Leadership and Nib Bank

Report-on-organizational-behavior-of-NIB-Bank. doc LETTER OF TRANSMITTAL May 31, 2008 Mr. Retd. Cdr. Tabassum Teacher, Organizational Behavior Bahria University Karachi. Sir: We herewith present our â€Å"Term Report† authorized by you as a requirement for this course. In this report, we have tried to provide analysis on organizational behavior of NIB Bank. We hope we have covered all that was required for the report. If there be any clarification demanded, we would appreciate a call from you to our group members. Sincerely, Maaz Khalid Muhammad Usman Badar Muhammad ZainACKNOWLEDGEMENT In the name of â€Å"Allah†, the most beneficent and merciful who gave us strength and knowledge to complete this report. This report is a part of our course â€Å"Organizational Behavior†. This has proved to be a great experience. This report is a combine effort of, Maaz Khalid, Muhammad Usman Badar and Muhammad Zain. We would like to express our gratitude to our organizational be havior teacher Mr. Retd. Cdr. Tabassum, who gave us this opportunity to fulfill this report. We would also like to thank our colleagues who participated in a focus group session.They gave us many helpful comments which helped us a lot in preparing our report. 1. 3 Objective The general purpose of this study is to determine the satisfactory level of job among the employees of British American Tobacco Bangladesh. We have selected British American Tobacco because this company has a multinational job environment and ensures the maximum level of efficiency among the employees. 3. Research Methodology A. Pilot survey We did a pilot survey for questionnaire testing (Vogt, 1999; Babbie, 2004) to detect error, validity and scale reliability.We used a 5 point- scale (â€Å"1† for Strongly Disagree to â€Å"5† for Strongly Agree) developed by Likert (1932). The pilot survey was done during in the month of January-February, 2008 with 30 respondents from 6 enterprises. A total numb er of 20 HRM items were used for this study. The sample size was 30 at managerial (mid level) jobs and simple random was used to obtain feedback and the scale validity of the survey. The calculated Chronbach’s alpha (? ) value is 0. 9063, which indicates the high eliability of the instrument. B. In-depth Interviews The second stage of our research method was in-depth interviews with the 12 executives. Semi-structured open-ended questionnaire was used for in-depth interviews. A simple random sampling method was used at this stage. The questionnaire was distributed to the executives to get feedback. C. Full-scale survey Full scale questionnaires were administered in the month of April, May and June 15, 2008 within 53 manufacturing organizations out of 103 (BEPZA statistics, May, 2008) organizations in economic zone, DEPZ.That covers 216 respondents from the total of 512 in the surveyed enterprises with the response rate of 42. 18% (26. 18% of 825 total entire populations). A si mple random sampling method was used for selecting the enterprises. From the pilot survey and in-depth survey finding and suggestion, questionnaire was modified and surveyed for this stage. D. Sample For the survey, a random sampling was chosen for selection enterprises from the A, B and C category of DEPZ organizations. A total number of 53 enterprises were selected from 103 and that covered 216 respondents. HISTORY OF THE DHAKA BANK LIMITED: DHAKA BANK LIMITED was incorporated as a public limited Company on 6th April 1995 under the company act. 1994 and started its commercial operation on June 05, 1995 as a private sector bank. The bank started its journey with an authorized capital of Tk. 1,000. 00 million and paid capital Tk. 100. 00 million. It is now one of the most renowned private banks having multiple branches in the major cities of the country. DBL has started its business with all the features of a corporate bank and the products of both corporate and retail banking syste m to facilitate the daily clientele requirements.Among all of its products Credit card is one of the most important financial-tool of the modern banking sector, Though DHAKA BANK is always trying to improve their services in this field, but in today’s competitive business world, banks need to offer additional concentration to the clients’ requirement in order stay at the top. Therefore, besides dealing with the general attributes of the Credit card, they also have been trying to put more emphasis on the customer benefits and other customer related facilities.The Credit Card Division is a new venture for the bank, so the card is only for the use within the city and therefore it is facing a huge competition against the existing local Credit Cards in the market. Moreover, DHAKA BANK LIMITED has expressed tremendous interest to create a competitive market for their Credit cards. GOAL SETTING THEORY: Goal setting theory was born out of Aristotle’s theory of final cau sality and then researched in greater detail by Edwin A. Locke in the 1960s to understand how goals can influence an individual’s performance.The basic theory behind goal setting is that human behavior is galvanized and governed by goals and ambition. Today, goal setting theory is very important not only for those studying organizational psychology, but for anyone seeking to increase productivity, enhance performance and reach for greater heights of success. Goals are able to motivate and spur you to meet your ambitions because it helps you focus your efforts on that objective. Every objective we have requires a list of tasks to be executed.By setting