Small and medium-size enterprises (SMEs) play a significant role in the global economy making up over 95% of businesses worldwide (Ayyagari, Demirgu-Kunt, and Maksimovicet, 2011). With the smaller size of SMEs, direct contact with senior leadership and even an organization’s founders is commonplace. Unlike larger corporations, SMEs typically offer more responsibility and the opportunity to make a larger impact in the organization. However, mistakes by employees in SMEs have a more significant impact; therefore, there is less tolerance for error. These differences must be kept in mind when determining the organizational culture and leadership styles SMEs should adopt to promote a productive work environment that will retain talent and ensure employees enjoy their jobs. A tailored balance of transformational and transactional leadership styles, when paired with innovative and supportive organizational cultures will promote job satisfaction and organizational commitment in SMEs.
Small and Medium Sized Enterprises (SME)
SMEs are defined differently throughout the world. Eurostat defines European Union (EU) SMEs as having less than 250 employees, maintaining independence from other enterprises, and achieving less than 50 million euro in sales or 43 million euros in annual sales. Some countries such as the United States have criteria that vary per sector. For example, the SBA (2016) classifies Breweries having less than 1000 employees and Saw Mills having…