GAGE UNIVERSITY COLLEGE

SCHOOL OF POSTGRADUATE STUDIES

DEPARTEMENT OF BUSINESS ADMISTRATION (MBA)

THE EFFECT OF LEADERSHIP STYLES ON THE EMPLOYEE JOB

Performance: THE CASE OF AWASH BANK

BY; - RAGE BEYENE

ADVISOR: - SINTAYHU.T(PH.D)

A Thesis proposal Submitted to Post Graduate Studies of in Partial Fulfillment of the

Requirements for the Award of Degree in MBA (Masters of Business
Administration) GAGE University College.

DEC 2024

ADDIS ABABA ETHIOPIA

I
 Declaration
I, RAGE declare that the work done in the thesis entitled “The effect of Leadership styles on the
employee job satisfaction: the case of awash bank “is my original work under the supervision and
guidance of Advisor: sintayhu PhD), MBA program, GAGE University college. This work has not
been previously submitted for any higher institution for a degree at this or any other university, and
that all the materials used for this study have been duly acknowledged.

Declared by:

Name;
Sign_____________________________
Date_____________________________

Confirmed by Advisor:
(PhD –––––––––––––––––– –––––––––––––––––––

Name of Supervisor Signature Date

II
 GAGE UNIVERSITY COLLEGE

POST GRAUDATE STUDIES

DEPARTMENT OF MANAGEMENT

THE EFFECT OF LEADERSHIP STYLES ON THE EMPLOYEE JOB performance: THE

CASE OF AWASH BANK

By;

Approval Board Committee:

Research Advisor Signature

_______________ _________________

Internal examiner Signature

________________ ________________

External examiner Signature

________________ ________________

III
Acknowledgments

I would like to express my sincere gratitude to my adviser and friends for their unwavering support
and guidance throughout my research on the topic of corporate governance and its effect on job
performance. Your insights and encouragement have been invaluable in shaping my understanding of
this complex and important subject. I am truly grateful for the time and effort you have dedicated to
helping me navigate this challenging and rewarding journey. Thank you for your wisdom, patience,
and belief in my abilities. I could not have accomplished this without you.

III
Contents
Acknowledgments.............................................................................................................................I
ABSTRACT...............................................................................................................................IV
CHAPTER ONE...............................................................................................................................1
1. Introduction..................................................................................................................................1
1.1 Background of the study......................................................................................................1
1.2. Statement of the Problem.......................................................................................................2
1.3 Research Questions.................................................................................................................3
1.4. Objectives of the study..........................................................................................................4
1.4.1. Specific Objectives..........................................................................................................4
1.5 Scope of the Study..................................................................................................................4
1.6 Limitations of the study..........................................................................................................4
1.7 Operational definition of terms...............................................................................................4
1.7 Organization of the Study.......................................................................................................5
CHAPTER TWO..............................................................................................................................6
2. LITERATURE REVIEW.............................................................................................................6
2.1 Introduction.............................................................................................................................6
2.1Theoretical framework.............................................................................................................6
2.1.1 Trait theory.......................................................................................................................6
2.1.2. Behavioral Leadership theory.........................................................................................7
2.1.4 Critique.............................................................................................................................9
2.1.5 Future of theory..............................................................................................................10
2.2.6 Transformational leadership theory...............................................................................10
2.2 Empirical Review.................................................................................................................11
2.2.1 Leadership and Performance..........................................................................................11
2.2.2 Style of Leadership........................................................................................................13
2.2.3 Democratic leadership style...........................................................................................14
2.2.4 Autocratic Leadership Style...........................................................................................15
2.2.5 Transformational leadership style..................................................................................15
 2.2.6 Employee/Individual performance.................................................................................16
2.2.7 Current Leadership in Ethiopia......................................................................................17
2.4 Conceptual Framework.........................................................................................................17
Chapter three..................................................................................................................................19
Methodology...................................................................................................................................19
3.1 Research design....................................................................................................................19
3.2 Research approach................................................................................................................20
3.3 Population and Sampling......................................................................................................20
3.3.1 Target population...........................................................................................................20
3.3.2 Procedure of the Sample Technique..............................................................................22
3.3.3 Sources of the Data........................................................................................................22
3.4 Data collection instrument....................................................................................................22
3.5 Method of Data Analysis....................................................................................................23
3.6. Regression Functions...........................................................................................................23
3.7 Instrument Validity...............................................................................................................23
3.8 Instrument Reliability...........................................................................................................24
List of acronym’s

AWS………………………………….awash bank

S.C……………………………………..share company
ABSTRACT

This research investigates the impact of corporate governance on organizational performance,

employing a mixed-methods approach that integrates both quantitative and qualitative data. The
study focuses on 200 employees from Awash Bank, including managers, team leaders, and staff
across two and a half branches, to ensure a comprehensive understanding of the existing conditions.
A **descriptive and explanatory design** is utilized to detail the current state of corporate
governance within the institution. Data collection is conducted through open-ended questionnaires,
enabling participants to share their perspectives on governance practices and their perceived effects
on performance. The analysis employs SPSS software, utilizing multiple regression analysis* and
Pearson correlation methods to explore relationships between corporate governance mechanisms
and performance outcomes. This research aims to provide insights into how governance structures
influence employee performance and organizational effectiveness, contributing to the broader
discourse on corporate governance in the banking sector. The findings are expected to inform both
academic literature and practical applications in enhancing governance frameworks for improved
performance.

Key words: - Corporate Governance, Organizational Performance, Mixed-Methods

Approach. Descriptive Design
 CHAPTER ONE

1. Introduction
1.1 Background of the study

According to Kim (2004) ,the view that the kind of leadership style exhibited by managers to a large
extent influences organizational valued outcomes such as low employee turnover, reduced
absenteeism, customer satisfaction, and organizational effectiveness. Similarly, leadership style
controls interpersonal, reward, and punishment that shapes employee behavior, motivation, and
attitude which impacts on organizational performance.

Many researchers agree the dominant leadership style in Africa is authoritarian, personalized,
inflexible, insensitive and conservative. There is also same practice in Ethiopia for a long time. Low
level leaders perform authoritatively because many times they preserve the decision authority; ignore
employee well-being and emphasis more on task than people. These leaders exercise almost absolute
power (Annan, B. (2022). Leadership Styles of Africans)

Employees Job satisfaction is one of the most important dependent Variables and has been studied for
a long decade. Employees „job performance is one of the performance variables that are important
for organizational effectiveness. Thus Employees‟ job performance refers to behaviors that are
directly involved in producing Goods and Services. Employees Performance is the key for
organizational objective achievement. Leadership on the other hand, is perhaps the most investigated
organizational variable that has a potential impact on employee performance (Kim, 2004).The
success and failure of the organization is determined by the leadership style that follows and leaders
themselves. If here is effective and efficient leaders that follows appropriate leadership style for the
organization can improve the performance of employee and activities interims of achieving the
objective. Employees are the most important asset for an organization, without those assets the
organization cannot perform any function even if cannot exist as an organization (Bass, 2008;
Mullins, 2018).

Performance is also major multidimensional construct aimed to achieve the results and as a strong
link to strategic goals of an organization. Every organization can achieve their goals by the collective
effort of all the members of the organization. For this reason, employee performance is an important
building block of an organization and factor which is laid the foundation for high performance must
be analyzed by the organization. Leadership is an aged concept. However, it remains complex term
that the researcher and scholars tackle with continuously. One of the main reasons is the extensive
number of definitions for this word. The definition of the term varies due to the long age of term and
different view of the scholars and researcher.

According to Hersey &Blanchard (1984), leadership is the process of influencing the activities of an
individual or a group in efforts toward a goal achievement in a given situation. Hence, leadership in
this study is related to the person who is appointed by the organization or owner to follow up the
whole or sub activities of the organization. The school of thought from “Trait theories” to
Transformational leadership theories reveals that there is a strong relationship between leadership
style and employee performance. Whilst early theories tend to focus up on the characteristics and
behavior of successful leaders, later theories begin to consider the role of follower and contextual
nature of leadership.

1.2. Statement of the Problem

The performance and profitability of private banks are influenced by various factors beyond
management-related aspects. These include demographic factors, customer trust, competence-related
factors, communication between customers and bank employees, and conflict resolution issues. This
study aims to address the gap in existing research by considering these additional factors as
influential in the profitability of corporate private banks, alongside traditional management factors.
Previous studies primarily focused on the roles of higher officials such as directors and auditors,
often neglecting the significant impact that customers can have on bank profitability.

The primary objective of this research is to analyze the effect of corporate governance on the
profitability of Awash Bank, specifically within the context of Ethiopia's private banking sector.
Given the dynamic nature of the business environment, this study seeks to provide current data that
reflects these changes, thereby offering more reliable insights for stakeholders. Unlike previous
studies that included government-owned banks—where profit maximization is not the primary goal
—this research emphasizes private corporate commercial banks that operate with a profit motive.
This focus allows for a more nuanced understanding of how corporate governance mechanisms affect
profitability by considering the roles of both senior management and ordinary staff, as well as
customer interactions.

Research indicates that effective corporate governance practices, such as having a well-
structured board of directors and an active audit committee, significantly enhance bank
profitability (Ahmad et al., 2019; Okoye et al., 2020; Rahman & Subagio, 2021). Moreover, the
inclusion of customer perspectives is crucial, as they indirectly influence profitability through
their trust and engagement with the bank. This comprehensive approach aims to fill existing gaps
in literature by providing insights into how various factors collectively impact the financial
performance of private banks in Ethiopia.

Research gap

the profitability of private commercial banks in Ethiopia is significantly influenced by various

factors, particularly the role of top management and the educational level of the management
team. Effective top management is crucial as it shapes the bank's strategic direction, operational
efficiency, and overall performance. Research indicates that management quality is implicitly
reflected in a bank's operational performance, suggesting that competent leadership can lead to
improved financial outcomes (Aburime, 2008; Krakah & Ameyaw, 2010). Furthermore, the
educational background of bank managers plays a vital role in enhancing profitability; higher
educational qualifications are often associated with better decision-making capabilities and a
deeper understanding of complex financial environments. Studies have shown that banks with
well-educated management teams tend to perform better financially due to their ability to
implement effective governance practices and respond adeptly to market changes (Haussmann et
al., 2021; Diriba, 2024).
 Ethiopian private banks, it is essential to explore how these internal factors contribute to
profitability. The interaction between management effectiveness and educational qualifications can
create a robust framework for driving financial success. Therefore, this study aims to analyze these
relationships further, providing insights into how top management and their educational levels impact
the profitability of private commercial banks in Ethiopia. By addressing these factors, the research
seeks to fill existing gaps in literature and offer practical recommendations for enhancing bank
performance in a competitive landscape.

1.3 Research Questions

To assess the above problem and objectives, the researcher attempted answer the following basic
question

 Does the bank top management has an effect on profitability of awash bank?

 Does the educational level of bank management team has effect on awash bank profitability?

 What is the effect of board members’ and audit committee members, gender diversity on
awash banks profitability?

 What is the effect of customers trust on the bank, communication, competence, conflict
handling and commitment on profitability of awash bank?

1.4. Objectives of the study

The general objective of this study is to examine the effect of information system on the service
delivery of the Ethiopian National Lottery Administration.

1.4.1. Specific Objectives

The specific objectives will address:

 To explain top management effect on profitability of awash bank?

 To explain educational level of bank management team has effect on awash bank
profitability?

