AN EXAMINATION OF DEMOCRATIC LEADERSHIP STYLE AS A CATALYST OF ORGANIZATIONAL GROWTH

CHAPTER ONE

INTRODUCTION

 BACKGROUND TO THE STUDY

Given the ever-evolving nature of commercial practices, competition and rivalry in the business world are consistently heightened. As a result, it is imperative for a leader to possess great managerial abilities in order to enhance corporate productivity. Leadership is an essential managerial competency that entails the capacity to motivate a collective of individuals towards a shared objective. Oseni (2020) argued that globalization and competition in business impact all organisations, regardless of their size or location. Therefore, leadership, which includes the leader, the followers, and the situation/environment, must be taken into account to collectively bear responsibility for the success or failure of an organisation. Inadequate leadership, stemming from these three elements, can lead to diminished productivity, reduced profitability, increased employee attrition, and decreased job satisfaction, among other consequences. The collective influence of these issues is responsible for the subpar performance of the institution.

Literarily, Momoh and Osagiobare (2018) state that the term "leadership" may be seen from a range of angles and notions, either as a collection of traits held by the leader or as a phenomenon in society that develops as a consequence of a link. Imariagbontua (2020) suggested that leadership ideas might offer many viewpoints on the meaning of leadership with ongoing debate over whether it derives from a leader's character attributes or if followers are attracted to a leader based on what they say or do. Recent assessments define leadership as "the process by which an individual motivates a group of people to achieve a common goal" (Northouse 2004, cited in Imariagbontua 2020). It is imperative for managers occupying leadership positions to focus on the development of value system of employees, their motivational level and moralities with the development of their skills (Uchenwamgbe, 2019). This approach will essentially help followers achieve their goals as they work in the organizational setting. 

According to Ologbo & Saudah (2016), a manager's pattern for leading an organization significantly increase employee engagement, therefore it is important for managers to develop a thorough understanding of different leadership styles. After all, the more approaches a manager is familiar with, the more tools they will be able to use to lead effectively.  Although Otieno, Waiganjo and  Njeru (2018) averred that leadership is not a "one size fits all" thing; frequently, a manager must adapt their style to fit a situation or a specific group. Importantly, the nature of the organization may have an impact on how the leadership style is developed and shaped, as well as how the performance of the employees is motivated.  Several leadership styles have been identified by managers which can help the subordinates to grow and it is expected that leaders must possess good attributes to achieve desirable results. According to Fenwick (2022), in common, there are three leadership styles namely: Autocratic, Democratic and Laissez Faire although as literature evolves other styles have been added such as Transactional and Transformational leadership styles. Leadership involves inducement, persuasion and motivation of subordinates to enable them contribute willingly to the organizational goals based on the employee’s maximum capabilities (Nwachukwu, 2020). According to Okeniyi, (2021), in any establishment, there are leaders whose behaviour and personality traits influence others to perform their legitimate duty. In other words, leaders must possess style which enable them achieve desired goals through proper co-ordination and direction of the path goal. Leadership style could be described in various ways. It refers to the underlying needs of the leader that motivate his behaviour 

Imperatively, democratic leadership is a pattern in which ideas are freely expressed and openly discussed between leaders and their subordinates and thus defines a collective style of leadership. (Demirtas & Karaca, 2020). Leaders must create an environment where they empower and encourage their subordinates to perform their work. The core issue about democracy is the importance it attaches to human personality. It assumes civic capacity on the part of individuals. This capacity involves intelligence, self-control and conscience. Its essence is the right of every man bound by the decision of a government (organization) to contribute (whatever is in him to contribute) to the making and remaking of those decisions. This right is integral to democracy because it makes possible free discussion and the continuous participation of the people (individuals) in the government (organization). This implies the obligation to respect the other man, to listen to his arguments and to take into account his point of view. It is through participation that individuals (subordinates) contribute ideas towards the solution of problems affecting their organization and jobs(Appadorai, 2015). 

In the opinion of Okpamen (2021) effective democratic leadership pattern is an essential component of organizational sustainability and survival. Participation can create an asset in morale so that when necessary orders are given, people will respond more co-operatively because they are participating in the affairs of the organization It greatly affects how well employees perform and how well organizations reach their objectives. This is why any establishment or organization with leaders that encourage excellent task performance among their employees is also more likely to keep her current employees and draw in new ones with the necessary abilities. These are a few of the reasons why businesses are interested in her leadership approaches. Ali et al (2018) maintain that although many factors may influence the performance of an organization, there can be little doubt that the quality of leadership available to it will be one of the most critical determinants of ultimate success.

PROBLEM STATEMENT

In recent times, democratic leadership, which involves inclusive decision-making and active employee participation, is often praised for its potential to enhance organizational performance. At Arla Global Dairy Products Limited, a leading international dairy company, the adoption of democratic leadership practices is aimed at fostering a collaborative work environment and driving innovation. Despite these intentions, the actual impact of democratic leadership on organizational growth at Arla remains underexplored and contentious.  In a study by Ogunlana, (2017), one of the primary challenges in assessing the impact of democratic leadership at Arla is the ambiguity surrounding the measurement of organizational growth. Organizational growth can be multi-dimensional, encompassing financial metrics, market presence, employee performance, and innovation rates (Ogunlana, 2017). Without a standardized framework to evaluate these dimensions, it is difficult to determine the effectiveness of democratic leadership practices. This lack of clarity necessitates a comprehensive approach to measure how democratic leadership influences each aspect of growth at Arla.  

