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RESEARCH PROPOSAL
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IMPACT OF LEADERSHIP STYLE ON ORGANIZATIONAL
ERFORMANCE: A CASE STUDY OF NIGERIAN

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BANKS

4/24/2014

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Vincent Mgbeze

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 IMPACT OF LEADERSHIP STYLE ON ORGANIZATIONAL
PERFORMANCE: A CASE STUDY OF NIGERIAN BANKS
(Executive Master in Business Administration, OAU, Ile-Ife)

BY

MGBEZE VINCENT AZUBUIKE

Registration Number ADP12/13/EX/MBA/2695

RESEARCH METHODOLOGY (MBA 632)

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Table of Contents
ABSTRACT.............................................................................................................................4
INTRODUCTION..................................................................................................................5
BACKGROUND TO THE STUDY...............................................................................................................................5

STATEMENT OF THE PROBLEM....................................................................................................................6

OBJECTIVE OF THE STUDY ................................................................................................................................6

RESEARCH QUESTIONS .....................................................................................................................................6

HYPOTHESES....................................................................................................................................................6

SIGNIFICANCE OF THE STUDY ...........................................................................................................................6

SCOPE OF THE STUDY......................................................................................................................................6

PLAN OF THE STUDY.................................................................................................................................................7

LITERATURE REVIEW...........................................................................................................................8
CONCEPTUAL CLARIFICATION AND THEORETICAL FRAMEWORK ................................................................8

STRATEGIC LEADERSHIP .............................................................................................................................................8

MANAGERIAL SKILLS ...................................................................................................................................................9

LEADERSHIP APPROACH...............................................................................................................................9

LEADERSHIP SKILLS........................................................................................................................................................ 12

RESEARCH METHODOLOGY.....................................................................................................14
RESEARCH DESIGN .....................................................................................................................................................14
POPULATION & SAMPLE ...........................................................................................................................................14
RESEARCH INSTRUMENT......................................................................................................................................14

DATA ANALYSIS & RESULT...........................................................................................................................15

TESTING OF HYPOTHESIS .................................................................................................................................15

DISCUSSION OF FINDING ................................................................................................................................16

CONCLUSION ..................................................................................................................................................16

REFERENCES....................................................................................................................................................16

APPENDICES..............................................................................................................................................18

APPENDIX 1: TABLE.....................................................................................................................................18

APPENDIX 2: QUESTIONAIRE .....................................................................................................................19

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 Abstract

Purpose – This study aims to examine the impact of leadership style on

organizational performance in selected Banks, in Lagos, Nigeria. It provides significant
value for both practitioners and academics.

On the practical side, it seeks to inform managers that they can adapt their
leadership behaviors or styles in order to enhance subordinates’ organizational
commitment, improve work performance, and consequently increase a
positive working atmosphere.

Academically, the study aims to provide additional insights into the leadership field
by contributing to the future development of this study area.

Methodology - Purposive sampling technique was adopted in selecting a total of

sixty (60) respondents as sample for the study, while relevant data was gathered
with the aid of a structured questionnaire.

Findings – The transformational and democratic leadership style has a positive

association with organizational performance more than other styles.
Transformational leaders produce higher leadership outcomes as well.

Practical implications – By applying the results in practice, managers can adjust

their leadership styles to support organizations in producing high work
performance and increasing organizational outcomes, whereas the human
resource management function of banking industries can also utilize these results
for the leadership development effort in their organization.

Value: This paper is aimed at understanding the impact of leadership style in the
Nigerian banking industry and its effect on the organization.

Keywords: Leadership, Banking industry, Performance management, Leadership

Styles, organizational performance

Paper Type: Research Paper

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 CHAPTER ONE

INTRODUCTION
1.1. Background to the Study
Leadership style is a key determinant of the success or failure of any
organization. Effective leadership is essential for every organizational
management and leadership style is an important variable having
significant impact on the success of the organization. In practice, there are
many problems facing an organization and the causes of the problems can
often be traced to the managers. Some of them may have insufficient
competencies or their traits may not fit with the nature of their work.
Besides, they may use inappropriate leadership styles in dealing with
subordinates on projects. Effective performance and great work outcomes
from subordinates are always desirable, but they do not always happen.
People normally respond well only to appropriate types of leadership. The
best style would lead them to work effectively (Likhitwonnawut, 1996).

