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This study investigated the effect of leadership styles on organizational performance of SMEs in Lagos State using a contingency approach. The descriptive survey method was used in estimating the model and the primary data were generated with aid of distributed questionnaire to two hundred respondents which were selected through judgemental sampling procedure. From the mean, standard deviation analysis and paired sample test, the result indicated a relationship between autocratic, participative, transactional and transformative leadership styles and performance of organisations. The recommendation of the study was that since compensation rewards are stimulating factors that help to boost the organizational performance, effective reward systems, recognition and managerial supervision should be implemented to improve employee’s performance. Managers were equally advised not to restrict themselves to a style of leadership but to adopt a mixture of various leadership styles due to different environmental factors and situations in which they find themselves.