Effect of Leadership Styles on Employees’ Motivation: The Case of Selected Multi- National Corporations in Addis Ababa
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Date
2025-03-01
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AAU
Abstract
This study is deployed to examine the effects of leadership styles on employee motivation within
six selected multi national corporations ( MNCs) located in Addis Ababa, Ethiopia. The primary
objectives include identifying the leadership styles practiced, examining the components of
leadership styles that significantly influence motivation, assessing the relationship between
transfer national, transactional, and laissez-faire leadership styles with motivation, and
identifying the dominant leadership style for enhancing employee motivation. A survey was
distributed to 154 employees, with 138 fully completed responses analyzed using SPSS Version 24.
To address this concern, on the theoretical literature review touches Trait, Behavioral and
Contingency or situational approach that are related to leadership styles and regarding the
dependent variable motivation Abrahams Maslow Hierarchy of need theory and expectancy
theories were discussed. The findings indicate that transformational leadership, with dimensions
such as idealized influence and inspirational motivation, has the most significant positive effect
on employee motivation, followed by transactional leadership. On the contrary Laissez-faire
leadership exhibited a negative relationship with motivation. Multiple regression analysis
confirmed that leadership styles account for 74. 3% of the variance in employee motivation, with
transfer national leadership emerging as the dominant style. The study highlights that
organizational politics and bias associated wit h leadership dimensions, particularly idealized
influence and inspirational motivation, may hinder fair promotions. Employees reported
satisfaction with benefits and promotion opportunities but indicated areas for improvement in
skills development and work activities. Recommendations include implementing unbiased
performance evaluations, enhancing inter-departmental communication, and investing in staff
training. Future research could explore leadership styles' effects on other sectors, such as
healthcare or banking, and examine cultural influences on motivation with in MNCs with
organizational politics as a mediator.