Leadership Style in Banking

LEADERSHIP STYLE IN BANKING
CHAPTER-1 INTRODUCTION OF LEADERSHIP
• INTRODUCTION
• DEFINITION OF LEADERSHIP
• LEADERSHIP : A CONCEPT
• PAST HISTORY OF LEADERSHIP
• BANKING ENTREPRENEURS
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INTRODUCTION OF LEADERSHIP
Leadership is all about harnessing people power for the attainment of a

desired goal and thus the concept of leadership cannot be restricted to the
Organizational context.
It pervades through all realms of society, whether it be in politics, religion

or the corporate world.
DEFINITION OF LEADERSHIP
We can define leadership as:
• “The activity of influencing people to strive willingly for group

objectives.”- George R. Terry.
• “It is interpersonal influence exercised in a situation and directed

through the communication process towards the attainment of
specialized goals.” – Robert Tannenbaum.
• “Leadership is influencing people to follow in the achievement

of a common goal” – Koontz O’Donnell.
• “Leadership is the process whereby one individual influences other

group members towards the attainment of defined group or
organizational goals.” – Baron & Greenberg
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The above definitions as is evident all pertain to the Western views. This is
because leadership as a formalized field of study and analysis with a
structured syllabus has not yet been established in India as it is in the West.
Here one still goes by the old Hindu tradition of the son wearing his father’s
shoes. Needless to say, this usually proves to be a ‘hit or miss’ approach as it
is not necessary that the leadership skills will be passed down the
generations automatically.
LEADERSHIP: A CONCEPT
There are four major factors in leadership:-
Follower
Different people require different styles of leadership. For example, a new

hire requires more supervision than an experienced employee. A person who
lacks motivation requires a different approach than one with a high degree of
motivation. You must know your people! The fundamental starting point is
having a good understanding of human nature, such as needs, emotions, and
motivation. You must become to know your employees' be, know, and do
attributes.
Leader
You must have an honest understanding of who you are, what you know,
determines if a leader is successful. If they do not trust or lack confidence in
their leader, then they will be uninspired. To be successful you have to
convince your followers, not yourself or your superiors, that you are worthy
of being followed.
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Communication
You lead through two-way communication. Much of it is nonverbal. For

instance, when you "set the example," that communicates to your people that
you would not ask them to perform anything that you would not be willing
to do. What and how you communicate either builds or harm the relationship
between you and your employees.
Situation
All are different. What you do in one situation will not always work in
another. You must use your judgment to decide the best course of action and
the leadership style needed for each situation. For example, you may need to
confront an employee for inappropriate behavior, but if the confrontation is
too late or too early, too harsh or too weak, then the results may prove
ineffective.
Various forces will affect these factors. Examples of forces are your
relationship with your seniors, the skill of your people, the informal leaders
within your organization, and how your company is organized.
PAST HISTORY OF LEADERSHIP
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Guru Brahma Gurur Vishnu

Guru Devo Maheshwaraha
Guru Saakshat Para Brahma
Tasmai Sree Gurave Namaha
Meaning:
Guru is verily the representative of Brahma, Vishnu and Shiva. He creates,

sustains knowledge and destroys the weeds of ignorance. I salute such a
guru.
This shloka essentially describes the pedestal on which a leader was placed
in the traditional Indian society. The Indian society, being an inward looking
and highly philosophical society awarded the guru a place even higher than
God. It was the only form of recognized leadership and everyone in the
society, irrespective of his position, would turn to the guru to seek advice on
matters ranging from war strategies to spiritual solace.
In the Indian society, after the thread ceremony, an important ritual marking
the beginning of the formal education of a child was being sent to a gurukul.
Here he would lead a life of a commoner, regardless of his background,
under the guidance of the guru. The Guru would condition his disciples both
spiritually and mentally to help them embark on the life of agrihastha once
they attain the age of twenty-five.
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His word was a command in every sphere and everyone was supposed to
discharge his debts to the guru, in the form of a guru dakshina, by carrying
out his orders.
In the post Aryan era, the balance of power shifted to the crown. The king
was now recognized as the ultimate leader who was responsible for all his
subjects.
The nineteenth century saw another turn and political leaders in the form of
revolutionaries fighting for the country’s independence came to the fore.
The likes of Mahatma Gandhi mesmerized the country and shook the British
throne.
After independence, in a pledge to build the nation, the importance of trade

and commerce gained recognition. Thus evolved the concept of business
leadership in India, personified by late Shri G.D. Birla, ShriJ.R.D.Tata and a
host of others.
The common thread running through these diverse personalities represents

the essence of Indian leadership. These elements can be bulleted as under:
• Warm / informal
• Respect for the individual
• Introspection
• Inward looking
• Compassionate
• Sensitive
• Objective
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• Collaborative
• Intellectual
• Ethical
• Aesthetic
• Recognition of social responsibility
Indian forms of leadership stand in stark contrast to the western philosophies

of leadership, essentially comprising of the concepts adopted by Northern
America and Europe.
Here too, the first instances of leadership can be traced to a spiritual leader
or the Pope exercising a strict control over the entire Catholic Christian
population across the globe.
Constant conflict erupting in the form of the two world wars saw the shift of
power to political leadership represented by Hitler, Churchill, Kennedy and
so forth.
Controls shifted again with the government taking a back seat and playing
the role of a facilitator, business leadership took the lead and emerged as the
key form of leadership.
Henry Ford, J. Paul Getty, Warren Buffet and their likes now became the
names to reckon with.
The essence of the western leadership philosophy as portrayed by them all

can be enlisted as follows:
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• Cold / impersonal
• Winning at any cost
• Admiration for power
• Drive for excellence
• Outward / aggressive
• Subjective
• Strict hierarchy
• System centric
• Technology based
From the aforesaid discussion it emerges that leadership comprises of

personality-based attributes appealing to the masses and channelizes their
energy towards a common end. Leaders always emerge out of vacuum in a
crisis situation when the masses are confused and agitated to stake
everything for the attainment of a given goal. The leadership may emerge in
any sphere, whether it is political, religious, social or economic.
It is also evident that although the trajectory of evolution of the concept is

similar in both India as well as the West, the shift of focus towards business
leadership was much quicker in the West
ENTREPRENEURS IN BANKING
 CHANDA KOCHHAR
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Chanda Kochhar (November 17, 1961) is currently the Managing Director

(MD) of ICICI Bank and Chief Executive Officer (CEO). ICICI Bank is
India's largest private bank and overall second largest bank in the country.
She also heads the Corporate Centre of ICICI Bank. Kocchar has also
consistently figured in Fortune's list of "Most Powerful Women in Business"
since 2005. In 2009, she debuted at number 20 in the Forbes
"World's 100 Most Powerful Women list".
PERSONAL LIFE
Chanda Kochhar was born in Jodhpur, Rajasthan and raised in Jaipur,

