Mission, values and key objectives of Faysal Bank
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An organization is a person or group of people intentionally organized to accomplish a common goal or set of goals.
Faysal Bank Limited:-
Introduction of Faysal Bank Limited:-
Faysal Bank Limited was incorporated in Pakistan on October 3, 1994, as a public limited company under the Companies Ordinance, 1984. On January 1, 2002, Al Faysal Investment Bank Limited, another group entity in Pakistan, merged into Faysal Bank Limited which resulted in a larger, stronger and much more versatile institution.
Mission or Purpose is a precise description of what an organization does. It is a definition of why the organization exists currently. Each member of an organization should be able to verbally express this mission. A mission statement focuses on the how of your business.
Faysal Bank Mission:-
Achieve leadership in providing financial services in chosen markets through innovation.
A value is a belief, a mission, or a philosophy that is really meaningful to the company.
Faysal Bank Values:-
Our daily code of conduct is exemplified by eight core values:
* Threshold values - values at the heart of our brand.
* Differentiator values - values that set our brand apart.
* Integrity- Our Integrity: Our Identity
* Team Work- Our Team Work: Our Asset
* Respect- Our Respect: Our Duty
* Professionalism- Our Professionalism: Our Competence
* Passion- Our Passion: Our Worth
* Responsiveness- Our Responsiveness: Our Distinguisher
* Innovation- Our Innovation: Our Strength
* Compassion- Our Compassion: Our Gift
Objectives give the business a clearly defined target. An objective is something you want to achieve.
Faysal Bank Objectives:-
* Prime focus to earn profit by providing values to its customers.
* To provide superior services to its customers.
* To provide assistance in the development of the commerce and trade industry.
* Focus on blending skills and experience towards creating an enabling environment.
* Core focus is to inculcate a culture of collaboration intended to deliver world class customer service.
* To promote and boost up business sector inside the country.
* To provide the employment opportunities in the country.
* To provide loan and advances to help out in self employment schemes
* To earn profit for the bank itself and for its stakeholders.
* To create maximum economic value for shareholders through constant relationship focuses on financial services.
Stakeholders are individuals or groups who have an interest in an organization's ability to deliver intended results and maintain the viability of its products and services. In the development of a firm's mission and vision is a good place to start, but first, of course, you must identify critical stakeholders, get a handle on their short- and long-term interests, calculate their potential influence on your strategy, and take into consideration how the firms strategy might affect the stakeholders (beneficially or adversely). Stakeholders can be internal as well as external
Internal stake holders are individual or groups inside a business or an organization.
External stake holders are individuals or groups outside the business who are interested in the decisions an organization makes.
Overall stakeholders include owners or shareholders, managers, employees, customers, government, suppliers, communities and Investors. Some stakeholders may have more than one interest in a business. An employee might also be a stakeholder. Managers are employees of the business, a customer might be a member of a local community but yet they can be stakeholders. Stakeholders in a business will usually benefit from their involvement with the organization. Employees will earn money which they can spend on goods and services. Customers will consume the goods and services supplied by the business and the government will collect tax from the organization.
P2:- Evaluate the extent to which an organization achieves the objectives of three stakeholders.
Interest & Objectives of Stake holders:-
Different Stake holders have diverse objective and they have different affects on an organization or business. According to Michael Novak following are seven points that should be kept in mind according to business ethics when developing relations with stakeholders.
* Customer satisfaction by providing goods and services of real value.
* Reasonable return on the funds entrusted to the business by its investors.
* Create new wealth
* New job opportunities
* Promote invention and creativity
* One of the most important is to diverse public interest into different sectors of life.
Following are the needs of the stakeholders that the organization caters to for their complete satisfaction.
* Shareholders want regular, secure and high returns.
* Managers want responsibility, high rewards and a lack of interference in their actions.
* Employees want high earnings, an interesting job and secure employment.
* Customers want quality products at low prices and a good service
* Suppliers want secure, regular and profitable orders.
* Government wants to achieve a large number of goals including growth in the economy and low inflation.
* The local community wants thriving local businesses which do not cause problems.
P3:- Explain the responsibilities of an organization and strategies employed to meet them.
Responsible Behaviour of an Organization:-
Agency theory devised by Milton Friedman says that the social responsibility of an organization is to generate the possible profit for its shareholders with fair competition, no fraud, etc. It should be understood that the managers of a firm are no more than agents working on behalf of the owners. But at the other end, the stakeholder theory emphasizes a broader set of social responsibilities for business (Mullins, 2005).
