The impact of the style of management on problem solving

Introduction

According to Uche and Timinepere, (2012), management style is constructed in a business organization as a method for managing the different processes within the organization and it is a specific approach followed by a manager for managing the different operations with people in the organization using specific authorities with the purpose of achieving the organizational goals. The current paper is discussing the impact of the style of management on problem solving and investigating the literature regarding that topic. The style of management can leave a great impact on business organization as that impact can be either positive or negative and leadership and management of business organizations can identify the proper management style that can be appropriate for specific organizational needs and different business situations. It is proved by many evidences in the research that management styles have different impacts on the organizational effectiveness as the total management process includes many processes such as controlling, planning, organizing, motivating and leading and all these processes have their roles in producing a level of effectiveness of the organization according to the way each process is made by the organization's management. Management styles can differ according to many different factors such as the country, the culture, religion or the environment of the business organization. 

Literature Review

Autocratic management style

Ghorbani and Heravi, (2011) discusses how management styles can affect problem solving processes in an organization as they discussed the autocratic management style and confirmed that this style is not very effective in problem solving. HELLRIEGEL and SLOCUM, (1975) discussed the personality theory and how it can affect the manager's character to follow certain management styles in problem solving as the manager's character can decide the preferred style for him but at the same time they referred to the organizational character and confirmed that it interferes in the way managers follow certain styles in problem solving; this view is well regarded by other authors such as Adizes, (2004) discussed the way managers identify their preferred management styles and how this affects the way they take decisions and solve problems. Weber, Mitchell and Brewer, (2002) referred to the autocratic managers and how they solve problems as he stated that the autocratic leader makes decisions unilaterally, and without much regard for subordinates. As a result, decisions will reflect the opinions and personality of the manager, which in turn can project an image of a confident, well-managed business but at the same time fails in problem solving effectively and deeply because this style neglects the human element, focuses on criticism more than reward and uses control and authority of the manager to solve problems and end them which may lead to unsolved problems as the manager who takes the decisions and suggests solutions without regard to the opinions of the subordinates which makes problems appear again and perhaps in a stronger way. 

Participative management style

It is suggested by many authors such as Thurman and Jamieson, (2014) that the participative management style is effective in problem solving in business organizations as when the participative managers face a problem, they ask all the work groups to attend a meeting where everything relevant to the problem is presented and deeply discussed through brainstorming techniques that enables employees to make the needed feedback from reports and mind as this makes differences in setting opinions and suggestions regarding the presented problems. This style raises the employees' value of themselves which encourages them provide more creative solutions for different problems and encourage them to feel self confident regarding any solutions they may have but hesitate to suggest. Amtmann, (2005)discussed the impact of following the participative management style on problem solving as he related it to positive results and innovative solutions for different problems; he referred to the usefulness of team work activities followed by the participative managers who focus mainly on engaging the employees in decision making and encouraging them to discuss the suggested solutions for different problems by employees in order to choose from the most creative and fastest solutions that don't exert too much effort. The participative style runs the risk of alienating employees whose ideas were not implemented and then discussing these opinions to give all employees the chances for having their opinions and solutions applied. This management style can give managers the chance to prove they are effective leaders who can be as models to inspire employees to suggest new solutions. 

Situational management styles

According to Philippe, (2014), the situational management style is effective in helping the organization solve its problems efficiently and in providing employees with opportunities for employees to provide new solutions and suggestions for the different problems in the organization. Lussier, (2000) reported that most managers prefer the situational management styles in solving organizational problems as these management styles are varied and can adapt to different organizational problems presenting new innovative solutions, managers can change their management style according to the needs of the problems and the organizational situations related to it as they can use the autocratic style moving to the participative style or other different styles according to the nature of the problem needing to be solved. Hersey, (1984) explained how the situational leader can suggest different policies and techniques for problem solving depending on the organizational situations as there is a high level of flexibility in the situational management styles and it can allow many agendas for being applied. The situational management styles yet have some disadvantages such as including big numbers of employees which increases the difficulty of achieving the process of decision making as the more people are involved in decision making processes, the harder it is to reach a proper decision or solution for the organizational problems. Philippe, (2014), reported that the new generations are more flexible in choosing many management styles that enable them to provide new innovative solutions as new managers have much more knowledge and information than old managers in spite of having less experience but that knowledge can enable them to be dare enough to try new management styles that can give more areas for problem solving; he explained the situational management styles are able to create effective cooperative work environments that bears a great amount of motivation for employees and this can make employees more able to suggest effective solutions for different business problems; he explained that the situational management styles are adaptive models that can allow the manager to adapt his style to the employees' skills and he referred to four situational management styles which are the directing style, the coaching style, the supporting style and the delegating style. The directing style depends mainly on the manager's role in explaining the different solutions for employees and giving them the needed instructions to solve the problems and it seeks for managers' advice to employees and it can be another image of the autocratic management style. The coaching style includes explanation tasks to be done by the manager but it doesn't focus on collective responsibilities to be mastered by the managers but it gives employees more space for discussion and asking questions about decisions and this style can easily be paternalistic. The supporting style is mainly depending on relational dimensions as it encourages exerting efforts and encourages employees share ideas together and have open discussions and it can lead to drifts in the way employees solve problems. The delegating style of management can be very effective in solving organizational problems as it bears high motivation levels and more opportunities for employees to suggest solutions for problems but at the same time it can depend on self sustained employees which can lead it to be rather free from control than needed.   

Conflict Management Styles

According to Graham, (2009), organizational management depends on power, authority and control as main elements for managing the relationship between power and subordinates as this relationship can result in many conflicts and difficulties that may reduce the effectiveness of work and lead to failure in achieving the organizational goals if management styles were not properly chosen and used. Graham, (2009) discussed conflict management styles in business organizations and confirmed that they can be used for raising employees' job satisfaction when they well applied as they referred to the way management styles can control conflicts and reduce them among the company's human resources such as the traditionalist, behavioralist, and interactionist management styles. The traditional approach in conflict management depends on resolving conflicts by managers or getting rid of these conflicts as this view depends on managers' abilities in ending conflicts in any way that ensures there are no conflicts in the organization even if the reasons behind the conflicts were not managed by managers. The second technique of conflict management is the behavioralist technique as it is a management style for dealing with different problems and conflicts in the organization depending on ending conflicts between employees by solving the conflict and looking for the reasons behind them and make deals with all parties of the conflict. The third management style for conflicts within an organization is the interactionist approach which is a style of management that looks differently into conflicts as it is based upon the concept of the continuous resolving for conflicts and problems by managers and the importance of having innovative units in the business organization with the help of managers who focus on proper communication between them and employees. It is proved that the interactionist style of management is effective in ending conflicts among employees with leaves a positive impact on the employees' performance as ending conflicts deeply with a full recognition for their reasons and ensuring continuous controlling for the reasons of conflicts by managers can raise employees' morale and helping them work cooperatively in a healthy work environment which raises their productivity and makes them feel more belonging for the organization and this can raise their retention and reduces employees' turnover resulting from conflicts and working in a stressful work environment. According to Vokic and Sontor, (2009), other conflict management styles can be effective with simple conflicts but they need continuous following for the conflicts as they may cause employees to withdraw when they are forced on ending conflicts without recognizing the reasons behind them and solving them. Verma, (1998) suggested an integrated style for conflict management in business organizations that depends on using managers' powers and authorities in a communicative way that can stop those who make the conflicts and recognize the reasons for the conflicts through investigating them by discussions and understanding as this can be effective in solving the problems related to those conflicts.   

