Научная статья на тему 'LEARNING ORGANIZATION AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES): EMPIRICALLY ANALYZING THE MODERATING ROLE OF LEADERSHIP'

LEARNING ORGANIZATION AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES): EMPIRICALLY ANALYZING THE MODERATING ROLE OF LEADERSHIP Текст научной статьи по специальности «Экономика и бизнес»

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lorem ipsum / Learning organization / System Thinking / Mental Mode / Personal Mastery / SMEs’ performance / IT

Аннотация научной статьи по экономике и бизнесу, автор научной работы — Muhammad Mansoor Asghar, Muhammad Zia-Ur-Rehman, Tahir Abbas, Khurram Abbas

The study aims at the role of learning organizations, as it has emerged as essential tool towards acquiring organizational performance. As small and medium enterprise is an emerging sector in Pakistan, thus the study examines the effect of Learning Organization on SMEs’ performance, by employing leadership role as moderator, in the contemporary world of rapid economic development. Being cross sectional in nature, the data were collected from the SMEs related to the industry of Information Technology. The study adapted questionnaire for data collection from the respondents to gauge their input. For Econometric Analysis and empirical investigation, we collected data from 282 employees working in SMEs of Information Technology (IT). Analysis show that learning organization is significant for inclusive performance in large corporations and small business enterprises. Six proposed hypotheses were tested, and moderation analysis was employed to examine the relationship. Statistical techniques were employed, and findings reveal that; there exists not only a significant and positive impact of Learning Organization on performance of SMEs but also, each dimension of Learning Organization shows significant contribution towards the performance of SMEs. The dimension of ‘shared vision’ is found having higher values. Findings depict that leadership is not significantly moderating the nexus of Learning Organization and SMEs’ performance. As it is one of its unique studies conducted in Pakistani culture, where we tested the associations. The study presents theoretical foundations for future researchers and practical implications for the managers of Small and Medium Enterprises.

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Текст научной работы на тему «LEARNING ORGANIZATION AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES): EMPIRICALLY ANALYZING THE MODERATING ROLE OF LEADERSHIP»

LEARNING ORGANIZATION AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES (SMES): EMPIRICALLY ANALYZING THE MODERATING ROLE OF LEADERSHIP

MUHAMMAD MANSOOR ASGHAR1, MUHAMMAD ZIA-UR-REHMAN 2, TAHIR ABBAS3, KHURRAM

ABBAS4

Department of Management Sciences, University of Jhang1, Post-Doc Fellow & Faculty Member, Universiti Malaya/NDU 2, Department of Environmental Sciences, University of Jhang3, Department of Management Sciences, COMSATS University1, Sahiwal Campus3

mansoorasghar@yahoo.com1 drziaofficial@um.edu.my2 khurramabbas@cuisahiwal.edu.pk3

Abstract - The study aims at the role of learning organizations, as it has emerged as essential tool towards acquiring organizational performance. As small and medium enterprise is an emerging sector in Pakistan, thus the study examines the effect of Learning Organization on SMEs' performance, by employing leadership role as moderator, in the contemporary world of rapid economic development. Being cross sectional in nature, the data were collected from the SMEs related to the industry of Information Technology. The study adapted questionnaire for data collection from the respondents to gauge their input. For Econometric Analysis and empirical investigation, we collected data from 282 employees working in SMEs of Information Technology (IT). Analysis show that learning organization is significant for inclusive performance in large corporations and small business enterprises. Six proposed hypotheses were tested, and moderation analysis was employed to examine the relationship. Statistical techniques were employed, and findings reveal that; there exists not only a significant and positive impact of Learning Organization on performance of SMEs but also, each dimension of Learning Organization shows significant contribution towards the performance of SMEs. The dimension of 'shared vision' is found having higher values. Findings depict that leadership is not significantly moderating the nexus of Learning Organization and SMEs' performance. As it is one of its unique studies conducted in Pakistani culture, where we tested the associations. The study presents theoretical foundations for future researchers and practical implications for the managers of Small and Medium Enterprises.

Keywords: lorem ipsum; Learning organization; System Thinking; Mental Mode;, Personal Mastery; SMEs' performance; IT.

