Edinburgh Napier University

  Probably the most important and strategic resource of SMEs is their employees” (Analoui & Karami, 2003b:204). A critical review of the literature on leadership in Small to Medium Enterprises (SMEs) suggests the relationship between the individual employees and leader can play a pivotal role in motivation. The dominant literature around leadership tends to be leader-centric, perhaps due to the leader being the object of study (Menzel & White, 2011). However the leader does not have the ultimate say on how he is viewed by his employees; he cannot force them to think in particular ways. The best he can hope to achieve is to influence their thought processes. Therefore a leader has to be cognisant of his actions and how it impacts on the perception of his employees. This thesis explores the important role of the dyadic relationship between a leader and his employees, from the perspective of the individual employee. The research was completed in five phases between April 2009 and December 2011. The literature research highlights psychodynamic components and ‘trust’ as key concepts in the leader/employee dyadic. The data collection methodology included the use of critical incident technique with the addition of direct and snapshot observation. Data was collected from two branches of Edinburgh retailer, Hi-Fi Corner, the subject of the study. Transactional Analysis, a theory of communication and personality, is employed as a lens to analyse the data (Stewart & Joines, 1987). This involved analytic triangulation using the employees’ ‘ego states’, ‘stroke economy’ and ‘life-positions’ perspectives..