goals, we’re able to persist with the list of tasks and are compelled to develop strategies in order to reach our objective. The incredible results achieved with the goal setting theory explain why it’s not just colleges, universities and sports institutions that use it to obtain results, but in businesses too wher e survival is based on ensuring positive outcomes. Having objectives is not the issue, but striving to attain them is. Following are the points that help you to achieve goals: †¢ State your goals in specific terms.Understand what your goals are and know why you’re selecting these goals. †¢ Make your goals attainable. There is no point setting goals you believe are unattainable. The best way to do this is to break your goals down into actionable steps. †¢ Measure your goals. Set a timeframe, or a milestone that can put the pressure on you to meet your objectives. ANALYSIS: To what extent you and your colleagues feel that the company sets challenging goals for itself and expects quality performance and outstanding production? Answer Log Table: Low |1 |2 | |standards | | | | | |1 |2 |3 |4 |5 | |1 |Tells group members what they are supposed to do. |- |- |4 |18 |3 | |2 |Acts friendly with members of the group. |- |- |3 |5 |17 | |3 |Sets standards of performance for group members. – |2 |5 |12 |6 | |4 |Helps others feel comfortable in the group. |- |- |4 |8 |13 | |5 |Makes suggestions about how to solve problems. |- |2 |4 |6 |13 | |6 |Responds favorably to suggestions made by others. |- |- |6 |10 |9 | |7 |Makes his/her perspective clear to others. |- |- |2 |16 |7 | |8 |Treats others fairly. |- |- |2 |5 |18 | |9 |Develops a plan of action for the group. |- |1 |14 |7 |3 | |10 |Behaves in a predictable manner toward group members. – |3 |12 |2 |8 | We asked different questions relating to the leadership style from NIB Bank employees to know which leadership style their leader uses and we found that two of the leadership styles that are task oriented and people oriented or relations-Oriented. The results we got from employees of NIB Bank that 53% of the employees feel that their managers are relationship oriented leaders and remaining 47% feels that their managers are task oriented leaders so this shows that the NIB Bank has got the com bination of leaders that are task oriented and relationship oriented.This shows that NIB Bank have the leaders that perform better in all situations and can manage their teams more effective in favorable conditions and also in very unfavorable conditions. PATH GOAL THEORY: House’s PATH GOAL THEORY describes how leaders can motivate their followers to achieve group and organizational goals and the kinds of behaviors they can engage in to accomplish that Path Goal theory suggests that effective leaders follow three guidelines to motivate their followers.The guidelines are based on the expectancy theory of motivation. Effective leaders who follow these guidelines have highly motivated subordinates who are likely to meet their work goals and perform at high levels. Determine what outcomes subordinates are trying to obtain in the workplace. For example, what needs are they trying to satisfy, or what goals are they trying to meet? After gaining this information, the leader must hav e control over those outcomes or over the ability to give or withhold the outcomes to subordinates.Reward subordinates for performing at high levels or achieving their work goals by giving them desired outcomes. Make sure the subordinates believe that they can obtain their work goals and perform at high levels. Leaders can do this by showing subordinates the paths to goal attainment (hence the name path goal theory), by removing any obstacles that might come along the way, and by expressing confidence in their subordinates capabilities. House identified four types of behavior that leaders can engage in to motivate subordinates: Directive behavior (similar to initiating structure) lets subordinates know what tasks need to be performed and how they should be performed. †¢ Supportive behavior (similar to consideration) lets subordinates know their leaders cares about their well-being and is looking out for them. †¢ Participative behavior enables subordinates to be involved in making decisions that affect them. †¢ Achievement-oriented behavior pushes subordinates to do their best.Such behavior includes setting difficult goals for followers, expecting high performance, and expressing confidence in their capabilities. ANALYSIS: We designed a different questionnaire especially for the TOP MANAGEMENT OF NIB Bank and the questions were related to PATH GOAL THEORY as the questionnaire belongs to the top management so we asked four top level managers of NIB Bank to fill this questionnaire list of their names and designation are given below: By studying our questionnaire we found different behaviors of leadership and there contribution in the organization’s behavior.We found different results for each behavior after analyzing the answers of our respondents which are given below: Directive Leaders Behavior: The most contributive behavior in leadership behaviors in NIB Bank having 27% share in leadership behavior was found to be directive behavior whic h is being frequently used in the organization we targeted. The benefit of using directive form of leadership which is characterized by greater control, defining what needs to be done, allocating resources and establishing clear expectations.The directive leadership behavior takes a more pragmatic approach to handling affairs in NIB Bank and is characteristically