INTRODUCTION

The very thought of any enterprise needs to be constituted on novelty, production, and innovation (Murphy et al., 2006) and the progress and development are based on the foundation of teamwork and learning, which is a process of co-evolution (Jones, C. (2007). Managerial skills, innovative strategies, skillful coordination of tactics, and creating a learning environment is essential part to beat the competition, and overcome these challenges by creating sense of a learning organization for promoting overall organizational performance (Sayed & Edgar, 2019). While in learning organization, individuals commonly generate, gain and share knowledge to help their organization to acclimatize and get edge through increased performance as compared to their competitors (Garvin, Edmondson, & Gino, 2008). As the capacity of the individuals enhance, the arguments further support the view-point that learning organization creates an environment for learning of individuals and implications of such learnings environment foster competitive edge (Stoll & Kools, 2017). Learning Organizations in 21st century is considered a vehicle for business performance and competitive advantage (P. Senge, 1990). Recent research puts forth learning organization as the philosophy of resolution to create permanent solutions to face challenges and to take effective

steps for organization to be competitive (Khunsoonthornkit & Panjakajornsak, 2018). Learning organization plays a vital role for making effective decisions to get competitive edge, as it also acts as a stimulator to increase the performance and productivity of workforce as well as profit maximization for organizations (Ashal et al., 2019), however the question arises, to what extent it contributes towards performance of the SMEs.

Essentially, the whole enterprise relies on its leadership as it sets the values and if there is just a perception of violation, it shakes the whole system (Murphy et al., 2013), therefore it is pertinent to mention that the SMEs rely on values and the values penetrate from society or the community of any country that stimulate the economy as they are considered to be the backbone for economic growth (Arshad & Arshad, 2019). In Asian context, especially of Pakistan, the scope and progression of SMEs are huge, and at the same time these small businesses have a lot of opportunities, to boost the economy of the country. The researchers shifted their focus towards this areas, however, not much research work has been conducted in association with the SMEs performance in developing countries (Chiang, 2018). Past studies featured the significance of SMEs, but there is not much research on relationship between factors influencing SMEs and performance (Shah, Othman, & Mansor, 2016).

The repute of small and medium enterprises in economy cannot be underrated because SMEs are major source to handle some essential issues including poverty reduction, progression in national level economy, overcoming un-employment and social uplifting (Arshad & Arshad, 2019). Similarly, other researchers claim that IT related business and SMEs has become need for today generation as they promote their products and services (Rashid et al., 2018) via internet and recommended that IT based enterprises should be established. And their performance, can be measured with effective leadership by realizing the learning organization value in true sense as a concept (P. Senge et al., 1999), however, the question arises, that to what extent leadership plays role of moderator among the nexus of LO and SMEs' performance. The growth of SMEs sector is directly proportional to economic growth (Khalique, et al., 2011), particularly, researchers explain that there is utilization and adoption of information technological related SMEs, which are increasing gradually and contributing towards the economy of country (Ahmed, et al. 2010). Therefore, the business owners of IT related enterprises need to be more competitive by capacity building of their employees through proper leadership (Beheshti, 2004).

Debating on the concept of learning organization seems a cosmic idea which relates to development, growth and progress for organizations which also emphasizes this empirical investigations (Stella, 2012). For measuring the influence of learning organizations on performance of small and medium emprises, with leadership role as moderator is the focus of the study. Prior studies show that leadership has influence of innovations, motivations, learning process, effective production of teams, entrepreneurial abilities, and truth worthiness in organizations (Voegtlin, 2011).

LITERATURE REVIEW

Learning organization is the name of process which provide best working atmosphere where employees and managers can easily expand their capacities, mental abilities, team learning to get outcomes of their efforts and desired results with the help of collective efforts and system thinking to boost the shared vision of organizations (Prelipcean, 2016). They also recommended in their research work that there is a need for organizations to establish a leaning organization mechanism by creating effective knowledge management and capacity building of leadership in around these constraints of learning organization, which include system thinking (ST), mental model (MM), shared vision (SV), personal mastery (PM) and team learning (TL), for enhancing the desired performance of organizations (Sayed & Edgar, 2019).

There are five main disciplines of learning organization (P. M. Senge, 2006), including: 1) 'System thinking', which can be defined as to see the organization as a whole system, 2) 'Shared Vision' is authentic source for providing common sense, recognition and commitment, it also plays a vital role for stimulating the aspirations and thoughts which directly leads the organization towards

success, 3) 'personal growth and development', where employees with this ability are intellectual, sharp minded, enthusiastic with sense of responsibility and show their full commitments to achieve organizational goals, 4) 'Mental Models' which are the suppositions and engagements taken against these assumptions, and the actions are taken for fulfilling the expectations which are being made for success of an organization, and 5) 'team learning' which moves from single to collective approach with mutual coordination, and knowledge sharing with each other. Furthermore, team learning is name of genuine thinking and high sense of collectivism, which leads organizations toward continuous success.