Rajasthan. She then moved to Mumbai, where she joined Jai Hind
College for a Bachelor of Arts degree. Kocchar graduated from the
College in 1982 and then pursued MBA and Cost Accountancy (ICWAI).
Later, she acquired the Masters Degree in Management Studies from the
Jamnalal Bajaj Institute of Management Studies, Mumbai. Kocchar received
the Wockhardt Gold Medal for Excellence in Management Studies as well as
the J. N. Bose Gold Medal in Cost Accountancy for highest marks in the
same year.Kocchar currently resides in Mumbai, and is married. She has two
children, a son and a daughter.
OTHER INVESTMENT
Kocchar is Often Titled Ms 10%.Its given to her due to her 10% holding in
Castrol India, Nestle India, ACC, Blackstone India, Indian Express, Ambuja
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Cement, ITC InfoTech, Blue dart & Acer India.Kocchar also sold her stake
at Perot Systems to Dell & Pyra Labs to Google.
RECOGNITION
Under Kocchar's leadership, ICICI Bank won the “Best Retail Bank in
India” award in 2001, 2003, 2004 and 2005 and “Excellence in Retail
Banking Award” in 2002; both awards were given by the The Asian Banker.
Kocchar personally was awarded "Retail Banker of the Year 2004 (Asia-
Pacific region)"by the Asian Banker, "Business Woman of the Year 2005"
by The Economic Times and "Rising Star Award" for Global Awards 2006
by Retail Banker International. Kocchar has also consistently figured in
Fortune's list of "Most Powerful Women in Business" since 2005. She
climbed up the list debuting with the 47th position in 2005, moving up 10
spots to 37 in 2006 and then to 33 in 2007. In the 2008 list, Kocchar features
at the 25thspot. In 2009, she debuted at number 20 in the Forbes "World's
100 Most Powerful Women list". She is the second Indian in the
list behind the ruling Indian National Congress party chief Sonia
Gandhi at number 13.
AWARDS
• Ranked 20th in the Forbe's list of Most Powerful Women in the
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World, 2009.
• Ranked 25th in the Fortune’s List of Most Powerful Women in

Business, 2008.
• Featured in the list of 25 most powerful women leaders in

Business Today, 2008.
• Selected as ‘Rising Star Award’ for Global Awards 2006 by

Retail Banker International.
• Awarded Business Woman of the Year 2005 by The Economic

Times of India.
 NAINA LAL KIDWAI
Naina Lal Kidwai is an Indian businesswoman. She is currently the Group

General Manager and Country Head of the HSBC Group in India.
EARLY LIFE
Kidwai has a Bachelors degree in Economics from Delhi University and an

MBA from Harvard Business School (graduated 1982).
CAREER
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From 1982-1994 she worked at ANZ Grind lays, where her assignments
included Head of the Investment Bank, Head of Global NRI Services and
Head of the Western India, Retail Bank. During 1994-2002, she worked
at Morgan Stanley as Vice Chairman of JM Morgan Stanley and Head of the
Investment Bank in India. At HSBC she has held positions as Chief
Executive Officer and Deputy Chief Executive Officer of HSBC Bank in
India and Managing Director and Managing Director of HSBC Securities
and Capital Markets India Private Limited. She became the group's country
head in 2009.
Her other positions include being a non-executive director on the board of

Nestle SA, Chairman, City of London's Advisory Council for India, Global
Advisor, Harvard Business School. She is on the Governing Board of
NCAER, Audit Advisory Board of the Comproller and Auditor General of
India, and on the National Executive Committee of CII and FICCI. Her
interests include microfinance and livelihood creation for rural women and
environment.Naina, also supports the world's largest youth driven
organization - AIESEC as a National Advisory Board Member to AIESEC
India.
AWARDS AND RECOGNITION
Kidwai has repeatedly ranked in the Fortune global list of Top Women in
Business, 12th in the Wall Street Journal 2006 Global Listing of Women to
watch ad listed by Time Magazine as one of their 15 Global Influentials
2002. In 2007, she received the Padma Shri, for her work in the promotion
of Trade and Industry.
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PERSONAL LIFE
Naina is married to Rashid Kidwai, who runs the NGO, Grassroot Trading
Network for Women.
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CHAPTER-2 LEADERSHIP STYLE
• AUTHORITARIAN OR AUTOCRATIC
• PARTICIPATIVE OR DEMOCRATIC
• DELEGATIVE OR FREE REIGN
• CHRISMATIC LEADERSHIP
• PARTICIPATIVE LEADERSHIP
• SITUATIONAL LEADERSHIP
• TRANSACTIONAL LEADERSHIP
• TRANFOMATIONAL LEADERSHIP
• THE QUIET LEADERSHIP
• SERVANT LEADERSHIP
LEADERSHIP STYLES
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Leadership style is the manner and approach of providing direction,

implementing plans, and motivating people. The U.S. Army Handbook,
1973 identifies three styles of leadership:
• AUTHORITARIAN OR AUTOCRATIC
• PARTICIPATIVE OR DEMOCRATIC
• DELEGATIVE OR FREE REIGN
Although good leaders use all three styles, with one of them normally
dominate, bad leaders tend to stick with one style.
AUTHORITARIAN OR AUTICRATI
This style is used when the leader tells his employees what he wants done
and how he wants it done, without getting the advice of his followers. Some
of the appropriate conditions to use it are when you have all the information
to solve the problem, you are short on time, and your employees are well
motivated.
Some people tend to think of this style as a vehicle for yelling, using
demeaning language, and leading by threats and abusing their power. This is
not the authoritarian style – rather, it is an abusive, unprofessional style
called ‘bossing’ people around. It has no place in a leader’s repertoire.
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The authoritarian style should normally only be used on rare occasions. If

you have the time and want to gain more commitment and motivation from
your employees, then you should use the participative style.
PARTICIPATIVE OR DEMOCRATIC
This type of style involves the leader including one or more employees in on
the decision making process (determining what to do and how to do it).
However, the leader maintains the final decision making authority. Using
this style is not a sign of weakness; rather it’s a sign of strength that your
employees will respect.
This is normally used when you have part of the information, and your
employees have other parts. A leader is not expected to know everything -
this is why you employ knowledgeable and skillful employees. Using this
style is of mutual benefit - it allows the employees to become part of the
team and allows you to make better decisions.
DELEGATIVE OR FREE REIGN
Also known as laissez faire, which is the noninterference in the affairs of

others. In this style, the leader allows the employees to make the decision.
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. You cannot do everything! You must set
priorities and delegate certain tasks.
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This is not a style to use so that you can blame others when things go wrong;
rather this is a style to be used when you have the full trust and confidence
in the people below you. One should not be afraid to use it, however, to be
effective, it must be used wisely!
There are a number of different approaches, or 'styles' to leadership and

management that are based on different assumptions and theories. The style
that individuals use will be based on a combination of their beliefs, values
and preferences, as well as the organizational culture and norms, which will
encourage some, and discourage others.
In this context, the various approaches could also be classified under the
following heads.
• CHRISMATIC LEADERSHIP
• PARTICIPATIVE LEADERSHIP
• SITUATIONAL LEADERSHIP
• TRANSACTIONAL LEADERSHIP
• TRANFOMATIONAL LEADERSHIP
• THE QUIET LEADERSHIP
• SERVANT LEADERSHIP
CHRISMATIC LEADERSHIP
Attributes of charismatic leaders that indicate a more transformational

