i
LEADERSHIP STYLES AND STRATEGY IMPLEMENTATION IN
SELECTED STIMA SACCOS IN KENYA.
JOSEPHAT OKOTH ATITO
D53/PT/NYI/28731/2014
A RESEARCH PROJECT SUBMITTED FOR THE PARTIAL FULFILLMENT OF
THE REQUIREMENT FOR THE AWARD OF DEGREE OF MASTER OF
BUSINESS ADMINISTRATION (STRATEGIC MANAGEMENT) OF KENYATTA
UNIVERSITY
JUNE 2017
ii
Declaration
This project was my original work and to the best of my knowledge had not been presented
for a degree in any other University
Signature: …………………………………… Date: ……………………
Josephat Okoth Atito
D53/NYI/PT/28731/2014
I confirm that the work in this research project was done by the candidate under my
supervision.
Signature: …………………………………… Date: ……………………
Dr Paul Waithaka
Supervisor,
Lecturer,
Business Administration Department
School of Business,
Kenyatta University
iii
Dedication
I dedicate this research project to my wife Mercy and my children for their encouragement,
understanding, support and patience for bearing with me when I had limited time to be with
them throughout this project. To all of you God bless you.
iv
Acknowledgements
I thank the Almighty God for His guidance throughout my studies and for enabling me
embrace the joy that this certification brings. My success would not have been achieved
without the great support and positive criticism by my supervisor Dr Paul Waithaka.
I would like to thank my wife, Mercy Akelo, for her encouragement and support throughout
this course. Mum, you ignited the little energy that was left in me and encouraged me to
finally defend the research project. To my siblings Gift Lacey and Milen Doris, I have finally
joined you in achieving this milestone of obtaining a Masters degree. Thank you for your
guidance and moral support.
My sincere thanks to my immediate bosses for the guidance you offered me throughout the
research work, the leave days you approved and for all the support you granted me
throughout my MBA course. I am also grateful to Stima Sacco of Kenya and all the
informants for the time taken to provide information required in carrying out the research.
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TABLE OF CONTENTS
Declaration ............................................................................................................................................. ii
Dedication ............................................................................................................................................. iii
Acknowledgements ............................................................................................................................... iv
List of Tables .........................................................................................................................................viii
List of Figures......................................................................................................................................... ix
Operational Definition of Terms ............................................................................................................. x
Abbreviations and Acronyms................................................................................................................. xi
Abstract ................................................................................................................................................ xii
CHAPTER ONE ......................................................................................................................................... 1
INRODUCTION ........................................................................................................................................ 1
1.1 Background of the Study ................................................................................................................... 1
1.1.1 Leadership Styles ........................................................................................................................ 2
1.1.2 Strategy Implementation ............................................................................................................ 4
1.1.3 Stima Sacco in Kenya ................................................................................................................... 4
1.2. Statement of the Problem .................................................................................................................. 6
1.3. Research Objectives ......................................................................................................................... 8
1.3.1 General objectives ...................................................................................................................... 8
1.3.2. Specific Objectives .................................................................................................................... 8
1.5 Significance of the Study ................................................................................................................... 9
1.6 Scope of the Study ............................................................................................................................. 9
1.7 Limitation of the Study ...................................................................................................................... 9
CHAPTER TWO ...................................................................................................................................... 11
LITERATURE REVIEW............................................................................................................................. 11
2.1 Introduction ..................................................................................................................................... 11
2.2 Theoretical Review.......................................................................................................................... 11
2.2.1 Behavioral Theory of Leadership .............................................................................................. 11
2.2.2 Trait Theory of Leadership ....................................................................................................... 13
2.2.3 Servant Leadership Theory ....................................................................................................... 15
2.2.4 Power and Influence Theory of Leadership ............................................................................... 17
2.2.5 The Higgins’s Eight (8) S Model of Strategy Implementation.................................................... 20
2.2.6 Noble’s Strategic Implementation Model (Minimalist Model) ................................................... 22
vi
2.3 Empirical Literature Review ............................................................................................................ 22
2.3.1 Autocratic Leadership Style and Strategy Implementation ......................................................... 23
2.3.2 Participative Leadership Style and Strategy Implementation ...................................................... 24
2.3.3 Transactional Leadership Style and Strategy Implementation .................................................... 25
2.3.4 Transformational Leadership Style and Strategy Implementation .............................................. 26
2.4 Summary of Literature Review and Research Gap ........................................................................... 27
2.5 Conceptual Framework .................................................................................................................... 28
CHAPTER THREE.................................................................................................................................... 30
RESEARCH METHODOLOGY .................................................................................................................. 30
3.1 Introduction ..................................................................................................................................... 30
3.3 Population of the Study ................................................................................................................... 30
3.4 Instrument Validity and Reliability .................................................................................................. 31
3.4.1 Instrument Validity ................................................................................................................... 31
3.4.2 Instrument Reliability .............................................................................................................. 32
3.5 Data Collection ............................................................................................................................... 32
3.6 Data Analysis .................................................................................................................................. 32
3.7 Ethical Considerations ..................................................................................................................... 34
CHAPTER FOUR ..................................................................................................................................... 36
DATA ANALYSIS, PRESENTATION AND DISCUSSION............................................................................. 36
4.1 Introduction ..................................................................................................................................... 36
4.2 Questionnaires Responses Rate ........................................................................................................ 36
4.3 Demographic Information ................................................................................................................ 36
4.3.1 Gender of the Respondents ....................................................................................................... 36
4.3.2 Length of Service...................................................................................................................... 37
4.3.3 Respondents’ Level of Education .............................................................................................. 38
4.4 Descriptive Statistics ....................................................................................................................... 39
4.4.1 Autocratic Leadership Style .................................................................................................... 39
4.4.2 Participative Leadership Style ................................................................................................... 41
4.4.3 Transactional Leadership Style ................................................................................................. 43
4.4.4 Transformational Leadership Style ............................................................................................ 46
4.4.5 Strategy Implementation ........................................................................................................... 50
4.5 Inferential Statistics ......................................................................................................................... 52
4.5.1 Bivariate Correlation Analysis .................................................................................................. 52
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4.5.2 Regression Analysis ................................................................................................................... 53
CHAPTER FIVE................................................................................................................................. 57
SUMMARY, CONCLUSION AND RECOMMENDATIONS .......................................................... 57
5.1. Introduction .................................................................................................................................... 57
5.2 Summary ......................................................................................................................................... 57
5.4 Recommendations ........................................................................................................................... 58
5.5 Areas for Further Research .............................................................................................................. 60
REFERENCE ........................................................................................................................................... 61
APPENDIX ............................................................................................................................................. 72
Letter to Respondents ......................................................................................................................... 72
Questionnaire ...................................................................................................................................... 73
Letter From the University ................................................................................................................. 79
Nacosti Certificate ............................................................................................................................... 80
Acceptance Letter from Stima Sacco .................................................................................................. 81
viii
List of Tables
Table 3.1: Nairobi Branch and Kisumu Branch Managers……………………………………………………………..… 31 Table 3.2: ReliabilityTest…………………….………………………………………… ……………………………………………….32 Table4. 1: Questionnaire response rate ........................................................................................... 36
Table4. 2: Gender of top and middle level managers of selected Stima Sacco Kenya ....................... 37
Table4. 3: Length of Service of Top and Middle Level Managers of selected Stima Sacco Kenya ....... 38
Table4. 4: Level of Education of Top and Middle Level Managers of Stima Sacco Kenya ............... 39
Table4. 5: Autocratic Leadership Style ............................................................................................. 40
Table4. 6: Participative Leadership Style .......................................................................................... 42
Table4. 7: Transactional Leadership Style ........................................................................................ 44
Table4. 8: Transformational Leadership Style .................................................................................. 47
Table4. 9 : Strategy Implementation................................................................................................ 51
Table4. 10: Correlation Results of Relationship between Leadership Style and SI ............................. 52
Table4. 11: Model Summary (How TSL, AL, TFL and DL Influnces Strategy Implementation) ............ 53
Table4. 12 :Anova ( How TSL, AL, TFL and influences Strategy Implementation)............................... 54
Table4. 13: Coefficients (How TSL, AL, TFL and influences Strategy Implementation) ....................... 54
ix
List of Figures
Figure 2.1: Conceptual Framework………………………………………………………….30
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Operational Definition of Terms
Implementing strategy Is putting the chosen strategy into practice
resourcing the strategy, configuring the
organization’s culture and structure to fit the
strategy and managing change.
Autocratic leadership style Leaders retain decision making rights. They can
damage an organization irreparably as they
force their ‘followers’ to execute strategies and
services in a very narrow way, based upon a
subjective idea of what success looks like. No
shared vision and little motivation beyond
coercion. Commitment, creativity and
innovation are typically eliminated by autocratic
leadership.
Transformational leadership style Is a leadership approach that causes change in
individuals and social systems. Managers
exercising transformational leadership style
focus on the development of value system of
employees, their motivational level and
moralities with development of their skills,
transformational leadership acts as a
bridge between leaders and followers to
develop clear understanding of follower’s
interests, values and motivational level.
Participative leadership style Is leadership style that involves
employees across levels of the hierarchy in
decision making.
Transactional leadership style Leaders receives certain tasks to perform and
provide rewards or punishments to team
members based on performance results.
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Abbreviations and Acronyms
ADM Annual Delegates Meeting
AGM Annual General Meeting
AL Autocratic Leadership Style
ANOVA Analysis Of Variance
B2C Business to Consumer
CRM Customer Relationship Management
DL Democratic Leadership Style
ERP Enterprise Resource Planning
FOSA Front Office Services Activities
ICT Information Communication Technology
KRA Kenya Revenue Authority
NGO Nongovernment Organization
MBA Masters in Business Administration
MQL Multi-leadership Questionnaire
SACCOs Saving and Credit Cooperative Society
SI Strategy Implementation
SME Small and Medium Enterprise
SPSS Statistical Package for Social Science
SRQ Self Reporting Questioning
TFL Transformation Leadership Style
TSL Transactional Leadership Style
xii
Abstract
This study examined the effects of leadership style on strategy implementation in selected
Stima Sacco Kenya. Organizational leadership is about relationship of an individual’s ability
to influence and be influenced by a group in the implementation of a common task. Strategy
implementation is an action phase of the strategic management process which involves the
operationalization of the formulated strategies. The general objective of this study was to
investigate the effect of leadership style on strategy implementation in selected Stima Sacco
Kenya. The specific objectives were the effects of: democratic leadership style, autocratic
leadership style, transactional leadership style and transformational leadership style on
strategy implementation in selected Stima Sacco Kenya. The study was anchored on the
following theories and models: behavioral theory of leadership style, trait theory of leadership
style, servant leadership theory , power and influence theory of leadership style, The
Haggins’s Eight 8S model of strategy implementation and Noble’s strategic implementation
model. The study adopted a mixed research design which was both quantitative and
qualitative. The target population of the study was 62 managers of Nairobi and Kisumu
branch Stima Sacco Kenya. The whole population was considered during data collection,
since the population was small. Primary data was collected using a self administered
questionnaire. The questionnaire was piloted in order to check for validity and reliability. A
questionnaire was administered through drop and pick method. The data collected was
analyzed using descriptive and inferential statistics. The study provided useful information to
the management of the Sacco body on the challenges the body was facing in providing
leadership on strategy implementation in the Sacco industry. In conclusion democratic
leadership style and transactional leadership style have significant relationship to strategy
implementation at Stima Sacco Kenya however, autocratic leadership style and
transformation leadership style has positive values but do not have significance on strategy
implementation. The study recommends the Sacco managers should apply two leadership
styles more often during strategy implementation, that is democratic leadership style and
transactional leadership style since they have a positive and significant effect to strategy
implementation, but minimize the application of autocratic leadership style and
transformation leadership style during the strategy implementation as they did not have
significance effect on strategy implementation. This study did not factor in other factors that
determine success in strategy implementation at Stima Sacco Kenya. A study should be
conducted to determine other f a c t o r s that influence implementation strategy at Stima
Sacco Kenya. The study was limited to only two branches of Stima Sacco. A more
generalized study should be conducted on the remaining branches of Stima Sacco Kenya on
the same topic of study.
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CHAPTER ONE
INRODUCTION
1.1 Background of the Study
A strategy is an important component of organization planning towards the attainment of
organizational objectives. In implementing strategies, leadership plays a critical role as it
directs all other resources in strategy implementation for a common goal (Mintzburg, 1990)
Organizational leadership is about relationship of an individual’s ability to influence and be
influenced by a group in the implementation of a common task (Giambatista, 2004). Absence
of quality leadership in an organizational setting had been found to negatively affect
performance. This leads to stagnation in organizational operations leading to missed
organizational objectives. Mintzburg (1990) acknowledged that leadership is essentially the
core and spirit of organizations as it directs all other organizational resources towards the
attainment of organizational objectives. Leaders in the organization need to marshal adequate
support from other employees so that they get involved in strategy implementation. Different
situations and circumstances in an organization demand that the leaders deploy different
leadership practices if they are to effectively implement a given strategy.
Nave (2006), asserts that effective leaders should implement organization strategies to
improve on the performance. Thompson and Strickland (2009), further argue that strategy
implementation is primarily an administrative task that involves figuring out workable
approaches to executing the strategy and then, during the day-to-day operations, getting
employees to accomplish their jobs in a strategy supportive and results achieving fashion.
Investigations also show that nine out of ten strategies fail to be successfully implemented
(Speculand, 2009). A brilliant strategy, thus, cannot be able to place an organization on
competitive position, but just strategy implementation can retain them there (Neilson et al.,
2008). That is, having strategy is necessary but is not enough. “execution gap” means the
inability to execute a well developed strategy (Dandira,2011). Research indicates that
implementing strategy is essential to any organization (Aaltonen, 2002), and also, harder than
development of the right strategy (Speculand, 2009). So that, it is concluded that most
2
managers believe that implementing strategy is more difficult than formulating it (Cândido,
2015).
