CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
It is thought about that a company's success results from organizational performance, employee job satisfaction and employee affective commitment (Bass, Rigio, 2006; Drucker, 2007). Some researchers have recommended that leaders motivate and help their employees to be competitive using effective leadership skills (Bass, Rigio, 2006; Luftman, 2004). For that reason, the leader's use of effective leadership skills is due to promote standards of excellence in the professional development of the members of the organization (La Rue, Childs, Larson, 2004).
Effective leadership also entails inspiration, management, motivation, remuneration and logical skills. When all these exist, the organizations record enhanced employee satisfaction that positively affects the efficiency and the profits. The positive impact of leadership on organizational performance was determined by some researchers (Sila, Ebrahimpour, 2005) with human resources (turnover rate and job performance), organizational effectiveness (cost and quality) and financial performance (market share, revenue, return on asset). To bring about organizational growth a leader should have the capacity to promote creativity and innovation, stimulate the subordinates to challenge their own value systems and improve their individual performance.
The behavior of employees in organisations life and their relationship with their jobs are affected by a lot of variables. Among the crucial of these variables is leadership behavior of supervisors for leadership is viewed as the behavior of impressing people in several studies. It has likewise become clear that organizational commitment has essential effects for employees and organizations with different studies by researchers. Bennett and Durkin (2000) mentioned that the negative impacts connected with a lack of employee commitment consist of absenteeism and turnover.
Employees are bent on acting in such way as they have seen their employer or superior imply. The activities of employee are the major component of performance and output due to the fact that an improved attitude towards work and towards one duty and assignment will transform into the person's capacity to either perform effectively or otherwise.
The aim of any organization is to survive and sustain its presence by improving performance. According to Arslan & Staub (2013) with the goal of meeting the needs of the highly competitive markets, organizations ought to increase their performance. As stated by earlier researchers such as (Peterson, Smith, Martorana, & Owens, 2003) the function of leadership is seriously essential for achieving the performance of organizations.
On the other hand, it is believed that a company's success is attributable to organizational performance, employee job satisfaction and employee affective commitment (Bass & Riggio, 2006) (Drucker, 2007). Some studies have recommended that leaders motivate and help their employees by using effective leadership skills to be competitive (Luftman, Bullen, Liao, Nash, & Neumann, 2004). As a result, due to promote standards of high quality in the professional development of the employees of the organization the leader should make use of the effective leadership skills (LaRue, Childs, & Larson, 2006). A number of studies on leadership styles (Kouzes & Posner, 2007) (Yukl, 2009) suggest that the performance of the transformational leadership have a positive impact on the organizational performance.
One of the most effective means of defining leadership is to recognize what people value in individuals that are recognized as leaders. Many people can think about individuals they consider being leaders. Research carried out in the 1980s by James Kouzes and Barry Posner discovered that a majority of individuals appreciate, and willingly follow, people who are honest, forward looking, inspiring, and competent. An individual that would love to develop leadership skills can profit from the understanding that leadership is not simply a set of exceptional skills and attributes possessed by only a few very special individuals. Instead, leadership is a process and a set of skills that can be learned which will however have significant effect on the performance of organisation. Thus, this study will consider the relationship between leadership skills and organizational performance by using Nestle Plc as a case study.
1.2 Statement of the Problem
For many years, there has been contrasting ideas and conceptions regarding the impact of leadership skills and the behavior of employees to organisational performance. Leadership consists of the ultimate source of power but has that positive ability in persuading other people and to be innovative in decision-making. According to Bennis and Nanus, (2013) lots of organizations are over managed and under led. The difference is important, manager are people who do things right, however leaders are people that do the right things always. Issues are bound to happen within every noted organization and decision-making is bound to generate conflicts while initiating policies. People are expected to coordinate. Whatever they are doing to achieve organizational objectives. In this light, the concept of leadership acts is those, which help organisations to achieve those stated goals (Bavelas 1960).
Nevertheless, the scholarly belief and dichotomy on the level of effect exacted on productivity and employee performance by leadership and organizational behavior continue to be a national and scholarly contest. A number of researchers are of the opinion that leadership skill is greatly related to performance while others believe that employee behavior is more related to productivity and performance level of a company at large. Undisputable, different scholars have different ideas and different perception regarding organizational behavior and leadership skills. Therefore, the issue is, which leadership skill is the best for organizational and employee’s performance maximization?
1.3 Objectives of the Study
The purpose of this study is to examine the relationship between leadership skills and organizational performance by using Nestle Plc as a case study. However, the specific objectives include:
a) To identify the different types of leadership skills and styles that managers in organizations can adopt
b) To study the correlation between leadership style and employee’s commitment to work.
c) To determine the relationship between organizational employees’ behavior and employee’s commitment to work.
1.4 Research Questions
The research questions for this study include:
a) What are the different types of leadership skills and styles that managers in organizations can adopt?
b) What is the correlation between leadership style and employee’s commitment to work?
c) What is the relationship between organizational employees’ behavior and employee’s commitment to work?
1.5 Research Hypotheses
The research hypotheses as derived from the outlined objectives include:
a) There is a significant correlation between leadership style and employee’s commitment to work.
b) There is no relationship between organizational employees’ behavior and employee’s commitment to work.
1.6 Significance of the Study
This study is significant in that it will help to filter out the skills which are being used by the leadership of manufacturing organisations like Nestle Plc to enable them achieve their organisational objectives in the aspect of performnce, productivity and efficiency. This study will mostly benefit manufacturing companies particularly, Nestle Plc by showing them where they are lagging behind in the area of leadership skills. Also, this study will provide a guideline for organisations and individuals who own as well as are starting a firm in local market.
The result of this study will be some good things done by good leaders. The study will tell that how companies become so big that people are keen to work with the company.
1.7 Scope of the Study
The focus of this the study is basically Nestle Plc, Lagos. The study is primarily concerned with the relationship between leadership skills and organizational performance particularly in Lagos.
1.8 Limitations of the Study
There are certain limitations encountered in the course of carrying out this study and they include:
Lukewarm attitude of the staff members of Nestle Plc in responding to the questionnaire.
Fears of espionage as all vital information are classified as “TOP SECRET” because of the code of conduct of the organisation.
Improper filling of questionnaires by the respondents
Long delays in getting back the filled questionnaires from the respondents as a result of busy schedule at work.
It should be noted, however that the limitations highlighted above did not in any way invalidate this research as sufficient data were obtained through insider friend and good human relation, therefore the research is still valid.
