Organizational Changes in HSBC Bank Based on the Turbulent Economic Conditions - Case Study Example

Organizational Change: HSBC Bank The objective of the essay is to proffer the changes in a major businessorganization based on the turbulent economic conditions today. The analysis would reflect how the organization has changed operations with respect to trends, issues, and problems that need to be considered when determining the changes that the organization has implemented, or needs to implement to remain competitive within the industry. Organizational Change: HSBC Bank Our world today is beset with financial crisis of insurmountable coverage. A multitude of corporations on a global scale declare bankruptcy and render thousands of employees jobless. The inevitable nature of factors which interplay and caused this financial turmoil on a global scale affect other facets of the organization’s operations. Several financial institutions are most affected by the crisis, of which HSBC Bank is one. The strategies employed by the organization, especially in critical areas of operations, assist in its survival. The objective of the essay is to proffer the changes in HSBC Bank based on the turbulent economic conditions today. The analysis would reflect on how HSBC has changed operations with respect to trends, issues, and problems to remain competitive within the industry. The following areas would be considered in the discourse: the marketing tools used by the organization, the customers of the organization, including issues such as customer care, the current issues faced by the organization, the control systems used by HSBC, as well as relevant human resources strategies. Background of HSBC Bank HSBC Bank’s holding company is located in New York City. Its official website boasts of its “nearly 400 branches in New York State, as well as 11 branches in Florida, six in California, and one branch each in Delaware, Pennsylvania, Oregon, Washington State and Washington, D.C.” (HSBC: About us, 2010, par. 2). . It offers a diverse portfolio of financial instruments including savings and current accounts, investment accounts, credit cards, loans, mortgages, insurance and international services. It supports a wide range of education and environmental projects and initiatives throughout the communities where they do business. Organizational Change Since the United States considered one of the most powerful countries in the world was the source of the financial crisis, the drastic effects cascaded to the rest of the countries directly or indirectly doing business with it. A number of financial institutions and business enterprises fail and close in countries such as Europe, Iceland, and Asian countries like Japan, China, India, from among the rest. Luckily, with the extent of drastic effects that the financial crisis have wrought, HSBC Bank remains strong in the market due to its strengths, as presented: (1) diversity of financial portfolio; (2) a strong customer relations skills; (3) a competent and professional management; (4) extensive global reach; (5) substantial resources. In fact, according to an article written by Marquez (2009, par. 15) “given the company’s traditional credit discipline, its share of trouble was relatively small compared to what the competition suffered through. And in the end, the bank’s strong capitalization, global diversification and discipline saved the day. HSBC’s exposure to a variety of resilient economies around the world, including Asia and Latin America, gave it an edge over U.S.-based firms”. Despite the minimal effect in terms of financial performance, HSBC focus on its competent and professional management as well as ensuring a qualified pool of diverse workforce to sustain its good fortune. In this regard, in view of increasing global competition, HSBC’s both marketing and human resources strategies needs to prepare its personnel in various aspects of the global market. Marketing Tools Used by HSBC HSBC boasts of offering a variety of products and services to cater to the diverse and unique needs of its clientele. From among the host of products and services, the following stand out are: Savings Accounts in this contemporary globally competitive world should be diverse and enticing to capture the interest of the customers. Investment Options are also accorded to customers in the form of Selected Investment Funds, tax efficient savings account, investment bonds, share dealing, guaranteed income bond, financial advice, and retirement solutions, among others. HSBC also offers personal loan, mortgages and several insurance alternatives (car, home, travel, life, student, business and even pet insurance). The bank provides international services for clients leaving the country and requiring a variety of international services (travel and holiday, currency transactions, offshore banking and investment). Pricing strategies of banks are highly competitive in terms of the rates given for savings and investment accounts, bonds, loan facilities and currency exchange rates. The rates follow those that are dictated by the market. Financial institutions assess their competitors in the