A Study to Determine the Impact of Transformational Leadership on the Growth of Profits in Start-Up Companies in Bangalore City

Mr. Prasad L¹ & Dr. Noor Firdoos Jahan¹¹Research Scholar and Associate Professor, Ramaiah Institute of Management Studies, No. 23, M S Ramaiah Road, Gokula, Bangalore, India
²Professor, R. V. Institute of Management, CA 17, 26^th Main, 36^th Cross, 4^th T Block, Jayanagar, Bangalore, India.
DOI – http://doi.org/10.37502/IJSMR.2021.4806

Abstract

Entrepreneurship, over the ages has seen tremendous transformation in terms of the objectives of entrepreneurship to the way entrepreneurs are finding new ways to fund their ventures and rake in profits. Not to forget the innovation quotient associated with entrepreneurship. Innovation has reached new heights, thanks mainly to emerging technologies such as Analytics, Design Thinking, Artificial Intelligence, Machine Learning, Robotics, etc.

The profile of the 21^st century entrepreneur has changed quite significantly with respect to age, educational qualifications, and prior experience. The new age entrepreneur is young, ambitious, innovative fearless, well-educated and has just about sufficient work experience to immerse himself into the exciting journey of new venture creation. From a socio-cultural perspective too there has been a significant shift in the way the India society looks at entrepreneurs. No longer are entrepreneurs looked down upon in society for their failures, especially keeping in mind that the failure rate of start-ups is more than 90% currently. Society has begun to accept the ups and downs of entrepreneurship in a positive way. The Central and State Governments too have recognised that start-ups are the need of the day to generate employment on a large scale and have come up with policies to encourage, fund and nurture start-ups.

This research paper tries to examine the connection between the leadership style of the founders with specific reference to Transformational Leadership style and the growth of profits of the start-ups. A survey was conducted in Bangalore City wherein a questionnaire covering demographic data and the Multifactor Leadership Questionnaire (a standard tool used by researchers worldwide to measure Transformational, Transactional and Passive-Avoidant leadership styles) was sent to 476 founders of start-ups. The responses were analysed using statistical tools such as Regression Analysis and Anova to determine whether Transformational Leadership style has an impact on the growth of profits of start-ups or not. The hypothesis was tested using the independent t-test.

The analysis of data did not point towards a strong connection between Transformational Leadership and growth in profits of the start-ups.

Keywords: Entrepreneurship, Start-ups, Leadership, Transformational Leadership, Profits.

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