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Leadership & Organization Behavior The influence of leadership styles on employee’s job satisfaction and overall

Leadership & Organization Behavior

The influence of leadership styles on employee’s job satisfaction and overall success of an organization

Main Body: 4797 Total Words: 5110 Date: 08/12/2018


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ASSIGMENT TOPIC: The influence of leadership styles

on employee’s job satisfaction and overall success of an organization

Module: Leadership and Organization Behaviour


PROGRAM: Master’s in business administration

Date: 08/12/2018

Letter of Transmittal

08 December 2018 Module Leader, KIMT and SMC+ University

Dear Mentor,

I have successfully completed the Assignment on How can an understanding of managerial economics help managers in global environments? This assignment has enabled me to gain more knowledge and attain more practical experience. I appreciate any sort of criticism on the report and welcome feedback that you will provide.

Thanking You,

Yours Sincerely,


Master’s in Business Administration, SMC+ UNIVERSITY, KIMT


One of the most pleasant parts of submitting a report is the opportunity to convey gratitude to those who have contributed in its successful completion. Unfortunately, no matter how extensive, the word thanks, it is always inadequate in expressing the earnest gratefulness. These acknowledgements are no exception.

Acknowledgements must also go to the course coordinator for their sincerity, willingness to accept differences; enthusiasm for creativity and long hours of earnest hard work under the pressure of knocking deadline; all of which has made this report possible and successful in due time.

Gratitude must be conveyed to those who have helped gather information; information which set the foundation of the report.

At last, I would like to convey our earnest gratefulness to our honourable module leader for providing me with such an opportunity. The assignment has undoubted helped me gain a lot of knowledge which can be carried down to my future career.

Table of Contents



Organizational Leadership Model


Type of Leadership


In Search for Leadership


Physical Behaviours




Characteristic Traits


Authoritarian, Democratic, and Laissez-faire Leadership


Initiating Structure and Consideration


Production-centred and Employee-centred Leader Behaviours


Managerial Grid




Contingency Theory of Leadership


Leader Orientation


Situational favourableness


Group effectiveness


Path-Goal Model






Decision-Making Model of Leadership


Criteria for selecting a leadership style


Diagnostic decision


Comparing the leadership models




Choosing a Leadership Style


Strategies for Improving Leadership


Constraints on leader behaviour








Individual skills and




Transactional leadership







In this global competitive environment, effective leadership style is necessary to reduce the attrition rate. From the effective leadership styles only, it is possible to achieve organizational goal productively. Leadership styles effect on the employee performance and productivity. This paper summarizes and analyses the available literature of leadership styles and effect on different components of Quality of work life. An effective leader influences follower in a desired manner to achieve desired goals. Different leadership styles may affect organizational effectiveness or performance30. Transformational leadership is a stronger predictor of both job satisfaction and overall satisfaction7. In the study it was concluded that organizational performance is influenced by a competitive and innovative culture. Organizational Culture is influenced by leadership style and consequently, leadership style affects organizational performance. Leadership is “the behaviour of an individual when he/she is directing the activities of a group towards a shared goal”. A leader is seen as someone who sets the paths to influence people to adhere to those paths. Leadership is an action and not just a position. It can be shown via different people in various situations. A person is not born to be a leader but cultured through the upbringing and environment.

A leader’s personal characteristics are also vital for the developments and motivations of the organizations. True leaders such as the teachers who illustrated that leadership is an action (teaching and leading the students) and not a position.

Touching the lives and affecting the outcome of many different expectations, a teacher is the epitome of a leader. A leader has his or her own style of motivating the people in the organizations. A leader must find the best skills in order to provide directions, motivations and purposes. Effective leaders are flexible.

Organizational Leadership Model

The effective leadership influence is not the same for everyone. It depends on their ranks in the organization and abilities which are required in leaders. The three basic leadership roles identified: initiation, speech, and management.

1. Initiation: Initiation refers to planned decision making on policy formulation or structural

change. These vital decisions are the determinants of the organization’s culture and mission.

2. Speech: Strategic decisions and methods designed for implementation within the establishment. It includes adjusting or adding on to the present structure towards new policy demands.

3. Management: Management is putting into practice the policies and measures that are

available to maintain the operations of the organization efficiently.

