The concept of leadership is neither a recent nor a unique development to the public sector. Leadership is regarded as the most significant role of the public sector leaders which is implemented to bring resolutions for issues and challenges experienced in specific business scenario. The focal point of leadership further plays an integrating and engaging role among several (Businessdirectoryoman.com 2018) Human Resource Management entities incorporating recruitment and selection, induction and development, performance management, along with public services and succession strategies. The report will intend to evaluate structural framework and the existing Leadership Value Systems and Structure of United Finance Company S.A.O.G and its impact on the leadership technique, management and the employee base. The paper will further cast light on the way the finance sector through which the company operates has evolved along with its difference between its competitors. United Finance Company SAOG is known as a public shareholding company based in Oman that provides services related to leasing and financial solutions (Ufcoman.com 2018). The organization further offers a broad array of products catering both conventional as well as non-conventional finance, cooperate deposits along with insurance provides through several bank institutions. It must be noted that UFC SAOG has been fundamentally involved in the provision of vehicle and equipment financing, composite loans, bridge loans, installment plans along with funding of receivables and leasing in the Sultanate of Oman. UFC SAOG being founded in the year 1997 is headquartered in Muscat along with a network of branches located in Ibra, Firq, Al Qabail, Salalah, Barka and Mawelah (U.S 2018). Furthermore, it must be noted that the company provides services of vehicle and equipment financing in the Sultanate of Oman. The company operates through Corporate and Retail sectors and offers heavy equipment and commercial vehicle finance. The company has recently announced unaudited income results for the period that ended on 31st March, 2018. UFC SAOG has further reported to earn a total income of over OMR 2.5 million in comparison to its last year’s income which was estimated at OMR 2.8 million. The major shareholders of the company included Oman Hotels & Tourism Company SAOG along with First National LLC (Businessdirectoryoman.com 2018).
The organizational design of UFC can be analyzed by viewing at 7 chief internal elements namely strategy, structure, systems, style, skills, and staff and shared values.
Strategy- UFC according to recent reports has granted the principle to merge with Bank Nizwa on further operations. Bank Nizwa has disclosed in an official statement related to the Muscat bourse that it has interacted to United Finance through a letter of interest in order to reveal the potentialities of a strategic unification between two entities (Yaseen 2014).
Structure- UFC’s primary business services involve banc assurance, consumer finance for vehicles and other loan requirements, debt consolidation. Furthermore, the company purchases financial contracts with startup companies (Al Kharusi and Ba?ci 2017). The company’s mortgage products and services operations along with specialized investment funds are operated through UFC’s subsidiaries.
Style- United Finance Company considers evolving as a true market leader within the domain of finance in relation to well-developed risk asset portfolio, economic health and good corporate governance through an immensely self-driven as well as motivated team consisting of visionary leadership as a form of its corporate leadership ( Gheeraert 2014). In order to accomplish consumer expectations and further achieve their vision, UFC SAOG has introduced several attractive services for composite loans, debt factoring as well as investing of receivables and start-up companies in the Sultanate of Oman.
Skills- UFC SAOG being one of the major investment companies endeavors to offer enhanced quality service to its customers (Singh and Fida 2015). The Nucleus Software with its expansion in the UAE has been leveraging its industry expertise as well as solution skills that will facilitate UFC in developing its competitive edge as well as product innovation capability.
Values and Principles-The Company aims to be the leading financial services organization for their investors and the community through the providing excellence in the department of customer service. Furthermore, UFC has successfully developed associations that reflect an encouraging difference in the lives of their consumers (Pradhan et al 2014). System- The United Finance Company leadership team is accountable for supervising its operational as well as business progress activities to accomplish sustainable development and further achieve company’s mission and vision.
Employee Base- UFC Oman comprises an asset base of RO 120 million, with over 12,000 contented customers, around 7 branches and more than 140 employees (Manchanda and Mukherjee 2014).
