How Poorly Performing Banks Become Sustainable Commerce Essay


The contribution of the banks in relation to develop the country's economy is important and the background of these financial institutions is important to understand the policy and program to make them sustainable organizations. Banks: The commercial banking system in Bangladesh has five different categories and those banks are performing either good or bad. Within these five categories, the central bank is one that is Bangladesh Bank reserve the currency and control money supply and policy. Bangladesh Bank established on 16th December 1971 reform from the State Bank of Pakistan before the independence of the Bangladesh. The head office is at Dhaka and other branch offices are stands in the big cities of the country. Category of Bangladesh banks are as follows:

Because your question refers only to State owned banks, I told you to make in the first table only two categories: state-owned and private. After you will discuss more criteria.


Number of Banks


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NCB (National commercial Banks in Bangladesh/State own Banks)



Private Banks



Foreign Banks



Development Banks



Source: International journal of business and management April 2009, Vol.4 No. 4 ( written by Tanbir ahmed Chowdhury and Kashfia Ahmed.

Four Nationalized commercial Banks named Sonali Bank, Janata Bank, Rupli Bank, Agrani Bank and two specialized government owned development Banks are Karmosangesthan Bank and Bangladesh Krishi Bank is holding approximate more than 50% of countries total deposit with maximum number of Branches (No. of Branch3616). (Encyclopedia). The central bank is always trying to increase the growth of the state-own banks residing in Bangladesh. Recently the four national commercial banks- Sonali Bank, Agrani Bank, Janata Bank and Rupali Banks becames limited banks and government took 100% share of these limited banks weather the other two development banks - Karmosangesthan Bank and Krishi Bank is totally government banks there is no reforms of those banks still now.

Sonali Bank: Sonali Bank Bangladesh now is a state owned public limited bank established in 1972 after the liberation war and independence of Bangladesh. It is the largest and fully state own banks in Bangladesh and compare to other banks it more pride. The history of the sonali banks provides that the national bank of Pakistan situated in the East Pakistan reforms after the independence of Bangladesh named as Sonali bank. Sonali bank staretd its journey with 30million paid up capital and now it's about 10billion authorized capital and 3+ billion of paid up capital. About 13 board members headed by the managing director and chief executive the Sonali banks is providing services both within the boundary side and abroad. There is one office in UK for the international transaction and global development of this state own banks having 7 branches in UK and Sonali exchange company having 8 branches in USA where the one representative office stands in Riyadh. (Sonali Bank website: 5th Feb. '10)

Agrani Bank: Agrani bank is also a state owned bank in Bangladesh established in 1972 for the national and overseas correspondence. The Habib bank ltd and commerce Bank Ltd. During the East Pakistan reforms the Agrani Bank by its asset and liability. (official website: 5th Feb. '10)

Janata Bank: Is established in Bangladesh national commercial bank on 1971 and it is a second largest commercial bank in Bangladesh. (official website: 5th Feb. '10)

Private Banks in Bangladesh are doing very well and due to dismissal performance of the state owned banks, private banks are providing better customer service and products from the very beginning of their establishment.

Foreign Banks in Bangladesh are providing very prompt and dynamic support and status customers like to have their transactions with the foreign Banks like: HSBC bank, Standard Chartered Banks etc.

Within the specialized development banks the Krishir bank Bangladesh deals with the agricultural loan and transaction and Shilpa Bank, Bangladesh is dealing with industrial transaction and development processes.

Overview of historical performance: State owned Banks in Bangladesh are not doing well like other private banks. The overall performance of state owned Bank is in a declining trend. Either they are making losses or they are not performing according their level or therefore state owned banks restructuring and re-evaluation of their policy and thus four important government commercial banks became public limited banks on 15th of November 2007. Poor infrastructure, weak governance and more centralization and formal policy of the state owned company are not getting much access to the potential growth. Likely most of the government sectors nowadays are doing very poor performance. Very slow changing process and constant system of the banks are the historical reasons of poor performance which will lead the research insight.

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Generating and refining the ideas: Techniques used to generate and refine the topic idea based on the person's academic and practical expediency of knowledge. It is necessary to think rationally so that the standpoint of the research will get dramatically out-put. Brain storming such as discussion with friends, supervisor, and use of existing case study creates for critical thinking of the general issues. Novelty of the idea in market place and choice upon the objective thinking provides better value to the topic areas.

