1.
Introduction
In today's business world, management plays a key role in the success of
an organization (Amanuel, 2022). The right management style will impact
a number of organizational outcomes, with employee productivity being
the most important. Productivity, as it relates to this particular topic, is
the output of and efficiency of employees, which contributes directly to a
company's profitability and competitive advantage. The productivity of
employees is one of the most significant factors of success of any
organization, especially in service-oriented organizations such as banking.
Notably, the Ethiopian government is now embarking on a number of
reforms to liberalize financial sector and open it to foreign competition.
The explicit goal is to attract foreign capital in order to raise the
competitiveness of the economy and promote economic growth. This
transformation offers important opportunities but also poses significant
challenges. As noted by (Sinha, 2017), the banking sector is vital in any
country in its economic development as it serves as a financial
intermediary to facilitate savings, investments, and account allocations of
capital. In particular, the banking sector must consider the operational
efficiency of its services and adapt to the increasing competition within
and outside the banking sector (Abebe, & Mekonnen, 2019 & Tesfaye, &
Lemma, 2020). This study aims to investigate the complexity of the
relationship between various management styles and employee
productivity in a dynamic banking sector.
(Gebrehiwot, 2021) The banking sector, particularly in developing
economies like Ethiopia, is characterized by a high-pressure work
environment, complex regulations, and the requirement of accuracy and
speed. The performance of the sector is critical to the economic
development and stability of the country. Therefore, understanding how
management practices affect the productivity of employees in such a
specific context is not merely an intellectual exercise but a practical
necessity for optimizing the general performance of the sector.
2. Statement of The Problem
Problem Statement
While the existing research literature provides strong evidence that leadership styles
contribute to organizational culture, employee behaviour, motivation, and ultimately,
productivity, there is a significant research gap concerning the direct nexus between diverse
management styles and employee productivity within the Ethiopian banking sector [Bass,
1985; Burns, 1978; Northouse, 2018]. Although studies conducted in Ethiopia have shown
that leadership styles, such as transformational and transactional, have a positive effect on
overall organizational performance, they often lack a granular, case-specific analysis that
directly links specific managerial practices to individual employee productivity metrics
[Awoke & Saeed, 2023; Kebede & Lemi, 2020].
This leaves a void in our understanding of how various management styles, from autocratic
to democratic and laissez-faire, influence day-to-day performance outcomes in this critical
sector [Lewin et al., 1939]. The banking industry in Ethiopia is undergoing rapid growth and
faces intense competition, yet the prevailing management practices may still be rooted in
traditional, routine-oriented approaches that might not be optimal for fostering innovation and
high productivity [Lodebo, 2023]. Therefore, this research serves to bridge this gap by
conducting a comparative case study to explore which managerial styles directly contribute to
employee productivity and the specific mechanisms through which they do so.
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