THE EFFECT OF ETHICAL LEADERSHIP PRACTICES ON ORGANIZATIONAL PERFORMANCE IN THE CASE OF AWASH BANK

Abstract

The purpose of this study was to examine the Effect of Ethical leadership practices on Performance of Awash Bank. The study employed descriptive and explanatory research design. To collect the relevant data questionnaires and document analysis were used. Data were collected from 180(54.5%) sample size to represent 330 Awash Bank Managerial employees. Questionnaires were collected from three levels of Managerial employee. In order to analyze the data, frequency, percentage, and descriptive statistics and inferential statistics were used. The findings of the study revealed that the six independent variables: ―Honesty, Fairness, Integrity, Ethical guidance, Power Sharing and Employee Orientation‖ have strong correlation with the dependent variable ―performance‖ with 95% confidence interval at 0.01 p-value 2-tailed. The regression analysis result also revealed that all independent variables except Fairness and Integrity were statistically significant at p- value <.05, whereas fairness and integrity are not significant. Furthermore, econometric analysis showed that all predictors have positive effects on organizational performance. It was concluded that Power Sharing is the strongest predictor or has the most significant effect on the performance of Awash Bank. This is because the Bank is used the strategy of power decentralization and authority delegations among Managerial employees to increase employee satisfaction and to increase organizational decision-making. Similarly, employee orientation, honesty and ethical guidance are also influential next to power sharing. This was achieved as a result of the Bank‘s better alignment between what the employees do and what the Organization needs them to do. The Bank oriented new employees to be familiar with the organizational culture, norms, code of conduct, environment, people and work. The Bank created an environment of trust both within the organization and with those that do business with the Organization. The Bank should implement strategies such as training, seminars and standard operating procedures that can promote fairness and integrity to have significant effect on Awash Bank performance.