Exploring the Effect of Leadership Styles on Financial Management Practices in Tertiary Healthcare Institutions in South-South Nigeria

Abstract

Leadership in healthcare institutions has a significant effect on financial management practices, which are crucial for ensuring the sustainability and efficiency of service delivery. This study explores the effect of various leadership styles—autocratic, democratic, laissez-faire, bureaucratic, transformational, and transactional—on financial management practices, specifically financial accountability and budgeting, in two tertiary healthcare institutions in South-South Nigeria: University of Port Harcourt Teaching Hospital (UPTH) and Rivers State University Teaching Hospital (RSUTH). Using a cross-sectional design approach, quantitative data were collected through structured questionnaires administered to 195 participants from UPTH and 115 from RSUTH. The data were analyzed using Descriptive statistics and Spearman’s rank-order correlation. The results revealed that at RSUTH, transformational and autocratic leadership styles positively influenced financial accountability, with transformational leaders fostering transparency and ethical practices, while autocratic leaders ensured compliance with financial standards. In terms of budgeting, democratic and transactional leadership styles were positively associated with budgeting practices at RSUTH, supporting inclusive and structured financial planning. At UPTH, laissez-faire and bureaucratic leadership styles unexpectedly showed positive correlations with budgeting, suggesting that decentralized decision-making and procedural rigor may encourage employee engagement in financial planning. These findings highlight the importance of adaptable leadership that balances compliance with collaborative and innovative approaches to financial management. The study concludes that healthcare institutions should prioritize transformational and democratic leadership styles, which promote transparency, accountability, and participatory decision-making. Implementing leadership development programs to equip leaders with adaptable skills based on situational needs is recommended. Future research should investigate the long-term effects of leadership styles on financial sustainability across diverse healthcare contexts.