Leadership and Management in UK Banking: An HSBC Case Study

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MANAGEMENT AND OPERATIONS
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Executive summary
In the present report, the role and characteristics of leaders and managers of a banking
sector of the UK namely HSBC has been analysed with the help of leader4ship theories.
The functions of leaders and managers in various situations have also been determined
here as well as their strengths and weaknesses have been discussed. Role of leaders
in operational management and benefits of operation management to meet business
objectives has also been evaluated with the help of theories. Decision making factors of
the leaders of HSBC have also been included in the report.
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Table of Contents
Introduction...................................................................................................................... 4
LO1.................................................................................................................................. 5
Definition and comparison of different roles and characteristics of leader and manager. 5
Difference between the roles and functions of leaders and managers with theories.......5
LO2.................................................................................................................................. 8
Examination of the role of a leader and the function of a manager apply in different
situational contexts...........................................................................................................8
Assessment of theories of situational leadership and evaluation of the strengths and
weaknesses of different approaches to situations............................................................8
Critically analyse and evaluate the different theories and approaches to leadership in
organisation......................................................................................................................9
LO3................................................................................................................................ 11
Explain the key approaches to operations management and the role that leaders and
managers....................................................................................................................... 11
Explanation of the importance and value of operations management in achieving
business objectives........................................................................................................11
The way by which the leaders and managers can improve the efficiencies of operational
management.................................................................................................................. 11
LO4................................................................................................................................ 13
Assessment of the factors within the business environment that impact upon operational
management and decision-making................................................................................13
Critical evaluation of application of operations management.........................................14
Recommendation...........................................................................................................15
Conclusion..................................................................................................................... 16
References.....................................................................................................................17
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Introduction
Management structure refers to the theoretical organisational structure which contains
communication, right, duties and authority of the organisation activities. It determines
the processes in which roles and responsibilities are assigned between the
organisational people and the way they interact with each other. This report determines
the characteristics of leaders and managers of a banking sector of the UK namely
HSBC. HSBC is a multinational banking sector which is the seventh largest bank in the
world headquartered in London, UK. Nest asset of company has been US$2.558 trillion.
Revenue of US$53.8 billion has been acquired by HSBC in 2018 along with operating
income of US$19.9 billion. Net income has been US$15.025 billion and number of
employees has been 235,217 in 2018 (Hsbc.co.uk, 2019).
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LO1
Definition and comparison of different roles and characteristics of leader and
manager
Leadership refers to the leading he employees and achieve organisational goals. They
plays important role to achieve goals. On the other hand, the managers have
responsibilities to oversee the work of different departments of an organization. The
principle distinction among leaders and manager of HSBC is that leaders have
individuals to tail them while managers have individuals who work for them. An effective
manager should be both a solid chief and administrator to get their group on board to
tail them towards their vision of progress.
The characteristics of the leaders are,
Genuineness and Integrity: guidance and integrity is required for the leaders to
maintain discipline in the team as well as maintain teamwork. It can reduce conflict
situation in team and increase work performance.
Vision: proper vision related to the work is required to cement the responsibilities
among the employees and motivate them (Voegtlin, 2016).
Motivation: motivation can be risen in the group if everything that are required by the
employees can be ensured by comprehending their job in the master plan
Challenge capacity: reluctance to challenge is not observed for ideal leaders and they
find alternative way and become fearless to consider some fresh possibilities.
Relational abilities: experience is required for the leaders and they need to keep the
group educated regarding the voyage and share any barriers that may be experienced
in activities.