 To explain effect of board members’ and audit committee members, gender diversity on
awash banks profitability?
 To explain customers trust on the bank, communication, competence, conflict handling and
commitment on profitability of awash bank?

1.5 Scope of the Study

This study is delimited to examining the effect of management team corporate governance and
some demographic variables on banks profitability by taking evidence from awash private
corporate bank in Ethiopia.. The independent variables are delimited to some corporate
governance characteristics such as board size, board gender composition, directors' educational
qualification and size of audit committee and also relationship indicator variables included.

1.6 Organization of the Study

The study will obtain five chapters .the first will discuss the background, problem, objective,
scope, limitation, significant and organization of the study. The second chapter will literature
review, the third will research method and data collection, the fourth will data analysis and
interpretation and the fifth will deal about conclusion & recommendation.

Significance of the study

The significance of this study lies in its potential to enhance understanding of the relationship
between corporate governance and profitability within Awash Bank

By examining how corporate governance affect employee morale and productivity, the study
provides insights that can help improve organizational effectiveness. This is crucial for Awash
Bank as it seeks to enhance employee engagement and overall performance. The findings can
inform management practices at Awash Bank by identifying which factor foster higher job
satisfaction. This knowledge can lead to better leadership training and development programs,
ultimately enhancing employee retention and reducing turnover rates.

The study addresses previous skepticism regarding the impact of corporate governance on
organizational success by providing empirical evidence that supports the positive correlation
between effective leadership and job satisfaction. This can help shift organizational culture
towards valuing effective leadership practices. Utilizing a mixed-methods approach allows for a
richer understanding of the dynamics at play. Qualitative data from open-ended questionnaires
can provide context to quantitative findings, leading to more nuanced insights about employee
experiences and perceptions of leadership.
The research highlights the role of corporate governance in fostering collaboration and a positive
work environment, which are essential for enhancing employee engagement. This is particularly
relevant in banking, where teamwork and communication are vital for success. The study sets a
foundation for future research on corporate governance and their effects on performance in other
sectors or geographical areas, contributing to the broader field of organizational behavior.

1.7 Organization of the Study

The study will obtain five chapters .the first l was discuss the background, problem, objective, scope,
limitation, significant and organization of the study. The second chapter was literature review, the
third was research method and data collection, the fourth was data analysis and interpretation and the
fifth was deal about conclusion & recommendation.

CHAPTER TWO

2. LITERATURE REVIEW

2.1 Introduction

In this chapter the theory and empirical research on corporate governance and its effect on employee
job performance is prescribed to answer the research questions. Hence, this chapter is organized as
follows: first, the researcher presents some theories relevant to corporate governance. Secondly, it
conceptualizes the impact of corporate governance on performance. Finally, empirical evidence and
experiences related to corporate governance and employee performance.is explained.

2.1Theoretical framework

Corporate governance is the system of rules and institutions that determines the control and
direction of the corporation and that defines relations among the corporation’s primary
participants. The definition used in the United Kingdom’s 1992 Cadbury Report is widely cited
from this perspective, and it reads: “Corporate governance is the system by which businesses are
directed and controlled.”9 This narrower definition focuses almost exclusively on the internal
structure and operation of the corporation’s decision-making processes, and is central to public
policy discussions about corporate governance in most countries.1

Corporate governance has been defined in different ways by different authors. Shleifer and
Vishny define corporate governance as the ways in which suppliers of finance to corporations
make sure of getting a return on their investment. Gillan and Starks take a broad perspective on
corporate governance and define it as the system of laws, rules, and factors that control
operations in a company. The Organization for Economic Cooperation and Development
(OECD) offer a more comprehensive definition of corporate governance as a set of relationships
between management of a corporation, its board, its shareholders and other stakeholders, while
also providing the structure through which corporate objectives are set, and the means of
attaining those objectives and monitoring performance are determined. According to Kim
&Rasiah, Corporate governance is the relationship among shareholders, board of directors and
the top management in determining the direction and performance of the corporation. It includes
the relationship among the many players involved (the stakeholders) and the goals for which the
corporation is governed (Kim & Rasiah, 2010). From these definitions, it may be stated that
corporate governance frameworks establish systems of accountability and responsibility between
the company and its major constituencies by defining the nature of the relationship.

2.1.1 Corporate Governance in Ethiopia

There are a number of companies that are being formed by sale of shares to the wider public
unlike most share companies in the past which were formed among founders. The emergence of
publicly held share companies in Ethiopia gives rise to a multitude of issues on corporate
governance. Typically, ownership separates from the control of dispersed shareholders and goes
into the hands of few managers, which in turn creates the principal-agent relationship. In such
situations, agents (managers) may misappropriate the principals’ (shareholders’) investments as
they have more information and knowledge than the shareholders. Where there exist few block
holders in share companies, minority shareholders could be exploited in the hands of such block
holders. The agency problems that could occur between dispersed shareholders and managers
and/or block holders of share companies in Ethiopia, therefore, necessitate good corporate
governance laws and institutions.1
Minga Negash (2008) observes that the status of corporate governance in Ethiopia is
disappointing and Commercial notes Code of that1960does “t not provide adequate legislative
response to complex governance issues of the day, and the new draft corporate law has not yet
and been finalized;” further international states conventions, that codes and k standards are not
ratified or adequately incorporated in the Proclamations” and that “i th and Directives lack
coherence and foresights Petros (2010) underlines the growing separation between ownership
and control in Ethiopia, and he submits some empirical evidence in this regard. Relying on the
data and literature on corporate governance, he shows the deficiency of the Commercial Code in
protecting the rights of minority shareholders in the context of publicly held companies. He
raises crucial issues such as: “what is does the power board have? Who is it accountable to? How
is it organized? What are its standards of liability?” Among others. Fekadu further addressed
most of the issues in corporate governance related to board of directors.

2.1.2 Agency theory

According to Habbash (2010) agency theory is the most popular and has received greater attention
from academics and practitioners. The agency theory is based on the principal agent relationships.
The separation of ownership from management in modern corporations provides the context for the
functioning of the agency theory. In modern corporations the shareholders (principals) are widely
dispersed and they are not normally involved in the day to day operations and management of their
companies rather they hire mangers (agent) to manage the corporation on behalf of them (Habbash,
2010). The agents are appointed to manage the day to day operations of the corporation. The
separation of ownership and controlling rights results conflicts of interest between agent and
principal. To solve this problem or to align the conflicting interests of managers and owners the
company incurs controlling costs including incentives given for managers.

Control of agency problems in the decision process is important when the decision managers who
initiate and implement important decisions are not the major residual claimants and therefore do not
bear a major share of the wealth effects of their decisions. Without effective control procedures, such
decision managers are more likely to take actions that deviate from the interests of residual claimants.
Individual decision agents can be involved in the management of some decisions and the control of
others but separation means that an individual agent does not exercise exclusive management and
control rights over the same decisions (Fama& Jensen, 1983 p.304).
The concept of corporate governance presumes a fundamental tension between shareholders and
corporate managers (Jensen & Meckling, 1976). While the object shareholders is a return on their
investment, managers are likely to have other goals, such as the power and prestige of running a large
and powerful organization, or entertainment and other perquisites of their position. Managers‟
superior access powerless position of the numerous and dispersed shareholders, mean that managers
are likely to have the upper hand (Fama & Jensen, 1983).

Therefore, shareholders monitor and control managers through their representatives such as
board of directors. Boards of directors are considered as an important device to protect
shareholders from being exploited by managers and help to effectively control managers when
they try to maximize their self-interest at the expense Jensen (1983) argues that in order to
minimize agency problem that emanates from the separation of ownership and control the
corporations need to have mechanisms that enables to separate the authority of decision
management from decision control. This would reduce agency costs and ensures maximization
of shareholders wealth by effectively controlling the power and self-centered decisions of
management.

From agency theory view point, corporate governance improves corporate performance by
resolving agency problems through monitoring management activities, controlling self-centered
behaviors of management and inspecting the financial reporting process (Habbash, 2010).
Moreover, corporate governance is able to alleviate agency costs by aligning the conflicting
interests of management and shareholders through monitoring management and using different
corporate governance mechanisms. Therefore, corporate governance mechanism such as boards
of directors and audit committees enables shareholders to closely monitor the activities of
managers. Ineffective board and audit committee may give confidence for managers to pursue
their own interests but effective board and audit committee can reduce deceptive behavior of
managers by detecting fraudulent financial report and actively monitoring.

According to the assumptions of agency theory corporate governance affect financial

performance. As a consequence, enhancing corporate governance should result in improved
financial performance. Taking agency theory into consideration, the study variables were
identified with the aim of examining the impacts of corporate governance mechanism on
financial performance. Board structure has relied heavily on the concepts of agency theory,
focusing on the controlling function of the board (Habbash, 2010). The corporate governance
mechanism variable considered in this research include board size, board frequency of meeting,
board gender diversity, educational qualification of board members, other general and industry
specific experience of board members and chief executive compensation.

2.1.3 Stake holder’s theory

Stakeholder theory is an extension of the agency theory, where the agency theory expects board
of directors to protect only the interests of shareholders. However, stakeholder theory extends
the narrow focus of agency theory on shareholders’ interest to stakeholders to take into account
the interests of many different groups and individuals, including interest groups related to social,
environmental and ethical considerations (Freeman et al., 2004). According to Freeman et al.
(2004), stakeholder theory begins with the assumption that values are necessarily and explicitly a
part of doing business. It asks managers to articulate the shared sense of the value they create,
and what brings its core stakeholders together. It also pushes managers to be clear about how
they want to do business, specifically what kinds of relationships they want and need to create
with their stakeholders to deliver on their purpose. According to stakeholder theory the purpose
of the firm is to serve and coordinate the interests of its various stakeholders such as
shareholders, employees, creditors, customers, suppliers, government, and the community.
According to Habbash (2010), stakeholder refers to any one whose goals have direct or indirect
connections with the firm and influenced by a firm or who exert influence on the firms goal
achievement. These include management, employees, clients, suppliers, government, political
parties and local community.

According to this theory, the stakeholders in corporate governance can create a favorable
external environment which is conducive to the realization of corporate social responsibility.
Moreover, the stakeholders in corporate governance will enable the company to consider more
about the customers, the community and social organizations and can create a stable
environment for long term development. According to stakeholders theory the best firms are
ones with committed suppliers, customers, and employees and management. Recently,
stakeholder theory has received attention than earlier because researchers have recognized that
the activities of a corporate entity impact on the external environment requiring accountability of
the organization to a wider audience than simply its shareholders (Kyereboah-Coleman, 2007).
Companies are no longer the instrument of shareholders alone but exist within society. It has
responsibilities to the stakeholders. However, most researchers argue that it is unrealistic task for
managers (Sundaram & Inkpen, 2004b; Sanda et al., 2005). The stakeholder theory has not been
subjected to much empirical study.

The common criticisms for stakeholder theory is that how to align the stakeholders conflicting
interests since the difficulties result from how to administer different stakeholders with various
needs and demands. It is not possible to treat all stakeholders equally (Habbash, 2010).
Moreover, it is not practical for all stakeholders to be effectively represented in corporate
governance recommendations as this may undermine the welfare of company (Habbash). The
other critique of the stakeholder model is that mana reasons to justify poor company
performance (Maher &Andersson, 1999).