It is important to think about the own academic field of study related issues which will create the new explanation and existing idea's critical analysis. The most value will discover when objective sets or purpose of the study is definite.

As I am studying in finance and management, I have set my idea to do a depth study on management and finance related issues with cotemporary venture in developing countries such as Bangladeshi financial market. I have used the case studies of the development of financial institution with brainstorming and discussion and come up with bunch of ideas which further refines and screenings the specific topic among those ideas. First focus on the specific institution in banking sector is a general analysis, and further analysis is narrow down to find the region based banking sector in the close cultural and practical knowledge based areas to find out the easiness and reliable of the research study. Here you need to give the correct research question and the sub purposes of your investigation: Therefore after a huge background study I have reached to take the research question that "How can poorly performing state-owned financial institutions become sustainable organizations in Bangladesh?" Change it, see above

According to Locke et. All. (2007, p.9), the purpose statement indicates why the study is being conducted and what intention is is being created. Purpose of the research question is created by the combination of the several superposes which are the splitting objective of the research question. I assume there are two different ways to investigate sub purposes: Organizational purpose and research design purpose. In Organizational purpose, the research question directly split in to several objectives learning issues: What is a state own financial institution, by answering this question we develop the knowledge about the focusing institution and their contribution to the society and economics as well as the need for this research investigation. Second question thus, what is sustainability, this question again answering the definition of sustainability but it helps to make a bridge between the financial institution and their sustainability needed. Therefore the relation of these two sub purposes support the basic aim of the research question that how we improve the poor performing state own banks performance to make them as a sustainable organization. The methodological purpose of the study is to develop the strategic phenomenological uncovering inquiry at the organizational level for research site.

Ontological and epistemological position: The topic choice is one that helps to connect the epistemological and ontological meaning that renovates the application of the research strategy of the social knowledge and reality in production. Epistemology approaches defines the intuitions, performers beliefs, faith as well as logical authoritative and empirical experimentation, and ontology uses to structuring and modeling the wide epistemological ideas and specifies the conceptualization of the production of the topic idea. Performance indicator of the organization and failure to perform the economic value is the main focus of the research conduct which will explain through social and organizational process in developing countries. Critical success factor of the banking sector will highlight by comparing the develop and developing countries, other minor study could be achievable to find the success factor of the private banks in Bangladesh. Because the performance of the successful Banking sector will lead the poor performing banks to integrate the strategy, the research question of this study influence the newness of contemporary issues which is very important forecast to find out the reason behind the poor performance of the national bank /institution residing in Bangladesh. Although the research region is Bangladesh, it is possible to find out a general view of poor performing banks residing in developing countries.

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Research Philosophy: It is important that researcher understand well the philosophy of science parameters anchoring their works (Ponterotto, 2005). Philosophy of science parameter is that to conduct the current day to day scholarly work with world-wide undergirding of research sciences (Ponterotto, 2005).

Philosophical ideas are invisible in large scale when conducting the research. As this philosophy is connected with the researcher own perspective form and then the knowledge of individuals are influence by that idea to form a research design, it is important to draw a research design. The methods of research will choice according to the worldview of the philosophical idea. Worldview here means the individuals as a meaning "a basic set of beliefs that guide action" (Guba, 1990, p. 17).

The research philosophy is consisting on the psychological thinking of the researcher and Psychology generally, and counseling psychology specifically, has been dominated by positivist and post positivist research paradigms and associated quantitative methods. Such a narrow paradigmatic focus has limited the profession's ability to advance the field in significant ways. As counseling psychology broadens its paradigmatic base and extends its scope of research methods to include qualitative approaches, it will advance rapidly as a scientific field. (Ponterotto, 2005)

To support ponterotto's view I want to contrast the world views, strategies of inquiry and research methods framework given by Creswell, 2009, p. 5: (question about referencing : copied from book)

Selective Strategies of Inquiry

Qualitative Strategy (Ethnography)

Quantitative Strategy (experiments)

Mixed Method Strategy (Sequential)

Philosophical Worldviews


Social Construction



Research Design

Qualitative Strategies

Quantitaive Strategy

Mixed Method Strategy

Research Method


Literature review and theoretical framework

Data Collection

Data analysis




A framework for Design-The interconnection of worldviews, Strategies of inquiry and research methods

The major concern of the philosophical worldview is to assume the fundamental consideration of the worldview and how this worldview and understanding shaped the research study in a systematic way.

