Relationship between Leadership Qualities and Performance of Nepali Cooperatives

Abstract

The role of a leader is imperative for the successful operation of an organization. Considering the important role of leadership to enhance organizational effectiveness, this study has examined the effects of leadership qualities on the performance of cooperatives in Nepal through the lens of learning from everyday life. The study developed instruments to measure leadership qualities and performance of cooperatives, and with their administration collected data to explore the role of leadership qualities and the background variables of leaders such as education, training, exposure, experience, age, and gender to the performance of cooperatives. The study applied a contextualized leadership questionnaire and collected data on qualities of leadership in cooperative societies. The cross-sectional survey method was used to collect data from 1255 respondents from 210 cooperatives operating in 41 districts. These districts represent all geographical areas of Nepal- the Mountains, Hills, and Terai regions. The factor analysis of the collected data determined four dimensions of leadership qualities in the context of cooperatives in Nepal: role model, team- ii empowerment, performance-based rewards and skills of the sector. The study indicated that, of the four dimensions of qualities of leadership, role model and team empowerment qualities of leaders were found to be more important than performance based rewards and leaders’ skills in Nepali socio-cultural context. Nevertheless, these four qualities of leadership were found to be interlinked and one quality helped to enhance other qualities being complementary to each other. The study has developed the ELEPHANTS rating tool to assess the performance of the cooperatives. Applying the assessment tool, the study showed that the performance of the cooperatives operating in the Terai was better than those located in Hills and Mountains; and the cooperatives managed by women outperformed the cooperatives managed by men. There was no significant difference in the performance of the cooperatives operating in rural and urban areas. The study applied Spearman’s correlation to examine the association of leadership qualities with the performance of the cooperatives. The correlation coefficients showed that performance-based rewards and leaders’ skills on the subject matters had a stronger association on the performance of cooperatives than role model and team-empowerment qualities of leadership. Logistic regression analysis also supported this as the analysis indicated that performance-based rewards and leaders’ skills on the subject matters had higher effects on the performance of cooperatives than role model and team-empowerment qualities. One of the explanations of this finding could be that our cultural values emphasize role models and team empowerment as important qualities of leadership, however, these qualities are little translated into practice in real life by the leaders. Furthermore, the four dimensions of leadership qualities were higher in the case of operational level leaders than policy level. This is because the operational leaders had higher educational qualifications and iii experience than the policy level leaders. Besides experience, exposure visits also had a positive effect on the performance of cooperatives. The findings thus indicated learning from self-experience and other experiences (exposure) as important factors in enhancing leadership qualities and performance of cooperatives. Hence, learning from everyday life experience is an important aspect to enhance the performance of cooperatives. The findings of the study have practical and policy level implications as well. The four dimensions of leadership qualities identified in this study will contribute the practitioners of cooperatives to adopt these qualities and increase their performance. The findings could also be useful beyond cooperatives. Organizations such as educational institutions, business enterprises and others could use these findings to devise leadership development program in order to improve organizational effectiveness. In addition, the leadership questionnaire and rating tools developed for this study could be of practical use in the cooperative and other sectors of Nepal as they share a common socio-cultural context.