Determinants of Effective Leadership in Banks: A Case Study of Diamond Trust Bank - Kenya

Abstract

Leadership is described as "a process of social influence in which a person can enlist the aid and support of others in the accomplishment of a common task". For example, some understand a leader simply as somebody whom people follow, or as somebody who guides or directs others, while others define leadership as "organizing a group of people to achieve a common goal”. However, effective leadership refers to systematic approach to improving results through evidence-based decision making, continuous organizational learning, and focus on accountability for performance. Accordingly, effective leaders are considered to be more successful and efficient in performing their duties towards achievement of organizational goals, building collective vision, mission, and set of values that help people focus on their contributions to bring out their best. Furthermore, effective leaders increase productivity, outcomes and also instill a sense of belonging within the entire workforce. In this connection, there are several determinants that influence effectiveness in leadership including, leadership skills, education levels and delegation culture et cetera. These factors also influence how leaders respond to challenges in mobilizing others to do extraordinary things for their organizations and to achieve company’s objectives. There are variety of leadership challenges facing organizations, ranging from lack of skilled manpower, human resource management, competition from peer Organizations, change resistance, adoption of new technology, deployment of capital, balance sheet structuring, customer demands et cetera. In fact, the hallmark of management is characterized by disruption in all spheres. Leaders are tasked to lead their respective teams towards resolving the above challenges and achievement of the overall company’s objectives within prescribed budgets and given timeframe thereby enhancing efficiency, profitability and productivity. However, often, leaders face challenges in achievement of their objectives due to the disruptive environment and the inherent leadership gaps thereof. As a result, leaders make wrong decisions, which end up costing their organizations dearly. This study sought to explore the factors influencing effective leadership in organizations. A case study of Diamond Trust Bank, Kenya was used. The study was guided by three specific objectives namely: to determine the influence of leadership skills on effective leadership in Diamond Trust Bank, to assess the effects of educational background on effective leadership in DTB and to determine the influence of delegation of duties on effective leadership in DTB. Data was collected using questionnaires and face to face interviews. A target population of 800 staff members of DTB was sampled by way of stratified sampling technique to obtain a representative sample. Data was analyzed using chi-square tests, correlations and descriptive statistics using SPSS version 20.

Keywords: leadership skills, educational background, delegation of duties, effective leadership in Banks.