FACULTY OF EDUCATION AND BUSINESS STUDIES
Department of Business and Economics Studies
The influence of leadership on employee commitment to small and medium enterprises
Priscilla Martey Marie S.N Goe
June, 2020
Master Programme in Business Administration (MBA): Business Management 60 Credits Master Thesis in Business Administration 15 Credits
Supervisor: Maria Fregidou-Malama Examiner: Daniella Fjellstrom
ACKNOWLEDGEMENT
Our foremost gratitude to God Almighty for the strength each day that enabled us to work on our thesis, we are here today because he made a way. We would like to extend our thanks and appreciation to everyone that supported us in the writing of our thesis one way or the other, your time and effort were not wasted. Our utmost gratitude goes to our beloved families for their moral support, and for standing by us through our difficult and stressful moments.
Next, we extend appreciation to our supervisor Professor Maria Fregidou-Malama for her guidance and supervision throughout from day one. We are thankful to Dr. Daniella Fjellström and Dr. Ehsanul Chowdhury for their constructive feedback and input that helped in making our thesis better. To opponents and colleagues, we are grateful for all your constructive criticism that helps strengthen our thesis.
We further want to appreciate the companies as well as our respondents for their participation and willingness to help in our data collection, without your support we could not have push through with this thesis.
Finally, we wish to extend our profound gratitude to the Swedish Institute for funding the scholarship that granted us the opportunity to produce this thesis.
We dedicate this research work to our beloved children for their love and understanding and for the times we were not available to them as we would have loved to.
ABSTRACT
Title: The influence of leadership on employee commitment to Small and Medium Enterprises
Level: Final assignment for Master of Business Administration (MBA) Author: Marie S.N Goe and Priscilla Martey
Supervisor: Maria Fregidou-Malama.
Examiner: Daniella Fjellstrom Date: 2020 – June
Aim: The purpose of this research is to determine the influence that leadership has on employees' commitment to SMEs. For the purpose, a theoretical framework was developed indicating the factors that affect commitment that leadership may employ to achieve commitment.
Method: The study took a Qualitative approach using both primary and secondary data. Primary data was collected from eleven respondents in two companies from Ghana and Liberia through zoom interviews, transcribed and analyzed by through common themes identified.
Result & Conclusions: The findings of this research show that leadership has a direct influence on employee commitment. Effective leadership promotes employee commitment through the implementation of leadership decisions that result in providing Job satisfaction and Motivation, good Working environment and meeting the Training and Development needs of employees. It is the role of the leadership function to establish a working climate which results in good performances and commitment is one of the identified factors that influences performance
Contribution of the thesis: The study contributes to the development of new
knowledge by showing the gap that exists between the understanding of the leadership role between the leaders and the employees in SMEs which influences employee’s commitment. The impact of this research is to inform management of what they ought to do to win the loyalty of employees and strategies that must be implemented to improve low commitment in employees. This will help to reduce the risk of losing their potential employees thereby reducing labor turnover rate in the organisation.
Suggestions for future research: Our findings have indicated that leadership has meaningful influence on employee’s commitment through their responsibilities towards employees. However, a new factor which is loyalty to third party was discovered we suggest a future probe into the influence of third parties on employee
commitment. Researchers will find it interesting area to research to investigate this area of study.
Key words: Job satisfaction, Employee commitment, Leadership in SMEs, Motivation
Table of Contents
CHAPTER ONE ... 1
Introduction ... 1
1.1. Background of the Study ... 1
1.2 Problem Statement... 4
1.3 Significance of The Study ... 5
1.4 Aim and Research Question ... 6
1.5 Limitation of the study ... 6
1.7 Study Outline ... 6
CHAPTER TWO ... 8
Literature Review ... 8
2.1 Leadership ... 8
2.2 Small and Medium Enterprise ... 10
2.2.1 Definition of Small and Medium Enterprises ... 11
2.2.2 Leadership in SMEs ... 12
2.3 Employees Commitment ... 13
2.3.1 Affective Commitment... 14
2.3.2 Continuance Commitment ... 14
2.3.3 Normative Commitment ... 15
2.4 Factors That Affect Employee Commitment ... 15
2.4.1 Motivation & Job Satisfaction ... 15
2.4.2 Working Environment ... 16
2.4.3 Training and Development... 17
2.5 Relationship between Leadership and the factors affecting commitment ... 17
2.6 Theoretical Framework ... 19
CHAPTER THREE ... 21
Research Methodology ... 21
3.1 Research Philosophy ... 21
3.2 Research Strategy ... 23
3.3 Research Population ... 24
3.3.1 Sampling Method and Techniques ... 24
3.3.2 Overview and motivation of Liberia and Ghana ... 25
3.3.3 Research Context ... 27
3.4 Research approach... 28
3.5 Data collection ... 29
3.5.1 Operationalisation of Interview Questions ... 30
3.5.2 Interview Structure and Process ... 33
3.6 Data Presentation and Analysis ... 34
3.7 Ethical consideration ... 36
3.8 Trustworthiness, Validity and Reliability... 36
3.9 Limitations of the Methodology ... 37
CHAPTER FOUR ... 38
Empirical Evidence ... 38
4.1 Leadership as observed by Employees... 38
4.1.1 Employee Perspective of Leadership ... 38
4.1.2 Management Perspective of Leadership ... 41
4.2 Factors affecting Employee Commitment ... 42
4.2.1 The Working Environment ... 42
4.2.2 Training and development from employee and management perspective ... 43
4.2.3 Job Satisfaction and Motivation ... 45
4.3 Reasons behind employees existing commitment... 46
4.3.1 What is keeping Employees working in the company ... 46
4.4 Summary of Empirical Findings ... 48
CHAPTER FIVE ... 50
Analysis and discussion ... 50
5.1 The Role of the Leadership in SMEs... 50
5.1.1 Observed versus Expected Leadership attributes ... 50
5.2 Employees Motivation & Satisfaction factors ... 53
5.3 The relevance of training to employees ... 54
5.4 Efficient Working Environment and Communication ... 55
5.5 Employee Commitment Elements ... 56
5.5.1 Unavailable Job Opportunities ... 56
5.5.2 Love for the Job... 57
5.5.3 Benefits from the job ... 58
5.5.4 Job Security ... 59
5.5.5 Loyalty to third parties ... 60
5.6 Future Commitment Deciders ... 61
5.7 Proposed Employee Commitment Model ... 61
5.8 Analysis Summary - Comparing Theory to Findings ... 63
CHAPTER SIX ... 67
Conclusion ... 67
6.1 Answer to research Question ... 67
6.2 Implications of the study ... 69
6.2.1 Theoretical Implication ... 69
6.2.2 Managerial Implications ... 70
6.2.3 Societal Implication ... 70
6.3 Reflections and Limitations of the Study ... 71
6.4 Suggestions for Future Research ... 71
References ... 73
Appendices ... 81
Appendix 1. Students Letter to Company ... 81
Co-operation for Master Thesis ... 81
To whom it may concern, ... 81
Appendix 2. Interview Questions... 82
Appendix 3. Transcripts of two Interviews ... 84
List of Figures
Figure 1 Study Outline ... 6
Figure 2 Theoretical Framework ... 20
Figure 3 Practical employee commitment model ... 62
List of Tables Table 1 Small and Medium Enterprise definition criteria ... 11
Table 2 Theoretical Link to the literature ... 19
Table 3 Operationalization of interview questions ... 31
Table 4 Interview Respondent Details ... 34
Table 5 Thematic Analysis and Codes... 35
Table. 6 Summary of Empirical Findings ... 48
Table 7: Summary of Analysis ... 64
Abbreviations
SMEs – Small and Medium-sized Enterprises ILO – International Labour Organizations
AFDB – African Development Bank
GDP – Gross Domestic Product
HR – Human Resource
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CHAPTER ONE Introduction
This chapter aims to provide the reader with the background of the research, which gives the reader an insight into the concept that the study is discussing, the significance of the study and why this study is important and interesting to conduct. The chapter further shows a gap identification and the aim of the study that was developed based on the research gap and concludes with the research questions and the limitation of the study.
