Developing Effective Leadership in Small Businesses: Identifying Key Contextual Factors

Leadership research has placed greater emphasis on motivational processes to the detriment of other understudied mechanisms, namely situational variables and contextual factors in light of follower readiness. Understanding and being able to interpret contextual factors is an important tool in leading and managing the internal dynamics of small teams at different levels, to further our understanding of small groups in relation to their surroundings. This qualitative and exploratory research explored the contextual factors that could be considered in the leadership process for effective leadership among Ghanaian small businesses. The study adopted a multiple-case study strategy using a purposive-homogeneous sample of thirty staff from ten small businesses and analyzed primary data from semi-structured interviews through latent thematic analysis and the Gioia technique as an analytical path and presented the results descriptively. This chapter concludes that family ties, cultural, and religious factors are key contextual factors that need to be considered in the leadership process for effective leadership when managing small teams, as managers find these factors very difficult to manage. This finding will provide a practical guide for small business leaders, managers, and practitioners to understand the contextual factors that could be considered in the leadership process for effective leadership and to deal with them appropriately when they surface.