The role of Small and Medium-Scale Enterprise (SMEs) in the national economy cannot be underestimated. The impact of SMEs is felt in greater utilization of local raw materials, employment generation, encouragement of rural development, development of entrepreneurship, mobilization of local savings, linkages with bigger industries, provision of regional balance by spreading investments more evenly, provision of avenue for self-employment and provision of opportunity for training managers and semi-skilled workers. However, SMEs are faced with daunting challenges that have led to poor productivity. This study, therefore, investigated the effect of democratic leadership style on firms’ productivity of selected Small and Medium Enterprises (SMEs) in Lagos State, Nigeria. The study adopted survey research design. The population of the study was 42,067 which is the total number of registered SMEs in Lagos State, Nigeria, and a sample size of 495 supervisors and middle level managers of SMEs were enumerated using Krejcie and Morgan’s (1970) formula. The study adopted stratified sampling technique. A structured, adapted and validated questionnaire was used to collect primary data from the respondents. Cronbach alpha reliability coefficient for all the constructs is greater than 0.7. Data were analyzed using both descriptive and inferential tools. Simple Linear Regression Analysis was used to determine the effect of the variables using Statistical Package for Social Science (SPSS) version 25. The finding revealed that democratic leadership had a significant effect on productivity. The study recommended that operators of SMEs should adopt democratic leadership style in running their organizations due to the advantages that come with its adoption.
Democratic Leadership, Productivity, Small and Medium Enterprises
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