2.0 in setting the tone and culture of the


This section will review the literature on leadership style and performance. Conceptual clarification of leaders, leadership and leadership styles will be examined. Theories of leadership which will form the theoretical frameworks for this study will also be examined and reviewed. Empirical studies will also be reviewed.

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A leader is a person who has the power to motivate people towards achieving a goal or an objective (Yukl, 1994) and leaders play a vital role in setting the tone and culture of the organization (Batista-Taran, Shuck, Gutierrez, & Baralt, 2009).  A capable leader is one who directs and guilds his followers to achieve the desired goals. A leader is a person who can influence the behaviour of his followers to achieve the set goals. According to Squires (2001), leadership is about having followers who have the utmost faith in you and can conform to what you stand for, thus, it is concerned with the spiritual aspect of their work.


A leader is a person who inspires their subordinates through, directing and motivating them to perform specific tasks in order to accomplish outlined company objectives (Ojokuku, Sajuyigbe, & Odetayo, 2012). Simply put, the definition of a leader is “someone who sets the direction for his people to follow, in an effort to influence them” (Fustin, 2013). Successful leaders need to understand themselves, their followers and the tasks and procedures that govern the organization as a whole. A leader needs confidence and strategies in order to administer a wide range of different issues effectively – from creating learning associations where workers grow and develop as effective members of an organization to managing any conflict that arises; from fostering hierarchical clarity to inspiring energy and creativity through bold visions (Gallos, 2008).

(Lee and Chuang, 2009), clarify that a good leader not only inspires subordinates to perform more efficiently but also meets the requirements for achieving organizational goals.  Leadership also has a social impact on the leaders as they influence their followers’ conduct, attitude and motivations.



Leadership has been studied for a long time as it is crucial to society and it has been an important part of the narrative on management and organizational conduct from time immemorial. It has fostered many debates in most professional communities worldwide.  Every organization seeks to constantly develop good leaders, as this will inevitably bring about success. However, the logical issue with this attempt is that there are countless leadership theories and styles. There have been a number of theories explaining leadership styles; this is likely because of the complexity of the concept of the term leadership which can be viewed from different perspectives.


There are different schools of thought on how leaders come about. Some people believe that leadership is a natural trait, that leaders are rather born not made while some people believe that leaders are made and nobody is born a leader. These differing opinions make it difficult for professionals to agree on which particular theory or style a leader should adopt to enhance their organizations and also to develop great leaders. Indeed, as stated in (Schwandt & Marquardt, 2000), “no other role in organizations has received more interest than that of the leader”. Consequently, several theories of leadership abound, a few of which are discussed below.


2.2.1 Trait Theories:

The trait theory posits that personal characteristics like personality traits, cognitive skills, and interpersonal skills can determine an individual’s potential for leadership roles and can distinguish leaders from non-leaders (Furnham, 2005). Thus, the trait theory is based on the idea that, leaders are born and not made and that leadership is unique to certain individuals. As (Parry & Bryman, 2006) put it, “nature is more important than nurture”; that is to say, an individual’s predisposition to leadership (his or her “nature”) has a greater influence than the environment within which they are raised.


The trait theory often identifies a particular attribute an individual possesses and compares this to the personality or behavioural characteristics shared by leaders that have come before them. However, the theory is flawed in the sense that there are people that possess the qualities of a leader but are not leaders and individuals who possess all the traits as opposed to individuals who are leaders that have certain singular traits. This makes it difficult to use trait theories to explain leadership as traits cannot be accurately measured.


2.2.2 Situational Theories:

This theory is more concerned with applied leadership in particular environments as it relates to the situation in the organization and the stakeholders of the organization. Here, leadership focuses on pre-existing conditions as the leader adjusts their leadership style to correspond to their own personal characteristics and the situation at hand (Krumm, 2001). Proponents of this theory are of the belief that for a leader to be effective, they should know how to adapt their innate or learned abilities to the situation.


2.2.3 Behavioral Theories:

Behavioral leadership theory holds that great leaders are made not born. This leadership theory focuses on the actions leaders take and their concern for people and production processes. The theory states that an individual or person can learn the art of leadership through teaching and observations and the success of that leader can be defined in terms of his action (Nahrgang, Morgeson, & Ilies, 2009).


In order to separate leaders from non-leaders, research was done in the 1940s to 1960s and it was discovered that the primary difference between studying leadership behaviours and leadership traits, is that traits are the attributes one possess while behaviors, on the other hand, can be taught and learned and by being taught these behaviors, managers are trained to develop an effective leadership style and in turn, the people under them can be trained to be better leaders (Nahrgang, Morgeson, & Ilies, 2009).