   

Conclusion

In conclusion, it can be stated that there is a great impact for the style of management on solving problems in the business organizations as this impact can be positive and lead to solving the problems when the management styles are well chosen and used by the managers and on the contrary, the impact can be negative and leads to more problems that are not solved if the managers are not able to choose the right management styles and focuses on traditional management styles that cannot provide effective solutions or that don't engage employees in solving problems and decision making as the current age needs creative solutions and new innovative techniques in discussing decisions and providing new solution for the different problems in business organizations. 

Recommendations

It is recommended that business organizations focus on the way the managers and leaders are leading employees, managing different problems and conflicts in the business environment as the management styles leaders and managers follow should be well chosen for the different situations and problems within the organization and each problem can be solved using a specific management style and the organization should make studies on the most effective management styles that were used in the organization and proved to be effective in problem solving. 

Nestle Corporate Social Responsibility

Introduction

Nestle is a big international company for producing milk products, cocoa, coffee, pet care products and other different food products that are estimated with more than 2000 worldwide brands. The company has a great history that goes back to 1866 when its first product was condensed milk as the company was established in Switzerland and throughout time, the company was able to set a good position for itself among food manufacturers in the world to have an international brand called Nestle group. The group had a main mission which is keeping the wellbeing and health of the consumers and attaining the trust of stakeholders through producing high quality products that are trusted and respected by all stakeholders. The company's vision is built on respect for others and providing the society with values products and services. The company keeps high appreciation and care for its stakeholders which is clear in its ethics and corporate social responsibility practices. (Nestle, 2015) The current paper is aiming at discussing how Nestle kept and attained the respect and trust of its stakeholders including employees, customers, suppliers and society through analyzing the company's strategy, ethics and its responsibility towards stakeholder following the corporate social responsibility that is clear in the rewards the company got in the field of Freeman's principles of corporate social responsibility (CSR). The research paper is explaining how Nestle practice business ethics with its stakeholders and it provides a critical evaluation for the company's practices in implementing the principles of Freeman regarding corporate social responsibility to the stakeholders of the company. 

Nestle is a company that has a specific definition for sustainable development as it depends on having a value for making the world a place that enjoys high quality food and at the same time, the company contributes to long term social development that involves maintaining an environment which is kept clean and healthy for the future generations. The company gives due care to its stakeholders such as consumers, employees, customers, shareholders and for the society as a whole; this can be regarded in the company's practices for promoting CSR based on the principles of CSR related to Freeman. According to Freeman, Velamuri and  Moriarty, (2006), any company that seeks sustainable competitive advantage should put its stakeholders on top of its priorities and this includes giving corporate social responsibility enough care by the practices of the company. According to O'Riordan, Zmuda and Heinemann, (2015), Nestle has many practices that promotes Freeman's CSR principles such as developing its suppliers by its strategy not to reduce raw materials costs and purchase more expensive raw materials of cocoa, milk, coffee and others as the company is only investing 67 million £ in cocoa farms in the period between 2010 and 2020 as it sets measurements for quality of the cocoa such as making the farmers plant in a healthy way for consumers and the environment, the company also gives care for the farmers themselves by educating their children and provide farmers with farming programs that depend on crop management strategies that are more responsible regarding controlling pests and planting more organically. This was affirmed by Pauly, (2013) who also added that Nestle is intelligent because this policy of better farming lead it to increase the number of suppliers who became more attracted to working with it; he also referred that Nestle has a special view for the CSR practices as it has a shared value creation principle related to what Freeman focused on as the shared value is shared between the company and all stakeholders. According to Freeman and Moutchink, (2013), stakeholders' development is a basis of CSR of any successful company. Nielson et al, (2014) referred to a practice that Nestle is doing and it is among its CSR practice based on Freeman's; it is its fight against malnutrition in many countries especially for children as for example, the company is adapting a project among its community partnership projects in Colombia as Nestle provided them with its crackers which are fortified with minerals and vitamins for children at schools to be consumed at breakfast, Nestle also provided clean water for the victims of Tsunami in Siri Lanka as according to Pauly, (2013) as he also focused on how Nestle focus on the society rather than on economic benefit. The past views show how Nestle exerted great efforts towards implementing CSR practices but according to Ihlen, Bartlett and May, (2011), Nestles needs to monitor how it is marketing for its products provided for the poor and certain society categories as they referred to the control practiced by the NGO over the way Nestle markets its products for certain categories as the organization warned Nestle from marketing products for the poor in  a way that contradicts its focus on social welfare as the poor shouldn't be harmed psychologically as Nestle marketed infant formula for poor mothers badly in developing countries but he also affirmed that Nestle changed its marketing strategy to be more respecting for the poor which confirms its following to Freeman's principles of CSR. Kiran and Sharma,(2011) referred to how Nestle focused on providing better life for workers in the factories producing milk in India as the company built more advanced factories and provided the workers with a better work environment in addition to improving their life by paying them more than the prices set by the government for milk production and the company also focused on keeping the environment sources by using less water, emitting less gases and it used less energy. 

