Influence of Strategic Leadership on the Organizational Performance of Tier-1 Commercial Banks in Nakuru County: Moderating Role of Organizational Culture

Abstract

Abstract This study examined the influence of strategic leadership on organizational performance in tier-1 commercial banks in Nakuru County, Kenya. It addressed three specific objectives: to determine the influence of transformational leadership on performance, assess the influence of transactional leadership on performance, and evaluate the moderating role of organizational culture in the relationship between strategic leadership and performance. Using a quantitative cross-sectional design, data were collected from 154 managers (response rate: 92.2%) via an online-based closed-ended questionnaire and analyzed through multiple linear regression and ANOVA. The questionnaire was subjected to validity and reliability tests. The overall Cronbach alpha (α = 0.796) obtained from the pilot study confirmed instrument reliability before its full-scale implementation. Results revealed that transformational leadership significantly predicted performance (R² = 0.334, β = 0.246, p = 0.016), transactional leadership had a stronger influence (R² = 0.403, β = 0.321, p = 0.033), and organizational culture exerted direct positive effects (β = 0.253, p = 0.038) on organizational performance. Organizational culture had no moderating influence on the strategic leadership-performance relationship (β = 0.054, p = 0.462). Findings show that while transformational and transactional leadership styles independently enhance the performance of top-tier banks, organizational culture stands out as a direct performance predictor rather than a contextual enhancer. This evidence encourages commercial banks in Nakuru County and Kenya at large to adopt hybrid leadership approaches and rethink the role of culture in performance improvement.