Effect of emerging leadership styles of branch managers on performance of commercial banks in Nairobi County

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dc.contributor.authorOtiende, G.
dc.date.accessioned2026-02-02T07:29:09Z
dc.date.available2026-02-02T07:29:09Z
dc.date.issued2025
dc.descriptionFull - text thesis
dc.description.abstractThe global banking sector is experiencing rapid transformation, driven by technological innovation, evolving customer expectations, and increasing regulatory demands. In Kenya, these changes are particularly evident among Tier 1 commercial banks, which dominate the sector in assets, deposits, and profitability. Branch managers are central to this transformation, as their leadership styles critically influence banks’ ability to adapt, innovate, and achieve sustainable performance. This study investigates the effect of emerging leadership styles-digital, hybrid, agile, and ethical-on the performance of commercial banks in Nairobi County, Kenya. The research is motivated by the recognition that traditional leadership models may be inadequate for addressing the complex challenges of the modern banking industry, and that empirical evidence on the impact of new leadership paradigms in the Kenyan context remains limited. The study addresses the gap in empirical research regarding the influence of contemporary leadership styles on bank branch performance in emerging economies. Digital leadership, characterized by the strategic use of technology to enhance efficiency and customer experience; hybrid leadership, which balances traditional management with modern innovations; agile leadership, emphasizing adaptability and rapid response to change; and ethical leadership, focusing on integrity and social responsibility, are all gaining traction globally. However, their specific effects on operational efficiency, customer satisfaction, staff engagement, and financial outcomes within Kenyan commercial banks had not been systematically examined prior to this study. The central research question is: How do digital, hybrid, agile, and ethical leadership styles adopted by branch managers affect the performance of commercial banks in Nairobi County? A descriptive research design was adopted, targeting all 337 branches of the nine Tier 1 commercial banks in Nairobi County. Using stratified random sampling, a representative sample of 77 branches was selected to ensure coverage across different banks and locations. Data were collected through structured questionnaires administered to branch managers, capturing both self-reported leadership styles and objective branch performance indicators. The questionnaires were developed based on established leadership and performance measurement frameworks, with reliability confirmed through pilot testing and Cronbach’s alpha analysis. Data analysis was conducted using SPSS, employing both descriptive statistics and inferential techniques, including correlation and multiple regression, to assess the relationships between leadership styles and branch performance. Diagnostic tests for normality and multicollinearity were also performed to validate the models. The findings reveal that digital leadership is a significant predictor of branch performance, with managers who champion digital tools, promote digital literacy, and foster innovation reporting higher operational efficiency, customer satisfaction, and revenue growth. Hybrid leadership also shows a strong positive association with performance, as managers who balance traditional customer service with digital solutions achieve superior staff morale, customer retention, and financial results. Agile leadership, while positively correlated with performance, has a more context-dependent impact, being less significant in highly regulated or rigid environments. Ethical leadership demonstrates a direct and significant effect on both financial and non-financial performance indicators, with branches led by ethical managers reporting greater employee engagement, customer trust, and reputational capital. The study offers actionable recommendations for bank executives and policymakers, advocating for the institutionalization of digital and hybrid leadership training, context-specific application of agile practices, and reinforcement of ethical standards. It underscores the need for regulatory frameworks that support innovation while safeguarding ethical conduct and financial stability. In conclusion, this thesis contributes to the understanding of leadership in the Kenyan banking sector by empirically demonstrating the positive effects of emerging leadership styles on branch performance, and recommends further research on their long-term and cross-sectoral impacts.
dc.identifier.citationOtiende, G. (2025). Effect of emerging leadership styles of branch managers on performance of commercial banks in Nairobi County [Strathmore University]. http://hdl.handle.net/11071/16047
dc.identifier.urihttp://hdl.handle.net/11071/16047
dc.language.isoen_US
dc.publisherStrathmore University
dc.titleEffect of emerging leadership styles of branch managers on performance of commercial banks in Nairobi County
dc.typeThesis
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