The private sector in Pakistan consist of micro, macro, small, medium and large enterprises which emerge with the passage of time and cover broader range of areas in manufacturing and service sector. As it is stated earlier that SMEs play a vital role in creating jobs, poverty reduction and economic development, therefore many countries in the whole world also try to focus on this areas and struggle to boost their economics via SMEs, as it is considered to be economic entity for developing and developed nations (Stella, 2012). The sector of SMEs is considered to be extensive idea in the world of business and management (Stella, 2012). Prior research also show that, performance of SMEs can be gauged based on competitive edge and profit maximization (Ali et al, 2018), and the work of other scholars support this (Raza et al., 2018). While focusing on leadership, the research emphasis that leadership is considered to be the backbone of organization to create learning environment, as it is name of delegation of power and authority among the subordinates, without any discrimination, thus empowring employees for effective decision making, proper guidance and not only providing support in daily routine work but also carefully listening to subordinates (N. Akhtar, 2009).

Hence, for promoting SMEs, the government of Pakistan established Small and Medium enterprises Development Authority (SMEDA), to flourish the concept of SMEs blooming in Pakistan (Zafar & Mustafa, 2017). Literature also provides evidences that Pakistan is basically consisted of 90% of private SMEs and economy of the country is also dependent on SMEs as these provide jobs to 80% of the labor (Aziz, et al., 2017). Others discussed the indirect role of leadership in educational sector and the studies reveal that leadership play a vital role in high performance for organizations and further need to be appreciated in context of SMEs (Higgins et al., 2012).

Small and Medium Enterprises (SMEs) are crucial to many economies worldwide, as they are responsible for creating jobs and generating revenue. In today's business landscape, SMEs must constantly adapt to remain competitive. Based on the existing literature, we can say that one effective way to achieve this, is by becoming a learning organization, which values and encourages learning at every level of the company. This essay will discuss how becoming a learning organization can enhance the performance of SMEs. One of the major benefits of being a learning organization is that it equips SMEs to handle changes in the business environment. Today, the business landscape is rapidly changing, and technological advancements and global competition are constant factors in this evolution. SMEs that can quickly adapt to these changes are more likely to succeed, and learning organizations are proactive in seeking new information and integrating it into their business practices. They encourage employees to experiment with new ideas and learn from their mistakes, which enables them to respond rapidly to changes in the market and to stay competitive. Another significant advantage of being a learning organization is that it leads to higher employee morale and job satisfaction. When employees feel that their personal and professional growth is supported and valued, they are more likely to engage with their work and be committed to their roles. In learning organizations, employees are encouraged to take ownership of their work and to develop their skills continuously. This sense of autonomy and personal growth leads to higher levels of job satisfaction and motivation. As a result, motivated employees are more productive, leading to improved performance for the SME.

Prior literature shows that learning organizations are also more innovative, which is critical for SMEs to remain competitive in the global market. They foster creativity and innovation by creating an environment that encourages employees to think outside the box and challenge the status quo.

This mindset allows learning organizations to develop new products, services, and business models, giving them a competitive edge in the market.

Additionally, learning organizations have a culture of continuous improvement. In these organizations, every employee is responsible for continuously improving their work and the work of the organization as a whole. This culture of continuous improvement results in higher levels of efficiency and effectiveness, leading to improved performance for the SME. By continuously striving for excellence, learning organizations are better equipped to meet the evolving needs of their customers and the market. Therefore, the benefits of becoming a learning organization are evident in the enhanced performance of SMEs. Learning organizations can handle changes in the business environment, increase employee morale and job satisfaction, foster innovation, and create a culture of continuous improvement. Therefore, SMEs must prioritize becoming a learning organization to stay competitive in the current business landscape. They should create an environment where learning is encouraged and valued at all levels of the organization, enabling them to adapt to changes, innovate, and continuously improve. However the moderating role of leadership cannot be undermined in Small and Medium Enterprises (SMEs) that are crucial for the economy as they create jobs and generate revenue. In today's fast-paced business environment, SMEs must remain competitive to survive. To achieve this, is by becoming a learning organization that values continuous learning and improvement at all levels of the company. However, the effectiveness of becoming a learning organization can be influenced by leadership. This study explores how leadership can moderate the relationship between learning organization and the performance of SMEs. Leadership plays a critical role in creating a learning organization. The commitment and support of leaders are necessary to create an environment where learning is valued and encouraged. Effective leaders understand the benefits of a learning organization and encourage their employees to participate in training and development programs, experiment with new ideas, and embrace new approaches. The role of leadership in creating a learning organization is so vital that it can influence the effectiveness of the relationship between learning organization and SME performance.