Viewpoint:
• Vision and articulation;
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• Sensitivity to the environment;
• Sensitivity to member needs;
• Personal risk taking;
• Performing unconventional behavior.
Musser (1987) notes that charismatic leaders seek to instill both

commitment to ideological goals and also devotion to themselves. The
extent to which either of these two goals is dominant depends on the
underlying motivations and needs of the leader.
PARTICIPATIVE LEADERSHIP
A participative leader, rather than taking autocratic decisions, seeks to

involve other people in the process, possibly including subordinates, peers,
superiors and other stakeholders. Often, however, as it is within the
managers' whim to give or deny control to his or her subordinates, most
participative activity is within the immediate team. The question of how
much influence others are given thus may vary on the manager's preferences
and beliefs, and a whole spectrum of participation is possible.
There are many varieties on this spectrum, including stages where the leader
sells the idea to the team. Another variant is for the leader to describe the
'what' of objectives or goals and let the team or individuals decide the 'how'
of the process by which the 'how' will be achieved (this is often called
'management by objectives').
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The level of participation may also depend on the type of decision being
made. Decisions on how to implement goals may be highly participative,
whilst decisions during subordinate performance evaluations are more likely
to be taken by the manager.
SITUATIONAL LEADERSHIP
When a decision is needed, an effective leader does not just fall into a single
preferred style, such as using transactional or transformational methods. In
practice, as they say, things are not that simple.
Factors that affect situational decisions include motivation and capability of

followers. This, in turn, is affected by factors within the particular situation.
The relationship between followers and the leader may be another factor that
affects leader behavior as much as it does follower behavior.
The leaders' perception of the follower and the situation will affect what they
do rather than the truth of the situation. The leader’s perception of
themselves and other factors such as stress and mood will also modify the
leaders' behavior.
Yukl (1989) seeks to combine other approaches and identifies six variables:
• Subordinate effort: the motivation and actual effort expended.
• Subordinate ability and role clarity: followers knowing what to do and

how to do it.
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• Organization of the work: the structure of the work and utilization of

resources.
• Cooperation and cohesiveness: of the group in working together.
• Resources and support: the availability of tools, materials, people, etc.
• External coordination: the need to collaborate with other groups.
Leaders here work on such factors as external relationships, acquisition of

resources, managing demands on the group and managing the structures and
culture of the group.
TRANSACTIONAL LEADERSHIP
The transactional leader works through creating clear structures whereby it

is clear what is required of their subordinates, and the rewards that they get
for following orders. Punishments are not always mentioned, but they are
also well understood and formal systems of discipline are usually in place.
The early stage of transactional leadership is in negotiating the contract

whereby the subordinate is given a salary and other benefits, and the
company (and by implication the subordinate's manager) gets authority over
the subordinate.
When the transactional leader allocates work to a subordinate, they are

considered to be fully responsible for it, whether or not they have the
resources or capability to carry it out. When things go wrong, then the
subordinate is considered to be personally at fault, and is punished for their
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failure (just as they are rewarded for succeeding).The transactional leader

often uses management by exception, working on the principle that if
something is operating to defined (and hence expected) performance then it
does not need attention. Exceptions to expectation require praise and reward
for exceeding expectation, whilst some kind of corrective action is applied
for performance below expectation.
Whereas transformational leadership has more of a 'selling' style,

transactional leadership, once the contract is in place, takes a 'telling' style.
TRANSFORMATINAL LEADERSHIP
Working for a transformational leader can be a wonderful and uplifting

experience. They put passion and energy into everything. They care about
you and want you to succeed.
Transformational leadership starts with the development of a vision, a view

of the future that will excite and convert potential followers. This vision may
be developed by the leader, by the senior team or may emerge from a broad
series of discussions. The important factor is the leader buys into it, hook,
line and sinker.
The next step, which in fact never stops, is to constantly sell the vision. This
takes energy and commitment, as few people will immediately buy into a
radical vision, and some will join the show much more slowly than others.
The transformational leader thus takes every opportunity and will use
whatever works to convince others to climb on board the bandwagon.
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In order to create followers, the transformational leader has to be very

careful in creating trust, and their personal integrity is a critical part of the
package that they are selling. In effect, they are selling themselves as well as
the vision.
Parallel to the selling activity is seeking the way forward. Some

transformational leaders know the way, and simply want others to follow
them. Others do not have a ready strategy, but will happily lead the
exploration of possible routes to the Promised Land.
The route forwards may not be obvious and may not be plotted in details,
but with a clear vision, the direction will always be known. Thus finding the
way forward can be an ongoing process of course correction and the
transformational leader will accept that there will be failures and blind
canyons along the way. As long as they feel progress is being made, they
will be happy.
The final stage is to remain up-front and central during the action.
Transformational leaders are always visible and will stand up to be counted
rather than hide behind their troops. They show by their attitudes and actions
how everyone else should behave. They also make continued efforts to
motivate and rally their followers, constantly doing the rounds, listening,
soothing and enthusing.
It is their unswerving commitment as much as anything else that keeps

people going, particularly through the darker times when some may question
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whether the vision can ever be achieved. If the people do not believe that
they can succeed, then their efforts will flag. The transformational leader
seeks to infect and reinfect their followers with a high level of commitment
to the vision.
Overall, they balance their attention between action that creates progress and
the mental state of their followers. Perhaps more than other approaches, they
are people-oriented and believe that success comes first and last through
deep and sustained commitment.
THE QUIET LEADER
The approach of quiet leaders is the antithesis of the classic charismatic (and
often transformational) leaders in that they base their success not on ego and
force of character but on their thoughts and actions. Although they are
strongly task-focused, they are neither bullies nor unnecessarily unkind and
may persuade people through rational argument and a form of benevolent
transactional leadership.
The 'level 5' leader: In his book “Good to Great”, Jim Collins, identified five
levels of effectiveness people can take in organizations.
At level four is the merely effective leader, whilst at level five the leader
who combines professional will with personal humility. The 'professional
will' indicates how they are far from being timid wilting flowers and will
march against any advice if they believe it is the right thing to do. In
'personal humility' they put the well-being of others before their own
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personal needs, for example giving others credit after successes but taking
personal responsibility for failures.
SERVANT LEADERSHIP
The servant leader serves others, rather than others serving the leader.
Serving others thus comes by helping them to achieve and improve.
Principles of servant leadership defined by the alliance for servant
Leadership is:
• Transformation as a vehicle for personal and institutional growth.
• Personal growth as a route to better serves others.
• Enabling environments that empower and encourage service.
• Service as a fundamental goal.
• Trusting relationships as a basic platform for collaboration and service.
• Creating commitment as a way to collaborative activity.
• Community building as a way to create environments in which people can

trust each other and work together.
• Nurturing the spirit as a way to provide joy and fulfillment in meaningful

work.
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CHAPTER -3 TNTRODUCTION TO BANKING

INDUSTRY
• INTRODUCTION TO BANKING INDUSTRY
• INTRODUCTION TO STATE BANK OF

INDIA
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INTRODUCTION TO BANKING INDUSTRY
The Indian Banking industry, which is governed by the Banking Regulation

Act of India, 1949 can be broadly classified into two major categories, non-
scheduled banks and scheduled banks. Scheduled banks comprise
commercial banks and the co-operative banks. In terms of ownership,
commercial banks can be further grouped into nationalized banks, the State
Bank of India and its group banks, regional rural banks and private sector
banks (the old/ new domestic and foreign). These banks have over 67,000
branches spread across the country.
The first phase of financial reforms resulted in the nationalization of 14

major banks in 1969 and resulted in a shift from Class banking to Mass
banking. This in turn resulted in a significant growth in the geographical
coverage of banks. Every bank had to earmark a minimum percentage of
their loan portfolio to sectors identified as “priority sectors”. The
manufacturing sector also grew during the 1970s in protected environs and
the banking sector was a critical source. The next wave of reforms saw the
nationalization of 6 more commercial banks in 1980. Since then the number
of scheduled commercial banks increased four-fold and the number of bank
branches increased eight-fold.
After the second phase of financial sector reforms and liberalization of the
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sector in the early nineties, the Public Sector Banks (PSB) s found it
extremely difficult to compete with the new private sector banks and the
foreign banks. The new private sector banks first made their appearance
after the guidelines permitting them were issued in January 1993. Eight new
private sector banks are presently in operation. These banks due to their late
start have access to state-of-the-art technology, which in turn helps them to
save on manpower costs and provide better services.
During the year 2000, the State Bank Of India (SBI) and its 7 associates
accounted for a 25 percent share in deposits and 28.1 percent share in credit.
The 20 nationalized banks accounted for 53.2 percent of the deposits and
47.5 percent of credit during the same period. The share of foreign banks
(numbering 42), regional rural banks and other scheduled commercial banks
accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in
deposits and 8.41 percent, 3.14 percent and 12.85 percent respectively in
credit during the year 2000.
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Structure of the organized banking sector in India. Numbers of banks are in brackets.
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INTRODUCTION TO STATE BANK OF INDIA
State Bank of India (SBI) is the largest state-owned banking and