Ecology and the increasing destruction of ecosystems and natural resources have a widespread concern from the public, the governments and inter-governmental agencies. Business organizations in the whole world are required to conduct an Environmental Impact Assessment (EIA) for their new operations or expansion of the existing ones. EIA is a detailed study of the likely environmental consequences of the new development, together with plans to avoid causing damage or to repair damage that cannot be avoided. The EIA takes into account whether resources used are renewable or non-renewable. Allaby elaborates that the cost of obeying regulations may inhibit innovation and apart from the economic effect, this may delay or even prevent the substitution of new products and processes for old ones.
Business ethics has a broad spectrum, because any action by a firm or one of its employees can be done ethically or unethically (Mullins, 2005). Thus the behaviour of a business towards its customers, competitors, suppliers, employees, the environment, local communities and other stakeholders will certainly reflect the organizational cultures in terms of ethics adopted or neglected. Sternberg includes two tests of the decency (e.g. refraining from stealing, cheating) and distributive justice (i.e. ensuring that rewards are proportional to contributions made). Therefore, an organization is said to be ethical if it satisfies three tests of:
* long-term wealth growth of its owners;
* common decency
* distributive justice
If it fails in any of these three tests, the organization is deemed unethical.
The stakeholder view suggests that management is responsible not only to the organization's owners (Shareholders), but also has responsibilities to:
* The Local Community
* The general public (and government)
Public Relations and Corporate Image:-
Corporate image describes the public attitude towards a company, or the image of the company in the mind of the general public and, perhaps more specifically, in the minds of potential customers. It is possible to promote a desired corporate image through a combination of public relations, advertising and the experiences and attitudes build up by customers over the year. (For example, the favorable corporate image of Marks and Spencer grew up over many years, without the need for substantial PR or advertising.)
P4:- Explain how economic systems attempt to allocate and make effective use of resources.
Economic systems comprises of a long list, some of which are as under:-
* Mixed Economy
Capitalism (Free Enterprise):-
Capitalism is an economic system characterized by a free market in which means of production and distribution (the land, factories, technology, transport system etc) are privately owned referred to as the capitalist class. The people who sell their ability to work in return for a wage or salary are referred to as the working class. The working class is paid to produce goods and services which are then sold for a profit. The profit is gained by the capitalist class. The capitalist class lives off the profits they obtain from exploiting the working class while reinvesting some of their profits for further accumulation of wealth.
Socialism is an economic system in which the means production and distribution of goods are owned by the community collectively usually through the government. Socialism is characterized by:
* Production for use rather than profit
* Equality of individual wealth
* Absence of competitive economic activity
* Government determination of investment, prices, and production levels
Mixed Economy is an economic system which allows the simultaneous operation of publicly and privately owned enterprises. It is an economy that reflects the elements of both capitalism and socialism. In a mixed economy, the private ownership as well as the state takes part in the means of production, distribution and other types of economic activities.
Allocation of Resources in the Economic system:-
In capitalism, the motive for producing goods and services is to sell them for a profit, not to satisfy people's needs. While in socialism all rights and decision are taken under the government bodies. Everyone can get benefit from that economic system while in mixed economy both socialism and capitalism take place.
P5:- Discuss the impact of Social welfare and Industrial policy.
Social Welfare Policy:-
Modern social welfare measures may include any of the following: the care of destitute adults; the treatment of the mentally ill; the rehabilitation of criminals; the care of destitute, neglected, and delinquent children; the care and relief of the sick or handicapped; the care and relief of needy families; and supervisory, educational, and constructive activity, especially for the young.
Government provides the financial support and capital to the private sector by direct subsidies, tax credits, or government-run developmental banks. Industrial policy emphasizes cooperation between government, banks, private enterprise, and employees to strengthen the national economy.
Impact of Social Welfare Policy on Faysal bank Ltd:-
As Faysal Bank is a socially responsible corporate entity so it has been a regular contributor to the society and communities it operates in. The employees of the bank established a relief fund for Internally Displaced Persons from Swat, with the bank. The bank partnered with the Institute of Business Administration (IBA) Karachi to provide Rs. 50 million over a period of 3-5 years for sponsorship of one academic chair in IBA's Executive MBA program. The bank even donated 183 computers to different educational institutions with a focus on promoting education for the underprivileged.
Impact of Industrial Policy on Faysal Bank Ltd:-
The main impact on FBL is if the government of Pakistan increases the interest rate so the all banks will get affected by this decision. Due to more interest profit will decrease and people will be reluctant to utilize the services and facilities provided by the bank.
P6:- Evaluate the impact of macroeconomic policy and its influence.
Macroeconomic Policy Measures:-
Macroeconomic is one of the two most general fields of economics that literally means managing economics at large. It deals with the entire economy's performance, total amount of goods and services produced, decision making, structure and etc. It can be national, regional, or global economy. It includes the study of GDP, unemployment rates, and general behavior of prices to understand how the economy works. It also develops models for analysis of national income, inflation, savings, investment, international trade and etc.
