College of Leadership and Governance

Department of Leadership and Governance

The Effect of Leadership Style on Employees’ Commitment: The

Case of Selected Branches of Commercial Bank of Ethiopia, Addis
Ababa, South District.

By:
Lidya Gebewahed Gidey
ID No. ECSU2100629

June, 2024
Addis Ababa, Ethiopia
 The Effect of Leadership Style on Employees’ Commitment: The
Case of Selected Branches of Commercial Bank of Ethiopia, Addis
Ababa, South District.

By:
Lidya Geberewahed

A Thesis Submitted to Ethiopian Civil Service University in Partial

Fulfillment for The Requirements of Master’s Degree in Leadership
and Good Governance.

Advisor:
Seifu Bekuretsion (Dr.)
June, 2024
Addis Ababa, Ethiopia

i
 Declaration

I hereby certify that the thesis, "The effect of leadership style on employee commitment
within the Southern Region branch of the Ethiopian Commercial Bank," which I submitted to
the Ethiopian University of Public Service for credit toward a Master of Science degree in
Leadership and Good Governance, is entirely original with no submissions made elsewhere
for credit toward any other degree or certification. I would want to thank everyone for their
support and encouragement as I worked on my research.

Name of the candidate: Lidya Geberewahed. Date

____________Signature __________

Certificate

I hereby certify that this paper titled “Impact of Leadership Style on Employee Commitment
of Commercial Banks in Southern Region of Ethiopia” was independently written by Lydia
Geberewahed under my guidance and supervision.

ii
Name of Advisor: Seifu Bekuretsion (Dr.)

Signature of Advisor: -----------------------------

Date of Submission: -------------------------------------

Place: Ethiopian Civil Service University

ETHIOPIAN CIVIL SERVICE UNIVERSITY

College of Leadership and Governance
Department Leadership and Good Governance

iii
 Approval of Thesis for Defense

I certify that I have supervised, read and evaluated Lydia Geberewahed's thesis on "Impact of

Leadership Style on Employee Commitment in Southern Regional Branch of Commercial

Bank of Ethiopia" written under my supervision. You are invited to submit a paper for oral

discussion.

Dr. Seifu Bekuretsion ___________ _______________

Advisor’s name Signature Date

_________________________ ____________ _______________

Co – advisor’s name Signature Date

_________________________ ____________ _______________

Name of Department Head Signature Date

Endorsement

This thesis was presented to the Graduate School of Ethiopian Public Service University with
the endorsement of my mentor.
Seifu Bekuretsion (Dr.) _____________________
Advisor Name Signature

Ethiopian Civil Service University

iv
 Acknowledgment

I thank God that He gave me the opportunity and the willpower to finish this
task. Many people have helped to carry out this investigation. Dr. Seifu
Bekuretsion, my supervisor, offered meticulous guidance and unwavering
professional assistance during my research expedition.

First of all, thank you for your advice and recommendations. A heartfelt thank
you to my family and friends for their unwavering support and encouraged my
research with their support and encouragement, guidance, wisdom and valuable
v
research comments at all stages of this research. They supported my growth
with patience and understanding.

We also thank the staff of Southern Ethiopia Commercial Bank for their
readiness to participate and contribute information to this study. I especially
want to thank my colleagues. I want to thank the many people who worked hard
to complete this project. I thank them all.

Table of Contents

Contents Page
Declaration...........................................................................................................................................ii
Certificate............................................................................................................................................iii
Approval of Thesis for Defense..........................................................................................................iv
Endorsement.......................................................................................................................................iv
Acknowledgment.................................................................................................................................v

vi
Table of Contents................................................................................................................................vi
List of Table.........................................................................................................................................ix
List of Figure........................................................................................................................................x
Acronyms.............................................................................................................................................xi
Abstract..............................................................................................................................................xii
CHAPTER ONE....................................................................................................................................1
INTRODUCTION.................................................................................................................................1
1.1 Background of the Study.......................................................................................................1
1.2 Background of Study Area.....................................................................................................2
1.3 Statement of the Problems.....................................................................................................3
1.4 Basic Research Questions......................................................................................................4
1.5 Objectives of the Study..........................................................................................................4
1.5.1 General Objective.................................................................................................................4
1.5.2 Specific Objectives...............................................................................................................4
1.6 Significance of the Study.............................................................................................................4
1.7 Scope of the Study.................................................................................................................5
1.7.1. Geographical Scope.............................................................................................................5
1.7.2. Conceptual scope.................................................................................................................5
1.7.3. Methodological Scope.........................................................................................................5
1.8. Limitation of the Study...............................................................................................................5
1.9. Definitions of Key Terms...........................................................................................................6
1.10. Structure of the Thesis..............................................................................................................6
CHAPTER TWO...................................................................................................................................7
REVIEW OF RELATED LITERATURE.............................................................................................7
2.1 Theoretical Related Literature Review........................................................................................7
2.1.1. The Definition of Leadership Style......................................................................................7
2.1.2 Types of Leadership Style....................................................................................................9
2.1.3 Theories of Leadership.......................................................................................................14
2.1.4 Employee Commitment......................................................................................................17
2.2.1The Relationship between Leadership Style and Employee Commitment...........................17
2.2 Empirical Literatures.................................................................................................................18
2.3 Research Gap.............................................................................................................................21
2.5 Conceptual Framework..............................................................................................................21
CHAPTER THREE.............................................................................................................................23

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RESEARCH METHODOLOGY........................................................................................................23
3.1 Research Design and Approach..............................................................................................23
3.1.1 Research Design................................................................................................................23
3.1.2 Research Approach...........................................................................................................23
3.2 Types and Source of Data.......................................................................................................23
3.2.1 Types of Data....................................................................................................................23
3.3.2. Sources of Data................................................................................................................24
3.4 Sampling Design......................................................................................................................24
3.4.1. Population and Sampling Frame....................................................................................24
3.4.2. Sampling Unit...................................................................................................................25
3.4.3. Sample Size Determination.............................................................................................25
3.4.4. Sampling Techniques and Procedure.............................................................................25
3.5. Data Collection Instruments..................................................................................................26
3.6. Data Validity and Reliability.................................................................................................26
3.6.1Validity...............................................................................................................................26
3.6.2 Reliability..........................................................................................................................26
3.7. Methods of Data Analysis.......................................................................................................27
3.8 Model Specification.................................................................................................................28
3.8.1 Measurement of Variables...............................................................................................28
3.9. Ethical Consideration.............................................................................................................29
CHAPTER FOUR...............................................................................................................................29
RESULT AND DISCUSSION............................................................................................................29
4.1 Response Rate..........................................................................................................................30
4.2 Demographic Information of Respondent.............................................................................30
4.2.1 Gender of the Respondents..............................................................................................30
4.2.2 Age of the Respondents....................................................................................................30
4.2.3 Educational Level of the Respondents.............................................................................31
4.2.4 Position of the Respondents.............................................................................................31
4.2.5 Work Experience of the Respondents.............................................................................32
4.3. Descriptive Analysis................................................................................................................32
4.3.1 Descriptive Statistics for Transformational Style...........................................................32
4.3.2 Descriptive Statistics for Transactional Leadership Style.............................................33
4.3.3 Descriptive Statistics for Laissez-fair Leadership Style.................................................34
4.3.4 Descriptive Statistics for Employee Commitment..........................................................34

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 4.4 Pearson's Correlation Analysis...............................................................................................35
4.5 Checking Assumption of Multiple Linear Regression...............................................................37
4.5.1 Test of Linearity.................................................................................................................37
4.5.2 Test of Normality................................................................................................................38
4.5.3 Test of Multi-co-linearity....................................................................................................38
4.5.4 Test of Auto Correlation.....................................................................................................39
4.6 Goodness of Fit and Analysis of Variance.................................................................................39
4.6.1 Goodness of Fit Test...........................................................................................................39
4.6.2 Analysis of Variance...........................................................................................................40
4.7 Multiple Linear Regression Analysis.........................................................................................40
4.8 Discussion of the Findings.........................................................................................................42
CHAPTER FIVE...............................................................................................................................43
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION..............................43
5.1 Summary of the Major Findings............................................................................................43
5.2 Conclusion................................................................................................................................44
5.3 Recommendation.....................................................................................................................45
5.4 Suggestion for Further Studies.........................................................................................45
References...........................................................................................................................................45
Appendix I: Survey Questionnaire.......................................................................................................52

List of Table

Table 3.1: Employee Count and Sample Proportion……………………………………………..27

Table 3.2: Reliability Statistics……………………..……………………………………………30

Table 4.1; Respondents Categorized by Gender........................................................................................46

Table 4.2: Respondents Categorized by Age Group..................................................................................47

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Table 4.3: Respondents by Educational level.............................................................................................47

Table 4.4; Respondents by Position level...................................................................................................48

Table 4.5: Respondents by work experience level.....................................................................................48

Table 4.6: Descriptive Statistics for Transformational Style......................................................................48

Table 4.7: Descriptive Statistics for Transactional Leadership Style.........................................................49

Table 4.8: Descriptive Statistics for Laissez-fair Leadership Style............................................................50

Table 4.9: Descriptive Statistics for Employee Commitment.....................................................................51

Table 4.10: Pearson's Correlation Coefficient between the Study Variables..............................................52

Table 4.11: Collinearity Statistics............................................................................................................55

Table 4.12: Model Summary......................................................................................................................56

Table 4.13: Analysis of Variance...............................................................................................................57

Table 4.14: Regression Coefficient..........................................................................................................57

List of Figure

Figure 2.1: The conceptual framework…………………………………………………………25

Figure 4.1: Normal p-p plot of Regression Standardized Residual...............................................54

Figure 4.2: Histogram Plot.............................................................................................................55

x
 Acronyms

CBE Ethiopian Commercial Bank

ECSU Ethiopian Civil Service University

EC Employee commitment

HRM Human Resource Management

xi
LS Leadership Style

SPSS Statistical Package for Social Science

SRB Southern Region branch

Abstract
This research analysed about the impact of leadership style on employees commitment: in the
context of Southern Region branch of the Ethiopian Commercial Bank. The objective of this
study was to identify primary leadership styles and assess their impact on employee
commitment. The researcher utilized a combined descriptive and explanatory design with
support from a mixed-methods research approach. From a total permanent employee of the
branch 123 selected randomly employees Participants were selected as the study sample
using a simple random sampling technique to ensure representativeness. The primary data
were gathered from the research participants via structured questionnaire. Descriptive and
inferential statistics, specifically Pearson’s correlation and multiple regressions, were
utilized as the primary methods of data analysis using the Statistical Package for the Social
Sciences (SPSS) for this study. These, then, are the principal findings of the study. According to
the coefficient of determination, the three factors explain 65.70% of the employee commitment,

xii
leaving the remaining 34.30% to be explained by other factors. Leadership philosophies that were
transactional, laissez-faire, and transformative had a significant impact on employee engagement.

The leaders, stakeholders motivate committed employee in order to achieve the

organizational achievement.Governmental and non-governmental organization should
support those types of sectors especially city administration by materials, finance,
accessories, etc. to increase employee commitment.