financial company in India, by almost every parameter - revenues, profits,
assets, market capitalization, etc. The bank traces its ancestry to British
India, through the Imperial, to the founding in 1806 of the Bank of Calcutta,
making it the oldest commercial bank in the Indian. Bank of Madras merged
into the other two presidency banks, Bank of Calcutta and Bank of Bombay
to form Imperial Bank of India, which in turn became State Bank of India.
The Government of India nationalized the Imperial Bank of India in 1955,
with the Reserve Bank of India taking a 60% stake, and renamed it the State
Bank of India. In 2008, the Government took over the stake held by the
Reserve Bank of India.
SBI provides a range of banking products through its vast network of

branches in India and overseas, including products aimed at NRIs. The State
Bank Group, with over 16,000 branches, has the largest banking branch
network in India. With an asset base of $352 billion and $285 billion in
deposits, it is a regional banking behemoth. It has a market share among
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Indian commercial banks of about 20% in deposits and advances, and SBI
accounts for almost one-fifth of the nation's loans.
SBI has tried to reduce over-staffing by computerizing operations and

"golden handshake" schemes that led to a flight of its best and brightest
managers. These managers took the retirement allowances and then went on
to become senior managers in new private sector banks.
In 1959 the Government passed the State Bank of India (Subsidiary Banks)
Act, enabling the State Bank of India to take over eight former State-
associated banks as its subsidiaries. On 13 September 2008,State Bank of
Saurashtra, one of its Associate Banks, merged with State Bank of India.
SBI has acquired local banks in rescues. For instance, in 1985, it acquired
Bank of Cochin in Kerala, which had 120 branches. SBI was the acquirer as
its affiliate, State Bank of Travancore, already had an extensive network in
Kerala.
The State bank of India is the 10th most reputed company in the world
according to Forbes.
State Bank of India is the largest of the Big Four Banks of India, along
with ICICI Bank, Punjab National Bank and Canara Bank — its main
competitors.
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CHAPTER -4 LEADERSHIP THEORIES
• GREAT MAN THEORIES
• TRAIT THEORIES
• CONTENGENCY THEORIES
• SITUATIONAL THEORIES
• BEHAVIORAL THEORIES
• PARTICIPATIVE THEORIES
• MANAGEMENT THEORIES
• RELATIONSHIP THEORIES
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LEADERSHIP THEORIES
GREAT MAN THEORIES
Great Man theories assume that the capacity for leadership is inherent – that
great leaders are born not made. These theories often portray great leaders as
heroic, mythic and destined to rise to leadership when needed. The term
“Great Man” was used because, at the time, leadership was thought of
primarily as a male quality, especially in terms of military leadership.
TRAIT THEORIE
Similar in some ways to "Great Man" theories, trait theory assumes that
people inherit certain qualities and traits that make them better suited to
leadership. Trait theories often identify particular personality or behavioral
characteristics shared by leaders. But if particular traits are key features of
leadership, how do we explain people who possess those qualities but are
not leaders? This question is one of the difficulties in using trait theories to
explain leadership.
Several researchers have demonstrated that such traits of leadership do not

always ensure successful leadership but they do place the possessor in
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higher esteem. It is also seen that hardly10% of the listed traits in over 100
such researchers appeared in 5 or more study. The trait approach has lead to
selection procedure by written tests or preference tests.
The Greatest defect of this theory is that we can not have common or
universal traits of leadership.
CONTINGENCY THEORIES
Contingency theories of leadership focus on particular variables related to

the environment that might determine which particular style of leadership is
best suited for the situation. According to this theory, no leadership style is
best in all situations. Success depends upon a number of variables, including
the leadership style, qualities of the followers and aspects of the situation.
Contingency theory is a class of behavioral theory that claims that there is

no best way to organize a corporation, to lead a company, or to make
decisions. Instead, the optimal course of action is contingent (dependent)
upon the internal and external situation. Several contingency approaches
were developed concurrently in the late 1960s.
They suggested that previous theories such

as Weber's bureaucracy and Taylor's management had failed because they
neglected that management style and organizational structure were
influenced by various aspects of the environment: the contingency factors.
There could not be "one best way" for leadership or organization.
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Historically, contingency theory has sought to formulate broad

generalizations about the formal structures that are typically associated with
or best fit the use of different technologies. The perspective originated with
the work of Joan Woodward (1958), who argued that technologies directly
determine differences in such organizational attributes as span of control,
centralization of authority, and the formalization of rules and procedures.
SITUATIONAL THEORIES
Situational theories propose that leaders choose the best course of action
based upon situational variables. Different styles of leadership may be more
appropriate for certain types of decision-making.
These approach places more emphasis on the characteristics of the specific

situation or environment in which the leader is operating. Qualities for
leadership vary with the situation or circumstances and that any traits or skill
can become a quality of leadership in the right situation.
BEHAVIORAL THEORIES
Behavioral theories of leadership are based upon the belief that great leaders
are made, not born. Rooted in behaviorism, this leadership theory focuses on
the actions of leaders not on mental qualities or internal states. According to
this theory, people can learn to become leaders through teaching and
observation.
PARTICIPATIVE THEORIES
Participative leadership theories suggest that the ideal leadership style is one
that takes the input of others into account. These leaders encourage
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participation and contributions from group members and help group

members feel more relevant and committed to the decision-making process.
In participative theories, however, the leader retains the right to allow the
input of others
MANAGEMENT THEORIES
Management theories (also known as "Transactional theories") focus on the

role of supervision, organization and group performance. These theories
base leadership on a system of rewards and punishments. Managerial
theories are often used in business; when employees are successful, they are
rewarded; when they fail, they are reprimanded or punished.
RELATIONSHIP THEORIES
Relationship theories (also known as "Transformational theories") focus

upon the connections formed between leaders and
followers. Transformational leaders motivate and inspire people by helping
group members see the importance and higher good of the task. These
leaders are focused on the performance of group members, but also want
each person to fulfill his or her potential. Leaders with this style often have
high ethical and moral standards.
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CHAPTER-5 DIFFERENT APPROACHES
•DIFFERENT APPROACHES
― POSITIVE vs. NEGATIVE APPROACH

― CONSIDERATION vs. STRUCTURED APPROACHES
•BASIC DIFFERENCE BETWEEN WESTERN AND INDIAN

LEADERSHIP APPROACHES
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DIFFERENT APPROACHES
A leader may use a variety of different approaches depending on the

situation and the employees in question.
 POSITIVE vs. NEGATIVE APPROACHES
There is a difference in ways leaders approach their employee. Positive

leaders use rewards, such as education, independence, etc. to motivate
employees. While leader adopting the negative approach emphasize
penalties.
While the negative approach has a place in a leader's repertoire of tools, it

must be used carefully due to its high cost on the human spirit.
Negative leaders act domineering and superior with people. They believe
the only way to get things done is through penalties, such as loss of job, days
off without pay, reprimand employees in front of others, etc. They believe
their authority is increased by freighting everyone into higher lever of
productivity. Yet what always happens when this approach is used wrongly
is that morale falls; which of course leads to lower productivity.
It is of vital significance that most leaders do not strictly use one or another,
but are somewhere on a continuum ranging from extremely positive to
extremely negative. People who continuously work out of the negative are
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‘bosses’ while those who primarily work out of the positive are considered
‘real leaders’.
 CONSIDERATION vs. STRUCTURED APPROACHES

