Leadership Practiced in the DBS Bank Ltd - Book Report/Review Example

Management of Organizations Table of Contents Introduction 3 Leadership Qualities and Styles 3 Link Between Organizational Effectiveness and Leadership 4 Leadership at DBS Bank Ltd 5 Evaluation of the Leadership Style 6 Strengths and Weaknesses of the Leadership Style 7 Team Dynamics 8 Planning and Management 9 Strategy 10 Decision-making 10 Strategy and Success of DBS Bank Ltd as reflected by the Leadership Style 11 Link between Leadership and Effectiveness of DBS Bank Ltd 11 Conclusion 12 Reference List 13 Introduction Leadership is the process of inspiring a group of people towards achieving a mutual purpose. It is the process of influencing a group of individuals inspiring them to fulfill an organizational goal through personal motivation (Northouse, 2015). Leadership does not mean the qualities and characteristics possessed by an individual but it is an interactive process between the leader and the followers (Bass and Bass, 2009).The individuals who are engaged in leadership are called leaders and the individuals towards whom leadership is directed are known as the followers or subordinates. Though the process involves both the leaders and the followers, generally the leaders start the relationship, establish the communication linkage and carry the responsibility of maintaining the relationship (Chemers, 2014). Leadership establishes the direction of future activities and changes strategies to achieve the target. It focuses on people and looks beyond the organizational structure. Leadership empowers the group members through personal motivation, establishing personal connection with the subordinates and developing them through evaluating their performance. Leadership process produces positive outcomes and acts in a decisive manner in order to bring dramatic changes in the work process to achieve the organizational targets (Kotter, 2008). The purpose of the report is to identify and analyze the leadership practiced in the DBS Bank Ltd, a renowned organization in Singapore and its contribution towards the organizational objectives. Leadership Qualities and Styles Leadership is a process which can be learned through experience. Vision, focus and concept are the qualities which are related to the ability of the leader to provide motivation. A leader must be goal-oriented and capable of giving the best explanations of the events and projecting future benefits. An individual will be considered as a successful leader if he or she is able to build trust and be caring towards its team members, has an ability to recognize potential of individuals, has a desire to help others and make them help each other. A leader must be competitive, energetic, courageous and achieve-oriented in order to motivate others. He or she must be responsible and be able to manage time efficiently. A leader must be able to coordinate activities of people and operate systems in order to help the subordinates to work efficiently. The theory of leadership suggests various leadership styles that leaders that must adopt in order to motivate the subordinates. Some of the basic styles of leadership are the autocratic leadership, bureaucratic leadership, democratic or participative leadership and laissez-faire leadership. Autocratic leadership is the classical approach towards leading people in which the employers have all the decision-making power and employees are expected to obey instructions without receiving any explanations. In the bureaucratic leadership style, work is strictly done according to the rules and regulations of the organization. In democratic or participative leadership, employees are encouraged to take part in decision-making and are regularly informed about the news and events that influences their work. Leaders in this approach share their problem solving responsibilities with their subordinates. In the laissez-faire style of leadership, the entire decision-making power is given to the employees. Subordinates are not directed or monitored by the leaders and thus experience full freedom in the workplace. The other leadership styles include the transactional and transformational leadership styles. The basic requirement for transactional leadership is that a transaction exists between the leader and the followers. The organization pays wages to its employees in return for their effort and obedience and also the leader has the authority to discipline the subordinates if their work does not meet the standards of the organization. The power of the transactional leaders comes from their position and responsibility within the organization. Transformational leadership is based on the ability of the leader to motivate their subordinates through their intellectual, charisma, stimulation and individual consideration. It is one of the most modern and most successful leadership styles. Transformational leaders believe in assigning responsibility, engaging the staff in important decisions and showing confidence in the ability of the employees to make the right assessments. They value individual contribution, encourage people to take ownership of their work and can transform an employee into a valuable team member by evaluating the strength and weakness of each follower. Link Between Organizational Effectiveness and Leadership It has been observed that successful organizations are a result of effective leadership and organizational culture (Popa, 2012). Earlier, the focus was on the financial performance of an organization but the in the recent times, non financial indices customer satisfaction and quality can be considered for evaluating the effectiveness of the organization. If an enterprise needs to improve its performance, it must evaluate the leadership style and modify it according to the new requirements (Popa, 2012). Different types of leadership styles affect the performance of an organization in a different manner. Some of them help the organizations to achieve their long term objectives while others hinder the progress of the enterprises. In the laissez-faire approach towards leadership, there is no specified objective, direction or restrictions and thus organizations adopting this approach