MN5619: Impact Of Leadership Style On Organisational Performance Assessment Answer

CHAPTER 1: INTRODUCTION

1.1 Problem Statement

In the opinions of Ibrahim and Daniel (2019), the management of employees in an organisation is a critical element as their performance is synonymous to that of the organisation. This further necessitates the presence of an astute leadership that acts as a guide for delivering the respective job roles but the betterment of the skills and performance of the employees. Additionally, the lack of adequate leadership can adversely affect the workforce in terms of creativity, innovation, employee retention, organisational effectiveness, and others. This in turn further draws attention to the various leadership styles and strategies that are pertinent for motivating and supporting the employees (Katsaros et al., 2020). Therefore, it is crucial for an organisation to strike a balance between the demands of the stakeholders and the requirement of the employees where the leadership attributes of the authorities are an eminent aspect and serves as the topic of interest for this research.

1.2 Research Questions

RQ1: What are the qualities and styles of leadership existent among the managers of any organisation that can enhance the organisation’s performance?

RQ2: What is the impact of leadership styles on an organisation's performance directly?

RQ3: What are the effective strategies that can eliminate the challenges experienced by leaders and managers of different organisations to sustain the motivational capacity and the organisation’s performance?

1.3 Aims and Objectives

The aim of the research is to examine the impact of leadership styles on organisational performance

RO1: To identify the different types of leadership styles and qualities which has a direct

positive or negative impact on organisational performance

RO2: To analyse the impact of leadership styles on organisational and employee

performance

RO3: To recommend effective strategies to the managers and leaders of organisations in

sustaining the organisation’s performance and motivational capacity

1.4 Scope of the Research

The topic of this research shows that this research is going to study the delicate relationship between leadership style and organisational performance, and the former affects the latter. Therefore, the research has the scope of examining each organisational performance factor in a company individually. The research might also analyse the leadership theories and their effectiveness in enhancing organisational performance by investigating real-world scenarios. The research may trace the direct and indirect effects of leadership in enhancing organisational efficiency. After the data analysis, recommendations will be drawn from the results that might guide the leaders in adopting leadership strategies that are specifically tailored to their organisation. Personalisation them to the organisational context would help mitigate the issues that are specific to the company.

CHAPTER 2: LITERATURE REVIEW

2.1 Theoretical Underpinning

The Transformational Leadership theory will be implemented in reviewing the evidence to maintain the efficiency of the findings. According to Brown et al. (2019), Transformational leadership theory is all about bringing change in the existing individual or social system. The theory encourages the leader to work with the employee as a team member to identify opportunities, create a vision and enforce the change. Asbari (2020) states that this leadership theory focuses on motivating employees and encouraging them to develop innovations. However, according to Shafi et al. (2020), employee innovation and motivation are the key concepts for enhanced organisational performance. Therefore, the transformational Leadership theory offers compelling strategy guidelines for organisational leaders to understand the key factors that drive the company's performance from within, and take targeted initiatives to enhance performance.

Figure 2.1 Qualities of Transformational Leadership Theory

(Source: Vaidya, 2022)

From the combined research by Saad Alessa (2021) and Asbari et al. (2020), it is evident that not only does this theory allow a leader to frame an explicit and inspiring vision, but also makes sure that it is well aligned with the organisational vision and business operation strategy. The theory specifically emphasises the intellectual stimulation of the employees with its drive for innovation. On the other hand, the theory instructs a leader to be creative and enhance their critical thinking for efficient problem-solving (Reza, 2019). The creativity factor within the theory guides the leaders towards out-of-the-box things and adaptive strategies to survive and thrive in the changing market environment. Therefore, the theory can view the impact of leadership style on organisational performance, and help understand if the impact is significant enough to make an impressionable change in employee performance.

2.2 Research Hypotheses

H1: Transformational leadership style has a momentous impression on organisation’s Performance.

The present market scenario demands businesses and firms to exhibit acute competitiveness, which requires the optimum efficacy of the workforce. To extract the best performance out of the employees, transformational leadership is pertinent as it acts as a tactical strategy as has been opined by Atan and Mahmood (2019). Transformational leadership is crucial as it helps in providing motivation to the subordinates to achieve organisational goals through fulfilling the vision of the firm. Simultaneously, Busari et al. (2019) have remarked that transformational leadership is a key aspect in developing a sense of unison between the employees and the organisation along with the alignment of individual values and actions to that of an organisation. Transformational leadership in an organisation acts as an agent of change by stimulating and transforming the motives, beliefs, and attitudes of the employees. Therefore, Hai et al. (2021) have stated that transformational leadership is considered an important parameter in establishing stability within an organisation along with strengthening emotional association.

