System Theory Management Concept for RBI Grade B Exam Notes

By Gaurav Tripathi|Updated : April 20th, 2022

In the RBI Grade B exam, Management plays an important role in the Phase 2 exam. System Theory is an important chapter in the Management syllabus of RBI Grade B exam. You can expect around 3-5 marks from this chapter based on the previous year's exam trends.

In the RBI Grade B exam 2022, you can easily score full marks in this section with a good approach. We will be covering the whole leadership chapter in-depth, for better preparation for the RBI Grade B exam.

Table of Content

System Theory (Leadership Theories)

What is System Theory ? 

Systems leadership is a set of skills and capacities that any individual or organization can use to catalyze, enable and support the process of systems-level change. It combines collaborative leadership, coalition-building and systems insight to mobilize innovation and action across a large, decentralized network.

In this post, we will discuss System Theory in depth? 

  • Systems theory treats an organization as a system.
  • A system can be either closed or open.
  • A system is any set of distinct parts that interact to form a complex whole.
  • An organization is a system with parts such as employees, assets, products, resources, and information that form a complex system.

What is the difference between open and closed system ?

  • A system can be open or closed. A closed system is not affected by its environment. An open system is a system that is affected by its environment. Most theorists treat an organization as an open system.
  • An organization continuously interacts with its environment and adopts principles of efficacious (effective) adaption with a view to take suitable advantage of this interaction so as to achieve its goals.
  • Adaption is a process through which a system makes itself suitable for meeting its environmental requirements.  Since the environment is dynamic, the organization makes suitable changes in its working from time to time.
  • With the result, the organization devises its task and social systems keeping in view its external environment.
  • There are interactions within and between task and social systems.
  • Task requirements of the task system are affected by organizational constraints and task constraints in whose context a task is performed.
  • Agent’s co-evolution (change and counter-charges in agents) is affected by structural modes (organization structure, rules, regulations, and other formal prescriptions) and the existence of many heterogeneous agents.                                                                                 

Because of these interactions, four types of leadership patterns emerge in organizations in stages. Brief characteristics of these patterns are presented as follow:

What is meaning of Formal Leadership ? 

 Type of leadership:  transformational and transactional; influence: authority/position based;  control: top-down; communication; vertical; context: a large number of people in a predictable and stable context.

What is the meaning of Emergent Leadership ?

Type of leadership: emerging; influence: based on skill and knowledge of an individual and his acceptance by the group; control: individual accountability; communication: vertical and horizontal. context: comparatively small number of people fluctuating between different attractions.

What do you understand by Shared Leadership ?

Type of leadership: self-managed team: influence; shared among participants; control: collective self- regulation; communication; horizontal; context: relatively small number of people in an open-ended dynamic context.

What is the meaning of Integrative Leadership? 

Type of leadership: interdependent; influence: irregularly oscillates between the formal leader, several individuals (emergent leaders), and collective; control: collective self-regulation (for policy making) and individual accountability (for operations): communication: multi-directional-- vertical, horizontal, and diagonal; context: can deal with complex and unpredictable contexts.

You can go through the following links for RBI Grade B Exam 2022 preparation:

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 Thus, System theory of leadership has opened a new thinking in analyzing leadership as it takes a holistic approach. However, this theory is not very popular because of two reasons. First, this theory is still in evolutionary stage and many variables which affects leadership are not been identified precisely. This problem may be overcome with the passage of time. Second. This theory is quite complex because of involvement of numerous variables. But then, overcoming complexity is the real art of managing.

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  • The following books may be referred to cover this topic exhaustively:

    • An introduction to Economics – A W Stonier and DC Hauge
    • Monetary Theory and Public Policy – Kenneth Kurihara
    • Indian Economy – Mishra and Puri
    • Indian Economy – R. Dutt and KPM Sundaram
    • Economic Growth and Development – Mayer and Baldwin
    • Financial Management – Prasanna Chandra
  • In addition to the above booklist, some additional resources that be referred for the preparation of FM Section for RBI Grade B Exam are:

    • RBI Circulars
    • Editorial Section of The Economic Times
    • FAQ section of important bank websites namely SIDBI, NABARD, RBI, EXIM
    • Daily Current Affairs Analysis
    • NCERT Business Studies (Class 11th and 12th)
    • Byjus Exam Prep Study Material
  • The paper of the Finance & Management in RBI Grade B Mains Exam will consist of 65 questions carrying 100 marks. The duration of the paper is 90 minutes. It is an objective type paper, wherein each question will have one correct answer. 

  • We suggest you to start your exam by attempting all moderate and easy level questions with laser focus accuracy. Majority of questions in the exam will be direct that is "Factual in nature". Hence, you must memorize facts , percentages and numbers for finance.

  • Current Affairs linked to the chapters mentioned in the syllabus is asked in recent years. For the questions related to static portion, you need to have deeper understanding of the topics and focus on building conceptual clarity.

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Regulatory Bodies

tags :Regulatory BodiesFinance and ManagementRBI Grade B OverviewRBI Grade B Exam AnalysisRBI Grade B Cut OffRBI Grade B Question PapersRBI Grade B Admit Card

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