Effect of Leadership Styles on Organizational Performance in Private Commercial Banks of Dire Dawa Administration

Abstract

The main objective of this study was to determine the effects of leadership style on organisational performance with specific reference to private commercial banks operate in Dire Dawa Administration. The study adapted a cross - sectional survey quantitative designs. The target population of this study was the leaders in different level and employees in the 6 private commercial banks, Dire Dawa Administration. The study used purposive sampling to select 81 leaders and proportional stratified random sampling to select 208 employees from the target population. This study was used primary and secondary data. Collected data was analyzed by use of descriptive and inferential statistics through the help of Statistical Package for Social Sciences (SPSS) version 23. Descriptive statistics were given using percentages, mean and standard deviation while inferential statistics were carried out using independent sample T-test and multiple regression analysis. The result showed that both transformational leadership style and transactional leadership style exhibited positive and significant effect on organisational performance in private commercial banks of Dire Dawa Administration. The study concluded that transformational leadership is more effective than transactional leadership in inducing organizational performance in private commercial banks of Dire Dawa Administration and, therefore, recommended to practice transformational leadership style according to the work situation. Keywords: Leadership Styles, Organizational Performance, Private Commercial Banks DOI: 10.7176/EJBM/14-13-03 Publication date: July 31 st 2022