2.0INTRODUCTIONThissection will review the literature on leadershipstyle and performance. Conceptual clarification of leaders, leadership andleadership styles will be examined. Theories of leadership which will form thetheoretical frameworks for this study will also be examined and reviewed.
Empirical studies will also be reviewed. 2.1 CONCEPT OF LEADERS ANDLEADERSHIP A leader is aperson who influences people to achieve a goal or an objective (Yukl, 1994) and everyorganization needs a leader, as leaders play a very important role in settingthe tone and culture of the organization (Batista-Taran, Shuck, Gutierrez, & Baralt, 2009). A capable leader is one who directs and guildshis followers to achieve the desired goals. A leader is a person who can influence the behaviourof his followers to achieve the set goals. According to Squires (2001),leadership is about having followers who have the utmost faith in you and canconform to what you stand for, thus, it is concerned with the spiritual aspectof their work. A leader is a personwho inspires their subordinates through, directing and motivating them to performspecific tasks in order to accomplish outlined company objectives (Ojokuku, Sajuyigbe, & Odetayo, 2012).
Simply put, thedefinition of a leader is “someone who sets the directionfor his people to follow, in an effort to influence them” (Fustin, 2013). Successful leaders needto understand themselves, their followers and the tasks and procedures thatgovern the organization as a whole. A leader needs confidence and strategies inorder to administer a wide range of different issues effectively – fromcreating learning associations where workers grow and develop as effectivemembers of an organization to managing any conflict that arises; from fosteringhierarchical clarity to inspiring energy and creativity through bold visions(Gallos, 2008).(Lee and Chuang, 2009),clarify that a good leader not only inspires subordinates to perform moreefficiently but also meets the requirements for achieving organizationalgoals. Leadership also has a socialimpact as the leaders influence their followers’ conduct, attitude andmotivations. Leaders play an important role in the attainment of organizationalgoals.
2.2 THEORIES OF LEADERSHIPThestudy of leadership is crucial and has been an important part of the narrativeon management and organization conduct from time immemorial. It has fostered manydebates in most professional communities worldwide. Every organization seeks to constantly developgood leaders, as this will inevitably bring about success. However, the logicalissue with this attempt is that there are countless leadership theories andstyles. There have been a number of theories explaining leadership styles; thisis likely because of the complexity of the concept of the term leadership whichcan be viewed from different perspectives.
Thereare different schools of thought on how leaders come about. Some people believethat leadership is a natural trait, that leaders are rather born not made whilesome people believe that leaders are made and nobody is born a leader. Thesediffering opinions make it difficult for professionals to agree on whichparticular theory or style a leader should adopt to enhance their organizationsand also to develop great leaders.
Indeed, as stated in (Schwandt , 2000), “no other role in organizations has received more interestthan that of the leader”. Consequently, several theories of leadership abound,a few of which are discussed below. 2.2.1Trait Theories:Thetrait theory posits that personal characteristics like personality traits,cognitive skills, and interpersonal skills can determine an individual’spotential for leadership roles and can distinguish leaders from non-leaders(Furham, 2005).
Thus, the trait theory establishes the fact that, leaders areborn and not made and that leadership is unique to certain individuals. AsParry and Bryman (2006) put it, “nature is more important than nurture”; thatis to say, an individual’s predisposition to leadership (his or her “nature”) hasa greater influence than the environment within which they are raised. Thetrait theory often identifies a particular attribute an individual possessesand compares this to the personality or behaviouralcharacteristics shared by leaders that have come before them. However, thetheory is flawed in the sense that there are people that possess the qualitiesof a leader but are not leaders and individuals who possess all the traits asopposed to individuals who are leaders that have certain singular traits. Thismakes it difficult to use trait theories to explain leadership as traits cannotbe accurately measured. (Ackerman & Heggestad, 1997; Judge, Jackson, Shaw,Scott, & Rich, 2007).
2.2.2Situational Theories:Thistheory, also known as Contingency theory, of leadership is more concerned withthe context of applied leadership as it relates to the situation at hand and thefollowers of the organization. Here, leadership focuses on pre-existingconditions as the leader adjusts their leadership style to correspond to theirown personal characteristics and the situation at hand (Krumm, 2001). Proponentsof this theory are of the belief that for a leader to be effective, they shouldknow how to adapt their personal characteristics to the situation. 2.
2.3Behavioral Theories:Behavioralleadership theory holds that great leaders are made not born. This leadershiptheory focuses on what actions leaders take and their concern for people andproduction processes. The theory states that an individual or person can learnthe art of leadership through teachingand observations and the success of that leader can be defined in terms of hisaction.
(Nahrgang, Morgeson, & Ilies, 2009). Researchersfrom the 1940s through the 1960s began studying behavioursexhibited by leaders as a means to separate leaders from non-leaders. Theprimary difference between studying leadership behavioursand leadership traits, is that traits are the attributes one possess while behaviors,on the other hand, can be taught and learnedand by being taught these behaviors, managers are trained to develop an effectiveleadership style and in turn, the people under them can be trained to be betterleaders (Nahrgang, Morgeson, & Ilies, 2009). 2.2.4Participative Theories:Participativeleadership theory is of the opinion that an ideal leadership style, is that whichwelcomes the input and contributions from those who are affected by thedecisions being made or are a part of the team and such inputs are accepted andare taken into account.
