The Impact Of Leadership Style On Employees Performance In The Oil Industry (A Case Study Of Agip Oil Company PH)

Project and Seminar Material for Business Administration and Management (BAM)

The Impact Of Leadership Style On Employees Performance In The Oil Industry (A Case Study Of Agip Oil Company PH)


Abstract


The purpose of this study was to identify the impact of leadership style on employee’s performance. It sought to investigate the different leadership styles and the degree of influence they would have on employees. Management involves the process of achieving goals and objectives through the effective and efficient use of human resources. The human factor of the organizations is regarded as the simple most important resources of management. Organizations would benefit immensely if adequate consideration is given to the processes or methods in which employees could be motivated towards achieving improved work performance.

As documented in literature, many leadership styles exist and there is confusion in determining the most suitable styles for leading employees to achieve their desired level of performance or goals in their respective organizations. This research work carefully looked at the impact of leadership style on performance of employees in selected oil companies in Port Harcourt, Rivers state. Based on the findings of this study, it is recommended that leaders should consider the situations, the nature of the employees, his feeling and the type of goals assigned to him or her before choosing any leadership style.


Table Of Contents


Preliminary Page(s)

  • Title page
  • Approval Page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table of Contents

Chapter One

1.0 Introduction

  • 1.1 Background of Study
  • 1.2 Statement of the Problem
  • 1.3 Objectives of the Study
  • 1.4 Research Questions
  • 1.5 The Significance of the Study
  • 1.6 Delimitations, Scope and Limitation of the Study
  • 1.7 Operational Definition of Terms

Chapter Two

2.0 Review of Related Literature

  • 2.1 Introduction
  • 2.2 The Concept of Leadership
  • 2.3 The Use of Theories and Principles in Understanding Leadership Style
  • 2.4 The Trait Approach to Leadership
  • 2.5 The Behavioural Approach to Leadership
  • 2.6 The Situational Approach
  • 2.7 Contingency Theories
  • 2.8.0 Basic Leadership Styles
  • 2.8.1 Authoritarian Style
  • 2.8.2 Democratic or Participative Style
  • 2.8.3 Laissez Faire or Free- Reign Style
  • 2.9 Choosing a Leadership Style
  • 2.10 Managing Employee in Organization
  • 2.11 The Concept Performance
  • 2.12 Performance of Standards
  • 2.13 Determination of Leadership
  • 2.14 Performance Evaluation
  • 2.15 Methods of Performance Evaluation
  • 2.16 Limitation of Evaluation Process
  • 2.17 Summary

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research Methodology
  • 3.3 Research Design
  • 3.4 Population of Study
  • 3.5 Sampling Procedure
  • 3.6 Sample Size
  • 3.7 Method of Data Collection
  • 3.8 Instrument of the Study
  • 3.9 Instrument of the Study
  • 3.10 Validity and Reliability of Measuring Instrument

Chapter Four

4.0 Data Presentation and Analysis

  • 4.1 Introduction
  • 4.2 Presentation and Analysis of Data
  • 4.3 Test of Hypothesis
  • 4.4 Situational Factors and Significant Effect on Leadership Style
  • 4.5 Discussion of Results

Chapter Five

5.0 Summary, Conclusion and Recommendations

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • Bibliography
  • Appendix

Chapter One


1.0 Introduction

1.1 The Background Of Study

Since years back, leadership and its special role in corporation has received quite a wide spread research attention. Irrespective if many decades of broad and careful study, numerous questions remain unanswered.

Leadership covers a very conspicuous position of group or organizational conduct. It is the heart of an organization, which without; organization or group cannot properly function. It is obvious, that leadership ensures orderliness in an organization when an economic venture is undertaken by an organization with a view to maximizing economic opportunities it calls for person to supervise, direct, control, and co-operation to ensure effectives. This point to the role of leadership in an organization.

Leadership cannot be completely delineated from management, though the former can be spoken of in relation to unorganized groups, while the later exist in an organized structure. At the same time most effective manager is a leader, and understands how leadership function is key towards understanding management itself. Montgomery (1960) define “leadership as the capacity and will to rally men and women to common purpose and the character which inspires confidence”

Furthermore, leadership as been defined in term of “ability to influence” that is simple but profound, a person may have a position of leadership, if he is not affecting thoughts and action of others, he is not a leader, however, the underlying in leadership are power and authority or the rights bestowed on the leader’s position to make decision, assign task to subordinates.

Maxwell (1960) likened leadership to an open umbrella held by a hand; the hand of the leader of that organization. Under the protection of that umbrella are all the department of the organization. The success of each department can never, will never raise any higher leadership set standard, whether the organization is a business, a church, or a family. The higher the standard the more effective the leadership. Thus, in the sense leadership is not the activity of a single individual worker can meet the tremendous demand of achieving the objective of the organization alone. Individual workers cannot be separated from the whole (organization) though individual leadership is important yet cannot be separated from the whole organization.