1.1. Background of the Study
The worldwide financial crisis has led to a surge of extraordinary challenges within the global economy and political commands, therefore the main change factor through vision and skill is leadership. In this contemporary age of globalization where there is rivalry everywhere in the business environment, for a firm to perform proficiently and efficiently, a well-organized employee participation and achievements prompt its performances (Khan et al., 2017).
According to Awan and Mahmood (2010) leadership refers to the procedure of social impact through which an individual can enrol in the guide of others in achieving specific goals and objectives. The leadership role consists of a series of activities, and it is enlightening to take a closer look at these events in connection to the internal upkeep and outer compliance of organizational functions.
Though previous research has presented different theories and results, it has still not been shown how leadership influences employees to stay committed to their jobs in Small and Medium-size Enterprise (To, 2003). The role of leadership in business is experiencing transformation over time. Dabke (2016) notes that leaders of the past were noted for planning, controlling, and examining the general running of firms. However, in present days leaders are relied upon to encourage and motivate their supporters or employees. Moreover, they are to create a feeling of belongingness and positive relationship among the employees with a focus of meeting the firm goals. Leadership has a great influence on the growth and performance of employees in an organization.
Franco and Matos (2015) discuss that leadership is a global phenomenon to the extent that it is shown in different forms within various organizations and contexts. The effectiveness of leadership is the main requirement for the success of undertakings in an organization as well as for ensuring future success and competitiveness. Long et al., (2016) argue that for SMEs to
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become successful, an organization is required to have good leadership, however, organizations with inadequate leadership and management skills lead SMEs on the path to failure. The way employees behave at work is greatly influenced by signs obtained from the employment setting. Moreover, effective duty is a typical reaction toward a positive workplace (Lau et al., 2017). Studies have identified that leadership has a significant influence on access to large achievements of an organization thus it opens avenues for connections with individuals as well as permits them to improve their skills in their specific fields (Tsai, 2011).
Leadership of Small and Medium-sized Enterprises
Small and Medium-sized Enterprises (SMEs) are the driving force of today's economy and it accounts for 99% of businesses in the European Union (European Commission, 2018). The World Bank defined SME independent businesses that are not subsidiaries which hires employees to the limit of 250 workers depending on the country (OECD 2005). Given that SMEs are often placed in an economic, social, and environmental context in which their activities would have future influence, the insight of leadership becomes essential to the company and the environment in which it is found.
Organizations nowadays need convincing leaders that can navigate complex and fast-changing global environments that they are increasingly vulnerable to. As SMEs are the foundation of the private division around the world, leadership has an inevitable major position in the administration of SMEs. Sakiru et al., (2013) emphasize that the understanding of leadership is fundamentally significant to firms as well as its environs, since SME is embedded in a social, financial and natural setting where its activities will have an effect, they further discussed that it is clear that leaders ought to be equipped for portraying changes with respect to ecological requests.
The Leadership in SMEs involves coordinating the activities of employees towards a specific goal and innovativeness (Szczepańska and Kurowska 2016). While managing SMEs, a leader’s effort needs to consciously be aimed at helping employees to grow in knowledge, experience, and skills. SMEs contribute to the national capital by improving and giving employment to residents of all nations concerned. They also counterbalance the negative economy patterns and strengthen the rebuilding of enterprises. In summary, leadership in SMEs is basically about having smooth and adaptable ways to deal with work procedures and strategies in the arrangement of the development and advancement of the business and its representatives. To
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survive amidst the competitive pressures in the business world, it is crucial for businesses to have committed employees. In the absence of commitment, employees will view their jobs as merely 9am to 5pm engagements without attaching any desire to achieve more than what is required to maintain their employment (Maicibi, 2003). The corporate environment has seen changes over the years and most businesses believe that having long-serving employees represents internal efficiency. According to Lakshmanaswamy (2015) employee empowerment is a strategy used by organizations in the workplace to retain quality employees and their loyalty.
Employee commitment may not have one static definition as many researchers and scholars have discussed it from various contexts. The context of commitment includes how commitment is developed, the variables that contribute to its development, as well as the extent of influence that commitment has on the behavior of an employee and these, remain subjects of arguments.
According to (Newstrom and Davies, 2002) employees' commitment refers to the extent to which an employee relates to the company and their willingness to be effectively involved with it. Like a solid attractive power pulling in one metallic article to another, it is a proportion of the employees‟ ability to stay with a firm later. It regularly signifies the employee’s faith in the strategic objectives of the firm, their ability to put more work toward their achievement, and their plans to continue working with the organization. As indicated by Allen and Meyer (1990) employees’ commitment can be considered as the mental connection of employees to their working environment.
