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The organization called commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts market activities. As the two no longer have to be under separate ownership under U.S. law some use the term 'commercial bank' to refer to a bank or a division of a bank primarily dealing with deposits and loans from corporations or large businesses.
When describing commercial bank vision, mission and values are,
"Becoming the best factoring company in our industry by leveraging on the high potential our qualified and experienced staff has in order to deliver the most efficient and top line services to our customers."
"Offering new alternatives and solutions to our customers, company and industry in the highly competitive environment of the domestic and foreign markets with our experienced staff and customer- oriented, high quality service approach."
"We act wisely, because we seek innovative solutions, we act in a solution- oriented and practical manner. We are decisive, because we achieve and improve our targets by performing our business patiently and passionately. We are sensitive, because our customers' requests and thoughts are valuable to us. We are accessible, because we devote time to our customer and deliver high quality service".
The organizational structure
Commercial bank has a matrix organizational structure. "This type of structure combines the traditional departments see in functional structures with project teams. In a matrix structure, individuals work across teams and projects as well as within their own department or function".
General MeetingCommercial bank organizational structure is,
Capital Operation Dept.
Risk Control Dept.
Business Development Dept.
Market Management Dept.
International Business Dept.
Credit Card Dept.
Asset Protection Dept.
Tai Long College
Loan Review Commission
Board of Directors office
Nomination & Remuneration Commission
Board of Supervisors
Board of Directors
Risk Control Commission
Connected Transaction Control Commission
1.1 The organizational decisions making process
Many managers work in organizations. They work and operate at different positions. Hierarchy of these managerial positions is called as "Level of Management".
Generally, there are three levels of management,
Strategic level management/ Co- operative management.
Executive management/ middle management.
Supervisory management/ lower management.
These three levels of management are involved for entire process in a company. Mainly decisions are taken by strategic management.
The strategic management consists of the board of directors (BOD) and the Chief Executive Officer (CEO). CEO called as General Manager (GM). They are the representatives of the shareholders; the shareholders of the company select them.
Strategic management makes comp airing with this in to commercial bank, the decisions. Their main role was summarized as follows,
They determine the objectives, policies and plans of the organization.
They mobilizes (assemble and bring together) available resources.
They spend more time in planning and organizing.
Strategic management prepares long-term plans of the organization that generally made for 5 to 20 years etc.
As an ex:-
Commercial bank strategic management is regarding to provide 'Loans'. It categories as Home loans, Personal loans, Educational loans and Professional loans. They except maximum loan amount for each one.
After finalizing 'loans', strategic management hand over this to middle management, who are in charge of parts of an organization and have less authority than the most senior managers.
Middle level management consists of the departmental heads (HOD), branch managers and the junior executives. The departmental heads are finance mangers, purchase mangers, etc. the middle level management selected by the strategic level management. Their main role summarized as follows,
Middle level management gives recommendations to the strategic management.
It executes the policies and plans which the strategic management makes.
It coordinates the activities of all the departments.
They spend more time in coordinating etc.
As an ex:-
Commercial bank strategic management wants to provide 'loans'. That would be the decision from the strategic management. So middle management obtain details for every loan, ex;-
Applicant should have a regular monthly income, individually or jointly with how applicant spouse. This income should be sufficient to meet the monthly loan commitment as well as living and other expenses.
Applicant can borrow from Rs.750, 000/= up to Rs. 5 million and its depending on applicant monthly income.
Applicant can adjust 2 repayment periods.(monthly installments - Equated or fixed)
Middle level management takes those decisions.
Finally, lower level management consists of other responsibilities. Middle management selects them and it called as first line of management. Their performs are following activities:
Lower level management directs the workers/ employees.
They develop morale in the workers.
It maintains a link between workers and the middle level management.
They spend more time in directing and controlling. Etc.
Comp airing home loans from commercial bank, the lower management consists for to have minimum documentation and fast approval, longer repayment period, must be attractive and competitive interest rates. Always lower management has to comp aired with other bank loans.
