Transactional leadership and its effect on supply chain management in manufacturing SMEs

Keywords: Supply chain performance, transactional leadership, supply chain execution, customer service, manufacturing SME


The continued lacklustre performance of small and medium enterprises (SMEs) in South Africa has brought the quest for lasting solutions. One of the options available is to tap into the areas of leadership and supply chain management (SCM) as potential sources of SME growth.

This study analysed the link between transactional leadership and SCM in manufacturing SMEs in South Africa. The research constructs included transactional leadership, supply chain execution (SCE), and performance.

The research was conducted in Gauteng, North-West and the Free State provinces. Furthermore, the study focused on established manufacturing SMEs, registered with the Small Enterprise Development Agency (SEDA).

A quantitative research approach using a correlational design was used. 411 SME owners, managers and professional employees participated in the study.

Management by exception exerted a positive effect on SCE. In turn, SCE positively impacted customer service (CS) but did not affect supplier performance.

The impact of transactional leadership on the execution of SCM in manufacturing SMEs is minimal and is demonstrated through management by exception. Effective implementation of SCM in these businesses is essential for optimising CS.


Download data is not yet available.

Author Biographies

Irvine Langton, Vaal University of Technology

Faculty of Management Sciences

Chengedzai Mafini, Vaal university of Technology

Faculty of Management Sciences


Cant, M. C., Wiid, J. A. (2013). Establishing The Challenges Affecting South African SMEs. International Business & Economics Research Journal (IBER), 12 (6), 707–716. doi:

Dzomonda, O., Fatoki, O., Oni, O. (2017). The Impact of Leadership Styles on the Entrepreneurial Orientation of Small and Medium Enterprises in South Africa. Journal of Economics and Behavioral Studies, 9 (2 (J)), 104–113. doi:

Nxumalo, N., Goudge, J., Gilson, L., Eyles, J. (2018). Performance management in times of change: experiences of implementing a performance assessment system in a district in South Africa. International Journal for Equity in Health, 17 (1). doi:

Sitharam, S., Hoque, M. (2016). Factors affecting the performance of small and medium enterprises in KwaZulu-Natal, South Africa. Problems and Perspectives in Management, 14 (2), 277–288. doi:

van Hoof, B., Thiell, M. (2014). Collaboration capacity for sustainable supply chain management: small and medium-sized enterprises in Mexico. Journal of Cleaner Production, 67, 239–248. doi:

Fatoki, O. (2012). An Investigation into the Financial Management Practices of New Micro-enterprises in South Africa. Journal of Social Sciences, 33 (2), 179–188. doi:

Mpele Lekhanya, L., Grace Olajumoke, N., Nirmala, D. (2017). Exploring fast moving consumer goods (FMCG) small, medium and micro enterprises manufacturers’ need for innovation to achieve growth. Environmental Economics, 8 (2), 8–16. doi:

Chen, L., Zhao, X., Tang, O., Price, L., Zhang, S., Zhu, W. (2017). Supply chain collaboration for sustainability: A literature review and future research agenda. International Journal of Production Economics, 194, 73–87. doi:

Govindan, K., Azevedo, S. G., Carvalho, H., Cruz-Machado, V. (2014). Impact of supply chain management practices on sustainability. Journal of Cleaner Production, 85, 212–225. doi:

Kroll, A. (2015). Exploring the Link Between Performance Information Use and Organizational Performance: A Contingency Approach. Public Performance & Management Review, 39 (1), 7–32. doi:

Lee, T. W., Steers, R. M.; Landy, F., Zedeck, S., Cleveland, J. (Eds.) (2017). Facilitating effective performance appraisals: The role of employee commitment and organisational climate. Performance measurement and theory. Abingdon: Routledge, 75–93. doi:

Ramahlo, R. M., Pillay, A. M., Madzimure, J. (2022). Assessing the effectiveness of compliance inspection in ensuring the quality of ICT products and services: a case of the compliance department at ICASA. EUREKA: Social and Humanities, 2, 15–25. doi:

