Banking and financial services of HSBC

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HSBC is a banking and financial services organization that provides investment banking, commercial banking and wealth management services. The group's international network comprises over 9,500 offices in 86 countries in the following five regions: Europe; Hong Kong; Rest of Asia-Pacific including the Middle East and Africa; North America and Latin America.

HSBC Premier provides personalized relationship management, 24-hour priority telephone access, and global travel assistance and check encashment facilities. There are over 2.6 million HSBC Premier Customers, who use more than 300 specially designated Premier branches and centres in 41 countries and territories, if they require a banking relationship in more than one country.

Wincor Nixdorf description:-Accepting and processing documents and checks still occupies much of bank staff's time and therefore continues to offer major savings potential. Automating this process - in other words, changing from paper-based to digital document processing - makes it possible to integrate customers in the process using self-service terminals. In order to achieve the necessary customer acceptance, operation must be familiar and straightforward - like on automated teller machines.

HSBC bank using the self check kiosk to provide quick service for the customers. The system name is Wincor Nixdorf. With this service customer can check their bank statements, pay bills and other kind of account transfer very quickly and easily. It's a very easy and time saving process for the both customers and bank as well.

Triggers for the organisations:-

There are two triggers that effect the organisation for any kind of change;

Internal trigger and

External trigger.

Internal Triggers

Human Resource Issues

Organizational learning requires humans as agents. Accordingly, changes in human resources within any organization pose major impetus for OL. In Virany, Tushman, and Romanelli (1992), the researchers examine how changes in the chief executive officer triggered off necessary organizational learning among members in the top management team. In a study on expatriation, Vink and Schapink (1994) argued that organizations must learn to work beyond Western ethnocentric theories of behaviour. Effective intercultural managers are those who have acquired and shared their collective experiences on unfamiliar and different cultures. On the relationship between personnel turnover and organizational learning, Carley (1992) showed that hierarchies were less affected by high turnover rates than teams, particularly when the task is no decomposable.

Implementation Issues

The introduction of a new technology, innovation, or R&D often triggers need for organizational learning (see George 1983; Bessant and Buckingham 1993; Carlsson and Kean1976). Implementing a new innovation often alters existing work routines, reward structures, or communication patterns to the extent that organizations must ensure sufficient slack resources to support learning activities to incorporate the innovations successfully and to obtain full benefits of the innovation.

Inter-organizational Relations

Organizational learning is an emerging paradigm for the study of strategy making when firms diversify into new practices, products or services and collaborate with other firms in creating new interorganizational relationships or IOR (Alaharkonen and Rutenberg 1990) (Kazanjian and Drazin 1987). The need for close collaboration and cooperation with others in IOR such as strategic alliances imposes an unprecedented emphasis on organizational learning as parties to the relationship need to institutionalize and amalgamate distinct organizational practices, new job definitions, new ways of managing and even redefining the nature of the firm (Lewis 1991). 18

External Triggers

Business Environment Issues

Business turbulence comprises one of the most significant environmental jolts faced by firms. Rapidly changing dynamics of industries and competitive forces require firms to learn faster than competitors to order to achieve sustainable competitive advantage. To survive, organizations must learn to shift from managing and producing in the world of stable markets to one with short product lifecycles, continual innovation, and rapid changes in customer demands. Organizations must build a capacity to learn: to conduct quick studies and tackle novel problems (Maccoby 1993; Hosley, Lau, Levy, and Tan, 1994)

Technological Environment Issues

The greatest jolt from the environment is the unprecedented pace of change in technologies. Because of the high rate of technological change, formal education in schools will never be able to totally prepare workers for their lifetime's technological work demands. It is thus paramount that firms create a learning environment within their organizations to promote on-the-job learning and growth. Continual learning and investing in the full spectrum of employee talents with teamwork are cornerstones for coping with relentless pace of change in technology (Benett and O'Brien 1994; Atkinson 1994).