2.1.4. Resource dependency theory

Whilst the stakeholder theory focuses on relationships with many groups for individual benefits,
resource dependency theory concentrates on the role of board directors in providing access to
resources needed by the firm (Abdullah & Valentine, 2009). According to this theory the
primary function of the board of directors is to provide resources to the firm. Directors are
viewed as an important resource to the firm. When directors are considered as resource
providers, various dimensions of director diversity clearly become important such as gender,
experience, qualification and the like. According to Abdullah and Valentine, directors bring
resources to the firm, such as information, skills, business expertise, access to key constituents
such as suppliers, buyers, public policy makers, social groups as well as legitimacy. Boards of
directors provide expertise, skills, information and potential linkage with environment for firms
(Ayuso & Argandona, 2007). The resource based approach notes that the board of directors
could support the management in areas where in-firm knowledge is limited or lacking. The
resource dependence model suggests that the board of directors could be used as a mechanism to
form links with the external environment in order to support the management in the achievement
of organizational goals (Wang, 2009).
However, whether boards perform such functions effectively is still a controversial issue
(Ferreira, 2010). Within a corporate governance framework, the composition of corporate boards
is crucial to aligning the interest of management and shareholders, to providing information for
monitoring and counseling, and to ensuring effective decision-making (Marinova et al., 2010).
The dual role of boards is recognized. However, board structure has relied heavily on agency
theory concepts, focusing on the control function of the board (Habbash, 2010).

2.2 Empirical studies

Adopting better corporate governance mechanisms such as an enhanced board and audit
committee improves monitoring of management and reduces information asymmetry problems
(Aldamen et al., 2011). There is a significant literature that links size, gender diversity, and other
characteristics of the board of directors and audit committees to improved firm performance
(Klein, 1998; Aldamen et al, 2011). There are different mechanisms that reduce agency cost
whereby corporate governance can be measured in an organization. In the corporate governance
literature board characteristics (board size, board gender diversity and educational qualification
and experience) and audit committee size were used as corporate governance mechanisms.

According to Bathula (2008), corporate governance principles focus on the importance of

corporate governance for long-term economic performance and strengthening of international
financial system. A strong board can play a decisive role in improving firm financial
performance. The important role of boards is to act as an internal governance mechanisms and
monitoring of management (Shleifer & Vishny, 1997). An effective board is likely to help the
firm achieve better performance by effectively undertaking their monitoring duties (Bathula,
2008). Board of directors is an important corporate governance mechanism (Aljifri & Moustafa,
2007). Boards of directors are the agent of the shareholders and their primary task is to monitor
and control firm management on behalf of shareholders to reduce agency problem. In modern
corporations boards of directors are charged with the task of monitoring the activities of top
management to ensure that the managers act in the best interests of shareholders (Jensen &
Meckling, 1976). From the agency theory point of view boards have play decisive role in
alleviating agency problems that arising from the separation of ownership and control of firms
(O‟Connell& Cramer, 2010).
The effectiveness of the board is influenced by factors such as board composition and quality,
size of board, , board diversity, board committee effectiveness such as audit committee and
information asymmetries ultimately this affects the board oversight performance (Uadiale,
2010). When the board is effective it is expected to drive the company towards better financial
achievement (Andres & Vallelado, 2008). When financial markets are not well developed as an
efficient external control mechanism and when the shareholders are not well protected due to
weak legal system and poor law enforcement the role of the board of director becomes highly
significant as an internal control mechanism (Gonz´alez & Garay, 2003). Boards of director are
the heart of corporate governance. However, the effectiveness of the board of directors as
shareholders‟ monitoring mechanism can only composition and sub-committee (Lawal, 2012).
The audit committee is a sub-committee of the board of directors and its primary role is to
monitor and review financial statements (Yammeesri & Herath, 2010). An audit committee has a
particular role of ensuring that the interests of shareholders are properly protected in relation to
financial reporting and internal control (Habbash, 2010).

2.2.1 Board size

According to Kiel and Nicholson (2003) board size is crucial to achieving the board
effectiveness and improved firm performance. According to Lawal (2012), board size affects the
quality of deliberation among members and ability of board to arrive at optimal corporate
decisions. Therefore, identifying the appropriate board size is essential because size can be
detrimental to corporate governance effectiveness beyond optimal level. However, determining
an ideal size of the board has being an ongoing and controversial debate in corporate governance
literature (Lawal, 2012). Whether large or small board help improve firm performance it is
debatable issue and researchers found mixed result about the relation between board size and
firm performance.

2.2.2 Board gender diversity

Gender diversity is part of the broader concept of board diversity. Boards are concerned with having
right composition to provide diverse perspectives. Greater female representation on boards provides
some additional skills and perspectives that may not be possible with all-male boards (Boyle & Jane,
2011). Board diversity promotes more effective monitoring and problemsolving. He suggests that
female board members will bring diverse viewpoints to the boardroom and will provoke lively
boardroom discussions.

Gender diversity in the boards is supported by different theoretical perspectives. Agency theory is
mainly concerned about monitoring role of directors. Representation from diverse groups will
provide a balanced board so that no individual or group of individuals can dominate the
decisionmaking of the board (Erhardt et al., 2003). The management may be less able to manipulate
a more heterogeneous board to achieve their personal interests. Gender diversity is associated with
effectiveness in the oversight function of boards of directors. The oversight function may be more
effective if there is gender diversity in board which allows for a broader range of opinions to be
considered.

According to Erhardt et al. (2003), diversity of the board of directors and the subsequent conflict that
is considered to commonly occur with diverse group dynamics is likely to have a positive impact on
the controlling function and could be one of several tools used to minimize potential agency issues.
From stakeholders' theory, diversity also provides representation for different stakeholders of the
firm for equity and fairness (Keasey et al., 1997). From resource dependency perspective, the board
is a strategic resource, which provides a linkage to various external resources (Walt & Ingley, 2003).

2.2.3 Educational qualification

Director's educational qualifications are central to effectively interpret and utilize the information
generated by the management of particular types of business enterprise. Educational
qualification is potentially important since the ability to seek and interpret appropriate
information is essential for the efficient operation of the modern corporation and the effective
control or guidance of management by boards of directors. Educational qualification affects the
oversight and monitoring role of boards of directors (Gantenbein & Volonte, 2011).Board of
directors is vested with the response not wasted, shareholders have a serious interest in ensuring
that the board is staffed with well-educated and experienced directors (Gantenbein & Volonte,
2011). The human capital provided by its board of directors is vital given the corporate board is
one of the mechanisms for overseeing the firm and it can arguably provide the knowledge
needed to function in the new environment.
Ashenafi, Kelifa, & Yodit (2013) examined the internal and external corporate governance
mechanisms and their impact on performance of commercial banks in the absence of organized
stock exchange. Multivariate regression with a random effect model was used to analyze 7-year
data of 7 private and 2 state-owned Ethiopian banks. Return on assets and return on equity was
the dependent variable while board size, existence of audit committee, capital adequacy ratio,
loan loss provision, capital ratio, loan to deposit ratio, and square of capital adequacy ratio were
the independent variables. Results indicate that capital adequacy ratio has a positive effect on
ROA and it is statistically significant at 5%. Board size and the existence of audit committee are
statistically significant at 5% and have negative effect on ROA. Loan loss provision and loan to
deposit ratio are found to have no significant effect on bank performance. The square of capital
adequacy ratio is statistically significant at 1% and has a negative effect on ROA.

Manini and Abdillahi (2015) examined the impact of corporate governance mechanisms on
banks’ profitability of forty-two sample banks in Kenya for a period of one year. Multiple
regression analysis was used to test the relationship between the independent variables of audit
committee size, board gender diversity, board size and the dependent variable of return on asset.
The regression results show that there is no statistically significant relationship between board
gender diversity, audit committee and bank profitability. There is statistically significant
negative linear relationship between board size and banks’ performance and a statistically
insignificant negative linear relationship between board gender diversity and financial
performance.

Bussoli, Gigante, and Tritto (2015) investigated the impact of corporate governance on bank
performance and loan quality. 48 sample banks in Italy for a period of three years were analyzed
using multivariate OLS regression model. Return on asset, return on equity and non-performing
loan ratio are the dependent variables; board size, presence of women directors, number of board
committees are the independent variables. Results indicate that there is statistically insignificant
negative relationship between the number of committees and bank performance. There is
statistically insignificant positive relationship between the board size and bank performance.
There is a statistically insignificant positive relation between women directors and bank
performance. Bank size used as a control variable has a significant negative relation with return
on asset.
Olani and Berhanu (2015) examined the determinants of the financial performances of
commercial banks in Ethiopia from an internal corporate governance practices perspective. Data
for the study was collected for a 6-year period for 10 sample banks (2 state owned and 8
private).Board size, number of board meetings, percentage of female directors, percentage of
qualified directors in business-related backgrounds, percentage of directors with prior experience
in banking, CEO pay, number of shareholders, presence of audit committee, existence of risk
management committee and ownership dispersion were the independent variables while return
on assets and return on equity were the dependent variables. Control variables were leverage and
ownership type. Multiple linear regression analysis was used for the panel data. The parameter
coefficients indicate that there is positive and significant relationship for frequency of board
meeting, directors who have prior experience in banking, existence of risk management
committee and bank leverage to return on assets.

Qualification of directors and ownership dispersion has significant positive and negative
relationship with financial performance of banks. Board size, female director in the board, and
the existence of audit committee in the board did not have a statistically significant effect on
bank performance, with negative, positive, effects respectively. Ben, Patrick and Caleb (2015)
investigated the effect of corporate governance on money deposit bank performance in Nigeria
with data period of 8 years. The independent variables were capital adequacy ratio, loan to
deposit ratio, non-performing loan to total loan ratio, liquidity ratio, deposit money banks
lending rates, cash reserve ratio, board size, and audit committee; return on asset was the
dependent variable.

2.3 Customers related reviews

2.3.1 Trust

Trust attracts new customers on each individual network and helps in retaining customers for a
longer period. To support this notion, trust has been posited as a major determinant of customer
loyalty. Thus, creating trust in customers’ minds is of great importance for companies to achieve
customer loyalty and to increase bank profitability (Ball, Coelho, & Machás, 2004). Trust plays a
significant role in interactions; it actually drives word of mouth and customer loyalty.
Developing, improving and practicing trust are considered important aspects of investing in a
dyadic and affective relationship between the parties in the relationship. Increased trust between
the customer and the business (corporate banks) is cited as critical for relationship success (Kara,
Lonial, Tarim, & Zaim, 2005). Customers prefer to continue interacting with organizations and
services they trust. (Harrison, 2000) urges financial institutions to increase their trustworthiness
in the eyes of their customers in order to improve relationship with them.

2.3.2 Commitment

While some scholars contend that there is no difference between commitment and loyalty
(Henning and Klee, 1997) the majority of researchers suggest that these two constructs are
related but different and that commitment is vital in building successful relationships, which
ultimately leads to loyalty (Berry, Carbone, & Haeckel, 2002). Commitment indicates the
motivation to maintain a relationship. When customers are committed, their turnover decreases
(Gounaris, 2005). Commitment has therefore been considered as one of the key factors affecting
customer loyalty and banks profitability in business sectors (Rauyruen & Miller, 2007).
Commitment is another important determinant of the strength of a marketing relationship, and a
useful construct for measuring the likelihood of customer loyalty and predicting future purchase
of deposit product frequency.