Several studies have observed the impacts of transformational and transactional leadership techniques of the UFC firm. The leaders of the company acknowledge its employees to accomplish specific vision for the company itself that constructs effective work productions. Functioning within the culture that promotes freedom in religion, the leaders of UFC further engages into intellectual stimulation that involves appealing the rationality of the subordinates and facilitating them to challenge the assumptions and to review previous problems in innovative ways (Imam and Kpodar 2013). The intellectually stimulating leaders may further empower the employees of the company to have active participation in the decision making procedures and further developed an opinionated staff base.
Oman Orix Leasing Company, one of the competitors has recorded highest business volumes in its record. Gross lease receivables of the organization raised by 14% to RO 260 Million in comparison to the RO 220 Million in 2016. The development has resulted in an increase of over 1.50% in the operating revenue earnings (Looney 2013).
The National Finance however has maintained a positive development in the trajectory. The net finance assets have rose over 4% during the year in order to reach RO 200 million from RO 190.5 million in 2016 (Rajasekar 2013).
On the contrary the Muscat finance has continued to maintain a relatively cautious approach towards asset growth and net loans and advance reduced by RO 6 Million in 2016. In 2016, the company has reduced its provision charge to the earnings by 9% (Al-Malkawi, Pillai and Bhatti 2014). It is further to be noted that incremental provisions that comprised of around RO 1 million and cumulative provisions that included reserve interest achieved RO 16 million.
The reduction of liquidity in the finance market has increased the cost of short-term investments for United Finance Company and has further triggered the risks and challenges about steady rise in the rate of interests within the existing economic environment (Halkias 2013). It has been further revealed that against the challenging economic situational context, this organization has been experiencing the role of preserving adequate available of assets as well as improved asset quality (Momany and Pillai 2013).
The economic scenario in Oman has been undergoing steady improvements as a consequence of growth strategies and competitive policies and regulation. The ban king and finance sector of Oman is primarily regulated by the Central Bank of Oman (CBO) which is further conferred with the role of monitoring the economic policy of the country. In 2015, the six listed finance service companies have been reported to generate the total profit of approximately $690 million entailing the equity return of over 13% and also the development of 25% in comparison to past years. In the context of lending loans, the deposit levels in the Oman’s finance sector is having a rapid increase in recent years that is well advanced of the GDP growth (Alshubiri 2017). The return on assets (ROA) was around 1.5% and return on equity was over 10% have remained unaffected in the relation (Mishra, Grunewald and Kulkarni 2014). However, the financial performance have remained well-established in 2015, with profits at the largest bank in Sultanate, which is the Bank of Muscat, that has been increasing approximately simultaneously in the initial phase of 2015 by 5% to OR 8 million. The Al Omaniya Financial Services has reportedly made an offer to achieve a 100% stake in the United Finance that has been considered as on one its associate financing company (Rabari and Storper 2014). Furthermore, NBO as well as Bank Nizwa had both separately penetrated into the merger conversation with the organization in 2016, though the finance deals were not finalized (Cherian and Farouq 2013).
The Muscat Finance Company among the top competitors of United Finance SAOG has been operating with multiplicity of nationalities that incorporates both its leaders as well as personnel that provides a rich combination of management techniques and traits. In the opinion of the Middle East analysts, the Muscat has been notably have been segmented as multi-active cultural traditions in the tripartite classification (Guardian.ng 2018). However, the company adheres to significant consequences as to the way the leaders and the ones responsible in managerial positions will communicate not only with their own subordinate employees but further with the workers.
However, on the other hand, the managers of the Oman Orix Leasing organization follow a linear-active approach and further demonstrate and investigate technical expertise. The leaders of Oman Orix Leasing Company follow the approach of deal-orientation by perceiving immediate achievements and productive outcomes (U.S 2018). With the enhancing innovative leadership techniques the company has managed to acquire over 50% equity venture in the Pak Oman Microfinance bank Limited, with the process of significant issuance of shares by POMB (Times of Oman 2018).
