Abstract
Most of SMEs in Malaysia are in the services industry. The industry is believed to largely contribute to Malaysia’s economy. The success and performance of services SMEs are obviously depended upon several contributing factors – managers’ leadership skills and qualities are reported to be two of them. The current study, aims to investigate the impact of leadership behaviours on the performance of services SMEs in Malaysia. 193 owners and top managers of services SMEs in Malaysia participated in the study. The results revealed that: a) there were significant relationships between different leadership behaviours and organisational performance of services SMEs; and b) transformational leadership contributed more significantly to the performance of SMEs than transactional leadership behaviour. The findings implicate that leadership behaviour of leaders of SMEs is one of the essential factors that influences SMEs performance in the services sector.