In the business world today, one critical challenge that managers are faced with is to formulate and implement effective human resources strategies to develop and improve organizational performance. With the level of emphasis on a company’s output, authors continuously emphasize on human resource strategies that are deemed effective such as job satisfaction, employee and group empowerment, strategic planning, and inclusive management (Bhatti and Qureshi, 2007). Kanter (1999) suggests that for employees’ loyalty to be built, management should give employees the opportunity to participate, provide a clear image for future success and show dedication to change. According to (Roodt and Kotze, 2005) the level of control over work employment, advancement opportunity, job satisfaction, skills and talent development, and employee well-being are factors that affect employee commitments. In their discussion, Nienga et al. (2015) also reiterates that the achievement of employee commitment is associated with the Working environment, Training and development and Motivation.
4 1.2 Problem Statement
Past and Current research on leadership in organizations has discussed how leadership impacts on employees’ job satisfaction (Shahab and Nisa, 2014), the effect that leadership has on employee’s motivation (Ntusikazi, 2017) and employee commitment (Alkahtani, 2015) to companies in different industries. Most research on employees' commitment through leadership has been conducted on large firms, however, researchers assert that the development of SMEs should be viewed differently than that of large organizations because they believe that to gain a deeper understanding of the culture within SMEs, a more unique approach to leadership is required. (Szczepańska and Kurowska 2016).
Therefore, after a comparison of different leadership approaches, Long et al., (2016) discussed that there exists a relationship between the employee commitment to an organization and the leadership of that organization. Zafar et al. (2014), however, argue that boosting employee’s motivation involves certain critical factors such as how the employees feel when they think about their jobs, their perception of the organization they work for and their expectations from their job. Nidadhavolu (2018) tested Job Satisfaction as a variable against various forms of leadership and concluded that the Transformational leadership has mostly influenced Employee Job Satisfaction. Long established investigations have been fixed on large organizations, as there is a conviction that SMEs, in contrast to bigger firms, need more assets to build up a proper human administration framework.
In their research, Hill et al., (2012) indicate that workers' commitment towards firm is important. The dedication shown by the employee is likewise significant for productivity, quality, and commendable effectiveness of an organization. Similarly, Long et al., (2016) states that committed workers are to the least extent liable to leave firms, at the point when employees are disappointed, they become less dedicated and will search for different chances to leave the organization, provided their chances to leave are inaccessible, they may genuinely or intellectually "pull back" from the company. Hence, there is a need for extensive study on how leadership can influence employees to be committed to SMEs (To, 2003).
A good number of researches have been made on the three variables of interest in this research individually thus Leadership (Appelbaum, 2003; Boerma et al., 2017; Dabke, 2016), Small and Medium-sized Enterprises (Thorpe et al., 2009) and Employees commitment (Andrew, 2017;
Bhatti and Qureshi, 2007) to their organizations. In spite of that, some other researches have
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also made connections between Leadership and SMEs (Franco and Matos, 2015) and also between Leadership and Employee commitment (Alkhatani, 2015; Awan and Mahmood, 2010; Hill et al., 2012) but most authors and theorists of these topics have not made optimal use of the three variables together. Authors that have examined Employee commitment hardly discussed the process that motivates the behaviour of employees in SMEs.
However, research carried on the behavioural patterns of leadership (Boerma et al., 2017;
Dabke, 2016) and its influence in maintaining their employees’ commitment (Awan and Mahmood, 2010; Hill et al., 2012; Alkhatani, 2015) has not focused on SMEs (To, 2003).
Therefore, we want to explore from the SME perspective.
1.3 Significance of The Study
SMEs play a major role in every economy. Aside from providing two-thirds of all jobs worldwide, they also account for most of the new job creation and are considered as the engines of economic growth and social development (ILO, 2019). The success of an organization is dependent on its ability to deliver to customers’ expectations and this shows how important quality employees are to the organization. Quality employees are characterized by highly motivated, competent, and committed staff, among others. The creation of customer experience stems from a functional relationship between employees and management. Many researches have been carried out on employee’s commitment and motivation, but researchers have not explored on employees of Small and Medium Enterprises (Hill et al., 2012; Awan and Mahmood, 2010).
This study is important considering that the results will add up to the collections of knowledge in leadership and its impact on employee’s commitment to SMEs. Getting employees commitment is especially significant during change since it includes a central, subjective move in the company's theory or centre point of view and key direction (Hills et al., 2012). We can say that without the help of workers within a firm, fundamental change actions are probably going to be unsuccessful. Therefore, results from this research would inform the management of organizations on the leadership approach that will result in winning the loyalty of their employees and keep them motivated and committed to the goals of the firm.
6 1.4 Aim and Research Question
The purpose of this research is to investigate the influence that leadership has on employee’s commitment. To fulfil the research aim, the following research question was formulated.
1. What role does leadership play in employee commitment?
1.5 Limitation of the study
To obtain enough information from different perspectives to solidly generalise the conclusion of this study, we would have preferred to be able to interview employees and managers from more SMEs in different countries and different industries but unfortunately that was impossible due to the effects of the Covid-19 global pandemic. We are unable to get positive responses from companies for collaboration as most employees were not available at work.
1.7 Study Outline
The study is outlined in the following ways to enable us to accomplish the aim of the research and provide the response to the research question.
Figure 1 Study Outline
Source: Own, 2020
This research work will be divided into six main chapters based on what each chapter entails.
Chapter 1. This is the introduction which discusses the background of the study, the research gap and problem discussion, the motivation and significance of the study, the aim and objectives of the study and the research questions that will lead to achieving the aims.
Chapter 2: In this chapter, we shall compare and obtain opinions by conducting a review of past literature on SMEs, SMEs in Sweden, Leadership and Employee Commitment from academic journals, articles, books and relevant websites that are significant to our research, thus it will help us decide on the research methodology.
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Chapter 3: This chapter explains the research methodology, in which the research design, data collection methods, sampling sources and all the procedures and techniques used in collecting data for the research. etc. shall be presented. The validity and reliability of data shall also be presented under this chapter.
Chapter 4: will be a Theoretical Framework which examines relevant theories in relation to the study upon which this research will take off. In this case theories on Leadership and Leadership Styles, Management of SMEs, and Employee Commitment determinants.
Chapter five is the Empirical Findings which will be a presentation of the primary data that has been gathered from the fieldwork for the purpose of this study
Chapter six is the Analysis and Discussion of the empirical finding and its relationship with the theoretical framework, whether it proves or deviates from established theories and conclusions drawn by other researchers as well as the authors’ conclusions and implications of the study.
