THE IMPACT OF LEADERSHIP STYLES ON BUDGETARY PERFORMANCE AT THE LOCAL GOVERNMENT LEVEL

Introduction

1.1 Background Of The Study

Leadership and budget are two management concepts that are inextricably linked. Budget basically has to do with a proposed revenue and estimated expenditure of a given organization. It is the statement of an organization for an ensuring fiscal year. While on the other hand leadership is defined as interaction between a leader and followers with the aim of achieving set goals.

It is pertinent to state that finance an administration are inseparable, therefore, to avoid wastage in administration there is need to carryout planning of revenue to be expended. But the success and failure of this depend on leadership style adopted in the organization. This project intends to investigate the impact of leadership style on budgetary performance at the Local government.

In examining the nature and style of leadership, there is need to dispel the misconception that all managers are leaders. Robins and Coulter (2000), offer the following explanation to the “managers versus Leaders” discourse: Managers are appointed. Their ability to influence is based on the formal authority inherent in their positions. In contrast, leaders may either be appointed or emerge from within a group. Leaders can influence others, to perform beyond the actions dictated by formal ability”.

According to Cole (1984:202), leadership can be described as a “dynamic process in a group whereby one individual influence the others to contribute voluntarily to the achievement of group task in given a situation”.

Following the above thinking, Coleman (2000), states that: “since the industrial revolution, companies have needed a mix of leadership skills such as high standard of managerial skill, being able to plan and budget, organize and manage their staff, and control and solve problems. Today, however, rapid changes in the environment may have altered the requirements for successful leadership. Leaders and managers are needed to bring about changes to stay ahead of competition while at the same time maintaining stability of business operations. To do this they need to create a climate for performance, including flexibility, responsibility, and high standard.

Many management scholars, to aid effective and efficient achievement of organizational objectives, have identified a myriad of leadership styles. These include trait theories and behavioral styles, contingency model, situation theory, path − goal model, and attribute theory of leadership. The leadership styles identified above cannot work in isolation or in vacuum. The work in tandem with a well formulated budget.

When two of the common definitions of management are examined, concept of leadership and budget may come more valid. Management has been defined as getting things done through others (Robins and Coulter, 2001. The same concept means planning, organizing, controlling and directing (Koontz and O’Donnel, 1976; Brench, 1963 and Fayol, 1916). A technique − oriented view inherent in the first definition is an identifiable personality (superior) around whom the performance of the task at and revolves. This is the manager.

However, the manager needs to employ some techniques in view of the environment uncertainties that impinge upon, usually threaten, and possible frustrate management’s operations. Paramount among these is budget − a tool for planning and controlling the organization’s activities so that they do not lack a sense of direction. However, budget is definitive (can be measure monetarily or quantitative), leadership is a volatile behavioural concept in a wide continuum of complex events. A number of leadership styles are available for the achievement specific budget goal.

Whereas managers rarely disagree on the computation of the budget, once the frame work for its preparation has been pre-determined (e.g. by what proportion should next year’s sales be above last year’s figure), the leadership style adopted by a superior has continued to provoke sharp and divergent views from researchers and managers alike. Thus, the leadership style adopted by a superior has a kind of influence on budget formulation and performance. What is the exact nature and degree of this influence? Researchers’ responses to this question are still enmeshed in polemics.

Flowing from above this project intend to examine the need for Behavioural aspect in budget formulation and implementation. It also presents a Nigerian perspective to leadership style and budget, evaluates the Nigerian situation for the purpose of enhancing performance in relation to budgeting.

1.2 Statement Of Problem

There are numerous problems all of which have contributed negatively to the budget performance at the Local Government level.

The Inability of the leaders to know or identify the types of leadership style that is mostly appropriate; lack of awareness of factors affecting leadership styles, reasons for the use of a particular style being used to address problems associated with such styles. Inability to measure the contribution of the adopted style to be used by the leaders and the subordinate not adhering strictly to leadership instructions, The fact that leadership styles are not universally applicable, the corrupt nature of some leaders and their unwillingness to delegate responsibilities.

