THE RELATIONSHIP BETWEEN LEADERSHIP STYLE’S AND EMPLOYEE’S ORGANIZATIONAL COMMITMENT AT DEVELOPMENT BANK OF ETHIOPIA, HEAD OFFICE

Abstract

Creating good supervisor and subordinates relationship is vital for accomplishing organizational objective and goals. The aim of this study was to examine the relationship between leadership styles and organizational commitment in Development Bank of Ethiopia (DBE). Quantitative research approach and a cross sectional survey design were used. The researcher adapted Multifactor leadership Questionnaire (MLQ) developed by Bass and Avolio, (2004) for measuring leadership style and organizational commitment Questionnaire (OCQ) developed by Allen and Meyer, (1990) for measuring employees organizational commitment. The study was conducted on DBE head office and the sample of the study consisted of 168 professional employees that were above Trainee junior level and have served the bank at least a year. Data were analyzed using both descriptive and inferential statistics. Descriptive statistics such as frequency, percentages, mean and standard deviations were used while inferential statistics, Pearson correlation were used. The two-tailed correlation analysis further revealed that there is a positive and significant relationship between transformational leadership style and organizational commitment (affective commitment and continuance commitment) but the relationship was not strong. Transactional leadership style had a weak but significant and positive relationship with affective, continuance and normative commitments. From the results, it was possible to conclude that both transformational and transactional leadership style were positively related with affective, continuance and normative commitments Finally, the study recommended that both transformational and transactional leadership style can play a major role in developing and improving affective, continuance and normative commitments at DBE.