These leaders encourage members of their team to play arole by participating and contributing and this helps team members feel morerelevant and in turn, more committed to the decision-making process. Inparticipative theories, however, the leader retains the right to allow the contributions.It is otherwise referred to as transactional leadership.
Transactionalleadership is focused more on the exchanges between leader and follower and itis a theory which promotes compliance. The followers are rewarded or punished foreither meeting specific objectives or performance criteria or not meeting therequired goals (Jung, 2001). The leader provides rewards and positive reinforcement.Transactional leadership is more practical in nature because of its emphasis onmeeting specific targets or objectives (Jung, 2001) and an effectivetransactional leader recognizes and rewards their followers’ accomplishments ina timely manner. However,subordinates of transactional leaders are not necessarily expected to thinkinnovatively and may be monitored on the basis of predetermined criteria, whichmay stifle creativity and lead to poor performance. Successful transactionalleaders make fitting moves to curb problems their subordinates may have (Jung,2001). A transactional leadership style is appropriate in many settings and maysupport adherence to practice standards but not necessarily receptiveness todevelopment.
RelationshipTheories:Relationshiptheories, also known as transformational theories, focus on the connectionsformed between leaders and followers. Transformational leaders are greatinfluencers who inspire and motivate employees by helping them know the importanceand the benefits of performing tasks. These leaders are not entirely focused onthe performance of the group as a whole, preferring to be more particular aboutindividuals performing their duties. Leaders with this style often have highethical and moral standards.
Transformationalleadership can be likened to charismatic or visionary leadership.Transformational leaders are inspirational leaders, who focus on motivatingtheir followers even beyond rewards. Transformational leadership operatesespecially well in close supervisory relationships, as opposed to distant andimpersonal relationships (Howell & Hall-Merenda, 1999). This closerelationship may be typical of a supervisor-supervisee relationship and is alsocaptured in the notion of “first-level leaders” (Priestland & Hanig 2005),who are thought to be important because they are the first point of contact forsupervisees in the chain of command of an organizational setting. A transformationalleader aims to expand their followers’ motivations through the communication ofthe value and importance of the leader’s goals (Howell, 1997; Gardner, Avolio,1998).
2.3EMPIRICAL FRAMEWORKStudies on leadership have been ongoing for a longtime, researchers have carried out various studies which are relevant to thispaper. One of such studies is one carried out by Koech & Namusonge (2012) on the effects of leadership styles on organizational performance at state-ownedcorporations in Kenya. The researcher specifically sought to discover thedegree to which various leadership styles affected organizational performanceat state-owned corporations in Kenya. A descriptive survey research was carriedout on the middle and senior managers in thirty (30) state-owned corporationsbased in Mombasa, Kenya was undertaken and a research questionnaire, completedby the participants was thereafter distributed. Various factors and three independentvariables were identified and measured. These were transactional; transformationaland laissez-faire leadership styles. The dependent factor was represented bythe degree to which the organization has achieved its business objectives inthe previous financial year.
Correlation analysis was employed to discover theleadership styles that influence organizational performance. The relationship betweenthe transformational-leadership factors and organizational performance ratings wasrecorded as high, whereas the relationship between the transactional-leadershipbehaviours and organizational performancewere relatively low. There was no significant correlation between laissez-faireleadership style and organizational performance. From the study, recommendations about transactionalleadership styles were made as managers were advised to get involved in the organization’s affairs and should give maximum attentionand guidance to their subordinates; effective reward & recognition systemsshould be formulated and employed by managers.
It was further recommended thatmanagers should inspire subordinates by providing meaning and motivation towork and become role models to their subordinates by helping them improve and stimulatesubordinate efforts to become more innovative & creative; and lastly, for theachievement and growth of the organization, managers should pay greaterattention to each of their followers’ needs. The study is similar to thepresent study as it determined the impact of leadership styles on organizationalperformance. It, however, differs in that it was carried out in state-owned corporation while the present studyis aimed at evaluating the leadership style and performance in an e-commerce industry. Another study similar to this present one isthat of Abasilim (2014) which reviewed organizational performance in a Nigerian work environment and how itrelates to transformational leadership. It relied on secondary data as its main source of information; however, a reviewof available literature for description and analysis of the subject matter wasperformed and thus, this could serve as the primary method of study. Theresearcher revealed the important role leadership style plays in organizationalperformance, with particular reference to transformational leadership style. This,however, depends on the situation and theenvironment of the organization.
Based on this study, it was implied thattransformational leadership style will be most appropriate for ensuring positiveorganizational performance in Nigerian work environment. Consequently, thestudy recommended that no particular leadership style is the best and that leadersshould adopt a leadership style that is suitable for the environment and thesituation in order for organizations to ensure optimal performance. Leadersshould attend leadership conferences and training schools in order to enhancetheir leadership skills and for the benefit of their organizations. It alsorecommends that leaders must learn to choose the right leadership style thatmatches their objectives and suits the prevailing situations and the environment if they must achieve the goals oftheir organization as a whole.
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