Leadership theories and their practices in eastern bank limited

1. Bangladesh University of Professionals (BUP)
Term Paper
Leadership Theories and Their Practices in Eastern Bank Limited
Submitted To
Course Coordinator Dr. Tazul Islam, Assoc Prof, BUP
Course MGT 7301
Prepared and Submitted By
Name Roll Batch & Section
Fatema Jahan 202 303 1001
MBA (Professional)
Batch 23
Section: A
Ashique-Ur-Rahman 202 303 1009
Md. Tariqul Islam 202 303 1015
S M Baki Billah 202 303 1025
Asif Shahriar Bhuiyan 202 303 1031
Date of Submission: 25/04/2020

2. Letter of Transmittal
25th
April 2020
To
Dr Tajul Islam
Associate Professor
Faculty of Business Studies
Bangladesh University of Professionals, Dhaka.
Sir,
It is indeed a great pleasure to have the opportunity to submit the term paper. We have prepared
this term paper per the instructions given by you. Our topic is “Leadership Theories and Their
Practices in Eastern Bank Limited”. We think that working on this topic was very interesting and
we have explored something remarkable through preparing this paper.
This paper is to describe our observation and learning based on the leadership practised in Eastern
Bank Limited, one of the major consumer banking organizations in Bangladesh. So, all of our
works have been done according to your guidelines.
We are glad to have the opportunity to work on this paper. This paper has provided us with the
learning opportunity and compares theoretical knowledge with practical situation.
We hope that you would be kind enough to accept our paper and bless us.

3. Executive Summary
Leadership refers to the process of influencing the behaviour of people in a manner that they strive
willingly and enthusiastically towards the achievement of group objectives. Leaders and their
leadership skills play an important role in the growth of any organization. This term paper reviews
literature as well as explores findings on leadership styles from the practical perspective. The
discussion was emphasized in Fiedler's contingency theory. To understand the leadership practised
in the Eastern Bank Limited, it is important to first know about their company profile, hierarchy
and their products. Throughout the preparation of this paper, we have gone through the different
theories of leadership and compared and matched them to the leadership practised in EBL.

4. Table of Contents
Introduction..................................................................................................................................... 1
Leadership and Its Importance........................................................................................................ 2
Leadership................................................................................................................................... 2
Importance of Leadership in Bank.............................................................................................. 2
EBL Company Profile and Hierarchy............................................................................................. 5
Mission Statement....................................................................................................................... 5
Vision Statement......................................................................................................................... 6
Management Hierarchy of EBL.................................................................................................. 6
Product and Services of EBL.......................................................................................................... 8
Consumer Banking Products....................................................................................................... 8
Loan Products ......................................................................................................................... 8
Deposit Products..................................................................................................................... 9
Card Products........................................................................................................................ 10
SME Banking Products............................................................................................................. 11
Loan Products ....................................................................................................................... 11
Deposit Products................................................................................................................... 12
Other Services........................................................................................................................... 12
Department of the Bank............................................................................................................ 13
Theories of Leadership ................................................................................................................. 15
Trait Theory of Leadership....................................................................................................... 15
Behavioural and Participative Approach (The Late 1940s, 1950s, 1960s)............................... 20
Theories under Behavior Approach...................................................................................... 20
Theories under Participative Approach ................................................................................ 22
Fiedler’s Contingency Theory .................................................................................................. 24
Situational Leadership Theory.................................................................................................. 28
Path-Goal Theory...................................................................................................................... 29
Attribution Theory .................................................................................................................... 30
Leader's Attributional Processes........................................................................................... 30

5. Leadership Style in the Audit Department.................................................................................... 31
The Function of the Audit Department in EBL ........................................................................ 31
Leadership Followed in the Audit Department......................................................................... 32
Leadership Style in the Sales Department .................................................................................... 35
The Objective of Sales Dept. in EBL........................................................................................ 35
Leadership Followed in the Sales Department ......................................................................... 35
Trait Theory .......................................................................................................................... 35
Behavioural Approaches....................................................................................................... 36
Fiedler Contingency (LPC) Model ....................................................................................... 36
Overall Leadership Style in EBL.................................................................................................. 37
Situational Leadership Theory.............................................................................................. 37
Path-Goal Theory.................................................................................................................. 38
Attribution Theory ................................................................................................................ 38
Conclusion .................................................................................................................................... 40
Reference ...................................................................................................................................... 41

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Introduction
Banking thrives on the financial intermediation abilities of financial institutions that allow them to
lend out money and receiving money on deposit. The bank is the most important financial
intermediary in the economy of our country as it connects surplus and deficit, economic agents.
Banks accept deposits and make loans and derive a profit from the difference in the interest rates
paid and charged to depositors and borrowers respectively. The process performed by banks of
taking in funds from a depositor and then lending them out to a borrower helps the economic
sectors in Bangladesh to bloom.
Majority of the top-level managers in the banking industry of Bangladesh are found to pursue
bureaucratic style, which is very much appropriate for works involving serious safety risks or
where large sums of money are involved. Furthermore, some corporate-level managers found to
be transformational in managing staffs and responsibilities that imply these managers are ideal
leaders, who are value-driven and care for their subordinates. Few of the senior-level managers
found to be switching in between styles and the underlying reason is yet to ascertain.
Leadership styles in context to the banking industry of Bangladesh. The banking industry of
Bangladesh at present is in the growth stage. However, the industry has been facing several
problems in terms of low profitability (return on asset, return on equity and non-performing loan)
after 2010. Effective leadership may provide the necessary power for improvement in supervision
and regulatory capacity, and streamlining of enforcement of prudential guidelines
This Term paper reviews literature as well as explores findings on leadership styles from the
practical perspective. The discussion was emphasized on Fiedler's contingency theory which states
that the effectiveness of leadership depends upon the situation, and there are numerous factors,
such as the nature of the task, leader's personality, and make-up of the group being led and also
the behavioural approach to management focuses on human relations and employee well-being.
The objective of this study is to explore the leadership practices in the banking industry of
Bangladesh. Data has been collected from the mid-level officers of a particular bank through a
small interview using a questionnaire with few questions regarding leadership. Analysis has been
done from both leaders’ and subordinates’ perspectives. The major finding has been gathered from
internet sourcing

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Leadership and Its Importance
Leadership
The dictionary meaning of Leadership is a person who leads, and in term of Management, a
Leadership is a process by which an executive can direct, guide and influence the behaviour and
work of others towards accomplishment of specific goals in a given situation. Leadership is the
ability of a manager to induce the subordinates to work with confidence and zeal.
Leaders and their leadership skills play an important role in the growth of any organization.
Leadership refers to the process of influencing the behaviour of people in a manner that they strive
willingly and enthusiastically towards the achievement of group objectives.
A leader should have the ability to maintain good interpersonal relations with the followers or
subordinates and motivate them to help in achieving the organizational objectives.
Importance of Leadership in Bank
Leadership plays an important part in the success of any organization. In the absence of effective
leadership, no organization can work efficiently. A Bank is an organization which is created to
achieve certain objectives through a human group; thus it becomes essential to control this human
group with proper leadership.
(1) Helps in Influencing the Behavior of People:
A manager in bank influences his subordinates with his leadership ability. He brings them
under his control in such a way that they put in their best efforts to achieve the goals of the
organization. Good leaders always get good results through their followers.
(2) Helps Followers in Fulfilling their Needs:
A leader establishes a personal relationship with his followers and tries to fulfil their needs.
It excludes the top management level like DGM, GM, CFO, CEO and president. They are
the ones who will fulfil the need of other employees of the bank. Why does a human group
follow a particular person? It can be said in reply to this question because that particular
person provides the security and the opportunities to earn wealth, gives them the right to
work and tries to understand their feelings. That is why people follow him. A person who
takes care of the above-mentioned needs of the employees, they willingly accept him.
Consequently, they work with complete dedication and enthusiasm.

