The purpose of this exploratory sequential mixed methods study on German SMEs is to deepen understanding on the nature of relationships between workplace flexibility practices (WFPs) and SME performance indicators, with particular emphasis on information and communication technology (ICT), leadership and trust on an organizational level. To achieve that, this study aims at identifying and investigating the impact of the variables that affect SME performance indicators if employees work in flexible workplaces. Methodologically, first, a systematic literature review, enhanced by a narrative one, identifies variables related to working flexibly, especially downsides, and result in an initial framework conceptualizing the influence of WFPs, transformational leadership, HR commitment practices and trust on SME performance indicators. Second, a qualitative study is conducted in which leaders of flexibly working SME employees are interviewed in order to fill knowledge gaps reflected by the developed conceptual framework, to be later validated by further quantitative analysis. Third, and based on the insights of the literature review and the interviews, a new scale for measuring technological requirements of virtual leadership (TRVL) is developed following a multi-method procedure ending with a confirmatory factor analysis (CR = .886, AVE = .795, GFI = .938, CFI = .964, RMSEA = .084). Fourth, a quantitative study focusing on company/team leaders in German SMEs analyzes the nature of the associations between WFPs, leadership, TRVL, trust, HR commitment practices and SME performance indicators via partial least squares structural equation modeling.

The main results of this study highlight that technology, in particular, has the power to either support or hinder leadership when employees work flexibly. In this context, transformational leadership is a suitable leadership style for leading flexibly working employees due to its trust enhancing properties (shown by both, the qualitative and quantitative studies). Hence, trust is understood as the very foundation for flexible work. The nexus between transformational leadership climate and internal numerical flexibility, i.e., temporal and local flexibility, is positively and fully mediated by TRVL. Furthermore, there is no evidence that working flexibly has either a positive or a negative impact on firm-level employee performance. However, it rather serves as a benefit for making work more attractive. From a managerial perspective, companies should therefore implement flexible work for better recruiting and retaining employees, but not enhancing performance indicators. Moreover, as technology is highly important, organizations must technologically equip leaders and employees well and train them to use it appropriately. This is necessary because TRVL explains the relationship between transformational leadership climate and working flexibly.

This study contributes knowledge to WFPs by (1) analyzing and summarizing the current status of academic literature in this research stream in which downsides in particular were evaluated and structured into four categories for the first time, (2) developing the first multi-level conceptual framework embracing and interrelating all WFPs, transformational leadership climate, HR commitment practices and trust with SME performance indicators, (3) analyzing the impact of certain interrelated constructs (especially WFPs) of the conceptual framework on SME performance indicators, (4) setting up an avenue for further research as well as (5) developing a validated scale on technological requirements of virtual leadership. This scale contains two factors (competent usage of virtual media in communication with employees and (organizational) support to ensure the ability to work flexibly) with four items respectively. Finally, (6) a new nature of relationship has been explored as the nexus between transformational leadership climate and internal numerical flexibility is fully mediated by technological requirements of virtual leadership, representing a new contribution to knowledge.