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TRANSFORMATIONAL LEADERSHIP AND PERFORMANCE OF
COMMERCIAL BANKS IN KENYA
Background of the Study
The tenets of leadership include the action of inspiring others as well as equipping and
developing of followers, especially with the ability to provide direction on pertinent
matters and also deploy the available resources to enhance the achievement of the firm’s
objectives (Feinberg, Ostroff & Burke, 2015). However, transformational leadership
refers to the leader’s ability to work with the other employees in non-managerial
employees to identify any necessary change, to set goals and objectives that exist to
pursue in line with their vision and mission of the organization, ability to put
considerable effort towards the achievements of the organization goals to a point that
makes it easier to achieve the probability of success levels in organizations as well as
ability to formulate visions that propel the change through by inspiring and executing the
changes in conjunction with other teams and committees (Chin, 2017). Transformational
leadership is critical in that it results into gradual positive changes within both the
individuals and social systems (Walumbwa & Hartnell, 2011). Since transformation
leadership is based on various factors such as the leader’s ability to punish, reward,
motivate and provide guidance or direction, it has been argued that it can help promote
performance of organizations.
This study utilized the upper echelons theory as well as the theory of transformational
leadership. Upper Echelons Theory (UET) has aroused considerable interest in strategic
management and is one of the most researched theories in the realm of organization and
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management (Sadeghinejad, 2013). It encapsulates the ideas of Donald Hambrick and
Phyllis Mason as first published in 1984 in the journal of Academic Management Review
(Hambrik & Mason, 1984). Upper echelons theory argues that organizational outcomes
have partial proportionality to the top-level management team’s managerial background
characteristics. However, the transformational leadership theory supports the view that
effective leaders mostly collaborate with their teams to provide the needed change
especially by formulating visions that drive the change by inspiring and executing the
change in collaboration with motivated teams (Mukhongo, 2013). Notably, the study
