Business analysis of Oklahoma National Bank - Case Study Example

?Running head: Case 15: Oklahoma National Bank This paper gives an overview of Oklahoma nationalbank. It is one of the outstanding banks in US which has realized its competitive advantage in the market. This is because of the quality management strategies which it has applied hence it is in a position to compete effectively with the other banks. The paper goes through the strategies the bank has put in place in trying to achieve its competitive advantage, it has also analyzed the bank’s plans and the competitive environment it is currently facing. Introduction This bank is one of the largest banks in Oklahoma; it has branches in Arkansas, Texas and New Mexico. It was founded in early 2000 and grew at such an alarming rate that within a couple of years, it multiplied more than eleven times the original assets and capital. It provides personal banking, commercial banking, business banking, and wealth management services in the United States. Its success was fueled by strong organizational culture, the bank’s ability to maintain high asset quality, quality management and use of En Act to zero in on customer relationship. Since then, it has merged with a larger banking organization, but it retains its decision making at a local level. It does this in order to remain committed to the fundamental values and beliefs that have seen this bank go far. As a result, the bank prides itself in having a unique laic culture of a strong relationship among the employees, directors and the founders of the bank. The bank is also God driven as they open all meetings with a prayer hence see this particular adventure as a blessing from God and seek to be good stewards indeed. Another key strategy which the bank has applied is that, they promote open discussion and honesty among their employees in order to have an honest dialogue in “an effort to effort” to meet the customers long term banking needs. For years, Oklahoma had been focused on sales as one of its key competencies. It had put all its staff in sales and sales management training, established sales goals for every sale individual and these sales were measured on a monthly basis. It also had a sales campaign and a fairly lucrative incentive program. During these years, the bank had competed very well hence leading to its success. Its loan outstanding was also doubled yearly and its core deposit growth was on a straight incline (Townsend, Busenitz, & Arthurs, 2001). Factors that led to Oklahoma national bank success Quality management Total quality management is one of the management approaches applied by Oklahoma bank in seeking to establish zero defects when running its business. It comprises of team leadership, worker empowerment, and creative problem solving in order to achieve its set goals. These programs are now available in marketing, production, customer support and finance (Schjoedt, 2009). A TQM program includes all aspects of organizations operations that include; the structure of the company, the culture the company has developed, and its hiring and promotional practices. TQM evolved from the quality assurance methods that were first developed during the First World War. It was due to the poor banking systems in the First World War that led to the adoption of the quality management practices by this bank (Rodriguez, 2008) Defining and measuring quality in Oklahoma bank Quality in its final analysis, is the capacity to meet diverse requirements which are economical, productive, social and of course with measurable actions. The quality of performance is one of the basic elements in trying to differentiate an organization within any market. This bank has applied the quality management in the following areas of its operation: 1) Customer relationships - involves establishing strong relationships with the customer’s through partnership arrangements and having direct customer contacts. 2) Customer involvement in the new product designs - this involves the involvement of the potential customers in the new product which is to be introduced into the market. This strategy helps the bank to be in a position to know whether the new product is good to the customers or not. 3) Collection of information on customer needs- this involves a close interaction with the customers and through this interaction, information that is suitable for the company is collected concerning its product in the market (Rodriguez, 2008). Opportunity seeking This refers to the ability of the entrepreneur to further see new business opportunities even in situations where other business operators do not see. Oklahoma bank has been in a position to seek opportunities where other people see nothing but problems and hopelessness only. It has even gone further to seizing unusual opportunities for obtaining the necessary resources such as, shares, equipments, financing, land, technical assistance, workplace among others. It has ventured in so many areas unlike in the other banks. This can be seen in the number of branches it has had since it was started, it caters for everyone’s needs, it does not favor any class of people, and in this case, it accommodates everybody. As a result, many people have been attracted to the bank hence its increased performance. (Townsend, Busenitz & Arthurs, 2001) The table below shows Oklahoma national bank participation in the shares market for a period between (2004-2009). The results in the table show how the bank has been in a position to increase its revenue through the stock market. (Townsend, Busenitz & Arthurs, 2001) Risk taking Business ventures are people who prefer taking moderate risks. You find that before they commit their resources in any form of a business, first, they assess the risks which might accrue when running their business and their ability to try and manage those risks, secondly they asses the benefits that they will realize after they have invested in that business as well as the challenges they might come upon when running their business. Now, Oklahoma bank is one bank that is a risk taker; it has proper management strategies which have been put in place in trying to manage the bank which has given it its key competencies as compared to the other