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Masters Thesis Defence  NATIONAL  AVIATION COLLEGE MBA IN BUSINESS LEADERSHIP PROGRAM

THE EFFECT OF LEADERSHIP STYLE  ON EMPLOYEES’   ORGANIZATIONAL COMMITMENT IN  THE CASE OF   CAPITAL  HOTEL AND  SPA BY : AWET GIRMAY ADVISOR: ASFAW YILMA ( PHD) July, 2021

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INTRODUCTION Background of the  Study Statement of the  Problem Research Questions Objective of the  Study Scope and Limitation of the  Study Significance of the  Study RESEARCH DESIGN  AND  METHODOLOGY Description of the Study  Area Research  Design Research  Methods Data Type and  Sources Method of Data  Analyzing DATA PRESENTATION, ANALYSIS AND  INTERPRETATION Response  Rate with Results  and  Discussion SUMMARY , CONCLUSION AND RECOMMENDATIONS

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BACKGROUND OF THE STUDY : The  Capital Hotel and Spa is one of the leading five star hotel based in Ethiopia established in 2013 E.C. The hotel has about 310 permanent staff.  STATEMENT OF THE PROBLEM  Capital  Hotel and Spa face many challenges such as globalization, rapid change and slow economic growth, which requires from their leaders to use leadership styles that believe in change and administrative innovation in the face of competition and market conditions, making them the most dynamic and innovative source of competitive advantage . RESEARCH QUESTIONS What  is the leadership style adopted at Capital Hotel and Spa as perceived by employees of the  Hotel? What  is level of employees’ organizational commitment at the  hotel? To  what extent does the Transformational, Transactional and Laissez–fair leadership styles adopted in the hotel affects Normative, Continuance and Affective organizational commitment ? OBJECTIVE General  objective:  The Purpose of this study is to identify the Effect of Leadership Style on Employees Organizational Commitment in the case of Capital Hotel and Spa.

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Specific Objective: Identify leadership styles adopted at Capital Hotel and  Spa. Find  out the level of employees’ organizational commitment at Capital Hotel and  Spa. Determine  the extent the perceived leadership style affects the commitment of employees’ to Capital Hotel and Spa. SCOPE AND LIMITATION OF THE STUDY As  units of study and area bound for the study both employees and management members of Capital Hotel and Spa were considered.  In  terms of topic delimitation, the Full Range Leadership Theory is taken as a comprehensive model consisting of the main leadership styles typically investigated in the field.  Other  leadership styles such as Autocratic, Democratic, Bureaucratic, and Servant were excluded from this study. Furthermore the kind of commitment studied in this paper is organizational commitment and the specific organizational commitments studied are Affective, Normative and Continuance commitments. SIGNIFICANCE OF THE STUDY The outcome of this study provides information for decision makers in Capital Hotel and Spa about the relationship between leadership styles and employee commitments .

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A Geographical Outline This  study will be conducted in Addis Ababa; capital city of Ethiopia which is located in coordination of 9°1′48″N 38°44′24″E. Addis Ababa has the status of both a city and a state. It is where the African Union (AU) is and its predecessor the Organization of African Unity (OAU) was based. Research Design The research design and approach is explanatory and quantitative. Descriptive statistics was used to summarize basic features like mean scores . Research Methods Qualitative Approach Quantitative Approach Population:  the  target population is 310 from employees of Capital Hotel and Spa and expertise from different organization . Sampling  Techniques:  Purposive Sampling  Technique:  the  sample is approached having a prior purpose in mind and the researcher predefines criteria of the elements that are to include in the study. A simple random : sample is a subset of a statistical population in which each member of the subset has an equal probability of being chosen.

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Data  collection instruments Questionnaire Interview In-depth Interview Key Informant  Interview Document analysis:  the  researcher used some documents from different sources and the documents were analyzed in triangulation with primary data. Most importantly, visitors statement from trip advisors, press release by hotel associations based in Ethiopia, annual reports of employment and turnover  rate Method of Data  Analyzing:  To  achieve the objectives of the study data was analyzed through both qualitative and quantitative approaches.           Quantitative part:          Questionnaires              Table                Percentage                   Statistical Package for Social Science              Qualitative data:  obtained using key informant interview and a field observation has been analyzed  in           thematic  way.

