Impact of leadership styles on organisational change in corporate organisations

CHAPTER ONE

INTRODUCTION

1.1       Background to the Study

Leadership is one of the factors that play a significant role in enhancing and retaining the interest and commitment of employees in organisation. Organisation, group, institutions developed or even the emerging economies of the world face leadership problems. The success or failure of any organisation depends on the leadership and the styles. Leadership is one of the contentious issues in all societies and organisations. Leadership is the aspect of management that falls under the direct function of a manager and one of the attributes of a good manager is effective leadership. The reason behind the wide spread concern about leadership is that there is a direct relationship between leadership and goal attainment in every organisation (Onuegbu and Okeke, 2018).

Leadership is considered a major factor that has an indisputable influence on employee performance in any kind of organisation (Ogbonna and Harris, cited in Obicci, 2015). But how employees perform under different kinds of leadership has been a point of contention among researchers and scholar alike (Gadot, 2006). Studies have shown that employee performance increases under an extraverted leadership when employees are passive, and if employees are proactive result will be opposite (Grant, Gino and Hofmann, 2011). Leadership has an immense influence on the performance of employees. Better improvement of employee performance is a clarion call for organisations in the midst of continual rising challenges due to scandals and unethical behaviors (Wang et al., 2005).

In an organisation, leadership is a great resource that guides employees as well as the organisation into the realization of its corporate objectives. The need for an effective leadership in the present day business environment has been enhanced because for an organisation to react appropriately in the face of competition and to also realize its objectives; the top leadership play an important role in determining its success or failure (Khademfar and Amiri, 2013). Consequently, most organisations are currently re-examining their strategic goal by developing directions, which start the establishments of moral administration for reasons for productivity and business benefit.

Ogbonna and Harris (2000) point that ethical leadership in an organisation influences employees’ performance since it is expected to determine the organisations capacity to define the association's objectives and procedures, create structures, procedures, controls and center abilities for the association which will eventually determine the organisations adaptation to changes in the business environment. The moral authority rotates around the level of business practice that connects the parts of culture and moral business hone (Oates and Dalmau, 2013).

According to open-systems theory, organisations constantly interact with their environments. They need to structure themselves to deal with forces in the world around them (Scott, 2008). Hence, Sande, Walela, and Wamukoya (2015) submitted that in the current business environment organisations pursue throat cut competition to survive. The competition they undergo may not be carried out with the old way of doing business. Therefore, they all tend to undergo an organisational change. Jones (2010) stated that organisational change is the process by which organisations move from their present state to some desired future state to increase their effectiveness.

Kitur (2015) is of the view that change comes in an organisation in many forms: merger, acquisition, joint venture, new leadership, technology implementation, organisational restructuring, and change in products or regulatory compliance. The change may be planned years in advance or may be forced upon an organisation because of a shift in the environment. Organisational change can be radical and alter the way an organisation operates, or it may be incremental and slowly change the way things are done.

Therefore, this study seeks to investigate leadership styles and organisational change in corporate organisations with particular reference to First Bank Nig Plc.

1.2       Statement of the Problem

When change in any industry is not properly managed, there is the tendency it will negatively affect corporate performance which may result in total closure of the organisation as it happens to many of the defunct banks in the past, or loss of valued employees or failure to meet financial objectives of shareholders and may eventually degenerate into customers dissatisfaction who could easily move to other competitors thereby affecting the overall financial performance of the firm.

The wave of various economic problems that led Enron, WorldCom and Cadbury to bankruptcy as well as the financial crisis witnessed globally in 2007 and 2008 especially in the banking industry have caused a lot of attention to be directed towards corporate leadership style.

Apart from cases of unethical practices in developed nations, evident have also shown in developing countries. For instance, Nigeria has witnessed increased in the rate of corporate failures. There were reported cases of corporate failure in Nigeria which were attributed to unethical practices of corporate leaders. The Nigerian banking sub-sector was at the halt of collapse in 1997, twenty-six commercial banks failed due to financial irregularities. In 2006, Cadbury Nigeria Plc, one of the leading Food and Beverages firms in Nigeria was affected by financial scandal (Bello, 2012).

Leadership requirement in today’s organisations in Nigerian perspective is very important to meet the global business challenges. On the other hand, leadership development is also a major consideration and challenge across the globe and has a major influence on corporate performance. There is a large amount of work done on leadership development and its impact on various factors in many parts of the world, however, there is very limited research conducted in Nigeria in the area of leadership styles and organisational change in corporate organisation. Hence, this study seeks to examine leadership styles and organisational change in corporate organisation with particular reference to First Nig Plc.

1.3       Objective of Study     

The main thrust of this research study is to examine leadership styles and organisational change in corporate organisation with particular reference to First Bank Nig Plc. Other specific objectives include:

1.   To investigate the link between leadership styles and organisational change.

2.   To examine the impact of democratic leadership style on corporate performance.

3.   To examine if there is any significant relationship between autocratic leadership style and employees’ job commitment.

4.   To examine if there is any significant relationship between leadership style and organisational growth.

1.4       Research Question 

The undertaking of this research project will beam a searchlight on the following research questions:

1.      What is the link between leadership styles and organisational change?

2.      What is the impact of democratic leadership style on corporate performance?

3.      How does autocratic leadership style impact on employees’ job commitment?

1.5       Research Hypotheses

The researcher intends to test the following hypotheses:

Hypothesis One:

Ho:      There is no significant relationship between leadership styles and    organisational change.

HI:        There is a significant relationship between leadership styles and       organisational change.

Hypothesis Two:

Ho:      There is no significant relationship between democratic leadership style and         corporate performance.

HI:        There is a significant relationship between democratic leadership style and            corporate performance.

Hypothesis Three:

Ho:      There is no significant relationship between autocratic leadership style and           employees’ job commitment.

HI:        There is a significant relationship between autocratic leadership style and employees’ job commitment.

1.8       Significance of the Study