McIlvaine, A. (2020). Per Urban Studies, Performance Management in the Time of Corona Virus. Available at: Last accessed: 05.01.2022

Wang, H., & Cruz, J. (2018). Transformational Leadership in Supply Chain Management. SSRN Electronic Journal. doi:

Gordhan, P. (2017). Budget speech 2017. viewed 27 April 2017, from Last accessed: 27.04.2017

Foster, S. T. (2007). Towards an understanding of supply chain quality management. Journal of Operations Management, 26 (4), 461–467. doi:

Rautenbach, C., Rothmann, S. (2017). Antecedents of flourishing at work in a fast-moving consumer goods company. Journal of Psychology in Africa, 27 (3), 227–234. doi:

Teoman, S., Ulengin, F. (2017). The impact of management leadership on quality performance throughout a supply chain: an empirical study. Total Quality Management & Business Excellence, 29 (11-12), 1427–1451. doi:

Laohavichien, T., Fredendall, L. D., Cantrell, R. S. (2009). The Effects of Transformational and Transactional Leadership on Quality Improvement. Quality Management Journal, 16 (2), 7–24. doi:

Wu, K.-S., Yang, L.-R., Chiang, I.-C. (2011). Leadership and Six Sigma project success: the role of member cohesiveness and resource management. Production Planning & Control, 23 (9), 707–717. doi:

Zulkiffli, S. N. ’Atikah, Perera, N. (2011). A Literature Analysis on Business Performance for SMEs: Subjective or Objective Measures? SSRN Electronic Journal. doi:

Yıldız, S., Karakaş, A. (2012). Defining Methods and Criteria for Measuring Business Performance: A Comparative Research Between the Literature in Turkey and Foreign. Procedia - Social and Behavioral Sciences, 58, 1091–1102. doi:

Antonakis, J., House, R. J. (2014). Instrumental leadership: Measurement and extension of transformational–transactional leadership theory. The Leadership Quarterly, 25 (4), 746–771. doi:

Tiwari, K., Kumar Sharma, A. (2017). Transactional leadership in total quality management. International Journal of Engineering Technology Science and Research, 4 (3), 97–100.

Willis, S., Clarke, S., O’Connor, E. (2017). Contextualizing leadership: Transformational leadership and Management-By-Exception-Active in safety-critical contexts. Journal of Occupational and Organizational Psychology, 90 (3), 281–305. doi:

Elsaid, N. M., Okasha, A. E., Abdelghaly, A. A. (2013). Defining and solving the organizational structure problems to improve the performance of Ministry of State for Environmental Affairs: Egypt. International Journal of Scientific and Research Publications, 3 (10), 1–10.

Nze, G. (2015). Exploring fast moving consumer goods (FMCG) small, medium, and micro enterprises (SMME) manufacturers need for innovation to achieve growth in KwaZulu-Natal’. Durban: Durban University of Technology. Available at: Last accessed: 03.01.2022

Hattingh, D., Magnus, K., Ramlakan, S. (2016). South Africa’s cautious consumer: In light of the country’s challenging economic environment, how can consumer goods companies and retailers succeed in South Africa? McKinsey & Company Report. Available at: Last accessed: 02.04.2019

Noko, I. L. (2018). Enterprise development and transformation in the FMCG and agriculture sector. Report by the NPI Governance Consulting. Available at: Last accessed: 27.01.2019

Maynard, J. (2016). South African household spending patterns. Available at: Last accessed: 27.01.2019

Shange, N. (2018). Feeling the pinch: SA’s spending habits adapt to tough economic times. Times Live. Available at: Last accessed: 27.01.2019

Bruwer, J. P. (2016). The relationship(s) between the managerial conduct and the internal control activities of South African fast-moving consumer goods SMMEs’. Cape Town: Cape Peninsula University of Technology.