These three kinds of Leadership are naturally executed at diverse ranks in the company with different abilities and skills. The top-level management would initiate new policies that involve a change in the business’s structure or understanding the company’s mission. An understanding of the entire organization, culture, mission, vision and how it correlates with the external parties is mandatory for these top-level individuals. They represent the organization and what the business stands for.

Understanding the policy decisions and practicing them to the existing organization via utterance or speech is usually made by the intermediate-level managers. They must uphold a two-way point of reference by taking orders from the above management and adapting them for the lower groups of people in the organization.

Type of Leadership

1. Process

2. Typical Organizational

3. Level

4. Cognitive

5. (Knowledge)

6. Affective

7. (Emotion)

8. Initiation: Change, creation and elimination of structure

9. Top echelons

10. System perspective

11. Charisma

12. Speech:

13. supplementing

14. and

15. piecing out of structure

16. Intermediate

17. levels:


pivotal roles

19. Subsystem perspective:

20. two-way orientation

21. Integration of primary

22. and secondary

23. relations: human

24. relation skills

25. Management: use of

26. existing structure

27. Lower levels

28. Technical knowledge

29. and understanding

30. of system of rules

31. Concern with equity in

32. use of rewards and

33. sanctions

Three Leadership Patterns, Their Location in the Organization, and Their Skill Requirements The company’s policies and procedures will be administered by the Lower-level supervisors. These personnel must possess both the technical knowledge and a clear perception of the organization’s rules in order to be successful. They must continually deal with issues such as equity, rewards and punishments in leading others. Therefore, leadership plays a crucial role in an organization because the it has direct impact on the effectiveness of the organizations. Leadership is when a person manipulates others to perform a task at their own will which they would not normally do. Leadership is a vital process to an organization and it can be deliberated on three different stages; i.e. the individual, group and organization.

Analysis at the individual stage: the leadership studies have paid attention on the successful leader’ personalities. Behaviours of both formal and informal leaders are focused at the group level. The effectiveness of an organization is decided by the relations between the leader, follower and circumstances. The studies have caused an emergence of different theories of leadership, namely situational and contingency.

In Search for Leadership

The requirements in selecting and training efficient leaders were emphasized during the World War I and the quarter century between World War l and World War II; numerous studies were made to examine the personal characteristics of good leaders. These studies are usually referred as characteristic studies since the primary goal was to classify the traits and personal characteristics of successful leaders.

The diverse methods used to study these leadership traits could possibly be the reason in the irregularities of the results. The manner of studies was not consistent in identifying the leaders. Most of the studies was in comparing efficient with inefficient leaders or leaders with non-leaders. Some were identified by external observers, others selected by the group by way

of recommendation or voting, nominated by observers such as teachers while some were chosen because they are already in leadership positions. The studies conducted were in conflict as to the way they deliberated on the traits. Some traits were measured by mental tests; others relied on viewers to spot the traits they have seen while some depended on the persons to report their own personality traits.

The trait studies were quite unsatisfactory especially since they had hoped to develop an accurate measure of leadership effectiveness. The spotlight on the leadership research moved because of the flimsy results, to contingency studies which investigated more than just traits of a leader. Numerous traits formed an important divergence in leadership effectiveness and they interrelated with other conditional variables to stimulate the effectiveness of the leader.

Physical Behaviours

Physical attributes including height, weight, health and appearance are also examined in the studies. It was concluded that there is a relationship between the above features and leadership. Apparently, leaders have the tendency to be taller, heavier, better fitness, greater physique, higher energy output and more attractive in appearance. However, these types of results were not always reliable and consistent. The results neither are too weak in general and not consistent to be effective in selecting leaders nor are they helpful for training functions since not much can be made to alter most of these physical traits.


It was generally agreed that leaders are more intellectual than non-leaders and the relationship was shown in the various studies. The relationship could probably begin from the reality that leadership functions depend mostly on success in problem solving. Leadership roles such as initiation, speech and management necessitate great mental ability. In general, it is safe to assume that leaders seems to be more intelligent than non-leaders but the relationships are small. Many other variables other than intellect inspire leadership effectiveness.

It was also suggested that leaders should not be too intelligent than the group because associates who are notably brilliant than others are rarely chosen as leaders since the other members tend to snub them. Individuals with high IQ’s are inclined to have different sets of vocabulary, networks and aspirations that would create communication and inter-relations problems.

