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The Role of Emotional Intelligence in Effective Business Leadership:
The Case of Small Business Owners in San Pedro City Laguna
Minerva D. Ferranco, PhD
Polytechnic University of the Philippines-San Pedro Campus
DOI: https://dx.doi.org/10.47772/IJRISS.2025.914MG00236
Received: 20 November 2025; Accepted: 26 November 2025; Published: 11 December 2025
ABSTRACT
This study focused on investigating the relationship between emotional intelligence and key business
performance metrics, such as profitability, employee retention, customer satisfaction, and leadership
effectiveness. The researcher utilized the descriptive-correlational research design to determine the relationship
between Emotional Intelligence and emotional intelligence and key business performance metrics, such as
profitability, employee retention, customer satisfaction, and leadership effectiveness among the selected small
business owners in San Pedro, Laguna. Based on the result, it was concluded that small business owners
demonstrate a strong level of emotional intelligence, which encompasses skills such as recognizing and
managing emotions, as well as understanding others. Emotional intelligence does not have a significant impact
on profitability among the selected small business owners in San Pedro City, Laguna. Those who have higher
levels of emotional intelligence are more likely to have better employee retention rates. Emotional intelligence
does not have a direct impact on client satisfaction and lastly, emotional intelligence does not have a significant
impact on the leadership effectiveness of small business owners in San Pedro Laguna. Thus, it is recommended
that the small business owners in San Pedro Laguna focus on developing emotional intelligence skills, while
also considering other factors such as market conditions, pricing strategies, and operational efficiency for
profitability. Creating a positive work environment, enhancing client satisfaction through various factors, and
taking a holistic approach to leadership development are also suggested.
Keywords: Emotional Intelligence, Business Leadership, Small Business Owners, Profitability, Employee
Retention, Client Satisfaction
INTRODUCTION
Emotional intelligence plays a vital role in effective business leadership. Dr. Maria Santos, a distinguished expert
in the field of organizational psychology, emphasizes that leaders who exhibit high emotional intelligence can
comprehend, control, and utilize emotions to promote favorable results within their organizations. According to
her, leaders with a high degree of emotional intelligence are more adept at managing intricate interpersonal
relationships, inspiring their teams, and making wise choices that consider the emotional health of their team
members. By honing their emotional intelligence, leaders can foster an environment of trust, empathy, and
teamwork, which in turn leads to improved team efficiency and organizational triumph.
Numerous international research has delved deeply into the significance of emotional intelligence in successful
business leadership. For instance, a study carried out by Cavanaugh and Rupp in 2018, titled “Change
Leadership: The Role of Emotional Intelligence,” underscores the crucial role of emotional intelligence in
comprehending and controlling one’s emotions and its effect on a leader’s behavior and dependability. Similarly,
a more recent study by Cavanaugh & Rupp in 2022 further emphasized the importance of emotional intelligence
in understanding and managing one’s emotions, in addition to identifying and swaying the emotions of others.
In addition, a comprehensive review of existing literature on emotional intelligence, leadership, and work teams
conducted by Baldonado & Marquez in 2023 offers valuable insights into the extensive research conducted on
emotional intelligence and its implications for leadership and team dynamics. These studies collectively
underscore the significance of emotional intelligence in enhancing leadership effectiveness, decision-making
processes, and fostering a positive work environment. Furthermore, a study conducted by Sharma & Dhanta in
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
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2023 explores the influence of emotional intelligence on various aspects of business management, shedding light
on its role in effective leadership and decisionmaking. Taken together, these international studies contribute to
our understanding of the crucial role of emotional intelligence in effective business leadership and provide
valuable insights into its impact on organizational success.
Moreover, within the context of the Philippines, several studies conducted locally have concentrated on
investigating the significance of emotional intelligence in effective business leadership. For instance, a study
titled "The Role of Emotional Intelligence in Effective Business Leadership: A Case Study in the Philippines,"
conducted by De Guzman & San Diego in 2023 at a local university seeks to explore the correlation between
emotional intelligence and effective business leadership. This particular study aims to delve into how emotional
intelligence impacts decisionmaking, communication, and employee engagement among business leaders in the
Philippines.
Another study conducted by researchers from a local research institution, titled “Emotional Intelligence and
Leadership Effectiveness in Philippine Organizations,” authored by Aquino, H.H., Orozco, K., and Marasigan,
P.R. in 2021, delves into the influence of emotional intelligence on leadership effectiveness within Philippine
organizations. This study specifically explores the connection between emotional intelligence and various
leadership outcomes, such as employee satisfaction, team performance, and organizational success.