Leadership is at its best when the vision is strategic, the voice persuasive and the results
tangible. Johnson and Scholes (2002) define strategy as the direction and scope of an
organization over the long term which achieves the advantage for the organization through its
configuration of resources within a challenging environment to meet the needs of markets
and fulfill stakeholders’ expectations. The relationships between the leader and employee, as
well as the quality of employees’ performance, are significantly influenced by the leadership
style adopted by the leader (Jeremy et al., 2011). Leadership style in an organization is one of
the factors that play significant role in enhancing or retarding the interest and commitment of
the individuals in the organization (Obiwuru et al., 2011).
Stima Sacco is a licensed Deposit Taking Sacco established in 1974 with the Sole objective
of uplifting the members’ social economic wellbeing to employees of the then East African
Power and Lighting Company. In April 2003 the Sacco responded to members banking needs
by introducing the Front Office Service Activity (FOSA) to offer banking services to its
members. To date the Sacco has five branches in Nairobi, Mombasa, Kisumu, Nakuru and
Olkaria. The Society’s membership is drawn from employees of Kenya Power and Lightning
Company Limited, Kenya Electricity Generating Company Limited, Stima Sacco Employees,
Electricity Regulatory Authority, Kenya Electrical Trade and Allied Workers Union and the
retired staff of the above organizations.
1.1.1 Leadership Styles
Leadership is a process whereby an individual influences a group of individuals to achieve a
common goal (Northouse, 2007). It is a process by which a person influences others to
accomplish an objective and directs the organization in a way that makes it more cohesive
and coherent. Organizational leadership is about relationship of an individual’s ability to
influence and be influenced by a group in the implementation of a common task
(Giambatista, 2004).
3
Some of the leadership styles include: Autocratic leaders retain for themselves the decision
making rights. They can damage an organization irreparably as they force their ‘followers’ to
execute strategies and services in a very narrow way, based upon a subjective idea of what
success looks like. There is no shared vision and little motivation beyond coercion.
Commitment, creativity and innovation are typically eliminated by autocratic leadership. In
fact, most followers of autocratic leaders can be described as biding their time, waiting for
the inevitable failure this leadership produces and the removal of the leader that follows
(Michael, 2010).
Transformational leadership is a leadership approach that causes change in individuals and
social systems (Hill, 2000). Transformational leadership styles focuses on the development
of followers and their needs. Managers exercising transformational leadership practice focus
on the development of value system of employees, their motivational level and moralities
with the development of their skills (Ismail et al., 2009). Transformational leadership acts as
a bridge between leaders and followers to develop clear understanding of follower’s interests,
values and motivational level. It basically helps follower’s achieve their goals working in the
organizational setting; it encourages followers to be expressive and adaptive to new and
improved practices and changes in the environment (Bass, 1994).
Participative leadership is defined as leadership that involves employees across levels of the
hierarchy in decision making (Spreitzer, 2007). Participative leaders involve their
subordinates in making and implementing decisions. Transactional leadership practice
receives certain tasks to perform and provide rewards or punishments to team members based
on performance results. Within the context of Maslow's hierarchy of needs, transactional
leadership works at the basic levels of need satisfaction, where transactional leaders focus on
the lower levels of the hierarchy. Transactional leaders use an exchange model, with rewards
being given for good work or positive outcomes. Conversely, people with this leadership
practice also can punish poor work or negative outcomes, until the problem is corrected. One
way that transactional leadership focuses on lower level needs is by stressing specific task
performance (Hargis et al., 2001). Transactional leaders are effective in getting specific tasks
completed by managing each portion individually.
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1.1.2 Strategy Implementation
Wheelen and Hunger (2010) pointed out that the strategic management process consists of
four stages: environmental scanning, formulation, strategy implementation and strategy
evaluation and control. Strategy implementation is the process by which strategies are put
into action through the development of programmes budgets and procedures (Hunger &
Wheelen 2010). Thompson and Strickland (2009), argue that strategy implementation is
primarily an administrative task that involves figuring out workable approaches to executing
the strategy and then, during the day-to-day operations, getting people to accomplish their
jobs in a strategy supportive and results achieving fashion.
Strategy implementation is an action phase of the strategic management process which
involves the operationalization of the formulated strategies. Implementing strategy is putting
the chosen strategy into practice, resourcing the strategy, configuring the organization’s
culture and structure to fit the strategy and managing change (Campbell et al., 2002).
Strategy implementation covers almost every aspect of the management and it needs to be
started from many different points within the organization (Shah, 2005). Effective
implementation calls for unique, creative skills including leadership, precision and attention
to detail, breaking down complexity into digestible tasks and activities and communicating in
clear and concise ways throughout the organization and to all its stakeholders. Forster and
Browne (1996) point out that this approach assumes a logical and hierarchical distinction
between strategy formulation and implementation, with implementation delegated to a
subordinate status as the responsibility of middle management (Cocks, 2010).
1.1.3 Stima Sacco in Kenya
SACCO stands for Savings and Credit Cooperative which is a special type of co-operative
offering financial services with major focus on mobilization of funds and provision of
affordable credit to its members who are both the owners and users. The primary purpose of
the SACCO is to encourage savings among members from which they can borrow at
affordable terms decided by them collectively or through the elected directors. Other
financial services SACCOs offer include ATM services, Mobile money transfer and custody
of valuable documents. The SACCO generates income by providing these services which it
5
uses to meet the related costs. Any income that remains after these costs is paid out to
members as dividends and interest based on their shares or deposits. SACCOs are managed
by staff employed by the Board on behalf of the members and the Chief Executive Officer is
responsible for the day-to-day running of the SACCO business.
The Board reports to the members on the management of the SACCO at least once a year
during the annual general meeting (AGM) or annual delegates meeting (ADM). During the
AGM or ADM, the members also get a chance to assess the performance of a Sacco and
make decisions concerning their SACCO. In microfinance country scan made by Triodos
(2007), it is argued that mainly SACCOS have an outreach to the rural parts of the country
and up to 2006 over 3500 SACCOS with the total number of 420,000 members were
registered in the ministry of cooperatives and marketing and, sixty percent of these classified
as the rural. Most SACCOS are very small and they tend to encounter capacity problems
such as lack of the staff and appropriate technology (Triodos, 2007). SACCOS Regulations
of 2005 stipulates that SACCOS will continue to be registered by the Registrar of
Cooperatives under the Cooperative Act 2003 and will also be subjected to the cooperative
rules as issued by the Ministry of Cooperatives and Marketing.
Today co-operatives particularly SACCOS are integral part of the government economic
strategy focusing on creating income generating opportunities especially in rural areas.
Kenya has been a success as far as the Co-operative Movement is concerned. It is estimated
that there are currently over 10,800 registered Co-operative Societies in Kenya with a
membership of about 6 million. Out of this, 46% are Agricultural, 38% Financial-based that
is SACCOS and, 16% are others. Sixty three percent of the Kenyan population depends on
the Co-operative related activities for their livelihood with over 250,000 benefiting through
direct employment (Mudibo, 2006).
Stima Sacco is a licensed Deposit Taking Sacco established in 1974 with the Sole objective
of uplifting the members’ social economic wellbeing to employees of the then East African
Power and Lighting Company. In April 2003 the Sacco responded to members banking needs
by introducing the Front Office Service Activity (FOSA) to offer banking services to its
6
members. To date the Sacco has five branches in Nairobi, Mombasa, Kisumu, Nakuru and
Olkaria. The Society’s membership is drawn from employees of Kenya Power and Lightning
Company Limited, Kenya Electricity Generating Company Limited, Stima Sacco Employees,
Electricity Regulatory Authority, Kenya Electrical Trade and Allied Workers Union and the
retired staff of the above organizations.
Stima Sacco is among the top twenty largest SACCOs in Kenya in terms of total assets. From
the recent audited accounts, the Society’s assets stood at KSh 3.6 billion and KSh 4.5 billion
in 2007 and 2008 respectively. The savings deposits rose to KSh2.78 billion in 2008 from
KSh 2.47 billion in 2007. The shares deposits rose marginally from KSh 7.2 million in 2007
to KSh 7.6 million in 2008, underlining a small change in membership from 7,107 to 7,398
over the same period. Stima SACCO is one of the first SACCOs in the nation to offer ATM
services to its members. Although Stima Sacco is currently a healthy, profitable financial
institution with a membership of 7,398 by December 2008, there are growing concerns about
its declining membership and what possible risks this situation portends to its future business
and survival.
Stima Sacco had been able to maintain and attract new membership through natural
affiliation, stemming from the common bond members. However, with increased competition
from other financial service providers (both formal and informal) and other factors such as
retrenchment, SACCO membership is beginning to decline and at best stagnate. Due to the
ongoing liberalization of the financial sector and innovations in ICT that have led to
reduction in transaction costs, banks are finding it easier to reach out to the traditional
SACCO markets with greater efficiencies and more attractive products and services.
1.2. Statement of the Problem
Stima Sacco implemented new technology and takes other actions to keep themselves
competitive in their chosen markets, they ensured that the strategy implemented achieve the
full scope of their technical, financial, and human objectives. Gor (2013), who research on
the practice of strategic leadership at Wrigley Company East Africa limited Kenya and
deduced that strategic leadership is crucial to the success of any organization and that
leadership uses communication as a leadership strategy.
7
Achitsa ( 2013) in his study on leadership and management of strategic change at Equity
Bank Limited Kenya and concluded that organizations needed to align the organizational
systems to support needed changes. Omondi (2011) studied impact of leadership styles of
managers on implementation of learning organization concept at Post Bank which revealed
that the best leaders at creating a learning organization are balanced between transactional
leadership, transformational behaviors and transformational characteristics but while
maintaining the a balance in all three, the most successful leaders at creating a learning
organization seemed to excel in the transformational leadership characteristic style.
Muhoro (2011) studied on the effect of leadership in strategic change implementation in
Telkom Kenya he concluded from the study that leadership alone may be more crucial than
when it comes to the effective change implementation. Ndungu (2010) studied the
effectiveness of leadership strategies used in destination branding in the promotion of return
to customers. The study found out that firms should be encouraged to use less traditional
leadership strategies to entice customers in their firms, thus increasing the number of
customers in their firms. Salim (2010), carried out a study on negative leadership practice
and the public sectors; a study of mainstream parastatals. This study found out that negative
leadership practice adversely affected performance.
Obara (2008) studied the challenges in strategy implementation at the Electoral Commission
of Kenya and found out that the key areas of challenges were weak organization structure,
gaps in systems, culture and traditions, lack of policies and rules, not fully equipped in
technology, inadequate leadership, lack of competent human resources, lack of rewards and
support systems and funding. Schaap (2006) carried out a study on effective senior-level
leadership behaviors and successful strategy implementation and argued that senior-level
leaders who have been trained in or studied strategic planning and implementation are more
likely to meet the performance standards of the company. However as identified in the
current study majority of the leaders were not well trained on issues to do with strategic
planning and implementation thus posed a challenge to performance of CDF projects.
8
None of the studies were carried out at the Stima Sacco. This was the gap that this study
intended to address. The study was intended to bridge the knowledge gap and provided
answers to the following research questions: which were the effect of leadership adopted by
Stima Sacco in Kenya? and how had the adoption of leadership practice contributed to the
strategy implementation within Stima Sacco in Kenya?
1.3. Research Objectives
1.3.1 General objectives
The general objective of this study was to investigate the effect of leadership styles on
strategy implementation in selected Stima Saccos in Kenya.
1.3.2. Specific Objectives
i) To establish the effect of autocratic leadership style on strategy implementation in selected
Stima Saccos in Kenya.
ii) To determine the effect of participative leadership style on strategy implementation in
selected Stima Saccos in Kenya.
iii) To investigate the effect of transactional leadership style on strategy implementation in
selected Stima Saccos in Kenya.
iv) To establish the effect of transformational leadership style on strategy implementation in
selected Stima Saccos in Kenya.
1.4 Research hypothesis
H01: Autocratic leadership style has no significant effect on strategy implementation in
selected Stima Saccos in Kenya.
H02: Participative leadership style has no significant effect on strategy implementation in
selected Stima Saccos in Kenya.
HO3: Transactional leadership style has no significant effect on strategy implementation in
selected Stima Saccos in Kenya.
HO4: Transformational leadership style has no significant effect on strategy implementation
in selected Stima Saccos in Kenya.
9
1.5 Significance of the Study
This study provided useful information to the management of the Sacco body on the
challenges the body would be facing in providing leadership style on strategy implementation
in the Sacco Kenya. The study finding would be useful to Government of Kenya and policy
makers who could use the information generated to better understand the leadership style
applied by Sacco. This would inform policy makers and government to initiate reform
channels, restructure the organization, and enable it to had good leadership style to enable
strategy implementation in the future. The area relating to Sacco’s leadership option
especially in Kenya which was still suffering from a deficiency of information, there are few
studies that had adequately discussed this issue. This study expected to contribute to the
literature in existence and would go a long way to facilitate further understanding into the
area. It could be used by policy makers in Sacco’s to evaluate the viability of leadership in
their institutions.
1.6 Scope of the Study
This study was carried out at Stima SACCO Limited. Data collected from the top and middle
level management at the branch of the SACCO in Nairobi Headquarter and Kisumu Branch.
The primary data collected for analysis covered a period of five years from the year 2011 -
2015. The independent variable consists of: Autocratic leadership style, participative
leadership style, transactional leadership style and transformational leadership style. The
strategy implementation of Stima Sacco was the dependant variable.
