• DR. ALI RAZA Department of Business Administration, Sukkur IBA University, Sukkur, Pakistan Author
  • DR. SHEEMA MATLOOB School of Management, Universiti Sains Malaysia, Penang, 11800, Malaysia Author
  • DR. MUZAFAR HUSSAIN SHAH Department of Business Administration, Newports Institute of communication and economics, Karachi, Pakistan Author
  • DR. IRSHAD HUSSAIN SARKI NCBA&E Campus Rahim Yar Khan, Pakistan Author




Leadership, Industry 4.0, SMEs, Organizational Learning, Pakistan


Previous research has primarily concentrated on the technological and operational aspects of Industry 4.0 in SMEs, leaving a significant gap in our understanding of the leadership's role in this context. This article aforesaid gap by empirically investigating impact of entrepreneurial leadership, transformational leadership, transactional leadership, and ethical leadership on the sustainable competitive performance of Small and Medium-sized Enterprises (SMEs) in Pakistan within the context of Industry 4.0. The study adopts a quantitative approach and collects data from Pakistani SMEs sector, including manufacturing sports, and textiles, using purposive sampling. A total of 500 questionnaires were distributed. The study's findings reveal that entrepreneurial leadership and ethical leadership significantly influence organizational learning. Furthermore, a significant relationship is observed between organizational learning and sustainable competitive performance. However, the study does not find a significant relationship between transactional leadership and organizational learning. Moreover, the research highlights a significant mediating relationship between organizational learning and the impact of entrepreneurial leadership, ethical leadership, and transformational leadership on sustainable competitive performance. However, transactional leadership does not exhibit a significant mediating effect. The study's contributions to the existing literature on Industry 4.0 are valuable as they shed light on the role of leadership styles in the context of SMEs in Pakistan. In the era of Industry 4.0, where technological advancements are transforming industries, understanding the impact of leadership on sustainable competitive performance is crucial. This research offers insights into which leadership styles are most effective in this rapidly changing landscape.


Anand, A., Agarwal, U. A., & Offergelt, F. (2023). Why should I let them know? Effects of workplace incivility and cynicism on employee knowledge hiding behavior under the control of ethical leadership. International Journal of Manpower, 44(2), 247-266.

Bär, K., Herbert-Hansen, Z. N. L., & Khalid, W. (2018). Considering Industry 4.0 aspects in the supply chain for an SME. Production Engineering, 12, 747-758.

Bartram, T., & Casimir, G. (2007). The relationship between leadership and follower in‐role performance and satisfaction with the leader: The mediating effects of empowerment and trust in the leader. Leadership & Organization Development Journal, 28(1), 4-19.

Bass, B. M., & Riggio, R. E. (2006). Transformational leadership.

Birasnav, M. (2014). Knowledge management and organizational performance in the service industry: The role of transformational leadership beyond the effects of transactional leadership. Journal of business research, 67(8), 1622-1629.

Bolisani, E., Bratianu, C., Bolisani, E., & Bratianu, C. (2018). The emergence of knowledge management (pp. 23-47). Springer International Publishing.

Boughton, N. J., & Arokiam, I. C. (2000). The application of cellular manufacturing: a regional small to medium enterprise perspective. Proceedings of the Institution of Mechanical Engineers, Part B: Journal of Engineering Manufacture, 214(8), 751-754.

Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. The leadership quarterly, 17(6), 595-616.

Brown, M. E., Treviño, L. K., & Harrison, D. A. (2005). Ethical leadership: A social learning perspective for construct development and testing. Organizational behavior and human decision processes, 97(2), 117-134.

Brunet-Thornton, R., & Martinez, F. (Eds.). (2018). Analyzing the impacts of industry 4.0 in modern business environments. IGI global.

Carless, S. A., Wearing, A. J., & Mann, L. (2000). A short measure of transformational leadership. Journal of business and psychology, 14, 389-405.

Eisenbeiss, S. A. (2012). Re-thinking ethical leadership: An interdisciplinary integrative approach. The Leadership Quarterly, 23(5), 791-808.

Erol, S., Jäger, A., Hold, P., Ott, K., & Sihn, W. (2016). Tangible Industry 4.0: a scenario-based approach to learning for the future of production. Procedia CiRp, 54, 13-18.

Garavan, T. (1997). The learning organization: a review and evaluation. The learning organization, 4(1), 18-29.

García-Morales, V. J., Jiménez-Barrionuevo, M. M., & Gutiérrez-Gutiérrez, L. (2012). Transformational leadership influence on organizational performance through organizational learning and innovation. Journal of business research, 65(7), 1040-1050.

Greenberg, D., McKone-Sweet, K., & Wilson, H. J. (2011). The new entrepreneurial leader: Developing leaders who shape social and economic opportunity. Berrett-Koehler Publishers.