If there is a proper level of management in an organization, that would be the valuable thing for the company. In addition, it would easy to take organizational decisions (marketing decisions, selling decisions)
1.2 Information and knowledge
It is important at the outset to clarify definitions and distinctions among data, information and knowledge.
"Data is raw facts and measurements". -By Fellow-
"Data that has been processed and presented as meaningful context". - By William B.Rouse-
"Information within people's mind". - By IEEE-
Decision-making is the toughest part for a management team, because one false move or wrong decision can lead the team to disaster in its project. Hence information and knowledge plays an important role in the decision making process. Without any sort of information or knowledge, will not help the management team to make right decisions, if it is not the organization faced many problems and challenges? The decision makers for any organization are its mangers.
Com pairing with this in to commercial bank, the decision that are needed to be made by the management(bank manager's)regarding to open a new branch, that would be a strategic type of decisions, which are going to help the bank to improve its performance considerably(in terms of customer service)
Every organization has three level of management, and they are the people who involved in decision-making process, and have to find the in formations.
As an ex:-
Commercial bank management regarding to open a new branch in Kandy, first they have to take the licenses around the district and have to make a budget for that so that would be the first decision from strategic level management. In addition, other decision goes on to operation level managers, first they to find about their main nationality. Thirdly have to recruit the employees for the bank. Operational level management takes the main decisions. Marketing decisions would be taken by lower level management.(Dot.com cards for younger's, home loans ; personal loans; educational loans and professional loans and debit cards, credit cards etc. for middle age people, Arunalu children's savings account for children's, Anagi for women etc.)
Within all these information's and the knowledge (best ideas) can take proper and valuable decisions by the management.
1.3 Internal vs. External information sources
1.3.1 Internal and External sources
This type of information is necessary for all levels of management. It will relate to activities performed within the organization. Such as administrative tasks, the production of products and services, or the sale of those products.
When define internal sources;
"Hard, focused and closely aligned to operational requirements".
Comps airing with this in to commercial bank, its internal sources are; staff, General Manager, Managing Director, officers , other than their inventories and attendances categories as marketing departments; their information on buying habits of customers and potential customers, and payroll systems and personnel documents and accounting ledgers etc. internal information's can easily gather in a company.
The focus of managing internal information sources is on managing the life cycle of these sources. There for internal information sources are highly valued, but because the management thereof is often not visible, the costs of managing these information sources are seldom close scrutinized.
External sources can be formal or informal, formal sources include statements from the organization, published documents and company advertising. Informal sources include other business associates interacting casually.
When defined external sources;
"Information that is typically 'contained 'in publications such as books etc."
When focusing on commercial bank, it has external sources also they are; customers, suppliers, preasure groups, shareholders, competitors, economy and government policies etc.
Traditionally external information sources are more difficult gather and manage than internal information sources. The main reason for this is that analysis and interpretation is necessary to determine the value of these information sources. Only information that has potential strategic value to the operation of the organization is acquiring.
These information sources not regarded as valuable on a daily basis, but the strategic value thereof is increasingly recognized. External information sources often perceived as very costly because of calculable purchase price.
Internal and External information sources are very important for a organization and it's adjust to company process.
1.4 Business Relationships with Stakeholders
1.4.1 Definition of stakeholders;
"Groups/individuals that are affected by hand or have an interest in the operations and objectives of the business".
-Author: Jim Riley-
Most businesses have a variety of stakeholder groups, which can broadly categorize as follows;
Stakeholder groups vary both in terms of their interest in the business activities and their power to influence business decisions. Here is an example in commercial bank
Power and Influence
Interest and principal to be repaid, maintain credit rating.
Can enforce loan covenants
Can withdraw banking facilities.
-Source Commercial bank-
Power and influence that a stakeholder has over the business objectives.
Considering with this in to commercial bank, their stakeholders are; Customers, Sharholders, Regulators, Employees, Government, Vendors, Credit Rating Agencies.
1.4.2 Maintaining / build stakeholders relationships
It is important for commercial bank to foster close cooperation with its stakeholders to ensure their support for its policies and programmers and to strengthen their confidence in what the bank is doing. Unless the bank works hard to create and sustain sound relations with its stakeholders, there are likely to be misunderstandings and suspicions about its activities. This may ultimately generate lack of public confidence and trust in the bank and the process.
