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On 29 March 1824 King Willem-I issued a royal decree creating the Nederlandsche Handel-Maatschappij with the aim of reviving trade between the Netherlands and the Dutch East Indies. In 1964, NHM merged with De Twentsche Bank to form Algemene Bank Nederland (ABN), while Amsterdamsche Bank and Rotterdamsche Bank joined to become Amsterdam-Rotterdam (Amro) Bank. In 1991, these two banks merged as ABN AMRO Bank. Today, ABN AMRO Bank has a powerful presence in world markets, building on a tradition of stimulating international trade.
ADB Regional Conference on Micro Finance, Manila 14-15 March 2005B Regional Con
After the merger in 1991, the bank turned its attention to overseas markets like the American Midwest, where LaSalle National Bank began to gobble up competitors like Talman Home Federal Savings (1991). ABN Amro also took control of European American Bank (EAB), which had sustained heavy losses in real estate deals and Third World loans. The company bought investment banks Chicago Corp. and Alfred Berg in 1995.
Expansion brought internal oversight problems during the next few years. In 1995, Swiss banking authorities asked ABN Amro to better police its branches after the bank lost as much as $124 million due to embezzlement. In 1997, the firm closed its diamond office after losing about $100 million due to fraud.
In '90s, people, product, services and capital were moving around Europe without any restrictions. Directors of all the comparatively small Dutch banks were struggling to find a way of staying alive in the European single market. European unification fits into the concept of globalisation. Globalisation would divide the world into three markets: United States, Europe and Asia. Banks wanted to be part of this needed to be BIG. Only a bank that processed huge numbers of transactions could afford the necessary investment. ABN and Amro both operated in the relatively small domestic market of the Netherlands. They would have to take over foreign banks in order to be among the world's leaders. If they combined forces, they would be able to afford large, expensive takeovers. So both parties started negotiating. Nelissen(Amro) eyed ABN's extensive network of overseas offices; Hazelhoff(ABN) realised that Amro had clearly advance further as an investment bank.
The reconstruction begins in 1990, when two bitter rivals, ABN and Amro, the 2 Dutch banks with the biggest high-street profile, merged. They joined forces because both banks wanted to be global leaders. For years, ABN Amro was one of the predators in a banking world that was consolidating, in which efficiency and economy of scale went hand in hand. But then the predator became the prey. In October 2007, a consortium comprising Royal Bank of Scotland(Scots), Fortis(Belgians) and Banco Santander(Spanish) paid 71 billion Euros to split the bank into three.
It was ABN Amro's defective management and flawed governors that drew the spotlight in almost every conversation. This is therefore about the bankers who ran ABN Amro, most particularly about Rijkman Groenink, the man who sat on the managing board for almost 20 years, the last 7 as its chairman.
Merger ABN & Amro
Date: 26th March 1990
"In barely 6 weeks, a handful of men merged Dutch's two largest banks together"
"The overall success of an organisation operating is significantly influenced by the interaction of a number of different groups who may facilitate or inhibit the attainment of organisational goals" (Croft et al,1999).
In every organisation, teams and groups are developed at some time or another as this plays a big role in maintaining an effective organisation. The changing structure of the financial industry calls for more employee contribution, particularly in case of mergers. The functionality of these teams and groups will be dependent on various elements within the organisation.
In 1990, ABN Amro took up the role of a predator when two Dutch banks with the biggest high-street profile joined forces with the ambition to be global leaders, yet ended becoming a fallen prey in the spring of 2007.
Too often the importance of organisation structure is overlooked and one of the most important aspects of a manager's role is the design of organisational structures. The impact of the poorly managed corporate restructures that took place in ABN Amro, discussed later in this report, supports this view.
We would suggest that this lack of management and poor leadership style is a serious shortcoming that contributed to the downfall. Another cause of Dysfunctional groups may be as a result of by the attitude of the group members, poor distribution of work and roles which are not clearly defined. Motivation also plays a significant part of how well the group will perform.
