The impact of leadership styles on digital transformation

Abstract

The digitalization of business processes is one of the main concepts of the latest industrial revolution - Industry 4.0. The results of the changes are already felt in small and medium-sized enterprises (SMEs) in almost all sectors. The adaptation of digital solutions will be essential soon, but currently, this is not the highest priority for smaller companies. The managerial implication could be the key indicator for businesses to embrace the adaptation to the digital changes. Within the companies, it is a question whether the different leadership styles have any influence on the digital transformation. In this research, it was examined whether the task-oriented and relationship-oriented leadership styles have an impact on the digital transformation process of small and medium-sized enterprises (which transformation consists of two pillars: digitalization strategy and digital transformation activities). Therefore, the changes have a beneficial effect on the competitiveness of the businesses. As a result of my primary research, I can say that both task- and relationship-oriented leadership styles have a significantly positive impact on the digital transformation strategy. Moreover, the task-oriented leadership style also has a significantly positive effect on the digital transformation activities in SMEs. Therefore, the digital transformation process rather requires task-oriented leaders, nevertheless, the best option is when these two are combined.