Key word: Employee commitment, transformational leadership, transactional leadership,

and laissez-faire leadership styles

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 CHAPTER ONE

INTRODUCTION

The research introduction, comprising the study's background, problem description, research
questions, and both general and specific objectives, is covered in this chapter. It also
discusses the significance of the study, its parameters, definitions of key words, and the
general structure of the thesis.

1.1 Background of the Study

In the modern workplace, leaders play a critical role in assisting their subordinates in
achieving organizational goals. Along with your employees, you also need to correctly
manage your company's resources, personnel, and money. In summary, leadership is the
process by which people motivate or influence others to achieve organizational goals
(Kesting et al., 2016). Achieving the goals and objectives of the firm requires developing and
enhancing the self-esteem of its personnel.

Empowering employees is necessary to achieve the best goals by encouraging them to exceed
the goals of the organization. Employee commitment, according to Anitha (2014), is the
degree to which workers have a strong emotional or psychological connection to the
company. Employees are essential to the achievement of business goals, particularly in the
service industry globally and in emerging nations such as Ethiopia. The staff must be
competent, skilled, and Have the ability to achieve the company's goals well. Leadership is
important in determining employee loyalty and maximizing the value of these resources. The
foundation of every successful company is the dedication, hard work and motivation of its
employees. A team member is important to the achievement of an organization's goals
because they rarely leave the company.

If a leader treats their staff with strong leadership, their motivation, productivity, and
performance should all increase. According to Lewis, Lippitt, and White (1939) and Bass &
Stogdill (1990), There exist three primary leadership styles: democratic, authoritarian, and
laissez-faire. Industrialized economies now have mature governments and semi-government
institutions that primarily use democratic leadership practices (Giddens, 2013). The way
people think varies depending on national culture, which leads to differences in management
styles and motivation of employees across the world (Hofstede, 1980). Nonetheless, there

1
hasn't been much focus on analyzing the leadership styles of developing nations' state
structures. For developing nations like Ethiopia, Therefore, leadership values and leadership
selection are very important. Human behavior is important in determining the success of any
business organization, whether public or private. Employee work commitment is largely
driven by the supervisors' leadership styles, which can have a major impact on how well
employees neutralize or embody job-related outcomes and responses from subordinates. The
impact that a supervisor's leadership style has on an employee's dedication is further
investigated in this study. Numerous leadership styles and their impacts on subordinate
motivation have been the focus of decades' worth in the realm of organizational behavior
research. Reviewing the literature, however, reveals that there is a dearth of serious empirical
investigation into the viability and relevance of modern leadership theory specifically,
charismatic and transformational leadership theory with regard to public sector organizations.

Van Wart (2003) further suggests that the amount of leadership research conducted on public
sector organizations is comparatively little compared to that conducted on private sector
companies, and that the research is still lacking in emphasis. Furthermore, it is clear that, as a
result of many limitations, lack of focus, and the economy, the majority of empirical
investigations in the leadership literature focus on results obtained mostly in developed
countries, such as North America, Europe, or Asia, rather than developing countries.
One of the motivating factors for the researcher was the occasional decline in employee
commitment in public organizations. Additionally, some employees voiced grievances, quit,
or experienced employee turnover, particularly in the Ethiopian Commercial Bank's Southern
Region branch. however, we attempted to measure the extent of leadership style on employee
commitment by identifying the most likely style based on evidence, as well as the fashions
that are popular right now at the Ethiopian Commercial Bank's Southern Region branch.

This study similarly used a mixed research approach and an explanatory research design.
Employee commitment was considered a dependent variable, and the research variables—
Leadership philosophies that are authoritarian, democratic, or laissez-faire were categorised
as independent variables.

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1.2 Background of Study Area

Ethiopia's Commercial Bank (CBE),a well-known state financial organization with a long
history of providing financial services, was founded in 1942. A network that includes
customers, branches, deposits, capital, and assets is used to conduct banking transactions. By
2025, this bank aspires to be a worldwide enterprise, leveraging technology to foster
discipline, motivation, and capabilities while maintaining the belief that building public trust
is the cornerstone of our success. Employee loyalty, customer happiness, decision-making,
dedication to training, teamwork, job fulfillment through human action, and public trust are
the values of CBE.

1.3 Statement of the Problems

Organizations compete fiercely with one another in the globalized world to retain employee
commitment. Employees are essential to the operation since their value to the organisation is
essentially intangible and hard to replicate (Meaghan et al., 2002).

According to Abbasi et al. (2000), businesses must thus acknowledge or encourage their
workforce's significant role in the successful attainment of their goals. Although it varies
from company to company, leadership philosophies have a big influence on how committed
staff members are. Bouckenooghe, Zafar, and Raja (2015) state that , a crucial element of
leadership is dedication. According to them, among other things, being a leader involves
having the capacity to inspire others and win their commitment Help their team succeed.
Asrar-ul-Haq and Kuchinke (2016) argued that the commitment of civil servants is important
because the actions of the government and management have a greater impact on society than
the actions of other private organizations.

While laissez-faire, or "hands-off," styles decrease the leader's engagement, autocratic styles
are domineering and democratic leaders rely on communal decision making and active
member involvement. According to Bhatti et al. (2012), independent leaders thrive in small
groups and are supported by an emphasis on inclusive communication. Schwartz (2013)
found that employees in a democratic environment show a high level of compliance, and in a
democratic environment, employees tend to be highly reactive and angry. Bukenog et al
(2015) showed how different evaluation methods affect board effectiveness. Therefore, the
autocratic model appears to be the most effective model in measuring the effectiveness of
leadership, while the democratic model appears to be the most effective model in managing

3
ethical and stable employment. In order to resolve the aforementioned controversy and
address the majority of studies carried out overseas in our nation, the researcher sought To
investigate how each leadership style influences employee commitments after evaluating
each one's degree separately. In addition, the researcher made an effort to close this gap and,
using regression analysis, concluded and recommended the current state of the Ethiopian
Commercial Bank branch in the Southern Region.

1.4 Basic Research Questions

1. Does the Ethiopian Commercial Bank's Southern Region branch's staff dedication
significantly change as a result of transformational leadership?

2. Does the Ethiopian Commercial Bank's Southern Region branch's staff commitment
significantly benefit from a transactional leadership style?

3. Does the Ethiopian Commercial Bank's Southern Region branch's workforce commitment
significantly benefit from a laissez-faire leadership style?

1.5 Objectives of the Study

Based on the above stated problems, the following research objectives were formulated as
follows:

1.5.1 General Objective

The general objective of this research was to assess the effect of leadership style on employee
commitment: in the case of Southern Region branch of the Ethiopian Commercial Bank.

1.5.2 Specific Objectives

The specific objectives of this study were:

1. Examining the impact of a transformative leadership style on staff commitment at the

Ethiopian Commercial Bank's Southern Region branch.

2. To evaluate the impact of a transactional leadership style on staff commitment at the

Ethiopian Commercial Bank's Southern Region branch.

3. To investigate if staff commitment at the Ethiopian Commercial Bank's Southern Region

branch is significantly impacted by the Laissez-Fair leadership style.

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1.6 Significance of the Study
There have been very few studies conducted in Ethiopia to date that aim to assess how staff
members are affected by a leader's style commitment in the Southern Region branch of the
Ethiopian Commercial Bank service provider organization. Because of this, the study's
theoretical significance was to advance the field of evaluating Examine how a leader's
approach influences the overall dedication of a workforce in the service industry and the
Southern Region branch of the Ethiopian Commercial Bank specifically. Furthermore, the
study's conclusions and recommendations for the service provider industry were developed
based on the findings. Additionally, it served as a baseline for future research and a source of
information on this particular subject. Finally this study also requirement for accomplish
masters Master's program focusing on Leadership and Good Governance at Ethiopian Civil
Service University.

1.7 Scope of the Study

The present investigation aims to investigate the relationship between employee dedication
and leadership style, particularly as it relates to the Commercial Bank of Ethiopia (CBE)
Southern Regional Office. Owing to temporal constraints, the analysts mostly focus on a few
areas in Addis Ababa, the southern region's capital.

1.7.1. Geographical Scope

Because of time limitations, the researchers' focus was limited to a few branches in the capital
of the South, with particular focus on the primary, secondary, secondary and quaternary
branches of the CBE in the South Addis Ababa Region.

1.7.2. Conceptual scope

The main objective of this research is to investigate the effects of three distinct leadership
philosophies on employees' commitment: transformational, transactional, and laissez-faire.

1.7.3. Methodological Scope

Utilizing a quantitative research methodology with a descriptive and explanatory design, the
study employed a methodical questionnaire to gather pertinent data. Time constraints, the
ease with which material could be accessed, the sizeable study population, the lack of prior
research on the subject, etc. were the primary factors in the study's scope reduction.

5
1.8. Limitation of the Study

Access issues, analysis software such as SAS and SPSS, gaps in the field's knowledge, and
internet access, among other things, were also present. Additionally, there were restrictions
on the study's scope and sampling strategies. Additionally, the researcher only considers how
three different leadership philosophies affect workers' commitment. Ultimately, the
researcher employed both explanatory and descriptive study designs. For this reason, the
researcher utilized an exploratory and descriptive research methodology, as these designs
have been widely used in this field of study. Rather than looking for new leadership styles,
the researcher focused solely on characteristics that already existed and demonstrated how
leadership style affected employee commitment.

1.9. Definitions of Key Terms

An employee is a person who works for pay in a government or commercial enterprise (Allen
and Meyer, 1990).Commitment: is the employee’s feeling of obligation to stay with the
organization, (Allen and Meyer, 1990).

Employee commitment is defined as both the readiness to stick with a plan and the
unwillingness to stray from it, frequently out of a sense of duty to continue in the same
direction (Vance 2006, p. 4). Laissez-faire Leadership approach: “Abdicates responsibilities
avoid making decisions” is how Similar Luthans (2005) defined the laissez-faire approach.
Leadership is a complex topic. In this instance, it can be characterized as the process by
which a leader conveys concepts, wins over followers to the vision, and inspires them to
support and carry out the ideas through others (Lussier 2013).

1.10. Structure of the Thesis

The thesis organized into five chapters, those were:

The first chapter serves as the study's introduction and covers a number of crucial topics,
including the study's history, description, problem statement, hypothesis, and explanation of
its general and particular objectives. It also clarifies the study's significance, scope,
definitions of important terms, and thesis organization. A conceptual framework, a theoretical
and empirical evaluation, and a review of relevant literature the investigation, is covered in
Chapter 2. In chapter three, the researcher discusses research methodology, which includes an

6
introduction, a research design, a description of variables and measurements, a study
population, The researcher discusses sampling methods, data types and sources, data
gathering and analysis techniques, data presentation, interpretation, and in the final chapters,
a summary, conclusions, further research suggestions, references, and an appendix.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

This chapter is structured as a review of relevant literature that the study took into account.
The first section presents concepts and The text explores theories of employee commitment
and leadership styles, reviews literature, and examines empirical research on how leadership
style influences employee commitment in Ethiopia and globally.