Leadership is one of those qualities that you know when you see it, but is
difficult to describe. There are almost as many definitions as there are
commentators. Many associate leadership with one person leading. Four
things stand out in this respect;
First, to lead involves influencing others. Second, where there are
leaders there are followers. Third, leaders seem to come to the fore when
there is a crisis or special problem. In other words, they often become visible
when an innovative response is needed. Fourth, leaders are people who
have a clear idea of what they want to achieve and why. Thus, leaders are
people who are able to think and act creatively in non routine situations and
who set out to influence the actions, beliefs and feelings of others. In this
sense being a “leader” is personal. It flows from an individual’s qualities and
actions. However, it is also often linked to some other role such as manager
and expert. Here there can be a lot of confusion. Not all managers, for
example are leaders and not all leaders are managers.

Leaders need a new mix of competencies to properly shape their board and
develop their subordinates to meet 21st century challenges. Shifting
cultures, rapidly changing technology and other factors will require new
patterns of leadership. The 21 st century leaders will need greater awareness
of diverse factors and new sets of competencies - characteristics that lead
to success on the job – to help them make relevant, correct and timely
decisions in the leadership of change and leadership of people.

An important factor in the leadership process is the relationship that a leader

has with individual followers. Previous researches have shown that successful
interaction between leaders and their followers are central to the
overall functioning of an organization {Noormala and Syed, (2009); Graen and
Uhl- Bien, (1995)}. High quality leader-fellower relationships have been found
to have impact on employee performance, organizational commitment,
delegation, empowerment and job satisfaction Noormala and Syed, (2009);
Gerstner and Day, (1997)}. One rationale for this study is that good leader-
fellower relationships are vital to ensure the effective functional of
any organization.

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1.2. Statement of the Problem
In recent times, many organizations in the Nigerian banking industry, have
recorded cases of immoral and unethical banking practices, gratifications,
high labor turnover, inability to meet basic required obligations, and
incessant financial distress syndrome, which has led to many banks being
merged and acquired. This may be as a result of lack of effective
leadership. The prime motive of many organizations is to achieve its stated
objectives, hence the need to effectively coordinate and motivate the
workers by an effective leader. Unfortunately some organizations do not
take cognizance of the leadership style adopted by their managers.

1.3. Objective of the Study

The objective of this study can be stated as follows;
1. To identify the style or styles of leadership adopted by the Managers.
2. To investigate the impact of leadership style on employees’ performance in the
Nigeria Banking environment, this invariably translated to organizational
performance.
3. To make suggestions on leadership patterns with the view of improving
employees’ performance.

1.4. Research Questions

The study would examine the following questions;
1. To what extent does leadership style influence organizations’
performance?
2. How does leader-employee relation affect organizational growth?
3. What are the factors that hinder cordial leader-employees relationship?
4. What leadership style could be adopted to improve employees’
performance?

1.5. Hypotheses
H0: Leadership style dimensions have no significant effect on organizational
performance in selected Banks in Nigeria.
H1: That leadership style impacts on the performance of workers in an
organization.

1.6. Significance of the Study

The significance of this research work is that it would explore the impact of
leadership on the performance of employees in organizations with special
references to Nigeria context. This particular industry was chosen because of
the rigor employees are made to go through in the industry in the course of
meeting the targets of the management. This has affected the economic, social
and private lives of the employees. It is intended to investigate
whether employees’ performance is related to the leadership style adopted by the
management. It is hoped that this study would contribute to the promotion of
the existing frontier or boundary between human knowledge and strengthen
the relationship between the management/employer and the employee in
Nigeria banking industry.
1.7. Scope of the Study
This study will be limited to the influence of leadership and leadership style
on the performance of employees in the banking industry in Nigeria. The
research work will focus mainly on leader-follower relations and how it
affects the performance of the organization. The study also aims at using

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 keystone Bank Limited for the sampling of opinions. The field survey shall
be conducted in Lagos because it is the commercial nerve centre of
the country.