utilized in corporate turn-around situations. Supportive Leaders Behavior: The second most contributory behavior in leadership behaviors in NIB Bank having 26% share in leadership behaviors was found to be supportive behavior the results obtained shows that supportive behavior used in NIB Bank is almost the same as the use of directive leadership behavior with having difference of only 1% which is not a very big figure. Participative Leaders Behavior:Participative leadership behavior is the least used behavior in NIB’s culture with having 23% this shows that the NIB Bank leaders do consult with their subordinates whi le making a decision but at low frequency as compared to other PATH GOAL leadership behaviors. Achievement Oriented Leaders Behavior: The third most contributory behavior in leadership behaviors in NIB Bank with having percentage of 24 this shows that the leaders of NIB Bank set challenging goals for their subordinates with low frequency but they expect from their employees to perform at their highest level.The results of our analysis shows that there is no such big difference in leadership behaviors used in NIB Bank and this is a very good sign for NIB Bank that their leaders manage their subordinates according to different situations with different leadership behaviors. NORMS: â€Å"Norms are shared group expectations about behavior and how members ought to behave. † Norms provide groups with control and predictability and give members a sense of security and comfort. Norms are also the way we express values, attitudes and beliefs.Norms put boundaries on members that may be narrow or wide. Many norms in organizations originate from management expectation or from work rules and procedures of the formal organization. They develop and operate in informal groups. Many central work group norms revolve around productivity. Norms can put lower and upper limits on productivity. Controlling productivity not only spread the work ought to more people for a longer period, but also prevents management from rising its expectation.Some organizations have norms emphasizing social concern for employees this norm foster taking care of people who needed or other wise contributing to the quality of an employee’s life at work. Management can foster many norms that contribute to organizational success, such as norms effecting work quality, helpfulness or customer relation. A norm of secrecy may be critical to keep competitors from stealing ideas. ANALYSIS: Norms are of four types. The one we quire about is social norm. The reason of selecting social norm is that our culture is based on collectivism so the importance of social norms is very high.The situation of norms in NIB’s culture is fair enough according to the result of our questionnaire most of the employees follows the norms set by the organization and they are satisfied with them, but we found some employees who are willing to improve the conditions i. e. norms the calculated value of there willingness is about 25%. The major factors of social norms are friendliness, trust and mutual support. According to the employees in NIB Bank the conditions of trust and friendliness are pretty good and they are willing to increase mutual support.It is necessary to emphasize on social arrangement norms in country like Pakistan because of its collectivism culture and these norms helps the organization to get the participation of their employee in positive manner to achieve the goals set by the organization these kind of norms also motivates the employees to remain in organization because of f riendly culture in organization social arrangement norms also helps the employees to interacts with each other in more friendly manner which will increase trust among them and with there top management.If these norms are valued by the management then it will positively affect employee satisfaction and productivity and it will also enhance the organization culture CONFORMITY: â€Å"Conformity can be defined as a change in a person’s behavior or opinions as a result of real or imagined pressure from a person or a group of people†. Who does Conformity affect? Conformity can affect people in all different ways, positively and negatively. In task-specific situations, those who are led to believe they do not have the required aptitude, their tendency to conform increases.Individualistic societies are less likely to conform than collectivistic. How does Conformity work? An individual will most likely conform if: ? The majority consists of experts ? The members of the majority are important to the individual ? The individual can relate to the majority on some level–there are similarities between the individual and the group ANALYSIS: Through our questionnaire we analyzed the pattern of answers given by employees and we found many similar answers in regard of questions and it hows greater extend of conformity among employees of NIB Bank as they have almost marked similar options given in each questions of our questionnaire. The level of conformity shows there good relations and understanding with each other which also shows that they will not leave each other in hard times but on the other hand the high level of conformity indicates the danger of employees saying always yes to other’s decision instead of thinking critically about it and there might be a chance of employee saying yes under pressure in the fear of loosing group and may result in loss of any useful idea.After Asch’s study about conformity, in the world the conformity is decreasing as the level of knowledge and