A Review Of Santander Bank Commerce Essay

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As per requirements of the assignment the whole report is divided into three parts. In the first part ethical issue of a business organization has been described. I have prioritized Santander Bank for fulfilling the basic purpose of this Assignment for giving the selective question answer. The ethical issue- rights, conflicts, responsibilities, Marketing strategies, professionalism, information technology, communication, freedom of action, censorship on the interest, computers and work, law and security of Santander is described in detail in this part. In the second part of the assignment requires the legal system of a country, its patterns customs, laws etc. needed to describe. Spain is the selected country to give the answer. In this part, describe the legal system, sources of law, court structure, different forms of business allowed and the laws governing them, dispute regulation procedures, laws relating to copyrights, trademarks, patents, designs and their effectiveness in Spain. In the final part of the report a business organization is needed to select and describe that bring some effects on the organization such as- globalization, development of information, communication and technology, culture, power, politics, law and choice. Santander is my selected organization for describing the answer.

Objectives :

The objectives of the report are:

To know the ethical practice of a multinational business organization

To know the legal practices of a country.

To know about the business law of a country

To know about the effects of globalization on a multinational organization.

To know the cultural, political, laws effects of a multinational organization.


Study Design: Necessary information for the study is taken out from miscellaneous sources. The study is narrative in nature with some descriptive graphs and informative tables. Some data and other relevant information were gathered from secondary sources including several journals, booklets and websites.

Data Collection methods: Data have been collected from two sources. These are as under:

Primary source: Personal meeting with the Santander employees.

Secondary sources:

Assigned textbooks.

Class notes and other related books.

Different publications about Santander and Spain.

The data and information collected from primary and secondary sources have been analyzed in this assignment. After data processing and analysis, the information gathered which precisely have been compiled and presented.

Ethical Issue Faces in Business Santander Bank:

Overview of Santander Bank:

The Santander Group is the fourth largest bank in the world by profits and eighth by stock market capitalization. In 2009, its net ordinary profits were over EUR 8.9 billion, 1% more than the previous year, and it distributed more than EUR 4.9 billion in dividends to shareholders. With these figures, the Group achieved the target set at the Annual General Meeting of Shareholders held on June 19th 2009 to maintain its profits and the dividend payout.

Business model

Santander Bank has a customer-focused business model that delivers a high level of recurrence in its earnings and results, in spite of the difficult economic and financial circumstances of recent years. This model is supported by five pillars:

 1) Commercial focus: Santander offers its 91 million customers a wide range of financial products and services through its 13,660 branches, the largest branch network in international banking.

 2) Efficiency: Santander has one of the most cutting edge technology and operations platforms in international banking, which allows it to turn cost savings into greater value for the customer. It is one of the most efficient banks in the world, with a cost-to-income ratio of 41.7% (37.6% excluding depreciations and amortisations).

 3) Geographical diversification: Santander's geographical diversification is evenly balanced between developed and emerging markets. Its presence is concentrated in 9 major markets: Spain, Portugal, Germany, the UK, Brazil, Mexico, Chile, Argentina and the US, and in most of these markets it has attained high market shares in retail banking.

 4) Prudence in risks: Santander's levels of bad debt and coverage are better than the sector average in the geographical areas in which the bank operates. The whole of the organisation is involved in managing risk, from the daily operations carried out in branches up to senior management and the board of directors. The bank's risk management principles are: independence of the risk function, support of the business while maintaining credit risk quality, committee-based decisions, the use of cutting-edge tools and systems to measure and analyse risk, and the strong involvement of all governing bodies in the management of risk, starting with the Board of Directors.

 5) Capital discipline and financial strength: Santander is one of the most solid and solvent banks in the world, with a core capital ratio of 8.6% in 2009. Furthermore, the bank maintains a comfortable liquidity position based on funding through customer deposits and medium- to long-term debt issues.

Furthermore, Santander maintains a firm commitment to communities in all the countries in which it is present. Its main channel for this commitment is Santander Universities, which has 833 cooperation agreements in place with universities throughout the world. Other CSR actions relating to the environment and social action demonstrate the bank's strong dedication to sustainable development. All of this positions Santander as one of the most highly valued brands in the finance sector (third in the world according to the consultant Brand Finance). The Santander brand represents the values that make the Group unique: dynamism, strength, innovation, leadership, commercial focus and professional ethics.

