Organizational Analysis of Bank of America - Research Paper Example

 Organizational Analysis Introduction Bank of America faces severe legal claims and human resource problems. Recent wave of stagnation in the American economy and particular financial crises faced by banks have really mitigated the financial and human resources problems. From the legal perspective, Bank of America currently faces numerous lawsuits, which are underway in different states. On the other hand, the Bank intends to cut its workforce in the subsequent years; this leads to a negative impact over the bank’s strategy of strategic human resource management along with putting more pressure on the strategic human resource management of the Bank; and to remain internationally competitive in the coming years. In the subsequent part of this essay; first, nature, size and human resource challenges are highlighted, second, legal issues along with recommendations are provided; which is followed by a highlighting analysis putting light over the existing and potential human resource challenges by the Bank. Nature, Size And Human Resource Challenge Bank of America is one of the largest financial institutions (Corporate Profile, 2011). The nature of bank is to serve a full range of investing, banking, asset management along with financial and risk management services and products through its various credit and other lines of credit. Currently, the Bank serves, only in the United States, around 57 million small business relationships and consumer along with 5,900 retail banking offices together with 18,000 ATMs and with 29 million online active users of the Bank (Corporate Profile, 2011). Globally, Bank is known for its leading wealth management policies and practices particularly in investment and corporate banking together with trading in a wide range of asset classes, institutions, governments and corporations. Additionally, the Bank is registered member of the New York Stock Exchange and the Dow Jones Industrial Average. And, internationally, the Bank of America provides its banking services in more than 40 countries. However, having such a huge corporate portfolio does not ensure smooth sailing, particularly, in this tougher and rather uncertain period in the financial history. The Bank seems to be facing some financial and human resource problems; in this regard, the Bank, in the third quarter 2011, has announced to cut its cost by shedding 40,000 jobs out of 287000 employees currently working in the Bank (Vault.com, n.d). Legal Issues and Recommendations Several legal issues hunt the management of the Bank of America. Riemer (2011) states that several homeowners have filed suit in Federal District Court in Manhattan, demanding to block a proposed $8.5 billion settlement between Bank of America and major mortgage investors, such as Pimco, BlackRock and the Federal Reserve Bank of New York. Additionally, a new suit filed by the U.S. Bancorp, the trustee of a $1.75 billion mortgage pool which was originated by Countrywide Financial in 2005, sued to pressurize Bank of America to buy back the underlying mortgages, contending that the loans were made without proper documents and violated the related underwriting standards (Riemer, 2011). Recommendations Brian Moynihan, who is the CEO of the Bank of America, claims that the Bank has both financial resources and size to prolong the legal battle for years (Moenning, 2010). However, this could not be termed as an effective way to deal with the legal issues of the Bank’s problems. Instead, an effective banking strategy along with the regulatory compliance must be implemented. This would enable the Bank to minimize the chances for the future legal actions against the Bank. Human Resource and International Expansion Various models of strategic international human resource management (SIHRM) focus on the management and control needs of the Multi-National Corporations (MNC) as they intend to pursue their strategic HR policies or to adopt international orientation (Taylor et al. 1996); exportive , adaptive and integrative approaches worth using for strategic international human resource management. The exportive approach is defined as the replication of the MNC parent company’s HRM policies and procedures overseas. Taylor et al. (1996) states high integration, standardization and internal consistency as its merits; potentially inflexible and less fitting with local conditions and rejection are its de-merits (Janssens, 2001). On the hand, the adaptive SIHRM approach allows differentiation with the local HRM utilization practices (Osland and Osland, 2005, p.2219). Suitability to local conditions such as legal system and cultural values are its advantages while duplication of efforts and fragmentation are its disadvantages (Jansses, 2001). However, the integrative approach is lauded for taking best approaches and practices along with its easy transferability throughout the organization creating a worldwide system (Bartlett and Ghoshal, 1989). Bank of America can avail any or all above mentioned human resource strategies for its international expansion. All these approaches have their merits and demerits along with them. Additionally, the global and local markets are diverse and complex in nature, it would be hard to select and implement any above mentioned HRM policies for global expansion. However, the local conditions such as legal system, labor market, labor laws, market capacity and available financial resources are those aspects of the strategic HRM policies that are fundamental to it. Additionally, the Bank of America is already locally under severe pressure in terms of financial legal issues as well as human resource issues; currently expanding globally seems less relevant for the Bank of America. Human Resource Recommendations and competitive environment Productivity and performance must be regularly monitored and evaluated. Bank of America must ensure a sound criterion for employee practices evaluation to the extent to which those practices enable the Bank to meet its goals. Additionally, some authors suggest that it is highly recommended to comprehend the effects of HRM practices and policies whether the bank employee show their appropriate level of comfort while following those policies. Additionally, there must exist a clear alignment between the employee performance with the organizational goals. Such alignment include, compensation ( rules governing pay raises, wage and benefit structure, and pay levels) staffing and training including the appropriate mix of part or full time and contingent employees; workplace environment along with hiring and selection process, including job description and job design of the Bank. References Bartlett, C.A. and Ghoshal, S. (1989). Managing across Borders: The Transnational Solution. Boston, MA: Harvard Business School Press. Corporate Profile, 2011. “Bank of America”. Retrieved from http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-homeprofile Janssens, M. (2001) ‘Developing a Culturally Synergistic Approach to International Human Resource Management’. Journal of World Business, 36(4): 429–50. Osland, A., Osland, J.S. (2005). Contextualization and strategic international human resource management approaches: the case of Central America and Panama. International Journal of Human Resource Management, 16, 2218-2236. Moenning, D.D. (2010). “Putting Bank of America’s Problem in Perspective”. Retrieved from http://www.istockanalyst.com/article/viewarticle/articleid/4600431. Taylor, S., Beechler, S. and Napier, N. (1996) ‘Toward an Integrative Model of Strategic International Human Resource Management’, Academy of Management Review, 21: 959–85. Riemer, K. 2011. “More Problems for Bank of America”. Retrieved from, http://www.alalaw.com/cms/index.php/section-blog/38-legalnews/168-more-problems-for-bank-of-america . Vault.com, (n.d) “Bank of America” Retrieved from http://www.vault.com/wps/portal/usa/companies/company-profile/Bank-of-America-Corp.?companyId=633 Read More