The Relationship between Laissez-Faire Leadership Style and SMEs Growth in the Top 100 SMEs in Kenya

The study sought to establish the relationship between laissez-fair leadership style and SMEs growth. The study adopted a pragmatic philosophical approach in order to facilitate data triangulation so as to have a clear understanding of the research problem and used a causal research design. The target population comprised of 553 personnel including owners and Managers of the top 100 SMEs of 2013. A sample of 227 managers was selected through a proportionate sampling and 25 top managers were purposely selected for the study. The study relied on primary data that was collected using closed-ended questionnaires as well as structured interview guides. Descriptive statistics were used to describe and summarize the data while inferential statistics where used to make inferences and draw conclusions about the quantitative data. Inferential statistics included Pearson’s correlation to test the association between the variables and chi-square test that was applied to test the research hypothesis. The study findings established that Laissez-faire leadership style and SMEs growth was positively correlated and significantly related to SMEs growth (r= 0.792, P= 0.011 (p< 0.025); the null hypothesis was rejected and the alternative hypothesis was accepted since the p value was less than alpha (χ² =213.143; d.f. = 60; P= 0.021 (P<0.05).

The study concluded that the effectiveness of the leaders in utilizing laissez-faire leadership style greatly influenced the performance and SME growth as the employees were able to execute their duties successfully and thus SME leaders should adopt leadership styles that would facilitate growth of their enterprises.