The Effect of Emotional Intelligence on Leadership Effectiveness: The Case of Commercial Bank of Ethiopia, Credit and Wholesale Banking Division
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Date
2024-01
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Addis Ababa University
Abstract
Leadership effectiveness is crucial to the success of a business. Emotional intelligence, which is the ability to perceive, understand, and manage emotions in oneself and others, has been demonstrated to be an important factor in leadership effectiveness in psychology and leadership research. The study reviewed relevant theories and empirical data and investigated the relationship between emotional intelligence and leadership effectiveness. Despite extensive research linking emotional intelligence to leadership effectiveness in several contexts, there is a significant gap in the Ethiopian banking sector. The objective of the study was to examine the relationship between emotional intelligence and leadership effectiveness at the headquarters of the Commercial Bank of Ethiopia. The specific objective was to investigate the relationship between emotional intelligence components such as self-awareness, self-management, social awareness, relationship management, and leadership effectiveness in the bank. The study used a quantitative approach using questionnaires adapted from existing literature. A sample of 234 employees was drawn from the target population, which consisted of 563 staff members. A stratified random sampling technique ensured proper representation. Descriptive and inferential statistics, such as Pearson correlation and multiple linear regression, were used to analyze the relationships between components of emotional intelligence and leadership effectiveness. SPSS Version 27 was used for this analysis. The findings revealed that there is a significant positive relationship between self-awareness, self-management, social awareness, relationship management, and leadership effectiveness at the Commercial Bank of Ethiopia. The study concluded that emotional intelligence significantly impacted leadership effectiveness in the bank. The study recommended that the Commercial Bank of Ethiopia formulate a policy of selection that promotes emotional intelligence for the recruitment and selection of managers. Furthermore, it suggested that the bank provide emotional intelligence training to its management staff, focusing on the development of self-awareness, self-management, social awareness, and relationship management skills—all of which are essential for improving leadership effectiveness.
Key words: Emotional intelligence, self- awareness, social awareness, self-management and relationship management, leadership effectiveness.