Effects of Leadership Styles on Organizational Performance: A Case of UAP Insurance Company Limited Nairobi, Kenya

Abstract

Organizational performance is essential for the survival of any organization. Organizations can measure performance on the basis of revenue growth, profitability, loss ratio, number of new products and assets growth. The research examined the issues that impacted organizational performance with specific focus on the leadership style. Using a case study approach, the research examined the effects of leadership style on organizational performance focusing on four key aspects: the leadership style practised, the leadership characteristics, how leadership style contributed to overall performance and established the performance indicators for the organization. The research employed a descriptive research as it sought to give an accurate description of the situation at UAP. The population of this study was 137 respondents. Data was collected with 96 copies of questionnaires. The findings of the research, were that the UAP CEO practised democratic leadership style as noted by 57 respondents (59.4%), employees were involved in decisions that impacted their work as noted by 44 respondents (45.8%), and performance was continually monitored against set targets to ensure sustainability. It was also found that the company performed well on profitability and asset growth as noted by 60 (62.5%) and 73 (76.1%) respondents respectively; there was average performance on loss ratio as indicated by 65 respondents (66.7%) and revenue growth as indicated by 47 respondents (49%). And new products were rated as average by 36 respondents (37.5%) and poor by 38 respondents (39.6%). The study concluded that the leadership style practised at an organization would have an impact on how the employees perform their duties. However certain factors such as supporting employees to solve problems and create new ideas needed to be changed by management. This can be mitigated by leaders taking more time to coach and develop employees.