Organisational characteristics and unit performance - the case of bank branches

Abstract

This dissertation is a study of organizational performance and the identification of managerial and organizational characteristics which are associated with high and low performing organizations, The units which have been picked’ up for the study are the branches of a leading public sector bank in the country. The nature of the research problem as it has been conceptualized in the present study has to do with the identification and measurement of variables thought to be relevant to the phenomenon of organizational performance and the determination of interrelationships among the variables. A model of organizational performance serves as a framework for examining the relationships between variables. The components of the model are contextual, strategic, behavioural and performance variables. The objective of the study is to identify some commonly utilized styles of management in bank branches and specify the environmental and contextual conditions in which the various styles are found. The association of style: with performance would also be examined. Bank branches were chosen as the setting for the study since they are spatially separated work units where the Head Office is-far removed from the location of the branches. Since branch managements have a great deal of leeway in deciding the strategy by which they improve the functioning of their branches, a study of management styles at the branch level, it was thought, would be of great use. The present study uses the questionnaire method for data collection. The scales used for measuring the variables in this study were constructed on the basis of interviews with senior officers of the bank and examination of audit reports. The pilot test was conducted on a sample of thirty-five branches and the interviews conducted with the respondents after administration formed the basis for modifying the questionnaire. The responses from seventy branches to the modified version of the questionnaire form the data base for the study. The cluster analysis of the data on the basis of the five style dimensions yielded five management styles. The professional management and entrepreneurial professional styles are associated with high and the traditional bureaucratic and conservative mechanistic styles associated with low organizational performance. The cluster analysis of data on the basis of eight on textual variables yielded four clusters. The inter cluster differences on the four measures of performance are not significantly different. The small and young branches (cluster 4) have low scores on all the organizational dimensions and the variability within the cluster is large indicating its heterogeneity. In contract, medium sized branches of average age (cluster 3) seem to be a fairly homogeneous cluster. The cluster analysis of the data does not indicate any strong relationship between context and style. However, medium sized branches of average age (cluster 3) tend to have a concentration of professional management and traditional bureaucratic styles. The professional management style is also prevalent in small and young branches (cluster 4). The relationship between context and performance is fairly weak and does not permit us to draw any definite conclusions in terms of relationship between the two. However the data do indicate that certain styles are more desirable in certain contextual clusters than in others. The professional management and the entrepreneurial professional styles are high performers in large and old branches (cluster 1) in contrast to the traditional bureaucratic style which performs poorly in this cluster. Similarly, the quasi entrepreneurial style is comparatively more successful in small and young branches (cluster 4) than in large and old branches (cluster 1). The various hypotheses that have been tested in this study provide some evidence that managerial orientations which are associated with high performing branches vary with the properties of the environment that a branch faces. The task of developing managerial orientations which are in tune with the demands of the environment is the task of training and management development departments. The findings of this study emphasize the need for a differential approach to training and development. In the present study we have been able to link up the properties of the environment of a branch with its managerial orientations. Further studies linking up personality attribute with managerial styles would go a long way in achieving a better fit between the person and the task. The probability of high Performance is high where we have been able to match the personality traits, the managerial orientations and the external environment of organizations.