Gulf Finance Corporation: Global Financial Crisis Report and Analysis

This report examines the global financial crisis and its impact on Gulf Finance Corporation (GFC), an Islamic investment bank. The analysis focuses on the leadership challenges GFC faced, including a lack of experienced leaders and ineffective leadership styles, which contributed to the organization's struggles during the crisis. The report details the leadership strategies adopted by GFC, such as strategic design, avoiding organizational politics, and utilizing HRM practices to mitigate the crisis. The conclusion emphasizes the importance of effective leadership, experienced employees, and proactive crisis management strategies for future financial stability and growth. The report also references several academic sources to support its findings.

Global Financial crisis
Global Finance Corporation

Introduction
Gulf Finance Corporation is also known as a Gulf Finance House. It is an Islamic investment
bank whose headquarter is situated in Bahrain. It was established in 1999. The organization is
providing services like working capital and asset finance, Vehicle and Equipment Finance,
Invoice Finance, Marine finance and small business loans (Peters, 2012) . The organization is
especially lending fund to healthcare, logistics, manufacturing, healthcare and construction
sector. It is a growing provider of funding solutions to medium and small sized enterprises in the
UAE. During 2008, the organization faced a financial crisis which influenced the financial
position of the organization to a larger extent. This arose due to irresponsible policy and lack of
regulations in the financial market. Due to this crisis, the organization has to stop hiring, and
many employees are laying off. During 2007, the organization listed its GDRs on the London
Stock Exchange (Shiller, 2012). The organization is also the owner of a 30% stake in the
Football League Championship club Leeds United. The organization is performing its finance
activities as per the principles and guidelines formulated by the Islamic Sharia. These principles
are specially related to the negotiable financial instrument, financial services investment
transactions, infrastructure and real estate, structured finance, and liquidity and securities
management. During 2004, it was transferred to a Public Shareholding company with its shares
being listed on the Kuwait Stock Exchange, Bahrain Stock Exchange and Dubai Financial
market (Al-Malkawi, 2013). The economy of Bahrain completely depends on Islamic banking,
insurance sectors, and production or aluminum export. Due to the financial crisis, all institutions
were not performed in an efficient manner.
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Analysis of Leadership
Leadership style utilizes in an organization play an important role in the success of it. Leadership
is known as the ability to influence people to freely work towards obtaining predetermined goals
(Dominguez, 2012). The leadership power of the organization is considered very poor due to
which it is not able to tackle the financial crisis efficiently. The members of the organization do
not aware about their goals and motives which provide them guidelines (Reddy, 2014). Due to
this the leaders of the organization seemed confusing and are not able to provide effective
guidelines to their subordinates. The major reason behind the failure of this organization is poor
leadership. It can be possible that global financial market cannot be supervised and regulated by
national institutions only, the challenges facing financial systems of the organization is that of
leadership crisis (De Haas, 2012). The following leadership problems faced by the organization:
 Lack of a good leader who has relevant experience, and the right set of skills of the
industry concerned. Due to this, they were not able to take right decisions at the right
time.
 Lack of appropriate leadership style which can help the organization in taking corrective
decisions as well as the large level of motivation to existing employees (Daft, 2014).
The management of the organization does not follow appropriate leadership strategies for tackle
the situation of financial crisis. This will cause a huge financial loss to the organization and also
lost it reputation in the existing market (Booth, 2015). Due to the faulty decisions the
management of organization faces lot of problem to survive in the market.
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Leadership strategies are taken by Global Finance Corporation
The leaders of the organization frames lots of potential strategies to tackle the crisis situation.
The following leadership strategies are adopted by the management of the organization:
 Strategic Design: The strategic design leadership strategies enable the organization to
design various strategic perspective which helps in achieving the predetermined goals
and provide various efficient strategies with which organization can deal with crisis
situation (Wooten, 2013). The main motive behind the strategic design is to create value
for different stakeholders with which the organization able to maintain its profitability
and healthy relation with its existing customers. Apart from it other organizations like
Stewart Living Omnimedia also utilizing strategic design strategy to tackle with its
management crisis.
 Avoid Organizational politics: Leaders of the organization consumes a large proportion
of their time on determining leadership strategies instead of focusing on organizational
politics (Ladegaard, 2014). Organizational Politics are considered as the dark side of
organizational life which destroy the overall reputation of the organization in the existing
marketplace. Organizational politics give birth dishonesty and selfishness among
members of the organization. By avoiding the organizational politics the organization
efficiently deal with the financial crisis because it brings coordination among members
due to which they fight together to deal with a particular situation.
 HRM Practices: Human Resource practices play an important role in directing the leader
of the organization. HRM practices enforce the management to focus on "people" side of
the crisis. This will be helpful in bringing coordination between employees and crisis
faced by the organization (Politis, 2015). Frequently said that such type of coordination
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help the organization in a tackle with the financial crisis and also can introduce various
new changes for make it successful in the existing marketplace.
Conclusion
After studying all this, it can be concluded that the organization should focus more on leadership
strategies. Efficient leadership style helps management of the organization to deal with existing
situation efficiently. If the organization wants to deal efficiently with the future crisis situations,
it should hire such leader who provided effective guidelines to their subordinates. The leader of
the organization should be such which have the high knowledge, an experience of related field
and very hardworking (Sperry, 2013). If the organization have such type of leaders the
management can deals with all future and current problems effectively and able to plan
expansion strategies for its business. During the crisis situation the management of the
organization should focus on hiring efficient employees instead of laying off, this able to
maintain the competitiveness of the organization.
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References
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Sperry, L. (2013). Effective leadership: Strategies for maximizing executive productivity and
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Ladegaard, L., Andersen, L. B., Bøllingtoft, A., Eriksen, T. L. M., Holten, A. L., Jacobsen, C. B.,
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