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CHAPTER TWO Literature Review
As part of this research work, we aim at providing a theoretical overview of the best-researched knowledge on the subject under discussion to compare, contrast and summarize the current literature and theories on Leadership, Employee commitment, the factors that influence employee commitment and the influence of leadership on commitment.
2.1 Leadership
Leadership has been a subject of discussion in every human society, based on the quantum of research work that has been carried out on it by researchers, historians and philosophers (Awan and Mahmood, 2010), hence, the study of leadership cannot be seen as a new phenomenon.
Studies on leadership from the twentieth century was mainly about systematic levels building up from simply studying the traits of a leader based on their characteristics and actions and progressively to their behaviour (Wren,1995). In a study conducted by McCleskey (2014) and Sakiru et al., (2013), their concept is that leadership is the distinctive skill of phenomenal people. The trait theory as the basis of successful leadership has historical connections dating back to the twentieth century.
According to Awan and Mahmood (2010) in their discussion of political system and leadership from the perspective of a book titled The Prince which was written in 1513, a historic Prince stands a higher advantage of prolonging his time in power if he is able to display the behavior of both a ‘fox’ and a ‘lion’ at the same time, where being a fox implies cunningness, and deceitful while lion implies being powerful, merciless and ruthless. However other formal theories on leadership such as Behavioural Theory which were introduced by sociologists, psychologists and other experts in human behavioural theories also came up after the second world war which ended up opening other avenues of the leadership concept which puts pressure on the trait theory of leadership (Awan and Mahmood, 2010). With many directions and phases of leadership, it is essential for Leadership to be broken down for a reader to comprehend what it means, as defined by other researchers.
The concept of Leadership has been discussed and defined in many ways ranging from the fact that leaders are born or whether they are made, leadership based on specific style choices while others also looked at it based on the relationship between leaders and their subordinates
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(Lunenburg, 2010). There is no one-size-fits all definition for leadership because it has been defined by different scholars on different basis. Some of which range from politics to world affairs depending on what studies are being undertaken. It is important to consider context when establishing an understanding of leadership. Leadership has been defined by Nidadhavolu (2018) as the achievement of goals through directing the people associated with the goal.
Leadership has also been viewed as an interaction between subordinates and their superiors where superiors have an influence on the subordinates towards attaining certain results and goals (Shabab and Nisa, 2014). Moreover, Thorpe et al. (2019) consider leadership as a portion of human resources and social capital. Hence, the authors further noted that since leaders are the predominant decision makers, small and medium-sized enterprises require the skills necessary to coordinate all the human and social capital available to them, while Tsai (2011) argues that leadership implies having influence in the widest sense of the word and not just the ability to employ, they included that it depends on targeted factors, for example, administrative capacity and increasingly emotional attributes that incorporate individual characteristics of a leader.
Research on gender and its associated leadership styles has it that when assessing leadership from a gender perspective, there is an observed difference in the leadership styles between males describing it as transactional while females approach is more transformational despite the existing stereotype that women are less effective leaders (Wu & Pan 2006). Fregidou- Malama (2017) explained that scholars in leadership have described the effectiveness of the leadership function as an important ethical issue when an organisation is trying to develop a democratic leadership. She further noted that social organizations develop a democratic supporting leadership that is linked environmentally and adjust to the capabilities of the workforce.
A firm’s organisational culture has an impact on how its employees set goals and perform their tasks according to the resources allocated for those goal (Lok and Crawford, 2004). In decision making, the human mind, consciously and subconsciously is guided by the practices allowed within the organisation especially in performance and commitment.
The level of commitment that an employee will have to their organisation may differ because they have different personalities based on different national cultures and backgrounds that
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those employees may have. Countries have different cultures which reflects their attitudes, values, and beliefs and this can create difficulties for a leader who is trying to fit people from different national cultures into an existing organisational culture. An organisation’s culture also has an influence on how their leadership role is managed because the leader’s action is guided depending on whether it is a bureaucratic, innovative, or supportive culture that the firm practices.
2.2 Small and Medium Enterprise
Just like mankind’s need to exploit available resources in the surroundings to sustain life, Small and medium enterprises started with the need to add value to the available natural resources in the surrounding to provide shelter in tree caves and mountains and produce food through cultivation (Liaqat, 2017).The transformation into SMEs emanated from the trading of the expertise that is achieved through the constant value-adding to the natural resources (Liaqat, 2017). After centuries, the continuous interaction of the human mind with nature invented the early civilization of clothing manufacturing, food processing and home building (Liaqat, 2017).
According to Wiboonchutikula (2002) majority of Thailand’s industrial firms are SMEs, stating that even though SMEs are labour-intensive with low levels of raw material imports, they can form alliances with large companies who subcontract them. With regards to their potential, skills required and experience, SMEs appear to be relatively easier to establish. A publication by World Bank SME Finance (2017) shows that most businesses worldwide are SMEs, accounting for about 90% of businesses and providing over 50% of employment worldwide. Pakistan records 90% of its businesses as SMEs which employs about 80% of their non-agricultural workforce (Liaqat, 2017).
Being that not much expertise and experience is required for the setting up of an SME, particularly the small ones, gives the impression that they are not productive or they are technically inefficient as compared to big organizations but that is not the case.
(Wiboonchutikula, 2002). SMEs are avenues to job creation for former workers of collapsed companies and even new graduates and entrepreneurs to prepare them for the management of larger firms with time (Wiboonchutikula, 2002).
Despite the financial and technological challenges that SMEs face, their impact on the economies of countries cannot be overlooked, as they contribute up to 40% of the GDP of Pakistan (Liaqat, 2017). Even without considering Informal SMEs, the formal ones generate
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up to 40% of GDP in emerging countries according to the World Bank SME Finance (2017).
The intrinsic features of SMEs make it necessary for mechanisms to be put in place to support them when it comes to some business functions such as human resource development, technical upgrades, financial and marketing functions (Liaqat, 2017).
The major constraints to the growth of SMEs in both emerging and developing economies, as identified by the World Bank SME Finance (2017) is their access to finance because as compared to large organizations, they do not have much access to bank credits so leaders or managers of SMEs rely mainly on internally generated funds or support from family and friends to run their businesses at the initial stages. As the World Bank SME Finance (2017) further estimates the need for about 600million jobs by the year 2030 to accommodate the fast- growing workforce globally, it implies that many governments are placing high priority on the development of SMEs. Developing a business that qualifies to be referred to as an SME brings to bare the importance of understanding what businesses constitute SMEs.