Common traits shared by the managers are:
Execution of Vision: the managers create vision and implement to the organisational
people in order to guide the group
Capacity to Direct: endeavouring of work, auditing required assets and fulfil the needs
of organisation and guide the employees properly
Procedure Management: the managers build norms, rules, procedures and working
techniques (CSU et al., 2016)
Individuals Focused: individuals are focused on the key responsibilities and implement
the works as per the vision
Difference between the roles and functions of leaders and managers with theories
The leaders and managers have different roles and functions to attain organisational
objectives. The differences between the managers and leaders are,
Activities Leader Manager
Responsibilities Leaders is an organisational Manager refers to the person
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person who influences the
subordinated to achieve
specific goal
who manages organizational
activities and responsibilities for
the direction, planning,
coordination and control
Approach Leaders set direction to the
organisational people
Managers plan details
Style transformational,
transactional, laissez-faire
Autocratic, democratic,
authoritative, collaborative
Attributes Foresightedness mind
Decision Facilitates and implement
decisions in the work
Makes decisions
Aim Growth and development Attainment of the required result
Subordinates Team followers Employees
Focus People Organisational procedures and
processes
Change
management
Promotes changes Create change management
ideas and implement the
processes to bring changes
People Aligns people Organised people
Table 1: Differences between the roles and functions of the leaders
(Source: Created by the learner)
Therefore, it is identified that the leaders are mainly fulfil specific goal whereas the
managers are focused on planning and direction (Bedi et al., 2016). The theories that
are related to the leadership and management operations of this banking sector are,
Trait theory of leadership
Trait theory of leadership depends on leadership traits and characteristics which can
enhance success and likelihood of the potential leaders. As per the theory, leaders
should have some specific traits to successfully maintain coordination and collaboration
among the organisation people. As mentioned by Ghasabeh et al., (2015), the traits that
are required for the leaders are self-confidence, integrity, honesty, knowledge in
business and emotional maturity. Therefore, the leaders of HSBC also have these
leadership traits to improve profit margin by 6.7% in 2018.
Behavioural or Role theory
Role theory refers to the leadership behavioural theory in which the theories focuses on
the behaviours of the leaders based on their emotional, physical and social
characteristics (Bottomley et al., 2016). This theory is effective to measure the effects of
relationship between the leaders and employees. The behavioural theory helps the
leaders of HSBC to successfully determine the effective skills and helps them to make
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decisions in different origination situations. It is effective for the leaders and managers
of HSBC to maintain employee motivation and customer satisfaction.
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LO2
Examination of the role of a leader and the function of a manager apply in
different situational contexts
In the chosen organization of HSBC, the various types of organizational situations that
can arise are given as follows:
Stable situation in the context of stable situation, the company of HSBC undergoes
insignificant changes within the organization as well as outside of it. Hence the leader or
the manager does not any such challenges to tackle the situation which is already
normal (Qin et al., 2015). Examples of this kind of situation are saturation in the
company’s financial growth where the organization’s productivity has reached stability.
Slow to moderate situation in this situation, there are some changes in the internal as
well as external aspects of the organization. Hence the managers of HSBC need to
make moderate changes in their leadership styles. For instance, when activities of the
employees get repetitive or boring, slight changes are incorporated for better
productivity of the staff. Hence supportive leadership style comes into play.
Fast changing situation
In this kind of situation, there are many changes that occur simultaneously at a single
point of time (Kerns, 2015). These can be considered in both the inside and outside
aspects of the organization of HSBC. The leaders therefore require controlling and
leading nature for managing the company. For example, when a company like HSBC
face huge loss and needs to recover, it inculcates directive and achievement oriented
model of leadership.
Assessment of theories of situational leadership and evaluation of the strengths
and weaknesses of different approaches to situations
The different theories that can be integrated in the development of the organization of
HSBC are as follows:
Situational leadership the readiness of the employees with their commitment level is
determined. Accordingly the leadership style is chosen. Strengths of this leadership are
helps in directing the employees and motivate them to be more participative. On the
contrary, distraction from long-term goals and low maturity level are the weaknesses.
Systems theory here the various systems are included like marketing, promotion, sales
and customer service. The manager thereby collects resources to generate necessary
outputs (Ketokivi and McIntosh, 2017). Pros are adaptive leadership model and
multidimensional whereas the cons are no clarity of interdependency and sometimes
unrealistic.
Contingency theory
Here the manager’s takes into account both the internal and external changes affecting
the organization of HSBC and thereby decides amongst them the most suitable
leadership style needed to be implemented. Advantages include analyzing the entire
working process thoroughly and widening the leadership goals. Disadvantages include
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less feasibility for scrutinizing each of the factors which makes the process a bit
complicated.
Chaos theory
This is applicable for situations which are unpredictable and can occur in any random
manner (Lamba and Singh, 2017). It is Useful to maintain changing customer
expectations and competitor performance. Weakness of this leadership is that it is
uncertain in the initial stages and may cause more turmoil if not handled effectively.
