Senior Leadership within the Banking Industry: The Impacts of Poor Communication to the Lowest Levels of Organization on Employee Morale, Ethics, and Performance

Foundation of the Study

Effective communication between leaders and their subordinates is essential for proper management. It is the key means leaders can use to solve problems, convey ideas, directions, negotiate, and motivate their employees. Moreover, through communication, an employer has a significant impact on the employees’ behavior (Susworo, 2019). Hence, inadequate or inefficient communication can have detrimental effects on work output, conduct, and morale. A study by Shrestha, Parajuli, and Paudel (2019) revealed that in the banking industry, effective communication strengthens interpersonal relationships with workers, which in turn improves the quality of service and customer satisfaction and retention. While most banks strive for optimal performance and profitability, some of them are held back by ineffective communication due to organizational, personal, and job barriers. Personal barriers include gender differences, temperament, and culture. The job barriers are job monotony and personal-personal-work life balance, while the organizational ones are physical separation, internal politics, technology, and existing communication approaches. Other factors include failure to give sufficient details or background information and using an inappropriate communication medium. Conclusively, these factors can result in adverse effects on employee productivity and business performance.

The Problem

The general problem to be addressed in this study is ineffective communication between managers and their subordinates, which results in low morale, abidance to ethics, and performance. According to Mohanty and Mohanty (2018), communication is not only important as a way of passing information, but also a tool that managers can use to promote teamwork, and motivate workers to achieve the organizational goals. Unmotivated workers are likely to perform poorly, leading to lower profitability. Nevertheless, most bank managers lack effective strategies to motivate and communicate with their workers (Wade, 2019). Lim and Lau (2017) stated that the primary cause of this problem is the existing power distance in many sectors, which affects the employees’ behavior and business culture significantly. The specific problem addressed in this study is the failure by leaders to communicate effectively with their employees in the banking industry in developing countries, resulting in low morale and affecting the ethics of how they perform assigned tasks.

Research Questions

Qualitative Research Questions

1. Why do leaders fail to communicate effectively with their subordinates?
2. What leadership practices can promote communication between leaders and workers?
3. What leadership practices discourage communication between employees and leaders?
4. What personal, organizational, and job-related factors minimize effective communication in the banking industry?
5. How do these factors manifest themselves?
6. Is there a way to curb the challenges associated with the factors?
7. What is the most appropriate way to deal with the problem?
8. How do the organizational structure and the diversifying nature of commercial banks limit effective communication?

Quantitative Research Questions

1. What is the relationship between leadership style and employee motivation?
2. How does the organizational structure affect communication between leaders and their subordinates?
3. How does this problem affect employee performance, morale, and abidance to ethics?

Nature of the Study

Research Paradigm

A scientific study can use the positivist, interpretivist, or critical research paradigms. Through the positivist approach, a researcher aims to understand a given aspect through observation, experimentation, and reasoning based on experience (Kivunja & Kuyini, 2017). The interpretivist, or constructivist paradigm focuses on understanding human experience by analyzing a viewpoint and interpreting it (Kivunja & Kuyini, 2017). The critical or transformative model examines social, economic, and political issues that might lead to struggles, conflicts, and social oppression, to promote justice (Kivunja & Kuyini, 2017). Since this study focuses on answering underlying assumptions, the positivist research design will be more applicable. Consequently, the questions will be supported by background research, which will help in the formulation of a hypothesis to be tested through experimentation. If the procedure works, the data obtained will be analyzed to draw valid conclusions.

Methodology. This study will use qualitative, quantitative, and mixed research methods. Consequently, the data collection methods to be used include interviews and open-ended questionnaires and surveys. Both the qualities and quantitative methods will involve 30 participants selected non-randomly from a specific group. For acceptable results and analysis, the study will require at least a 70 percent response rate. Existing primary research articles published between 2016 and 2020 will be used to provide data to support this study. The qualitative method will be used to gain contextual knowledge about the impacts of communication on employee empowerment and performance. The quantitative approach will be used to obtain generalizable knowledge on the effects of poor, ineffective communication by leaders to their subordinates on work performance and morale. The qualitative data will be analyzed through the content, thematic, and discourse approaches.

Research Designs

This study will utilize three research designs: flexible, fixed, and mixed approach. The flexile method will help to explore the open-ended qualitative research questions for primary data collection. The fixed approach will help to collect statistical data, which will be analyzed to determine whether or not the study hypothesis is valid by answering the close-ended quantitative research questions. The combination of both approaches will also be used to test the hypothesis.

