Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)

Research Article: 2020 Vol: 19 Issue: 5

Leadership Capabilities and Operational Efficiency of Faith-Based Organisations in Nigeria

Joseph A. Dada, Covenant University

Rowland E. K. Worlu, Covenant University

Adewale O. Osibanjo, Covenant University

Daniel E. Ufua, Covenant University

Hezekiah O. Falola, Covenant University


This study explored the impact of leadership capabilities on the operational efficiency of faith-based organisations (FBOs) in Nigeria. The strategic leaders are decision-making bodies that played a critical role in choosing and executing organisational strategies in FBOs. The motivation of this study was deduced from the problems of failure and vision/goal achievement seems to have progressively threatened the life and growth of many FBO sin Nigeria. With the assistance of stratified and simple random sampling techniques, one hundred and forty (140) respondents were selected from the leadership system of the selected organisation. One hundred and eighteen (118) copies of the questionnaire were received, reflecting the response rate of 84.21 percent. The mathematical method used for the study was the Structural Equation Model (AMOS 23). The findings indicated that the organisation's leadership skills have a major impact on its operational performance. The results also showed that demographic features moderate the relationship of faith-based organisations between leadership capabilities and operational efficiency of FBOs. The research recommended that leadership capabilities (strategic direction, people management skills and technological strength) should be leveraged and prioritized by faith-based organisations for more operational efficiency and excellent performance outcome. Future research could expand the spectrum on several fast-growing organisations focusing on the Pentecostal and other faiths.


Leadership Capabilities, Operational Efficiency, People Management Skills, Strategic Direction, Technological Strength.


Globally, organisations are formed to accomplish clear objectives and goals in both profit making and non-profit making. The role played by the workers cannot be over-emphasized in achieving these goals and objectives (Gberevbie, 2017; Mokgolo et al., 2012; Mottoh, 2015). This is because, regardless of the financial and non-financial resources at their disposal, organisations cannot achieve realistic integration goals without assessing the correct skills required to drive the success of other resources (Okeke, 2019). FBOs are development organisations with unique religious identities and one or more of the following features:(i) religious body affiliation, (ii) a mission statement with clear reference to religious principles, (iii) financial from religious sources, and (iv) a governance structure in which the appointment of staff members of the board is focused on religious beliefs and decision-making. Churches, mosques, temples are also considered FBOs (Addai-Duah, 2020; Akanbi & Beyers, 2017). In the meantime, leadership capabilities are things that are used to visualize possibilities and inspire others to make strategic progress (Volberda et al., 2015).

There are two problems that necessitated this study. First, in Nigeria, the increased number of failed FBOs (Para-Mallan, 2019). Second, the somewhat growing challenge for some FBOs is achieving such pre-determined membership, funds, and strategic growth targets and vision which hindered operational efficiency, performance, survival and growth (Agbiji & Swart, 2015; Alawode, 2020; Raoof, 2019). It has been argued that achieving targets is not only indicators of operational efficiency and survival, but also of sustainability (Adebowale et al., 2017; Bora & Chungyalpa, 2017). The challenges of failure and vision/goal accomplishment seem to have threatened the existence and sustainability of many FBOs more and more. In the meantime, an organisation's collapse or survival has been assigned to management because it is not administered prudently (Abiso et al., 2016). It is still not fully understood whether the problems of failure and survival of FBOs can be attributed to the leadership capabilities of its founders and leaders, especially from the point of view of FBOs as a business enterprise with some types of spiritual and business motives.

Strong people management skills will expand the decision-making base of a church. People today prefer to criticise leaders and hesitate, in stark contrast to what things were like many years ago, to take their word at face value, particularly, among churches nowadays, this seems to be a true fact. It seems that the very role of leadership in a historically authoritarian culture, no matter what type of leadership the pastor assumes, obviously makes it an object of hostility. Nowadays, members of the church want a greater share of decision making. They want to make the processes and the church's practices public and available for critical review. Pastors who preach harmony and engagement but manage in a lone ranger style, make unilateral decisions and work individually, perceive individuals as inexperienced and make them appear inexperienced contributed to low congregation that is ineffective and inefficient (Awojobi, 2019).

