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BUSN20016 Research in Business- Leadership Affects the Performance of

Recession is a phenomenon of decreasing demand for raw materials, products and services and its beginning, progress and ending depends on the operational measures used by different researchers and federal agencies (Shama, 1993). It leads to a drop in share market, an increase in unemployment, stagnant wages, a fall in retail sales and a decline in the housing market (Amadeo, 2015). If a recession lasts longer, it can be classified as economic depression. There were worldwide recessions during the years 2007 – 2009 (“The Great Recession”). Large business companies were a bit resilient during this time with government subsidy and grants but, smaller companies which contribute more to the overall employment growth were badly affected (Nanto, 2009).

Smaller businesses suffered huge net employment losses due to sharper cuts in the rate of gross job gains which in turn reflected on slower business creation and a lower rate of hiring among expanding small businesses (Laderman, 2013). Between 2007 and 2012, small businesses experienced disproportionate job losses wherein their overall job losses was double their 30% share of total employment. Also, jobs at small businesses declined about 11% and the payrolls at businesses that had 50 or more employees declined further by 7% (Laderman, 2013). SME’s suffered disproportionately during such economic downturns because of their limited financial resources, their relative shortcomings in technological, managerial and human capabilities and their greater dependence on fewer customers and suppliers which readily reduced their capacity to overcome the economic crisis (Bourletidis & Triantafyllopoulos,

In such a scenario, it becomes imperative to analyse and understand what went wrong for these SME’s and this study will fill that gap with empirical evidence of the losses/impacts suffered by the small firms during the period of recession. Also, the marketing strategies, innovative tactics and new concepts adopted by them in order to survive the Recession will be researched upon. This is done so that the future SME’s can take preventive measures and
be proactive if at all Recession occurs in the future. 

The overall aim of this project is to investigate the Recession-related effects on small firms,their responses to tackle that (i.e. their strategies) and the resulting impact on the performance of the firm. More specifically, this study aims to answer the following research questions: 
RQ1: How did recession affect the SMEs
RQ2: What were the impacts suffered by SMEs as a result of Recession
RQ3: How did the SMEs respond to the Recession conditions
RQ4: What are the factors that drive the SMEs performance under Recession conditions.


This research aims at establishing how leadership affects the performance of SME`s in Nigeria. The leadership style applied by a particular organization is very influential in determining the market success of a particular company. Different leaders also apply different theories of leadership in steering organizations towards the achievement of organizational objectives. The study also aims at establishing how leadership styles in SME`s have led to failures in the sector in the Nigerian economy.

The study analyzes the leadership styles that different organizations and leaders use to guide the organization towards achieving its objectives. Since the leaders are the figureheads in an organization, it is important for the leaders to influence the employees positively and make the vision for the organization clear so that employees can work with a clear vision in mind. The study is conducted using both primary and secondary sources of data (Scouller, 2011). It uses qualitative research methods to access the impact of leadership on the performance of an organizational. Peer-reviewed journal articles have been mainly used in this research together with other sources such as books and internet sources.

The objectives of this research project are to establish ways in which leadership impacts an organization and ways in which lack of proper leadership leads to failure in an organization. The research analyzes various cases in Nigeria where small and medium enterprises have suffered hugely due to the poor leadership by the management. Leading is an important aspect of management because it provides the synergies required for employees to perform optimum. The transformational and transactional theories are the most commonly used theories in leading organizations. The transformational theory emphasizes on the motivation of employees to create additional value and increase efficiency in the organization while at the same time using increasing creating value to the consumers.

Problem statement

The study is carried out with the aim of evaluating the impact of leadership styles on the performance of organizational units in the Nigerian economy and to evaluate deeply the impact of failure in organizations as a result of inappropriate leadership styles.

