North South University (NSU)

Study

On

Leadership Style and Organizational Performance: A study on your own

organization

Submitted to

Dr. Md. Shariful Alam Khandakar

School of Business & Economics

North South University

Submitted by

Evana Yasmin - ID 1935059090

Submission Date: 19-08-2021

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Leadership Style and Organizational Performance: A study on your
own organization

Evana Yasmin

North South University

Aug, 2021

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 Letter of Transmittal

Date :19-08-2021

Dr, Md. Shariful Alam Khandakar,

Department of Business Administration,

North South University

Subject: Submission of study on “Leadership Style and Organizational Performance of

Friendship INGO in Bangladesh.”

Dear Sir,

I am very grateful to submit my study report on “Leadership style and organizational

performance” on my previous organization to you. From this study, you will find current
leadership practices, their effectiveness over the performance of the organization, the problems
and loopholes of their leadership strategy and recommendations for mitigating those findings.
The study has been completed by the knowledge that I have experienced from my previous
organization, the recommended text books and online articles and study.

I have tried my label best to complete this study report meaningfully and correctly, as much as
possible. I do believe that my tiresome effort will help you to get ahead with this sort of venture.
In this case it will be meaningful to me. However, if you need any assistance in interpreting this
study, please contact me without any kind of hesitation.

Thank you.

Yours obediently,

Evana Yasmin

ID: 1935059090

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 Declaration

I do hereby declare that the study on “Leadership Style and Organizational Performance of
Friendship INGO in Bangladesh” submitted is a record of my original work done by me under
the guidance of Dr, Md. Shariful Alam Khandakar of School of Business & Economics in
North South University, Bangladesh. This study work is submitted to the partial fulfillment of the
requirements for the award of EMBA degree of North South University. The results embodied in
this study have not been submitted to any other University or Institute for the award of any
degree or diploma.

Acknowledgement

First of all, I am grateful to almighty Allah for giving me the opportunity to do this study report.
Secondly, I would like to convey my sincere thanks to my report supervisor, Dr. Md. Shariful
Alam Khandakar for his keen interest, valuable suggestions and feedback throughout my study
process. It would not have been possible for me to complete this study without his support. I
would also like to thank the officials of Friendship, Bangladesh for communications and helping
me in providing all the necessary information related to the report. My regards to friends and
family for their support throughout my study.

Above all my special thanks to Almighty Allah for everything.

Thank you all,

Evana Yasmin

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 Executive Summary

Leadership has a direct cause and effect relationship on organizations and their performance. It is
essential to emphasize that leaders could be seen at any organizational level and aren't exclusive
to management (Igbaekemen, 2015). [1] Applying the right leadership style in the right
environment can be a competitive advantage of any organization. Due to inappropriate leadership
practice by managers, employees become demotivated and suffer in job dissatisfaction,
person-job fit crisis which results in employee turnover at the end. I discussed here different
types of leadership as transactional, transformational, bureaucratic and situational leadership that
Friendship organization is practicing and the impact of organizational performance. In
conclusion, I recommended the transformational leadership style along with situational
leadership based on circumstances of the organization to improve employee performance as well
as organizational long run performance growth. In addition, I also recommended leadership
training for the managers for their leadership development to align with current market demand.

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 Table of Contents
Chapter 1: Introduction

1.1 Background of the Study

1.2 Objective of the Study
1.3 Rationale of the Study
1.4 Scope of the Study
1.5 Limitations of the study

Chapter 2: Literature Review

2.0 Literature Review

Chapter 3: Organizational Profile

3.1 Background of the Organization

3.2 Vision
3.3 Mission

Chapter 4: Overview of Work and Industry

Chapter 5: Analysis and Findings

Chapter 6: Recommendations

6.1 Recommendations

Chapter 7: Conclusion

7.0 Conclusion

Chapter 8: Reference

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 1. Introduction
1.1 Background of the study