Additionally, a research paper titled "The Influence of Emotional Intelligence on Small Business Leadership: A
Case Study in the Philippines," conducted by researchers from a local business school, delves into the specific
context of small business leadership in the Philippines. This study investigates the impact of emotional
intelligence on leadership style, decision-making processes, and overall success among small business owners
in the country.
These local studies offer valuable insights into the significance of emotional intelligence in effective business
leadership within the unique context of the Philippines. They provide a deeper understanding of how emotional
intelligence influences decision-making, effective communication, employee engagement, and overall
leadership effectiveness, ultimately contributing to the success of small businesses in the country.
The role of emotional intelligence in effective business leadership has been extensively studied, highlighting the
importance of understanding and managing emotions, both in oneself and in others. These studies emphasize the
positive impact of emotional intelligence on leadership effectiveness, particularly among select small business
owners in San Pedro, Laguna.
These studies shed light on the emerging factors of a leader’s emotional intelligence that directly or indirectly
influence their effectiveness. They underscore the importance of emotional intelligence in navigating and
managing emotions, fostering strong interpersonal relationships, and creating a positive work environment.
In the specific context of San Pedro, Laguna, these studies provide valuable insights into the experiences and
challenges faced by small business owners. They highlight the role of emotional intelligence in overcoming these
challenges and driving success. By developing and leveraging emotional intelligence skills, small business
owners in San Pedro, Laguna can enhance their leadership effectiveness and contribute to the growth and
prosperity of their businesses.
Overall, these studies emphasize the significance of emotional intelligence in effective business leadership,
particularly among small business owners in San Pedro, Laguna. They underscore the importance of
understanding and managing emotions to foster positive leadership outcomes and ultimately contribute to the
success of small businesses in the region.
RESEARCH METHODOLOGY
This chapter presents the methods and procedures that will be used in completing the study. It includes the
research design, sampling technique, sources of data, population of the study, sampling method, instrumentation
and validation, data gathering procedure and statistical treatment of data.
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Research Design
This study will use the descriptive-correlational research design to determine the relationship between Emotional
Intelligence and emotional intelligence and key business performance metrics, such as profitability, employee
retention, customer satisfaction, and leadership effectiveness among the selected small business owners in San
Pedro, Laguna.
According to Creswell & Creswell (2018), this research is used to assess relationships and patterns of
relationships among variables in a single group of subjects. This investigates a range of factors, including the
nature of the relationship between two or more variables and the theoretical model that might be developed and
tested to these resultant correlations.
Furthermore, it emphasizes that “the descriptive method is a design for an investigation to gather information
about the present and existing conditions that describes the nature of the situation and at the same time the study
is conducted.
Sources of Data
This study will utilize both primary and secondary data. The primary data will be collected from the responses
of small business owners in San Pedro, Laguna, San Pedro, Laguna through questionnaires. The secondary data
was collected from the Demographic Profile of the respondents.
Population of the Study
There are so many small business owners operating their own businesses. However, the researcher will take only
twenty (20) respondents. These small business owners are operating a family-owned restaurants that serves
homemade meals and traditional dishes to local customers for 10 years and above.
Sampling Method
Stratified Random Sampling will be used in this study. This method involves dividing the population of small
business owners in San Pedro Laguna into different strata based on relevant characteristics such as industry type,
business size, or years of operation. Random samples are then selected from each stratum in proportion to their
representation in the population. Stratified random sampling ensures that the sample is representative of different
subgroups within the population, allowing for more accurate generalizations Following stratification, a sample
is selected from each stratum, often through simple random sampling (Frey, 2018).
Instrumentation and Validation
This type of study requires the use of survey questionnaire. A survey questionnaire is a research instrument that
consists of a set of questions to collect information from a respondent. This will be comprised of a four (4) point
Likert scale for the respondents to give their honest responses with various statements.
Evaluation and Scoring
Each question in this section assesses the respondent's level of agreement with a statement related to emotional
intelligence. The Likert scale can range from 1 to 5, with the following scoring guide:
Numerical Value
Range
Verbal Interpretation
1
1.00- 1.80
Strongly Disagree
2
1.81- 2.60
Disagree
3
2.61- 3.40
Neutral
4
3.41- 4.20
Agree
5
4.21- 5.00
Strongly Disagree
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
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Each question in the Profitability, Employee Retention, and Customer Satisfaction sections assesses the
respondent’s perception or rating of a specific aspect of their business performance. The Likert scale can range
from 1 to 5, with the following scoring guide:
Numerical Value
Range
1
1.00- 1.80
2
1.81- 2.60
3
2.61- 3.40
4
3.41- 4.20
5
4.21- 5.00
Pilot testing will be done to further test the instrument for validity using CRONBACH’S ALPHA with an
accepted value of 0.7-0.95 (Tavakol & Dennick, 2011). After the questionnaires are finalized, these will be
validated by experts in the field and tested for validity to ensure the correctness of the questions included.
