The mediating effect of organizational culture on transformational leadership and performance in small and medium enterprises in Peru

Abstract

Transformational leadership, organizational culture, and organizational performance are relevant topics in management studies as well as the study of small and medium enterprises (SME) due to their importance in the society and economy; despite this, even when literature shows that transformational leadership and organizational culture have a positive effect on the performance of large companies, no study has assessed if these topics and their interrelationship increases the performance in SME. This quantitative, survey-based, crosssectional research, based on a theoretical framework and previous empirical findings, assessed whether organizational culture is a mediator between transformational leadership and organizational performance into a population of SME using a sample of 303 firms (276 effective) in Peru. Findings suggest that organizational culture fully mediates the relationship between transformational leadership and organizational performance; therefore, this study proposes that is not enough to be a transformational leader but also to create and promote an organizational culture for improving the performance of an organization. Very few studies worldwide have investigated this topic, and none has focused on SME. Future research could include SME and large firms – using the size of the business as moderator - in different countries