Theory X and Theory Y Type Leadership Behavior and its Impact on Organizational Performance: Small Business Owners in the Şishane Lighting and Chandelier District

Leadership style and organizational performance have been researched extensively. However, the literature has a limited number of studies concerning organizational performance of small and medium businesses, even less research on the impact on organizational performance of Theory X and Theory Y type leadership styles. In addition, minimal access to data on financials for small and medium businesses presents a challenge for this line of research. Regardless, research does show that small and medium business owners/managers are quite accurate when asked about their financials and growth. In this study, we focused on three related questions: 1) Do owners/managers who report increases in turnover for the last five-year period more likely to exhibit Theory Y tendencies? 2) Are owners/managers who report increases in innovations more likely to exhibit Theory Y tendencies? 3) Are owners/managers who report decreases in overall costs more likely to exhibit Theory Y tendencies? The research was conducted in the Şishane region of Istanbul, Turkey. This region, in particular, houses hundreds of chandelier makers and lighting firms, some of which even date back to the Ottoman Empire. Data was collected via a survey instrument distributed to 200 chandelier makers and lighting firms in the area. Data was analyzed through the SPSS statistical packet program and proposed relations in the model were tested through logistic regression analyses.