Nestle has gained many rewards for its outstanding implementations for Freeman's CSR principles such as "Your Reward" which is a reward given by the UK as it is a type of recognition programs that is given to companies that apply the CSR principles, it is based upon appreciating those employees in the organization for their behaviors and attitudes that cope with the principles of CSR. (Corporaterewards, 2015). Another reward was given to Nestle as for its CSR is BJAN reward that is provided for the company for its participation in areas such as health, public welfare, education, women, sport, community relation, the poor, the talents and being friendly to the environment The company was honored with the reward in the gala night included Access Bank Plc, First Bank Limited, Nestle Nigeria Plc, Promasidor Nigeria Limited, Nigerian Breweries Plc, Guinness Nigeria Plc, MTN Nigeria and Laferge Africa. This was as a result of the works of the company which are related to CSR in the area in a way that can encourage other companies to follow Nestle in the way it goes through in sustainable CSR; these rewards are effective in encouraging the company itself to do more works related to CSR as they focus on positive works presented for the society and all stakeholders by the company which makes it exert more efforts to keep its level of excellence. (ngrguardian, 2015). Another reward is given to Nestle for its strategy in implementing the CSR principles of Freeman is that of Ghana as the country provides certificates for the company for its great participation in the Ghana society regarding the principles of Freeman such as health, public wellbeing and education of the poor. (ghananewsagency, 2014) These rewards are giving the company its real position among other companies of the world which tells that the company that gives much interest for practices of CSR deserves appreciation and respect by the society. This can push other companies towards participating in CSR activities and implementing them effectively to reach better competitiveness regarding the social responsibility appreciated by all people.

According to Bowie, (1999), business ethics can be regarded through a Kantian approach as Kant refers to actions in the business context and how they should be moral, he thinks that there is a maxim for every action done by the employees, he assumes that actions shouldn't be justified by lies or promises that are not based on real facts. An example is that when the manager wants his employees to do specific tasks, it is not ethical to promise them with a reward when the company isn't able to afford the reward. Gulcan, (2015) discussed how business ethics are related to applied ethics theories as he referred to the Teleological Theories- Utilitarianism which is focusing on the actions' results as those results that affect others are what determine actions to be ethical or not. He also referred to another theory which is egoism that is different as it refers to ethics through the actions themselves not the results. The Utilitarian is focusing on the acts of people and the alternative acts that affect them and others and in business this can be regarded through the organizations' policies and how following them can affect the employee and other employees, this can also be seen through the behaviors of the employees and how they affect themselves as they can decide how others can regard them and at the same time they affect other employees; for example when an employee's work results in cooperation in the department, this can affect others to be cooperative and affect the way others regard him as they will appreciate him more. Fryer, (2015) discussed business ethics as being human activities, he referred to the social contract theory that considers some social responsibilities that should be regarded by the employees and the business organization such as ethics related to the society such as charity and giving much interest to people in the community and their needs.

Nestle is a company that develops many practices in the context of its implementing to business ethics as it practices business ethics with its employees through providing them with a level of respect and appreciation seen in its motivation, reward and recognition to them. The company works according to a group of business ethics including honesty with employees, respect them, fair and equal dealing with them and being compliant to the laws, there is a standard of behavior the employees and the organization are following in addition to the policy of share value the company adopt. All employees are equal without regard to their race, culture or religion.  As for the customers, the company is very keen to provide them with the best products regarding healthy ingredients, fortified products and products that are free from harmful substances. The company is also keen on providing them with a level of consumer communication where consumers can claim any complaints and request anything they need. The company has a code of ethics that ensures the customers with having products that prevent malnutrition and this is seen in the way it markets its products as there isn't an attitude of following bad dietary life styles in the advertisement of the company but on the contrary, the company focuses on rational consumption for a better life.  (businesscasestudies, 2015) The company is commitment to provide customers with all nutrition facts on the packets of the food they buy and it is honest in every detail of information. The company's practices regarding business ethics include its practices to society as the company respects family life in its advertisements, it gives special interest for people in rural areas by making special campaigns for them and it makes special food for children which is fortified with vitamins and minerals. The company tends to use the best raw materials with the least consumption of water and other natural elements to keep the world safer. In all countries the company worked at, the company tended to respect the social culture of the people of that country. It was also keen on providing the workers in these countries with health care and food and education. (ethicalperformance, 2011)  As to suppliers, the company is obliged to follow the laws and legislations and the terms of the contracts written with each supplier with regard to the values and beliefs' respect of each supplier. Suppliers are all dealt with fairly and without any discrimination and the company is confidential regarding the security and privacy of suppliers regarding any information that may be relevant to them. (Nestle, 2015)   

Nestle focuses on sustainability of business ethics within the organization as it reviews all related issues with business ethics and analyzes how customers and the society regards Nestle ethics and then the company improves its ethical code; an example is that the company realizes the fact that people once boycott its baby milk due to the marketing campaign that focused on its being for poor people in developing countries and that it is better than mothers' milk so the company realized this and changed its marketing strategy for the product. (Curtin, 2005) The company focuses on purchasing the best types of raw materials as this is a part of its strategy of sustainable development. The sustainable development of Nestle depends on focusing on ethics in current and future practices of the company related with products, employees, customers and suppliers. The company has sustainable criteria for producing good coffee and it sets a standard for the level of quality the coffee beans should be on. Sustainability is also seen in regard to having customers satisfied with the social change the company is sharing in as fairness is focused on to be a social demand as, for example Nestle provides farmers with a 20% more prices than the market prices for the fairness of their coffee beans that can then be produced for the public in a fair price compared to its high quality. The company seeks sustainability of ethics regarding the environment and the way it uses its sources and the rational use for sources as water, farmlands and human resources in addition to the respect for animal needs as it has special vets for dealing with diseased animals and prevent getting any raw materials from any diseased animal. (Carrigan, 2005). 

Conclusion

In conclusion, it is important to focus on how business ethics are important to any business organization that needs to succeed. Corporate social responsibility is a major interest for the companies that need to have competitive advantage and to build a strong brand with a good reputation to all stakeholders. Nestle company is a great company that works in the field of food products including milk, coffee, chocolate and other products and the company is keen on keeping a high level of CSR regarding its stakeholders including the suppliers, consumers, employees and the society as a whole. The company is implementing many practices based upon Freeman's CSR principles that include respect stakeholders, recognizing their needs, having shared value creation criteria for them and to be ethical in all the company's practices with its stakeholders. Ethics have great interest by the company as all stakeholders are ethically treated by the company and this includes keeping sustainable ethic of codes as the company tries to improve its ethical practices and change its business ethics level to the better. Nestle is in need for doing more research regarding the theories and applied practices of business ethics and corporate social responsibility in order to improve its current position in the market.  

A Study on leadership and performance of khalifa company

Introduction

All businesses need leadership as an important function needed for raising the company's performance to achieve business success and organizational goals. Leadership provides the business with a vision for directing employees towards achieving competitive advantage needed for the business promotion. The current paper is discussing leadership and performance in Khalife company.

Research Objective

To reach a conclusion about the relation of leadership and performance of Khalifa company.

