Leadership and Financial Performance of Commercial Banks in Albania

Abstract

This study investigates the leadership traits of secondary banks’ branch managers in Albania and the manner the leadership behaviour relates to the financial performance of the organizations. The linkages between leadership patterns and banking institutions performance has not been researched to a satisfactory extent in Albania. This study employs quantitative methods to gather the data and utilized SPSS to analyse the tacit aspects of expected correlations between transformational and transactional leadership traits of branch managers and their institutions’ financial performance as measured by ROE. Findings of this study have shown the existence of strong and statistically significant correlations between the dimensions of transformational and transactional leadership behavior found among the middle level managers and their organizations’ financial performance. The direction of this proven relationship is also very consistent with the peer research: transformational leadership traits are positively correlated with the ROE scores of a secondary bank, while the transactional and laissez faire leadership traits are negatively correlated to the financial performance of the targeted organizations.