Leadership Styles and Behaviors of Oman Arab Bank - Case Study Example

Leadership Project One

Introduction

Oman Arab Bank is jointly owned by the Arab Bank group in collaboration with Ominvest. The institution was founded in 1984, and it is the third largest bank in Oman based on net profits. In 2014, the banks posted revenue amounting to RO 31 million with assets exceeding RO 1,816 million (Oman Arab Bank annual reports, 2016). Oman Arab Bank operates in three main sectors namely; Islamic finance, investment banking, and retail. The essay will evaluate and analyze Oman Arab Bank together with its leadership base on the value systems theory and other theories that will be applicable. The first section of the paper will describe the value system theory by relating it to real life examples. The second part will mainly deal with evaluating divergent leadership styles and behaviors in Oman Arab Bank from different geographical, cultural and historical perspectives. Similarly, the third section will majorly involve analysis of specific leadership issues in Oman Arab Bank with the help of relevant leadership theories. The last part of the essay will provide a conclusion on the definition of leadership based on different worldviews and perspectives.

Background of Value Systems Theory

The value systems theory is grounded on the notion that the psychology of human beings is in an unfolding spiral process that is characterized by progressive subordination from lower order systems to higher orders systems depending on the people’s problem existence. The value systems are essential mechanisms of thinking that determine human behavior, but they do not necessarily represent the types of individuals or their personality traits. Ideally, the value system as advanced by Dr. Clare Glaves is open-ended in the sense that human beings will continuously quest for higher or rather better needs based on the problems they are currently facing in their environment. The value system in a spiral in nature in that it oscillates from a focus on ‘me’ to focus on ‘we’, similarly the systems exemplifies a shift from the expression of self -interest to that of self-sacrifice for the benefit of the society as a whole. It is prudent that the value system theory advocates for a transition from turning attention from inward interest to reach out for outward needs in the external environment (Beck and Cowan, 2014).

Unlike Maslow’s theory of hierarchy of human needs that postulates that self-actualization is the highest level possible that people can achieve in their quest to satisfy their needs. The value system theory is open-ended implying that people are subject to continuous development based on the problems that they are currently undergoing in their respective surroundings. It is prudent that the value system theory is continuously widening and expanding spiral of development that human being moves through the different levels of biological, psychological neurological as well as social complexities in their respective settings. Ideally, it is not obvious that people have to move from one level to the other chronologically since an individual can still achieve self-actualization while remaining at one level during the entire period of his/her existence. The eight levels that are advanced by the theory do not depict any form of progression from one to the next. Each level is different and distinct in nature since all are characterized by unique features that are not dependent on each other.

Value systems are elaborate coping systems that act as decision-making instigators and serve as mechanisms of reasoning that emerge as a result of the problems of existence. The eight value systems alternate from an individual focus to a more general and accommodative mode of emphasis. As individual moves from one level of the value system to the rest, the mindset or rather the underpinning ideology will change from an individualistic to a more general focus. In essence, people tend to transform their psychology as the conditions of their existence change. Thus, it is prudent that the theory postulates that human beings exist in particular life conditions, for instance, specific times in history, challenges, and circumstances (Beck and Cowan, 2014a).

Similarly, when people interact with certain conditions in their environment, they tend to adopt biologically, psychologically as well as neurologically to enable them to thrive and survive more elaborately. Since there are different levels of complexities in life, human beings tend to employ resources of separate volumes to ensure they maintain stability as well as guarantee their survival is guaranteed. To enable them to meet the needs of the different levels of the value system, people develop adaptive intelligence that allows them to cope with different circumstances to successfully, live and thrive in their respective settings. In essence, the value system is composed of cultural patterns, institutional arrangements that facilitate adequate behavior in real-life conditions as well as sets of consistent values and beliefs (Beck and Cowan, 2014a).

The value system theory can be applied to the current geopolitics of the world. Ideally, China an upcoming world superpower has assumed an orange/beige value system. In light of its orange value system, China has an individual materialistic expression in that all its activities are selfish in nature since they aimed at its interests without considering the impact on the global society. For instance, in the past, the country has often devalued its currency so as to benefit from the massive exports that it makes to other nations in international trade. In that perspective, nations around the world will incur more cost by buying China’s products which in turn translates to more foreign exchange for China. Similarly, China is a renegade country that will indulge in uncouth dealings with the intention of surviving the current situations (Rosado, 2004). In the wake of global warming, countries across the world embarked on a move to reduce their carbon footprint to save the world from global warming and its associated effects. However, contrary to the expectations of many China has increased the volume of carbon compounds that are released into the atmosphere as it runs to catch up economically with the developed world. Contrary, the United States of America has maintained a red/blue value system. Despite being individualistic and egocentric as it is evidenced by implementing foreign policies that safeguard and advances its interests and agenda across the globe. That notwithstanding, America has sacrificed itself to instill peace and tranquility in numerous parts of the world as evidenced in the Iraq war, Afghanistan, Syria, Libya just to name but a few.