Literature Review

Karamat, (2013)discussed leadership as tool helps the company improve its organizational performance through skilled leaders who are able to use the company's resources, develop them and employ them to satisfy certain organizational needs involved within main goals. Sustainable competitive advantage can be reached through many leadership practices and then performance can be evaluated by leaders through performance indicators such as the company's net profit, clients' satisfaction, market reputation and costs.

According to Carter and Greer, (2013)Strategic leadership is a type of leadership followed by leaders in order to set a strategy for raising the level of performance within the organization. Strategies include certain symbolic activities  assigned to each employee by leaders to recognize best individual performance. Strategic leadership requires high efficient leaders who are characterized with having good behaviors that can influence others' performance as good behaviors reflect leaders values.

Timothy et al, (2011) discussed the styles of leadership and how choosing the appropriate style for the organization can affect the individual and organizational performance. There are many leadership styles such as the transformational and transactional leadership styles. Customer satisfaction is highly affected with the style of leadership followed by an organization as it controls the business relationships through the functions of leaders and the way they are performed with. 

According to Yun and Mulhern, (2009)a good leadership usually puts human elements at top of its priorities as employees should be understood by leaders, their wishes, desires and ambitions should be considered as this raises their morale and encourages them to work better and feel that they belong to the work which improves their performance. Customers also should be cared for within leadership plans regarding their needs, interests and inspirations.

As to Popa, (2012) change is very important for leaders as change management is a basic practice of leadership. Change is a step towards improving a company performance as it replaces old practices with new ones suitable to the new technologies and the new needs of the environment inside and outside the organization. Innovation and creativity are major requirements of change and leadership has to apply them on all its practices.

Research Philosophy

Acheampong and Mkansi, (2012) reported that research philosophy is the development of information, knowledge, background and ideas relevant to the research. Interpretivism is a research philosophy that requires the researcher to make interpretations for the study elements in order to put personal views of the researchers and implement them on the study according to the interpretation process. The researcher who uses interpretivism uses diverse approaches of criticism in order to reach reality.

Research Approach

Thomas and Bergold, (2012) referred to research approach as a group of certain steps and procedures that form a plan for a research as being based upon data gathered through research methods and analysis for this data. The plan set by the researcher identifies the approach of research. Inductive approach was chosen because it depends on observation and explanations developed by the researcher through discussing theories related to the research according to certain hypothesis to be applied at the end of the research.

Research Strategy

Jebreen, (2012) referred to a research strategy as some procedures the researcher has planned for in order to be followed to conduct the research. The inductive approach includes a research strategy that depends on surveys, questionnaires or ethnographies in order to conduct the research according to a specific methodology.

Ethical implications in this research

The current research is following research ethics such as confidentiality, reliability and privacy on high dependence on keeping all data relevant to the participants secured and not to be revealed within the research or to anyone else, participants were gently asked to do the questionnaire according to their consent and after consent. The research methodology depends on respecting the participants and their desires of hiding names and personal information from being revealed within the research. The questionnaire doesn't include any inconvenient content to the participants or any information that bears harm to the environment, laws or general morals.

Research Methodology

Research Design

Degu and Yigzaw,  (2006) asserted that the research design discusses the type of the research which could be descriptive, experimental, meta analytic or review and the research sub type such as the descriptive or the case study. The research design function is to focus on evidence from data gathered to be evaluated. Descriptive analysis is going to be used in this research. Descriptive analysis depends on statistics gathered using research methodology as data is analyzed according to the used variables. Number of cases which are valid should be known in order to provide a correct measuring.

Sampling

Samples were gathered from Alkhalifa company in Oman as the questionnaire was delivered to 23 employees in the company from different departments and in different job ranks. The questionnaire depends on questions  for four questions answered with strongly agree, agree, disagree and strongly disagree and the fourth question was an open one expressing personal opinions of the participants.

Analysis and Findings

Chart 1-4

 Answers for the first question were 15 answers strongly agree, 6 agree, 1 disagree and 1 strongly disagree with percentages 65%, 26%, 4,4% and 4,4% respectively which asserts what Karamat, (2013) confirmed about the effect of leaders on employees performance as it is clear that leaders in Khalifa company have great effect on the employees there and this is confirmed by the percentage of answers with strongly agree and agree as they both represent 91,2% from the whole answers and this doesn't mean that all employees think so as there are two answers as one strongly disagreed and another one who disagreed that leaders in Khalifa company affect employees performance.

Chart (2-4)

 The second question dealt with the degree of employees' satisfaction with the changes leaders are implementing within the company as Chart 2 shows that most participants agreed strongly that they are satisfied with leaders change as 19 person agreed strongly representing 82,6% and 6 persons agreed representing 17,4% and no one either disagreed or strongly disagreed representing zero percentages each. This confirms what Carter and Greer, (2013) stated about the strategic leadership that considers change one of its responsibilities as it is clear that leaders in Khalifa company are considering change an important part of their strategy because all employees see this.

Chart(3-4)

Chart(3-4) represents answers of participants on the third question that deals with the relationships between employees and leaders in Khalifa company as it shows that most participants agreed strongly that there are good relationships between leaders and employees in Khalifa company as 20 persons strongly agreed on that and 3 persons agreed representing 86,9% and 13,1% each respectively. This refers to what Popa, (2012) discussed regarding the relationship between leaders and employees and that it depends on deep understanding and cooperation just as leaders of Khalifa company.

Chart(4-4)

Chart(4-4) present percentages of question 4 answers which showed how leaders in Khalifa company encourage employees to do better as answers showed that they really encourage employees to do better as 18 persons strongly agreed and 5 agreed with percentages of 78,2% and 21,8% respectively. According to Yun, (2009) the employees need high encouragement from their leaders as this raises their performance and make them more enthusiastic to do better. 

Question 5

All answers affirmed that the company is following a transformational leadership style that depends on deep understanding for employees' needs and tends to achieve organizational changes which are tended to enhance employees performance as according to Sahgal and Pathak, (2007) transformational leadership affects the employees performance towards changes that are developed on the long run.

Validity and Reliability

This research was conducted on a valid sample from Khalifa company in order to measure how far they are satisfied with their leaders and the changes they are implemented to perform changes and the nature of the relationship between them and their leaders. Participants showed great responsibility in dealing with the questionnaire and they were so cooperative.

The current research depends on real questions and real answers from an organization that follows transformational leadership style and is applying changes according to the company's needs.