Di Bartolo, N. (2017). The leadership skills required in FMCG in 2017. Brand Activity Newsletter, 29 August, viewed 27 January 2019, from Last accessed: 29.08.2019

Burns, J. M. (1978). Leadership. New York Harper & Row, 530.

Bass, B. M. (1985). Leadership and performance beyond expectations. New York: Free Press, 191.

Nguyen, T. T., Mia, L., Winata, L., Chong, V. K. (2017). Effect of transformational-leadership style and management control system on managerial performance. Journal of Business Research, 70, 202–213. doi:

Camps, J., Torres, F. (2010). Contingent reward leader behaviour: Where does it come from? Systems Research and Behavioral Science, 28 (3), 212–230. doi:

Yu, Y., Huo, B. (2018). Supply chain quality integration: relational antecedents and operational consequences. Supply Chain Management: An International Journal, 23 (3), 188–206. doi:

Birasnav, M., Mittal, R., Loughlin, S. (2015). Linking Leadership Behaviors and Information Exchange to Improve Supply Chain Performance: A Conceptual Model. Global Journal of Flexible Systems Management, 16 (2), 205–217. doi:

Dubey, R., Gunasekaran, A., Samar Ali, S. (2015). Exploring the relationship between leadership, operational practices, institutional pressures and environmental performance: A framework for green supply chain. International Journal of Production Economics, 160, 120–132. doi:

Birasnav, M., Bienstock, J. (2019). Supply chain integration, advanced manufacturing technology, and strategic leadership: An empirical study. Computers & Industrial Engineering, 130, 142–157. doi:

Mikelsone, E., Liela, E. (2016). Idea management and organisational effectiveness: A research gap. Journal of Business Management, 12 (8), 4–23.

Fekpe, E. S., Delaporte, Y. Y. A. (2017). Challenges of integrating sustainability into supply chains of small and medium scale firms. International Journal of Business and Management Study, 11 (4), 25–29.

Chaudhry, A. Q., Javed, H. (2012). Impact of transactional and laissez-faire leadership style on motivation’. International Journal of Business and Social Science, 3 (7), 258–264.

Khan, M. A., Zubair, S. S. (2018). Impact of transactional leadership and transformational leadership on employee performance: a case of FMCG industry of Pakistan. Industrial Engineering Letters, 8 (3), 23–30.

Odumeru, J. A., Feanyi, G. O. (2013). Transformational vs. transactional leadership theories: evidence in literature. International Review of Management and Business Research, 2 (2), 355–361.

Brahm, F., Tarzijan, J. (2016). Relational Contracts and Collaboration in the Supply Chain: Impact of Expected Future Business Volume on the Make-or-Buy Decision. Journal of Supply Chain Management, 52 (3), 48–67. doi:

Uvet, H., Celik, H., Cevikparmak, S., Adana, S. (2020). Supply chain collaboration in performance-based contracting: an empirical study. International Journal of Productivity and Performance Management, 70 (4), 769–788. doi:

Kotzab, H., Busk, T., Friis, A. (2016). The supply chain management execution within organizations: construct, measurement, and explorative empirical discussion. Die Unternehmung, 62 (5), 102–114.

Dey, P. K., Cheffi, W. (2013). Managing supply chain integration: contemporary approaches and scope for further research. Production Planning & Control, 24 (8-9), 653–657. doi:

Esper, T. L., Clifford Defee, C., Mentzer, J. T. (2010). A framework of supply chain orientation. The International Journal of Logistics Management, 21 (2), 161–179. doi:

Fernandes, A. A. C. M., Lourenço, L. A. N., Silva, M. J. (2014). Influence of quality management on the innovative performance. Revista Brasileira de Gestao de Negocios, 16 (53), 575–593.