Ethical Issues Relating to Santander

Rights, Conflicts and Responsibilities

Rights: Santander is an employee friendly company. The bank has always noticed about to the benefit of the employees. Maintaining work-life balance polices is the prime motto of the bank. The employees are openly giving their opinion to their line manager. They can easily take part in the strategy develop meetings. The bank provides world class remuneration and training facilities to their employees. The bank is also providing share options to their employees. The employees participate in various variable play agreements. As a part of the corporate social responsibility the bank employed differently able people. These are the brief description of the rights of the Santander's' employees.

Conflicts: It is the right of the employee to give his or her option openly to the meeting and in the time of making strategic plan. So, here lies some possibility for occurring interpersonal conflict between the employees in the bank. The bank employed 169,460 (2009) employees all over the world. So, it can be a source of interbank conflicts. Santander has more than 209,182 shareholders all over the world. They expect more profit from the bank. So conflict may arise between the shareholders and the bank. Santander is one of the world leading banking corporations of the world. So there may be some conflicts with other banks in terms of banking service, in terms of making profits, in terms of providing profit to their shareholders and in terms of hiring best employees from the market.

Responsibilities: The main responsibility of a bank is to keep the customers money save and secure. Invest the money in those sectors which will give it highest return. Another responsibility of the bank is to provide the highest return to their share holders. Santander performs all these responsibility very well. There lies no objection about the Santander's' responsibility in the banking industry.


Santander marketing strategy is very strong as they use handsome amount of money for advertising. They are very much aware about what should be the marketing strategy in the serving area. They take different types of marketing plans of different area.

The target customers of the different country are different. They set their marketing plan and strategy according to their target customers. The bank also sponsors of different social developments programs.


There is no doubt about the professionalism of Santander bank. If we consider their profit making we can say that they are professional enough. In 2009, its net ordinary profits were over EUR 8.9 billion, 1% more than the previous year, and it distributed more than EUR 4.9 billion in dividends to shareholders. With these figures, the Group achieved the target set at the Annual General Meeting of Shareholders held on June 19th 2009 to maintain its profits and the dividend payout.

Information Technology

Santander has a world class IT structure and online banking service. The bank provides online banking services all over the world. One customer of Santander bank can easily transfer his fund from UK to Spain in a minute. The bank also provides ATM and credit card facilities to their customers. The customers who are using internet banking the bank provide special security to them. There accounts are more secured. The customers use their account from their country's bank website. The customers have to maintain the privacy policy fixed by Santander bank.


Communication means connected with internal employees and external customers and shareholders. Employees of the bank are to share information with their colleagues. They are also free to make contract personally and officially to their colleagues. Santander arranges different types of cultural programs for their prime customers and colleagues and their family members. In this way Santander maintain their communication. The bank also sends souvenirs to their customers at different religious and cultural occasions.

Freedom of Action

Freedom of action means the employees freedom to take any actions. It is the right of the employees to participate in the strategy development meeting and they are free to give their opinion in the meeting. As well as the employee of the bank are free to discuss any topic to their line manager. They are free to provide solution to their customer, which is also a good sign of independency of their customers.

Censorship on the Internet

It is very important to the customers what kind of information bank share with others. Santander maintains a very strong privacy policy for their customers. If a customer wants a copy of their privacy policy he or she can easily collect the policy through the mail from the Santander. In internet it also maintains a very strong censorship policy. Here a customer can get only the information of the products. Only who has the permission of access the account from the online only they can see the information from the internet. So it can be said that Santander has a good censorship policy for the safety of the customers.

Computers and Work

All kind of banking transaction of the bank is performing through internet. The bank is maintaining all databases in the computer and the employees of the bank perform their task in it. The bank has a strong computer network all over the world. So they can easily share the information from one country to another in every minute. All kind of financial analysis of the customers is done through computers. The financial experts are done rest of the task.


When Santander bank starts banking in a country it is incorporated as a subsidiary company of Santander holding Plc. In several stock exchange its share are traded as Santander Holding Plc. It starts banking service as a private bank and follows the rule and regulation of the parent country. The bank follows the international banking law and the bank maintains a strong privacy policy for their customers.


