Entrepreneurial Orientation, Leadership and Performance in Somali Telecom Firms: What a 2025 Study Reveals

A digest of Sheikh Ali (2025), International Review of Management and Marketing

Somalia's telecommunications sector is one of the most dynamic parts of its post-conflict economy, operating with limited regulation and intense competition. Entrepreneurship research has long linked a firm's entrepreneurial orientation — its tendency to innovate, act proactively and take risks — to better performance, but less is known about how leadership shapes that link in fragile, emerging markets. This 2025 study surveys 208 staff of Somali telecom firms and uses structural equation modelling to test whether leadership style carries part of the effect of entrepreneurial orientation on firm performance. It will interest management researchers, business leaders and students studying entrepreneurship in Africa.

The survey yielded 208 valid responses out of 300 distributed. Leadership style is strongly linked to performance (β = .588), the indirect effect of entrepreneurial orientation through leadership is β = .402, and the model explains R² = .635 of the variance in firm performance.

Article at a Glance

The article is "The Role of Entrepreneurial Orientation and Leadership in Enhancing Firm Performance: Insights from Somali Telecommunication Firms," by Ali Yassin Sheikh Ali (SIMAD University). It was published in the International Review of Management and Marketing, Vol. 15, No. 4, pp. 58–66 (EconJournals; open access, CC BY 4.0), in 2025 (received 28 December 2024; accepted 7 May 2025). Its research area is entrepreneurship, leadership and strategic management, and its study context is telecommunication firms in Somalia, with Mogadishu-based respondents. The method is a cross-sectional survey analysed with partial least squares structural equation modelling (SmartPLS 3.0) and 5,000-sample bootstrapping. The DOI is https://doi.org/10.32479/irmm.18783.

The Research Problem

Studies the author reviews broadly agree that entrepreneurial orientation (EO) supports performance, but the mechanisms behind that link are less understood. Only a few studies examine EO, leadership and performance together, and the reported effects of leadership vary.

Evidence from post-conflict African markets is especially thin. The author argues that Somalia's telecom sector — fast-changing and resource-constrained — is a useful setting to test whether leadership helps turn an entrepreneurial stance into results.

Research Objective

The study examines how EO affects the performance of Somali telecom firms and whether leadership style mediates that relationship. The first hypothesis is that EO has a positive direct effect on firm performance. The second is that EO is positively related to leadership style. The third is that leadership style has a positive effect on firm performance. The fourth is that leadership style mediates the EO–performance relationship.

How the Study Was Conducted

A quantitative, cross-sectional survey. The author reports distributing 300 questionnaires to regional and departmental staff of telecom firms, receiving 208 valid responses (about 70%), after a 30-person pilot. EO was measured through innovativeness, proactiveness and risk-taking; leadership style and firm performance were measured with multi-item scales. The model was estimated with PLS-SEM in SmartPLS 3.0.

The analysis followed six steps. In step 01, Sample, 87.5% of respondents were male, 61.5% were aged 21–25, 45.7% worked in sales and 75% held a bachelor's degree. In step 02, Item refinement, two risk-taking items and four leadership items were dropped for low loadings. In step 03, Reliability, Cronbach's alpha was .71–.92 and composite reliability was .82–.94. In step 04, Convergent validity, average variance extracted was .54–.76, above the 0.5 threshold. In step 05, Discriminant validity, the Fornell–Larcker criterion was reported by the author as satisfied. In step 06, Structural model, bootstrapped path coefficients (5,000 samples) and the indirect effect were estimated.

Key Findings

The path coefficients come from Tables 4 and 5 of the article, and the model has R² = .635 for firm performance and .467 for leadership style. The direct path from EO to firm performance has β = 0.270 (t = 4.225), which is significant (p < .001). The path from EO to leadership style has β = 0.683 (t = 21.177), also significant (p < .001). The path from leadership style to firm performance has β = 0.588 (t = 9.963), significant (p < .001). The indirect path from EO through leadership to performance has β = 0.402 (t = 8.715), with a 95% confidence interval of [0.317, 0.496], indicating partial mediation.

1. EO is positively associated with performance. Respondents who describe their firm as more innovative, proactive and risk-taking also rate its performance higher, even after accounting for leadership (β = 0.270).

2. Leadership style shows the strongest link to performance. Leadership has the largest direct coefficient (β = 0.588), and EO is strongly associated with leadership style (β = 0.683).

3. Leadership carries a large share of EO's effect. The indirect path through leadership (0.402) is larger than the direct path, with a confidence interval well above zero. Because the direct effect remains significant, the author describes this as partial mediation.

Reading note: The sample is described differently across the paper: "300 workers of three major telecommunication companies in Mogadishu" in the abstract, "middle and senior managers" in the methods, while the demographics show mostly young sales staff. The abstract also generalises to small- and medium-scale firms, and the conclusion describes leadership as a moderator, although the model tests mediation among large telecom operators.

What the Study Contributes

The contribution is primarily empirical: survey evidence from Somalia's telecom sector linking EO, leadership style and performance in one model. The author frames it as extending the resource-based view by treating leadership as a resource that channels EO into results. Practical recommendations include aligning leadership with entrepreneurial strategy, investing in leadership development and capacity building, and policy support for EO and leadership in post-conflict economies.

Important Limitations

Identified by the author: The abstract refers to limitations in the conclusion, but no explicit limitations are listed in the published text.

Skilful cautions arising from the study design: Leadership's √AVE (0.735) is below its correlation with performance (0.774), so the Fornell–Larcker criterion does not appear to be met for that construct. All constructs come from the same respondents at one point in time, so common-method bias is possible and the paths show associations, not causal effects. Firm performance is self-reported, and the leadership style measured (e.g., transformational or transactional) and the questionnaire items are not specified. Finally, after item removal, risk-taking rests on a single indicator.

Why This Research Matters

Telecoms underpin Somalia's mobile-money economy and much of its private-sector growth. Evidence that leadership quality is closely tied to how entrepreneurial strategy translates into performance is relevant to managers, HR and training providers, and investors assessing firms in fragile markets.

Skilful Research Insight

Editorial commentary — not a finding of the study. Three lessons stand out. First, check validity tables against the stated criteria yourself: here the Fornell–Larcker test for leadership fails on the paper's own numbers, and the HTMT ratio is now the recommended check in PLS-SEM. Second, keep the sample description consistent from abstract to demographics, because it determines to whom the results apply. Third, the model invites follow-up with objective performance data (subscriber growth, revenue), a named leadership framework, responses from several levels per firm, and comparison with SMEs outside telecoms.

Read the Original Research

The original article is "The Role of Entrepreneurial Orientation and Leadership in Enhancing Firm Performance: Insights from Somali Telecommunication Firms," published in the International Review of Management and Marketing, 15(4), 58–66 (2025), by Ali Yassin Sheikh Ali. Its DOI is https://doi.org/10.32479/irmm.18783, and the publisher/journal page is EconJournals, www.econjournals.com (open access, CC BY 4.0). Skilful summarises; all findings belong to the original author.

SEO Information

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