Leadership Trends in Common Wealth Bank - Case Study Example

Leadership Trends in Common Wealth Bank Author Author’s Affiliation Overview of Common Wealth Bank of Australia Commonwealth bank of Australia is one out of four largest integrated financial institutions. The bank operates in New Zealand, Asia, and the United Kingdom. The bank was founded in 1911 by the Australian government and later privatized in1996 after being listed in Australian stock exchange ("About Us - Commonwealth Bank overview - CommBank," 2014.). Some of the services offered by the bank include business and institution banking among others. The bank has a clear vision that places the interest of the customer at the heart of their plans. Being one of the top financial institutions, Common Wealth Bank has a huge task ahead of it to maintain the best leadership skills and styles as possible so as to stay ahead of its competitors ("About Us - Commonwealth Bank overview - CommBank," 2014.). The bank ensures that there is diversity in leadership through a variety of strategies among them being attracting retaining talented females into top positions ("Diversity in leadership - Commonwealth Bank," 2014). Leadership Theories Relevant to the Common Wealth Bank There are numerous theories that can be used to describe leadership in organizations based on the styles that the leaders assume. For common wealth Bank the best theories that are relevant are path-goal oriented theory, transactional theory, situational theory and transformational theory. Path-goal theory describes the scenario where the leaders motivate the subordinates to meet organizational goals that are designated to them (Lussier & Achua, 2013). It emphasizes on the relationship between leadership styles and characteristics of the followers in the work environment (Northouse, 2010). CBA’s leadership is in this form in that the leaders motivate the subordinate employees to work towards realization of the vision and the mission of the bank. The leaders at CBA are entitled to define goals, clarify path for vision achievement through provision of information, provision of support for goal achievement and removal of obstacles that may hinder the employees from attaining their targets. Path-goal oriented theory is very practical, has a variety of leadership styles in it and looks at the well being of the subordinate through motivation (Northouse, 2010). The second leadership theory relevant to CBA is the transformational leadership theory. This theory is also referred to as the relationship theory. It focuses more on the connections between leaders and the subordinates or followers. Transformational leaders always inspire and motivate the employees by providing them with the knowledge of the importance and advantages of a task (Lussier & Achua, 2013). The leaders are more concerned with the performance of the team members while at the same time achieving their own personal goals (Northouse, 2010). This form of leadership is associated with higher moral and ethical standards. With the above attributes of the leadership theory, it is in no doubt that it is one of the best leadership forms that Common Wealth Bank has integrated into its leadership platform. At Commonwealth Bank all the employees assigned to a given leader are bound to achieve the tasks. Characteristics of People who rise to Leadership positions in Common Wealth Bank Leaders who rise to top positions must exemplify some peculiar characteristics. It is these characteristics and their uniqueness that reflects the leadership in the leaders, making them be promoted to better positions in leadership (Northouse, 2010). For one to be elevated to a top leadership position in CBA they must be talented, this encompasses creativity and innovation. The leader is able to develop new insights into various scenarios, including design and implementation of cutting edge processes. Secondly, the leader has good communication skills. The leader must be able to express themselves both to the subordinates and the shareholders as well as the customers. Good communication skills also allow the leader to communicate the company strategies to the subordinates so as to achieve the organizational goals (Lussier & Achua, 2013). Whenever there is a crisis in the organization the leader is in a position to take charge and effectively outline the mitigation plan. Communication also aids in establishing leader-follower relationship, since the leader is able to get the contributions of the subordinates and in turn make the leadership effective. The leaders are also goal oriented. With this in mind, the leader is able to make decisions that are more inclined to the achievement of the mission and vision of the organization (Lussier & Achua, 2013). The leaders are also committed to their duty to serve the subordinates and the organization (Northouse, 2010). The leaders are also confident, this enables the leaders to garner support of the subordinates, motivate them however tough the task ahead is and take control of the team. In short, it makes the task achievable and ensures that all participate. The leaders have external awareness. They must be conversant with local and international policies and trends relevant to the organization. The leaders are basically aware of the external environment (Lussier & Achua, 2013). The leader must also be a strategic thinker so as to formulate ideas, implement plans that are both long-term and short-term as well as capitalize on any window of opportunity that appears (Northouse, 2010). The leader must be a visionary