This report forms part of a broader discussion on case studies built between the periods where ABN Amro, once the Holland's leading international bank, ended as a mere shadow. Although many commentators blamed the bank's last CEO, Rijkman Groenink to its eventual downfall, our group felt more importantly it would be useful to learn the functional and dysfunctional organisation issues from this giant merger.
Group Structures, Goals and Objectives
Organisational structure refers to the way that an organisation arranges people and jobs so that its work can be performed and its goals can be met. "Structure is an entity (such as an organisation) made up of elements or parts (such as people, resources, aspirations, market trends, levels of competence, reward systems, departmental mandates, and so on) that impact each other by the relationship they form. A structural relationship is one in which the various parts act upon each other, and consequently generate particular types of behavior." (Fritz, 1996:4)
A number of writers have stressed the importance of an organisation's structure and its relationship with its relevant goals, objectives and cultures. Mintzberg (1989) has written significantly the importance of organisational structure. Furthermore, Handy (1990, 1993) has explored the importance of culture in relation to organisational design and structure and the need for new organisational forms. Thus structure has a great impact on how effective groups and teams within an organisation will perform.
2.1. Definition of Goal
A goal is a statement of a desired future an organisation wishes to achieve. It describes what the organisation is trying accomplish. According to Barton (2000), goals serve as an internal source of motivation and commitment and provide a guide to action as well as a means of measuring performance.
2.1.1. Goal of ABN AMRO
The goal of ABN Amro is to create value for its clients. The key of its relationship approach is to constantly focusing on the financial services needs of their client segments. Globally, its customers are increasingly requiring a comprehensive range of products, professional skills and services.
Its goal is to be recognised as a leader in service, quality and customer satisfaction. They aim to achieve their objectives by working in partnership with their customers, employees and stakeholders.
2.2. Definition of Objective
Objective of an organisation defines the purposes, missions, and goals of an individual firm or its units, established through administrative processes. It includes an organisation's long-range plans and administrative philosophy.
2.2.1. Objective of ABN AMRO
Creating value for its clients by offering high-quality financial solutions which best meet their current needs and long-term goals.
Consumer and commercial clients in home markets (NL, US Midwest, Brazil) and selected growth markets around the world
Selected wholesale clients with an emphasis on Europe, and financial institutions
Leveraging its advantages in products and people to benefit all clients
Sharing expertise and operational excellence across the Group
Creating 'fuel for growth' by allocating capital and talent according to the principles of Managing for Value and value-based management model
2.3. Application of Group Structure in ABN Amro
Although the old ABN Amro had already ceased to exist as an independent bank, undeniably it survived through seventeen years of merger between ABN and Amro. Our first part of case studies shall contrast the organisation structures from two different periods of the merged bank.
2.3.1. Dysfunctional Structure - Matrix organisation
It was after the merger with Amro in 1990 did the organisational structure of ABN change. In order not to create a bank organisation within a bank, ABN Amro introduced a matrix structure for the American organisation in 1993. In the bank's opinion, for the creation of a universal bank, a matrix organisation was the best organisational structure.
Developing an effective matrix organisation, however, takes time and a willingness to learn new roles and behaviour, this means that matrix structures are often difficult for management to implement effectively (Mullins, 2005) Given the fact that merger between ABN and Amro took place within 6 weeks, it could be argued that there was insufficient time allocated for proper change management. Moreover, the vast difference in both corporate cultures, matrix structure proved not to work for the merger.