Motivation in the Business Organization

Introduction

Motivation is a process that depends on urging individuals to work for achieving specific goals, targets and aims through guiding them to following goal oriented behaviors. It is the factor that orients people to do effective actions through activating their different behaviors by social, biological, emotional and cognitive forces. The employee who is well motivated works hard due to the feeling of belonging to the organization and due to the feelings of appreciation and respect resulting from proper motivating techniques. Motivation is very important in business as it is considered a catalyst needed for employees in addition to owners of business because it helps them reach the business goals and reach the sought competitive advantage. Motivation is also necessary for attaining goals and setting  main purposes of the business and reach them. The main role motivation plays in business is influencing the human resources’ reactions towards raising benefits ratio for the business as it works on the physical and emotional sides of people to make them efficient in performing the tasks required for the business effectively and this returns to the business with high revenues, profits and increased productivity. Low motivation can result in slowing the work, reduced productivity, more costs and reduced profits.

Body

Major Components of Motivation

Motivation has three major components which are activation, intensity and persistence. Activation is important as it is the tool that initiates behaviors needed for the work, intensity is a factor that pursues goals set by managers and owners of the business and persistence is the effort exerted continuously to achieve those goals in spite of facing any obstacles as its main purpose is fighting those obstacles and reducing costs that they may cause. 

Types of Motivation

Intrinsic and Extrinsic Motivation

Intrinsic motivation is a type of motivation which reflects the inner motivation stimuli that an individual has and that they come from inside and from his desires to achieve the better for the work, the employee whose motivation is intrinsic has beliefs in achieving the best for the business.  
Extrinsic motivation means that the stimuli of the person’s motivation comes from outside as the employee whose motivation is intrinsic has main targets from working hard such as having a reward, promotion or bonus but the enjoyment with the work itself is not included within this type of motivation.

Incentive

Incentive motivation is including monetary and non monetary rewards and recognition. When incentive motivation is applied in business organizations, employees find it more interesting to provide the business with all what it needs of goal achievement as bonuses and promotion systems work as goals to be reached by employees themselves.

Fear Motivation

Consequences and results are the main bases that fear motivation is based on as when the business organization fails in motivating its employees, fear motivation is used as when employees fear punishment and negative consequences when work is not properly done, they work harder to avoid such punishment and potential penalties. (Olsson, 2008)

Characteristics of Motivation

1. Motivation is a psychological concept

Motivating employees or any other individuals depend on the fact that anybody has main needs and there should be psychological; factors in meeting these needs such as motivation which should come from the inner of the individuals. Motivation includes two main desiring factors which are the fundamental needs which are represented in main needs of food, clothing, housing and so on in addition to the needs of self satisfaction such as respect, esteem, appreciation, recognition, development and promotion so motivation should be built on meeting all these needs and satisfying the individual physically and psychologically in order to reach the main goals.

2. Motivation affects the whole individual

Motivation deals with individuals as everyone represents a specific whole unit so motivating the person should target all the needs of the person and not just one need, for example, monetary recognition cannot be satisfying if applied alone without other types of non monetary recognition which proved being successful in making individuals perform better and provide their best for the place they are working in.

3. Motivation is not an ending process

Human beings are social creatures so they have continuous needs and every new day may bear new needs for the individual so motivation depends on this fact as if a specific need is well satisfied in the person, motivation should look for other needs to motivate the person towards achieving them.

4. Motivation doesn’t neglect basic needs

Motivating a person should begin with looking for the needs a person requires more than other needs because if an employee for example is in need for money, an honor certificate will not be motivating for him but on the contrary, it could frustrate him and delay his work so motivation is based on seeking the person’s basic needs and satisfying them.

5. Goals are motivators

Motivation cannot separate goals from motivators as any business has goals and employees also have their own goals that they work to achieve so motivation should be based on recognizing individuals’ own goals and the setting the work goals to achieve them as individuals’ stop being motivated after goal achievement so goals should be recognized, planned for and achieved in stages and phases.

6. Motivation is a complex phenomenon

Motivation has direct and indirect sides which could be hidden in the person’s inner soul and to motivate persons well, inner motivators should be monitored or at least sought in order to know ways to activate and motivate persons according to what is shown and hidden of motivators.

Importance of Motivation

1. Putting human resources into action

Motivation enables management of businesses to use its human resources effectively and get the best of what they can provide to the other business physical and financial resources so it turns human resources to be on action of bringing more benefits for other business resources.

2. Increasing efficiency and outputs

By making a relationship between outputs and general efficiency in work motivation  urges  individuals to be more enthusiastic to work  in order to provide better outputs  by raising the effectiveness of performance and by urging employees to be more efficient when asked to do specific tasks.

3. Achieving organizational goals

Goal directed behaviors is developed in employees through motivation as it declares the directions employees should work on and sheds the light on the basics that an individual should work for and achieve. Planning and organizing for a business should include goals of the business to achieve and should motivate employees according to these goals.

4. Developing friendly relationships

Because employees’ satisfaction is driven by motivation, an incentive plan for employees’ benefit can be made in order to initiate many things such as opportunities for promoting employees, incentives which can be either monetary or non monetary and penalties for employees who are ineffective. Managers are responsible for using motivation as a tool for building good business relationships among employees and managers and among work mates themselves as this is important in raising the business cooperation atmosphere, brings stability to work, increase levels of productivity and reducing employees’ dissatisfaction with the work.

5. Bringing stability in workforce

Motivation  can raise the sense of belonging in employees by making them feel satisfied with the work and aspiring for more rewards and honors so this reduces employees’ turnover and raises their retention and this in turn raises the stability of the work and of workforce.  (Managementstudyguide.com, 2015)

Theories of Motivation

Motivation theories depend on classifying needs so there are some theories classifying needs such as the following: (Beck, 2004)

1. Maslow

Maslow had classified needs according to his famous needs’ hierarchy that includes five basic needs which are self actualization, esteem, belongingness, safety and the physiological needs such as food, water and sex. Maslow suggests that the satisfaction of needs should begin from the end of the hierarchy as physiological needs must be first satisfied before thinking of satisfying superior needs and then motivation should target these needs at first and then upgrade to superior ones.

2. Alderfer's ERG theory

Alderfer makes a classification for needs to be of three main categories ordered according to a hierarchy as they are the growth needs, relatedness needs and the existence needs. His theory resembles that of Maslow with differences in changing the position of sex from the bottom. Satisfying higher needs are more important in this theory which means that motivation of individuals differs according to the different natures of individuals. 

3. Acquired Needs Theory (mcclellan)

This theory is stating that life experience can lead an individual to have needs acquired via experiences such as the need for having powers, the need to control, the needs for achievement and the need for promotion. Motivation should consider the changes occur in people’s needs and address them.

