Background Of Bank Of Montreal Business Essay


This paper will explain importance of organizational behavior and the issue which occurred during the change event with the help of Bank of Montreal as an example ,where I have worked previously .This will be followed by change in structure and culture due to change which includes leadership issues and power and politics . Will also throw light on Human resource and SHRM , integrated view embracing both theory and practice .This paper will be concluded by recommendations .

Organizational behavior

In today's rapidly growing dynamic and competitive environment understanding the organizational culture and effectiveness for the management is very essential for the success and growth of organization (Champoux 2011),for which learning about organizational behavior is essential. It is a study of "individuals and groups in organization (French et al. 2011). As people are the main resources of any organization it is very important to know about the organizational culture and it also helps to predict and understand different human behaviors. Organizational behavior is "The study of the structure ,functioning and performance of organizations and the behavior of people and groups within them" (Pugh 1971) study of oganizational behavior makes it easier for managers to handle difficult situations and they can deal with them appropriately and effectively . They can forecast the causes of problems, predict measures and also control its consequences .

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Below diagram explains the importance of organizational behavior in an any organization and connects between people behavior and the effectiveness. In the centre we can see the human behavior which is directly linked with different perspectives and these will be discussed through out in the assignment like conflicts, power and politics , organizational structure etc. This is a very effective model and I can relate it with my banking customer service experience . According to this model it is important for managers to understand people and through that they can be motivated to work effectively like in groups which improves there interpersonal skills and also handling conflicts ,difference of opinion and conflicts which helps them to face challenges when working . This makes employees more confident and effective. Also employees needs to understand culture ,structure and their roles to achieve there goals .

Fig 1: Model of Organizational Behavior (Parikh 2010)

Organizational behavior has many challenges and issues but only few are discussed in this paper .

Organizational Structure

It is very important to understand the organization structure because it provides guidance to any organization that it should change and innovate due to competition in that particular sector. It is one of the ways to meet potential challenges for any organization (Education resource Information centre 2006).A good organizational structure not only increases efficiency but also productivity and economic efficiency but also increases employee morale and job satisfaction (mullins 2007) . It also helps to formulate strategies and explains day to day activities within the organization. Due to increasing competition and global markets changes are happening quite often. This is evident from my case study of Bank of Montreal which had to undergo technological change because core banking was gaining importance and it was mandatory to get this change ,otherwise will effect the business by loosing customers who will be more attractive towards the safer and better banking options. Even if the companies are stable sometimes changes are required to cope up with the competition. Changes in the organization can be internal or external. Internal are change in size of organization, employees need or change in top management whereas ,external are business scenarios, enviromental factors or technology (Sengupta, Mousumi and Sengupta 2006). I agree with this opinion because my organisation had also undergone technological change . In the banking sector nothiong works without technology and with the advancement of technology it became very important for the company to bring a change . To implement any Change is very challenging for managers and causes lots of organisational issues and the whole structure changes which causes lots of behavioral issues too.

Few of the issues are being dicussed in this paper focusing on the change that happened .

Background of bank of Montreal

My case study is going to be about Bank of Montreal , in Canada where I have as a customer service executive.

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bmo_logo.JPG was established in 1817 opening its doors for business on nov3,1817. it is Canada's First bank . BMO was first to circulate Canadian currency and had been a big contributor in country's growth. Since 1817 it has grown into one of biggest banks in Canada totaling its assets to 525Billion dollars as of 31, Oct 2012.BMO serves more than12 million clients in North America and Internationally in personal, commercial , corporate sector and to provide these services top its clients and is listed on TSX, NYSE: BMO (Bank of Montreal 2012)

BMO has various sectors to help and serve Canadian clients and has headquarters is Toronto, Canada and employs around 47,180 people .BMO has personal and commercial banking for day to day activities and then there is wealth management through Nesbitt Burns (Bank of montreal 2012) BMO clients across border in United states are helped and served by BMO Harris bank with their personal and commercial needs. Private bank is there for wealth management (Bank of Montreal 2012)

Another achievement by BMO was on 8th , oct 2012 when BMO's merger with Marshal and IIsley corporation (M&I) was completed M&I merged with Harris Bank to Form BMO Harris Bank of NA. All its branches now operate under BMO Harris Bank (Bank of montreal 2012).

Personal and commercial banking:

Personal and commercial banking in Canada provides customer with great experience with well informed and trained employees so that clients can make well informed and correct financial decision. BMO offers a wide range of products and services for its clients that are more than 7 million. One point contact with financial service representative enhances client experience as they are matched to right products and services to meet with their financial needs. There are various banking alternatives also available for clients to do their banking. They can use branches, telephone banking, online banking and ATM's along with advise from expertise's of financial advisors and mortgage specialist. Personal and commercial banking in US is provided in various cities, the bank has more than 600 branches and approximately 1,300 ATM all over in Us for convenience of customers (Bank of montreal 2012)

Private client group

Private client group is there to help clients from mainstream to ultra high net worth clients. It has broad range of wealth management products and solutions. Clients PCG operated in Canada, USA, China and UK. Clients can use BMO Nesbitt Burns, BMO Investor line, Insurance, BMO Harris Bank and BMO Private Bank (BMO financial group 2012).