1.7 Limitation of the Study
There was reluctance by the respondents to provide adequate accessibility of information
since most businesses prefer to keep such data private. The researcher sought permission of
the Stima SACCO management to conduct this study in order to ensure cooperation. The
data collection was confined to only two branches of Stima Sacco since constraints were
faced during data collection. The replication of the study at different branches of Stima Sacco
would enable better generalizability of the findings of the study. The sample for the study
comprises of data from top management and middle level managers of Stima Sacco based at
Nairobi Headquarter and Kisumu. This sample was only a very small proportion of the entire
population of Sacco in the country. Therefore, research study with much larger sample size
10
was required to ensure appropriate generalization of the findings of the study. The use of self
reporting by management tend to applaud themselves hence a replica study be done that
triangulates the findings of the managers and their subordinates in order to establish the
managers leadership style.
11
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
The purpose of review examined the already existing literature that gave this study guidance.
The literature available provided critical analysis and helps improve the methodology used.
Survival and success of the organization are normally influenced by their ability of top
management leadership to reduce the resistance during strategy implementation. It related to
the main area of study that was concerned with the effect of leadership style on strategy
implementation.
2.2 Theoretical Review
The review examined four theories of leadership styles and two models of strategy
implementation which included: Behavioral theory of leadership style, Trait theory of
leadership style, Servant Leadership Theory, Power and influence theory of leadership style,
The Haggins’s Eight 8S model of strategy implementation and Noble’s strategic
implementation model.
2.2.1 Behavioral Theory of Leadership
The behaviorist movement began in 1913 when John Watson wrote an article entitled
'Psychology as the behaviorist views it'. Watson (1913) stated that 'Psychology as a
behaviorist views it is a purely objective experimental branch of natural science.
Behaviorism is primarily concerned with observable behavior, as opposed to internal events
like thinking and emotion. While behaviorists often accept the existence of cognitions and
emotions, they prefer not to study them as only observable (i.e. external) behavior can be
objectively and scientifically measured. Lewin (1939) (as cited by Cherry, 2010) developed a
framework based on a leader's behavior. He argued that there are three types of leaders: the
autocratic (or authoritarian), the democratic (or participative) and Laissez-Faire (or
delegative) leadership.
Autocratic leadership is often classified as the classical approach (Swarup, 2013). This
leadership is based on the traditional premise that leaders are good managers who direct and
12
control their people. Those followers (employees) are obedient subordinates who follow
orders (Ali, Ismael, Mohamed & Davoud, 2011). This position is supported by Gordon
(2013) that employees under autocratic leadership are expected to follow the orders of their
manager even if they do not agree or do not receive any explanation. She argued that in order
to motivate employees, managers using autocratic leadership often employ a set of rewards
and punishments that are highly structured. Zervas and David (2013) posit that an autocratic
leader accomplishes ends through imparting a clear, compelling vision, that the vision is built
into strategic planning, and that it guides action throughout the organization. Autocratic
leaders provide clear directions, monitor progress closely, and convince subordinates of the
position of management. Ushie et al., (2010) in support of this position, posit that autocratic
leadership creates two types of behaviour. It makes workers to be either aggressive or
apathetic and withdrawn.
A democratic leadership keeps his employees informed about everything that affects their
work and shares decision-making and problem solving responsibilities (Swarup, 2013). This
definition is supported by Johari (2008) who described participative leader as a leader who
encourages the participation of staff in solving problems and decision making in a daily
operational matters. In the various views of Iheriohanma et al., (2014), democratic leadership
tends to foster responsibility, flexibility, and high morale that will result to improved strategy
implementation.
Donna (2011) pointed out five basic challenges of the democratic leadership to include:
competency, crises, consensus, pseudo-participation and adherence. He further concluded
that overcoming these five negatives of the democratic leadership will allow organizations to
fully benefit from the advantages of this management such as higher employee performance,
satisfaction and better retention rates. This is because a working environment with
democratic leadership creates opportunities for employees’ empowerment, creativity,
initiative, participation, career growth and development and succession, and also provides for
a safe future with the organization.
13
Democratic leadership foster open communication among all employees at all levels (Ronald,
2011). According to Northouse (2007), democratic leader shares decision making with the
other members. Democratic leadership is associated with higher morale in most situations
although it is associated with low productivity. Thus, participation is the major characteristic
of democratic leadership (Bass, 1990). The main objective is to democratically attain
commitment to and ownership of decisions. He/she has high performance and quality
expectations and recognizes that the only way to attain them is through a committed
workforce (Ronald, 2011).
Laissez-faire leadership: Laissez-faire leadership represents a type of behavior in which
leaders display a passive indifference towards their followers (Moss & Ritossa, 2007).
Laissez-faire leaders incline to move out from the leadership role and offer little direction or
support to followers (Kirkbride, 2006), they avoid making decision, give up responsibilities,
and are indifferent to the needs of their followers. It is believed that laissez-faire is the
passive avoidant and ineffective type leadership theory. However, the best leaders are those
who can use many different behavioral styles, and choose the right style for each situation.
The theory assumes: Leaders can be made, rather than are born; behavioral theories of
leadership do not seek inborn traits or capabilities. Rather, they look at what leaders actually
do. Successful leadership is based in definable, learnable behavior. If success can be defined
in terms of describable actions, then it should be relatively easy for other people to act in the
same way. This is easier to teach and learn than to adopt the more ephemeral 'traits' or
'capabilities'.
The study supported that a leader should combine different leadership styles depending on
situations which would lead to successful implementation of strategy. The approach was
valuable in that it broadened the focus of leadership research to include the actual behaviours
that leaders show, and in that distinctions were drawn between task-related behaviour and
relationship related behavior during strategy implementation
2.2.2 Trait Theory of Leadership
The trait theory was proposed by Ralph Stodgill (1974). McCall and Lombardo (1983),
which expanded on the trait theory, argued that a leader is made or broken based on
14
emotional stability, the ability to admit faults and errors, intellectual strength and having
refined interpersonal skills and relations. Trait leadership is defined as integrated patterns of
personal characteristics that reflect a range of individual differences and foster consistent
leader effectiveness across a variety of group and organizational situations (Zaccaro, Kemp
& Bader 2004).
The theory of trait leadership developed from early leadership research which focused
primarily on finding a group of heritable attributes that differentiated leaders from non
leaders. Research has demonstrated that successful leaders differ from other people and
possess certain core personality traits that significantly contribute to their success. Empirical
studies directly supporting trait leadership (Judge et al., 2004), traits have reemerged in the
lexicon of the scientific research into leadership. Furthermore, scholars have expanded their
focus and have proposed looking at more malleable traits (ones susceptible to development)
in addition to the traditional dispositional traits as predictors of leader effectiveness
(Hoffman et al., 2011).
Based on review of the trait leadership literature, Derue et al., (2011) stated that most leader
traits can be organized into three categories: demographic, task competence, and
interpersonal attributes. For the demographics category, gender has by far received the most
attention in terms of leadership; however, most scholars have found that male and female
leaders are both equally effective. Task competence relates to how individuals approach the
execution and performance of tasks (Bass, 2008). Hoffman grouped intelligence,
Conscientiousness, Openness to Experience, and Emotional Stability into this category.
Lastly, interpersonal attributes are related to how a leader approaches social interactions.
Derue (2011) found that individuals who are high in Conscientiousness, Extraversion, and
Agreeableness are predicted to be more likely to be perceived as successful in leadership
positions, Judge et al.,(2006) wrote that individuals who are high in narcissism are more
likely to be a liability in certain jobs. Complementing the suggestion that personality traits
should be used as selection tools, Judge et al.,(2002) found that the Five Personality traits
were more strongly related to leadership than intelligence. If organizations select leaders
15
based on intelligence, it is recommended by Judge (2002) that these individuals be placed in
leadership positions when the stress level is low and the individual has the ability to be
directive.
The process through which personality predicts the actual effectiveness of leaders has been
relatively unexplored (Ng, Ang & Chan, 2008), these scholars have concluded that
personality currently has low explanatory and predictive power over job performance and
cannot help organizations select leaders who will be effective (Morgeson & Ilies, 2007).
Another criticism of trait leadership is its silence on the influence of the situational context
surrounding leaders (Ng et al., 2008). Additionally, trait leadership’s focus on a small set of
personality traits and neglect of more malleable traits such as social skills and problem
solving skills has received considerable criticism. Lastly, trait leadership often fails to
consider the integration of multiple traits when studying the effects of traits on leader
effectiveness (Zaccaro, 2007).
The study was anchored on this theory, human resource departments within organizations
should use personality traits as selection tools for identifying emerging leaders in strategy
implementation. The empirical studies had found that the individual traits predict success in
leader effectiveness as well as the traits that could be detrimental to leader effectiveness in
strategy implementation. This finding suggested that selecting leaders based on their
personality is more important than selecting them based on intelligence.
2.2.3 Servant Leadership Theory
The phrase “servant leadership” was coined by Robert K. Greenleaf in The Servant as
Leader, an essay that he first published in 1970. In that essay, Greenleaf said: “the servant-
leader is servant first’’. It begins with the natural feeling that one wants to serve, to serve
first. Individual perspective the servant leader believes in people, serves other’s needs before
their own, is receptive and non judgmental, listens intently to followers (Smith et al., 2004).
Banutu and Gomez (2004) states that "to succeed, leaders must teach their followers not only
how to lead: leadership, but more importantly, how to be a good follower: followership". The
servant leader’s ability to be both a great follower and a great leader results in their
16
inspiration and motivation of others. Moreover, the servant leader is willing to sacrifice
themselves out of love for others and in the face of difficulty willingly accepts fault for
negative outcomes (Wheatley, 2004). Cultural perspective, servant leaders provide
opportunities for their followers to learn and grow, model appropriate behavior, provide
encourage and affirmation (Covey, 2006).
The servant leader sometimes strives to instill a mutual acceptance, understanding, and
appreciation of a shared vision and goal (Whetstone, 2002). Banutu and Gomez (2004) states
that people need structure, order and predictability to avoid a feeling of powerlessness in the
organizational setting. Thus, servant leaders are able to overcome the paradox of teaching
employees to become independent and use critical thinking while maintaining their
subordinate status. The servant leader’s key to overcoming this paradox in the organizational
change process by challenging each person to become self-sufficient by tapping into their
intelligence, spirit, creativity, commitment and uniqueness (Banutu & Gomez, 2004). Servant
leader insists that followers confront their fear of conflict with one another in order to avoid
the development of alienation (Rowe, 2003).
Decision making perspective. A true servant leader makes decisions that focus on
transforming their followers toward personal greatness while sacrificing their own
acknowledgement and recognition (Covey, 2006). By openly focusing on their follower’s
best interest, the servant leader is able to create a psychological and social contract with their
followers that enhance both tangible and intangible relationships with followers (Banutu &
Gomez, 2004).
Banutu and Gomez (2004), states "the central role of the server leader is establishing
sustainable strategic vision for the organization or community in a convincing and inspiring
fashion”. Hence, the servant leader models the organizational vision through their actions,
behavior, and decisions in a visible and consistent manner (Wheatley, 2004). Servant leaders
are able to inspire hope and encourage followers by adhering to their convictions, facilitating
positive images, and by giving hope, love and encouragement (Banutu & Gomez, 2004).
17
These actions by servant leaders demonstrate concern for their follower’s needs and interests
above and beyond their own self interest (Smith et al., 2004).
Organizational change perspectives. The quality of their followers is a measure of an
effective servant leader (Washington, 2007). Hence, it is important to address the skills that
are possessed by exemplary followers. During the organizational change process, a servant
leader envisions the future, takes initiative, clarifies goals, facilitates a shared vision, shares
and releases power, shares status and promotes others (Smith et al., 2004).
The theory was applicable to the study since, it was imperative that the leadership recognizes
the unique talents of its employees and develop for effective strategy implementation.
Leaders could play a critical role in helping employees to realize their potential. An approach
to leadership called servant leadership focuses on developing employees to their fullest
potential in the areas of task effectiveness, community stewardship, self-motivation, and
future leadership capabilities (Liden et al., 2008).
2.2.4 Power and Influence Theory of Leadership
The theory examines the source of a leader’s influence, and the leadership style that emerges
from it. John French and Bertram Raven conducted a study in 1959 in which they cited five
forms of power. Legitimate power is a person’s ability to influence others’ behavior because
of the position that person holds within the organization. Legitimate or position power, as it
is sometimes called, is derived from a position of authority inside the organization, often
referred to as “formal authority.” That is, the organization has given to an individual
occupying a particular position the right to influence, direct certain other individuals.
Managers can enhance their position power by formulating policies and procedures. For
example, a manager might establish a requirement that all new hires must be approved by
said manager, thus exercising authority over hiring (DuBrin, 2009).
Subordinates play a major role in the exercise of legitimate power. If subordinates view the
use of power as legitimate, they comply (Gibson et al., 2012). That is, legitimate power
covers a relatively narrow range of influence and, therefore, it may be inappropriate to
overstep these bounds (Greenberg, 2011). Legitimate authority is a person’s authority to
18
make discretionary decisions as long as followers accept this discretion (McShane et al.,
2012). Reward power is a person’s ability to influence others’ behavior by providing them
with things they want to receive. These rewards can be either financial, such as pay raise or
bonuses or nonfinancial, including promotions, favorable work assignments, more
responsibility, new equipment, praise and recognition. A manager can use reward power to
influence and control employees’ behavior, as long as employees value the rewards.
Reward power can lead to better performance, as long as the employee sees a clear link
between performance and rewards. To use reward power effectively, therefore, the manager
should be explicit about the behavior being rewarded and should make clear the connection
between the behavior and the reward (Nelson & Quick, 2012). Employees also have reward
power over their managers through the use of 360-degree feedback systems (McShane &
Von Glinow, 2011). Employee feedback affects managers’ promotions and other rewards, so
managers tend to behave differently toward employees after 360-degree feedback is
introduced into the organization (Mabey, 2001).
Coercive power is a person’s ability to influence others’ behavior by punishing them or by
creating a perceived threat to do so. Typical organizational punishments include reprimands,
undesirable work assignments, withholding key information, demotion, suspension or
dismissal. Coercive power has negative side effects and should be used with caution, because
it tends to result in negative feelings toward those who use it. Expert power is a person’s
ability to influence others’ behavior because of recognized knowledge, skills or abilities.