7
2.1 Theoretical Related Literature Review

2.1.1. The Definition of Leadership Style

It may be argued that the number of authors who have attempted to define leadership has
almost equaled the number of those who have attempted to explain it (Stogdill, 1974). The
number of those definitions has expanded since Stogdill first noted this and continues to this
day. And based on all of those definitions, it can be concluded that the characteristics, actions,
influence, interaction styles, roles, and holding of an administrative post have all been used to
characterize leadership (Yukl, 2002). Some of the more representative definitions put forth in
the latter part of the 20th century are displayed in the paragraphs that follow. Yukl draws the
conclusion that, in light of all these definitions, (Yukl, 2002). Leadership, as defined by
Hemphill & Coons (1957), is the act of an individual guiding the actions of a group toward a
common objective. According to Burns (1978), individuals demonstrate leadership when they
utilize many resources such as institutional, political, and psychological ones to stimulate,
involve, and fulfill the desires of their followers.

House et al. (1999), an individual's capacity to inspire, encourage, and facilitate others to
make contributions towards the prosperity and efficiency of the organization is what matters.
Humanistic theories show that adjusting leadership styles is vital for high productivity and
motivation.

Numerous distinct leadership philosophies have been defined by these theories. An

individual's style develops over time and is influenced by a variety of factors, including his
views, values, and preferences as well as the norms and organizational culture that support
certain styles and discourage others. According to leadership theories, the three primary
factors that influence a leader's style of leadership are the situational factors, follower
qualities, and leader traits.

The three elements of leadership depend on one another. A leader's competence, follower
motivation, and the stability of the environment significantly influence leadership outcomes.
In actuality, they decide whether leadership succeeds or fails in any particular circumstance.
As a result, striking and maintaining a balance between the aforementioned elements is the
fundamental responsibility of leadership.

8
In any industry within the cutthroat international commercial marketplaces of today. The
biggest companies in the world, as well as small firms, are greatly impacted by the leadership
styles used. Private sector companies are vulnerable to stagnation, loss of credibility, and
decreased profitability in the absence of effective leadership (Lian & Tui, 2012). Global
public sector leadership faces similar challenges and opportunities, despite structural
differences from private sector leadership (Lian & Tui, 2012). The areas of greatest difference
between leadership in the public and private sectors are typically in how they handle
employee commitment and decision-making involvement. Regardless of the industry or goal
of the company, a leader's style can have a big impact on their team (Lian & Tui, 2012).
Leadership style affects the psychological climate of the workplace and can either positively
or negatively impact productivity and teamwork (Bildstein, Gueldenberg, &Tjitra, 2013).

Leadership is an important aspect of human resources and a widely studied topic in

management. In 1939, psychologists Lewin, Lippitt, and White identified three major
leadership styles: authoritarian, democratic, and laissez-faire. The following sources: Puni et
al., 2014; Meindl, 2013; Asrar-ul-Haq & Kuchinke, 2016; Kesting et al., 2016). Similar to
this, a leader's style controls the interactions, incentives, and sanctions that mold the attitudes,
actions, and behaviors of their subordinates that impact output (Pufi et al., 2014).An
organization's leadership style and the sense of security it offers its staff can have a
significant impact on how effective it is.

As a result, employees may become unkind or resentful, which can increase or decrease
productivity. Moreover, few leadership philosophies, such as transformational and
transactional leadership, are applicable beyond national borders. Chaudhry and Javed (2012)
argue that a laissez-faire management style allows people to develop their full potential
without being hindered by management. This approach encourages cultural change and
encourages employee participation.

2.1.2 Types of Leadership Style

A leader's style, which has diversified with advances in leadership studies, greatly influences
organizational performance and goal achievement. Effective leadership enhances
organizational success, while poor styles harm morale and effectiveness. This significant
impact has inspired extensive research and the development of various leadership theories,
each offering unique approaches, often blending different methods (Hussain& Hassan, 2016).

9
Sheng Victor & Sopar (2005) assert that a leader's immediate family—their subordinates—
have a big influence on their leadership styles. This study explores the connection between
organizational leadership and standards, aimed at enhancing company and family
development. The three main universal leadership philosophies—laissez-faire,
transformational, and transactional—suit different situations, and leaders may switch between
styles as needed. Traits of transformational or transactional leaders are often dictated by their
personalities (Bono & Judge, 2004), but followers' acceptance, willingness, and task
complexity also influence leadership style. Leaders must understand their organizational
context and make informed decisions for success (Alqahtani, 2015). Researchers focused on
five leadership styles' impact on employee job satisfaction. Therefore three types of
leadership style or measurement of leadership, which are discussed as follows:

2.1.2.1 Transformational Leadership Style

But followers' awareness of their leaders, their readiness, and the complexities of the tasks at
hand also influence the leadership philosophies that leaders choose. According to Alkahtani
(2015), leaders must possess the exceptional capacity to ascertain organizational
circumstances, discern unforeseen factors with care, and make sound decisions that propel the
firm towards success. The impact (or determinant of employee work satisfaction) of the
following five leadership philosophies is the main subject of this study.

Consequently, the following three categories of leadership styles or leadership assessment

methods are examined:

It entails guiding team members to perceive things differently and inspiring them to tackle
challenges and opportunities with a fresh outlook. These leaders proactively foster personal,
group, and organizational growth and innovation, going beyond meeting basic expectations.
They encourage striving for higher potential and uphold strong ethical standards.
Transformational leadership complements transactional leadership, fostering unity and shared
purpose among leaders and followers to achieve group goals. This approach emphasizes
teamwork and collective success, transcending individual interests or expected rewards.

The presence of transformative assumptions, standards, and values does not guarantee that
people will achieve their goals and benefits. Pioneers integrate modern people into the
culture by acting as mentors, coaches, role models, and pioneers. Usually not because of
commitment, but rather because we believe it is our own responsibility to help the

10
underutilized people become adapted. Many different actions are directed by disparate
standards, which adapt to external changes in the corporate environment (Bass & Avolio,
1993; Bolden et al., 2003). According to Intellect Instruments Restricted's book
Administration Styles (2009–2011), people who master transformational leadership can
develop into trustworthy trailblazers who inspire their teams with a common goal over the
long haul.

It is leaders themselves, focusing on creating positive changes within the community. They
prioritize building respect, considering ethical implications, articulating a compelling vision
for the future, approaching problems from various perspectives, demonstrating confidence,
and emphasizing the importance of a shared mission. As to Bass and Riggio's (2006)
findings, transformational leaders foster their own leadership abilities while motivating their
subordinates to attain remarkable outcomes. They spend a lot of time communicating, are
very visible, and frequently assign tasks to team members.

According to Sadeghi and Pihie (2012), quality, behavioral, and potential methods were
combined to develop transformative leadership. In agreement with Sadeghi and Pihie (2012),
Northouse (2013) identified some academics who contributed to the development of
transformative leaders.

2.1.2.2 Transactional Leadership Style

Since "transaction" literally means "exchange," the relationship between a leader and their
followers is the focal point of transactional leadership. Transactional leadership, as defined
by Kuhnert and Lewis (1987), is the process through which followers and leaders exchange
desired outcomes in return for the leader's gain and the followers' wishes, which may include
commitments or promises made out of trust and gratitude, Jung (2000–2001) similarly
defines transactional authority as a leader's propensity to see evidence of their subordinates'
needs and desires and to clearly demonstrate ways to provide these needs in exchange for
their work. According to Bass (2000), effective leaders look out for the interests of their
subordinates by providing promises, respect, and contingent incentives to those who show
promise in carrying out their responsibilities to the business or to the leaders. Typically, the
achievement of regular execution fuels the advancement of the devotee (Munaf, 2011). In a
sense, transactional leaders put pressure on followers to follow their wishes in order to
receive rewards and opportunities for promotion. Transactional leadership focuses on
motivating supporters to understand their tasks and goals to achieve performance,

11
emphasizing interactions between leaders and followers, and utilizing rewards and penalties
to complete tasks (Lo, Ramayah, and Min, 2009; Long and Thean, 2011). Authenticity and
bureaucratic power within the company are prerequisites for this leadership style.

A "pure" leadership culture is built on relationships of unwavering dedication in which the

context, discipline, and performance of every duty are all explicitly stated. Priorities are given
to personal interests. Discussions are the foundation of collaboration, not problem resolution
or teamwork. Managers essentially serve as negotiators and service providers, while
employees have little power, accountability, or vision (Bass and Avolio, 1993). Effective
authority involves a "exchange" in which followers of a pioneer receive compensation for
successfully completing certain goals or following instructions (Trohttier et al., 2008; Bass et
al., 2003).

Good gifts and assistance are given by leaders to their following. As a result, business
leadership is seen as pragmatic since it concentrates on reaching particular objectives (James
and Collins, 2008; Sosik and Dinger, 2007). Successful business leaders are quick to
recognize and reward the success of successful people. However, in business culture,
followers are not expected to be creative and are evaluated based on given criteria.
Ineffective business leaders may be less effective in resolving problems before they escalate,
but successful business leaders can respond quickly when necessary (Bass et al., 2003).
Business leader’s exhibit behaviors associated with business excellence and correction; here
rewards continue to represent ways of creating and managing through fashion (frequent and
repeated work), it represents a way to fix. Business leaders create expectations and drive
performance to achieve stated goals. Key highlights such as competitive rewards and
administration by special case are related with execution administration in an
organization.

Comprehensive innovators take into account and beyond these elements (MLQ, n.d.; Bass et
al., 2003; Bolden et al., 2003). When contrasting transformational with transformational
administration, it's important to note that transformative authority can motivate compliance in
a variety of situations and as a strategy, but it can't always motivate risk-taking and
advancement. Differentially, transformative leadership pushes partners to go beyond their
least expectations and presents a good vision. On the other hand, transformational
administration involves an empowering dedication to a task. In this way, transformational
leadership is more likely to spark action than stable authority because it inspires growth via

12
zeal, conviction, and transparency. Conversely, authority stimulates progress by providing
incentives and rewards.

2.1.2.3 Laissez-faire Leadership Style

Passive-avoidant is another meaning of the term laissez-faire (Bass, 1990; Bennett, 2009;
Burns, 1978). The phrase "laissez-faire" is used to characterize a leader who shies away from
serious topics, fails to take action when necessary, postpones making decisions, and fails to
answer pressing inquiries (Sadeghi & Pihie, 2012; Yueh, Chen, Lee, & Barnes, 2010).

The idea of a laissez-faire culture is that people are uncertain and uncontrollable, and trying
to understand them is a waste of time and energy. Therefore, this style reduces people and
production. According to this theory, leaders in the organization try to keep a low profile,
respect all stakeholders in the group, avoid stress, and try to rely on some trusted individuals
to complete the task (Chaudhry and Javed, 2012). Laissez-faire leaders accept the existing
system and work within it without advice or criticism. Goals and objectives are set only when
appropriate and appropriate. The leader gives uncontrolled power to his employees. These
leaders avoid making decisions whenever possible, preferring not to participate in discussions
and participating only when necessary. Laissez-faire managers don't worry about employee
development since they believe that employees can take care of themselves (Wong and
Giessner, 2015). Research conducted in Pakistan's banking sector indicates a negative
correlation between employee performance and a laissez-faire culture (Asrar-ul-Haq and
Kuchinke, 2016).