Security of money is a prime conscious of the customers. If the customers do not fill comfortable they will not deposit their money in the bank. Santander has 91 million customers all over the world. So Santander gains the trust of the customers. The customers of the Santander believe that, their money will remain secure in the bank. The bank experts decide in which sectors they will invest the depositors' money that will give the highest return to them. So the shareholders of the bank are secure for their share value.

Another meaning of the security of the bank is to secure information of the customers. Santander bank has maintained a strong privacy policy for their customers so there is very low chance to publish any kind of information from the bank. As well as the bank has a very strong internet censorship program. So, only registered customers of the bank can access their information from the website.


These are the detail description of ethical issues-- rights, conflicts, responsibilities, Marketing strategies, professionalism, information technology, communication, freedom of action, censorship on the interest, computers and work, law and security relating to Santander Bank. Form the description it can be said that they maintain their ethical issue very strongly. It is the foundation of success in banking business of Santander bank.

Legal system of Spain

Brief Description of Spain

Kingdom of Spain is the official name of Spain. It is located in the southern Europe on the Iberian Peninsula. It is one of the members European Union (EU). Madrid is the capital city of Spain. Official language is Spanish. Parliamentary democracy and Constitutional monarchy is the ruling system of Spain. According to the 1978 constitution power was centered to bicameral legislature. The Cortes includes- comprising of the lower house, Congress of Deputies, and upper house and Senate. Both houses are selected for four years regulation period. The 350-member Congress of Deputies uses a proportional representation system and the Senate contains 208 members elected directly not only these 49 regional representatives are also selected in this time. The prime minister of the dominant party is selected by the party leader. Prime Minister, Deputy Prime Ministers and cabinet minister are the members of judicial committee. They make the law for Spain. 504,030 square kilometer is the total area of Spain. Euro is the currency name of Spain. In 2008, 46 million people are living in Spain. According to World Bank it is the ninth largest economy in the world, fifth in the Europe. It is also the third largest world investors. It is business friendly country. The legal system and other legal issue are discussed elaborately in below-

The Legal System

Constitutional Status:

The Spanish Constitution of 1978 is the foundation of the Spanish transition to democracy. It is a constitutional monarchy. Cortes Generals is the name of its bicameral parliament. Monarch appoints and nominate the executive branch (consists of a Council of Ministers) presided over by the President of Government, it is confirmed by the Congress of Deputies following legislative elections. King Juan Carlos has established political custom since the ratification of the 1978 Constitution; the most popular parties of who nominated by the king seats in the congress.

According to this constitution the 350-member Congress of Deputies uses a proportional representation system and the Senate contains 208 members elected directly not only these 49 regional representatives are also selected in this time. The prime minister of the dominant party is selected by the party leader. Prime Minister, Deputy Prime Ministers and cabinet minister are the members of judicial committee. They make the law for Spain.

Origin of Law:

The nominated members of the government make the rules and regulation of Spain. According to the 1978 Spain Constitution Spanish Court System is governed by the judicial council. It is free from the domination of the legislative and executive branches of Government

Source of Law

Spanish Constitution should be the source of law. But the historical reasons civil code regulates the law of the country. There are three types of law. That's: law, custom and general principal of law. Spanish legal system is hierarchical. In below the types of law are given. The rank is higher to lower:

Organic Law

Ordinary Law


Legislative Decree


International Treaties

European Community legislation

Court Structure

Spanish court structure is hierarchical. Structure of the Spanish court is given below:

Chart 1: Court Structure of Spain

I. Supreme Court:

The Supreme Court is the highest level of justice in the Spanish system. Though it is based in Madrid but its jurisdiction extends throughout the Spanish territory and over all judicial matters. Supreme Court is divided into five Chambers-




Military and


ii. National Court:

National Court has its jurisdiction all over the Spain. It is located in Madrid. It has three chambers. That's:

The Criminal Chamber: the cases involves with royal family, high official, major drug trafficking are deals in the criminal chamber.

The Administrative Chamber: in this chamber hires and apples against ministers and secretaries decision.

