Different Strategic Issues of Bancolombia - Case Study Example

Table of Contents Executive Summary 2 Introduction 3 Problem Statement 3 Supporting Evidence 4 Key Decision Criteria 4 Alternative Analysis 5 Recommendations 6 Action & Implementation Plan 6 Conclusion 7 References 8 Executive Summary Bancolombia works in the banking sector and looks towards providing different banking services like investing, financing and other to its customers. The bank merged with 2 other banks as the financial system was undergoing changes and the opening up of the Columbian economy which allowed other international bank to enter the country. The most important issue before Bancolombia was the manner in which the merger resulted in a change in organizational culture making it difficult for the employees to work in the same manner. The merger brought about a change in the style of working which had an effect on the culture and was resulting in developing hurdles in the path of the employees as the entire process in which the work was to be carried out changed. This will require that Bancolombia looks towards working on areas like providing the required training and developing a fundamental through which the business is able to make the employees understand the importance of working through a new process and output which will help to multiply efficiency. This will also require developing an environment where better facilities are developed through which the overall effectiveness can be gained. This will thereby ensure that the entire process is improved and the bank is able to work on the different areas through which the performance of the organization improves Introduction Bancolombia works in the banking sector and looks towards providing different banking services like investing, financing and other to its customers. The bank started its operations in 1945 and by 2010 the bank had more than 16,000 employees and grew in size and stature after the merger. This resulted in a change in management and the process with which the work was carried out. The bank merged with 2 other banks as the financial system was undergoing changes and the opening up of the Columbian economy which allowed other international bank to enter the country. This intensified the level of competition and required a more flexible and professional approach which was possible only after the merger. The other reason for the merger was the manner in which privatization was taking place and banks to consolidate their position required to develop strategies which was possible through merger as it would increase the market share and also help to supply different financial products. The merger also gave rise to different strategic issues which will be addressed throughout the report. This report will also look towards presenting the different alternatives and the mechanism which has to be adopted to deal with the issues. This will help Bancolombia to perform better and ensure that positive synergy is developed after the merger. Problem Statement The merger of the 3 banks highlighted different strategic issues which Bancolombia had to confront with. The most important issue before Bancolombia was the manner in which the merger resulted in a change in organizational culture making it difficult for the employees to work in the same manner. The merger brought about a change in the style of working which had an effect on the culture and was resulting in developing hurdles in the path of the employees as the entire process in which the work was to be carried out changed. Supporting Evidence The problem of cultural changes in Bancolombia can be seen from the risk that employees started to have regarding their job. The feeling of job insecurity gripped the employees as the changes in process and mechanism through which the work was to be carried out resulted in widening the gap between the employees. This resulted in creating ambiguity and the upper level decision makes were finding it difficult to determine the authority boundaries which will determine their role and responsibilties within the organization. In addition to it the employees at the lower level were witnessing a change in the manner the work was to be carried out which made it difficult for the different employees to come together and work as a single unit. This was fuelled by the fact that the merger resulted in the addition of different financing activities which further confused the employees as their roles were not clear. The problem intensified as dealing with people belonging to a different culture raised concerns for employees at all level. Key Decision Criteria Bancolombia has to look towards finding ways through which positive synergy is developed which will help to get the required benefits which is expected out of the merger. The management has to look towards developing a process through which the overall process gains efficiency and the cultural issue which is being faced is resolved. This will require development of strategies both at the lower, middle and upper level so that the problem which is surfacing due to changes in the cultural issues is addressed and the bank is able to develop positive synergy which will help to improve the level of efficiency through which the work is carried out. Alternative Analysis Bancolombia can looks towards using the following alternatives which will have to deal with the strategic issues of cultural difference Look towards providing training to the employees and developing an environment through which an environment is fostered which will help to ensure that employees are able to mix properly. This will require that the management looks towards developing conducive environment through which employees are able to communicate freely and provide an environment through which the differences that exist between the employees are removed (Arnold, 2005). Make the employees understand the change in process, accountability and responsibility that they will have to deal with. This will also require that the organization ensures that employees are made to feel secure regarding their employment and provide the required understanding to them. The management has to look towards developing a method through which they are able to make employees understand the manner in which they will be benefitted and have to look towards shedding their differences which exist (Boddy & Macbeth, 2000). Look towards taking the help of specialist so that the employees are able to develop a culture which looks towards removing the differences which is present. This will help Bancolombia to be able to ensure that better and consistent strategy with little chances of failure is developed (Clegg & Walsh, 2004). This will help to multiply the value and effectiveness of the merger and will pacify the employees towards working in a coordinated manner. This will thereby facilitate the overall process and develop mechanism through which better strategy is developed. Recommendations Bancolombia should look towards providing training to the employees and developing an environment through which an environment is fostered which will help to ensure that employees are able to mix properly. This will require that the management looks towards developing conducive environment through which employees are able to communicate freely and provide an environment through which the differences that exist between the employees are removed. This will help to develop strategy which is beneficial for organization and will ensure that the business is able to garner maximum efficiency (Hunter & Hunter, 2004). Bancolombia through the process will be able to remove the differences which exist and will be able to develop an environment which s friendly and looks towards integrating the different fundamentals through which the employees work together and look towards achieving the common goals. Action & Implementation Plan Bancolombia has to look towards ensuring that all employees at all level undergoes the required training which will make them understand their role and contribution towards the organization. These will also determine the path that the employees have to follow and will help to remove the differences which exist among the employees (Cable & Judge, 2006). This will also act as a guide and will make the employees understand the manner in working together they are able to understand. This process will also require continuous monitoring and if any differences exist between the members then they will have to look towards dealing with those and ensure that effectiveness is gained. The process of transformation will also require working on different fundamentals through which the business is able to multiply their effectiveness in dealing with the changing business environment (Ryan & Schmit, 2003). Conclusion The report thereby highlights the strategic issue which Bancolombia is facing due to change in culture which the business is witnessing within the organization. This will require that Bancolombia looks towards working on areas like providing the required training and developing a fundamental through which the business is able to make the employees understand the importance of working through a new process and output which will help to multiply efficiency. This will also require developing an environment where better facilities are developed through which the overall effectiveness can be gained. This will thereby ensure that the entire process is improved and the bank is able to work on the different areas through which the performance of the organization improves. References Arnold, J. 2005. Work Psychology: Understanding human behaviour in the workplace 4th ed. Harlow: FT Prentice Hall. Boddy, D. & Macbeth, D. 2000. Prescriptions for managing change: a survey of their effects in projects to implement collaborative working between organizations International Journal of Project Management, 18, pp. 297-306 Cable, D. & Judge, T. 2006. Person-organization fit, job choice decisions, and organizational entry. Organizational Behavior and Human Decision Processes, 67(3), 294–311 Clegg, C. & Walsh, S. 2004. Change Management: Time for a change. European Journal of Work and Organizational Psychology, 13 (2), pp. 217-239 Hunter, J. & Hunter, R. 2004. Validity and utility of alternative predictors of job performance. Psychological Bulletin, 96, 72–98 Ryan, A. & Schmit, M. 2003. Assessing organizational fit in employee selection. Paper presented at the 8th Annual Conference of the Society for Industrial & Organizational Psychology, San Francisco, CA Read More