4. Cognitive Evaluation Theory

Cognitive evaluation theory is based on having two main motivation systems which are the intrinsic and extrinsic systems and that motivation should emerge from them. 

5. Two Factor theory (Herzberg)

This theory suggests that motivation is affected by two factors which are hygiene factors and motivators, hygiene factors refer to things which are found in the work place, for example, and of great importance to employees such as comfort seats, air conditioner and good desks and if they were removed, employees are not satisfied and motivators are things that when are present, they motivate individuals to do better as a result of their satisfaction.

6. Equity Theory

This theory suggests that the rewards should be suitable for the amount and type of work done in order to be satisfactory and there should be equity and fairness in methods used for motivating different people in one place.

7. Reinforcement Theory

This theory depends on using reinforcement in order to control certain behaviors such as positive reinforcement to reward individuals for doing good behaviors and negative reinforcement to take away a good thing as a result of doing bad behaviors. 

8. Expectancy Theory (Vroom).                                                                                                                                             

   This theory is a combination of all the previous theories as it combines equity with behavior control with other motivating elements. (Managementstudyguide.com, 2015)

Conclusion

Motivation is very important in all organizations today especially in business organizations as it is the main factor that urges individuals to work and provide the best for the business they are working in and because motivation can result in adding too much to the business of competitive advantage, profits, good reputation and having a strong human resource asset.  Human resources can be well motivated using many types of motivation such as the intrinsic and extrinsic types. Motivation has many characteristics that should be considered before motivating individuals so as to achieve the utmost benefits from motivation. Motivation is very important because of the good results it leaves on individuals and organizations where it is applied. Motivation is based on many theories such as Maslow theory and many other ones.

Recommendation and personal opinion

Regarding motivation, it is recommended that all organizations study the theories related to motivation well before applying any motivation plan and before setting goals to be achieved in the business so as to measure how far motivation can succeed and can achieve its expected results. Great organizations that use motivation according to scientific bases can achieve the best of their expected organizational goals as they measure everything before applying motivation plans which can result in having great profits and spending the least expenses on motivation plans. My personal opinion is that before beginning motivating individuals, studying their natures, discussing their needs and recognizing their dreams and desires will help too much in choosing the right proper way to motivate them. I think that companies or business entities that neglect motivation face many turnovers and cannot retain their employees who seek other places where they can find appreciation and satisfaction so the most important thing to urge employees to bring success to the organization is motivating them properly and choosing the best ways to motivate employees according to a pre set research about the real needs and desires of those individuals as motivation is a tool for investing in any organization human resource.

Improving the Work Environment to Reach Competitive Advantage

Introduction

Work environment is among the major factors that control the organizational growth and affect it as it can work for the welfare of the business organization and help it reach the required competitive advantage or on the contrary, it can reduce the level of success a business organization has and decrease its opportunities in reaching competitive advantage; this depends on the nature and the impact of the work environment.

Many authors discussed the relationship between the work environment of the business organization and its competitive advantage as many of them have found that improving the work environment can help the organization reach competitive advantage. Claretha, (2012) related employees performance to the nature of the work environment and she also referred to the culture and strategy of the organization as factors that affect the work environment and affect its ability to lead to competitive advantage. This can be well investigated according to the critical analysis in this research.  

The current research paper is critically analyzing a very important matter for any business organization which can be summarized in the question:"How can the work environment be improved to help business organizations reach competitive advantage?" This question can be answered through some objectives as analyzing the role of leadership in forming a positive work environment, discussing employees' engagement, identifying the organizational strategy, investigating the factors that form a better work environment and understanding the methodology of using the organization's human resources as tools for bringing in competitive advantage when they are in an improved work environment.

Literature Review

According to Wiskow, Albreht and Pietro, (2010), positive supportive work environment can be gained via positive leaders who are able to improve the work environment till it can be suitable for providing better results that can tell the organization has reached competitive advantage, this point of view can be regarded by  Bill and Flint, (2011) who asserted on the role of the leaders in ensuring an attractive work environment for employees by making strong relationships with them built on trust and understanding as well as communication as this raises their morale and job satisfaction and create a communicative work environment that leads employees to reach high work performance which is a main path for competitive advantage. This view is largely true but needs more explaining for the leaders' role. According to Madu, (2015), leaders can work as motivators within the organization and their motivation should be built upon the organization's culture which he defined as the values, behaviors and sociology of the organization and individuals. This is a good opinion because by following this, the leader can create the suitable climate for competitive advantage as when he understands the organizational culture; he can work hard for improving the work environment with what individuals need as well as what makes them achieve the goals of the organization to reach success and competitive advantage. Some authors reported that leadership role in improving the work environment is represented in the way they manage the business organization and push employees towards working hard and exerting their efforts to achieve competitive advantage such as Barney, (1991) as he sees that human resources are a basic capital for the business and managers should work hard to invest in this capital; he is true in considering the human resources are a capital that should be invested in to achieve competitive advantage but he has to be deeper in his regard to the management role in motivating the employees as they shouldn't be included with other resources of the company, they need to be regarded and dealt with specifically in order to be well allocated for bringing competitive advantage. It is better to invest in human resources via leaders or managers according to what Garmise, (2014) reported as he confirmed that leaders should build the workforce and then to invest in them and this can be achieved through providing them with the work environment that includes all they need of means of comfort, training opportunities, mutual understanding, communication and respect in addition to appraisal and motivation strategies.

According to Young et al, (2011), improving the work environment includes employees' engagement which raises employees' value proposition and helps employees provide high quality work which raises the general effectiveness of the organization; this view is good but it was completed by the views of Lokwood, (2007) as she added that work environments should be improved to be boundaryless in order to achieve competitive advantage and this means that the work environment should be enhanced with a wide variety of abilities and possibilities that can attract, employ and retain talents who can be engaged easily in the organization and work as a part that belongs to it. Kaliannan and Adjovu, (2014) discussed how employees can be engaged to provide the organization with success as they asserted the need for a developed work environment that uses the latest training methods for making employees coping for the latest world technologies and updates of the industry the organization belongs to as when employees are engaged in such a competitive work environment, they can perform better and competitive advantage will be the result of their performance. Many views also added that there is a big role for the organization's strategy in improving the work environment to reach competitive advantage; Reeves and Deimler, (2011) discussed an important relevant point which is improving the work environment according to the latest business trends globally as neglecting these global changes in the work environment is what creates a gap between performance and competitive advantage which may turn to be impossible with a retarded work environment, they added that the organization's strategy should include reaching sustainable competitive advantage and plan for reaching it via the organization's environment and human resources. This view is very strong and provides a clear understanding for using the business's strategy in reaching competitive advantage.