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(3) Helps in Introducing Required Changes:
These days the business environment is changing rapidly. As such the banking section is
constantly changing every second. To face the changing environment, many changes have
got to be introduced in the organization.
Since the people already happen to be under the influence of the leader, he readily makes
them agree to implement these changes. In this way, the possible opposition to the change
is eliminated with the strength of leadership ability.
(4) Helps in Solving Conflicts Effectively:
A leader can solve every type of conflict (employee’s vs. employees and employees vs.
employer) effectively under the weight of his influence. A leader always allows his
followers the freedom to express their views.
That is the reason that he easily understands the reality of the conflict, in this way, by
understanding the nature of the conflict he tries to provide a timely solution and minimises
the possibility of adverse results.
(5) Helps in Training and Development of Subordinates:
A leader proves helpful in the training and development of his subordinates. He provides
them with information about the modern techniques of work. Not only this, but he also
makes it possible for them to be good leaders in future. Training will include Collections
of Savings and Advancing Loans, Money Transfer, Encourages Savings, Transfer Savings
into Investment, Overdraft Facilities, Discounting Bill of Exchange, Financing Internal &
External Trade, Act as an Agent, Issue of Traveler’s Cheques, General Utility Services etc.
(6) Leaders can inspire other individuals to achieve a high level of success
Great leaders can inspire other individuals to reach their potential and to obtain high levels
of personal and professional success. As an example, a great CEO will be able to inspire
their employees to use their initiative for the good of their business, which will then
increase their employees’ chances of thriving in their business and being offered pay raises,
promotions of opportunities to develop their business skills. If you have no idea how to
become a leader there are leadership & management training courses for all career levels
that can help you!
(7) Leaders set the tone for Banking organizations
A leader will set a tone for everyone to work on. Important tasks will include -

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a) Acceptance of deposits, by opening different kinds of bank accounts
b) Advancing of loans to needy persons through different methods and requirements
c) Provisions of agency and general utility services to his customers
d) Making new investments in different organizations and increasing the productive
capacity of the country
e) Promote capital formation in the country by mobilizing and collection of savings for
investments
f) Development of industries in the country according to the requirements of the economy
g) Balanced development in the economy is achieved in different sectors & regions
through the resources of bank funds
h) Development in agricultural production is made possible by providing different kinds
of loans
i) These banks help in reducing reliance on foreign assistance by their efforts in the
mobilization of domestic savings
j) Helping to implement an effective monetary policy according to the objective of the
central bank.
(8) Leaders in the bank are needed to select the right people for the right jobs
A good leader will be able to recognize great potential in their employees and will have an
instinct for selecting employees who are well suited to be offered a promotion within their
company. As a great leader will be able to recognize greatness in others, not just in
themselves.
One of the payoffs for a bank of hiring a leader who is capable of promoting the right
employees is that their business will thrive as a result of having the right individuals in the
right positions.
As an added benefit a leader who successfully places individuals in the right positions will
be able to trust the individuals which they’ve mentored and promoted to handle challenging
roles and tasks.
(9) Leaders act as spokespeople for bank
Leaders act as spokespeople for their bank and organizations and are responsible for
ensuring that the public has a positive image of their banking sector. This character plays
an important role in the financial system and economic development. As a key component
of the financial system, banks allocate funds from savers to borrowers in an efficient
manner. These financial services help to make the overall economy more efficient.

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EBL Company Profile and Hierarchy
Eastern Bank Limited (EBL) is one of the modern, fully online and technologically superior private
commercial Bank in Bangladesh. EBL was organized in August 1992 at the initiative of the
Government of Bangladesh (GoB) to take over the assets and liabilities of the Bangladesh branches
of the BCCI (Bank of Credit & Commerce International, Overseas) GoB sold their 52% shares
through the stock exchange and the Bank became fully private sector owned in 2000. Over the
period EBL achieved the following steps: PCIDSS certificate of compliance that has been awarded
to EBL in 2016 and reaffirmed last year by world's most renowned cybersecurity leader NCC
Group of UK is a tell-tale indication of EBL’s emphasis on the security of our cards in the market,
three consecutive years at the ICSB National Award for Corporate Governance Excellence award,
Operations department's recent ISO 9001: 2015 certification, Best Retail Bank in Bangladesh
accolade for the last six consecutive years since 2013, “Euromoney” Best Bank in Bangladesh
award for its professionalism, prudence, and growth for the three consecutive years since 2016,
Best Corporate and Investment Bank accolade from “Asiamoney” and Best Bank in Bangladesh
by “FinanceAsia” and a lot more.
Eastern Bank Limited (EBL) is a private sector commercial bank having its lending exposures
mainly in the manufacturing sector of different kinds ranging from RMG to pharmaceuticals, ship
breaking and re-rolling industry to beverage industry of the country. They also involve heavily in
the telecommunication sector, especially in cell phone operators. Bank mainly deals with corporate
clients have already established a base in the manufacturing industry. Though not officially in the
policy EBL doesn't encourage financing in the green field and also doesn't go for the sectors that
are not tested.
Mission Statement
• We will deliver service excellence to all our customers, both internal and external.
• We will constantly challenge our systems, procedures and training to maintain a cohesive
and professional team to achieve service excellence.
• We will ensure to maximize shareholders value
• We will create an enabling environment and embrace a team-based culture where people
will excel.

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Vision Statement
To become the most valuable brand in the financial services in Bangladesh creating long-lasting
value for our stakeholders and above all, for the community, we operate in by transforming the
way we do business and by delivering sustainable growth.
Management Hierarchy of EBL
Managing Director
Executive Vice President
Senior Vice President
Vice President
Senior Assistant Vice President
First Assistant Vice President
Assistant Vice President
Senior Principal Officer
Principal Officer
Management Trainee (Entry Level)
Senior Officer
Officer
Contractual Officer

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Like any other business organization, all the major decisions in EBL are made by the top
management. The board of directors, being at the highest level of the organizational structure plays
an important role in the policy formulation. The board of directors is not directly concerned with
the day-to-day operation of the bank. They have delegated their authority to its management
committee. The board establishes the objectives and policies of the bank. There are three (3)
committees of the board for different purposes:
1. Management committee comprises of 16 members
2. Committee of the board for Administrative matter
3. Committee to examine Bad Loan Cases
Then there is the managing director and the CEO of EBL. The managing director takes the
necessary steps and initiative of the company. The managing director makes a plan for the whole
organization, control the employees to achieve goals and make the plan successful. Then there are
2 Deputy Managing Director (DMD), who look after some segments; for example DMD
(Corporate Banking, Treasury & Investment Banking) and DMD (Consumer Banking). The DMDs
report straight to the CEO.
Medium and lower-level employees get the direction and instruction from the top executives
about the duties and tasks they have to perform. Management of Eastern Bank Limited assumes
that employees are the members of the team, who actively participate in accomplishing the
organizational goals. The CEO provides the guideline and broad direction to the managers and
employees but delegate‟s responsibility for determining how tasks and goals are to be
accomplished.
Medium and lower-level employees get the direction and instruction from the top executives about
the duties and tasks they have to perform. Management of Eastern Bank Limited assumes that
employees are the members of the team, who actively participate in accomplishing the
organizational goals. The CEO provides the guideline and broad direction to the managers and
employees but delegate‟s responsibility for determining how tasks and goals are to be
accomplished.

