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HOLBORN COLLEGE MBA University of Wales Coursework Report
Subject Organizations Course Work Title organizations
:
Understanding and Managing
:
A Comparative analysis (OB) of 2 merging
Module Code
:
WAMB 4001
Module Leader
:
K.Heffernan
Surname
: MANIKANTAN
First Name
: Jackson
Student ID
: 0802966
No. of words :1943 2000)
(Word limit :
Student’s signature Date:
Table of content: Question 1…………………………………………………………………………….04
Student ID: 0802966
Jackson MANIKANTAN
Page 1
Culture………………………………………………………………………………. .04 Views of seeing culture……………………………………………………………….04 The Cultural perspective……………………………………………………………...04 Schein organization Culture…………………………………………………………..05 Handy organizational culture…………………………………………………………06 Deal and Kennedy model……………………………………………………………..07 Culture comparison through Hofstede study…………………………………………07 Question 2......................................................................................................................08 Leadership…………………………………………………………………………….08 Leadership theories…………………………………………………………………. .08 Trait theory……………………………………………………………………………08 Group and exchange theory…………………………………………………………...08 Behavioral theory……………………………………………………………………...08 Leadership styles………………………………………………………………………08 Authoritarian style…………………………………………………………………….08 Democratic style……………………………………………………………………....08 Laissez-faire style…………………………………………………………………… .08 Lloyds TSB Leadership style………………………………………………………….09 HBOS Leadership style………………………………………………………………..09 Question 3……………………………………………………………………………..10 Fiedler’s situational theory…………………………………………………………….10 Vroom/Yetton & Vroom/Jago theories………………………………………………..11 House/Dressler Path goal theory ………………………………………………………… ..12 Hersey/Blanchard model……………………………………………………………….13 Question 4…………………………………………………………………………......14 Bicultural Audit………………………………………………………………………..14 Identification of cultural gap…………………………………………………………..14 Analysis of cultural gap………………………………………………………………..14 Student ID: 0802966
Jackson MANIKANTAN
Page 2
Culture Bridging……………………………………………………………………….14 Challenges faced by Lloyds TSB and HBOS………………………………………….14 Challenges faced after merging………………………………………………………..14 Mckinsey’s five key of challenges…………………………………………………….15 Conclusion…………………………………………………………………………….15,16 References and Websites………………………………………………………………17
Lloyds TSB and HBOS Student ID: 0802966
Jackson MANIKANTAN
Page 3
Question 1 Brooks I(2006 p.139) has stated most astutely that “Culture also influences the way organizational members interpret the nature of their business environment, as knowledge of the relationship between the organization and its environment is an extension of the organizational culture; the environment is viewed through cultural lenses”. Organism
Brain
Virtual
Culture
ORGANIZATION
Instrument of domination
is a ……..
Political system
Machine
In figure -Ways of seeing an organization (2006 p.139 fig.5.4) Brooks claims there are many ways of seeing an organization. The Cultural perspective: According to Brooks I(2006 p.140) “Culture and organization can be viewed as an iceberg, a metaphor which suggests what you see on the surface masks a much deeper, mystical and powerful reality”. As per Schein Organizational culture (Mullins, 2007 p.722) Lloyds TSB: It is seen that though they have merged with many companies in the past, they were all of similar culture so the original culture of the organization stayed undiluted. (Source: Company Corporate Responsibility Review 2007, VAULT Employee Satisfaction Surveys and Media Articles) They are based on Artifacts: a. Customer oriented b. Recruit talented people through tough selection procedure Student ID: 0802966
Jackson MANIKANTAN
Page 4
c. Create framework for employee clear learning and future needs d. Employees rewarded on the basis of client satisfaction. e. Provide personal development programs for employees.