1.8. Plan of the Study

This research work will be divided into three (3) chapters. The first is the
introduction. Chapter two will focus on literature review and theoretical
framework of leadership, while chapter three will be based on the
methodology stating the sample design, method used and ends with the
conclusion.

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 CHAPTER TWO

LITERATURE REVIEW
This chapter covers a review of concepts (Conceptual Clarification and
Theoretical Framework).

2.1. Conceptual Clarification and Theoretical Framework

Leadership is an elusive concept. The concept may differ from one person,
or situation, to the other. Previous views about leadership show it as personal
ability. Gray (2004) believes that managing the performance of others is often
characterized as “leadership”. True leadership provides a strong sense of purpose
and which harnesses the creative energies of all the people in the
business, it is a key ingredient to making strategic change effective and
lasting. Lee and Chuang (2009), explain that the excellent leader not only
inspires subordinate’s potential to enhance efficiency but also meets their
requirements in the process of achieving organizational goals. Okoh (1998)
defined leadership as the ability to induce or persuade by any legitimate
means, all subordinates or followers to contribute willingly to organizational
objectives in accordance with their maximum capacity. According to Ulrich,
Zenger and Smallwood (1999), “leaders build not only individual but also organizational
capacity.” And “organizational capacity refers to the processes, practices,
and activities that create value for the organization” (Ulrich Zenger and Smallwood,
1999). Fry (2003) explains leadership as use of leading strategy to offer
inspiring motive and to enhance the staff’s potential for growth and
development. Effective leadership is the extent to which a leader
continually and progressively leading and directing his/her followers to the
agreed destination which is defined by the whole group (Omolayo, 2000).

A fast changing and increasingly complex business environment like

banking sector requires visionary leadership, and leaders who are willing to
learn, experiment and influence organizational change (Meyer, Botha 2000).
In this way leadership can be in terms of two key constituents: knowing what
should be done, and influencing others to cooperate in doing it. White (2004)
advocates flexible plans capable of adjustment to suite changing
environmental circumstances. The role of planning diminishes with the speed of
change, youthfulness of an industry and the degree of competition.
Harrison and St John (2004) include strategic direction, which is defined in
terms of a firm’s vision of where it is heading, the businesses in which it is involved,
and the stakeholders it serves.

2.1.1. Strategic Leadership

Strategic Leadership is a process, which allows management to be proactive
rather than reactive in shaping its own future. A focused
organizational leader develops a proactive approach to strategic
management, rather than just identifying and responding to change,
anticipates or even creates the change. According to Harrison (2003),
strategic leadership generally refers to leadership behaviors associated with
creating organizational vision. Establishing core values, developing
strategies and a management structure, fostering organizational learning,

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 and serving as a steward for the firm. Harrison (2003) indicates that senior
executive management has a significant impact on the strategies and
performance of their organizations. Just as excellent leadership can have an
enormous positive influence; poor leadership can have a powerful negative
influence. Any of business organization with high degree of perspective
approach will have management that have shared view and vision and
make a positive impact on the environment where it operates. Strategy is
needed to focus effort and promote coordination of activities.
Without strategy an organization becomes bunch of individuals, hence
strategy is required to ensure collective actions and concentration of
efforts towards achieving organizational plans and objective.

2.1.2 Managerial Skills

Managerial skills are sets of qualities and attributes in the personality of
managers that enable them to effectively manage the working of a firm.
Good managerial skills can create a world of difference in the efficiency and
performance of the organization. American Management Association
has identified important skills i.e. conceptual, communication, effectiveness,
and interpersonal skills. These skills helps manager to execute the
policies and activity associated with being a manager. Jack Welch
(2008) coined ten quantities or skills for effective Managers in completive
market, such as multi-skilling, proactive, Mater-in-charge, Global vision,
become tomorrow’s manager today, winning strategies, complete
manger, global mindset, Managing Complexity, Global-local
balance, (Strategic competency management Indian perspectives). In
the banking industry, it has long been found that managerial effectiveness has
significant role to play in bank performance, in addition to other factors
like capital adequacy, asset quality, earnings power and liquidity
(Adekanye, 1992). Essentially, ten key business leadership skills needed to
succeed as a leader in organizations include; leading by example, passion,
organization, delegation, taken ownership and responsibility, effective
communication, braveness and honesty, listening to followers, knowing the
followers, and being a leader- follower.

