An Organizational Review of the Banking Industry - Case Study Example

Table Of Contents Introduction……………………………………………………………………………..2 2. Basic Organizational Components……………………………………..………….……3 2.1 Inputs…………………...………………………………………………….……………3 2.1.1. The Environment……………………………………………………………………3 2.1.2. Resources…………………………………………………………………………....4 2.1.3. History……………………………………………………………………………….4 2.1.4. Strategy………………………………………………………………………………4 3. The Organizational Transformation Process…...……………………………………….5 3.1. Tasks…………………………………………………………………………......5 3.2. People……………………………………………………………………………6 3.3. The Formal Organization………………………………………………………..6 3.4. The Informal Organization………………………………………………………6 3.5. Outputs…………………………………………………………………………..7 4. Conclusion……………………………………………………………………………….8 5. Work Cited……………………………………………………………………………….9 An Organizational Review of the Banking Industry 1. INTRODUCTION The first vital measure in redesigning and leading a prosperous large-scale change in an organization is to entirely understand the performance dynamics of the organization. It is almost impossible to recommend a suitable remedy without first analyzing the nature and magnitude of an organization’s problems. In most cases, senior leaders assume top positions in an organization without thorough knowledge about the structures and trends of the organization. This leads to knee-jerk reactions in trying to solve problems without addressing the underlying issues thoroughly and conclusively. Such leaders hastily spot obvious similarities between the new circumstances they face and difficulties they have solved before, with the assumption that the former strategies will work again (The Oil Spill Contingency Planning Process 56). This case study reviews the underlying factors affecting the growth and development of the banking industry and focusses on the organization’s potential to carry out its duties efficiently and effectively. With the incorporation of the congruence model, this paper will give suggestions on how it can offer an entry point for a large-scale change in the bank. By simplifying the complications and reducing complexity to manageable levels, leaders will be in a position to understand and forecast the essentials of behavior and performance. In a nutshell, it addresses questions concerned with the demands of the environment to the bank, the quality and accessibility of the resources used, and the major phases of development in the organization. 2. BASIC ORGANIZATIONAL COMPONENTS 2.1. Inputs Inputs are factors that constitute the "givens" in the organization. These are the first-hand materials that the organization has to put into play for the smooth running of business. There are various types of inputs that affect the organization in various ways. 2.1.1. The Environment In a wider scope, banks fall under the financial services industry and they are readily influenced by a larger environment that consists of people, direct and indirect competitors, social and economic forces as well as legal constrictions. In a deeper perspective, the banking environment specifically includes clients, competitors, labor unions, special interest organizations, regulatory regimes and technological and economic conditions (Rašković, 77). It inflicts demand on the organization in such a way that the clients’ preferences and requirements dictate the pricing of financial products, quality of service and pricing. It is also limited by constraints such as legal prohibitions, court action, insufficient technology and government regulation. On a positive note, it is linked to opportunities such as technological innovation, expansion of new markets and elimination of trade barriers. Conclusively, the environment, both internal and external, affects the banking industry. 2.1.2. Resources Resources include both tangible and intangible assets in the bank and include the employees, capital, data, technology and also the bank’s reputation. The latter is a vital ingredient both internally and externally since it is a benchmark through which employees, customers, competitors and the government base their ideologies. 2.1.3. History The history of the bank is the main focus when it comes its day-to-day functioning. This is because; most clients will be influenced by the milestones that the organization has conquered to be where they are presently (Mustafa and Lines). A bank with poor history may not fetch more returns from the market since their customer base may be constricted. For example, key milestones are always pinpointed by the leaders of that time and if they still exist within the organization (Mustafa & Rune, 62). 2.1.4. Strategy Any organization faces two main levels of strategic matters to address that are corporate strategy and business strategy. In the banking scenario, corporate strategy is vital in making overall decisions about which kind of businesses the company should link up with. On the other hand, business strategy revolves around the set of decisions to be made to address the demands, threats, opportunities and constraints the organization might face (Mustafa & Rune, 44). These include customer selection, unique value proposition, strategic control and how to make profits from the banking products like loans. The scope of the business also matters since it gives the organization tips on how to retain customers through unique sales and marketing strategies and still remains relevant. When it comes to customer selection, one needs to know the target markets that have the potential to buy the products and services of the bank. The sales and marketing department must have an upbeat and tactical team that has the prowess to turn business ideas into profits by engaging potential clients with different ways of investing their money. 