Leaders do extremely well generally at school/college/university and score better grades. It is important for effective leadership to know how to do things. Thus, general and practical knowledge are essential for leaders to make better decisions.

Characteristic Traits

Only a partial of the characteristic traits seem to be related to leadership and most are not especially convincing. It was suggested that the average leader is more used to social

displays, greater initiative, persistent, knows how to get things done, self-confident, are more cooperative and adaptable, and possesses excellent communication skills. Leaders were found to be more emotionally mature than non-leaders in the personality integration or emotional adjustment. It can be concluded that personal characteristics are related to leadership.

Effective leadership does not depend on a mixture of personality traits only because situational variables are also important since they always decide whether a character was associated with effective leadership either positively or negatively. Therefore, it can deduce that effective leadership depends on the leader’s characteristics, his subordinates and the nature of the task at hand.

Many leadership styles were based on studies of leaders’ behaviours. The finest researches on the styles of leadership are made together at the same time; i.e. The Ohio State University and the University of Michigan. Researchers acknowledged two leader behaviours that were similar although the investigations were conducted separately. As a result, a two-dimensional aspect of leadership has been to use to form the Managerial Grid.

Authoritarian, Democratic, and Laissez-faire Leadership

Due to the diverse political systems in the US and Germany before World War II inspired studies of leadership which evaluated three leadership styles: authoritarian, democratic, and laissez faire. In the democratic leadership style, decisions were made by vote of majority; equal participation encouraged; criticism and punishment minimal. In the autocratic leader, the leader made all the decisions and others must follow the set procedures strictly. In the laissez-faire leader, there was minimal actual leadership and others were permitted to work and play as usual without proper directives.

Initiating Structure and Consideration

The two leadership factors were initiating structure and consideration which include leadership behaviours in organizing and defining the tasks to be performed and goal achievements. A leader who assigns people to do specific jobs, expected workers to follow set routines and meet deadlines. The consideration factor is showing friendship, mutual trust, warmth and concern for subordinates.

Production-centred and Employee-centred Leader Behaviours

Production centred behaviours were akin to initiating structure in which leaders would establish targets, gave directives, checked on operations and planned the group Employee’s work. centred behaviours were like the consideration’s dimension in which the leader would develop a caring personal relationship with the subordinates and encouraged a two-way communication with them. The relationship between production-centred and employee centred behaviours are found to be independent scopes of leadership. A leader with strong production orientation does not mean that he is disinterested in the employees.

Managerial Grid

Robert Blake and Jane Mouton had created a framework which combines a concern for task accomplishment and a concern for people called the Managerial Grid. They both assumed that concern for production and concern for people would produce the most effective leadership style. There are leaders primarily more concerned with accomplishing the production and task not concerned about people. This person wants the job done and schedule followed at all costs. There is also individual who is not concerned whether the group produces anything but concerned more about the personal needs and interests of the team members. Ideally, leaders should be concerned about meeting schedules in order to get the work done and simultaneously are concerned about the team members’ interest and feelings too.

The Managerial Grid is popular among managers. It is extensively used by organisations as part of their training program to assess leadership style. However, the effectiveness of the Managerial Grid is not consistently supported. The factors which are considered in determining leadership styles interact in complicated ways which resulted in various leadership styles.


In assessing leadership effectiveness, there are many factors that must be combined. Paul Hersey and Ken Blanchard developed a situational leadership model which considers three variables:

(1) guidance and direction provided by the leaders (task behaviour)

(2) emotional support given by the leader (relationship behaviour)

(3) the maturity level exhibited in performing the task

As a result, four potential leadership styles have been created using a combination of the above factors:

S1: Telling

Give instructions and supervise performance closely. Suited for followers who are unwilling but of low maturity.

S2: Selling

Decide and provide opportunity for explanation. Appropriate for followers who are not able but willing.

S3: Participating

Sharing ideas in making decisions. Suited for followers who are able but not willing.

S4: Delegating

Responsibility handed over for decisions and performance. Appropriate for groups who are able and willing.

Contingency Theory of Leadership

Fiedler studied the interaction of leadership style and situation. He identified and developed ways to measure leadership orientation of the leader and situational factors which influence leadership.