who has the long-term view and perception of every situation. This also helps the leader to stick to their shared organizational vision. The leaders are team players because in essence no objectives are ever met in solitude. Some other characteristics of leaders that arise to top positions include: customer service, decisiveness, accountability, entrepreneurship, technical credibility, and business acumen as well as negotiation skills. The listed qualities are those that have made individuals rise to leadership positions in different organizations. Challenges to Effective Leadership in Common Wealth Bank The Common Wealth Bank just like any other financial institution experiences the same challenges in leadership. Challenges in leadership occur in various time frames (Northouse, 2010). Some of the situations include: when something new is to commence, when a project is almost ending, when the times are tough, and when there is transition from one phase to the next ("Chapter 13. Orienting Ideas in Leadership | Section 6. Recognizing the Challenges of Leadership | Main Section | Community Tool Box,” 2014.). Some of the internal challenges include crises such financial windfall, in such instances the leaders are expected to come up with implementable decisions on how to come off without losses (Northouse, 2010).. Secondly, collaboration or partnership also presents a challenge to the leaders because they have to stipulate clear boundaries for the partnership to work. Here the leader must balance between the organization and the partner ("Chapter 13. Orienting Ideas in Leadership | Section 6. Recognizing the Challenges of Leadership | Main Section | Community Tool Box,” 2014.). The leaders also face the challenge of being criticized by their subordinates, especially in the event that the rules on the ground and tasks are not merging. Common Wealth Bank’s Place in the Economy Common Wealth Bank an outstanding financial institution in Australia, offering a variety of services. Its competencies lies in its simple but complex vision that is customer centered. To be a leader in every aspect, strategies are in place to ensure that the services offered are satisfactory. According to Common Wealth Bank 2014, CBA’s position in the business arena is strong as rated by Ratings direct. This was based both on home loans and retail deposits. The customers are also satisfied with the services offered at the bank. CBA is also geographically concentrated compared to its peers; Asia, New Zealand and Australia and still more branches are to open in various nations. According to the Common Wealth Bank (2014) CBA has performed well financially compared to the past years. For example, in the financial year that ended in June 2014 the net profit index after taxation increased by 13% (Common Wealth Bank, 2014). The bank has also been involved in community and sport programs that have benefited many individuals (Common Wealth Bank, 2014). Sustainability of Leadership in Common Wealth Bank The success of CBA is attributed to the competent leadership team in place, from the executive to the lowest levels of leadership. The bank recruits everyone regardless of any social, economic, and gender boundaries and moulds them to be leaders provided they are talented and willing to learn ("Diversity in leadership - Commonwealth Bank," 2014). The form of leadership is sustainable through diversification of leadership itself. To make sure that this blossom, CBA ensures that top talented women are lured and retained in leadership. The bank ensures that women who have leadership qualities are identified at the early stages of their career. The bank then mentors, educate, and offer flexible working terms and parental support options to them ("Diversity in leadership - Commonwealth Bank," 2014). Additionally, the bank is also creating transparency in all the appointments and updating business policies and procedures. Conclusion The financial industry is very competitive; to remain above the others organizations within the industry must work on their leadership wheels. There are various theories that describe different styles of leadership. The relevant theories for CBA leadership are transformational and path-goal oriented leadership theories. Others that can also fit are transactional and situational theory of leadership. Based on the leadership styles the characteristic of a leader comes out clearly. There are certain attributes that makes a leader be promoted to higher positions as discussed above. CBA’s place in the economy and the society at large is very strong. References About Us - Commonwealth Bank overview - CommBank. (2014). Retrieved from https://www.commbank.com.au/about-us/our-company/overview.html Chapter 13. Orienting Ideas in Leadership | Section 6. Recognizing the Challenges of Leadership | Main Section | Community Tool Box. (2014). Retrieved from http://ctb.ku.edu/en/table-of-contents/leadership/leadership-ideas/leadership-challenges/main Common Wealth Bank. (2014). Annual Report. Retrieved from https://www.commbank.com.au/content/dam/commbank/about- us/shareholders/pdfs/annual-reports/2014-annual-report-website.pdf Diversity in leadership - Commonwealth Bank. (2014). Retrieved from https://www.commbank.com.au/about-us/who-we-are/our-company/our-approach-to-diversity/diversity-in-leadership.html Lussier, R. N., & Achua, C. F. (2013). Leadership: Theory, application & skill development. Mason, OH: South-Western Cengage Learning. Northouse, P. G. (2004). Leadership: Theory and practice. Thousand Oaks, CA: Sage. Read More