On this note, the study examined leadership capabilities and operational efficiency of faith-based organisations in Nigeria with a view to proffer workable solutions on the set research questions such as:

(i) In what way does strategic direction enhance operational efficiency of faith-based organisations in Nigeria?
(ii) What are the effects of people management skills on operational efficiency of faith-based organisations in Nigeria?
(iii) How does technological strength impact operational efficiency of faith-based organisations in Nigeria? and
(iv) What are the roles of demographic characteristics on leadership capabilities and operational efficiency of faith-based organisations in Nigeria?

Therefore, the work is organised in sections of the introduction, literature review, methodology, and results presentation, discussion of findings, and conclusion, and recommendation.

Literature Review

Strategic Direction and Operational Efficiency

According to Mutia (2016) and Volberda et al. (2015), strategic direction includes the creation of a long-term organisational vision. Strategic direction includes articulating the purpose and vision of the organisation, establishing the strategic priorities, targets, and coming up with a strategic plan. Strategic leaders are saddled with the challenge of assessing the organisation's strategic course (Ireland & Hitt, 2015). Karim-Zadeh (2012) opined that operational efficiency is concerned with the detection of process waste that drains money and has a detrimental impact on the organization's bottom-line. For organisations that wish to minimize waste, Westernman (2020) argued that cost control is a must and this can be accomplished either by maintaining the same level of production with fewer resources or by increasing the production level with less proportionate cost increases, thus reducing the total cost of production.

In the context of the circumstances, Ireland & Hitt (2015) and Nzisi (2017) emphasised that the core philosophy inspired workers through the tradition of the organisation, but the foreseen future encouraged workers to step beyond their standards of success and demanded substantial change and development to be realized. The foreseen future has served as a guide to many facets of the development process of organisational strategy for FBOs, including inspiration, leadership, employee empowerment and organisational design. Whitler & Puto (2020) opined that strategic leaders expected their organisations to face in the nearest future, the strategic path typically framed. The ideal long-term strategic path has two parts: core philosophy and envisioned future.Sahi et al. (2020) affirmed that the friction between exploration and exploitation has presented a challenge to strike a proper balance between the two objectives for the organizational role of an organization due to limited resources, expertise and capabilities. They further that the transfer of resources from exploitation to exploration and back could jeopardize the operations department's functioning, so operational efficiency has been conceptualized as an operations management term for exploration and exploitation concurrent adoption (Sahi et al., 2020).

People Management Skills and Operational Efficiency

One of the variables of leadership capabilities in this study was people management skills. It recognized that without recruiting and retaining talented workers with appropriate experience, attitudes and skills, no organisation, whether profit or non-profit, could effectively conduct its various operations (Armstrong et al., 2020). Operational efficiency also focuses on the effective use of all properties, including personnel, facilities, machinery and finance. High productivity and cost reduction will benefit from the effective use and mix of these tools in the production of goods and services (Karim-Zadeh 2012). Both in quantitative and qualitative terms, operating efficiency can be calculated. Westernman (2020) further that financial efficiency, members’ satisfaction, internal control and religious organisation processes and the growth and development of workers in the organisation are among these indicators. The improvement of people management skills, according to Mutia (2016), was a key to improving the efficiency, improved performance and competitive advantage of the religious organisation.

Ozolina-Ozola (2014) noted that the employability of workers is improved when corporate leadership implements workforce management practices. The human resources procedures introduced to enhance employee morale and skills often increase satisfaction with employees ' current employability and further increase the operating efficiency of organisations. Jaja & Arugu (2015) supported the view that organisations often work to enhance productivity, operational performance and sustainability with better trained and innovative workers. The effectiveness of handling people needs to be converted into success metrics (Abasilim et al., 2019). This will enable the religious organisations to get the best output from their workforce within the minimum space of time so as to benefit the religious society where these organisations are operating in.

Technological Strength and Operational Efficiency

One of the leadership capabilities organisations used to drive organisational productivity in this market climate of the 21st century was technological strength (Motilewa et al., 2015). Karim-Zadeh (2012) emphasised that operational efficiency is a broader term in scope that measures the deviation from the cost-effective frontier set as the highest expected performance that can occur in the production process from the resources available. He furthers that operational efficiency, given the various definitions, is a term used in an enterprise as a high-level planning to maintain a proper balance between cost and production. In this analysis, the technological strength of FBOs refers to as information communication technology. Abdul-Aziz et al. (2015) claimed that data is important because it influences the living practices of individuals and reflects an orderly truth about the essence of the environment in which people live.