Leader Orientation

Two types of leaders were identified, i.e. relationship-oriented or task-oriented. Leaders who are relationship-oriented tend to look at others as co-workers and look upon interpersonal relations as a requirement towards accomplishing the task. However, for task-oriented leaders, they react strongly against people whom they could not get along with in performing a task.

Situational favourableness

(1) relationships between leader and member can be good or bad;

(2) the task is relatively well planned or not; and

(3) the leader’s authority is relatively strong or weak.

The task structure becomes the second most important situational variable as evaluated by judges who examined four aspects of the task structure.

Clarity: whether requirements of the tasks are stated clearly,

Multiplicity: which the problems encounter can be solved.

Verifiability: which the correctness of the decisions can be ascertained.

Specificity: which there are generally more solutions involved in performing the task.

Group effectiveness

Relationship-oriented leaders perform excellently well in situations where concern for the team members is apparently necessary in order to motivate them to perform well. People naturally prefer leaders who care about them and their welfare. However, task-oriented leaders are clearly more effective in impossible situations.

Path-Goal Model

Directive leadership: subordinates are told what to be expected. Specific guide, standards and work schedules are provided to ensure that task is performed as expected.

Supportive leadership: subordinates are treated equally and show concern for their needs and well-being; develop pleasant interpersonal relationships among the group members.

Achievement-oriented leadership: challenging goals are set, and subordinates are expected to perform at their highest level, improvement in performance always.

Participative leadership: subordinates are consulted on suggestions and ideas in making decisions.

Situational factors

Situational factors characteristics of the followers and environmental factors which affect leadership style. Significant characteristics of the followers which have been identified as determinants of leadership style are:

(1). Followers with internal locus of control believe that they are rewarded for their own effort. Meanwhile, followers with external locus of control believe that external forces have a control on their rewards.

(2). Authoritarianism: an individual’s willingness to accept the influence of others.

(3). Abilities: The followers’ ability and experience influence a leader whether they are able to work with an achievement-oriented leader or a supportive leader who are patient enough to provide encouragement and instruction.

The path-goal model recognises three environmental factors which effect leadership styles:

the nature of the task to be performed,

the existing organisation’s authority system

the organisational norms and dynamics

The above factors may influence the effectiveness of different leadership styles in a many way.

Normative Decision-Making Model of Leadership

Based on the contingency theory of leadership, this leadership model does not assume any leadership style as appropriate for all situations. Leaders must develop a range of leadership styles and take on the most appropriate style depending on the situation. Leaders are required to know in which circumstances they need to consult others and vice versa.

Even though the leader may be the chairman of the group, he is just one of the group members and does not try to influence the group to adopt a solution.

Criteria for selecting a leadership style.

Two criteria used for assessing the efficiency of a leadership style are quality and acceptance. The quality of the decisions made refers to the accurateness of the actions taken and the extent which some objectives are achieved. The quality of decisions depends on accurate and relevant information Conferring with other group members often provides additional information.

Diagnostic decision rules.

In order to save time and minimize costs, some managers choose the lead autocratically. If the aim was to further the subordinates’ personal development, the participative style is selected. In some strategies, the manager decides alone. At times, the manager decides on his own after earlier consultations with his subordinates.

Comparing the leadership models.

All situational leadership models emphasize on the effect of external factors on a leadership style. Different leadership styles suggest styles that are determined by various situational factors. The models focus on different methods, which are situational factors and criteria for selecting the best style: task-oriented versus relationship-oriented.

The normative decision-making model ascertains three leadership styles, namely autocratic, consultative, and participative. In each model, situational factors which influence the effectiveness of leadership are somewhat different. A significant reason being that normative decision- making model equates leadership with making decisions and looks at only this leadership function. The models also use different criteria for evaluating leadership effectiveness.


Although identifying what makes an effective leader seems like a simple task, however, individuals who are in leadership positions are often faced with a dilemma on deciding which leadership pattern to practice.

Choosing a Leadership Style

Choosing the most appropriate leadership style to adopt depends largely on the context of the organisation. A successful leader must be capable of assessing the situational forces in the organisation and respond accordingly to the needs. The forces include the organisation culture, business goals as well as the organisation’s strategic plans. Effective leaders must understand themselves, the group, company and social environment.