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Product and Services of EBL
Consumer Banking Products
Loan Products
EBL Jibandhara Loan: EBL Jibandhara Loan is an unsecured loan facility. Loan amount ranges
from BDT 50,000 to BDT 1,000,000 at an attractive interest rate.
EBL Utshab Loan: Utshab Loan is a short-term festival loan facility. Loan amount ranges from
BDT 50,000 to BDT 1, 50,000 and repayable in 12-36 installments.
Fast Cash: A secured loan facility against a security deposit. It is a revolving credit facility and
interest is charged on drawn amount.
Fast Loan: An EMI based loan secured loan facility for any emergency cash need. Any individual
having an FD or other securities like Wage Earner’s Bond, LCB unit certificate etc. can avail this
short term personal loan with 12 – 36 months repayment period.
EBL Executive Loan: Any purpose loan facility for Salaried Executives (both private sector and
government service). Loan amount ranging from minimum BDT 50,000 to maximum BDT
1,000,000 and the interest rate is highly competitive.
EBL Auto Loan: EBL Auto Loan is an EMI based loan facility to purchase cars. Loan amount
ranges from BDT 350,000 to BDT 2,000,000.
EBL Travel Loan: Available in secured and unsecured versions, EBL Travel Loan offers EMI
based loan facility for meeting the travel related financial needs. The loan amount ranges from Tk
50,000 to Tk 500,000.
EBL Education Finance Pack: EBL Education Finance Pack comprises of three unique products
– EduLoan Secured, EduLoan Unsecured and EduLine. This pack is designed to meet any type of
education financial need of a student. Any creditworthy person can avail the loan for his/her

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children or him/herself Loan amount is maximum BDT 10, 00,000 or 95% of the cash security
value.
EBL Parseloan: Partial Secured Loan facility for the individuals where one can take loan up to
BDT 10, 00,000 by providing 30% or 50% cash security. Loan interest rate is highly competitive
and can be repayable in a maximum of 60 months.
EBL Just Double: At EBL, opportunities are as simple. Hook your possibilities with us and our
new deposit scheme, EBL Just Double. The amount of your deposit with us today gets double in
just six years.
Deposit Products
EBL Interesting: A savings account where interest is calculated daily and credited to the account
every month.
EBL Campus Account: This is an interest-bearing savings account for the students.
EBL High-Performance Account: Daily interest-bearing product with unlimited cash
withdrawal facility. Minimum balance requirement Tk 20,000 and interest is credited into account
twice a year.
EBL Repeat: Monthly interest payable fixed deposit scheme with 1-3 years tenure.
EBL Confidence: It is an annuity based deposit scheme with monthly instalment, not exceeding
Tk.20, 000 per month.
EBL Just Double: Deposit will be double after a fixed time.
EBL Power Savings: EBL Power savings provides you with a handsome interest in your small
deposits. The interest is paid to your account every month and there is no transaction limit.
EBL Premium Savings: EBL Premium Savings is a tier-based savings account that allows
earning more interest as the savings increases; with no transaction limit. With free Life insurance
and enhanced ATM withdrawal limit, this Account is really for the truly premium’s.

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EBL Max Saver: With EBL Max Saver, a client can have the security and growth of a Savings
account while conducting the daily transactions with convenience- just like a Current Account-
maximizing the experience.
EBL Kotipoti Scheme: EBL Kotipoti Scheme is a monthly Savings Scheme with flexible long
term tenure that gives you maturity Value of BDT 1 (one) Crore-with monthly instalments as low
as BDT 17,200.
EBL Multiplier Scheme: EBL Multiplier Scheme is a monthly Savings Scheme that doubles the
initial deposit in a span of Six years-with monthly instalments as low as BDT 2,100
EBL FD: EBL FD is term deposit accounts of different tenure for Bangladeshi Citizens only.
Card Products
EBL Simple Credit Card: EBL Simple Credit Card is a complete Credit Card solution. This
VISA branded card comes in gold and dual versions with both local and dual currency facility.
Other than regular card features, EBL Simple Credit Card offers zero renewal fee, a double
insurance benefit, free cheque book and balance transfer options.
EBL Lifestyle Card: A VISA branded local currency prepaid card that can be used at any VISA
POS or ATM countrywide A very popular product among the student segment.
EBL Cool Card: This is a VISA Electron Debit Card for the student banking accounts.
EBL Hajj Card: This is a VISA Prepaid Card valid only in Saudi Arabia. This card frees one
from the hassles of carrying foreign currency during Hajj.

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SME Banking Products
Loan Products
EBL Agrim: This is a short-term unsecured loan facility to meet immediate fund requirement for
any business concern. The loan amount ranges from Tk. 200,000 to Tk 9,50,000 with single-shot
repayment at the end of 1 to 6 months tenure.
EBL Uddog: EBL Uddog is intended to finance business expansion with 50% of the loan amount
in the form of fixed deposit as security. The loan amount ranges from Tk 600,000 to Tk 5,000,000
with monthly instalment based repayment within a maximum 60 months’ tenure
EBL Asha: This loan is intended to meet the immediate business fund requirement. The loan
amount ranges from Tk 200,000 to Tk 1,000,000 and monthly instalment can be payable within
maximum 24 months’ tenure’
EBL Puji: It is a long- term loan for capital investment under collateral security. The loan amount
ranges from Tk 5, 00,000 to Tk. 50, 00,000 and the loan can be repaid within 36 months.
EBL Bannijyo: Credit facility up to BDT 20,000,000 to any legitimate import business with Nil
margin LC facility. 30%-40% of total limit in the form of FD as collateral required. Monthly
instalment based repayment facility available.
EBL Mukti: This is an unsecured loan facility is for the women entrepreneurs. The loan amount
is maximum Tk. 300.000 and can be repaid in 36 instalments.
EBL Nobody: Loan for agro-based industry, loan amount minimum BDT 2,00000 - maximum
BDT 70,00000.
EBL UTKORSHO: EBL would like to offer simply structured, process-based, yet risk-mitigating
banking product to the SMEs. EBL "UTKORSHO".
EBL Udoy: "EBL UDOY" SME loan facility for developing leather cluster of Dhaka area with
single-digit interest, 100% Pre-financed by SME Foundation.

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Deposit Products
EBL Subidha: A daily interest-bearing deposit account for SME entrepreneurs
Other Services
Corporate Banking: EBL Corporate Banking is the strongest unit of the Bank where customized
corporate banking solution is offered to the local and MNC corporate; highly efficient corporate
team backed by cutting-edge technology and determination to serve the customers who are the
driving force behind the success of the EBL Corporate banking division.
Internet Banking: EBL Internet banking application addresses the needs of small, individual and
corporate account holders of the bank. This application provides a comprehensive range of banking
services such as Account Operations and Inquiries, Fund Transfers and Payments, Utility Bill
Payment, Deposits, Loans, Inquiries and other services and a Session Summary.
NRB Banking: EBL offers full range money transfer facility through MoneyGram, UAE
Exchange and other exchange houses from anywhere in the world
Student Banking: Other than education loans and student accounts – EBL offers students file
services for the students who seek to study abroad through its dedicated student centres at Gulshan
and Dhanmondi.
Hajj Remittance service: EBL’s Hajj Remittance service provides convenient, secure and reliable
money transfers during a pilgrimage in Mecca, Madina and Jeddah for EBL account holders.
Service includes handling Foreign Demand Drafts (FDDs) and Foreign Telegraphic Transfers
(FTTS) in Saudi Arabian in local currency.

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Department of the Bank
The bank is comprised of four major business departments
Table: Business Units of Eastern Bank Limited.
Department Activity
Corporate Banking Business units for Corporate Clients
Retail banking Business units/branches for individuals
Commercial Banking Business units for Commercial Clients
Treasury Deal with Money Market and financial risk
To support these major business departments there are other departments/divisions (Support
Office)
i) Retail Banking:
Retail banking refers to the division of a bank that deals directly with retail customers. Also
known as consumer banking or personal banking, retail banking is the visible face
of banking to the general public, with bank branches located in abundance in most major
cities. Retail banking is one of the strongest and efficient units of EBL. It handles various
personal loans, vehicle loans, education loans etc.
ii) Corporate Banking:
EBL corporate banking is the strongest unit of the bank where a customized corporate
banking solution is offered to the local and MNC corporate. The highly efficient corporate
team backed by cutting edge technology and determination to serve the customers is the
driving force behind the success of EBL corporate division.
iii) Commercial Banking
EBL Commercial Bank plays an important role by serving the mid-range corporate
customer. That this business unit serves companies who have a business size between 20
crore-75 crores. As Bangladesh is a developing country, many of the SME is turning into a
successful venture. To help them turn into a bigger entity, this division helps them by
providing financial help.