2.2. Leadership Approach

Leadership is life blood of any organization and its importance cannot be
underestimated. Many authors have studied this phenomenon, but there is
no conscious definition of what leadership is, no dominant paradigm for
studying it, and little agreement regarding the best strategies for developing
and exercising it (Bennis, 2007; Hackman & Wageman, 2007; Vroom &
Jago, 2007). Omolayole (2006) views leadership as that kind of direction,
which a person can give to a group of people under him in such a way that
these will influence the behavior of another individual, or group. Ngodo
(2008) perceives leadership to be a reciprocal process of social influence, in
which leaders and subordinates influence each other in order to
achieve organisational goals. Leadership style is viewed as the combination
of traits, characteristics, skills and behaviours that leaders use when
interacting with their subordinates (Marturano & Gosling, 2008, Jeremy et
al., 2011). Flippo & Musinger (1999) see leadership as a pattern of
managerial behavior designed to integrate personal or organizational
interest and effect, in pursuit of some objectives.

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Fiedler (1969) postulates that leadership style refers to a kind of relationship
whereby someone uses his ways and methods to make many people work
together for a common task. In modern leadership theories, five leadership
styles have been presented, including (i) charismatic leadership, (ii)
transactional leadership, (iii) transformational leadership, (iv) visionary
leadership, and (v) culture-based leadership (Yukl, 1994; Bass, 1990; Sashkin,
1996; Sergiovanni, 1987). Tannenbanum and Schmidt (1958) also identify
four different types of leaders which have been most widely accepted
and
used. These leadership styles, which centre around Mc Gregor’s Theory ‘X and Y’
assumptions, are democratic, autocratic, dictatorial, and laissez faire
leadership styles.

Below is a brief examination of some common leadership style dimensions

listed above and their potential impact on a group as well as their
relative usefulness.

Autocratic Style: Central to the operation of the Authoritarian’s style is the leader’s
responsibility for outcomes. While some input is sought from subordinates, the
leader regards his/her influence as the key element in any major decision or
job outcome. The Authoritative leader accomplishes ends through
imparting a clear, compelling vision, sees to it that the vision is built into
strategic planning, and that it guides action throughout the organization. The
Authoritarian provides clear directions, monitors progress
closely, and convinces subordinates of the position s/he wishes them to
adopt by explaining why certain things are expected, done, or required and how
individual actions fit into the larger picture. The feedback Authoritarian
offers may be positive or negative but clear, and treatment of subordinates
tends to be firm but fair. This kind of leadership is the most common one in
Asia. It may shade over into a Directive style when subordinates are given
very little power or decision making authority.

Bureaucratic Style: Bureaucratic leaders create, and rely on, policy to meet
organizational goals. Policies drive execution, strategy, objectives and
outcomes. Bureaucratic leaders are most comfortable relying on a stated policy
in order to convince followers to get on board. In doing so they send a
very direct message that policy dictates direction. Bureaucratic leaders
are usually strongly committed to procedures and processes instead of
people, and as a result they may appear aloof and highly change adverse. The
specific problem or problems associated with using policies to lead are not
always obvious until the damage is done. The danger here is that leadership’s
greatest benefits, motivating and developing people, are ignored by bureaucratic
leaders (Michael, 2010).

Charismatic Style: Also known as pacesetters, they are star performers

who lay sole claim to the limelight and seek it as a core goal. A
Pacesetter would rather do a job him/herself and is so good at what s/he
does that s/he is reluctant to delegate. Leadership is achieved through setting
an example, rather than through instruction or intentional staff development,
establishment of high standards, and through imparting enthusiasm. People
follow the Pacesetter because of who s/he is and/or what s/he can do,
rather than because of his/her leadership skill. The Pacesetter tends to

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become coercive when a subordinate fails to live up to expectations or
when there is trouble. What succeeds as a Charismatic leader in one
country may be an entirely different kind of person from the one who succeeds
as a Pacesetter in another. Who “looks like” a leader depends heavily on culture.