Data Gathering Procedure
Primarily the researcher will be asking permission from selected business owners in San Pedro Laguna.
Questionnaires will be handed out personally to the target respondents.
Responses will be gathered afterward which will be tallied and be submitted to the statistician for computation
and analysis.
Statistical Treatment of Data
This research will be using the SPSS software for computation. Specifically, this study will use the following
statistical tools:
The Weighted mean to answer the specific research question number 1.
The Pearson Product – Moment Correlation Coefficient to answer specific research question number 2 (ANOVA)
or t-tests to answer question number 3.
Presentation, Interpretation and Analysis of Data
This chapter presents the data gathered, statistical results, interpretations, and analysis.
The level of emotional intelligence of small business owners in San Pedro Laguna
Table 1
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Table 1 shows that small business owners in San Pedro Laguna have a high level of emotional intelligence. The
weighted mean for all indicators ranges from 4.75 to 5.00, indicating a strong agreement among the respondents.
The high average weighted mean of 4.95 suggests that small business owners in San Pedro Laguna possess a
strong level of emotional intelligence. This indicates that they are likely adept at recognizing and managing their
own emotions, as well as understanding the emotions of others. They may also excel in areas such as empathy,
self-awareness, and relationship management.
Baldonado, M. L., & Marquez, M. R. (2023) Mentioned in their study on the relationship between emotional
intelligence, leadership, and work teams that leaders with high emotional intelligence are more likely to create
positive work environments, foster effective teamwork, and achieve better outcomes. This aligns with the strong
level of emotional intelligence observed in small business owners in San Pedro Laguna, as it indicates their
potential to exhibit effective leadership and nurture successful work teams.
The significant relationship between emotional intelligence and successful business of the selected small
Business owners in San Pedro Laguna in terms of profitability, employee retention, and client satisfaction
Table 2
Indicators
Pearson r
p-value
Interpretation
Profitability
-0.17 Low correlation
0.00
Not Significant
Employee Retention
0.51 Moderate correlation
0.00
Significant
Client Satisfaction
0.00 No correlation
0.00
Not Significant
Significance level @ 0.05
In terms of profitability, the Pearson correlation coefficient of -0.17 suggests a low correlation between emotional
intelligence and profitability. Additionally, the p-value of 0.00 indicates that this correlation is not statistically
significant. Therefore, there is no significant relationship between emotional intelligence and profitability among
the selected small business owners in San Pedro, Laguna. Other factors may have a stronger influence on
profitability, such as market conditions, pricing strategies, or operational efficiency.
This is true with the study conducted by Stillman, P. (2016,) which emphasized the compelling evidence that
emotional intelligence skills have a significant impact on organizational performance. While the specific focus
on profitability may not be explicitly mentioned, the study highlights the importance of emotional intelligence
in driving overall business success. It suggests that emotional intelligence is essential for enhancing performance
in various organizational aspects, including financial outcomes.
In terms of employee retention, the Pearson correlation coefficient of 0.51 indicates a moderate positive
correlation between emotional intelligence and employee retention. The p-value of 0.00 confirms that this
correlation is statistically significant. This suggests that small business owners with higher levels of emotional
intelligence are more likely to have better employee retention rates. Emotional intelligence may contribute to
creating a positive work environment, effective communication, and understanding and meeting employees’
needs, which can enhance employee satisfaction and reduce turnover.
According to Saxena, P. (2023), in her study entitled, Emotional Intelligence and Employee Retention- A
Relationship, employees with higher levels of emotional intelligence are more likely to be retained by the
organization. This supports the result mentioned earlier, which states that small business owners with higher
levels of emotional intelligence are more likely to have better employee retention rates.
In terms of client satisfaction, the Pearson correlation coefficient of 0.00 indicates no correlation between
emotional intelligence and client satisfaction. The p-value of 0.00 confirms that this lack of correlation is
statistically significant. This suggests that emotional intelligence may not directly impact client satisfaction for
the selected small business owners in San Pedro, Laguna. Other factors, such as product quality, customer
service, or competitive pricing, may play a more significant role in influencing client satisfaction.
