Effect of Leadership on Operational Efficiency of Non-governmental Organizations in Nairobi County, Kenya

Abstract

Leaders bear the ability to contribute significantly in the manner in which an organization undertakes its activities. An organization’s performance hugely relies on the leadership aspects put in place to facilitate the achievement of its vision. Organizational operational performance is targeted towards achieving efficient and effective systems which are marked with high reliability and facilitate the achievement of excellence that surpasses an organization’s client expectations. On the other hand, Non-Governmental Organizations are self-governing, institutions whose primary mission is to improve the standard of living of the world's most disadvantaged people. To be effective in their mandate, NGOs need resilient institutional structures, leadership and regulations supported by sustained training so as to ensure that duties are efficiently divided within the organization. The purpose of the study was to evaluate the effect of leadership on operational efficiency of Non-Governmental Organizations in Nairobi County. The study’s specific objectives were: to determine the effect of leadership style on operational efficiency of NGOs in Nairobi County; to evaluate the impact of leadership structure on operational efficiency of NGOs in Nairobi County and to assess the influence of leadership culture on operational efficiency of NGOs in Nairobi County. The study adopted the dynamic capability theory as the overarching theory that is based on maximizing the use of an organization's already existing internal and external competencies in response to the dynamic nature of the business environments. The researcher chose to conduct her investigation using a longitudinal methodology. The study targeted 200 NGOs that were determined based on the criterion that; they were duly registered to operate by the NGO Council of Kenya, are compliant with NGO Council in relation to submission of annual returns and that they at least have their operation in Nairobi. The general population for the study comprised of the top managers serving in 4 key departments; finance, operations, human resources and supply chain from each of the 200 NGOs giving a total population of 800 top managers. Purposive sampling method was then utilized in determining the sample elements. Data was collected using semi-structured. There was piloting of research instruments before data collection to test their reliability and validity. Data collected was analyzed using SPSS, version 20. Descriptive analyses methods including average, mode, range and S.D measures were utilised in analysing the demographic set-up of the population and other background information details within the Kenyan NGOs. The correlational analysis approach was used to investigate the link between leadership and organizational performance whereas regression analysis was utilized in assessing the nature of association between categorical variables. The key findings revealed that there exists a strong positive correlation between the dependent variable (operational efficiency) and each of the independent variables (leadership style, leadership structure and leadership culture). The r values were determined as 0.878, 0.786 and 0.847 respectively. Besides, the coefficient-of-determination describing the percentage variation in operational efficiency that is explained by the changes in the independent variables R2 was determined to be at 0.731, implying that leadership style, leadership structure and leadership culture explain up to 73.1 percent of changes in operational efficiency. The research recommends that the NGOs in Nairobi should always seek to adopt a leadership style, culture and structure that positively impacts the operational environment of the organization. The leaders should also strengthen their abilities in developing methods of assessment, scheduling work-related activities and in offering motivation and other required resources while also seeking to enhance their efficiency in the management of operational costs and fundraising efficiency.