upcoming banks. It has a competitive advantage in this case from its good strategies which have been put in place and decision making by the managers who hold a conference every month hence leading to the growth of the bank. (Townsend, Busenitz, & Arthurs, 2001) Systematic planning and monitoring This involves the ability to develop plans that are used in monitoring and evaluating the progress of the bank. It helps the bank to carefully monitor its business performance and turn to other alternatives when the need arises in order to achieve the set goals. Oklahoma bank in this case is one bank with systematic planning and monitoring; this is seen in its qualified managerial staff that properly makes decisions concerning the performance of the bank (Townsend, Busenitz, & Arthurs, 2001). Business planning involves a plan by the team leaders concerning the operation of the business. So in this case, the bank has set its strategies which are different from the other banks hence enabling them to compete more effectively than the other banks. Key strategy here is coming up with a plan and working towards achieving the set goals and objectives. For example in Oklahoma, you find that its greatest and unique strategy is customer satisfaction strategy. Here, it majorly concerns in making sure that the products and services in the market can satisfy its customers effectively and as a result, it has competed effectively in the market (Townsend, Busenitz, & Arthurs, 2001). Evaluation of accounting information Oklahoma national bank has applied this technique hence its rapid growth. Research has shown that successful implementation and evaluation of the accounting information require a fit between three key factors that is; a fit must be achieved with a dominant view of the firm or even a perception of the situation. Secondly, the accounting system must fit when problems are been solved in the organization i.e. the technology of the organization. Thirdly, the accounting system must fit with the culture i.e. the norms and the value systems that characterize the organization (Townsend, Busenitz, & Arthurs, 2001) Accounting information can be categorized in to two groups namely; 1) information that influences decision making and used mainly in controlling the organization 2) Information that facilities decision making process and can be used in coordination within the organization. The evaluation and effectiveness of the accounting information depend upon the quality of the output that can satisfy the user’s needs. Generally, accounting information provides financial reports on a daily and weekly basis; provide useful information for monitoring decision making process and performance of the firm. As a result, you find that proper valuation of information accounting is very much vital since it ensures that decisions are well agreed upon by the bank managers hence financial reports will be provided showing the position of the bank (Hick, 2009). The effectiveness of the accounting information will depend largely on the perception of the decision makers on the usefulness of the information which is generated by the system. This information satisfies needs for operation processes, budgeting, managerial reports, and control within the bank. By reviewing research studies during the 1987-1999, it was found that accounting information provide data for decision making and the data can be collected concerning the firms available resources. It is through this data then an effective decision can be done on how to allocate these resources properly (Morris, & MSchindehutte, 2005). Decision-making is one of the keys to success in any organization in that, bank managers sit down and make their own decisions, which are supposed to act as a guide to the running the company. These decisions involve the finance and the resources of the bank, and how these resources are to be utilized. This is due to information technology which has led to many changes in reporting information. So, with current evaluation of the accounting information, the bank managers have been in a position to achieve the following according to Morris & MSchindehutte (2005): 1) Evaluation of accounting information lead to a better decision making by the managers. This is when managers or the team leaders come up with strategies which help in running the company. This may involve going through the companies records in order to ascertain that no single resource has been wasted. 2) Accounting information systems lead to more effective internal control systems. In any financial firm, audits are properly made and it is through auditing by the accountants that help the firm in assessing its profit worth or even loss. 3) Accounting information systems improve on the quality of financial reports. Quality financial reports which include data collection and proper book keeping on the accounts finances 4) Improve on performance measures; this is in financial accounts, which helps the firm to know when it is making loss or when it is making profits. Consequently, the performance of the company can be increased in case of losses. 5) Facilitate financial transactions processes. Facilitating the financial transactions is very much important and it involves the inputs which are required in order for this process to be effective (Ranyan, Droge & Swinney, 2008). Analyzing the nature of ONB's competitive environment. Oklahoma bank has faced a high competitive environment from the other large banks like FleetBoston Financial, Canadian Imperial bank of commerce and the Abbey national bank. These banks have recently shown a high competition in the market which has made the executive president of Oklahoma bank to apply the strategies mentioned earlier in trying to compete with its key competitors effectively (Ranyan, Droge & Swinney, 2008). The huge profits from shares create a competitive environment in this bank. Research over the last years show that Oklahoma has witnessed the fastest and largest banking population growth in Oklahoma. This bank has then attracted a net share of approximately 7.6 billion US dollars in the period (2007-2008) (Economic survey of U.K, (2007-2008). This sector witnessed a 28.4% growth in the reinvested earnings in shares in the