awareness are increasing and the result of our questionnaire shows high level of conformity, we can suggest the reason â€Å"collectivism culture of Pakistan† TEAMS: A group whose individual efforts result in a performance that is greater than the sum of the individuals input.Guideline for team leaders set by NIB’s management: |Definition: | |Has a natural authority, generates commitment and builds team cohesiveness by setting a clear vision for the team, reflected in core values. |EFFECTIVE BEHAVIOUR INDICATOR |LESS EFFECTIVE BEHAVIOUR INDICATOR | |MORE OF THIS |LESS OF THIS | | | | |Communicates frequently a realistic picture of future plans so people know |Takes independent decisions and asks the team to follow | |what has to be done and why? instruction without questioning. | | | | |Arrives at decision by consensus, where appropriate, to gain team |Waits for team to ask for information instead of proactively | |commitment. | keeping them informed of the ‘big’ picture. | | | |Is supportive of the team / individuals and helps in overcoming problems to|Exhibits high personal energy when initiating action but does not | |achieve targets. |follow through. | | | | |Leads by example; displays behavior which reflects the desired work norms |Talks about the theory and principles of leadership, yet not | |and values. reflected in behavior. | | | | |Spends time finding out the way individuals want to be managed and work |Uses the abilities of staff for own personal and career gains; | |together; adapts leadership by style to match. does not share benefits and praise but passes on criticisms and | | |blame. | |Maximizes the available resource by constructing well-balanced teams; | | |acknowledges and helps others values the unique contributions of each |Does not seek to identify and discuss the values of the team to | |member. |ensure everyone is working towards a common goal. | | | |Identifies own lea dership style and strengths, adapts these to specific |Avoid admitting own mistakes or limitations. | |situations. | | | | | |Follows up with dissenters or blocker to contain negativity. | Guidelines for reducing conflicts between team members set by NIB’s management: |Definition: | |The ability to pull together individuals or parties in conflict by diffusing emotions, identifying the critical issues and helping got reach a| |compromise; keeps the focus on common objective to meet both needs. |EFFECTIVE BEHAVIOUR INDICATOR |LESS EFFECTIVE BEHAVIOUR INDICATOR | |MORE OF THIS |LESS OF THIS | | | | |Confronts covert conflict; draws out sensitive issues or relationships. Lets conflict escalate before taking any action. | | | | |Uses all-round knowledge to manage interdepartmental and |Seeks to diffuse conflict after listening to only some of the parties | |intra-departmental conflicts. |involved; jumps to conclusions about others based on earlier | | |situations. |Keeps the focus of conflict resolution on the long term overall | | |interests of the organization. |Adopts a singular style or strategy across different contexts. | | | | |Facilitates open discussion between conflicting parties. |Does not identify brewing conflicts from emotional reactions. | | | |Remains impartial when dealing with others; listen to arguments of each|Suggests own solution to conflict without identifying the source. | |party. | | | |Focuses too much on emotional aspects of the conflict rather than the | |Adapts approach to the situation and the culture of the conflicting |solutions. |parties. | | | |Conveys inconsistent messages to conflicting parties, thus resulting | | |in the further confusions. | ANALYSIS:After visited to NIB Bank we discovered that the NIB Bank employees comprised of self-managed works teams according to employees responses they feel greater level of responsibility on their shoulders and they manage the things like planning, scheduling of work, and assigning task to the member of team, control the pace of the work, make decisions through discussion between the team members, take actions to solve the problem and also interact with their customers and we found that the employees called their colleagues relationship officer rather than sales officer.QUALITY MANAGEMENT: CREATIVITY |Definition: | |Is able to conceive original, imaginative and valuable ideas to solve problems and improve processes. |EFFECTIVE BEHAVIOUR INDICATOR |LESS EFFECTIVE BEHAVIOUR INDICATOR | |MORE OF THIS |LESS OF THIS | | | | |Develops ideas and thinks through to an innovative conclusions. Prefers to use tried and tested methods to solve problems rather than| | |think of new and innovative solutions. | |Questions traditional thinking in order to initiate new perspectives. | | | |Sees opportunities as risks; talks about the dangers and risks rather| |Builds on information and ideas provided by others. |than the potential benefits. | | | |Acts quickly to grasp and dev elop novel opportunities. |Actions ideas giving appropriate thought only to short-term benefits | | |and immediate impact. | |Improvises effective solutions when faced with ambiguous and difficult | | |situations. Is overly absorbed in own ideas; hence is not as aware of the | | |environment or important events as required. | |Tests out ideas for practicality and feasibility. | | | |Over relies heavily on past experience; does not think laterally. |Seeks out pools and thinkers and puts them together to generate ideas; | | |uses tools and techniques to simulate others’ creativity. | | CONTINUES LEARNING: |Definition: | |A strong personal commitment to self-development reflected in an