According to Kyade & Kyade (2018) information communication technology is characterized by a single cabling framework as the integration of audio-visual and telephone networks with computer networks. This instantly, effectively and comprehensively improved task efficiency. The researchers: Kyade & Kyade (2018) argued that information technologies are not a panacea for FBOs because they have the ability to bridge the organisational efficiency gap between leaders, management teams and constituencies. Mikalef & Pateli (2017) concluded that organizations capable of importing information technology could speed up decision-making and respond quickly to changing demand from the religious market. As one of the aspects of a successful science and technology model, they felt that the influence of technology has made information systems useful and simple to use. As a result, Mikalef et al. (2020) confirmed that the implementation of technology is intended to enhance the performance of the system and to allow people to improve productivity. FBOs leaders need be conscious of information communication technologies which can be used to enhance their organisation operational efficiency for impacting members and organisational management teams.

Theoretical Review

Resource-based view theory

In his article (A resource-based view of the organisation) in 1984, Wernerfelt promoted the principle of resource-based opinion in order to explain the root of an organisation's profit as found in its strategies. Barney (1986) and Corner (1991) further developed this theory. The resource-based view (RBV) theory indicated that within an organisation's environment, there are two key sources of advantage that are essential to the planning of organisation strategy. The efficient and effective use of these tools would enable organisations to gain the competitive edge required for growth (Rigim et al., 2012). Based on the RBV context, both tangible and intangible assets such as plants and facilities, management abilities, organisational processes and routines, information and expertise were included in the FBO tools (Barney, 2001; Wang et al., 2012; Wirattanapornkul, 2012).

In the same way, there are two key assumptions that this principle is based on: (i) resources must be heterogeneous in nature; that is, the nature of resources means that religious organisations use strategies that lead to an advantage while other organisations use strategies that are different from their competitors' (Kim et al., 2011); and (ii) In nature, resources are non-movable and non-transferable; that is, resources attributed to a specific organisation do not shift from one organisation to another in the short term, at least (Akio, 2005).

This theory has been criticized because the world in which religious organisations function in fact is characterized by dramatic changes and turbulence and may not be possible in a competitive environment to gain an advantage with the aid of any definite resources, thereby restricting the usefulness of this theory to a static environment only. Scientifically and without administrative ramifications, the hypothesis that sees resources as strategically important, seldom inimitable and organisationally embedded as sources of competitive advantage is not proved (Kraaijenbrink et al., 2010; Serpa, 2016). In order to fill the void of resource-based theory shortfalls, the opponents of this theory gave birth to dynamic capacity theory. From the point of view of RBV, FBO leaders who are faced with a changing world and willing to apply stagnant model to solve social and environmental issues and religious challenges might not be the greatest chance for operational success.

The dynamic capability theory

Teece et al. (1997) propounded this hypothesis. In order to achieve short-term competitive advantage leading to organisational growth and sustainability, the dynamic capability theory explored the ability of organisations to rapidly organize and reconfigure externally sourced competences. This principle is more concerned with short-term competitive advantage that can be used for organisational growth and sustainability to create long-term competitive advantage (Lim et al., 2013). This theory focuses on the organisation's ability to quickly learn about changes and technologies that are emerging in the religious organisation environment, develop strategic assets that would allow them to compete and turn the organisation's existing assets to respond to changes taking place in the religious organisation environment in order to improve operational efficiency and success.

According to Ambrosini et al. (2009) emphasize four different outcomes, which could arise from the implementation of complex capabilities. Firstly, if the generated resource base is not imitated over a long period of time and rents are maintained, they may contribute to sustainable competitive advantage. Secondly, they may contribute to a temporary profit. Thirdly, they can only provide competitive advantage if their influence on the resource base actually helps the religious organisation to operate rather than outperform competitors in the religious market. Fourthly, when the resulting resource stock is irrelevant to the religious market, the deployment of dynamic capabilities can lead to failure. However, the reason for choosing the theory of dynamic capability to anchor this study is its readiness to integrate internal and external variables of operational efficiency that are important for considering the dynamic and tumultuous existence of faith-based organisations of the 21st century in Nigeria.


