Unveiling the Impact of Transformational Leadership on Safety Performance Measures in Malaysia's SME Sector: A Two-Stage PLS-SEM Analysis

Abstract

This paper presents a comprehensive exploration of the relationship between transformational leadership, safety behavior, and organizational safety performance within Malaysia's Small and Medium Enterprises (SMEs) sector, offering a fresh perspective grounded in social exchange theory and domino theory. It leverages a two-stage higher-order structural model to analyze responses from a sample of 107 Safety & Health Officers and Human Resource Officers from various SMEs in the Northern Region of Malaysia. Our findings affirm a significant direct link between safety behavior and organizational safety performance, additionally underscoring the mediatory role of safety behavior variables in the positive association between transformational leadership and safety performance. The outcomes of this research not only extend our empirical understanding of the role of transformational leadership in workplace safety within SMEs but also provide actionable insights for industry practitioners. As such, this study makes a robust contribution to academic and industry discourse, proposing a validated higher-order model for enhancing safety performance in Malaysia's burgeoning SME sector.