According to Bennett (2009), a laissez-faire leader is one who shirks accountability, puts off
making decisions, and shows little interest in learning about and meeting the needs of their
followers. There is no relationship or exchange of any kind between leaders and followers,
making this a passive style of leadership. An overall or general incapacity to accept
responsibilities related to supervising is what characterizes this leadership style (Bass, 1999).

Laissez-faire leaders should seek other sources of guidance when making important
decisions (Liphadzi, Aigbavboa, and Thwala, 2015). It also presents a culture of
worthlessness characterized by hasty choices, procrastination, neglect of responsibility and
abuse of power. This can be seen as an unsatisfactory leader who does not tolerate employees
doing a good job. Government avoidance or lack of control is known as laissez-faire
leadership (Thaj and Piccolo, 2004).

13
Bass and Avolio (1994) argue laissez-faire leadership is insufficient and latent, merely an
outward manifestation of leadership. Moreover, it demonstrates a non-value-based leadership
style characterized by snap choices, procrastination, neglect of administrative duties, and
misuse of power. This is seen as an unforgiving leader who does not tolerate their
subordinates' success in the job. The administration's shirking or lack of attention is referred
to as laissez-faire leadership (Judge and Piccolo, 2004).

A laissez-faire leadership style, Bass and Avolio (1994) claim that is merely the external
representation of a genuine leadership style; given the majority of leadership-related
questions, this style is insufficient and latent.

Both transformational and transformational pioneers are characterized by interceding to

fathom issues, indeed utilizing distinctive strategies. When examining these two
administration styles, they are frequently compared to a third authority fashion called
laissez-faire administration (Bass, 1990, cited in Bučiūniene & Škudienė, 2008). James and
Collins (2008) characterize a laissez-faire pioneer as a inactive individual who is
hesitant to compromise the essential opportunities of his supporters and some of the time
disregards their obligations . In reality , need of administration presupposes need of
administration. A culture of keenness can impact the desires of not as it were the
pioneer , but moreover his subordinates and colleagues. Numerous behaviors are related
with a laissez-faire culture, counting pulling back from workers , dodging authority
duties , and overreacting with “do nothing” or “fuck” rather than working. Analysts have
reliably contended that fulfillment is the foremost successful and fulfilling shape of
administration. usually as a result of a decline in followers' respect for the pioneer as well as
a demand for achievement, directness, and group cohesion (Trohttier et al., 2008; Lok and
Crawford, 1999). Therefore, many analysts have decided to reject laissez-faire management
from their theories and instead concentrate on transformative and altered management.
According to the Administration Styles Exercise manual (2009-2011) published by Intellect
Instruments Restricted, he is a proactive pioneer and seasoned group member who sets the
direction and consistently conveys the advantages of a laissez-faire culture. Be that as it
may , in the event that unpracticed workers require clear heading , this approach can be
deplorable . Laissez-faire authority has its put , but it is frequently no way better than
alter and change .

14
2.1.3 Theories of Leadership

The behavior of outstanding people is at the heart of the authority theory. For example, some
acknowledge that Israel would still be in Egypt if it weren't for Moses, and that Britain would
not have triumphed in 1940 if it weren't for Winston Churchill (James and Burgoyne, 2001).
These valiant events improved the human administration theory, which holds that pioneers
are created, not born. According to this theory, certain people possess leadership abilities that
cannot be taught (Parren and Burgoyne, 2001). According to Lussier and Achua (1994),
theories of authority provide light on specific aspects of management and aid in locating,
predicting, and vetting potential authority. The most reason of hypothesis is to apply it in
hone . It is frequently said that great considerations break even with great activities.
Authority can be isolated into four categories: behavioral, behavioral, social, and social.

2.1.3.1. Trait Theory for Leadership

Early days of administration inquire about, it was accepted that pioneers were born, not
made. Analysts have endeavored to recognize particular characteristics or characteristics that
recognize pioneers. The goal of the authority introduction hypothesis has been to identify
specific traits that support effective authority. Analysts took into account both mental and
physical traits including quality, appearance, forcefulness, self-confidence, convincingness,
and control to determine what made a pioneer viable. This list of attributes is anticipated to
be used as a criterion when choosing applicants for positions of power. Supervisor roles are
available to those who fulfill all specified requirements. Wide-ranging research on states of
mind was done in the 1930s and 1940s, and a list of constituents was created. Despite the
widespread knowledge of authoritative attributes, a list of traits that constitute effective
administration has not yet been established (Lussier and Achua, 1994).

2.1.3.2 Behavioral Theory of Leadership

In 1950s, authorities investigate moved from optimism centered on leader characteristics to

the look for superior authority styles over numerous measurements. The focus of analysts
has been on the behavioral differences between successful and unsuccessful pioneers. The
effectiveness of administration execution is the focus of another aspect of the behavioral
approach. Subsequently, behavioral administration aims to depict the character of successful
pioneers' work or identify specific behaviors that they employ. Pioneer behavior is
characterized by the 10 administration parts identified by Mintzberg. Activities explore

15
characteristics that set apart actions that advance our comprehension of authority. A few
researchers have examined the connection between pioneer conduct and adequate
administration metrics. In any event, there isn't a single administration style that works well
for all administrative roles. Positively, authority has improved as a result of the extensive
application of Mintzberg's authority pattern to train people in commerce and human
administration (Lussier and Achua, 1994).

2.1.3.3 Contingency Theory of Leadership

Because they outline recommended practices applied in all workplaces, behavioral and
behavioral theories are referred to as universal theories. The idea that the best culture would
depend on the particular circumstance emerged in the 1960s when it was realized that the
ideal culture was not suited in every circumstance. By taking the leader, followers, and task
into consideration, situational leadership theory aims to define appropriate leadership. In
essence, we examine whether dispositions or actions result in effective leadership under
various conditions. According to Lussier and Achua (1994), contingency theory highlights
the significance of elements like followers, the sort of job, and the surrounding environment.

2.1.3.4 Integrative Theory of Leadership

There was a push for a new theory of charisma in the middle to late 1970s—a cohesive
theory that incorporates previous theories. In order to clarify the connections between
relationships based on leaders, shared leadership theory combines social, behavioral, and
relational theories. Analysts try to understand why a select few people take on the role of
pioneers and are prepared to perform personal penances in order to achieve group and
organizational goals, as well as how pioneers can effectively influence the conduct of their
followers. This hypothesis explains why a leader's actions can typically have an impact on
people and identifies the traits and behaviors that make pioneers feasible.

2.1.3.4 Full Range Leadership Model

The successful leadership model identifies many factors that influence effective leadership,
from negative to transformational leadership. In essence, a culture of change at least leads to
a culture of justice. By considering the concepts of pure transformational and pure
transformational leadership, organizations can develop a culture that combines the two.
Administrators can use two different clocks or different clocks. Recent research shows that
organizational change not only improves user experience and productivity, but also exceeds

16
the expectations of business leaders. The authors argue that management organizations
should prioritize integrating various changes in their culture while maintaining a strong
performance foundation well (Bass and Avolio: Bass et al., 2003). Bass' leadership style is
linked to organizational development and seeks to increase the impact of leaders on employee
engagement, according to Trottier et al. (2008). The significance of Bass's leadership model
for understanding the requirements and function of leaders in contemporary companies is
another point made by these writers. Despite the acceptance and presentation of numerous
theories, leadership in a social context of being effective at work is different from behavior,
such as justice or leadership, which is more focused on rewards and punishments (Bass and
Avolio, 1993, mentioned in Bučiūnienė and Škudienė, 2008).

2.1.4 Employee Commitment

Employee commitment is an employee's sense of obligation and willingness to remain with

an organization, as defined by Allen and Meyer (1990). This concept is flexible and open to
interpretations, such as Vance's (2006) view, which includes both a willingness to continue a
chosen course and reluctance to change plans due to a sense of obligation. Akanbi and Itiola
(2013) describe employee engagement as the extent to which employees feel a sense of
belonging and are motivated to contribute to the organization's goals. Mensah, Akuoko, and
Ellis (2016) add that it measures how well an employee identifies with and is satisfied with
their job. Allen and Meyer (1996) state that commitment stems from a psychological
attachment to the organization, reducing changes that might occur otherwise. They later
(1997) define commitment as a psychological state related to people, management, work, and
the company, categorizing it into three types: positive commitment, continuance
commitment, and affective commitment. Ibrahim and Perez (2014) highlight the emotional
bond between employees and the organization, which motivates their dedication to achieving
organizational goals.

2.2.1The Relationship between Leadership Style and Employee

Commitment

Research interest in the relationship between employee engagement and leadership is

inconclusive. Most studies have produced mixed results. For example, Yachoochi (2009)
stated in his research that Lebanese culture is considered more revolutionary than
revolutionary culture and that both cultures have social and influence on contract workers.
Leadership practices vary from organization to organization but have a significant impact on
employee engagement. Bukenog, Zafar, and Raja (2015) believe that the most important
aspect of leadership is commitment. They believe that one of the many characteristics of

17
leadership is the ability to inspire others to contribute to the success and performance of their
organization. Asrar-ul-Haq and Kuchinke (2016) argue that the motivation and commitment
of public sector employees is important because the performance and management of the
government has more impact on society than other private companies. Touré-Tillery and
Fishbach (2014) distinguish between process-oriented motivation (which includes the content
of goal pursuit) and outcome motivation (which focuses on goal achievement). This
difference is used to measure commitment. According to Schwartz (2013), while employees
in democratic companies are obedient, employees in independent companies show anger and
resentment. According to Bouckenooghe et al. (2015), a group leader's efficacy depends on
the standard being applied to evaluate their leadership. Thus, authoritarian leadership is most
effective when evaluated in terms of output; whereas, democratic leadership is best when
evaluated in terms of upholding a consistent level of work and positive morale.

2.2 Empirical Literatures

The study found that there was no significant difference between the transformational and
transactional leadership styles of male and female respondents. However, there are significant
differences between Muslim and Christian communities. The Christian workforce, due to its
“collectivist culture and family ties,” viewed its leaders as transformational rather than
transactional. This suggests that a variety of elements, including environment, culture, and
religion, could explain why a specific leadership style is adopted and used to inspire loyalty
from workers. Understanding these elements will improve one's comprehension of how
management techniques and leadership philosophies influence workers' organizational
commitment in a given setting.

In their research, Raja and Palanichamy (2011) We found that when transformational
leadership is used, employees are more committed to the company than when using
traditional leadership. It is found that, while respondents' positional identities significantly
influenced how their leadership style was seen by subordinates and how committed they were
to their work, salaries did not appear to differ across the selected respondents. The study
found that remuneration, which can be viewed as a type of financial incentive, accounts for
employees' preference for a particular leadership style as well as their commitment to the
company. Employees' perceptions of others also play a role in their desire for a particular
leadership style. The findings support the view that employee commitment to a company may
not always be linked to external incentives.