Organizations face many challenges, but one of the greatest ones is ensuring the right leadership
styles which are the best fit for achieving organizational growth. Leadership has a direct cause
and effect relationship upon organization performance because it assists in creating an efficient
and motivated workforce and allows for an organization to achieve overall goals & objectives
(Amburgey, 2005).[2] When it is correctly applied, every employee of each sector becomes
committed towards achieving the organizational goals. There are several types of Leadership
styles available but in this study, I mainly focused on transformational, transactional and
situational leadership styles.  It is however important to note that no single leadership style is not
appropriate for all kinds of situations; rather there are multiple leadership styles that might play
together for handling particular situations and resolving conflicts or act as an individual style in
an effective way based on surroundings and circumstances of the situation.

1.2 Objective

This study analyzed the impact of leadership on the organization performance of Friendship
INGO in Dhaka, Bangladesh. The style of leadership a manager practices in an organization has
a deep impact on the overall performance of an organization in the long run. The study exposed
that transformational leadership and participative leadership practices enhances the employee
performance and attainment of corporate goals and objectives. The study therefore concludes
that the achievement of an organization's goal and objective depends solely on the practices of
leadership style that an organization adopted. As leadership is the key determinant for achieving
organization goals, it is very important to maintain the practices of right leadership that provide
clarity of purpose, motivate and guide the organization to realize its mission.

1.3 Rationale of the Study

Every organization works for a vision and for pursuing their vision they set their mission, goals
and objectives. Right leadership in the right environmental context of an organization plays an
important role for pursuing its vision. The present study highlights the needs of effective and

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efficient leaders who have the potential to inspire a set of people towards a common objective.
There are many organizations that are doing very well in the short run but after a period of time
they face challenges to achieve their goals and objectives and lose their strong foothold in the
particular marketplace. However, they may analyze mostly about their loopholes by searching
current business and marketing strategy to get rid of their catastrophe but they hardly research on
the leadership styles that a manager adopts to perform which may act like the hidden reasons in
overall performance gains of the organization and hence its importance cannot be
underestimated. Therefore, for organizational sustainability in the long run, it is significant for
every organization to estimate the effectiveness of leaders who are working in the organization
by applying different approaches such as research, employee assessment, training and
development etc. and encourage the organizational culture to practice the right leadership styles
for a desirable performance.

1.4 Scope of the Study

The scope of this study is based on my current organization named Friendship, Bangladesh. The
focus is to identify the relationship between leadership styles and organizational performance of
this organization. It will also analyze the impact of practicing leadership styles on organizational
performance. Since there are several leadership styles and due to the limitations of time, this
study has narrowed down its scope to focus on three main leadership styles namely
Transformational, Transactional and Situational leadership style in this organization.

1.5 Limitations of the Study

This study is conducted based on secondary data like internet, textbook and articles, my own
experience and observations and by consulting with company’s employees over phone. Due to
the pandemic period, it was not possible for me to visit the office physically and collect a set of
data regarding the managerial performance and its impact on the organization. Therefore, I had
to use some hypothetical causes and effects for better analysis to make this study more relevant
and intensive.

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 2. Literature Review
The importance of leadership in an organization can not be underestimated. The practice of
leadership style on employees has an immense effect on organizational performance as well as
its growth. Leadership is about articulating visions, embodying values, and creating the
environment within which things can be accomplished (Richards & Engle, 1986, p. 206). (Yukl,
2010), defined leadership as "the process of making others influenced and they should be able to
understand to agree about what has to be done and how it should be done, and how to facilitate
individuals and collective efforts to achieve the objectives you are working on".

