MOB Shantel Thomas-final 1

8/11/2019 MOB Shantel Thomas-final 1

http://slidepdf.com/reader/full/mob-shantel-thomas-final-1 1/32

An investigation of Leadership 0f National Commercial Bank (NCB).

Candidate name: Shantel Thomas

Subject: Management of Business Unit 1

School name: McGrath High

Centre number: 100074

Candidate Number: 1000740509

Teacher name: Miss Shorter

Date Submitted: April 29, 2013



Table of Contents Page #

Topic _____

Acknowledgement _____

Introduction: _____

- Topic/ Aim of the project- Background

Literature Review _____

Methodology _____

Presentation of Data _____

Analysis and Evaluation _____

Conclusion and Recommendation _____

Appendix: _____

Questionnaire _____

Interview schedule _____

Letter of Introduction _____

References and Citations _____



Topic

An investigation of Impact of Leadership particularly, leadership style of NCB.



Acknowledgement

The heights by great men reached and kept were not attained by sudden flight.

Firstly I would like to greatly acknowledge God for his divine guidance and wisdom to do this

Internal Assessment and secondly, to my Management of Business teacher, Miss Shorter for her

invaluable guidance in completing this assessment. I would like to thank the management and

staff of National Commercial Bank (NCB) for accommodating me; last but by no means least,

thanks to my Mother for her support.



Introduction

Topic Statement/Aim of the Project

The leadership styles of managers of NCB affect decision making and influence its financial

performance. Thus the research aims are:

- To determine the leadership styles used by management of NCB.

- To ascertain the influence of leadership styles on the decision making of NCB.

- To identify the effect of leadership styles on financial performance of NCB.

This research will enable managers to understand that their leadership style affects organizational

effectiveness, particularly decision making and financial performance.

Background of the Project

Obiwuru et al, 2011 conducted a study of the effect of leadership styles on organizational

performance in selected small scale enterprises. Their research revealed that the leadership style

of managers does have an effect on followers and performance.

This research paper aligns to the study of leadership on organization performance by Obiwuru et

al, 2011, however, it will look at leadership in a large organization and the impact of leadership

on decision making and financial performance.



Literature Review

Organisational Background

National Commercial Bank (NCB) must have grown to be what it is today because of effective

leadership.

The National Commercial Bank Jamaica Ltd (NCB) had its genesis over 176 years when in 1837

the Colonial Bank of London, England, opened its doors on Harbour Street in Kingston. Through

a series of mergers and acquisitions, the Bank eventually became known, in 1977, as National

Commercial Bank Jamaica Limited.

The National Commercial Bank Jamaica Limited is incorporated in Jamaica and licensed under

the Banking Act, 1992. The Bank is a 66.36% subsidiary of AIC (Barbados) Limited. The

ultimate parent company is Portland Holdings Inc., incorporated in Canada. With a current work

force of over 2,500 employees, NCBJ has an assets base of approximately US $3,877 million.

The Bank is listed on the Jamaica Stock Exchange and the Trinidad and Tobago Stock Exchange

and because of this NCB has grown to become Jamaica‟s largest financial services provider with

40.0% market share by assets of the commercial banking sector (as at September 2011).

NCB provides a wealth of financial services through its network of 42 locations and over 170

ABMs islandwide. These services include chequing and savings accounts, credit card facilities,

personal and commercial loans, insurance, and wealth management; supported by internet

banking, along with telephone banking and a toll-free 24/7 Customer Care Centre at 1-888-NCB-

FIRST (1-888-622-3477).



Leadership styles

Robinson and Hamil, 2008 saw leaders as one who is able to integrate the most appropriate

strategies for getting the work done in order to meet goals of an organization.

The ability of a superior to influence the behaviour of subordinates and persuade them to follow

a particular course of action (Barnard 1938).

Leadership style in an organization is one of the factors that play significant role in enhancing or

retarding the interest and commitment of the individuals in the organization (Obiwuru et al,

2011). Therefore, it is important that managers find their leadership style (Glantz 2002).

Leadership styles may broadly be classified as autocratic, free rein or laissez-faire and

democratic (Webber and Morrison, pg. 168).

