This study examined the effect of leadership style on employees’ performance of Lafarge Cement Plc, Lagos State. The success of any business organization can be attributed to the performance of the employees. As a result, employees are vital asset to the growth and survival of business organization. Thus, employee performance is the ability of an employee to achieve a given task, while leadership style refers to the style employed by an organization or leader to manage, direct, and lead talented employees towards achieving organizational goals.
The research objectives were to; assess the effect of autocratic leadership style on employee job achievement of the employees in Lafarge Cement Plc, Lagos State; investigate the effect of democratic leadership style on employee efficiency of the employees in Lafarge Cement Plc, Lagos State; and examine the effect of laissez-faire leadership style on employee creativity of the employees in Lafarge Cement Plc, Lagos State. This research work made use of quantitative source of data, through which data were gathered using a self-structure questionnaire and administered to 363 employees of Lafarge Cement Plc, Lagos State.
The findings showed that, there is a significant effect of autocratic on employee job achievement of the employees in Lafarge Cement Plc, Lagos State. The result from the model summary table revealed autocratic leadership style is 11.4% i.e. (R square = 0.114), with R value of 0.119. The ANOVA table shows the Fcal 4.627 at 0.0001 significance level. It was further found that, there is a significant effect of democratic on employee efficiency of the employees in Lafarge Cement Plc, Lagos State. The result from the model summary table revealed that democratic leadership style is 0.54% i.e. (R square = 0.545), with R value of 0.212. The ANOVA table shows the Fcal 15.213 at 0.000 significance level. Lastly, the study showed that, laissez-faire has a significant effect on employee creativity of the employees in Lafarge Cement Plc, Lagos State. The result from the model summary table revealed that laissez-faire leadership style is 0.35% i.e. (R square = 0.348), with R value of 0.220. The ANOVA table shows the Fcal 16.352 at 0.000 significance level.
The study recommends that, organizational leaders should ensure that while adopting the autocratic leadership style, they should ensure that the system is not too rigid so as not to create an atmosphere of fear, tension and pressure among the employees. In addition, democratic style should be embraced by organizations as it is found to yield positive employees commitment and enhances their morale towards job performance, which in turn contribute to the organization effectiveness and overall performance.
Keywords: autocratic, democratic, laissez-faire, leadership style, employee efficiency, employee job achievement, employee creativity.
1.1. Background to the Study
The success of any business organization can be attributed to the performance of the employees. As a result, employees are vital asset to the growth and survival of business organization. Thus, employee performance is the ability of an employee to achieve a given task, while leadership style refers to the style employed by an organization or leader to manage, direct, and lead talented employees towards achieving organizational goals.
In USA, there is difficulty blending multiple personalities into a cohesive and unified team. This can be an enormous issue, regardless whether the team is part of the executive suite, special project team in an R&D lab, or an operating team in a production facility, (Robbins, 2012). People’s personalities vary widely, and the diversity of backgrounds, opinions, views, and experiences can cause challenges for teams. This creates a unique set of potential issues and opportunities. If an organization can get people to come into alignment to support common objectives, a diverse team of leaders can produce amazing results, take on the demands of customers, and meet the threat of competitors, (Young, 2013). However, if organizational leaders stay in their silos, protect their own “turf,” fail to share information, refuse to collaborate on shared problems, or lack the ability to think with an entrepreneurial mindset, the organization will under-produce, (Zammuto, 2012).
In Europe, some organizations have a lot of hardworking people who have good intentions. However, despite their experience in the service industry, their technical talent and the subject-matter expertise that many leaders bring to the table, creating a high-performance organization is often still out of reach, (O’Sullivan, & Lazonick, 2006).Sometimes leaders are aware of their behavioral shortcomings; in other cases, they are blind to their leadership deficits. People inside the organization are often afraid to candidly say what they think, and helping enormously successful leaders with their Achilles heels can be tricky, (Bell, 2012).
In other countries, leading and managing an organization is a complex task that requires a unique mix of skill leaders who have to utilize their natural strengths, they also have to search relentlessly for ways to close their own performance gaps and improve their behavior, (Bunderson & Sutcliffe, 2016).Without continuous improvement, an organization’s capabilities will be severely limited. In short, if leaders don’t constantly raise their game, they will suck all the energy and employ engagement out of an organization, (Bunderson & Sutcliffe, 2016). Leaders need to be constantly aware of and working on their personal opportunities for improvement.