Source: Annual reports 1990 and 1991
Table 1: ABN Amro Managing Board Structure
18.104.22.168. Definition of Matrix Structure
Matrix structures rely heavily on teamwork or their success, with managers needing high-level behavioural and people management skills. The focus is on solving problems through team action. This type of organisational arrangement, therefore, requires a culture of co-operation, with supportive training programmes to help staff develop their team-working and conflict-resolution skills (Mullins, 2005)
22.214.171.124. Matrix Structure in ABN AMRO
Functional departments which provide a stable base for specialised activities and permanent location for members of staff. (Mullins, 2005)
Functional activities like credit management, personnel and automation were still centralized at head office. The management of each division consisted of members of the Managing Board and of the Senior Executive Vice President's of the division. For example, in 1991 the management of the International Division consisted of two members of the managing board, Kalff and R.W.F. van Tets and two Senior Executive Vice Presidents, M.H. Reuchlin responsible for Europe, and Oyevaar responsible for the rest of the world.
Units that integrate various activities of different functional departments on a project team, product, programme, geographical or systems basis. (Mullins, 2005)
In ABN Amro, the new divisional structure was given to the division Investment Banking & Global Clients (IB&GC), which before had been Directorate Securities. The newly created division served client groups that needed specialized knowledge on merger & acquisitions, issue activities, aerospace finance, project finance & leasing, securities, trade finance and private banking, IB&GC had to cooperate with the Domestic and International Division, which remained profit responsible.
126.96.36.199. Potential Problems
By adopting matrix structure, redundancies were avoided for the fear of upsetting employees from either ABN or Amro bank. However, this approach which was designed to balance regional concerns had resulted in loss of cost controls and accountabilities.
Limited number of employees reporting directly to managers which resulted in a feeling as ambiguity. Employees might be reluctant to accept constant change and prefer the organisational stability from membership of their own functional grouping.
For cross border branches like in US, the Americans are not enchanted by matrix structures. They prefer hierarchical lines and just one contact in the line organisation to which they have to report. The fact that the American organisation had to report to different people in the Netherlands and consequently received different orders was not found desirable.
It resulted in more complex structure. By using 2 methods of grouping it sacrificed the unity of command and caused problems of co-ordination.
ABN had historically developed into a more decentralised organisation divided into regions. Delegation of authority and reporting lines had been organised top down. The changes resulting from the introduction of the matrix organisation therefore were great. In the regions, top management at head office remained close to the final decision-making, leaving the employees with little knowledge about what moved the regions and its clients.
There are problems in defining the extent of the manager's authority over employees from other departments and in gaining the support of other functional managers.
Matrix structure indeed made ABN Amro into huge bureaucratic organisation. It was hard to work hand in hand because harmony was missing within the two different cultures. The board was convinced that final responsibility should lie with managers who knew most about the bank's products and services, yet neglected the underlying problems that many managers spent half their time fending off colleagues with conflicting interests.
ABN Amro has pushed ahead with international expansion since the merger, however geographical distance, differences in language and mentality were hurdles between the Netherlands and the US. Communication with ABN Amro's subsidiary companies abroad was more difficult with matrix structure.
Functional Structure - Divisional Structure
In 2000, realising that matrix structure was not the right path, the solution resulted in the creation of a Divisional structure by the ABN Amro. It was seen as an efficient way to deal with the problems of remote control in the international operations. The specialty of this Division was coordination of all foreign activities of the ABN Amro; it forged links between specialist at home and in others countries. The Division assisted the Managing Board in implementing its corporate policies and strategies. It provided support and assistance to ABN Amro members wherever located and was seen as the centre of communications to and from affiliated companies worldwide. It has to be stressed that the Division had no hierarchical task; the foreign companies and branches reported directly to the Managing Board in the Netherlands.
Table 2: Operational Structure in ABN Amro
(Source: ABN Amro annual report 2007)
Enhance coordination and motivation advantages of a Divisional Structure
Facilitates communication - between functions improve decision making, thereby increasing performance.
Customized management and problem solving - A geographic structure puts managers closer to the scene of operations than are managers at central headquarters. Regional managers are well positioned to be responsive to local situations such as the needs of regional customers and to fluctuations in resources. Thus regional divisions are often able to find solutions to region-specific problems and to use available resources more effectively than are managers at corporate headquarters.