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iv) Treasury
Treasury Department (or treasury operations) includes management of the bank’s holdings,
with the ultimate goal of managing the bank's liquidity and mitigating its operational,
financial and reputational risk. Treasury Management includes a firm's collections,
disbursements, concentration, investment and funding activities. It is also responsible for
trading in bonds, currencies, financial derivatives and the associated financial risk
management.
Table: Support Offices of EBL
Department Activity
Operations Operations for export/import business,
Treasury/Dealing Room
Credit Risk Management (CRM) Approval of business units
(Corporate, Commercial)
Credit Administration Division (CAD) Documentation for business units
Retail Risk Approval of business units
(Consumer & Retail)
Card Division Approval & issuance of cards for
Retail Banking
Human Resources (HR) Entire Human Resources management
Finance Division Approval and publication of all financial
reports
Audit division Internal audit
Service Delivery Ensuring service centrally
Administration Branch/office/Transport physical logistics
support
Marketing Brand & Marketing
Information Technology (IT) Ensuring full IT-related solutions

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Theories of Leadership
Trait Theory of Leadership
The Trait theory of leadership as the name indicates is based on traits or characteristics of leaders
that make them successful in their leading role. It is viewed as the first modern theory of leadership
concept and came into existence in the late 20th century. Trait theory is also termed as the
Dispositional theory in psychology which is meant to discover the personality of people. The main
aim of researchers of this theory was measuring traits of people related to the pattern of behaviour,
emotions, etc.
Trait theory is an extension of the Great Man theory of leadership which states that leaders are
born, not made. Trait theory agrees upon the same and specifies different personality traits of
leaders that distinguish them from non-leaders. Like the Great man theory, it also states that leaders
cannot be developed and they have inherited characteristics to become successful leaders. This
theory explains those traits or characteristics in detail. The theory also differentiates between
leaders and subordinates by assuming that an individual having a leadership role would have a few
more traits than their subordinates. Leaders can be more confident, extrovert, charming, etc.
History:
As stated above, Trait theory is derived from the Great Man theory of leadership which was
identified by Thomas Carlyle. According to Carlyle leaders possess leadership qualities by birth
only and they cannot be trained for these qualities. This concept laid the foundation for researchers
to research these inherent traits or qualities. Different researchers further worked on this theory
like Francis Galton. Galton stated that leadership quality is meant for those who have specific traits
that are rigid by birth.
Cowley also stated in 1931 that traits should be part of research in leadership study. In 1948, Ralph
Melvin Stogdill also supported Trait theory and did value addition to it. He added further that
leadership is based on inherent traits but it also depends on the way a leader interacts with the
situation.

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Assumptions:
Different assumptions on which Trait theory of leadership is based are:
• Individuals have leadership traits by birth.
• A specific set of traits are responsible for specific behaviour pattern.
• This behaviour pattern is irrespective of the situation i.e. doesn’t change according to the
situation.
A broader perspective of the theory:
Trait Theory is an extension of the Great Man Theory. It states that individuals inherit certain
qualities and abilities which make them a great leader. According to Trait theory, those individuals
born with special characteristics become successful leaders. It helps in identifying different
personalities and behavioural characteristics that transform an individual into a great leader. These
could be self-confidence, courage, communication skills, etc. It also clears the abilities and
personality characteristics of both successful and unsuccessful leaders so that the effectiveness of
leadership can be identified.
Once different traits or characteristics are identified, they are used to compare the traits of potential
leaders to determine their success or failure possibilities. This theory also believes that leaders
having such natural traits can be boosted further to be an effective and great leader. This theory
helped in identifying the main characteristics of a leader. According to the theory, the behaviour
of an individual is determined by his/her certain characteristics or traits. These traits are present in
human attitude irrespective of the situation.
Different leadership traits have been identified by different researchers from time to time.
The most common and latest studies states following common leadership traits:
Judgment capability: Leaders having intelligence and ability to make choices that lift the team
are great leaders.
Willingness and sense of Responsibility: Effective leaders are those who are responsible and
accountable for their work. They also admit their mistakes and don’t pass them to someone else.
Competency of work: Great leaders are skilled enough to handle their job and set an example for
others.

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Understanding attitude: Successful leaders are those who take their subordinates along with them
and help them in fulfilling their tasks. They understand the needs of them and share a caring
relationship with their staff.
Interpersonal skills: An effective leader has strong interpersonal skills i.e. interacting effectively
with their team and seniors.
Success-oriented: Strong leaders have a desire and attitude towards the success of themselves and
their team. For this, they take care of all aspects to achieve their own and team assigned tasks.
Motivational approach: A great leader is the one who motivates and inspires the team.
Brave and work commitment: Commitment towards work and goals, courage in handling
challenging situations and tasks are the qualities of an impressive leader.
Strong determination: Tough situations and hurdles in work require strong determination from a
result-oriented leader.
Faithful: A leader needs to be trustworthy as the team relies on him/her for their activities and
decisions.
Decision-maker: An effective leader should be a good decision-maker.
Confident: Self-confidence is the key to success. Great leaders are confident in their decisions and
boost the confidence of the team as well.
Self-assertive: Leaders who can direct their team with assertiveness, simultaneously not being
aggressive.
Out-of-box thinker and flexible: Great leaders can think the solution to a problem in different
ways and are flexible enough to handle things as per the situation.
Emotional intelligence: Strong leaders have balanced emotions and they don’t overreact.
Innovative: Strong leaders produce innovative ideas to handle things.
Practical Implications:
The trait theory provides useful aspects of leadership and it is practically applicable in the different
organizations irrespective of type and size. It is utilized for self-assessment and one can also
compare his/her traits with successful leaders. Mostly these are in the form of a questionnaire for
self-analysis. By using the information from Trait theory, managers can access their current
position and also they can improve it further in the organization. They can get thorough knowledge
of themselves i.e. about their personality and how they will have an impact on others. It also

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provides them with an opportunity to know their strengths, weaknesses and the way to enhance
leadership skills. Trait theory has identified different traits required for leadership for specific job
types.
The trait theory concept is not only useful for self-assessment but also at the organization level for
comparing traits of a leader with using the assessment to look for similar traits in others for a
leadership role. Personality assessment tools can be utilized to recruit the right candidates for the
organization and to find out the areas where characteristics of employees can be beneficial for the
organization. One can do self-assessment and further enhance their skills and fill the gap between
traits required for leadership and current traits.
Criticism:
The trait theory of leadership lacks in providing better and clear results. It is not fit for all situations
as different traits identified by different researchers so there is no uniform list. Consideration of
other factors that affect leadership is also missing. Also, the comparative analysis of traits and their
importance is not covered under this theory. It couldn’t justify the reasons why some people having
different traits as per the theory; were not effective leaders and why some people who were
effective leaders despite being rigid, narrow-minded. Measuring traits and tests to measure them
is also not present. Trait theory is also criticized for traits not being change according to time.
Significance:
Despite criticism, Trait theory has different advantages. It provides useful information on
leadership. Different researchers have authenticated the concept of this theory and also applicable
in all types of companies at different levels. It also acts as a benchmark to assess leadership traits.
It covers the details of a leader in leadership.
Limitations or Disadvantages:
Trait Theory of leadership has certain limitations as well. It is not possible to separate specific
traits that are always useful in leadership in different situations. It doesn’t clear the relationship
between traits and behaviour, performance. Traits of a leader alone cannot be responsible for the
overall personality. This theory only focuses on leaders and not subordinates. It’s difficult to

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identify the degree of traits even. Trait theory primary focuses on personal traits and ignores
situational and environmental factors. Based on the Great man theory of leadership it also
considers that leaders are born and cannot be developed. There are no uniform leadership traits.
The Trait theory of leadership provided insights into the research of leadership aspects like leaders
have leadership qualities by birth or these qualities can be developed over time. Leadership is an
art and it also requires a specific skill set. Motivation and development are required to good leaders
even having leadership qualities by birth. Like leaders can be trained for self-confidence and
knowledge of work. Traits specified by researchers in Trait theory can be found in different leaders
but situations and behaviour also play an important role in giving direction to leadership. Good
leadership quality also requires the way leadership traits and situations interact in which a leader
possesses leadership skills.

