Investigating the relationship between managers' decision-making style and analyzing the financial approach of banks in Gilan province

Educational Thesis for receiving a master's degree (M.A.)

Field: Public Administration Major: Human Resource Management

Research Summary:

The purpose of this research was to investigate the decision-making style of managers and analyze the financial approach of commercial banks in the fiscal year 2013. For this purpose, 96 middle managers of 6 commercial banks, including Mellat Bank, National Bank of Iran, Saderat Iran Bank, Sepeh Bank, Trade Bank and Workers' Welfare Bank, have been investigated and analyzed. The independent variable of the current research is the decision-making style of managers and the dependent variable of the research is the financial approach. The present research is descriptive and correlational based on the practical purpose and the method of data collection. The method of collecting information is in the field. The data collection tool for measuring the independent variable is the Scott Webrus decision style questionnaire from 1995, which includes 25 items explaining 5 decision styles (rational, intuitive, dependent, avoidant, and urgent). This questionnaire is standard and has been used in many researches abroad, while in separate researches, its validity has been measured and its validity has been confirmed by interviewing experts. The reliability of the instrument was also calculated using Cronbach's alpha method, the value of 0.7. It should be noted that to evaluate the financial approach of the mentioned banks in 2013, the reports of the Ministry of Economic Affairs and Finance and the financial statements audited by the auditing organization in 2013 were used. After distributing and receiving the questionnaire and extracting the data, the findings of the research in order to check the hypotheses, first the normality of the variables was checked and after ensuring the normality of the variables, spss software and the Pearson correlation coefficient test were used. The findings of the research show that there is a significant relationship between the decision-making style of managers and the analysis of the financial approach of commercial banks. The findings also showed that banks with rational and dependent decision-making style managers have a higher financial approach and banks whose managers have an avoidant, intuitive and immediate decision-making style have a lower financial approach.

Key words:

Management decision-making style, financial approach, bank, capital structure, growth, profitability

Introduction:

Human resources are the most important and valuable assets of an organization. Office, factory or any institution. The type of performance of people in any organization has a direct relationship with their productivity. For example, a depressed, dejected and unmotivated person cannot be the source of work as it should be in his work environment, and on the contrary, a healthy, energetic, motivated and hopeful person with high efficiency, creativity, initiative and ability and with the highest productivity and work efficiency can be a valuable force for his organization and ultimately contribute to the organization's productivity (Azmandian, 2013).

In recent decades, all kinds of institutions have witnessed fundamental changes in the field have been their structures, functions and management styles. Current institutions have given more importance to understanding, adapting and managing the changes in the surrounding environment and have excelled in acquiring and using up-to-date knowledge and information in order to improve operations and provide better services and products to clients (Cheng Ming Yu, 2005).

In this chapter, firstly, the statement of the problem is explained and then the importance and necessity of the research, the theoretical framework of the research, research objectives, research assumptions, theoretical and operational definitions of the research and finally the scope of the research are discussed.

Statement of the problem:

The subject of approach evaluation in the organization has become so important that experts in management science believe: "What cannot be measured cannot be managed". National, the creation of new capabilities, sustainability and promotion of the world class of companies and institutions (Azmandian, 2013).

One of the organizations and institutions in a system that plays a role in regulating economic and social equations is the bank. In the meantime, the bank manager, as the head of an organization, pursues a specific goal, and the main role in this field is the decision-making style of the manager.. Today, bank managers need to measure and evaluate the approach of branches in order to plan and manage the affairs of their branches so that they can compare their branches with each other and be aware of their strengths and weaknesses. At the same time, managers should take into account the basic point that there is no decision-making style that all management experts fully agree on, rather they all emphasize that different situations require different management styles, so managers should not wish for the best management style (Rezaian, 2018). It reaches (Alagheh Band, 1381).

Banks, especially state banks that are structurally massive and sometimes are responsible for the circulation of government funds, improving even one percent in their improvement programs will contribute significantly to the provision of services to the people and the management of the bank. All over the world, bank operations are considered as one of the most important economic activities of any economic system. Any activity that requires the acquisition of capital and financial resources undoubtedly requires the involvement of banks and financial institutions. Due to the very important and fundamental role of banks in most economic activities, examining the approach of banks in the country's banking system, most of which are state-owned and created with national capital, like other economic institutions and the public sector, has a special place (Hakirt and Nasiri, 2013). Competitive behaviors allow managers to prevent the wastage of valuable resources of the organization and make the resources needed to provide better products or services available to everyone (Da'ai et al., 1388).

Nowadays, banking has become a completely competitive business all over the world, due to the fact that the main and real products offered to customers in all banks are more or less the same, the strong need to differentiate from competitors is inevitable (Amirshahi et al., 1388). The global classification as well as the special attention of the honorable government and parliament to banks has made the issue of improving the approach of state-owned banks very important (Ministry of Economic Affairs and Finance, 2009).

Public trust in the bank is considered its main asset The emergence of even a slight stagnation in the approach of the bank can be considered as a sign based on its weakness in the eyes of the people. Such a sign of weakness may weaken people's confidence in the bank and make it more difficult for the bank to compete in the market. Loss of people's trust may cause depositors to withdraw their funds from the bank. Therefore, the bank's liquidity situation is under pressure. Bank mistrust can also encourage the best borrowers to diversify their banks to support their funding sources. It is unlikely that a bank that has significantly less income than the average income of the same group will be able to compete with them. A bank's weak approach may force it to try to increase its income by making risky loans or offering fee-based services that reputable banks avoid. In addition to that, the bank may try to reduce its costs by exercising excessive control over employees or postponing necessary discretionary expenses in areas such as training, mechanization, and reserves covering loan losses (Ministry of Economic Affairs and Finance, 1389). Considering the dependence of the financial approach on the decision-making style of managers, in this research, the effect of the decision-making style of managers has been tried as an independent variable relying on 5 decision-making styles. Rational[1], intuitive[2], dependent[3], avoidant[4] and urgent[5] Scott and Bruce[6] on the financial approach and its components (capital structure, profit, growth) have been evaluated as dependent variables.

In the present research, attention is paid to this issue. Is there a meaningful relationship between the decision-making style of managers and the financial approach of banks? Until the early 1950s, experts believed that the main cause of the backwardness of developing countries was mainly the lack of financial and physical capital. The logical solution resulting from such a frame of mind was that countries should obtain the capital needed to implement development programs in various ways.