In Asia, managing diversity is the confusion between functional diversity and types of non-functional diversity. Functional diversity leads to more effective function or innovation (Sunia, 2015), is often the form of diversity intended in common workplace statements such as “we need to focus on diversity,” or “diversity is something we strive for.” However, in practice there are various forms of diversity that can be encountered in organizations, not all of which are related to improving organizational performance, and some of which may be harmful. Many of these forms of diversity have been termed social diversity, (Giovanni, 2014).The globalisation of culture is a fact of life. It is at once an extraordinary opportunity for the circulation of ideas, people, works and products, but there is also a risk of everyone falling into the same mould, and their cultures and languages disappearing
In Africa, many organizations are faced with lack of poor communication and feedback. There seem to be two extremes in this area: either people do everything in their power to avoid confronting others and holding them accountable or they relish any opportunity to chew people out, belittle them, and crush their spirits, (Bell, 2012). Many organizations in Africa have countless leadership teams which the number-one problem was a lack of honest, constructive, and open dialogue about team members’ practices, styles, skills, or behaviors, (Bell, 2012). Without a culture of openness, feedback, and coaching, organizations will struggle to grow. Many organizational teams try to muddle through this somehow enduring the bully or trying to guess what other want and need from them. People often tell others that they fear reprisal or retaliation if they open up, but the reality is that leaders can’t execute on their strategies, lower costs, or effectively launch new processes or services when people fail to communicate with constructive candor, so this is an issue that must be overcome, (Boldman & Deal, 2003).
In West Africa, as technologies change practically at the speed of light, it’s vital for organizations in the service and manufacturing sector to innovate or be left behind. However, many organizations started their careers and businesses before many of these technologies even existed, (Bell, 2012).Organizations can be vital for integrating new technologies, in particular mobile app development, and cloud computing. Lack of direction is one of the most common organizational issues encountered in many organizations in West Africa,
According to Aluko (2012), building a solid organization in Nigeria takes hard work and a keen awareness of the environment that exists in a business. Most executives are very busy people; a lot of things vie for their attention. Market conditions can change fast in business world and demand huge portions of leader’s time. Unfortunately, while they’re busy focusing on the many necessary operational distractions, many leaders take their eye off the teamwork ball, (Adi, 2011). This means that communication suffers and leaders get preoccupied and fail to recognize people, celebrate progress, build the talent pipeline, or invest time reviewing processes, practices, and better ways of working across functions. People then become disengaged, create marginalized, and lose focus and commitment in the organization.
There are numerous styles of leadership but for this study, the autocratic leadership, democratic leadership, and laissez-faire leadership style is considered. The autocratic leadership style is dogmatic and positive and leads by the ability to withhold or give rewards and punishment (Fubara, 1985). Autocratic leaders make a decision without involving their followers, (Ryan & Tipu, 2013; Khan, et, al., 2016). They do not entertain any suggestions or initiatives from subordinates. Democratic leadership involves the leader including one or more employees in the decision making process (Skouzes, Posner, & Barry, 2015). To Robbins (2012), democratic leadership style tends to favour mainly, decision-making by the group members. The laissez-faire style is an absolutely passive leadership. Laissez-Faire Leadership, also known as “free-rein leader” does not lead, but leaves the group entirely to itself, (Mintzberg, 2013). It is also one of the factors that intensify the commitment of the individuals towards the organization (Obiwuru, 2011; Ojokuku, et. al., 2012).
Leaders are accountable for the performance of their organization or the success of the government, which is dependent on employees’ performance. Leadership is an indispensable requisite for the success of any organization, (Lewis & Gilman, 2013).A good leadership style is expected to direct workers behaviours toward achieving organizational predetermined goals. The performance of an employee is an important determinant of the organizational success or failure. According to Vasaan (2015), the active role they play towards a company’s success cannot be underestimated. Afshan (2012) sees performance as the achievement of specific tasks measured against predetermined or identified standards of accuracy, completeness, cost and speed. Employee performance can be manifested in improvement in production, easiness in using the new technology, highly motivated workers.