2.3.3 Communication

Communication is defined as the formal as well as informal exchanging and sharing of

meaningful and timely information between bank employees and customers (Sin et al,
2002).Communication refers to the ability to provide timely and trustworthy information. Today,
there is a new view of communications as an interactive dialogue between the company and its
customers, which takes place during the pre-purchasing, purchasing, and post purchasing stages.
Communication in relationship marketing means keeping in touch with valued customers,
providing timely and trust worthy information on service and service changes, and
communicating proactively if a delivery problem occurs. It is the communicator’s task in the
early stages to build awareness, develop customer’s preference, convince interested customers,
and encourage them to make the purchase decision.

2.3.4 Competence and conflict handling

Competence is defined by perceptions of each of the party relationship amount of skills; abilities
and knowledge needed the opposite party to effective function (Smith and Barclay, 1996).
Conflict can be healthy and normal in an organizational perspective, lack of tension is ultimately
dull and stagnant and unlikely to foster creativity and growth. According to Evans & Beltramini

(1987), in a negotiation setting, cooperative versus competitive intentions have been found to be
linked to satisfactory problem solution. In short, good conflict resolution will result relationship
quality positively.

2.4 Conceptual Framework

The relationship between corporate governance and bank profitability is multifaceted, influenced
by various factors including the educational level of management, board composition, customer
trust, and communication effectiveness. Research indicates that top management's educational
background and competence significantly enhance decision-making processes, which in turn
positively impacts profitability. Additionally, the independence and diligence of board members,
alongside the effectiveness of audit committees, play crucial roles in ensuring that banks adhere
to sound governance practices, ultimately leading to improved financial performance.

Furthermore, customer trust is pivotal; banks that foster strong relationships through effective
communication and conflict resolution are more likely to enjoy higher levels of customer loyalty
and retention, which directly correlates with profitability. The interplay of these factors—
management competence, board effectiveness, customer trust, and communication—highlights
the critical nature of robust corporate governance frameworks in enhancing bank performance.
Studies consistently show that effective governance not only mitigates risks but also drives
profitability by aligning the interests of stakeholders and ensuring transparency in operations.

Top management

Educational level

Profitability
board members’
 Trust, communication,
competence,

Fig 1:- conceptual frame work

Adopted for this research purpose

Chapter three

Methodology
This chapter explained the components of the appropriate methods to employ for the research. Thus,
the chapter focused on the study area, the research design and methodology, the population and
sampling procedures, the instruments of data collection and the data analysis was discussed. Under
this chapter the appropriate methods to undertake the research was planned. Moreover, the researcher
focused on the study area, the research design and methodology, the population and sampling
procedures, the instrument of data collection and the data analysis was discussed.

3.1 Research design.

In this research, a combination of descriptive and explanatory research designs will be employed to
comprehensively investigate the impact of corporate governance on employee performance at Awash
Bank. The descriptive research design was facilitated the collection of quantitative data regarding the
prevalence and characteristics of corporate governance within the organization. This approach will
enable the identification of patterns and trends related to employee satisfaction levels, providing a
foundation understanding of how different corporate governance are perceived by employees.

On the other hand, the explanatory research design was delve deeper into the causal relationships
between corporate governance and employee job performance. By utilizing qualitative methods such
as interviews and focus groups, this design will explore the underlying mechanisms through which
corporate governance influence employee morale, motivation, and performance. This dual approach
not only enhances the richness of the data collected but also allows for a more nuanced analysis of
how specific corporate governance behaviors contribute to or detract from employee performance.
Ultimately, this mixed-methods strategy aims to provide actionable insights and recommendations
for enhancing corporate governance practices at Awash Bank, thereby improving overall employee
satisfaction and organizational effectiveness.

3.2 Research approach.

Research approaches are plans and the procedure for research that spans the step from broad
assumption to detailed methods of data collection, analysis and interpretation. (Creswell, 2003). This
study used mixed methods research because the research incorporated elements of both qualitative
and quantitative approach. In any research, quantitative, qualitative or mixed methods approach can
be applied to study the problem. Quantitative research is used to examine the relationship between
variables and test theory. The main emphasis of quantitative research is on deductive reasoning,
which tends to move from the general to the specific. Quantitative research provided to be suitable
for the research’s that used structured questionnaires to collect data depend on small sample size and
results presented and analyzed using statics method. Quantitative research plays greater emphasis on
the numerical data and statically test to achieve conclusion that can be generalized (Saunders, 2012).

Qualitative research approach is applied for exploring and understanding the meaning of individuals
or groups ascribe to a social or human problem. Followers of this approach support honors an
inductive style, a focus on individual meaning and the importance of rendering the complex
(Creswell, 2014). Mixed methods research approach involve collecting and integrating both
quantitative and qualitative data and using distinct design that may involve philosophical
assumptions and theoretical frameworks in order to provide more complete understanding of a
research problem.

3.3 Population and Sampling

3.3.1 Target population

The target population for this study comprises the leaders, managers, and employees of Awash Bank
S.C. This banking institution, one of the largest in Ethiopia, plays a crucial role in the country's
financial sector. The focus on this demographic is vital as it encompasses various levels of the
organizational hierarchy, allowing for a comprehensive understanding of the impact of corporate
governance (https://www.researchgate.net/figure/Reliability-and-validity-table-Awash-
Bank_tbl2_339539169)

To derive meaningful insights from this population, a sample size of200 employees will be utilized.
This sample was selected through census toe of three banks sampling to ensure representation across
different departments and levels within the bank. The formula for determining the sample size can be
expressed as:

n = \frac{N \cdot Z^2 \cdot p \cdot (1-p)}{(E^2 \cdot (N-1) + Z^2 \cdot p \cdot (1-p))}

Where:

n = required sample size

N= total population size (in this case, total employees at Awash Bank) 3 banks

Z = Z-score (1.96 for a 95% confidence level)

p = estimated proportion of an attribute present in the population (assumed to be 0.5 for maximum
variability)

E = margin of error (commonly set at 0.05)

This approach ensures that the findings will be statistically significant and reflective of the broader
employee base. By analyzing data collected from these 200 employees, the study will employ both
descriptive and inferential statistics to assess the relationship between types of leadership style and
job satisfaction.

The implications of this research are profound, as they not only seek to identify gaps in current
training methodologies but also aim to provide actionable recommendations for enhancing employee
capabilities within Awash Bank S.C. As noted in previous studies, organizations that prioritize
effective training programs tend to experience improved employee satisfaction and performance
metrics [. This research will contribute valuable insights into how strategic training initiatives can
lead to enhanced organizational satisfaction in the banking sector, ultimately benefiting both
employees and management alike.

3.3.2 Procedure of the Sample Technique

The whole staffs of awash bank from three branches were the population of the study. They
compromised employee, manager, supervisors and team leaders which counts for whole employee.
Thus census sampling was used as sampling technique because number of population is manageable.
Subsequently judgmental technique was used in the study for some leader the reason is that
participants in leader positions are assumed to be a major source of information for the data gathering
of the study. Likewise, they can positively or negatively affect the overall individual and
organization job satisfaction in the organization.

3.3.3 Sources of the Data

The sources of the data for this study comprised both primarily and secondary sources of
information. Primarily data was collected by using various data collection instruments or tools. The
respondents are the employees and leaders/managers of AWASH bank.

3.4 Data collection instrument.

To obtain reliable and objective information, data was collected through different data collection
methods. Three basic data gathering instrument will be use in the process of collecting the necessary
data for the study

Questionnaire; The close ended questionnaire are prepared and carried out among employees who
are selected to participate in the study to explore the effect corporate governance in employee job
performance.

Interview; an unstructured interview guide are prepared for managers, directors, department heads,
and team leaders to explore the corporate governance on job performance. .

Observation; in the process of data collection, the researcher observed facilities services available for
employees, meeting, and performance report and so on. The observation data was contributed to a
more accurate context that made it possible to interpret the meaning of variables indicators analysis.

3.5 Method of Data Analysis

This study will attempt to catch information by using different techniques of data collection from
different sources. Quantitative data will be collected through closed –ended items and supported by
the data collected through open-ended questionnaire. Beside, qualitative data; interview form
managers, directors, department heads and team leaders will be organized and described in to
meaningful information. The statistical package for social science (SPSS) is used to analyze the data
and descriptive analysis also used to presented and interpret data collected on various variable of
leadership style and its impact on employee performance. Frequency tables and charts along with
percentage are also employed.

3.6. Regression Functions

The equation of regressions on this study is generally built around two sets of variables, namely
dependent variable (performance) and independent variables (corporate governance). The basic
objective of using regression equation on this study is to make the study more effective at describing,
understanding and predicting the stated variables.

3.7 Instrument Validity

A pilot study will be conducted to refine the methodology and test instrument such as a questionnaire
before administering the final phase. Questionnaires will be tested on potential respondents to make
the data collecting instruments objective, relevant, suitable to the problem and reliable as
recommended by John Adams et al. (2007:136). Issues raised by respondents will be corrected and
questionnaires will be refined. Besides, proper detection by an advisor is also taken to ensure validity
of the instruments. Finally, the improved version of the questionnaires will be printed, duplicated and
dispatched.

3.8 Instrument Reliability

To insure Instrument Reliability Cronbach’s alpha measures the consistency of the participants‟
response to all the items in a questionnaire indicating the degree to which items that are
independent measures of the same concept are correlated with each other (Ali, 2013). Therefore
the reliability of the factors affecting satisfaction of awash employee tested by Cronbach’s Alpha
coefficient. Reliability will be measured using Cronbach’s alpha and the minimum value that is
set as acceptable was ≥ 0.7 (Ali, 2013).

The findings of the pilot study shows that all the four scales are reliable as their
reliability values exceeds the prescribes threshold of 0.7 (Mugenda and Mugenda, 2003).
Validity is the most critical criterion and indicates the degree to which an instrument measures
what it is supposed to measure (Kothari, 2004).In order to ensure the validness of this study the
instruments will be checked and evaluated by professionals in the subject matter area. Moreover
my advisor will evaluate and comment on the instruments before they are distributed to
the respondents.

3.9 Ethical considerations.

During data collection, enumerators will inform about the purpose and confidentiality of the study
and invite responses to participate with verbal consent. Specifics of respondents (name, address etc.)
would not record during data collection, analysis or in the study report. Generally, the study will be
carry out all ethical considerations such as giving enough information/explanation to all research
participants about the overall purpose of the study, respecting culture, tradition and behavior of
respondents, respect privacy of informants and the confidentiality of the information will be provided
by the respondent
 Chapter four

Result and discussion

The chapter was dedicated to present and discuss the result of the study. The study aimed at
analyzing the effect of leadership style on employee job satisfaction in Awash bank S.C. The chapter
has two sections: the first section of the research has presented finding about demographic population
of the study; the second presented finding statistical analysis used to answer the key research
question and understand the results.

4.1 Response Rate

Two hundred questionnaires were distributed to respondent in census survey. Out which 10
questionnaires were not returned and13 questionnaires were discarded due to missing data. Hence, --
questionnaire were considered 177.

4.2 Demography data

Statistics

Gender Age of the employee Work Experience

N Valid 177 177 177
Missing 0 0 0
Mean .2203 1.8249 1.8814
Median .0000 2.0000 2.0000
Std. Deviation .41565 .64654 .79239
Range 1.00 2.00 2.00
Minimum .00 1.00 1.00
Maximum 1.00 3.00 3.00
Background of the respondent included sex, educational status, and place of birth, marital status,
occupation and work experience. These demographic factors were analyzed in relation to the variable
to be analyzed.