Two other approaches that leaders use are:
Consideration (Employee Orientation) –
Leaders are concerned about the human needs of their employees. They
build teamwork, help employees with their problems, and provide
psychological support.
Structure (Task Orientation) –
Leaders believe that they get results by consistently keeping people busy and
urging them to produce. There is evidence that leaders who are considerate
in their leadership style are higher performers and are more satisfied with
their job.
One must appreciate that consideration and structure are independent of each
other, thus they should not be viewed on opposite ends of a continuum. For
example, a leader who becomes more considerate does not necessarily mean
that he has become less structured.
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THE BASIC DIFFERENCE BETWEEN WESTERN AND INDIAN

LEADERSHIP APPROCHES
The following is the differentiation of leadership approaches and concepts

with respect to various important aspects, as I perceived them.
 APPROACH TO PROBLEM SOLVING
The West tends to take a more rational approach towards problem solving,
backing its decisions with hard data and strong systems. The Indian
perspective being a more inward looking one, hunch, intuition and gut
feeling play a bigger role in making decisions. People, as a result tend to
sleep over decision. Very often a well is dug only on the outbreak of fire.
The fatalistic attitude proves fatal for the Indian managers; for Instance,
Mohammed Gazani looted the Somnath Temple seventeen times. His armies
were always shielded by a herd of cows. Instead of fighting and in the
process causing cow slaughter, able-bodied warriors permitted themselves to
be slaughtered and the temple was vandalized. This gross act of
cowardliness being meek surrender without fighting was glorified as a path
to salvation in order to save the dharma.
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History is witness that India has never attacked others but has not been able
to defend herself despite being quite capable due to its fatalistic attitude,
infighting & jealousy.
 KEY DRIVERS TO ACTION
The key motivator in the West is material prosperity and in its quest, leaders
tend to be ruthless, aggressive, brazen and high-risk takers. India is
traditionally conservative and thus intangible factors play a significant role.
Self esteem, conscience and self-satisfaction form a major part of the driving
force behind ones work. Thus managers tend to be more sensitive and try to
take the middle path, avoiding conflicts to the greatest extent possible, at
times even at the cost of productivity.
Indians believe in the theory of rebirth and accumulation of karma. In

contrast in the West people believe that a person gets only one life and tend
to work hard and play harder. For them, the end is important irrespective of
the means, the motto being “All’s fair in love and war.”The go-getter
attitude breeds selfishness and people tend to be self-centered, though true
achievers
 RESPONSE TO CHANGING ENVIRONMENT
• The West has a clinical approach to change and take it in their stride.
They are the proactive leaders and therefore always ready to respond to
changes quickly and positively, using it to their advantage.
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• India, due to its laidback attitude towards changes tends to procrastinate

and take bold decisions only in the moment of crisis.
• The leaders in general have a more reactive approach to the

changing environment.
• A case in point: major reforms and an opening up of the economy were

forced by an acute foreign exchange crisis.
• In the West adventure is the spirit of life whereas in India it is

regarded as rash and foolhardy.
 QUEST FOR EXCELLENCE
• In the West, it is always about “being the best”, “being the biggest”,
“being the largest’, which basically means being market leaders. It is
always ‘myself against the world’.
• The Indian leaders are more content by just making optimum use of the
available resources without much ado about what the others are doing.
• They compete with themselves and are satisfied with the fruits of their
labor so long as they have done their best. Materialism is associated
with chasing a mirage or Maya.
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• This is the reason that major scientific discoveries have taken place in
the West whereas India is known for spiritual evolution, art and culture.
• Seekers of wealth have migrated to the West and seekers of solace

have migrated to the East.
• Alexander despite conquering the world came to India searching for

a guru.
• It is believed that both Christ and Hazarat Mohammed visited India in

search of enlightenment.
 THE DIVISION BETWEEN PROFESSIONAL AND

PERSONAL LIFE
In the West, people tend to draw a clear division between their personal and
professional life. The employer - employee relationship is purely
commercial in nature where money is paid for the services rendered. The
relationship is formal and strictly business like. Any attempt by the
employer to delve into the personal life of the employee is considered to be
invasion of privacy and is subject to costly litigation.
‘Hire and fire’ is the order of the day. People change jobs very casually and
a long tenure of service with a single employer is considered to be a sign of
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timidity, inefficiency or both. One has to either shape up or he is shipped

out.
In India the concept of Vasudev Kutumbakam preaches that the entire world
is one big family with the employer being regarded as the head of the family.
It thus becomes his duty to ensure that all the needs of his employees are
taken care of. In return the employees are supposed to be totally devoted to
the employer. Often the relationship extends to a number of generations.
Lifetime employment is the norm. Frequent change of jobs is discouraged.
Due to the seamless integration between personal and professional life, it

becomes difficult for the managers to take tough decisions.
People work till their end as a result there are limited opportunities for
the infusion of young blood and the organization is deprived of a fresh
perspective.
 MOBILITY OF LABOR
In the West, the factors of production are mobile. People are always in
search of the elusive pot of gold under the rainbow and are prepared to risk
every thing if the rewards are suitable.
It is only in search of the land of milk and honey that Columbus discovered
America. In contrast, in India, status quo is the done thing. People inherently
dislike instability and constant change.
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 RISK TAKING ABILITY
In the West it is common to see flatter organizations in real terms, as a result

of effective delegation of both responsibility and authority. This in turn
being a direct outcome of the hire and fire policy
Managers being risk takers, failure is tolerated as long as the right decisions
are taken at the right time. People are encouraged to learn from failure and
move on.
Risk management and control, not risk avoidance is the order of the day - as
long as the risk: rewards ratio and the management’s appetite for the risk are
in unison.
For Instance Pharmaceutical companies are known to pump in billions of

dollars for research and development even when they are incurring losses
and the management, for this purpose, has to take expensive debts or dilute
its holdings in the hope that the company will come out with a winner.
In India people are generally risk averse and are reluctant to delegate. Even
after formal delegation, real transfer of authority does not take place though
the delegate becomes a sitting duck to face the bullet if things go wrong.
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Some reasons why effective delegation does not take place are:
• People have a king size ego about their capabilities and are
unwilling to trust easily.
• As a result of the seamless integration of personal and professional life,

any failure is taken to be personal and the manager is marked for life.
• A direct outcome of the expensive and slow legal procedures is that any
failure cannot be reversed easily and assets are locked. n a failed
venture for a lifetime facing rapid value erosion, not to speak of the
opportunity cost.
• The quest for spiritual solace ensures that people do not want
to undergo stress and strain.
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CHAPTER-6 QUALITIEA OF A LEADER
• QUALITIES OF A LAEDER
• FOUR MOST IMPORTANT QUALITIES OF A

