Leadership Style and Financial Performance of Commercial Banks in Kenya
DOI:
https://doi.org/10.53819/81018102t2099Abstract
This study aimed at establishing the influence of leadership style on the financial performance of commercial banks operating in Kenya. The study adopted a positivist philosophy, correlational and cross-sectional research deigns and a target population comprising management staff working in commercial banks. 385 respondents were selected from 10,395 management staff. Primary data was collected using structured questionnaires with data being analyzed using both descriptive and inferential statistics. Parametric test statistics was adopted to establish the significance influence of variable effect at 95% level of significance as well as to test the study hypothesis. The regression of coefficients indicates that transformational leadership has a positive and significant partial effect on financial performance of commercial banks in Kenya with Democratic Leadership having a positive and significant partial effect on financial performance of commercial banks in Kenya. The study also shows that autocratic leadership has a positive and significant partial effect on financial performance of commercial banks in Kenya while Laissez-Faire leadership has a negative and significant partial effect on financial performance of commercial banks in Kenya. The study recommends that that top managers of the commercial banks need to take up effective transformational and democratic leadership style in their management programs. This can be achieved through staff training and development using both in-house and open training programs as well as continuing development programs. Banks should join hands with training and educational institutions in regard to development of leadership modules under their training programs.
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Gandolfi, F. & Stone, S. (2018). Leadership, Leadership Styles, and Servant Leadership. Journal of Management Research. Vol. 18, No. 4, Oct.-Dec. 2018, pp. 261-269
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Harrison, J., Freeman, R. & Abreu, M. (2015). Stakeholder Theory as an Ethical Approach to Effective Management: applying the theory to multiple contexts. Review of Business Management. 17. 858-869. 10.7819/rbgn.v17i55.2647.
Hull, J. (2018). Risk Management and Financial Institutions. John Wiley & Sons, Inc., Hoboken, New Jersey, USA.
Johns H. &, Moser H. (1989). From trait to transformation: the evolution of leadership theories. Education 1989; 110:115.
Jones, T. (1995). Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20: 404-437. https://doi.org/10.5465/amr.1995.9507312924
Kasuni, J., Mandere, E. & Njeru, P. (2022). Investigating Influence of Strategic Leadership on Financial Performance of Commercial Banks in Kenya. International Academic Journal of Human Resource and Business Administration | Volume 3, Issue 10, pp. 313-328. ISSN 2518-2374
Katsaros &. Tsirikas (2019). The impact of leadership on firm financial performance: the mediating role of employees’ readiness to change. Emerald Insight. at: https://www.emerald.com/insight/0143-7739.htm
Keremidchiev, S. (2021). Theoretical Foundations of Stakeholder Theory. 30. 70-88. Economic Studies (Ikonomicheski Izsledvania), 30 (1), p. 70-88.
Khan, A., & Adnan, N. (2014). Impact of Leadership Styles on Organizational Performance. International Journal of Management Sciences Vol. 2, No. 11, 2014, 501-515
Khan, N. (2017). Adaptive or Transactional Leadership in Current Higher Education: A Brief Comparison. International Review of Research in Open and Distributed Learning. Athabasa University. Volume 18, Number 3
Khan, Z., Nawaz, A. & Khan, I. (2016). Leadership Theories and Styles: A Literature Review. Journal of Resources Development and Management Vol.16, 2016. https://doi.org/10.19173/irrodl.v18i3.3294
Khajeh E. (2018). Impact of Leadership Styles on Organizational Performance. Journal of Human Resources Management Research, Vol. 2018 (2018), Article ID 687849, DOI: 10.5171/2018.687849
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2022-10-19
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Mwangi, W., Awuor, E., & Kithae, P. (2022). Leadership Style and Financial Performance of Commercial Banks in Kenya. Journal of Finance and Accounting, 6(4), 83–108. https://doi.org/10.53819/81018102t2099
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