Effect of Leadership Structure on the Financial Performance of Seventh day Adventist Church Ventures in Kenya
DOI:
https://doi.org/10.47604/ijlg.3957Keywords:
Leadership Structure, Financial Performance, Corporate Governance, Agency Theory, Stewardship Theory, SDA Church Ventures, KenyaAbstract
Purpose: The study examined the effect of leadership structure on the financial performance of Seventh-day Adventist (SDA) Church ventures in Kenya. Specifically, it assessed whether the way authority, responsibilities, supervision, accountability, and decision-making processes are structured within SDA ventures influences their financial performance.
Methodology: The study was guided by agency theory and stewardship theory and adopted a quantitative cross-sectional research design. Data were collected from 97 respondents drawn from SDA-affiliated ventures operating in the health, education, publishing, and hospitality sectors in Kenya. Leadership structure was assessed in terms of supervisory arrangements, separation of powers, role clarity, leadership effectiveness, participatory decision-making, openness to innovation, and ethical leadership. Data were analyzed using descriptive statistics, Pearson correlation, and simple linear regression.
Findings: The findings revealed a moderate positive and statistically significant relationship between leadership structure and financial performance (r = .494, p < .01). Regression analysis showed that leadership structure explained 24.4% of the variance in financial performance (R² = .244, adjusted R² = .236). The regression model was statistically significant, F(1, 94) = 30.357, p < .001. Leadership structure had a positive and statistically significant effect on financial performance (B = .578, β = .494, t = 5.510, p < .001). The null hypothesis that leadership structure has no statistically significant effect on financial performance was therefore rejected.
Unique Contribution to Theory, Practice and Policy: The study recommends that SDA Church ventures strengthen leadership structures by clearly defining governance and managerial responsibilities, enhancing separation of authority, strengthening supervisory and accountability mechanisms, and promoting participatory decision-making. Leadership capacity development should also be prioritized to enhance effective resource management, innovation, accountability, and long-term financial sustainability.
Downloads
References
Avolio, B. J., Walumbwa, F. O., & Weber, T. J. (2009). Leadership: Current theories, research, and future directions. Annual Review of Psychology, 60, 421–449. https://doi.org/10.1146/annurev.psych.60.110707.163621
Dalton, D. R., Daily, C. M., Ellstrand, A. E., & Johnson, J. L. (1998). Meta analytic reviews of board composition, leadership structure, and financial performance. Strategic Management Journal, 19(3), 269–290. https://doi.org/10.1002/(SICI)1097-0266(199803)19:3<269::AID-SMJ950>3.0.CO;2-K
Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a stewardship theory of management. Academy of Management Review, 22(1), 20–47. https://doi.org/10.5465/amr.1997.9707180258
Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301–325. https://doi.org/10.1086/467037
Finkelstein, S., Hambrick, D. C., & Cannella, A. A., Jr. (2009). Strategic leadership: Theory and research on executives, top management teams, and boards. Oxford University Press.
Hernandez, M. (2012). Toward an understanding of the psychology of stewardship. Academy of Management Review, 37(2), 172–193. https://doi.org/10.5465/amr.2010.0363
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Judge, T. A., Piccolo, R. F., & Ilies, R. (2004). The forgotten ones? The validity of consideration and initiating structure in leadership research. Journal of Applied Psychology, 89(1), 36–51. https://doi.org/10.1037/0021-9010.89.1.36
Mintzberg, H. (1979). The structuring of organizations: A synthesis of the research. Prentice Hall.
OECD. (2023). G20/OECD principles of corporate governance 2023. OECD Publishing. https://doi.org/10.1787/ed750b30-en
Tricker, B. (2019). Corporate governance: Principles, policies, and practices (4th ed.). Oxford University Press.
Yukl, G. (2013). Leadership in organizations (8th ed.). Pearson.
Zietlow, J., Hankin, J. A., Seidner, A. G., & O'Brien, T. (2018). Financial management for nonprofit organizations: Policies and practices. Wiley.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Dr. Nicodemus Oyugi Okoth
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