Democratic Style: A Democratic leader “believes in” people and relies on the
functioning of a group or team to achieve results. Subordinates take part in
the decision making process, and decisions result from a group consensus.
There are frequent meetings, and subordinates are listened to by the leader.
The style tends to foster responsibility, flexibility, and high morale. Because
staff are engaged in decision making and planning, there is a tendency for
them to be more realistic about what is and is not possible. The Democratic
leader considers close supervision unnecessary after trust has been
established, and negative feedback is offered sparingly. Participative leadership
is more common in Europe and is sometimes required by law (as in northern
Europe, especially Germany). A variant of Participative leadership with cultural
overtones is common in Japan as well as some other Asian countries.

Transactional Style: Transactional leaders focus mainly on the physical and

the security needs of subordinates. The relationship that evolves between
the leader and the follower is based on bargaining exchange or reward
systems (Bass, 1985; Bass and Avolio, 1993).

According to J. Antonakis et al. (2006), transactional leadership is based on

the exchange process to fulfill its contractual obligations and is usually
described as set of objectives monitoring and controlling the outcome.
Transactional leadership is theorized to consist of the following three first-
order factors:

(a) Contingent reward leadership (transactions constructive) refers to leader

behavior focused on explaining the role and job requirements and providing
followers with material or psychological reward depends on the fulfillment of
contractual obligations,
(b) Management-by-exception active (transaction active correction)
refers to the active monitoring of the goals of the leader is to
ensure that standards are met and,
(c) Management-by-exception passive (passive correction transaction) only
after the intervention of non-compliance has occurred or when the
error occurred.

Transformational Style: Transformational leader encourages subordinates

to put in extra effort and to go beyond what they (subordinates) expected
before (Burns, 1978). The subordinates of transformational leaders feel trust,
admiration, loyalty, and respect toward leaders and are motivated to
perform extra-role behaviors (Bass, 1985; Katz and Kahn, 1978).
Transformational leaders achieve the greatest performance from
subordinates since they are able to inspire their subordinates to raise their
capabilities for success and develop subordinates’ innovative problem solving skills
(Bass, 1985; Yammarino and Bass, 1990). This leadership style has also been
found to lead to higher levels of organizational commitment and is
associated with business unit performance (Barling et al., 1996).

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 According to J. Antonakis et al. (2006), transformational leaders are proactive,
raising awareness for the collective interests of his transcendent, and his
assistance to achieve extraordinary goals. Transformational leadership is
theorized to consist of the following five first-order factors:

(a) Idealized Influence (attributed) refers to the socialized

charismatic leader, whether the leader is seen as confident and powerful,
and whether the leader is seen as focused on the ideals that higher-order
and ethics;
(b) Idealized Influence (behavior) refers to charismatic leaders act based on
the values, beliefs, and sense of mission;
(c) Inspirational Motivation refers to the way energy leaders see
their followers with 264 J. Antonakis et al. / Leadership Quarterly 14 (2003)
261- 295future with confidence, stressing ambitious goals, projecting a
vision of his superior and communicate that vision can be achieved;
(d) Intellectual stimulation refers to the actions of leaders who appealed
to his sense of 'logic and analysis by challenging followers to think
creatively and find solutions to difficult problems and
(e) Individual consideration refers to leader behaviors that contribute to
his satisfaction with advising, support, and pay attention to the individual
needs of followers, and thus enable them to develop and self-actualize.

2.3. Leadership Skills

2.3.1 Leadership Outcomes
The outcomes from leadership quality consist of three measurable factors:
(1) Effectiveness (reflects the leader’s efficacy in achieving organizational outcomes,
objectives, goals and subordinates’ needs in their job);
(2) Satisfaction (reflects the degrees to which subordinates are satisfied with
their leader’s behavior and the leader works with others in a satisfactory way);
(3) Extra Effort (reflects the degrees to which the leader can increase
subordinates’ desire to succeed and subordinates exert effort higher than their
normal rate).

2.3.2 Organizational Commitment

Porter et al. (1974) defined the word “commitment” as the strength of an individual’s
identification with and involvement in a particular organization. They explained
that commitment has three major components: a strong belief in and
acceptance of the organization’s goals and values; a willingness to exert
considerable effort on behalf of the organization; and a definite desire to
maintain organizational membership.

