Tra Dao Thu

Leadership style is a key factor shaping employee engagement and performance, which in turn determines organizational success. This study investigated the relationship between leadership style, work engagement, and employee performance in women-owned small and medium-sized enterprises (SMEs) in Vietnam. Over three months (March to May 2024), 1,000 questionnaires were distributed via Google Forms to employees working in women-owned SMEs in Vietnam; 465 responses were received, of which 376 were considered valid for analysis. The workforce was predominantly female, aged 36–45, with a high school education or less, and the highest proportion was those with 3–6 years of work experience. SMART PLS Version 4.0 software was used to test the research hypotheses. The findings showed that transformational leadership had the most positive effect on work engagement and employee performance, followed by transactional and democratic styles. In contrast, the authoritarian and laissez-faire leadership styles had lower impacts on employee engagement and performance than the previous three leadership styles, but in the opposite direction. Notably, work engagement played a mediating role in the relationship between leadership style and employee performance. This study suggests that leaders should adopt a flexible approach to leadership, particularly by leveraging the strengths of transformational, transactional, and democratic styles, while minimizing the use of authoritarian and laissez-faire approaches.