THE INFLUENCE OF THE MANAGER ON THE ECONO MIC EFFECTIVENESS OF HIS FINANCIAL INSTITUTION

The director of the credit union branch is usually seen as the corners tone of economic decisions in his organization, even if he has to proc eed under numerous constraints. But few empirical studies have sought to examine this assumption. This study examines the extent to which th e financial results of the institution are dependent on its managers. Ninety-two credit union managers from small and medium sized credit un ion branches served as respondents. Performance data were obtained fro m the federation's accounting reports for a period of three full years . Data on managers' characteristics were gathered from different quest ionnaires. The first result is the surprising and radical difference b etween small and medium-sized branches in terms of the ability to pred ict financial performance. More than 80% of the financial performance of a small branch is due to factors other than the ones considered in this study. However, in medium-sized branches, characteristics of the director explain 50% to 63% of variance, and this with a parsimonious number of predictive variables. While personal and environmental facto rs are both important, their effects differ. The second issue is the p redictive supremacy of organizational values vs leadership style. Rese arch and related literature have canonized leadership style, and organ izational values have received scant attention. There is a need to inc lude in models nor only how a manager leads (leadership style) but whe re he wants to lead (axiological orientation). Another point needs to be made concerning empowerment. None of the variables predicting profi tability indices, assets-development and loan losses are related to th e recent trend of mobilization and empowerment. Only the productivity index, a ratio of total transactions to total salary, relates to this trend. There is a negative correlation between financial indicators an d adherence to << mobilizing >> principles. It appears that perhaps th e effect of empowerment on financial results should be down played, bu t not on its ability to lead to action.