2.2.1 Definition of Small and Medium Enterprises
The basis for defining small and medium enterprise or any other business differ by countries.
According to the European Commission (2014), for a business to qualify as a small and medium scale enterprise, they ought to meet the criteria combination of either Total turnover or Balance Sheet total and the number of employees in the company.
Table 1 Small and Medium Enterprise definition criteria
Company category Staff headcount Turnover Balance sheet total
Medium-sized <250 ≤ €50 million ≤ €43 million
Small <50 ≤ €10 million ≤ €10 million
Micro <10 ≤ €2 million ≤ €2 million
Source: European Commission 2014
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From the Table presented above it can be deduced that a Microbusiness has less than 10 employees and a total turnover that is less than or equal to two (2) million euros or a favorable balance sheet not exceeding two (2) million euros. A small business also falls in the criteria of not more than fifty (50) staff members and a turnover that does not exceed ten (10)million euros or a balance sheet total up to the limit of ten(10) million euros. A medium size business is a business that employs not more than two hundred and fifty (250) employees and has a turnover not exceeding 50million euros or a balance sheet total of not exceeding Forty-three (43) million euros. Therefore, to classify a business as an SME, it is appropriate for the company to meet the criteria of a Medium Enterprise.
The World Bank also provides the definition of SME as a non-subsidiary independent business that hires a specific number of people to a limit of 250 workers according to the European Union, however, it is subject to country-specific preference (OECD 2005). The country- specific criteria apply to countries such as the United States where the limit is five hundred (500) employees, however, some countries also have a limit of two hundred (200) employees like South Africa.
2.2.2 Leadership in SMEs
The literature on SMEs and Leadership makes it increasingly important to understand what leaders of successful SMEs do and how their leadership affects the sustenance of their employees and their business (Szczepańska and Kurowska, 2016). As presented in the research by Berisha and Pula (2015), the differences between SMEs and Large organizations do not only lie in the size but also in qualitative indicators. These indicators include the differences in Management, their sources of finance, their organization, and even buyer relationships. A closer look at the differences in the management of SMEs and large organizations shows that, as compared to Large organizations that are characterized by division of labor by subject matter, the management function of most SMEs is linked to the personalities in leadership (Berisha and Pula, 2015). Also, in comparison with large companies, SMEs are usually managed by the owners and this is what Berisha and Pula (2015) refer to as Proprietor- Entrepreneurship. This implies that the leader or manager performs a central role in the business decision making process including having direct contacts with employees, customers, and suppliers. SME Managers are charged with the duty to build high-performance teams, set, define and ensure the clarity of goals, set and implement policies that develop employee competencies while creating a working environment that is favourable to innovation and
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learning (Franco and Matos, 2015). The overall human capital of a business has the potential to predict success when it is enriched with knowledge, experience, and networking (Schlosser, 2015).
Employees play an important role in the implementation of any business strategy and reflect the company’s organizational culture and therefore how they are managed has the tendency to create a relationship that results in employees’ desire to get committed to their job roles or even the business. The ability to adopt leadership roles by the people in positions is the response to the human resource challenges that SMEs face currently (Franco and Matos, 2015). The identification and motivation of key employees has been examined to be a critical phenomenon to the success of SMEs (Schlosser, 2015), where key employees are identified by three characteristics; employees whose work are perceived by the leader as a good contribution to the success of the business, employees that the leader believes in, and most importantly employees that the leader considers reliable and trusts to get the job done. The attempt to explore the reliability and trustworthiness of an employee as perceived by a leader introduces the issue of employees’ commitment to their job roles or company.
2.3 Employees Commitment
According to Alkahtani (2015), The basic meaning of commitment does not exist because various researchers give various definitions. However, commitment was further characterized as the general quality of a person's relationship with an association and their participation within the association Alkahtani (2015). On the other hand, Bhatti and Qureshi (2007) pointed out that several researchers have defined employee’s commitment as the corresponding between the objective of the individual and the company, whereas the person relates to and expands effort in the interest of the overall objectives of the business. In their submission, Mugizi et al. (2015) stated that an employee’s commitment is a bond between the worker and the organization with the end goal that he/she wants to keep serving the company and to assist it with accomplishing its goals.
Similarly, Andrew (2017) discussed that Committed employees build up a bond with an organization and that makes up better administrative performance. He further noted that past researchers have analyzed various components that can influence job performance and a vital component is the commitment of employees to their jobs. Moreover, Mugizi et al. (2015), and Alkahtani, (2015) argued that a committed employee is a compliant, perfect, and rewarding
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person who has more significant levels of fulfilment, loyalty, and obligation. In addition, the authors suggested that employee commitment decreases employee turnover.
Achieving the commitment of employees is significant during fundamental change since it includes a crucial, subjective move in the reasoning of the company or central point of view and strategic focus (Hills et al., 2011). According to Elorza et al., (2011), consistent studies have revealed that administrative practices of individuals add up to upgrading and boosting the emotions and morale of employees to pledge loyalty to the organization. In addition to the authors’ argument, constructive outcomes happen on the grounds that a few individual administrations practice which are considered as commitment practices, convey a message to workers that the organization is concerned about their wellbeing.
The significance of employees’ commitment has caught the attention of various authors.
Mugizi et al. (2015) and Alkahtani (2015) concluded that employees with high hierarchical commitment sentiments influence firm performance in positive manners since they reduce the recurrence of performing negative conduct and improve service quality. In their work (Alkahtani 2015; Andrew 2017; Hills et al., 2011) classified commitments into three components: affective commitment, normative and continuance commitments.
2.3.1 Affective Commitment
According to Andrew (2017) & Alkahtani (2015), Affective Commitment refers to the employee’s passionate connection to identify with, and their membership within the organization. The author also noted that individuals who are committed on an affective level tend to remain with the firms since they see their own business relationship as consistent with the objectives and values of the firms. Workers’ willingness to offer help that will bring change to the organization depends on their belief in the benefits they will derive and their expectations to be motivated by the incentive (Hills et al., 2011). It was stated by Alkahtani (2015) that commitments become affective only when workers see the need to identify with the organization and its objectives.
