National Bank of Canada
National Bank of Canada is among the largest commercial banks in Canada, with its headquarters located in Montreal, Canada. The bank’s history dates back in 1859 when francophone businesspersons founded it (Cheffins, 1998). The bank has approximately 452 branches located in most of the Canadian provinces and approximately 2.4 million clients. The bank also has partnerships, subsidiaries and representative offices in other countries through which it serves both Canadian and non-Canadian customers. The bank has a public company ownership structure and its shares trade in Toronto stock market. This paper discusses in details the organizational structure, managerial practices, and organizational culture of the bank, how these factors affect its performance, how the culture of the bank has evolved over time and the impact of this evolution on the bank.
Describe the National Bank of Canada organizational design- identify the type of structure employed.
The bank has a hierarchical structure, which follows a pyramidal layout. All employees of the bank apart from the highest-ranking employee are subordinate to the higher rank of authority above them. Under this organizational structure, the employees are ranked in levels in accordance with their level of authority (Cameron & Quinn, 2005). The board of directors is in the highest position regarding authority and is responsible for making key decisions within the organization.
The board is made up of thirteen directors among them being the chairperson of the board and the chief executive officer also referred to as the president of the bank. Other responsibilities of the board of directors include recruiting, training, supervising and compensating the chief executive officer, formulating the policies of the company, providing directions, monitoring and controlling activities and a fiduciary duty of protecting the assets of the bank.
The other level of authority below the board of directors is the office of the president. The office of the president is composed of eleven members among them being the chief executive officer and executive vice-presidents. There are ten vice presidents with each playing a particular role within the company, depending on the department off operation. The duties of the executive vice presidents include supervision of activities such as risk management, personal and commercial banking, information technology, operations, corporate and human resource affairs, financial markets, marketing functions, finance and treasury, wealth management and transformations within the company.
Each of the vice-presidents is responsible for one of the stated duties. The chief executive officer by the name Louis Vachon, who is the chairperson of the office of the president, has various responsibilities such as investment management of the bank. The role is exercised in accordance with the guidelines and powers given by the board of directors. Furthermore, the chief executive officer is also responsible for the overall administration and direction of programs, services, and products of the bank, which includes risk management, regulatory compliance, credit quality, financial performance, and business development (Alvesson & Sveningsson, 2015). The vice-presidents report to the chief executive officer.
The board of directors and the office of the president make up the managerial structure of the organization. The two ranks are responsible for the overall management of the bank operations, investment, human resource and all the other bank activities. Below the office of the president are the managers of the different departments and subsidiaries.
A manager governs each subsidiary branch, region, and department. For instance, a marketing manager and the production department by a production manager lead the marketing department. The operations of the bank are also divided into segments based on the geographical region of operation. A manager is assigned to represent each region. A manager also represents each subsidiary. All the managers mentioned above report to the vice-presidents responsible for the function they are assigned.
Below the department, regional and subsidiary branch managers are another level of managers, who are responsible for the operations of each of the bank branches. The branch managers report to the managers of the region in which their branches fall under. The managers can also direct any query relating to various departments such as human resource queries to the responsible higher manager. The role of the branch managers is marketing and promoting the branch and the products and services offered, monitoring sales targets, resolving the complaints of the clients, and developing plans aimed at attracting more customers. The branch managers are also responsible for directing their subordinates.
The bank staffs are at the lowest rank in the bank’s hierarchical structure. The staff is the employees who are responsible for carrying out various banking operations such as the credit operation, customer service, sales, accounts, business banking, investment banking, personal banking and retail branch operations like the teller tasks. There is a manager in charge of each of the bank operations and other staff members who aid in the performance of the various tasks. The clerks report to the managers in charge of the operations they engage in while the managers in charge of the various operations report to the branch manager. This explains the completely organizational structure of the National Bank of Canada.
Assess whether the structure/design is suitable for the type of organization. Why or why not.