Strategies for Improving Leadership

One of the main variables to improve leadership relates largely to the organisation’s reward system. Leaders should not overlook his capacity to reward his followers accordingly since followers will respond otherwise. For instance, the managers of high- performing groups generally are compensated according to their achievements. Considerate leaders manage to create satisfaction among their performing subordinates while at the same time, changes in the behaviour of the leaders could be caused by the performance of the subordinates.

Constraints on leader behaviour.

Leaders have limited opportunities to influence others. Leadership effectiveness is inhibited by a variety of factors. For example, the managerial decisions are planned because of the law, structure, technological specifications and the absence of alternatives.

Many other organisational factors can impose limitations on the leader’s capability to either communicate with or to reinforce the behaviour of the subordinates. For example, organisational policies, nature of task, skills and abilities of available resources and other external factors may impede the capacities of organisational leaders.

External factors.

In terms of external factors, leaders are constrained by factors that they have no control on such as state and federal laws. Other external factors include the world economy and global issues. Irrespective of their leadership style, leaders with unskilled resources will face great challenges in leading. The availability of skilled followers is subjected to the external labour market.

Organizational policies.

The organization may limit a leader’s effectiveness by hampering the amount of communication between leaders and followers. The existing company policies may also pose restrictions on the ability of leaders to reward or punish followers.

Group factors.

Leaders may find it hard to penetrate or influence group members who are highly unified. This will create difficulty for leaders to demonstrate his true capabilities in performing tasks for the organisation.

Individual skills and abilities.

The leader’s own skills and abilities may act as constraints since leaders can only possess so much expertise, energy, and power. Some situations may simply require greater skills and abilities than the leader may possibly hope to possess. Substitutes for leadership. While some situations constrain leaders, other situations make leadership unnecessary. These variables

are referred to as substitute variables because they substitute for leadership either by making the leader’s behaviour unnecessary or by neutralizing the leader’s ability to influence subordinates. Leadership is an extremely important function. It has an enormous influence on the value of groups and organizations. The complexity of the situation, however, may prevent us from knowing in advance which will be the most effective leadership behaviours.

1. Leadership refers to increasing influence which occur when an individual manipulates

others to do tasks voluntarily which they would not do otherwise. The basic leadership roles include initiation of policy and structure, speech, and management. A need for leadership within organizations stems from the incompleteness of the organization design and the

dynamic nature of the internal and external environments.

2. The studies of leadership were mainly studying on traits that tried to identify the

characteristics of effective leaders. The studies focused mainly on physical traits, intellect

and characteristic. The results were usually weak and inconsistent although some personal characteristics were always related to leadership. Most studies concluded that the characteristics of the subordinate and the nature of the task were as important as the characteristics of the leader in determining success.

3. Another approach to studying leadership set on leader behaviours; i.e. how leaders behave. One of the studies compared three leadership styles: authoritarian, democratic and laissez- faire. Although democratic leadership produced the greatest satisfaction, autocratic leadership had the highest levels of productivity.

4. Research conducted simultaneously at two universities identified two similar leadership

behaviours. At the Ohio State University, the researchers labelled these two leader behaviours initiating structure and consideration. At the University of Michigan, the same two factors were labelled production-centred and employee-centred leader behaviours. These two leader behaviours appear to identify leadership functions essential to the effectiveness of a group. The two Factors have been used to form a matrix called the Managerial Grid which places a concern for production on one side of the grid and concern for people on the other. The research evidence does not support this conclusion consistently.

5. The unsuccessful research to identify leadership traits or universally superior leader

behaviours caused an emergence of development of four situational theories of leadership. The theories suggest that the most effective leadership style depends upon situational variables particularly the characteristics of the group and the nature of the task.

6. A situational leadership model that matched different combinations of task behaviour and

relationship behaviour with the maturity of the followers. As the followers increase, the appropriate leadership style is telling, selling, participating, and finally for highly mature

followers, delegating.

7. The most appropriate leadership style was determined by assessing three situational

variables: whether the relationships between the leader and the members were good or poor, the task was structured or unstructured, and the power position of the leader was strong or

weak. When these three situational variables created an extremely favourable or extremely unfavourable situation, the most effective leadership style was a task-oriented leader. However, where there were intermediate levels of favourableness, a leader with a high concern for interpersonal relationships was more effective in these situations.