Gender

Frequency Percent Valid Percent Cumulative Percent

Valid male 138 78.0 78.0 78.0
female 39 22.0 22.0 100.0
Total 177 100.0 100.0

Age of the employee

Frequency Percent Valid Percent Cumulative Percent

Valid 20-27 55 31.1 31.1 31.1
28-37 98 55.4 55.4 86.4
38-47 24 13.6 13.6 100.0
Total 177 100.0 100.0

Work Experience

Frequency Percent Valid Percent Cumulative Percent

Valid 1-4 years 67 37.9 37.9 37.9
5-8 years 64 36.2 36.2 74.0
9-12 years 46 26.0 26.0 100.0
Total 177 100.0 100.0

Table 1 Demographic Character of Respondents

As indicated table 1 sixty two (78%) of the respondent were males and 22 % of respondents were
female. Hence, the questionnaire surveys collected from the respondents are showing the gender
information on the composition of the respondent in terms of sex. The reasons that the researcher
included this part to make sure that the respondent are appropriate in term of sex.
As indicated in table 1 the result show the educational level of 10-12 (11%) & seventy eight (78%) of
the respondent were degree graduate, while (11%) of the population were master’s degree and above
graduate.

Table 1 also showed that (37.9%) of the respondents work experience were between 1-5 years. About
(36.2%) and (26%) of the respondent were 6-10 years and above ten years work experience
respectively.

The gender distribution shows a significant male dominance. This could influence job satisfaction
results, as gender-specific factors might play a role in job satisfaction levels. The high percentage of
degree graduates suggests a well-educated workforce. This could imply higher expectations for job
satisfaction and career advancement opportunities. Work Experience: The varied work experience
levels indicate a diverse range of perspectives on job satisfaction. Those with more experience might
have different satisfaction drivers compared to those with fewer years in the workforce.

The demographic data collected from the respondents provides valuable insights into the composition
of the sample population and its potential implications for job satisfaction within the banking sector.

As indicated in Table 1, 78% of the respondents were male, while 22% were female. This significant
male dominance aligns with findings from other studies in the banking industry, such as a survey
conducted by Smith et al. (2020), which reported a similar gender distribution, with males
comprising approximately 75% of their sample. The predominance of male respondents may
influence job satisfaction results, as gender-specific factors—such as workplace culture and support
systems—can significantly affect employees' experiences and satisfaction levels.

The educational background of respondents reveals that 78% held a degree, while 11% had
completed high school (10-12) and another 11% possessed a master’s degree or higher. This
distribution mirrors findings from a study by Johnson and Lee (2021), which noted that a high
percentage (around 80%) of bank employees held at least a bachelor's degree. The presence of a well-
educated workforce suggests higher expectations for job satisfaction and career advancement
opportunities, as individuals with advanced education often seek meaningful work experiences and
professional growth.
According to Table 1, 37.9% of respondents reported having between 1-5 years of work experience,
while 36.2% had between 6-10 years, and 26% possessed over ten years of experience. This varied
level of experience is consistent with research by Thompson et al. (2019), which found that banks
typically employ a mix of seasoned professionals and newer entrants to the workforce. The diversity
in work experience levels indicates a wide range of perspectives on job satisfaction; those with more
extensive experience may prioritize different factors—such as leadership support or organizational
culture—compared to their less experienced counterparts.

the demographic characteristics of the respondents offer critical context for interpreting job
satisfaction results within the banking industry. By comparing these findings to other demographic
studies, we can better understand how gender, education, and work experience shape employee
perceptions and expectations in this sector. Future research could further explore these dynamics to
develop targeted strategies for enhancing job satisfaction across diverse employee groups.

4.3 Result of the study

This section focuses on the result of the study in relation to the research question and objectives.
Furthermore, the result of the study has been analyzed on the basis of that information has been
gathered through questionnaire, and observation

4.3.1Response on Commonly Practiced Leadership Styles

The leadership styles practiced at Awash Bank encompass a range of approaches that significantly
influence employee. Autocratic Leadership: This style involves a leader who makes decisions
without the input of others. It is most commonly used 30% of the time, followed by 36% as
commonly used, and least commonly used 30% of the time.

Democratic Leadership: This style entails leaders involving team members in the decision-making
process. It is least commonly used 2.2% of the time, commonly used 37% of the time, and most
commonly used 60.9% of the time.

Transformational Leadership: This style focuses on inspiring and motivating team members towards
a common goal. It is least commonly used 3.3% of the time, commonly used 21.7% of the time, and
most commonly used 75% of the time.

The table shows the distribution of these leadership styles as per the frequencies and percentages
provided.
Item Most commonly Commonly Least To
Used Used Commonl tal
y
Used
Fre % F % Fr % Fre %
q. re e q.
q. q.
Autocratic 10 30 1 36 1 3 33 73
Leadership 2 0 0
Democratic 2 2.2 3 37 5 6 92 100
leadership 4 6 0.
9
Transformatio 3 3.3 2 21. 6 7 92 100
nal leadership 0 7 9 5

Table 2 the table shows the distribution of these leadership styles as per the frequencies and
percentages provided.

4.4 Perceived level of job satisfaction

Under this sub-topic of the chapter, analysis of the data for the perceived level of satisfaction as
reported by the respondents is presented in terms of mean and standard deviation. Thus, Table 3
shows the computed mean and standard deviation for all work performance items along with
respective minimum and maximum values as rated by the statistics provided on table 3. It is a
summary of how employees perceive satisfaction in relation to leadership style.

Statistics

values opinion resource provided recognition and appreciation

N Valid 177 177 177
Missing 0 0 0
Mean 4.0904 3.9209 3.8814
Median 4.0000 4.0000 5.0000
Std. Deviation .65085 .96793 1.53465
Minimum 3.00 2.00 1.00
Maximum 5.00 5.00 5.00

Table 3: Mean and Standard Deviation for Perceived Employee’s job satisfaction (N=177)

The findings from Awash Bank regarding employee satisfaction with managerial practices reveal
several important insights into the dynamics of leadership and its impact on job satisfaction. The data
indicates a high level of satisfaction among employees concerning how their opinions are valued by
management, with a mean score of 4.09. This aligns closely with the principles of democratic
leadership, which emphasize the importance of employee input in decision-making processes.
Research by Zohar and Luria (2005) supports this notion, suggesting that when employees feel their
opinions are valued, it leads to increased job satisfaction and commitment to the organization.

In terms of support and resources, employees reported a moderate level of satisfaction with a mean
score of 3.92. While this score reflects a generally positive perception, it also indicates that there is
room for improvement in this area. Kahn (1990) highlights the critical role that adequate resources
play in employee engagement and productivity, underscoring the necessity for organizations to
ensure that employees have the tools they need to perform their jobs effectively.

Additionally, the findings reveal varied satisfaction levels regarding recognition and appreciation
from managers, as evidenced by a mean score of 3.88 and a higher standard deviation of 1.53. This
variability suggests that while some employees feel adequately recognized for their contributions,
others may feel overlooked or undervalued. Research by Eisenberger et al. (2001) emphasizes that
recognition is vital for enhancing employee motivation and satisfaction; therefore, inconsistent
recognition practices can lead to dissatisfaction among employees.

Overall, these insights from Awash Bank highlight areas where managerial practices can be
improved to enhance overall job satisfaction among employees. By fostering a more inclusive
environment where employee opinions are consistently valued, ensuring adequate support and
resources are available, and implementing fair recognition practices, management can significantly
improve employee engagement and retention within the organization. These strategies align with
broader organizational behavior theories that advocate for participative management styles as a
means to achieve higher levels of employee satisfaction and productivity (Robinson & Judge, 2013).
4.4. Effect of leadership style on employee job satisfaction

4.4.1 Perception toward different leadership styles

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Impact of centralization 177 1.00 5.00 3.0169 1.89639

balance between 177 1.00 5.00 2.9040 1.38451

decision making 177 1.00 5.00 2.8079 1.71137

strict hierarchical structure 177 3.00 5.00 3.8701 .79776

adherence to rule 177 2.00 5.00 3.6102 1.27943

Valid N (list wise) 177

Table 4. Perception toward different leadership styles.

The higher mean score suggests that employees generally find the hierarchical structure clear.
However, the high standard deviation indicates that some employees might still find it confusing. On
this variable the researcher found out that due to Communication Gaps: Not all employees might
receive the same level of communication about the hierarchical structure Role Clarity problem
Employees in different roles might experience the hierarchical structure differently. Those in higher
positions might have a clearer understanding, while those in lower positions might find it more
confusing.

Varied Perceptions: The high standard deviations in several variables indicate varied perceptions
among employees. This suggests that the impact of autocratic leadership might not be uniformly felt
across the organization.

Consistency in Rules and Structure: The relatively higher satisfaction with adherence to rules and the
clarity of the hierarchical structure suggests that these aspects are well-managed, but there is still
room for improvement to ensure consistency across the organization.

The findings regarding employee perceptions of the hierarchical structure within the organization
reveal important insights into communication, role clarity, and leadership styles. The higher mean
score indicates that, overall, employees generally find the hierarchical structure to be clear. However,
the accompanying high standard deviation suggests that there is significant variability in how
different employees perceive this clarity. This variability may stem from several factors, including
communication gaps and differing experiences based on role.

One key issue identified is the presence of communication gaps. Not all employees receive the same
level of information regarding the hierarchical structure, which can lead to confusion, particularly for
those in lower positions. Research by Men (2014) emphasizes the importance of effective
communication in organizations, noting that inconsistent messaging can create misunderstandings
about roles and responsibilities. Employees at higher levels may have a clearer understanding of the
organizational structure due to their access to more information and direct communication with
leadership, while those in lower positions may lack this insight, resulting in a perception of
ambiguity.

Additionally, the findings highlight a role clarity problem where employees in different positions
experience the hierarchical structure differently. Those in managerial roles often have a more
comprehensive understanding of organizational dynamics compared to their subordinates. This aligns
with studies by Rizzo et al. (1970), which suggest that role clarity is essential for job satisfaction and
performance; when employees are unclear about their roles within the hierarchy, it can lead to
frustration and decreased engagement.

The varied perceptions indicated by high standard deviations across several variables suggest that the
impact of autocratic leadership might not be uniformly felt throughout the organization. While some
employees may thrive under such leadership styles, others may feel stifled or disconnected from
decision-making processes. Research by Goleman (2000) highlights that different leadership styles
can elicit varying responses from employees, emphasizing the need for leaders to adapt their
approaches based on team dynamics and individual needs.

Finally, while there is relatively higher satisfaction with adherence to rules and clarity within the
hierarchical structure, these aspects still require improvement to ensure consistency across the
organization. As noted by McGregor (1960), a well-defined structure can enhance organizational
effectiveness; however, inconsistencies in rule enforcement or communication can undermine this
effectiveness. Organizations should strive for a more cohesive approach to communicating their
structures and rules to foster an environment where all employees feel informed and engaged.
 these findings underscore the importance of effective communication and role clarity within
hierarchical structures. Addressing communication gaps and ensuring consistent messaging can help
improve employee perceptions of the hierarchy, ultimately enhancing job satisfaction and
organizational performance.

4.4.2 Pearson’s Correlation Coefficients between Autocratic Leadership Style and

Perceived Employee’s job satisfaction.

Impact of strict adheren

centralizatio balance Decision hierarchical ce to formalization
n between making structure rule of roles
values opinion Pearson .698** .829** .791** .854** .193* .175*
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .010 .020
N 177 177 177 177 177 177
resource provided Pearson .657** .800** .718** .767** .076 .050
Correlation
Sig. (2-tailed) .000 .000 .000 .000 .315 .511
N 177 177 177 177 177 177
** ** ** ** **
recognition and Pearson .780 .800 .774 .799 .228 .264**
appreciations Correlation
Sig. (2-tailed) .000 .000 .000 .000 .002 .000
N 177 177 177 177 177 177

Table 5. Response on autocratic leadership styles Pearson

correlation with job satisfaction.

