The Impact of Leadership, Employee Engagement, and Organizational Culture on the Performance of Hospitality SMEs in Tak Province

Abstract

The study explores the impact of leadership styles on employee engagement in small and medium-sized enterprises (SMEs) in the hospitality sector of Tak Province, Thailand. It aims to evaluate the relationship between employee engagement and SME performance metrics, including productivity, profitability, retention, and organizational effectiveness. The research uses a mixed-methods approach, including a cross-sectional survey of 200 employees and leaders, and semi-structured interviews with 10-15 participants. Key findings indicate that leadership styles significantly affect employee engagement, which drives better SME performance, including higher productivity, profitability, and retention rates. Organizational culture plays a critical role in enhancing the connection between leadership and engagement, acting as a mediator.The findings align with organizational theory, emphasizing shared values, beliefs, norms, and practices as the backbone of organizational culture. The study's validation analysis confirmed the construct's validity and reliability, with all items exhibiting factor loadings above 0.8, demonstrating a strong correlation with the latent factor. Managerial implications include emphasizing leadership styles that foster employee involvement, promoting cultural initiatives aligned with employees' values, and encouraging collaboration. Additionally, the introduction of engagement programs, such as team-building activities, flexible work arrangements, and clear communication channels, is recommended. Deep interviews were conducted using a combination of quantitative and qualitative analysis methods to explore relationships and contributing factors. A total of 15 interviewees were selected based on specific criteria. Three key themes emerged from the analysis: leadership styles, the impact of employee engagement, and organizational culture improvement, along with strategies to enhance leadership and employee engagement. Transformational, transactional, democratic, and servant styles significantly impact employee engagement and organizational performance. To improve leadership and engagement, organizations should foster a feedback-rich culture, invest in leadership development training, and promote diversity and inclusion.