Leadership Style And Employee Creativity In The Rural Banking Industry: Case Study Of Otuasekan Rural Bank

Abstract

Despite the enormous role of rural and community banks (RCBs) in the Ghanaian economy, the industry’s performance over the past 20 years has been deemed below expectations. The RCBs still have high number of incompetent employees to effectively and creatively manage operations. This therefore emphasizes on the importance of understanding the extent of the influence of leadership styles on the creativity of RCB employees. However, existing studies in Ghana have largely focused on behavioural outcomes in the form of employee productivity, employee performance and innovativeness, with limited emphasis on employee creativity. This study therefore investigated the influence of leadership style on the creativity of employees of Otuasekan Rural Bank (ORB) in the Ashanti Region of Ghana. The explanatory study surveyed 170 employees of the ORB using structured questionnaire. Data in IBM SPSS Version 25 was imported in free format to LISREL 8.50 for confirmatory factor analysis (CFA). Developed hypotheses were tested through partial least squared structural equation (PLS-SEM) modeling. The results showed that a multiple of leadership styles are employed by the rural bank. However, the most dominant leadership style employed was autocratic leadership. The level of creativity of the employees in the rural bank was deemed moderate. Transformational and autocratic leadership styles positively and significantly influenced the creativity of employees. Evidently, transformational leadership style exerted the highest positive effect on the creativity of the employees. However, democratic and transactional leadership styles negatively and significantly influenced the creativity of employees of the rural bank. In conclusion, the prevailing multiple leadership styles of the rural bank exerted differing forms of influence on employee creativity.