Single Case Study Design

The primary focus of this study is to analyze the impacts of communication between leaders and workers in the banking industry in developing countries. According to Hjelmgaard (2018), African banks are growing faster than American banks. Branches in the U.S. are closing, while the banking industry is flourishing in Latin America and Africa (Hjelmgaard, 2018). The difference in growth between the economies arises from the new technologies that consumers use to make payments and to manage their money (Hjelmgaard, 2018). The disparity in the adoption of new payment technologies shows that the developing countries are more likely to rely on traditional banking systems. Hence, they will benefit more from this study.

A single-case study design is appropriate for the qualitative and quantitative methods used in research as it helps to understand the complexities associate with a given group (Krusenvik, 2016). Single-subject in-depth studies allow the researcher to find out more information that he or she did not anticipate at the beginning of the study. Moreover, they offer vital evidence to complement the experiment (Krusenvik, 2016). Also, case studies enable researchers to combine different methods of data collection (Krusenvik, 2016). Although single-subject studies have a significant share of advantages, their validity and reliability are highly criticized. Some of the arguments against single-subject studies are: it is not possible to generalize from a single case, and they are more reliable for generating hypotheses, rather than testing them and building theories (Krusenvik, 2016). In addition, single-case studies are difficult to summarize, they contain a bias towards verification, and they do not overcome the importance of practical knowledge (Krusenvik, 2016). Despite the challenges mentioned above, the model is sufficient for this study as it focusses on expanding the knowledge on the impacts of communication on employee empowerment, not the formulation of new theories.

Summary

The positivist, interpretivist, or critical research paradigms are applicable in scientific studies. The positivist approach is used in this paper, as it focuses on answering underlying assumptions on communication between leaders and workers in the banking industry. This study will use qualitative, quantitative, and mixed research methods, and interviews and open-ended questionnaires and surveys as data collection methods. The study will involve 30 non-randomly selected participants. Also, existing primary research articles published between 2016 and 2020 will be used to provide the secondary data required to support this research. Flexible, fixed, and mixed research designs will be used to explore the qualitative and quantitative research questions, and to test the hypothesis.

The primary focus of this study is to analyze the impacts of communication between leaders and workers in the banking industry in developing countries. African and Latin American banks are growing faster than American banks, which are continually closing branches. This phenomenon is caused by a disparity in the adoption of new payment technologies, which make developing countries are more likely to rely on traditional banking systems. Hence, they are more likely to benefit from the findings of this study. While a single-case study is criticized for bias towards verification, unreliability in testing a hypothesis, and an inability to be applied in making generalizations, the model is applicable in this research. This is because this paper focusses on expanding the knowledge on the impacts of communication on employee empowerment, instead of the formulation of new theories.

Theoretical Framework

Communication is not a mere passage of information from one person to the other. According to Winarso (2018), the process involves the transfer of meaning and understanding from the sender to the receiver through a known language. Therefore, for effective communication, a message should be adequately encoded, delivered through the appropriate channel, received, decoded, and adequately understood by the recipient. In organizations, communication is effective if the information passed to the workers contributes to overall business success (Tutorials Point, 2016). Communication leads to better relationships with workers, which in turn boosts their morale and performance. It motivates employees by clarifying how assigned tasks should be done, which results in high-quality outcomes. In addition, communication is instrumental in the coordination of activities, the achievement of personal goals, and implementation and response to changes (Winarso, 2018). Conversely, ineffective business communication has adverse impacts; it results in poor interpersonal relations, performance, and low customer satisfaction (Atambo & Momanyi, 2016). Despite the weighty role played by communication, most managers lack a clear understanding of the importance and strategies that can be employed to communicate effectively with the workers (Atambo & Momanyi, 2016). Hence, there exists a weak relationship between the management and the workers in such organizations.

Effective communication adopts the communication theory framework, which follows five viewpoints. The mechanistic view holds that communication is the transmission of information from the sender to the recipient (Juneja, 2015). The second is the psychological viewpoint, which suggests that communication is not only the passage of information, but also thoughts and feelings the sender is trying to convey, and the response from the receiver (Juneja, 2015). The social point of view holds that communication is dependent on the interaction between the parties involved (Juneja, 2015). The systemic view states that communication is the new message created after an individual interprets in in his or her way, and draws a personal conclusion (Juneja, 2015). Finally, the critical view holds that communication is a means of expressing power and authority among other people (Juneja, 2015).

Organizations that lack adequate communication do not perform well compared to those that communicate effectively (Tan & Husin, 2019). Therefore, the success of a business is dependent on vertical communication between leaders and their subordinates. The dependent variable considered in this study is vertical communication in the banking industry, whereas the independent variables are employee performance, morale, and ethics of completing tasks.

