LEADERSHIP STYLES AND ITS EFFECT IN ORGANIZATIONAL PERFORMANCE

Abstract

This study was on leadership styles and its effect in organizational performance. Three objectives were raised which included:  To examine the impact of Transformational leadership style on productivity, to examine the effect of Transactional leadership style on productivity and to examine the effect of laissez-faire style of leadership on productivity. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Benue Links Nigeria Limited, Makurdi. Hypothesis was tested using Chi-Square statistical tool (SPSS).

Chapter one

Introduction

Background of the study

 Leadership is conceived as a process where one or more persons influence a group of persons to move in a certain direction. The word leadership has been used in various aspects of human endeavour such as politics, business, academics and social works. Messick and Krammer (2004) argued that the degree to which the individual exhibits leadership traits depends not only on his characteristics and personal abilities, but also on the characteristics of the situation and environment in which he finds himself. Therefore, an individual will support the organization if he believes that through it his personal objective and goals could be met, if not, the person’s interest will decline.

Among the objectives of any organization are profit making and attainment of maturity and liquidity status. In the pursuit of these objectives, organizations allocate scarce resources to competing ends. In the process they provide employment, provide goods and services, purchase goods and services and, thus contribute to the growth of the society and economy at large. Imamaka (1995) observes that, the effectiveness of this process is greatly determined by the availability of and access to personnel, finance, machinery, raw material and possibility of making their goods and services available to their customers.

The extent to which members of the organization contribute in harnessing the resources of an organization equally depends on how well the managers or leaders of the organization understand and adopt appropriate leadership style in performing their roles as managers and leaders. Thus, efficiency in resource mobilization, allocation, utilization and enhancement of organizational productivity depends, to a large extent, on leadership styles among other factors. Chuang (2005), explain that the excellent leader not only inspires subordinates’ potential to enhance efficiency, but also meets their requirements in the process of achieving the common target of the organization. Fry (2003), state that leadership as a use of leading strategy to offer inspiring motive and to enhance the staff’s potential for growth and development in the organization. Burn’s (1975) approach is that leadership influences subordinates to exert greater effort in the pursuit of higher-order needs; support a greater vision for their work group or organization and in the course perform beyond expectations.

Stoner (2000) defines leadership as a process of directing and influencing the task of related activities of group members. It can also be seen as the process of influencing other people to achieve organizational objectives. Bass (1982) define leadership as an interaction between members of a group. Leaders are agents of change, persons whose act affect other people more than then other people’s act affect them.  Leadership occurs when one group member modifies the motivation or competence of others in the group. Also, Nongo (2009) states that leadership entails an unequal distribution of power between leaders and group members. Group members have power, but leaders usually have more powers. According to Rachin (2001) leadership is directly connected to the practice to which people are dedicated. The most substantial of leaders is their influential personality that has positive relation with the follower, job satisfaction and the performance Lian, (2011) Leadership style is the manner and approach of providing direction, implementing plans and motivating people. Having acquired the human resources, there is the need to maintain and keep them together, it should be noted that every individual has his personal expectation for working in an organization. To this effect, the leader must employ the various ways of making sure that the employees stay at work, feel contented, ready to put in their best and that their expectations are met without neglecting the overall corporate objective(s) of the organization.

There are numerous styles of leadership but for this study, the transformational leadership, transactional leadership and laissez-faire leadership style is considered. The transformational leadership style is more effective, productive, innovative, and satisfying to followers as both parties work towards the good of organization propelled by shared visions and values as well as mutual trust and respect (Avolio & Bass, 1991). Transactional leadership style as opined by Burns (1978) indicated that transactional leaders are those who sought to motivate followers by appealing to their self-interests. They motivate subordinates to achieve expected levels of performance by helping by helping them to recognize task responsibilities, identify goals and develop confidence about meeting desired performance level Bass (1990), While laissez-faire style is an absolutely passive leadership.

Productivity is the ratio between output and total of factors required to achieve it. Productivity is efficiency in individual production. It is a multinational factor in organizations, in which it could be principally improved by employees’ efforts. The relationship between leaders’ behaviour or the leadership style and subordinate has gained increased attention from the community. The kind of leadership style influences how organizations cope with improving productivity, the Transformational leadership style play a crucial role in improving productivity by way of improved marketability and creating strategic vision of the organization. Leadership style effect the overall operational performance of effectiveness, efficiency, profitability, large market share and as well as the organization commitment to achieve a stated goal. Behind the wonderment of any organization productivity today is the leadership style adopt by the organization. Productivity in every organization is largely centred on labour productivity, perhaps human-labour is the universal key resources required of any organization and the assertion that a critical element in all successful productivity effort to date has been due to good leadership style.

The study is divided into five sections; section one is the introduction, section two is a review of related literature, section three the methodology employed in carrying out the study, section four is data presentation and analysis while section five concludes the study and proffer recommendations to the researched study.

1.2       Statement of the Problem

The findings reveal what seems to be a blind spot among company planners about their own leadership and management skills. You might look at this and say that leadership is just about being nice to people, however, it’s far more complex, coercive leaders can have a slightly positive impact on standards and pacesetters on responsibility. As Gole man point out, no one leadership style is going to be right one in every situation. Leaders in public service like Benue links Nigeria limited have to balance their concern for their co-workers with their responsibility to the community they serve. A lot of people think that one need to pay people more money to motivate them, wrong there are plenty of low and no-cost strategies you can use to motivate staff, executives who want to improve performance will bring in tough managers or promote the most productive staff member as a pacesetter. Leadership is the art and craft of influencing the thinking and behaviour of audiences to achieve mutual goals, leadership is not about what leaders do, but the relationship between leaders and audiences.