HBOS:
Their Anglo- Scottish merger earlier between Halifax and Bank of Scotland however seems to have resulted in dilution of both cultures.(Source: Company Corporate Responsibility Review 2007, VAULT Employee Satisfaction Surveys and Media Articles) They are based on Values: a. Rewards-oriented company b. Market savvy c. Younger d. Mortgage expertise
As per Handy organizational culture (Martin, 2005 p.494)
Student ID: 0802966
Jackson MANIKANTAN
Page 5
Lloyds TSB:
They are role cultured: a. Strong banking system b. Produce more output in good environment
Student ID: 0802966
Jackson MANIKANTAN
Page 6
HBOS:
They are task cultured: a. Focused on goals b. Work in team As per Deal & Kennedy Feedback-Rise Model:
Student ID: 0802966
Jackson MANIKANTAN
Page 7
As per Hofstede’s study model( Source: Social Responsibility Report 2007 and 2008)
Power distance
Lloyds TSB
HBOS
High-
Low-
Disciplined
Acceptance of responsibility
Uncertainty avoidance
Collectivism vs. Individualism Masculinity vs. Feminity
Long vs. short term
High-
Low-
Precision
Basic innovations
High-
Low-
Employee commitment
Management mobility
High-
Low-
Mass production
Personal service
Efficiency
Custom-made products
Bulk chemistry
Biochemistry
High-
Low-
orientation Student ID: 0802966
Jackson MANIKANTAN
Page 8
Developing new markets
Fast adaptation
Question 2 “Leadership is an attribute that is highly prized in most organizations and, as a result, it is an extensively studied and debated topic in Organizational behavior” (Meiindl et al.1987). Robbins S P (1998 p.347) states “Leadership is the ability to influence a group toward the achievement of goals” supported by Stogdill R (1950, p3) who defined leadership as influencing process aimed at goal achievement. Bennis W and Nanus B (1985, p.21) observes that managers do things right while leaders do the right thing. “The leader is prophet, catalyst, mover-shaker, focused on strategy” (Bryman,1986 p.6).Rollinson D(2005 p.436) has stated most astutely that a“ leader is someone who occupies a role which involves conforming to a set of behavioral norms and expectations emanating from followers, in turn for which they confer on the leader a degree of power(within prescribed limits) allows the leader to influence their actions.” Following are the main leadership theories a. Trait theory: Leadership is inborn talent and God gifted b. Group and exchange theories: This gives more loads on subordinates and
more benefits to the leader. They are of three types-Leader based; where there is less authority to the subordinates .Follower based; where there is a self performance management and more authority to subordinates. Relationship based; where trust is generated between the employees giving them due respect in through meetings. c. Behavioral theories: They are of two types-People oriented; where emphasis
is given on subordinates rather than the goal. Task oriented; where it gives importance to the goal than the employees. Following are the main leadership styles (Mullins, 2007 p.371) a. Authoritarian: The leader sets the goal and his subordinates has to follow
him b. Democratic style: The leader plays the role of a team member. Student ID: 0802966
Jackson MANIKANTAN
Page 9
c. Laissez-faire: Gives empowerment to the employees helping them to take
their own decisions.
Prevailing leadership styles Lloyds TSB leadership style a. “Demonstrating leadership from the top b. Vision to be the best UK financial services company c. “Balanced scorecard” for performance on relationships
d. Corporate values generated from the top e. Emphasis communication of responsibility to followers”(Source: Company
Corporate Responsibility Report 2007)
Lloyds TSB themselves describe their leadership style using these words. Therefore it may be a task oriented company using scorecards to measure relationships. They seem to have an Authoritarian Style of leadership – or may be slightly democratic also.
HBOS leadership style a. “Aim for “joined up” approach of leaders and followers b. Create leadership/rewards culture throughout the company c. Peer-based “colleague advocacy” used to substitute leadership d. Communicate objectives , and do not dictate activities Take pride in increase in female workers in the company” (Source: Company Corporate Responsibility Report 2004)
From the description of the HBOS Corporate Responsibility Report we see their own self descriptions of leadership. It seems they share leadership with employees using a more people oriented style. They use peer-advocacy (people advising people).They seem more democratic or even laissez-faire.