Critically analyse and evaluate the different theories and approaches to
leadership in organisation
Planning and role of the leaders and managers is changed with different situational
contexts. The theories required for determining leadership approaches are,
Fiedler's contingency theory
As per the theory, there is no best way to lead the organisation and the leaders utilize
different approaches to make decisions as per the situation. According to Fiedler,
(2015), the elements are task structure, positioning power and relationship between
managers and employees. The managers and leaders determine the valuable
resources for improving their financial and insurance services and communicate with
the operational staffs to successfully jump over the operations. The branch manager of
the company is responsible for the supervising and managing operations of branch of
bank. HR managers have responsibilities to hire and train staffs that are necessary for
increasing revenue of the branch.
Hersey-Blanchard's situational model
This model is based on socio-emotional support or relationship behaviour and direction
amount or task behaviour of the leaders. As opined by Meirovich and GU, (2015), the
leader set responsibilities to the employees as per the situation and the level of
knowledge of the employees. Initiative is taken to make individuals comprehensive and
the managers should have confidence to create vision for fulfilling the organisational
objectives and overseeing it progressively to ensure and control daily tasks.
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Figure 1: Hersey-Blanchard's situational model
(Source: Meirovich and GU, 2015)
The operational managers have duties regarding managing and supervising the
employees, assisting the customers to provide excellent services (Lawton and Páez,
2015). The leaders follow one-way or two-way communication support employees. The
usage of high quality banking software such as Finacle by HSBC has made it easier for
the customers to manifest online banking by virtue of net banking process. Furthermore,
the customers are able to invest their money on share trading platforms as well as
mutual funds which are in association with HSBC.
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LO3
Explain the key approaches to operations management and the role that leaders
and managers
Key approaches to the operational management involve planning, organising,
supervising the processes and making necessary improvements to obtain higher
profitability. The leaders and managers needs to support the strategic goals of the
organisms as well as conduct deep measurements and analysis of the current
processes of the organization (Tornjanski et al., 2017). Operations of HSBC includes
accounting, finance asset management, audit, call centre management, capital market
as well as administration and secretarial. As HSBC has largest global function in 52
countries, they mainly matrix organisational structure is followed by the company. It has
been identified that HSBC has picked new head of global trading business to expand
their market and enhance marketing opportunities. The key approaches of operational
management of the banking sector are banking service system, cost control, creation of
common strategies and basic material planning.
On the other hand, the leaders are responsible for communicating with the managers
and maintain integrity among the team (Müller et al., 2018). They create relationship
between managers and product specialists in order to create a clear structure of the
requirements of corporate, institutional and government clients. HSBC also foster
women leadership bench which motivates the women employees as well as gain trust
of the customers which increases their operating income and sales.
Explanation of the importance and value of operations management in achieving
business objectives
Operational management helps the organizations to achieve the organizational goal of
making profit and maximizing the value of the stakeholders. It is also efficient for gaining
contributions improvement and successful quality management. As per the viewpoint of
Giannakis and Papadopoulos, (2016) operational management plays a critical role in
designing, operation and managing the organisational system of production of goods
and services. Operation management is required in the HSBC to ensure digital
standardisation of the organizational activities.
Operation management create strategies for improving productivity and efficiency of the
employees by changing the organisational structure after monitoring the existing
processes and resources. Assessment of the employee effectiveness is also possible
along with quality assurance program which is necessary for improving operation quality
of HSBC operations that effectively achieve business objectives.
The way by which the leaders and managers can improve the efficiencies of
operational management
The leaders and managers develop the strategies with the help of the trial and error
methods to successfully determine effective operations. The leaders need to utilise
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sequential flow and minimise backtracking of work. Managers of HSBC needs to
include technology and bring changes in organisational structure maintain banking
operations.
The managers follow Taylor's scientific management theory to successfully and
scientifically organise the activities of operational management. In accordance with
Waring, (2016), the approaches such as evaluating the organizational processes in
numerical terms and performance measurement techniques are followed by the
managers in order to maintain efficiency. Therefore, it has been effective for gaining
trust and motivation of the employees and reduces organisational conflict. The
managers of HSBC follow this theory of management to analyse a syntheses the
workflow as well as improve productivity and economic efficiency.
As per the Mintzberg’s leadership or managerial theory, the individuals who can
analyse the situational trends in an organisation can benefit the organisation (Slack and
Brandon-Jones, 2018). Thereby, following this theory of leadership, the leaders and
managers of HSBC have been able to evaluate cost and benefits associated with tying
up with individual organisations. By virtue of this loan, the bank has been able to pay its
debt to various share trading firms which has tied up with HSBC. For instance, the IT
development manager of HSBC has decided to install Finacle software which provides
core banking solution to the customers more easily.
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