Aim and objectives of research

The aim and objectives of conducting this study are to establish the ways in which leadership influences the performance of an organization either positively or negatively. The following are the specific aims and objectives of this study:

l    To establish how leadership styles in an organization influencing the behavior of employees to help the organization achieve its objectives

l    To examine how the failure of organizations due to inappropriate leadership styles has affected the Nigerian economy.

l    To determine how leadership influences the organizational culture to influence the performance of an organization

ng>Justification of the project

This study is very crucial especially since it helps business leaders and employees working in different sectors of the economy understand the role played by leaders in influencing the performance of an organization. The study was conducted after a gap was established on the impact that leadership styles have on organizational performance especially for small and medium enterprises (Murgatroyd, 2012). The study focuses on how leadership style used by organizations is important in influencing performance with an analysis of Nigerian economy.

The study focuses on Nigeria which is a very vibrant economy in Africa and largely depends on the small and medium enterprises. This study is expected to provide deep insight on how leadership styles used by different organizations have impacted on the performance of different organizations (Kock, 2011). There are various leadership theories that are applied by different leaders as they undertake their responsibility of leading the organization to achieve its objectives. The research will help to identify how failures in organizations due to inappropriate leadership affect the economy of a country. This research will also continue in finding ways in which different leadership styles can be used to influence an organization positively so that it can achieve the desired performance.

Potential research output

This study will help to identify ways in which leadership influences organizational performance. The study will evaluate different leadership style theories and analyze how these theories work in an organization. It is expected that this research will identify how the leadership style affects the motivation of employees.  Different leaders use different motivation styles depending on the styles of leadership they use.

The motivation methods used by leaders influences the performance of business organization since labor is an important factor of production. the relations between the leadership of a business organization and the junior employees determines their desire to work and their overall levels of output(Storey,2014).The research will also help to understand how the leadership style applied in an organization influences the setting of goals and objectives and implementing the strategic plan of a company. In the modern business world, innovation is very important for the performance and success of every business. It is therefore expected that the study will help to identify ways in which the leadership of a business organization will influence the innovation in an organization which in turn influences overall success.

This research is also expected to give the researcher a deeper understanding of the role played by leadership in contributing to efficiency which is a pillar in the success of an organization.

Apart from the impact of leadership styles on performance, this research will also help the audience to understand ways in which application of inappropriate leadership styles affects businesses. Failure of businesses as a result of poor leadership has various is expected to have negative consequences on the Nigerian economy such as an increase in levels of unemployment, loss of livelihoods by individuals, reduction in GDP of the country. The failure of businesses due to the application of inappropriate leadership styles results in a reduction in disposable income levels of the people who depended on the businesses and therefore leading to contraction of the economy(Phillips,2012).

Conceptual framework

This research will use a descriptive conceptual framework to analyze the results of this research. The analysis of data collected in this study will be evaluated and a relationship between variable will be established. The relationship between leadership and organizational performance is established first by determining the indicator of performance in an organization. The indicators in an organization can be financial performance, customer satisfaction, efficiency levels, and the rate of return on capital. Different leadership style used by management will be identified and then the performance of various organizations using this different leadership is compared to determine whether and to what extent leadership style affects organizational performance.

Organization of study

This study is organized in such a way that the objectives of the research will be fulfilled. The activity in this study is to prepare for the study. At this point, all the materials and equipment required to carry out the research are bought. The second activity is travel to the research destination or site. After arriving in Nigeria, the team will use the first two days after arriving to prepare for data collection by making preliminary visit to the research areas so as to familiarize with the environment. Data collection is followed by grouping of data and data analysis. The activity of this study is to prepare the final report of the study.

A lot has been written on the impact of leadership on organizational performance. This section of project proposal analyzes the various relevant literatures to this research topic. The literature review analyzes the views and arguments of various scholars and compares their thoughts, ideas, findings and recommendations. Differences between the works of various researchers are evaluated. The review of literature will help in identifying gaps in this research topic that need further research so that the existing gap can be filled.

According to (Phillips,2012), leadership is very important in determining the success of an organization. Leaders in an organization are expected to play various roles such as coordinating, influencing, directing and controlling the activities of a firm. Different authors have different views and definition of leadership.(Blazey, 2013), explains that leadership is simply the art of influencing people to strive without being coerced towards achieving the goals of an organization or group of people. He emphasizes not only the willingness but also the high desire and zeal to work (Kouzes, 2017)describes leadership as the act of influencing other people towards achieving a set goal.

