THE INFLUENCE OF ETHICAL LEADERSHIP ON ORGANIZATIONAL PERFORMANCE IN STATE CORPORATIONS IN NAIROBI, KENYA

Abstract

This study sought to examine the impact of ethical leadership on the performance of state corporations in Nairobi, Kenya. It was driven by ongoing public sector challenges such as project delays, weak accountability mechanisms, and unsustainable operations, which are often linked to leadership shortcomings. A descriptive cross-sectional approach was used, involving 171 support staff from various departments, including Planning and Design, Construction, Road Asset Management, Corporate Services, Audit Services, Legal Services, and Supply Chain Management. Data was gathered through structured questionnaires and analyzed with SPSS Version 26. The reliability test showed acceptable internal consistency for the ethical leadership measure (Cronbach’s Alpha = 0.764). Regression results indicated that ethical leadership had a significant effect on organizational performance (B = 0.879, p = 0.007), though the negative standardized beta coefficient (β = -0.224) suggested possible resistance to ethical changes or difficulties during organizational transitions. Correlation analysis revealed a weak association between ethical leadership and performance (r = 0.040), suggesting that contextual or structural factors may limit the influence of ethical leadership. The findings contribute to leadership theory by suggesting that ethical leadership alone may not lead to improved performance without supportive internal conditions. Practically, the study highlights the need for focused ethics training and open communication to build leadership credibility. Policy-wise, it advocates for establishing institutional frameworks that promote ethical conduct in public services. Future research should investigate sector-specific factors and the long-term effects of ethical leadership in Kenya’s state corporations.