Measurable psychological paradigm designed to quantitative and qualitative knowledge to the research area. We use the qualitative research in our day to day life to describe the position of the issues depending on the experience, and qualitative research follows the specific paradigm which is one of the best ways to go with the structure and designed research process.

In this research before choosing the method, I get philosophical point of view when the connection between the method and scientist worldview eg: Post positivist and hermeneutist argument and then the analysis of quantitative and qualitative as well as mixed method will set up.

Post positivist worldview: A post positivists lens is based on careful observations and measurement of the objective reality that exists "out there" in the world Creswell, 2009, p.7).

In scientific method, the accepted approach to research by positivists, an individual's begins with theory and then collect the data and according those data that either support or refute the theory. Book

According to Phillips and Burbules (2000), absolute truth can never be found. Thus evidence found in research is always imperfect and fallible instead they indicate a failure or reject the hypotheses.

The nature of the post positivist world view is to discover and asses the cause of the outcome which provides a numeric measurement of some discrete ideas through a scientific test with the set of some variables that consist of the hypotheses and research question.

Social Constructivism: Social constructivist's holds assumptions that individuals seek understanding of the world in which they live and work, individuals develop subjective meaning of their experience -meanings directed toward certain objects or things. (Creswell, 2009, p.8)

The view of the constructivism is that, one specific idea become more generalizes in the research and finds the opinion as situational empirics. It is more about to analysis and understand the historical, personal and cultural standpoint of the question that the researcher aiming to study. The philosophy of the world views of the individual best suite with the qualitative method than of quantitative measurement because in quantitative method there is some barrier to balance between individuals personal idea based on culture understanding but rely on some tested output. Open ended question in the qualitative method will more concern about the current and real data to understand the situation and thus possible to get output based on study. The changing process of the environment like why crisis is going on or the already passed natural disaster is not a suitable method to study by quantitative measurement.

Strategies of inquiry: To make a strategic inquiry, below table shows the fundamentals of the both qualitative and quantitative methods and later explain which one is the best suite with this research. (Creswell, 2009, p.17). (Question: copied few parts of the book) quote the source carefully


Philosophical assumption

Strategies of inquiry

Method's instruments


Practice of the research


Constructivist worldview

Grounded theory, phenomenology, ethnography, case study and narrative

Open ended questions, emerging approaches, text or image data


Focusing on a single concept, bring personal value to the study, creates an agenda for change or reform


Post positivist and positivist worldview

Survey and experiments

Close ended question, predetermined approaches, numeric data


Collects both qualitative and quantitative data, presents visual pictures of the procedures in the study

A coming contemporary issue of this topic area is very much subjective which will lead some general results at the end of the research through some descriptive conclusion. Therefore constructivist point of view is best suite with this research method process. Although constructivist analysis defines the qualitative study, but for more authentic choice of the method, sentence missing part

As the research is to find a solution to make the Bangladeshi state owned banks environment change "from poor performance to be sustainable organization" this research is not a question to reject or support the analysis but this research aim is to provide the solution that how to become sustainable sustainable organization. The above table shows the practice of the qualitative research focusing on a single concept, bring personal value to the study, creates an agenda for change or reform and I have selected my topic that stands on a single concept, and change or reform is the main goal of this study. To achieve this goal I assume my personal value of thinking that, an open ended question and interviews as well as observation is the best method which supports through constructivists point of view(cultural, ethnography) .

Research Approach: Positivism is a form of philosophical realism adhering closely to the hypothetic-deductive method (Cacioppo,Semin, & Berntson, 2004; McGrath & Johnson, 2003; Sciarra,1999). Scientific method includes the observation and description of the events and presents the hypotheses which is testable and make structured inquiry of the experimentation, prediction and control possible organism. A single case is commonly used more variables than data points (lee 1989:35). The qualitative data used to compare the potential observed outcome and the observed outcome is the aim of this research, a inductive approach is the easiest way to direct the purpose of the study.

An inductive approach is best suite with the qualitative method which proves the specific sciences of the individual's observations rather than in generalization. The objective of the research is to find out the poor performing reason of the Bangladesh/developing country, in this thesis through the analysis of the banks in Bangladesh; I would like to design a picture for the developing country as a whole. A lot of data will prove empirics to support a conclusion of this research and thus quantitative method and inductive approach is eliminated from this study paradigm.