IAAP, 2009 outlined the assumptions of participative leadership. Assumptions: Involvement in

decision‐making improves the understanding of the issues involved by those who must carry out

the decisions. People are more committed to actions where they have involved in the relevant

decision‐making. People are less competitive and more collaborative when they are working on

joint goals. When people make decisions together, the social commitment to one another is

greater and thus increases their commitment to the decision. Several people deciding together

make better decisions than one person alone.

A participative leader, rather than taking autocratic decisions, seeks to involve other people in

the process, possibly including subordinates, peers, superiors and other stakeholders.



In 1939 the famous psychologist Kurt Lewin identified the classic style of leadership: autocratic,

democratic and laissez faire.

Autocratic. In the autocratic style, the leader makes decisions without consulting with others. In

Lewin's experiments, he found that this caused the greatest discontent. According to Randall et

al 2007, autocratic style of leadership is used when the leader tells the employees what he/she

wants done and how he/she wants it done, without getting the advice of her followers. This style

tends to demotivates workers who want to contribute and accept responsibility and decisions do

not benefit from workers‟ knowledge and experience (Stimpson et al, 2011).

Democratic leadership style. In the democratic style, the leader involves the people in the

decision‐making. Democratic decision decision‐making is usually appreciated by the people,

especially if they have been used to autocratic decisions with which they disagreed. Democratic

style can be problematic when there are a wide range of opinions and there is no clear way of

reaching an equitable final decision. Stimpson et al, 2011 put forward that consultation with staff

can be time-consuming and on occasion, quick decision making will be required. At times issues

are too sensitive.

Laissez‐Faire leadership style. The laissez‐faire style minimizes the leader's involvement in

decision making. Laissez Laissez‐faire works best when: people are capable and motivated in

making their own decisions, and where there is no requirement for a central coordination.

Laissez faire style of leadership is when the leader allows the employees to make decisions.

However, the leader is still responsible for the decisions that are made. This is used when

employees are able to analyze the situation and determine what needs to be done and how to do it

based on their experience and expertise. However, you cannot allow workers to take every



decision. This style is used when a leader has the full trust and confidence in the people below

them for example entry level workers (Randall et al, 2007). However, this style is ineffective if

it is used as a result of weak managers not exerting control when it might be needed (Stimpson et

al, 2011).

Lewin discovered from his experiments that: The most effective style was democratic.

Excessive autocratic styles led to revolution. Laissez‐faire resulted in less coherent work

patterns and exertion of less energy.

The Hersey-Blanchard Situational Leadership Theory was created by Dr Paul Hersey, a

professor and author of "The Situational Leader," and Ken Blanchard, author of the best selling

"The One-Minute Manager," among others. The theory states that instead of using just one style,

successful leaders should change their leadership styles based on the maturity of the people

they're leading and the details of the task. Using this theory, leaders should be able to place more

or less emphasis on the task, and more or less emphasis on the relationships with the people

they're leading, depending on what's needed to get the job done successfully (mindtools.com).

Obiwuru et al, 2011, explains transformational leadership.

For transformational leadership style, the follower feels trust, admiration, loyalty and

respect towards the leader, and is motivated to do more than what was originally

expected to do (Bass, 1985; Katz & Kahn, 1978). The transformational leader motivates

by making follower more aware of the importance of task outcomes, inducing them to

transcend their own self-interest for the sake of the organization or team and activating

their higher order needs. He encourages followers to think critically and seek new ways

to approach their jobs, resulting in intellectual stimulation (Bass et al., 1994). As a result,



there is an increase in their level of performance, satisfaction, and commitment to the

goals of their organization (Podsakoff et al, 1996).

There are four elements/ dimensions/ components of transformational leadership. The four „I‟s‟:

Idealised influence, inspiration, intellectual stimulation and individual consideration (Bass &

Avolio, 1994).

Influence of leadership on Decision Making

Bittel, Burke and Bilbrey, 1996 purported that decision making is referred to the selection of one

course of action Kotter, 1985 postulated that challenges faced by strategic leaders in

implementing complex and long range consequential decisions, demand that they sophisticated

with respect to issues of leadership, power and influence. Making organizations more innovative

and responsible require focus on a number of leadership, power and influence issues.