Experts have power even when they rank low in the organization’s hierarchy. As
organizations become increasingly more technologically complex and specialized, expert
power of organization members at all levels in the hierarchy becomes more important
(Luthans, 2011). Some firms deliberately include lower-level staff members with expert
power in top-level decision making (Nebus, 2006). To be granted expert power, followers
must perceive the power holder to be credible, trustworthy, and relevant (Luthans, 2011).
Credibility is acquired by having the appropriate credentials.
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Referent power is a person’s ability to influence others’ behavior because they like, admire,
and respect the individual. Referent power develops out of admiration of another and a desire
to be like that person. Marketing research shows that people such as Michael Jordan and
Serena Williams have the power to influence your choice of athletic shoes and tennis
products (Craig & Douglas, 2006). The same could be said of leaders in business firms who
have a good reputation, attractive personal characteristics, or a certain level of charisma
(Kudisch et al., 1995). A charismatic leader can ignite an entire organization (Tosi et al.,
2004).
One review of several studies that examined the sources of power concluded the following
(Pfeffer, 1993): Legitimate power can be depended on initially, but continued reliance on it
may create dissatisfaction, resistance and frustration among employees; if legitimate power
does not coincide with expert power, there may be negative effects on productivity and
dependence on legitimate power may lead to only minimum compliance while increasing
resistance. Reward power can directly influence the frequency of employee-performance
behaviors in the short run. Prolonged use of reward power can lead to a dependent
relationship in which subordinates feel manipulated and become dissatisfied. Although
coercive power may lead to temporary compliance by subordinates, it produces the
undesirable side effects of frustration, fear, revenge and alienation. This in turn may lead to
poor performance, dissatisfaction and turnover.
Expert power is closely related to a climate of trust. A leader’s influence can be internalized
by subordinates; that is, when a leader uses expert power, attitudinal conformity and
internalized motivation on the part of subordinates will result. This in turn requires less
surveillance of employees by the leader than does reward or coercive power. Referent power
can lead to enthusiastic and unquestioning trust, compliance, loyalty and commitment from
subordinates. Like expert power, considerably less surveillance of employees is required.
The theory was anchored on this study since; leader without power or who does not know
how to use power would fail in strategy implementation for such a leader would not be in a
position to influence individuals to perform. Hardy (1996) argues that power has a central
20
role in strategy implementation and studied how the use of power can guide an organization
and its members throughout a strategy implementation process. Jackson and Carter (2000)
presented that there are two kinds of forces in an organization; power and authority. They
identified the forces of power as being “the ability to get someone to do something that he or
she does not particularly want to do”. However, Hardy (1996) further reasons that in order to
use power it is necessary to understand what it involves before actual application on
employees.
2.2.5 The Higgins’s Eight (8) S Model of Strategy Implementation
Higgins revised the original McKinsey’s 7-S framework and developed the 8-S
framework for implementing strategies in organizations. The famous and widely
applied 7-S strategy implementation framework was developed in 1980’s by Tom
Peters and Bob Waterman. These components include the system, structure,
systems, skills, staff, style and shared values which are all intertwined.
Higgins then revised and improved the McKinsey’s 7-S model by adding the 8th
S component (Strategic performance) which is the derivative or outcome of the
interaction of 7-S’s components contained in the original McKinsey’s 7-S’s framework.
All these factors tinted above in the Eight S model are vital for successful strategy execution.
Higgins (2005) states that the key here is that all the factors falling in the Contextual Seven
S’s must be aligned to achieve best possible strategic performance. Importantly
organization’s arrows should be pointing in the same direction that is they should be aligned
with one another. The other six contextual S’s should point in the similar direction as of the
strategy (Higgins, 2005).
Strategy and Purpose: The element of ‘strategy’ refers to the “actions that a company plans in
response to or in anticipation of changes in its external environment, its customers, and its
competitors” (Waterman et al., 1980). Change in strategic purpose leads to change in
strategy. Strategic purpose includes strategic intent, vision, focus, mission, goals and
strategic objectives. There are four types of strategies named by Higgins as; corporate,
business, functional, and process strategies. Structure: De Wit and Meyer (2003) define
21
organizational structure as the clustering of tasks and people into smaller groups, i.e. dividing
the organizations into smaller sections (departments, divisions).
Systems and Processes: Higgins (2005) has described systems and processes by stating that
systems and process enable an organization to execute daily activities. Hence, this element is
about the formal and informal procedures used in an organization to manage information
systems, planning systems, budgeting and resource allocation systems, quality control
systems and reward systems. Style refers to leadership/ management mode exhibited by the
leaders/managers when relating to subordinates and other employees. According to Hitt,
Ireland and Hoskisson (2009), strategic leadership is defined as “the leader’s ability to
anticipate, envision, and maintain flexibility and to empower others to create strategic change
as necessary. Staff: After defining company’s strategic purpose, management must settle, as
how many employees are needed and what are the required backgrounds and skills essential
to achieve the strategic purpose.
This factor also covers aspects such as staff training, career management and promotion of
employees (Higgins, 2005). Resources include people, money and technology and other
management systems. Shared Values: Shared values on the whole relates to
corporate/organizational culture. Therefore, shared values are the values shared by the
members of the organization making it different and diverse from the other organizations.
This is because a company’s culture acts as a kind of organizational glue, thus affecting the
degree to which a strategy is successfully implemented (Heide et al., 2002). Strategic
performance can be measured at any level. Financial performance measurements are critical
barometers of strategic performance. However an expanded balanced scorecard approach is
best.
The model was anchored on the study that, for an organization to take successful strategy
implementation, these eight elements need to be aligned and mutually reinforced. So, the
model can be used to help identify what needs to be realigned to improve on strategy
implementation, or to maintain alignment during strategy implementation.
22
2.2.6 Noble’s Strategic Implementation Model (Minimalist Model)
Noble (1999) states that physical distance hindering the necessary, cross-functional
collaboration in the organization form physical barriers. Turf barriers are the other side of
this coin, representing the differing interests of the distinct units. Interpretive barriers are
formed by the different ways different units interpret and comprehend the strategy.
Communication barriers need no explanation. Personality barriers reflect the personal
characteristics of key personnel, as well as between different groups in the organization's
hierarchy. Mankins and Steele (2005) assert that minimalist model and gave two criticisms to
Noble’s rather linear view on strategy implementation. The first was the actual linearity,
which is not a very realistic view even in the interpretation of a single person. There seems to
be, however, some interconnections between interpretation and adoption. If one thinks about
the three levels of interpretation presented by Aberg, one notes that the factors essential to
adoption would seem to be essential to the connotative and symbolic levels of interpretation
as well.
The model was anchored on this study since personal values play a role in the connotative
layer of interpretation. Organizational values on the other hand play a role in the symbolic,
interpersonal layer of interpretation. It might be prudent, therefore not to speak of
interpretation and acceptance as separate processes. It would seem that the structural and
systemic dimensions could act as strong strategic messages themselves in many cases, which
mean that if the structural and systemic properties were not matched with communication
styles (directly affecting the life worlds of the organizational members), one faced with
conflicts in the cultural dimension as well.
2.3 Empirical Literature Review
There are several empirical studies on leadership styles and strategy implementation of
organization. Many of these studies drew evidence from developed economies like the
United States of America, the United Kingdom and Canada. Empirical evidence existed on
the relationship between leadership styles and strategy implementation. The following
studies show the methodology, sample and main findings of these studies.
23
2.3.1 Autocratic Leadership Style and Strategy Implementation
Anita,Wachira and Mwendas (2015) studied the effect of leadership styles on implementation
of organization strategic plans in Small and Medium Enterprises in Nairobi. Descriptive
research design was used. A questionnaire was used to collect data from 354 SMEs.
Autocratic leadership style measurements used were: supervision, the manager being in
control of business operation, decision making by the owner without consultation and use of
punishment on employees. Finding reveals that autocratic leadership influences strategy
implementation positively. This finding agrees with Murigi (2013), who conducted a study
on influence of autocratic leadership style on performance. According to Murigi (2013)
autocratic leadership style involves the application of punishment, task oriented, commands
and supervision. This implies that autocratic leader focuses in his managerial role and getting
things done.
Ngetich and Maina (2014) examine the influence of autocratic leadership style, laissez-faire
leadership style, democratic leadership style and participative leadership style to on strategy
implementation. The target population of the study was 320 of managers. Data was collected
by use of questionnaires. Data was analyzed mainly by use of descriptive and inferential
statistics. Results show Autocratic Leadership Style has positive relationship on strategy
implementation at KRA.
Allameh (2015) examined the relation between Leadership style and effective strategy
implementation in Iran public sector Hamed Dehghanani. Data was collected from 60 top and
middle managers of public sector and the result data of the questionnaire were analyzed by
Pearson correlation technique, ANOVA and TUKEY. Finding shows that autocratic
leadership style influence strategy implementation negatively. Ghamrawi (2013) studied the
relationship between leadership styles of Lebanese Public School principals and their
attitudes towards ICT implementation versus the level of ICT used by their teachers. They
concluded that autocratic leadership style of school principal is negatively related toward the
use of ICT for educational purposes.
24
A Survey on the Chinese entrepreneurship acknowledges that authoritative leadership
combines strong discipline and authority with fatherly benevolence and moral integrity (Farh
& Cheng, 2000). According to Ronald (2011), this leadership results in minimal or no
innovation, and virtually no personal or organizational change, growth and development.
Cooperation, commitment and achievement are stifled. This implies that autocratic leader
focuses in his managerial role and getting things done on strategy implementation. It is best
applied where there is little time for group decision making or where the leader is the most
knowledgeable during strategy implementation.
2.3.2 Participative Leadership Style and Strategy Implementation
The study by Anita, Wachira and Mwenda (2015) on effect of leadership styles on
implementation of organization strategic plans in Small and Medium Enterprises in Nairobi.
Descriptive research design was used. A questionnaire was used to collect primary data. The
study showed the adoption of democratic leadership style where the owner and the
employees are involved in the decisions making improved implementation of strategic plan,
open communication in the business and constant feedback improved implementation of
strategic plans. Further encouragement of team work improved implementation of strategic
plans, the owner of the business cares for the well-being of the employees improved
implementation of strategic plans and lastly delegation of authority improved implementation
of strategic plans. This finding concurs with Ogbeide and Harrington (2011) who observed
that small firms are likely to use an approach with greater participation in implementation.
According to a study carried on small and medium enterprises in Nairobi in may 2015 the
adoption of democratic leadership where the owner and the employees are involved in the
decisions making improved implementation of strategic plan, open communication in the
business and constant feedback also improved implementation of strategic plans.
Encouragement of team work, the owner of the business caring for the well-being of the
employees and delegation of authority also played a great role in efficient implementation of
strategy. Further encouragement of team work improved implementation of strategic plans,
the owner of the business cares for the well-being of the employees improved
implementation of strategic plans and delegation of authority improved implementation of
25
strategic plans. This concurs with Ogbeide and Harrington (2011) who observed that small
firms are likely to use an approach with greater participation in implementation of strategy.
Ogbeide and Harrington (2011), studied the relationship among participative management
style, strategy implementation, success and financial performance in the food service
industry. The study was done in United Stated of America. The measurements used were
organizational structure, level of involvement and implementation success. The findings of
the study were that higher levels of action plan implementation success for restaurants firms
were more likely to use participation in decision making and plan execution. Small firms are
likely to use an approach with greater participation than larger firms.
Ngetich and Maina (2014) they examine the influence of autocratic leadership style, laissez-
faire leadership style, democratic leadership style and participative leadership style to on
strategy implementation. The research design for the study was descriptive survey design.
The population of the study was top management, middle management and supervisory team
of Kenya Revenue Authority. The target population of the study was 320 members. Data was
collected by use of questionnaires. Data was analyzed mainly by use of descriptive and
inferential statistics. The result indicates that participative leadership style has positive
influence on strategy implementation at KRA.
Allameh (2015) examines The Relation between Leadership style and effective strategy
implementation in Iran public sector Hamed Dehghanani. Data was collected from 60 top and
middle managers of public sector and the result data of the questionnaire were analyzed by
Pearson correlation technique and ANOVA. Finding shows that participative leadership style
influence strategy implementation positively.
2.3.3 Transactional Leadership Style and Strategy Implementation
Nancy ( 2015) in her research on leadership styles and implementation of strategy among
nongovernmental organizations in Nairobi City County. The research targeted chief
executive officers of various nongovernmental organizations. The study used primary data
collected through questionnaires. The data was analyzed using frequencies, percentages,
mean and standard deviation. Transactional leadership style had influence on strategy
26
implementation as it influenced how transactions were executed towards the realization of
organizational objectives.
Li (2010) examined how transformational and transactional leadership styles affect
knowledge-based customer relationship management implementation in the Taiwanese hotel
industry. A model of the relationship was created based on earlier research and used Bass and
Avolio’s Multi-Factor Leadership Questionnaire along with questions to assess a multi-
dimensional construct for CRM. Two components of leadership which are: Contingent
Rewards and Management by Exception. The results generally support a negative
relationship between transactional leadership styles and the implementation of knowledge-
based CRM .
2.3.4 Transformational Leadership Style and Strategy Implementation
Nancy (2015) research on leadership styles and implementation of strategy among
nongovernmental organizations in Nairobi City County. The research targeted chief
executive officers of various nongovernmental organizations. The study used primary data
collected through questionnaires. Generally, the respondents indicated that transformational
leadership style was applied by managers to forester strategy implementation.
Li (2010) examines how transformational and transactional leadership styles affect
knowledge-based customer relationship management implementation in the Taiwanese hotel
industry. A model of the relationship was created based on earlier research and used Bass and
Avolio’s Multi-Factor Leadership Questionnaire along with questions to assess a multi-
dimensional construct for CRM. Four components of transformational leadership: Idealized
Influence, Inspirational Motivation, Intellectual Stimulation, and Individualized
Consideration. The results generally support a positive relationship between transformational
leadership styles and the implementation of knowledge-based CRM.