It is further to note, that the foreign managerial executives dealing with the leaders of Al-Omaniya Financial Services have shared certain experiences of their amalgamation with the company that facilitates effective hospitality services, integration while dealing with the important subordinates (Halkias 2013). The leaders of the company unlike the other two companies are well aware of the implicit behaviors and sentiments. The leaders of Al-Omaniya reflect adherence to tradition as well as resistance towards abrupt transformations. The managers allow time for decision making by consensus (Mohamed Shahwan and Mohammed Hassan 2013).
As per the Oman annual global survey around the leaders and stock marketers anticipated a growth of its company’s revenue at the rate of 45%. However, it has been noted as a decline from the figure estimated in 2016 that recorded a rise of over 65% (Cherian and Farouq 2013). These differentiations have reportedly affected the efficient and challenging operational platform that has posed threats to their customer experience. The Oman financial sector has been increasingly merging with robotic process automation (RPA) along with artificial intelligence in order to distinguish the level of customer engagement (Abduh and Othman 2014).
It is further to note that the credit off take in the UFC organization has remained unresponsive in 2016 with a marginal growth of around 10% between the third quarters of 2017-2016. The rate of credit intensification was investment at a large rate by government borrow that developed by the rate of over 4% at the end of third quarter of 2017 (Businessdirectoryoman.com 2018). Furthermore, the rate of loan from government-centric entities has contracted during last year. UFC in recent times has been witnessing an effective but low rated credit rise of around 0.5% on the contrary to the retail investment segment (Wilson 2013).
The credit off take however, is anticipated to stabilize in the next quarters because to the economic respite. The slower financial development and rising ineffective loans is anticipated to pose certain challenges for UFC for further progress. However, such threats have facilitated the organization into consolidation mode and further to take consistent steps towards the enhancement of profitability as well as cost efficiencies (Shailesh 2018).
The leaders of the UFC SAOG is recognized for establishing the goals and targets of the company whereby these purposes of the company are further intended to achieve through effective transparency and clarity of the set roles and responsibilities of the employees ( Gheeraert 2014). The employee base of the company is reportedly being motivated by the leaders towards successful accomplishment of the established goals. UFC comprises of an exchange association between its leaders and the subordinates of the organization.
The United Finance Company SAOG in recent times has introduced an advanced financial literacy manual in order to assist consumers to sustain their economic status in a more effective way and further combat the growth of indebtedness. The Financial Literacy for Individuals has revealed that several financial companies have been facing consumer debts that have been growing further resulting to the lack of economic expertise (Momany and Pillai 2013). With the recent federation challenges, the company expressed incompetence in making wise managerial decisions on their financial transactions thereby assisting the consumers to achieve financial autonomy and further decrease the potentialities of financial trouble. As per the Oman financial data, over 7 million cheques worth $ 35 billion, that was maintained by the Oman clearing Cheque System during the initial three months of 2018 was reported to be bounced (Imam and Kpodar 2013).
In the significant shift away from Saudi and UAE restraint in challenging to force the global community and multi nationals from taking positions in the one year dispute, important financial institutions that are being challenged because of the disputes that erupt during the declaration of diplomatic as well as economic prohibition of Oman(Businessdirectoryoman.com 2018). Furthermore, the nation has countered to the efforts to influence United Finance Company to reduce by further declining future business endeavors with Dubai bankers and consultants.
United Finance of Oman revealed the issues related to internal fraud and scan worth over $ 130 million whereby, few employees at the company had allegedly withdrawn funds from dormant customer accounts (Ufcoman.com 2018). This case has been further heard in the court that involved some employees of the company. However, Oman police and UFC were been successful in retrieving around 620 million dirhams of the money that has been taken.