Student ID: 0802966
Jackson MANIKANTAN
Page 10
Question 3 The quality and success of leadership depends on two factors: the mindset of the people in the company and the environmental situations. There are four different theories used to analyze the effect of situational factors on leadership: 1. Fiedler’s situational theory: Here three different factors are compared-task
structure, leader power and leader-worker relations. Eight different scenarios are listed where these three factors are either strong or weak. If all the three factors are too strong (first column) or all are too weak(last column) the leader is forced to use a task –oriented direct-control style. Scenario
Situational
One
Two
Three
Four
Five
Strong
Strong
Strong
Strong
Six
Seven
Eight
Weaker
Weaker
Strong
Strong
Weaker
Weaker
Weaker
Strong
Weaker
Strong
Weaker
Strong
Weaker
Strong
Strong
Strong
Weaker
Weaker
Weaker
Weaker
Factor Task Structure Leader's Power Leader worker relations Leader's style
Task
Task
Oriented
Participative Approach
Directive Style Lloyds
Oriented Directive Style
HBOS
TSB Bank
Student ID: 0802966
Jackson MANIKANTAN
Page 11
Where in all other cases, the three factors have varied mix of strengths and weaknesses, the leader may need to use a participative style. Lloyds TSB has a controlling style, while HBOS has a participative leadership style. 2. Vroom/Yetton & Vroom/Jago theories: Here the twelve variables that affect
leadership style are discussed. Using different combinations of these variables, they arrived at five clear leadership styles: Autocrat A1 and A2, ConsultativeC1 and C2, and group G2.Each style shows leaders and workers mixing in a different way when taking decisions.(Mullins, 2007 p.377)
Leader gets information and takes decision
Autocratic:A1
Variables Quality Commitment
Group gets information and leader
Leader information
takes decision
Problem structure
Autocratic: A2 Lloyds
Commitment probability Goal congruence Subordinate conflict
TSB Leader consults with the individuals and takes decision Consultative: C1
Time constraint Subordinate information
HBOS Leader consults with group and takes decision Consultative: C2
Motivation development Geographical dispersion Motivation time
Group shares decision and leader stays apart Group: G
Lloyds TSB uses a more Autocratic style and less consultative, where the leader empowers the worker less. HBOS empowers the worker more. Therefore they are more consultative and less Group ( Social responsibility review 2007) Student ID: 0802966
Jackson MANIKANTAN
Page 12
3. House/Dressler Path goal theory: This theory tries to show how the leader’s
behavior and his ultimate effectiveness are affected by both employee contingencies and environmental contingencies. Depending on the type and quality of these contingencies the leader is advised to use directive, supportive, participative or achievement oriented style.(Kelvin: 2009)
Leader
Achievement
Directive
Supportive
Participative
Skill/Experience
Low
High
Low
High
Locus of control
External
External
Internal
Internal
Routine
Non-routine
Non-routine
Low cohesion
Positive norms
High cohesion
Lloyds TSB
HBOS
Behavior Employee Contingencies
Oriented
Environmental Contingencies Task Structure Team Dynamics
Routine Negative norms
HBOS scores as a more participative style because the employee contingencies and environmental contingencies are managed by employees themselves more. Whereas in Lloyds TSB, the leaders tend to direct and manage more.
4. Hersey/Blanchard model: This is a study of the task-oriented and people-
oriented behaviors of leader’s .The leader task orientedness may be low or high and the people orientedness may be low or high. Depending on the combination it may result in either-Delegating, participating, selling or a Telling style.(Huczynski & Buchanan, 2001 p.723)
Student ID: 0802966
Jackson MANIKANTAN
Page 13
It is seen that Lloyds TSB leadership style is more telling and less selling. While HBOS leadership style is more participating and less delegating. (Source: Social responsibility report)
Student ID: 0802966
Jackson MANIKANTAN
Page 14
Question 4: The merging of Lloyds TSB and HBOS is not only a merging of two different financial companies but also a merging of two different cultures. They have to be ready to face new challenges when they combine. Bicultural audit is important for the merging of two company’s culture. This audit produces data for starting work platform, strategy required for successful merger. They are of three types: a. Identification of cultural gap: Comparing the values, vision and
management behavior of the two companies, this phase recognizes the gap. b. Analysis of cultural gap: This phase brings out the similarities and
dissimilarities between the two cultures. c. Culture bridging: On the basis of the above two information’s the data
management team can start the bridging of culture process.(Bicultural Audit, by Richard Cook) Challenges faced by Lloyds TSB and HBOS
Lloyds TSB
HBOS
Financial crises in the market
Fund raising from the whole sale market
Searching for new investors
Misleading interview
Job insecurity due to recession
Financial crisis
Quick decision on merging with HBOS
Clearing the picture about the organization
Challenges faced after merging a. Shake in leadership b. Less investment by people c. Employee problems d. Unemployment problems Student ID: 0802966
Jackson MANIKANTAN
Page 15
e. Reduction in share holder confidence f. Conflict between organizations g. Employee dissatisfaction
h. Chances of people investing less i.
