Back to Basics at Westbank - Essay Example

? Back to Basics at Westbank: A Case Study Word Count 500 (6 pages) I. Introduction & Background to the Case Study (300 words) Obviously, WestBankplc has a lot of obstacles to overcome. First, its organizational head by the name of Mr. Ron Smith (a.k.a. “Ron the Rat”) took off with 500,000 pounds of a pension that was really probably not due him anyway, since he had been forced to leave WestBank. That casts a pall on the already struggling bank, which, in essence, has too many ‘irons in the fire,’ one might say in a euphemistic sense. WestBank’s main problem—which will have to be handled by the wonderful Ms. Jones—happens to be in the predicament whereby there is no leadership and no one seems to know what they are doing, much less what the overall company vision is for WestBank. In other words, Ms. Jones must have a serious meeting with members of the board and make sure that the company is heading in the right direction, and that everyone in the company is ‘on the same page,’ as it were. If the company does not have a common goal (or goals), now is the time to do it, since the departure of Mr. Smith definitely heralds a new and exciting time in WestBank’s history. Now the company can start afresh, knowing that it has had some failures in the past with securing student overdrafts as did HSBC, but now it is flailing amidst the sundry musings of a—most likely—underpaid and underinformed work force. Therefore, it is up to Ms. Jones to set the company aright, although, truth be told, she cannot do this alone—she needs help. Most definitely, one of the key elements to her success is how the board meeting goes. She must find the unity of the company’s mindset, generally, in order to know how to proceed and take the direction of the company. II. WestBank’s Former Reputation (325 words) Obviously, WestBank got into a lot of trouble by backing a bunch of unsecured debts, and that is basically where it ran into troubles. Let’s hope that WestBank doesn’t eventually do what happened to HSBC’s original parent company. “[Britain’s Midland Bank] was the biggest in the world in 1934, and then went into a slow decline, eventually being taken over by HSBC in 1992, changing its name to HSBC Bank plc in 1999” (Siklos, Bohl, & Wohar, 2010, pp. 168). In order to maintain the WestBank brand, it is of premier importance that all of WestBank’s dealings be transparent with Premier, the parent company. That was not the case at HSBC. “At HSBC, the bank was 'happy to discuss some of the finer detail in private meetings, but prefer[red] to restrict circulation of the internal policies themselves'” (De Neve, 2008, pp. 249). Another bank, Santander, was established by having replaced various UK banks that had formerly been well-known. “[Banco Santander] is headquartered at the Ciudad Financeria Santander (Santander Financial City) in Madrid and employs around 130,000 people worldwide. The history of BSCH began in 1857 when Banco Santander was established by royal decree…” (Wankel, 2009, pp. 106). It still holds significant appeal for the UK in the Royal Bank of Scotland (RBS). “In January 2000 Santander's holding in RBS peaked at about 10 percent. Later, Santander's support was critical to the success of RBS's bid for National Westminster, completed in March 2000” (Guillen, 2005, pp. 109). One of the mistakes that WestBank must learn from in its past is to not make the same mistakes in the future. In the next section it will be discussed what is currently the state of this particular bank and what it has to do to overcome its obstacles—and what Ms. Jones is going to have to do to make WestBank a winning brand once again. Obviously, there are steps which must be taken now to ensure success. III. WestBank’s Current Dilemma (300 words) WestBank’s current dilemma is very similar to that of what HSBC went thorugh. Right now, HSBC is going through a difficult time. “[For HSBC, t]he first-quarter reading was in line with the long-run series average of 54.9. Still, the index shows that inflation ‘is in danger of becoming an entrenched problem,’ and that the pace of growth, while adequate, ‘has lost momentum,’ said Stephen King, HSBC’s chief economist, in a statement” (Mozee, 2011, pgh. 2). Both HSBC and RBS are not very good indicators—if there are any—in order to ensure that the UK banking industry, especially as it regards to WestBank, will have a bright future as a global bank. But in the UK market, it might work. This is according to reports of larger banks doing well in emerging markets. “[There are] weak outlooks from HSBC and Royal Bank of Scotland. The twin disappointments have…investor attention because the banks have reasonably different footprints. Both are global, but RBS is more dependent on the UK and other developed markets while HSBC has a strong position in emerging markets, especially Asia” (Kansas, 2010, pghs. 1-2). WestBank might not be doing as well in emerging markets, however, it has the potential of being very successful if it sticks to a plan for the future that is measured and reasonable, and as such, Ms. Jones should seek to take the company in that exact direction—toward success. The future of the company will look very bleak unless Ms. Jones steps up, shows some leadership ability, and guides the company in the direction she