Management at ANZ Bank - Case Study Example

Globalization - ANZ Name Class Unit Introduction The rise of globalisation has had a great impact on the banking sector. As the banking sector expands, there are a lot of challenges that have to be met. Globalisation can be defined as the integration of countries and people which have been done through reduction of communication and transportation barriers which have led to ease inflow of goods and services. Virtually every country has been able to be part of globalisation which has led to the spread of free market. Opening up of the domestic banks to the foreign competition have led to benefits and potential risks. The banking sector has been under the influence of changes which have been brought out by globalisation (Robert 2004, p. 31). As ANZ ventured into global market, it was affected by several issues. The bank has presence globally with employees from more than 130 countries. There was increased competition internationally, cultural differences, legal requirements and managing diversity. Despite the efforts to harmonise banking regulations, there are still challenges that banking sector faces. There are also marketing risks that the banking sector faces as they enter the global market. At the moment, the global banking environment is faced with an increasing competition, domestic and international regulations. This report will identify the key issues and concerns for ANZ internal management policies and practices across multinational sites, cultures and workforces (Branine 2011, p. 49). Entering into the global arena allows a business to create competencies and advantages. This is due to fact that the organisation is exposed to a diverse market, more resources and new regulatory regimes. By use the operations from different areas the firm is able to have a competitive advantage (Geert 2001, p. 56). As ANZ ventured into the global market, they had a chance to enjoy greater economies of scale. They could supply different markets from a single source. Their bargaining power was also enhanced. The bank was also able to enjoy a global supply chain (Geert 2001, p. 57). One of the challenges that the internal management of the bank had to face is managing across cultures. The management had to face challenges as they had to operate in different cultural backgrounds. There have been arguments that cultures converge into one global culture. This has been supported by the advances in communication and other technologies (Geert 2001, p. 55). Despite this, the concept of the converging culture has led to pressure for culture fragmentation. The management is shaped by the origin culture and cannot be applied universally. Culture integration have been supported by economic, technological and development of new management principles. Despite the existence of these forces, the forces advocating for culture fragmentation are stronger. There are beliefs and national pride which may have a stronger force towards cultural fragmentation. For ANZ bank, entering into a new market meant they had to face a different culture. For example, the Australian culture is very different than the Indian culture (Branine 2011, p. 16). In every management practice that is practised across the borders, there have to be cultural conflicts. Values and beliefs are very important in every culture. The management have to face problems as they contemplate what matters in every culture. ANZ had to identify what matters in each culture and how they could utilise the culture for their advantage (Geert 2001, p. 56). For the management, the first step was recognising the culture differences and how they could utilise them for an advantage. Within each country, there are regional cultures. The management has to face customers from different regional cultures (Wilson et al. 1996, p. 54). The banking management had to face challenges as they faced differing industry cultures. The nature of decision making is different according to cultures. In some cultures, their decision making has been affected by the state intervention, secrecy and type of environment (Wilson et al. 1996, p. 51). According to Hofstede cultural dimensions, each country has their value dimension. As ANZ ventured into different markets, they had to face different values. The values identified are; power distance, uncertainty avoidance, individualism, and masculinity/femininity. Each of the country has different ranking in the four value dimensions. Power distance refers to the way in which a society accepts unequal power distribution. Uncertainty avoidance refers to the society value of discomfort when faced with uncertainty. The extent to which people prefer to take care of themselves is known as individualism. For example, venturing into the Asian market meant that ANZ had to face different value dimensions as compared to Australia (Geert 2001, p. 75). As ANZ ventured into global market, they had to implement global strategies. This meant that the bank human resource policies and practices were supposed to support the global strategy. The main challenge is the fact that the policies cannot produce the same effect on different cultural context. The human resource management had to be modified in order for the practices to meet different global cultures (Branine 2011, p. 38). Getting the right workforce is a vital aspect of the human resource management. This becomes a challenge in the global arena as the firm is unfamiliar with the local labour market. A standard profile in one country is very different when implemented in another country (Wilson et al. 1996, p. 54). There are differences in the education systems which makes it hard to standardise selection criteria. As ANZ entered into a new market, they faced the problem in knowing the workforce with the right profile. The competition from the local firms makes it hard to determine the exclusive labour pool. For ANZ bank, they had to look for the right balance between making their own choices and copying from the local firms. The selection had to be carried out through making sure that they know local norms, values and assumptions. For ANZ, the selection procedure utilised had to ensure that they identify what to respect and follow and what to ignore. This is due to fact that the selection process had to ensure that the bank was able to have a competitive advantage over the rivals. Another challenge for the ANZ bank was the socialisation. This is a process in which new members are able to absorb the corporate culture and become acquainted with it. The management has to ensure that the process is carried out in a smooth manner. ANZ bank had to carry out training for the workforce to ensure that they are acquainted with the new corporate culture. The new workforce is also expected to be observant of the new culture. ANZ had to train and develop managerial competencies in their new areas of operations. This was aimed at helping them to gain know how on what is needed in their jobs. Different cultures have different training needs. The company had to decide where to standardise the training depending on the context (Branine 2011, p. 61). The mode used to reward the employees is affected by the culture. In some cases, there is more favour towards equality rather than individualism. The way in which management carries out career development is also varied in different countries. For ANZ bank promotion had to be carried out depending on the culture. Individual importance versus group importance determines the way career development is carried out (Wilson et al. 1996, p. 52). ANZ had to make the HRM practices to be meaningful across different cultures. They had to make decision on which management practices to export globally and which needed to be locally adapted. If the