18
In contrast to transactional leadership, school principals embraced transformational
leadership, according to Cemaloglu, Sezgin, and Kilinc (2012), who also observed that
teachers place a higher value on financial gain than personal fulfillment, with their
continuance commitment levels being higher than affective and normative commitment. The
research also showed that the community critiques teachers encountered were the cause of
their low affective and normative commitment. Research shows that there is a negative
relationship between teachers' motivation and administrators' change and change leadership.
In contrast, principals' leadership styles of laissez-faire and mismanagement have been
associated with teachers' motivation. Teachers' motivation is not driven by extrinsic
motivation, suggesting that leadership may not influence employee engagement. A 2013
study of South African nonprofits by Garg and Ramjee found a weak but significant
relationship between organizational change and employee engagement. The likes,
applications and commitments continue. Laissez-faire culture has little impact on liking and
commitment, while leadership is more related to commitment. Elements of transformational
leadership, such as encouraging a shared vision, encouraging creativity, and recognizing
accomplishments, make employees feel more stressed. Business leadership involves setting
clear goals, recognizing achievements, and ensuring compliance and corrective actions that
can influence people's actions as needed. Laissez-faire leadership, characterized by inaction
when problems arise, can have a negative impact on motivation. Research shows that
leadership (transitional, flexible, and laissez-faire) affects employees differently in terms of
commitment (positive, ongoing, and positive commitment).

Similarly, Wiza and Hlanganipai's (2014) investigations demonstrated that employees'

commitment is influenced by leadership styles, and acknowledging this by the organization's
leaders will guarantee the intended results. The study supported the idea that when workers
felt that the organization had a good leadership style, it would be easier for them to relate to
it. Their study found transactional leadership positively related to employees' normative
commitment, while transformational leadership positively influenced affective and
continuance commitment.

In their research, Ahmad, Majid, and Zin (2015) found that academic staff at public tertiary
institutions require development of an efficient leadership structure from the administration.
The results show that when this is implemented, employee commitment will increase and the
organization's employee turnover rate will decrease. According to Dariush et al. (2016),
research indicates that while laissez-faire leadership has a detrimental impact on employees'
19
commitment, transformational and transactional leadership styles of managers have a major
beneficial impact on the same. The results suggest that different leadership philosophies
would have different kinds of relationships with workers' commitment. Positive or negative
relationships are possible.

Furthermore, a 2017 study by Dahi, Mohamed, and Mohamed discovered a positive

relationship between transformational and transactional leadership philosophies and worker
commitment. Similar findings were obtained in a previous investigation.

Mulugeta and Hailemariam (2018) found transformational leadership more prevalent in their
organization compared to transactional and laissez-faire styles. Besides leadership
philosophies, other factors also influenced employee loyalty. Similarly, Gcaza, Garande, and
Echezona (2018) discovered that organizational culture and transformational leadership had a
greater influence on employee commitment than transactional leadership. The relationship
between leadership style and employee commitment in Nigeria has not been extensively
studied, although research by Fasola et al. (2013), Abasilim et al. (2018a, 2018b), and others
indicates that interest in these areas is developing. Othman et al. (2013) found a positive
correlation between employee commitment and both transformational and transactional
leadership styles.

An important addition to the body of empirical research on the impact of leadership styles on
worker performance in India's public and commercial sectors was Raja's (2015) study. Out of
the 199 respondents in the sample, 43 middle level managers and 156 subordinates provided
the analytical result. The study found a negative correlation, with a 95 percent confidence
interval, between employee performance and a laissez-faire approach. Furthermore, he said
that workers under the direction of laissez-faire leaders perform poorly and their companies
fail to achieve their goals.

Ipas (2012) carried out a second study in the hotel business titled "The Influence of
Leadership Styles on Performance of Employees." According to the analysis's findings,
managers most commonly adopt an authoritarian style, which improves worker performance.
According to the survey, employees favored an autocratic leadership style since it enabled
them to obtain the desired results. Additionally, the study advised managers to adopt an
authoritarian style in order to improve worker performance and fulfill organizational
standards.

20
Sakiru et al. (2013) studied the relationship between leadership style, emotional intelligence,
and employee performance among 180 respondents in Malaysia. Using ECP, Parastatal
Performance Appraisal Method, and the Multi-Factor Leadership Questionnaire, they found a
significant correlation between employee performance, emotional intelligence, and leadership
style. Similarly, Ojokuku et al. (2012) examined 60 employees from 20 banks in Ibadan,
Nigeria, finding that leadership style accounted for nearly 23% of the variation in
organizational performance. They recommended bank executives adopt transformational and
democratic leadership approaches to succeed.

2.3 Research Gap

There are few research conducted with related to this topic in the world as well as in our
country, Ethiopia as discussed above. The reviewed above those research show that the effect
of leadership style on employee commitment in production sector.

In addition to this the aim of the researcher was after identifying the exercised leadership
style and measure their effect on employee commitment, in the case of Southern Region
branch of the Ethiopian Commercial Bank. More over the previous study not included all the
target population (taking samples from selected public sectors), the research design by the
previous study was descriptive, research design, but in order to study the case and effect
relationship explanatory or casual research design more convent for this study, and also
objectives of the previews and this study was different. Due to such evidence the researcher
motivate to this research on the effect of leadership style on employee commitment, in the
case of Southern Region branch of the Ethiopian Commercial Bank.

2.5 Conceptual Framework

This study investigates the perceived relationship between leadership style and employee
commitment in Southern regional branches of Ethiopian commercial banks. Citing Ojokuku
et al (2012), it was highlighted that leadership style has a significant impact on organizational
performance and explains more than 23% of the variance in employee performance. This
study suggests utilizing both transformational and democratic leadership to remain
competitive in the banking industry.

21
 Independent variables Dependent variable

Transformational Leadership
Lea

Style
styl
der
shi
p

Employee Commitment
Transactional Leadership Style

Laissez-faire Leadership Style

Source: Lewin, Lippitt and White (1939) and based on above literature review, (2024)

Figure 2.1: The conceptual framework of the study

22
 CHAPTER THREE

RESEARCH METHODOLOGY
The researcher covered the following topics in this section: model specification, data validity,
reliability, sampling design, data collection tool, research design, methodology, categories of
data, and ethical considerations.

3.1 Research Design and Approach

3.1.1 Research Design

According to Creswell (2009), a research design is a plan for a study and technique that
covers the choice between general assumptions and specific or precise means of gathering
data.It serves as a guide for carrying out business research projects, including the specific
steps required to gather the data required to formulate or address research questions.

This study used a descriptive and explanatory design to examine how leadership styles
influence employee engagement.

3.1.2 Research Approach

A mixed research approach was utilized in the study's execution. According to Creswell
(2003), in order for the final data to be provided with both quantitative and qualitative
information, the data collecting process entails obtaining numerical or quantitative
information through surveys, document evaluations, as well as text material from interviews.
The researcher used mixed methods to study the impact of various leadership philosophies on
employee commitment at the Southern Regional Branch of the Commercial Bank of Ethiopia,
due to the qualitative and quantitative data collected.

3.2 Types and Source of Data

3.2.1 Types of Data

Primary data is defined by (Ehsan & Qureshi, 2019) as materials that one has independently
obtained through systematic observation, information archives, and the outcomes of
questionnaires one has constructed. The utilization of original data was warranted since the

23
study aim was addressed by the data obtained in the present, and no prior data was accessible
for analysis of this research purpose.

3.3.2. Sources of Data

Primary data were used in the investigation. The primary data would be collected by closed-
and open-ended questionnaires from a subset of respondents (permanent employees).

3.4 Sampling Design

3.4.1. Population and Sampling Frame

A target population is described as a particular group for the purpose of gathering data and
information by Raziq & Maulabakhsh (2015). The Bank of Ethiopia Business (CBE) branch
in Addis Ababa is divided into four zones: Northern Zone, Eastern Zone, Southern Zone and
Western Zone. According to HR data, the total workforce of CBE in Addis Ababa is 15,720
(HR report, January, 2024). This study focuses on the southern region of Addis Ababa.
Regionally, eight sites in the Sarris region were selected taking into account time availability,
financial constraints and population size. These are branches I, II, III and IV. They are
divided into groups. The researchers obtained data from the human resources department of
an Ethiopian commercial bank and selected five branches in the Saris region. A total of 177
employees from this branch were selected for the study. The distribution pattern for each
industry is shown in Table 3.1 below.

Table 3.1: Employee Count and Sample Proportion

N Total Grade Sample proportion

O Branch name Employees classification
1 Kadisco 33 Grade III 33/177*123=22.9322
2 Adey Abeba 35 Grade IV 35/177*123=24.3220
3 Saris Adis Sefer 26 Grade III 26/177*123=18.0677
4 Nifas Silk(Special 55 Grade IV 55/177*123=38.2203
Branch)
5 Gotera Masalecha 28 Grade III 28/177*123=19.45762
Total Number of employees 177 123

Participants were selected based on specific criteria related to teamwork and required at least
one year of experience as a current manager to be included in the sample. The distribution of
respondents was divided into main departments and branch employees at levels 1, 2, 3, and 4,
and the southern region of Addis Ababa was selected as the research target using the
convenience sampling method, a non-probability method focusing on satisfaction of needs.
This approach was chosen to focus only on the southern regional branch to the exclusion of

24
other branches, including the management and overall commitment of staff involved in
executing the project.

3.4.2. Sampling Unit

It is object that is actually sampled. So in this the samplings units were both employees taken
as sampling unit.

3.4.3. Sample Size Determination

The following sample size determination formula was created by Yemane (1967) and was
used to determine the overall representative sample sizes for this investigation.

The total numbers of employees were large so they need to take sufficient numbers
respondents based on scientific sample size determination formula developed by Yemane
formula at 95% confidence interval precision as follows:

Where, n= is the sample size,

N= is the population size, and

e=is the level of precision or sampling error= (0.05); then

= =122.70 123

Therefore the total numbers of samples included were 123 permanent employees.

3.4.4. Sampling Techniques and Procedure

The sampling technique used for this research was simple random sampling technique for
selecting individual employees from a list of 177 permanent. The reasons for used this
technique was list of employees already taken from the data base of this office and the
population were finite population, so we can select randomly 123 out of the total 177
permanent registered at southern region of Addis Ababa.

25
3.5. Data Collection Instruments
According to (Cherinet, 2020),The main data are created by the researcher specifically to
tackle the issue under consideration. Primary data, which are the most important, were
acquired via structured questionnaires, despite the fact that acquiring them can be costly and
time-consuming.
The primary source of information used by the researcher was primary data. The researcher
was interested in gathering first-hand information from a population and assessing employee
commitment because the individual was the unit of study. It was decided that a survey would
be the best design to meet the goals of the study.

A questionnaire is important to generate rich data from employees. The researcher to

collection used techniques primary data collection technique. Primary data were collected
from the employees. In order to minimize misunderstandings and doubts among respondents,
the questionnaires were constructed using straightforward English language.

