LEADERSHIP STYLE AND ORGANIZATIONAL PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The challenges of coping with today’s uncertain business environment have put many organizations on their toes to struggle for survival in the heat of competition. The driver of such strategic move towards surviving the competition is the leadership provided by managers who are expected to influence others in achieving organizational goals and also boost employee’s performance. Shafie (2013) explains the importance of leadership in organizations and especially on human beings who are apparently the biggest asset of any firm; “The main drivers of organizations are usually employees, they give life to the organizations and provide goals" (Shafie et al., 2013). It is very paramount to provide workers with direction and psychological satisfaction to get the best from them, this direction can only come from leaders. In fact, leadership is very critical for all organizations in realizing their set objectives. Since leadership is a key factor for improving the performance of many if not all organizations and the success or failure of an organization depends on the effectiveness of leadership at all levels. Paracha (2012) is in support of this “Leaders play essential role in accomplishment of goals and boost employee’s performance by satisfying them with their jobs”. Leadership is perhaps the most thoroughly investigated organizational variable that has a potential impact on employee performance (Cummings & Schwab, 1973). “It is a vital issue in every organization primarily because the decisions made by the leaders could lead to success or business failure”. Notably, it has been widely accepted that effective organizations require effective leadership and that employee performance together with organizational performance will suffer in direct proportion to the neglect of this, Fiedler and House (1988). Furthermore, it is generally accepted that the effectiveness of any set of people is largely dependent on the quality of its leadership – effective leader behavior facilitates the attainment of the follower’s desires, which then results in effective performance (Fiedler & House, 1988; Maritz, 1995; Ristow, 1999).

Aboshaiqah et al (2020) looked at the link between leadership and employee performance among hospital nurses and report that the transformational styles are significantly positively related to employee performance while leaving things to take care of their own course is significantly negatively correlated to employee performance. Significant positive relationship between both transformational styles and employee performance is also reported in Pradeep and Prabhu (2011) in India, and in Kehinde and Banjo (2014) and Ejere and Abasilim (2013), both in Nigeria. Other studies in Africa are Tsigu and Rao (2012) and Gimuguni et al (2014) in Ethiopian banking industry and Ugandan local government authorities respectively. While Tsigu and Rao finds that the transformation leadership explained the variation is employee performance better than transaction leadership,

Leadership is the taking control over the day to day activities and equipment of the organization with the aim of achieving organizational objectives. We have lots of Leadership styles such as: Autocratic Leadership style, Transactional Leadership style, Bureaucratic Leadership style, Charismatic Leadership style, Transformational Leadership style ,Coaching Leadership style, Democratic Leadership style, Collaborative Leadership style, laissez faire leadership style, traditional leadership style

Therefore, although the literature on leadership and employee performance is scattered across countries and across industry, the evidence of the effect of leadership style on employee performance is also varied. While most of the literature reviewed is somehow consistent in suggesting that both transformational and transactional work styles are significantly positively related to employee performance and that transformational style’s effect is more pronounced (Rasool, 2020; Kehinde & Bajo, 2014; Tsigu & Rao, 2020), the evidence on the relationship between laissez-faire and performance is not that straight forward. For example while, some are reporting negative relationship, e.g. Aboushaqah (2020), others like Gimuguni, et al (2014) have reported a positive relationship. This suggests that the evidence on this leadership style is inconsistent. In addition, neither all industries nor countries are covered in the literature. Of those reviewed, the medical field is represented (Rassol, 2020; Aboushaqah, 2020), local government authorities (Gimuguni, 2014), hotel (Ipas, 2012), Petroleum (Kehinde & Bajo, 2014). Of more interest to this study is the paucity of researches in this area from Africa and East Africa in particular. A few reviewed here are Tsigu and Rao (2020), Ejere and Abasalim (2013) and Gimuguni (2020), Nuhu, (2010), but there are also those from South Africa (Howard, 2003). While several industries are represents in the growing body of evidence few are coming from the banking sector, see for example Tsigu and Rao (2020) from Ethiopian banking industry.

Therefore, from the preview of literature it is evident that the research evidence on the effect of leadership style on organizational performance that leadership style can explain significant number of performance outcomes at individual and organizational level.

But the evidence is not evenly distributed across economies at large or even within African economies. It is also evident that evidence from the banking sector is lagging behind. It is these facts that have motivated this study in order to contribute evidence from the Nigerian banking industry.

1.2 Statement of the Problem

Organizations are being affected in accordance to leadership styles adopted and the principles guiding the leadership style, autocratic leadership style which deals with focusing powers on a particular head, while democratic leadership style gives everyone the opportunity to contribute ideas, strength and knowledge to help achieve organizational objectives, transformational leadership which is aimed at making sure the organization makes income through motivating and encouraging workers to be more effective and efficient, laissez faire leadership which gives everyone the opportunity to do whatever they want without caring to satisfy followers need, all of this leadership styles his its own impact on organizational performance which gave me the urge to investigate on leadership styles, so I can be able to analyze and know most favorable leadership style to be adopted by any organization.

The study of leadership style and its impact on organizational performance is becoming increasingly essential if organizations want to gain and sustain a competitive advantage in today’s global academic environment and economy, Having a well strategized and organized organization is vital as research indicates that satisfied employees without corrupt minds help organizations reap benefits such as increased efficiency, higher levels of customer satisfaction, higher productivity and lower turnover rates.

Leadership as a subject has increased expanding consideration by numerous scholars, researchers and specialists in the course of the most recent decades or somewhere in the vicinity. Given numerous organizations are in turmoil because of various crisis, leaders are regularly considered as somebody who is equipped for moving the boat in the midst of solid tides and streams, and thus it is not amazing this idea has drawn scholarly considerations (Ababneh, 2009).

1.3 Objective of the Study

The general objective of the study is to ascertain the effect of leadership style on organizational performance in Cross River Institute of Technology and Management Ugep, Nigeria. Specifically sought;

To determine if leadership style affects organizational performance
To determine how leadership style affect organizational performance.
To investigate the contributions of leadership of leadership style to organizational performance

1.4 Research Question

1. Does leadership style affect organizational performance?

2. How does leadership style affect organizational performance?

3. What are the contributions of leadership style to organizational performance?

1.5 Research Hypotheses

Hypothesis 1

H_o: There no significant relationship between leadership style and organizational performance in Cross River Institute of Technology and Management Ugep.

H_1:There is significant relationship between leadership style and organizational performance in Cross River Institute of Technology and Management Ugep.

Hypothesis 2

H_o2: There is no significant relationship between transformational leadership style and organizational performance in Cross River Institute of Technology and Management Ugep.

H_2:There is significant relationship between transformational leadership style and organizational performance in Cross River Institute of Technology and Management Ugep.

Hypothesis 3

H_o:There is no significant relationship between laissez faire leadership style and organizational performance in Cross River Institute of Technology And Management Ugep.

H_3:There is significant relationship between laissez faire leadership style and organizational performance in Cross River Institute Of Technology And Management Ugep.

1.6 Significance of the Study

If organizations had an insight into the leadership style that results in the highest levels of organizational performance, and the most common style followed at a specific location as a result of the influence of national and local culture, they could take the necessary actions in order to promote the desired style for its leaders and keep their employees satisfied. This stud...

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