A distinguishing characteristics of the constructivism is the centrally of the interaction between the investigator and the objective of the investigation. Only this interaction can deeper meaning be uncovered. The researcher and his/her co-worker can create findings and reality is created by the actor which criticizes the both positivism and post positivism approach. (Ponterotto, 2005)

An inductive approach with constructivism approaches is being considered in this of the topic areas to develop the market position of the failing areas in the Banks situated in Bangladesh.

Please check if it is really new, since I believe that it has been studied for other countries. The newness is to apply it to Bengladesh.

Research Strategy: Answering the research question is the main motto to set up strategy and which technique will follow in connection with the research method and approach. Many research are stratified depending on what level of research will conduct, is it from the individual level, or organizational level. Interconnection of the literature choice to answering the research question is quite critical. Research strategy provide guidance on what we have learned and what is still to be explored in strategy-process research (Hutzschenreuter* and Kleindienst, 2006: 32, 673). Understanding and learning the history and find out the gap between current position and history will provide a stable picture of the solutions and reasons of the theme. According to the exploring corporate strategy book by Johnson, Scholes, and Whittington, 2008, business strategy divides into three parts, the strategic position, strategic choice and strategic action. I assume that, to clear answering the research question, the research should analysis its position which will provide the most primary and secondary data like case studies and interviews, what current strategic choice running in the poor performing banks will understand through the interview and reviewing the policy and culture. What need to implement based on those position and choices have a very little connection with this research. To analysis these strategy, this study will need deeper understanding of the banks/institutions policy and experts empirics thus need to conduct data collection, writing and analysis. Data collection through interviews is a most common and useful strategic tool of the qualitative research and secondary data from case study case studies and observation is also very important qualitative collect the data. Interviews can be different types like: face to face interview, telephonic conversation, and focus group interview as well as email internet interview process. Different types of interview have different advantages but for this specific research, telephonic interview and internet emailing interview is best suitable process to conduct. It has possibility to get historical information when telephonic interviews are occurred and internet emailing is a very quick process to get the answer of the open ended question. The dynamic internet emailing questionnaire method is most suitable for academic research where the time and budget are limited. Although it is observable that telephonic interview and internet email process doesn't provide the nonverbal expressional of meaning from the respondent, this phenomenon study consider this issue that the telephonic interview, internet emailing and case study is enough to support this research. Video conference and collect data through voice recording could be the good instrument for the qualitative research but the researcher decision based on the importance will get the priority to conduct this process. Documents study like article, journal, public documents study such as minutes, and newspapers are also providing good qualitative information to make the research strong and authentic. These kinds of secondary data are easy to access and researcher can chose the option to get good literature review according to his or her understating and objective. These studies are also useful to use during the limited budget and time. A research strategy holds a good research proposal. As this research study selection already made for qualitative study, a format for qualitative constructivist proposal is being conducted below (Creswell, 2009, p.74-74, example 4.1):


Background study

Purpose statement

Research questions

May be list of subpurposes





Philosophical assumption of qualitative research and constructivist world view

Qualitative research strategy and approach

Data collection process

Making time line and proposed budget

Perspective and Preconception: As a researcher of the study, it is necessary to draw a intuitive picture in the mind which will approximately fits with the research purpose. A preconception will be set with the perspective analysis. Dieting and scheduling of the forecasted hypotheses will allow growing the research strength. Connecting or rejecting the empirics suitably based on preconception and perspective view of the research increase the potentiality. Rethinking and bring storming is the essential elements of the perspective and preconception.

Data Collection: Data collection method includes the qualitative and quantitative way and then analysis it. Qualitative data is based on the explanation and word expression a quantitative data is based on number which has the mathematical solutions to support the answers of the research questions. For two different methods there are two most common type of data analysis in the most of the scientific research, primary and secondary. Although there are other type of data collection method name tertiary, but this is not very often used by the scientist. This research purpose is aim to collect the primary and secondary data which is perspective and pre-conceptualized. Primary data includes interview which has a great value to this study. As the research is not only depends on some selective experts in the banking field in the world but it is effected both micro and macro environment of the business and economic process of the global world, the secondary data is also must for this study which will analysis and experiment through the use of case study, journal, literature and other secondary materials.