3.6. Data Validity and Reliability

3.6.1Validity

The study employed credible sources, including recently released books and articles by well
regarded authors on the factors influencing employee commitment, to ensure the validity of
the findings. From the questionnaire's design to the results' interpretation, a number of
procedures were used to guarantee that the data were free of significant errors. The
questionnaire was distributed by the researcher to many specialists, who then evaluated it.

3.6.2 Reliability

According to Merlinejessy (2018), dependability primarily deals with measure consistency-

related problems. As per Maneye (2019), a score beyond 0.7 indicates more reliability,
whereas a value below 0.3 indicates worse reliability. The reliability of the source data is
crucial because the study mostly depends on the opinions of the respondents. In order to
guarantee that respondents comprehend the purpose of each question and to increase the
likelihood of a consistent response, research instruments are constructed with a focus on
simplicity and clarity in language.

26
Cronbach's alpha was computed for each variable in the study using SPSS to evaluate the
validity of the employed questionnaire. A minimum of 70% for Cronbach's alpha is
recommended by Walsh (1995). As a result, the response's dependability could be
guaranteed. (Clifton, 2020) states that although overall reliability tastes results show excellent
internal consistency, measures with low reliability results may occasionally still have an
impact on the scale measure.

Table 3.2: Reliability Statistics

Variables Cronbach's Alpha No. of Items

Employee commitment 0.856 5
Transformational leadership styles 0.802 4
Transactional leadership style 0.826 4
Laissez-faire leadership style 0.916 4
Source: Survey Data, 2024

The reliability of the data was accepted by this criterion since, as Table 3.2 above illustrates,
the Cronbach's Alpha value is higher than the minimum acceptance value of 70%.

3.7. Methods of Data Analysis

The researcher employed both descriptive and inferential statistics to an analyzed the
collected data. Alem et al. (2016) state that inferential statistics makes it possible to deduce
from data analysis the relationship between two or more variables as well as the ways in
which a number of independent variables may be able to explain variance in a dependent
variable. To ascertain the link between the variables, the researcher employed inferential
analysis techniques including regression and correlation. Consequently, drawing conclusions
or estimates about a population from data from the sample is the goal of inferential statistics.

Descriptive statistics provide an accurate description of the data, calculating the target
population without drawing any conclusions. It also covers the processes and strategies for
compiling vast amounts of numerical data into a form that is understandable by applying
different statistical approaches like percentages and frequencies to characterize the
information gathered.

The goal of data analysis is to organize, summarize, and interpret the results while searching
for patterns and using statistical approaches to decrease a big amount of accumulated data to
a manageable size (Sebikari, 2019). In order to compile and analyze the information gathered

27
from the respondents, the Statistical Package for Social Sciences (SPSS) version 26 was used
to code and record the data into the computer for analysis.

3.8 Model Specification

A technique for estimating or forecasting the value of a dependent variable given the values
of one or more independent variables is called linear regression. Multiple regressions were
used in this investigation using M. According to Sun et al. (2016), this technique also
considers the relationships between the predictor scores. many regression analysis was
incorporated, whereby many predictors are jointly regressed against the criterion variable. To
ascertain whether the independent factors account for the variance in the dependent variable,
this method is employed. Using methods for fitting a linear equation to observed data, it
describes how two or more explanatory (independent) factors and the response (dependent)
relate in a straight line.
The general multiple liner regression models for this study were:

EC= β0+ β1Transf. + β2Transa + β3LLS +εi

Where:

EP= Employee commitment

Transf. = Transformational Leadership Style, Transa. =Transactional Leadership Style and

LLS= Laissez-Faire Leadership Style

3.8.1 Measurement of Variables

Dependent or response variable: is a variable which depends on other variable or estimated

by other variables. Since the dependent variables used for this study was employee
commitment. The variables that are used to estimate the dependent variable, employee
commitment, are known as independent or explanatory variables. The independent variables
in this study were three different leadership philosophies: transactional, laissez-faire, and
transformational. The researcher examined each strategy using a Likert scale with five
answer categories: strongly disagree, disagree, neither agree nor disagree, agree, and highly
agree. The Likert scale approach was used to raise response rates by creating engaging
questions and encouraging participation (Manedo, 2019). Each variable is measured using the
audit manual and a few list questions.

28
3.9. Ethical Consideration

By building a strong rapport through the introduction and outlining the goals of the study as
well as the advantages the respondents will receive from it, the researcher can gain the
respondents' desire to participate in the research process. Additionally, the researcher uses the
coding approach to omit any name, address, or identification number in order to maintain
anonymity and prevent reluctance or irritation by fully explaining why their identities are not
written on the questionnaire. The district granted ethical clearance, and permission and
assistance were requested for the data gathering. Additionally, no information was altered or
modified, and all data collected from the respondents was handled with confidentially, with
no information revealing the respondents' identities.

CHAPTER FOUR

RESULT AND DISCUSSION

This section delves into the researcher's primary conclusions after presenting, analyzing, and
interpreting data gathered from Southern Region branch employees of Ethiopian Commercial
Bank to investigate the impact of leadership style on employees' commitment. Whenever
possible, study objectives and pertinent literature constitute the basis for discussion and
interpretations. The general methods of approach were given according to the respondents'
demographic data in order.

29
4.1 Response Rate

Kwon et al. (2010) state that there is no discernible impact on the research's overall
conclusions if a questionnaire has a response rate of 60% or above that is promptly completed
and returned. The study received 123 complete responses from employees in less than a
week, or 100.00% of the total. Since more than 60% of the completed and returned
questionnaires for this study were completed, the remaining incomplete and non-returned
questionnaires had no bearing on the study's final conclusions.

4.2 Demographic Information of Respondent

The demographic data, which included the respondents' gender, age group, educational
attainment, position, and experience, was used to properly understand their characteristics
and background knowledge before moving on to the more fundamental goals. The
respondents' personal information is displayed in the following table.

4.2.1 Gender of the Respondents

This survey was evenly divided between male and female respondents, but men accounted for
the majority at 52.8%. This difference may be due to the fact that some women are on
vacation. Therefore, the findings can be considered representative of both genders and reflect
a commitment to gender equality within the Southside CBE branch organization.

Table 4.1: Respondents Categorized by Gender

Gender category Respondents by Percentage Respondents by Number

Female 47.1 58
Male 52.8 65
Source: Fields Survey, 2024

4.2.2 Age of the Respondents

The following table shows that 18.6% of respondents are in the 40–60 age range, and 81.3%
are in the 20–39 age range.This indicates that youthful or middle-aged people make up the
bulk of responders. This population's age distribution is comparable to Ethiopia's labor

30
force's. Thus, by presenting its employees across the nation, it highlights the financial
institution's creative and brilliant qualities.

Table 4.2: Respondents Categorized by Age Group

Age Category Distribution of Respondents by Respondents by

Age Percentage Number
20-39 81.3 100
40-60 18.6 23
Above 61 0 0
Total 100.0% 123
Source: Fields Survey, 2024

4.2.3 Educational Level of the Respondents

Considering the educational level of the participants, it is clear that most have at least a
bachelor's degree. As can be seen in Table 4.2, more than two-thirds of the survey
participants were undergraduate graduates and one-third were college graduates.

Table 4.3: Respondents by Educational level

Educational level Percentage Distribution of Number of Respondents by

Respondents by Educational Educational Level
Level
Bachelor’s degree 73.1 90
Masters’ degree and above 26.8 33
total 100 % 123
Source: Fields Survey, 2024

4.2.4 Position of the Respondents

Among the respondents, Customer service officer position is more than half percent. And
also in the manager position there were 5(4%) employee. In the middle level manager
position there were 26.8% employees. In the clerk position there are 5(4%) employee. Thus,
we can deduce that there are enough window officers so as to serve customers properly
without any customer. So, it may show as that the bank has there is potential labor force.

Table 4.4; Respondents by Position level

Position level Respondents by position Respondents by position

level (%) level in figure
Clerk 4.0 5
Customer service officer 65.0 80
Middle level manager 26.8 33
Manager 4.0 5
Total 100.0 123
31
Source: Fields Survey, 2024

4.2.5 Work Experience of the Respondents

The respondents' employment experience is shown in the table below. The respondents' job
experience ranged from 1 to 5, 6 to 10, 11 to 15, and more than 15 years for 70 (56.9%), 45
(36.5%), 5 (4%), and 3 (2.4%). This indicates that the majority of respondents had experience
ranging from one to five years, while the least number had experience beyond fifteen years.

Table 4.5: Respondents by work experience level

Work experience Respondents by work Respondents by work

experience level (%) experience level in figure
1-5 56.9 70
6-10 36.5 45
11-15 4.0 5
More than 15 2.4 3
Total 100 123
Source: Fields Survey, 2024

4.3. Descriptive Analysis

The information gathered from the respondents via a frequencies table was described using
descriptive statistics. Strongly disagree (SA), agree (A), disagree (SD), agree (D), and neutral
(N) are the ranges of the Likert scale.

4.3.1 Descriptive Statistics for Transformational Style

Table 4.6: Descriptive Statistics for Transformational Style

Item descriptions SD D N A SA Total Mean Std.

Deviation
The manager actively n 0 0 8 0 115 123 4.87 0.4932
seeks diverse
% 0 0 0.07 0 0.93 100
viewpoints when
addressing problems.
The manager talks n 0 0 0 3 120 123 4.98 0.1543
optimistically about % 0 0 0 0.02 0.98 100

32
 the future.
The manager's actions n 0 0 0 9 114 123 4.93 0.5467
consistently earn my
% 0 0 0 0.07 0.93 100
respect.
The manager fills me n 0 9 0 25 89 123 4.58 0.8264
with pride to be % 0 0.07 0 0.2 0.72 100
associated with them.
Overall average n 0 2.25 2 9.25 109.5 123 4.84 0.505115
% 0 0.0175 0.0175 0.075 0.89 100
Source: Sample Survey, 2024

SD= Strongly Disagree, D= Disagree, N= Neutral, A= Agree, SA= Strongly Agree,

n= frequency, %= Percentage

The overall score for transformational leadership was 4.84, indicating that this leadership
style typically has an above average overall score. This suggests that a cultural change is
needed in the CBE Western Division.

4.3.2 Descriptive Statistics for Transactional Leadership Style

Table 4.7: Descriptive Statistics for Transactional Leadership Style

Item descriptions SD D N A SA Total Mean Std.

Deviation
The manager offers support n 0 0 3 103 17 123 4.11 0.38279
in return for my % 0 0 0.02 0.84 0.14 100
contributions.
The manager reassesses n 0 0 6 102 15 123 4.07 0.5669
fundamental assumptions % 0 0 0.05 0.83 0.12 100
to determine their validity.
The manager waits until n 0 4 40 59 20 123 3.77 0.74938
issues arise before % 0 0.03 0.33 0.48 0.16 100
intervening or taking
action.
The manager ensures n 0 0 0 9 114 123 4.93 0.26044
clarity regarding the
rewards or recognition
employees can expect upon % 0 0 0 0.07 0.93 100
achieving performance
goals.
Overall average n 0 1 12.25 68.25 41.5 123 4.22 0.489877
% 0 0.00 0.1 0.555 0.337 100
75 5
Source: Sample Survey, 2024

SD= Strongly Disagree, D= Disagree, N= Neutral, A= Agree, SA= Strongly Agree

N= frequency, %= Percentage

33
The overall leadership score of 4.22 indicates that participants were able to form their own
opinions about this leadership. They understand cultural change.