thinks it should go. More about how she will deal with the company’s future is going to be discussed in the next section, which is about WestBank’s future as it relates to her suggestions for WestBank in general. IV. Evaluation of WestBank’s Future And Ms. Jones’s Suggestion (450 words) Like HSBC, WestBank should set out to have an ambitious plan. “HSBC, the world's second largest bank, recently embarked on an ambitious strategic plan 'Managing for Growth', which placed effective diversity management at its core…[including the necessity for] HSBC to understand the needs of its customers and their communities (Clements & Jones, 2008, pp. 38). It is certain that Ms. Jones must take into account the kind of services that her clients need and then provide exactly that. The financial products that are offered at WestBank should be put in writing in order to ensure that, like HSBC bank, their employees know what they are able to offer to customers and what they cannot. “HSBC Bank…also provides a range of additional financial products including traditional banking services like savings...In particular, it aims to deliver a world-class brand through its human resource policies…” (Lancaster & Withey, 2007, pp. 362). WestBank’s human resources need to reflect its values within the community at large—while Ms. Jones provides the overarching ‘big picture’ of a company plan for one-, five-, and ten-year goals. WestBank, like HSBC, had given students checking accounts with no overdraft charges. However, WestBank should be wary about getting involved with such practices like revoking a good policy, because—as HSBC found out—students revolted online and the HSBC policy backfired on them when they revoked the student overdraft policy. “The UK division of the bank HSBC had been recruiting students and recent graduates with the promise of checking accounts that carried no penalty for overdrafts. In August 2007, HSBC…revoke[d] this policy, giving students [short] notice… [It] made corporate sense [but there were] mass defections.  HSBC hadn’t reckoned on Facebook” (Shirky, 2009, pp. 180). WestBank, in essence, should corner the market on student investing once again as long as it has a good record in the public eye. However, if Ms. Jones feels that WestBank’s reputation has been severely damaged by the bad investments it took on—especially the subprime mortgage lending in the U.S.—it might be wisest to stick to offering financial products which are probably not giving customers too much value, but just enough value so that they will consider returning to WestBank. For example, customer discounts can be replaced with good customer service and people-friendly ATM’s. Ms. Jones must rebuild the company’s reputation first before diving head-first into student checking accounts with no overdraft fees, as that backfired once already like it did with HSBC. WestBank should invest in financial products that are safe and effective and will improve their reputation first. Then, the bank can move on to more lucrative and more risky investment ventures once it has proven its mettle with simpler tasks in kind. V. Conclusion (175 words) Overall, it is recommended that Ms. Jones be conservative when deciding the future path that she is going to suggest that WestBank take. She may just decide that, even though she does have sufficient and extensive experience with student accounts—that, perhaps that experience should take a back seat right now as she struggles to repair the overall face and look of the company. Right now, WestBank is suffering from major financial and reputation issues. In order for people to invest in WestBank, they are going to have to feel comfortable and ‘at-home’ with the bank. It is in Ms. Jones’s best interest to proceed cautiously and to start getting the company back on track for a rebound. Until the company gets itself in a place where there is a loyal client base with lots of room for experimentation, and until that negative press subsides with interest-free checking accounts for students including no overdraft charges, it only makes sense to start to rebuild the client base first before attempting to corner such a market again. BIBLIOGRAPHY Clements PE & Jones J (2008). The diversity training handbook: a practical guide to understanding and changing attitudes. UK: Kogan Page Publishers. De Neve G (2008). Hidden hands in the market: ethnographies of fair trade, ethical consumption, and corporate social responsibility. UK: Emerald Group Publishing. Guillen MF (2001). The limits of convergence: globalization and organizational change in Argentina, Korea, and Spain. US: Princeton University Press. Kansas D (2010). HSBC, RBS sour the banking sector. Online. Available: . Lancaster G & Withey F (2007). Marketing fundamentals 2007-2008. US: Butterworth-Heinemann. Mozee C (2011). Inflation crimps emerging-market growth: HSBC. Online. Available: . Shirky C (2009). Here comes everybody: the power of organizing without organizations. US: Penguin. Siklos PL, Bohl MT, & Wohar ME (2010). Challenges in central banking: the current institutional environment and forces affecting monetary policy. UK: Cambridge University Press. Wankel C (2009). Encyclopedia of business in today’s world, volume 1. US: Sage Publishing. Read More

 

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