Leadership's moderating role is evident in how it can influence the impact of becoming a learning organization on the performance of SMEs. Leaders who are committed to the principles of a learning organization can enhance the effectiveness of the organization's learning initiatives. They can motivate their employees to embrace new ideas, experiment with different approaches, and continuously improve their skills. This kind of leadership creates an environment that is conducive to learning, which, in turn, enhances SMEs' performance. On the other hand, leadership that is not supportive of the principles of a learning organization can negatively impact the effectiveness of the organization's learning initiatives. Leaders who are not committed to learning may not provide sufficient resources for learning and development programs or may discourage experimentation and risk-taking. Such leaders can create a culture of stagnation, which hampers the SME's ability to adapt to changing business environments, remain competitive, and innovate. This kind of leadership creates an environment that is not conducive to learning, which, in turn, negatively affects SMEs' performance.

Furthermore, leadership can also moderate the relationship between learning organization and employee motivation. Leaders who embrace the principles of a learning organization create a sense of purpose and direction for their employees. They foster a sense of ownership among employees, which increases their motivation to contribute to the success of the SME. Leaders who support continuous learning and improvement create a work environment that values employee growth and development, which leads to higher employee morale and job satisfaction. This type of leadership creates an environment where learning enhances employee motivation, which, in turn, leads to improved SME performance. Therefore, leadership plays a crucial moderating role in the relationship between learning organization and the performance of SMEs. Effective leadership is essential in creating an environment that values and encourages continuous learning and improvement. By creating a culture that values continuous learning, SMEs can enhance employee motivation, remain competitive, and achieve improved performance. In contrast, leadership that is

unsupportive of the principles of a learning organization hampers the SME's ability to remain competitive and innovate. So, SMEs need to prioritize developing effective leadership that is committed to learning and development initiatives to maximize the effectiveness of becoming a learning organization.

So, on the basis of the above relationships based on existing literature, there is a need to intellectually examine the nexus of learning organization and SMEs performance with moderating role of leadership role in the context of Pakistan as there is clear gap exists. The study proposed the following theoretical framework:

Figure 1. Theoretical Framework

Based on the theoretical framework, following hypotheses were developed :

H 1 Learning Organization has positive relationship with SMEs perceived performance

H 2 (a) System thinking is positively contributing to SMEs perceived performance

H 2(b) mental model is positively contributing to SMEs perceived performance

H 2(c) Shared vision is positively contributing to SMEs perceived performance

H 2(d) Personal mastery is positively contributing to SMEs perceived performance

H 2(e) Team learning is positively contributing to SMEs perceived performance

H3 Leadership Role has positive and significant moderating role in nexus of Learning Organization

and SMEs' performance.

RESEARCH DESIGN AND INSTRUMENT MEASURES Empirically investigating the nexus between learning organization, its dimensions and their impact on perceived performance for SMEs by using leadership as moderating variable, the perceptions of employees working in small and medium enterprises were considered. The instrument was adapted from past studies and our target population was IT related SMEs with the background of trouble shooting, web development, software development and software houses. The unit of analysis were the employees who were working in these SMEs. Data were collected from those employees which were directly involved in the process of learning and enhancing performance of SMEs. As IT related SMEs represent the service sector and there is provision in growth rate of service sector with high growth rate towards country (N. Akhtar, 2009), and where there are more chances available for growth, the learning process can be fast in such organizations. So the population of the study was IT related service sector SMEs, and for collecting data, non-probability convenient sampling technique was applied to get maximum feedback in short period of time.

For learning organization and leadership role, instrument was adapted from (N. Akhtar, 2009), and for SMEs' perceived performance, it was adapted from the research of (Stella, 2012). The measurement for the instrument was based on five-point Likert scale, starting from the range of (1) strongly disagree to (5) strongly agree. Total number of items for independent variable of Learning Organization were 37, while for SMEs performance and leadership there were 27 and 8 respectively. The total number of items were 72 for the research instrument. Moreover, other details for respondents like education status, gender, managerial level, experience, contacts, organization name and type, total number of workforce working in organization and demographic information were also part of our study.