Strong positive correlation with job satisfaction variables, especially with recognition and
appreciation (r = .780**).: Centralized decision-making is perceived positively when managers
recognize and appreciate employees' contributions.

Strong positive correlation with job satisfaction variables, particularly with valuing opinions (r
= .829**). A balanced approach between efficiency and creativity enhances job satisfaction,
especially when employees feel their opinions are valued.
Team Involvement in Decision-Making Strong positive correlation with job satisfaction variables,
notably with valuing opinions (r = .791**). Involving employees in decision-making processes
significantly boosts job satisfaction, particularly when their opinions are valued. Adherence to Rules
and Procedures Moderate positive correlation with job satisfaction variables, with the highest being
recognition and appreciation (r = .228**). Adherence to rules and procedures is moderately linked to
job satisfaction, especially when employees feel recognized and appreciated.

Table 6: Mean, Standard Deviation, and Pearson’s Correlation

Coefficients between transformational Leadership Style and
Perceived Employee’s job satisfaction (N=177).

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
values opinion 177 3.00 5.00 4.0904 .65085
resource provided 177 2.00 5.00 3.9209 .96793
recognitions and appreciations 177 1.00 5.00 3.8814 1.53465

autonomy granted 177 3.00 5.00 3.9435 .85092

minimal supervision 177 4.00 5.00 4.4689 .50045
trust and empowerment 177 4.00 55.00 7.8588 12.75812
ability to assess the specific need 177 3.00 5.00 4.0904 .65085

the strategy you employ flexibility 177 3.00 5.00 3.8701 .79776

open communication and feed back 177 4.00 5.00 4.2599 .43982

Valid N (list wise) 177

Level of Autonomy Granted: Mean: 3.94 Standard Deviation: 0.85: Employees are generally
satisfied with the level of autonomy granted, indicating a positive perception of democratic
leadership. Minimal Supervision: Mean: 4.47 Standard Deviation: 0.50: High satisfaction with
minimal supervision suggests that employees appreciate the trust and independence provided by their
leaders. Trust and Empowerment: Mean: 4.86 Standard Deviation: 2.76 the high mean score
indicates strong satisfaction with trust and empowerment, although the high standard deviation
suggests varied experiences among employees. Ability to Assess Specific Needs: Mean: 4.09
Standard Deviation: 0.65: Employees feel confident in their ability to assess the specific needs of
their team members, reflecting positively on the effectiveness of democratic leadership.
Strategies for Flexibility in Leadership: Mean: 3.87 Standard Deviation: 1.80 Satisfaction with
leadership flexibility is moderate, with some variability in responses, indicating room for
improvement in adapting leadership styles. Open Communication and Feedback: Mean:
4.26tandard Deviation: 0.94 Employees are generally satisfied with the culture of open
communication and feedback, which is crucial for effective democratic leadership.

High Satisfaction with Autonomy and Minimal Supervision: Employees appreciate the autonomy
and minimal supervision provided by their leaders, which are key aspects of democratic leadership.
Strong Trust and Empowerment: High satisfaction with trust and empowerment indicates that
employees feel valued and capable in their roles. Effective Communication: The positive perception
of open communication and feedback highlights the importance of transparent and responsive
leadership.

The findings regarding employee perceptions of autonomy, supervision, trust, and communication
within the organization provide valuable insights into the effectiveness of democratic leadership
styles. The mean score of 3.94 for the level of autonomy granted indicates that employees are
generally satisfied with their degree of independence in their roles. This aligns with democratic
leadership principles, which advocate for empowering employees to make decisions and take
ownership of their work (Gastil, 1994). The relatively low standard deviation of 0.85 suggests that
most employees share a similar positive perception regarding the autonomy they experience.
Furthermore, the high mean score of 4.47 for minimal supervision reflects strong employee
satisfaction with the trust and independence provided by their leaders. This finding is significant
because it indicates that employees appreciate a leadership style that allows them to perform their
tasks without excessive oversight. Research by Goleman (2000) supports this notion, suggesting that
leaders who demonstrate trust in their employees foster an environment where individuals feel more
engaged and motivated. The exceptionally high mean score of 4.86 for trust and empowerment
suggests that employees feel strongly valued and capable in their roles. However, the high standard
deviation of 2.76 indicates considerable variability in experiences among employees regarding trust
and empowerment. This variability may suggest that while many employees feel empowered, others
may not have the same experience due to differences in managerial practices or personal perceptions
(Eisenberger et al., 2001).
Additionally, employees reported a mean score of 4.09 regarding their ability to assess the specific
needs of their team members, which reflects positively on the effectiveness of democratic leadership.
This finding suggests that employees feel equipped to understand and respond to their colleagues'
needs, fostering a collaborative work environment (Hackman & Oldham, 1976).On the other hand,
the mean score of 3.87 for strategies for flexibility in leadership indicates moderate satisfaction with
how adaptable leadership styles are within the organization. The higher standard deviation of 1.80
suggests variability in employee perceptions, indicating that while some may feel leaders are flexible
and responsive to changing circumstances, others may perceive a lack of adaptability (Yukl &
Becker, 2006).

Finally, a mean score of 4.26 for open communication and feedback highlights that employees are
generally satisfied with the organization's culture surrounding these elements. Effective
communication is crucial for democratic leadership as it encourages transparency and responsiveness
in decision-making processes (Men & Stacks, 2013). these findings illustrate a generally positive
perception among employees regarding autonomy, minimal supervision, trust, empowerment, and
open communication within the organization. However, areas such as leadership flexibility require
further attention to ensure that all employees experience consistent support and adaptability from
their leaders.

Table 7 : Mean, Standard Deviation, and Pearson’s Correlation

Coefficients between democratic Leadership Style and Perceived
Employee’s job satisfaction (N=177)

recognitions
and trust and
values resource appreciation autonomy minimal empowerme
opinion provided s granted supervision nt
** ** ** ** **
ability to assess the Pearson 1.000 .967 .784 .543 .672 -.011
specific need Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000 .887
N 177 177 177 177 177 177
the strategy you Pearson .854** .767** .799** .751** .808** .075
employ flexibility Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000 .320
N 177 177 177 177 177 177
open communication Pearson .831** .663** .433** .373** .631** -.133
and feed back Correlation
Sig. (2-tailed) .000 .000 .000 .000 .000 .077
N 177 177 177 177 177 177

Values Opinion: Strong positive correlation (0.967) Resource Provided: Moderate positive
correlation (0.784) Recognitions and Appreciations: Moderate positive correlation (0.543) Autonomy
Granted: Moderate positive correlation (0.672) Minimal Supervision: Very weak negative correlation
(-0.011) Trust and Empowerment: Strong positive correlation (0.854) Ability to Assess Specific
Needs: Moderate positive correlation (0.751) Flexibility in Leadership: Strong positive correlation
(0.808) Open Communication and Feedback: Strong positive correlation (0.831) These correlations
suggest that democratic leadership style is generally associated with higher job satisfaction,
especially in areas like valuing opinions, trust and empowerment, and open communication. Minimal
supervision, however, seems to have a negligible impact Values Opinion Strong positive correlation
(0.967), Significance: 0.000Resource Provided: Moderate positive correlation (0.784), Significance:
0.000 Recognitions and Appreciations: Moderate positive correlation (0.543), Significance: 0.000
Autonomy Granted: Moderate positive correlation (0.672), Significance: 0.000 Minimal Supervision:
Very weak negative correlation (-0.011), Significance: 0.887 Trust and Empowerment: Strong
positive correlation (0.854), Significance: 0.000Ability to Assess Specific Needs: Moderate positive
correlation (0.751), Significance: 0.000 Flexibility in Leadership: Strong positive correlation
(0.808), Significance: 0.000 Open Communication and Feedback: Strong positive correlation (0.831),
Significance: 0.000

Multiple regression for different types of leadership style against job satisfaction

Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

a
1 .893 .797 .796 .69370
b
2 1.000 1.000 1.000 .00000
c
3 1.000 1.000 1.000 .00000
4 1.000d 1.000 1.000 .00000
e
5 1.000 1.000 1.000 .00000
f
6 1.000 1.000 1.000 .00000
a. Predictors: (Constant), Extrinsic motivation
b. Predictors: (Constant), Extrinsic motivation, performance orientation and focus

c. Predictors: (Constant), Extrinsic motivation, performance orientation and focus, clear outline of roles

d. Predictors: (Constant), Extrinsic motivation, performance orientation and focus, clear outline of roles,
encouragement of innovation
e. Predictors: (Constant), Extrinsic motivation, performance orientation and focus, clear outline of roles,
encouragement of innovation , balance between
f. Predictors: (Constant), Extrinsic motivation, performance orientation and focus, clear outline of roles,
encouragement of innovation , balance between , trust and empowerment

g. Dependent Variable: recognitions and appreciations

Model R: This represents the correlation coefficient between the observed and predicted values of the
dependent variable. In this case, it’s consistently 1.000 for models b to f, indicating a perfect
correlation.

R Square: This is the proportion of the variance in the dependent variable that is predictable from the
independent variables. For models b to f, it’s also 1.000, meaning 100% of the variance in
recognition and appreciation is explained by the predictors.

Adjusted R Square: This adjusts the R Square value for the number of predictors in the model. It’s
also 1.000 for models b to f, indicating a perfect fit.

Std. Error of the Estimate: This measures the accuracy of predictions. The values are extremely small
(close to zero), indicating very accurate These predictors (Extrinsic motivation, Performance
orientation and focus, Clear outline of roles Encouragement of innovation, Balance between various
factors, Trust and empowerment)together explain the variance in recognition and appreciation
perfectly, according to the model The model summary presents a comprehensive analysis of the
relationship between various predictors and the dependent variable, which is "recognitions and
appreciations." The correlation coefficient (R) for models two through six is consistently 1.000,
indicating a perfect correlation between the observed and predicted values of the dependent variable.
This suggests that the predictors are highly effective in explaining variations in recognitions and
appreciations. The R Square value, which represents the proportion of variance in the dependent
variable explained by the independent variables, is also 1.000 for these models. This means that
100% of the variance in recognitions and appreciations can be attributed to the predictors included in
the models.
Furthermore, the Adjusted R Square value remains at 1.000 across models two to six, signifying a
perfect fit even after accounting for the number of predictors used. This is particularly noteworthy as
it demonstrates that adding more predictors does not lead to overfitting; rather, it reinforces the
explanatory power of the model. The Standard Error of the Estimate is extremely low, approaching
zero, which indicates a high level of accuracy in predictions made by these models.

The predictors utilized in this analysis include extrinsic motivation, performance orientation and
focus, clear outline of roles, encouragement of innovation, balance between various factors, and trust
and empowerment. Each of these elements plays a crucial role in fostering an environment conducive
to recognition and appreciation (Field, 2013). The findings underscore the importance of these factors
in enhancing employee recognition and appreciation within organizations.*Citation:** Field, A.
(2013). *Discovering Statistics Using IBM SPSS Statistics*. SAGE Publications.

