IMPACT OF LEADERSHIP STYLE IN START-UP ENTERPRISES ON EMPLOYEE PERFORMANCE IN CHINA

Abstract

This study examined the relationships between transformational leadership, transactional leadership, work engagement, and employee performance. Additionally, the direct and indirect effects of transformational leadership, transactional leadership, and work engagement, as well as their impact on employee performance, are analysed. The study participants comprise centre-level administrators in 9,601 retail startups across 14 urban areas in Guangxi Province, China. Five hundred forty-one centre-level administrators from these retail startups were chosen for the analysis. The data were analysed using the Structure Modelling Technique. Results suggested that both leadership styles significantly affect work engagement, confirming the importance of leadership in motivating employees and enabling a more engaged workforce. Furthermore, work engagement is also very important in improving employee performance, emphasising its mediating role in workplace outcomes. Both forms of leadership —whether transformational or transactional —directly impact employee performance. This is further confirmed by the mediation analysis, which found that work engagement is a significant link between leadership styles and employee performance, highlighting work engagement as a crucial factor in this relationship. The findings emphasise the need for effective leadership strategies to be implemented at all levels of the organisation to enhance employee engagement and performance.