Economic Environment Issues

Economic environment issues take on many forms. With globalization of markets, organizations must learn to break the limited mindsets of national markets to compete on a worldwide basis (Ghoshal and Butler 1992). Firms in economic recessionary regimes must learn new survival skills to re-vitalize the organization, steering the organization from danger to opportunity (Hollingworth 1992). Organizations in East European economies and other communist regimes face great challenges when reforms coverted centrally planned markets to free, open markets (Swiderski and Seiderski 1986). Firms had to erase old organizational memories and routines of a socialist economy and generate new rules, standard operating procedures to compete in a new open market economy

The change process

Conceptually, the change process starts with an awareness of the need for change. An analysis of this situation and the factors that have created it leads to a diagnosis of their distinctive characteristics and an indication of the direction in which action needs to be taken. Possible courses of action can then be identified and evaluated and a choice made of the preferred action.

It is then necessary to decide how to get from here to there. Managing change during this transition state is a critical phase in the change process. It is here that the problems of introducing change emerge and have to be managed. These problems can include resistance to change, low stability, high levels of stress, misdirected energy, conflict and loss of momentum. Hence the need to do everything possible to anticipate reactions and likely impediments to the introduction of change.

The installation stage can also be painful. When planning change there is a tendency for people to think that it will be an entirely logical and linear process of going from A to B. It is not like that at all. As described by Pettigrew and Whipp (1991), the implementation of change is an 'iterative, cumulative and reformulationin- use process'.

To manage change, it is first necessary to understand the types of change and why people resist change. It is important to bear in mind that while those wanting change need to be constant about ends, they have to be flexible about means. This requires them to come to an understanding of the various models of change that have been developed. In the light of an understanding of these models they will be better equipped to make use of the guidelines for change set out at the end of this section.

Types of change

There are two main types of change: strategic and operational.

Strategic change

Strategic change is concerned with organizational transformation as described in the last section of this chapter. It deals with broad, long-term and organization-wide issues. It is about moving to a future state, which has been defined generally in terms of strategic vision and scope. It will cover the purpose and mission of the organization, its corporate philosophy on such matters as growth, quality, innovation and values concerning people, the customer needs served and the technologies employed. This overall definition leads to specifications of competitive positioning and strategic goals for achieving and maintaining competitive advantage and for product-market development. These goals are supported by policies concerning marketing, sales, manufacturing, product and process development, finance and human resource management.

Strategic change takes place within the context of the external competitive, economic and social environment, and the organization's internal resources, capabilities, culture, structure and systems. Its successful implementation requires thorough analysis and understanding of these factors in the formulation and planning stages.

The ultimate achievement of sustainable competitive advantage relies on the qualities defined by Pettigrew and Whipp (1991), namely: 'The capacity of the firm to identify and understand the competitive forces in play and how they change over time, linked to the competence of a business to mobilize and manage the resources necessary for the chosen competitive response through time.' Strategic change, however, should not be treated simplistically as a linear process of getting from A to B which can be planned and executed as a logical sequence of events. Pettigrew and Whipp (1991) issued the following warning based on their research into competitiveness and managing change in the motor, financial services, insurance and publishing industries:

The process by which strategic changes are made seldom moves directly through neat, successive stages of analysis, choice and implementation. Changes in the firm's environment persistently threaten the course and logic of strategic changes: dilemma abounds… We conclude that one of the defining features of the process, in so far as management action is concerned, is ambiguity; seldom is there an easily isolated logic to strategic change. Instead, that process may derive its motive force from an amalgam of economic, personal and political imperatives. Their introduction through time requires that those responsible for managing that process make continual assessments, repeated choices and multiple adjustments.

Operational change

Operational change relates to new systems, procedures, structures or technology which will have an immediate effect on working arrangements within a part of the organization. But their impact on people can be more significant than broader strategic change and they have to be handled just as carefully.

Resistance to change

Why people resist change

People resist change because it is seen as a threat to familiar patterns of behaviour as well as to status and financial rewards. Joan Woodward (1968) made this point clearly:

When we talk about resistance to change we tend to imply that management is always rational in changing its direction, and that employees are stupid, emotional or irrational in not responding in the way they should. But if an individual is going to be worse off, explicitly or implicitly, when the proposed changes have been made, any resistance is entirely rational in terms of his own best interest. The interests of the organization and the individual do not always coincide.

