WALLAGA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

TITLE :THE ROLE OF LEADERSHIP ON THE ORGANIZATIONAL

PERFORMANCE

THE CASE ON COMMERCIAL BANK OF ETHIOPIA ABDISA AGA

BRANCH PROPOSAL SUBMITED TO THE DEPARTMENT OF
MANAGEMENT

Group Name IDNo

1 BADHASA GEZALI ALIYI...................................................1305249

2 MOHAMMED KEYRE.........................................................1305829

3 TIGIST MELKE...................................................................1305720

INSTRUCTOR : Mr :HINDIBU TESFA Dec 2023

Gimbi Ethiopia
 ABSTRACT

This research is to assess the role of leadership on organizational performance in case of

Commercial Bank of Ethiopia Abdisa aga branch.The study would use to both primary and
secondary source of data.

Primary data will collecte by both open ended and close ended questionnaires from the
employees of the organization and interview which are arranged and structured in a logical
sequence.

Whereas secondary data source are gather the organizational documents and internet. we would
use descriptive research design and to conduct this research paper then we would use census
survey because of small number of employees.

The total number of employees in the organization are 65 they work permanently.The collected

data will be process,analyze and interprate by using table and percentage.

Table Content. Page

ABSTRACT........................................................................................................................................................
CHAPTER ONE...............................................................................................................................................4
1. INTRODUCTION.......................................................................................................................................4
1.1 Back ground of the study.....................................................................................................................4
1.2. Background of the Organization.......................................................................................................4
1.3 Statement of the problem.....................................................................................................................6
 1.4 Research objectives...............................................................................................................................7
1.4.1 General objective...........................................................................................................................7
1.4.2 Specific objectives.........................................................................................................................7
1.5. Research question.................................................................................................................................7
1.6. Significance of the study....................................................................................................................7
1.7 The Scope of the study.........................................................................................................................8
1.8 limitation of the study...........................................................................................................................8
1.9 organization of the paper.....................................................................................................................8
1.10. Variables Factors of Leadership.....................................................................................................8
CHAPTER TWO..............................................................................................................................................9
2. REVIEW OF RELATED LITERATURE..............................................................................................9
2.1 INTRODUCTION.................................................................................................................................9
2.2 Definition of Leadership......................................................................................................................9
2.3 Gender differences in leadership......................................................................................................10
2.4 Leadership and management.............................................................................................................10
2.5 How leadership affects behavior, human relation and performance.........................................10
2.6 Diversity and global leader................................................................................................................11
2.7 Leadership skills..................................................................................................................................11
2.8 Relationships between leadership, power and authority..................................................................12
2.9 Role of Leadership on organizational performance.....................................................................12
2.10 Some Behaviors of an effective leader.........................................................................................13
2.11 Approaches of leadership................................................................................................................13
2.12. Leadership style................................................................................................................................14
CHAPTER THREE.......................................................................................................................................15
3. RESEARCH METHODOLOGY AND DATA COLLECTION....................................................15
3.1 Research Methodology.......................................................................................................................15
3.1.1 Introduction...................................................................................................................................15
3.2. Research Design.................................................................................................................................15
 3.3. Type and Source of data...................................................................................................................16
3.4 Target population...............................................................................................................................16
3.5 Sample techniques...............................................................................................................................16
3.6 Method of data collection..................................................................................................................16
3.7 Data processing and analysis............................................................................................................17
3.8 ethical considerations.......................................................................................17

3.9 Time and cost budget.............................................................................18

3.9.1 Time plan................................................................................................18
3.9.2 Budget plan............................................................................................19
Reference...................................................................................................... ..20

CHAPTER ONE

1. INTRODUCTION

1.1 Back ground of the study

Leadership has been a topic of interest since the dawn of man, Leadership management

Studies were taken up in earnest in the early twenty century. This hub chronicles of evaluation in
Leadership behavior studies from the traits of effective Leaders to follower centered Leadership
theories proposed in the late twenty century early twenty one century.

Leadership style is the relative consistent pattern of behavior that characterizes a leader. Leaders’
styles encompass how they related to other within and outside the organization. The style of an
organization leadership is reflected in both the nature of that organization and its relationship
with the community.
Different types of leadership style exist in working environments. Advantages and disadvantages
exist within each leadership style. The culture and goals of an organization determine which
leadership style fits the firm best. Some companies offer several leadership styles within the
organization such as laissez-faire, autocratic, participative or democratic, transactional and
transformational.