Leadership Styles and Behaviors of Oman Arab Bank

Oman Arab Bank has undergone numerous leadership transformations since its inception with the aim of adapting to changes in its business environment as well as maintaining competitiveness in the banking sector. Ideally, during the initial years of its inception, the bank assumed the red value system since its style of leadership was primarily bureaucratic in nature. At that time, Oman Arab Bank was predominantly an Islamic financial institution since it was run, managed and served Muslims exclusively. Since it was a Sharia-compliant bank, most of the values, rules, and principles that governed the operations of the institution were drawn from the Quran. In that sense, standards and regulation were crafted by the top management and the employees were supposed to follow them to the letter (Rosado, 2004). Leaders were sacred in that they were treated with a lot of respect to the extent that junior employees would not question their decisions even when they made inconsistent decisions.

The management wanted to stamp their authority on their juniors by coming up with regulations that would defend their reputation as well as grant them certain privileges that made them favorable as compared to their subordinates. The bureaucratic leadership style was ingrained in the conventional mode of governance that was dominant across the Arab world during that time whereby religious leaders and people in positions of influence would dictate the manner in which their subjects conducted themselves. It is worth noting, that during that period the bank posted average performance since productivity was not good given the fact that employees were not motivated (Northouse, 2010). Ideally, the firm’s leadership was not keen to post excellent results but to create a culture and environment whereby they are respected and influential over all matter concerning the bank. Relatively, the fact that all employees of the bank during that time were Muslims made it easier for the management group to implement a bureaucratic form of leadership that drew some of its governing principles from religious and cultural underpinnings. However, due to economic and social ramifications, the financial market in Oman underwent a massive transformation that opened it to new players both within and without the country. In that light, the level of competition increased and the firm had to implement best practices to remain competitive in the industry (Beck and Cowan, 2014a).

The value systems of Oman Arab Bank changed in the course of time since the institution faced varied issues ranging from lack of productivity, increased competition and the advent of globalization. In that light, the company adopted the green value system where it emphasized group and cultural expression in running its affairs. It is worth noting that it is this value system that catapulted the institution to being the third largest bank in Oman as well as facilitated its expansion to over twenty-five countries across the globe. With the green value system, the leadership style implemented by Oman Arab Bank has shifted from the bureaucratic form to a more transformational mode of governance.

The management incorporates the junior employees of the company in decision-making to ensure an inclusive process that will facilitate cooperation and teamwork to attain the firm’s objectives. It was prudent for the organization that without incorporating the employees, the bank will not achieve productivity in an increasingly competitive environment. Thus, for Oman Arab Bank to thrive in such an environment, it has to employ transformational leadership styles whereby the management formulated the vision for the company and inspired its employees to be part of that initiative. Through incorporation, the employees would feel a sense of belonging with the obligation to attain the goals that had been set. Ideally, this leadership style encouraged new methodologies of solving emergent problems that the firm would encounter in the course of its operations by seeking feedback from all employees (Meindl and Schyns, 2005).

Evaluation and Analysis of Particular Leadership Issue in Oman Arab Bank

The historical context and cultural influences are among the related problems that have shaped the kind of leadership styles that Oman Arab Bank has implemented over time. Ideally, just like other conventional organizations in the Gulf region, cultural influences and in particular the Islamic way of life affects the manner in which corporate organizations operates. The purple value system used to be a dominant mechanism to cope with the cultural and religious ramifications to ensure the team experienced an enabling environment to conduct its business (Beck and Cowan, 2014). In that perspective, the operations of the bank had to be fashioned in a manner that depicted the firm was part of the Islamic community by designing its services to fit the Sharia laws and principles. Ideally, this is among the factors that made Oman Arab Bank to be limited to the domestic market for quite some time before it would expand its operations to tap the market of non-Muslim clients. Given the strict regulations to Islamic laws and principles, the bank presented itself in a manner that suggested it only targeted Muslim customers thus making it unattractive to other potential clients.