Vision" We know how important it is to recognize and respect customer values and to embody them in our own values and the way we do business." Bill Downe ( President and Chief , BMO Financial Group)The vision of Bank of Montreal is to be the bank that provides customer with the ultimate experience. Helping clients with their money that would make sense top them (Bank of montreal 2012)

Values: Take Pride , Keep your word, Embrace Diversity, Do the right thing, Have courage to win. At BMO Bank of Montreal they take pride in what they do by keeping their commitments respecting their clients and their needs, thus gaining their trust which in return makes then successful and a leader in what they do (BMO financial group 2012)

The change: Main Issue

For the growth and success of any organization changes are essential because of globalization and changing trends is business world. The aim of any change is aimed on culture change, objectives ,strategy or technology and to succeed in the change "it is important to know the readiness of change -at both individual and whole of organization level" (Smith 2006, p.301) For any successful change employees participation is very important as employees are the resource of organization through which changes are implemented with their innovative ideas for future improvement.


It was determined that the customer experience at the Bank of Montreal was lagging behind that of their competitors.  The software that was currently being used for even relatively small transactions resulted in lengthy processes and procedures and led to a time consuming, overly labour intensive and ultimately frustrating experience for the customers.  These methods needed to be upgraded to ensure that the customers experienced a more streamlined, simple and interactive process that remained safe and secure while transactions were being carried out.  The new interface should be simple to use for all of the bank's customers.  The decision was taken, therefore, to upgrade the entire technical system mainly because of the following reasons:

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Changes in technology

Change in customer service

Changes due to competition

Changing trends of banking.

 This was achieved by changing from and Windows to a Linux based system and completely redesigning the interface to make the customer experience more interactive and intuitive while remaining safe and secure. It was an emergent change and it was mandatory for BMO to implement this change for its survival as the bank was already loosing customers. This change had few pitfalls ,which are discussed in this paper. However, their was a delay but it eventually was a successful change.

 Organizational culture

Organizational culture is the integral part of any organization and has gained importance in the last 20 years and the companies world wide 'try to adapt their culture according to external environment and to the new challenges ' (Valeriu 2009) and due to the same reasons BMO had to change its technology as the banking sector is very competitive and all

the banks are customer focused trying to attract customers by giving them better and secured banking options like using any ATM for cash, online banking and easy banking options for which your technology has to be compatible with other banks . Organizational culture "is the shared values ,beliefs, and norms which influence the way employees think, feel and act towards inside and outside organization (Huczynski and Buchanan 2007, p.100). It is a way of doing things in routine. This definition is quite true as without values and beliefs it is really difficult to understand the culture and organization expectations from employees. The shared values and beliefs of BMO was embrace diversity and do the right things which helps employee to deal with difficult situations while handling customers and taking self decisions (BMO financial group 2012).These assumptions are continous process of human interaction ,in simple words it is the right way in which things are done or the problem should be well understood which was very much adapted by BMO employees (E.C and F 2003)

The diagram below different dimension of organizational culture which were observed in BMO. This is suitable for BMO culture as it has invocative and creative culture which employees find t exciting and challenging .

Dimensions of organizational culture (E.C and F 2003, p.70)

BMO had a very strong culture and was a very innovating and creative place to work .It maintained high quality standards and we employees really enjoyed the working environment which results in job satisfaction and motivation to do better and show commitment towards organization by doing our best. All the top managers were flexible and always maintained contact with lower levels by conducting monthly meetings to share our views .The core culture of BMO was creating 'great customer experience' which is very important in banking sector (BMO financial group 2012). This starts with making sure that it is a innovative and exciting organization to work with.

Many models are developed to understand organizational culture. (Sathe 1985) developed theory of organizational culture which mainly focused on influences of leadership, organizations system and employee pattern , this was limited to organizations internal issues .this theory lack and is not suitable for any public sector because it doe not explain effects of culture by external environment which is a very important aspect in the competitive business world . Awareness of environment is very vital to survive in today's global markets (E.C and F 2003).

The most widely accepted organizational culture model of (Scheins 2004) is divided into three levels artefacts, values and basic assumptions as shown in below diagram. This model can be explained by taking BMO as an example for better understanding as BMO concentrates lot on maintaining corporate culture and managers do make frequent changes to make it entrepreneurial .