For strategic leaders in most organizations the key to successfully implementing organizational

change and improving long term performance rests with the leader‟s skill in knowing how to

make power dynamics work for the organization, instead of against it.

Influence of leadership on Financial Performance

Financial performance is defined as a subjective measure of how well a firm can use assets from

its primary mode of business and generate revenues. This term is also used as a general measure

of a firm‟s overall financial health over a given period of time, and can be used to compare

similar firms across the same industry or to compare industries or sectors in aggregation.

Furthermore, the analyst or investor may wish to look deeper into financial statements and seek

out margin growth rates or any declining debt (Investopedia).



Methodology

Research Methods

The research methods used were survey. This method was used to achieve the research

objectives. The research instruments used were questionnaires and interview.

Sample

The researcher chose a sample size of six (6) including the manager. The respondents were

selected based on convenience as the researcher had access to them. Therefore, a non-probability

sampling method used called convenience sampling. The respondents were to be both males and

females of various age groups and ranks within in the branch as well as they worked there for

various durations.

Research Instrument and Design

In order to gather preliminary data, a secondary research was done. The secondary research

included the internet, textbooks and brochures. In an attempt to collect data first hand, five (5)

questionnaires were issued to staff members of NCB.

The questionnaires were used because it allowed the respondents to complete it, in his or her

own pace and gather data on the control systems used by National Commercial Bank. They were

also chosen because they allow anonymity and they can be answered quickly. The questionnaires

were designed to mainly cover objectives 1 and 2 with 17 closed ended questions. (see

appendix).



Interviews were also used to collect first hand data. Interview was done as it enabled the

researcher to get more detailed information. The interview mainly covered objective one (1), two

(2) and three (3) (see appendix).

Research Procedure

- A letter was typed on December 12, 2012, edited and printed on December 20, 2012 and

delivered to the manager of National Commercial Bank on December 28, 2013 seeking

the permission to administer questionnaires and conduct interviews (see appendix).

- Permission was granted and the researcher went back to administer the questionnaires and

conduct the interview on March 4, 2013.

- The report was subsequently written and submitted.

Limits and Delimits of Study

While conducting the research, several problems were encountered especially regarding the

collection of data.

Limits

The researcher had no control over several factors, such as the sample size was too small and

therefore not representative of the entire population of NCB so generalization cannot be made.

Delimits

There are hundreds of individuals employed at NCB. It would be costly and time consuming to

include the entire population in this research, so the research was limited to NCB Linstead

branch with a small amount of employees and only six (6) employees including the manager

were selected.



Presentation of Data

Democratic/Participative Leadership Style

Figure 1. Shows the democratic and participative style of leadership of NCB. Majority of the

respondents agree that management accepts suggestions made by other members of staff as they

indicated most of the time 40% and sometimes 40%. While only 20% of the respondents claim

that management never involves other. Also, majority of the respondents feel that management

consults with them before making the final decision as 20% indicated always, 20% most of the

time and 60% sometimes. In addition, management often implements the ideas of staff members

(most of the time 40% and sometimes 60%).

0 10 20 30 40 50 60 70

management accepts suggestions

management consults staff

management uses ideasnever

sometimes

most of the time

always



Autocratic Style of Leadership

Figure 2. This shows that management of NCB uses the autocratic style of leadership as well.

The respondents indicated that management often tells workers what to do (always 20% and

sometimes 80%), when workers make mistakes they are reprimanded or punished (most of the

times 40% and sometimes 60%), management also often closely supervise workers (most of the

times 40% and sometimes 60%) and management set clear rewards and punishments in order to

get staff to conform (always 40%, most of the time 40% and sometimes 80%).

0%

10%

20%

30%

40%

50%

60%

70%

80%

management

tells

management

punishes

management

watches

management

set

consequences

always

most of the time

sometimes

never



Liaisez-faire Style of Leadership

Management allows

employees to decide how and

when to carry out tasks

Management allows workers

to carry out roles without

interference.

Always 0% 0%

Most of the time 20% 40%

Sometimes 80% 60%

never 0% 0%

Figure 3. The table shows that the management of NCB uses laisiez faire style of leadership as

well. The respondents are of the view that management allows workers to decide how and when

tasks are to be done (most of the time 20% and sometimes 80%). Management also allows

workers to carry out roles without interference (most of the time 40% and sometimes 60%).



