Transformational leadership and performance of commercial banks in Kenya

Abstract

This research study aimed at establishing the relationship between performance of Commercial Banks and transformational leadership in Kenya. A cross sectional research design was used to study the research problem and data was collected from the Commercial Banks in Kenya. 30 top banks made up the study population and the inquiry used questionnaire for data collection. However, the data analysis was done using SPSS model and regression analysis conducted to show the relationship between the variables under study. The conclusion found was that the adoption of transformation leadership strategies such as idealized influence, intellectual stimulation strategies as well as inspirational motivation plans and individualized consideration strategies is directly correlated with the performance of the Commercial Banks in the country. It was further showed that transformational leadership style allowed the bank top management to provide their employees with inclusion support plans, shared vision and ability to provide stronger relationship with different stakeholders. The study also found out that the adoption of participatory and democratic leadership style is associated with strong bank’s performance. This is because the findings indicated that the banks whose leadership had adopted transformational leadership exhibited increased performance over time. The study then concluded that there existed a strong positive relationship between performance of Commercial Banks and transformational leadership. The study recommends that the management of the commercial banks needed to adopt effective transformational leadership styles in their management programs to enhance their performance. This study also suggests that top management of commercial banks should be trained on the how to use transformational leadership models to improve the banks’ performance.