Western Union History, Operational Structure, and Services Provided - Case Study Example

Title Page Student’s Names: Student’s ID: Course Title: Course ID: Instructor’s Name: Date: Abstract The ingredient to any service organization lies in the delivery of products and services which are superior and are also clearly visible to the consumers. The best of companies operating in the global arena understands this too well, the value of performing to their optimal best to satisfy the customers and creating a structure that leaves their clients concentrating on their work as they deliver quality services to them. It is with this essence that this essay seeks to analyze a global service organization with the focus being on a discussion in the following areas; Major services provided by the organization Operational structure of the organization Key tactical and strategic challenges faced by the operations managers and how the operations managers tackles these issues Consumer’s perspectives about the overall services provided and delivery of services by the organization in question Contents Title Page 1 Abstract 2 Contents 3 Western Union Brief History 4 Services provided by Western Union 4 Sending and Receiving of Money 4 Bill Payments Service through Western Union 5 Prepaid Services and Money Orders 5 Business Solutions Service 5 Operational Structure of Western Union 6 Management Team 6 Board of Directors 7 Board Committee 7 Agents 7 Support Operations 7 Investor Relations 7 Corporate Governance 7 Key tactical and strategic challenges faced by the operations managers and how the operations managers tackle these issues 8 Consumer’s perspectives about the overall services provided and delivery of services by the organization in question 10 Conclusion 11 References 12 Western Union Brief History The company was founded in 1851 and has continued to fill the gaps that exist in the financial sector in the world today. The company offers financial services to over 200 countries in the world. The company has a base of more than 515, 000 agents in the world and also more than 100, 000 ATMs worldwide (WU Website). The company’s portfolio includes offering business solutions to its clients, offering the means through which consumers transfer money among themselves (consumer to consumer), services like bill payments among others like stored value through prepaid cards. Therefore, the company continuously aims at moving money from one location to another, anytime and anywhere that its customer wants. It is in this regard that Western Union is considered among the global company in the financial service industry for its dedication in the process of offering standard end to end services on the globe and thus transforming the lives of its clients. Services provided by Western Union The services offered by Western Union are classified into 4 main categories which are discussed below; Sending and Receiving of Money Western Union clients are able to send and receive money regardless of their location for the organization has strategically positioned itself in big cities and also in small villages. The option of sending money is made possible via phone, online or through the use of a credit or a debit card (Kramer 1). The company’s clients are offered various options when it comes to receiving money and they include; receiving the money at home, which involves a customer personally going to a Western Union agent and filling in forms and then the money sent to him or her by the sender is made available. Other options include; through a client’s bank account, a type of service called a wallet which entails an account which is tied to a mobile phone, more so referred to as a mobile wallet. Western Union also offers other means through which money is transferred worldwide and this is inclusive of online transfers (a service which is available on a 24/7 basis to its clients) (WU Website), through the phone for clients in the USA and UK dial a toll free number and are able to send money using their credit and debit cards. Also, money transfer to a receiver’s mobile is available and therefore it is convenient and efficient for the customers. Bill Payments Service through Western Union Being an internationally established and renowned company, the vision and the imagination of the organization (Western Union) has moved beyond the basic money transfer across the globe to taking of more steps in improving the efficiency offered to its clients in the delivery of its services. The bill payment service is a service that offers customers and even organizations such as insurance entities and government organizations the opportunity of making payments to many payees all over the world. This is a world class bill payment service made available to clients either as a one time basis or it can be on a habitual basis (WU Website). It is also important to note that, Western Union offers the bill service payment either in cash or electronically, offering solutions to its clients and organizations to move cash freely around the globe and also reduces the costs of transferring money. Prepaid Services and Money Orders Western Union offers a variety of prepaid products to U.S. citizens. Examples of prepaid products offered at Western Union include, gift cards, money orders, phone cards and prepaid cards like goCASHsm and MoneyWiseTM Prepaid MasterCard. Prepaid® cards (WU Website). Western Union offers clients the benefits of withdrawing money by the client from ATMs, clients to shop online, deposits from employers to the prepaid cards and also the benefit of reloading the cards online. Business Solutions Service The various tailored payment solutions provided by Western Union to its clients and organizations enables businesses to compete on the global scene through offering services that solve the ever complex requirements in payments. Examples of customized solutions offered by Western Union include; International payments, where, outgoing payments for organizations are processed in more than 200 countries and in over 135 currencies, Incoming payments, where through the help of EFTs (Electronic Funds Transfers), organizations are able to receive and also convert funds received in foreign currencies to USD (WU Website). Risk management, where Western Union uses its expertise in helping its business clients with strategies that help them survive market fluctuations among others. Business Solutions in Foreign exchange where, businesses are able to make international payments