The effect of leadership style and innovation capital on SMEs sustainability performance from a managerial perspective

  • Hazlina Hassan Faculty of Accountancy, Universiti Teknologi MARA
  • Amrizah Kamaluddin Faculty of Accountancy, Universiti Teknologi MARA
  • Shukriah Saad Faculty of Accountancy, Universiti Teknologi MARA
  • Nurhayati Samad Faculty of Accountancy, Universiti Teknologi MARA

Abstract

Small and medium enterprises (SMEs) face various challenges in sustaining their operations in the global business competition. In line with the resource-based view (RBV), SMEs need to utilize their available assets, including the right leadership style and innovative initiatives, to create a competitive pursuit of sustainability performance. An effective leadership style should be adaptable and flexible, manifesting in different scenarios of varying leadership behaviors. Meanwhile, innovation capital is a valuable asset that may help businesses create value in today's economy and encourage employees to be more creative. However, there has been little empirical research on the impact of leadership styles and innovative capital on sustainability performance from the emerging economies perspective. Hence, this study aimed to test the relationship between innovation capital, leadership styles, and sustainability performance of SMEs. Data were collected from 111 SMEs in Malaysia and analyzed using IBM SPSS. The results revealed that leadership styles and innovation capital have significant positive relationships with sustainability performance. This study contributes to the literature on the sustainability performance of SMEs and helps leaders strategize the appropriate leadership approaches and innovation capital to achieve sustainable performance.

Author Biographies

Amrizah Kamaluddin, Faculty of Accountancy, Universiti Teknologi MARA

Dr Amrizah Kamaluddin is an Associate Professor at the Faculty of Accountancy, Universiti Teknologi MARA (UiTM), Malaysia. Her teaching and research interests include financial reporting, fraudulent reporting, intellectual capital and innovation capital. She has published and presented papers internationally and locally. She is currently the managing editor of Journal of Financial Reporting and Accounting (JFRA). She is also the Head of System and Assurance Research Interest Group, Management Science Cluster at the university. She can be contacted at amrizah@uitm.edu.my

Shukriah Saad, Faculty of Accountancy, Universiti Teknologi MARA

Shukriah Binti Saad is currently a senior lecturer from the Faculty of Accountancy, Universiti Teknologi Mara (UiTM). She held a PhD from Universiti Kebangsaan Malaysia (UKM). She has more than 20 years of teaching experience and vast experience in doing research and consultancies. Her research, including her doctoral thesis, has concentrated on management and disclosure of knowledge capital. Her research interest is also in financial accounting and reporting, public sector accounting, small-medium enterprises (SMEs), behavioural accounting, and accounting education. She has published several articles in national and international refereed journals. She can be reached by email at shukriah736@uitm.edu.my.

Nurhayati Samad, Faculty of Accountancy, Universiti Teknologi MARA

Nur Hayati Ab Samad is a lecturer at the Faculty of Accountancy, Universiti Teknologi MARA, Malaysia and currently pursuing her studies in PhD at the School of Management USM Malaysia. Her research interests are in the areas of Corporate Governance, Intellectual Capital and Sustainability of Non-profit. She can be reached through by email at Email: nurhayati321@uitm.edu.my.

Published
2021-09-21
How to Cite
HASSAN, Hazlina et al. The effect of leadership style and innovation capital on SMEs sustainability performance from a managerial perspective. Journal of Emerging Economies and Islamic Research, [S.l.], v. 9, n. 3, p. 83 – 97, sep. 2021. ISSN 2289-2559. Available at: <https://myjms.mohe.gov.my/index.php/JEEIR/article/view/14755>. Date accessed: 24 oct. 2021. doi: https://doi.org/10.24191/jeeir.v9i3.14755.