An Investigation of the Leadership Style in Small and Medium Enterprises in Saudi Arabia

Abstract

The Kingdom of Saudi Arabia is going through a rapid transformation. The SME sector is expected to play a key role in this. As a result, the issue of leadership style in the small business sector is now more important than ever. The right business styles mean that they can innovate and stay competitive in the global economy. This led to the development of the research question, which seeks to understand what type of leadership style is common in the Kingdom. This was developed after a review of the relevant literature on the subject. A thorough investigation of the secondary literature on leadership theory with regard to Saudi Arabia was conducted. The research method used for the project was a systematic literature review and this involved collecting data from mainly secondary sources. This information as evaluated using thematic analysis. This led to the collection of a great deal of qualitative data. The main findings of the study were that most Saudi SMEs still use the transactional leadership styles and are more like managers than leaders. This means that they are not more innovating and not able to build teams in multicultural companies. Going forward this could be bad for the Saudi economy and its expected transformation. However, the research found that many women and younger leaders are adopting more democratic styles of leadership and this is to the benefit of the economy. However, among the findings were than transactional leadership had some advantages especially in a Saudi setting. Then every sector may need a particular leadership style. The study concluded with a number of recommendations for practice and future study, including a recommendation that a situational leadership approach may be the most suitable for Saudi SMEs.