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AN INVESTIGATION INTO THE RELATIONSHIP BETWEEN LEADERSHIP STYLES AND ORGANISATIONAL PERFORMANCE

Chapter One

Introduction

1.1 Background of the study

Leadership is a fascinating concept in which philosophers, historians, psychologists, sociologists, politicians, and all kinds of executives, have shown much interest. It is considered as one of the key functions of management and, as such, has been a subject of considerable research. According to Igboeli, (1990:151), leadership may be defined as a process by which people are directed, guided and influenced in achieving group goals. A leader is a person who is central in a group goals interaction. According to Ile, (1999, 208), a leaders is one who influences his or her followers or group to achieve an objective in a given situation. The followers may be his or her superiors or peers as well as the subordinates of the leader. It is the willingness of people to follow that makes a person a leader. Moreover, people tend to follow those whom they perceive as providing a means of achieving their own desires, wants and needs.

By the nature of their position, managers are placed in a leadership position in organizations to influence the behaviour of the formal work group. Their effectiveness can be measured by the accomplishment of the group vis-à-vis the organizational goals and objectives. Leadership consists of two types – formal and informal. Formal leaders are appointed to their leadership positions while informal leaders are selected by the group. Each type of leader relies on a different source of authority to influence members. A manager, who relies exclusively on his formal authority to influence group members, falls into the formal leadership category.

 According to Ile, (1999:217) there are some important implications in the concept of leadership, for instance, leadership involves others. In other words, leadership involves followers. The followers may be superiors, or peers, as well as the subordinates by their willingness to follow, accept directions from the leader, group members help define the leader’s status and make the leadership process possible. Thus, leadership demands followership. Leadership involves unequal distribution of power between leaders and group members. This is implied that group members are not powerless; they can and do shape group activities in a number of ways. Leadership involves ability to use difference forms of power to influence followers’ behaviours in a number of ways. According to Appleby, (1981:117) leadership also involves the acceptance of responsibility for the achievement of the group objectives. Because of this, it is therefore, essential for trust and cooperation from both sides to be in evidence all the time.

Therefore, without leadership, an organization is but a muddle of men and machines. In other words, without leadership, an organization would be comprised of uncoordinated groups of people lacking unity and direction.

1.2 Statement of the Problem

The role of organizational leaders in facilitating optimum or high performance in work organisations cannot be over emphasised. A number of studies that have examined the relationship between leadership styles and organisational performance had indicated that leadership behaviour and organisational performance are significantly related (Bass, 1990; Collins and Porras, 1996; Manz and Sims, 1991; Sarros and Woodman, 1993).  But some studies have also provided evidence that leadership styles may have a positive correlation or negative correlation with organisational performance, depending on the variables used by various researchers (Goleman, 2000; Vigoda-Gadot, 2007, Wang, Chich-Jen, Shieh, and Mei-Ling, 2010).

For instance, certain studies have focused on what is generally called the Full Range Leadership Development theoretical model.  This model includes: laissez-faire or no leadership style; transactional leadership style which is based on passive and active aspects; and transformational leadership style which is based on personal relationships, intellectual challenge, inspirational motivation and behavioural charisma.  These three styles have been commonly applied by researchers to the study of leadership and organisational performance (Avolio and Bass, 1991; Bass, 1985; Bass and Avolio, 1993; Geyer and Styrer, 1998; Lowe, Kroeck, and Sivasubramaniam, 1996; Mackenzie, Podssakoff, and Rich, 2001; Parry, 2003; Pillai, Schrieshim, and Williams 1999). These three categories create a hierarchical sequence of leadership styles according to the extent of activity that the leader expresses in his/her actions and according to the extent of its effectiveness.  In this model, transformational leadership ranks as the most effective style, followed by transactional leadership and then the laissez-faire style in descending order of effectiveness.  The basic assumption of the Full Range Leadership Development model is that in every leader all styles can be found.  Other studies on the link between leadership and organisational performance indicate that a stronger relationship exist between transformational leadership and performance than between transactional leadership and performance. Transactional leadership and performance was found to have a lower correlation than transformational leadership and performance (Den Hertog, Van Muijen and Koopman, 1997; Vigoda-Gadot, 2007).

On the other hand, the relationship between transformational leadership and organisation performance is positive and strong.  However, the question arises as to whether or not these research outcomes on the relationship between various leadership styles and organisational performance is universally valid.  As such, there is the need to test these research results in the Nigerian work environment.

In a nutshell the research problem is: What is the actual relationship between the various leadership styles and organisational performance in the Nigerian work context.

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