Specifically, the main reasons for resisting change are as follows:

â- The shock of the new - people are suspicious of anything which they perceive will upset their established routines, methods of working or conditions of employment.

They do not want to lose the security of what is familiar to them. They may not believe statements by management that the change is for their benefit as well as that of the organization; sometimes with good reason. They may feel that management has ulterior motives and, sometimes, the louder the protestations of managements, the less they will be believed.

â- Economic fears - loss of money, threats to job security.

â- Inconvenience - the change will make life more difficult.

â- Uncertainty - change can be worrying because of uncertainty about its likely impact.

â- Symbolic fears - a small change that may affect some treasured symbol, such as a separate office or a reserved parking space, may symbolize big ones, especially when employees are uncertain about how extensive the programme of change will be.

â- Threat to interpersonal relationships - anything that disrupts the customary social relationships and standards of the group will be resisted.

â- Threat to status or skill - the change is perceived as reducing the status of individuals or as de-skilling them.

â- Competence fears - concern about the ability to cope with new demands or to acquire new skills.

Overcoming resistance to change

Resistance to change can be difficult to overcome even when it is not detrimental to those concerned. But the attempt must be made. The first step is to analyse the potential impact of change by considering how it will affect people in their jobs. The analysis should indicate which aspects of the proposed change may be supported generally or by specified individuals and which aspects may be resisted. So far as possible, the potentially hostile or negative reactions of people should be identified, taking into account all the possible reasons for resisting change listed above. It is necessary to try to understand the likely feelings and fears of those affected so that unnecessary worries can be relieved and, as far as possible, ambiguities can be resolved. In making this analysis, the individual introducing the change, who is sometimes called the 'change agent', should recognize that new ideas are likely to be suspect and should make ample provision for the discussion of reactions to proposals to ensure complete understanding of them.

Involvement in the change process gives people the chance to raise and resolve their concerns and make suggestions about the form of the change and how it should be introduced. The aim is to get 'ownership' - a feeling amongst people that the change is something that they are happy to live with because they have been involved in its planning and introduction - it has become their change.

Communications about the proposed change should be carefully prepared and worded so that unnecessary fears are allayed. All the available channels as described in Chapter 54 should be used, but face-to-face communications direct from managers to individuals or through a team briefing system are best.

Change models

The best-known change models are those developed by Lewin (1951) and Beckhard

(1969). But other important contributions to an understanding of the mechanisms for change have been made by Thurley (1979), Quinn (1980), Nadler and Tushman (1980), Bandura (1986) and Beer et al (1990).


The basic mechanisms for managing change, according to Lewin (1951), are as follows:

Unfreezing - altering the present stable equilibrium which supports existing behaviours and attitudes. This process must take account of the inherent threats that change presents to people and the need to motivate those affected to attain the natural state of equilibrium by accepting change.

Changing - developing new responses based on new information.

Refreezing - stabilizing the change by introducing the new responses into the personalities of those concerned.

Lewin also suggested a methodology for analysing change which he called 'field force analysis'. This involves:

Analysing the restraining or driving forces that will affect the transition to the future state; these restraining forces will include the reactions of those who see change as unnecessary or as constituting a threat;

Assessing which of the driving or restraining forces are critical;

Taking steps both to increase the critical driving forces and to decrease the critical restraining forces.

Guidelines for change management

The achievement of sustainable change requires strong commitment and visionary leadership from the top.

Understanding is necessary of the culture of the organization and the levers for change that are most likely to be effective in that culture.

Those concerned with managing change at all levels should have the temperament and leadership skills appropriate to the circumstances of the organization and its change strategies.

It is important to build a working environment that is conducive to change. This means developing the firm as a 'learning organization'.

People support what they help to create. Commitment to change is improved if those affected by change are allowed to participate as fully as possible in planning and implementing it. The aim should be to get them to 'own' the change as something they want and will be glad to live with.

The reward system should encourage innovation and recognize success in achieving change.