Schein's three level of culture (Huczynski and Buchanan 2007, p.101)

Artefacts is the first layer and is a visible formal system .This is the culture of the organization which is observed by the employees and it is the responsibility of the managers to maintain . BMO did observe this culture as mangers always maintained good relation with workforce as discussed above in BMO's culture and maintained the professionalism and understood employees behavior by maintaining all norms ,rites and rituals and setting goals and missions, .The other two layers which are invisible but most important because it describes about values and assumptions by managers which helps them to know the potential of organization. These two layers explains the set rules of working and how difficult situations should be handled. They are also involved in learning process like in BMO when technological change took place managers had undergone training first so that they can guide employees and understand their behavior towards the change and learning process. values are very important for any organization and are always seen in companies mission or vision statement as by BMO (BMO financial group 2012).The third layer which talk about basic assumptions of organization in relation with environment .These are not visible but have to be understood by managers and chief executive for competitive advantage and have to be more innovative and creative . to maintain this corporate culture managers are the real leaders.


'Leadership is the process of influencing the activities of an organized group in its effort toward goal-setting and goal achievement' (Huczynski and Buchanan 2007, p695) . managers who are the real leaders play an important role while implementing a change .The diagram below shows the traits a leader should have to encourage employees for a successful change.

(Daft 2008) .The leadership experience . pg.5

In BMO when a change happened there were few traits of leadership like motivation, lack of training skills were missing and there was no proper co-ordination among leaders which bought lot of difficulties for employees . Lot of issues were faced when I was undergoing a change process. Leaders were too busy working on their mission and due to shortage of time the change was very aggressive. No proper training was given and to change the entire system within two weeks was too short. The top management had pressured the middle managers to implement the change at earliest . due to time restrictions the whole organization culture was changing and employees were finding difficult to change the routine and handle customers with the new technology effecting the customer service which was the core value of BMO. Long line ups , technical issues and making customer feel satisfied with the new system was very challenging . employees were split in different groups and every group had a leader . All the groups were trained differently and the information was not complete as leaders itself were not well educated about the change process which bough lot of conflicts in the management specially between the top managers and middle managers who were leading the change this disabled them to increase morale of employees.

Power and Politics

Power and politics have great impact on organizations success or failure and also affects human behavior within the organization (Huczynski and Buchanan 2007, p797). As well said by (Huczynski and Buchanan 2007, p798) "power is the capacity of indiviuals to overcome resistance on the part of others,to exert their will and to produced results consistent with their interests abd objectives ".this definition is best suited in my case study because when changed occered there was resetance shown by few employees as they were not able to adapt the change but then it was imporatant to overcome resistance .As managers have powers they used to motivate those employess by giving some extra training which increased their morale and confidence to adapt the change. Power depends on the employees designation ,like top management has maximum powers they have access to entire companies information, have all updated informtaion which prepares them in adavance to achoieve there goals .Politics is " influence to obtain ends not sanctioned by the organization , or to obtain sanctioned ends through non sanctioned means if influence " (French et al. 2011,p.498). Usually politics happens at the top management level in organization which was exactly the case in BMO. We at have .However,organization power and politics is very effective for managers to deal with issues or for making any decisions ,like to overcome any personnel inadequacies , cope with change substitute for formal authority (French et al. 2011, p.503).This theory is well supported for my case study because when the change took place leaders ahd a conflict as it was very cahllenging to train employess and there was no understanding between leaders . employees were reacting differently and top mangement had to take decision on behalf of leaders to resolve issues by giving those resistant employees some extra training and making them understand the importance of change. politics is where people try to exhert influence on those around them and other members of staff in order to ensure that their view prevails in the organisation

However , political powers are even be misused and the influence can take many forms, from direct line management, to more indirect influences which can be based on favours, friendships and respect that others may have for the persons skills, knowledge, experience and networks.

Human Resource Management

To have a better understanding about SHRM , studying about human resource management is also important. HRM needs to scan the environment very carefully to have a competitive edge . As defined by (J and J 2000, p.37) " Human Resource Management as the process of linking the human resource function with the strategic objectives of the organization in order to improve performance"

Hr plays vital role than any other resource in the organization. Role of HR managers roles should be parallel with the need of organizational changes. Mostly organizations are becoming more adaptable ,try to make frequent changes for competitive advantage and our customer centered .If an organization has this kind of enviroment Hr professionals should have a clear understanding of the emerging changes and focus more on employee development by proper planning and controlling the human resources (Albu 2009)

Human resource implementation strategy model (Deb 2006, p.58)

The above model shows the complete role of Human resources. Some of the relevant aspects of HR were examined taking into consideration decision making process and its impact on operations of organization and its effectiveness in operations of organization (Deb 2006). As seen in above diagram Hr job is not only to understand internal environment of org but also external depending on which they train the employees to meet the demands of business .They have their mission that is the change and then set goals and decides which is the best strategic choice to implement the change .the same strategy was followed by BMO as their mission was technology change and their goal was to enhance customer service through this change for implementing change training was given to employees.