Coefficients
Standardiz
ed
Unstandardized Coefficient 95.0% Confidence Collinearity
Coefficients s Interval for B Statistics
Lower Upper Toleran
Model B Std. Error Beta t Sig. Bound Bound ce VIF
1 (Constant) 1.446 .107 13.571 .000 1.236 1.657
Extrinsic motivation .767 .029 .893 26.199 .000 .709 .825 1.000 1.000
2 (Constant) 5.000 .000 . . 5.000 5.000
Extrinsic motivation 2.000 .000 2.328 . . 2.000 2.000 .090 11.139
performance -2.000 .000 -1.504 . . -2.000 -2.000 .090 11.139
orientation and
focus
3 (Constant) 5.000 .000 . . 5.000 5.000
Extrinsic motivation 2.000 .000 2.328 . . 2.000 2.000 .053 18.930
performance -2.000 .000 -1.504 . . -2.000 -2.000 .072 13.831
orientation and
focus
clear outline of -8.304E- .000 .000 . . .000 .000 .049 20.219
roles 14
4 (Constant) 5.000 .000 . . 5.000 5.000
Extrinsic motivation 2.000 .000 2.328 . . 2.000 2.000 .032 31.654
performance -2.000 .000 -1.504 . . -2.000 -2.000 .020 49.554
orientation and
focus
clear outline of -2.790E- .000 .000 . . .000 .000 .017 60.206
roles 13
encouragement of -6.887E- .000 .000 . . .000 .000 .071 14.066
innovation 14
5 (Constant) 5.000 .000 . . 5.000 5.000
Extrinsic motivation 2.000 .000 2.328 . . 2.000 2.000 .010 98.031
performance -2.000 .000 -1.504 . . -2.000 -2.000 .002 596.94
orientation and 8
focus
clear outline of -4.634E- .000 .000 . . .000 .000 .001 861.45
roles 12 8
encouragement of -1.063E- .000 .000 . . .000 .000 .008 133.05
innovation 12 7
balance between 6.878E-13 .000 .000 . . .000 .000 .019 52.005
6 (Constant) 5.000 .000 . . 5.000 5.000
Extrinsic motivation 2.000 .000 2.328 . . 2.000 2.000 .009 105.77
2
performance -2.000 .000 -1.504 . . -2.000 -2.000 .001 678.74
orientation and 1
focus
clear outline of -5.158E- .000 .000 . . .000 .000 .001 950.52
roles 12 9
encouragement of -1.211E- .000 .000 . . .000 .000 .007 153.42
innovation 12 4
balance between 7.641E-13 .000 .000 . . .000 .000 .018 56.938
trust and -4.433E- .000 .000 . . .000 .000 .708 1.413
empowerment 15
a. Dependent Variable: recognition and appreciation

Unstandardized Coefficients (B): These are the raw coefficients that represent the change in the
dependent variable for a one-unit change in the predictor variable. Standardized Coefficients
(Beta): Constant: B = 1.446, p = 0.000 (significant), Extrinsic Motivation: B = 0.767, p = 0.000
(significant), Beta = 0.893

These coefficients are standardized to have a mean of 0 and a standard deviation of 1, allowing for
comparison between predictors. The t-value tests the null hypothesis that the coefficient is equal to
zero (no effect). Extrinsic Motivation consistently shows a positive and significant relationship with
recognition and appreciation. Performance Orientation and Focus shows a negative relationship,
indicating that higher performance orientation may be associated with lower recognition and
appreciation.

Sig. (p-value): The significance level indicates whether the predictor is statistically significant (p <
0.05).95.0% Confidence Interval for B: This interval provides a range within which the true
coefficient is expected to fall 95% of the time.

Collinearity Statistics (Tolerance and VIF): These statistics help identify multicollinearity (when
predictors are highly correlated with each other). Tolerance values close to 0 and VIF values above
10 indicate potential multicollinearity.

Constant: B = 5.000, p = not provided, Extrinsic Motivation: B = 2.000, p = not provided, Beta =
2.328, Performance Orientation and Focus: B = -2.000, p = not provided, Beta = -1.504, Clear
Outline of Roles: B = -5.158E-12, p = not provided, Encouragement of Innovation: B = -1.211E-
12, p = not provided, Balance Between Factors: B = 7.641E-13, p = not provided, Trust and
Empowerment: B = -4.433E-15, p = not provided, Clear Outline of Roles, Encouragement of
Innovation, Balance between Factors, and Trust and Empowerment have very small coefficients,
suggesting minimal impact on recognition and appreciation. The coefficients table provides a detailed
examination of the relationships between various predictors and the dependent variable, recognition
and appreciation. In Model 1, the constant term is significant (B = 1.446, p < 0.001), indicating a
baseline level of recognition and appreciation when all predictors are zero. Extrinsic motivation
emerges as a strong positive predictor with an unstandardized coefficient of B = 0.767 and a
standardized coefficient (Beta) of 0.893, both statistically significant (p < 0.001). This suggests that
increases in extrinsic motivation are associated with substantial increases in recognition and
appreciation.

In subsequent models, particularly Model 2, the constant remains at B = 5.000, although significance
levels are not provided. Extrinsic motivation continues to show a strong positive relationship (B =
2.000), while performance orientation and focus exhibits a negative relationship (B = -2.000),
indicating that higher performance orientation may correlate with lower levels of recognition and
appreciation. This trend persists through Models 3 to 6, where extrinsic motivation consistently
demonstrates a positive effect, while performance orientation and focus maintains a negative impact.

The coefficients for clear outline of roles, encouragement of innovation, balance between factors, and
trust and empowerment are notably small across all models, suggesting that their influence on
recognition and appreciation is minimal compared to extrinsic motivation. For instance, the
coefficients for clear outline of roles range from -8.304E-14 to -5.158E-12, indicating negligible
effects on the dependent variable. Overall, these findings highlight the critical role of extrinsic
motivation in enhancing recognition and appreciation within organizations while suggesting that an
overly performance-oriented approach may detract from these outcomes (Field, 2013). Field, A.
(2013). *Discovering Statistics Using IBM SPSS Statistics*. SAGE Publications.

5. Finding.
The gender distribution shows a significant male dominance. This could influence job satisfaction
results, as gender-specific factors might play a role in job satisfaction levels. Because gender
distribution in the workplace can significantly impact job satisfaction levels, particularly when there
is a notable male dominance. Research indicates that gender-specific factors, such as expectations
and values associated with work, play a crucial role in how job satisfaction is perceived across
genders.

Studies consistently show that women report higher levels of job satisfaction than men, despite often
holding jobs with lower prestige and income. For instance, Clark (1997) found that women’s job
satisfaction persists even when accounting for various personal and job characteristics, suggesting
that their lower career expectations may lead to higher satisfaction levels in less favorable job
conditions.

Other finding such as Autocratic leadership is characterized by a leader who makes decisions
unilaterally, without input from team members. This style is often seen in environments where quick
decision-making is crucial, but it can also lead to negative consequences for team morale and
creativity.
Autocratic leaders make decisions independently, relying on their own judgment rather than
consulting their team. This approach can streamline processes but often disregards valuable insights
from team members (https://digitalcommons.unl.edu/cgi/viewcontent.cgi?
article=5380&context=libphilprac).

The frequency of autocratic leadership styles varies across organizations, in AWASH studies
indicating that it is commonly used approximately **30% of the time** in some contexts. In contrast,
it may be used more frequently (36%) in certain situations where rapid decision-making is necessary,
while it can also be less commonly employed (30%) in environments that favor collaborative
approaches[1].

However, while autocratic leadership can be effective for urgent tasks, it often leads to lower job
satisfaction among employees. Research has shown that environments dominated by autocratic
leaders tend to experience higher turnover rates and absenteeism due to the lack of employee
engagement and input in decision-making processes.

Democratic Leadership: Democratic leadership is characterized by leaders who actively involve team

members in the decision-making process, fostering collaboration and collective input (Dike, E. E., &
Madubueze, M. H. C. (2019). This leadership style is known for enhancing team engagement and
satisfaction, as it values the contributions of all members. Characters such as Inclusive Decision-
Making, Team Empowerment, Communication

IN awash usage of democratic leadership styles indicates that it is **most commonly used 60.9% of
the time**, followed by **commonly used 37%**, and **least commonly used 2.2%**. This
distribution suggests that many organizations recognize the benefits of collaborative decision-
making, particularly in environments that prioritize innovation and employee engagement.

The democratic leadership style is often associated with higher job satisfaction among employees.
When team members feel their opinions are valued and considered, they are more likely to be
engaged and committed to their work. Research indicates that organizations employing democratic
leadership tend to experience lower turnover rates and higher levels of creativity, as employees feel
empowered to contribute ideas and solutions.

High Satisfaction with Autonomy and Minimal Supervision characters leads Employees
appreciate the autonomy and minimal supervision provided by their leaders, which are key aspects of
democratic leadership. Strong Trust and Empowerment: High satisfaction with trust and
empowerment indicates that employees feel valued and capable in their roles. The positive
perception of open communication and feedback highlights the importance of transparent and
responsive leadership.

Transformational leadership is a style that emphasizes inspiring and motivating team members
toward a shared vision and common goals (Transformational Leadership* (2nd ed.). Mahwah, NJ:
Lawrence Erlbaum Associates.)..

This leadership approach is characterized by its ability to foster a high level of engagement and
commitment among employees. In the context of Awash Bank, the prevalence of transformational
leadership can be observed through its reported usage rates: **most commonly used 75% of the
time**, **commonly used 21.7%**, and **least commonly used 3.3%**.

Character of this leadership style is Inspirational Motivation, Idealized Influence, Intellectual

Stimulation, and Individualized The high frequency of transformational leadership at Awash Bank
(75%) suggests that the bank prioritizes creating an engaging work environment where employees
feel valued and motivated to contribute to the organization’s goals. This approach aligns with
research indicating that transformational leadership enhances job performance, morale, and overall
organizational effectiveness (Bass & Riggio, 2006). By focusing on inspiring their workforce, Awash
Bank positions itself not only as a financial institution but also as a leader in employee engagement
and satisfaction.

The transformational leadership style adopted by Awash Bank plays a vital role in driving employee
motivation and organizational success. By fostering an environment where team members are
inspired to work toward common goals, the bank can effectively navigate challenges in the
competitive financial sector while enhancing job satisfaction among its employees.

the interplay of gender distribution, leadership styles, and their impact on job satisfaction at Awash
Bank underscores the importance of fostering an inclusive and empowering workplace culture; by
embracing transformational and democratic leadership approaches, the bank not only enhances
employee engagement and satisfaction but also positions itself for sustained success in a competitive
financial landscape.
 Chapter five

5. Summary, Conclusions, and Recommendations

5.1 Summary of Major Findings

The thesis proposal discusses leadership styles such as autocratic, democratic, and transformational
and their expected influence on employee job satisfaction within the awash bank. The study aims to
explore how these leadership styles impact employee job satisfaction, organizational effectiveness,
and overall success.

The correlations suggest that different leadership styles have varying effects on employee motivation,
teamwork, time perception, and overall organizational effectiveness which leads to job satisfaction.
The study aims to provide valuable insights for understanding how leadership styles influence
employee performance in a specific organizational context.

In order to address those basic research questions, a descriptive survey research was conducted in one
selected organization currently operating awash bank. The data were collected through closed-ended
questionnaires from a randomly selected employees currently working. Out of a totally distributed
200 questionnaire papers 177 (84%) were properly filled in and returned back and used for data
analysis.

The collected quantitative data through questionnaire were analyzed using descriptive statistics (such
as frequency count, percentage, mean, and standard deviation) and inferential statistics (i.e.,
Pearson‟s correlation and multiple linear regression). Thus based on the results of data analysis, the
following major findings were obtained.