Pressure of government regulation
Mckinsey identifies five key of challenges: a. Identify and train people about the merger
b. Understand about the external champion stakeholders c. Understand the performance culture of the merger company and establish
new hybrid culture d. Understand and communicate to down merger communication e. Create a new team for understanding analysis of the company ( Source:
Bicultural Audit: by Richard Cook)
Conclusion: Lloyds TSB has a strong culture compared to HBOS. Strong culture seems desirable for the sake of strong performance, and weak culture is believed to arise due to employee empowerment. But a strong culture can be unsuccessful if it is too strong and suppresses creativity. It can also be a disadvantage in a volatile market when the company needs flexibility. Both companies culture may be assets according to the market situation. In a short term advantage, in this current market volatility the adaptive culture of HBOS may perform better than Lloyds TSB. But in the long term, after the present economic crisis, the government may impose strict regulations on banks hereafter. In that case the most conservative culture of Lloyds may be better. Lloyds TSB is a leader based organization which aims to be the top financial company in UK. Since they focus on “Balanced scorecard” for performance on relationships and on the completion of task, it is a task oriented company. They use authoritarian style in which the leader sets the goal and reward system for the team. They have a directive style in which the leader provides certain specific direction to the subordinates, who follow the given rules and regulations. They Student ID: 0802966
Jackson MANIKANTAN
Page 16
demonstrate perhaps more concern for rules and regulations. However, HBOS is a relationship based organization as they are concerned with the relationship with the employees. As they are more concerned with employee welfare they are basically a people oriented company. They adopt a more or less a Laissez-faire style where there is more empowerment to the subordinates, giving team members more flexibility and allowing them to take decisions of their own. They believe in participative leadership style as the company welcomes suggestions for the improvement of the same .They are more concerned about production.
References 1. Robbins S P(1998). Organizational Behavior,8th edn,New Delhi: Prentice-Hall 2. Rollinson D(2005).Organizational behavior and analysis.3rd edn,Gasport:Ashford color press Student ID: 0802966
Jackson MANIKANTAN
Page 17
3. Mullins Laurie J (2007).Management and Organizational Behavior, 8thedn, Harlow: FT Prentice Hall. 4. Martin J (2005).Organizational Behavior and Management, 3rdedn, London: Thomson Learning. 5. Buchanan D & Huczynski A (2001).Organizational Behaviors, an Introductory Text, 4thedn, Harlow: FT Prentice Hall 6. Luthans Fred (2005).Organizational Behavior, 10thedn, New York: McGraw-Hill. 7. Robbins Stephen P (2005).Essentials of Organization behavior, 8thedn, New Jersey: Pearson Prentice hall. 8. Cole G (2004).Management Theory and Practice, 6thedn,Gosport:Ashford Color Press 9. Martin J (2001).Organizational Behaviors, 2ndedn, London: Thomson Learning. 10.Hofstede G and Hofstede J.Culures and Organizations,2nd edn,New York: McGrawHill 11.Brooks I(2006).Organizational Behavior, 3rd edn, Harlow: Pearson educational limited Websites 1. www.global-excellence.com/getfile.php?g=46 (Bi cultural Audit) 2. http://intranet.holborncollege.ac.uk/students/ClassHandouts/MBAWales/WAM B4001%20UaMO/l%20-%20Lecture%2006%20(Culture).pdf (Kelvin:2009) 3. http://www.lloydstsb.com/about_ltsb/lloyds_bank.asp 4. http://www.mediacentre.lloydstsb.com/gr/history.asp 5. www.hbosplc.com/community/includes/HBOS_CR_Report_2006.pdf (The Way We Do Business) 6. http://www.lloydstsb.com/media/lloydstsb2004/pdfs/corporate_report_2007.pd f 7. http://www.mckinsey.com/ideas/books/Mergers/ (Success on merger challenges) 8. http://www.lloydstsb-annualreport.com/businessreview/our_people