4.3.3 Descriptive Statistics for Laissez-fair Leadership Style

Table 4.8: Descriptive Statistics for Laissez-fair Leadership Style

Item descriptions SD D N A SA Total Mean Std.

Deviation
The manager avoids getting n 70 41 12 0 0 123 1.53 0.6682
involved when important % 0.5 0.33 0.1 0 0 100
issues arise
7
The manager fails to interfere n 15 77 31 0 0 123 2.13 0.5999
until problems become % 0.1 0.63 0.2 0 0 100
serious. 2 5
The manager Shows that n 10 96 17 0 0 123 2.06 0.4669
he/she is a firm believer in “If % 0.0 0.78 0.1 0 0 100
it isn't broke, don’t fix it.”
8 4
The manager delays n 17 83 23 0 0 123 2.05 0.5705
responding to urgent
questions. % 0.1 0.67 0.1 0 0 100
4 9
Overall average n 28 74.2 20. 0 0 123 1.94 0.57
7
% 0.2 0.60 0.1 0 0 100
5
Source: Sample Survey 2020
SD= Strongly Disagree, D= Disagree, N= Neutral, A= Agree, SA= Strongly Agree
n= frequency, %= Percentage

The above table appears shows about for the recurrence, scale, and standard deviation of the
unwavering quality things or questions. The cruel speaks to the normal of member reactions,
and the standard deviation measures the deviation from the cruel. The by and large
unwavering quality score was 3.73. Regarding frequency, over half of the respondents
selected 'agree' (38.5%) and 'disagree' (30.6%) across all aspects of belief, while the majority
of respondents were 'neutral' (14.3%). I too chose this choice. ‘Disagree’ (6.1%), ‘Disagree’
(10.4%). These comes about demonstrate that the lion's share of respondents have great
certainty , near to 'agree', with an normal score of 3.73 or higher.

4.3.4 Descriptive Statistics for Employee Commitment

Table 4.9: Descriptive Statistics for Employee Commitment

Items descriptions S D N A SA Tota Mea Std.

D l n Dev.
I am comfortable with my n 0 0 0 20 103 123 4.84 0.369

34
 supervisors leadership style % 0 0 0 0.16 0.84 100
Commitment provides prospects n 0 0 8 38 77 123 4.56 0.6135
for personal growth and % 0 0 0.07 0.31 0.63 100
development
Commitment place employees in n 0 0 0 62 61 123 4.5 0.4999
job that fit their skills % 0 0 0 0.5 0.5 100
Employees with high n 0 1 3 7 112 123 4.87 0.4589
organizational commitment % 0 0.01 0.02 0.06 0.91 100
feelings affect organizational
effectiveness in positive.
In higher employee commitment n 0 0 0 10 113 123 4.92 0.2732
is related to lower levels of staff
% 0 0 0 0.08 0.92 100
turnover, absenteeism and
tardiness.
Overall average n 0 0.2 2.2 27.4 93.2 123 3.77 0.4
% 0 0.00 0.01 0.22 0.76 100 0.4429
2 8 2
Source: Sample Survey 2020
SD= Strongly Disagree, D= Disagree, N= Neutral, A= Agree, SA= Strongly Agree
n= frequency, %= Percentage

From the above table 4.9, results it can be understand that employee commitment was
significant for employees. The employees had positive commitment. As long as employee
commitment derived from the inherent satisfaction and enjoyment and linked to self-activity.
When people are intrinsically motivated they participate in the activity. So employee of CBE
staffs was committed for their jobs.

4.4 Pearson's Correlation Analysis

A correlation coefficient, which ranges from -1 to 1, indicates how strongly two variables are
related. According to Cohen and West (2003), a link is ideal when the value is ±1, while
weaker relationships are indicated by values that are closer to zero. This relationship is
quantified by the Pearson Correlation Coefficient, where positive values denote a direct
association and negative values, an inverse relationship (Ruud et al., 2012). The correlation
coefficients between the independent variables (transformational, transactional, and laissez-
faire leadership styles) and the dependent variable (employee commitment) are shown in the
table below.

35
Table 4.10: Pearson's Correlation Coefficient between the Study Variables

Transactional laissez fair-

Employee Transformational Leadership leadership
Commitment Leadership Style Style style
** **
Pearson 1 .636 .525 .502**
al Leadership Commitment

Correlation
Transformation Employee

Sig. (2- .000 .000 .000

tailed)
N 123 123 123
**
Pearson 1 .505 .060
Correlation
Sig. (2- .000 .509
tailed)
Style

N 123 123
Pearson 1 .114
Transactional

Correlation
leadership style Leadership

Sig. (2- .208

tailed)
Style

N 123
Pearson 1
Correlation
laissez fair-

Sig. (2-
tailed)
N
**. Correlation is significant at the 0.01 level (2-tailed).
Source: Sample Survey, 2024
The correlation coefficient shows how strongly the variables are correlated: In terms of
correlation, 0.1 and 0.20 indicate a slight or small correlation, 0.20 and 0.40 indicate a low
correlation or weak relationship, 0.40 and 0.70 indicate a moderate correlation, 0.70 and 0.90
indicate a high correlation or substantial relationship, and 0.90 and 1.00 indicate a very high
or very strong correlation (Burns & R. Burns, 2008).

Transformational leadership styles: according to the above table 4.10 the correlation
coefficient value (r =0.636, N=123, P-value=0.00) indicates a moderate correlation
relationship between employee commitment and transformational leadership styles.Therefore
there was slight correlation or small significant relationship with employee commitment.

Transactional leadership style: the correlation coefficient value (r = 0.525, N=123, P-

value=0.00) indicates there was a positive significance moderate relationship between the
dependent variable, employee commitment and independent variable, Transactional

36
leadership style. Therefore there was appositive significant relationship with employee
commitment.

Laissez fair leadership style: the correlation coefficient value (r = 0.063, N=0.502, 0.00
indicates there was a positive significance moderate relationship between the dependent
variable, employee commitment and independent variable,laissez-fair leadership style.
Therefore, it appears that there is a positive and moderate relationship with employee
engagement.

4.5 Checking Assumption of Multiple Linear Regression

4.5.1 Test of Linearity

The linearity of a variable can be tested by plotting a scatterplot of the response variable
against the fitted values. To achieve linearity, pattern of the plot must be approximately linear
or the distribution of the points around the fitted line otherwise there may be out layer points.

Source: Sample Survey, 2024

Figure 4.1: Normal p-p plot

Figure 4.1 above shows that the error term has zero mean and constant variance. This
indicates that the error term has a unit variance and zero mean, according to a conventional
normal distribution. The assumption that the error term should have constant variance is
further explained in picture 4.1.

37
4.5.2 Test of Normality

You can check for normality by drawing a histogram. Normality is achieved if the
distribution of the error terms under the histogram is approximately normal (bell-shaped) and
the distribution of points in the probability plot (pp) lies around a straight line. It's broken.

Figure 4.2: Histogram Plot

Source: Sample Survey, 2024

As shown from the above figure 4.2, normality assumption (mean=0, and variance=1) was
approximately satisfied. This means the residual of the employee commitment normally
distributed.

4.5.3 Test of Multi-co-linearity

One of the multiple regression's underlying hypotheses, multi-co-linearity, is examined In

bivariate correlation analysis, the assumption of no multicollinearity is met if the Pearson
correlation value is less than 0.5 and the VIF value is less than 10. otherwise, this assumption
is not satisfied or violated. Stated differently, if the correlation is more than or equal to 0.8,
there is a significant issue with multi-colinearity (Gujarati 2003). Since none of the
explanatory variables are over the traditional 80%, it is safe to state that there is significant
multi-linearity because the explanatory variable's multi-co-linearity is below 0.80.

38
Table 4.11: Collinearity Statistics

Independent variable Tolerance VIF

Transformational Leadership Style .744 1.343
Transactional Leadership Style .737 1.356
laissez fair-leadership style .987 1.013
Source: Sample Survey, 2024

The Multi-co-linearity test of the predictor or explanatory factors for this study revealed that
not all predictor variables exhibit the multi-co-linearity problem, as can be seen in Table 4.11
above. We employ the VIF as a measure of multi-colinearity; that is, multi-colinearity exists
if the VIF is higher than 10. Since the study variables' VIF for this investigation are less than
10, we may conclude that the assumption of the absence of multi-colinearity was met.

4.5.4 Test of Auto Correlation

The data must have little to no autocorrelation in order to be used for linear regression
analysis. When there is no longer any residual independence among them, autocorrelation
arises. I can use the Durbin-Watson test to determine whether the linear regression model has
autocorrelation.

According to Andy (2009), the appropriate Durbin-Watson range is between 1.5 and 2.5;
hence, the study's Durbin-Watson value is 1.862, as seen in the table above. These numbers
are within the permissible bounds and show that there was no autocorrelation issue with the
data used in this study.

4.6 Goodness of Fit and Analysis of Variance

4.6.1 Goodness of Fit Test
R-squared (R2) or The percentage that the explanatory variables' goodness of fit in explaining
the dependent variable is expressed as the coefficient of determination.

Table 4.12: Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

a
1 .811 .657 .649 .482
Source: Sample Survey, 2024
The above table 4.12 show that the employee commitment explained through the leadership
philosophies of transactional, laissez-faire, and transformational leadership. Thus, the three

39
criteria account for 65.70% of employee commitment, with the other 34.30% remaining
unexplained.

4.6.2 Analysis of Variance

Analysis of variance is used to show how well the model with the three leadership
philosophies of the independent variables functions.

Table 4.13: Analysis of Variance

Sum of
Model Squares df Mean Square F Sig.
1 Regression 53.100 3 17.700 76.050 .000b
Residual 27.696 119 .233
Total 80.797 122
Source: Sample Survey, 2024

The regression contained a constant, as can be seen in table 4.13 above; the sum total
(497.020) and the sum of squares resulting from the model both represent the sum after
means have been subtracted. The ANOVA table's corresponding F statistic was 76.050. The
theory that all coefficients, with the exception of the constant, are zero is tested by the value
of the F-statistic. The likelihood of finding a big or greater F statistic is stated as significant
value alpha value 0.00; this suggests that all independent variables (that is, factors
influencing leadership style) work together to explain the dependent variable (that is,
employee commitment). Stated differently, the study's model was notably effective in
elucidating the fluctuations in the dependent variable.

4.7 Multiple Linear Regression Analysis

The ordinary least squares approach, also known as OLS, is used in multiple regression to
estimate the β's in the equation. The study's goal was to determine how each independent
variable affected the dependent variable, employee commitment. Additionally, statistical
analysis can be used to determine how strongly different variables correlate with one another
(Faraway, 2002).