Literature Review

Various socio-psychological theories have been developed to explore the impacts of communication on employees. One of them is the individual difference theory, which states that people are physiologically, psychologically, and biologically different; hence, they cannot understand the same message uniformly (Nwata, Umoh, & Amah, 2016). For effecting communication, one must overcome this barrier by putting information in ways that the recipient can understand. The other is the selective processes theory, which holds that people expose themselves to particular messages, and retain them depending on the benefits they can derive from the exposure (Nwata, Umoh, & Amah, 2016). Therefore, people are likely to keep messages that are relevant to their needs. Consequently, effective communication might rely on the clarity and specificity of the information transmitted. Contrary to the others discussed above, the social relationship’s theory focusses on interactions between different people in a group, and the impacts of such involvements on the members (Nwata, Umoh, & Amah, 2016). This theory is more relevant to this study, as it emphasizes the role of communication in interactions.

Organizations are set to achieve individual goals, which primarily rely on employee performance. If the performance is well-coordinated, a business can increase its profitability. Customer satisfaction is closely related to the quality of services provided by an organization. Following the importance of workers, employers need to monitor any factors that might limit productivity (Nwata, Umoh, & Amah, 2016). As a result, the employees will have higher job satisfaction, reduced emotional problems at work, increased goodwill of the firm, and higher profitability (Nwata, Umoh, & Amah, 2016). Communication is one of the crucial instruments that are used to achieve this success. Nwata, Umoh, and Amah (2016) stated that communication is essential for all parties in an organization to interact. In turn, the interactions help members to define necessary tasks assigned by their superiors, articulate ideas on how to complete them, and to form beliefs of what is right or wrong in their practice (Nwata, Umoh, & Amah, 2016). Also, employee performance cannot be improved without communication (Nwata, Umoh, & Amah, 2016). Therefore, businesses face imminent productivity issues when leaders fail to communicate effectively with their workers. This is caused by confusion over how to complete assignments and unclear goals and standards.

Vertical communication in businesses increases employee engagement, which, in turn, boosts productivity (Mohammed, Patrick, Ahmed, & Rashid, 2017). Mohammed et al. (2017) suggested that an enabling organizational culture propels this phenomenon. For instance, a business with a friendly environment is more likely to guarantee employee engagement through effective communication. The social exchange theory, which holds that mutual benefits in a relationship results in more commitment, trust, and loyalty, can be used to explain the above example (Mohammed et al., 2017). When the workers feel that they are benefiting from their leaders, they will feel obliged to contribute to the organization’s growth through their work ethics. Conversely, if the employers feel that the workers are benefiting the business, they will support them and provide an enabling work environment. Consequently, the two-way relationship will create trust between the two parties. Such experiences will lead to a positive organizational culture, which will, in turn, fuel business growth (Mohammed et al., 2017).

In the banking industry, vertical communication results in a timely and consistent flow of information from the managerial level to the subordinates. This results in the engagement of employees in the decision-making process and motivation to complete a given assignment with the scheduled time (Nwata, Umoh, & Amah, 2016). Hence, communication helps workers to adjust well to their roles, and to maintain the required work output in an organization. However, the vertical communication process needs to go both up and down, to ensure that employees can communicate their ideas to their superiors. This way, they can participate in promoting understanding and corporation between the two parties, thereby creating a harmonious work environment. Nwata, Umoh, and Amah (2016) stated that the communication process should be consistent and enforced through policies that serve the interests of both the leaders and the subordinates. Also, to improve employee performance, communication should be concise, timely, and adequate (Nwata, Umoh, & Amah, 2016).

Summary

Effective communication is the primary tool leaders use to solve problems, convey ideas, directions, negotiate, and motivate their employees. In the banking industry, this type of communication strengthens interpersonal relationships with workers, which in turn improves the quality of service and customer satisfaction and retention. Organizations that lack adequate communication perform poorly compared to those that communicate effectively. Therefore, the success of a business depends on vertical communication between leaders and their subordinates. Communication leads to better relationships with workers, which in turn boosts their morale and performance; it also motivates employees by clarifying how assigned tasks should be done, which results in high-quality outcomes. Organizations are set to achieve specific goals, which mainly rely on employee performance, which, if well-coordinated, can increase their profitability. Following the social exchange theory, if workers feel that they are benefiting from their leaders, they will feel obliged to contribute to the organization’s growth through their work ethics. On the other hand, if the employers think that the workers are benefiting the business, they will support them and provide an enabling work environment. Vertical communication process to go both up and down, to ensure that employees can communicate their ideas to their superiors. Hence, they will participate in promoting understanding and corporation between the two parties, thereby creating a harmonious work environment. The communication process should be enforced through policies that serve the interests of both the leaders and the subordinates.

References

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