LEADERSHIP STYLES AND ITS EFFECT ON ORGANIZATIONAL PERFORMANCE: THE CASE OF COOPERATIVE BANK OF OROMYIA

Abstract

One of the most important factors in enhancing a company's performance is leadership. It is assumed that an organization's overall success is influenced by the type of leadership style used. The impact of leadership style on organizational performance at the cooperative bank of Oromia will be investigated in this study. It is quite useful for both practitioners and academics. On the practical side, it aims to inform managers that they can adjust their leadership behaviors or styles to improve subordinates' organizational commitment, work performance, and, as a result, increase a happy working environment. Academically, the study intends to contribute to the future development of this subject area by providing additional insights into the leadership field. The aim of this study was to examine the impact of leadership style on organizational performance at the cooperative bank of Oromia in headquarters and 2 branches around Addis Ababa City. By taking in to account the research objectives and questions, quantitative research approach and, explanatory research design were used. Target population was 55 employees of cooperative bank of oromia which are located at head quarters and branches at sululta and chancho. Quantitative data was collected through structured questionnaires that have been distributed to 55 employees of Cooperative Bank of Oromia. Out of the distributed questionnaires, 48 (87.2%) questionnaires have been returned and used for data analyses. The quantitative data were analyzed by using descriptive and inferential analysis. The findings of descriptive statistics have revealed that the mean score of leadership style variables, that is, transformational, autocratic and democratic was tended to agreement level. All independent variables have significant correlation with the dependent variable, performance where relatively transformational leadership style had a higher strong relationship with performance. Similarly, the result of multiple regressions showed that, predictor variables including transformational, and democratic leadership styles have positive and significant effect on the performance of the bank whereas, autocratic leadership style doesn’t. Finally, recommendations were forwarded to the bank to exercise transformational and democratic leadership styles in combination emphasizing more on transformational leadership style.