Leadership Styles and Employee Performance in Selected Commercial Banks in Nairobi City County, Kenya
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Date
2020
Authors
Kabiru, George Kay
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Effective leadership in an organization is very important for continued existence of commercial
banks. The banking industry in Kenya has witnessed tremendous changes brought about by
globalization, liberalization, intense competition among rivals, changing regulatory guidelines,
technology, and more demanding customers. These changes and dynamic business environment
requires leadership that can enable both the people and the organization to adapt and be
successful. Therefore, this study aimed at investigating the influence of leadership styles on
employee performance in selected commercial banks in Nairobi City County, Kenya. The
specific objectives were to examine the influence of transactional leadership style,
transformational leadership style, laissez-faire's leadership style and bureaucratic style of
leadership on employee performance. Leadership contingency model theory, traits and
behavioral theory and transactional theory were used to anchor the study. This study used
descriptive survey research design. This study was carried out in selected commercial banks in
Nairobi City County, Kenya that included Kenya Commercial Banks, Cooperative Bank, Equity
Bank and Family Bank. The total population was 242 respondents comprising of managers and
support staff from the selected commercial banks. The study used proportionate stratified
sampling method and the respondents were selected using simple random sampling method. The
sample size was 151 respondents. Primary data was collected using questionnaires. Quantitative
data was analysed with the use of descriptive statistics such as mean and standard deviations and
presented using tables, graphs, charts and figures. In addition, the study conducted a multiple
regression analysis. The study established a positive significance influence between transactional
leadership style, transformational leadership style, laissez-faire’s leadership style and
bureaucratic style of leadership on employee performance. The study concluded that through
transactional leadership employees are motivated to become more productive and efficient team
members. Transformation leaders are particularly good at constructing a positive organizational
culture, offering intellectual stimulation and modeling beneficial behaviors of employees,
laissez-faire leadership style empower and boost employees’ general performance and also help
the employees become more creative and enhance their morale. Bureaucratic leaders establish
impersonal relationships to guarantee the best possible outcomes can be accomplished. The study
recommends that bank managers should invite staff to engage in objective setting to discuss what
the bank wants their staff to accomplish and offer them an chance to share their thoughts. Bank
managers should develop a supportive atmosphere where accountability is shared. Bank
managers should track employee team performance carefully, hire highly qualified employees.
Bank positions should be organized in an hierarchical manner where smaller positions are
accountable to and under the oversight of the level above and the qualification for bureaucratic
leadership should normally be based on the technical skills needed to handle management duties
efficiently and effectively.
Description
A Research Project Submitted to the School of Business in
Partial Fulfilment for the Award of Degree in Master of
Business Administration (Strategic Management Option) of
Kenyatta University
Keywords
Leadership Styles, Employee Performance, Commercial Banks, Nairobi City County, Kenya, Transactional leadership style, Transformational leadership style, Laissez-faire's leadership style, Bureaucratic style