THE MODERATED-MEDIATED EFFECT OF REGULATORY FRAMEWORK AND INSTITUTIONAL CULTURE ON THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP AND ORGANIZATIONAL PERFORMANCE OF PRIVATE FAITH-BASED HIGHER LEARNING INSTITUTIONS IN KENYA

Author: Dr Ellen Waithira Karuga

ABSTRACT

This study evaluated the moderated-mediated effect of regulatory framework and institutional culture on the relationship between transformational leadership and organizational performance of private faith-based higher learning institutions in Kenya. Although transformational leadership, regulatory compliance, and institutional culture have each been studied as separate influences on organizational performance, their combined moderated-mediated effect – in which regulatory framework and institutional culture jointly condition and transmit the effect of leadership on performance – has received less empirical attention. Data were collected from 312 respondents (an 85.24% response rate) in private faith-based higher learning institutions and analyzed using hierarchical multiple regression. The hypothesis tested stated that there is no significant moderated-mediated effect of regulatory framework and institutional culture on the relationship between transformational leadership and organizational performance. Diagnostic tests confirmed the data satisfied the assumptions of homoscedasticity, independence of residuals, normality, and the absence of problematic multicollinearity. The first model, incorporating transformational leadership, regulatory framework, institutional culture, and their combined index, explained 76.8% of the variance in organizational performance (R² = .768, F = 298.097, p < .001), with all four predictors contributing significantly. Introducing the moderated-mediated index in a second model significantly improved the model, raising R² to .811 (F change = 82.804, p < .001). The null hypothesis was rejected, and the study concludes that regulatory framework and institutional culture jointly and significantly moderate and mediate the relationship between transformational leadership and organizational performance. The study recommends that private faith-based higher learning institutions align their internal culture with the demands of the regulatory environment, so that leadership, culture, and compliance work together to strengthen organizational performance.

Keywords: Transformational leadership; regulatory framework; institutional culture; moderated mediation; organizational performance; faith-based higher education; Kenya

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