According to Ram, Bhargavi and Prabhakar, (2011) , better work environment can be got by developing the current business environment and improving it to be satisfying and supporting for all employees in addition to its proper usage of the business different resources and the right distribution for workload on individuals which creates an atmosphere of satisfaction and co-operation, a good work environment provides its employees with the chance to improve themselves and their abilities with additional advanced skills such as language usage, information technology using and having strong capabilities related to the industry. This view was asserted by Patrick and Kumar, (2014)who referred to how to manage the diversity of the workplace and turn it to be a factor for bringing competitive advantage and not to cause problems; they explained how to create a positive work environment through managing diversity in the work place, this was a good step towards improving the work environment as according to Green et al, (2012), many work problems usually occur as a result of misunderstanding but diversity management can ensure respect, understanding among employees and high efficient work as diversity management can ensure effective team work, high levels of communication and accepting others' ideas which encourages innovation and creativity that are necessary to reach the competitive advantage.

According to Dobre, (2013) human resources can provide the best they can and more than expected when they work at an improved work environment, this improvement can be via many way such as making the work environment a more collaborative one. Heerwagen et al, (2004) referred to the collaborative work environment that contains knowledge workers who work in interactive group works rather than working individually as this raises the work effectiveness and leads to better results regarding reaching competitive advantage. Other authors such as Ajla, (2012) who added that human resources should have workspace satisfaction which he focused very different from job satisfaction as this means the human resources are satisfied with the work environment and he referred to many factors that should be regarded in the work environment such as giving interest to the physical, psychological and physiological health of the human resources, this view can also be seen in a study by Dieleman and Harnmeijer, (2006)who has a different view that relates high performance that leads to competitive advantage to the health of employees as he mentioned that raising the level of human resources' health care within the work environment can retain them and job satisfaction which are two conditions needed for maintain competitive advantage. Competitive advantage is as Rumelt and Kunin, (2003) referred To, reaching the competitive value of the industry in the market and being unique among competitors in addition to getting high profitability and productivity, this level of excellence can be reached when employees are working for achieving it as a main goal and this can never be done when they are in a poor work environment. Jassim, (2015) stated that reward and recognition can be basics of any work environment that can lead employees to achieve competitive advantage as when the employees are well recognized and rewarded for their effective work, this view was also confirmed by Willingham, (2014) who asserted that to improve the work environment, it is important to keep it healthy by many things such as employees' recognition and reward which are basic motivators but he added that promotion is also a motivator that can ensure a healthy work environment that can lead employees to work for achieving competitive advantage. Forastieri, (1991) referred to another important element that should be focused on when the business organization tends to improve its work environment which is ensuring safety measurements as he focused on the importance of continuous checking for safety measurements in the work environment in order to ensure the physical comfort that can help employees work better and take the organization to better market competitive advantage. This is very important but the psychological safety is also important to be ensured within the work environment because physical safety isn't enough to ensure real high working performance, this can be seen in the views of Chevalier, (2007) who focused in his book on the sustained high working performance and how to attain it via the improved work environment that gives much interest to the individual and his psychological needs such as appraisal, recognition, respect, understanding and promotion, he also referred to the importance of selection for talents when the organization recruits new employees as any organization that seeks competitive advantage and tries to improve its work environment should care for selection because selection can bring the talents that can provide the organization with creative and innovative ideas and that can add efficiency to the work environment.

Conclusion

In conclusion, it is important to refer to the importance of having a work environment that can help the organization to reach competitive advantage and that there are many features that should be found in such a work environment. To improve the work environment, it is necessary to focus on the role of positive leaders in ensuring a positive work environment where employees have raised morale and job satisfaction due to a communicative work environment where they can express their needs and suggest their creative ideas. Human resources are a basic capital that needs to be invested in by supporting them with a work environment that is safe and comfortable and that provides them with opportunities for promotion and recognition. Human resources are the basic tools for achieving the competitive advantage to the business organization so they need to be well selected and motivated in addition to retain them in order to have the potential enthusiasm that makes them wok for reaching competitive advantage. Any organization that seeks competitive advantage, is recommended to improve its work environment to urge employees to perform better and reach high working performance, this work environment should be physically and psychologically safe which means to provide them with the physical comfort and the elements of psychological safety such as recognition, promotion and mutual understanding in addition to assure group work and cooperation within the work environment. Improving the work environment should be sustained by the continuous check for the elements that ensure a safe collaborative supportive work environment.

The Development of Commercial Banking in India

Introduction

The modern economic world considers banking systems as very important factors in business, industries and trade. It is also considered as a commercial agency. There is a new region of modern banking that emerged as a result of the Industrial Revolution as a need for the new economic society and to help promote the economy of countries. Countries have been giving much interest to banking development by enhancing their banks with new technologies, services, online services and by having a diversity of banking such as commercial banking and specialized banking such as Islamic banking and housing banking. Modern trends have been used to develop banking industry all over the world. Societies changed a lot recently which resulted in new needs for individuals regarding banking transactions and services which made it urgent to develop the banking industry to cope with the information technologies in everything. Countries that sought competitive advantage in the banking industry tended to develop the services of banks and to make a diversity of banks that can satisfy the needs of all social scales. Banking systems have changed to cope with technologies and facilitate banking delivery processes. The current assignment is discussing banking development through a country which is considered a leading country in banks development. This country is India. India has changed a lot of its banking industry strategies by expanding the base of its commercial banks and having many specialized banks. The assignment provides a background of the Indian commercial banking, a critical discussion for the development of Indian commercial banking and the development of its specialized banking. (Rao, 2007)