Decision makers at NCB

Figure 4. The bar chart above shows the decision makers of NCB. The respondents claimed that

decisions are mainly taken by supervisors upwards in the hierarchy. Shareholders (60%), board

of directors (100%), executive management team (100%), middle management (60%) and

supervisors (60%) while entry level workers are (40%).

0

20

40

60

80

100

120

Decision Makers at NCB

Decision Makers at NCB



Benefits of Employee Involvement in Decision Making

Figure 5. Shows the benefits of employee involvement in decision making of NCB. The

respondents are of the view that when included in decision making it helps to build trust (60%),

creates transparency (80%), reduce resistance to change (60%), increase the level of motivation

(80%) and strengthens commitment (80%).

0

20

40

60

80

Benefits of Employee Involvement in

Decision Making

Benefits of Employee

Involvement in Decision Making

%



Analysis and Evaluation

The researcher found out that NCB has been operating in Jamaica for 176 years and employs

over 2500 persons. The company has 42 branches and over 170 ABMs island wide in order to

better serve their customers. At the Linstead branch, there are about 50 workers.

40% of the respondents selected by the researcher were males and the remaining 60% were

females. 20% of the respondents were between the ages of 22- 25, while 80% were 30 years and

over. 40% of the respondents have been employed at the National Commercial Bank for the past

1- 5 years; the other 60% have been employed for 11 years and over.

Objective 1

- To determine the leadership styles used by management of NCB.

Majority of the respondents agree that management of NCB accepts suggestions made by other

members of staff. They also feel that management consults with them before making the final

decision. In addition, management often implements the ideas of staff members. Therefore, the

democratic and participative is used. (See figure 1 above). However, there are drawbacks to this

style of leadership being used by management of NCB such as quick decisions may have to be

made but consultations with staff may be time consuming. Also some issues are confidential

(Stimpson et al 2011).

The respondents claimed that management often tells workers what to do, when workers make

mistakes they are reprimanded or punished, management also often closely supervise workers

and management set clear rewards and punishments in order to get staff to conform. Hence, NCB

also uses the autocratic style of leadership as well. (See figure 2 above). On the other hand,



management should be in mind that this style of leadership often demotivates staff as workers

feel left out and business do not benefit from the insight of the workers.

The respondents are also of the view that management allows workers to decide how and when

tasks are to be done. Workers are allowed to carry out roles without interference. This shows

that management uses laisiez faire style of leadership also. (See figure 3 above). However, this

style of leadership is ineffective; it is used by weak managers who want to shirk responsibility.

The manager is of the view that her leader is a transformational leader. She feels that he is

charismatic (idealized influence), articulates a vision and gets buy in (inspirational motivation),

challenge his team to “think outside the box” (intellectual s timulation). This is keeping with

Bass and Avolio, 1994 views of a transformational leader.

Based on the findings, the management uses a variety of methods of leadership. It may be

deduced that the style of leadership used depends largely on the situation. Hersey and

Blanchard, 1982 stated that instead of using just one style, successful leaders should change their

leadership styles based on the maturity of the people they're leading and the details of the task.

Using this theory, leaders should be able to place more or less emphasis on the task, and more or

less emphasis on the relationships with the people they're leading, depending on what's needed to

get the job done successfully.

Objective 2

- To ascertain the influence of leadership styles on the decision making of NCB.

According to the branch manager, “decision making is mainly done centrally

(headquarters/office)”. She further stated that, “the types of decisions made within organization



are: Strategic, tactical and operational decisions”. Policy decisions and other strategic decisions

that are long-term and affect the entire organization are made at head office by top level

management.

The respondents share this view. They claimed that decisions are mainly taken by supervisors

upwards in the hierarchy. Shareholders (60%), board of directors (100%), executive

management team (100%), middle management (60%) and supervisors (60%) while entry level

workers are (40%). (See figure 4 above).

She also said that when making decisions it is affected by leadership approach in that “top

management usually communicate the current approach or thrust and then get the buy in of

middle managers who are usually expected to sensitize lower staff and get their buy-in

depending on the gravity of the decision, this information is usually communicated to staff

directly by top management officials. Hence, management would use a participative approach”.

