Organizational behavior in Ecuadorian SME’s. An analysis of leadership, trust and conflict management

Abstract

There are many factors involved in the low survival rate of Ecuadorian SMEs, among which we can highlight: a lack of R & D, poor managerial orientation to improve processes, poor relations with universities, excessive decision-making centralization by administrators, low technical training of personnel, societal conflicts and human relations problems. The present research will focus on analyzing the leadership styles of Ecuadorian SMEs' managers and how leadership styles affect trust and conflict behavior. Study results will represent a contribution towards human relations and the sustainability of SMEs in Ecuador. Two samples take the perception of the managers (N=341) and of the employees (N=314) were analyzed. Fist contribution describe the leadership styles of managers of SMEs in Ecuador and the relation between the different styles. The demographic characteristics of the leaders are taken into consideration in order to establish if they have an impact on the pattern used. Second contribution showed that from the managerial perspective, cognitive and affective trust and leadership styles were significantly and positively correlated to a different extent. In addition, cognitive trust was found to mediate the relationship between leadership styles and affective trust. In contrast, the employees’ perspective showed no correlation between the aforementioned variables. The third contribution showed a significant and positive correlation between conflict management styles and leadership styles, and trust may have a mediation effect on this relationship, except with transformational leadership and problem-solving. The hypotheses were tested through a structural equation model (SEM) methodology. Finally, theoretical and practical implications and suggestions for future research were proposed.