Employees must know what they need to do to perform their job successfully. Setting performance expectations and goals for individuals and groups to channel their efforts towards achieving organizational objectives. Getting employees involved in the planning process helps them understand the goals of the organization, what needs to be done, why it needs to be done and how well it should be done, (Terrington, 2015). Performance expectations need to be understood and where possible, to involve the contribution from the employees. Williams (2010), argues that as individuals cannot always control their results, it‘s important to have behavioral targets as well as output targets. It is recommended that there is a personal development plan which would again underpin the achievement of objectives.
Employee performance is vital for the success of every organization and profitability in this dynamic environment (Chen, 2014). Nowadays, organizations require such type of employees who contribute more than their job scope and far from goals expectations. Most of the organizations copping with contemporary challenges put more emphasis on employee performance. (Gruman & Saks, 2011). Employee performance is a key factor that contributes directly to the performance of the company. Organizations today, with increased competition in the business arena, are keen to boost employee performance in order to enhance their profitability, market reach and brand recognition. Thus, HR managers and quality managers have put special emphasis on techniques to gauge employee performance and periodically conduct review sessions in order to monitor it. The better the overall performance review is, the more valuable the employee is for the company.
Therefore, this study will investigate how different leadership styles (e.g. autocratic, democratic, and liaises faire) affect the performance of employees in Lafarge Cement Plc, Lagos State.
1.2. Statement of Research Problems
Quite a number of studies have been examined by various authors in different countries, (Bell, 2012; Kuvaas and Dysvik, 2009). However, despite the importance of leadership to the performance of an organization, studies are lacking to show the degree to which leadership style influence employee performance in the manufacturing industry, using Lafarge Cement Plc, Lagos State. As a result, there exists a gap in this area.
The 21st century leaders are saddled with the responsibility of both leading employees and responding to the needs of customers who are more ethnically and culturally diverse from each other. Various types of leadership styles have been observed to have an effect on employees’ attitudes, behaviors, and overall performance. The problems associated with the effect of leadership styles on employees’ performance are significant issues and this has generated diverse opinions. The following are some of the problems;
Autocratic leadership style is task centered and a leader focus is to get a certain task done rapidly. Autocratic leader makes all the decisions and assigns tasks to members of the group. This leadership style can distance team members from the leader which can cause low level of job satisfaction and trust in the organization, (Men & Stacks, 2013). This was further proofed by Dale (2012), who argued that, autocratic leadership style has been found to discourage employee job participation and demotivation of employees’ morale in the organization. This is so because, it doesn’t encourage an open flow of communication and as a result, it does not encourage employee involvement. The end result of this shows a negative attitude to work by employees which greatly affect employees’ commitment and overall performance of the organizations.
Democratic leadership should not be used when there is no enough time to get everyone's input; it's easier and more cost-effective for the manager to make the decision, the manager feels threatened by this type of leadership and when employee safety is a critical concern, (Gastil, 2012). To proof this point, a study examined by Riccomini (2015) in a number of organizational study, reveals that the better a leader communicate, the more satisfied the employees will be in all areas of their work life. This simply connotes that, building a positive communication with employees is very paramount mainly because employees are the best ambassador that represent the organization to the outside world. Therefore, to be able to achieve a better result and organizational growth, a leader should be able to get everyone involved.
According to Egri and Herman (2011), laissez-faire leadership style is not ideal in situations where group members lack the knowledge or experience they need to complete tasks and make decisions. In many organizations in Nigeria, some employees are not good at setting their own deadlines, managing their own projects and solving problems on their own. This is so because in such situations, projects can go off-track and deadlines can be missed when team members do not get enough guidance or feedback from leaders. This was confirmed by Cummings (2010), who revealed that, the laissez-faire leadership style leads to the lowest productivity among group members. Corresponding to the above, Stafford (2013) stated that, since there is absolutely no control or guidance in this style of leadership wrong decisions can impose devastating effects on organizations. Since there is the absence of the leaders’ control some individuals can dominate group decisions and bully other members in the group, and as a result affect employee productivity and overall performance of the organization.