Student ID: 0802966
Jackson MANIKANTAN
Page 18
Subject Organizations Course Work Title organizations
:
Understanding and Managing
:
A Comparative analysis (OB) of 2 merging
Module Code
:
WAMB 4001
Module Leader
:
K.Heffernan
Surname
: MANIKANTAN
First Name
: Jackson
Student ID
: 0802966
No. of words :1943 2000)
(Word limit :
Student’s signature Date:
Table of content: Question 1…………………………………………………………………………….04
Student ID: 0802966
Jackson MANIKANTAN
Page 1
Culture………………………………………………………………………………. .04 Views of seeing culture……………………………………………………………….04 The Cultural perspective……………………………………………………………...04 Schein organization Culture…………………………………………………………..05 Handy organizational culture…………………………………………………………06 Deal and Kennedy model……………………………………………………………..07 Culture comparison through Hofstede study…………………………………………07 Question 2......................................................................................................................08 Leadership…………………………………………………………………………….08 Leadership theories…………………………………………………………………. .08 Trait theory……………………………………………………………………………08 Group and exchange theory…………………………………………………………...08 Behavioral theory……………………………………………………………………...08 Leadership styles………………………………………………………………………08 Authoritarian style…………………………………………………………………….08 Democratic style……………………………………………………………………....08 Laissez-faire style…………………………………………………………………… .08 Lloyds TSB Leadership style………………………………………………………….09 HBOS Leadership style………………………………………………………………..09 Question 3……………………………………………………………………………..10 Fiedler’s situational theory…………………………………………………………….10 Vroom/Yetton & Vroom/Jago theories………………………………………………..11 House/Dressler Path goal theory ………………………………………………………… ..12 Hersey/Blanchard model……………………………………………………………….13 Question 4…………………………………………………………………………......14 Bicultural Audit………………………………………………………………………..14 Identification of cultural gap…………………………………………………………..14 Analysis of cultural gap………………………………………………………………..14 Student ID: 0802966
Jackson MANIKANTAN
Page 2
Culture Bridging……………………………………………………………………….14 Challenges faced by Lloyds TSB and HBOS………………………………………….14 Challenges faced after merging………………………………………………………..14 Mckinsey’s five key of challenges…………………………………………………….15 Conclusion…………………………………………………………………………….15,16 References and Websites………………………………………………………………17
Lloyds TSB and HBOS Student ID: 0802966
Jackson MANIKANTAN
Page 3
Question 1 Brooks I(2006 p.139) has stated most astutely that “Culture also influences the way organizational members interpret the nature of their business environment, as knowledge of the relationship between the organization and its environment is an extension of the organizational culture; the environment is viewed through cultural lenses”. Organism
Brain
Virtual
Culture
ORGANIZATION
Instrument of domination
is a ……..
Political system
Machine
In figure -Ways of seeing an organization (2006 p.139 fig.5.4) Brooks claims there are many ways of seeing an organization. The Cultural perspective: According to Brooks I(2006 p.140) “Culture and organization can be viewed as an iceberg, a metaphor which suggests what you see on the surface masks a much deeper, mystical and powerful reality”. As per Schein Organizational culture (Mullins, 2007 p.722) Lloyds TSB: It is seen that though they have merged with many companies in the past, they were all of similar culture so the original culture of the organization stayed undiluted. (Source: Company Corporate Responsibility Review 2007, VAULT Employee Satisfaction Surveys and Media Articles) They are based on Artifacts: a. Customer oriented b. Recruit talented people through tough selection procedure Student ID: 0802966
Jackson MANIKANTAN
Page 4
c. Create framework for employee clear learning and future needs d. Employees rewarded on the basis of client satisfaction. e. Provide personal development programs for employees.