Conclusions
Therefore, from the above discussion it can be concluded that the concept of leadership varies from geographical locations from the same organization in certain aspects. However, the issues and challenges faced by recent companies are primarily related to the competitive scenario situated in the finance sector of Oman whereby, innovation along with advanced business strategies have been introduced to maintain the rate of sustainability in the rapidly shifting global economy. The role of leadership is to produce certain effective resolutions for issues as well as challenges that have been experienced in certain commercial situation. The paper has effectively evaluated the structural framework by focusing on its system, techniques, styles and employee base. In addition to this it has also observed the leadership value system and impact on its employees and management further analyzing the differentiation between its local competitors namely Oman Orix Leasing Company, Muscat Finance and Al-Omaniya Lease Company by focusing on its market growth and revenue generation. Further to this paper evaluated the impact of this differentiation on United Finance Company thereby revealing the experiences of the role of maintaining sufficient accessibility of assets and quality. Further to this, the report has focused on the development of Oman’s finance sector by providing data on the implications on the company. Lastly, the paper has intend to study the transformations occurred in the Oman’s finance sector with the three significant financial risks it has faced in recent times. The paper concludes by providing recommendations in order to achieve growth and sustainability.
(I)The higher management system of UFC SAOG in order to increase its market growth must introduce improved online payment services and discard the conventional mode of payment methods as the major section of its consumers in recent times have been advancing towards digital services.
(II) As UFC introduced a wide array of initiatives to sustain improved level of dedication to the customers, the company must enhance its role in CSR activities towards the society by delivering to the wellbeing of the stakeholders and the local communities where they have their operations.
(III) UFC SAOG is recognized for its revenue sharing programs and internal promotions along with its consistent office hours and health care provisions. However, UFC in recent times have been experiencing concerns related to its cultural aspect, thus the company must develop new ideas and find resolutions to go from bottom level to the higher level instead of applying the reverse methodology. Managers must introduce an effective feedback procedure to increase customer satisfaction.
1b) Leadership Value System and Impact on Employees and Management
(IV) With the rapid shift of consumer financing, UFC SAOG management must seek methods to transform with the shifting times whereby mere ‘word of mouth’ advertising will not produce any effectiveness.
Analyze Difference among Competitors
(V) Furthermore, the leaders of the company must follow the recent trends of the finance market and try to cope up with the companies competing within the sector. Services such as collection procedures, online systems, skip trace procedures are helpful tools which would facilitate the company to generate growth and sustainability.
Competitor differentiation impact on United Finance Company
(VI) UFC SAOG must merge with other commercial organizations in order to cope up challenges caused due to the decrease of liquidity in the Oman financial sector.
(VII) The financial institutions of the Oman Finance industry, must specify types of information and data includes where to find information as well as the terms and conditions of general comparative along with objective information related to the risks and returns of various kinds of services which the finance companies of Oman require to provide to the clients based on the financial goods and services which must be acknowledged in effective manners.
(VIII) Financial institutions should be encouraged to provide information at various levels to accomplish the needs and demands of the consumers. Furthermore, small print, complex documentation must be avoided.
(IX) As most of UFC’s competitors have outlined structural and operational frameworks of their companies, the company must merge with advanced technological systems such as robotic process automation (RPA) with an amalgamation of artificial intelligence in order to enhance its level of customer satisfaction encourage automated managerial procedures.
3) Changes in Oman’s Financial Sector
(X) The increasing shift of customers’ preferences must be taken into consideration by UFC SAOG by concentrating on its service range and quality along with its level of convenience with its customers.
(XI) UFC’s greatest competitors like Muscat finance and Al Omaniya Leasing Company has been promoting advanced technological applications for payment and made refurbishments in its infrastructure. Similarly, UFC must also implement these transformations and promote digital revolution to increase its growth.
(XII) UFC must adhere to varied code of conduct and principles in order to develop a positive impact on the level of its profitability along with its rate of revenue returns of the company’s shareholders.
(XIII) Though UFC has been recognized for the leaders to successfully establish the aims and purpose of the organization, however the leadership technique must encourage changing cultures and preferences of the consumer and employee base to increase customer and employee sustainability.
4) Critical challenges faced by United Finance Company SAOG
(XIV) UFC must take positions during crisis situations in global community to avoid further threats to the company.
(XV) UFC must improve the levels of its protection level during the process of funding and verify customers’ accounts of both employees and customers to avoid any fraudulent situations.
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