THE EFFECT OF LEADERSHIP STYLE ON EMPLOYEE PERFORMANCE: THE CASE OF CHINA GEO-ENGINEERING CORPORATION GROUPS IN ADDIS ABABA

Abstract

In the contemporary business world, organizations are operating in a stiff competitive environment in which effective leadership plays crucial role for enhancement of employee performance to assure their missions successfully. However, multinational companies are subjected to cultural variation in a host country that needs to be considered to reconcile and harmonize the leadership policy of the company. The objective of this study was, thus, to investigate the effect of leadership style on employee performance mediated by organizational culture in the case of CGC Groups in Addis Ababa. A quantitative research approach along with an explanatory research design was adopted. The survey was conducted on employees working under the umbrella of CGC Groups. A sample of 241 respondents who were selected with stratified random sampling technique were participated in this survey. Primary data were collected through a self-administered questionnaire. A multiple linear regression inferential analysis was adopted to examine the relationship between leadership style, organizational culture and employee performance, with the help of the SPSS 22.0 Software application. The results of the findings revealed that leadership style had a positive and significant effect on both employee performance and organizational culture. Specifically, autocratic leadership showed the highest effect followed by transactional style. While transformational and democratic styles were the least contributors. Moreover, the organizational culture played a mediating role on the relationship between leadership style and employee performance. Based on the findings, it can be concluded that different leadership styles had different effect on organizational culture (direct) and employee performance (indirect effect). Moreover, autocratic leadership is more appropriate style of leadership that significantly affects the employee performance in CGC Groups context. It is advisable that managers at all levels need to be strict decision makers in dire situations like in time of project failures.