This research explores the effects of leadership capabilities in Nigeria on the operational efficiency of faith-based organisations. With strategic vision, people management skills and technological strength, leadership capabilities were assessed. In the same way, with four (4) measurement objects, operational efficiency was used as the dependent variable. It is equally relevant to note that since the study is descriptive in nature, this study adopts cross-sectional research design. What guides the selection of descriptive research design is that it helps to determine the degree to which the variables identified correlate with each other.

From the leadership system of the chosen organisation; the Redeemed Christian Church of God (RCCG), one hundred and forty (140) respondents were sampled. The reason for choosing the RCCG was because this Pentecostal church in Nigeria is rapidly growing. Methods of purposeful and stratified sampling were employed. Purposeful sampling was used because only the leadership workers at the provincial, state and national headquarters were chosen to participate in the survey, while stratified sampling was used because there are different diversity and strata in the study population. Within each stratum, however, everyone was given equal opportunities for selection. One hundred and eighteen (118) copies of the questionnaire reflecting the response rate of 84.21 percent were collected at the end of the survey. In order to collect data from the respondents, the researchers used standardized questionnaires. The questionnaire was developed using the 5-point Likert scale based on what can be obtained in the literature. During work hours, copies of the questionnaire were administered with the aid of two (2) research assistants. It was carried out to ensure the validity and reliability of the research instrument. Two professors in the University's Department of Business Management looked at the content and face value of the instrument for validity, while Cronbach Alpha was used to assess the reliability of the instrument. The respondents were told of the study's intent. Both respondents were offered to remain anonymous in order to protect the respondents' right to privacy and they were also assured the confidentiality of their responses. It is equally important to remember that the participants of this study have received verbal consent.

For the elimination of missing data, which is actually below 5 percent, the Listwise Deletion Approach was adopted. In the meantime, version 23 of the Statistical Package for Social Sciences (SPSS) program was used to code the data, while structural equation modelling (SEM) was used to analyse the data showing the impact of leadership capabilities on the organisational efficiency of faith-based organisations in Nigeria. Furthermore, as suggested by Kline (2005) and Tabachnick & Fidell (2007) the procedures necessary for the assumptions of the study were thoroughly tested to determine the accuracy of the results.


Respondents’ Demographic Profile

Table 1 showed the demographic characteristics of respondents indicated the relationship that subsists between leadership capabilities and faith-based organisations' operational efficiency.

Table 1: Respondents’ Demographic Profile Of RCCG
Variables Indicators Frequency Percentage%
Gender Male 85 72.03
Female 33 27.97
  118 100.00
Age 1-25yrs 7 05.93
26-40yrs 59 50.00
41-60yrs 44 37.29
61yrs & Above 8 06.78
  118 100.00
Education FLSC 0 00.00
SSCE 6 05.08
HND/BSC 87 73.73
Post-Graduate 25 21.19
  118 100.00
Periods in Church 1-5yrs 7 05.93
6-10yrs 10 08.45
11-15yrs 10 08.45
16yrs & Above 91 77.12
  118 100.00
Marital Status Single 24 20.34
Married 90 76.27
Divorced 4 03.39
Other 0 00.00
  118 100.00
Work Experience 1-5yrs 17 14.41
6-10yrs 15 12.71
11-15yrs 21 17.80
16yrs & Above 65 55.08
  118 100.00

The demographic variables (gender, age, educational qualification, periods in church, work experience, and marital status) impact the significant results indicated both dependent and independent variables in the study.