area and peg their rates accordingly. From the corporate offices identified above, the locations are chosen strategically depending on the demographic factors, population of the area, business locations, among others. With the technological advantage offered by the internet, most promotional activities are implemented through social networking through the internet. In addition, HSBC employs a uniform corporate branding strategy. According to Roll (2004, par. 8), “HSBC employs the same common expression throughout the globe with a simple advertising strategy based on the slogan “The world’s local bank.” This creative platform enables the corporation to bridge between many cultural differences, and to portray many faces of the same strategy.” By being aware of their strengths, HSBC can utilize these to sustain market share and to convince the public that they have not resorted to sub prime mortgages which were the ultimate cause of the financial breakdown. By acknowledging that HSBC still emphasize the utilization of prime mortgages and employ the necessary steps to ensure that their customers were appropriately assessed to ensure regular payments, the company would assure the public that they adhere to the vision, values and corporate responsibility in their banking practices. Since HSBC has a wide global reach and enormous financial resources, the public would be assured that their products and services were least affected by the financial turmoil. Customers of HSBC HSBC has over 125 million customers all over the world with 25 million registering for internet banking (Subramanian, n.d., 1). One of the strategies implemented by HSBC is “Managing for Growth”, building on the company’s strengths and addresses areas where improvement have been identified as desirable and attainable (HSBC, 2010, 1). As manifested in the diversity of products and services that HSBC offers, the profile of HSBC is of a wide age range encompassing children and retirees. Their savings for children and savings for retirement attest to the fact that HSBC captures a wide market base. Customer Issues The proliferation of social networking made it inevitable for HSBC to address issues of safeguarding the accessibility of their Personal Internet Banking service with the installation of a security device. (HSBC Security Device, 2010, 1) According to Oladimeji, Supakkul & Chung, “a security threat is simply a potential violation of the security of a system - an event that may have some negative impact.” Their study delved into the importance of “designing security into software applications rather than retrofitting it as an afterthought”. (Oladimeji, Supakkul & Chung, n.d., 1) HSBC invests on managing their risks readily anticipates and identifies the threats in their system and devises a comprehensive plan of action to ensure that day-to-day operations are not compromised. In addition, a study conducted by the QM Group (2007, 1), revealed that the “leading global bank HSBC recognized there was a chance to improve the way it managed non-transactional enquiries within its UK branch network and turned to queue management specialist Qm Group to help it drive innovation, reduce waiting times and improve customer service.” Further, to improve customer service and satisfaction, “HSBC is also investing heavily in the latest banking technology, installing 600 next generation ‘smart’ deposit devices, as well as 1,200 ‘Express Banking’ kiosks, which allow customers to pay bills, transfer funds and obtain statements, and a further 500 new fee-free Automatic Teller Machines.” (QM Group, 2007, 3) Human Resources and Globalization According to Epstein (2009, par. 12), “HSBC normally rotates its senior executives not only within a country but globally every two to three years, ensuring they amass a breadth of experience while also bringing fresh eyes to its business lines and geographic markets”. In global organizations, like HSBC, culture plays an important part in influencing and affecting the host organizations’ operations in terms of interacting with a collective group of people, whose values, beliefs and traditions are diversely variant from theirs. The complexity of managing global processes on a wider scale is eminent taking into account obstacles including “language, customs, current standards, education levels, and government regulations. Increased competition, demanding customers, and constantly changing business environments have forced management to seek radically different ways for their companies to succeed in the marketplace.” (Manrodt & Vitasek, 2004, 3) Rotating executives every two or three years might compromise application of appropriate leadership and management strategies in new cultures which could affect their performance in the long run. In this regard, HSBC’s human resources management must focus on training and development of personnel especially in the area of organizational culture and globalization. Failure to do so would create anxiety and stress to executives expected to deliver improvements on a new culture. Recruitment is a critical function of human resources management to ensure that the organization has