The Strategic Design Leadership Strategies

Requirement

V. A2: Global Financial Crisis

Page 1: Introduction to the company

Page 2: Analysis of leadership in the company

Page 3: Strategies took by the leadership during the Financial crisis to strengthen the company

Page 4: References

Solution

Introduction

Gulf Finance Corporation is also known as a Gulf Finance House. It is an Islamic investment bank whose headquarter is situated in Bahrain. It was established in 1999. The organization is providing services like working capital and asset finance, Vehicle and Equipment Finance, Invoice Finance, Marine finance and small business loans (Peters, 2012) . The organization is especially lending fund to healthcare, logistics, manufacturing, healthcare and construction sector. It is a growing provider of funding solutions to medium and small sized enterprises in the UAE. During 2008, the organization faced a financial crisis which influenced the financial position of the organization to a larger extent. This arose due to irresponsible policy and lack of regulations in the financial market. Due to this crisis, the organization has to stop hiring, and many employees are laying off.  During 2007, the organization listed its GDRs on the London Stock Exchange (Shiller, 2012). The organization is also the owner of a 30% stake in the Football League Championship club Leeds United. The organization is performing its finance activities as per the principles and guidelines formulated by the Islamic Sharia. These principles are specially related to the negotiable financial instrument, financial services investment transactions, infrastructure and real estate, structured finance, and liquidity and securities management. During 2004, it was transferred to a Public Shareholding company with its shares being listed on the Kuwait Stock Exchange, Bahrain Stock Exchange and Dubai Financial market (Al-Malkawi, 2013). The economy of Bahrain completely depends on Islamic banking, insurance sectors, and production or aluminum export. Due to the financial crisis, all institutions were not performed in an efficient manner. 

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Analysis of Leadership

Leadership style utilizes in an organization play an important role in the success of it. Leadership is known as the ability to influence people to freely work towards obtaining predetermined goals (Dominguez, 2012). The leadership power of the organization is considered very poor due to which it is not able to tackle the financial crisis efficiently. The members of the organization do not aware about their goals and motives which provide them guidelines (Reddy, 2014). Due to this the leaders of the organization seemed confusing and are not able to provide effective guidelines to their subordinates. The major reason behind the failure of this organization is poor leadership. It can be possible that global financial market cannot be supervised and regulated by national institutions only, the challenges facing financial systems of the organization is that of leadership crisis (De Haas, 2012). The following leadership problems faced by the organization:

  • Lack of a good leader who has relevant experience, and the right set of skills of the industry concerned. Due to this, they were not able to take right decisions at the right time.

  • Lack of appropriate leadership style which can help the organization in taking corrective decisions as well as the large level of motivation to existing employees (Daft, 2014).

The management of the organization does not follow appropriate leadership strategies for tackle the situation of financial crisis. This will cause a huge financial loss to the organization and also lost it reputation in the existing market (Booth, 2015). Due to the faulty decisions the management of organization faces lot of problem to survive in the market.

Leadership strategies are taken by Global Finance Corporation

The leaders of the organization frames lots of potential strategies to tackle the crisis situation. The following leadership strategies are adopted by the management of the organization:

  1. Strategic Design: The strategic design leadership strategies enable the organization to design various strategic perspective which helps in achieving the predetermined goals and provide various efficient strategies with which organization can deal with crisis situation (Wooten, 2013). The main motive behind the strategic design is to create value for different stakeholders with which the organization able to maintain its profitability and healthy relation with its existing customers. Apart from it other organizations like Stewart Living Omnimedia also utilizing strategic design strategy to tackle with its management crisis.

  2. Avoid Organizational politics: Leaders of the organization consumes a large proportion of their time on determining leadership strategies instead of focusing on organizational politics (Ladegaard, 2014). Organizational Politics are considered as the dark side of organizational life which destroy the overall reputation of the organization in the existing marketplace. Organizational politics give birth dishonesty and selfishness among members of the organization. By avoiding the organizational politics the organization efficiently deal with the financial crisis because it brings coordination among members due to which they fight together to deal with a particular situation.

  3. HRM Practices: Human Resource practices play an important role in directing the leader of the organization. HRM practices enforce the management to focus on "people" side of the crisis. This will be helpful in bringing coordination between employees and crisis faced by the organization (Politis, 2015). Frequently said that such type of coordination help the organization in a tackle with the financial crisis and also can introduce various new changes for make it successful in the existing marketplace. 

Conclusion

After studying all this, it can be concluded that the organization should focus more on leadership strategies. Efficient leadership style helps management of the organization to deal with existing situation efficiently. If the organization wants to deal efficiently with the future crisis situations, it should hire such leader who provided effective guidelines to their subordinates. The leader of the organization should be such which have the high knowledge, an experience of related field and very hardworking (Sperry, 2013). If the organization have such type of leaders the management can deals with all future and current problems effectively and able to plan expansion strategies for its business. During the crisis situation the management of the organization should focus on hiring efficient employees instead of laying off, this able to maintain the competitiveness of the organization.

 

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References

  • Peters, G. P., Marland, G., Le Quéré, C., Boden, T., Canadell, J. G., & Raupach, M. R. (2012). Rapid growth in CO2 emissions after the 2008-2009 global financial crisis. Nature Climate Change, 2(1), 2-4.

  • Shiller, R. J. (2012). The subprime solution: how today's global financial crisis happened, and what to do about it. Princeton University Press.

  • Al-Malkawi, H. A. N., & Pillai, R. (2013). The impact of financial crisis on UAE real estate and construction sector: analysis and implications.Humanomics, 29(2), 115-135.

  • Dominguez, K. M., Hashimoto, Y., & Ito, T. (2012). International reserves and the global financial crisis. Journal of International Economics, 88(2), 388-406.

  • Reddy, K. S., Nangia, V. K., & Agrawal, R. (2014). The 2007–2008 Global Financial Crisis, and Cross-border Mergers and Acquisitions A 26-nation Exploratory Study. Global Journal of Emerging Market Economies, 6(3), 257-281.

  • De Haas, R., & Van Horen, N. (2012). Running for the exit? International bank lending during a financial crisis. Review of Financial Studies, hhs113.

  • Daft, R. L. (2014). The leadership experience. Cengage Learning.

  • Booth, S. A. (2015). Crisis management strategy: Competition and change in modern enterprises. Routledge.

  • Fabbrini, S. (2013). Intergovernmentalism and its limits assessing the European Union’s answer to the Euro crisis. Comparative Political Studies, 0010414013489502.

  • Sperry, L. (2013). Effective leadership: Strategies for maximizing executive productivity and health. Routledge.

  • Wooten, L. P., James, E. H., & Parsons, K. (2013). 10. Leadership strategies and tactics for crisis management. Handbook of Research on Crisis Leadership in Organizations, 193.

  • Ladegaard, L., Andersen, L. B., Bøllingtoft, A., Eriksen, T. L. M., Holten, A. L., Jacobsen, C. B., ... & Westergaard-Nielsen, N. (2014). Leadership training, leadership strategies and organizational performance: Designing an experiment to test the causal effect of leadership on performance. In Annual Conference IRSPM.

  • Politis, J. D. (2015). Entrepreneurial Orientation, Creativity, and Productivity: The Influence of Self-leadership Strategies. Management, 3(7-8), 203-213. 

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