Managing People: Structure and Culture - Case Study Example

1.1 Introduction In accordance with the changing economic conditions of the world, it is imperative for organizations to reorganize and adopt new ways in the existing organizational structures in order to perform more efficiently and to achieve the goals. Organization finds more appropriate to revise their organizational structure to survive in today’s environment. All business organization has common goals, but they achieve them at various speed. A common observation is that every organization tries to work efficiently. Some of the organizations mainly banks in UK have achieved success very rapidly such as Barclays, HSBC, Standard Chartered, Royal Bank of Scotland etc. The secret of their success is that they try to do every work with efficiency. In order to perform efficiently researchers have identified many theories and models, which organizations have adopted freely. These have focused on the theories and models of organization structure and culture. Both of these are very important for an organizations success. In order to study in detail the structure and culture of an organization I have selected one of the largest banks in UK which is HSBC. This paper not only focuses on discussing the structure of bank but also identifies it impact on the workforce and the possible changes in future (Mullins Laurie J, 2007, p.550) 1.2 HSBC Bank In today’s global environment HSBC bank is the biggest financial service provider. It is one of the largest banks in UK, having its headquarters in London. It has 10,000 offices in 82 states some of which are in Middle East, Asia –Pacific Regions, Africa, Europe, United Kingdom etc. it have a wide network. HSBC Holdings Plc has 200,000 shareholders in hundred nations, such as in Hong Kong, UK, Paris, New York etc. Due to the facilities of internet and other technological systems HSBC provides many financial services to the customers, which includes personal financial services, investment banking, commercial banking, and other products and services. HSBC mainly considers principles and values in the organization. It provides financial services to small and medium sized enterprises. It has more than three million customers on the list which includes public companies, incorporated businesses, associations, clubs, partnership and sole proprietorship. 1.3 Organizational Structure of HSBC bank HSBC organizational structure model is similar to the model defined in the theories of organizational behavior as shown in figure 1. A normal model of structural framework is used in a chart. It emphasizes on the fact that organizational structure provides efficiency in its operations and supply chain department. HSBC have used wide structural model which helps in dealing with uncertain and complex situation. This structure emphasized on the two theoretical facts identified in the book of Mullins. Firstly, organization set up in their own way which they prefer rather than copying other business. Secondly, make sure that all people in the organization are utility maximizes. Analysis of the organizational structure HSBC have maintained a tight organizational structure. Its structure can be known as liberal because managers of all branches of the bank directly communicate to the executive committee. This structure results in efficient management which is the core basis of all theories of organizational structure. It provides bank efficiency not only in the localities but also the whole organization. Company has used one of the traditional organizational structures. A central committee controls all the branches in a region and is subdivided on the basis of domestic and national markets. Figure 1 Organizational structure chart of HSBC bank The structure of the organization is less bureaucratic. This means local players have autonomy to make decisions on their own. Such as in skin and care business, zonal presidents are responsible to look after the local operations of HSBC. This means that company makes management decisions on the basis of flexibility. In past performance of bank this structure have promoted high productivity and increased the profitability of bank. Functional structure HSBC banks structure is functional based. This means employees perform on the basis of function such as retail, finance, marketing, research etc. and when employees perform in functions it results in excellence of work. Such as finance department will be staffed with finance and accounts personal, IT department will be staffed with software professionals. This kind of structure have resulted efficiency in every department of HSBC bank. The hierarchy of each department is closely related which shows effective communication among all functional groups. Bank has mainly focused on specialization and coordination among the task which is the basis of functional structure. It has integrated its activities vertically to reduce the cost and other expenses (Jones G. R, 2009, p. 5). In the organizational structure of HSBC each member works in a particular function and contributes to the performance of the company. In it bank managers are responsible for evaluation process of employee’s behavior. This means that a part of the immediate supervisor, other techniques can also be used for the evaluation of employees performance such as work products, subordinates etc. 1.4 Impact of structure on workplace culture Organizational structure greatly affects the workplace of on organization. It enhances the management, strategy and culture of a business. Some of the points highlighting the impact of HSBC organizational structure on the workplace are discussed below: Organizational structure of the bank has affected the strategy of the company, by making it more efficient. It has helped in management of the bank by enabling coordination, planning and have provided control on all activities of the staff. Structure promotes communication in the workplace among various functional departments and helps the staff to effectively communicate with one another. It helps workers to make value-based choices, by briefing them their job task on the basis of functional criteria. It has promoted a rational behavior in the bank because everyone is familiar of their duties and task and has to work in one specific department on the basis of specialization. Through this structure management and the workforce have been able to synchronize different parts of the organizations. Structure has helped HSBC in strategic management practices. Due to which it has been able to increase the performance of