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Behavioural and Participative Approach (The Late 1940s, 1950s, 1960s)
Though the Trait theory of leadership laid down the foundation of leadership theories and
suggested key attributes or characteristics of an effective and successful leader; but it was failed
in other aspects i.e. behavioural aspects of a leader. So due to the dissatisfactory results of the Trait
theories, different scholars shifted their research area on leadership from characteristics of a leader
to the behaviour of leaders in the 1950s.
The philosophy behind this research was that behaviour demonstrated by leaders has much impact
on effective leadership rather than of different traits like physical, psychological, or mental. It also
states that by demonstrating appropriate behaviours, anyone can become a leader. So it is not right
to say that leaders are born by birth only. Lots of studies held to support the behavioural approach,
out of which two most famous studies were done by the Ohio State University in the late 1940s
and by the University of Michigan in the 1950s.
Ohio State University studies revealed common leadership behaviours. People of this University
designed the LBDQ (Leader Behavior Description Questionnaire) that was used to examine
common leadership behaviours among college students, private companies, etc. This study
identified the two types of leaders i.e. Task-oriented and people-oriented.
Task-Oriented approach (left) and People-Oriented Approach (right)
The behaviour of task-oriented leaders revolves around handling management functions i.e.
planning, organizing, coordinating, etc. The people-oriented leader’s behaviour is much based on
the motivational, human aspect i.e. boosting morale, coaching, supporting, listening to the staff.
Theories under Behavior Approach
There are two main theories under the Behavior Approach:
1. Role Theory
2. Management Grid Theory
Let’s see these two theories in detail –
1. Role Theory:
Role Theory is an outlook of social psychology (related to human behaviour and other’s
influence impact on them). This theory states that the behaviour of a human is mostly

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influenced by the expectations of other humans. These expectations are sought in different
roles of humans that they play in their lives daily. Like a human plays different roles in life i.e.
a friend, a professional, a student, etc.
This theory assumes that people act or behave as anticipated as well as their behaviour is based
on social factors and their particular role.
Take an example of an actor or a hero who plays different roles based on the requirement of
script and expectations of the audience, similarly, an individual’s social role is based on the
expectations of his/her society, his rights, responsibilities, behaviour aspects, etc. From an
organizational point of view, role theory specifies defining different roles of leaders and
subordinates by themselves and others, the expectations of others in performing their roles and
their actual performance in their roles.
2. Management Grid Theory:
The next theory is the Management Grid theory based on a behavioural leadership approach.
Dr Robert R. Blake and Dr Jane Srygley Mouton were the founders of this theory. The concept
was given in 1964. Management Grid theory is based on two aspects i.e. person and
performance or production. It defines co-relation between these two
According to this theory, the leadership quality is evaluated on concern for people and concern
for performance basis. It states five different types of leadership styles named ‘impoverished
management’, ‘country club’, ‘Middle-of-the-road’, ‘Team management’ and ‘ Task-oriented’.
These leadership styles are based on the demonstration of a leader’s different behaviour up to
what extent related to people and results or production.
• Impoverished management (Very less focus on both people and results by a leader)
• Country club (More concern for people and less on results or performance)
• Middle-of-the-road (Equal or balanced concern of both people and performance)
• Team-Management (Both concerns i.e. people and performance are considered high
by a leader)
• Task-oriented (More concern on results or performance and less on people)
Out of the above five leadership styles of a leader, the Team-management style was declared
as the best style in this theory. So a strong leader is the one who is committed to achieving
better results or output as well as keeps the team committed, motivated by creating a healthy
environment of trust, respect, and employee empowerment.

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The study of the University of Michigan introduced a Participative leadership Approach and
this study was undergone by a psychologist Dr Rensis Likert. Participative leadership
Approach indicates that a good leader is the one who ensures maximum participation or
involvement of the team in process and strategy development tasks to achieve common goals
so that they can contribute at their max in organizational success.
This story strongly believes that an effective and strong leader motivates the team and acts as
part of a team rather than just instructing the team to get the work done. Giving commands or
just orders to the team can demotivate them by lowering down their morale which hinders their
performance. So the participative approach is one of the most important approaches in
leadership and also fits well in today’s competitive environment.
This approach is very beneficial in making the best decisions as participative leaders allow
team members to show their skills and share their creative ideas to reach the best possible
solutions. It is just like that one mind can put good ideas but different minds can come up with
the best ideas due to a variety of solutions and thus problems can be viewed from a different
perspective.
Theories under Participative Approach
There are two main theories of Participative approach:
1. Lewin’s Leadership Style Theory
2. Likert’s Leadership Style Theory
Let’s study these two theories in detail –
1. Lewin’s Leadership Style Theory:
This leadership theory was developed by Kurt Lewin in 1939 who is known as the father of
social psychology.
Different leadership types were identified by a few researchers in close guidance of Kurt
Lewin. This study generated very impressive results and discovered 3 types of leadership
styles. It also laid down the foundation for better leadership theories.
In this study, there were three groups of leaders or researchers of different leadership styles i.e.
authoritarian, democratic, laissez-faire. Leaders handed over the assignment of a project to and
observed their behaviour based on the responsiveness of different leadership styles. This

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invented the above 3 leadership styles. Researchers also concluded that the democratic
leadership style is the most influencing one as it encourages team members to perform well.
The Authoritarian (Autocratic) leaders don’t consult with team members before taking any
decision. Leaders closely control and monitor the tasks of the team. They provide clear
instructions and guidance to the team.
Democratic leaders invite the participation of the team in decision-making.
Laissez-faire or delegate leaders don’t provide any guidance to the team and have very low
control.
2. Likert’s Leadership Theory
Likert’s leadership style, also known as Likert’s management system was developed by Rensis
Likert. Different styles and patterns were examined by Likert and his team at Michigan
University, USA.
A questionnaire was prepared for managers in more than 200 organizations. Based on this
study and extensive research, Likert developed four management systems of leadership i.e.
exploitive authoritative, benevolent authoritative, consultative leadership, and participative
leadership.
Likert also compared the above four leadership styles with each other on different organization
factors i.e. motivational factors, decision-making, defining goals, communication system,
monitoring system, and leadership process, etc. Likert also recommended the Participative
leadership style in organizations for improving team performance, motivation, high
productivity, and profits.
Exploitive authoritative leadership is based on tight control, fear, and threats, with minimal
or no participation of the team in decision-making.
Benevolent authoritative leadership is based on the reward system for subordinates. There
is a patronizing attitude of leaders towards staff.
Consultative leadership consists of having somewhat discussion of subordinates with leaders
regarding their job profiles. Still confidence level of leaders is low in subordinates.
The Participative leadership style allows subordinates to participate in the decision-making
process and subordinates are given enough responsibilities and authority to do their tasks.