The hierarchical organization structure is suitable for the bank since it gives a clear flow of authority (Shafritz & Jang, 2015). Each employee is aware of the next level of authority expected to deliver reports. This ensures an efficient flow of activities within the bank. The structure ensures that there is no confusion regarding the level of authority and responsibility assigned to each employee as there exists a clear chain of command. This kind of structure also ensures that the lines of communication are clear and known to each employee. As a result, the employees are aware of the area they can run to in case they require any assistance or advice relating to their duties.
In addition, the bank achieves a high level of teamwork by organizing the employees into various job categories. When the employees performing similar duties are placed in one place within the branches or department, they can share resources, ideas, and as a result promoting teamwork within the bank. The managers also find it easy to coordinate activities since each employee is assigned various duties and is expected to report to the manager in charge (Keating & Markovski, 2001). Thus, it is easy for managers to recognize areas that are inefficient and correct the problem at the earliest stage.
Suggest changes to the organizational structure that will facilitate better strategy implementation if required.
The hierarchical structure used by the organization has various limitations. For instance, the structure makes the decision-making process to be cumbersome due to the many levels of authorities involved during the process. Despite the shortcoming, the hierarchical organization structure has proven to be the most appropriate structure that can be used by the bank as it facilitates cooperation in the implementation of the company’s strategic plans and goals. Adjustments like the removal of the many bureaucracies involved during the decision-making process.
Assess the internal management practices of the National Bank of Canada by describing and analyzing two of the following areas.
Policies, procedures, and practices
The National Bank of Canada is guided by a strong code of ethics that guides its policies, procedures, and practices. The bank operations are guided by values such as high level of integrity, ensuring that clients are satisfied, high level of performance, teamwork and cooperation, innovation, and efficiency. The purpose of the bank’s code of conduct is to define the behavior that the employees are expected to portray to safeguard the name of the bank and enhance its competitiveness.
New employees are advised on the ethical standards expected of them by the company, and a copy of the company’s code of conduct is presented to them to ensure that they abide by the standards. The employees are expected to apply the stated code of conduct at all times in the course of performing the responsibilities assigned to them. The bank also has a procedure for reporting and inquiring on issues relating to the ethical code.
The strong emphasis that is put by the bank on the code of conduct plays a key role in facilitating its success. The good behavior and respect portrayed by the bank employees attracts many customers and helps in retention of the already existing customers. Also, the bank’s value promotes teamwork and cooperation, which is essential in promoting business success. The ethical standards ensure that the bank remains competitive and profitable since the customers are attracted to the bank due to its efficient services. The bank a customer oriented strategy when designing its products and services, whereby the products and services are designed to fit the needs of the customers and fulfill their expectations, and as a result, the bank achieves the objective of satisfying their customer.
Process improvement activities
The bank has also put in place various process improvement activities, which enhances its competitiveness and customer attraction ability. The process improvement activities use of customer friendly application, the establishment of new departments to cater for different categories of customers and improvement of the bank’s customer experience by training the staff members on important customer service techniques. The bank introduced a new application known as the SAP Customer Relationship Management application, which ensures a quick, smooth, and easy loan approval process.
The application has greatly simplified the mortgage processes and makes the company a bank of choice for many clients wishing to borrow a loan. The bank has also established new outlets, branches, and automatic teller machines to improve its accessibility. Also, the bank invests greatly in training programs for the staff members and as a result, improves the employee-customer interaction. The improvement in the customer service continues to attract more customers and helps in retaining the existing clients.
Other process improvement activities include applications such as the national bank mobile banking solution. The mobile banking application helps the customers to manage their money effectively, transfer funds, pay bills and access their banking information without having to visit the bank. This saves on clients’ time and enhances the accessibility of the banking services. The bank has also put in place customer support system where the customers can make them enquiries through the phone, mail, and even the social media. This kind of improvements created by the management enhances the accessibility of the banking service and ability of the customers to obtain their banking information.
Describe each of the selected items and assess how they have or have not been successful in supporting the company’s strategy execution.
