Impact of leadership style on bank profitability: Case study of a bank in Bosnia and Herzegovina

Management : Journal of Contemporary Management Issues

Mersiha Alić¹  Emira Kozarević²  Adisa Delić² 

[1] Indiana Institute of Technology;University of Tuzla, Faculty of Economics;

关键词: banks;    leadership;    leader-member exchange (LMX);    in-group exchange;    out-group exchange;   

DOI  :  

来源: DOAJ

【 摘 要 】

The goal of this paper is to demonstrate the extent to which the quality of the leader-follower relationship, expressed by the LMX coefficient, affects the bank profitability. Banks characterised by a high level of LMX possess a successful social atmosphere and interpersonal relationships, which is reflected in the emotional support and willingness to share resources, knowledge, and information between employees. Such a relationship between leaders and followers contributes to creating favourable social atmosphere, significantly affecting the overall performance of banks. Empirical research presented in this paper uses the data collected from a business network of a specifically selected Bank. The data was collected via a modified version of the LMX-7 questionnaire, focusing on each branch of a selected bank. Concrete indicators were analyzed (such as net profit margin, ROA, and ROE), which helped establish a link between profitability and the degree of leader-follower communication exchange (measured by LMX coefficient). The results reveal that the applied leadership style directly impacted on the profitability of a selected bank, indicating that this finding could be used as input for management systems of similar financial institutions as well as a catalyst for further research in this field.

【 授权许可】

Unknown