Based on the above, it is important that a study in this area is carried out in order to identify how the various leadership styles influence the performance of employees in Lafarge Cement Plc, Lagos State
1.3 Objectives of the Study
The main objective of the study is to examine the effect of leadership style on employees’ performance of Lafarge Cement Plc, Lagos State. However, to achieve the main objective, the following sub-objectives will be to;
- assess the effect of autocratic leadership style on employee job achievement of the employees in Lafarge Cement Plc, Lagos State
- investigate the effect of democratic leadership style on employee efficiency of the employees in Lafarge Cement Plc, Lagos State
- examine the effect of laissez-faire leadership style on employee creativity of the employees in Lafarge Cement Plc, Lagos State
1.4 Research Questions
The questions of interest in the study are:
- What is the effect of autocratic on employee job achievement of the employees in Lafarge Cement Plc, Lagos State?
- What is the effect of democratic on employee efficiency of the employees in Lafarge Cement Plc, Lagos State?
- What is the effect of laissez-faire on employee creativity of the employees in Lafarge Cement Plc, Lagos State?
1.5 Research Hypotheses
Based on the objectives, the following hypotheses were expressed in their null form:
- There is no significant effect of autocratic on employee job achievement of the employees in Lafarge Cement Plc, Lagos State.
- There is no significant effect of democratic on employee efficiency of the employees in Lafarge Cement Plc, Lagos State.
- Laissez-faire has no significant effect on employee creativity of the employees in Lafarge Cement Plc, Lagos State.
1.6. Scope of the Study
The study focuses on the leadership styles on employee performance of Lafarge Cement Plc, Lagos State. The study is streamlined to leadership style variables namely autocratic, democratic, and laissez-faire leadership style; and employee performance variables which are, employee job achievement, employee efficiency, and employee creativity. The study is to be carried out in Lafarge Cement Plc, Lagos State. The unit of analysis of the study is the employees of Lafarge Cement Plc, Lagos State at Junior, Middle level, Senior and Management level positions.
In addition, the population of the study comprised 3,630 employees of Lafarge Cement Plc, Lagos State. This study was carried out using a primary source of data, while data were gathered using a self-structured questionnaire for the purpose of eliciting information from the respondents. The sample size for the study was 363 employees to be selected randomly among the employees of Lafarge Cement Plc, Lagos State. The rationale for using Lafarge Cement is because they have a huge workforce and it is essential to understand the leadership style employed in managing their employees towards organizational performance.
1.7. Significance of the Study
The findings of this study will be of benefit to organizations in the manufacturing industry in appreciating the critical role played by sound leadership in improving organization‘s employee performance both at national and international fronts. Further, this study will be of significant to organizations’ management in order to evaluate how employees and regulator perception of top leadership impacts employee performance of the organization, as it will help to enlighten the management of the organization on the need and importance of having effective leaders in the organization.
Besides, the findings of this study will help enlighten the employees on their roles and obligations to the leadership in the organization and other related matters. It will identify the reason why employees react positively to a particular leadership style of a leader and also aim at discovering what makes workers to be motivated and satisfied with their job.
The finding from the study is important because they have the capacity of being used to formulate policy guidelines which are relevant and sensitive to the forces that influence the manufacturing sector productivity in Lagos and Nigeria as a whole.
To the academicians, the study contributes to the existing literature in the field of leadership. Furthermore, this study will act as a stimulus for further research to refine and extend the present study especially in Lagos State.
In addition, the findings of this study will be useful to the researcher and scholars as it contributes to the body of knowledge in the area of leadership. And lastly, this study will assist other researchers to further their studies on areas of interest not yet exploited.
