This section will review the literature on leadership style and performance. Conceptual clarification of leaders, leadership and leadership styles will be examined. Theories of leadership which will form the theoretical frameworks for this study will also be examined and reviewed. Empirical studies will also be reviewed.
2.1 CONCEPT OF LEADERS AND LEADERSHIP
Leaders are the individuals in the organization who set the tone and culture (Batista-Taran, Shuck, Gutierrez, & Baralt, 2009). A leader is a person who influences people to achieve a goal or an objective (Yukl, 1994) and every organization needs a leader, as leaders play a very important role. A capable leader is one who directs and guilds his followers to achieve the desired goals. A leader is a person who can influence the behaviour of his followers to achieve the set goals. According to Squires (2001), leadership is about having followers who have the utmost faith in you and can conform to what you stand for, thus, it is concerned with the spiritual aspect of their work.
A leader is a person who inspires his subordinate through influence and directions, motivating his followers to perform specific tasks for the accomplishment of the stated corporate objectives (R.M., T.A., & A.S., 2012). Simply put, the definition of a leader is “someone who sets the direction for his people to follow, in an effort to influence them” (Fustin, 2013). Successful leaders need to understand themselves, their followers and the tasks and procedures that govern the organization as a whole. A leader needs confidence and strategies for working competently across a wide range of diverse issues – from creating learning associations where workers mature and develop as everyday leaders to managing the conflict inevitable in an organization from fostering the hierarchical clarity that comes from sound structures and policies to unleashing energy and creativity through bold visions (Gallos, 2008). Lee and Chuang (2009), clarify that the excellent leader not only inspires subordinates to perform more efficiently but also meets the requirements for achieving organizational goals. Leadership is about social impact as the leaders influence their followers’ conduct, attitude and motivations. Leaders play an important role in the attainment of organizational goals.
2.2 THEORIES OF LEADERSHIP
The study of leadership is crucial and has been an important part of the narrative on management and organization conduct from time immemorial. It has fostered many debates in most professional communities worldwide. Every organization seeks to constantly develop good leaders, as this will inevitably bring about success. However, the logical issue with this attempt is that there are countless leadership theories and styles. There have been a number of theories explaining leadership styles; this is likely because of the complexity of the concept of the term leadership which can be viewed from different perspectives. There are different schools of thought on leadership. Some people believe that leadership is a natural trait, that leaders are rather born not made while some people believe that leaders are made and nobody is born a leader. These differing opinions make it difficult for professionals to agree on which particular theory or style a leader should adopt to enhance their organizations and also to develop great leaders. Indeed, as stated in (Schwandt & Marquardt, 2000), “no other role in organizations has received more interest than that of the leader”. Consequently, several theories of leadership abound, a few of which are discussed below.
2.2.1 Trait Theories:
The Trait Theory posits that personal characteristics like personality traits, cognitive skills, and inter-personal skills can determine an individual’s potential for leadership roles and can distinguish leaders from non-leaders (Furham, 2005). Thus, the Trait Theory establishes the fact that, leaders are born and not made, that leadership is unique to certain individuals. As Parry and Bryman (2006) put it, “nature is more important than nurture”; that is to say, an individual’s predisposition to leadership (his or her “nature”) has a greater influence than the environment within which they are raised.
The trait theory often identifies a particular attribute an individual possesses and compares this to the personality or behavioural characteristics shared by leaders that have come before them. However, the theory is flawed in the sense that there are people that possess the qualities of a leader but are not leaders and individuals who possess all the traits as opposed to individuals who are leaders that have certain singular traits. This makes it difficult to use trait theories to explain leadership as traits cannot be accurately measured. (Ackerman & Heggestad, 1997; Judge, Jackson, Shaw, Scott, & Rich, 2007).
2.2.2 Situational Theories:
The Situational, also known as Contingency, theory of leadership is more concerned with the context of applied leadership as it relates to the situation at hand and the followers of the organization. Here, leadership focuses on situational variables: the leader adjusts their leadership style to correspond to their own personal characteristics and the situation at hand (Krumm, 2001). Proponents of this theory are of the belief that for a leader to be effective, they should know how to adapt their personal characteristics to the situation.
2.2.3 Behavioral Theories:
Behavioral leadership theory holds that great leaders are made not born. This leadership theory focuses on what actions leaders take and their concern for people and production processes. The theory states that an individual or person can learn the art of leadership through teaching and observations and the success of that leader can be defined in terms of his action. (Nahrgang, Morgeson, & Ilies, 2009).
As a result of the presumed failures and failings of early studies in the Trait theory, researchers from the 1940s through the 1960s began studying behaviours exhibited by leaders as a means to separate leaders from non-leaders. The primary difference between studying leadership behaviours and leadership traits, is that traits are the attributes one possess, thus trait studies attempted to mould the “great man” who had inborn characteristics that can supposedly make one a good leader. Behaviors, on the other hand, can be taught and learned and by being taught these behaviors, managers are trained to develop an effective leadership style and in turn, the people under them can be trained to be better leaders (Nahrgang, Morgeson, & Ilies, 2009).