Facilitates teamwork - staffsare sometimes able to pool their skills and knowledge and brainstorm new ideas for products or improved customer service.
Facilitates decision making - As divisions develop a common identity and approach to solving problems, their cohesiveness in- creases, and the result is improved decision making.
Clear connection between performance and reward - A divisional structure makes it relatively easy for organization to evaluate and reward the performance of individual divisions and their managers and to assign rewards in a way that is closely linked to their performance. Corporate managers can also evaluate one regional operation against another and thus share ideas between regions and find ways to improve performance.
Customized service - regional managers and employees are close to their customers and may develop personal relationships with them-relationships that may give those managers and employees extra incentive to perform well.
Identification with division - employees'close identification with their division can increase their commitment, loyalty, and job satisfaction.
Achievements of divisional structure
The operation department was effectively functional because they had achieved their merger's goals. They were also able to do what all financial institutions want, which is to have a strong capital base and broad experience.
At Chicago Business Editor 2000, ABN Amro was awarded the highest ranking within the banking institutions and at the 12th Annual Information Week, listed as the most innovative bank of information technology. Netherlands-based ABN AMRO Holding is the parent company of ABN AMRO Bank N.V. one of the world's largest banks with total assets of $511 billion and more than 3,500 locations in over 70 countries and territories.
In North America, ABN AMRO is headquartered in Chicago and has $171 billion in assets and more than 18,000 employees with wholesale banking offices in 13 cities in the U.S., Canada and Mexico. Major North American, subsidiaries include ABN AMRO Incorporated, an investment banking, advisory and brokerage firm; ABN AMRO Asset Management (USA) Inc.; LaSalle Bank in Chicago; Standard Federal Bank in Michigan and EAB in New York.
3. Leadership and Management in Groups and Teams
3.1. Leadership and Management
Leadership and management are usually used interchangeably; however they have different meanings. It is difficult to come up with a clear definition for both words. However for this report we will use the following definitions "leadership is ultimately about creating a way for people to contribute to making something extraordinary happen" (Kouzes and Posner, 2007). Management is "The process of achieving organisational effectiveness within a changing environment by balancing efficiency, effectiveness and equity, obtaining the most from limited resources and working and through other people" (Mullins, 2007).
McKinsey's 7S model was used by Watson to differentiate managers from leaders. He said that managers are concerned with the hard elements of Strategy, Structure and Systems whereas the soft elements of Staff, Skills, Style and Shared values are the prime concern of leaders (Mullins, 2005).
3.2. Groups and Teams
Organisations cannot function effectively without efficient team work and to create thriving teams are those who have a leader to motivate them. One third of the variation in the performance of teams can be attributed to personal actions shown by leaders and the climate that leaders create for their teams. For example, the clarity of assigned missions and expectations, the standards set, how much autonomy they delegate, their approach to reward, how they foster new ideas and finally, how those come together to create team commitment (Hay Group, 2009).
In another study Belbin analysed the pattern of behaviour of individual team members and acknowledged that 'teamwork does not, of course guarantee in itself good results,......it all depends on how the players play together' (Belbin, 1997).
Groups are formed in organisations for two main reasons either social orientated or task orientated. Task orientated groups are normally formal groups which are formed by management where as social orientated groups are informal are usually come together in a more spontaneous way (Croft et al, 1999).
3.3. Effects of Leadership Style on Groups in ABN Amro
3.3.1. Leadership within ABN Amro
It is important to have a strong leader as it increases group motivation, interpersonal behaviour and communication which allow the team to operate effectively. In ABN Amro, Rijkman Groenink is the leader as he forefronts all the decisions in the organisation. However his attitude contradicts the definition of a leader as well as Watsons application of the 'soft' Ss and more represents the 'hard' Ss (Peters and Waterman, 1982). This is where we can identify a thin line between management and leadership. Whereas Wilco Jiskoot proves that his leadership in ABN Amro was effective and led to good team building.