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Fiedler’s Contingency Theory
Fiedler’s Contingency Theory, just like all contingency theories, states that there is no one best
way to lead your team. The best way to lead your team will instead be determined by the situation.
It is important to realize that in Fiedler’s Contingency Theory your leadership style is fixed. You
cannot change your style to suit the situation. Instead, you must put leaders into situations that
match their style. This puts the theory at odds with more modern contingency theories such as
situational leadership.
There are two important factors in Fiedler’s Contingency Theory: leadership style and situational
favorableness.
1. Leadership Style
The first step in using the model is to determine your natural leadership style. To do this,
Fiedler developed a scale called the Least Preferred Coworker (LPC).
To score yourself on this scale you have to describe the coworker with whom you least
prefer to work. What do you think about those people you least prefer working with?
Well, according to the model, the more favourably you rated the person you least prefer to
work with the more relationship-oriented you are. The less favourably you rated the person
you least like working with the more task-oriented you are. So, in a nutshell:
High LPC = Relationship-oriented leader.
Low LPC = Task-oriented leader.
Task-oriented leaders tend to be good at organizing teams and projects and gettings things
done. Relationship-oriented leaders tend to be good at building good relationships and
managing conflict to get things done.
2. Situational Favorableness
The next step is to understand the favorableness of the situation you face. This is
determined by how much control over the situation you have as a leader (situational
control). Determining situational favorableness is done by examining the following three
factors:

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a. Leader-Member Relations
This factor measures how much your team trusts you. Greater trust increases the
favorableness of the situation and less trust reduces it.
b. Task Structure
This factor measures the tasks that need to be performed. Are they clear and precise
or vague? Vague tasks decrease the favorableness of the situation and concrete and
clear tasks increase it.
c. Position Power
This is determined by your authority, meaning the power you have to reward or
punish your subordinates. As you might expect, having more power increases
situational favorableness.
Using the Model:
To use Fiedler’s Contingency Theory of Leadership follows these steps.
Step: 1 Identify your Leadership Style
The first step is to determine your preferred leadership style using the LPC scale. You can use the
following table to score yourself on the LPC scale. Fill in your answers keeping in mind the one
person that you least like to work with.
Negative Score Positive
Unpleasant 1 2 3 4 5 6 7 8 Pleasant
Rejecting 1 2 3 4 5 6 7 8 Accepting
Tense 1 2 3 4 5 6 7 8 Relaxed
Cold 1 2 3 4 5 6 7 8 Warm
Boring 1 2 3 4 5 6 7 8 Interesting
Backbiting 1 2 3 4 5 6 7 8 Loyal

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Uncooperative 1 2 3 4 5 6 7 8 Cooperative
Hostile 1 2 3 4 5 6 7 8 Supportive
Guarded 1 2 3 4 5 6 7 8 Open
Insincere 1 2 3 4 5 6 7 8 Sincere
Unkind 1 2 3 4 5 6 7 8 Kind
Inconsiderate 1 2 3 4 5 6 7 8 Considerate
Untrustworthy 1 2 3 4 5 6 7 8 Trustworthy
Gloomy 1 2 3 4 5 6 7 8 Cheerful
Quarrelsome 1 2 3 4 5 6 7 8 Harmonious
You can now calculate your LPC score by totalling all the numbers you circled. You can interpret
your score as follows:
73 and above: You are a relationship-oriented leader.
54 and below: You are a task-oriented leader.
Between 55 and 72: You are a mixture of both and it’s up to you to determine which style suits
you the best.
Step 2: Understand your Situation
To understand the situations you are facing answer the following questions:
• Is trust with your team high or low (member relations)?
• Are tasks vague or clear-cut and well understood (task structure)?
• Is your authority low or high (position power)?
• The easiest way to do this is to score each answer from 1 to 10, with 10 representing the
highest value.

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Step 3: Find the Right Leadership Style
Now that we understand how we like to lead, and we understand the situation we are facing, we’re
in a position to determine if we have the right style for the situation we’re facing. The table below
allows you to determine your results:
This table is showing us what Fiedler found to be the best leadership style given different
combinations of the situational factors. Note that the red line in this diagram represents task-
oriented leaders, and the yellow line represents relationship-oriented leaders.
In general, you can see that when situations are highly favourable or highly unfavourable the task-
oriented leader is most effective. It is only in the middle area, where situational factors are mixed,
that the relationship-oriented leader is most effective.
From Fiedler’s perspective, you would place leaders into situations that are most suited to their
style. However, a more modern approach is to adapt your style according to the situation.

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Situational Leadership Theory
Theory:
The situational theory of leadership and the LEAD instruments for determining leadership style
are explained, and the application of the situational leadership theory to the process of planning
for and implementing organizational change is described.
Early studies of leadership style identified two basic leadership styles: the task-oriented autocratic
style and the relationship-oriented democratic style. Subsequent research found that most leaders
exhibited one of four combinations of task and relationship behaviours. The situational leadership
theory holds that the difference between the effectiveness and ineffectiveness of the four leadership
styles is the appropriateness of the leader's behaviour to the particular situation in which it is used.
The task maturity of the individual or group being led must also be accounted for; follower
readiness is defined in terms of the capacity to set high but attainable goals, willingness or ability
to accept responsibility and possession of the necessary education or experience for a specific task.
A person's leadership style, range, and adaptability can be determined from the LEADSelf and
LEADOther questionnaires. By applying the principles of the situational leadership theory and
adapting their managerial styles to specific tasks and levels of follower maturity, the authors were
successful in implementing 24-hour pharmacokinetic dosing services provided by staff
pharmacists with little previous experience in clinical services.
Practical:
The situational leadership model enables a leader to identify a task, set goals, determine the task
maturity of the individual or group, select an appropriate leadership style, and modify the style as
change occurs.
A situational theory of leadership attempts to match a particular leadership style or type to specific
external circumstances. The general idea is that one type of leadership will be effective in one
situation, but a different type of leadership will be effective in another situation. Historically,
situational theories of leadership have been too abstract to apply to specific situations.
Nevertheless, the concept of situational leadership retains considerable intuitive appeal. In this
article, we draw on our previous research about situational leadership during resuscitation in a
trauma centre, to derive a general strategy of how a leader can best develop his or her theory of
leadership which best works for their unique circumstances. The core of the strategic approach
involves (1) defining goals for a specific situation, (2) defining potential leadership types, (3)
identifying situational conditions, (4) matching a leadership style to the particular situation, and
(5) determining how the match between leadership style and situation will be made. The medical
trauma centre we profile provided an interesting example of how leaders considered elements of
the situation to guide their leadership

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Path-Goal Theory
The Path-Goal model is a theory based on specifying a leader's style or behaviour that best fits the
employee and work environment to achieve a goal (House, Mitchell, 1974). The goal is to increase
your employees' motivation, empowerment, and satisfaction so they become productive members
of the organization.
Path-Goal is based on Vroom's (1964) expectancy theory in which an individual will act in a
certain way based on the expectation that the act will be followed by a given outcome and on the
attractiveness of that outcome to the individual. The path-goal theory was first introduced by
Martin Evans (1970) and then further developed by House (1971).
The path-goal theory can best be thought of as a process in which leaders select specific behaviours
that are best suited to the employees' needs and the working environment so that they may best
guide the employees through their path in the obtainment of their daily work activities (goals)
(Northouse, 2013).
While Path-Goal Theory is not a detailed process, it generally follows these basic steps as shown
in the graphic below:
1. Determine the employee and environmental characteristics
2. Select a leadership style
3. Focus on motivational factors that will help the employee succeed

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Attribution Theory
The attribution theory of leadership suggests that a leader's judgment about his employees is
influenced by the leader's attribution of the causes of the employees' performance. This model has
facets:
1. leader attributions for and reaction to poor performance by subordinates, and
2. observer attributions for and reactions to poor performance by the leader
Leader's Attributional Processes
The attributional approach starts with the position that the leader is essentially an information
processor. Based on information about subordinates and their behaviours, the leader decides an
attribution of the cause of each subordinate's behaviours and selects strategies to deal with any
poor performers.
Attributions are based upon the leader's ability to process information based on three dimensions
on behaviour:
Distinctiveness: Did the behaviour occur in this task only?
Consensus: Is this level of performance usual for other employees?
Consistency: Is this level of performance usual for this employee?
The answers to these three questions identify for the leader either external (situational) or internal
(personal) causes for the employee's performance. This attribution is critical to leader employee
relations. The judgment of responsibility moderates the leader's response to an attribution.
Attribution theory is concerned with peoples’ causal explanation for outcomes: successes and
failures. The basic premise is that beliefs about outcomes are a primary determinant of expectations
and, consequently, future behaviour. Attribution theory articulates how this process occurs and
provides a basis for understanding that translates into practical action.