are lack of motivation in the employees, poor work culture, and declining performance. Moreover, the sometimes the autocratic style of leadership has a negative impact on the performance of an organization. However, democratic leadership encourages the participation of employees in the decision-making and thus increases employee engagement. Transformational leaders help the subordinates to trust the organization and its mission and stop having a doubt about the objectives of the company and work harder to achieve targets. Leadership at DBS Bank Ltd Headquartered in Singapore, DBS Bank Ltd is the leading financial services group in Asia expanding increasingly in the markets of Greater China, South Asia and Southeast Asia. It is the largest bank in Singapore and Southeast Asia with more than 280 branches across 17 countries (DBS Bank Ltd, 2014b). The organization is committed to being an employer of choice and considers people at the heart of banking. DBS is fully committed in protecting the interest of all its stakeholders including its employees and also to promote long-term sustainability of the group through effective governance (DBS Bank Ltd, 2014b). DBS Bank Ltd is clearly focused in the Asian region and is continuously growing in this region with immense opportunities. The organization believes that their employees are the most valuable assets and provide different employee experiences which involve learning and development, rewards and recognition and work-life balance (DBS Bank Ltd, 2014a). The enterprise has received various prestigious awards which reflects that the increasing influence and strength of the company across the whole landscape across Asia. The market recognizes the capability of the diverse team of the company and the meet the needs of the customers by delivering innovative financial solutions. The company has received the Gold for Best Managed Board at the Singapore Corporate Awards 2014 in the Big Cap Category. This indicates the effective corporate governance practiced within the organization (DBS Bank Ltd, 2014c). The bank has also been renowned as the Bank of the Year, Asia by The Banker, a member of the Financial Times Group and also the Best Bank in Asia” by Global Finance. The organization has also been named the “Safest Bank in Asia” for six consecutive years from 2009 to 2014 (DBS Bank Ltd, 2014c). This reflects that ability of the organization to stay with the people at times of economic crisis and build loyal and long –term relationships with its customers. The organization believes in recruiting talented individuals, instill in them a sense of purpose and direction, and align them with the objectives of the organizations. The organization also provides their employees with adequate support and training with the intention of empowering them to make decisions and encourage them to aim high in their career paths (Ratanjee, 2013). Thus it can be stated that the largest bank of Asia practice the transformational leadership styles in their organizational structure. Evaluation of the Leadership Style Transformational leaders are more efficient in assessing the current situation of the company and design a long term goal for growth and development of the enterprise. They can communicate their views efficiently among the employees of the organization and make them trust on the objectives of the organization. Thus a transformational leader can deal with a challenging situation of the company and bring about dramatic changes in the work culture to improve the current situation. In 2009, the CEO seat in the organization fell vacant and at that time the bank was facing a challenging situation in the global environment. Its development of its operating systems and work processes were lagging behind the speed of its expansion in the region. At that time, Piyush Gupta was appointed as the new CEO. Later, he proved to be successful in transforming the performance of the organization. Though, the leader was experienced working t\with western values and insights as he has spent 27 years in Citibank. He has served in the Asian region and thus has the knowledge about the Asian values (Ratanjee, 2013). Transformational leaders trust on their passion and enthusiasm to bring transformation by inspiring the followers to align their personal interests with the vision of the organization and work harder towards achieving the goals. Transformational leadership has a broad view of leadership as it augments other leadership styles such as the participative style of leadership. This is because both transformational and participative leadership encourages employees to take part in the decision-making process and share the responsibilities of the leaders. Strengths and Weaknesses of the Leadership Style Motivation Transformational leadership motivates people by recognizing individual effort in the team and making the followers believe that the work done by them is crucial to the organization and contributes positively to achieve the overall objective of the enterprise. The transformational leader has a clear understanding of the mission of the company. The mission of the company defines the purpose of the organization for remaining in the business and identifies the people for whom they are working. The leader must also possess a view of the vision of the company. The vision of the company determines the goal of the company and specifies the time period within which it should reach the targeted position. The leader following the transformational style instills in its followers the purpose and direction towards which they should work and tries to align the personal interests of the subordinates with the goals of the organization. Thus motivation is the key strength of the transformational leadership style. They can also motivate people by encouraging them to develop innovative ideas. Recognizing the achievement of the employees by thanking or congratulating them in person or in writing; nominating the employee to serve a specific committee, for an award from a university or for participating in a mentoring program are some of the effective no-cost ways to motivate employees (Global Knowledge Training LLC, 2006). At DBS Bank Ltd, there