188.8.131.52. Democratic Leader
Jiskoot demonstrated the democratic leadership style, this was exercised by him holding his co workers responsible for their actions since he believed in team work. Being head of the investment bank, he followed a strategy of small takeovers to improve on the bank's competitive position. He also explained that that the takeover was actually a takeover of people and by making them feel at home will not only motivate them but will enable them get used to the new situation.
After 10yrs of successful work since Jiskoot joined Amro bank in 1976, he was appointed to a central position in the bank's share department. He believed in the Amro culture which was based on colleagues being accountable for their actions, while at ABN the culture was based on being friends. However, Jiskoot acknowledges the need for good communication and motivation with his team and the organisation as a whole.
184.108.40.206. An Autocratic Leader
Groenink has an autocratic style of leadership, this can be clearly seen in the way he does not like taking advice from any other personnel and makes decisions without consulting the other board members. Board meetings are held at a long table with him and Martinez (President) seated at one end and carry out the meeting without any input from the governors and managing directors. His tell style of leadership was evident when he decided to have talks of a merger with the president and chairman of ING but did not inform the president of ABN Amro until a meeting was scheduled. He also showed lack of communication as at the meeting Martinez was faced with questions which he was unable to answer due to the lack of information from Groenink.
220.127.116.11. A Team Player
At ABN Amro the supervisory board team consisted of the five members; Joost Kuiper, Huibert Boumeester, Wilco JisKoot, Scott Barrett, Rijkman Groenink and Arthur Martinez. The team was dysfunctional as there is no togetherness, the entire organisation is spending heavily and the team is not making an effort to reduce cost so as to improve their profits. The bank profits are reducing because they had made a terrible acquisition and also cost of compliance was rising. To meet his strategy Groenink tried to make the team aware of reducing cost, Jiskoot was disgruntled idea because his bonus would be affected. He made a remark that he had to sometimes pay two million dollars so that a banker would not go to a rival. Groenink's objective for ABN Amro was to become one of the top five largest banks in Europe but to achieve this they needed to work together. Although Martinez was the president most of the decisions were made by Groenink.
Within the board there was constant conflict due to the alienation on decisions. Team performance is consistent with the widely-shared view that performance outcomes are directly shaped by the group interaction process, which is strongly influenced by the behaviour and style of the team leader. Anger arose among the team when they found out that Groenink was having talks about merging without their involvement.
There was also an issue of trust among managing directors (team members) and managers and managing directors. In the bank after carrying out a survey it was found that the managers in the bank did not trust the managing board and Groenink strategy and leadership. They even thought that to solve the bank's problems that he should resign as they wanted a new leader.
Adapted from The Managerial Grid (Blake and Mouton, 1978)
4. Contribution, Motivation, Rewards and Roles of Individuals
Motivation also plays a significant part of how well the group will perform. The job of a manager in the workplace is to get things done through employees. To do this the manager should be able to recognize the contribution of each employee, know how to motivate them and build up an appropriate rewards system. The success of any facet of business can almost always be traced back to motivated employees. From productivity and profitability to recruiting and retention, hardworking and happy employees lead to triumph. Unfortunately, motivating people is far from an exact science. There's no secret formula, no set calculation, no work sheet to fill out. In fact, there are many competing theories that attempt to explain the nature of motivation. Some of theories may be helped with certain people at certain time.
In business, Equity Theory is usually associated with the work of Adams. The Adams' Equity Theory is named for John Stacey Adams, a workplace and behavioral psychologist, who developed this job motivation theory in 1963. Equity theory focuses on people's feelings of how fairly they have been treated in comparison with the treatment received by others. It is based on exchange theory. Social relationships involve an exchange process. For example, a person may expect promotion as an outcome of a high level of contribution or of a long term service (input) in helping to achieve an important organisational objective. They determine the perceived equity of their own position. Their feelings about the equity of the exchange are affected by the treatment they receive when compared with what happens to other people. Most exchanges involve a number of inputs and outcomes. When there is an unequal comparison of ratios between input and output, the person experiences a sense of inequity.
