Transformational leadership and organizational performance of Omani SMEs: the role of market orientation

Abstract

Purpose

This study proposed and tested a model on the relationship between transformational leadership (TL) and organizational performance (OP) with a possible intervening effect of market orientation (MO) at Omani small and medium enterprises (SMEs).

Design/methodology/approach

The study followed a quantitative research design and the deductive approach. Data were collected from 259 employees working in Omani SMEs and were analyzed using structural equation modeling SEM AMOS V24.

Findings

The findings supported positive direct effects of transformational leadership on Omani SMEs' business performance and market orientation. The results also supported the effect of market orientation on business performance. Further analysis showed that market orientation partly mediates the relationship between transformational leadership and business performance.

Practical implications

The results motivate Omani SMEs' leaders to use intangible capabilities (i.e., market orientation practices) to improve the different aspects of organizational performance. It also suggests that developing SMEs leaders' transformational skills on envisioning the future, adopting open communication styles, motivating employees and stimulating their creativity influences Omani SMEs' performance.

Originality/value

Due to the mixed results regarding the TL–OP relationship and the recommendations for further exploring this relationship, this study contributes to theory and practice. It is among the few studies to explore the mediating role of MO between TL and OP in a developing country's SMEs environment.

Citation

Dahleez, K.A. and Abdelmuniem Abdelfattah, F. (2022), "Transformational leadership and organizational performance of Omani SMEs: the role of market orientation", International Journal of Productivity and Performance Management, Vol. 71 No. 8, pp. 3809-3825. https://doi.org/10.1108/IJPPM-08-2020-0447