exists a strong program to identify role models within the bank. Employees who have performed beyond their line of duty are rewarded with Spot Awards all through the year. Also, employees who demonstrate the values of the company are also featured on the intranet of the company. The enterprise also recognizes and gives rewards to people and teams for their outstanding performances. Due to the motivation provided by the senior management to the new recruits, the retention rate of employees has increased over the years with more and more people preferring to build a career with the bank. The bank also appreciates the efforts of its employees through the DBS Care Program. One of the elements of the program is “5@5” which persuades the employees to leave from work one hour earlier on Fridays at 5 p.m. to spend to maintain work-life balance. They are also allowed to take leave for half the day on their birthdays to celebrate with family (Ratanjee, 2013). Team Dynamics Team dynamics are the underlying psychological factors that influence the direction of the performance and behavior of the team. Team dynamics is established by the nature of work performed by the team, the personalities in the team, their working relationships with other people and the surroundings in which the team work. Team dynamics can be beneficial when it contributes towards improving the overall performance of the team. It can also be harmful when team dynamics causes demotivation, unproductive conflicts and prevent the team from reaching its goals (Chou et al., 2013).Under transformational leadership the team’s perceptive trust and the collective efficacy may evolve as the process variables and contribute significantly towards the performance of the team in respect to quality, quantity and time to meet the determined objectives. Team dynamics at DBS Bank has always been successful in contributing positively to the organizational objectives of the bank. It is recognized as one of the world’s top 25 companies for leaders by Aon Hewitt. The bank ranked 18th among the 25 companies for the strength of its leadership culture and practice. It has also receives the Gallup Great Workplace Award 2014 for two consecutive years for creating a workplace culture with highly engaged employees. The employees engagement score of the bank has increased over the years and the employees are provided with developmental opportunities for both personal and professional growth (DBS Bank Ltd, 2014d). Each team at DBS Bank Ltd is guided by the values to develop a distinct performance culture through “PRIDE!” The team members are Purpose-driven as they are motivated to develop an impact beyond banking. They are committed to the objective of the bank to make banking trustworthy and joyful and in transforming Asia for the better. Leadership at DBS Bank is Relationship-led and their leaders are committed in building long-term relationships with the team members and in building strong teams. Team members are encouraged to embrace change and add value in serving customers in Innovative ways and providing them with delightful experiences. Team members are given freedom to decide and take responsibility to make things happen (Decisive). The team are satisfied to be a part of the wonderful management and remain excited and energized about everything and they celebrate every occasion together (E!). Planning and Management Planning and management are significant aspects of leadership. Transformational leaders emphasizes on detailed information about the work processes, work culture and recent performance variable of the organization. This is because they need to identify the factors which influence the performance of the company. Thus, in this approach leaders require the support of leaders at several stages in order to bring a dramatic transformation in the structure of the organization. Thus the planning and management aspects of the transformational leaders will depend on the responsiveness of others. This is one of the weaknesses of this approach towards leadership (Suresh and Rajini, 2013). The top management of the DBS Bank Ltd invests significantly in building a system of leadership and management process. A team of more than 20 people report directly to the CEO of the company and again another 250 people report to these 20 top executives. The thus the decision of the transformational leaders depends on how the leaders at each stage is working towards improving the team performances. DBS Bank Ltd aims to develop a pipeline of leaders in order to ensure that the next level of top executives is groomed internally (Tomizawa and Pedersen, 2014). Thus, the bank invests huge amount of resources in training early graduates in fundamentals of banking and rotate them through assignments including the front, mid and back office positions. The rotations are developed to provide each of the recruit with board experience and assist them to know about every operations of the bank. DBS Bank Ltd also undertakes the “Triple E” approach towards planning and management of leadership. The three “Es” comprises of Experience (rotations and assignments), Exposure (observing, mentoring and networking) and Education (development in class) (DBS Bank Ltd, 2014d). According to the top management executives of the company, the highly talented individuals are most productive when they are exposed to the senior management. Thus the senior management members are responsible for the growing and nurturing the future leaders within the organization. Thus the company has tried to remove the weakness of this transformational approach by dividing the responsibility of developing future talents among all the senior management staffs. Therefore, it ensures that leaders at each stage of the organization carry out their responsibility successfully. Strategy It is the decision taken by the leaders about the way in which the long-term objectives of the organization can be achieved. This includes the procedures of motivating people, inspiring them by presenting a clear view of the vision of the company and build string trust-based relationships with the employees. In the transformational approach towards relationship, leaders focus more on the