Mediating effect of the organizational culture on the relationship between leadership and operational performance in food processing SMEs

Abstract

The purpose of this study is to examine the role of leadership on the operational performance of food processing SMEs in Punjab, Pakistan. This study also examines whether the organizational culture plays a mediating role in the relationship between leadership and operational performance. Previous studies explained that visionary leadership and dynamic organizational culture are the key factors for the organization’s success that provide a competitive environment and had an impact on the organization’s performance. The data were collected from 288 food processing SMEs through purposive with snowball sampling techniques. A structured questionnaire was employed for data collection from the Owners/Managers of the food processing SMEs. The Partial Least Square (PLS) approach was used to test the proposed hypothesis. The empirical investigations show that leadership is positively related to organizational culture and operational performance. The study also found a mediating role of organizational culture between leadership and operational performance by adopting the Hayes process of mediation. The findings of the study will help food manufacturers in improving the operational performance of their SMEs. Moreover, by practicing transformational leadership styles, and adopting the quality culture, SMEs can get a competitive advantage.