DETERMINATION OF THE ROLE OF TRANSFORMATIONAL SHARED INFLUENCE IN BANKING SECTOR PERFORMANCE IN KENYA

Abstract

Performance in the banking industry has always determined the survival of a given bank.  The level of such performance could be determined from different perspectives but one most frequented test is the type of leadership driving the particular bank or  the industry as a whole.  It is from the background that this study sought to establish the influence by transformational shared influence on the performance of commercial banks in Kenya. Using a positivist approach, the study adopted a descriptive correlational research design with stratified sampling of managers from all the 3-Tiers of 39 registered commercial banks in Kenya.  The main instrument of data collection was a structured questionnaire from which a total of 307 responses were received out of a target 324 managers. Field results were analysed using both descriptive and inferential models with all processes run through the Statistical Package for Social Sciences (SPSS) program. Key findings indicated that the transformational shared influence on performance of commercial banks in Kenya was statistically significant, R² = 0.283, F (1, 306) =23.264, p-value <.05. This shows that 28.3% of the performance of commercial banks in Kenya was attributed to transformational influence while the remaining 71.7% could be attributed to other factors not included in the study and the error term.  Additionally, results of regression coefficient indicated the transformational influence significantly predicted the performance of commercial banks in Kenya (β = .594 t = 4.823, p<.05). The study concluded that transformational shared influence is an important function of shared leadership for commercial banks in Kenya achieving their effectiveness and efficiency. The study thus recommends full implementation of all the aspects of transformational shared influence including idealized influence, inspirational motivation, intellectual stimulation and individual consideration across all commercial banks in Kenya.

Keywords: transformational influence, idealized influence, inspirational motivation, intellectual stimulation, individual consideration, Kenya