In addition, the studies on leadership so far, have confirmed that there is no single basic pattern of abilities and personality traits characteristics of all leaders.

Macgregor .O. (1960:180) stated that “personality characteristics of the leader are vital, but those which are essential differ considerably depending on circumstances. Even without a single institution such as industry, different circumstances require different leader’s characteristics. The leadership requirement by a young growing company for example are different functions (sales, finance, production, etc) demand rather different abilities and skills of leadership.

To crown it all, the essence of this to fine out the effect of leadership style on employee performance. The extent in which effective leadership is synonymous to the survival of business or organization. However, this study will enlighten managers to be effective leaders and not leader by position rather disposition. And how to be employee oriented: go to their employee, connect, find common ground, and empower them to succeed so as to achieve the organizational set goals.

The impact of using unstable leadership style in a situation can be grievous. This has reduced the moral of many employees and even made them vow never to take introduction from such managers again. These therefore, are problems I believe if not checked might result in disastrous, disintegration, disharmony and chaos in the organization.


1.2 Statement Of The Problem

Poor leadership style in an organization results in effective employee performance. The oil sector, which should be the main driver of the economy. Makes minimal contribution to country gross domestic product, has turned to be disastrous effect on the nation, many of participants blame the poor leadership in the oil sector.

Why as 50years of oil export not transformed Nigeria into an industrial giant? Why as its massive oil wealth not banished mass poverty amongst its citizen? Why does the world 14th largest oil producing country still import fuel and petrochemicals: why it is that Nigeria is the only country were the oil producing communities lack infrastructure, school; healthcare facilities and employment (Tajuidee suleman 2004). The reason according to oil industry expert: and a stakeholder is failure of leadership. Nigeria is the only oil producing country in the world was illegal oil bunkering and smuggling is an issue. Because of ineffective leadership style in the organization.

Therefore, due to problems of bad leadership in the organization, the organization as suffered both internally and externally. Internally, on the employee’s performance. Externally, on the country’s economy. However, the impact of using unstable leadership style in a situation can be grievous.
This has reduced the moral of many employees’ and even made them vow never to take instruction from such manager again.


1.3 Objective Of The Study

The objective of this study is to

  1. To examine the impart of leadership style of employee’s performance
  2. To identify the appropriate leadership style to use in different situation in the organization.
  3. To evaluate effective leadership as the determinant factor of achieving organizational goals.
  4. To measure good leadership and its influence on the employee’s performance.
  5. To examined the impact of motivation as the tool for improving employee’s performance

1.4 Research Questions

The following research questions will be appropriate to this study.

  1. What are the impacts of leadership on employee’s performance?
  2. What are the appropriate leadership styles suitable in different situations in the organization?
  3. How does effective leadership determine the achievement of the organizational goals?
  4. How can we estimate or appraise good leadership and its influence on the employee performance.
  5. How can employee be energizing so as to improve their performance.

1.5 The Significance Of The Study

The human factor as noted in management is a simple most important resource. This study ensures to help as well as tackle the leadership problems challenging oil companies in River state and attainable remedies to these problems. Those in other parts of the country will therefore achieve from this study the private and public sectors firms also are not exempted from these achievements and will find this study relevant since they experience nearly similar type of environment.

The study will also assist potential business investors on the basic issues of how to effectively and efficiently utilize the human resources in their organizations

Scholars and researchers with ensure interest on this area of study will as well as find this work relevant. However, leadership subsumed under management effort is substantial and cannot be criticized.


1.6 Delimitations, Scope And Limitation Of The Study

Oil companies operating in River State were selected for this important study with special preference to those in Port Harcourt.

Respondent sort for are line managers, supervisors and personnel managers since they perform the leadership roles in organizations.

The study is limited to only oil firm in Port Harcourt, due to most of oil companies in Nigeria and other related organizations are located in port Harcourt. In course of this study many constraints were encountered, most notably are financial and time constraints.


1.7 Operational Definition Of Terms

Leadership Style

As use in this study, implies the way which influence process is exercised. It is the characteristics ways in which the leadership relates to his subordinates or employees.

Effectiveness

This implies the ability of an organization in achieving its objective. It is doing the right thing.

Efficiency

This is the optimum level o9f a given resources which the organization may fully utilize to produce a given unit of output/ waste. However, it is act of doing things right.

Employee Performance

This is the employee’s behavior directed towards the requirement of the job as well as productivity and profitability of the organization. It involves the employee utilized potentials towards attainment of the organizational goal.

Goal Congruence

This is as used in this work refers to the agreement of employer and employee to wards the achieving the goal of the organization. It is harmonious activities between the organizational policy and the employee so as to obtain the required targets.

