Investigation Of Leadership Style As A Determinant Factor For Employee Performance In A Private Firm

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Investigation Of Leadership Style As A Determinant Factor For Employee Performance In A Private Firm

Chapter One


1.1 Background Of The Study

Thousands of people are selected or chosen to assume leadership roles and duties in today’s society. Leadership is performed at all levels, in schools and universities, factories and farms, businesses, clinics and hospitals, civil and military institutions of a country, and public life, to name a few. These leaders should work to foster society’s unity, harmony, strength, wealth, and happiness. The problems of managing with today’s uncertain business environment have forced many firms to be on their toes in order to compete for survival. The leadership offered by managers, who are expected to influence others in accomplishing corporate goals while also boosting employee performance, is the driving force behind such strategic moves towards surviving the competition. “The major drivers of organizations are usually employees, they provide life to the businesses and create goals,” Shafie et al. (2013) underlines the importance of leadership in businesses, particularly on human beings, who are ostensibly the most valuable asset of any corporation (Shafie et al., 2013). To get the best out of employees, it is critical to offer them with direction and psychological fulfillment. This direction can only come from leaders. In truth, leadership is essential for all businesses to achieve their objectives. Because leadership is a critical role in enhancing the performance of many, if not all, organizations, and the success or failure of an organization is determined by the effectiveness of leadership at all levels, This is supported by Paracha et al (2012). Leadership is perhaps the most well investigated organizational variable that has a potential impact on employee performance (Cummings and Schwab, 1973). “It is a vital issue in every organization primarily because the decisions made by the leaders could lead to the achievement of goals and boost employee performance by satisfying them with their jobs” (p.55). Notably, it is commonly acknowledged that effective organizations require effective leadership, and both employee and organizational performance suffer in direct proportion to this, according to Fiedler and House (1988). Furthermore, it is well acknowledged that the success of any group of people is primarily determined by the quality of its leadership — successful leader conduct allows the fulfillment of the desires of followers, which leads to effective performance (Fiedler & House, 1988; Maritz, 1995; Ristow, et al., 1999). The impact of leadership styles on employee performance has been studied in a number of recent research. Rasool et al. (2015), Pradeep and Prabhu (2011), Aboshaqah et al. (2015), Ipas (2012), Kahinde and Bajo (2014), Tsigu ad Rao (2015), Gimuguni et al. (2014), Raja and Palanichamy (2015), and many others. Rasool et al. (2015) studied the health industry in Pakistan and found that both transformational and transactional leadership styles have an impact on employee performance, although transformational leadership has a greater impact than transactional leadership. From a sample of employees in public and private sector firms in India, Raja and Palanichamy (2015) found a favorable association between transformational and transactional leadership styles, but a negative association between laissez-faire leadership style and employee performance. Ipas (2012) claims that authoritarian leadership is the most popular style among hotel managers, claiming that it is seen to produce the best results. Aboshaiqah et al. (2015) investigated the relationship between leadership and employee performance among hospital nurses, finding that transformational and transactional leadership styles are significantly positively associated to employee performance, whereas laissez-faire leadership is significantly negatively connected. Pradeep and Prabhu (2011) in India, as well as Kehinde and Banjo (2014) and Ejere and Abasilim (2013) in Nigeria, found a significant positive association between both transformational and transactional leadership styles and employee performance. Tsigu and Rao (2012) and Gimuguni et al (2014) in the Ethiopian banking industry and Ugandan local government authority, respectively, are two more African studies. While Tsigu and Rao show that transformation leadership explains employee performance variation better than transaction leadership, Gimuguni et al show a strong positive link between authoritarian, laissez-faire, and democratic leadership styles and performance.

1.2 Statement Of Research Problem

“In today’s competitive world, firms develop globally and confront a lot of hurdles in reaching their objectives and chasing to be more successful than others,” wrote Kehinde and Banjo (2014). The researcher’s goal in this study was to pique interest in this topic by examining the varied concerns of private-sector executives. The style and method employed by managers in the attempt to induce efficiency, which involves specialized leadership approaches to distinct performance issues in accomplishing departmental goals, should be obvious through defined roles, meeting deadlines, team input, and the cohesion of both leadership and performance. According to Armstrong (2005), the aforementioned factors lead to efficiency, specialization, effective feedback, and positive organizational relationships. Leadership styles are the independent variable in this study, and according to Richard et al (2010), leadership is the ability to influence people toward achieving goals. This phrase expresses how leaders collaborate with others to attain their objectives. This is a source of concern for the researcher, therefore he decided to conduct research on the matter. The goal is to evaluate employee performance and see if it is influenced by employees’ perceptions of their immediate supervisor’s leadership style.

1.3 Objectives Of The Study

The study was guided by the following specific objectives:

l to see how transformational leadership affects employee performance in Nigeria.

  1. To see how transactional leadership affects employee performance.
  2. To determine the impact of a laissez-faire leadership style on employee performance in Nigeria.
  3. To investigate the impact of autocratic leadership in Nigeria on employee performance.

1.4 Research Questions

The study sought to answer the following questions;

  1. What is the effect of transformational leadership style on employee performance in Nigeria?
  2. What is the effect of transactional leadership style on employee performance in Nigeria?
  3. What is the effect of laissez -faire leadership style on employee performance in Nigeria?
  4. What is the effect of Autocratic leadership style on employee performance in Nigeria?

1.5 Significance Of The Study

This study is significant because leadership styles and employee performance are intertwined as one cannot do without the other and also, leadership styles continue to evolve from one management to the other. The findings of this research work will undoubtedly provide the much needed information to government organizations, private firms, individuals, NGOS, and academia

1.6 Scope Of The Study

This study intends to investigate leadership styles as a determinant factor for employee performance in a private firm. Hence, this study is delimited to banks in Akure south local government area in ondo state.

1.7 Limitations Of The Study

This study was constrained by a number of factors which are as follows:

Financial constraint is inevitable considering the present economic situations. Due to lack of finance at the researchers disposal to get materials and in printing of questionnaires. it was not possible to visit some of the communities that have been plagued by bandit activities.

In developing countries like Nigeria, there is the problem of insufficient data.

Time factor: time factor pose another constraint since having to shuttle between writing of the research and also engaging in other academic work making it uneasy for the researcher

1.8 Operational Definition Of Terms


The action of investigating something or someone; formal or systematic examination or research.

Leadership Style:

Refers to a leader’s characteristic behaviors when directing, motivating, guiding, and managing groups of people


A factor which decisively affects the nature or outcome of something.

Employee Performance:

Is defined as how an employee fulfills their job duties and executes their required tasks. It refers to the effectiveness, quality, and efficiency of their output.

Private Firm:

Is a firm held under private ownership

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