Structure of an Organization of Bank of Canada - Essay Example

Evaluate the Structure of an Organization of Bank of Canada Table of Contents Introduction 2 Organizational Structure of Royal Bank of Canada 4 Method of Departmentalization 6 Implications for Authority and Job Design 7 Recommendation and Conclusion 8 References 10 Introduction The term ‘organization’ can be defined as the purposely created group that has common goals and known boundaries. The biggest and the most complex decision that the management needs to make when the organization tends to grow bigger is to structure the organization. It is the structure of the organization that assists in formulating the strategies. Most of the organizations’ structure tends to be quite flexible and easy to manage for the day to day business. However, large organizations in majority of times become bureaucratic and tend not to be flexible enough in order to deal with the challenges of the contemporary day business. The most significant point to consider is that the structure of the organization needs to permit it to fulfill its objectives and also needs to ensure that the structure fits with the business environment in which it works. The range of organizational structures are the ‘entrepreneurial structures’, the ‘product-based structures’, the ‘function-based structures’, the ‘divisional structures’, the ‘matrix structures’, and the ‘holding company structures’ (Sinclair-Hunt & Simms, 2005). The organization that has been chosen for the purpose of this study is Royal Bank of Canada (RBC). This bank is the leading retail bank in Canada (Halime, 2010). The bank is observed to present the financial services that are generally diversified in nature. The various business segments of the company are wealth management, international banking, capital markets, Canadian banking and insurance (The New York Times, 2011). Organizational Structure of Royal Bank of Canada The Royal Bank of Canada assumes that an organization must centralize the papers, but needs to decentralize the people (Marquardt, 1999). The chart presented below is the three level organizational chart of Royal Bank of Canada. It can be stated that the board of RBC has an independent chairman. There are 16 directors who are associated with the organization independently and there are two executive directors (ICMR, 2004). Source: (The Official Board, 2011). Method of Departmentalization The term departmentalization can be understood as the process whereby the tasks are grouped into departments. Five basic methods of grouping the activities are followed; they are ‘departmentalization by product, departmentalization by process, departmentalization by customers, departmentalization by geographical regions and departmentalization by function’ (Syfes, n.d.). The Royal bank of Canada adopts the departmentalization by geography which can be shown in the figure presented below: Source: (Slidefinder, n.d.). Implications for Authority and Job Design In the organizational structure, it is the jobs that are the most significant factors. The primary managerial decision is job design in the organizing function. Those jobs are generally assigned to the individuals that consist of the objectives as well as the specialized task of the organization. It is worth mentioning that the overall task of the organization cannot be assigned to a single person. For instance, the bank may consist of numerous individuals. However, it is not possible for the single individual to take the responsibility of the entire task. A few may take the responsibility of taking deposits while others may be assigned the task of the granting loans. In terms of management, when one tends to define the job’s authority then it is referred to as delegation. It is the sole responsibility of the managers in order to decide the level of authority the individuals in the organization need to possess in order to complete the task. In simpler terms, it can be stated that the authority provides an individual the right to make decisions without consulting or taking approval of others (Kumar & Sharma, 2000). It has been evident that the Royal Bank of Canada restructured its mortgage process in order to remain more decentralized (Nelson & Quick, 2007). It has been apparent from the above organizational structure of the Royal Bank of Canada that the authority to make the decisions is held with the CEO of the company Mr. Gordon Nixon. He holds the position of the leader for achieving cohesion and direction among the various organizational units as well as individuals of the bank. There are various personnel working under the CEO. The job design of Royal Bank of Canada has been segregated into various departments such as capital market analyst, international banking executives, wealth management executives, human resource executives, Chief Financial Officer and others. It is worthwhile mentioning that individuals are assigned to accomplish each of the above mentioned specialized tasks. This makes it relatively easier for the bank to achieve the goals of the organization. Recommendation and Conclusion The organizational structure of the organization tends to focus upon various activities of the organization. In case of the Royal Bank of Canada, it has been noted that the bank has been following geographical departmentalization. Although, this will tend to reduce the cost since the resources will be located quite near to the customers and thus the bank will be able to respond to the requirements of the different markets, it becomes cumbersome to coordinate across various departments. Therefore, in addition to following the geographical departmentalization, the Royal Bank of Canada can also follow the product departmentalization since the bank offers various products and/or services to its customers. The main objective of the Royal Bank of Canada has been to be the acknowledged leader in Canada for providing the financial services. It also aims at being the leader at providing the solution to the capital markets as well as the wealth management (Royal Bank of Canada, 2011). It can be measured that the organizational structure followed by the bank has been appropriate. It is following a three level structure and the powers as delegated are being enhanced. It is because of the decentralized power related structure of the bank that has allowed the bank to respond to the changing needs of the customers and has also enabled them to adapt to the altering business environments. If the bank focuses upon the organizational structure in the similar manner, it will be able to maintain its position in the market. References Halime, F., (2010). Royal Bank of Canada to Sponsor PGA. Banking News. Retrieved Online on May 30, 2011 from http://www.vrl-financial-news.com/retail-banking/retail-banker intl/issues/rbi-2010/rbi-626/royal-bank-of-canada-rbc,-th.aspx ICMR, (2004). Excerpts. Corporate Governance Code. Retrieved Online on May 30, 2011 from http://www.icmrindia.org/casestudies/catalogue/Corporate%20Governance/Corporate%20Governance%20at%20Royal%20Bank%20of%20Canada%20-%20Excerpts.htm Kumar, A. & Sharma, R. (2000). Principles of Business Management. Atlantic Publishers & Dist, 2000. Marquardt, M. J., (1999). The Global Advantage: How World-Class Organizations Improve Performance Through Globalization. Gulf Professional Publishing. Nelson, D. L. & Quick, J. C., (2007). Understanding Organisational Behavior. Cengage Learning EMEA. Royal Bank of Canada, (2011). Strategic Goals. Vision. Retrieved Online on May 30, 2011 from http://www.rbc.com/aboutus/visionandvalues.html Sinclair-Hunt, M. & Simms, H., (2005). Organisational Behaviour and Change Management. Select Knowledge Limited. Slidefinder, (No Date). Organisational Structure. Departmentalisation By Geography. Retrieved Online on May 30, 2011 from http://www.slidefinder.net/c/chapter_organizational_structure/21575138 Syfes, (No Date). Departmentalisation. By Function. Retrieved Online on May 30, 2011 from http://www.syfes.com/ The New York Times, (2011). Royal Bank of Canada. Company Information. Retrieved Online on May 30, 2011 from http://topics.nytimes.com/top/news/business/companies/royal-bank-of-canada/index.html The Official Board, (2011). Organisation Chart RBC. RBC. Retrieved Online on May 30, 2011 from http://www.theofficialboard.com/org-chart/royal-bank-of-canada Read More