Macquarie Group Analysis - Case Study Example

Macquarie Group Analysis Name Course Institution Date Introduction The level of competitiveness in the corporate world is increasing with the growth in technology. It has come to a point where it is literally impossible to separate business success from technology. It takes pragmatic goal-oriented leaders to take advantage of growth in technology and other opportunities to turn around the progress of the organization. In Australia, there are a number of personalities who have done an excellent job in the corporate world. This report seeks to analyze one of such personalities in line with the achievements they have attained over time. One of these personalities is Allan Moss. He is regarded as one of the most successful CEO in Australia. He was the CEO of Macquarie Group until 2008 when he resigned and formed a private investment firm. For the 15 years that he was the CEO of the company, he was very successful. He had had a successful career even before joining this company. Macquarie Group is a company offering banking, advisory, investment and financial services. It is a multinational company operating in very many countries around the globe. The company has been in a very strong financial position over time. The company has received a number of awards based on its performance. This is one indicator that the company has been on a very successful trend. For instance, in 2013 alone, the company has received almost ten awards and recognitions. With this kind of performance, the focus shifts to the leadership. It is basically because of strong leadership that a company is in position to achieve this kind of success. Since the company was formed in 1969, the progress has been steady. It has achieved numerous milestones to get to where it is now. This is very impressive indeed. External Environment Economical The Bank has faced some challenges in the past which have left the company in somehow bad shape. Macquarie Group, just like any other company was very much affected by the global financial crisis. The company was hit hard by the crisis. It took serious combat strategies for the company to continue with its normal operations. The bank was forced to revise its fund management approaches. The new business operation strategies led the company to paying out a lot of taxes to the federal government. In addition, the rising Australian dollar has had a huge impact on the company’s progress. This is because 60% of company’s earnings are generated off-shore. This has led to diminishing returns for the company. With such trends, off course there are concerns on how to maintain profitability. In such a scenario, many companies may think of reducing labor force. This may not be the feasible solution. The concern of the company is the market price of the ordinary shares on ASX. During such periods, such trends could easily spark speculations that could affect share price in a serious manner. This is what the company has had to deal with especially after the 2008 financial crisis. With the change in top management in 2008, this must have played a key role in reduced profits that have been reported. After the retirement of Allan Moss, the trend of the company in terms of profitability has been worrying. 2008 seemingly marked the climax of the company’s good performance. Since that time, the company’s profits have been declining slowly. In 2008, the company recorded a profit high of A$1.8 billion. Some years down the line, the profitability of the company has fallen to $860 million. The Returns on Investment (ROI) has also declined over time. These are the indicators that point to the fact that the company’s performance has declined over time. Technology Macquarie Group, just like any other organization has experienced some issues in relation to technology. The company is looking forward to utilizing technology to have a cutting edge in the industry. Currently, the company’s greatest challenge in relation to technology is how to capture analyze data in the industry. The company looks forward to adapting to the dynamic nature of business environment as a result of technology. It remains a challenge on how the company can use the new technologies to enhance efficiency and effectiveness in business processes. Task Environment Customers Over the years, the company enjoys a wide base of customers. This ranges from domestic to international customers. This is a key pillar that supports the organization’s functions (Zeithaml, Bitner & Gremler 2011, p. 101). In this case, customers are considered as an external force. They work together to determine the extent to which certain operations run in the organization. The nature of the banking industry does not allow the customers to be extremely powerful. While customers can influence the price of some products, there are so many controls to regulate this. The price at which banks are selling their products to their customers is determined by market forces which cut across the board (Kotler 1999, p. 141). Nevertheless, the banks have designed mechanisms of differentiating their products and services in order to have a competitive advantage. Through this, they have redesigned their service delivery to the customers in order to appeal to as many customers as possible. In this case, customers do not have the power to manipulate the pricing of the products. This is because for some products like the loan, the lending rate is determined by the central bank. Competition This company has very many competitors. This is expected considering the nature of competition in the banking sector. Having pointed out this, it is good to assess the trend that this company has maintained for some time. The company has managed to post good financial performance in the midst of competition. Even after the decline in profitability after the world financial crisis in 2008, the company still remains firm as compared to other players in the sector. This point to the fact that the company has managed to differentiate its services as well products to a level that is quite satisfactory to the customers (Furtado & Fadil 2012, p. 291). This clearly shows a weak competitor power. That is to say that inasmuch as there is stiff competition in the industry, the company is still able to make some profits. Strategy Formulation SWOT Analysis Strength Good reputation across Australia and most parts in Europe Diversified investment portfolio Good financial records Wide customer base Has had strong leadership for a very long time Received many awards and recognitions Weaknesses Change of leadership High employee turnover Strengthening of Australian dollar is weakening its offshore earnings Reduction in profit after tax with time Opportunities Growth in technology Availability of international markets Threats Global financial crisis Increased level of competition in the industry