workforce in their existing jobs and have also helped to contribute new specialized staff to the bank. HSBC have improved the organizational performance by improving the performance of workforce through its organizational structure. This structure also helped to identify the existing talent in the bank. By evaluating the work of staff member’s persons with higher talent can be sifted to senior position within the organization rather than hiring a new person and increasing expenses. One of the common practices of HSBC is that its culture is highly related to work-ethics endorsement. This means a screening process is done to evaluate the skills of workers and finding ways of improvement. By adopting this practice HSBC have been able to maintain an efficient workforce who is more skilled and committed to the company. Structure helps to communicate a common goal from top managers to the employees. This results in harmonious relationship among staff members. It promotes the belief that all levels should work together i.e. managers and employees without any bias should work together in the organization which means that workers just don’t have to satisfy their supervisors or their own need. In spite they work as a family for the organization. People work in team on the basis of coordination. This structure has increased the sense of pride in the employees of the bank. This means HSBC have a positive influence on the behavior of the organization, which results efficient performance from the workforce in alignment with the strategy of the company. Empowerment is the key tool used by the bank in its organizational structure in which employees are given powers to make decision on their own rather than relying on top management. This means that workforce is highly involved in the company and is responsible for the outcomes (Bloisi W, 2007, p.216). 1.5 Suitability and recommendations HSBC organization structure have always supported the company in past and have increased its profitability. But presently, HSBC has low business in many regions of the world. The structure that was used previously by the organizations need to be reorganized. One of the major fault in its structure is that bank has overemployed the workers. There are lots of workers in every function of the company as compared to the work. This leads to increase in expenses related to wages. HSBC share prices have also decreased to 24% in 2009. Crises It have been noted that presently HSBC is facing any losses due to changing economic condition. In March 2009, an announcement was made by HSBC that it will close down all its branches in UK due to less business and will only operate the business of credit card. It is an estimation that if this is done it will result to 6000 job losses in UK. In accordance to the 2010 financial report of HSBC in UK, expenses have increased rapidly as compared to profits. Wages compensation of workers has also increased due to excess of staff in the organization. Recommendations Following are some the changes that HSBC should adopt in its organizational structure in order to be successful in future and to cope up with the present situation of the company. HSBC should go for mergers and acquisition with other banks. It is the most appropriate way to boast up their profits with minimum investment. Organization should revise structure by focusing on its supply chain and operation departments. All job positions should be critically evaluated in the structure. Positions which results in no or less work efficiency should be eliminated from the organizational chart. Company’s effectiveness demands changes in its organizational structure and designs. The bank should revise the structure of some of the functional departments which are not working on maximum utilization. This requires critical analysis and research in internal perspective. Company should try to come up with new techniques and procedures of investment to attract the target market segment and to raise its share prices. Organizational structure can be transformed from functional to divisional structure i.e. performing on the basis of division as HSBC have a wide business network. This structure will bring changes in the working conditions and may lead to profitability. In order to ensure success in the organization in is imperative that a company should have effective and efficient organizational structure and culture within its premises. HSBC competes in this competitive environment on the basis of two key tools i.e. organizational structure and culture. Which can be further improved if critical focus is made to improve its management procedures and techniques. HSBC mainly uses its resources to compete in the market; in fact it should have more focus on its working staff. If employees will work on the basis of efficiency than only the performance of organization will improve and will be back in the leading position. 1.6 Conclusion HSBC bank does not only possess effective organizational structure but also have a unique culture within the organization. It has a traditional organizational structure and culture as specified in the theories of organizational behavior. It has a strong organization culture which is further subdivided which binds the firm in one knot and helps to deal with the challenging situations. In order to make its brand different HSBC launched a campaign in which it differentiated it characteristics from the competitor and considered itself unique from others because of this basis it is known as the world’s local bank. However, presently HSBC bank is facing some problems in business due to uncertain economic conditions. So in order to be successful it is imperative that managers should think more critically on the systems and structures used in the organization, they should manage resources of the company efficiently, especially the people. Managers should make a more prosperous structure and culture of the organization by managing the people, motivating them and keeping them satisfied to get more improvement in their work as well as the organization. Strategic management, strong culture and organizational structure are not only the basis of leadership for HSBC bank but are also the reason for its survival. References Bloisi, W .(2007). An Introduction to Human Resource Management. McGraw-Hill, London. Chapter 7, pp. 215-251 Jones, G. R. (2009). Organisational theory, design and change. 6th ed. London: Prentice Hall, pp. 1-10 Mullins, Laurie J. (2007). Management and Organisational Behaviour. 8th ed. Harlow: Financial Times Prentice Hall, pp. 545-600 Read More