hypotheses results – both of the correlation matrix used indicated a strong correlation between transformational and transactional leadership and profitability, and a very weak relationship between laissez-faire leadership and profitability.

Christine

Conclusion

 Positive and strong relationships exist between transformational and transactional leadership styles, and profitability and organizational success, revealed that robust leadership existed within the small construction business.

Recommendation

 Leadership is important for small businesses to survive, and a future research study could examine a leader’s personal leadership construct.  A study on the relationship between employee performance and satisfaction might provide small business owners and executives with insightful knowledge.

Christine

 Guercini, S. (2014). New qualitative research methodologies in management. Management Decision, 52(4), 662. Retrieved from http://search.proquest.com/docview/1651361288?accountid=2 8644  Valdiserri, G. A., & Wilson, J. L. (2010). THE STUDY OF LEADERSHIP IN SMALL BUSINESS ORGANIZATIONS: IMPACT ON PROFITABILITY AND ORGANIZATIONAL SUCCESS.

The Entrepreneurial Executive, 15

, 47-71. Retrieved from http://search.proquest.com/docview/807725904?accountid=28644