Assessing the moderating role of organizational culture in the relationship between organizational leadership and organizational efficiency in the banking sector
| DOI | https://doi.org/10.1108/EBHRM-07-2021-0143 |
| Published date | 18 March 2022 |
| Date | 18 March 2022 |
| Pages | 330-346 |
| Subject Matter | HR & organizational behaviour,Global HRM |
| Author | Francisca Omama Koranteng,Faisal Iddris,Gabriel Dwomoh,Courage Simon Kofi Dogbe |
Assessing the moderating role of
organizational culture in the
relationship between
organizational leadership and
organizational efficiency in the
banking sector
Francisca Omama Koranteng
Department of Management Studies, Kumasi Technical University,
Kumasi, Ghana
Faisal Iddris
Department of Management Studies Education,
Akenten Appiah-Menka University of Skills Training and Entrepreneurial
Development, Tanoso-Kumasi, Ghana
Gabriel Dwomoh
Department of Management Studies, Kumasi Technical University,
Kumasi, Ghana, and
Courage Simon Kofi Dogbe
Department of Management Studies Education,
Akenten Appiah-Menka University of Skills Training and Entrepreneurial
Development, Kumasi, Ghana
Abstract
Purpose –This study explored the moderating role of organizational culture in the relationship between
organizational leadership and organizational culture in the banking sector.
Design/methodology/approach –The sample comprised of 331 full-time bank employees in the
Ashanti region of Ghana. The reliability and validity of the data was tested using con firmatory factor
analysis, with structural equation modeling as the main means of analysis, run using Amos (V23) in
the data analysis.
Findings –The study concluded that all four leadership styles (transformational, transactional, servant and
sustainable leadership styles) had a positive effect on banks’efficiency. Organizational culture also had a direct
positive effect on banks’efficiency in Ghana. The study concludes that organizational culture positively
moderated the relationship between organizational leadership and organizational efficiency in the banking
industry. This implies organizational culture strengthens the relationship between organizational leadership
and organizational efficiency in the banking industry.
Research limitations/implications ––A limitation of this study was to consider organizational culture as
a composite variable, instead of considering the effects of the individual dimensions (clan culture, adhocracy
culture, hierarchy culture and market culture). Although using the composite variable was not theoretically
wrong, each of the four dimensions had unique characteristics and may influence organizational outcomes
differently, and should have been considered.
Practical implications –To achieve strategic organizational outcomes, leaders are to comprehend the
various leaderships styles and how they could be transformed to influence organizational outcomes.
Originality/value –Past studies have paid limited attention to the interaction between organizational
leadership and organizational culture, and how this affects organizational efficiency.
Keywords Organizational leadership, Organizational culture, Organizational efficiency, Banking, Ghana
Paper type Research paper
EBHRM
10,3
330
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2049-3983.htm
Received 16 July 2021
Revised 25 November 2021
15 February 2022
Accepted 4 March 2022
Evidence-based HRM: a Global
Forum for Empirical Scholarship
Vol. 10 No. 3, 2022
pp. 330-346
© Emerald Publishing Limited
2049-3983
DOI10.1108/EBHRM-07-2021-0143
1. Introduction
The Ghana’s banking sector has seen some year-on-year increase in profit-after-tax, resulting
from the growth in revenue lines such as commission, interests and fees (Ghana Banking
Survey Report, 2019). The sector currently has 23 commercial banks and has contributed
immensely to the private sector credit growth and enhanced financial intermediation. By
raising deposits from households and institutions, banks can use those funds and turn them
into credit and thereby facilitate new investments, which contribute to further economic
growth. Banks raise deposits from individuals and institutions, turns those funds into credit
facility for investments, thereby contributing to the economic growth of an economy
(Abusharbeh, 2017). The fierce competition in this industry in Ghana, however, makes it
difficult for non-efficient firms to survive. From 2017 to 2019, Ghana’s banking industry has
seen the collapse/license revocation/mergers and acquisition of 16 commercial banks
(Ghanaweb, 2019). This, therefore, makes questions on organizational efficiency in the
banking sector (especially in Ghana) very critical.
Studies have focused on employee turnover (Shaikh et al., 2020), technologies (Mart
ınez
and Noriega, 2020), collaborations (Park et al., 2019), manpower development (Mustapha,
2019), social capital and creativity (S€
ozbilir, 2018) as determinants of organizational
efficiency. From these recent studies, it is evident that organizational efficiency as a concept is
still relevant, especially in a turbulent industry as the Ghana’s banking sector. From existing
literature, however, it is realized that very limited attention has been paid to the concepts of
organizational leadership and organizational culture, although Olanrewaju et al. (2019)
assessed the direct effect of organizational cultural practices on employee efficiency among
commercial banks. This study, therefore, sought to fill this gap by assessing how the
interaction of organizational leadership and organizational culture could enhance
organizational efficiency in the Ghanaian banking sector.
The intense competition within the banking sector of Ghana makes it difficult for
inefficient banks to remain in business. Banks’ability to operate efficiently is, however, a
product of leadership qualities. Leaders are responsible for developing a shared vision,
developing strategic plan and adopting leadership qualities that inspire subordinates to be
committed to the organizational goals. For an effective organization, leadership style should
resonate with organizational culture and employee values (Mekpor and Dartey-Baah, 2020).
Effective coordination between leaders and subordinates is essential for effective and
efficient organization. Leadership is defined as the process of providing direction and
influencing, i.e. a process of social influence (Vidyarthi et al., 2014). Leadership style engaged
by management influences employee commitment toward a particular organization and the
willingness to deliver to expectation. Sethibe and Steyn (2015) indicate that leadership style
influences the creativity and innovative initiatives by employees. Although some past studies
have sought to establish the individual effects of the leadership styles on organizational
output, less attention is paid all four types of organizational leadership style
(transformational, transactional, servant and su stainable), to assess their effects on
organizational efficiency. We fill this research gap by assessing the effects of all four
leadership types on organizational efficiency within the banking sector.
The final contribution of this study hitched on the moderating role of organizational
culture in the leadership–organizational efficiency relationship. Organizational culture is also
considered as the set of shared values, philosophies, attitudes, assumptions, expectations and
norms that bind an organization together (Barney, 1986;Hofstede, 2001). These shared
commonalities are found to influence organizational learning, employee behavior, innovation,
creativity, knowledge management and performance outcomes (Lee et al., 2018;Sihombing
et al., 2018). Paying specific attention to the banking sector of Ghana, this study assessed how
organizational culture can be used as a strategic tool to enhance the relationship between
organizational leadership and organizational efficiency.
The moderating
role of
organizational
culture
331
To continue reading
Request your trial