Leadership style is viewed as the combination of traits, characteristics, skills and behaviors that
leaders use when interacting with their subordinates (Marturano & Gosling, 2008, Jeremy et
al.,2011).[3] In today’s dynamic and competitive marketplace, the competition of an organization
is based on innovation, pricing strategy, right decision-making in right time, organizational
performance, decreasing returns etc. For achieving sustainable profit, ensuring effective
leadership style by managers may be a competitive advantage of the organization. In most of the
organizations, three leadership styles have been widely practiced, including (i) transactional
leadership, (ii) transformational leadership, and (iii) Situational leadership.

2.1 Leadership Styles

Transactional Leadership:

Transactional leadership style is defined as the exchange of rewards and targets between
employees and management (Howell & Avolio, 1993) [4]. Transactional leadership motivates
followers by appealing to their self‐interest and exchanging benefits. This leadership style may
involve values, but those values are relevant to the exchange process, such as honesty, fairness,
responsibility, and reciprocity. It is also acknowledged as managerial leadership which focuses
on the role of supervision, organization, and group performance. The leader practicing
transactional style believes in motivating employees through offering rewards or punishment. If a
follower accomplishes a task based on the supervisor's desire, then the subordinate is rewarded
otherwise they face punishment.

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Transformational Leadership:

Transformational leadership is defined as a leadership approach that causes change in individuals
as well as overall the organization or society. It is a leadership style in which a leader can
change, help grow and shape the organization by motivating, encouraging, guiding and inspiring
his/her followers to become more innovative, dynamic and effective employees. The leadership
expert and presidential biographer James MacGregor Burns initially introduced the concept of
transformational leadership in 1978. According to Burns, transforming leadership is a process in
which "leaders and followers help each other to advance to a higher level of morale and
motivation" [5] . According to Burns, the transforming approach not only creates significant
change in people's lives and organizations but also redesigns perceptions, increases motivation
and values, and changes expectations and aspirations of employees. Transforming leaders are
idealized in the sense that they are a moral paradigm of working towards the benefit of the team,
organization and/or community. [5]

Situational Leadership:

The situational approach emphasizes the importance of contextual factors that influence
leader behavior and how it influences outcomes such as subordinate satisfaction and
performance. It is necessary to understand the situational leadership key concepts of task
behavior, the amount of guidance and direction you provide; relationship behavior, the amount of
social and emotional support you provide; follower readiness, exhibited in followers performing
a specific task or function or accomplishing a specific objective; and follower development,
followers’ maturity and ability to manage themselves in an organizational environment. (U.S.
Army, 2006).[6] Major situational variables include the characteristics of followers, the nature of
the work performed by the leader’s unit, the type of organization, and the nature of the external
environment. There are two major subcategories of this approach well defined. One line of
research is
an attempt to discover the extent to which leadership processes are the same or unique across
different types of organizations, levels of management, and cultures. The other subcategory of
situational research attempts to identify aspects of the situation that “moderate” the relationship
of leader attributes (e.g., traits, skills, behavior) to leadership effectiveness. Theories describing
this relationship are sometimes called “contingency theories” of leadership.

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 3. Organizational Profile
Friendship began its operations in 2002 pioneering the first NGO-run hospital ship in the world
for the most unaddressed and deprived communities in the world living on river islands, called
chars, of the mighty Jamuna River (Brahmaputra) in Bangladesh. It was founded by Runa Khan
and is directed by an Executive Board and an International Team. Friendship’s head office is in
Bangladesh and has set up a network of entities worldwide. The international network is not only
a source of financial resources, but also constitutes a unique platform for exchanging skills and
ideas. It is committed by relying on 6 sectors of activity, 2 legal entities supporting products and
services and an international network of local organizations. Friendship is a needs-based and
values-driven organization, deeply embedded in the communities where it works. It focuses on
understanding local situations and identifying gaps that they can fill, and they always do so in
consultation and inclusion with the communities.

There are 65,00000 people who have access to Friendship’s Health services and 5,491,710
person-days of emergency food relief are distributed. 2,85,000 people benefit from inclusive
Citizenship awareness programs each year and 82,747 people have benefitted from Friendship’s
Sustainable Economic Development programme. In addition, there are 80, 000 people who have
access to safe water from Friendship’s 6 water plants in coastal saline areas and 21,813 children
& adult learners have benefitted from Friendship’s Education Programme.