in an efficient and cost effective way. Small organizations are also able to pay suppliers which can be done in the office via online. Offering risk management strategies to its clients, where Western Union is dedicated in analyzing of a business, and offering solutions to reduce risks inherent to businesses due to increasing fluctuations in world currencies, increasing competition among companies and also failure of business to have effective plans in risk management. Customized foreign exchange solutions for small business, at a lesser fee, small businesses are able to make payments internationally. Operational Structure of Western Union The western Union operational structure is composed of a management team that is keen in continuously striving to adapt Western Union products to suit the ever changing needs of the customers. The following list is the management team of the organization who have the mandate of spearheading the organization. However, the list is not exhaustive. Management Team Ersek Hikmet; he is the C.E.O, director at Western Union and also the president of the organization. He is tasked with the overall management of Western Union. Raj Agrawal; he is the executive vice president at Western Union and also serves as the president of the western union business solution. He is tasked with the continuous growth, development and also expansion of services offered by Western Union. Scott T. Sceirman; he is an executive vice president at Western Union and a chief financial officer mandated with the responsibility of leading in financial matters appertaining to the organization (WU Website). Luella Chavez D’ Angelo: Officer in charge of communication and therefore charged with matters relating to corporate social responsibility of WU in the global arena. Other support staffs in the operational structure of WU include; John R. Dye; secretary, executive Vice President and also General Counsel Diane Scot; Executive Vice President, Chief Product and also Marketing Officer John David Thompson; Executive Vice President, Global Operations and Technology Information Officer Board of Directors The organization had a board of directors that is drawn from all over the world, as an indication of its diversity in the world. Among the members in the WU board of directors include; Dinyar S. Devitre, who is the chair of the board of directors, Hiket Ersek among others (WU Website). Board Committee The board committee plays the advisory role in the areas of their expertise, for instance, advice relating to issues of corporate governance are handled by the corporate governance committee (WU Website). Agents The organization has five hundred and fifteen thousand agents all over the world. Support Operations Investor Relations The relationship with investors at WU is well taken care of and they are provided with WU annual reports and Quarterly Reports and other documents that they may need (WU Website). Corporate Governance The corporate governance of the organization involves the right leadership, public policies of the organization, committees like the audit, compensation committee, and compliance committee among other committees in the organization (WU Website). Key tactical and strategic challenges faced by the operations managers and how the operations managers tackle these issues One of the biggest challenges faced by financial institutions anywhere in the world and more specifically the ones that offer online transactions is online fraud. Some customers use WU to send money to people that they have not met. Scammers also have the habit of using WU in internet fraud. Fraudsters provide fake addresses and names of which if buying something, WU is not mandated with the task of verifying the details provided and therefore customers may end up paying money to people who cannot be traced in the event of fraud. It is with the same concern, that some sites like eBay have banned WU as a means through which payments are made on eBay (Kramer 1). In dealing with online fraud, WU takes measures such as keeping records of locations where payout transactions have occurred. However, scammers still find refuge in using WU in scamming overseas clients knowing very well that if such information is to be released it would take a long process of obtaining court summons to compel WU to release such information regarding payout locations for it is only through a Writ that WU can release information of location of where a particular payout was made. In addition, customers are constantly warned not to be making payments to people that they do not know. WU also provides hotlines which its clients can use in case they suspect fraud in their transactions, or if they want to file a complaint concerning fraud or having sent money wrongly among others. The need for the organization to diversify and also evolve in light of the ever changing needs of the global consumers’ poses both tactical and strategic challenges to managers. The ever increasing global economies of the world have placed more and more pressure to global service organizations like Western Union to open up new markets and new trades in emerging markets or less they risk being outdone by other companies offering products which are similar to theirs for instance, the presence of international banks which offer transmittal services to customers. Increasing use of technology by customers creates a challenge as well as an opportunity to WU customers. The advantage is that clients are more aware and can use the online payment transfer offered by WU while at the same time, the disadvantage tied to it is that, while customers have more access to the internet, they are also exposed to other online payment companies like Paypal and Alertpay among others. Western Union managers are therefore tasked with the responsibility of finding out new markets in light of the continuing movement of people around the world and hence more movement of money. When diversifying to other markets, managers are also tasked with the responsibility of identifying the right employees to head the companies in the different regions that it has diversified to. With diversification into other markets comes the task of dealing with different laws pertaining to immigration procedures or policies of different countries in order to have the right people heading the company’s offices. Immigration reforms by countries especially where WU has a strong holding like the US, posse’s potential risks and opportunities to amount of money