needs and requirements of the individual subordinates and thus try to design a strategy that facilitates the subordinates to feel comfortable in the workplace environment. Thus the leaders avoid accepting the realistic situation of the company and takes decisions on the basis of trust and passion. Over reliance on the enthusiasm restricts the transformational leaders to study and accept the facts which may not be favorable for the organization. The leaders at DBS Bank Ltd believe in designing a business strategy that focus on the Asian relationship, their insights, and connectivity. They include in their strategies the elements that are embodied in the Asian relationships: being there through both good and bad times, understanding that there are swings in the relationships and the fact the every transaction may not be profitable all the time. The bank has successfully managed the Asian stock market crash in 1997-98 and has also withstood the worldwide recession that started in 2007. As a result it emerged as the regional market player when major global banking corporations disappeared from the market (Ratanjee, 2013). Thus it has stayed with the people even if it has not been profitable for the organization. Thus transformational leadership instills in its subordinates to align to the mission of the company to stay beside the people in crisis situations. Decision-making Transformational leaders encourage and engage their followers by inviting them to take part in the important decision making processes. They value the suggestions and opinions of the followers and incorporate their ideas in the process of finalizing a decision. The subordinates are allowed to question the various work processes followed within the organization and they are provided with appropriate answers to their queries in this approach towards leadership. At DBS Bank Ltd, the leaders empower their employees by allowing them to introduce innovative process that will enhance customer satisfaction. This is done through experimentation and by incorporating human centered design thinking in process improvement events and customer journey workshops. The employees are provided with the required authority and resources to introduce the changes beneficial to the customer. The top management of the bank believes that the power of communication is a two way channel and thus it has introduced a feedback portal named “Ask Piyush” (after Piyush Gupta, the current CEO of DBS Bank Ltd). Through this the chairman seeks employee opinions, suggestions and criticisms and responds to each of the submissions. Thus, it has helped employees to feel that they are a valuable part of the organization (Ratanjee, 2013). Strategy and Success of DBS Bank Ltd as reflected by the Leadership Style The operations of the bank are centered on people and thus providing people with the best banking experience is the main aim of the institution. The transformational leadership style also focuses on the individual needs of the employees and empowers them to implement new ways that enhance customer satisfaction. The bank offers a full range of services in customer banking, institutional banking and wealth management and is committed to establishing long lasting relationships with its customers. The leaders of the organization determines the values, organizational culture and employee motivation and also the design the strategies of execution and effectiveness. The success of the leaders at DBS Bank Ltd to make the subordinates understand the strategy of the organization and make them work collaboratively to achieve objectives has contributed to the increased earnings of the bank over the last five years despite low interest rates (DBS Bank Ltd, 2014d). The most fundamental aspect that contributed to the huge success of the organization despite volatile, uncertain and complex economic environment is the transformational approach towards leading the people. This has been achieved through embracing innovation, entrepreneurship, liveliness and decisiveness keeping the customer viewpoint in mind. Link between Leadership and Effectiveness of DBS Bank Ltd In the recent times, performance of an organization is preferred to be measured in terms of the quality and customer satisfaction than on financial performance of the organization. The success of an organization highly depends on the leadership strategy adopted by the enterprise as leadership shapes the values and culture in the organization according to the requirements in the current changing economic environment. In the case of the DBS Bank Ltd, the transformational leadership style assists in incorporating the objectives of the organization within the team members and allows empowers them to make appropriate changes that eventually contribute positively towards the mission of bank to improve the banking experience of the people of Asia. The leadership style also empowers the employees to take the advantage of technological progress and thus improve the quality of services by providing them with intensive training and giving them exposure to a wide range of experiences. Conclusion The leadership style is a key factor that influences the performance of an organization. The transformational leadership approach adopted by the DBS Bank Ltd in Singapore contributed significantly to the success of the bank to survive worldwide recession and also increase the income of the bank despite of low interest rates. The leaders at the bank has been successful in retaining talented individuals by making them feel that their contribution is significant for the bank to achieve its objectives of improving the banking experiences of the people of South Asia. The leadership style has also been successful in making the employees understand the purpose of their work and thus work harder to achieve them. Thus, it can be concluded that the transformational leadership style practiced in the DBS Bank Ltd has contributed positively towards the organizational objectives. Reference List Bass, B. M. and Bass, R., 2009. The Bass Handbook of Leadership: Theory, Research, and Managerial Applications. New York: Simon and Schuster. Chemers, M., 2014. 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