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American Journal of Business and Management Vol. 1, No. 4, 2012, 202-207

Impact of Leadership Style on Organizational Performance: A Case Study of Nigerian Banks Ojokuku R. M1, Odetayo T. A2* and Sajuyigbe A. S3
1

Department of Management and Accounting, Ladoke Akintola University of Technology, Oyo State, Nigeria 2 Department of Accountancy, Osun State Polytechnic, Iree, Osun State, Nigeria 3 Department of Business Administration, Osun State Polytechnic, Iree, Osun State, Nigeria

The study examined the impact of leadership style on organizational performance in selected Banks, in Ibadan Nigeria. Purposive sampling technique was adopted in selecting a total of sixty (60) respondents as sample for the study, while relevant data was gathered with the aid of a structured questionnaire. One hypothesis was formulated and inferential statistical tool was used to analyze the data specifically Pearson product moment correlation was used to examine the relationship between leadership style dimensions and organizational performance, while Regression analysis was used to examine the significant effect of leadership style dimensions on followers and performance. Findings showed positive and negative correlation between leadership style dimensions and organizational performance. It was also found that leadership style dimensions jointly predict organizational performance, which counted for 23% variance of performance. The study concluded that transformational and democratic leadership style should be employed by the Banks’ management in order to wax stronger in a global competitive environment. Keywords: leadership style, organizational performance, transformational leadership, democratic leadership

Introduction Leadership style is a key determinant of the success or failure of any organization. A leader is person who influences, directs, and motivates others to perform specific tasks and also inspire his subordinates for efficient performance towards the accomplishment of the stated corporate objectives. Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. According to Ngambi et al. (2010) and Ngambi (2011), cited in Jeremy et al. (2011), leadership is a process of influencing others’ commitment towards realizing their full potential in achieving a valueadded, shared vision, with passion and integrity. The nature of this influence is such that the members of the team cooperate voluntarily with each other in order to achieve the objectives which the leader has set for each member, as well as for the group. The relationships between the leader and employee, as well as the quality of employees’ performance, are significantly influenced by the leadership style adopted *

Corresponding author. Email: deentao@yahoo.com

by the leader (Jeremy et al., 2011). Leadership style in an organization is one of the factors that play significant role in enhancing or retarding the interest and commitment of the individuals in the organization (Obiwuru et al., 2011). Leadership is a critical management skill, involving the ability to encourage a group of people towards common goal. Leadership focuses on the development of followers and their needs. Managers exercising transformational leadership style focus on the development of value system of employees, their motivational level and moralities with the development of their skills (Ismail et al., 2009).It basically helps followers achieve their goals as they work in the organizational setting; it encourages followers to be expressive and adaptive to new and improved practices and changes in the environment (Azka et al., 2011). According to Michael (2011) leadership has a direct cause and effect relationship upon organizations and their success. Leaders determine values, culture, change tolerance and employee motivation. They shape institutional strategies including their execution and effectiveness. Leaders can appear at any level...
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