An empirical investigation of the influence of leadership styles and strategic decision-making on business performance: a generational ownership perspective

This study investigates the relation among leadership style adoption; strategic decision-making and business performance from the generational ownership perspective of family business. Prior studies have attempted to establish the relation of leadership style adoption through firm's working environment, with sparse literature on generational ownership. How does the generational shift impact performance? Is there a transition in leadership style? These need to be collated through strategic decision-making to understand their impact on business performance. The research employs a survey-based technique with data from owners of 100 large and medium family business firms. PLS-SEM is applied to analyse the relation of leadership style (considering organizational and attitudinal factors) through strategic decision-making on business performance. Two models were created, one from data collected from first generation owners and second from second generational owners. The results highlight that there is a shift in leadership style i.e., from Autocratic to Transformational style with the change in management control in the first and second generation. The outcomes indicate that autocratic leadership style and strategic decision-making explained 58.7 percent of business performance in the first generation and transformational leadership style predominated in second generation and this model explained 75.7 percent of variation in business performance. Since results imply that transformational leadership style dominated in second generation, a shift towards this style is preferable.The findings will act as a guideline for the new generations to accept how adopting a transformational leadership style through strategic decision-making may help improve family businesses performance.