Impact of the interaction among emotional intelligence, transformational leadership and organisational climate on job satisfaction: case of selected youth-owned and managed small businesses in Ghana

Abstract

Many youth-owned and managed small businesses (YOMSB) in Ghana face management-related challenges that continue to reduce their survival rates and have become a major source of worry for government, industry, and academics alike. This study aimed to enrich the theoretical and practical understanding of the youth-owned and managed small businesses sector by developing and testing an explanatory structural model on the interactive effect of organisational climate, transformational leadership, and emotional intelligence on employee job satisfaction. The study assessed the levels of organisational climate, employee job satisfaction, emotional intelligence, and transformational leadership among YOMSB in Ghana. Additionally, a direct relationship between organisational climate and employee job satisfaction, organisational climate and transformational leadership, transformational leadership and employee job satisfaction, organisational climate, and leaders' emotional intelligence, leader's emotional intelligence and employee job satisfaction were examined. Furthermore, the moderating effect of transformational leadership and emotional intelligence on the relationship between organisational climate and employee job satisfaction among YOMSB in Ghana was also examined. The study adopted a sequential mixed-method approach. The sample size for the quantitative part of the study was 602, while the qualitative part was 20. Random sampling technique was used for drawing participants for the quantitative research and for the qualitative aspect it was purposive. A close-ended survey questionnaire was used in the quantitative data collection while in-depth interviews were used for collecting qualitative data. Descriptive and inferential analyses were carried out on the quantitative data using both SPSS version 26 and PLS-SEM version 4. The qualitative part of the data was analysed using thematic analysis. The study's findings revealed a significant positive relationship between organisational climate and job satisfaction, emotional intelligence and organisational climate, and transformational leadership and job satisfaction. Leaders' emotional intelligence was also positively associated with job satisfaction and transformational leadership style. There was, however, no relationship between transformational leadership and organisational climate. Additionally, emotional intelligence failed to moderate the organisational and job satisfaction relationship. Transformational leadership, on the contrary, negatively moderated the relationship. The results of the qualitative inquiry into negative moderation of the transformational leadership style revealed that although transformational leadership is essential, the current monetary challenges facing YOMSB as a result of difficulties in recovering financially from the Covid-19 business disruptions, have shifted their focus primarily to financial growth, as compared to managerial issues like transformational leadership. The study contributes to Sustainable Development Goal 8 by promoting a decent work environment for YOMSB employees in Ghana by adopting open and autonomous organisational climates that enhance cooperation and support, as well as creativity and innovation among employees of YOMSB. From the policy perspective, the study contributes to the importance of promoting financial policies such as removing or reducing YOMSB taxes in their first five years to create an enabling business environment that supports growth. From the theoretical perceptive, the study provides new valuable insights into the relevance of transformational leadership as a moderator on the relationship between organisational climate and employee job satisfaction in YOMSB.