3.1 Vision
We are an international Social Purpose Organization guided by our vision of a world where
people — especially the hard-to-reach and unaddressed — have equal opportunities to live with
dignity and hope.

3.2 Mission
From Bangladesh, a country facing the most pressing of humanity’s challenges, we develop
scalable solutions to strengthen marginalized communities, and empower people to transform
their lives and reach their full potential.

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 4 Overview of Work and Industry

This study is focused on an IT department of Friendship NGO, work nature of Information

Technology, and the importance of utilizing effective IT services in an organization to achieve
synergistic performance. The job of an IT professional, especially software engineer, begins by
analyzing the needs of a user and then designing, developing, and testing the software to see if
those needs are effectively met. Flowcharts, diagrams and prototypes are created during this
process as well algorithms that inform the computer what to do.

Information Technology is a branch of technology which makes the study, usage and process of
data possible in the areas of storage, manipulation, transfer, management, control and automated
data preparation using hardware, software and NetWare [7]. The specific work of an IT
professional is to coordinate the maintenance, expansion, and construction of an organization’s
computer systems including software development, computer networking and IT services. They
will work with each department’s requirements and needs after that develop a system based on
user requirements followed by implementation. Furthermore, they advise technical suggestions
on how to robust and effective their daily activities through system automation. They may also
help implement or design reliable system security or uninterrupted data assurance of overall
organization.

The importance of Information Technology over an organization is overwhelming and

noteworthy. Some major points are mentioned as: Improving the organization’s performance,
ability to do computations which were not possible before, decreasing activities and paperwork,
improving the quality and accuracy of tasks, improving the decision making, more relationship
and coordination in the institution level, improving customers' services, making a linkage
between consumers and goods suppliers, decreasing the time of work processes, supporting the
organizations’ strategies, improving the competition, and improving the redesign of work
process. [7] However, IT faces some challenges recurrently and they are accountable to take
prompt action to resolve or mitigate issues for the sake of uninterrupted services in an
organization. One of the main challenges that the IT industry has to face today is safety or
cybersecurity. The amount of data, identities and personal information that we share and with
which we interact daily is so high that making it safe has become a challenge, given the very
high value of said assets for any organization. Another major challenge is system integration. To
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understand different services, written in different technologies or languages, integrate correctly,
implementation and user acceptance is very crucial as well as challenging in many organizations.

5 Analysis and Findings

In Friendship organization, leaders are instructed to operate in an ingrained transactional style

base. Managers create tasks with timelines and assigned to particular employees to accomplish it
effectively. Their tendency is to get a job done at any cost without providing associate
requirements if necessary and proper guidelines and direction. If any employee succeeds in
submitting his task within the deadline, then he/she is rewarded at the time of performance
assessment at the end of each year otherwise he/she faces challenges to continue further in the
organization. Employees feel self-destructing sometimes because of less interest in innovative
approaches to particular tasks. Managers or leaders advised followers to not to think more about
the higher-level issues, longer-term planning, or innovative improvements because the system is
already developed and stable with necessary features and will not be changed recurrently and
we've got real work to do. Some managers are also observed practicing the bureaucratic
leadership style in particular cases. They are usually strongly committed to procedures and
processes instead of people, and as a result they may appear reserved and highly adverse. Their
target is to create and meet organization goals within the defined policy. As a result, employees
become demotivated to work hard and give effort to get the job done as well as dissatisfied to
supervisors followed by job nature and suffering from a person-job fit crisis which is alarming
for employees’ career growth and organizational performance in the long run. In addition, there
are some lacking and loopholes in improving employee’s skill development for career growth
through proper training and development process by HR. Managers are quite reluctant to suggest
proper training for his/her followers as they are not encouraged or advised themselves to get
trained for the purpose of improving and practicing their leadership style which are best fit for
better performance as well as organizational profit.