Additionally, the unique cultural and operational context of Arla poses significant considerations for evaluating democratic leadership. As a global company, Arla operates in diverse markets with varying cultural norms and business practices. The effectiveness of democratic leadership can be significantly influenced by these contextual factors (Olumuyiwa & Ijaiya, 2014). For example, what works well in one regional market may not be as effective in another due to differences in organizational culture and employee expectations. Therefore, it is crucial to examine how these contextual variables affect the implementation and outcomes of democratic leadership across Arla’s global operations. Nwachukwu (2020) stressed that the democratic leadership is marked by several drawbacks that must be overcome to ensure its effectiveness in the organization. He pointed out five basic challenges of the democratic leadership style to include: competency, crises, consensus, pseudo-participation, and adherence. He further concluded that overcoming these five negatives of the democratic leadership style will allow organizations to fully benefit from the advantages of this management style such as higher employee performance, satisfaction and better retention rates.  Moreover, the potential trade-offs associated with democratic leadership at Arla need careful examination. While fostering a participative environment can lead to higher employee morale and innovation (Adeyemi-Bello, 2021), it might also result in slower decision-making processes and increased internal conflict (Akintayo, 2020). 

While some studies suggest that democratic leadership style fosters a positive work environment and enhances employee satisfaction, others argue that it may lead to inefficiencies and decision-making delays (Somech, 2020). This dichotomy highlights the need for a comprehensive assessment of the impact of democratic leadership on organizational growth, considering both its potential benefits and drawbacks.  Moreover, the long-term effects of democratic leadership on organizational growth remain underexplored. Most studies focus on short-term outcomes, such as immediate improvements in team morale and productivity. However, the sustainability of these positive effects and their influence on long-term organizational growth are less understood. Against this backdrop, this study will  investigate democratic leadership style: an assessment of its impact on organizational growth.

OBJECTIVES OF THE STUDY 

The broad objectives will focus on democratic leadership style: an assessment of its impact on organizational growth. Specifically, the study seeks to:

Investigate the impact of democratic leadership style on employees’ commitment in an organization.

Investigate the impact of democratic leadership style on the achievement of organizational goals.

Investigate the impact of democratic leadership style on organizational innovation.

Investigate the impact of employee involvement in decision-making as an attribute of democratic leadership style on organizational productivity.

Ascertain other attributes of democratic leadership style which promotes organizational growth.

RESEARCH QUESTION 

The study will be guided by the following questions

What is the impact of democratic leadership style on employees’ commitment in an organization?

What is the impact of democratic leadership style on the achievement of organizational goals?

What is the impact of democratic leadership style on organizational innovation?

What is the impact of employee involvement in decision-making as an attribute of democratic leadership style on organizational productivity?

What are the other attributes of democratic leadership style which promotes organizational growth?

RESEARCH HYPOTHESES 

Ho1: There is no significant impact of democratic leadership style on employees’ commitment in an organization.

Ho2: There is no significant impact of democratic leadership style on the achievement of organizational goals.

Ho3: There is no  significant  impact of democratic leadership style on organizational innovation.

Ho4: There is no significant impact of employee involvement in decision-making as an attribute of democratic leadership style on organizational productivity.

SIGNIFICANCE OF THE STUDY

Findings from this research will provide light on how a leader's actions affect the commitment and productivity of his team members. This will help upper-level management and leaders get insight into what motivates workers to leave their current positions and why. This study offers Arla Global Dairy Products Limited critical insights into the practical implications of democratic leadership on organizational growth. By analyzing how democratic leadership affects key performance indicators such as financial performance, market share, and employee productivity, Arla will through the study refine its leadership strategies to enhance overall organizational effectiveness. Moreover, understanding the specific conditions under which democratic leadership is most beneficial and will help Arla tailor its approach to different regional and cultural contexts, thereby improving decision-making processes and operational efficiency.

Theoretically, the study will contribute to the broader body of knowledge on leadership styles and organizational growth. It will address the existing gaps in literature by providing empirical evidence on the long-term impacts of democratic leadership, especially within the context of a global organization like Arla. The research will also explore the mediating role of contextual factors such as organizational culture and industry type, offering a nuanced understanding of how democratic leadership functions in diverse environments. This study, therefore, will not only advances theoretical frameworks but also sets the stage for future research on leadership effectiveness in multinational corporations.

SCOPE OF THE STUDY

In content, the study will focus on evaluating the impact of democratic leadership on organizational growth. It will analyze various dimensions of growth, including financial performance, market share, employee productivity, and innovation. By considering the unique cultural and operational contexts of these regions, the study aims to provide a comprehensive understanding of how democratic leadership practices influence organizational outcomes across different markets. Geographically, the study will be limited to Arla Global Dairy Products Limited, Lagos State, Nigeria.

OPERATIONAL DEFINITION OF TERMS

Leadership: Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives. 

Leadership styles: This is the styles of behaviours, which a leader adopts to influence the behaviors of his/her followers. It is a combination of different characteristics, traits and behaviors that are used by leaders for interacting with their subordinates

Democratic Leadership: This a leadership style characterized by participative decision-making, where leaders encourage input and feedback from employees at all levels and consider their opinions in the decision-making process. In the context of Arla Global Dairy Products Limited, democratic leadership involves inclusive practices that aim to enhance employee engagement and innovation.

Organizational Growth: This the process through which a company increases its market presence, financial performance, workforce productivity, and capacity for innovation over time. For Arla, organizational growth is measured through metrics such as revenue growth, market share expansion, increased employee productivity, and the rate of new product development.

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