According to the respondents there are a number of benefits to employees being involved in

decision making. The respondents are of the view that when included in decision making it

helps to build trust, creates transparency, reduce resistance to change, increase the level of

motivation and strengthens commitment. (See figure 5 above).



Objective 3

- To identify the affect of leadership styles on financial performance.

The preparation of the financial statements which are profit and loss account, balance sheet,

statement of cash flows, statement of changes in equity and statement of comprehensive income

are done by the head office. These statements often show improved financial performance and

financial position.

The manager explains why. According to the manager this is largely due to the leadership style

of management. The manager is of the opinion that because management do not always “tell”

them that a change is to be made and that they are expected to implement it, but sensitize them

about what to expect and get their “buy in”. Hence, employees feel motivated and work hard to

accomplish what is required. This increases productivity and thereby profits, despite the

economic climate.



Conclusion

The aim to determine the leadership styles used by management of NCB has been met. It is

evident that various styles of leadership are being used by the management of NCB, namely,

democratic/participative, autocratic, laissez faire and transformational leadership. Hence, this

may be concluded that the style of leadership used depends largely on the situation. Successful

leaders should change their leadership styles based on the maturity of the people they're leading

and the task. Leaders should be able to place emphasis on the task or on the relationships

depending on the goals to be met.

The second aim of the research is to ascertain the influence of leadership styles on the decision

making of NCB. Decision making is affected by leadership approach, for instance, if

management needs to get “buy in” then they use the participative approach.

The third aim is to identify the affect of leadership styles on financial performance of NCB. It

may be concluded that the leadership style of management does affect the performance of NCB

in a positive way. Workers feel motivated to work hard which leads to greater productivity and

profits.

The researcher claimed that the leadership styles of managers of NCB affect decision making

and influence its financial performance. It is proven that leadership styles of management of

NCB affect decision making as well as its financial performance.



Recommendations

Continue to use styles of leadership depending on the situation, particularly,

transformational leadership style in order to change and gain a greater competitive edge.

Use leadership styles based on the nature of decision to be made for instance, if “buy in”

then use the participative approach.

A more in depth survey may be done on the topic as the sample size is too small to make

generalizations.



McGrath High School

Management of Business

Internal Assessment (I.A.)

Questionnaire

The following questions are designed to study “Leadership” at NCB. Please indicate your

response to each question by placing a tick in the box provided and state where appropriate.

Please note you are not required to declare your name on the questionnaire sheet; hence your

response will be confidential.

1. Gender

{ } Male

{ } Female

2.

What age group are you in?

{ } 18-21

{ } 22-25

{ } 26-29

{ } 30 and over

3. How long have you been working with this organization?

{ } Less than one year

{ } 1-5 years

{ } 6-10 years{ } 11 years and over

4. Management accepts suggestions made by others in the organization based on

Management vote.

{ } always

{ } most of the time

{ } sometimes

{ } never

5.

Management consults with staff members but has the final say over decisions madewithin the organization.

{ } always


{ } sometimes

{ } never



6. Does management implement/ use the ideas of staff members?

{ } every time

{ } sometimes

{ } majority of the time

{ } never

7.

Management tells group members what to do, how to do it, and when they want it done.

{ } always


{ } sometimes

{ } never

8. If a member of staff makes a mistake, they are reprimanded or punished.

{ } always

{ } most of the time{ } sometimes

{ } never

9. Management carefully watches staff members to be sure they are performing tasks

properly.

{ } always


{ } sometimes

{ } never

10. Management sets clear rewards and punishments in order to get staff members to

complete tasks and achieve goals.

{ } always


{ } sometimes

{ } never

11. Management let staff members decide what needs to be done and how to do it

{ } always


{ } sometimes

{ } never



12. Management allows staff members to carry out their role with little or no intervention

from them.

{ } always


{ } sometimes

{ } never

13. Do members admire and respect management in terms of how they behave?

{ } always


{ } sometimes

{ } never

14. Do members get along well with management and therefore readily put in place their

directives?{ } always


{ } sometimes

{ } never

15. Does management articulate a vision that is appealing and inspiring?

{ } always


{ } sometimes

{ } never

16.