4.2. Application in ABN AMRO
4.2.1. Groenink Rijkman
In the context of ABN Amro, when Groenink was just appointed as chairman and carried a lot of changes in resources of management board as well as redundancy of 6,250 employees. There is no doubt that the Equity Theory is the most appropriate to discuss about.
Obviously that instead of building equitable rewards, Groenink had risen the inequity at the very early stage of his position, by touching the most sensitive issue that is replacing of personnel, firstly in the managing board. That was logical that a new chairman does a lot of changes, but the way he carried out the change was not tactful arrangement at all.
In the meeting with the top 200 managers of the bank in May 2000, Groenink indicated that Jan Maarten De Jong (CEO of Consumer & Commercial Clients) and Dolf Van de Brink (CEO of Private Clients and Asset Management) would retire early, in 2003 and 2004 respectively. But he could not wait that long, early 2001, he suggested that the three longest-serving members of the board should leave, Jan Maarten de Jong, Dolf van den Brink and Rijnhard van Tets (CEO of Corporate Business Division). He asked three of them to give up their seats on the managing board.
We can say that these CEO's are people with high achievement, according to Maslow's hierarchy of needs model, they belong to self-actualisation needs level. At their age and as the plan, they were not ready for retirement; they were still looking for challenging jobs, opportunities of dedication for more success of the bank, higher achievement, maintaining their social recognition.
Understanding the Maslow's need hierarchy, we can sympathise how Van den Brink was angry, he no longer felt at home at the bank as he did. Bitterer, De Jong was at his holiday home when Groenink phoned him and asked him to take early retirement. After all, he had made a major error in communication, De Jong was shocked, and he was being asked to leave the bank where he had worked for 32 years, and suddenly, within a few months. The conversation with Van Tets was more forceful. As he saw it, Groenink had not delivered what he had said he would two years before, in exchange for Van Tets's support for his candidacy as chairman.
The series unpeaceful leaving of other seniorities: Hans ten Cate, Henk Rutgers, Jean-Paul Votron, Bob Kleyn (General Human Resources Manager)â€¦ and replaced by new, younger blood, such as: Dolf Collee-47 years old, High Scott Barrett-41 years old, Sergio Lires Rial-39 years oldâ€¦ In total, eleven new general managers were appointed. It was immediately clear to everyone that Groenink wanted his own men on the managing board.
In dealing with the plan to scrap 25% of the jobs, Groenink made a big mistake as well. The way they sent out 2 groups of letter, 25,500 employees would read that they would be allowed to leave the bank with a severance package. The other remaining 8,500 who were indispensable to the bank, would not be allowed to made use of the severance stimulation package. The letters did a huge amount of harm, they simply underestimated the harshness of the message. People felt that they had been dumped. Everyone involved in the negotiations, including the unions, had simply missed that aspect. They should not have made a distinction between people. They might have lost some people who they needed, they were faced to deal with thousands of grieving, demotivated employees.
4.2.2. Jan Kalff
Jan Kalff was regarded as the undisputed chairman who insisted that every decision by the board should be collective and should always consider for the welfare of colleagues. We see his role which was very close to Elton Mayo Theory (1880-1949) which concluded that workers are best motivated by better communication between workers and mangers greater manger involvement in employees lives and working in teams and groups.
Kalff believes harmonious leadership is the crucial factor. Team spirit and motivation of staff create a culture in which everyone works together in the best interest for the bank instead of self-interests. He believed that workers are not just concerned with money but could be better motivated by having their social needs met whilst at work. He introduced the Human Relation School of thought, which focused on managers taking more of an interest in the workers, treating them as people who have worthwhile opinions and realising that workers enjoy interacting together.