The key role of Hr is recruitment and training and this department is responsible for maintaining quality standard through recruiting , that the company is able to recruit and retain the staff with the right skill set ensuring productive work force which is very essential in today competitive world. As rightly said by (Roy 194) there are certain quality standards that can be modeled by Hr dept . To have a competitive advantage , the managers at BMO adapted the following strategy for implementing the change which was :

Focus on customer needs

Focus on problem solving

Continous improvement

Employee training for better quality

Applying team approach for better problem solving skills.

This helped in good performance satisfying customer needs and demands wich is the main focus at BMO .

Strategic Human Resource Management

SHRM is a general approach to human resource management considering physical factors like financial, technological resources to set goals and solve organizational issues . According to (Giri 2005) SHRM is actually the concept which integrates traditional human relation management activities within firm overall strategic planning and implementation . SHRM focuses on HR issues within an organization to ensure that the company get the best of out staff .It tries to focus on the individual's needs regarding personal development and personal well being thus ensuring that both the individual and the the company goals are met to everyone's satisfaction..

There are different theories which have been developed which S help managers to control organizational behavior for its potential as without people there is no organization and meeting employee requirement is a big challenge in the present business world. According to my opinion Denise Rousseau Psychological Contract theory is a very relevant theory which helps to understand different psychological behaviors in organization and also age effects in developing skills which was the issue in BMO during the change event. This theory can be supported by my case study of BMO. According to (Rousseau 2012) " It is a concept of free will" . She also explained peoples will is not transparent and lack of knowledge is threat to functions of social regulations. In BMO when change took place managers anticipated that two weeks training was good time to learn new skills which was unrealistic .But they ignored the age factor and assumed older people will also learn new technical skills and adapt the change .If managers had the understanding of psychological contract they would have first made employees understand the complete change process, prepare them psychologically and then introduce the change understanding their efficiency . this would have made the change more effective and in a planned and organized way increasing employee confidence and committed .but due to lack of psychological contract few elderly employees left the organization because of lack of job satisfaction and not understanding the change.

Healthy psychological contract fosters job satisfaction which in turn encourages employees to do their best and grow in there career which is a benefit for the organisation. So both employee and employer demands are meet and they feel good about the relationship with workplace . However, if there was a mutual understanding between and employee and employer both would benefit from each other which will be helpful for there future growth . It affects desire to work effectively , enthusiastically and to derive satisfaction. The aim is to have a win - win situation for everyone.


BMO as an example has helped us to understand issues that can evolve during change. Inspite, of investment of time ,effort and resources changes fail or fail to achieve assumed results. Some of the drawbacks which were observed in BMO change process and also described by (Smith 2006) are:

Lack of change readiness

Lack of proper training

Failure in leadership qualities

Ineffective planning

Though this change was not a failure but taught a lesson to the managers and they should consider the following key points for potential changes :

Ensuring readiness for change

Managers should be aware that people are responsible for the success of change and they are the ones who will embrace or resist the change (Smith 2006)


Managers should organize good training programs and educate the people to understand the change completely . This will help them to adapt the change faster and make them feel confident .

Lead Change

Top managers and leaders play vital role in motivating and making a change effective. They should have a clear vision which helps in better performance and employees are more productive and shows their commitment towards organization.

Plan for Change

Proper planning should be done and sufficient time should be given to implement change in a systematic and organized way . This helps in implementing the change effectively and efficiently without any delays.

Deal with Resistance

Resistance is a big issue and any change brings resistance because people are different. Some people enjoy the change and deal with it easily whereas few show resistance . There should be good communication between leaders and resistant people so they can overcome and get involved in change process.

Above are the few recommendations which can be considered if a change has to be implemented . I would also like to recommend McKinsey 7's model which is very appropriate for any kind of change to maintain competitive advantage.


McKinseys 7's Framework

This model can be used by managers to diagnose any change for effective performance ensuring the impact of change .There are seven elements aligned and they are all inter-related . It helps to guide the organizational behavior, determines how to implement the proposed strategy , restructuring any process and aligning different departments in the organization. It helps to make complex situation easy and its results are quite effective as it links all the important aspects for better co-ordination and understanding (Mind Tools 2012)


I would like to conclude by that to achieve competitive advantage in banking sector is very important to survive to attract customers and satisfy their demands for which timely changes are important . Managers and leaders who are involved in this process should be more focused , motivating and committed towards the workforce to perform effectively and efficiently . In this paper we also understood the role of HR in the change process .the knowledge gained was a good learnind experience and will help me in my potential career growth .