40
Table 4.14: Regression Coefficient

Unstandardized Standardized 95.0% Confidence

Coefficients Coefficients Interval for B
Lower Upper
Model B Std. Error Beta t Sig. Bound Bound
1 (Constant) -.460 .242 - .060 -.940 .020
1.900
Transformational .470 .059 .496 7.967 .000 .353 .587
Leadership Style
Transactional .258 .072 .224 3.582 .000 .115 .401
Leadership Style
laissez fair- .438 .053 .447 8.274 .000 .333 .542
leadership style
Dependent Variable: Employee Commitment
Source: Sample Survey, 2024
Based on the criteria of the significance level or p-value greater than alpha-value (0.05), the
general model was reduced to a final fitted multiple linear regression model where the impact
of those factors on the dependent variable was found to be significant.

EC= β0+ β1Transf. + β2Transa + β3LLS +εi

EC= -0.46+ 0.470 Transf. + 0.258 Transa + 0.438 LLS +εi

Where: EP= Employee commitment, Transf. = Transformational leadership style

Transa.=Transactional Leadership Style, LLS= Laissez-Faire Leadership Style

The slope or mean change of employee commitment was -0.460 when the effect of leadership
style effect was zero.
Table 4.14 above demonstrates that a transformative leadership style has a positive,
statistically significant, and 95% meaningful impact on employee commitment. This
demonstrates how, while all other independent factors remain constant, the mean changes in
employee commitment per unit change in transformational leadership style. Thus, if all other
factors remain constant, an increase of one unit in transformational leadership style also
results in an average increase in employee commitment of 0.470. Furthermore, the p-value
(0.000) was smaller than the alpha value (0.05) within the confidence interval of 0.353 to
0.587, indicating a substantial impact of the transformational leadership style on employee
commitment.

41
 The results demonstrate that the p-value (0.000) was less than the alpha value (0.05),
indicating that the transactional leadership style significantly affects employee commitment
within the confidence interval (0.115, 0.401). The effect of transactional leadership style on
employee commitment was positive and statistically significant at the 95% significant level.
This indicates that the mean change in employee commitment per a unit change in
transactional leadership style, when other independent variables are constant. Consequently, a
one-unit increase in transactional leadership style the employee commitment increases by an
average of 0.258 when other leadership style constant.

Lastly, table 4.14 above demonstrates that a laissez-faire leadership style had a positive and
statistically significant effect on employee commitment at the 95% significant level. This
demonstrates that, while all other independent factors remain constant, the mean change in
employee commitment per unit change in a laissez-faire leadership style. Therefore, when
other leadership styles are held constant within the confidence interval (0.333, 0.542), a one
unit increase in laissez-faire leadership style increases employee commitment by an average
of 0.438.

4.8 Discussion of the Findings

The study's conclusions are corroborated by research done in 2018 by Gcaza, Garande, and
Echezona, which evaluated the impact of corporate culture and leadership style on workers'
commitment. Their results show that business culture and leadership philosophies
significantly increase workers' commitment. In a different study, Asrar-ul-Haq & Kuchinke
(2016) found a negative correlation between employee commitment ratings and a laissez-fair
leadership style.
Affective, normative, and continuous commitment were found to be positively correlated
with transformative leadership in South African public organizations by Garg and Ramjee's
(2013) marginally significant study. The data supports the study's conclusions, which indicate
that there was little relationship between employee commitment and leadership style.

42
 CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION

This chapter presents the study's main conclusions, management suggestions, and effects of
leadership style on staff commitment at Ethiopian Commercial Bank's Southern Region
branch. Beyond this, formulate helpful conclusions and suggestions in light of the
researcher's findings. Finally, provide a useful suggestion for additional research on this
topic.

5.1 Summary of the Major Findings

Response rate of this study was out of 123 prepared structured questionnaires distributed for
employees. Out of those distributed questionnaire 123 (100%) were fulfilled correctly and
timely by the respondents. Based on finding of this collected data the researcher investigate
the following major finding from inferential statistics:

 According to the descriptive statistics, most respondents concur that a leader's style has
an impact on employee commitment.
 Employee commitment was correlated with transformational, transactional, and laissez-
faire leadership styles, with coefficients of 0.636, 0.525, and 0.502, respectively.

43
  These leadership styles explain 65.70% of employee commitment (R2). Multiple linear
regression was used to determine correlations, assuming normal distribution of
variables.
 The regression coefficients indicate that transformational (0.470), transactional (0.258),
and laissez-faire (0.438) leadership styles impact employee commitment, with
transformational being the most significant, transactional the least, and laissez-faire
moderately significant.

5.2 Conclusion

The purpose of the study is to evaluate how a leader's style affects staff commitment in the
context of the Ethiopian Commercial Bank's Southern Region branch. Based on the above
finding the following conclusion draw:

The employee commitment derived from the inherent satisfaction and enjoyment and linked
to self-activity. When people are intrinsically motivated they participate in the activity they
become committed and effective in their jobs. Employees with high organizational
commitment feelings affect organizational commitment in positive. It was discovered that
three main leadership philosophies—transformational, transactional, and laissez-faire—were
related to employee commitment.

Employee loyalty is therefore greatly influenced by those three leadership philosophies.

From highest to lowest, transformational leadership styles (0.470), laissez-faire (0.438), and
transactional leadership styles (0.258) had the greatest impact on employee commitment.
Thus, we draw the conclusion that those three leadership philosophies ought to be prioritized
by the management of the Ethiopian Commercial Bank's Southern Region branch, staff, and
other stakeholders.
The evidence is clear: effective leadership is a cornerstone of employee commitment. When
leaders foster a positive and supportive work environment, inspire their team members, and
demonstrate trust and respect, the result is a workforce that feels valued, engaged, and
motivated to contribute. This commitment translates into improved productivity, higher job
satisfaction, reduced turnover, and ultimately, a more successful and thriving organization.
There is no one-size-fits-all relationship between dedication and leadership, though. Various
teams and people respond differently to different leadership philosophies. What is effective in
one setting may not be in another. This underscores the significance of leaders consistently
modifying their methodology to align with the requirements of their team and the dynamic
demands of the work environment. In the future, companies need to put a high priority on

44
leadership development and fund initiatives that provide leaders the abilities and know-how
to foster a culture of dedication. Fostering empathy, emotional intelligence, and the capacity
for motivation and inspiration are all part of this. By placing emphasis on the leadership's role
in cultivating employee engagement, businesses may unleash a potent force that propels
innovation, productivity, and eventually, sustained success.

5.3 Recommendation

 The following recommendation is made in light of the study's findings and theoretical
discussion:
 Employee engagement was significantly impacted by transactional, laissez-faire, and
transformational leadership philosophies. In order to increase staff engagement, a
transformational leader should actively seek out different points of view when solving
issues, speak positively about the future, and take delight in being linked with them.
 Committed employees are motivated by leaders and stakeholders to attain
organizational success. The HR division ought to start by concentrating on those
fundamental issues. To foster more employee dedication, governmental and non-
governmental organizations should provide materials, funding, accessories, and other
forms of support to those sectors, particularly city administration.

5.4 Suggestion for Further Studies

The study's scope, sample size, data processing techniques, and leadership style were all
constrained. The study's scope was limited because it was carried out in the service business
sector. Future studies may look at how a leader's style affects staff members' commitment to
the brod notion on a national scale.

45
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 Ethiopian Civil Service University

Leadership and Good Governance Department

Master Program

Appendix I: Survey Questionnaire

Dear respondents,

The objective of this questionnaire is to gather the necessary and relevant first-hand
information that is useful to conduct a thesis “The effect of leadership styles on employee
commitment: in the case of Southern Region branch of the Ethiopian Commercial
Bank.’’

This was used to prepare a thesis required for accomplish Master degree. You have been
selected as a key respondent for this study. Kindly, complete the questionnaire to enable the
researcher complete the study. Therefore, your response in this regard helps a lot to undertake
the study. The result of this survey treated with at most confidentiality and will be strictly
used for academic purpose only. The researcher thus appreciates in advance your cooperation
and costing your valuable time for filling this questionnaire.
Researcher’s Name: Lidya Gebewahed Gidey
Phone number: 0982415294
Notice:

No need to write your name, cell phone number, and address.

Please put a “ √” in the space provided
Please full fill all questionnaires properly, incomplete questionnaire not accessible
Please briefly explain your opinion for open ended questions in the space
provided.return the completed questionnaire in time.

52
 Part I: Demographic Information of the respondents
1. Please indicate your gender:
Male Female
2. Please indicate your age category:
20-39 40-60 50 and above years
3. Please indicate your educational level
Diploma Degree Masters other specify………….
4. How long you have experience in the Southern Region branch of the Ethiopian
Commercial Bank service:
1-5 6-10 years 11-15 years More than 15 years
5. Please indicate your Position:
Top level manager Middle level manager Customer service officer
Clerk Other , Specify…………………

Part II Questions Related to the research questions: the effect of

leadership style on employee commitment

 General guide line for the following questions listed in the tables below: Please
indicate your agreement or disagreement, from rate of five Likert scales: (Strongly Disagree
(1)to Strongly Agree (5)for the following statements by put mark“√” on the space provided.
 Questions related to Employee commitment

No. 6. Statement About Employee Commitment Strongly Disagree neutral Agree Strongly
Disagree (D) (N) (A) agree (SA)
(SD)
1 2 3 4 5
6.1 I am comfortable with my supervisors leadership
style
6.2 Commitment provides prospects for personal growth
and development
6.3 Commitment place employees in job that fit their
skills
6.4 Employees with high organizational commitment
feelings affect organizational commitment in
positive.
6.5 At an organisational level higher employee
commitment is related to lower levels of staff
turnover, absenteeism and tardiness.

53
  Questions related to leadership styles (transformational leadership styles,
transactional leadership style and laissez-faire leadership style).

No 7. Statement About transformational leadership Strongly Disagree neutral Agree Strongly

Disagree (D) (N) (A) agree (SA)
. styles (SD)
1 2 3 4 5
7.1 The manager actively seeks diverse viewpoints when
addressing problems.
7.2 The manager talks optimistically about the future.
7.3 The manager's actions consistently earn my respect.
7.4 The manager fills me with pride to be associated with
them.
8. Statement About transactional leadership style SD D N A SA

8.1 The manager offers support in return for my

contributions.
8.2 The manager reassesses fundamental assumptions to
determine their validity.
8.3 The manager waits until issues arise before
intervening or taking action.
8.4 The manager ensures clarity regarding the rewards or
recognition employees can expect upon achieving
performance goals.
9. Statement About laissez-faire leadership style SD D N A SA

9.1 The manager avoids getting involved when important

issues arise
9.2 The manager fails to interfere until problems become
serious.
9.3 The manager Shows that he/she is a firm believer in
“If it isn't broke, don’t fix it.”
9.4 The manager delays responding to urgent questions.

Part III: The respondent with regard to the topic not addressed by the researcher.
1. Please write your opinion about not addressed point about the effect of leadership style on
employee commitment in your office.
54
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
____________________________.

Thank You Very Much for Your Cooperation!!!

55