GOOD LEADER
• LEADERSHIP STRENGTHS
• LEADERSHIP AND MANAGERS : A

COMPARISON
• THE BE,KNOW,DO PRINCIPLE OF

LEADERSHIP
• THE PROCESS OF GREAT LEADERSHIP
• THUMB RULES OF A SUCCESSFUL LEADER
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QUALITIES OF A LEADER
Leaders are not made, it is said, and they are born. This is true because not
everyone can lead. Some people are docile and dormant by nature, and
constantly require some person to overlook their activities and remind them
about the ultimate goal, so they are not cut out for leadership. The best
leaders are those who are born with the good qualities of a leader naturally.
So, let us see what the qualities of a great leader are.
There are a number of different qualities that a leader must possess, but
broadly, they can be classified into these categories. Possessing these traits
will make an individual a good leader, and these leadership qualities should
be present in a leader naturally.
GOOD COMMUNICATION SKILL
Communication is the key to be a great leader. The reason for this is simple:
if he possesses the other nine leadership qualities but if he fails to
communicate well, he will never be great leader.
What he can do is communicate with others in the organization about what

IT can do to move the company forward. In other words, good
communication is the key for developing good business relationships. If he
can’t establish a good business working relationship, he is not going to be
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that leader, that team player. He will not be able to communicate how IT can
add long-term value to the company. The modern leaders must therefore be
equipped with good communication skill and use new ways to do effective
communication.
HONESTY
The most valuable asset of a leader is honesty. He must be honest with both
his employees and the management committee. Another part of his features
is integrity. Once a leader compromises his or her integrity, it is lost. That is
perhaps the reason integrity is considered the most admirable trait. The
leaders therefore must keep it "above all else."
VISIONARY LOOK
Leadership qualities are different for different position. For a CIO he must
be thinking for stabilizing the current business and always looking for future
scope of expansion. He has to be able to look beyond where we are today,
know where the business is going, and be able to use that vision to move the
company forward. Being able to do this is a rare skill indeed.
SELECTING A GOOD TEAM
A good CIO although he possesses sound technical skills he assures that the
team he selects is efficient enough to back up any skill he lacks. Choosing
the best people for such team is a skill. A CIO after all is a human being and
does not have answer for everything. But by working together he creates an
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atmosphere of mutual trust and respect; the teams then always find the best
solution.
ACTION SPEAKS LOUDER THAN WORDS
Managers must be able to put aside their concerns to listen to (and appear to
listen to) those around them. As a result, they come know what is going on,
and know what is both said, and said between the lines. They have the knack
of appearing to know what people need even if those needs are not expressed
directly. However, knowing what is going on, and identifying the needs of
those around them is not sufficient. The responsive manager also acts upon
that knowledge, attempting to help fulfill the needs of employees, superiors,
etc. Responsive managers wield influence to solve problems for those
around them, often before even being asked.
ABILITY TO MOTIVATE PEOPLE AROUND
A good leader must always keep motivating his team mates for good work
and should maintain healthy environment. He must give first priority to
safety of workers and see that they are not exploited by superiors.
CONSISTENCY
Leadership effectiveness is impossible without consistency. Every leader has

an approach that is unique to them. Don't change your personal style
radically after all; it got you in a leadership position. Modify the rough spots
but take care not to confound your staff by displaying inconsistency. Your
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expectations, though subject to modification based on ever-changing

business needs, should remain as constant as possible. The business world is
confusing enough without you adding unwelcome surprises into the mix.
Keep things simple and consistent.
ABILITY TO STAND AGAINST CRITICS
As the success rate increases your critics multiply and become louder. Come
to peace with the fact that you will always have a camp of people who
critique every decision you make. They are generally the ones who are
excellent problem-identifiers rather than problem-solvers. Develop your
skills of repelling such critics so that they do not diminish your confidence
or enthusiasm.
It takes focus and confidence not to be adversely affected by criticism.

Strong leaders learn the art of listening to critics, but ultimately making
decisions for the good of the department, not to simply please the critics.
The following quote sums it up nicely: "Some of the most talented people
are terrible leaders because they have a crippling need to be loved by
everyone." As rightly stated by James Schorr.
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 FOUR MOSTIMPORTANT QUALITIES OF A GOOD LEADER
Good leaders are required in all fields. They lead, motivate and inspire
others. Superior leadership is essential in today’s high-pressure competitive
world. The four most important qualities of leadership are given below.
RISK TAKING
A leader needs to be ready to take risks. It is claimed that higher, the risk
higher is the gain. A leader should not be living in a comfortable zone and
being happy with whatever he has achieved. He does not rest on past laurels.
Such leaders soon lose their position and the time wave removes them from
the peoples' mind. The constant urge for innovation is one of the most
important leadership qualities. It helps the leader to be in tune with the
modern times and help them to face new challenges much more effectively.
A leader doesn’t accept society's definition of what is possible, they make
their own outlines. Good leaders refuse to allow the norms and limits
defined by society to guide their actions or plans. They are characterized by
lack of acceptance for what you see as reality. They just don't see the world
the same way as others. Everything is possible for them despite the arduous
and bumpy road to getting there.
MENTAL TOUGHNESS
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A leader needs to be mentally tough. No one can lead without being

criticized or without facing tough situations. A tough-minded leader sees
things as they are and will pay the price for it. Leadership creates a certain
separation from one's peers which comes from carrying responsibility that
only the leader is able to carry. The leader must be able to keep his or her
own counsel until the proper time. A leader possesses the ability to live with
criticism and not be affected by it. It is not possible for a leader to please
everyone. Leaders are able to limit the impact of stress on their lives. A good
leader thrives on the energy of stressful situations not the negativity. They
assume control even when they don't have it thus eliminating the stress of
not having control. Good leaders have a self-esteem and self-confidence to
ride out of any tough situation.
SUPIRIOR COMMUNICATION SKILLS
Effective leadership necessitates good listening skills. They need to create a

system of communication for the organization. Interaction should take in
account the cultural differences too. They possess the ability to ask the right
questions. A good leader possesses superior interviewing skills in order to
choose the right candidate. He is able to communicate clearly the objectives
and procedures required for a task. He needs to be excellent in public
speaking and reading body language. A leader has to be open to constructive
feedback. They have the ability to convince others and also communicate
their vision to their team. They are endowed with the ability to inspire others
to work more productively by their speech or words.
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GOING THE EXTRA MILE
Good leaders always put more effort than the organization expects from
them. They do activities that the majority of people won't do. Where most
people quit they persevere. This serves as an excellent example to their team
which then strives to achieve much more. A good leader doesn’t just order
things; he does it so that others can do it. They not only motivate themselves
in personal development but also motivate those around them. Good leaders
do what is necessary to upgrade their knowledge and skills and be on the
cutting edge in their field.
 LEADERSHIP STRENGTH
Leadership is the ability of a person to guide people in a group towards

