Contingency theory to study leadership styles of small businesses owner-managers at Santo Domingo, Ecuador

Abstract

The study provides a discussion about the leadership style of small businesses owner-managers at Santo Domingo de los Tsáchilas, Ecuador, supported on contingency theory of leadership. And adaptation of Hershey and Blanchard questionnaire was made in order to make it clear to the target population. A total of 175 owner-managers of small businesses and 1218 employees comprised the respondents of the study. The perception of leadership style of owner-managers and employees, style range, and style adaptability and perception of the maturity degree of employees were the variables involved in the hypotheses raised. In spite of totally or partially proving the hypothesis raised, findings of the study revealed mixed support to the theory which impedes giving clear recommendations about how to behave in certain organizational situations in the context of small Ecuadorian businesses. Results of the study caution owner-managers of small businesses to consider carefully the way they behave in certain situation to the enrichment of employee motivation toward work with the purpose to obtain a better performance of their enterprises; but should avoid assuming that there are more or less appropriate leader behaviors based on the results of this research. The study constitutes a starting point to focus the research related to leadership style in small companies, considering the preponderance of this type of business in the economy of Ecuador.