However, with the advent of a diversified economic environment that was characterized by increased competition the bank’s productivity declined with the entry of new firms. The banking sector was expanded since new products and services were introduced most of which would not cope with the strict sharia laws. Thus, customers that were keen on investments would opt to deal with conventional banks at the expense of Sharia-compliant institutions like Oman Arab Bank. In that light, Oman had to employ a Beige value system that was premised on survival tactics that would enable the organization to thrive in a harsh business environment. In that light, Oman Arab Bank made mergers with other development groups in the country to increase its capital proportion as well as venture into alternative banking services to remain competitive in the industry (Metcalfe and Mimouni, 2011).

The organization culture and leadership styles of the bank underwent massive transformation since they departed from the traditional model of bureaucratic leadership to a more open and change form of governance. The new leadership strategy was more social in nature since it emphasized in incorporating the entire company workforce contrary to the individualistic approach that top management implemented in the previous dispensation. In this setting, individual talent, skills, and competencies were given room to thrive a factor that contributed to increased productivity and expansion that enabled Oman Arab Bank to venture into other external markets. According to role theory, individuals in an organization define roles for themselves and others based on social learning (Rauber, 2013). In that regard, the employees of Oman Arab Bank mastered the art of new skills and knowledge in the workplace through social learning that was promoted by the collective nature in which the company operated. The more the workers interacted, the more they learned new skills that contributed to the overall productivity of the enterprise.

Bass’ transformational leadership theory states that awareness of tasks in firms is crucial to motivating employees. In that sense, the tasks assigned to workers ought to be defined to them to create a sense of responsibility that will motivate them in accomplishing the assigned duties (Gill, 2010). Once their tasks are defined, the employees will embark on focusing on the most suitable techniques that will be employed to ensure positive results are obtained. Increased competition in the banking sector forced Oman Arab Bank to shift from rigid and centralized form of leadership to an open model of governance that enabled collective participation. In this case, the employees would be incorporated in the design and definition of their jobs, and then they would be motivated to accomplish the set obligations in line with the objectives of the organization. The model became popular in the company since it realized massive improvement in its productivity a factor that facilitated its expansion to more than twenty-five countries.

Conclusion

Based on the knowledge acquired from the course it is evident that there is no standard definition of leadership. The meaning of the term leadership is relative, and it depends on the particular situation where it is applied. Ideally, there are numerous concepts in leadership apart from just setting the rules and regulations that govern the manner in which subjects operate in a given setting. Before Leadership Project one course, I held the worldview that leadership was the process by which an individual in an influential position or power made his/her subjects to behave or act in a particular manner with the aim of accomplishing certain objectives. Ideally, my definition of leadership was limited to the fact that subjects had to follow the directions of their masters to achieve particular goals. However, after the course, my knowledge of the term has substantially transformed since I have come to understand that numerous factors affect the manner in which people react to situations in their environment (Beck and Cowan, 2014).

The value system theory made me understand the fact that leadership styles are not techniques that are crafted by those in a position to manipulate their subjects into achieving particular objectives, but they are mechanisms of responding to changes in the environment. For instance, when the people in management positions decide to employ autocratic tendencies; it is largely because they want to stamp their authority on their subjects. It is possible that during that period the firm is enjoying monopolistic privileges in the sense that the employees do not have alternative places to works, and thus they will have to cope with the underlying situation (Palestini, 2009). However, with the entry of new firm sin the industry consumers as well as the employees will have a choice to choose between the competing organizations. Therefore, if a company continues its bureaucratic tendencies its employees will shift to other firms that are more engaging thus creating a workforce shortage. In such situations, those in a management position will move to a leadership style that emphasizes on groups and social expression by engaging its workers on all pertinent issues before major decisions can be formulated. In essence, the type of leadership strategies that are applied by organizations is often aimed at ensuring that the firm copes with the underlying issues in its environment to obtain a competitive edge over rivals (Finkelstein, Hambrick, and Cannella, 2009).

The knowledge from the project leadership course, my new definition of leadership is a manner in which organizations cope with problems in their environment. The leadership styles that firms implement are solely based on the issues they encounter and, thus they institute mechanisms that will see then thrive in such conditions. All the eight levels of the value system theory are typical scenarios that firms encounter in the course of their lifecycle. In that perspective, they will implement each value system depending on the underlying factors during a particular time in their operations. It is prudent that each value system will be implemented one at a time though some situations may be more complicated to warrant a collaboration of two or more value systems. Thus, to lead is not mobilizing resources to achieve a particular objective but the manner in which those in position harness their resources to respond to problems in their environment with the aim of surviving or thriving in that setting.