3. THE ORGANIZATIONAL TRANSFORMATION PROCESS The core purpose of this model is to transform an organization so that its focus is purely followed to the letter. Transformation includes blending the inputs to produce a set of desired outputs. The banking sector contains four main components which function in harmony with this model namely: task or work, the individuals or people who implement the work, the informal organization or the operating environment and the formal organization which give structure and direction to their work. 3.1. Tasks These are the day-to-day activities that are performed by the people in the bank to achieve the projected results of the company. The bank has different tasks to carry out and this requires skills and expertise since these tasks carry monetary equivalence. The tasks carried out by the employees in a bank are majorly high skilled and complex (Rašković 82). The bank has two main sections: the back office and the front office. The front office tasks are less complex than the back office tasks since they mostly deal with enquiries and instant problem solving issues. The back office on the other hand deals with delicate and time-bound processes, which are very sensitive to the bank’s operations. Any mishap can lead to tragic consequences. Hence, training should be done frequently so as to give the people easy time and positive results in the long run. 3.2. People There should be harmony in the hierarchy of the banking industry to help with the smooth coordination of activities. Every department has a key decision maker and must always be consulted in all matters arising. People should possess characteristics that match their tasks well. Since this is a monetary organization, integrity and honesty are key assets that the people should mirror. This helps in curbing money laundering and fraudulent activities within the institution. Hence, the people should be well trained on anti-money laundering and the consequences that might arise if it happens. Relationship within and without must be thoroughly monitored for precautionary reasons. 3.3. The Formal Organization This comprises of the established structures, the systems within the structures and processes carried out by the people to coordinate their activities. The formal organization ensures that tasks are done efficiently and effectively in order to achieve the strategic objective of the company. The organizational arrangement within the bank must encourage and motivate the people to carry out tasks with ease. Poorly designed structures, faulty systems and uncoordinated processes can lead to revenue leakage and subsequent legal implications to the organization. There should be periodical checks to monitor such incidences and keep the structures in good condition. 3.4. The Informal Organization The informal organizations are informal guidelines that influence the organization’s behavioral patterns. They include beliefs, values, political relationships, and desired norms in the society. All the above has a direct impact on the people who work within the organization and eventually has an indirect influence on the decision people make within and without the company. Informal arrangements co-exist alongside the formal arrangements (Mustafa & Rune, 69). 3.5. Outputs The critical part of an organization’s activity is to produce output. Output is the range of activities, behavioral patterns and system performance at the below levels. The total system: This is measured in the scales of revenues, values of good and services produced, profits, creation of jobs and the impact the organization has on the community. System units: This includes the different departments in the bank and how harmonized they are to create a lasting impression to both the internal employees and the clients. This cohesion helps in boosting positive behavior within the bank. Individuals: This is the correlation between the behavioral patterns and performance indicators of the employees within the bank. In the case of this model, output refers to comprehensive terms and defines the products of the bank, its performance, and its success. It denotes the organization’s capacity to craft products and services, attain results and to achieve a confident level of performance both individually and collectively within the organization. 4. CONCLUSION It is of importance to interpret the congruence model as a tool for opening up an organization’s mind about any situation instead of depending on a rigid model to separate and categorize the main observations. The banking sector has been in existent for ages and roles have changed overtime. Thus it is important to focus on the individuals’ roles and their harmonization with the entire system to achieve the projected results. Works Cited Mustafa, Ghulam, and Rune Lines. A Cultural Contingency Model of The Effects Of Leader- Society Value Congruence. International Business Research 6.10 (2013) Planning Institute of Jamaica. Vision 2030 Jamaica: National Plan for Development. (2013). Retrieved April 9, 2012, from http://www.vision2030.gov.jm/NationalDevelopmentPlan/tabid/73/Default.aspx Rašković, Matevž. Measuring Culture Effect Size Differences In Slovenian And Portuguese Leadership Practices: Cross-Cultural Leadership Universality Or Contigency?. South East European Journal of Economics and Business 8.2 (2014): n. pag. Web. The Oil Spill Contigency Planning Process; A Process Commonly Misunderstood: IOSC 2011. International Oil Spill Conference Proceedings 2011.1 (2011): abs126. Web. Read More