Findings have shown that the analysis comprised of one hundred and eighteen (118) respondents from the sample size of 140 leaders who occupied various managerial position in the Redeemed Christian Church of God for the past ten (10) years. Approximately eighty-five (85) respondents, representing 72.97% of the total participants, were female by gender, while the remaining thirty-three (33) respondents, representing 27.03%, were male. The respondents between the age of 26-40 years and 41-60 years indicated figures of 59(50%) and 44(37%) respectively. The respondents are matured in line with their age distribution. Educational qualification of respondents showed that respondents who have HND/BSC were 87(73%) and Post-Graduate were 25(21%) of the total participants. The respondents are knowledgeable about the information they volunteered for this study because of the level of education acquired. The marital status of the respondents indicated that 24(20%) were single and 90(76%) were married of the total participants. The period of the respondents in the church leadership position indicated that respondents between the age brackets of 16 years and above indicated 91(77%) of the total participants, which showed that they have necessary information that can make robust contribution of this study to body of knowledge. This would also enhance the validity and reliability of the study. The submission of Aransi (2020) has validated the findings on gender in this report. It can be inferred that the majority of the participants involved in the FBOs' leadership skills and sustainability issues were 53 percent male. This distribution means indicated that, when it comes to faith-based operational efficiency for organisational sustainability, it is gender-sensitive.

Descriptive Statistics

The following model fitness indicators such as chi-square/degree of freedom (χ2/df), X2/DF = Chi-square/degree of freedom, P-value = Significant, IFI = Incremental Fix Index, NFI = Normed Fit Index CFI = Comparative Fit Index GFI = Goodness-of-Fit Index, AGFI= Adjusted Goodness of fit and RMSEA = Root Mean Square Error of Approximation as suggested by Fornell & Larcker (1981) were to determine the degree fitness of the measurement of the observed variables as depicted in Table 2 and Figure 1.

Figure 1: Leadership Capabilities and Operational Efficiency Model

Table 2 indicates that the level of fitness of the different assessment metrics exceeds the minimum recommended acceptance levels. The results indicate that, as recommended by Fornell & Larcker (1981), all the formulated hypotheses as depicted in the model statistically and significantly match the sample data. This means that the predictive potential of leadership capabilities and operational efficiency is critical at 0.000.

Table 2: Goodness Of Fit Statistics
Indicators Parameters Recommended Goodness of fit
Chi-Square >5.0 236.543
CMIN/DF >3.0 10.776
GFI >0.9 0.920
AGFI >0.8 0.871
NFI >0.9 0.911
RFI >0.8 0.819
IFI >0.9 0.904
CFI >0.9 0.909
RMSEA >0.08 0.176

Table 3 displays the structure and calculation models of the formulated theories that are standardized and unstandardized. The unstandardized systemic path coefficient of leadership capabilities, i.e. strategic direction, people management skills and technological strength on the operational efficiency model were 0.485, 0.522 and 0.270 with a p-value of 0.05. In addition, the standardized systemic path coefficient of leadership capabilities was 0.269, 0.317 and 0.154 with p-values of 0.000, 0.000 and 0.038 respectively, i.e. strategic direction, people management skills and technological strength on the operational efficiency model.

Table 3: Maximum Likelihood Estimates
S.E. C.R. P
Structural Path
Ops_Eff <--- People_Mgt_Skill 0.522 .317 .116 4.502 ***
Ops_Eff <--- Technological_Strength .270 .154 .130 2.073 .038
Ops_Eff <--- Strategic_Direction .485 .269 .114 4.257 ***
SD4 <--- Strategic_Direction 1.000 .520 .101 8.312 ***
SD3 <--- Strategic_Direction 1.222 .647 .151 8.101 ***
SD2 <--- Strategic_Direction 1.668 .841 .191 8.743 ***
SD1 <--- Strategic_Direction 1.440 .652 .172 8.377 ***
PMS5 <--- People_Mgt_Skill 1.000 .559 .133 9.374 ***
PMS4 <--- People_Mgt_Skill 1.025 .611 .111 9.261 ***
PMS3 <--- People_Mgt_Skill 1.559 .804 .158 9.881 ***
PMS2 <--- People_Mgt_Skill .966 .537 .108 8.929 ***
PMS1 <--- People_Mgt_Skill 1.125 .556 .121 9.314 ***
OE4 <--- Operational_Efficiency .251 .242 .041 6.127 ***
OE1 <--- Operational_Efficiency .447 .396 .042 10.617 ***
OE3 <--- Operational_Efficiency .248 .220 .045 5.534 ***
OE2 <--- Operational_Efficiency .401 .382 .039 10.177 ***
TS4 <--- Technological_Strength 1.000 .561 .141 8.704 ***
TS3 <--- Technological_Strength .968 .524 .125 7.749 ***
TS1 <--- Technological_Strength 1.089 .591 .126 8.647 ***
TS2 <--- Technological_Strength 1.351 .668 .164 8.230 ***