Measures employed by governments to stabilize the economy, specifically by adjusting the levels and allocations of taxes and government expenditures. When the economy is sluggish, the government may cut taxes, leaving taxpayers with extra cash to spend and thereby increasing levels of consumption. An increase in public-works spending may likewise pump cash into the economy, having an expansionary effect. Conversely, a decrease in government spending or an increase in taxes tends to cause the economy to contract. Fiscal policy is often used in tandem with monetary policy. Until the 1930s, fiscal policy aimed at maintaining a balanced budget; since then it has been used "countercyclical," as recommended by John Maynard Keynes, to offset the cycle of expansion and contraction in the economy. Fiscal policy is more effective at stimulating a flagging economy than at cooling an inflationary one, partly because spending cuts and tax increases are unpopular and partly because of the work of economic stabilizers.
Impact of Fiscal Policy on Faysal Bank Limited:-
Due to rise in rate of taxation the selected organization has to pay extra taxes, and due to this it will cause reduction in investment because of less earnings and high taxes. The enlargement in the government expenses or payments will increase employment rate as well as the purchasing power of the people means they will spend more. This will cause rise in demand of hospital facilities and services.
Measures employed by governments to influence economic activity, specifically by manipulating the money supply and interest rates. Monetary and fiscal policy are two ways in which governments attempt to achieve or maintain high levels of employment, price stability, and economic growth. Monetary policy is directed by a nation's central bank. In the U.S., monetary policy is the responsibility of the Federal Reserve System, which uses three main instruments: open-market operations, the discount rate, and reserve requirements. In the post-World War II era, economists reached a consensus that, in the long run, inflation results when the money supply grows at too rapid a rate.
Impact of Monetary Policy on Faysal Bank Limited:-
The supply of money will reduce, and the flow of money will be a smaller amount due to all this it will affect the business performance. Decrease in business actions will decrease buying power of people and income rate. Due to more interest profit will decrease and people will buy less services and facilities from the selected organization.
M1:- Give your judgments about the organizational performance in achieving its objective and also satisfy its stakeholders.
2009 was the first year of implementation of bank's five year strategy developed in 2008. The bank made considerable progress in all five pillars of strategic focus i.e. Customer Franchise, People, Risk Management, Processes and Financial Perspective.
Keeping in view the objective of being the bank of choice for customers, new initiatives were undertaken during the year. To improve customer experience, a service quality department was set up which developed a comprehensive service quality program covering customer experience measurement, process refinement and employee engagement.
Barkat Islamic Banking was launched, that introduced Shariah compliant banking transactions.
Alternate Delivery Channels:
The Bank expanded its ATM network by adding 23 new ATMs taking the total ATM network to 116 ATMs across the nation. The bank also introduced real time Cash Deposit facility through ATMs on 13 Cash Deposit ATMs in selected cities.
Organizational structures across all functions were reviewed and aligned to focus on business, risks, costs and clarity of roles and responsibility keeping in view with the best practices. Similarly HR policies were reviewed and have been revised. A new performance management system was introduced. Trainings were also conducted for soft skills development of employees.
The Risk Management Framework was revitalized through inclusion of following functions:-
* Special Asset Management Group - focusing on account recovery and classified exposure management, and
* Credit Administration Department - engaged mainly in credit monitoring and security documentation.
The bank centralized five operational hubs into a processing centre for providing seamless services from one single location to the entire branch network. Two geographically separate centralized operation clusters have been created to behave as a backup site for each other in case of a major disaster at one location.
In line with the organizational setup, the MIS setup of the bank has also been changed from geographical to functional. During the year MIS level was graduated to the next level i.e. from business segment level to customer level.
M2:- Discuss how much the organization acting responsibly under current circumstances.
There are various ways and methods for an organization to consider so they can act responsible, however those various ways and methods also depend on the kind of organization you are working with. However, the organization we have selected to write upon is the banking sector. Banks are situated at at places ideal for customers and are environment friendly, as building do not pose threats to the environment. Given the nature of the bank work, which is mainly clerical or administrative, employees are not subject to occupational health hazards. However, a variety of occupational risks to health do exist in the banking sector, as in other clerical occupations. It is the important for the employees health that adequate standards of hygiene, cleanliness and comfort are maintained in the workplace.