H0: Transformational relationship style does not have a momentous impression on organisation’s performance.

To excel in terms of performance the competence of the employees combined with their expertise and their intent to exhibit an outstanding performance is significantly more important than leadership or transformational leadership at large. In the opinions of Lin et al. (2019), transformational leadership might be an important aspect but it takes a negative toll on the wellbeing and the mind-set of the leaders because of catering to their leadership roles daily. The authors have also stated that being invested in the transformational leadership style often poses a detrimental impact on the emotional and psychological wellbeing of the leader. Simultaneously, Purwanto et al. (2020) have also stated that leadership style alone cannot be an effective tool in the betterment of organisational performance as the individual capacity, maturity, willingness to take responsibility and skill or experience relevant to tasks and competence are aspects that contributes to the organisation’s performance.

H2: There is a positive correlation between leadership styles and employee motivation to influence organisation’s performance.

The management of employees is a daunting and complex task as the employees often hail from heterogeneous backgrounds, which further necessitates the presence of an adequate leadership that can guide and motivate the employees in accordance with the organisational goals. According to Arifuddin et al. (2023), leadership style plays an immaculate role in motivating the subordinates which is eventually reflected in their performance which further depicts that higher the level of motivation the higher the employee performance will be. The connection between leadership style and employee motivation is further reverberated in the opinions of Guterresa et al. (2020) who have stated that leadership behaviour influences subordinates' performance. Leadership style has an eminent impact on team collectivism that in turn poses a positive influence on team potential. Furthermore, Hajiali et al. (2022) have remarked that issues regarding leadership styles can often lead to low job satisfaction and poor performance of the employees.

H0: There is no correlation between leadership styles and employee motivation that influences organisation’s performance

Employee motivation is regulated by several aspects such as work-life balance, job flexibility, options for further development and advancement, rewards and others and is not intrinsically confined to the leadership style within an organisation. Therefore, Shafi et al. (2020) have stated that employee motivation is intertwined with the innovation initiatives taken by an organisation and the opportunities provided to the workforce to flourish their creative side. In a survey conducted by the Harvard Business Review it has been identified that employee motivation and performance is often influenced by several aspects other than leadership style as could be observed from the figure provided below (Williams, 2023).

Figure 2.2: Factors affecting employee motivation and performance

(Source: Williams, 2023)

In addition to this, Nguyen et al. (2020) have stated that leadership is an effort that uses leadership style to influence and not force in motivating individuals to achieve goals and therefore can be estimated to have no correlation between leadership styles and employee motivation.

2.3 Conceptual Framework

Figure 2.3: Conceptual Framework

2.4 Literature gap

The chapter lacks substantial data to support the first proposed hypothesis, suggesting a lack of impression on the organisation’s performance. Furthermore, the literature also failed to analyse other factors than the leadership style that may affect the motivation of employees. However, these gaps can be covered in further research.

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Research Framework

According to Alrowwad et al. (2020), a Research framework is the process of investigation followed in a study to find out the correlation between the leadership styles, motivation of employees and the company’s performance in the business market. The research Implemented an interpretivism research philosophy since it would allow the study to examine different data sets from their own perspective instead of focusing on the conclusion to gain the desired outcome (Grassini and Laumann, 2020). The choice of the research philosophy was justified since this research had multiple sources of data that would be scrutinised under the same data collection and data analysis method.

The framework of research also depends on its approach, as it is responsible for keeping the study on track with the objectives. According to Dauzón-Ledesma and Izquierdo (2023), a deductive approach is especially effective and suitable in quantitative research, as it ensures that the raw numerical data are taken into consideration. This attempt is to enhance the quality and reliability of the research.

3.2 Data Collection

The topic of the research is focused on examining the impact of leadership style specifically on a specific population of employees. Therefore, the study has used primary data collection methods to collect real-world information from the targeted population in this research (Dreyer et al., 2019). This not only improved the quality of the data but also helped the study to meet the research objectives. Google Forms was used as a platform for data collection, and weblinks were shared with each respondent. The survey questionnaire itself contained 20 questions, including demographic queries. The research instrument (questionnaire) was designed based on the Five-point Likert Scale of Agreement. According to Dauzón-Ledesma and Izquierdo (2023), such a Likert scale in a questionnaire provides five responses to each question, ranging from “Strongly Disagree” to “Strongly Agree”. A wider range of responses allows the respondents to show their opinions better and improves the quality of the data.