2.3.3 Work Performance

The success of any work is usually stated in terms of meeting three major
objectives: completion on time, completion within budget, completion
at the desired level of quality or technical specification (Tukel and Rom,
2001; Xiao and Proverbs, 2003).
The framework of this study is guided by the various leadership theories
abound in literature. These range from the trait theories that emphasize certain
personal qualities and characteristics as basis for successful
leadership; style theories that put emphasis essentially on a leader’s

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behavior at work; contingency theories that emphasize settings which
include characteristics of the employees, the nature of the task they
perform, and characteristics of the organization; to the theory of distributed
leadership, which emphasizes what one does and not who one is, as the basis
for successful leadership. The theories argue that leadership at all levels
matters and must be drawn from, not just be added to individuals and
groups in organizations. From the foregoing, it is obvious that while some
scholars believe that leadership enhances organizational performance while
others contradict this, different concepts of leadership have been
employed in different studies, making direct comparisons virtually
impossible.

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 CHAPTER THREE

RESEARCH METHODOLOGY
3.1. RESEARCH DESIGN
Primary data shall be used in the course of this research work. It shall be
sourced via the survey method i.e. the questionnaire designed by the
researcher and distributed to the respondents. The researcher would then
collect the filled questionnaire from the respondents in order to analyze the
data collected with the appropriate statistical instrument (s).

Pearson product moment correlation was used to examine the

relationship between leadership style dimensions and organizational
performance, while Regression analysis was used to examine the significant
effect of leadership style dimensions on followers and performance.

3.2. Population and Sample

The study covered twenty (20) randomly selected banks in Lagos
metropolis, Lagos State, Nigeria. A structured questionnaire was used in
gathering relevant data from the branch managers, heads of operations,
junior staff, and accountants face to face respectively. 60 questionnaires
were filled and returned by the respondents.

3.3. Research Instrument

Leadership scale adopted by Zhu (2002) and Li (2002) was used in this
research work. Leadership behavior was divided by its frequency performance
into 5 levels, including “never”, little”, “occasionally”, “often” and “always” as
scored by Likert’s five -point scoring. Sample of questions were: “My supervisor
rewards performance when his/her expectations are
fulfilled”, “My supervisor will provide a new thinking approach for my difficult
problem ”, “My supervisor is not present when he/she is needed”, “My supervisor will
inspire me with new ways to think about old problems” , “My supervisor speaks
enthusiastically about our goals as a team” , “Unless the problem gets worse, my supervisor
interferes ”, “ My supervisor makes me feel proud of being a member of the department
”,“I am confident in my supervisor”.

In respect to measuring the reliability of the scale, the reliability coefficients

(Cronbach’s) of the charismatic leadership, the transactional leaders hip, the
transformational leadership, the autocratic leadership, the bureaucratic
leadership and the democratic leadership were 0.823, 0.791, 0.807, 0.644,
0.790 and 0.754 respectively .Organizational performance scale was used to
assess respondents’level of their organizational performance compare with their
competitors in the banking industry. The scale was subjected to item
analysis in order to ensure it is valid and reliable and it yielded reliability
alpha of .76.

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3.4 Data Analysis and Results
Data from respondents were analyzed in the form of descriptive statistics.
The relationship between leadership styles, leadership outcomes,
subordinate commitment and work performance was examined through
correlation analysis using Pearson Correlation Table. The result in table 1
shows that leadership dimensions have both positive and negative
relationship with organizational performance, specifically, charismas style of
leadership, transactional style of leadership, and bureaucratic style of
leadership have negative effect on organizational performance with (r= -
0.337, -0.186, -0.287: df = 53; P<.001) respectively. This implies that charismas
style of leadership, transactional style of leadership, and bureaucratic style
of leadership do not induce employees to perform as expected. This
indicates that these styles of leadership demoralize employees and this may
lead to high turnover intension. However, transformational style of leadership,
autocratic style of leadership and democratic style of leadership have
positive effect on organizational performance with (r =0.215; 0.016 and 0.109:
df = 53; P<.001) respectively, which indicate that transformational style of
leadership, autocratic style of leadership and democratic style of leadership
induce employees in Nigeria banking industry to perform as expected.