1.8. Operationalization of the Variables
The dependent variable is employees’ performance, represented by Employee Job Achievement (EJA), Employee Efficiency (EE), and Employee Creativity (EC). On the other hand, leadership style, being the independent variable, is proxied by Autocratic Leadership Style (ALS), Democratic Leadership Style (DLS), and Laissez-Faire Leadership Style (LFLS)
Where Y= Dependent variable
X= Independent variable
X= Leadership Style
X = f(x1, x2, x3,)
x1= Autocratic Leadership Style (ALS)
x2= Democratic Leadership Style (DLS)
x3= Laissez-Faire Leadership Style (LFLS)
Y= Employees’ Performance
Y= f(y1,y2, y3)
y1 = Employee Job Achievement (EJA)
y2 = Employee Efficiency (EF)
y3 = Employee Creativity (EC)
1.9. Definition of Terms
Leader: is an appointed individual with the ability to organize other subordinates, (Bell, 2012)
Performance: The accomplishment of a given task measured against preset known standard of accuracy, completeness, cost and speed, (Terrington, 2015)
Leadership: is the act of persuading/inspiring subordinates to perform and engage in achieving a goal, (Riccomini, 2015)
Leadership Style: It refers to a kind of relationship that someone uses his rights and method s to make many people work together for a common task, (Dale, 2012)
Employee Performance: refers to the performance or effectiveness of an employee on a given task towards organizational performance. Employee performance is vital for the success of every organization and profitability in this dynamic environment, (Chen, 2014).
1.10. Historical Background of Lafarge Cement Plc.
Lafarge Africa Plc is a leading building materials company, specializing in the provision of diversified building material solutions in Africa. The Company is a member of the LafargeHolcim Group, a world leader in the manufacture of cement, aggregates and concretes.
Lafarge Africa Plc (formerly Lafarge Cement Wapco Nigeria Plc.) was incorporated in Nigeria on 24 February, 1959 and commenced operations on 10 January, 1961 with its plant in Ewekoro, Ogun State. The second factory was established in Sagamu, also in Ogun State in 1978. In 1979, the Company was listed on the Nigerian Stock Exchange and is the second largest cement manufacturing company in Nigeria by cement production. The Company’s corporate head office is situated at 27B Gerrard Road, Ikoyi, Lagos State, Nigeria.
LAP commenced production, with an initial installed capacity of 200,000 tons per annum (TPA), which has grown over the past decades to 14.1 million TPA, through organic and inorganic growth. Lafarge S.A. France became the majority shareholder of WAPCO, following the take-over of Blue Circle Industries Plc. in 2001, The Company’s name was changed to Lafarge Cement WAPCO Nigeria Plc in 2008 and in 2011 Lafarge Ready-mix Nigeria Limited (Ready-mix) commenced operations as a wholly owned subsidiary of the Company. In September 2014, Lafarge Cement Wapco Nigeria Plc. was renamed Lafarge Africa Plc., as a vehicle for the acquisition of Lafarge Group’s equity holding in Ashaka Cem, Lafarge South Africa Holdings (Pty) Limited (LSAH), Atlas Cement Company Nigeria Limited and its indirect holding in United Cement Company of Nigeria Limited (Unicem).
In July 2015, Lafarge S.A. France merged with Holcim Group of Switzerland to become “Lafarge Holcim” the world leading company in cement, concretes, aggregates and asphalt. Lafarge Holcim has an installed cement production capacity of 353.3 metric tons, with 2,300 operating plants in more than 80 countries globally.
Lafarge Africa Plc. primarily engages in the manufacturing and marketing of cement and other cementitious products such as Ready-Mix concrete, Aggregates and Fly-Ash. The Company offers a wide range of products primarily under the brand names of Ashaka, Elephant, UniCem, Readymix Concrete, and Aggregates, as well as Buildcrete, DuraBuild, DuraPozz, FastCast, PozzFill, Powercrete Plus and SuperPozz. The Company’s offerings are channeled through trade customers and contractors. Lafarge Africa Plc, operates mainly in Nigeria and South Africa through six affiliated companies, with an installed cement capacity of 14.1 million metric tonnes per annum (mmtpa), aggregates capacity of more than 5 mmtpa, ready-mix concrete capacity of 3.5 million cubic meter. Cement is of critical importance in closing Nigeria’s infrastructure gap estimated at $100 billion given its application in the construction of roads, bridges, houses and other infrastructural activities.
The Company has five subsidiaries including AshakaCem Plc., Atlas Cement Company Limited, Lafarge Ready Mix Nigeria Limited, Lafarge South Africa Holdings and United Cement Company of Nigeria.