2.2.4 Participative Theories:
Participative leadership theory is of the opinion that an ideal leadership style, is that which welcomes the input and contributions from those who are affected by the decisions being made or are a part of the team and such inputs are accepted and are taken into account. These leaders encourage members of their team to play a role by participating and contributing and this helps team members feel more relevant and in turn, more committed to the decision-making process. In participative theories, however, the leader retains the right to allow the contributions. It is otherwise referred to as transactional leadership.
Transactional leadership is focused more on the exchanges between leader and follower and it is a theory which promotes compliance. The followers are rewarded or punished for either meeting specific objectives or performance criteria or not meeting the required goals (Jung, 2001). The leader provides rewards and positive reinforcement. Transactional leadership is more practical in nature because of its emphasis on meeting specific targets or objectives (Jung, 2001). An effective transactional leader recognizes and rewards their followers’ accomplishments in a timely manner. However, subordinates of transactional leaders are not necessarily expected to think innovatively and may be monitored on the basis of predetermined criteria, which may stifle creativity and lead to poor performance. Poor transactional leaders may be less perceptive to problems among their followers or within their organization and thus, may be less likely to intervene before these problems grow out of their reach while more successful transactional leaders make fitting moves in an auspicious manner (Jung, 2001). A transactional leadership style is appropriate in many settings and may support adherence to practice standards but not necessarily receptiveness to development.
Relationship theories, also known as transformational theories, focus on the connections formed between leaders and followers. Transformational leaders are great influencers who inspire and motivate employees by helping them know the importance and the benefits of performing tasks. These leaders are not entirely focused on the performance of the group as a whole, preferring to be more particular about individuals performing their duties. Leaders with this style often have high ethical and moral standards.
Transformational leadership can be likened to charismatic or visionary leadership. Transformational leaders are inspirational leaders, who focus on motivating their followers in ways that go beyond rewards. Transformational leadership operates especially well in close, personal supervisory relationships, compared with more distant and impersonal relationships (Howell & Hall-Merenda, 1999), and closer supervision is often more typical in mental health settings. This close relationship may be typical of a supervisor-supervisee relationship and is also captured in the notion of “first-level leaders” (Priestland & Hanig 2005), who are thought to be important because of their proximity to supervisees in an organizational setting. A transformational leader aims to expand and their followers’ motivations through the expression of the value and importance of the leader’s goals (Howell, 1997; Gardner, Avolio, 1998).
2.3 EMPIRICAL FRAMEWORK
Studies on leadership have been ongoing for a long time, researchers have carried out various studies which are relevant to this paper. One of such studies is one carried out by Koech & Namusonge (2012) on the effects of leadership styles on organizational performance at state-owned corporations in Kenya. The researcher specifically sought to discover the degree to which various leadership styles such as laissez-faire, transactional and transformational affected organizational performance at state-owned corporations in Kenya. A descriptive survey research based on the perceptions of middle and senior managers in thirty (30) state-owned corporations based in Mombasa, Kenya was undertaken and a structured, self-completed research questionnaire was thereafter distributed.
Various factors and three independent variables were identified and measured. These were transactional; transformational and laissez-faire leadership styles. The dependent factor was represented by the degree to which the organization has achieved its business objectives in the previous financial year. Correlation analysis was employed to discover the leadership styles that influence organizational performance. The relationship between the transformational-leadership factors and organizational performance ratings was recorded as high, whereas the relationship between the transactional-leadership behaviours and organizational performance were relatively low. There was no significant correlation between laissez-faire leadership style and organizational performance.
From the study, recommendations about laissez-faire leadership styles were made as managers were advised to get involved in the organization’s affairs and should give maximum guidance to their subordinates; effective reward & recognition systems should be formulated and employed by managers. It was further recommended that managers should: inspire subordinates by providing meaning and challenging to work; and become a role model to his subordinates by helping them improve and stimulate subordinate efforts to become more innovative & creative; and lastly, for the achievement and growth of the organization, managers should pay greater attention to each of his followers needs. The study is similar to the present study as it determined the impact of leadership styles on organizational performance. It, however, differs in that it was carried out in state-owned cooperation while the present study is aimed at evaluating the leadership style and performance in an e-commerce industry.
Another study similar to this present one is that of Abasilim (2014) which reviewed organizational performance in Nigerian work environment and how it relates to transformational leadership. It relied on secondary data as its main source of information; however, a review of available literature for description and analysis of the subject matter were reviewed and this could serve as the primary method of study. The researcher revealed the important role leadership style plays in an organizational performance, with particular reference to transformational leadership style. This, however, depends on the situation and the environment of the organization. It implied that transformational leadership style will be best appropriate for ensuring organizational performance in Nigerian work environment.
Consequently, the study recommended that no particular leadership style is the best and that leaders should adopt a leadership style that is suitable for the environment and the situation in order for organizations to improve or ensure optimal organizational performance. Leaders should attend leadership submits and training schools to enhance their leadership style and for the benefit of their organizations. It also recommends that leaders must learn to choose the right leadership style that matches the tactics they are taking to achieve their objectives and suits the prevailing situations and the environment if they must achieve the goals and objectives of their organization as a whole. The study is different from the present study as it is only a review of literature while the present study is set to carry out an investigation on the influence of leadership style and performance on employees’ performance and satisfaction in Payporte Nigeria limited and this will be conducted using questionnaires and conducting interviews.
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