Khan et al., (2009) conducted a study among 296 top executives from the telecommunication
sector in Pakistan and found that all facets of transformational leadership are significant to
organizational innovation except idealized influences. In another study by Imran et al.,
(2011) in Pakistan, and concluded that transformational leadership style was positively
27
related with the innovative work during strategy implementation. Chen et al., (2012)
investigated the relationship between transformational leadership with technological
innovations among 102 Taiwanese small business units. The results indicate that
transformational leadership behaviours promote technological innovation at strategic
business units during implementation.
Afzaal and Mohd (2014) studied leadership style of Chief Executives Officers’ (CEO) in
adoption and implementation of e-business technologies especially within the context of
small and medium enterprises (SMEs). This study investigates sixty CEOs’ leadership style
towards implementation of Enterprise Resource Planning (ERP) systems among Bruneian
SMEs. The study used the Multi-leadership Questionnaire (MLQ) from Bass and Avolio
(1995) to measure the leadership style. The results confirm that CEOs’ transformational
leadership style is significant towards implementation of ERP system.
Correia ( 2010) analyzes the impact of transformational leadership and ethical integrity in
firms' strategic implementation related to corporate social responsibility. A survey of the
largest Portuguese firms was conducted during the second quarter of 2009; data from 50
participating firms were gathered through a self-reporting questionnaire. The results
indicated that transformational leadership is positively related to a firm's strategic
implementation in regard to corporate social responsibility.
2.4 Summary of Literature Review and Research Gap
This chapter reviewed the literature that informs the formation of study variables. In
particular, it reviewed the theoretical and model perspective where the behavioral leadership
theory, trait leadership theory, servant, power and influence leadership theory, The Haggins’s
Eight 8S model and Noble’s strategic implementation model (minimalistic model). The study
presented leadership style and strategy implementation as urged out by other scholars and
researchers.
The vast majority of studies conducted pointed towards strategy implementation by use of
effective leadership style. From the studies conducted so far, the most critical factors which
influence the effectiveness of leadership style were the, creation of constituted body to serve
28
their interests, material and technical capacitated to improve their effectiveness. However,
there were varied opinions as to the impact of leadership styles. Though, most researchers
believed that leadership style is effective in strategy implementation, there were a few others
who believed that there was no such but leadership style depended with the situation and
hence their applicability do not prevent strategy implementation. This chapter therefore
reveals that effective leadership style was key to strategy implementation. Many of the
previous studies on this subject suffer from limitations of over-relying on the cross-sectional
data which could not satisfactorily address the country and the entities (Stima Sacco) specific
issues. In particular, they failed to explicitly address the potential biases induced by the
existence of cross-country heterogeneity, which may lead to inconsistent and misleading
estimates (Ghirmay, 2004). This empirical study therefore aimed at filling this research gap
by examining the effect of leadership styles on strategy implementation in selected Stima
Sacco branches.
2.5 Conceptual Framework
The framework showed the relationship between the independent variables and dependent
variable as discussed in the literature review and elaborated in the figure below. Independent
variables: autocratic leadership style, participative leadership style, transactional leadership
style and transformational leadership style while the strategy implementation which was
essential for of Stima Sacco to achieve its strategic objective was the dependent variable in
this study.
29
Independent Dependent
variables Variable
Source: researcher (2016)
Figure 2.1: Conceptual framework
The variables were: Autocratic Leadership style, Participative Leadership style,
Transactional Leadership style, Transformational Leadership style and Strategy
Implementation. These were conceptualized as shown in the Figure 2.1.
Autocratic Leadership Style
-Coercion
- No shared vision
-Non involvement
Participative Leadership Style
-Group participations
-Discussion
-Group decision
Transactional Leadership Style
-contingent reward
-management by exception
-reward motivation
Transformational Leadership Style
-charisma / idealized influence
-Inspirational motivation
-Intellectual stimulation
-individual attention
Strategy Implementation
- Effectiveness
- Efficiency
- Market share
- New product
30
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Introduction
This chapter provided a discussion of the research method and procedures that was employed
in this study. It discussed the research design especially with respect to the choice of design.
It also discusses the population of the study, data collection methods as well as data analysis
and data presentation methods employed in the study and highlight the sources of
information for the research and data validation and integrity so that the kinds of errors be
identified and eliminated during the analysis and interpretation.
3.2 Research Design
Mathoko et al., (2007) describe a research design as a set of decisions that make up the
master plan specifying the methods and procedures for collecting and analyzing the needed
information. In this study, a survey design was used. This research problem was best studied
through the use of descriptive research. Descriptive research portrays an accurate profile of
persons, events, or situations (Saunders, Lewis & Thornhill, 2003). Surveys allow the
collection of large amount of data from a sizable population in a highly economical way.
Therefore descriptive survey was deemed the best strategy to fulfill the objectives of this
study.
3.3 Population of the Study
Target population in statistics is the specific population about which information is desired.
A population is a well defined or set of people, services, elements, events, group of things or
households that are being investigated (Ngechu, 2004). The target population for this study
was full time managers of Nairobi and Kisumu Stima Sacco branches. There were 18 top
level managers and 44 middle level managers at the two Sacco’s branches. This gave a
total of 62 managers. The management teams were responsible for implementation of the
strategy with an aim to achieve set objectives. The targeted population for this study were
all managers as they all feel the ripple effects of leadership and all had a role to play in
strategy implementation. A census study of all 62 top and middle level managers in the two
31
branches was done since the population was small. A summary of the population was given
in the table 3.1.
Table3. 1 : Nairobi Branch and Kisumu Branch Managers
Top level managers Middle level managers total
populat ion
Nairobi Kisumu Nairobi Kisumu
62
6 12 26 18
Percentage
(%)
10% 19% 42% 29% 100%
Source: Stima Sacco, Human Resource Department (2016)
3.4 Instrument Validity and Reliability
3.4.1 Instrument Validity
Validity is concerned with the extent to which an instrument measures what it is suppose to
measure (Ofanson & Aigbokhaevbolo, 2006). There are four types of validity: Criterion
(concurrent or predictive) validity focuses on how well the instrument compares with
external variables considered to be direct measures of the characteristic or behavior being
examined. Leadership style is used to predict future strategy implementation at Stima Sacco
Kenya. Content validity is concerned with how well the content of the instrument samples
the kinds of things about which conclusions are to be drawn. For example, other Sacco
managers were examined to see whether the content relates to leadership styles expected
during strategy implementation.
Construct validity involves the extent to which certain explanatory concepts or qualities
account for performance. For example, a leadership style test was studied to see how well
theoretical implications of the typologies account for the actual results obtained. Face
validity is often used to indicate whether the instrument, on the face of it, appears to measure
what it claims to measure. Here the question is whether the persons making use of the
instrument accept it as a valid measure in the everyday sense of the word? Test statistics such
as t-test and f-test were used.
32
3.4.2 Instrument Reliability
To verify the reliability of the measuring instrument (questionnaire) developed for the
purpose of this study, it was subjected to pre-trial tests. To test the internal
consistency of the questionnaire, reliability test was carried out on the dependent
and the explanatory variables and the Cronbach’s alpha was obtained. Strategy
implementation of Stima Sacco recorded an alpha of 0.981 while leadership styles
recorded alpha of 0.988 as shown in the Table 3.2. According to Cronbach a n alpha
level of 0.7 to 1.0 is acceptable.
Table 3. 2: Reliability Test
Cronbach's Alpha Cronbach's Alpha Based on Standardized
Items
N of Items
.981 .988 42
3.5 Data Collection
Data collection is gathering empirical evidence in order to gain new insights about a situation
and answer questions that prompt undertaking of the research (Kothari, 2004). This study
collected primary data and utilized self reporting questionnaire (SRQ). The questionnaire
attached at the appendix I. The questionnaire was collected after the respondents filled it.
That was on a drop and pick basis. The study concerned with variables which cannot be
directly observed such as opinions, perceptions and feelings of respondents. Such
information is best described through questionnaires (Oso & Onen, 2005). The questionnaire
considered most appropriate because it allows for collection of data from many respondents
within a short time and provided a high degree of data standardization and adoption of
generalized information amongst any population.
3.6 Data Analysis
Completed questionnaire was edited for completeness and consistency questionnaire was
coded to allow for statistical analysis. According to Mugenda (1999), data must be cleaned,
coded and properly analyzed in order to obtain a meaningful report. The Statistical Package
for Social Science (SPSS) version 12 was used to analyze and interpret the collected data
where appropriate. Descriptive statistics such as mean scores, standard deviations,
33
percentages, and frequency distribution were computed to describe the characteristics of the
variables of interest in the study.
Inferential statistics such as correlation and regression analysis as suggested by Muthen and
Muthen (2007) was used to establish the nature and magnitude of the relationships between
the variables and to test the hypothesized relationships. The findings were presented using
tables. A regression model was developed and correlation analysis was conducted at 95%
confidence level. Pearson’s product moment correlation (r) was derived to show the nature
and strength of the relationship. Spearman’s rho (p) estimate is accompanied by p-values
from statistical significance tests that test the null hypothesis at p<0.05. Coefficient of
determination (R2) was used to measure the amount of variation in the dependent variable
explained by the independent variables.
3.6.1 Model Specification
Conceptual Model
The study model is based on leadership styles and strategy implementation of Stima Sacco in
Kenya. The study conceptualize that strategy implementation of the Stima Sacco is a function
of a mix of leadership style.
The model of this relationship is presented in equation 3.1 below;
Strategy Implementation = f (Autocratic Leadership Style, Democratic Leadership
Style, Transactional Leadership Style, Transformational leadership
Style)………………………………………………………………………………....... (3.1)
Analytical Model
The multiple regression model of strategy implementation versus indicators of leadership
styles is to examine the relationship between the variables. The study use strategy
implementation as the dependant variable and various indicators of leadership styles
(autocratic, democratic, transactional, and transformational) as the independent variables.
Algebraic expression of the analytical model is presented in equation 3.2.
34
(Strategy Implementation) = β0 + β1(Autocratic Leadership Style) + β2(Democratic
Leadership Style) + β3(Transactional Leadership Style) + β4(Transformational Leadership
Style) + εi…………………………………………………………………………………..(3.2)
(SI) = β0 + β1(AL) + β2(DL) + β3(TSL) + β4(TFL) +
εi………..…………………………………………………………………………...……..(3.3)
i = Indexes individual Stima Sacco branch
SI = Strategy Implementation
AL = Autocratic Leadership Style
DL = Democratic Leadership Style
TSL = Transactional Leadership Style
TFL = Transformation Leadership Style
εi = An error term of the model
Where β0 is the constant of the model while β1, β2, β3, and β4 are the coefficients of the
independent variables. The effect of autocratic leadership practice, democratic leadership
Style, transactional leadership style and transformation leadership style on strategy
implementation are measured based on their indices on the responses derive from the likert
scale questions.
The analytical model expresses the strength of linkage or co-occurrence between variables in
a single value between -1 and +1. This value is called the correlation coefficient (β1, β2, β3,
and β4). A positive correlation coefficient indicates a positive relationship between the two
variables while negative correlation coefficient expresses a negative relationship. A
correlation coefficient of zero indicates that no relationship between the variables exists at
all. However correlations are limited to linear relationships between variables. Even if the
correlation coefficient is zero a non-linear relationship might exist.
3.7 Ethical Considerations
Ethics is a branch of philosophy, said to have been initiated by Aristotle, which takes human
action as its subject matter (Seale et al., 2004). Indeed a number of ethical considerations are
taken into account throughout this study. Research permit from National Commission for
Science and Technology (NACOSTI) to carry out research in Nairobi County. A letter of
35
consent (appended) was obtained from Nairobi Headquarter of Stima Sacco manager to
request for participation of top and middle level managers in the research. When permission
was granted, the research topic was introduced at a staff meeting (while on field practice) and
invited people to participate on voluntary basis. The questionnaire (appended) was very clear
that participation was voluntary, the research was purely for academic purposes and that
confidentiality of participants was assured.
36
CHAPTER FOUR
DATA ANALYSIS, PRESENTATION AND DISCUSSION
4.1 Introduction
This chapter covers the general findings of the research, data analysis interpretation
and discussions of the results. A total of 38 questionnaires were returned. A total of 38
questionnaires were analyzed, 12 of which were obtained from the top level managers and 26
from middle level manager. The chapter studied at the respondents’ characteristics as well
as findings of the analysis. In the analysis, descriptive statistics and inferential statistics
were used. The measures of central tendency were used as descriptive statistics.
4.2 Questionnaires Responses Rate
The study administer one set of questionnaires to a sample of 62 respondent identified for the
study as shown in the Table 4.1.
Table4. 1: Questionnaire response rate
Frequency Percent
Valid
Returned 38 61.3
Unreturned 24 38.7
Total 62 100.0
A total of 38 questionnaires were returned by the respondent representing 38(61.3%)
responses rate and 24(38.7%) did not return their questionnaires. Mugenda and Mugenda
(1999) indicate the responses rate of 50% is adequate for analysis and reporting. It is
therefore concluded that the response rate was satisfactory to make conclusion for the study.
4.3 Demographic Information
The study collected data from two sets of respondents, namely top and middle level
managers of selected Stima Sacco Kenya. Demographic information entailed getting data
on gender, length of service and educational level of selected Stima Sacco Kenya.
4.3.1 Gender of the Respondents
Table 4.2 indicated the distribution of respondents by gender. In Table 4.2, the male are
60.5% and the female are 39.5% of the 38 valid cases. There was almost a balance in
gender among employees. Human behavior differs among men and women and thus there
37
should be some more female members of management to give diversity in the management
and decision making processes at the Stima Sacco.