Having weak, ineffective managers in the workplace has many damaging effect on employees and the firm as a whole. Company with poor managers almost always perform below expectations, they lack vision, an adequate understanding of business finance and good communication skills. By recognising if these characteristics are present in the manager of their firms, company’s can make the necessary changes in order to prevent failure. Many planners undervalue leadership because, I believe, the hold on to old, the incorrect assumptions about the subject but as professionals whose work greatly affect the public, there is need to have a responsibility to be effective and efficient. An effective leadership makes decisions with the information available, provide clear guidance, flexible enough to change direction, delegate and build team spirit. A leader that involves employees in the company’s operation builds morale and improves productivity, when staff feels alienated, morale and productivity suffer. If you search for project on leadership style, almost every expert agrees that no management style is able to fit all projects. Unfortunately, leaders who are unable to be flexible, trustworthy, open and inspiring may have a combination of the varying traits of management styles with no clear definition to guide a team.

An effective manager realises the need for change in style and adapts the correct style to the team or project goal. Managers that fall claim to many complaints to upper management from team members should re-evaluate their manager goals and project management certifications to help improve their careers. While no project management leadership style may be the best style, each should be considered when tackling projects. As Daniel Goleman pointed out, a manager should consider the project and then select an effective style, or “choose the correct club for the shot,” To bring projects to successful completions. You may have the title of manager but what is your project management leadership style? Are you forceful, determined, opinionated, or feared? Surprisingly, there are many projects management leadership styles and no style fits all projects. What makes you a leader is what you do when problem comes along. Because a project manager’s leadership directly affects how team responds to that problem, leadership style is critical during all phases of the project’s life cycle. Here is a quick review of leadership style that will help different leaders respond to the elements;

Transformational leaders want to change the world or at least the world of their organization. A transformational leader is visionary leader who thinks in possibilities but believes that those possibilities comes realities. A transactional leader offers incentives and rewards to employees for commitment and efforts in fulfilling the organization goal. Laissez-faire leadership, also known as delegation leadership is a type of leadership style in which leaders are hands-off and allow group members to make decisions. It generally leads to low productivity. Bad leadership is expensive, under the watch of poor leaders and managers, staff morale declines and workers feel less committed to the organization and its mission that tends to lead to work of lesser quality and things getting done more slowly. Poor leadership can stop planners from producing new ideas and solution to problems.

1.3        Objectives of the Study

The overall objective of this study is to look generally on the impact of leadership style on organizational productivity with a particular reference to the organization of study. The objectives among others include the following:

1      To examine the impact of Transformational leadership style on productivity.

2      To examine the effect of Transactional leadership style on productivity.

3      To examine the effect of laissez-faire style of leadership on productivity.

1.5            Research Hypotheses

Ho1: There is no significant relationship between transformational leadership style and productivity.

Ho2:  There is no significant relationship between Transactional leadership style and productivity.

Ho3: There is no significant relationship between laissez-faire leadership style and productivity.

1.6       Significance of the Study

This research study is significant in many aspects:

It is hoped that, when the study is successfully completed will serve as a source of policy guidance to the study organization and provide necessary incentive for increasing productivity. It will help to enlighten the management of the organization on the need and importance of having effective leaders in the organization. It will enlighten the employee on their roles and obligations to the leadership in the organization and other related matters. It will identify the reason why employees react positively to a particular leadership style of a manager and also aim at discovering what makes workers to be dedicated and committed to their duties.

The research will help to challenge both the management and workers in the organization on both the importance attached to increase productivity.  The study serves as a partial fulfilment for the award of Bachelor of Science Degree in Business Management to the researcher. Finally, this work will be of immense benefit as aid and guide to future researcher on leadership style and productivity.

1.7       Scope / Limitations of the Study

The scope of study is exclusively restricted to Benue Links Nigeria Limited, Makurdi. However, it should not be misconceived that the study has no relevance to other organizations in Nigeria they are bound to face such problem considering the globalized nature of organizational environment. The theoretical issues to be discuss are leadership style and productivity. Some of the constraints encountered in carrying out this research work are;

Finance; the study is one that requires money to enable the researcher to browse more information and also to carry out the research work effectively but due to this financial constraint, the researcher could not get everything required for this project thereby hampering the best work on the study.

Time; this study is one that required longer time to enable the researcher get the necessary and quality data for effective work but since it is a project research of student which takes only three months that is a semester work as required by the school, the researcher is less of valid information to use.

Attitude of respondents; To make this study a very viable one, some vital information is requested from Benue Links Nigeria Limited, which the management are not willing to release, workers inability to identify their leadership style of the organization.

1.9       Definition of Key Terms

A Leader: is an appointed individual with the ability to organize other subordinate.

Leadership: is the act of getting things done through people.

Leadership style: refer to a kind of relationship that someone uses his rights and method s to make many people work together for a common task.

Productivity: the rate at which a company produces goods and the amount produced, compared with how much time, work and money is needed to produce them.

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