8. The path goal model theory is derived from expectancy theory. It suggests that effective leaders must clarify the target paths and increase its attractiveness for followers. Four distinct leadership styles are proposed in the model: directive, supportive achievement-oriented and participative leadership styles.

The style most appropriate depends upon two types of situational factors: the characteristics of the follower and characteristics of the environment. Three of the most important follower characteristics include the locus of control, authoritarianism, and personal abilities. The three environmental factors include the nature of the task, the formal authority system within the organization, and the group norms and dynamics.

9. The three leadership styles include autocratic decision making, consultative decision making, and group decision making. The decision titles determining which style is most appropriate include such questions as whether the leader has adequate information to make the decision alone, whether the subordinates will accept the goals of the organization, whether subordinates will accept the decision if they do not participate in making it, and whether the decision will produce a controversial solution.

10. The influence of the group upon the leader should not be overlooked. The relationship between the leader and the group implies a reciprocal influence. Groups have the capacity to influence the behaviour of their leaders by responding selectively to specific leader behaviours. The influence of a leader can also be constrained by several external factors, such as organizational policies, group norms, and individual skills and abilities. Other variables have been found to neutralize or substitute for the influence of a leader, such as the skills and abilities of followers and the nature of the task itself.


There are many leadership theories. Arthur G. Jogo (1982) had proposed a framework that organizes leadership theories based on each theory’s focus and approach. Focus refers to whether the leadership is seen as a set of traits or actions. There is a universal formula of traits or behaviour for an effective leader. However, effective leadership also depends on specific situations.

The kinds of behaviours that leaders can perform in a group. The two leader behaviours that have been consistently observed including task-related activities, called initiating structure or production-centred activities, and interpersonal relations activities, sometimes called consideration or employee-centred activities. The incremental influence that one individual exerts upon another and that causes the second person to change his or her behaviour voluntarily. Three leadership roles include origination of the structure by top-level managers,

interpolation or adapting the structure by middle-level managers and administration or implementation of the policies and procedures by lower-level supervisors.

I concur with A. Ange on the presence of leadership crisis, but I also foresee the resolutions taken and are still being taken to resolve the problem. Many organizations are spending money in sending their employees to be groomed and trained for future growth of the company whereby they are exposed to different methods of management and how to be great leaders. Leaders are born to leaders but in some circumstances, situations and environments also play a huge role in creating a leader.

Leaders come and go, and new ones are always on the threshold to take over the empty space. The qualities of the leaders and their leadership styles vary but they are vital in the development and motivation processes of the organizations. There is a crisis in good leadership, but it is not at a critical point. Big organizations would have everything in place for the future growth of the company and would have in line the replacements for all aspects of the management. Even is small to medium sized organizations have planned their management line-ups for the future. The ongoing programs and trainings that are conducted by organizations to produce capable leaders and groom them further showed that companies are aware of the could be crisis and had taken steps to overcome the situation.

Yes, there is a crisis, but the severity of the crisis is not huge enough to cause panics throughout the organizations.

Transactional leadership

Transactional Leadership is focused on staff’s basic and external demand, the relationship between leaders and subordinates is based on the contract. They tend to attain organizational goal by pacific job roles and mission design, their basic purpose is to maintain a stable organization. Podsakoff et al said that leadership behaviour can affect trust and satisfaction of employees to organization and organizational citizenship behaviour further enhances the relationship between leadership style and organizational commitment directly. Leadership style is the „relatively consistent pattern of behaviour that characterizes a leader‟. Today’s organizations need effective leaders who understand the complexities of the rapidly changing global environment. Different leadership styles may affect organizational electiveness or performance. According to the Oladipo et al, the success or failure of proper organizations, nations and other social units has been largely credited to the nature of their leadership style, Transactional leadership relies more about "trades" between the leader and follower by which followers are compensated for meeting specific goals or performance criteria. The transactional leader will first validate the relationship between performance and reward and then exchange it for an appropriate response that encourages subordinates to improve performance.


It is observed that from the available literature, all the studies conducted are related to the large sector which interns reveal that leadership style, organizational commitment and work satisfaction are interrelated. Thus, leadership styles can affect the quality of work life. Since much work has not been carried out with respect to SMEs, there is a need for the study of the effect of Transformational and Transactional leadership styles on the Quality of work life of employees working in the SMEs.


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