THE EFFECT OF STRATEGIC LEADERSHIP ON ORGANIZATIONAL PERFORMANCE: THE CASE OF BANK OF ABYSSINIA

Abstract

The study has the objective of examining the effects of strategic leadership on the performance of an organization taking the case of Bank of Abyssinia. The study has used the major five aspects of strategic leadership (setting clear vision, translating strategy into action, aligning people with strategy, determining effective interventions points and developing strategic capabilities of the organization) as variables of strategic leadership. The study was conducted as there has not been adequate research works conducted on topic of the study in the financial industry of Ethiopia. The study has employed a quantitative research approach with explanatory research design to achieve the objectives of the study. Both primary and secondary data sources were used to extract relevant data for the study. The study has focused on the head office of Bank of Abyssinia and selected a sample of 319. However, it was about 271 respondents that filled and returned the questionnaire properly. Questionnaire was used to solicit information from respondents. The collected data were analyzed using both descriptive and inferential statistics with the aid of SPSS software. The results of the study indicates that all of the explanatory variables considered in the study have significant positive effect on the performance of the bank. The effect analysis shows that the model summary of the regression analysis has significant explanatory power with r2 and adjusted r2 o .852 and .849 respectively. The ANOVA test result of the study indicates that the model is adequate and fitting in the relationship between the explanatory variables and the dependent variable. Specifically, determining effective interventions points had a highest significant effect while setting clear vision had the least significant effect on the performance the bank. Finally, the study recommends that the bank give focus for all dimensions of strategic leadership to improve the overall organizational performance of the bank.