There is therefore, the need to study the impact of leadership styles on budgetary performance with special focus on Ikosi/Isheri Local government. It is possible that some of the problems in the local government system which lead to ineffective and efficient delivery of services to the local people could be base or located in bad leadership style. Yet that issue have not been well explicated to bear this failure. Hence, this study seeks to find out this challenge facing budgetary performance at the local government level.

1.3 Objective Of The Study

The general objective of this research is to examine the impact of leadership style on budgetary performance at the Local Government level.

Other specific objectives include:

1. To examine the nature of leadership at the local government level;
2. To examine the relationship between leadership style and budgetary performance;
3. To discuss the problem facing leadership in budgetary performance;
4. To recommend ways of making leadership more effective instrument in budgetary performance.

1.4 Research Questions

In this research attempt will be made to provide answer to the following questions:

1. To what extent has leadership contributed to the entrenchment of public accountability and transparency at the local government?
2. In what ways can leadership style enhance effective delivery at the local government?
3. What is the relationship between leadership style and budgetary performance?
4. What is the role of leadership style on budgetary performance at the local government level?
5. Does leadership style has impact on budgetary performance at local government level?
6. How do people feel the impact of budgetary implementation at the local government level?

1.5 Research Hypotheses

1. Ho: There is no significant relationship between leadership style and budgetary performance at the local government level.
   H1: There is significant relationship between leadership style and budgetary performance at the local government level.
2. Ho; There is no significant relationship between leadership style rod budget decisions at the local government level
   H1: There is significant relationship between leadership style and budgetary decisions at the local government level.

1.6 Scope And Limitation Of The Study

This study is limited to Ikosi/Isheri Local Council Development Area of Lagos State. The choice of this area of study is because of the proximity of the study area to the researcher and financial constraints. The research will cover the staff of the local government and some of the residents of the local government area.

1.7 Significance Of The Study

This research shall be beneficial to the resident of Ikosi/Isheri Local Council Development Area because the resident of the area would be able to evaluate budget implementation in the area. Since local government functions are assessed on the basis of effective as efficient service delivery at the grass root, budget passed will determine how these services are delivered. This research would be beneficial to the government in formulation of policies. One of the rationale or justification for the creation of local government is to serve as agent of policy implementation at the local government level; this will enable the central government to evaluate local governments which have been able to implement policy they formulated. This research would be of benefit to researchers, since many researches have been carried out on budgeting at the local government level. Finally, since there is no knowledge that is wasted, this research will be of crucial benefit to the general public.

1.8 Definitions Of Terms

Budget:

This is a special plan quantified in monetary terms prepared and approved prior to define period, of time usually planned income to be generated and an expenditure to be incurred during that period and the capital to be employed to attained given objectives.

Budgetary:

This is the process of comparing actual operation with budgeted operation and investigation significant derivation in order to provide direction and make creative action.

Leadership:

This is the process through which an individual tries to influence another individual or a group of individuals to accomplish a goal;

Leadership Style:

It refers to a leaders’ behavior. It is the result of the philosophy, personality and experience of leader.

Local Government:

The system of government at the grassroots area by elected representatives of the people who live there. It is also sub- structure where the super − structure is laid.

Accountability:

Accountability is a system ensuring proper stewardship of assets, It involves legal and moral contexts, which that public funds are used for intended purposes and the best value for money is obtained.

Style:

The particular way in which something is done, style is the approach introduced adopted in a very different method to motive and complete a task.

Effective:

Fulfilling a function and achieving the intended result. In other words, effectiveness in management means achieving the desired goals and objectives.

Efficiency:

This is a state or quality of being able to perform duties well or satisfactorily. Efficiency involves proper planning to consider benefit cost and influence of any organization action. Efficiency produces a successful organization. Efficiency means using minimum inputto achieve maximum output.