achieving a task at hand. There are many leadership qualities that help you
to become a good leader. These are certain leadership strengths a person
needs to capitalize on to be able to execute effective leadership. So, given
below is a list that entails the important strengths of leadership that you need
to keep in mind to be a good leader.
KEY LEADERSHIP STRENGTHS
• TASK EXECUTION
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There's many a slip between cup and lip. Coming up with a brilliant idea and
executing that idea are two completely different things. Bringing an idea to
life is lot easier said than done. An idea really comes to life only when it is
executed to perfection. Thus, this is one of the most
important leadership strengths. For this, you need to be a team player. There
is a fine line between having followers that follow you out of respect and
having followers that follow because they have no choice. Any kind of
discord in the team reflects in the end result and the efficiency of the task
performed.
• ENVISION
Before you go on to put any kind of strategy into place, you need to
understand and envision what you wish to achieve. This is important
because the expectations of the entire group will ride on your shoulders.
Thus, one of the important leadership strengths is to be a visionary because
you need to have a very clear vision about how to go about a task at hand,
keeping the long term and short term goals and repercussions in mind. You
need to be realistic yet optimistic about the prospects involved in any task
and must take into consideration all the risks involved.
• LISTEN
Being the leader does not mean that you own the people you work with.
Many people tend to get carried away and do not listen to their team
members. This can go against them as the team members then tend to lose
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respect for their leader. Hence, one of the most important leadership
strengths is the ability to listen to your teammates. You need to genuinely
listen to your team members because they are the only ones that will tell you
if you go wrong at any point of time. Furthermore, listening will make sure
that you connect with your team members on a personal level, which will
improve the performance of your team greatly. Read more on team
leadership.
• RELATIONSHIP BUILDING
No two people are alike and hence, even the thinking of no two people will
match. Hence, there is always scope for discord and dispute within group
members. In such cases, you need to be the peacemaker. You need to be the
one who manages to listen to both sides of the story from an unbiased third
person’s point of view. Furthermore, when an idea is conveyed, be sure to
never out rightly rule out any kind of suggestion offered, no matter how
irrelevant or unrealistic it may be. This makes it look like the group is
following a dictatorship, which in general, brings down the morale of the
group. Thus, relationship building within a team, and outside of it, is one of
the most important leadership strengths examples that a person needs to
keep in mind. Read more on strategic leadership.
• ACCEPT MISTAKES
There will be times when as a leader and as a group, you may fail. This will
be a hard time for you but you need to understand that you have been
patient. Lashing out at your team members, blaming them for failure will
55
only add to your resentment. If the success is shared, then so must the
failure be shared. So in fact, when the team fails, ensure that you take an
equal amount of responsibility in the failure. Do not cower to admit defeat
because if you do so, then you may lose the respect of your team. So accept
your mistake, learn from it and try to improvise as a leader. This will earn
you respect and the most loyal team members you can ever hope to find.
Read more on leadership.
Leadership strengths are essential qualities that distinguish a good leader

from a bad one. Irrespective of what the saying is, I believe that leaders are
made, they are not born and a person can always be a good leader if he
capitalizes on the above given list of leadership strengths.
 LEADERS AND MANAGERS : A COMPARISON
Experts argue that leadership and management are different. Abraham

Zaleznik (1986) argues that leaders are different from managers and they are
very different kind of people. They differ in motivation, personal history and
how they think and act.
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1. Managers tend to take impersonal attitudes toward goals, whereas

leaders take a personal and active attitude towards goals.
2. Managers tend to take moderate risk and establish strategies and make
decisions. Leaders work from high-risk positions.
3. Managers are appointed to their positions. Their ability to influence

employees is based on the formal authority inherent in that position.
4. Leaders are appointed or merge from within a work group and are able
to influence others for reasons beyond formal authority.
5. Managers prefer to work with people; they avoid solitary activity because
it makes them anxious. Leaders, who are concerned with ideas, relate to
people in more intuitive and emphatic ways.
6. Good management brings about order and consistency by formulating

plans, designing organization structure and monitoring results against the
plans.
7. Leadership, in contrast, is coping with change. Leaders establish vision of

the future and articulate this vision and inspire people to overcome
hurdles.
8. Managers use the authority inherent in their designated formal rank to

obtain compliance from organizational members
 THE BE,KNOW,DO PRINCIPLE OF LEADERSHIP
57
If you are a leader who can be trusted, then those around you will grow to
respect you. To be such a leader, there is a leadership framework to guide
you:
- Be a professional. Examples: be loyal to the organization, perform

selfless service, and take personal responsibility.
- Be a professional who possess good character traits. Examples: honesty,

competence, candor, commitment, integrity, courage,
straightforwardness, imagination.
- Know the four factors of leadership - follower, leader, communication,

and situation.
- Know yourself. Examples: strengths and weakness of your character,

knowledge, and skills.
- Know human nature. Examples: human needs, emotions and how people
respond to stress.
- Know your job. Examples: be proficient and be able to train others in

their tasks.
- Know your organization. Examples: where to go for help, its climate and
culture, who the unofficial leaders are.
- Do provide direction. Examples: goal setting, problem solving, decision

making, planning.
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- Do implement. Examples: communicating, coordinating, supervising,

evaluating.
- Do motivate. Examples: develop moral and esprit de corps in the

organization, train, coach, and counsel.
 THE PROCESS OF GREAT LEADERSHIP
The road to great leadership that is Common to successful leaders:
• Challenge the process - first, find a process that you believe needs to be
improved the most.
• Inspire a shared vision - next, share you vision in words that can be
understood by your followers.
• Enable others to act - give them the tools and methods to solve the
problem.
• Model the way - when the process gets tough, get your hands dirty. A boss
tells others what to do...a leader shows that it can be done.
• Encourage the heart - share the glory with your followers' heart, while
keeping the pains within your own.
 THUMB RULES OF A SUCCESSFUL LEADER
59
Whether a leader is operating in the West or in India, these are some Of the
thumb rules when it comes to successful leadership:
- The six most important words: "I admit I made a mistake."
- The five most important words: "You did a good job."
- The four most important words: "What is your opinion?"
- The three most important words: "If you please."
- The two most important words: "Thank you,"
- The one most important word: "We"
- The least most important word: "I"
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CHAPTER -7 CROSS-CULTURAL ISSUES IN

LEADERSHIP
• COMMUNICATION AND CO-OPERATION

PROBLEM
• PHILOSOPHICAL DIFFERENCES
• COMMITMENT TO THE COMPANY AND

WORKERS
• PERKS AND STATUS
• COMMITMENT IN A SINGLE COMPANY
CROSS-CULTURAL ISSUES IN LEADERSHIP
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The increasing growth in international business has resulted in research

being focused on cross-cultural issues in leadership of particular interest
have been Japanese manufacturing organization which operate on American
soil. These Japanese management methods on American employees. The
Cultural difference prevalent in such organization, have resulted in certain
types of problems such as:
• COMMUNICATION AND CO-OPERATION PROBLEM
Language has been a major cause of communication and co-operation

problems in such transplant organization.
American managers are often unable to interpret the communication that
they receive from officials in Japan.
• PHILOSOPHICAL DIFFERENCES
The Japanese believe that workers have a right to refuse a legitimate (legal
or rightful) request by the managers and they should not be punished for it.
Rather the manager should aim at developing a sense of obligation and
ownership among the employees.
On the other, the Americans believe that insubordinations should be dealt
severly.Such ideology differences is another cause of problems in cross-
cultural organizations.
• COMMITMENT TO THE COMPANY AND WORKERS
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Japanese managers strongly identify with their company and are highly
committed and dedicated to it. The Japanese often find that this quality is
lacking in their American counterparts.
American managers put their personal interest above those of the company
and co-workers. Such differences in commitment are another cause of
problems.
• PERKS AND STATUS
The Japanese prefers to do away with such symbol as private office;

reserved parking spaces and management meeting rooms. They believe that
lack of such symbols reduces the gap between the management and the
workers.
On the other hand, American managers think that loss of such perks is a loss
of status and that they are not being treated well.
• CAREER IN A SINGLE COMPANY
The Japanese strongly believe in lifetime commitment to the organization.