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Response Rate:  In  this research 76 questionnaires were administered for employees and all of them were filled returned. However, out of the 76 copies, only 75 were properly filled and processed for analysis.  Results and  Discussion:  The  hotels’ operational employees and managers were asked to complete a questionnaire to assess the influence of leadership styles on employees‟ organizational commitment in Capital Hotel and Spa.  Demographic Characteristics of  Respondent’s

DATA  PRESENTATION, ANALYSIS AND INTERPRETATION

S.N Variables Type Count % 1 Gender Male 44 58.6 Female 31 41.4 Total 75 100.0 2   Age (in years) 18-30yrs 41 54.7 31-40yrs 21 28.5 41-50yrs 8 11.3 >50yrs 5 5.5 Total 75 100.0 3 Marital status Single 49 64.4 Married 26 35.6 Total 75 100.0 4     Education qualification Diploma 50 66.6 Degree 24 32 Masters 1 1.3 PHD     Total 75 100.0 5     Service year 0-5yrs 41 54.7 6-10yrs 21 26.9 11-15yrs 4 5.7 16-20yrs 3 4.9 >20yrs 6 7.8 Total 75 100.0

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No       Transformational   Leadership   Style                                                       Level   of   Agreement        Total        Mean   Strongly   Disagree   Dis   agree   Neutral   Agree   Strongly   Agree 1 My   leader   is   approachable   and   friendly. Count 2 1 7 45 20 75   4.0324 % 2.9 1.6 9.7 59.9 25.9 100 2 My   manager   maintains   a   friendly   working   relationship   with   subordinates. Count 2 3 4 49 17 75   3.9353 % 1.9 4.2 5.8 65.4 22.7 100 3 My   manager   does   little   things That   makes   it   pleasant   to   be   a   member   of the   group. Count 10 12 6 34 13 75   3.3722 % 12.6 15.9 8 46 17.5 100 4 All   team   members   are   given   opportunities to attend relevant   trainings   and   conferences Count 12 5 9 41 8 75   3.5566 % 15.5 7.1 12 54.4 11 100 5 My leader Spends  time      Teaching   and   coaching. Count 3 26 6 31 9 75   3.2395 % 3.8 35.5 7.4 41.1 12 100 6 Our   leader   puts   suggestions   made by   us   into   actions. Count 6 12 17 40   75   3.2168 % 7.7 15.9 23 53.4   100 7 My leader assigns me  to            Particular tasks. Count 12 6 17 26 14 75   3.2201 % 15.8 7.8 23 34.6 18.8 100 8 My manager   listens   receptively To subordinates ideas  and   suggestions. Count 5 7 17 31 15 75   3.4951 % 6.1 9 23 41.7 20 100 9 My manager consults  with       employees   before   making   key Decisions. Count 4 5 16 39 11 75   3.7702 % 5.8 6.7 20.7 51.4 15.2 100 10 My leader gives me complete   freedom   in   decision   making   and   problem   solving. Count 3 5 13 37 17 75   3.8285 %   3.5   7.7 17.1 49.4 22.3 100

Effect  of Transformational Leadership Style on Employee Commitment

Descriptive  statistics of employee’s perception towards transformational leadership style

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Transformational Organizational  Commitment     Transformational Pearson  Correlation 1 . 847 ** Sig .   (2-tailed)   . 000 N 75 75     Organizational Commitment Pearson  Correlation . 847 ** 1 Sig .   (2-tailed) . 000   N 75 75 **.   Correlation   is   significant   at   the   0.01   level   (2-tailed).

CONT. Correlations  for Transformational Leadership Style on Employee Commitment

The results were as shown in above. It shows that transformational leadership style factors was a significant factor in employee commitment  r  (75) =.847,  p> .05

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No   Laissez–fair   Leadership   Style         Level   of   Agreement      Total     Mean   Strongly   Disagree   Dis   agree   Neutral   Agree   Strongly   Agree 1 My leader is lacking of control   directing,   which   he/she   not   explains   the actions to us. Count 10 19 15 20 11 75   3.1068 % 12.6 25.6 19.4 27.2 15.2 100 2 My   leader   refuses   to   explain   his/her   actions. Count 9 12 17 25 12 75   3.3754 % 11.3 16.8 22.7 33.3 15.9 100 3 My leader avoids him/her   from goal setting and decision   making. Count 11 30 7 20 7 75   2.8026 % 15.2 39.8 8.7 26.9 9.4 100 4 My   leader   delay responding   to   urgent   questions. Count 5 21 13 27 9 75   3.0906 % 6.8 26.9 17.8 36.2 12.3 100 5 My leader avoids   him/her   from   getting   involved   when   important   issues arise. Count 4 21 12 31 7 75   3.3204 % 5.8 27.6 15.9 42 8.7 100 6 My   leader   waits   for   things   to   go   wrong   before   taking action. Count 5 26 2 34 8 75   3.1456 % 6.1 35 2.6 45.6 10.7 100

CONT. Effect  of Laissez–fair Leadership Style on Employee  Commitment Descriptive  statistics of employee’s perception towards Laissez–fair leadership style .