2.2.4 Participative Theories:

Participative leadership theory is of the opinion that an ideal leadership style, is that which welcomes the input and contributions from those who are affected by the decisions being made or are a part of the team and such inputs are accepted and are taken into account. These leaders encourage members of their team to play a role by participating and contributing and this helps team members feel more relevant and useful, which in turn creates employees that are more committed to the decision-making process. It is otherwise referred to as transactional leadership.


Transactional leadership is focused more on the exchanges between leader and follower and it is a theory which promotes compliance with the system. Subordinates are rewarded or punished for either meeting specific objectives or performance criteria or not meeting the required goals (Jung D. I., 2001). The leader provides rewards and positive reinforcement. Transactional leadership is more practical in nature because of its emphasis on meeting specific targets or objectives (Jung D. I., 2001) and an effective transactional leader recognizes and rewards their followers’ accomplishments in a quickly and early.


However, this leadership style can inadvertently stifle creativity as innovation is not encouraged under transactional leadership. Evaluation of subordinates of transactional leaders may be monitored on the basis of predetermined criteria which may lead to weak performances. Successful transactional leaders make fitting moves to curb problems their subordinates may have (Jung D. I., 2001). A transactional leadership style is appropriate in many settings and may be a tried and true method of leadership but it is ultimately not receptive to development.


Relationship Theories:

Relationship theories, also known as transformational theories, focus on the bonds formed between leaders and followers. Transformational leaders are great influencers who inspire and motivate employees by helping them know the importance and the benefits of performing tasks. These leaders are not entirely focused on the performance of the group as a whole, preferring to be more particular about motivating the individuals. Leaders with this style often have high ethical and moral standards.


Transformational leadership can be likened to charismatic or visionary leadership. Transformational leaders are inspirational leaders, who focus on motivating their followers even beyond rewards. Transformational leadership operates especially well in close supervisory relationships, as opposed to distant and impersonal relationships as stated by (Howell & Hall-Merenda, The ties that bind: The impact of leader–member exchange, transformational and transactional leadership, and distance on predicting follower performance., 1999). This close relationship may be typical of a supervisor-supervisee relationship and is also captured in the notion of “first-level leaders” (Priestland & Hanig, 2005), who are thought to be important because they are the first point of contact for supervisees in the chain of command of an organizational setting. A transformational leader aims to expand their followers’ motivations through the communication of the value and importance of the leader’s goals (Howell, 1997; Gardner, Avolio, 1998).




Studies on leadership have been ongoing for a long time, researchers have carried out various studies which are relevant to this paper. One of such studies is one carried out (Namusonge, Koech, & G.S, 2012) on the effects of leadership styles on organizational performance at state-owned corporations in Kenya. The researcher specifically sought to discover the degree to which various leadership styles affected organizational performance at state-owned corporations in Kenya. Research was carried out on the mid-level and senior managers of thirty (30) state-owned corporations based in Mombasa, Kenya was undertaken and it was discovered that there were three leadership styles, transactional; transformational and laissez-faire leadership styles, being used by the surveyed managers. These results were then analyzed to show the relationship between the leadership styles being employed and the degree to which the organizations had achieved their business objectives in the previous financial year. The relationship between the transformational-leadership factors and organizational performance ratings was recorded as high, whereas the relationship between the transactional-leadership behaviours and organizational performance were relatively low. There was no significant correlation between laissez-faire leadership style and organizational performance.


From the study, recommendations about transactional leadership styles were made as managers were advised to get involved in the organization’s affairs and should give maximum attention and guidance to their subordinates; effective reward & recognition systems should be formulated and employed by managers. It was further recommended that managers should inspire subordinates by providing motivation to work and become role models to their subordinates, helping them improve and stimulate efforts to become more innovative; and lastly, for the achievement and growth of the organization, managers should pay greater attention to each of their followers’ needs. The study is similar to the present study as it determined the impact of leadership styles on organizational performance. It, however, differs in that it was carried out in state-owned corporations while the present study is aimed at evaluating the leadership style and performance in an e-commerce industry.


Another study similar to this present one is that of Abasilim (2014) which reviewed organizational performance in a Nigerian work environment and how it relates to transformational leadership.  In the study, existing literature on the subject matter was reviewed and analyzed. The researcher revealed the important role leadership style plays in organizational performance, with particular emphasis to transformational leadership style. This, however, depends on the situation and the environment of the organization. Based on this study, it was implied that the transformational leadership style will be most appropriate for ensuring positive organizational performance in the typical Nigerian work environment.


Consequently, the study recommended that no particular leadership style is the best and that leaders should adopt a leadership style that is suitable for the environment and the situation in order for organizations to perform optimally. It also recommended that organizational leaders should attend leadership conferences and training schools in order to enhance their leadership skills and for the benefit of their organizations. The study is different from the present study as it is only a review of literature while the present study is set to carry out an investigation on the influence of leadership style and performance on employees’ performance and satisfaction in Payporte Nigeria Limited and this will be conducted using questionnaires and conducting interviews.



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