It is imperative to mention that a person who is working in the capacity of a manager may also exhibit the qualities of a leader. In the contemporary scenario, the modern organization has drawn a distinct line between management and leadership, emphasizing that the real definition of a leader is a visionary and powerful orator encouraging others to absorb change or innovation through non-compelling methods. A leader is a person who can innovate, craft a vision, and can transform it into an implementation strategy. Leaders can surface from any level in an organization but tend to be managers in middle or top management.
Service-related organizations, such as banks, are restless to comprehend, identify, and pursue leadership globally. Managers are confronting bigger challenges due to intensified competition, socio-environmental intricacy, and change management. Managers, who display leadership skills, are accountable for the formulation and implementation of strategy-oriented organizational objectives. They are the main drivers to assimilate, cultivate, and exploit the bank’s human capital to its full potential, resulting in higher productivity.
To see the impact of theories related to management and leadership on the overall strategic direction, it is imperative to filter through the scope of various leadership theories. There may be some similarities and overlap as they aim to cover identified gaps and observe the outcomes. Many theories revolve around management and leadership styles, which are defined as:
Charismatic theory, Contingency theory, Situational theory, Behavioral theory, Contingency theory, Functional theory, Great man theory, Situational theory, Trait theory, Tri-Dimensional Theory, and transactional, and Transformational theory. In the prevalent scenario, two common theories are discussed below:
Transformational Leadership
Transformational leaders are also called silent leaders, becoming a source of inspiration for their subordinates. They not only appreciate the decisions of their subordinates but also stand out as they exhibit audacity, confidence, and enthusiasm for the betterment of the organization. It is the most common and popular type of style seen in middle management.
Transactional Leadership
Transactional leadership theory concentrates on outcomes, adheres to the prevalent framework, and evaluates achievement as per the prescribed policy. Such leaders are held accountable for upholding the organization’s policies and procedures by supervising performance on an individual basis and the team’s overall productivity. This is mainly seen in financial institutions, such as cashiers, import and export managers, and associates in the legal administration department.
Before creating a leadership strategy, it is important to know the direction in which the company is heading. In this case, a blend of Transformational Leadership with Transactional Leadership and a combined style of Charismatic and Persuasive style will be the most appropriate leadership strategy.
Most firms focus on innovation and eradicate any autocratic culture across all the tiers of management’s hierarchy. If any company goes through the process of merger, almost all the managers will utilize a great deal of their time and, at the same time, may tend to demonstrate struggle with the inadequate structure.
The persuasive style of leadership is often associated with those managers who have the inborn capability to influence other staff members and conform to change. They are true leaders or visionaries and can play a vital role in top management. This leadership strategy will also give birth to self-motivation and will impact the organization by convincingly engaging employees’ self- created motivational concepts.
Furthermore, it is imperative that Emotional Intelligence (EI) is required to positively impact leadership’s effectiveness. The skill should be in harmony with oneself and emotions, with solid environmental knowledge, which can be a productive and effective skill for a manager to lead a team. The pretense of acknowledging, comprehending, and reacting positively to feelings, overpowering pressure in a situation, and having an attentive mind of how your verbal and non-verbal communication may impact your peer workers, is called EI.
A manager deficient in EI will not be in a position to evaluate the needs, demands, and expectations of their peer workers or subordinates. Managers who respond from their gut without understanding their own motives can create doubt among staff and may genuinely hamper their working rapport.
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