ABSTRACT

The study examined the impact of leadership styles on task performance in the micro-finance industry. The study is a quantitative in nature and adopted a cross-sectional research approach. With a sample of 118 employee sampled from Micro-finance firms and were drawn using the convenience sample technique. The researcher gathered data on the variables of interest and used both descriptive and inferential statistics to analyze the data and test the various hypotheses. Data was collected through the administration of questionnaires and was analyzed using SPSS. The findings of the research disclosed that the transformational leadership style was the dominant style in the Micro-finance industry. Again, it was discovered that transformational leadership style had a significant positive relationship with task performance; whiles transactional leadership style also correlated positively with task performance. From the findings of the study, it was deduced that gender did not account for any major differences in leadership experience among employees. It was thus recommended that managers are trained and encouraged to exhibit both transformational and transactional leadership in order to engender task performance among their employees.

CHARPTER ONE INTRODUCTION

• Background of the Study

Leadership is an important area in management that occupies the central position in our everyday lives. It involves the skill of leading and dealing with people. One thing among the human group is that there is always a leader otherwise the group cannot live to achieve its purpose. The success in leading a group is contingent upon both leaders’ ability to hold power effectively. The problems which result within organizational members disagree on both the nature of the goals of which people aspire and the art of leadership. Leadership in this work refers to behaviour undertaken within the context of an organization that influence the ways in which other organizational members behave. It could be observed that leadership and management are deeply into what the organization can achieve if quality recognition is accorded to them. Leadership includes the source of influences that are built into positions in an organizational hierarchy. These include organizational sanctioned rewards and punishment authority and also expert power. It could be seen however that subordinates within the organization, though not all seem not to enjoy the influence that is above them in the organizational hierarchy.

Four things stand out in this respect. First to lead involve influencing others (Schneider, 2008) Second, where there are leaders, there are followers. Third, leaders seem to come to the forefront when there is crisis or special a problem. In other words, they often become visible when an innovative response is needed. Fourth, leaders are people who have a clear idea of what they want to achieve (goal) and as such have to develop the best strategies and adopt the effective

leading style which are goal oriented to influence their subordinates in achieving their goals (Walumbwa, 2007).

Since an organization cannot progress by depending on one or two individuals’ effort, there is the need for a manager (leader) to enhance the collective effort of each and every subordinate to adopt organizational goals as their personal goals. What leadership style will the manager adopt in order to witness an increase in each subordinate performance that will lead to accomplishing the organizational goals, he or she must first start by understanding what the organization requires from him/her, understand the goals of the organization, and understand the type of employees he or she is dealing with. Additionally, the leader should understand the industry or the type of company they are in, and to exercise just the style that will be appropriate for both the organization and the employees in that particular organization.

Mwita (2000) stated that performance is a major multi-dimensional construct aimed at achieving results and has a strong link to strategic goals of an organization. In an attempt for managers to achieve these results (strategic goals), most of them have made subordinates to become curious about the special traits behaviour and styles that their leaders might exhibit at their job side. This case has made us aware that there is a correlation between the way leaders in an organization should lead and manage their employees and their performance because it leadership style affect the output of employees.

It is with this question that we can align the work of Timothy (2011) with the result he concluded from his study on “The effect of Leadership Style on Organizational Performance of some small scale enterprises in Lagos State Nigeria”, this study was carried out on two leadership styles; the transactional and the transformational leadership style and at the end he concluded that the

transactional leadership style was more appropriate in inducing performance in small scale enterprises than transformational leadership style. This study does not rule out the use of transformational leadership style and support the use of transactional leadership style, but rather stated that transactional leadership style has proved to work better in this case than the transformational leadership style. Therefore, it is necessary in every organization for personnel’s in leadership position to identify their industry, know what the goals of the organization are and adopt appropriate the leadership style that will be appropriate to enable subordinates to work in accordance to achieve organizational goals.