It is difficult, to single out health risks involved to the banking sector that are not common to other clerical occupations and it is even more difficult to isolate any special problems in this area for employees of multinational banks. In the majority of cases, foreign and domestic banks are moreover governed by the same legislative standards with regard to health and safety and hygiene in workplaces, which are said to be respected by foreign banks and enforced through inspection at regular intervals. In a number of countries, particularly in Europe, enterprises of a certain size are obliged by law to set up a joint committee on safety and health to monitor the application of legal provisions, point out deficiencies and make suggestions for improvements. Many of the large banks have gone far beyond the legal prescriptions in their concern for protecting their employee's health. For example, in a number of cases they have organized training sessions for employees on safety and health problems, precautionary measures in the workplace, fire prevention and other security matters.
Ethical codes are rooted in a wider value system, as to what is right or wrong. Companies do have ethical responsibility and are not protected by limited liability from the consequences of their actions. A company's record and the perception of its ethics affect its reputation and ensure long term success or failure.
The financial community has a history of placing moral considerations above legal or opportunistic expedients. But we are often exposed to moral dangers. Banker's role is one of stewardship based on trust. They are trusted by the people who ask them to look after their money and they have a duty to lend that money responsible.
Banking is about rewards reflecting real risks and ethical considerations form an important part of their risk taking activities. The welfare of borrowing customer's money, in good times and bad is of major concern in any business proposition. Bank depends on people to run their business and to reflect their ethical standards. Banks have to let their people know what is expected of them.
A bank responsibility extends to Government, customers, shareholders, staff and community. In the future, as the banks face increasingly complex and conflicting issues, their resolve and commitment to ethical behaviour will be tested.
D1:- Justify a choice of a new mission statement & salient features.
Mission Statement for Faysal Bank Limited:-
Focusing on the customer's loyalty by providing standard financial services, through developing and delivering innovative products and services keeping in view the stakeholder's profitability.
* Customers loyalty
* Financial Services
* Stakeholders Profitability
Objective of the bank is to provide valuable and superior services to customers, so for this the Bank is focusing on close and long term relationship with customers. Their prime aim is to facilitate their customers with more advanced financial services, so to make them loyal.
Objective of the bank is to provide assistance for an individual and business, so the bank is providing mixture of financial services to an individual and businesses for the development and promotion of individual's life and commerce.
The focus of bank is to bring more new ideas in their services to their customers. Which will increase the market share of the bank and will led the bank serve more customers.
By providing valuable services and innovation it will increase the stakeholder's wealth.
D2:- Recommend the broad strategies to achieve stakeholders Objective successfully.
* Focus the business on the group's core skills and process technology.
* Position the group in growth markets where our core skills are applicable. Environmental Technologies Division, which combines the skills in catalysts and process technology, is well positioned to serve these emerging markets.
* Differentiate their strategies by using our world class technology. We will continue to invest significantly in research and development to develop new products and manufacturing processes. Technology is the key driver for most of the businesses and because of that organizations have a strong science base with technical centers located in all our major markets.
* Maintain strong relationships with major customers, suppliers, government bodies and other stakeholders by investing resources on joint projects to ensure the group is well positioned for future market development.
* Continue to invest in employees to ensure they are well trained, motivated and encouraged to meet the challenges of the future.
* Ensure the business is run in a sustainable way by using resources efficiently.
M3 & D3:- What are the response of an organization towards social & industrial policy and recommended solution.
Social Welfare Policy:-
The impact of Social Welfare Policy on Faysal Bank is sometime positive and negative. In case of providing free education and medical treatment etc the bank has to spent money which can affect their financial position. While on other hand, by providing these facilities students get motivated. The Bank provides facility of internship to fresh students to develop their practical skills. Faysal Bank provides Gratuity Fund to their employees. The Bank provides fund to IDP's, earthquake/flood affected people, in case of natural disaster in the country.
Industries are growing in this leading age so the Faysal Bank is also one of the leading Bank in the banking sector of Pakistan. The Bank provides variety of products of standardized nature which encourages the bank position to be stable in that sector. Against other competitors in the Banking sector, the Faysal Bank has provided innovative products and services to their customers and to business. Providing loans to businesses and encouraging different businesses and providing standard services by Faysal Bank is representing that the bank has given full response towards the industrial policy.
Observation and Conclusion:-
I observed Faysal Bank Limited a financially sound bank. Its profits are increasing year by year. Their staff is very good and sincere with the bank. According to my research Faysal Bank is not yet facing any major problems regarding Social Welfare Policy and Industrial Policy. Faysal Bank views specialization and service excellence as the cornerstone of its strategy. The people at Bank realize that innovation, creativity, reliability, customized services and their execution are the key ingredients for their future growth. They are aware that they have stepped into 21st century and they must meet its challenges by acquiring the highest level of technology. They will thus be accelerating their technological advances to enable them to distribute their products and services through most efficient and high technology means.
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