The Effect of transformational leadership on employee job satisfaction in small and medium IT enterprises

Abstract

A transformational leadership style is currently identified as a critical component affecting the performance of small and medium-sized businesses (SMEs), impacting their trajectory towards development, innovation, and long-term success. The current study was carried out by the researcher with the overall purpose of recognizing the effects of transformational leadership on employee job satisfaction in small and medium-sized information technology enterprises in the Sri Lankan context. The concept of transformational leadership was characterised into four components which perform as the independent variables of the study including inspirational motivation, idealized influence, individualized consideration and intellectual stimulation while employee job satisfaction used as the dependant variables. The study population for the investigation chosen as the employees who are working in SMEs in IT sector in Sri Lanka. As the sample of the study, the study selected 400 employees of SME firms of IT industry from the population. All the respondents were chosen from IT SMEs which employed workers between 11 to 200 based on the SME categorization introduced in National Policy Framework for Small Medium Enterprise Development utilizing convenient sampling technique and distributing a structured questionnaire. The data analysis for the study was carried out using SPSS software 25.0 version. Descriptive statistical analysis, Pearson correlation analysis and multiple regression analysis were used to address the core requirements of the study. According to the findings of the correlation analysis discussed, the independent variable of the study including inspirational motivation, idealized influence, individualized consideration and intellectual stimulation were positively associated with the employee job satisfaction in small and medium-sized IT enterprises in the Sri Lanka. Finally, based on the findings of multiple regression analysis, all the independent variables including inspirational motivation, idealized influence, individualized consideration and intellectual stimulation considered in the regression model has demonstrated a significant positive influence on the determination of employee job satisfaction within the considered a study context.