3.3 Data Analysis

The research used a case study strategy, along with a Quantitative data-analysis method to understand the practices related to leadership strategies and styles by surveying the employees from different departments of the company (Do and Do, 2022). After the primary collection of data as survey responses, the research implemented a descriptive and inferential statistics analysis of the data with a better frequency distribution. This would help during the graphical representation of the data. The software used for the quantitative analysis is SPSS (Statistical Package for Social Sciences). According to Purwanto (2021), SPSS is known to be useful in managing large datasets and performing complex analyses faster and more efficiently. Therefore, the use of the software is justified for identifying patterns in the survey responses of the employee respondents. On the other hand, the software also helped determine the reliability of the research using the Cronbach Alpha test.

3.4 Sampling and Population

The population of the study was apparent from the research topic, as it intends to find out the impact of leadership styles on organisational performance, which largely depends on the employees of the organisation. Anwar and Abdullah (2021) even suggested that the performance of a company is directly proportional to the performance of the employees. The sampling strategy used for sleeping the respondents is Purposive sampling, to select respondents under common leadership to capture the intricacies of the impact of leadership styles on various employees (Campbell et al., 2020). However, since surveying millions of employees across the globe is impossible, the research decided on a sample size of 200, who will participate in the survey. These 200 employee-respondents were selected from the various departments of Uganda Breweries Ltd and were given three days to fill out the survey upon distribution.

3.5 Ethical Considerations

The research is going to ensure the ethical considerations related to the research by distributing a consent form to the participants of the survey, informing them about the use of their response data, and ensuring that they are not being coerced into giving false responses. In addition to that, the study will also safeguard the confidentiality of every participant, as advised in the Data Protection Act 2018 (Hoofnagle et al., 2019). The research will ensure careful handling and storage of the data, as well as responsible disposal. The survey response will not have any mention of the personal details of the respondent, such as name, address or contact information, and will be saved in an encrypted cloud storage.

CHAPTER 4: ANALYSIS AND FINDINGS

4.1 Quantitative Analysis

This research used IBM SPSS software to analyse the responses of 200 survey respondents against the research questionnaire. Various quantitative data analysis tests were adopted over this research chapter to analyse the 200 research respondents' perception towards the research issue.

4.1.1 Demographic Information

Figure 4.1.1: Demographic Information

Over the IBM SPSS, using the research demographic analysis it was identified that among the 200 employees of Uganda Breweries Ltd, 104 were male and 96 of them were female employees. It was also identified that most of the employee respondents were aged between 26 to 30 years. Additionally, only 13 employees were aged above 36 years where most of them were female and rest were male. 

4.1.2 Common Method Variance

Figure 4.1.2: Common Method Variance

Highest variance of the first component at 35.881% is affecting the data set due to the highest percentage of variance. On the other hand, the fourth component has the lowest variance percentage at 6.729% that influences the study.

4.1.3 Reliability

Figure 4.1.3.1: Cronbach Alpha

This research used Cronbach alpha test to identify the reliability of the research variable questions. According to previous research using IBM SPSS Cronbach Alpha test the value of the Cronbach Alpha required to be stated between .7 to .95 to present that the research results are reliable. Over this specific research, the Cronbach Alpha value was identified as .784, which presents that this research is reliable, and the questionnaires the research used to collect data form the research respondents is valid.

It was identified over the reliability analysis that the first dependent variable constant presented the highest std. Deviation value, which presents low response accuracy, by the survey respondents. Similarly, the fifth constant of the second independent variable presented the lowest std. Deviation and the respondents' responses against this specific question was highly accurate.

4.1.4 Multicollinearity Analysis

Figure 4.1.4: Multicollinearity Table

This research used the linear regression method over the IBM SPSS by selecting the research independent variable questions against one dependent variable question to test the multicollinearity. Over the previous multicollinearity test, using the IBM SPSS it was identified that if any research variable presents Variation inflation rate of more than 4 and Tolerance value below .25 that specific variable presents multicollinearity. However, over this specific research process only two of independent variable questions out of twelve independent variable questions presented multicollinearity against the dependent variable question responses. Over the multicollinearity test, it was identified that less than 50% of the research independent variable questions present multicollinearity, therefore this research is valid and succeeds in acquiring accurate results.