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Leadership Style in the Audit Department
Developing leadership skills is an investment for the future. And the banking sector needs it more
than others. A country’s economy and financial growth and stability depend on these leaders. The
impact and importance of leadership training and development are beyond measure. Leaders are
supporters, coaches, and mentors. In this term paper, we have tried to portray the leadership
practices followed by the managers in Eastern Bank Limited (EBL) by analyzing the leadership
style of two particular departments namely Audit department and Sales department. To gain
insights about the leadership style followed in these two departments, we have interviewed Mr
Raihanul Amin Mozumder who is currently working as a Principal Officer in the Audit department
and Mr Rakibul Alam who is now employed as a Trainee Assistant Officer in the sales department.
We conducted a small interview over the phone with them so that they can share their valuable
insights with us regarding the leadership methods their managers follow in their respective
departments.
The Function of the Audit Department in EBL
Implementing the rescheduling process of stuck up loan to the branches for obtaining
repayment schedule through strong persuasion and serve final notice as the condition
required.
Monitoring the individual cases concerning their securities, value of securities and finally
a review of the possibility of recovery of bank’s stuck-up classified loan.
Investigating suspicious or irregular matters being directed by higher management and
being requested by the branch in charges too.
Time to time follow up of stuck- up-advances of branches and keeping the branches under
constant pressure.
Inspecting all branches operations at least once in a year.
Carrying out surprise audit as felt necessary.

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Leadership Followed in the Audit Department
In the audit department, no specific leadership style is followed. The main focus is on the task
execution. The manager can follow any leadership style h/she wants but the main objective is to
get the job done. If by any means the manager fails to get the job done then it displays that the
leadership style practised by the manager is ineffective and futile in carrying out tasks. So, no
particular style is there for the managers rather they can follow any style they want to be given that
they get the job done within the deadline.
Another crucial factor in the audit department is performance. It is significant for not only in the
Audit department but also in the entire EBL. To survive in the bank, the manager must fulfil the
target otherwise his performance and leadership will be questioned. Again, the ability and
willingness are related to the achievement of the target of the manager. If he fails to fulfil the target
provided by the department head then the bank will simply consider that the ability and willingness
of the manager are low. He is not motivated and serious enough about his role and performance.
The managers in the Audit department are very flexible with their sub-ordinates as it is the
responsibility of the managers to know about the capabilities of their juniors as well as make them
feel motivated to carry out their tasks.
According to Path goal theory, the leaders are flexible and they can change their style, as situations
require. The case is no different for the managers in the Audit department. Different line managers
carry out different types of leadership styles. Some line managers change their styles with the
situation and some always remain adamant to their style. It mainly depends on their preference
and comfort.
Moreover, the target or KPI (key performance indicator) in this department is set based on previous
year performance and capability. The action plan depends on the line manager. It’s his/her wish
how h/she wants to achieve the target following his/her strategies.
The Path goal theory also proposes two contingency variables such as environment and employee
characteristics, that moderate the leader behaviour-outcome relationship. Most of the managers in
the audit department act according to the environment. They change their style and tactics to adapt
to the new environment. However, few managers prefer to follow their own set of rules and styles
no matter the change in the environment.
Trait theory often identifies the behavioural characteristics that are common in leaders. These
behavioural characteristics can also play a vital role in the promotion of the manager. Common
traits of an ideal manager could be judgment capability, sense of responsibility, work competency,

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interpersonal skills, creative thinking, success-oriented attitude, decision making capability etc.
According to Mr Raihanul Amin, the most important traits for an employee’s promotion are work
competency, success-oriented attitude, and decision-making capability. Firstly, work
competencies have long been used as a framework to help focus employees' behaviour on things
that matter most in a bank and help drive success. They can provide a common way to harmonize,
select, and develop talent. The benefits are clear for employees and managers, and ultimately, the
bank. Secondly, a success-oriented attitude encourages employees to reach their goals and
objectives, to work hard and stay focused on fulfilling their dreams. Positivity begets more
positivity. Over time, we may find that even the most stubborn employee in the department who
refuses to enjoy something has a change of heart and changes to be more positive, all because
h/she had such a success-oriented attitude. Thirdly, decision making is related to planning,
organizing, directing, and controlling functions of a manager. It is important to achieve the
department goals or objectives within given time and budget. But a manager needs to be creative
while deciding to solve a problem. It also allows the manager to more fully appraise and understand
the problem sometimes in ways other employees in the audit department can’t see it.
The behavioural theory states that leadership capability can be learned, rather than being inherent.
This theory is based on the principle that behaviours can be conditioned in a manner that one can
have a specific response to specific stimuli. In the audit department, the managers are conditioned
in a manner that they always step up in critical work problems and sort out ways to solve it. Solving
these problems doesn’t affect the annual report but the managers are rewarded with incentives and
promotion. So, the managers are conditioned and trained adequately so that they can respond to
various critical situations within the shortest possible times.
Another important leadership theory is the contingency theory. Contingency theory claims that
there is no best way to organize a corporation, to lead a company, or to make decisions. Instead,
the optimal course of action is contingent upon the internal and external situation. This contingency
theory is purely followed in the Audit department of EBL. The managers don’t follow any
particular course of action to reach the goals or solve the problem. Rather they look for the best
possible solutions which will fit the environment to deal with the problem. Apart from that, the
managers are mainly task-oriented instead of relationship-oriented. To the completion of the task
is what is evaluated and is considered the most important parameter of performance at the end of
the day. They do maintain a certain level of relationship with their superiors as well as their
subordinates but they follow the task-oriented leadership style. Each team member of a particular
team is assigned with a set of tasks along with deadlines. The members may need to monitor cases,
investigate suspicious matters, follow up with other branches, and also inspect other branches'
operation.

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Each member needs to be proactive and complete their task on time so that the managers can take
vital decisions and come up with strategies on time based on the reports prepared by the team. In
short, the task needs to be done no matter what and that’s what the managers emphasize at the end
of the day.
These are the few leadership styles that are currently followed in the Audit department of Eastern
Bank Limited. In the future, they might also adopt new leadership styles or withdraw the current
styles to adapt to the environment and the current trend as the line managers prefer to be dynamic
instead of sticking to a set of practices only.

