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Abstract
This review describes the intricate relationship between transformational leadership, work alienation, and organizational structure in the banking industry. The literature review yields evidence of a very strong relationship between the style of leadership employed and organizational structure on the motivation levels of the rank and file and the levels of work alienation present in community banks that are trying to shift to a more sales oriented focus to remain competitive in their markets.
Introduction
The banking industry has undergone tremendous changes in the last three decades. From a strict regulated environment, the banking and financial services industry underwent deregulation, which sparked an increase in competition, followed by a bailout from the federal government. Winston (1998) discusses the effects of deregulation on the banking industry and finds that the increased merger activity occurs within one decade of deregulating an entire industry. These mergers, in turn, facilitated the large-scale exit of weaker companies. This increase in competition forced the more inefficient firms to improve their performance or disappear.
The time period of deregulation occurred between 1970 and 1994, as 38 states lifted their restrictions on branching. Banking companies were allowed to expand in some states by establishing multi-bank holding companies, even though intrastate banking was generally restricted. In the mid-1980s, the Office of the Comptroller of the Currency (OCC) permitted nationally chartered banks to branch freely in those states where savings institutions did not have branching restrictions (Stiroh & Strahan, 2003). New technologies (such as advances in credit scoring techniques and the development of large customer information databases) applied to banking products may have paved the way for the complete elimination of geographic markets (Kroszner & Strahan, 1999). Furthermore, interstate banking and intrastate regulation were a causal factor in the convergence of market share across all states as well as the steady market share of good banks (Stiroh & Strahan, 2003).
In order to be able to survive in this newer competitive environment, banks have changed their organizational culture to one that fosters proactive behavior and sales. An organization's sales culture was seen as the growth-oriented facet of the market oriented firm. The growth that organizations pursued comes through a focus on the customer in whom relationships are built through the creation of value for...