Policies, procedures, and practices
Despite the advantages created by the internal management practices, the practices were accompanied by various limitations, which hindered the execution of the company’s strategy execution (Kryzanowski & Roberts, 1992). The employees and this lead to the creation of a negative organization attitude at times perceived the policies, procedures, and practices established by the bank negatively. The poor attitude has the effect of creating an unhealthy work environment, which may affect the interaction between the employees and customers and the operation of the bank at large. Such situations also hinder the efforts of the company to promote cooperation and team spirit among the employees.
Process improvement activities
The applications implemented by the bank experiences failures due to technical breakdowns, and this creates inconveniences both to the customers and staff members who spends much time addressing the complaints of the customers. This also hinders the company’s strategic plan of ensuring the customers accesses the desired services at any given time. The complexity of the applications also hinders the implementation of the company’s plans since some customers do not know how to use them.
Assess the organizational culture of the National Bank of Canada
The National Bank of Canada has one of the most admirable corporate cultures (National Bank of Canada, 2006). In the year 2012, the bank was listed among the top ten organization with the most admirable corporate cultures, this being the third consecutive year that the bank was listed in the prestigious ranking. The reward is given to the organization, which has a corporate culture that helps them to sustain a competitive advantage and enhance their performance.
a. Identify and discuss a minimum of three initiatives undertaken by the company to perpetuate their culture.
The bank has established a culture that emphasizes on teamwork, customer service, and accountability in the pursuit to create an excellent customer experience. The corporate culture of the bank is also geared towards the achievement of the trust of their clients and dedication of their employees. The bank has also received other rewards such as the best diversity employer in Canada and best Canadian brands rewards because of their attractive culture.
The company has worked hard over years to perpetuate their good culture. The initiative of the bank to make their culture grow includes diversity employment and training facilities offered to the employees. The bank attracts a wide range of employees from different nationalities, backgrounds, and ethnic groups. The company embarks on providing training programs to these employees where they are taught to embrace each other’s differences, cooperate, and work together as a team. Through these activities, the company perpetuates the culture of teamwork and diversity among the employees.
Also, the company has also put in place measures to enhance customer satisfaction. The company has a code of conduct that provides guidelines to the employees and ensures that the needs of the clients come first. The company continually improves on the customer service in the attempt to ensure that the customers get the best services and products.
Analyze at least three forces that are maybe causing the culture to evolve.
The culture of the company has evolved over the years. The bank was first established in Quebec City and has expanded largely after that. Today, the bank is made up of many divisions and subsidiaries with one of its subsidiary located in New York City. The continuous expansion of the bank has led to gradual changes in its culture over the years. The culture has changed to accommodate the wide range of clients and employees, from a different background.
The company has continued to an emphasis on the culture of excellent customer service, which is one of its most known and admirable cultures. The company culture has also changed from a less diversified to a more diversified culture because of interacting with a big number of people across the nations where the bank has established subsidiaries. Expansion of the bank activities has necessitated culture evolution. Another force that leads to the evolution of the bank’s culture is the high level of competition. The bank faces stiff completion from other banks and financial institutions. As a result, the company is forced to make adjustments on its culture in the attempt to curb the competition.
Does the Bank of Canada have a healthy or unhealthy organizational culture? Explain.
The bank has a healthy organization culture, which improves its competitiveness and the customer retention ability. The culture also enhances employee retention, and this made the company be awarded as one of the fifty best employers in Canada. The company recruits employees from a wide range of backgrounds. One of the most admirable cultures is the ability of the bank to mobilize the employees from different backgrounds to work together and embrace each other’s differences.
The contribution of the employees, from diverse cultures, largely inputs into the bank’s unique culture. The aspect is since the employees can acquire knowledge from each other and influence positively on the overall culture of the bank. The company is focused on fulfilling the needs and expectations of their clients. In the attempt to achieve this objective, the company provides a code of conduct that guides the employees and trains the employees to provide excellent services to their clients. This culture is healthy and has highly contributed to the success of the bank to the position it is today.
In conclusion, National Bank of India is characterized by good organization structure and culture. The management of the organization plays a key role in ensuring that the values of the company are adhered to achieve the desired organization goals and objectives. The good organization structure, culture, and proper management lead to the success of the bank to the position it is today.
References
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