Change will always involve failure as well as success. The failures must be expected and learned from.

Hard evidence and data on the need for change are the most powerful tools for its achievement, but establishing the need for change is easier than deciding how to satisfy it.

It is easier to change behaviour by changing processes, structure and systems than to change attitudes or the corporate culture.

There are always people in organizations who can act as champions of change.

They will welcome the challenges and opportunities that change can provide.

They are the ones to be chosen as change agents.

Resistance to change is inevitable if the individuals concerned feel that they are going to be worse off - implicitly or explicitly. The inept management of change will produce that reaction.

In an age of global competition, technological innovation, turbulence, discontinuity, even chaos, change is inevitable and necessary. The organization must do all it can to explain why change is essential and how it will affect everyone.

Moreover, every effort must be made to protect the interests of those affected by change.

The role of the management:

Management's responsibility (and that of administration in case of political changes) is to detect trends in the macro environment as well as in the microenvironment so as to be able to identify changes and initiate programs. It is also important to estimate what impact a change will likely have on employee behaviour patterns, work processes, technological requirements, and motivation. Management must assess what employee reactions will be and craft a change program that will provide support as workers go through the process of accepting change. The program must then be implemented, disseminated throughout the organization, monitored for effectiveness, and adjusted where necessary. Organisations exist within a dynamic environment that is subject to change due to the impact of various change \"triggers\", such as evolving technologies. To continue to operate effectively within this environmental turbulence, organisations must be able to change themselves in response to internally and externally initiated change. However, change will also impact upon the individuals within the organisation. Effective change management requires an understanding of the possible effects of change upon people, and how to manage potential sources of resistance to that change. Change can be said to occur where there is an imbalance between the current state and the environment. How does Change Management work? Change management is a procedural based process. It starts with the detections of a change trigger and ends with the implementation of a new strategy within the organization. Below is the complete lifecycle of change management.

The value chain and technology:-

Competitive advantage is based on firm specific combination of scientific and technical knowledge and know-how leading to an embedded in products, services and management systems Technologies are embedded not only in product but in all the primary and support activities of the Firm.

What are the effects of new technology in the organisation:-

Wincor Nixdorf, one of the world's largest leading suppliers of IT solutions for the banking and retail industries.

Wincor Nixdorf kiosk brings the functionality of Internet banking into HSBC branches. Customers can use the touch-screen kiosks to administer their accounts, pay bills and transfer money without waiting in line to see a cashier.

"This innovation has benefits for customers, staff, and the bank as a whole," HSBC bank staff spent 60 percent of their time dealing with administration and basic account servicing, because customers had no alternative or preferred dealing with a cashier in person. There was a lot of waiting in line, and new customers wanting financial advice would often just walk out."

The Wincor Nixdorf solution provides a secure and reliable way for account holders to serve themselves, releasing bank staff to spend more time on sales and higher-level customer service. This also saves HSBC money: transactions using the machines cost the bank a few pence, while a face-to-face transaction at the counter has an estimated cost of around one pound.

Wincor Nixdorf's kiosks have helped deliver a competitive advantage. Usage of machines has grown exponentially since its introduction, customer satisfaction has risen dramatically, and the system is well on its way towards registering its one millionth unique users.

Advantages for the bank and its customers using the innovation:-

Lower costs for cash handling and document/check processing (up to 75% in the entire value chain)

Lower transport costs for paper and documents/checks

Frequent usage makes ATMs a more viable financial proposition; self-service transactions are cost-efficient

Less cash circulating at the counter

The intelligent deposit system totals the amounts

Errors made filling out forms are identified and corrected immediately

Shorter business hours for tellers, longer banking hours for customers

Cash and checks are credited immediately to customer accounts

Does not depend on opening hours

Customers are provided with a list of the banknotes/documents and an image of the documents on the ATM screen, which they can either confirm or cancel

For security purposes, the documents can be printed out and made available to customers.

Technological change allows firms to produce the same rate of output using fewer inputs

Technological change may be input neutral, labor saving or capital saving

Single most source of economic growth in the USA has been "Technological Change"



Limitation of the study:-