ROLE OF LEADERSHIP IN BANKING PERFORMANCE
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ROLE OF LEADERSHIP IN BANKING PERFORMANCE
Chapter one
Introduction
Background of the study.
Leadership is often described as influence. It is the ability to persuade others to work freely towards reaching specific goals. The influencer (a person or a group), also known as the leader or leadership, must have one or more aims to achieve. Leadership influences people’s conduct and attitudes, motivating them to work towards achieving the goals that have been set.
They will not only complete the work voluntarily, but also with enthusiasm and confidence. When you lead, you are conducting and directing. Leadership is made up of three components: motivational knowledge, the capacity to inspire others, and leadership style.
According to Koontz (1978), leaders assist groups achieve their goals by maximising the use of their skills. They do not stand behind a group to push and prod; rather, they position themselves in front of the group to enable progress and motivate the group to achieve organisational goals.
Effective leadership is the ability to motivate others to work for you gladly, enthusiastically, and confidently, both when you are physically present and, more importantly, when you are not.
So, although bank management implements the board of directors’ policies, they should leave the operational staff to carry out the enterprise’s operations to their logical conclusion.
The core of leadership is followership. People’s willingness to follow someone is what defines a leader. However, it has been noticed that people tend to follow those they consider to be a method of accomplishing their own ambitions, wants, and requirements.
From this perspective, it should be clear that leadership and motivation are strongly related ideas. Leadership necessitates a successful alignment of personal and organisational goals.
Most Nigerian banks’ management has failed to meet government expectations, causing regulatory authorities to impose sanctions and, when necessary, closure. The contraction of Nigerian deposit money banks (previously known as commercial banks) from 89 to 24 in 2005 is still quite recent.
In 2008, the regulatory authority, the Central Bank of Nigeria (CBN), replaced the management of eight deposit money institutions, including Union Bank Plc, Intercontinental Bank, Wema Bank, and Equatorial Trust Bank.
There have been instances of weak corporate governance, poor risk management, and, most importantly, insufficient human capital and managerial ability among leaders.
Most organisations struggle to meet profitability targets due to a lack of knowledge and exposure to strategic leadership (Carmeli et al., 2011). Strategic leadership knowledge is necessary since the demands placed on senior management teams by shareholders and stakeholders have grown in intensity and complexity (Carter & Greer, 2013).
Some bank executives take on strategic leadership responsibilities without adequate training or experience. Limited strategic leadership expertise may lead to a reduction in performance.
A lack of understanding of strategic leadership might jeopardise organisational competitiveness, performance, and sustainability (Bansal & Desjardine, 2014).
Statement of the Problem
Most organisations’ failure to meet profitability targets can be attributed to a lack of strategic leadership expertise and exposure. The projected failure rate of leadership in attaining profitability targets is up to 60% (Vugt & Ronay, 2014).
The overall business problem is that some senior bank executives take on strategic leadership responsibilities without first receiving strategic leadership training and orientation.
The specific business challenge is that certain bank executives lack the strategic leadership abilities required to increase bank profitability.
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