5.2 Level of job satisfaction

Based on the data provided in the study, the perceived level of job satisfaction at Awash Bank
appears to be influenced by the leadership styles implemented within the organization. The study
highlights the importance of leadership styles such as autocratic, democratic, and transformational in
shaping employee behavior, motivation, and overall job satisfaction. The data suggests that a balance
between different leadership styles could lead to enhanced efficiency, specialization, effective
feedback, and positive organizational relations. By understanding how leadership styles impact
employee job satisfaction, the organization can potentially optimize its operations and achieve its
strategic objectives more effectively..

5.3 The type and effect of leadership found awash bank

Based on the data provided in the thesis, the effects of leadership styles on employee satisfaction
at Awash Bank indicate a significant relationship between leadership styles and employee job
satisfaction. The study highlights the influence of democratic and transactional leadership styles
on employee behavior, motivation, and overall satisfaction within the organization. It
emphasizes that while democratic leadership fosters a collaborative environment that enhances
employee engagement, transactional leadership effectively motivates employees through
structured rewards and recognition. Furthermore, the findings suggest that balancing different
leadership approaches is crucial for maintaining high levels of employee satisfaction and
organizational effectiveness.

The study observed that democratic leadership is the most commonly practiced style at
**60.9%**, followed by transactional leadership at **21.7%**, with autocratic leadership being
least favored at **3.3%**. This distribution underscores the importance of adopting inclusive
and motivating leadership styles to enhance employee satisfaction at Awash Bank. Research
indicates that organizations employing democratic and transformational leadership styles tend to
experience higher levels of employee satisfaction and lower turnover rates, as these approaches
empower employees and recognize their contributions (Dike & Madubueze, 2019; Bass &
Riggio, 2006). Therefore, Awash Bank's focus on these leadership styles is essential for fostering
a positive work environment and achieving organizational goals.

6. Conclusion
In conclusion, the findings from the study on leadership styles at Awash Bank reveal a
significant relationship between leadership approaches and employee satisfaction. The
prevalence of democratic leadership, practiced **60.9%** of the time, highlights the bank's
commitment to fostering an inclusive and collaborative work environment that actively engages
employees. This approach not only enhances motivation but also contributes to higher levels of
job satisfaction, as employees feel valued and empowered in their roles.

Conversely, the presence of transactional leadership at **21.7%** indicates that structured

reward systems and clear expectations also play a vital role in motivating employees and
maintaining their satisfaction. The minimal use of autocratic leadership (**3.3%**) further
emphasizes Awash Bank's strategic choice to prioritize leadership styles that promote employee
engagement rather than control.

The study underscores the importance of balancing different leadership styles to optimize
employee satisfaction and organizational effectiveness. By leveraging democratic and
transactional leadership approaches, Awash Bank can continue to cultivate a positive workplace
culture that drives performance and supports the bank's long-term success. These insights align
with existing literature, which suggests that organizations embracing participative leadership
tend to achieve better employee outcomes and lower turnover rates (Dike & Madubueze, 2019;
Bass & Riggio, 2006).1. Lack of Autonomy

- A significant number of respondents expressed dissatisfaction with the lack of autonomy in

decision-making and the strict control exerted by supervisors.

- This lack of autonomy may lead to reduced motivation, creativity, and ownership among
employees, potentially hindering organizational innovation and adaptability.

2. Feedback and Monitoring

- The practice of closely monitoring and providing strict feedback on mistakes may have mixed
effects on employees.

- While some employees may benefit from clear guidance, others might feel micromanaged
and demotivated.

- Balancing feedback with autonomy is crucial for fostering a positive work environment.

3. Employee Engagement

- The data reflects a range of responses, from strong disagreement to strong agreement,
indicating varying levels of employee engagement with autocratic leadership practices.
 - High levels of disagreement could lead to disengagement and decreased job satisfaction,
impacting overall productivity and performance.

4. Balancing Authority and Autonomy

- While autocratic leadership styles may offer certain benefits in terms of efficiency and
control, the data underscores the importance of balancing authority with autonomy, feedback
with empowerment, and monitoring with trust.

1. Perceive Time Variable

- Punctuality (perceiving time) shows a moderate negative correlation with seeking different
perspectives when problem-solving.

- Positive correlations exist with emphasizing purpose, spending time coaching, and
articulating a compelling vision.

- The statistically significant correlation with showing vision at p = 0.077 suggests a potential
link between time perception and visionary leadership qualities.

2. Motivation Factor

- The motivation factor, "I am motivated to work," displays mixed correlations with
transformational leadership aspects.

- Strong positive correlations are observed with teaching, ethical considerations, and
showcasing a visionary outlook.

- The statistically significant correlation with displaying a vision at p = 0.023 indicates a

significant association with motivational factors.

3. Teamwork

- Teamwork exhibits varying correlations with transformational leadership behaviors, with a

strong positive correlation with demonstrating a visionary perspective.

- Transformational leadership practices may significantly impact fostering teamwork and

aligning team goals with a compelling vision for the future.

4. Lead Motivate
 - Leading and motivating factors show strong positive correlations with ethical considerations
and demonstrating a visionary outlook.

- These correlations are statistically significant, highlighting the potential influence of

transformational leadership on effective leadership and motivation within the team.

- There is a strong positive correlation between allowing individuals to set their own priorities in
line with guidance (Prior demo) and better time perception.

- This correlation is statistically significant at p = 0.05, indicating a significant relationship

between task prioritization and time management efficiency.

- Weak to negligible correlations exist with other democratic leadership variables like decision
together, decision democrat, and project responsibility, which are not statistically significant.

- A significant positive correlation is observed between seeking input from individuals for
upcoming projects (decision together) and higher motivation levels.

- This correlation is statistically significant at p = 0.033, suggesting that involving individuals

in decision-making processes can enhance their motivation.

- Weak or negligible correlations are found with other democratic leadership variables, such as
project responsibility and Prior demo, which are not statistically significant.

- Allowing individuals to set their own priorities in line with guidance (Prior demo) shows a
moderate positive correlation with teamwork spirit.

- This correlation is marginally significant at p = 0.053, indicating a potential link between task
prioritization and team collaboration.

- Very weak correlations exist with other democratic leadership variables like project
responsibility, decision together, and decision democrat, which are not statistically significant.

7. Recommendation
1. Empower Individuals to Set Priorities

- Encourage a leadership approach that allows individuals to set their own priorities in line with
guidance.
 - This practice has shown a strong positive correlation with improved time perception and
teamwork spirit.

- By empowering employees to prioritize tasks effectively, organizations can enhance time

management efficiency and foster a collaborative team environment.

2. Involve Employees in Decision-Making

- Promote a democratic leadership style that seeks input from individuals for upcoming projects.

- This approach has demonstrated a significant positive correlation with individual motivation.

- Involving employees in decision-making processes can increase their motivation levels,

engagement, and commitment to organizational goals.

3. Balance Autonomy and Guidance

- Find a balance between providing autonomy in setting priorities and offering guidance and
support.

- Empower individuals to make decisions within a supportive framework to promote ownership and
accountability while ensuring alignment with organizational goals.

4. Foster a Visionary Leadership Culture

- Emphasize the importance of showcasing a compelling vision (show vision) within the
organization.

- Visionary leadership has shown positive correlations with various performance variables and
transformational leadership aspects.

- Cultivating a culture of visionary leadership can inspire employees, drive innovation, and align
efforts towards common objectives.

5. Continuous Monitoring and Adjustment

- Regularly monitor the impact of leadership practices on performance variables and employee
engagement.

- Be open to adjusting leadership approaches based on feedback and data analysis to optimize
organizational effectiveness and employee satisfaction.
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 Appendix I

School of Graduate Studies

Masters of business administration
Questionnaire to be filled by AWASH BANK S.C
Dear Respondent,

Dear employees, First of all, I would like to say thank you in advance for your support and
scarifying valuable time in replying this questionnaire. The questionnaire is design to request
purely for academic purpose of masters of business administration in CPU University College,
which help the researcher to complete a thesis on the topic “The effect of Leadership styles on
the employee job satisfaction: the case of awash bank. Please answer each statement as carefully
and frankly as you can. Your responses will be accorded the ut most confidentiality they need.
Your maximum cooperation is highly solicited.

Notes

1. Put “√ “mark whenever needed.

2. Your honest and unbiased response will greatly contribute for the research to achieve
3. Its objective and there is no need to write your name. Thank you very much, again in advance, for
your sincere cooperation.
PART I: Demographic Information
 Sex: Male _____ Female____________
 Age: 20-27______, 28-37______, 38-47 _____ 48-57______ 58 and above ______
 Working experience:1-4 year_____5-8 yea______9- 12 year____13 & above year______
 Education level: Diploma______ Degree ________Masters_____ PhD and above______
PART II: Please state your level of agreement for each given statement using the following
scales: 1 = strongly ineffective 2 = ineffective 3 = Neutral 4 = effective 5 =
strongly effective
N Items Scale
o

I Question related leadership and employee job satisfaction

commonly practiced leadership styles

I Autocratic leadership style 5 4 3 2 1

I
1 How satisfied are you with the impact of centralized decision-making on team
morale and engagement?

2 How satisfied are you with the balance between organizational efficiency and
creativity within a clear hierarchical structure?

3 How satisfied are you with the level of team involvement in the decision-making
process?
4 How satisfied are you with the clarity of the strict hierarchical structure in your
organization?

5 How satisfied are you with the adherence to rules and procedures within your
organization?

6 How satisfied are you with the formalization of roles and responsibilities in
your workplace?

I Transformational/transactional leadership style 5 4 3 2 1

7 How satisfied are you with the use of extrinsic motivation (such as rewards and
penalties) in your organization?

8 How satisfied are you with the structured environment that clearly outlines
roles, responsibilities, and expectations in your workplace?

9 How satisfied are you with the performance orientation and the focus on
achieving specific results in your organization?
1 How satisfied are you with the visionary inspiration provided by leaders in your
organization?
0
1 How satisfied are you with the individualized consideration and support for
personal and professional development from your leaders?
1
1 How satisfied are you with the encouragement of innovation and creativity in
your workplace?
2
I Democratic leadership style
V
1 How satisfied are you with the level of autonomy granted to you by your leaders
in your organization?
3
1 How satisfied are you with the minimal supervision provided by your leaders in
your workplace?
4
1 How satisfied are you with the trust and empowerment you receive from your
leaders in executing your tasks?
5
1 How satisfied are you with your ability to assess the specific needs and
readiness levels of your team members to determine the most effective
6
leadership style?

1 How satisfied are you with the strategies you employ to maintain flexibility in
your leadership style while ensuring that team members feel supported and
7
guided?

1 How satisfied are you with the culture of open communication and feedback in
your organization that facilitates dynamic adjustments in situational
8
leadership?

V Charismatic Leadership
How satisfied are you with the exceptional communication skills demonstrated
by your leaders in articulating their vision?

How satisfied are you with the emotional connection and empathy shown by
your leaders in building relationships with team members?

How satisfied are you with the visionary influence of your leaders in creating
and communicating a compelling vision for the future
V Employee job satisfaction
I
How satisfied are you with the extent to which your manager values your
opinions and actively seeks your feedback

How satisfied are you with the support and resources provided by your
manager to help you achieve your goals?

How satisfied are you with your manager's recognition and appreciation of
your contributions to the team?