The Development of Commercial Banking in India

A commercial bank is very essential in the banking industry of any country as it provides capital and other needs for businessmen so that trade, agriculture and other industries can be developed. A commercial bank helps in the development of foreign trade, money transfer and production support. The commercial banking sector in India witnessed reforms that occurred in two phases, the first phase followed the Report of the Committee on Financial System, 1992 and it was concentrating on strengthening measures as well as enabling them. This phase witnessed developments such as: adopting new agricultural technology known as the green revolution and nationalizing 14 commercial banks in 1969 and another 6 banks in 1980. Agricultural credit and rural credit were reformed by using a Multi Agency Approach (MMA) and then agricultural finance was well helped by commercial banks. This period witnessed establishing of two new institutions which were the farmers' service society and the regional rural banks. Reforms witnessed a second phase that was following the Committee on Banking Sector Reforms recommendations in 1998 as this phase stressed on aligning the Indian standards with the international best practices through improving transparency levels and improving disclosure standards as well. This followed the banks nationalization phase in 1969 during the last decades, specifically the last four decades. India has a commercial banking system that developed to be branched to two main parts; scheduled banks and non scheduled banks. Scheduled banks include scheduled cooperative banks and scheduled commercial banks which include four types of banks which are :Public sector banks such as SBI state bank of India, private sector banks which turned to be old ones and new ones which mean those banks established after 1991, foreign banks in India and the regional rural banks that refer to the banks that help farmers in rural areas by credits and other aids. The mentioned Indian banks are under the Companies Act except the foreign banks. The scheduled banks mean the banks registered under the Second Schedule of the Banking Regulation Act of 1965 under the conditions of : having a capital which is paid up and less than 500,000 Rs of reserves, satisfying the Reserve Bank of India. (Nandy, 2010) The development of commercial banks of India included developing human resource and its management so as to promote the banking industry to reach best levels of services. India has a changing economic scenario which forces banking systems to cope with it by being supported with strong bases of human resources especially in commercial banks as they need an environment of service oriented business which in turn need good bases of business human resources, well trained employees, good business environment and a good working environment with employees who really belong to the business. (Rohmetra, 1998)

The Development of Specialized Banking in India

Specialized banks of India are various are of all types of financial institutions. These institutions are providing various financial services according to the specialty of the bank. These banks provide their clients with services as well as participating in the India economic developments through many certain missions. There are some Indian financial institutions that their work is on both the central level and the state level such as : Industrial Development Bank of India, The Industrial Financial Corporation of India, ICICI and Export Import Bank of India. Specialized banks developed to meet the needs of the clients and there are some of them mainly establishes for serving clients such as institutions set for providing services for their clients in specific domains such as housing, agriculture, railway, scale business, roads, power, shipping, Islamic services and others. There are some specialized financial institutes in India that witnessed developments in guaranteeing products to export companies such as India Ltd, Export Import Bank of India and Export Credit Guarantee Corporation of India. There is a great growth in the Indian Banking Sector that helped the Indian society to progress and enhanced its economic growth. Rural banking in India has improved for providing poor rural societies with services and small loans and such development was under the umbrella of the Reserve Bank of India RBI.

The RBI has shared a lot in the development of India specialized banks as it prepared a panel led by Nachiket Mor as this panel had a goal of letting specialized banks be catered to low income households. Such specialized banks will provide all Indian citizens with the chance of having a bank account in 2016 in addition to facilitating payment, deposit and withdrawal operations. Among these specialized banks that the panel provides are the Payment Banks which enable small projects of low income households to be set up by the help of payment services the banks provide. (Jagranjosh, 2014)

Among the specialized banks in India is the National Housing Bank NHB which helps a lot in promoting the housing development in India. This bank witnessed great progresses and developments as since 1999, the bank has witnessed many reforms and progress as the bank is following a plan of adding new technologies and techniques for adapting commercialization as there are programs for promoting farming systems, getting experts from outside India and using advanced banking technologies to provide the best services for its clients. (agritech, 2014)

Islamic banking is a type of specialized banks that India is taking serious steps towards establishing such type there to provide the Islamic banking services for Indian citizens. This type of banks is not going to accept deposits but it will be only used for investments and this will increase the venture capital activity of banking industry in India. The Reserve Bank of India (RBI) has already started an era of reviewing and studying setting up Islamic banks in India and its regulations as India is a country that contains many Muslims who will welcome these types of specialized banks that can provide services of Islamic banking as Murabaha and others. An internal committee has been set up by the central bank of India to discuss the matter and examine it according to everything required to achieve it. There are some countries that practice Islamic banking in the Middle East and other areas of the world and they are set following Laws of Shariah and this Indian model will be different from conventional banking in two major things which are not allowing receiving or paying interests and investment prohibition in any matter that Muslims consider sinful such as trading in alcoholic substances, making them, doing pornography or gambling activities. Islamic banks need discussing and relooking into their regulations which is very important before setting them up and this matter was revived with the new development of the Indian Central Bank which witnessed opening many differentiated banks with great diversity in specialties in India such as payment banks and smaller banks and Islamic banks as a start for a new era of banking development in India. Reforms in the Indian banking sector involved developing new types of specialized banks such as Islamic banks and others.    (firstpost, 2014)

Diversity in the Indian banking and the new developments also occurred in new private banks and also foreign banks which are also considered types of specialized banks and India is witnessing great developments in such banks as after 1993, there have been many of such banks serving many people which raised the competition among banks and in turn enhanced the Indian economic society a lot. Deregulation of interest rates for both deposits and also for advances raised the competition between the various types of specialized banks and other banks as well. Commercial banking also revived as a result of this and this also created a new space for emerging new specialized financial institutions such as mutual funds and housing financial companies and others as banks sponsor them and this began since 1996 and 1997 and developed to reach a good level today. Another type of specialized banks in India that the Indian government has stated its launching is the new Private Local Area Banks(LABs). Rural savings will be much helped by such banks as they could be easily mobilized and channeled within local areas into investments. There are set guidelines that the RBI has issued regarding establishing these banks and this was since 1996 and were approved then that seven of these LABs can be set up in the private sector. Then the RBI agreed that five LABs can be licenses in Andhra Pradesh, Karnataka, Rajasthan, Punjab and Gujarat. The guidelines for establishing these banks that were issued by the RBI in the year 1996 provided a chance for new investments and developments of the Indian banking industry in general and in developing of specialized banks specifically and this lead to great development in Indian economy and trade.(Shodhganga, 2014)

Conclusion    

Banking industry is considered a great source of refreshing the business market in any country and this made all countries give great interest and care for developing their banking industry through developing the banking systems, banking services, updating the technologies used in these banking institutions and training their employees on using new and modern banking systems. This evolution helped both clients and banking systems and this raised the space for competition among banks which could be of any type. Commercial banks have great roles in upgrading the economic levels in any society as they can provide many services for business entities and businessmen whether for small or huge projects that help governments develop and progress. India is one of the most leading countries in developing its banking system and in creating new reforms in the old banking systems to refresh and promote its commercial life and economy. India is a country that has a good base of commercial banks in addition to the many types of specialized banks such as Housing banks and Import Export banks and others. India is thanked that it is also continuing in creating new specialized banks such as Islamic banks for example which is a matter that attracts more clients and lets more individuals share in developing the economy of India. The RBI has many good steps and participated a lot in developing Indian banking through creating many specialized banks and also developing and reforming the existed Indian banks.