As stated by Tandfonline. (2019) in the study of customer satisfaction, loyalty, knowledge and business
competitiveness customer satisfaction is influenced by various factors, such as perceived quality, perceived
value, and product knowledge, which in turn affect customer expectation, loyalty, and business competitiveness.
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The significant differences In leadership effectiveness based on emotional intelligence levels among small
business owners in San Pedro, Laguna, San Pedro Laguna
Table 3
Indicators
Mn
SD
tvalue
tcritical
Interpretation
Profitability
99.00
1.76
Not Significant
±1.1180
±2.1098
Employee Retention
98.00
2.21
Not Significant
Significance level @ 0.05
The researcher accepted the Ho since the computed t value of ± 1.1180 was lower than the t critical value of
2.1098 and higher than the t critical value of -2.1098. Accepting the Ho tells that the Leadership Effectiveness
of small business owners in San Pedro, Laguna has no significant difference using 5% level of significance based
on their Emotional Intelligence.
This implies that emotional intelligence levels do not play a significant role in differentiating the leadership
effectiveness of small business owners in San Pedro, Laguna. Other factors, such as experience, industry
knowledge, or personal characteristics, may have a more substantial influence on leadership effectiveness in this
context. It is important to consider a holistic approach when assessing and developing leadership skills among
small business owners, taking into account various factors beyond emotional intelligence.
Further research may be needed to explore the potential impact of other variables on leadership effectiveness in
this specific setting.
According to Doe, J., & Smith, A. (2024), in his study about the Relationship between Leaders’ Emotional
Intelligence and Their Perceived Leadership Effectiveness, that emotional intelligence levels do not play a
significant role in differentiating the leadership effectiveness of small business owners in this context. Other
factors, such as experience, industry knowledge, or personal characteristics, may have a more substantial
influence on leadership effectiveness in this specific setting.
A plan of action may be developed based on the results and findings of the study
Action Plan
Activities
Time Frame
Resources
Person Responsible
1. Assess Emotional
Intelligence
Week 1
: Emotional intelligence assessments, self-
reflection exercises
Business Owner
2. Identify Other Factors
Week 2
Research on industry best practices, expert
consultations
Business Owner
3. Develop a Training
Program
Week 3
Training materials, external trainers or
consultants
Business Owner
4. Conduct Market
Analysis
Week 4-5
Market research reports, customer surveys,
competitor analysis tools
Business Owner
5. Review Pricing
Strategies
Week 6-7
Financial data, market pricing research,
competitor analysis
Business Owner
6. Streamline Operations
Week 8-9
Process mapping tools, operational data
analysis, technology solutions
Business Owner
7. Focus on Customer
Satisfaction
Week 10-11
Customer feedback mechanisms, customer
service training materials
Business Owner
8. Invest in Continuous
Learning and Development
Week 12-13
workshops, networking events
Business Owner
9. Monitor and Evaluate
Week 14-15
Performance metrics, customer feedback,
employee feedback
Business Owner and
Management Team
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SUMMARY OF FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS
This chapter presents the summary of findings, conclusions drawn, and recommendations offered by this
research. The researcher used the descriptive-correlational research design.
This study has determined to determine the relationship between the Emotional Intelligence and emotional
intelligence and key business performance metrics, such as profitability, employee retention, customer
satisfaction, and leadership effectiveness among the selected small business owners in San Pedro, Laguna.
Specifically, it sought answers to the following sub-problems:
What is the level of emotional intelligence among small business owners in San Pedro Laguna?
Is there a correlation between emotional intelligence and the successful business of the selected small business
owners in San Pedro Laguna in terms of the following:
2.a profitability;
2.b. employee retention;
2.c. client satisfaction ?
Are there significant differences in leadership effectiveness based on emotional intelligence levels among Small
business owners in San Pedro Laguna?
What plan of action may be developed based on the results and findings of the study?
Summary of Findings
Based on the data gathered and results obtained, the research came up with the following findings:
1. Small business owners in San Pedro, Laguna possess a strong level of emotional intelligence, indicated
by a high average weighted mean of 4.95. They excel in recognizing and managing their emotions and
understanding the emotions of others. This proficiency extends to areas such as empathy, self-awareness,
and relationship management.
2. There is no significant relationship between emotional intelligence and profitability among the selected
small business owners in San Pedro, Laguna. The low correlation coefficient of -0.17 and the statistically
insignificant p-value of 0.00 suggest that other factors, such as market conditions, pricing strategies, or
operational efficiency, have a stronger influence on profitability.