an adequate supply of the right quantity and quality of human resources at all levels and in all positions at the right time and in the right place to man the jobs that have been properly identified and described. As management wants to ensure the healthy operation of the organization, human resource acquisition should be given priority. At HSBC, the policy of diversity is being actively implemented. Their official website reveals that “HSBC is committed to attracting and selecting only the best-qualified candidates while valuing a diverse workforce. We are committed to creating a workplace that nurtures individual growth regardless of age, citizenship, color, creed, disability, marital status, national origin, race, religion, sex, sexual orientation, or veteran status. To keep our valuable people, we provide an attractive array of employee benefits and services.” (HSBC: Diversity, 2010, par. 5) This policy ensures that people from diverse cultures with different backgrounds, educational capabilities and skills are honed to prepare them for new markets and various clienteles in the global market. Under global conditions, culture is seen as heterogeneous which consists of dissimilar elements or parts. Therefore, global organizations, like HSBC, should design strategies taking into consideration the diversity of cultures in the markets currently operate and plan to expand in the future. HSBC must train and prepare a competent leadership team who understands components such as the intricate systems and processes of their core competencies, the functions they are to undertake, the culture of the target markets and the ability to change cultural framework in the targeted markets. Knowledge of cross-cultural and interpersonal communication are likewise critical factors in ensuring a competent pool of human resources to encompass diverse cultural backgrounds of virtual teams. A knowledge of diverse cultures would incorporate and address issues concerning organizational culture and diversity. Conclusion Organizations need stability and continuity as well as innovation and adaptation. Without some stability, any organization cannot function, yet, without adaptation it cannot survive. Organizational change is the essence of adaptation and innovation. People, processes and systems need to be flexible to respond to conflicts and changes in the environment. The interplay of factors contributing to the financial dilemma which affected financial institutions like HSBC created a crisis so severe that the situation became unmanageable and complex. It diminished the confidence on financial institutions which are pinpointed as the cause of the financial breakdown. However, like HSBC, other financial institutions could restore confidence in financial services by adhering to the high standards of the codes of banking and those set by the Financial Services Authority. Likewise, by building on the company’s strengths and addresses areas where improvement have been identified as desirable and attainable, HSBC would ensure its customers that their financial institution remains strong despite economic pressures and a highly competitive global environment. By emphasizing corporate values such as long term ethical client relationships; high productivity through teamwork, its personnel would remain confident in delivering high standards of service ensuring customer satisfaction. A confident and ambitious sense of excellence exemplified and manifested by management and the rest of the human resources of HSBC is required to continue looking for ways to adapt and adjust to the competitive environment. It is an effective strategy to focus on international issues and be global in outlook and character. Finally, prudence, creativity, customer focused marketing and excellent human resources management helps establish the leadership that HSBC gained in their respective markets. References Epstein, J.D. (2009). “HSBC Bank USAs new president to be transferred from Malaysia.” Buffalo News (New York). Retrieved 15 April 2010. HSBC Bank USA, N.A. (2010). About us. Retrieved 15 April 2010. < http://www.us.hsbc.com/1/2/3/personal/inside/about> -----------------------------. (2010). Diversity at HSBC. Retrieved 15 April 2010. < http://www.hsbcusa.com/diversity> HSBC. (2010). Security Device. Retrieved 15 April 2010. Marquez, H. (2009). HSBC Holdings PLC (NYSE: HBC) has absorbed the financial crisis impact and is now exploiting it. Retrieved 15 April 2010. Manrodt, K.B. & Vitasek, K. 2004. Global Process Standardization: A Case Study. Journal of Business Logistics, 25(1), 1 – 23. Retrieved 15 April 2010. Oladimeji, E.A., Supakkul, S. & Chung, L. (n.d). Security Threat Modeling and Analysis: A Goal-Oriented Approach. Retrieved 15 April 2010. QM Group. (2007). HSBC IMPROVES BRANCH CUSTOMERSERVICE WITH Qm’s MATCHMAKER® SOLUTION. Retrieved 15 April 2010. < http://www.cisco.com/web/strategy/docs/finance/HSBC_case_study.pdf> Roll, M., 2004, Understanding the Purpose of a Corporate Branding Strategy. Retrieved 15 April 2010. < http://www.brandchannel.com/brand_speak.asp?bs_id=81> Subramanian, C. HSBC Software. Retrieved 15 April 2010. Read More