Organization

This is the coalescing of sub-system so as to achieve specified objectives. It is a system of critically co-ordinate activities of two or units.

Situational Leader

As used in this study mean leadership styles depending on the circumstances that arise at particular time in a given organization so as to attain the organizational target. “Situational leaders give direction because circumstances demand it”, stand George Bama (2002). However, circumstance is more often the entry level mind set of the situational leader.


Plan Of Work

This was arranged or organized sequentially as follows: chapter one covers the interdiction, the background of study, statement of the problem, objective of the study, research questions were formulated to guide research in the study. Whereas, chapter two encompasses the literature review, where the concept of leadership, use of the theories and principle in understanding leadership, the trait approach to leadership, situational approach to leadership, behavioral approach, basic leadership style, the choosing a leadership style, the termination of leadership style, the leadership continuum, managing sub-ordinate in organization, the concept of performance and contribution of other aspects were used to enriched the chapter. The summary was drawn.

In chapter three, research methodology and design was stipulated. The population of the study, sample procedure, sample size, method of data collection, and instrument of the study and the validation of the instrument were also explained.

Furthermore, chapter four focus on the data analysis and interpretation of result, and analysis of respondents as wall as the summary of the chapter.

Finally, the chapter five which is basically on conclusion and recommendation and the summary.


Chapter Five


5.0 Summary, Conclusion And Recommendations

5.1 Summary

This study is on the impact of leadership styles on employees performance in oil company with reference to three selected oil companies (Agip oil company Ltd, Shell development company and Elf petroleum Nigeria Ltd), some findings were made from the research questionnaires distributed were made as it related to the objectives of the study and some of the finding are discussed below.

With reference to the data analysis and questionnaires distributed, it was discovered that leadership style had positive impacts on the responses of the respondents.

The findings also reveal that situation factor have significant effect on leadership style on employees performance because the leadership style to be adopted depends on situation involved in a particular time.

The findings untold that leadership style has significant impact on employee performance which attributes the type of response we receive from employees.

To crown it all, it was discovered that leadership style indeed have positive impact on employee performance.


5.2 Conclusion

The impact of leadership style on employee’s performance cannot be over emphasized. A leader’s behaviour has great influence over the employees. Leaders communicate trust by behaviour more than rewards. In turn, the employee’s sense of security arises out of perceiving this behaviour as distinct from hearing the right smoothing words. The leadership functions fulfill the role of procuring employees and creating the necessary atmosphere or environment for workers to perform. Managerial success is achieved through good leadership quality.

Leadership constitutes a significant aspects of groups or organizational behaviour. It is a core variable without which organizations or groups may not function effectively. Thus leaders are the pivot of any business organization because they direct the use of organizational resources to achieve desired objects.

Directing is one of the functions of management and leadership, motivation and communication makes up the directing mix. A leader should be able to lure his subordinates into goal oriented actions, influence them to perform effectively in their duties. “He should serve as invigorating tonic that spore employee’s action”. (Dalil, 1988: 49). The leader should realize that his positive aspects will instigate workers to work with him rather than to work for him.

The extent to which a manager leader succeeds will depend on the employee’s willingness to co-operate with him. Such willingness among other things will depend on the degree of congruency between the manager’s leadership and employee’s expectation and desires.

Organization are made up of leaders and followers leadership is not one way process of influence where a leader determines a style and imposes it on his followers. Leadership is the reciprocal process, hence its effectiveness should be assessed by the degree of sponsor and commitment. A leader receives from his employees. It there fore follows that the leadership style adopted by a manager considerable impact on the performance of his employees.


5.3 Recommendation

In view of the impact of leadership style on employees performance in oil companies. The researcher wishes to make the following recommendations on how oil companies could further improve their leadership style so as to attain optimum employees:

  1. To ensure optimum performance of workers in oil companies in Port Harcourt, leaders should adopt the participative style of leadership.
  2. Leaders should imbibe the idea of full utilization of employees.
  3. Utilization involves long term or strategic consideration of employees.
  4. A manager should avoid human relation characterized by unhappy, insensitive, unproductive, or disruptive philosophy in Nigeria such as master – servant relationship, ethnicity, corruption, and personal goal oriented philosophy should be avoided.

The elimination of the will enhance inter-personal relationship and improve communication in the organization. A uader should be honest, patristic, company, intelligent, brake, decisive, action and result oriented. A leader should be conscious of employees motivational factors such as their needs, aspirations, interests, expectations, etc a leader should instill in his employees motivational factors such as sense of ownership. Direction, belongingness. That is to say works or employees should be viewed as part of the organization rather than the system.

Manger – leader should recognize and reward employees for good performance. Subordinates (employees) should be trained and developed regularly. Selection and promotions should be based. On merits, achievement and redeployment should suit worker wishes. Manager – leader should therefore adopt the 9,91 leadership high concern for people (workers) and high concern for production.