A laissez fair or free rain or delegate leader is lacks of direct supervision of employees and fails
to provide regular feedback to those under his supervision known as no leadership at all or
laissez fair leader delegates all responsibility for decisions alone without the input of others
managers possess total authority and impose their will on employees and it is task oriented and
depend on one way communication downward only.

Participative or Democratic leadership style often person centered. This leadership style involves
the values the input of team members including one or more group members determining what to
do and to do it. The leader maintains the final decision making authority.

Transactional leadership style managers using the transactional leadership style receive certain
tasks to perform and provide rewards or punishments to team members based on performance
results.

Transactional leadership style depends on high levels of communication for management to meet
goals. Leader motivates employees and enhances productivity and efficiency through
communication and high visibility.

The most fundamental role of leader is to define the organizational goal formulates plans and
organizes to achieve the goals through the execution of plans (lussies, 2005).

Leadership is complex concepts that will be define as the ability to influence, motivates and
enables others to the effectiveness and success of the organizations of which they are members.
They exist throughout the organization just only in the executive site (Steven, 2005)The
leadership of an organization is an ability of management to get and protect the company targets
and bringing them together to work in a better environment to achieve the common goals
(sansom, 1998).
According to Lufthansa (2005) there are four main generations of leadership theories include
Trait theory, Behavioral theory, contingency theory and Transformation theory.

Leadership is a social process in which leader seeks the voluntary participation of subordinates in
an effort to reach organizational goals.

1.3 Statement of the problem

Leadership and its role are the most concerning issue for the business and organization now days.
The leaders are individuals who establish direction for a working group of individuals and who
gain commitment from this group of members to established direction and who then motivate
members to achievements the direction outcome (conger 1992).

The term leadership will be view through multiple angles and concepts. Traditionally leadership
is a set of feature owned by the leader or it is a social phenomenon that comes from relationship
with groups. This concepts will be give different opinions about the definition of leadership
comes from personal qualities of a leader or a leaded makes follower ship through what she or he
does or believes (Grint,2004).

Recent reviews takes leadership as a process whereby an individual influences a group of

individuals to achieve a common goals. As a business environment became more competitive,
corporations may face to push themselves to very capabilities. However there are many
challenges that affect role of leadership on organizational performance. Other authors say that
effective leadership involves motivation, management, inspiration, remuneration and analytical
skills. When all these are present the organizations record increased employees satisfaction and
organizational performance that positively influence the productivity and the profits. Those
conclude that the role of organization performance is measured by the employees satisfaction
(Nor hours 2004).

The study will be to assess the role of leadership on organizational performance in the case
Commercial Bank of Ethiopia Abdisa aga branch. To identify the leadership style implemented
by the organization. is there those who creating smooth relationships with managers and
employees and then establishes conductive working environment for the achievement of goals by
detail identification and remedial measures.
1.4 Research objectives

1.4.1 General objective

The General objective of the study will be to assess the role of leadership on organizational
performance in the case Commercial Bank of Ethiopia Abdisa aga branch.

1.4.2 Specific objectives

1. To assess the effective of leadership organizational performance.

2. To identify the leadership style implemented by the organization.
3. To investigate the interaction between leader and follower.
4. To suggest possible alternative solutions that have improve the performance of employees in
the organization.

1.5. Research question

1. What is the effect of leadership on organizational performance?

2 .what type of leadership style does apply in the organization?
3. How does the corporation leader interact with follower?
4. What is to improve the performance of employees in the corporation?

1.6. Significance of the study

 After we will complete this study the organizations, we as well as employees of

organization are beneficially.

 It will enable we to acquire good knowledge about how to do research study.

 The study will provide current strength and weaknesses of commercial Bank of Ethiopia
Abdisa aga branch on the role of leadership on organizational performance.

 It will enable we to full fill degree of bachelor of art in management and exercise the way
of investigation.

 It will be help for other group as a secondary source for further investigation on the topic.
1.7 The Scope of the study

This study will focuse on commercial Bank of Ethiopia Abdisa aga branch. Due to time and
resource constraints the study would be delimited to commercial Bank of Ethiopia Abdisa aga
branch. The study also will focus only all employees on the commercial Bank of Ethiopia Abdisa
aga branch that it will be convenient to the research to further more manageable data.

1.8 limitation of the study

 The study will be focuse on the role of leadership on organizational performance only
limited to the commercial Bank of Ethiopia Abdisa aga branch

 Lack of skill and experience of we since it is the first research paper for them.

 unwillingness of some respondents to provide information or to return the questionnaire.