human resource practices are ill fitted to a given culture, they can lead to low morale as the workforce views them as imposing. The human resource management policies had to be looked critically to ensure that they do not lead to confusion and poor coherence in the firm. ANZ had to ensure that they carried out their human resource practices in a manner that it would cater for different cultures globally. Internationalising human resource management is another challenge that ANZ bank faced. The bank had to make sure that their HRM policies were aligned with its corporate strategy. The bank had to ensure that their cultural assumptions that were embedded in the HR practices were able to prevail in their local cultures. The management had to ensure that they counter any local resistance to the policies. The resistance to policies is embedded to the cultural differences that exist. Globalisation has led to firms being more interdependent. The advances in communication technology have led to ease of business to be interconnected. The banking sector has been able to adopt information technology at a fast pace (Schneider, Susan & Jean-Louis 2003, p. 45). The management had to ensure that those in authority were able to act as global managers who had the capability to distribute international responsibility. Where the bank had to use expatriates, there were problems with failures where expatriates returns home before the end of their assignment. The failure to adapt to the local culture can be cited to be the main reason for expatriates failing in their mission abroad (Branine 2011, p. 43). Industry dynamics is another problem that faced the ANZ bank management team. In the global arena, organisations are ranked according to their capabilities and achievement worldwide. Prior to expansion to other countries, ANZ was rating itself in Australian and New Zealand. The increase of their presence in the international arena meant that the bank was now rated among the international competitors (Schneider, Susan & Jean-Louis 2003, p. 45). The management had to come up with strategies that would ensure that they stayed ahead in their business and obtain market leadership. The bank was now competing globally. The liberalisation of the financial markets meant that it was easier for other banks to invest across national boundaries. The international banking arena, thus became more competitive (Branine 2011, p. 35). The management faced challenges in coming up with corporate capabilities and human capital that could help them to exploit the global market. The mangers were expected to have a global mindset and cross cultural competencies that could help them to operate across different cultures. ANZ was required to have a deep understanding of the global industry and its dynamics. The complexity of the new market was higher than in a domestic market. The bank had to make sure that the leaders were well informed and ready to take any appropriate action that would enhance their presence globally (Wilson et al. 1996, p. 52). Coordination challenges are another issue that the internal management faced. The bank had to make sure that all business in different countries was managed appropriately. For example, ANZ headquarters was supposed to be able to follow all the business activities that were taking place in India, Australia and New Zealand among other overseas destinations. The risk management is a new challenge that the bank had to face in the wave of globalisation (Wilson et al. 1996, p. 52). The global market has new forms of risks. The risks also occur in a complex global context (Schneider, Susan & Jean-Louis 2003, p. 45). As the bank enters the global arena, there is a change in policies. The corporates have to ensure that their policies are in line with the area of operation. The policies are effective if the corporate is able to operate in a new market with minimal friction. The corporation is also expected to observe the changing policies that occur. For example, some countries have national policies that support domestic firms (Wilson et al. 1996, p. 52). This means that for a new firm, being able to withstand competition in these countries is hard. The management of the ANZ bank had a challenge to ensure that they are able to identify the existing policies in different countries of operations and determine how they affect the bank. The bank was also supposed to ensure that they support variations of their policies in different areas of operations in order to reduce friction (Robert 2004, p. 32). In 2000, ANZ management had to look into ways in which the organisation would continue to gain market and remain sustainable in the competitive global environment. The bank was aiming to become a high value driven organisation. The organisation came up with a strategy to transform its culture. The main focus was put on the people and organisation culture in order to come up with a global bank (Wilson et al. 1996, p. 55). The effort enabled the bank to improve its workforce engagement across its operations. The bank internal management utilised cultural transformation tool. The bank reviewed their organisation culture based on the employees’ feedback in order to come up with a culture that employee could identify with. The bank management came up with a strategy that recognised diversity among the employees where issues such as gender, lifestyle, race and choice were valued. The bank had to make sure their management was able to reflect the diversity that is reflected in its operations in different countries (Michael & Peter 1996, p. 220). Open communication helped the bank to manage their operations in the global arena. The employees were given the chance to raise their issues with the line managers. The company also started conducting regular surveys where employees could give feedbacks on areas to improve (Lewis 2000, p. 56 ). Conclusion ANZ bank venture into the global market have led to several issues in their policies and practices. The multinational sites have different cultures and workforce attributes. Managing across cultures was a major issue for the bank. Different countries have different cultures which mean that the bank had to ensure they were acquainted with different cultures. They had to consider the five elements of culture outlined by Hofstede (Wilson et al. 1996, p. 54). The main issues faced by ANZ bank were; socialisation, getting right workforce, means of rewarding across cultures, internationalising HRM, increase in global competition and changing policies according to cultures. The bank had to ensure that they were able to able to ensure their human resource management policies were relevant in different cultures. The bank had to come up with global strategies that could enable them manage diversity among their workforce. The management had to face the implications as the bank operated in the global market. References Branine, M 2011, Managing Across Cultures: Concepts, Policies and Practices, Los Angeles, Sage, 2011. Geert, H 2001, “Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations”, revised version, Thousand Oaks, CA, Sage. Lewis, R 2000, “When Cultures Collide: Managing Successfully Across Cultures”, London, Nicholas Brealey. Michael, B & Peter, S 1996, “Cross-cultural social and organizational psychology,”Annual Review of Psychology, vol. 47, p. 205–235. Robert, J., Paul, J., Mansour, J., Peter, W & Vipin, G 2004, “Culture, Leadership and Organizations: The GLOBE Study of 62 Societies”, ThousandOaks, CA: Sage. Schneider, S & Jean-Louis, B 2003, “Managing Across Cultures”, Harlow, England, Financial Times Prentice Hall. Wilson, M., Michael, H & Leonard, R 1996, “Managing Across Cultures: A Learning Framework”, Greensboro, N.C, Center for Creative Leadership. Read More