6 Recommendation

In most of the organization, leadership development nevertheless remains one of the least
explored topics within the field of leadership research (Avolio, Avey, & Quisenberry, 2010;
Harrison, 2017; Martinelli & Erzikova, 2017; Subramony, Segers, Chadwick, & Shyamsunder,

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2018). While some researchers continue to debate whether or not leadership is innate (Parent,
2013), in this article, to bridge the gap between the current practice and the expected outcomes,
training and development of leadership style is significantly important in every organization. In
that case, leadership development can be seen and prioritized by an organization as establishing a
real competitive advantage for fetching rivals in a competitive market-place. However, there are
various ways to adopt good leadership styles in a working environment. According to
organizational perspective, the best leadership style that could be seen from the three common
styles that were discussed above is the situational leadership approach. In this diverse working
environment like IT industry, it is also suggested that the company should adopt transformational
leadership style for IT department because transformational leadership can be considered an
important facilitator of technological communication, which enhances interactions among
organizational members and departments and improves the extent to which knowledge is shared
and is accessible for all employees. However, there is no "one size fits all" leadership style in the
world, hence the management is also advised to practice different techniques and approaches in
different circumstances to keep their employees motivated and satisfied in every aspect of their
work.

7 Conclusion

The top management plays a very vital role in an organization to carry the organization in a very
diplomatic way by which the role of employees is not much significant but they have to make
employees feel to be a part of their organization. In this context, it is important for the
organization to research the cause and effects of existing leadership style and let their managers
adopt the right leadership style for the well-being of employees and the organizational
performance. This report investigated the effect of leadership being practiced as well as the
impacts on the organizational performance. On the basis of the findings of this study, it can be
concluded that leadership style has both positive and negative effects on organizational
performance. It is recommended that transformational and situational leadership styles are the
best for the management of Friendship (NGO) to be adopted in order to achieve a strong foothold
in a global competitive environment.

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 8. Reference

[1] U. I. Abbas and C. O. Daniel, “The Impact of Engaging Leadership on Organisational

Performance,” Int. J. Business, Manag. Soc. Res., vol. 06, no. 02, pp. 367–374, 2019,
[Online]. Available: https://doi.org/10.18801/ijbmsr.060218.39.

[2] M. Personal and R. Archive, “Munich Personal RePEc Archive Leadership Style and
Organization Performance,” no. 70387, 2016.

[3] L. Veliu, M. Manxhari, V. Demiri, and L. Jahaj, “the Influence of Leadership Styles on
Employee’S Performance,” J. Manag. Soc. Sci. Vadyb. J. Manag., vol. 31, no. 231, pp.
59–69, 2017.

[4] R. M. Ojokuku, T. A. Odetayo, and A. S. Sajuyigbe, “Impact of Leadership Style on

Organizational Performance: A Case Study of Nigerian Banks,” Am. J. Bus. Manag., vol.
2, no. 1, p. 202, 2013, doi: 10.11634/216796061706212.

[5] W. George, “Transformational Leadership,” Enterp. Transform. Underst. Enabling

Fundam. Chang., pp. 69–77, 2006, doi: 10.1002/0470007826.ch4.

[6] D. S. Bhargavi and A. Yaseen, “Leadership Styles and Organizational Performance Dr.
Swapna Bhargavi 1 & Mr. Ibrahim Shehhi 2,” Strateg. Manag. Q., vol. 4, no. 1, pp.
87–117, 2016, doi: 10.15640/smq.v4n1a5.

[7] E. Chirani and S. M. Tirgar, “Information Technology’s Role in Organizations’

Performance,” Kuwait Chapter Arab. J. Bus. Manag. Rev., vol. 3, no. 1, pp. 16–22, 2013,
doi: 10.12816/0001277.

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