HBOS:
Their Anglo- Scottish merger earlier between Halifax and Bank of Scotland however seems to have resulted in dilution of both cultures.(Source: Company Corporate Responsibility Review 2007, VAULT Employee Satisfaction Surveys and Media Articles) They are based on Values: a. Rewards-oriented company b. Market savvy c. Younger d. Mortgage expertise
As per Handy organizational culture (Martin, 2005 p.494)
Student ID: 0802966
Jackson MANIKANTAN
Page 5
Lloyds TSB:
They are role cultured: a. Strong banking system b. Produce more output in good environment
Student ID: 0802966
Jackson MANIKANTAN
Page 6
HBOS:
They are task cultured: a. Focused on goals b. Work in team As per Deal & Kennedy Feedback-Rise Model:
Student ID: 0802966
Jackson MANIKANTAN
Page 7
As per Hofstede’s study model( Source: Social Responsibility Report 2007 and 2008)
Power distance
Lloyds TSB
HBOS
High-
Low-
Disciplined
Acceptance of responsibility
Uncertainty avoidance
Collectivism vs. Individualism Masculinity vs. Feminity
Long vs. short term
High-
Low-
Precision
Basic innovations
High-
Low-
Employee commitment
Management mobility
High-
Low-
Mass production
Personal service
Efficiency
Custom-made products
Bulk chemistry
Biochemistry
High-
Low-
orientation Student ID: 0802966
Jackson MANIKANTAN
Page 8
Developing new markets
Fast adaptation
Question 2 “Leadership is an attribute that is highly prized in most organizations and, as a result, it is an extensively studied and debated topic in Organizational behavior” (Meiindl et al.1987). Robbins S P (1998 p.347) states “Leadership is the ability to influence a group toward the achievement of goals” supported by Stogdill R (1950, p3) who defined leadership as influencing process aimed at goal achievement. Bennis W and Nanus B (1985, p.21) observes that managers do things right while leaders do the right thing. “The leader is prophet, catalyst, mover-shaker, focused on strategy” (Bryman,1986 p.6).Rollinson D(2005 p.436) has stated most astutely that a“ leader is someone who occupies a role which involves conforming to a set of behavioral norms and expectations emanating from followers, in turn for which they confer on the leader a degree of power(within prescribed limits) allows the leader to influence their actions.” Following are the main leadership theories a. Trait theory: Leadership is inborn talent and God gifted b. Group and exchange theories: This gives more loads on subordinates and
more benefits to the leader. They are of three types-Leader based; where there is less authority to the subordinates .Follower based; where there is a self performance management and more authority to subordinates. Relationship based; where trust is generated between the employees giving them due respect in through meetings. c. Behavioral theories: They are of two types-People oriented; where emphasis
is given on subordinates rather than the goal. Task oriented; where it gives importance to the goal than the employees. Following are the main leadership styles (Mullins, 2007 p.371) a. Authoritarian: The leader sets the goal and his subordinates has to follow
him b. Democratic style: The leader plays the role of a team member. Student ID: 0802966
Jackson MANIKANTAN
Page 9
c. Laissez-faire: Gives empowerment to the employees helping them to take
their own decisions.
Prevailing leadership styles Lloyds TSB leadership style a. “Demonstrating leadership from the top b. Vision to be the best UK financial services company c. “Balanced scorecard” for performance on relationships
d. Corporate values generated from the top e. Emphasis communication of responsibility to followers”(Source: Company
Corporate Responsibility Report 2007)
Lloyds TSB themselves describe their leadership style using these words. Therefore it may be a task oriented company using scorecards to measure relationships. They seem to have an Authoritarian Style of leadership – or may be slightly democratic also.
HBOS leadership style a. “Aim for “joined up” approach of leaders and followers b. Create leadership/rewards culture throughout the company c. Peer-based “colleague advocacy” used to substitute leadership d. Communicate objectives , and do not dictate activities Take pride in increase in female workers in the company” (Source: Company Corporate Responsibility Report 2004)
From the description of the HBOS Corporate Responsibility Report we see their own self descriptions of leadership. It seems they share leadership with employees using a more people oriented style. They use peer-advocacy (people advising people).They seem more democratic or even laissez-faire.