The instrument also contained demographics of respondent i.e. name, organization, department, designation, email, gender, education, managerial level, total number of employees in organization and total experience. The detail for each construct (dimension wise) item is reflected in table below:

Table 1. Dimension wise detail of construct and their items Variables Dimensions Items Total Sources

Items

Organizational Learning

Perceived Performance

SMEs

Leadership Role Total Overall Items of Instrument

System Thinking 07

Mental Model 06

Shared Vision 08 37 Akhtar(2009)

Personal Mastery 09

Team Leaning 07

Sales Growth 05

Customer Satisfaction 10 27 Stella (2012)

Market Share 05

Profitability 07

- 08 08 Akhtar (2009)

72

Operationalization of the study variables

Relaying on the existing literature, definitions of the constructs are provided below, supported with proper captions.

Table 2: Operational Definitions

Variable name

Learning organization

Supported

by

Definition

A learning organization processes are both the experience and the & way the organization experiences it. Learning organization learns Jr, from the interaction with employees, customers, vendors, suppliers, and even competitors. Company learns consciously from every experience as it collects, processes, and uses information

(McGill Slocum 1993)

System Thinking

(O'Brien, 1998)

System thinking is a discipline for seeing wholes and understanding connections instead of taking a superficial look on matters at one point in time (O'Brien, 1998). Systems thinking means taking the holistic view of the organizations. Instead of looking the activities as discrete phenomenon managers must see the underlying patterns and interconnections and search for systemic problems solving (Parek, 2003). Ultimately, it simplifies life by helping us see the deeper patterns lying behind the events and the details.

Mental models are deeply ingrained assumptions, generalizations, or even pictures or images that influence our actions and understanding of the world. These internal images help people learn. Many organizational practices fail because these are being opposed by powerful, tacit mental models. Institutionalizing strategy requires a culture that supports strategy (P. Senge, 1990)

Shared visions are pictures people carry throughout an organization. It creates a sense of commonality that permeates the organizations and gives coherence to diverse activities (P. Senge, 1990). Vision inspires when it is linked with personal goals of employees, well communicated, and creates commitment among the members (Pareek, 2002).

Personal mastery means lifelong learning which is the discipline of continually clarifying and deepening personal vision and seeing reality objectively. Personal mastery is the discipline of personal growth and learning (P. M. Senge, 2006).

A team is a group of people with a high degree of interdependence, geared toward the achievement of a goal or the completion of task (Pareek, 2002).

Leaders of a learning organization delegate, empower, provide guidance and resources to complete work, reward on critical problem solving, and listen to the employees, and create new things (N. Akhtar, 2009).

Sales growth, market share, customer satisfaction and profitability are the important indicators of a company's health and ability to sustain its business. Therefore, firm performance among SMEs was measured basing on (Stella, 2012) using Sales growth, Market Share, Customer Satisfaction and Profitability. If all these indicators positively changes from the previous year to the current year than we can say that performance of the organization will improved.

ANALYSIS AND RESULTS

Data were analyzed using M-plus version 8.1, using a two-step approach (Anderson & Gerbing, 1988). First, we conducted confirmatory factor analysis to measure the reliability and validity of the observed data. Then we estimated the structural model to test the proposed hypotheses. The results of the confirmatory factor analysis are presented in Table 1, which indicate the suitability of observed data with the proposed theoretical model. Based on criteria recommended by Fornell and Larcker (1981) and Hair et al. (2010), we assessed the measurement model for reliability, validity. The values for the Cronbach Alpha of each multi-item measure are higher than 0.70, indicating high internal consistency among the items. The values for the individual factor loadings of all measurement scales are higher than 0.50, providing support for construct validity.

Table 3 Statistics of Confirmatory Factor Analysis

Construct Item Number Factor Loading AVE Cronbach Alpha

Syst A1 0.822 0.526 0.879

Mental Model

(P. Senge, 1990)

Shared Vision

(Pareek, 2002)

Personal Mastery

(P. M.

Senge, 2006).

Team Learning

(Pareek, 2002).

Leadership

(N. Akhtar, 2009).

