This study investigated the main effects of leadership styles on organizational performance at state-owned corporations in Kenya. It specifically sought to determine the impact of laissez-faire, transactional and transformational leadership styles on organizational performance at state-owned corporations in Kenya. A descriptive survey research based on the perceptions of middle and senior managers in thirty (30) stateowned corporations based in Mombasa, Kenya was undertaken. A structured selfcompleted research questionnaire was thereafter distributed and collected after one week. The completed questionnaires were checked for plausibility, integrity and completeness resulting in 72 usable cases. Three independent variables with various factors were identified and measured using a five-point scale ranging from 1 (strongly disagree) to 5 (strongly agree). These were laissez-faire; transactional; and transformational leadership styles. The dependent factor was represented by the degree to which the organization has achieved its business objectives in the previous financial year. To discover the leadership styles that influence organizational performance, correlation analysis was employed. Correlations between the transformational-leadership factors and organizational performance ratings were high (0.518 to 0.696, P < .05), whereas correlations between the transactional-leadership behaviors and organizational performance were relatively low (0.219 to 0.375, P < .05). As expected, laissez-faire leadership style is not significantly correlated to organizational performance. Based on the findings, the following recommendations are given: managers should discard laissez-faire leadership style by becoming more involved in guiding their subordinates; public managers should formulate and implement effective reward & recognition systems. It was further recommended that managers should: strive to become role models to their subordinates; inspire subordinates by providing meaning and challenge to work; stimulate subordinate efforts to become more innovative & creative; and lastly, pay greater attention to each individual’s need for achievement and growth.
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