Table4. 2: Gender of top and middle level managers of selected Stima Sacco Kenya
Source: Researcher (2017)
4.3.2 Length of Service
Response from management on the question of length of service returned an outcome
categorized into three. Those that had served for more than 5 years were 57.9%, those that
had served between one and five years were 26.3% and those that had served below one
year were 15.8%. Majority of the staff have served for more than five years. This is
shows that close to 50% of employees have observed strategy implementation from its roll
out and thus knowledgeable to give valid and reliable information. A summary is given in
Table 4.3 .
Frequency Percent
Valid
MALE 23 60.5
FEMALE 15 39.5
Total 38 100.0
38
Table4. 3: Length of Service of Top and Middle Level Managers of selected Stima Sacco
Kenya
Frequency Percent
Valid
below 1 year 6 15.8
1-5 years 10 26.3
over 5 years 22 57.9
Total 38 100.0
Source: Researcher (2017)
4.3.3 Respondents’ Level of Education
Table 4.4 shows a summary of the level of education for the top and middle level
managers of selected Stima Sacco Kenya. The top level management consists of highly
qualified staff because majority has masters level of education. This means they are
knowledgeable and skilled enough to implement a strategy as well as provide guidance
during implementation of strategy of Stima Sacco Kenya.
39
Table4. 4: Level of Education of Top and Middle Level Managers of Stima Sacco Kenya
Frequency Percent
Valid
Doctorate 4 10.5
Masters 10 26.3
Bachelors 8 21.1
Diploma 7 18.4
High School 1 2.6
Others 8 21.1
Total 38 100.0
Source: Researcher (2017)
4.4 Descriptive Statistics
4.4.1 Autocratic Leadership Style
The first objective was to establish the effect of autocratic leadership style on strategy
implementation in selected Stima Sacco Kenya. Descriptive statistics involving items
classified under autocratic leadership style was first analyzed. An ordinal measurement
scale was used to measure the perception of respondents on each of these items based on a
5-point likert scale from strongly agree (5) to strongly disagree (1) with not sure in the
middle (3).
40
Table4. 5: Autocratic Leadership Style
Statements N Mean Std. Deviation Skewness
Statistic Statistic Statistic Statistic Std. Error
Success in strategy implementation
requires a pusher to ensure things get
done.
38 4.32 1.317 -1.822 .383
As supervisor I think it is good to be firm
and forceful when you want good
outcomes from a strategy process.
38 3.89 1.226 -1.463 .383
Autocratic managers at Sacco achieve
better results than others. 38 4.16 1.242 -1.388 .383
I always retain the final decision making
authority within my department or team. 38 4.95 .226 -4.174 .383
I always try to include one or more
employees in determining what to do and
how to do it. However, I maintain the final
decision making authority.
38 4.37 .489 .568 .383
Valid N (listwise) 38
Source: Researcher (2017)
The respondents were asked to indicate the influence of autocratic leadership style on
strategy implementation at Stima Sacco Kenya. Results in table 4.5 revealed that majority of
respondents agreed with the statement that Success in strategy implementation requires a
pusher to ensure things get done, with a mean of 4.32, standard deviation of 1.317 implying
success in strategy implementation in Stima Sacco, Kenya requires pushers to ensure things
get done . A left skew of -1.822 shows most respondents concentrating on the right of the
mean with respondents with extreme values on the left.
41
The statement that as managers they thought it was good to be firm and forceful when they
want good outcomes from a strategy implementation had a mean of 3.89 and standard
deviation of 1.226, implying majority of respondent agreed that being firm and forceful
during strategy implementation is necessary. A left skew of -1.463 indicating that most
respondents concentrating on the right of the mean with respondents with extreme values on
the left. On the statement that autocratic managers at Stima Sacco Kenya achieve better
results than others, had a mean of 4.16 and standard deviation of 1.242, implying respondents
agreed that autocratic managers to achieve better results. A left skew of -1.388 shows most
respondents concentrating on the right of the mean with respondents with extreme values on
the left.
Based on the statement that the respondents always retain the final decision making authority
within their department or team had mean of 4.95 and standard deviation of 0.226 from
respondents, implying most managers retain the final decision within their departments or
teams. A left skew of -4.174 shows most respondents concentrating on the right of the mean
with respondents with extreme values on the left. The statement that the respondent always
tries to include one or more employees in determining what to do and how to do it, However,
they maintain the final decision making authority, had a means score of 4.37 and standard
deviation of 0.489 implying that respondents agree that managers include the employees in
decision making but maintain the final decision making authority. A right skew of 0.568
shows most respondents concentrating on the left of the mean with respondents with
extreme values on the right.
The mean score of the responses were above 3.5 which means that majority agreed that with
coercion, no shared vision and non involvement of employees by the manager had positive
influence on success of strategy implementation at Stima Sacco Kenya. This supports the
finding by Anita,Wachira and Mwendas (2015) on effect of leadership styles on
implementation of organization strategic plans in Small and Medium Enterprises in Nairobi.
4.4.2 Participative Leadership Style
The second objective was to determine the effect of participative leadership style on strategy
implementation in selected Stima Sacco Kenya. Descriptive statistics involving items
42
classified under participative leadership style was analyzed. An ordinal measurement scale
was used to measure the perception of respondents on each of these items based on a 5-
point likert scale from strongly agree (5) to strongly disagree (1) with not sure in the middle
(3).
Table4. 6: Participative Leadership Style
Statements N Mean Std.
Deviation
Skewness
Statistic Statistic Statistic Statistic Std. Error
I invite subordinates to participate in
decision making. 38 4.68 .662 -1.913 .383
I solicit subordinates’ suggestions before
making a decision. 38 4.26 .795 -1.202 .383
I am receptive to ideas and advice from
others. 38 4.16 1.103 -1.603 .383
I put suggestion made by other employees
into action. 38 4.74 .446 -1.120 .383
When I identify the problem, I generate
solutions and evaluate the alternatives
together with subordinates.
38 4.63 .489 -.568 .383
Valid N (listwise) 38
Source: Researcher (2017)
Based on the findings the respondents were asked to indicate the influence of participative
leadership style on strategy implementation at Stima Sacco Kenya. Results in table 4.6
indicated a mean of 4.68 and standard deviation of 0.662 on response whether subordinates
are invited to participate in decision making; implying respondents strongly agree that
subordinates participate in decision making. A left skew of -1.913 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left.
43
Majority of respondents agree that respondents solicit subordinates’ suggestions before
making a decision with a mean of 4.26 and standard deviation of 0.795 meaning managers
solicit suggestions before making decison. A left skew of -1.202 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left.
The statement that they are receptive to ideas and advice from other the respondents results
indicated a means score of 4.16 and standard deviation of 1.103 meaning the respondents
agrees that managers are receptive to ideas and advice from others. A left skew of -1.603
shows most respondents concentrating on the right of the mean with respondents with
extreme values on the left. The respondents strongly agreed with the statements that they put
suggestion made by other employees into action with a mean of 4.74 and standard deviation
of 0.446, implying managers put suggestions made by employees in action. A left skew of -
1.120 shows most respondents concentrating on the right of the mean with respondents with
extreme values on the left and finally the respondents strongly agree that When they identify
the problem, they generate solutions and evaluate the alternatives together with subordinates
with a mean of 4.63 and standard deviation of 0.489, meaning there is group decision among
the employees and the managers. A left skew of -0.568 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left.
The mean score of the responses majority are above 4.50 which mean that
respondents strongly agreed that participative leadership style has influence on strategy
implementation at Stima Sacco Kenya. The result concurred with a study by Ogbeide and
Harrington (2011), who studied the relationship among participative management style,
strategy implementation, success and financial performance in the food service industry.
4.4.3 Transactional Leadership Style
The third objective was to investigate the effect of transactional leadership style on strategy
implementation in selected Stima Sacco Kenya. Descriptive statistics involving items
classified under transactional leadership style was analyzed. An ordinal measurement
scale was used to measure the perception of respondents on each of these items based on
a 5-point likert scale from strongly agree (5) to strongly disagree (1) with not sure in the
middle (3).
44
Table4. 7: Transactional Leadership Style
Statements N Mean Std.
Deviation
Skewness
Statistic Statistic Statistic Statistic Std.
Error
I provide one with assistance in exchange for
his/her efforts. 38 4.11 .727 -.165 .383
I discuss in specific terms who is responsible for
achieving strategy implementation targets. 38 3.05 1.754 -.148 .383
I make clear what one can expect to receive when
performance goals are achieved. 38 1.74 1.032 1.814 .383
I express satisfaction when I meet expectations. 38 1.76 1.025 1.778 .383
I focus attention on irregularities, mistakes,
exceptions and deviations from standards. 38 1.42 .599 1.118 .383
I concentrate my full attention on dealing with
mistakes, complaints and failures. 38 1.21 .413 1.479 .383
I keep track of all mistakes. 38 1.32 .471 .826 .383
I direct my attention toward failures to meet
standards. 38 4.76 .542 -2.289 .383
I fail to interfere until problems become serious. 38 4.37 .489 .568 .383
I wait for things to go wrong before taking action. 38 4.53 .830 -1.886 .383
I demonstrate that problems must become chronic
before taking action. 38 4.37 .489 .568 .383
Valid N (listwise) 38
Source: Researcher (2017)
On the statement of providing one with assistance in exchange for his/her efforts there were
38 respondents with a mean of 4.11 and standard deviation of 0.727 implying respondents
agree that manager’s offer rewards for employees efforts. A left skew of -0.165 shows most
respondents concentrating on the right of the mean with respondents with extreme values on
the left. Based on the statement on discuss in specific terms who is responsible for achieving
45
strategy implementation targets there were 38 respondents, mean of 3.05 and standard
deviation 1.754 indicates the respondents are not sure whether there is individual
responsibility. A left skew of -0.148 shows most respondents concentrating on the right of
the mean with respondents with extreme values on the left.
The respondents disagree with a statement on whether they make clear what one can expect
to receive when performance goals are achieved with mean of 1.74 and standard deviation of
1.032, implying it’s not clear from management what one expect to receive when
performance is achieved. A right skew of 1.814 shows most respondents concentrating on
the left of the mean with respondents with extreme values on the right. On the statement on
expressing satisfaction when respondents met expectations results had 38 respondents, mean
1.76 and standard deviation of 1.025 implied respondent disagree on expression of
satisfaction when employee meet expectations. A right skew of 1.778 shows most
respondents concentrating on the left of the mean with respondents with extreme values on
the right.
Based on the statement from 38 respondents on focusing attention on irregularities, mistakes,
exceptions and deviations from standards with a mean of 1.42 and standard deviation of
0.599 the respondents strongly disagree, meaning the managers do not pay attention on
irregularities, mistakes, exceptions and deviation from standards. A right skew of 1.118
shows most respondents concentrating on the left of the mean with respondents with
extreme values on the right. Respondents of 38 strongly disagree with statement on
concentrating full attention on dealing with mistakes, complaints and failures with mean
1.21, and standard deviation of 0.413 meaning managers do not concentrate full attention on
dealing with mistakes, complaints and failures A right skew of 1.479 shows most
respondents concentrating on the left of the mean with respondents with extreme values on
the right.
Respondents of 38 indicated strongly disagree on the statement on keeping track of all
mistakes with mean of 1.32 and standard deviation of 0.471; managers do keep track of all
mistakes. A right skew of 0.826 shows most respondents concentrating on the left of the
mean with respondents with extreme values on the right. Based on the statement on directing
attention toward failures to meet standards with a mean of 4.76 and standard deviation of
46
0.542 implying the respondents strongly agree that manager’s pay attention to failures to
meet standards. A left skew of -2.289 shows most respondents concentrating on the right of
the mean with respondents with extreme values on the left.
On the statement whether 38 respondents fail to interfere until problems become serious
results were mean 4.37 and standard deviation 0.489 the respondents agree meaning
managers pays attention when the problem become serious. A right skew of 0.568 shows
most respondents concentrating on the left of the mean with respondents with extreme
values on the right. There were 38 responses with a mean of 4.53 on the statement whether
they wait for things to go wrong before taking action, the respondents strongly agree
implying manager take action once things had gone wrong. A left skew of -1.886 shows
most respondents concentrating on the right of the mean with respondents with extreme
values on the left.
Based statement on demonstrating that problems must become chronic before taking action ,
results were mean 4.37 and standard deviation 0.489 the respondents agree, meaning
managers take action when problem become chronic. A right skew of 0.568 shows most
respondents concentrating on the left of the mean with respondents with extreme values on
the right. However, the descriptive statistics gave mixed results as some items had mean of
one, two, three and others mean were four. However most mean were above 4.00 implying
respondents agree with questions on transactional leadership variable had positive effect on
strategy implementation. This study contradict the research finding by Li (2010) who
examined how transformational and transactional leadership styles affect knowledge-based
customer relationship management implementation in the Taiwanese hotel industry who
found a negative relationship between transactional leadership styles and the implementation
of knowledge-based CRM.
4.4.4 Transformational Leadership Style
The fourth objective was to establish the effect of transformational leadership style on
strategy implementation in selected Stima Sacco Kenya. Descriptive statistics involving
items classified under transformational leadership style was analyzed. An ordinal
measurement scale was used to measure the perception of respondents on each of these
47
items based on a 5-point likert scale from strongly agree (5) to strongly disagree (1) with
not sure in the middle (3).
Table4. 8: Transformational Leadership Style
Statement N Mean Std.