Discussion of Findings

Hypothesis One

This implies that leadership capability, i.e., strategic direction, has a major effect on faith-based organisations' operational efficiency (SD→OE) at a p-value of 0.000. This suggests that when the leadership of faith-based organisations pays attention to strategic direction, it will increase the organisational efficiency. This result validates the submission of Tseng et al. (2019). The results also confirm Efuntade's (2019) claim. In their operations and services, any faith organisation that has a strong, workable and futuristic strategic direction with appropriate implementation plans would be more successful. This corroborates Bayton 's (2020) results.

Hypothesis Two

In addition, for the standardized model, the systemic path coefficient of people management skills (PMS→OE) amounted to 0.317 at 0.000 p-value. This demonstrates that the management skills of individuals displayed by the leadership of faith-based organisations can facilitate the operational efficiency of faith-based organisations. This is because the capacity of leaders to handle individuals is important for organisational advancement. As stated by Taiwo (2019), because of the diversity, inclusion and experiences of individuals coming together, management of people is to some degree difficult. The reports from Akande (2016); Kitonga (2017); Namji et al. (2018); and Okafor et al. (2019) corroborate this result.

Hypothesis Three

As shown in Table 3, the systemic path coefficient of technological intensity in the prediction of faith-based organisations' (TS→OE) operational efficiency for the standardized model was 0.154. The standardized estimate, though, is poor, but 0.038 is significant. This means that the technological ability of faith-based organisations in improving their operating efficiency would go a long way. In this current age and period, the impact of technology in form of information communication on every organisation's operational deliveries cannot be over-emphasized. This result supports the status of Kyade & Kyade (2018) and Barnes (2020); Hackey (2018).

Conclusions and Recommendation

In their different ministries, it is the joy of any faith-based organisation to witness dramatic numerical and financial growth and development. Without the leadership of faith-based organisations, creation and change cannot come without appropriate leadership capabilities and distinctive competencies. Therefore, faith-based organisations in Nigeria need to strengthen their model of strategic direction, people management skills and technological strength. However, through managing faith-based organisations in Nigeria, these leadership capabilities (strategic direction, people management skills and technological strengths) can be leveraged on in order to enhance their operational efficiency.

In order to drive the organisational efficiency of faith-based organisations, realistic and strategic policies and initiatives should be formulated by the management or leadership of the various ministries to promote and enhance the efficacy of the organisations' operations. Furthermore, management must be eager and able to invest in technology where the future of faith-based organisations lies. For instance, as a result of the COVID-19 pandemic that forced and prohibited any meeting in order to prevent the spread of the virus, most individuals are compelled to enter online services. It was noted that there were problems with most faith-based organisations that were not prepared and equipped during the period. Hence, adaptability to necessary information communication technologies to enhance operational efficiency handled by competent workforce would ensure excellent performance outcome that can be survived on by FBOs in Nigeria. This COVID-19 pandemic had change faces of doing business and workplace environment as a result of importation of global technological advancement.

Limitations and Suggestions for Further Studies

For this research, only one (1) fast-growing Pentecostal church in Nigeria was considered, restricting the scope of the study. However, it is proposed that future research could expand the spectrum to fit several fast-growing organisations focused on the Pentecostal faith. Future studies can also include traditional churches in the sample, in addition to that. It is equally important to state that only three constructs were used to assess leadership capabilities (strategic direction, people management skills and technological strengths). For more robust results, future studies may raise the number of constructs and make comparative studies of different faiths (Christianity, Islam and African Traditional Religions).


The authors would like to acknowledge the leadership of Covenant University, Ota, Ogun State, Nigeria, through the Covenant University Centre for Research, Innovation and Discoveries (CUCRID), for supporting the entire research processes. The authors also appreciate the efforts of Prof. Evans Osabuohien, Chair of the Centre for Economic Policy and Development Research (CEPDeR), Covenant University, Ota, Ogun State, Nigeria, who gave his time for a palliative analysis and the final draft of this work to be completed.


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