The Role of Employee Commitment and Organizational Culture on the Relationship between Transformational Leadership and Performance of Deposit Taking SACCOs in Nairobi County, Kenya

Abstract

The main objective of this study was to establish the role of employee commitment and organizational culture on the relationship between transformational leadership and performance of Deposit taking SACCOs in Nairobi City County, Kenya. The theories chosen to anchor the variables in this study include: transformational leadership theory Self-determination theory, organizational culture theory and contingency theory. This study adopted descriptive cross-sectional research design. The population of the study was the (40) deposit taking savings and cooperative societies in Nairobi City County as at December 2016. Multiple regression models were used to test the significance of the influence of the independent variable on the dependent variable. T-test was used to test the direction of the relationship between the dependent and the independent variable. The study found that employee commitment and organizational culture played a significant mediating and moderating role in the relationship between transformational leadership and both financial and non-financial performance.  Since organizational culture and employee commitment mediates and moderates the relationship between transformational leadership and performance respectively, the SACCO ought to continually invest in the development of employee's skills in order to stay competitive and meet on-going business needs. The study recommends that building a capacity in the workforce to prepare for transition in commitment will require leadership training, communication, and clear expectations for the leaders and followers. Capacity development within an organization may be challenging to organizations with limited resources and limited time for training initiates. The study also recommends that it is critical that Sacco's leaders understand the cultures of their organization and seek to develop values and practices that are supportive of innovation. This can be influenced: through the beliefs and experiences of its members, through beliefs and values of leaders, and through organizational practices.