Leadership in an organizational context is defined by (Storey,2014) as the process of influencing and directing people within an organization to work in order to attain goals and objectives by communicating effectively with them. He argues that each and every organization has three aspects which must relate amicably in order to attain success. These aspects include time, people and tasks. He argues that people are the most important of the three elements and therefore an interpersonal relationship between people in an organization is crucial in attaining goals and objectives. There are different leadership styles that management of organization can use. These leadership styles include:

l    Autocratic or authoritarian leadership style

l    Democratic style

l    Laissez-faire/free rein

The autocratic leadership style was developed by Adebakin and Ghadamosi(1996), a person who was known to be autocratic and had little faith in other people. The authoritarian leadership style is based on the assumption that pay is the only type of reward and it is the way that employees can be motivated. According to (Murgatroyd, 2012), the autocratic leadership style is used by leaders in many organizations. The leaders using style do not believe in delegating duty. This leadership style emphasis on hands-on approach where the leader is involved in each and decision made in the organization. (Murgatroyd, 2012) argues that this style has impacted positively on the performance of organizations especially in Nigeria.

He argues that the use of authoritarian leadership helps to reduce the length of the decision-making process and therefore it leads to better decision making. (Holroyd, 2012) also, argues that authoritarian leadership style is good for organizations. According to (Holroyd, 2012), an authoritarian leader is able to command respect among the junior staff in an organization and this will influence the workers to work more since they fear the person who is at the helm of the organization. By doing this, employees are able to achieve high productivity which leads to a good performance by the entire organization.

Another author who advocates for the use of this leadership style is (Charan, 2017), he argues that authoritarian leadership is very effective in an organization. This is because the style motivates employees through money. Money is the main motivator of employees according to(Charan, 2017) j and therefore, an organization using this leadership style is able to achieve its aims and objectives by motivating employees by offering bonuses and wage increment depending on performance. The authoritarian leadership style uses threats and commanding language to influence the performance of employees. This method works in some instances but in most cases, this method is not effective in achieving organizational performance since most employees are unhappy and uncomfortable at the workplace.

According to (Karadag?,2015), authoritarian leadership style is very detrimental to the motivation of employees. This is because the style imposes upon employees to do things that they may not be willing to do. This style uses orders to get things done rather than appealing to the needs of the people. When employees perform a task just because they have been commanded to do so, the outcome of the task in most cases is going to be undesirable.(Charan, 2017) , also agrees with this argument. He explains that humans have emotions and psychological needs that organizations need to appeal to in order to motivate them to work.

The use of money as the only motivator in this style, therefore, means that all the things that motivate employees to work will not be catered for and therefore employees will not be motivated to work hard. The absence of other motivational techniques makes it difficult for an organization to achieve its objectives, especially in Nigeria. According to(Kock, 2011), authoritarian leadership style has a negative impact on organizational performance in Nigeria. This is because of the style advocates for top-down decision-making approach. This means that the leader makes decisions without involving other people within the organization who are likely to be affected by these decisions. Some of the decisions taken by the leader may be unpopular among employees and therefore implementing them may become difficult.

Since the implementation is the most important phase in the path towards achieving organizational objectives, it is important that decisions made involve various stakeholders so that the implementation process may be easy. Many of the organizations in Nigeria which use authoritarian leadership style experiences low morale among employees and poor accomplishment of tasks. (Mizrahi, 2017), argues that authoritarian leadership style hinders innovation in many organizations. He is of the opinion that, in an organization where leaders have the final say on everything, it becomes very difficult for the employees to be innovative and creative.

This is caused by lack of independent thinking and poor work environment where employees are not allowed to try new methods and processes. (Mizrahi, 2017) argues that since innovation is an important indicator of organizational performance absence of new products, ideas or production processes means that this style results to poor organization performance. He argues that the use of this leadership style has had its hand in the collapse of many businesses in Nigeria.

