The Influence of Leadership Behavior and Organizational Culture: Mediation Analysis on Organizational Performance: The Case of Bank of Abyssinia S.C.

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Addis Ababa University


The main purpose of the study was to investigate the influence of organizational leadership behavior and organizational culture on organizational performance behavior in Bank of Abyssinia Addis Ababa city branches, district offices and head office organs. The study used explanatory research design with quantitative research approach. The study used a cross sectional primary data from 256 individual employees of the bank who have been selected on both stratified sampling (to select representative sample from braches, district offices and head offices) and simple random sampling method was employed to select respondents from the above respective organs of the Bank. Organizational Culture Assessment Instrument (OCAI) and performance management and leadership behavior questionnaires were adopted from different sources. The instruments were measured by using a Likert’s five-point rating scale so as to analyze the statistical relationship between organizational leadership behavior (OB), organizational culture and organizational performance (OP) of the Bank. Quantitative data that was collected from questionnaire was analyzed by inferential statistical analysis techniques hypothesis testing, model fit test as well as structural equation model(SEM) to measure the extents influence of organizational leadership behavior and organizational culture on organizational performance of the Bank. In addition, descriptive statistics such as mean and frequency and averages were also used to analyze the existing types of organizational culture and organizational leadership behavior The result revealed that clan and Market culture are the existing dominant organizational culture types employees prefer for both now and the future while adhocracy and hierarchy culture constituent a less preference in relative terms. Additionally, the SEM regression result indicates that organizational leadership behavior have positive and significant influence on the organizational performance of the bank and also organizational behavior influences organizational culture significantly. From the organizational culture dimensions’ market and clan culture have positive effect whereas hierarchy and adhocracy culture have negative effect on organizational performance but as a combined influence organizational culture has insignificant influence on organizational performance of the Bank. Based on the conclusions the study recommends, managers shall pay attention to market and clan cultures to develop a good performance indicator for the Bank and organizational leadership behavior should get better attention so as to able to make the Bank competitive in the open competition on financial sectors and so as to be a able to retain the current progress of the Bank.



Adhocracy, Clan, Market