EFFECTS OF LEADERSHIP STYLES

AND ORGANIZATIONAL CULTURE ON

FIRM PERFORMANCE: EVIDENCES
FROM BANKING SECTOR OF KARACHI
INTRODUCTION:

This study aims to extend the effects of organizational culture which are

classified in this study as: Competitive Culture, Community Culture,

Bureaucratic Culture and leadership styles which are: Humanistic-based and

mechanistic- based leadership on Firm performance. It shows evidences from

Banking Sector of Karachi.

AIM OF THE STUDY:

 The aim of this study is to extend and expand the effects of the

relationship between organizational culture .

 This study also investigates the organizational culture phenomenon

and leadership styles in Banking Sector.

PROBLEM STATEMENT:

 In a corporate group, lack of effective organizational culture

and poor cultural integration affect organizational

performance and decrease shareholders return.

 The general business problem was that some company

managers lack an effective organizational culture, which often

results in poor performance and loss of productivity within the

corporate group.
RESEARCH GAP:

 In the literature survey no study could be found which explores the

relationships among leadership styles, organizational culture and
organizational commitment in the context of Banking Sector.
The main questions which are going to be addressed in this study are:

(i) Is there any effect of organizational culture on firm performance?

(ii) Is there any effect of leadership style on firm performance?

(iii) Is there any relation between leadership style and firm

performance?
LITERATURE REVIEW:
LEADERSHIP AND PERFORMANCE:

Generally, Leadership styles can be divided into two major categories:

 HUMANISTIC BASED LEADERSHIP STYLE

 MECHANISTIC BASED LEADERSHIP STYLE

Culture, Leadership and Performance:

 Many researchers study on the effects and practices of leadership on

organizational culture.

 Leaders create mechanisms for cultural development and cultural

norms arise and change due to its leaders focus.

Culture and performance:

“Organizational culture is a system of shared assumptions, values, and

beliefs, which governs how people behave in organizations”

The cultures studied in this paper are:

Community, Competitive and Bureaucratic culture.

HYPOTHESIS:

H1: There is a positive effect of humanistic based leadership style on firm

performance.

H2: There is a positive effect of mechanistic based leadership style on firm

performance.

H3: There is a positive effect of community culture on firm performance.

H4: There is a positive effect of bureaucratic culture on firm performance.

H5: There is a positive effect of competitive culture on firm performance.

THEORIES:

 PATH –GOAL THEORY OF LEADERSHIP.

 Trait theories

 Contingency Theory.
CONCEPTUAL FRAMEWORK:
Humanistic
Humanistic- -based
based
leadership
leadership

Mechanistic
Mechanistic- -based
based
leadership
leadership
FIRM
FIRM
Competitive PERFORMANCE
CompetitiveCulture
Culture PERFORMANCE

Bureaucratic
BureaucraticCulture
Culture

Community
CommunityCulture
Culture
METHODOLOGY:
 Sample:
The data used in this paper was collected from
employees of different Banks of Karachi

 Measures:
The questionnaire comprises of three parts, first part is
of Leadership styles second part is about cultural types and last part
is about Firm performance.
 DATA ANALYSIS
Descriptive Statistics:

Constructs N Mean Std. Deviation Skewness Kurtosis

Statistic Statistic Statistic Statistic Statistic

Humanistic based leadership 187 2.7969 0.50185 -0.833 2.358

Mechanistic based leadership 187 2.6398 0.65930 -1.021 0.864

Competitive Culture 187 2.6609 0.48455 -0.968 2.598

Community Culture 187 2.8123 0.60724 -0.369 0.709

Bureaucratic Culture 187 2.7931 0.61891 -1.010 1.927

Firm Performance 187 2.8263 0.53842 -0.547 1.761

RELIABILITY STATISTICS:

CONSTRUCTS Cronbach's Alpha N of items

Humanistic based leadership 0.772 9

Mechanistic based leadership 0.790 3
Competitive Culture 0.795 6
Community Culture 0.730 3
Bureaucratic Culture 0.766 3
Firm Performance 0.786 9
CORRELATION ANALYSIS:

HBL= Humanistic based leadership style , MBL= Mechanistic based leadership,

CC= Competitive Culture , CCC= Community Culture , BC= Bureaucratic Culture
FM= Firm Performance
REGRESSION ANALYSIS:
CONCLUSION
THANK YOU!