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Frequently Asked Questions


Which leadership style has the greatest impact on performance?

Regression analysis was conducted to analyses the data using SPSS 21. The result shows that autocratic and democratic leadership style has positive and significant impact on employee performance. However we found that laissez-fair leadership style have no significant influence on employee performance.

How does leadership influence employee performance?

Peter Drucker, a well known leadership guru defines leadership as “doing the right things A particular approach of leadership style undertaken by any manager in an organization, would also influence the organization in a particular way, either positively (high employee’s performance) or negatively (low performance).

How do transformational and transactional leadership styles affect employee performance?

Therefore, work motivation positively and significantly may mediate the relationship between transformational leadership styles on employee performance. On other hand, basically transactional leaders emphasize that a leader needs to determine what needs to be done by subordinates to achieve organizational goals.

What are the independent variables that influence organizational performance?

Independent variables • Leadership Style Leadership is perhaps the most investigated organizational variable that has a potential impact on employees’ performance (Cummings and Schwab 1973).

How does leadership style affect organizational performance?

There is a considerable impact of the leadership styles on organizational performance. The leadership style influences the culture of the organization which, in turn, influences the organizational performance. Klienet al (2013) proved this fact by using four factor theory of leadership along with

What is a leadership style?

Defined by leadership studies scholars Bruce Avolio and Bernard Bass, this leadership style involves improving the morale and job performance of team members by connecting with their sense of identity and the collective identity of the organization.

What is the most successful trait-driven leadership style?

By far the most successful trait-driven leadership style is charismatic. Charismatic leaders have a vision, as well as a personality that motivates followers to execute that vision. As a result, this leadership type has traditionally been one of the most valued.

What are the 5 leadership styles?

I will focus on 5 common styles that I’ve encountered in my career: democratic, autocratic, transformational, transactional and laissez-faire leadership . The democratic style seeks collaboration and consensus.

How does the style of leadership affect the organizational performance?

The style of leadership a manager adopted has a direct effect on the organizational performance of the employee. The study among others things discovered is that participatory of leadership and delegation of duties enhances the employee performance and attainment of corporate goals and objectives.

How does lead leadership affect employee performance?

Leadership directly affects employee performance, with regards to their contributions to the organization. There are elements of group performance that cannot be taught as hard skills, they are rather encouraged through the relationships between the employees and their leaders.

How does leadership impact employee engagement?

All of which pertain to the impact leadership has on managers’ ability to engage employees. Here we argue that leaders have a direct impact on employee engagement as well. Judging from the data, trust in leadership is a significant challenge. And the level of trust in an organization sets the tone for the corporate culture.

How do employees feel about their leaders?

Only 22% of employees strongly agree that their leaders have a clear direction for their organization About 15% of employees strongly agree that leadership makes them feel enthusiastic about the future 13% of employees strongly agree the leadership of their organization communicates effectively with the rest of the organization.

What are the results of transactional and transformational leadership?

The results of both transactional and transformational leadership directly affect employee Breevaart et al., 2014). organizational performance, culture, finance and behavior. Although each theory is different and increased job satisfaction.

What is the relationship between leadership style and performance?

There is a significant relationship between managers’ leadership style (transformational, transactional, and laissez-faire) and employees’ willingness to exert extra effort. Previous studies reveal that leadership style affects employee׳s performance in many ways.

Does transformational leadership style increase or decrease performance?

Since transformational leadership seeks to enhance vision and awareness, and both styles can be effective at increasing performance depending on the situation. For example, if consequences such as a reduction in bonuses. However, if the leader exhibits transformational

What is the difference between transactional and motivational leadership?

(Kuhnert & Lewis, 1987; Breevaart et al., 2014). Burns (1978) stated that great leaders could transform employees by tapping into their needs to increase motivation. In contrast, transactional leadership focuses on a framework of appealing to the interests of employees.

Is performance an independent or a dependent variable?

Most studies of organizational performance define performance as a dependent variable and seek to identify variables that produce variations in performance. Researchers who study organizational per…

What are the factors affecting organizational performance?

Factors Affecting Organizational Performance In this uncertain economic and social climate there are many factors that affect the organizational performance. The most essential factors affecting organizational performance are Leadership, Motivation, Organisational Culture and Knowledge Management. 1.

Is organizational behavior a dependent variable?

As a result, Organizational Behavior is concerned with organizational citizenship behavior as a dependent variable. It has been said that managers must work with used not new human beings. The individuals when they enter an organization are a bit like used cars. Each is different.

What are internal factors in Organizational Behavior?

Internal factors: Organizational characteristics, including: Individual choice factors: Members joint or individual decisions regarding expected costs and benefits. Older studies, especially in the 1970s, focused on the influence of internal factors, while more recent work has emphasized the importance of all three sets of factors. 

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