Gu, Q., Hu, D., & Hempel, P. (2022). Team reward interdependence and team performance: roles of shared leadership and psychological ownership. Personnel Review, 51(5), 1518-1533.

Guţă, A. L. (2012). The Learning Organization–An Answer To The Challenges Of The Actual Business Environment?. CES Working Papers, 4(3), 340-355.

Haseeb, M., Hussain, H. I., Ślusarczyk, B., & Jermsittiparsert, K. (2019). Industry 4.0: A solution towards technology challenges of sustainable business performance. Social Sciences, 8(5), 154.

Hasib, F. F., Eliyana, A., Arief, Z., & Pratiwi, A. A. (2020). The effect of transformational leadership on employee performance mediated by leader-member exchange (LMX). Systematic Reviews in Pharmacy, 11(11).

Hinkin, T. R., & Schriesheim, C. A. (2008). A theoretical and empirical examination of the transactional and non-leadership dimensions of the Multifactor Leadership Questionnaire (MLQ). The Leadership Quarterly, 19(5), 501-513.

Kagermann, H. (2014). Change through digitization—Value creation in the age of Industry 4.0. In Management of permanent change (pp. 23-45). Wiesbaden: Springer Fachmedien Wiesbaden.

Khan, N. Z. A., Imran, A., & Anwar, A. (2019). Destructive leadership and job stress: causal effect of emotional exhaustion on job satisfaction of employees in call centers. International Journal of Information, Business and Management, 11(1), 135.

Kumar, S., & Rao, P. (2015). A conceptual framework for identifying financing preferences of SMEs. Small Enterprise Research, 22(1), 99-112.

Liao, S. H., Chen, C. C., Hu, D. C., Chung, Y. C., & Yang, M. J. (2017). Developing a sustainable competitive advantage: absorptive capacity, knowledge transfer and organizational learning. The Journal of Technology Transfer, 42, 1431-1450.

MacKenzie, S. B., Podsakoff, P. M., & Rich, G. A. (2001). Transformational and transactional leadership and salesperson performance. Journal of the academy of Marketing Science, 29, 115-134.

Maresova, P., Soukal, I., Svobodova, L., Hedvicakova, M., Javanmardi, E., Selamat, A., & Krejcar, O. (2018). Consequences of industry 4.0 in business and economics. Economies, 6(3), 46.

Mariappanadar, S. (2018). The impact of dissonance in schema based leadership perceptions on employee engagement: Evidence from Australia. Personnel Review, 47(7), 1309-1329.

Matt, D. T., & Rauch, E. (2020). SME 4.0: The role of small-and medium-sized enterprises in the digital transformation. Industry 4.0 for SMEs: Challenges, opportunities and requirements, 3-36.

Mayer, D. M., Aquino, K., Greenbaum, R. L., & Kuenzi, M. (2012). Who displays ethical leadership, and why does it matter? An examination of antecedents and consequences of ethical leadership. Academy of management journal, 55(1), 151-171.

Mikalef, P., Pateli, A., & van de Wetering, R. (2016). IT flexibility and competitive performance: The mediating role of IT-enabled dynamic capabilities.

Mittal, S., & Dhar, R. L. (2016). Effect of green transformational leadership on green creativity: A study of tourist hotels. Tourism Management, 57, 118-127.

Mittal, S., Khan, M. A., Romero, D., & Wuest, T. (2018). A critical review of smart manufacturing & Industry 4.0 maturity models: Implications for small and medium-sized enterprises (SMEs). Journal of manufacturing systems, 49, 194-214.

Moeuf, A., Pellerin, R., Lamouri, S., Tamayo-Giraldo, S., & Barbaray, R. (2018). The industrial management of SMEs in the era of Industry 4.0. International journal of production research, 56(3), 1118-1136.

Müller, J. M., Kiel, D., & Voigt, K. I. (2018). What drives the implementation of Industry 4.0? The role of opportunities and challenges in the context of sustainability. Sustainability, 10(1), 247.

Nor-Aishah, H., Ahmad, N. H., & Thurasamy, R. (2020). Entrepreneurial leadership and sustainable performance of manufacturing SMEs in Malaysia: The contingent role of entrepreneurial bricolage. Sustainability, 12(8), 3100.

Nor-Aishah, H., Ahmad, N. H., & Thurasamy, R. (2020). Entrepreneurial leadership and sustainable performance of manufacturing SMEs in Malaysia: The contingent role of entrepreneurial bricolage. Sustainability, 12(8), 3100.

Nor-Aishah, H., Ahmad, N. H., & Thurasamy, R. (2020). Entrepreneurial leadership and sustainable performance of manufacturing SMEs in Malaysia: The contingent role of entrepreneurial bricolage. Sustainability, 12(8), 3100.