3.5. Testing of Hypothesis

Ho: Leadership style dimensions have no significant effect on
the organizational performance.
The result shows that leadership style dimensions (charismas, transactional,
bureaucratic, transformational, autocratic and democratic style of
leadership) were joint predictors of organizational performance (F (6, 53) =
2.635; R2 = 0.23; P <.05). The predictor variables jointly explained 23% of the
variance of organizational performance, while the remaining 77% could be due
to the effect of extraneous variables. Charismas leadership style (β = -
0.395; t = -2.511; P<.05); bureaucratic leadership style (β =-0.562; t = -2.208;
P<.05) were significantly independent predictors of organizational
performance.

This implies that both have negative significant effect on followers and
performance. This means that leadership’s greatest benefits, motivating and developing
people are ignored and this will not induce employees to perform as
expected. Furthermore, transactional leadership style (β= -0.61; t
= -0.296; P ns) has negative effect but not significant on followers and
performance. However, transformational style of leadership (β = 0.44; t= 0.298; P<.05)
and democratic style of leadership (β = 0.001; t= 0.010; P<.05) were significantly
independent predictors of organizational performance. This implies that both
have positive significant effect on followers and performance. This indicate that
transformational and democratic styles of leadership focus on the development
of value system of employees, their motivational level and moralities with the
development of their skills and this induce employees to perform as
expected. Also bureaucratic style of

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 leadership (β= 0.072; t = 0.581; P ns) has positive effect but insignificant on
followers and performance.

3.6. Discussion of Findings

The objective of this research work was to examine the significant effect of
leadership style on organizational performance. From the result, it was
discovered that there is positive and negative correlation between
leadership style dimensions and organizational performance, the model
gives good account of dependent variable of organizational performance
on leadership style dimensions. The coefficient of determinant of R= 0.23
indicates that 23% variation in organizational performance is accounted for
by good leadership style. This finding agrees with the work of Howell and
Frost (1989), Fu-Jin et al. (2010), Obiwuru et al (2011), and Jeremy et al.
(2011) that leadership style has significant effect on organizational
performance.

3.7. Conclusion
This study has investigated the effect of leadership style on organizational
performance in Nigerian banks. The results of this study revealed that there is
strong relationship between leadership style and organizational performance.
On the basis of the findings of this study, it can be concluded that
leadership style has both positive and negative effect on organizational
performance. The study found that transformational and democratic
leadership style, in which employees are allowed to have sense of
belonging, carry out higher responsibility with little supervision, and followers
are helped to achieve their visions and needs enhance organizational
efficiency. Surprisingly autocratic leadership style also has positive effect on
banks’ performance although is insignificant. It is concluded that
transformational and domestic leadership styles are the best for the
management of Nigerian banks to be adopted in order for them to wax stronger
in a global financial competitive environment.

3.8. References
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The factor structure of Bass’s Multifactor Leadership Questionnaire in the South
African Context. Journal of Industrial Psychology, 26 (2), 58-65.
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Akpala, A. (1998). Igbo Cultural Factors that may bear on
Management and Organizational Performance in Nigeria. In Imaga, E. U. L.
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publishers.
Allen, N.J. & Meyer, J.P. (1990). The measurement and antecedents of
affective, continuance and normative commitment to the organisation.
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Bass, B. M. 1997. Personal selling and transactional /transformational
leadership, Journal of
Personal Selling and Sales Management 17(3), 19-28
Beer, T.A. & Newman, J.E. 1978. Job stress, employee health, and
organizational effectiveness ：A facet analysis, model and literature review,
Personnel Psychology, 31, 665-699.