The Social Chamber: it is bigger than the autonomous committee. It tries the special process for contesting collective bargaining agreements applicable to a territory.

iii. Regional High Court:

This is the highest level of justice within each autonomous committee. It is divided in to four chambers:





iv. Provincial Court:

The provincial court deals with civil and criminal cases. It is located in the capital of province. Its jurisdiction extends throughout the province. It has two portions:

Civil Section and Criminal Section.

v. Tribunals:

Tribunal court is divided into three parts:

Central Criminal Court

Administrative Court

Criminal Court

Different Forms of Business Allowed to Operate and the Laws Governing Them

Spain is a business friendly country. According to World Bank it is the ninth largest economy in the world, fifth in the Europe. It is also the third largest world investors. There are mainly four forms of business organization can be formed in Spain which is:

Sole Proprietorship

Partnership and



Partnership business is two kinds-

Limited Partnership

General Partnership

Company can be formed in -

European Public Limited liability company

Limited liability company

New limited liability company

Spain welcomes all foreign investors to invest in the country. The investor need to meet with some legal requirements to invest in Spain. The legal requirements are - minimum capital, minimum share holder, and to maintain some legal corporate obligation.

Dispute Resolution Procedure

Arbitration is the only procedure which is follow to solve dispute outside of the court. The procedure is set by the parties in the absence of agreements. The procedure is set by the arbitrators. The exits cases are not the subject of arbitration.

Laws relating to


Spanish copyrights law is set by the Spanish government. According to the copyright law the author of literacy, the scientific research documents are protected in the law. The law is first installed in January 1879. In the time of origination it was influenced by the French Copyright Law. In 2006 the law was modified and it approved by the Royal Legislative. The law covers the area of all original works of literature, science, art, music, and movie. It is not mandatory that the creator must registered the work but if he registered the work than that person will get some advantages. It is providing prima facie to the creator.


New trademarks law enforced in 31 July 2002. According to the law if the applicant has no third parties then he will take the rights of the trademarks. If there is any third party also applicant for the same trademarks then none of the parties will get the rights of the trademarks. On the other hand if one party apple for the trademarks earlier than another party then the prior party will get the registration.


Patents right is preserved in Spain by the Patents Act 2002. There is also the Patents Regulations 1953. Royal Legislative is the major persons of patents related issues. Following purposes are served by this act:

Administration Pattern

Maintaining the patents register.

Providing the patents forms and other applications and documents forms.

Determining the patterns fees.

Receiving the pattern fees.

Publish the pattern in the official journal.

Registering patent attorneys.

Any Spanish person or any foreign neutral person gets the opportunity to patents his works. Royal Legislative becomes involved in proceedings when an opposition to the grant of an IP right is filed, when a revocation application is made, or when a hearing is requested. A panel of Assistant Commissioners (Hearings Officers) gives decisions on matters referred to the Commissioner for hearing. 


The Designs Act 2002 is the main law relating to designs in Spain. It is supported by the Designs Regulations 1954.

Following purposes are served by the Design Act 2002:

Design registers should be maintained.

Power and the function of the design should be defined.

Design and document should be provided.

Determining and collecting design fees.

Commissioner deal with designs issues in the hearing office and this office is the primary place for judicial cases of deign. Royal Legislative becomes involved in proceedings when a revocation application is made, or when a hearing is requested. A panel of Assistant Commissioners (Hearings Officers) gives decisions on matters referred to the Commissioner for hearing.

Royal Legislative publishes a number of practice guidelines that are used as a reference tool for examiners of designs. They set out procedural and legal matters relevant to the examination of applications of Designs under the Act.


These are the brief description of the legal system of Spain. As well as the court structure, sources of business law, laws relating to copyrights, trademarks, patents and designs. From the analysis it can easily find out that Spain Business Law is very suitable for the local and foreign investors. Any investors of any country can easily invest in Spain. Investment friendly law helps the country to develop quickly. Spain is the best example.


Globalization helps the multinational financial institution to expand their business all over the world. Early part of 21st century more than $1.5 trillion are traded daily for the expansion of the business. The effects of the globalization to the business organization are:

Global Expansion

Tax free rate in different countries

Cultural Integration

Whole world is a single market

Increasing opportunity to use different mass media for promoting the products.

Increases the opportunity to diversify the work force.