4.1.5 Descriptive Analysis

Figure 4.1.5: Descriptive Analysis

This research used a descriptive analysis to identify the value of mean, median and mode against each of the variable questions. It was identified that the fourth question of the dependent variable “Organisational factors must be monitored to measure the performance” presented the highest mean value of 3.7850. Similarly, it was also identified that the second independent variable fifth question “Leadership plays an important role in shaping the organisation” presented the lowest mean value of 1.2500. It was identified that the overall median value is 2.5000 and the overall mode value is 1.00.

4.1.6 Regression

4.1.6.1 Normality, Homoscedasticity and Non- Response Bias

The value of kurtosis analyses the normality of population. Major amount of positive value of kurtosis in this table portrays the normal distribution of the population from where data was collected.

4.1.6.2 Outliers Examination

Outliers define the range within which values for a data set are gathered. Values beyond the maximum and minimum range are considered as outliers. In this table, most of the constructs have an outliers’ range of 1.00 to 5.00.

4.1.7 Multiple Linear Regression Analysis

This research used the multiple linear regression test where all the independent variable question responses were tested against a specific dependent variable question “Organisational productivity depends on employee productivity”. Over previous research using IBM SPSS multiple linear regression test it was identified that the variable constants required to present a p-value of 0.05 or below than that to present a statistically significant connection towards the research dependent variable constant. Over this multiple linear regression test, it was identified that 7 out of 12 research independent variables were able to present a statistical significance towards the research dependent variable.

4.1.8 R-square

The value of R-square is 0.960 that is above the value of 50% and hence the regression model is a git fit for the study. 96% of the variance in the dependent variable can be explained by the independent variables in the study.

4.1.9 Hypothesis Testing

Figure 4.2.9: Hypothesis Testing

The research hypothesis test identified that the first research independent variable “Leadership style” 50% constant were able to present a statistically significant connection towards the dependent research variable constants. Therefore, it was identified that the first research hypothesis “H1: Transformational leadership style has a momentous impression on organisation’s Performance” was supported and the null hypothesis “H0: Transformational relationship style does not have a momentous impression on organisation’s performance” was rejected.

Similarly, in the second research variable “leadership quality” more that 50% of the constants were able to present a statistically significant connection towards the dependent research variable constants. On the virtue of that, the second research hypothesis “H2: There is a positive correlation between leadership styles and employee motivation to influence organisation’s performance” was supported and the null hypothesis “H0: There is no correlation between leadership styles and employee motivation that influences organisation’s performance” was rejected.

CHAPTER 5: CONCLUSION

5.1 Recommendation

Certain recommendations are if that can contribute to the betterment of leadership style leading to improved organisational performance:

Development of communication: Initiating a two-way communication through providing critiques, praises, feedback and guidance between the leaders and the subordinates can help in the development of leadership style within an organisation.

Disciplined approach: Developing and practising discipline can not only leverage the leadership style of the authorities but also inspire the subordinates to meet their deadlines, job roles and so on.

Accountability: Taking responsibility for the actions as well as crediting the employees on their efficiency can contribute to the betterment of leadership style. In addition to this, taking accountability when things go wrong can further help in developing trust and respect thereby catering to increased organisational culture and performance.

Articulating vision: Being more articulate regarding the missions and visions of the organisation can help increasing leadership attributes as well as encouraging productivity.

5.2 Linking with objectives

Objective 1: There have been types of leadership styles that are widely prevalent in organisations across the globe. However, not all leadership styles are adequate or effective in the betterment of the performance of the employees. This draw attention to the fact certain leadership styles such as transformational or transactional are more effective and beneficial in enhancing employee performance in comparison to that of autocratic leadership and others.

Objective 2: It has been identified that leadership style has a prominent impact on the performance of the employees as leadership in an organisation not only contributes to the betterment of the performance of the employees but also serves as a factor contributing to organisational culture.

Objective 3: Identification of strategies for establishing leadership style is significant to motivate the employees as well as leverage the overall performance of an organisation. In congruence with the objective identified in the beginning of the study that certain recommendations have been included in this study to leverage leadership style.

5.3 Implications

The study draws attention to the significant role of leadership style in the betterment of organisational performance where the implications of this research can contribute to the development of innovative work behaviour. In addition to this, the research can be beneficial in effective conflict management along with helping the organisations in enhancing their knowledge and skills.

5.4 Limitations and Future scope

The research has been extensive and comprehensive in investigating various aspects of the impact of leadership style on organisational performance. However, the research could not include a wider range of responses along with exploring into the individual competency of the leaders as well as the implications of leadership roles on the well-being of the leaders. Therefore, future research can delve into these aspects to procure a better understanding.

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