High cost of operation Litigation costs have threatened the goodwill of the entity Planning, Growth & Development Strategies The company has laid its strategic goals on innovation and creativity. The company has put a lot of mechanisms in place to ensure that it is in a position to attract and retain the brightest and best talents in the region. The Graduate Recruitment program is one of its kinds. It is meant to attract the best talents for the benefit of the company. The only reason such a program was put in place is to ensure that innovation and creativity is cultivated in the organization (Boxall & Purcell 2001, p. 72). The organization understands pretty well the nature of the market. The level of competitiveness is soaring high every day. Without creativity and innovation in an organization, overcoming such impediments in the market may be very difficult. The company has communicated its strategic approaches to growth to all its subsidiaries around the globe. The organizational structure allows it to coordinate the affairs of the company in subsidiaries around the globe. In order to achieve its strategic goals in relation to global expansion, the company has invested heavily in its employees. The graduate recruitment programs aims at harnessing the best from the graduates for the benefit of the company. The program seeks to utilize the creativity in these graduates to drive its strategic plans in the global markets. The company appreciates the potential in terms of the zeal and energy such young generation has. It is based on the understanding that the success of the company rests upon new ideas that must be injected into the company. In relation to human resources, the company understands the role of staff in achieving its goals. The company understands that this being a financial institution, its staff is constantly interacting with customers. That is the point where value creation steps in. Business is brokered when the staff deals with the customers. Having understood the role of human capital in achieving the strategic goals of the company, the human resource department has put in place policies that seek to motivate the employees in order to offer the best for the company (Bratton & Gold 2001, p. 171). The human resource planning policies are meant to ensure that labor supply is maintained according to the demand in the organization. This has been seen through the graduate recruitment programs. They seek to ensure that the company is not in deficit of skilled personnel. Strategic, Tactical & Operational Plans Macquarie Group is a multinational company. In the recruitment process, the company has demonstrated its commitment to reflect a global outlook. As a branding strategy, the company is committed to ensuring that its workforce is a representation of diversity. This is aimed at increasing the level of acceptability in the international markets. This is one way through which the company has decided to approach globalization. The policies that the company designs provide a clear roadmap that shows that the company is committed in achieving its global strategies. This can be reflected in the manner in which the organization operates its subsidiaries. Ethics in Workplace The company’s commitment to maintain high ethical standards is unquestionable. The company clearly understands the role of ethics in achieving its set goals. Ethics is part of an organization’s image. It is part of the ingredients meant for building a brand of an organization. Therefore, this is an asset to the organization and that is the reason it is doing everything possible to maintain high ethical standards. Honesty and integrity in service delivery is highly cherished across the group’s operations. Honesty and integrity is rewarded accordingly in the company’s operations and this keeps employees upbeat about ethics. Few cases of unethical standards have been reported against this company, except one reported in 2012. The claim raised against the company concerned an issue of fraud in issuing of loans. The company’s agent is reported to have given malicious financial advice to a client who later lost everything in the scheme. The plan involved using the client’s home as a security to secure a mortgage. Little did the client suspect that the deal was fraudulent and malicious. The client ended up losing the only home she had and that was quite devastating. Social Responsibility The company has invested a lot in terms of social responsibility. This is something that has been running for quite some time now. Currently, there are several initiatives that are being spearheaded by the company in the community. One of the initiatives is meant to finance the community to facilitate environmental conservation programs. There is foundation that has been established by the company to raise funds for the same function. The staff members contribute part of their salary to the foundation. The funds have been used not only for environmental conservation, but also other empowerment programs. The communities around have greatly benefited from this program. Conclusion The achievements that this company has recorded are mainly as result of good leadership. This is because policies and other plans that run the organization are made at strategic levels. These are the senior managers that come up with such strategies. These strategies have enabled the company deal with all the issues that affect the operation of the organization. These strategies have come up with means of dealing with the stiff competition in the market. At the same time, mechanisms for attracting the best skills in the industry have been designed. In addition, the company has been able to come up with strategies for attracting customers as it expands into the international market. The company has used innovation and creativity to come up with strategies that enables to maintain market leadership in the industry. References Belcourt, M. & McBey, K 2009, Strategic Human Resource Planning, Nelson College Indigenous, New York, pp. 139-165. Boxall, P. & Purcell, J 2001, Strategy and Human Resource Management, 3rd Ed., Palgrave Macmillan, Hampshire, pp. 63-93. Bratton, J. & Gold, J 2001, Human Resource Management: Theory and Practice, Psychology Press, Hampshire, pp. 163-187. Carter, E 2008, Successful Change Requires More Than Change Management, Journal of Quality & Participation, vol. 31, no. 1, pp. 20-23. Furtado, B. & Fadil, P 2012, The Four Faces Organizational Culture, Competitive Review, vol. 22, no. 4, pp. 283-298. Kotler, P 1999, Kotler on Marketing: How to Create, Win, and Dominate Markets, Free Press, London, pp. 137-187. Fletcher, R & Crawford, H 2011, International marketing: an Asia-Pacific perspective, 5th edn, Pearson education Australia, French Forest, NSW, pp. 56-79. Zeithaml, VA, Bitner, MJ & Gremler, DD 2011, Services marketing, McGraw-Hill Irwin, p. 95-126. Read More