Student ID: 0802966
Jackson MANIKANTAN
Page 10
Question 3 The quality and success of leadership depends on two factors: the mindset of the people in the company and the environmental situations. There are four different theories used to analyze the effect of situational factors on leadership: 1. Fiedler’s situational theory: Here three different factors are compared-task
structure, leader power and leader-worker relations. Eight different scenarios are listed where these three factors are either strong or weak. If all the three factors are too strong (first column) or all are too weak(last column) the leader is forced to use a task –oriented direct-control style. Scenario
Situational
One
Two
Three
Four
Five
Strong
Strong
Strong
Strong
Six
Seven
Eight
Weaker
Weaker
Strong
Strong
Weaker
Weaker
Weaker
Strong
Weaker
Strong
Weaker
Strong
Weaker
Strong
Strong
Strong
Weaker
Weaker
Weaker
Weaker
Factor Task Structure Leader's Power Leader worker relations Leader's style
Task
Task
Oriented
Participative Approach
Directive Style Lloyds
Oriented Directive Style
HBOS
TSB Bank
Student ID: 0802966
Jackson MANIKANTAN
Page 11
Where in all other cases, the three factors have varied mix of strengths and weaknesses, the leader may need to use a participative style. Lloyds TSB has a controlling style, while HBOS has a participative leadership style. 2. Vroom/Yetton & Vroom/Jago theories: Here the twelve variables that affect
leadership style are discussed. Using different combinations of these variables, they arrived at five clear leadership styles: Autocrat A1 and A2, ConsultativeC1 and C2, and group G2.Each style shows leaders and workers mixing in a different way when taking decisions.(Mullins, 2007 p.377)
Leader gets information and takes decision
Autocratic:A1
Variables Quality Commitment
Group gets information and leader
Leader information
takes decision
Problem structure
Autocratic: A2 Lloyds
Commitment probability Goal congruence Subordinate conflict
TSB Leader consults with the individuals and takes decision Consultative: C1
Time constraint Subordinate information
HBOS Leader consults with group and takes decision Consultative: C2
Motivation development Geographical dispersion Motivation time
Group shares decision and leader stays apart Group: G
Lloyds TSB uses a more Autocratic style and less consultative, where the leader empowers the worker less. HBOS empowers the worker more. Therefore they are more consultative and less Group ( Social responsibility review 2007) Student ID: 0802966
Jackson MANIKANTAN
Page 12
3. House/Dressler Path goal theory: This theory tries to show how the leader’s
behavior and his ultimate effectiveness are affected by both employee contingencies and environmental contingencies. Depending on the type and quality of these contingencies the leader is advised to use directive, supportive, participative or achievement oriented style.(Kelvin: 2009)
Leader
Achievement
Directive
Supportive
Participative
Skill/Experience
Low
High
Low
High
Locus of control
External
External
Internal
Internal
Routine
Non-routine
Non-routine
Low cohesion
Positive norms
High cohesion
Lloyds TSB
HBOS
Behavior Employee Contingencies
Oriented
Environmental Contingencies Task Structure Team Dynamics
Routine Negative norms
HBOS scores as a more participative style because the employee contingencies and environmental contingencies are managed by employees themselves more. Whereas in Lloyds TSB, the leaders tend to direct and manage more.
4. Hersey/Blanchard model: This is a study of the task-oriented and people-
oriented behaviors of leader’s .The leader task orientedness may be low or high and the people orientedness may be low or high. Depending on the combination it may result in either-Delegating, participating, selling or a Telling style.(Huczynski & Buchanan, 2001 p.723)
Student ID: 0802966
Jackson MANIKANTAN
Page 13
It is seen that Lloyds TSB leadership style is more telling and less selling. While HBOS leadership style is more participating and less delegating. (Source: Social responsibility report)
Student ID: 0802966
Jackson MANIKANTAN
Page 14
Question 4: The merging of Lloyds TSB and HBOS is not only a merging of two different financial companies but also a merging of two different cultures. They have to be ready to face new challenges when they combine. Bicultural audit is important for the merging of two company’s culture. This audit produces data for starting work platform, strategy required for successful merger. They are of three types: a. Identification of cultural gap: Comparing the values, vision and
management behavior of the two companies, this phase recognizes the gap. b. Analysis of cultural gap: This phase brings out the similarities and
dissimilarities between the two cultures. c. Culture bridging: On the basis of the above two information’s the data
management team can start the bridging of culture process.(Bicultural Audit, by Richard Cook) Challenges faced by Lloyds TSB and HBOS
Lloyds TSB
HBOS
Financial crises in the market
Fund raising from the whole sale market
Searching for new investors
Misleading interview
Job insecurity due to recession
Financial crisis
Quick decision on merging with HBOS
Clearing the picture about the organization
Challenges faced after merging a. Shake in leadership b. Less investment by people c. Employee problems d. Unemployment problems Student ID: 0802966
Jackson MANIKANTAN
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e. Reduction in share holder confidence f. Conflict between organizations g. Employee dissatisfaction
h. Chances of people investing less i.