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 Bower, D. G.. 1969. Predicting organizational effectiveness with a four -
factor theory of leadership, In Gibb C. A.,Leadership: Selected Readings,
Baltimore, Maryland: Penguin.
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Research. The Leadership Quarterly, 10(2): 45-169.
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 Appendices
3.9.1. Appendix 1: Table

Table1. Pearson correlation: Showing the relations of leadership style dimensions

and organizational performance.
Variables Mean SD 1 2 3 4 5 6 7
Organizational
Performance 22.030 1.562 1.000
-
Charismas Leadership 3.683 1.396 0.337** 1.000
-
Transactional Leadership 3.083 1.062 0.186** 0.224 1.000
Transformational -
Leadership 4.767 0.427 0.215** 0.240 0.193* 1.000
-
Autocratic Leadership 1.950 1.419 0.016** 0.042 -0.310 -0.19 1.000
-
Bureaucratic Leadership 2.317 0.892 -0.287* 0.122 0.222* -0.34 0.200 1.000
-
Democratic Leadership 4.950 6.662 0.109** 0.204 -0.100 0.073 -0.05 -0.05 -
Note: **P<.001 * P<.05

Table 2. Model Summaryb

Std. Error of the
Model R R Square Adjusted R Square Estimate Durbin-Watson
1 .479a 0.230 0.143 1.446 1.060
a. Predictors: (Constant), democratic, autocratic, transactional, transformational, charismas, bureaucratic
b. Dependent variable: orgp stands for organization performance

Table 3. ANOVAb

Sum of
Model Squares Df Mean Square F Sig.
Regression 33.066 6 5.511 2.635 .026a
Residual 110.867 53 2.092
Total 143.933 59
a. Predictors: (Constant), democratic, autocratic, transactional, transformational, charismas, bureaucratic
b. Dependent variable: orgp

Table 4. Coefficientsa
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) 24.053 3.011 7.988 .000
Charismas -.395 .157 -.353 -2.511 .015
Transactional -.061 .206 -.041 -.296 .768
Transformational .161 .541 .044 .298 .017
Autocratic .080 .137 .072 .581 .564
Bureaucratic -.562 .254 -.321 -2.208 .032
Democratic .000 .029 .001 .010 .012
a. Dependent variable: orgp

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 3.9.2. Appendix 2: Questionnaire

Section A:1

Dear respondent,

I am an MBA student at Obafemi Awolowo University (O.A.U.) conducting a

research study on the topic of, impact of leadership style on organizational
performance, a case study of Nigerian Banks
You have been carefully chosen as one with capacity to help in gathering
this information that will contribute to the expected results of this research.
All the information provided will be treated with utmost confidentiality it
deserves and it will strictly be used for academic research.
I pray that you answer objectively all the questions to enable me contribute to the
creation of knowledge.

Thank you in advance.

Purpose

1. To identify the style or styles of leadership adopted by Bank’s Managers.

2. To investigate the impact of leadership style on employees’ performance in
the Nigeria Banking environment.

Directions
1. For each of the statements below, tick the circle that indicates the
degree to which you agree or disagree.
2. Give your immediate impressions. There are no rights or wrong answer

Personality Assessment

1. Which of the Banks do you work for?

2. Are you a male or female?
3. What year did you join this bank?
4. What is your current grade or level?
5. What is your job designation or title?

Leadership Style Assessment

Tick the appropriate answer basing on the scale below

Frequency 1 2 3 4 5
Performance Never Little Occasionally Often Always

1. My supervisor rewards performance when his/her expectations are fulfilled.

2. My supervisor will provide a new thinking approach for my difficult problem.

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 3. My supervisor is not present when he/she is needed.

4. My supervisor will inspire me with new ways to think about old problems.

5. My supervisor makes me feel proud of being a member of the department.

6. My supervisor speaks enthusiastically about our goals as a team.

7. My supervisor interferes only when the problem gets worse and out of hand.

8. I am confident in my supervisor.

9. My Supervisor gives orders and clarifies procedures.

10. Supervisors should give subordinates complete freedom to solve problems on their own.

11. Do your supervisors often chat with employees about their lives outside work?

12. Can you turn to your supervisor for guidance during and after a particular
stressful situation?

13. Do others count on your supply of information and wisdom?

14. Does your supervisor introduce new people to new ideas and new paths?

15. Has any of the employees ever called your supervisor a perfectionist?

16. Is your supervisor often the “idea person” and the driver of new initiatives?

17. Can you regard your supervisor as being methodical about collecting facts before
making a decision?

18. Does your supervisor act as the go-between when others are in conflict, or during
negotiations?

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