The democratic leadership style is found to be popular among many authors. This leadership style is a direct contradiction of the authoritarian style. According to(Be?rard, 2013), the democratic leadership style has played a big role in determining the performance of organizations in Nigeria. He explains that many of the organizations that use the democratic leadership style are successful since the leaders involve junior in decision making. This helps in boosting the confidence and morale of all employees since they feel part of the organization and hence are motivated to work harder and smarter. (Scouller, 2011)is another author who is in favor of this argument.

His view is that the democratic leadership style uses different motivational techniques apart from money to motivate its employees. The motivational techniques used by leaders help in fulfilling the psychological needs of employees hence boosting their morale and which in turn leads to good performance. According to (Dutton & Spreitzer, 2014), the democratic leadership style has been instrumental in achieving good performance for SME`s in Nigeria. He argues that the performance of many SME's in Nigeria has been due to the leadership style used by the management of the organizations. His reasoning is that when the democratic leadership style is used in a business organization, it foster a culture of innovation and creativity since employees are free to experiment and make errors. This eventually results in new products, services, and technologies which help the organization in becoming more successful.

Some author, however, believes the democratic leadership style does not influence the performance of an organization positively. He reasons that this style makes decision-making process long and complicated since it involves a lot of consultation. Delay in decision making affects the performance of an organization negatively especially in cases where decisions need to be made urgently. Decisions made as a result of the democratic style may also be inappropriate since employees may influence decisions that are in their interest and against the interest of the organization in general and therefore resulting in organization failure.

According to (Treasurer, 2011)j, the failure of organizations as a result of the use of inappropriate leadership styles has had detrimental effects on the economy of Nigeria. He argues that failure of organizations has resulted in rising in unemployment levels which have resulted in increasing dependency also argues that failure of business organizations brings about a slump in the rate of economic growth. since Nigeria is a developing nation, it is largely dependent on small and medium enterprises and therefore, the closure of these businesses leads to decrease in the rate of economic growth. The failure of business due to the application of inappropriate leadership styles also affects the income levels and consumption patterns of various people.

Key performance indicators

This research will use the following variables to measure the performance of an organization; profit levels, employee turnover ratio, products portfolio of a business organization, consumer satisfaction levels, liquidity ratios and the level of innovation within the organization (Sornum, 2010). These variables will be independently analyzed before arriving at a conclusion on whether an organization is successful or has failed.

Research methodologies

The study is conducted using qualitative research methods. It is a theoretical examination of ways in which leadership influences the performance of an organization in the case of the Nigerian economy.

Data collection methods

 The data used in this research is collected from different sources. Both primary data and secondary data is used in this research. The primary sources of data used in this research include data from the various leaders in the SME`s sector and data collected from various experts and researchers in the business and academic community in Nigeria. The data from the primary sources was collected by use of questionnaires and interviews. The structured questionnaires were used to obtain information from the various stakeholders in the small and medium enterprises who were included in the sample population (Treasurer, 2011).

Interviews were also organized on time to ensure all the data needed in this research was ready on time. The interviews conducted are important in this research so as to get first-hand information on how different leadership styles work in an organization and how employees react to different leadership styles. The research also establishes how the leadership of an organization is important in decision making which is very crucial in the performance of an organization. The data collected in this research is qualitative. This means that its mainly a description of opinions, theories, thoughts and ideas of different people concerning how leadership influences performance.

The qualitative method will be used in this research because leadership styles are theoretical in nature and different leadership styles are bound to have different effects on different organizations. One factor that may cause this difference is due to other factors in play which affect the motivation of employees as well as decision making (Orabi, 2016). Apart from the primary source, this research relies to a large extent on secondary sources of information. Data on this research proposal topic will be collected from books. Books written by different researchers and academicians will be sampled to determine the most appropriate to use in this context. The books to be used in this research contain in-depth analysis of leadership styles both new and old and how they work in a typical organization.

The sources secondary sources to be used will also contain an evaluation of the relationship of the various variables that are of particular importance in this research. Peer reviewed economics journals will also be of great importance in this research (Yanney, 2014). The journals on leadership styles together with journals organizational performance and employee motivation will be used in this research. Internet sources such as Google books will also be used by the researcher to support arguments and discussions in this research.