Jan Kalff decided to devote time to formulating the bank's core value that would give his personnel a sense of common purpose. Value that would give Integrity, Teamwork, Respect, and Professionalism. He was practically always there for his people, even during occasional absence on holidays, they could still reach him; he was in touch every day. Kalff had a tremendous sense of duty and earned his colleagues' respect.
5.1. Organisational Structure
In order to make the divisional structure more effectively, ABN Amro should introduce a wider span of control to the establishment of the number of jobs to be included in any specific group. It leads to greater specialization, enhancing efficiency and performance of a manager. This factor comprises the skills and abilities of the manager and the employees and characteristics of the work being done. For example, the more training and experience employees have the less direct supervision they'll need. Therefore, managers with well-trained and experienced employees can function quite well with a wider span.
Other contingency variables that will determine the appropriate span include similarity of employee tasks, the complexity of those tasks, the physical proximity of subordinates, the degree to which standardized procedures are in place, the sophistication of the organisation's information system, the strength of the organisation's culture, and the preferred style of the manager.
It involves required contact, degree of specialization, and ability to communicate needed across actual relationships of a manager's interaction with subordinates, permutations of subordinates, and the subordinate interactions between each other.
Implementation of a new shared corporate culture is critical during post-merger integration phase. They need to develop a new culture that is accepted by the members of both ABN and Amro banks.
5.2. Leadership & Management
Another problem which the groups in ABN Amro suffered was the lack of an effective leader. In order for them to have become more effective the chairman needed to acknowledge the value of the other directors and communicate effectively. He would need to listen to their views and explain his actions or any decisions taken them. He also needed to tell the truth to avoid some of the conflicts which arose.
The leadership in ABN Amro lacked balance there was a high concern for results but little concern for the individuals which contributed to those results. Therefore there needed to be more concern for the human resource in the organisation.
There was also a lack of respect for authority which needed to be addressed; the president should have been kept informed about decisions which were being made by the chairman.
At a certain point in time, ABN Amro leaders and managers developed self interest in the organisation. Instead of working for the good of the organisation they all became interested in their personal outcomes from the organisation.
An organisation with clear and unbiased norms, values and culture will not breathe or encourage such malpractice. ABN Amro should set culture which revolved around their resources, with clear boundaries on what can be offered for each staff. (In the job description)
The feeling of being in control can cause irresponsible actions and shift in responsibility. The power bestowed on certain members at ABN Amro led to lack of effective communication amongst staff. This in turn leads to poor management. Documentation of all information necessary for the proper running of the organisation should be made available.
Performance targets and measures should be set for each employee to ease with the reward scheme at ABN Amro.
5.3. Motivation and Role of Individual
Groenink certainly could handle his role better in motivation employees if he applied artistically the McClelland's theory (1961) of needs of people with high achievement in management board, those with a high achievement need harmonious relationships with other people and need to feel accepted and respected by employees. By attempting to modify their self-image and to see themselves as needing challenges and success, the leader can influence other employees as well; therefore achieve the link between organisation's spirit and the development of available resources.
ABN Amro Human Resources Management should be aware of the probable inequity among staff and should seek to remove or reduce tension of that sensation by setting up an appropriate reward system, maintaining the relationship between how hard they work and how fairly they have been treated, and the most important is that do not made a distinction between people. The manager needs to know how best to elicit the employees and direct their contribution to achieving the goals of the organisation, from productivity and profitability to recruiting and retention, hardworking and happy employees lead to triumph.
ABN Amro's downfall showed the importance of proper integration of merger. Over ambitious in becoming the top international bank, it went through fast expansion without consideration of proper change management. This resulted in a weak merged giant which, through consistently failure to tap into synergies, did not create sustainable competitive advantages within the competitive financial sector.
We have studied the relationships within the various groups in ABN Amro under different management and different timelines and found that employees were more motivated and worked better when they had a leader which was more democratic. Multinational organisations operate most effectively when they are lead either under a democratic or bureaucratic leadership style. An autocratic style is best suited for small owner managed organisations.
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