The combined power, influence and interest of a stakeholder can be referred to as its stakeholder value to banks policies and practices. Stakeholder value is the basis on which bank can develop an appropriate strategy for promoting sound relationships with each stakeholder. Bank may not, need to be so focused on its relationships with low-interest/low-power stakeholders with only a peripheral interest in its activities.
There are a number of basic actions that commercial bank can take to maintain good relationships with its stakeholders. They are;
Maintaining open, two-way communication with stakeholders.
Being sensitive to stakeholder needs and concerns.
Seriously considering stakeholder views when making decisions.
Acting transparently, with meetings open to scrutiny and follow-up.
Treating stakeholders equitably, so that none are unfairly advantaged or disadvantaged by the commercial bank activities.
1.4.3 Stakeholders involve for the company growth.
Commercial bank has seven main stakeholders; they have described from the above paragraph. They are involving for the bank growth also, it was describe like this way,
Shareholders: - Involve for profit growth, share price growth, dividends.
Employees : - Salaries & Wages, JS &motivation.
Customers : - Customer service, Value for money etc.
Government: - operate legally, tax receipts & jobs.
More than these stakeholders can be involved for the bank decision-making process.
2.3 Information sources and stakeholder involvement
Stakeholders mainly engaged for the decisions making process in an organization. Working with stakeholders considered common practice yet often only particular stakeholders are involved. However, it is important to involve all different types of stakeholders throughout the whole process.
Stakeholders involve for information sources in a organization; commercial banks also have different aims in working with/ involving stakeholders. There are direct benefits and indirect benefits.
Communicate about our work.
Knowledge for target groups.
Evaluate work with them.
For the organizational help.
Dissemination of results.
Spread awareness of importance of inclusion.
Make inclusion possible.
Commercial bank stakeholders are getting information sources by financial news, stock market and from the annual report, strategic & business development consultants etcâ€¦
The above paragraph described about the recommendations for improvement in information sources and stakeholder involvement.
3.1 Communication in the organization
Communication is more valuable for a business environment as there are several parties involved. Various stakeholders, whether they are customers, employees or the media, are always sending important information to each other at all times.
In addition, there are types of communication. Even though new instruments have emerged over the years to help, people communicate effectively.
In every organization, have different communication methods. In addition, it is very important and easy to communicate with the customers.
Communication methods are; e-mail, notice boards, faxes, SMS , calls, TV advertisements and from letters etcâ€¦ likewise commercial bank also using the above communication methods to communicate with their customers and stakeholders,
Opening a websites for a commercial bank, it's easy to get the information about them and customers can easily get their details (ex:- interest rates, banking loans, new accounts etc..) commercial bank website is www.commercialbank.net
It offers many advantages. Fast, economical, recipient gets the hard copy, can sent worldwide, can prepare and share complex documents and message management features.
Commercial bank uses these methods for mostly in inside operations. Ex : - to give meeting reminders, participation reminders etcâ€¦.
Even though there are many different communication methods like notice board, fax, SMS, calls, TV. In commercial bank, they are using notice boards in rest room (ex;- if there is a net ball match they invite other staff to join with them.) commercial bank produces lots of TV advertisements because majority of the people are watching TV. Finally in every organization have a communication system to communicate.
3.2 Improve Proper Communication
There are three main steps to improve proper communication within the organization. They are;
One of the most important building blocks for a highly successful organization and an extraordinary workplace is "organizational culture". When define organizational culture as the set of shared beliefs, truths, assumptions and values that operate in organizations. Organizational culture has been described as "â€¦ how people behave when no one is looking."
Organizational culture must be in an organization, because "behind the scenes" of what happens in the day-to-day life of organizations and employeesâ€¦ is culture. It directly effect for the organization.
Considering with this in to commercial bank; their culture is the way they talk to customers and the way dress, politeness, customer satisfactions are the basic cultures in the bank.