2.3.2 Continuance Commitment
The idea of Continuance commitment is acquired from the view of expenses that are related to leaving an organization, and the impression that there is an absence of work options (Nidadhavolu, 2018). As highlighted in Alkahtani (2015), continuance commitment has to do
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with the evaluation of workers on whether the cost of quitting from a company is higher than staying. Workers that realize that the cost of leaving the organization is higher than that of staying are more likely to stay with the organization. Moreover, it has been established that continuance commitment brings about lower job performance (Alkahtani, 2015). One author Andrew (2017) viewed continuance commitment as an instrumental connection to the company, where a persons’ relationship with the company relies on an appraisal of financial advantages. As opposed to the other two elements of commitments, continuance commitment doesn’t identify with feelings, it mostly identifies with investments put forth by the workers within an organization, their time and improvement with work relationship, skills and political arrangements (Alkahtani 2015).
2.3.3 Normative Commitment
Normative Commitment refers to workers' sentiments of obligation to proceed with their employment within an organization thus, workers that have high levels of normative commitment remain with the organization since they feel they ought to (Andrew 2017;
Alkahtani 2015). According to Hills et al (2011), normative commitment originates from a feeling of commitment and responsibility in support of change within the organization.
Consequently, normative commitment will probably be fortified when employees become faithful to the company or see reasons to give back excellent treatment they have gotten from the firms.
2.4 Factors That Affect Employee Commitment
In present days employees are better taught, progressively mobile and are continually looking for means of empowerment. In the future working environment, numerous businesses are understanding that the only favourable advantage that they will have is their employees which is their reasonable capital (Robbins et al., 2009). Nonetheless, the employee’s commitment to a firm is affected by the benefits they receive, level of supervision, reward for work done, opportunities for development/advancement, pay rates, and acknowledgement from leaders for good execution (Robbins et al., 2009).
2.4.1 Motivation & Job Satisfaction
Job satisfaction has been linked to few organizational phases of leadership, performance and moral. According to Nidadhavolu (2018) several researchers have been trying to characterize
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the different components of job satisfaction and study what result these components have on the commitment of employees to an organization. Employees that are effectively managed in most cases are motivated to accomplish greatness in any business arena. There is emphasis that for a business to be competitive, companies are required to bring to the table the best quality goods or services for the absolute best value. According to Fregidou-Malama (2017) when employees are motivated their self-esteem increases when duties and responsibilities are given to them by their leaders, showing that they are important and their views matter. In the work of Nidadhavolu (2018), job satisfaction was defined as an emotional response to a person's obligations to working environment conditions and the degree to which an employee desires are satisfied. The author further stated that the ongoing interest for work fulfilment is centred mainly around its effect of employee’s commitment y to the organization, non-attendance, and turnover.
2.4.2 Working Environment
A conducive working atmosphere urges employee to exercise their commitment and loyalty towards satisfying the organization’s needs while they satisfy their own as well (Armstrong, 2005). Working Environment can be expressed as conducive when it is enabling with clear communication channels, provides proper tools and equipment to undertake duties and has a well-maintained facilities to prevent ill health and preserve the safety of employees (Nienga et al., 2015).The development of commitment and the feeling of loyalty among employees drives them to work towards the organizational goal but this occurs when employees feel supported by the organization (Nienga et al., 2015).
A supportive organization is perceived when the organization shows commitment to its workers in different forms. When employees feel safe, secure, and perceive that the organization can be trustworthy and predictable, they do not have fears of the consequence of taking risks on behalf of the company. Interpersonal relationships between the leadership of an organization and the perception of supportiveness develops the feeling of safety in the minds of employees and this is exhibited in their willingness to go the extra mile and engage fully in their work.
An innovative working environment breeds high productivity and depicts job satisfaction, judging from the positive attitudes and collaboration among employees (McGuire and McLaren, 2009). The author reached a conclusion that one of the key mediating factors
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between the physical environment that an employee is working in and commitment is the consideration of the employee’s well-being. This represents the active role that the human resource plays in providing support to their staff, controlling the workflow, and reducing stress for the employees.
2.4.3 Training and Development
Training and Development of Employees has to do with the conscious effort by management to achieve a balance between what is required to enrich the workforce of the organization and taking care of the employee’s career needs. The increasing awareness of this phenomenon can give one company a competitive edge over the other in the job market. Greller (2006) elaborated that every individual has an underlying reason for working and that reason should be found in the company, their colleagues, their job role or within themselves.
The bond between an organization and its employees strengthens when they consider their training and development needs and commit funds to achieve it. This makes the employees not only marketable within the organization but also in the labour market. The ability to identify perfect strategies that drives employee commitments to the goals of the firm remains a challenge for HR managers. Bratton and Gold (2003) resolved that the inability of employees to foresee the development of a theory career path can influence their decision to stay with the organization or leave when the slightest opportunity presents itself.
2.5 Relationship between Leadership and the factors affecting commitment Relationship between Motivation & Job Satisfaction and Leadership
There lies a cordial connection between employees and their leadership which motivates them on their job when they are consulted on their view on some decisions (Bhatti and Qureshi, 2007). There is a tendency that employees are motivated when they are asked about their views and are informed of happening within the organization so that they will be able to use the knowledge that resides in the organization to its full potential (Bhatti and Qureshi, 2007).
Motivating employees has a positive influence on the outcome of their work (Shahab and Nisa 2014). The level of motivation employees receive from their employer, determines their output toward their job.
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An established relationship exists between Leadership and Job satisfaction in the sense that the leadership of an organization plays a significant role in satisfying employees (Nidadhavolu, 2018). Employees tend to be more satisfied with their job when they see that their leaders are not only concerned about getting the job done but they also seek the interest of their followers.
Sakiru et al., (2013) proved that there is a connection between leadership and employee job satisfaction. When an employee is motivated and supported by their leaders it gives them a sense of belonging and satisfaction (Sakiru et al., 2013). therefore, since managers of SMEs are most often the owners, they should focus on building an improved support unit to satisfy their employees.
Relationship between Working Environment and Leadership
The responsibility to provide employees a functional and conducive working environment lies with the organisation which is represented by the leadership (Njenga et al., 2015). There is improvement in work efficiency and reduction in injuries when appropriate tools and equipment required for their jobs are adequately provided (Njenga et al., 2015). There is a high tendency for employees to leave their jobs when they perceive that directions of management are unclear (Roodt and Kotze, 2005). One of the key roles of a leader is the ability to clearly communicate goals and ensure channels of communication fosters a better relationship and team growth between Supervisors and their Subordinates. (Njenga et al., 2015).
Relationship between Training and Development and Leadership
The emotional well-being of employees in an organisation is affected profoundly when employees feel their management takes interest in their development (Njenga at al., 2015).