transferred. As an opportunity, a country’s immigration policies can make it easy for people to move into the country thus increase the volume of money transferred and as a risk, the policies can make it hard for people to move and settle in a particular country and hence decrease the volume of money transferred through such financial services like WU. Of importance to note is that, current immigration demographics indicate that more and more people continue to move around the world and this will fuel the opportunities available to WU for customer to customer money transfers (WU Website). Challenges regarding competition from other financial providers can be tackled effectively through diversifying into other markets. In essence, the sender of the money may have many services at his or her disposal when sending money, however, the person on the receiving end may not be in a position to access various options when it comes to receiving money. This therefore form the base upon which WU managers solve the competition puzzle from competitors by having WU continually diversify into foreign markets making it one of the financial service providers to serve a large customer base of across 500, 000 networks and in more than 200 countries worldwide (Kramer 1). The search for new markets is also another strategy used by the managers in conquering new clients while at the same time maintaining and satisfying the needs of their old clients. According to Tom Risen, in the article, ‘CIA Spying on Money Transfers Stifle U.S. Business’, WU and other financial institutions are subject to scrutiny from government in a bid to curb money laundry and terrorism activities and also for the purposes of national safety. This could harm financial institution's business as foreign customers may feel that they are being spied on by governments therefore, the ease with which financial service providers like WU penetrate foreign markets becomes a problem. Operation managers handle such challenges when confronted by clients in foreign markets by assuring the clients of the reasons as to why governments needs to conduct financial scrutiny is for national safety purposes and not to give away the clients personal information regarding his or her financial transactions. Consumer’s perspectives about the overall services provided and delivery of services by the organization in question Western Union offers consumers with a means by which to transfer and receive money that is different from other companies on the same platform like Xoom. One of the differences between Western Union and other online financial companies that it is mostly compared to is the ability to receive money instantly through WU. In some online money transfer companies, money may take a few days while being transferred whereas in WU, customers have the opportunity of receiving money instantly, making it the preferred money transfer provider. Customers also feel that WU offers clients who are under – banked in various countries for instance, the immigration population in the US to have the means through which to send money home (WU Website). In foreign markets also, WU offers its services to the people who do not have access to a foreign market conventional bank service. This therefore makes WU an easy platform that offers its clients with easy ways that they can send and receive money unlike other financial providers where clients may be required to have bank accounts in specific banks to receive money or send money, have ATM cards which may take days to process among other verification procedures which are bureaucratic and makes it hard for the clients to use such services when remitting money (Kramer 1). Customers consider WU as a very trusted brand in the money transfers. WU has earned its trust as a global footprint in money transfers and this makes its customers feel at ease when transacting with them. Customers have confidence in the services provided by Western Union which is a key asset to any business. However, customers also express their concern regarding WU ban in some sites like eBay due to the ease with which fraudsters are able to use it to commit fraud. Such loyal customers are often frustrated when they are purchasing goods online since they have to look for other money transfer services. In solidarity with nations fighting terrorism, WU nowadays requires senders to give out their telephone numbers in order to confirm their identities. If WU officials' calls and the senders phone happens to be switched off, such transactions are reversed and the sender is notified with an explanation that the information that the sender provided fails to meet the requirements specified by WU. No further disclosure is given out in regard to the failed transactions. Customers often feel that they are denied the use of WU services and therefore many opt to switch to other money transfer services making WU lose some of its customers. Conclusion Western Union takes care of its clients’ needs through the various services provided by the organization. The organization services are designed to meet the essential needs of the underserved clients whose needs revolve around the basic concept of how to send and receive cash for in most cases, immigrants are the ones who benefit from the services of the organization among others. WU has managed to position itself as a brand that can easily be trusted by clients and this makes it way ahead of the game. WU offers both the traditional and the conventional methods of money transfer services, beating other competitors at their own game who may only be offering online services only to their clients. In addition, in comparison to financial institutions like banks, the organization has adopted simple ways of remitting money and this makes it to be preferred for its services and hence it has a global footprint when it comes to money transfer services especially to the underserved population like the immigrants. References Kramer Hilary. Western Union: Moving Money to Make Money. Web. 5th October, 2013. Accessed from, http://www.forbes.com/sites/hilarykramer/2013/05/10/wu-stock-report/, Accessed on 3rd December, 2013. Risen Tom. CIA Spying on Money Transfers could Stifle U.S. Business. Web. 15th November, 2013. Accessed from, http://www.usnews.com/news/articles/2013/11/15/cia-spying-on-money-transfers-could-stifle-us-business, Accessed on 3rd December, 2013. Western Union Website. http://corporate.westernunion.com/index.html, Web. 3rd December, 2013. Read More