Main Article Content
The purpose of the study was to establish the effect of transformational style on the performance of SMEs in Uganda. In particular the study sought to find out the contribution of each of the dimensions of transformational style of leadership that included charismatic, intellectual stimulation and individualized consideration aspect of leadership on the performance of SMEs. In order to attain this purpose, a crosssectional explanatory-quantitative survey design was used to collect data and a sample size of 140 hotels in Eastern part of Uganda were selected. Whereas the response rate was 80%, retained organizations for analysis accounted for 68.6% of the sample selected. The study included both managers and employees as units of inquiry while unit of analysis were the hotels. The findings revealed that transformational style of leadership did not significantly influence performance of SMEs in Uganda. In terms of its constructs, the hierarchical analysis revealed that only charismatic style associated significantly with performance at β=0.248, ρ<0.05). Intellectual stimulation (β=-0.037, ρ>0.05) and individualized consideration (β= -0.019, ρ>0.05) had close to zero contribution towards performance of SMEs respectively. The results imply that organizations need to focus more on cultivating charismatic style of leadership in order to improve their performance. It should be noted that SMEs continue playing significant economic role in various economies especially for developing countries. However, their failure rates continue to be an issue of global concern. Whereas leadership contribution to the sustainability and performance of SMEs has been studies especially as regards transformational style of leadership, few studies have detailed the contribution of each of its dimension. Yet, the different dimensions of transformational style reflect different traits or characteristic of a leader that can be harnessed differently to improve SMEs performance. This study therefore sought to address this gap by analyzing individual contribution of the dimensions of transformational style on SMEs performance.