Assessing the moderating role of organizational culture in the relationship between organizational leadership and organizational efficiency in the banking sector

Abstract

PurposeThis study explored the moderating role of organizational culture in the relationship between organizational leadership and organizational culture in the banking sector.Design/methodology/approachThe sample comprised of 331 full-time bank employees in the Ashanti region of Ghana. The reliability and validity of the data was tested using confirmatory factor analysis, with structural equation modeling as the main means of analysis, run using Amos (V23) in the data analysis.FindingsThe study concluded that all four leadership styles (transformational, transactional, servant and sustainable leadership styles) had a positive effect on banks' efficiency. Organizational culture also had a direct positive effect on banks' efficiency in Ghana. The study concludes that organizational culture positively moderated the relationship between organizational leadership and organizational efficiency in the banking industry. This implies organizational culture strengthens the relationship between organizational leadership and organizational efficiency in the banking industry.Research limitations/implications– A limitation of this study was to consider organizational culture as a composite variable, instead of considering the effects of the individual dimensions (clan culture, adhocracy culture, hierarchy culture and market culture). Although using the composite variable was not theoretically wrong, each of the four dimensions had unique characteristics and may influence organizational outcomes differently, and should have been considered.Practical implicationsTo achieve strategic organizational outcomes, leaders are to comprehend the various leaderships styles and how they could be transformed to influence organizational outcomes.Originality/valuePast studies have paid limited attention to the interaction between organizational leadership and organizational culture, and how this affects organizational efficiency.