Since, there are many researchers who have written on this topic over the years, information from theses and dissertation will be valuable in contributing to the achievement of research goals and objectives stated in this project proposal. This study will also depend on data on the performance of Nigerian economy and how the failure or closure in business affects the economy (Be?rard, 2013). These effects include loss of income and increase in unemployment levels. The source of information that will be used in this research is expected to provide statistical data which is backed by evidence and theoretical explanations so that by the end of the study, the researcher will have achieved the goals and objectives of the research.

Project budget

The following is the budget estimate of the amount of money required to conduct the research successfully.

Budget item




Material and supplies


Consultation fees


Printing cost


Accommodation & meals during research


Total cost


 Justification of the budget


The research will involve a lot of traveling in order to conduct interviews in different parts of Nigeria and mainly in the major cities. Therefore, the average traveling cost is a bit high.

Material and supplies

The research will require the purchase of materials such as writing materials and other office equipment. The research will require the purchase of a laptop to be used in data analysis. The cost of the laptop is estimated to be.These are the general expenses that are expected to be spent on people providing valuable guidance and information which facilitates the collection of data. This is expected to cost$1,870.This is expected to be used in printing materials to be used in data collection and analysis

The researcher together with the assistants will spend significantly on accommodation. It is estimated that $3,380 dollars will be used for accommodation and on meals. The cost is expected to be high since the research is being conducted in a foreign country and mainly in the cities where food and accommodation are expensive

Reference List

Be?rard, J. (2013). Accelerating leadership development: Practical solutions for building your organization's potential.

Blazey, M. L. (2013). Insights to performance excellence, 2013-2014: Understanding the integrated management system and the Baldridge criteria. Milwaukee: ASQ Quality Press.

Charan, R. (2017). The high-potential leader: How to grow fast, take on new responsibilities, and make an impact.

Dutton, J. E., & Spreitzer, G. M. (2014). How to be a positive leader: Small actions, big impact.

Holroyd, J. (2012). Improving personal and organisational performance in social work.

Information Resources Management Association. (2016). Project management: Concepts, methodologies, tools, and applications. Hershey: Business Science Reference.

Karadag?, E. (2015). Leadership and organizational outcomes: Meta-analysis of empirical studies.

Keller, S., & Price, C. (2011). Beyond performance: How great organizations build ultimate competitive advantage. Hoboken, N.J: Wiley.

Kouzes, J. M. (2017). Leadership Challenge : How to Make Extraordinary Things Happen in Organizations. Wiley & Sons, Incorporated, John.

Kock, N. F. (2011). E-collaboration technologies and organizational performance: Current and future trends. Hershey, PA: Information Science Reference.

Murgatroyd, P. F. F. S. (2012). Rethinking innovation - driving dramatic improvements in organizational. Place of publication not identified: Lulu Com.

Meagher, K. (2010). Identity economics: Social networks & the informal economy in Nigeria. Woodbridge [England: James Currey.

Mizrahi, S. (2017). Public Policy and Performance Management in Democratic Systems: Theory and Practice.

Phillips, J. J. (2012). Measuring leadership development: Quantify your program's impact and ROI on organizational performance. New York: McGraw-Hill Professional.

Storey, S. (2014). The impact of diversity on global leadership performance: LEAD2.

Scouller, J. (2011). The three levels of leadership: How to develop your leadership presence, knowhow, and skill. Cirencester: Management Books 2000.

Sornum, K. (2010). Poor leadership leading to organizational failures. Norderstedt: GRIN Verlag.

Treasurer, B. (2011). Courageous leadership: A program for using courage to transform the workplace participant workbook. San Francisco, Calif: Jossey-Bass.

Orabi, T. (2016). The Impact of Transformational Leadership Style on Organizational Performance: Evidence from Jordan. International Journal Of Human Resource Studies, 6(2), 89.

Yanney, J. (2014). Business Strategy and Leadership Style: Impact on Organizational Performance in the Manufacturing Sector of Ghana. American Journal Of Industrial And Business Management, 04(12), 767-775.

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