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Leadership Style in the Sales Department
Eastern Bank Limited (EBL) is one of the leading Private Commercial banks in Bangladesh. In a
very short time Eastern Bank Ltd. became one of the successful and fastest-growing private banks
in Bangladesh. One of the most responsible departments behind its success is the sales department.
Certainly, they follow many of the Leadership theories, or at least the cream part of it. In different
aspects, they follow different measures. Now we’re going to discuss the leadership approaches
followed by the Eastern Bank Limited.
The Objective of Sales Dept. in EBL
To maintain a satisfactory deposit mix
To grow its credit extension service to corporate as well as individual customers
To increase its diversification of loan portfolio and geographical coverage
To reduce present operating expenses further to increase earnings before tax
To reduce the burden of non-performing assets.
Leadership Followed in the Sales Department
Trait Theory
If we say leaders are born, not made, there might be an argument starting over it. But the trait
theory is completely based on this statement. Now, from the interviews of employees in the EBL,
and many papers and journals published on the internet. We have come to know that the trait theory
is not implied a hundred per cent, but the important traits for the company growth and prosperity
are valued. For example, from the list of traits we provided, Sense of Responsibility, Work
Competency, Success Oriented Attitude, Decision Making Capability, and Confidence were said
to have the most impact on the promotion of an employee. Which means, these qualities of
leadership is more preferred by the authority of the EBL, where leadership traits like Creative
Thinking, Motivational Approaches, Emotional Intelligence, and Judgment Capability has less
preference.

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Behavioural Approaches
Now if we see how the behavioural approaches of leadership come to the play in the EBL sales
department, we shall see that the leaders are mostly Task-Oriented. But again, they act in a way
that the people-oriented approach is also present. The behaviour of task-oriented leaders revolves
around handling management functions i.e. planning, organizing, coordinating, etc. The people-
oriented leader’s behaviour is much based on the motivational, human aspect i.e. boosting morale,
coaching, supporting, and listening to the staff.
They manage their employees by both X and Y theories and reward the employees when they step
up in a critical work situation. The employees also have a good effect on their APR if they do such.
The leaders work on the bank’s functionality, sales performance, employee management, planning,
organizing, supporting the employees, and coordinating. So they have a mixture of both Task-
oriented and People-Oriented approach.
Fiedler Contingency (LPC) Model
The Fiedler Contingency Model suggests that there is no “ONE” theory of leadership to lead your
organization. You have lead according to your goal and situation.
Now, of the two factors, the first one, which is to identify the leadership style used in EBL, we
found it was task-oriented. The LPC graph, if rated, would be found rather neutral. They do not
involve much on a relationship basis, and mostly emphasis on the performance of the employees.
If an employee does not perform for a consistent period, they tend to release him/her, which
ultimately shows their task-oriented behaviour.
Now, if we go for the second factor, situational favorableness, which is comprised of three more
factors, Leader-Member relationship, Task Structure, and Position Power. They maintain a mix of
formal and informal relations in the organization. Anyone can call their superiors with their
preferred designation. Again, the leaders also apply the x theory to their employees if necessary.
The Task Structure is very much defined, and the leaders have the authoritarian power over their
employees.

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Overall Leadership Style in EBL
Eastern Bank Limited (EBL) is one of the most renowned banking service providers in
Bangladesh. In this report, we tried to dig deep to find out about the leadership styles followed in
EBL and collect relevant information.
Situational Leadership Theory
In Situational Leadership Theory, we noticed there is a search for the best approach which fit
specific situation occurred in an organization. EBL thinks there is no best approach for all
situations in general rather there is always a suitable leadership style for that particular situation
arisen. They don’t have only one leadership style but they try to implement different strategies for
different scenarios. In EBL management Task behaviour is more important than Relationship
behaviour. That is very common in other banks in Bangladesh because of the autocratic
organizational structure we follow. The Relationship behaviour, that holds a democratic view of
treating employees with Consideration and Socioeconomic support, is not a feasible leadership
approach for the Bangladeshi banking system. Commercial banks in Bangladesh are much more
aggressive and target-oriented organizations. Task behaviour of SLT, where clear Structure and
Direction is provided for followers and the main goal is the annual target, really serves the purpose
for EBL management authority. They try to get the best outcome possible by hook or by crook.
Performance is always the first requirement and most focused in EBL. Good performance can take
you higher in this organization and poor performance can also drag you down. If an employee
doesn’t perform for a long period, there is a chance he will lose the job. That’s because EBL thinks
that employee is not creating value for the organization and he/she should not be invested upon.
The ability or willingness of an employee is very Important in Situational Leadership Theory and
EBL calculates the willingness or ability of an employee by their target performance. One annual
target is set every year but performance is calculated quarterly in EBL. There is a point rating
system where employees are rated 1 to 5 according to their performance. So, management doesn’t
have to wait until the end of the year to know which employees are performing well and which
ones are not. About the situational leadership, EBL uses different approaches for different tasks,
different jobs and different functions. They have to act according to the situation arises. Managers
are trained for acting in different situations and scenarios. Their experience helps them to take
situational appropriate decisions that created profit for the bank, not losses. So, it varies situation
to situation which style to select and how the leadership style will be implemented and followed.

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Path-Goal Theory
Path goal theory focuses on the employees and the work environment where a goal can be set and
informed into the followers to get the best outcome. EBL maintains some portions of Path goal
theory to a great extent. Managers and top-level employees are flexible with the followers and
subordinates. They have created such an environment to make employees more comfortable to
share their problems while providing service. That’s the most important part of Path goal theory
where employees are clear about their goals and problems in target path is solved together by
leading employees properly. A leader is the one who knows the way, Shows the way and Goes the
way. EBL managers try to learn through their experiences, then train their followers and finally
they keep providing support while employees are serving bank customers. That’s the best practices
in EBL management where they can achieve together. Managers change their styles according to
situations. Different situations arise when achieving a goal (annual target) and managers are
required to act accordingly. Not only that, but they also have to train their employees accordingly.
If a similar situation faced before the precedent decisions are re-applied but if the situation is
completely new managers have to think out of the box to find a solution for their customers. In
situations or target path, managers act according to the environment or follower characteristics. In
EBL managers act according to the environment more than according to followers’ characteristics.
They think followers too act according to the situation.
Attribution Theory
This theory practically focuses on attributes of leaders and followers of an organization. EBL
focuses on individual attributes to find out individual strength and weakness so that tasks can be
divided according to individual capability. It is very important in leadership theories to know
individual attributes because you cannot lead someone you don’t know and you cannot follow
someone you do not agree with. So, to lead a team a manager first has to show leadership attributes
which will attract the employees. Then managers must know the attributes of his/her subordinates
so that he/she can guide the employees to reach the goal. To be a successful leader you have to
have that influence on your followers and motivate them to work for development. To motivate
others a leader must know the inner characteristics of his followers. To a certain extent a leader
must know the individual capability and output capacity so that he can assign tasks accordingly.
Not everyone will be best at everything and people do have specialization. Managers must know
what his officers are good at and he should divide tasks very wisely for outstanding outcomes.
EBL management maintains an employee profile where employee details are recorded properly.

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The managers go beyond the employee profile sometimes and try to connect with subordinates
personally to have an impact upon them. Most managers in EBL have leadership attributes and
they seek out leadership attributes in their employees. Managers who focus on profit target and
guide their employees to attain that target are most successful. It is also appreciated if the target is
achieved ethically, not manipulating numbers. Profit is very important indeed but ethics are more
important than that.

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Conclusion
Throughout this course, we have learned how much output-driven the banking sector of
Bangladesh is. As the sector is full of top tier competitors and the organizations always have to be
on their toes to serve their customers to be profitable. This also reflects on the leadership of various
divisions in the Eastern Bank Limited. While it is certainly preferable to maintain a good
relationship with the leaders, colleagues, and subordinates, performance is the key that will open
many doors to the top.
As performance is so much at the centre of all, it is evident that the most practised leaderships in
EBL is following the Contingency Theory and the Path-Goal theory. As these are the theories that
allow the leader to be flexible based on situations and stay focused on performance and outputs
rather than certain strict rules and regulations. However, a good performer is not always necessarily
a good leader. So, it is important to follow the Trait Theory and Attribution Theory in choosing
the leader of the divisions and that practice is also largely visible in the organization.
Seeing their progress over the last few years and how fast they are growing, we can certainly
conclude that EBL is practising the internal leadership following a good combination of the
leadership theories and it will continuously prove to be a key ingredient to their success.

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