Abstract

Numerous studies indicated a tremendous need of a competent leadership to lead transformation process within the South African small and medium enterprises (SMEs), especially after 1994. Over the past years, a number of SMEs failed in innovation due to lack of innovative culture. Leadership has been proven as a critical factor to create an innovative culture within organisations. Thus, this paper proposes a theoretical model to emphasize the impact of innovative leadership on organisational culture. Data were collected through a semi-structured questionnaire from a group of SMEs (n = 15) within the manufacturing sector from the Western Cape. A descriptive analysis was carried out through the SPSS 19 program. Both alternative (H₁) and null (H₀) hypothesis were used to test the relationship between leadership characteristics and organisational culture. The results revealed that the key factors such as lack of business management skills, knowledge of leadership transition, education and training, market and technological know-how, entrepreneurial drive, and resistance of changes remained the primary determinants for leaders to manage innovation successfully in SMEs. The model provided a guideline for leaders to influence employees to be creative and innovative to ensure the success of innovation within their organisations.

Key words: Leadership, South African small and medium enterprises (SMEs), creativity, innovative culture, descriptive analysis.