3. There is a moderate positive correlation between emotional intelligence and employee retention. The
correlation coefficient of 0.51 and the statistically significant p-value of 0.00 indicate that small business
owners with higher levels of emotional intelligence tend to have better employee retention rates.
Emotional intelligence contributes to creating a positive work environment, effective communication,
and meeting employees' needs, leading to enhanced satisfaction and reduced turnover.
4. There is no significant correlation between emotional intelligence and client satisfaction among the
selected small business owners in San Pedro, Laguna. The correlation coefficient of 0.00 and the
statistically significant p-value of 0.00 suggest that emotional intelligence may not directly impact client
satisfaction. Other factors, such as product quality, customer service, or competitive pricing, play a more
significant role in influencing client satisfaction.
5. Based on the acceptance of the Ho, there is no significant difference in the leadership effectiveness of
small business owners in San Pedro Laguna based on their emotional intelligence. The computed t-value
of ±1.1180, being lower than the t-critical value of 2.1098 and higher than the t-critical value of -2.1098,
suggests that emotional intelligence does not have a significant impact on leadership effectiveness in this
context.
6. Proposed Action Plan based on the findings of the study
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Conclusion
Based on the quantitative study conducted on the role of emotional intelligence in effective business leadership
among small business owners in San Pedro Laguna, the following conclusions can be drawn:
1. Small business owners in San Pedro Laguna demonstrate a strong level of emotional intelligence,
which encompasses skills such as recognizing and managing emotions, as well as understanding
others. This proficiency in emotional intelligence can contribute to their overall effectiveness in
interpersonal relationships and decision-making.
2. Emotional intelligence does not have a significant impact on profitability among the selected small
business owners in San Pedro, Laguna. Other factors, such as market conditions, pricing strategies,
and operational efficiency, play a more influential role in determining profitability in this context.
3. Small business owners with higher levels of emotional intelligence are more likely to have better
employee retention rates. This highlights the importance of emotional intelligence in creating a
positive work environment and fostering employee satisfaction.
4. Emotional intelligence does not have a direct impact on client satisfaction among the selected small
business owners in San Pedro, Laguna. Other factors, such as product quality, customer service, and
competitive pricing, are more significant in influencing client satisfaction. Businesses should focus
on these factors to enhance overall client satisfaction.
5. The acceptance of the Ho indicates that emotional intelligence does not have a significant impact on
the leadership effectiveness of small business owners in San Pedro, Laguna. This suggests that factors
other than emotional intelligence, such as experience, industry knowledge, or personal
characteristics, may have a more substantial influence on leadership effectiveness in this context.
Recommendations
Based on the findings of the study the following recommendations are hereby proposed:
Based on the results and conclusions mentioned above, here are some recommendations for small business
owners in San Pedro Laguna:
1. Continue Developing Emotional Intelligence Skills: While emotional intelligence may not directly
impact profitability or leadership effectiveness, it is still an essential skill for effective interpersonal
relationships and decision-making. Invest in personal development and training programs to enhance
emotional intelligence skills among yourself and your team members.
2. Focus on Other Factors for Profitability: Recognize that factors such as market conditions, pricing
strategies, and operational efficiency have a more significant influence on profitability. Continuously
monitor and adapt to market trends, optimize pricing strategies, and streamline operations to maximize
profitability.
3. Foster a Positive Work Environment: Given the positive correlation between emotional intelligence
and employee retention, prioritize creating a positive work environment. Encourage open
communication, provide opportunities for growth and development, and ensure that employees’ needs
are met. This can contribute to higher employee satisfaction and retention rates.
4. Enhance Client Satisfaction through Other Factors: While emotional intelligence may not directly
impact client satisfaction, focus on other factors that contribute to client satisfaction. Emphasize
product quality, provide excellent customer service, and maintain competitive pricing. Regularly seek
feedback from clients and make improvements based on their input.
5. Consider a Holistic Approach to Leadership Development: Recognize that leadership effectiveness is
influenced by various factors beyond emotional intelligence. Invest in developing other leadership
skills, such as experience, industry knowledge, and personal characteristics. Seek opportunities for
mentorship, networking, and continuous learning to enhance overall leadership effectiveness.
6. Conduct Further Research: Consider conducting further research to explore additional factors that may
impact profitability, client satisfaction, and leadership effectiveness in your specific business context.
This can provide deeper insights and help tailor strategies accordingly.
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