ORGANIZATIONAL LEADERSHIP AND PERFORMANCE OF COMMERCIAL BANKS IN NYERI COUNTY, KENYA

Abstract

Competent and knowledgeable leadership ensures business survival and also plays a key role in keeping the competitive edge of organizations. In the backdrop of the numerous dynamic shifts characterizing the banking sector environment in Kenya, it is imperative for commercial banks to come up with a clear leadership framework as change in the banking industry is often speedy and complex. The purpose of this study was to determine the effect of organizational leadership on performance of Commercial Banks in Nyeri County, Kenya. The study used census study approach which subjected all the 16 commercial banks in Nyeri County. The study specifically targeted Managers. Primary data was collected through questionnaires which was administered using the drop and pick method. Descriptive and inferential statistics was used to analyze data. The regression analysis indicated that a unit increase in leadership would increase performance by 0.598 units. In view of significance of organizational leadership at 5% level, organizational leadership significantly added up to performance (P=0.002<0.05). The findings of the study indicated that commercial bank leaders create a sense of urgency to reinforce the need for change. The findings of the study indicated that the commercial banks are led by a committed and greatly motivated class of leaders. The study also indicated that banks’ leaders are competent and knowledgeable enough to drive change initiatives and that banks regularly conducts training and development programs to equip the work force to handle change initiatives and peer learning is encouraged in the organization as an important pillar to successful change introduction.

Keywords: Organizational Leadership, Commercial Banks, Organizational Performance