They want everyone who is recruited by the organization and then retire
with it.
When a manager leaves the company, the Japanese view it as a double loss:-
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a - The manager has to repair employees network and assume the role of the
departed peer.
b - Prepare a new person to grow and adjust in the various networks of the
organization.
In sharp contrast to the Japanese belief of loyalty to the organization,

American managers will swear loyalty to the organization but will not
hesitate twice to quit the organization and join the organization of the
competitors.
The reason why such cultural clashes occur is because:-
a - American fear that adopting the Japanese system will damage their
values of individualism.
b - The Japanese fear that adopting the American management system will
harm their values of teamwork.
The solution to these problems lies in creating willingness in both the parties
to learn the other’s culture and build a new hybrid culture. Effective
leadership requires sensitivity to such cross-cultural issues.
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CHAPTER-8 LEADERSHIP DEVELOPMENT
• DEVELOPING INDIVIDUAL LEADERS
• DEVELOPING LEADERSHIP AT A
COLLECTIVE LEVEL
65
LEADERSHIP DEVELOPMENT
DEVELOPING INDIVIDUAL LEADERS
Traditionally, leadership development has focused on developing the

leadership abilities and attitudes of individuals.
Just like people aren't all born with the ability to, say,
play football like Zinedine Zidane or sing like Luciano Pavarotti, people
aren't all born with the ability to lead. Different personal characteristics can
help or hinder a person's leadership effectiveness and require formalized
programs for developing leadership competencies yet; everyone can develop
their leadership effectiveness. Achieving such development takes focus,
practice and persistence more akin to learning a musical instrument than
reading a book.
Classroom-style training and associated reading is effective in helping

leaders to know more about what is involved in leading well. However,
knowing what to do and doing what you know are two very different
outcomes; management expert Henry Mintzberg is one person to highlight
this dilemma. It is estimated that as little as 15% of learning from traditional
classroom style training results in sustained behavioral change within the
workplace
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The success of leadership development efforts has been linked to three

variables
 Individual learner characteristics

 The quality and nature of the leadership development program
 Genuine support for behavioral change from the leader's supervisor
Military officer training academies, such as the Royal Military Academy

Sandhurst, go to great lengths to only accept candidates who show the
highest potential to lead well. Personal characteristics that associated with
successful leadership development include leader motivation to learn, a high
achievement drive and personality traits such as openness to experience, an
internal focus of control, and self-monitoring.
Development is also more likely to occur when the design of the

development program:
 Integrates a range of developmental experiences over a set period of

time (e.g. 6–12 months). These experiences may include 360 degree
feedback, experiential classroom style programs, business school style
coursework, executive coaching, reflective journaling, mentoring and
more.
 Involve goal setting, following an assessment of key developmental
needs and then evaluate the achievement of goals after a given time
period.
67
Among key concepts in leadership development one may find:
- Experiential learning: positioning the individual in the focus of the

learning process, going through the four stages of experiential learning as
formulated by David A. Kolb:
1. Concrete experience
2. Observation and reflection
3. Forming abstract concept
4. Testing in new situations.
- Self efficacy: The right training and coaching should bring about 'Self
efficacy' in the trainee, as Albert Bandura formulated: A person's belief
about his capabilities to produce effects
- Visioning: Developing the ability to formulate a clear image of the aspired

future of an organization unit.
DEVELOPING LEADERSHIP AT A COLLECTIVE LEVEL
More recently, organizations have come to understand that leadership can

also be developed by strengthening the connection between, and alignment
of, the efforts of individual leaders and the systems through which they
influence organizational operations. This has led to a differentiation
between leader development and leadership development. Leader
68
development focuses on the development of the leader, such as the personal

attributes desired in a leader, desired ways of behaving, ways of thinking or
feeling. In contrast, leadership development focuses on the development of
leadership as a process. This will include the interpersonal relationships,
social influence process, and the team dynamics between the leader and
his/her team at the dyad level, the contextual factors surrounding the team
such as the perception of the organizational climate and the social network
linkages between the team and other groups in the organization.
One practical example of developing leadership specifically so as to

influence an organization's safety culture is described by Burman & Evans
Both forms of development may mutually influence each other, as
exemplified in the concept of "Deep Change" in Robert E. Quinn's 1996
book of the same title.
Leadership development can build on the development of individuals

(including followers) to become leaders. In addition, it also needs to focus
on the interpersonal linkages between the individuals in the team.
In the belief that the most important resource that an organization possesses
is the people that comprise the organization, some organizations address the
development of these resources (even including the leadership).
In contrast, the concept of "Employee ship" recognizes that what it takes to

be a good leader is not too dissimilar to what it takes to be a good employee.
69
Therefore, bringing the notional leader together with the team to explore
these similarities (rather than focusing on the differences) brings positive
results. This approach has been particularly successful in Sweden where the
power distance between manager and team is small.
70

Leadership Style in Banking

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Leadership Style in Banking

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LEADERSHIP STYLE IN BANKING

CHAPTER-1 INTRODUCTION OF LEADERSHIP

• PAST HISTORY OF LEADERSHIP

Leadership is all about harnessing people power for the attainment of a

It pervades through all realms of society, whether it be in politics, religion

We can define leadership as:

• “The activity of influencing people to strive willingly for group

• “It is interpersonal influence exercised in a situation and directed

• “Leadership is influencing people to follow in the achievement

• “Leadership is the process whereby one individual influences other

There are four major factors in leadership:-

Different people require different styles of leadership. For example, a new

You lead through two-way communication. Much of it is nonverbal. For

PAST HISTORY OF LEADERSHIP

Guru Brahma Gurur Vishnu

Guru is verily the representative of Brahma, Vishnu and Shiva. He creates,

After independence, in a pledge to build the nation, the importance of trade

The common thread running through these diverse personalities represents

Indian forms of leadership stand in stark contrast to the western philosophies

The essence of the western leadership philosophy as portrayed by them all

From the aforesaid discussion it emerges that leadership comprises of

It is also evident that although the trajectory of evolution of the concept is

Chanda Kochhar (November 17, 1961) is currently the Managing Director

Chanda Kochhar was born in Jodhpur, Rajasthan and raised in Jaipur,

• Ranked 20th in the Forbe's list of Most Powerful Women in the

• Ranked 25th in the Fortune’s List of Most Powerful Women in

• Featured in the list of 25 most powerful women leaders in

• Selected as ‘Rising Star Award’ for Global Awards 2006 by

• Awarded Business Woman of the Year 2005 by The Economic

 NAINA LAL KIDWAI

Naina Lal Kidwai is an Indian businesswoman. She is currently the Group

Kidwai has a Bachelors degree in Economics from Delhi University and an

Her other positions include being a non-executive director on the board of

AWARDS AND RECOGNITION

CHAPTER-2 LEADERSHIP STYLE

• DELEGATIVE OR FREE REIGN

• THE QUIET LEADERSHIP

Leadership style is the manner and approach of providing direction,

The authoritarian style should normally only be used on rare occasions. If

DELEGATIVE OR FREE REIGN

Also known as laissez faire, which is the noninterference in the affairs of

There are a number of different approaches, or 'styles' to leadership and

Attributes of charismatic leaders that indicate a more transformational

• Vision and articulation;

• Sensitivity to the environment;

• Sensitivity to member needs;

• Personal risk taking;

• Performing unconventional behavior.

Musser (1987) notes that charismatic leaders seek to instill both

A participative leader, rather than taking autocratic decisions, seeks to

Factors that affect situational decisions include motivation and capability of

• Subordinate effort: the motivation and actual effort expended.

• Subordinate ability and role clarity: followers knowing what to do and

• Organization of the work: the structure of the work and utilization of

• Cooperation and cohesiveness: of the group in working together.

• Resources and support: the availability of tools, materials, people, etc.

• External coordination: the need to collaborate with other groups.

Leaders here work on such factors as external relationships, acquisition of

The transactional leader works through creating clear structures whereby it

The early stage of transactional leadership is in negotiating the contract

When the transactional leader allocates work to a subordinate, they are

failure (just as they are rewarded for succeeding).The transactional leader