underlying curiosity to know more about people, things, issues, stretching | |beyond what is routine or required job knowledge. |EFFECTIVE BEHAVIOUR INDICATOR |LESS EFFECTIVE BEHAVIOUR INDICATOR | |MORE OF THIS |LESS OF THIS | | | | |Identifies skills needed for the future and takes steps to devel op |Over emphasizes the importance of won professional development at the | |self and others. cost of work priorities. | | | | |Actively seeks professional development opportunities, both inside |Relies too heavily on own knowledge does not accept constructive | |and outside the organization. |feedback. | | | |Seeks opportunities to work with the others of diverse backgrounds, |Sticks to own area of expertise rather than broadening one’s focus. | |experience, viewpoints. | | | |Develops oneself for tangible rewards rather than more and grow. |Has personally established on-going systems or habits for information| | |gathering through professional memberships, literature and contacts. |Waits for others to identify own development needs. | | | | |Sets clear personal development targets which focus on behavioral |Considers skills lifelong; continuously resorts to tried and tested | |improvements as much as professional / technical skills. methods. | | | | |Volunteers for assignme nts which contribute to individual learning |Prefers to cover up mistakes rather than seek feedback and learn. | |goals. | | | | | |Accepts and seeks feedback from others; learns from past mistakes. | CONCLUSION: After studying and a analyzing the results of our research on the various issues related to the organizational behavior within the organization that are affecting the performance of its management and particularly its employee, followed by several general and specific list of questions we asked and the interviews we conducted during our visit to the two branches of NIB bank one on â€Å"Tariq Road† and other on â€Å"I.I Chundrigar Road†, we are able to draw out our conclusions about this report. NIB Bank is a global bank which is also operating in Pakistan. The organization behavior regarding goal setting for employees we have concluded that the management of NIB Bank is effective in setting goals according to the competition in the banking sector of Pakistan . As the requirement of growing banking sector it is necessary to set challenging and effective goals so as to become market leaders.Despite of setting challenging goals the employees of NIB Bank are satisfied with these challenging goals and performing well to achieve the goals which were provided to them. The management style in NIB Bank is kind of participative management in which employees are given chance to share their ideas for decision making so the NIB Bank is utilizing its employees by getting different ideas from different employees this provides greater chances for getting better and innovative ideas.Not only this but from this activity employees feel motivated because they think they also have the authority in decision making process and they are also a part of an organization. During the interview of an employee NIB Bank he told us â€Å"All the employees here are given title of relationship officer rather than any other designation and at the beginning of each month the top level management visits every branch and arrange meeting with all the employees of the branch and discuss the problems faced by every employee and immediately tries to resolve the problem and this is the major motivating factor for us†.For motivating their employees management uses different types of motivating tools the innovative ones we found are ESOP (Employees Stock Ownership Plan) and the pay plan for less productive workers. By providing ESOP the employees gains the ownership of an organization and work hard not only for their benefit but also to maximize the profit of the organization. The next thing about the pay plan for less productive workers the company motivate their employees whose performance is not up to the mark by giving them the salaries equivalent to the market value of the any other employee of same rank.As the motivation and reward systems are up to the expectation of the employees so the employees are very much satisfied and don’t want to leave the organization. The leadership styles in NIB Bank are mixture of both the task oriented and relationship oriented but it is little lien towards relationship oriented leadership style. The leader’s behavior consisting of all the leaders’ behavior provided by House’s Path Goal Theory having almost same percentages with very low variation.Overall we concluded NIB Bank inherits strong organizational culture having values for leaders and as well as for employees and the organization behavior is up to the mark for any company being in Pakistan.RECOMMENDATION: 1. NIB Bank should offer training and development sessions for undergraduates; this will help NIB Bank in future while recruiting employees. 2. NIB Bank should reduce conformity by giving rewards to employees for suggesting more effective idea in the benefit of the organization this will not only provide wider range of ideas but also act as a motivational tool for their employees. . NIB Bank should arran ge extra curricular activities like cricket matches on inter bank level to further improve relations between employees as other organizations are organizing (for example ABN Amro, Mobilink, etc. ) 4. NIB should introduce â€Å"Dress-Down† day i. e. employees should be given permission to wear dresses other than formal dresses on certain days so as to make them relaxed while work.