 Its final out put may not work in other organizations.

1.9 organization of the paper

The study will organized in three successive chapters.

The first chapter will contains introduction, background of the study, background of the
organization, statement of the problem, research objective such as general and specific objective,
research questions, significance of the study, and scope of the study, limitation of the study and
variables factors of leadership.

The second chapter will consists of literature review which is about the role of leadership on
organizational performance.

The third chapter will includes research methodology and design, data source, data collection
and data analysis and presentation
 CHAPTER TWO

2. REVIEW OF RELATED LITERATURE

2.1 INTRODUCTION

The primary purpose of this chapter is to get the theoretical understanding of the problem of role
of leadership on organizational performance.

2.2 Definition of Leadership

Leadership is a complex concept that is defined as the ability to influence motivates and enable
others to contribute to the effectiveness and success of the organizations of which they are
members. Leaders use influence to motivate followers and arrange the work environment so that
they do the job more effectively. They exist throughout the organization just only in the
executive site (Steven, 2005).

Leadership is defined as a social process in which leader seeks the voluntary participation of
subordinates in an effort to reach organizational goal. This definition implies that leadership
involves more than welding power one exercising authority and his exhibited on different levels.
At the individual level for example leaders build teams created and change at the group level.
Finally leaders built culture and create change at the organization level (Robert, 2003).

Some people say the leadership is difficult to define but we know it when we see it. Other argued
that a leader can only be defined as someone how has followers. As one respective scholar
acknowledge leadership is one of the most observed and last understood phenomena one earth
(Burn, 1998).

Leader ship is the process of influencing people and providing an environment for them to
achieve team or organization objectives. Effective leaders help group of people to define their
goals and find ways to achieve them (Duries and Toulouse's, 2002).

2.3 Gender differences in leadership

Several writers think so they suggest that women have interactive style consisting of more people
oriented and productive leadership. They say that women are more people oriented and
emotional in their leadership roles. Do woman adopt more people oriented and participative
leadership style? The answer is no and yes respectively. Leadership is studied in fields setting
have generally found that male and female leaders do not differ in their levels of task oriented or
people oriented leadership. The main explanation way men and women do not differ on this
styles is that real world job requires similar behavior from men and women job conditions.
Studies indicate that differences in the inherent leadership style between men and women.
Women tend to adopt a more Demonstrative leadership style. They encourage participation,
share power and information and attempting to enhance followers’ self-worth (Steven 2005).

2.4 Leadership and management

Leadership and management are not necessary the same. But are not compatible, effective
leadership in the organization create long term interests parties involved in the organization
developed strategy for moving towards that vision the support of employees to produce the
movement and motivated employees to implement the strategy whereas, management is the
process of planning, organizing, staffing, motivating and controlling through the use of formal
authority (Byars,2005).

2.5 How leadership affects behavior, human relation and performance

Leadership is the process of employees towards to work the achievement of objectives. There are
various styles of leadership. The leader’s styles affect behaviors to other world. The leader’s
behavior different from that of a Democratic leader. The human relation between leader and
follower will different according to the leadership style. The main reason for employs failure is
poor leadership (Lussier, 2005).

2.6 Diversity and global leader

Thinking globally and having global leadership are essential to effective organizations. Most
large companies conduct business in many parts of the world. This makes cultural awareness and
diversity in leadership necessary for business success in the increasingly global business
environment. According to Lustier seven major differences between the Japans and united state
countries were identified. The Japans have a longer length employment, use effective decision
making, use more collective responsibility, evaluate and promote employs more slowly, use
more implicit mechanism more slowly, have more specialized career path and have more holistic
concern employees.

2.7 Leadership skills

There is no recognition in both leadership theory and practice the importance of skills, how
leaders behave and perform effects vary. Both style and role activities are closely related to
skills. The research on leader traits continuous but in recent years increasing attention is being
given to identifying leader’s skill. There are many list suggested leadership in the practitioner
oriented skills critical to success in the global economy. According to Lufthansa there are five
leadership skills.

1. Cultural flexibility is the interaction assignments the skill refers to cultural awareness and
sensitivity. In Democratic organizations the same skill could be critical for success in sight of
increasing diversity.

2. Communication skill is effective leaders must be able to communicate in written form, orally
and none verbally. Leaders are communicators.

3. Human resource development is a part of leadership effectiveness leaders must have human
resource development skill of developing a leader learning climate designing and conducting
training programs. Transmitting information and experience assessing results, providing career
counseling creating organizational change and adopting learning materials.