Jayaram, J., Tan, K.-C., Nachiappan, S. P. (2009). Examining the interrelationships between supply chain integration scope and supply chain management efforts. International Journal of Production Research, 48 (22), 6837–6857. doi:

Johnson, M., Templar, S. (2011). The relationships between supply chain and firm performance. International Journal of Physical Distribution & Logistics Management, 41 (2), 88–103. doi:

Lin, C., Kuei, C., Chai, K. (2013). Identifying critical enablers and pathways to high performance supply chain quality management. International Journal of Operations & Production Management, 33 (3), 347–370. doi:

Nollet, J., Beaulieu, M., Fabbe-Costes, N. (2017). The impact of performance measurement on purchasing group dynamics: The Canadian experience. Journal of Purchasing and Supply Management, 23 (1), 17–27. doi:

Islam, T., Amir, M., Ahmed, I., Muhammed, S. K. (2015). The impact of transformational and transactional leadership styles on the motivation and academic performance of students at university level. Journal of Educational & Social Research, 211 (3), 237–244.

Kumar, G., Goswami, M. (2019). Sustainable supply chain performance, its practice and impact on barriers to collaboration. International Journal of Productivity and Performance Management, 68 (8), 1434–1456. doi:

Wang, X., Yuen, K. F., Wong, Y. D., Teo, C.-C. (2019). Consumer participation in last-mile logistics service: an investigation on cognitions and affects. International Journal of Physical Distribution & Logistics Management, 49 (2), 217–238. doi:

Sampson, S. E., Spring, M. (2012). Customer Roles in Service Supply Chains and Opportunities for Innovation. Journal of Supply Chain Management, 48 (4), 30–50. doi:

Wu, I.-L., Chuang, C.-H., Hsu, C.-H. (2014). Information sharing and collaborative behaviors in enabling supply chain performance: A social exchange perspective. International Journal of Production Economics, 148, 122–132. doi:

Ho, L.-H., Feng, S.-Y., Lee, Y.-C., Yen, T.-M. (2012). Using modified IPA to evaluate supplier’s performance: Multiple regression analysis and DEMATEL approach. Expert Systems with Applications, 39 (8), 7102–7109. doi:

Hussain, S. T., Abbas, J., Lei, S., Jamal Haider, M., Akram, T. (2017). Transactional leadership and organizational creativity: Examining the mediating role of knowledge sharing behavior. Cogent Business & Management, 4 (1). doi:

Jacobs, E., Mafini, C. (2019). Transactional leadership, supply chain quality and business performance in the fast-moving consumer goods industry. Journal of Transport and Supply Chain Management, 13 (3), 413–442. doi:

Aziz, R. A., Abdullah, M. H., Tajudin, A. (2015). The effect of leadership styles on the business performance of SMEs in Malaysia. International Journal of Economics, Business and Management Studies, 2 (2), 45–52.

Pillai, R., Schriesheim, C. A., Williams, E. S. (1999). Fairness Perceptions and Trust as Mediators for Transformational and Transactional Leadership: A Two-Sample Study. Journal of Management, 25 (6), 897–933. doi:

Plowman, D. A., Solansky, S., Beck, T. E., Baker, L., Kulkarni, M., Travis, D. V. (2007). The role of leadership in emergent, self-organization. The Leadership Quarterly, 18 (4), 341–356. doi:

Akhtar, P., Fischer, C., Marr, N. E. (2011). Improving the effectiveness of food chain coordinators: a conceptual model. Acta Horticulturae, 89 (5), 15–21. doi:

Mehta, R., Dubinsky, A. J., Anderson, R. E. (2003). Leadership style, motivation and performance in international marketing channels. European Journal of Marketing, 37 (1/2), 50–85. doi:

Oshagbemi, T., Ocholi, S. A. (2006). Leadership styles and behaviour profiles of managers. Journal of Management Development, 25 (8), 748–762. doi:

DeConinck, J. (2010). The effect of organisational justice perceived organisational support, and perceived supervisor support on marketing employees’ level of trust. Journal of Business Research, 63 (12), 1349–1355. doi:

Salamon, S. D., Robinson, S. L. (2008). Trust that binds: The impact of collective felt trust on organizational performance. Journal of Applied Psychology, 93 (3), 593–601. doi:

Karami, A., Analoui, F., Kakabadse, K. (2006). The CEOs’ characteristics and their strategy development in UK SME sector. Journal of Management Development, 25 (4), 316–324. doi:

Kotzab, H., Teller, C., Grant, D., Friis, A. (2014). Supply Chain Management Resources, Capabilities and Execution. Production Planning and Control, 26 (7), 525–542. doi:

Khorshid, S., Pashazadeh, A. (2014). The effect of transformational leadership on organizational learning capabilities with respect to the mediating role of organisational intelligence. Journal of Change Management, 6 (11), 7–22.

Chang, H., Tzu-Chuan, L. (2014). Re-examining supply chain integration and the supplier’s performance relationships under uncertainty. Supply Chain Management: An International Journal, 19 (1), 64–78. doi:

Khalili, A. (2016). Linking transformational leadership, creativity, innovation, and innovation-supportive climate. Management Decision, 54 (9), 2277–2293. doi:

Esper, T. L., Peinkofer, S. T. (2017). Consumer-Based Supply Chain Management Performance Research: A Structured Literature Review. Transportation Journal, 56 (4), 395–428. doi:

Djelassi, S., Decoopman, I. (2015). Customers’ Participation in Product Development through Crowdsourcing: Issues and Implications. Industrial Marketing Management, 42 (5), 683–692. doi:

Maull, R., Geraldi, J., Johnston, R. (2012). Service Supply Chains: A Customer Perspective. Journal of Supply Chain Management, 48 (4), 72–86. doi:

Fabbe‐Costes, N., Jahre, M. (2008). Supply chain integration and performance: a review of the evidence. The International Journal of Logistics Management, 19 (2), 130–154. doi:

Tobi, H., Kampen, J. K. (2018). Research design: the methodology for interdisciplinary research framework. Quality & Quantity, 52 (3), 1209–1225. doi:

Saunders, M., Thornhill, A. (2018). Research methods for business students. Essex: Pearson Education.

Sekaran, U., Bougie, R. (2019). Research methods for business: A skill building approach. New Delhi: Wiley.

Saunders, M., Lewis, P., Thornhill, A. (2019). Research methods for business students’. Essex: Pearson Education.

Sindhuja, P.N. (2014). Impact of information security initiatives on supply chain performance. Information Management & Computer Security, 22 (5), 450–473. doi:

McGuirk, P. M., O'Neill, P.; Hay, I. (Ed.) (2016). Using questionnaires in qualitative human geography. Qualitative Research Methods in Human Geography. Don Mills: Oxford University Press, 246–273.

Hair, J., Black, W. C., Babin, B. J., Anderson, R. E. (2014). Multivariate data analysis. Harlow: Pearson New International edn., Pearson Education.

Agi, M. A. N., Nishant, R. (2017). Understanding influential factors on implementing green supply chain management practices: An interpretive structural modelling analysis. Journal of Environmental Management, 188, 351–363. doi:

Ivanov, D. (2020). Predicting the impacts of epidemic outbreaks on global supply chains: a simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case. Transportation Research Part E: Logistics and Transportation Review, 136 (3). doi:

Jia, F., Blome, C., Sun, H., Yang, Y., Zhi, B. (2020). Towards an integrated conceptual framework of supply chain finance: An information processing perspective. International Journal of Production Economics, 219, 18–30. doi:

Lee, S. M., Rha, J. S. (2016). Ambidextrous supply chain as a dynamic capability: building a resilient supply chain. Management Decision, 54 (1), 2–23. doi:

👁 271
⬇ 248
How to Cite
Langton, I., & Mafini, C. (2022). Transactional leadership and its effect on supply chain management in manufacturing SMEs. EUREKA: Social and Humanities, (5), 10-30.
Business, Management and Accounting