Organization for Economic Cooperation and Development (OECD). SMEs Statistics. https://stats.oecd.org/index.aspx?queryid=81354

Otuya, S., & Okolo, P. O. (2019). Leadership and accountability in Nigerian universities: A critical factor for the nation’s sustainable development. British International Journal of Education and Social Sciences, 6(11), 21-27.

Podsakoff, P. M., MacKenzie, S. B., Moorman, R. H., & Fetter, R. (1990). Transformational leader behaviors and their effects on followers' trust in leader, satisfaction, and organizational citizenship behaviors. The leadership quarterly, 1(2), 107-142.

Renko, M., El Tarabishy, A., Carsrud, A. L., & Brännback, M. (2015). Understanding and measuring entrepreneurial leadership style. Journal of small business Management, 53(1), 54-74.

Rojas, R. A., & Ruiz Garcia, M. A. (2020). Implementation of industrial internet of things and cyber-physical systems in smes for distributed and service-oriented control. Industry 4.0 for SMEs: Challenges, Opportunities and Requirements, 73-103.

Sahi, G. K., Gupta, M. C., & Cheng, T. C. E. (2020). The effects of strategic orientation on operational ambidexterity: A study of indian SMEs in the industry 4.0 era. International Journal of Production Economics, 220, 107395.

Saqib, S., Ahmad, M. M., Panezai, S., & Ali, U. (2016). Factors influencing farmers' adoption of agricultural credit as a risk management strategy: The case of Pakistan. International journal of disaster risk reduction, 17, 67-76.

Shafi, M., Lei, Z., Song, X., & Sarker, M. N. I. (2020). The effects of transformational leadership on employee creativity: Moderating role of intrinsic motivation. Asia Pacific Management Review, 25(3), 166-176.

Shah, T., & Mulla, Z. R. (2013). Leader motives, impression management, and charisma: A comparison of Steve Jobs and Bill Gates. Management and Labour Studies, 38(3), 155-184.

Sitorus, P., Sarkum, S., & Nasution, M. F. (2021). The Influence of Transformasional Leadership Style, Organizational Justice, Employee Engagament and Employee Reaction on Employee Performance. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 4(3), 4076-4084.

Sommer, L. (2015). Industrial revolution-industry 4.0: Are German manufacturing SMEs the first victims of this revolution?. Journal of Industrial Engineering and Management, 8(5), 1512-1532.

Tarabishy, A., Solomon, G., Fernald Jr, L. W., & Sashkin, M. (2005). The entrepreneurial leader's impact on the organization's performance in dynamic markets. The Journal of private equity, 20-29.

Thanh, N. H., & Quang, N. V. (2019). Ethical leadership in the digital era: Requirements for developing ethical leaderships in Vietnam. The International Journal of Business & Management, 7(7).

Türkeș, M. C., Oncioiu, I., Aslam, H. D., Marin-Pantelescu, A., Topor, D. I., & Căpușneanu, S. (2019). Drivers and barriers in using industry 4.0: a perspective of SMEs in Romania. Processes, 7(3), 153.

Velt, H., Torkkeli, L., & Saarenketo, S. (2020). Transnational entrepreneurial ecosystems: The perspectives of Finnish and Estonian born-global start-ups. Research handbook on start-up incubation ecosystems, 110-134.

Vrchota, J., Volek, T., & Novotná, M. (2019). Factors introducing Industry 4.0 to SMES. Social Sciences, 8(5), 130.

Zainol, F. A., Daud, W. N. W., Shamsu, L., Abubakar, H. S., & Halim, H. A. (2018). A linkage between entrepreneurial leadership and SMEs performance: An integrated review. International Journal of Academic Research in Business and Social Sciences, 8(4), 104-118.

Zhang, X., Chu, Z., Ren, L., & Xing, J. (2023). Open innovation and sustainable competitive advantage: The role of organizational learning. Technological Forecasting and Social Change, 186, 122114.

Zhao, Y., Li, Y., Lee, S. H., & Bo Chen, L. (2011). Entrepreneurial orientation, organizational learning, and performance: Evidence from China. Entrepreneurship theory and practice, 35(2), 293-317.







How to Cite

RAZA, D. A. ., MATLOOB, D. S. ., SHAH, D. M. H., & SARKI, D. I. H. . (2023). LEADERSHIP STYLES AND SUSTAINABLE COMPETITIVE PERFORMANCE IN PAKISTANI SMES: AN INDUSTRY 4.0 PERSPECTIVE. Bulletin of Business and Economics (BBE), 12(3), 138-149. https://doi.org/10.61506/01.00011

Similar Articles

1-10 of 567

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)

1 2 3 4 5 6 7 8 9 10 > >>