Business Relationships in a Service Banking Sector - Term Paper Example

NAVIGATING DECISIONS NAVIGATING DECISIONS A POINT OF NO RETURN SHIRLEY BONGBONG FOR ACADEMIA-RESEARCH Decision making is the art of making a strategic, tactical, and technical choice in the course and flow of the business operations to uphold particular practices and policies or procedures of a certain business enterprise. It takes a lot of considerations as to the effects it will have on the employee, the business operations and workflow, the customers, and more on the aspect of leadership category which can be readily assessed by the feedbacks we get from affected customers or employees. This paper aims to provide a good reality check for businesses that are in the banking sector to promote awareness to Human Resource Department strengths or their failure to monitor employee's activity and attitudes specifically those who are assigned as frontliners or customer service. This will also lead you to take action on refined management interaction course. Communication and the way you handle it and its deliverance is very important in all forms of entities be it actual or online for the retention of customers. Situation: An employee of the bank, the teller, complained directly to the representative of the client that their interbranch deposits and their deposits at the branch itself shall be made under one deposit slip and not in several deposit slips. Client's representative explains that it is made according to the location /outlets depositing. Their policy is one deposit slip per outlet. Since there are lots of outlets near the bank then there are lots of deposit slips that was made and their cut off for making deposit slips is twice a day. Therefore we can expect two deposit slips made for each outlet. It has been happening for a week and the teller was really annoyed that the client did not follow his suggestion. What he did is to confront the representative every time deposits were made, grumble and let the customer wait for long intentionally. Feedback was given to the depositor who called the Branch Head. The Branch Head also suggested that the deposits will be made in one deposit slip everyday. Since the depositor stuck to his policy for one deposit slip per outlet for easy monitoring, the Branch Head told the client to close the account and transfer to another bank because his tellers are very busy. If they cannot improve their accounting system then he cannot accommodate counting a lot of deposit slips from the bakery everyday. (This is the second situation that problem of similar kind has occurred in the bank. The first client was a gasoline station depositor who deliberately transferred his account to another bank near the erring bank and maintained large deposits on the account.) Decision made by the Branch Head: You have an option to follow our suggestion or close the account. You can very well go open an account with another bank. We don't have the manpower to count your deposits for you and do your accounting matters in our passbook. This is how it was stated, frank and direct. Client's reaction: Naturally any client has the option to close the account and bank with another bank he likes. But then the client has an attitude also that he decided to maintain his deposits in the bank, continue making same deposits to his account, then afterwards issue a check to transfer the funds to another bank of his choice the same date it was counted. Effects of the decision that was made: The confrontation was elevated to the Region Head who called the Branch Head of the bank and told him to accept the deposits as is. The bakery client maintained a lot of businesses and he has been giving the bank a list of other business accounts also. Region's head decision to cater the bakery is to prevent losses whenever the client decides to close all other relative and related accounts of bigger ADB's (average daily deposits). The Branch Head is under the supervision of the Region Head. He will have a hard time making request to the Region Head if he will not follow. The worst scenario is if the Region Head will decide to transfer him to another branch or location outside the city. He was forced to accept the deposits and so is the teller. Every time the bakery client has problems with the bank, he complains directly to the Region Head and not to the branch' Branch Head anymore. Relative importance to me as a decision maker (Branch Head position): The two incidents marked a very low form of decision by which there is no turning back. It is a point of no return, destroying client business relationships, suffering the consequence of the action by maintaining the deposits and serving the client as is and absolutely against my will. My boss (the Region Head) will see me as a person lacking in management styles, low in decision making, has an attitude problem, and most of all absence of tact and respect in dealing with clients. I could see myself in the last list for the line of promotions next year. I now understand flexibility and the practice of patience is very important in the art of maintaining customer and letting them favor your suggestion. It might take long but I have to contain the sacrifice for a moment. I should have made an objective action on the teller, who is a close friend of mine, to stop grumbling and making childish complaints against the client. It would be like imagining those several deposits belonging to several clients that we ought to serve at the branch. Favoring staff must be objective and not subjective because he is a long time friend of mine when I was not yet a Branch Head. Prospect Theory of decision making process: The Branch Head has carefully evaluated the losses in terms of lowering his budget in the balances of this account and making an offsetting decision to raise the balance to another client's account he is confident he could solicit more deposits. The losses and the gain were evaluated in terms of the branch resources and function only. He had forgotten that the bank is a commercial bank and is serving the client using the whole network's resources. So a decline in one client's deposit will affect the entirety of the bank since it will effect changes on the deposits of the relatives and the other business related to this account maintained at other branches. 1 Regret theory: Branch Head does not want his friend who is the teller to think that he did not understand the situation so he made a subjective decision based on wishful thinking that is rather partial and is biased on the part of the client. Decision of this kind that practices omission bias always leads to bad outcome. It has a lot to do with the feelings of responsibility, blame and subjective evaluation of the situation on hand. Analysis: Decision making process for managers are very important tool in the monitoring and managing day to day business transactions. The teller must not voice his complains towards the client to any of his representatives or friends. The teller must tell the Branch Head about the transaction so the Branch Head may not be prompted to make any decisions that has been already fore acted by the teller. Even if the teller has already initiated the word war with the client's representative, the Branch head must be objective enough to call his attention to reprimand his attitude problem. Favoring the teller even if considered improper is well related to the Regret Theory. How can one maintain an objective and smooth operations in the branch if the erring teller is always favored Every deposit made in the bank is a hard earned marketing strategy of the bank. It shall be maintained and cared to grow and not simply mandated to close and transfer accounts to another competing bank. This is a very wrong marketing decision and is very inappropriate if we can define it under the manager's actions. We can very well use the elements of Prospect Theory in this regard. The evaluation of one deposit to lose and a lot of other deposits to lose bankwide is much more considerate and applicable in his reality. One deposit to lose and another deposit to gain branch aspect prove irrelevant. Implication of the decision that was made: It is but human factor to be bias in some of our decision making process. A very good Branch Head or Manager must relate well to the staff and to the clients so he will be able to know and understand the situation fully and not an impromptu report that could very well affect emotions and decision making. Objectiveness is a must in every thing you have to deal with. Human Resource department must be strong in terms of monitoring feedbacks and navigating staff and officer's attitudes and directions in banking and customer servicing. They must have something to get afraid of to positively mine their bearings. How will your analysis of this decision help you to make better decisions in the future Everything must be done with great tact and respect even in our dealings with regular life and people. We must practice a very good balance with friendship and the thought of what is proper and appropriate in a certain situation. Strong leadership is a must for managers. Attitudes and flexibility in dealing with any job functions and constraints must be observed. Over confidence is not welcome when making agreements and influencing client's decision. It must be done with an art that is very unique and that commands response to the one accepting the suggestion. Customer service like marketing has its own art. Managers shall learn to do that in their daily routine. As we can note the importance of decision making in our work place we can also practice making small decisions in our daily lives. We ought to listen when somebody talks and talk when that somebody allows you to do otherwise we should practice our listening skills often. Quacking and talking is something that is not hard to master, but listening is. And this is a very good management tool for maintaining business relationships in a service banking sector. References: Prospect Theory, Wikipedia, Read More