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Laissez–fair Organizational Commitment     Laissez–fair Pearson Correlation 1 -.900 ** Sig.   (2-tailed)   .000 N 75 75     OrganizationalCommitment Pearson Correlation -.900 ** 1 Sig.   (2-tailed) .000   N 75 75

Correlations for Laissez–fair Leadership Style on Employee Commitment

A Pearson correlation test was carried out to determine the significance of the several Laissez–fair leadership style factors and their influence on employee commitment, and the p value of <0.05 was used as the threshold for determining significant factors. The results were as shown in Table 4.11.it shows that Laissez–fair Leadership Style was negatively correlated with employee commitment  r  (309) = -.900,  p< .05;

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No     Transactional   Leadership   Style         Level   of   Agreement Total Mean   Strongly   Disagree   Dis   agree   Neutral   Agree   Strongly   Agree 1 My   leader   maintains   definite   standards   of   performance. Count 2 16 20 28 9 75   3.3269 % 2.6 20.7 26.2 38.2 12.3 100 2 My leader makes clear what   one   can   expect   to   receive   when   performance   goals   are Achieved Count 2 6 12 17 38 75   3.7379 % 2.9 8 16.2 22 50.8 100 3 My   leader   is   effective   in   meeting	organizational   requirements Count 3 4 13 11 44 75   3.7767 % 3.5 5.6 16.8 14.9 59.2 100

Effect of Transactional Leadership Style on Employee Commitment

Descriptive  statistics of employee’s perception towards transactional leadership style

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Correlations  for Transactional Leadership on Employee Commitment

Transactional Organizational Commitment     Transactional Pearson Correlation 1 .918 ** Sig.   (2-tailed)   .000 N 75 75     Organizational Commitment Pearson Correlation .918 ** 1 Sig.   (2-tailed) .000   N 75 75

The  results  were shows  that Transactional leadership style was a significant factor in employee commitment  r  (309) =>0. 918, p<.05.

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Summary  of Major  Finding Research Question 1:-  What is the leadership style adopted at Capital Hotel and Spa as perceived by employees of the Hotel ? The study showed that both transactional and transformational leadership styles are the leadership styles usually implemented in the hotel.  Research Question 2:-   What is level of employees’ organizational commitment at the hotel ? the results revealed that the level of employees’ organizational commitment is strong. Most of the employees have interest working in the  hotel Research Question 3:-   To what extent does the Transformational, Transactional and Laissez–fair leadership styles adopted in the hotel affects Normative, Continuance and Affective organizational commitment ? The results give clear picture of the role of transformational leadership style and transactional leadership style towards making employees committed to organizational.

SUMMARY ,  CONCLUSION  AND RECOMMENDATIONS ONCLUSION  AND RECOMMENDATIONS

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Conclusion There is a correlation between transformational, transactional, and laissez–fair   leadership styles and organizational commitment. The study concluded that both Transformational and Transactional leadership styles significantly influenced among employees’ at the hotel. The study concluded that Laissez–fair Leadership styles significantly influenced employee among employees in Capital Hotel and Spa . The study employed explanatory research design with emphasis on the effect of leadership styles on employees’ commitment in Capital Hotel and Spa. For these reason, questionnaires were administered to seventy five employees . T wo  types of interview, i.e., in-depth interview and   key informant interviews were used to purposively contact 5 individuals who hold leadership or managerial role from Capital Hotel and Spa and 6 individuals from different organizations who are expertise with hospitality leadership background. Both secondary and primary methods were used, with the secondary sources were concerned data was collected from documents such as annual report from Capital Hotel and Spa, brochures on the profile of organization, operations and policy manual of the organization . The findings were presented using tables and figures. Correlational analysis was also employed to test the relationship between the independent and dependent variables.

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Recommendations The management teams shall analyze the current workforce profile and need to address the issue of all employees to make the organization a better place to  work. The  organization need to use the human capital it has effectively and efficiently, most of the employee have interest working in Capital Hotel and Spa more than getting  paid. The  hotel should develop and implement continues training program for all employees’ to maintain the updated leadership style and training related to theory of organizational  commitment. It  is recommended that the Capital Hotel and Spa should offer their employees competitive remuneration terms, in order to retain and attract the best, skilled and competent  workforce. It  is also recommended that the Capital Hotel and Spa ought to work on those employee who fell they stay in the organization because of necessity, not as desirable place to work, the organization need to facilitate the requirements requested by employee at different time to make them  stable. For  Capital Hotel and Spa, it is equally important to periodically assess the leadership styles of their employees and provide leadership development training if they lack transformational and transformational leadership qualities.

Masters Thesis Defence NATIONAL AVIATION COLLEGE MBA IN BUSINESS LEADERSHIP PROGRAM

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