4. Creativity is the problem solving invention and creativity provide to completive advantage in
to days global market place.

5 Self-management of learning is the skill refers to the need for continues learning of new
knowledge and skill.

2.8 Relationships between leadership, power and authority

Leadership in an organizational performance a clear understanding must be developed in the

relation among power, authority and leadership in an organization. Power is a measure of a
person’s potential to get others to do. What she or he wants them to do, as well as avoid being
forced by others to do what or he does not want to do. Source of power in organizational source
include reward power, coercive power or capacity to punish, legitimate power or person position
in an organization. Whereas personal source of power in an organization can be emerged from
expert power the skill experience and knowledge an individual possess and referent power or the
personal characteristics of an individual that make other people want associate with the person.
Authority which is the right to issue directives and expand resources is related to power but is
narrow can exert authority is a function of position in the organization hierarchy flowing from
top to the bottom of the organization (Bayer's, 2005).

2.9 Role of Leadership on organizational performance

Managers all over the world are recognizing the essential role that effective leadership is
important in organizational performance. Leadership is important in organization because
without effective leaders it will be difficult for an organization to achieve their goals. A true
leader’s job is to get the organization developing to get it operating at a high efficiency in order
to meet its goals. These visions are often innovation through the personal creatively and in sight
and creating an environment for free thinking. They also make it possible for others to bring
innovation to the organization at all level. They also support organizational freedom of
expression and protection for different opinion. In recent directed system they not only pass
along information they also make sure the information in the organization (Robert and Angelo,
2003).

2.10 Some Behaviors of an effective leader

According to drank (2007) Leadership behaviors including the following.Thinking critically is

carefully desire use respond analysis to reach a decision about what to believe of what to do. The
essence of critical thinking is a willingness to ask question and to open to be new ideas and new
ways to do things.

Solving problems client problems, paper work problems, staff problems and others that are
occurring frequently need to be solved.

Respecting the individuals although people have many things in common each individual have
different wants, needs and different life styles or experience. The effective leaders recognized the
differences in people and help them to find the rewards in their work for most them. In addition
skillful communication which includes listening of others, encouraging exchange of information
and feed backs are behaviors of effective leaders.

2.11 Approaches of leadership

According to Lufthansa (2005) there are four main generation of leadership

1. Trait theory is the idea that people are born with certain character traits. Since certain traits
are associated with proficient leadership. People who make good leaders have the right or
sufficient combination of traits. The problem with the trait approach lies in the fact that almost as
many traits as studies under taken were identified. These leadership traits are innate and
instinctive qualities that you either have or you do not. Some people are natural leaders and are
endowed with certain traits not possessed by others individuals.

2. Behavioral theories are leaders can be made rather than are born. Behavioral theories
successful leadership is based in definable, learnable behavior and can be trained. This
leadership theory focused on the actions of leaders not on personalities or characteristics they
possess.

3. Contingency theories focused on the particular variables related to the environment that might
determine which particular style of leadership is the best suited for the situations. According to
this theory there is no leadership style is best in all situations. Contingency theory is a class of
behavioral theory that contents there are no one best way of organizing or leading and that an
organizational leadership style is effective in some situation may not be successful in others
(Fiddler, 1967).

4. Transformation theories is a leadership believe that people are motivated by the task that must
be reformed. The more structured an organization is the greater the success. People give their all
to organization which can be their primary need and they will place their individual interest
second. Transformational leadership enhances the motivation, moral and performance of
followers through variety mechanism. These include being role model for follows that inspire
them and understanding the strength and weakness of followers, so the leader can align followers
with task that optimize their performance. According to burns, transforming leadership is a
process of which leaders and followers help each other to advance to a higher level moral and
motivations.

2.12. Leadership style

Leadership style depends on the situations including where the organization is in its life cycle.
According to boyars,(2005)the following are common leadership styles.

Autocratic the autocratic leadership style is the manager makes all the decision and dominant
team members. Generally, this approach is not a good way target to get the best performance
from team. However this style may be appropriate when urgent actions are necessary or when
subordinates actually prefer this style.

Participative the managers involve the subordinate in decision making by consulting team
members, which encourages employee ownership for decision. A good participative leader
encourages participation and delegates wisely.

Laissez fair is also called free rein in these hands of the leadership style the leader encourages
team members to independently and works out their problems by them selves, although he or she
is available for advice and assistance.