Training and career development involve giving employees the opportunity to learn new skills and develop talents and therefore employees feel trapped in job roles that do not have much scope for development (Roodt and Kotze, 2005).
19 Table 2 Theoretical Link to the literature
Source- Own, 2020
2.6 Theoretical Framework
The framework below is generated from theories discussed as the factors that affect Employee Commitment to organisations which are Working Environment, Training & Development and Employee Motivation &Job Satisfaction (Bhatti and Qureshi, 2007; Njenga et al., 2015; Roodt and Kotze, 2005,)
We chose these three factors because we believe they address the employee from three important perspectives, external environment, intrinsic response, and conscious effort to add value to employees (Njenga et al., 2015). Working environment factor focuses on the components in the external physical environment of the employee that may influence, the Motivation and Job Satisfaction focuses on intrinsic and emotional response to their environment that may affect an employee (Tsai, 2011; Nidadhavolu, 2018) and the Training
Constructs Authors Arguments
Employee Commitment
Hill et al.2012; ; Alkahtani, 2015; Long et al., 2016; Mugizi et al., 2015; Andrew 2017;
Bhatti and Qureshi, 2007; Hills et al. 2011.
Importance of employee commitment to an organisation. The existence of a positive relationship between a committed employee and the organisation. Classification of employees commitment and the relation Leadership in SMEs
Berisha and Pula, 2015;Szczepańska and Kurowska, 2016). Franco and Matos, 2015;
Schlosser, 2015.
Leaders as the main agents of change in SMEs.
Leadership approach in SME and the role of leadership in sustaining SME employees Working Environment Nienga et al., 2015; Armstrong, 2005; McGuire
and McLaren, 2009
Components and importance of a conducive working environment and its effect on employees
Training and Development Bratton and Gold, 2003; Greller, 2006
The importance of training to employees and the bond it creates between the employees and organisation
Job Satisfaction/Motivation
Fregidou-Malama, 2017; Bhatti and Qureshi, 2007; Zafar et al., 2014; Nidadavolu, 2018;
Shahab and Nisa, 2014;Ntusikazi, 2017
Major factors affecting employee retention and commitment.Leadership impacts on employees job satisfaction and Motivation
Relationship between Leadership and Employee commitment
Hill et al.2012; Fregidou-Malama, 2017; Shahab and Nisa, 2014; Ntusikazi, 2017; Long et al., 2016; Alkhatani, 2015; Awan and Mahmood,
Importance of committed employees and the Leadership role in it. The effect of leadership on the type of commitment employees have.
THEORETICAL LINK TO LITERATURE
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and Development that emphasizes on the conscious effort to input value into employees that may also influence their commitment.
With reference the theories discussed earlier in the chapter, Leadership emerges as an essential function in any corporate setting but most importantly in small and medium enterprises (Franco and Matos, 2015) because it carries the responsibility of ensuring that employees are motivated and satisfied with their jobs, to provide a conducive working environment for employees and implement policies to cater for their training and development needs. In summary, the factors considered in this study as the determinants of employee commitments are responsibilities of the Leadership and plays a role in the influencing the type of commitment an employee exhibits towards SMEs as shown in the figure above.
Figure 2 Theoretical Framework of Leadership influence on employee’s commitment
Source: Own, 2020
Small and Medium-sized Enterprises
LEADERSHIP
responsibilities
Working Environment
Job Satisfaction
&Motivation Training & Career
Development
Employee Commitment
• Affective
• Normative
• Continuance
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CHAPTER THREE Research Methodology
The purpose of this chapter is to enable the reader to appraise the validity and reliability of the study. Hence, this chapter is set to discuss all aspects of the methodology that is employed in this study, beginning from identifying the research paradigms, the methods that best suit the knowledge we are interested, the presentation of what motivates our choice of methods and data sources, to describing in details all the tools used for analysis and also provide a reflection of the constraints and credibility of the research work with consideration to ethics.
3.1 Research Philosophy
The research philosophy is concerned with the comprehension of various beliefs from philosophers (Bryman 2016). Researchers from different perspectives that have been advocating for research philosophies have connected with and shown their insight and convictions in what showed up and got translated as paradigm war even though their description of epistemology and ontology have share themes with different importance (Mkansi and Acheampong, 2012).
Ontology - As indicated by Bryman and Bell (2007), Ontology is concerned about the nature of social substances. The most essential issue of direction of ontology is the question of whether social elements can and should be viewed as target elements that have a reality external to social characters, or whether they can and ought to be viewed as social constructions that are developed from the perception and activities of social actors (Bryman 2014, Pp.32). There are two part of Ontology; one is objectivism and the other is constructivism. Objectivism clarifies the truth that the existence of social entities is ahead of our impact and is outer to the social actors.
Constructivism clarifies the reality of social phenomena which is made by characters with continuous change (Bryman and Bell, 2007, p. 22). Ontology has been defined by Ding and Foo (2001) as having the capacity to improve companies Information, the executives, and their understanding. Objectivism is an ontological position that affirms that social phenomena and their implications have a presence that is free of social actors while constructivism is an ontological position that states that social phenomena and their implications are consistently being practiced by social characters (Bryman 2016, p.32-33)
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Epistemology - Bryman (2016, p.27) indicated that epistemological issues regarding what is or ought to be considered as adequate understanding within a discipline. Epistemology shows interest in knowing whether there is there a link between the knowledge and who has the knowledge? How could we know what we know? It is also interested to establishing what is considered as knowledge? (Tuli 2010). The reflection of epistemology does not seek out to be widespread nor normative, rather it makes up a constant, innovative movement that is re- established consistently and it displays the difficulties encountered by researchers when the attributes of what they expect to know are uncommon (Vasilachis, 2009).
Epistemological positions are in two perspectives: interpretivism or constructivism and positivism (Slevitch, 2011). Positivism is an epistemological position that advocates the use of organized methods for merging physical sciences to the investigation of the social reality of a person behavior to find and affirm fundamental laws that can be applied to predict the overall forms of human activities (Tuli, 2010 and Bryman, 2016). Positivist accepts that logical discoveries can be summed up across time in various contexts and their findings show alleged certainties about the world without the social, cultural, or authentic setting from which these discoveries were made (Giacobbi et al., 2005). Positivist believes that the topic of sociologies—individuals and their organizations is different from that of natural sciences (Bryman 2016). However, Positivist researchers believe that Quantitative methodology originates from positivism, which has a realist direction and depends on the possibility of God's view or a freely existing reality that can be described as it truly may be (Slevitch, 2011).