Facing global competition

Threats of new entrance

Price competition

Development in Information, Communication and Technology:

Santander has a very strong IT structure. The bank provides online banking services to its customers. The bank has a global virtual network. All kind of customers' information is maintained in the computer. Development of communication is a major component of the banks.

Without time to time development of the communication technology Santander will not come in this stage. The bank has developed its information, communication technology time to time. Now bank delivers four basic products in its all branches. Internet banking is one of them. Santander is one of the pioneers in internet banking. Up gradation of communication technology is a regular work of Santander.


According to John D. Daniels, Lee H. Radebaugh and Daniel P. Sullivan states that Culture refers to the learned norms based on attitudes, values, and beliefs of a group of people. In the age of globalization culture play an important role for the multinational organization like Santander. 169,660 employees work in Santander. These people have different culture. Santander shows respect to their culture. They design the organization culture in this way that they can follow the rules and regulation to their own country. These are all about the external environment of the Santander. Internal environment of Santander is also very flexible. The employees in the organization are free to make contact with its other colleagues in other country. They can easily share their ideas and point of views with their foreign colleagues and their line managers. Santander is one of the banks who maintain their work life balance policy very strongly. Flexibility, good training and development program, attractive salary and strong corporate culture are the reasons of Santander success.


Santander combines common corporate policies and divisions with local implementation in the countries in which it operates, thus taking advantage of synergies and competitive advantages on an international scale.

In accordance with the criteria established by New International Accounting Standards, the Group structures its business areas into two levels: the main or geographical level, and the secondary level, by type of business.


Main level:

The main or geographical level is divided into the following areas:

Continental Europe: This area incorporates all retail banking, asset management, insurance and wholesale banking business carried out in Continental Europe. The main units are:

the Santander Branch Network Spain


Santander Consumer Finance, in which Germany is the unit that contributes the most to the consumer finance business

Santander Totta

UK: Focusing chiefly on retail banking. Santander UK is the third largest bank in the country by deposits.

 Latin America: This area encompasses the subsidiary banks in Latin America, mainly in Brazil, Mexico, Chile and Argentina.

Furthermore, Santander has subsidiaries in Puerto Rico, Colombia and Uruguay.

US: The bank bases its business mainly on retail banking in this area, through Sovereign Bank.

Secondary level

The secondary level, broken down by type of business, is equivalent in its sum total to that of the three geographical areas included in the main level:

Retail Banking, which also encompasses Private Banking.

Global Wholesale Banking

Asset Management and Insurance

In addition to the operational segments, the Group has a Finance Management and Holdings area.


Political stability is very important for the development of a business organization. It is very good advantage for the Santander that, the main two countries in Europe from where they mainly operated its worldwide banking business, have very strong democratic system. All of these countries political system are not same. Global political and economic crisis like- World war and world rescission also play very important role in case of multinational company like -Santander. Santander provides banking services most areas over the world. Now it is age of communication and technology. So any political crisis of a particular country is not play very important role in the total business of a multinational company. On the other hand it is very good for the Santander that they did not have to face any major political crisis in the recent decades.


As a global company it also follows the laws of all countries where it operates. Its local operations are totally controlled according to local banking rules and regulations. Santander is always respectful to laws because without showing respect on laws it is impossible to be a socially responsible banking institution. In every country where the banks operated its banking services follow the rules set by its central bank. The bank also follows separate law and terms condition for its website and internet banking. Santander maintains strong privacy rules for their customers. They do not publish any information to other company without permission of the customers. In case of internet banking the bank provide selected information to the customers. It is the motto of the Santander that they follow the rules and regulation and the being the social responsible company of the country.


People come to the bank mainly for two reasons; one is to deposit their money and other is borrowing fund from the bank. So the banks arrange their products and services according to the customers' choice. Santander provides banking services to 91 million people all over the world. They arrange the products according to the choice if the customers.

Santander respects the customers' choice. So, bank diversified the product line according to the customers need. There are lots of sub products for the Santander. So, when customers come to the bank he or she gets services according to his needs.


These are the factors Santander manages successfully in its global operation all over the world. Santander faces the effects of globalization, development of information, communication, and technology, culture, power, politics, law and choice very strongly. Santander prepares very well to faces the challenges. It is the reasons of its success in the global market.