Deviation
Skewness
Statistic Statistic Statistic Statistic Std. Error
I go beyond self-interest for the good of the group. 38 4.16 .886 -.324 .383
I act in a way that build my respect. 38 4.68 .471 -.826 .383
I display a sense of power and confidence. 38 4.58 .642 -1.280 .383
I do specify the importance of having a strong
sense of purpose. 38 4.50 .647 -.947 .383
I consider the moral and ethical consequences of
decisions. 38 4.68 .739 -1.954 .383
I emphasize the importance of having a collective
sense of mission. 38 4.71 .460 -.967 .383
I talk enthusiastically about what needs to be
accomplished. 38 4.42 .500 .333 .383
I articulate a compelling vision of the future. 38 4.55 .504 -.221 .383
I express confidence that goals will be achieved. 38 4.53 .506 -.110 .383
I reexamine critical assumptions to question
whether they are appropriate. 38 4.58 .500 -.333 .383
I seek differing perspectives when solving
problems. 38 4.79 .413 -1.479 .383
I get one to look at problems from many different
angles. 38 4.16 .370 1.954 .383
I suggest new ways of looking at how to complete
assignments. 38 4.53 .951 -2.069 .383
I spend time teaching and coaching. 38 4.26 1.032 -1.814 .383
I treat one as an individual rather than just as a
member of a group. 38 4.53 .687 -1.154 .383
I consider one as having different needs, abilities
and aspirations from others. 38 4.89 .311 -2.679 .383
I help one to develop his/her strengths. 38 4.55 .686 -1.261 .383
Valid N (listwise) 38
Source: Researcher (2017)
48
There were 38 respondents were asked whether they go beyond self-interest for the good of
the group with a mean score of 4.16 and standard deviation of 0.886 implying respondents
agree they have interest of employees .A left skew of -1.886 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left.
Based on the statement acting in a way that build my respect there were 38 responses, mean
4.68 and standard deviation of 0.471, implying respondents strongly agree that managers act
in way that build them respect. A left skew of -0.826 shows most respondents concentrating
on the right of the mean with respondents with extreme values on the left.
On the statement whether respondents display a sense of power and confidence the results
were 38 respondents with mean 4.58, standard deviation of 0.642 implying the respondents
strongly agree that they display sense of power and confidence. A left skew of -1.280 shows
most respondents concentrating on the right of the mean with respondents with extreme
values on the left. On the statement whether respondents do specify the importance of having
a strong sense of purpose the results indicated 38 respondents with, mean of 4.50 and
standard deviation of 0.647 meaning the respondents strongly agree that managers do specify
the importance of having a strong sense of purpose to employees. A left skew of -0.947
shows most respondents concentrating on the right of the mean with respondents with
extreme values on the left.
Base on the statement whether the respondents consider the moral and ethical consequences
of decisions the results indicated 38 responses with , mean 4.68 and standard deviation of
0.739, implying respondents strongly agree that managers are considering the moral and
ethical consequences of decisions. A left skew of -1.954 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left. On
the statement of emphasizing the importance of having a collective sense of mission the
results had 38 responses, with mean 4.71 and standard deviation of 0.460, implying the
respondents strongly agree that managers emphasize the importance of having a collective
sense of mission. A left skew of -0.967 shows most respondents concentrating on the right
of the mean with respondents with extreme values on the left.
49
The 38 respondents agree with the statement on talking enthusiastically about what needs to
be accomplished with mean of 4.42 and standard deviation of 0.500 implying the respondents
agree that managers talk enthusiastically about what needs to be accomplished. A right skew
of 0.333 shows most respondents concentrating on the left of the mean with respondents
with extreme values on the right. The statement on the 38 respondents articulating a
compelling vision of the future indicated, mean of 4.55 and standard deviation of 0.504,
meaning respondents strongly agree that managers articulate a compelling vision of the
future. A left skew of -0.221 shows most respondents concentrating on the right of the mean
with respondents with extreme values on the left.
The results of 38 respondents on the statement expressing confidence that goals will be
achieved indicates a mean 4.53 and standard deviation of 0.506 implying respondents
strongly agree that managers expresses confidence that goals will be achieved .A left skew
of -0.221 shows most respondents concentrating on the right of the mean with respondents
with extreme values on the left. The 38 responses indicated strongly agree on the statement of
reexamining critical assumptions to question whether they are appropriate with a mean of
4.58 and standard deviation of 0.500 implying managers always reexamine critical
assumptions to question whether they are appropriate. A left skew of -0.333 shows most
respondents concentrating on the right of the mean with respondents with extreme values on
the left.
On the statement of seeking differing perspectives when solving problems there were 38
respondents with mean of 4.79 and standard deviation of 0.413 implying respondents
strongly agree that always managers sought differing perspectives when solving problems. A
left skew of -0.333 shows most respondents concentrating on the right of the mean with
respondents with extreme values on the left. Based on statement that respondents get one to
look at problems from many different angles there were 38 respondents, mean of 4.16 and
standard deviation of 0.370 indicating that the respondents agree that managers look at
problems from many different angles. A right skew of 1.954 shows most respondents
concentrating on the left of the mean with respondents with extreme values on the right.
The 38 respondents strongly agree on statement suggesting new ways of looking at how to
complete assignments of with a mean of 4.53 and standard deviation 0.951 implying most
50
managers suggest new ways of looking at how to complete assignments. A left skew of -
2.069 shows most respondents concentrating on the right of the mean with respondents with
extreme values on the left. The 38 respondents agree with the statement that on spending
time teaching and coaching with a mean 4.26 and standard deviation of 1.032 implying
respondents agree that managers spend time teaching and coaching on employees. A left
skew of -1.814 shows most respondents concentrating on the right of the mean with
respondents with extreme values on the left.
Based on the statement on treating one as an individual rather than just as a member of a
group there were 38 responses with, mean of 4.53 and standard deviation of 0.687, implying
respondents strongly agree that managers treat one as an individual rather than as group. A
left skew of -1.154 shows most respondents concentrating on the right of the mean with
respondents with extreme values on the left. On the statement of considering one as having
different needs, abilities and aspirations from others, the respondents were 38, mean of 4.89
and standard deviation of 0.311 indicating that the respondents strongly agree that managers
considers one as having different needs, abilities and aspirations from others. A left skew of
-2.679 shows most respondents concentrating on the right of the mean with respondents
with extreme values on the left.
The statement in helping one to develop his/her strength there were 38 responses with , mean
of 4.55 and standard deviation of 0.686, implying respondents strongly agree that manager
helps one to develop on his strength. A left skew of -1.261 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left. The
mean score of the responses majority were above 4.00 which mean that respondents either
agreed or strongly agreed that transformation leadership style had influence on strategy
implementation at Stima Sacco Kenya. The result supports the findings by Afzaal and Mohd
(2014) who studied leadership style of Chief Executives Officers’ (CEO) in adoption and
implementation of e-business technologies especially within the context of small and
medium enterprises (SMEs).
4.4.5 Strategy Implementation
Descriptive statistics involving items classified under strategy implementation was
analyzed. An ordinal measurement scale was used to measure the perception of
51
respondents on each of these items based on a 5-point likert scale from strongly agree (5)
to strongly disagree (1) with not sure in the middle (3).
Table4. 9 : Strategy Implementation
N Mean Std.
Deviation
Skewness
Statistic Statistic Statistic Statistic Std.
Error
At Sacco the system is effective to ensure
customers are served without delay. 38 4.76 .542 -2.289 .383
At Sacco there is efficiency to ensure
minimal errors in the system reported. 38 4.37 .489 .568 .383
At Sacco there is increase in the number
of new shareholders. 38 4.53 .830 -1.886 .383
At Sacco there is development of new
products to customers. 38 4.37 .489 .568 .383
Valid N (listwise) 38
Source: Researcher (2017)
The respondents were asked to indicate about the strategy implementation at Stima Sacco
Kenya. results in table 4.9 revealed that the respondents strongly agreed with the statement
that at Sacco the system is effective to serve customers without delay with a mean of 4.76,
standard deviation of 0.542 and a left skew of -2.289 shows most respondents concentrating
on the right of the mean with respondents with extreme values on the left. Respondents
agreed with the statement that at Sacco there is efficiency to ensure minimal errors in the
system reported with a mean of 4.37 and standard deviation of 0.489 a right skew of 0.568
shows most respondents concentrating on the left of the mean with respondents with
extreme values on the right.
52
The respondents strongly agree that there is an increase on the number of shareholders with a
mean 4.53 and standard deviation 0.830 and a left skew of -1.886 shows most respondents
concentrating on the right of the mean with respondents with extreme values on the left. At
the Sacco the respondent agree that there is development of new products to customers with
mean of 4.37, standard deviation of 0.489 and a right skew of 0.56 shows most respondents
concentrating on the left of the mean with respondents with extreme values on the right.
4.5 Inferential Statistics
Correlation and regressions analysis were utilized to assist in answering the research
questions.
4.5.1 Bivariate Correlation Analysis
Data was further subjected to inferential analysis and Pearson’s correlation was applied to
test the extent of relationship among the variables.
Table4. 10: Correlation Results of Relationship between Leadership Style and SI
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Researcher (2017)
AL DL TFL TSL SI
AL
Pearson Correlation 1
Sig. (2-tailed)
N 38
DL
Pearson Correlation .964** 1
Sig. (2-tailed) .000
N 38 38
TFL
Pearson Correlation .941** .920** 1
Sig. (2-tailed) .000 .000
N 38 38 38
TSL
Pearson Correlation .748** .818** .862** 1
Sig. (2-tailed) .000 .000 .000
N 38 38 38 38
SI
Pearson Correlation .932** .967** .933** .871** 1
Sig. (2-tailed) .000 .000 .000 .000
N 38 38 38 38 38
53
Correlation test results on table 4.10 indicate that autocratic leadership style (0.932),
democratic leadership style (0.967), transformational leadership style (0.933) and
transactional leadership style (0.871) had strong and positive correlations with strategy
implementation and statistically significant (0.000). The positive correlations mean that a
unit change on the predictor variables resulted to a positive change unit in strategy
implementation.
This depicts a strong and positive relationship between leadership style and strategy
implementation of Stima Sacco Kenya. These findings corroborate various studies (Messah
and Muchai, 2011; Ofori and Atigobe, 2011; Wairia (2010); Gachunga and Maina, 2011)
who established a positive relationship between Managerial behaviour and the
implementation of strategic plans in their studies on Factors Affecting the Implementation of
Strategic Plans in Government Tertiary Institutions in Kenya, public universities in Ghana,
Kenya roads board and technical institutes in Kenya. The findings of this study along with
the review of past studies indicated that there was a positive relationship between leadership
styles and strategy implementation of Stima Sacco,Kenya.
4.5.2 Regression Analysis
In addition, the researcher conducted a multiple regression analysis so as to determine the
influence of leadership style on the implementation of strategy in Stima Sacco Kenya. The
researcher applied the statistical package for social sciences (SPSS) to code, enter and
compute the measurements of the multiple regressions for the study as shown in the tables
below.
Table4. 11: Model Summary (How TSL, AL, TFL and DL Influnces Strategy
Implementation)
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .979a .958 .952 .10645
Source: Researcher (2017)
54
Table4. 12 :Anova ( How TSL, AL, TFL and influences Strategy Implementation)
Model Sum of
Squares
df Mean Square F Sig.
1
Regression 8.437 4 2.109 186.119 .000b
Residual .374 33 .011
Total 8.811 37
a. Dependent Variable: SI
b. Predictors: (Constant), TSL, AL, TFL, DL
Source: Researcher (2017)
Table4. 13: Coefficients (How TSL, AL, TFL and influences Strategy Implementation)
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 1.048 .574 1.825 .077
AL .007 .100 .014 .066 .948
DL .557 .146 .669 3.810 .001
TFL .123 .153 .131 .803 .428
TSL .132 .064 .201 2.049 .048
Source: Researcher (2017)
Table 4.11 shows that the coefficient of determination also called the R square was 95.2%.
This means that the combined influence of the predictor variables (autocratic leadership
style, democratic leadership style, transformational leadership style and transactional
leadership style) explains 95.2% of the variations in strategy implementation. The correlation
coefficient of 95.8% indicated that the combined influence of the predictor variables has a
positive correlation with strategy implementation at Stima Sacco, Kenya. This supports the
finding by Anita,Wachira and Mwendas (2015) on effect of leadership styles on
implementation of organization strategic plans in Small and Medium Enterprises in Nairobi.
Table 4.12 provides the results on the analysis of the variance (ANOVA). The results
indicated that the overall model was statistically significant. Further, the results imply that
the independent variables are good predictors of strategy implementation. This was supported
by an F statistic of 186.119 and the reported p value (0.000) which was less than the
55
probability of 0.05 significance level. This supports the finding by Afzaal (2015) on
examining the role of transformational leadership in technology adoption: evidence from
Bruneian Technical and Vocational Establishments (TVE)
The Un-standardized beta coefficients column in Table 4.13 above were used to obtain the
overall equation as suggested in the analytical model. When these beta coefficients are
substituted in the equation, the model becomes:
SI = 1.048 + 0.007AL + 0.557 DL + 0.123TFL+0.132TSL + εi
Where
i = Indexes individual Stima Sacco branch
SI = Strategy Implementation
AL = Autocratic Leadership Style
DL = Democratic Leadership Style
TSL = Transactional Leadership Style
TFL = Transformation Leadership Style
εi = An error term of the model
The study conducted a multiple regression analysis and from the above regression model,
holding (autocratic leadership style, democratic leadership style, transactional leadership
style and transformational leadership style) constant at zero, the strategy implementation will
be 1.048. A one unit change in autocratic leadership practice results to 0.007 units increase in
strategy implementation; also a one unit change in democratic leadership style results to
0.557 units increase in strategy implementation ; also a one unit change in transformational
leadership style results to 0.123 units increase in strategy implementation. Lastly, a one unit
change in transactional leadership style results to 0.132 units in strategy implementation.
This shows that there is a positive relationship between (Autocratic leadership style,
democratic leadership style, transformational leadership style and transactional leadership
style) and strategy implementation. This supports the finding by Ngetich and Maina (2014)
who examine the influence of autocratic leadership style, laissez-faire leadership style,
democratic leadership style and participative leadership style to on strategy implementation.