According to Giacobbi et al., (2005) Interpretivism, is a research philosophy that allow researchers to understand and interpret the reality of a study, the author further discusses that interpretivism shows the differences between human as social actors and objects. Hence, being an interpretivist amounts to understanding the world from the perspective of the experiences of individuals which are subjective and needs to be interpreted. Interpretivist rely on the relationship between the researcher and subjects using subjective methods such as participant observation or interviews (Giacobbi et al., 2005).
We hold a constructivist view and share the opinion that there is the existence of multiple realities based on the social construction of our understanding of the world we live in. We also share in the belief that knowledge needs to be interpreted to get the underlying meaning.
23 3.2 Research Strategy
When research is carried out there are two approaches that are used by researchers. These approaches are referred to as inductive and deductive research. The inductive approach is done when a qualitative study is carried out by a researcher (Bryman 2016 pp.27). Inductive Approach focuses mainly on utilizing point by point readings of raw data to develop ideas, themes, or a model through which understanding is developed from the raw data using by a researcher (Thomas, 2003). This approach begins with the researcher having an open mind without an assumed idea of what the outcome will be.
The deductive approach is completed on a quantitative study. Deductive research discusses to the commonest perspective on the idea of the link between hypothesis and social research, it usually starts with a hypothesis (Bryman 2016 Pp.24). He further mentioned that the most significant points to consider when conducting research are the purpose of the research, the method that is used to examine a hypothesis, discover a new research area or give answers to the research questions.
Our study takes the form of exploratory research with an Inductive approach where reality tells the story in its way (Gummesson, 2005). The author states that the inspiration derived from an inductive empirical search is embedded in the Grounded theory which involves the construction of theories by designing categories and criteria from a dynamic and complicated domain. It was established by Saunders et al. (2009) that even though a study may have developed theoretically, the purpose is not to examine it but to serve as a foundation for the study and a guide in setting the interview questions and this can characterize a study as Exploratory. In this case, this study aims at collating data to explore into detail how leadership influence employees to commit to their jobs in SMEs.
An exploratory inductive research is a good combination for this study because exploratory studies allow researchers to satisfy their curiosity by exploring the subject of interest in details (Babbie, 2013) while Saunders et al., (2009) also concludes that inductive research approach is appropriate for researchers who are aiming at collecting additional data to develop a theory.
With consideration to the context of this research, the flexibility of the data collection structure allows for alternative explanations and results and our findings will was also analyzed with current theories to draw a conclusion and provide answers to the research questions. The population that contains the respondents is discussed in the sections below.
24 3.3 Research Population
The population generally explains the collection of people or objects in the focus area of the study. The definition of a research population has been ascribed by Kothari (2004, p.55) as all components in a field of inquiry. The author argues on the presumption that when all elements in the population are used in research, the results have a guaranteed highest level of accuracy.
The author further states that this is not necessarily true because slight elements of bias rather increase as the number of observations increases. The population in this research refers to managers and employees of SMEs but due to the enormous size of the population of SMEs, we cannot test every member of this population realistically, hence we employ a sampling methods to narrow down the focus to a realistic workable size considering the time, cost and convenience of the study.
3.3.1 Sampling Method and Techniques
Researchers have defined Sampling as a portion or part of the population of interest in a research (Etikan, 2016). Sampling can be grouped into Probability and Nonprobability Sampling, where probability sampling is defined by Etikan (2016) as the situation where the variables in the population have distinguishing characteristics that show that each variable has a chance of being sampled. That implies that each unit in the population has equal chances of being chosen from the population. Nonprobability Sampling is further explained as the technique that does not give all participants an equal opportunity to be sampled when gathering the sample (Etikan, 2016). Non-Probability sampling is appropriate to use in a population that is not well defined or where there are no real concerns about inferences from the sample to the population (Etikan, 2016).
The sample of this research work is collected using the Non-Probability method because this is more appropriate for the study. Nonprobability sampling is cheaper to use and faster to implement as compared to Probability sampling regarding the time frame within which this work is being carried out (Etikan, 2016). The technique employed to further narrow down to reach our respondents is discussed in the Sampling Technique.
Sampling Technique - There are many sampling techniques applied to different research.
When choosing a sampling technique, the researcher needs to know which one is appropriate and applicable to their type, nature, and purpose of study. To achieve the objective of this study, it is required that managers and employees of SMEs that are working with the company must
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be interviewed. To be able to gather respondents for the research, we are applying the Convenience sampling technique. When a sample is chosen based on proximity, thus the researcher has easy access, then the researcher is practicing Convenience sampling but in the case where samples or participants that fits the purpose of the research are based on a specific mindset, the researcher is practicing Purposive sampling (Etikan, 2016).
Convenience sampling technique is appropriate for this study because the participants of the sample fit into our practical criteria which is their accessibility, availability, and willingness to participate (Etikan, 2016). As part of the sampling strategy, emails were sent to potential companies requesting to interview up to three managers and five employees with different positions from both genders.
3.3.2 Overview and motivation of Liberia and Ghana
Liberia- Liberia, the oldest nation in Africa is situated in west Africa with an estimated population of about 4.8million, of which 71.0% of the population is under 35 years with nearly half are below the age 15 (AFDB 2020). This indicate that the population of Liberia is mostly the young generation. Liberia is one of the poorest countries in the world has a high unemployment rate of about 2.8% (World Bank, 2019).
According to AFDB (2020), the economy of Liberia has faced a lot of uncertainties within the past two years which is a result the decrease in mining exports and increase in inflation and depreciation of currency. Therefore, the real GDP growth of the country is expected to increase up to 1.6% in 2020, which will be boosted by mining, forestry, and agriculture as they are the main sources of income to the country. According to Barchue and Aikaeli (2016), SMEs in Liberia are continually facing numerous challenges such as managerial competences, access to finances access to training and access to market as compare to other developing countries.
According to the five-year Transformation Agenda that Liberia launched in 2013, the country aims at achieving middle income status by 2030 and with majority of Liberian firms being SMEs, it is obvious that SMEs dominate the Liberian labour market (International Trade Centre, 2015). The development of SMEs is vital in achieving transformation, as stated in (International Trade Centre, 2015) that Small and Medium enterprises are the heart of the countries private sector making up a significant contribution to the upliftment of the economy.
Despite a massive young labor force who may be ready and willing to work, it is obvious that Liberia faces challenges in managing SMEs and structuring programmes to support the growth