Who takes decisions in your organization?{ } shareholders

{ } board of directors

{ } executive management team

{ } middle management

{ } supervisory

{ } entry level work

17. What do you think happens when management include members of staff in decision

making?

{ } Builds trust

{ } Creates transparency

{ } Reduces resistance

{ } Increase the level of motivation among staff

{ } Strengthens commitment



McGrath High School

Management of Business

Internal Assessment (I.A.)

Interview Schedule

1. Do you find your leader to be charismatic?

{ } always{ } most of the time{ } sometimes{ } never

2. Does your leader articulate a vision that inspires you?


3. Are you challenged to think outside the box?


4.

How is decision making done in your firm?

{ } Centrally (head quarters/office)

{ } Decentrally (locally)

5. What are the types of decisions made within the organization?

{ } strategic decisions- concerned with the long term direction of the business and

developing the policies

{ } tactical decisions- concerned with implementing strategic decisions

{ } operational decisions- concerning the ever day running of the operation

{ } all of the above

6.

When making decisions is it affected by the leadership approach?

{ } Yes

{ } No



b. If yes, how?

________________________________________________________________________

________________________________________________________________________

7. What financial statements does your firm prepare?

{ } profit and loss account

{ } balance sheet

{ } statement of cash flow

{ } statement of retain earnings

Other

________________________________________________________________________

________________________________________________________________________

8. Do you think that the leadership style of management affects the financial performance of

NCB?{ } Yes

{ } No

b. If yes, how?

________________________________________________________________________

________________________________________________________________________



Time and Patience,

Linstead P. O,

St. Catherine

December 20, 2012

The Manager

NCB,

Linstead

Dear Sir/Madam,

I am a student of McGrath High School, where I am studying at the sixth form

level. Management of Business is one of my core subjects for which I am required to

complete an Internal Assessment (I.A.).

My desire is to investigate the “Importance of Leadership” in your organization. Ihereby seek permission to administer questionnaires among the employees of your firm,

conduct an interview with the manager and observe the operation of your organization. I

look forward to your favorable response. You may contact me at 447-1988 or email me at

[email protected].

Yours sincerely,

_____________

Shantel Thomas(Student)

mailto:[email protected]

mailto:[email protected]



References

Books and Publications

Bittel R. Lester, Billrey P. Charles, Burk S. Ronald, 1996 Business in Action. 3rd Edition

Mcgraw Hill Inc Ochio

Obiwuru Timothy C., Okwu, Andy T., Akpa, Victoria O., October-2011. Effects of Leadership

Style on Organizational Performance: A Survey of Selected Small Scale Enterprises in

Ikosi-Ketu Council Development Area of Lagos State, Nigeria. Australian Journal of

Business and Management Research Vol.1 No.7 [100-111]

Randall Harold, Lystra Stephens- James Ceceila Lamorell, Lennex Francis, Dennis Noel, 2007.

CAPE Accounting. Cambridge

Robinson K. & Sybile Hamil, 2011. Principles of Business for CSEC published Carlong

Publishers Ltd.

Stimpson P, Kathleen Singh, 2007. CAPE Management of Business Unit 1. Cambridge

University Press.

Stimpson P., Harvey Y., Hemlee D., Latty-Morrison J. 2011. Principles of Business for CSEC.

Nelson Thornes.

Sullivan E. & Decker . 2009. Effective Leadership and Management in Nursing. Sixth Edition.

Pearson

Personal Interview

A personal interview was done with the branch manager Miss. Stone of National Commercial

Bank Linstead, on March 4, 2013.



Websites

http://www.jncb.com/, consulted on April 16, 2013, author unknown

http:// www.investopedia.com, consulted March 20, 2013, author unknown

http://leadershipperformance.blogspot.com/2008/03leadership-excellence-that-gets-results.html,

consulted April 5, 2013, posted by Mark Von Rosing.

http://www.mindtools.com/pages/article/newLDR_44.htm. Consulted April 10, 2013, author

unknown

http://www.investopedia.com/

http://www.mindtools.com/pages/article/newLDR_44.htm.%20Consulted%20April%2010

http://www.mindtools.com/pages/article/newLDR_44.htm.%20Consulted%20April%2010

http://www.investopedia.com/

MOB Shantel Thomas-final 1

Documents

Transcript of MOB Shantel Thomas-final 1