SMEs

Performance

(Stella, 2012))

A2 0.738

A3 0.670

A4 0.724

A5 0.724

A6 0.687

A7 0.701

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MENTM B1 0.644 0.489 0.857

B2 0.688

B3 0.764

B4 0.684

B5 0.705

B6 0.707

SHVIS C1 0.680 0.447 0.866

C2 0.668

C3 0.669

C4 0.701

C5 0.676

C6 0.649

C7 0.657

C8 0.652

PERMAST D1 0.646 0.441 0.878

D2 0.679

D3 0.654

D4 0.654

D5 0.722

D6 0.678

D7 0.614

D8 0.697

D9 0.627

TEAMLR E1 0.642 0.434 0.843

E2 0.626

E3 0.636

E4 0.631

E5 0.670

E6 0.665

E7 0.736

LEADROL F1 0.698 0.495 0.888

F2 0.701

F3 0.681

F4 0.696

F5 0.720

F6 0.727

F7 0.695

F8 0.710

SGROW G1 0.771 0.421 0.777

G2 0.681

G3 0.625

G4 0.620

G5 0.523

CSAT H1 0.513 0.431 0.884

H2 0.672

H3 0.725

H4 0.715

H5 0.676

H6 0.680

H7 0.649

H8 0.643

H9 0.620

H10 0.652

MSHARE I1 0.710 0.351 0.756

I2 0.623

I3 0.594

I4 0.546

I5 0.463

PROFIT J1 0.504 0.356 0.818

J2 0.646

J3 0.637

J4 0.605

J5 0.553

J6 0.562

J7 0.656

HYPOTHESES TESTING

The model fit indices structural model i.e., chi-square (x2/df = 2.60), comparative fit index (CFI = 0.981), Tucker-Lewis index (TLI = 0.952), root mean square error of approximation (RMSEA = 0.075), and standardized root mean residual (SRMR = 0.016) present a good model fit. The estimated paths and statistics of the structural model are presented in Table. The results are shown as follows:

Table 4 Hypothesized Paths

Hypothesized Path ß S.E C.R p-Value

SYST ^ LEADROLE 0.222 0.047 4.696 0.000

MENTM ^ LEADROLE 0.146 0.037 3.936 0.000

SHVIS ^ LEADROLE 0.069 0.053 1.296 0.195

PERMAST ^ LEADROLE 0.220 0.054 4.070 0.000

TEAMLR ^ LEADROLE 0.393 0.043 9.042 0.000

LEADROLE ^ SGROW 0.843 0.053 15.94 0.000

LEADROLE ^ CSAT 0.842 0.048 17.36 0.000

LEADROLE ^ MSHARE 0.674 0.055 12.31 0.000

LEADROLE ^ PROFIT 0.558 0.057 9.785 0.000

Indirect Effects

SYST ^ LEADROLE ^ SGROW 0.187 0.043 4.382 0.000

MENTM ^ LEADROLE ^ SGROW 0.123 0.032 3.870 0.000

SHVIS ^ LEADROLE ^ SGROW 0.058 0.045 1.30 0.194

PERMAST ^ LEADROLE ^ SGROW 0.186 0.045 4.081 0.000

TEAMLR ^ LEADROLE ^ SGROW 0.331 0.040 8.259 0.000

SYST ^ LEADROLE ^ CSAT 0.187 0.041 4.530 0.000

MENTM ^ LEADROLE ^ CSAT 0.123 0.032 3.864 0.000

SHVIS ^ LEADROLE ^ CSAT 0.058 0.045 1.295 0.195

PERMAST ^ LEADROLE ^ CSAT 0.185 0.045 4.120 0.000

TEAMLR ^ LEADROLE ^ CSAT 0.331 0.040 8.210 0.000

SYST ^ LEADROLE ^ MSHARE 0.150 0.034 4.435 0.000

MENTM ^ LEADROLE ^ MSHARE 0.099 0.026 3.797 0.000

SHVIS ^ LEADROLE ^ MSHARE 0.046 0.036 1.280 0.200

PERMAST ^ LEADROLE ^ MSHARE 0.148 0.038 3.938 0.000

TEAMLR ^ LEADROLE ^ MSHARE 0.265 0.034 7.783 0.000

SYST ^ LEADROLE ^ PROFIT 0.124 0.029 3.632 0.000

MENTM ^ LEADROLE ^ PROFIT 0.082 0.022 3.632 0.000

SHVIS ^ LEADROLE ^ PROFIT 0.038 0.030 1.283 0.199

PERMAST ^ LEADROLE ^ PROFIT 0.123 0.032 3.797 0.000

TEAMLR ^ LEADROLE ^ PROFIT 0.219 0.031 6.983 0.000

R2 LEADROLE 0.787

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R2 SGROW 0.538

R2 CSAT 0.579

R2 MSHARE 0.512

R2 PROFIT 0.413

The factor loading with range have also been extracted, as shown in table below.