last financial year. It has also reported a generation of 40,000 indirect jobs to its citizens (Morris, Schindehutte & Allen, 2005). ONB's goals and objectives The overcharging goal of the Bank is to help in maximizing its resources which are available for the economic development and the social progress in this bank. It has the motive of been the best bank in the world in the provision of its products and services. Plans are underway to Increasing the number of branches in order to ensure that its customers are fully satisfied since this is the best strategy in any business venture. Customer satisfaction is very much important since when customers are not satisfied with your products, they tend to move to another bank offering better products. So, Oklahoma bank ensures that it has quality products in the market (Kogut, Short & Wall, 2010). Explore the potential problems in ONB's rapid growth Despite advantages the bank has had over the last years, there are potential problems hindering the banks rapid growth. Firstly, technology today has seen many banks rise in this sector (Crane, 2000). Due to the rise in technology, it has been quite expensive to adopting it and when not properly applied, it can lead to the bank’s failure. For instance in the total quality management, this is one of the technologies applied by the bank and it is very much expensive hence its resources sometimes becomes limiting. A good example is in training its employee to be more effective. It has become an expensive tool for the bank to adopt hence a limiting factor in its growth (Lechner, & Leyronas, 2009) Secondly, competition has been high in this sector. There are large banks which are trying to compete with this bank. As a result, you find that the managers have to keep on changing their strategies in order to compete effectively in the market. This is because its competitors are producing the same products in the market. For an entrepreneur, it has to be unique in its line of product in order to compete well in the market (Kobia, & Sikalieh, 2010). Personal and professional ethics has guided the bank in its rapid growth. The bank effectively has its culture which sees it compete effectively in the global market. Company culture: The culture of the company in this case aims at developing the employee’s ability to working together towards improving quality products and services. Oklahoma in this case has applied this principle in that the workers are motivated to work together towards the achievements of the companies set goals and objectives (Karlsson, & Honig, 2009) Employee involvement: Here, the employees are motivated to be more pro-active in trying to identify and address the quality related problems. You find that the workers in this bank out of the knowledge they have, they can see a problem, relate to their products hence when such a problem is detected, the company is in a position to improve on the quality of that particular product hence improving consumer satisfaction. (Hallam, & Seebohm, 2007) Customer focus: Through the consideration on quality products, you find that the customer satisfaction is improved hence leading to more customers banking in this bank. In return, you will find that the business output increases hence the growth of the economy in return. Decision making: Good and quality decisions are also made based on measurements. Once decisions have been made, it is found that, the firms set goals and objectives can be realized hence leading to the growth of the bank. Continuous improvement: Oklahoma work continuously towards improving quality products. In Oklahoma, you find that the principle has applied since the firms have continuously improved on the range of their products. This is because many consumers have the tendency of liking the new products in the market. Hence, due to increasing demands of customers, they have improved on their products quality indeed (Hallam, & Seebohm, 2007). Conclusion This paper presents a model of strategic approach and entrepreneurial behavior and activities in either individual or cooperate entrepreneurship that eventually leads to a positive leap forward relative to present position. Oklahoma is one interesting bank. Achieving a competitive advantage needs well set strategies which the bank uses as a guide when in operation. It is through the set strategies which have made Oklahoma national bank to be a good bank in its operation. It has used these strategies in realizing its set goal and objectives. But, if I was the president of Oklahoma bank, then En Act strategy it used in sending all its employees to sales then would be a bit challenging and interesting. This is one of the strategies it used in achieving its competitive advantage. Planning and initiation of a new venture strategy from a position of non existence to a start up and achieving a dramatic leap in growth beyond even the normal growth trend is good. The inputs in to the model are innovations and opportunity driven visionary leadership with a central authority, a dominant growth objective coupled with targets which can surpass conventional logic. The process here is strategic thinking which is dominated by logic of value innovation for offering unproceded value instead of staying competing. References Crane, O. (2000). High performance teams. Team performance management. British journal, Pp 87-102 John, K. (1997). Achieving competitive advantage. London, Littman publishing free press. Hallam, S., & Seebohm, P. (2007). What makes an entrepreneur? A life in the day, 11 (1), 12-1 Hicks, S. (2009). What business ethics can learn from entrepreneur. Journal of private enterprise, 24 (2), 49-57 Karlsson, T., & Honig, B. (2009). Judging a business by its cover: An institutional perspective on new ventures and the business plan. Journal of Business Venturing, 24(1), 27–45. Kobia, M., & Sikalieh, D. (2010). 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Entrepreneurship: Theory & Practice, 33(3), 619–644. Townsend, J.(2001).Cooperative ventures in emerging economies. Journal of business research, pp 45(6): 345-6 Apendix: 1 Bank Financial Snapshots Assets $14,649.039 millions  12.90% Liabilities $14,068.856 millions  16.60% Net Income $277.902 millions  23.90%   Read More