56
The Table 4.13 indicates that autocratic leadership style has no significant effect on strategy
implementation at Stima Sacco Kenya with a probability of 0.948 which is higher than the
0.05 level of significance, with p>0.05 reject the hypothesis. This contradicts the study by
Anita,Wachira and Mwendas (2015) on effect of leadership styles on implementation of
organization strategic plans in Small and Medium Enterprises in Nairobi.
The results from the Table 4.13 indicates that, democratic leadership style has significant
effect on strategy implementation Stima Sacco Kenya as it had a probability of 0.001 which
is less than 0.05 level of significance, with p<0.05 accept the hypothesis. This supports the
finding by Anita,Wachira and Mwendas (2015) on effect of leadership styles on
implementation of organization strategic plans in Small and Medium Enterprises in Nairobi.
Table 4.13 indicates that, transactional leadership style has significant effect on strategy
implementation Stima Sacco Kenya as it had a probability of 0.048 which is less than 0.05
level of significance, with p<0.05 accept the hypothesis. This contradicts the study by Li
(2010) who examined how transformational and transactional leadership styles affect
knowledge-based customer relationship management implementation in the Taiwanese hotel
industry.
The Table 4.13 indicates transformational leadership style has no significant effect on
strategy implementation at Stima Sacco whose p value 0.428 higher than the 0.05 level of
significance, with p>0.05 reject the hypothesis. This study contradict the study by Correia (
2010) who analyzed the impact of transformational leadership and ethical integrity in firms'
strategic implementation related to corporate social responsibility.
57
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1. Introduction
This chapter summarizes the findings as well as the conclusions gathered from the
analysis of data. The findings have been summarized alongside the objectives of the
study. Conclusions have been drawn from the study and the recommendations given.
5.2 Summary
The first objective was to establish the effect of autocratic leadership style on strategy
implementation in selected Stima Sacco Kenya. The mean score of the responses were above
3.5 which indicate that majority agreed that with coercion, no shared vision and non
involvement of employees by the manager had positive influence on success of strategy
implementation at Stima Sacco Kenya. Correlation test results indicate that autocratic
leadership style with value 0.932 indicates strong and positive correlations with strategy
implementation and statistically significant (0.000). The positive correlations mean that a
unit change on the predictor variables resulted to a positive change unit in strategy
implementation. Multiple regression analysis, Autocratic leadership style is insignificant
variable whose p value is 0.948 higher than the 0.05 level of significance, with p>0.05 reject
the hypothesis implying even though autocratic leadership style has positive value but do not
have significance on strategy implementation.
The second objective was to determine the effect of participative leadership style on strategy
implementation in selected Stima Sacco Kenya. The mean score of the responses majority are
above 4.50 which mean that respondents strongly agreed that participative leadership style
has influence on strategy implementation at Stima Sacco Kenya. Correlation test results,
democratic leadership style (0.967), implying strong and positive correlation between
democratic leadership style and strategy implementation exist. The results of multiple
regression analysis democratic leadership style, has a probability of 0.001 which is less than
0.05 level of significance, with p<0.05 accept the hypothesis, implying democratic leadership
style is significant on strategy implementation at Stima Sacco Kenya.
58
The third objective was to investigate the effect of transactional leadership style on strategy
implementation in selected Stima Sacco Kenya. The descriptive statistics gave mixed results
as some items had mean of one, two, three and others mean 4.00 and most mean above 4.00
implying most respondents agree that transactional leadership style influence success in
strategy implementation. Correlation test results on transactional leadership style (0.871)
implying there is strong and positive relationship between transactional leadership style and
strategy implementation are strongly correlated. Results for regression analysis indicates
transactional leadership style is statistically significant in measuring strategy implementation
as it had a probability of 0.048 which is less than 0.05 level of significance, with p<0.05
accept the hypothesis, implying transactional leadership style is significant on strategy
implementation at Stima Sacco Kenya.
The fourth objective was to establish the effect of transformational leadership style on
strategy implementation in selected Stima Sacco Kenya. The mean score of the responses
majority were above 4.00 which mean that respondents either agreed or strongly agreed that
transformation leadership style had influence on strategy implementation at Stima Sacco
Kenya. Correlation test results indicate transformational leadership style (0.933) has strong
and positive relationship between transformation leadership style and strategy
implementation. Results on multiple regression analysis transformational leadership style is
insignificant whose p value 0.428 more than the 0.05 level of significance; transformation
leadership style has positive values but do not have significance on strategy implementation.
5.3 Conclusion
The study concluded that Stima Sacco has autocratic leaders who are firm and forceful
especially, during strategy implementation. In addition the leaders always retain the final
decision making authority within their department or team. Stima Sacco leadership always
tries to include one or more employees in decision making. However, the leaders maintain
the final decision making authority with mean response above 3.5. Autocratic leadership
style with r= 0.932 and p= 0.948 indicates that autocratic leadership style has positive
correlation but has no significant effect on strategy implementation.
59
At Stima Sacco there is participative leadership during strategy implementation who involves
subordinates to participate in decision making, solicit subordinates suggestions before
making decision, put suggestion made by employees into action and identify the problem,
generates solutions and evaluate the alternatives together with subordinates indicated with a
mean value above 4.50. Participative leadership style has positive correlation (0.967) with
strategy implementation at Stima Sacco and has significant effect on strategy implementation
with p value of 0.001.
Stima Sacco has transactional leadership during strategy implementation who provide one
with assistance in exchange for ones efforts, discuss in specific terms who is responsible for
achieving strategy implementation targets, do not make clear what one is expected to receive
when performance goals are achieved, do not express satisfaction when expectations are met,
does not focus attention on irregularities, mistakes, exceptions and deviations from standards,
do not concentrate full attention on dealing with mistakes, complaints and failures, do not
keep track of all mistakes, direct attention toward failures to meet standards, fails to interfere
until problems become serious, waits for things to go wrong before taking action and
demonstrates that problems must become chronic before taking action with most mean values
of above 4.00. Transactional leadership style has a positive correlation (0.871) and
significant effect on strategy implementation at Stima Sacco Kenya with p=0.048.
There is transformational leadership during strategy implementation at Stima Sacco Kenya
who go beyond self-interest for the good of the group, act in way that build them respect,
displays a sense of power and confidence, specify the importance of having a strong sense of
purpose, consider the moral and ethical consequences of decisions, emphasize the importance
of having a collective sense of mission, talks enthusiastically about what needs to be
accomplished, articulates a compelling vision of the future , express confidence that goals
will be achieved, reexamines critical assumptions to question whether they are appropriate,
seek differing perspectives when solving problems, get one to look at problems from many
different angles, suggests new ways of looking at how to complete assignments, spends time
teaching and coaching, treat one as an individual rather than just as a member of a group,
consider one as having different needs, abilities and aspirations from others and help one to
60
develop his/her strengths with most mean values above 4.00. Transformational leadership
style has positive correlation (0.933) but has no significant effect on strategy implementation
at Stima Sacco Kenya.
5.4 Recommendations
The study recommends that autocratic leadership style that involves coercion, no shared
vision and non involvement of employees during strategy implementation at Stima Sacco
Kenya should not be applied, since autocratic leadership style has positive but has no
significant effect on strategy implementation. However, the study recommends that
participative leadership style which involves group participation, discussion and group
decision should be applied at Stima Saccos Kenya because participative leadership style has
positive and has significant effect on strategy implementation.
Further the study recommends that transactional leadership style that involves contingent
reward, management by exception and reward motivation should be used during strategy
implementation at Stima Sacco Kenya, since transactional leadership style has a positive and
significant effect on strategy implementation at Stima Sacco Kenya. However,
transformational leadership style which involves idealized influence, inspirational
motivation, intellectual stimulation and individual attention should not be used during Stima
Sacco strategy implementation because transformational leadership style has positive but has
no significant effect on strategy implementation at Stima Sacco Kenya.
5.5 Areas for Further Research
This study did not factor in other factors that determine success in strategy implementation at
Stima Sacco Kenya. A study should be conducted to determine other f a c t o r s that
influence implementation strategy at Stima Sacco Kenya. The study was limited to only two
branches of Stima Sacco. The study should be conducted on the remaining branches of Stima
Sacco Kenya on the same topic of study. The use of self report by managers, a replica study
be done that triangulates the findings of the managers and their subordinates in order to
establish the managers leadership styles.
61
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APPENDIX
Letter to Respondents
4th
February, 2017
Josephat Okoth Atito
P.O. Box 73-40131
Paw-Akuche
Dear Respondent,
RE: RESEARCH SURVEY QUESTIONNAIRE
I am a p o s t graduate student of Kenyatta University pursuing Master of Business
Administration degree (strategic management option). As part of the requirements for the
award of this degree, I am expected to carry out a research and present a report to the
University. My research interest is on Organization Leadership Practices and Strategy
Implementation in selected Stima Sacco Kenya.
I kindly request for your support to enable me achieve this endeavor. A questionnaire shall
be given to you to fill and the information shall be analyzed to determine the influence of
Organization Leadership Styles and Strategy Implementation in selected Stima Sacco
Kenya.
Kindly note that any information provided will be handled with confidentiality and will be
used for academic purposes only.
Thank you and may God bless you.
Yours faithfully,
Josephat Okoth Atito
73
Questionnaire
QUESTIONNAIRE FOR STIMA SACCO MANAGEMENT
Dear Respondent,
I am MBA student with Kenyatta University bearing this Particulars JOSEPHAT OKOTH
ATITO REG NO D53/NYI/PT/28731/14. I am interested in carrying out a research on
effect of leadership on strategy implementation in Stima Sacco Kenya to enable me
complete my studies. As a member of the Sacco Management, you occupy a unique
position at Stima Sacco to ensure implementation of the strategy with an aim to achieve set
objectives. Consequently, I request you to spare few minutes to fill in this questionnaire
with your honest opinion. This exercise is purely academic and the data will be handled
with utmost confidence.
Josephat Okoth Atito
(Researcher)
SECTION A: BACKGROUND INFORMATION
Kindly tick or cross once in the appropriate box.
1. What is your gender?
i) Male
ii) Female
2. How long have you served at your present station?
Below 1 year 1-5 Years Over 5 years
3. What is your level of education?
i) Doctorate
ii) Masters
iii) Bachelors
iv) Diploma
v) High School
vi) Other (Specify).........................................……………
74
SECTION B:
This section deals with the developments in the last five years in the implementation of
the Sacco’s strategy (2011-2015). Indicate to what extent you agree or disagree with the
statements using the following scale:
5 = Strongly Agree (SA) 4 = Agree (A) 3 = Not Sure (NS) 2 = Disagree (D)
1 = Strongly Disagree (SD)
Part 1. Autocratic Leadership Style
Kindly tick or cross once in the appropriate box.
NO STATEMENTS 5
SA
4
A
3
NS
2
D
1
SD
1. Success in strategy implementation requires a
pusher to ensure things get done.
2. As supervisor I think it is good to be firm and
forceful when you want good outcomes from a
strategy process.
3 Autocratic managers at Sacco achieve better
results than others.
4 I always retain the final decision making authority
within my department or team.
5 I always try to include one or more employees in
determining what to do and how to do it.
However, I maintain the final decision making
authority.
75
Part 2. Participative Leadership Style
Kindly tick or cross once in the appropriate box.
NO STATEMENTS 5
SA
4
A
3
NS
2
D
1
SD
6 I invite subordinates to participate in decision
making.
7 I solicit subordinates’ suggestions before making a
decision.
8 I am receptive to ideas and advice from others.
9 I put suggestion made by other employees into
action.
10 When I identify the problem, I generate solutions
and evaluate the alternatives together with
subordinates.
Part3. Transformational Leadership Style
Kindly tick or cross once in the appropriate box.
NO STATEMENTS 5
SA
4
A
3
NS
2
D
1
SD
11 I go beyond self-interest for the good of the
group.
12 I act in way that build my respect.
13 I display a sense of power and confidence.
14 I do specify the importance of having a strong
sense of purpose.
76
15 I consider the moral and ethical consequences of
decisions.
16 I emphasize the importance of having a collective
sense of mission.
17 I talk enthusiastically about what needs to be
accomplished.
18 I articulate a compelling vision of the future.
19 I express confidence that goals will be achieved.
20 I reexamine critical assumptions to question
whether they are appropriate.
21 I seek differing perspectives when solving
problems.
22 I get one to look at problems from many different
angles.
23 I suggest new ways of looking at how to complete
assignments.
24 I spend time teaching and coaching.
25 I treat one as an individual rather than just as a
member of a group.
26 I consider one as having different needs, abilities
and aspirations from others.
27 I help one to develop his/her strengths.
Part 4 Transactional Leadership Style
Kindly tick or cross once in the appropriate box.
NO STATEMENTS 5
SA
4
A
3
NS
2
D
1
SD
28 I provide one with assistance in exchange for
his/her efforts.
77
29 I discuss in specific terms who is responsible for
achieving strategy implementation targets.
30 I make clear what one can expect to receive when
performance goals are achieved.
31 I express satisfaction when I meet expectations.
32 I focus attention on irregularities, mistakes,
exceptions and deviations from standards.
33 I concentrate my full attention on dealing with
mistakes, complaints and failures.
34 I keep track of all mistakes.
35 I direct my attention toward failures to meet
standards.
36 I fail to interfere until problems become serious.
37 I wait for things to go wrong before taking action.
38 I demonstrate that problems must become chronic
before taking action.
Part 5. Strategy Implementation
Kindly tick or cross once in the appropriate box.
NO
STATEMENTS 5
SA
4
A
3
NS
2
D
1
SD
39 At Sacco the system is effective to ensure
customers are served without delay.
40 At Sacco there is efficiency to ensure minimal
errors in the system reported.
41 At Sacco there is increase in the number of new
shareholders.
78
42 At Sacco there is development of new products to
customers.
……………………………….……………END…………………………………………………
79
Letter From the University
80
Nacosti Certificate
81
Acceptance Letter from Stima Sacco