Table 5 Factor Loading and Range

Construct Mean S.D No. of Items Factor Loading Range CR

HE 4.16 0.68 03 0.675 - 0.883 0.858

SE 3.97 0.61 05 0.576 - 0.807 0.852

EE 3.60 0.61 06 0.671 - 0.739 0.861

CoE 3.26 0.86 05 0.781 - 0.867 0.916

Overall CCE 4.18 0.66 04 0.769 - 0.928 0.927

CS 4.19 0.62 04 0.598 - 0.925 0.886

EA 3.89 0.69 04 0.631 - 0.871 0.858

CE-Buying 3.83 0.67 03 0.718 - 0.824 0.805

CE-Referring 3.44 0.69 04 0.667 - 0.814 0.840

CE-Influencing 3.30 0.77 04 0.704 - 0.859 0.885

CE-Feedback 2.93 0.89 04 0.851 - 0.899 0.930

FINDINGS

It was an attempt to study Learning organization and its dimensions, SMEs performance and leadership role as moderator in context of SMEs ( IT based) sector. Findings are in line with the past studies of (N. Akhtar, 2009). It is deduced that there exist positive relationship between learning organization and performance and there are also evidences of leadership role as moderator. As concerned with the practical endeavor of our study, we tried to provide useful insights for managers, employees, entrepreneurs and all other stakeholders which are part of any organization specifically SMEs which are IT based in nature. Furthermore, we also concluded that leadership play a vital role to create sense of learning in organizations and due to learning atmosphere the performance of organization towards profitability can be further increased.

LIMITATIONS AND FUTURE RECOMMENDATIONS

The scheme and design for this research was cross sectional in nature with main focused area of IT related small and medium enterprises only which may be extended to some other institution which

comes under the umbrella of public sector like, banks, educational institute etc. Secondly this study was conducted only in SME, s of twin cities of Pakistan so, for different insights there are some provision for extended this research on whole IT industry of Pakistan and other countries, other organizations and sectors as well. At third, we focused only 5 major disciplines of learning organization, for making results more worthy, future researchers can extend their ideas by taking other dimensions of learning organization in their research work like knowledge sharing etc. or by consulting the work of (N. Akhtar, 2009), (P. M. Senge, 2006) for depth knowledge of learning organization and leadership . At fourth it was observed from the literature that team leadership can be experienced as moderation in hypothesized model instead of simple leadership role which may be more appropriate in IT industries as there is contribution of team work and concept of team leader who has authorities to instruct teams according to projects. Comparative studies with other organizations are also considered to be future recommendations for interesting results. It was further recommended after the empirical results that IT related SMEs should promote the concept of learning organization in order to get competitive edge and superior performance with profit maximization and organization wellbeing. As the results revealed that shared vision is contributing more among other variables so it should be promoted and legated in organizations.

CONCLUSION

In our research work we concluded that by creating learning atmosphere in organizations (learning organization) are the good source for the capacity building of employees that further leads organizations and businesses towards profitability and good reputation among competitors. This study is also practically and theoretical contribution in body of literature that how leadership moderate the relationship between leaning organization, its dimensions and SMEs performance. In this research three main hypothesis were constructed. HI and H2, H2a, H2b, H2c, H2d, H2e were constructed for measuring the impact of LO and each dimension of LO on perceived performance of SME, and H3 was constructed for checking the role of leadership among the nexus of learning organization, its dimension and perceived performance of SME,s. The findings of our study concluded positive and significant relationship among LO and its disciplines including, system thinking, personal masterly, shared vision mental model and team learning with performance of SME,s. As concerned with moderating variable the leadership role has week relationship with SMEs performance. The reason behind the variable of leadership role not acting as moderator in the proposed model is, traditional leadership is not that much important in IT related SMEs because the tasks and duties are team orientated and in team work there is role of team leader as main implementer or facilitator while traditional leaders don't have so many intercessions in team work.

ACKNOWLEDGEMENT

We acknowledge all the authors' contribution and the facilitations provided by all or any person for carrying out this study. We are thankful for the library facility and the management team..

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