Pressure of government regulation
Mckinsey identifies five key of challenges: a. Identify and train people about the merger
b. Understand about the external champion stakeholders c. Understand the performance culture of the merger company and establish
new hybrid culture d. Understand and communicate to down merger communication e. Create a new team for understanding analysis of the company ( Source:
Bicultural Audit: by Richard Cook)
Conclusion: Lloyds TSB has a strong culture compared to HBOS. Strong culture seems desirable for the sake of strong performance, and weak culture is believed to arise due to employee empowerment. But a strong culture can be unsuccessful if it is too strong and suppresses creativity. It can also be a disadvantage in a volatile market when the company needs flexibility. Both companies culture may be assets according to the market situation. In a short term advantage, in this current market volatility the adaptive culture of HBOS may perform better than Lloyds TSB. But in the long term, after the present economic crisis, the government may impose strict regulations on banks hereafter. In that case the most conservative culture of Lloyds may be better. Lloyds TSB is a leader based organization which aims to be the top financial company in UK. Since they focus on “Balanced scorecard” for performance on relationships and on the completion of task, it is a task oriented company. They use authoritarian style in which the leader sets the goal and reward system for the team. They have a directive style in which the leader provides certain specific direction to the subordinates, who follow the given rules and regulations. They Student ID: 0802966
Jackson MANIKANTAN
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demonstrate perhaps more concern for rules and regulations. However, HBOS is a relationship based organization as they are concerned with the relationship with the employees. As they are more concerned with employee welfare they are basically a people oriented company. They adopt a more or less a Laissez-faire style where there is more empowerment to the subordinates, giving team members more flexibility and allowing them to take decisions of their own. They believe in participative leadership style as the company welcomes suggestions for the improvement of the same .They are more concerned about production.
References 1. Robbins S P(1998). Organizational Behavior,8th edn,New Delhi: Prentice-Hall 2. Rollinson D(2005).Organizational behavior and analysis.3rd edn,Gasport:Ashford color press Student ID: 0802966
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3. Mullins Laurie J (2007).Management and Organizational Behavior, 8thedn, Harlow: FT Prentice Hall. 4. Martin J (2005).Organizational Behavior and Management, 3rdedn, London: Thomson Learning. 5. Buchanan D & Huczynski A (2001).Organizational Behaviors, an Introductory Text, 4thedn, Harlow: FT Prentice Hall 6. Luthans Fred (2005).Organizational Behavior, 10thedn, New York: McGraw-Hill. 7. Robbins Stephen P (2005).Essentials of Organization behavior, 8thedn, New Jersey: Pearson Prentice hall. 8. Cole G (2004).Management Theory and Practice, 6thedn,Gosport:Ashford Color Press 9. Martin J (2001).Organizational Behaviors, 2ndedn, London: Thomson Learning. 10.Hofstede G and Hofstede J.Culures and Organizations,2nd edn,New York: McGrawHill 11.Brooks I(2006).Organizational Behavior, 3rd edn, Harlow: Pearson educational limited Websites 1. www.global-excellence.com/getfile.php?g=46 (Bi cultural Audit) 2. http://intranet.holborncollege.ac.uk/students/ClassHandouts/MBAWales/WAM B4001%20UaMO/l%20-%20Lecture%2006%20(Culture).pdf (Kelvin:2009) 3. http://www.lloydstsb.com/about_ltsb/lloyds_bank.asp 4. http://www.mediacentre.lloydstsb.com/gr/history.asp 5. www.hbosplc.com/community/includes/HBOS_CR_Report_2006.pdf (The Way We Do Business) 6. http://www.lloydstsb.com/media/lloydstsb2004/pdfs/corporate_report_2007.pd f 7. http://www.mckinsey.com/ideas/books/Mergers/ (Success on merger challenges) 8. http://www.lloydstsb-annualreport.com/businessreview/our_people
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