CHAPTER THREE

3. RESEARCH METHODOLOGY AND DATA COLLECTION

3.1 Research Methodology

3.1.1 Introduction

This research will use descriptive design and we will be analysis the collected data by using
descriptive, quantitative and qualitative tools and percentage.we will be used both primary and
secondary data.
 3.2. Research Design

The researchers will be used descriptive research design to describe the existing phenomena
obtaining information about the role of leadership on organizational performance in commercial
Bank of Ethiopia Abdisa aga branch and this research design is very important when the
statement of the problem is known. The goal of descriptive research is to offers we the profile or
to describe relevant aspects of the phenomenon of interest from an individual, organizational and
industry-oriented perspective. The objective of descriptive research is to portray an accurate
profile of person, events or situation (Robson 2002:59).

Descriptive study is used to describe the role of leadership on organizational performance in

Commercial Bank of Ethiopia Abdisa aga branch to provide relevant information that helps we
to achieve the objective. Research design is an arrangement of conditions and collection analysis.
It is amine that aims to combine relevance of the research purpose with economy in procedure. It
constitutes the blueprint for collection measurement and analysis data. (Kocheler 2002)

We will be use census survey because there is a small member of the employees. The research
would be conduct in Commercial Bank of Ethiopia Abdisa aga branch. In this organization there
are 65 employees that are work permanently.

3.3. Type and Source of data

We will use descriptive research design because we wants to describe the actual existing
conditions and obtaining information about the role of leadership on organizational performance.
To conduct this study we will use both primary and secondary source of data to achieve the
objectives of the study. The primary data source will to obtain data from managers through
questionnaire, and employees through interview in the organization. Secondary source of data
will use to collect data from organization documents and internet.

3.4 Target population

The target population for this study will be include all employees working in Commercial Bank
of Ethiopia Abdisa aga branch. according to the information obtained from Commercial Bank of
Ethiopia Abdsa aga branch the total population of this organization 65 employees exist in
number 50 males and 15 females.
 3.5 Sample techniques

The method we interested to use for conducting the study is census. The reason why we choose
census is because it is highly reliable and yields more pure and dependable information. In
general, the data derived through census, are accurate because it addresses all the entire available
employees in the bank.

To conduct these study we will use census method. The reason to use census method is that the
total population is manageable and small they can be addresses by the capacity.

3.6 Method of data collection

In order to gather primarily information we would be developed the appropriate questionnaire

from other similar group. Some modification to distribute to the respondents. The first section is
regarding the Demographic aspect of the respondent asking their gender, age, educational
qualification position and their experience in the organization.

We will use both primary and secondary data collection method to collect reliable information on
the role of leadership on organizational performance. The primary data is collected preparing
both open and closed ended questionnaires and Interview method. In the questionnaire for open
ended research was to provide the respondent. its own answer to the question is used qualitative
data collection method and close ended form use the respondent was asked to select its answer
from among a list of provide by we and we will be use quantitative data collection method.
Secondary data is collected from organizational document, internet report would be found in the
organization.

3.7 Data processing and analysis

The data collect have no meaning without analyzing and interpreting it. Therefore the data will
be processed and analyzed by using tables and percentage. After collected the required data
through questionnaires it would be analyzed using descriptive method. The method of data
analyzes for questionnaires and interview would be quantitative. The analyze data will be
presented by using tables, percentage and then we present after the research study.
 3.8 ethical considerations

It could not be ethical to access some confidential documents of the

organization.Therefore,theorganization code of ethics will taken in to account without significantly
compromising findings of the study.Also it may not be ethical to ask employees to answers questionaries
while they are at their work responsibility,enough time will given to respondents so that they can either
take the questionaries to their home or use their breaktime.

3.9 Time and cost budget

3.9.1 Time plan

The study will complete with in six months.The following tables explain each of important
phase necessary for conducting research

N0 Activity The months in the year

January February March April May June
Tittle selection X
Literature review X

Finding proposal X

Submission of proposal X

Data collection X
Processing X
Data analysis X
Report writing X
N0 Activity The months in the year
Final paper submission X

Presentation X

3.9.2 Budget plan

The research will be the cost amount of budget listed below with a given time,because to do a
research budget is also the most important and great role without budget cannot do a
research .Therefore, the researchers plan for the following budget plan.

No Item discription Quantity Cost per unit Total cost

1 Paper 2 110 220

2 Pen 5 10 50

3 Pencil 2 5 10

4 Flash 1 250 1250

5 Ruler 2 5 10

6 Transportation 10 5 50

7 Typist 1 200 200

8 Miscellaneous 1 90 90

9 Mabile card 2 50 100

Total 980

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