Asb Bank In New Zealand Management Essay

ASB Bank Limited is one of New Zealands leading banking and financial services groups. ASB has a history of over 150 years of service to New Zealanders, and is proud to be one of the country’s leading banks. ASB banks had eyes fixed firmly on tomorrow and aim to be “One Step Ahead” with the product offerings and service.

1.2 Purpose of report

The purpose of this report is going to conduct research on ASB Bank in New Zealand on its management planning and control functions, organisational structure, and leadership, motivation and delegation.

2. Existing planning and control functions of managers

2.1 Management planning functions

Planning is a process that involves defining the organisation’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate organizational work. (Robbins, Bergman, Stagg, and Coulter, 2003, P. 200) In the management process, planning is determining goals and how they are to be achieved (Inkson & Kolb, 2004, P. 17). It can be divided into long term planning such as the strategic planning which determines how the organization intends to response its environment in the long term, medium term planning such as tactical planning which breaks down strategic plans so that each unit or department has its own plans contributing to the overall strategy, and short term planning such as operational planning which specifies the activities for each department and for individuals to play their part in achieving tactical and strategic plans. Strategic plan is the organization’s grand plan, its statement of how, over an extended time period, it will respond to its environment challenges to achieve success. It is important for ASB bank as it will develop the business in the future. The operational planning is to specify the day-to-day work and it will help the company to achieve the strategic plan. The plans can be divided into single use plan such as five- year strategic plan which has specific goals and are to be achieved by a particular date or time then plan expires, the standing plan such as the mission statement and policies in the firms which provide guidance on an ongoing or recurrent basis, and contingency plans which are used to deal with some special matters.

2.2 Management control functions

Controlling is a process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations. (Robbins, Bergman, Stagg, and Coulter, 2003, P. 558)

In the management process, controlling is gathering information about what has been done, and taking action to correct deviations from plan. (Inkson & Kolb, 2004, P. 17)

It is very important for the control function because it is the final link in the management functions. It is the only way managers know whether organizational goals are being met. The managers must ensure they are being accomplished as planned through the control functions. Also, they need to correct the significant deviations to ensure the plan can be achieved. Furthermore, it is important that the managers delegate authority and empower employees to ensure the employees do things right.

The objectives, as the important part of planning, give specific direction to managers. The control with relative standards, measurements, comparisons, and actions, will be established based on how to achieve the objectives. There are three methods can be used in the management controlling including feedforward control, concurrent control and feedback control. Feedforward control predicts likely problems and specifies high standards of inputs to prevent them occurring. Concurrent control is ongoing supervision and regulation which allows for immediate action. Feedback control provides information after the activity has been completed, making it possible to take remedial action (Inkson & Kolb, 2002)

2.3 Applications of planning and control functions

Managing is an ongoing process, controlling activities provide the critical link back to planning. The link between planning and controlling is very important because without control, the managers have no way of knowing whether the goals and plans were on target and what future actions to take.

The objectives, as the important part of planning, give specific direction to managers. The control with relative standards, measurements, comparisons, and actions, will be established based on how to achieve the objectives. For instance, to achieve the objective of ASB, to maintain the same level of quality service in all branches, the requirement for controlling process to identify the appropriate measurements about this objective such as speed of services. Therefore, the objective is an important part of the link between planning and controlling.

3. Organisational structure

3.1 Evaluation of organizational structure

The structure of ASB is divisional with establishing the branches with the managers to control the operations. There are three characters for the divisional structure of the ASB Limited.

Divisions encourage team spirit and identification with a product or region. Managers can develop broad skills as they have control of all basic functions.

Each division is likely to have a devolved human resource function. But there is a risk of duplicating activities between head office and divisional human resource departments and of conflict between staff in successful and unsuccessful divisions.

The divisional function may play a coordinating role, reconciling decisions taken at the corporate and business unit levels. This results in a complex picture of people management (Robbins, Bergman, Stagg & Coulter, 2006).

The organizational chart for the whole company:

Managing director, CEO

Secretary office

General counsel

General manager marketing

General manager banking services

General manager human resource

General manager finance & accounting

Distribution

Service programs

Training

Investment

Promotion

Service quality

HRM development

Financial analysis

Communication

Research

Health unit

Tax

The organizational chart at each branch:

Branch Manager

Personal Bankers Customer Service Specialist

(CSS)

Customer Service Officers (CSO)

Commercial Desks Personal Bankings

3.2 Recommendation of alternative structure

Johnson, Scholes, and Whittington, (2005, p 273) summarized how the seven basic structures meet the challenges of control, change, knowledge and globalization as following exhibit:

Comparison of structures

Challenge

Functional

Multidivisional

Holding

Matrix

Transnational

Team

Project

Control

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**

*

*

**

*

**

Change

*

**

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***

**

***

Knowledge

**

*

*

***

***

***

**

Globalization

*

**

**

***

***

*

**

Stars indicate typical capacities to cope with each challenges, with three stars indicating high, two stars indicating medium, and one star indicating poor

From the exhibit, there is no structure get the high scores across all the four challenges. The organizational designers have to choose. Obviously, if ASB wants to foster environment change and flexibility on a global scale, then it might consider a matrix or transnational structure.

For instance, Matrix structure is defined as a type of management system in which workers report to more than one person, effectively having two or more supervisors at the same time. This can be illustrated by the example of a project environment, where professionals with different types of expertise are brought together to work on a projects. They report to a number of managers of different projects, as well as to a functional supervisor. The idea is to share knowledge and personnel to maximize effectiveness

3.3 Comparison

3.3.1 Centralization & decentralisation

Under the centralization structure, the power of the top manager is stronger. Under the decentralization structure, the power and authority will be delegated to the lower levels.

At ASB bank, the company adopts the centralization structure which is a setup in which most power and critical decision making responsibilities are concentrated with a few key leaders. As a centralized organization, ASB bank often houses its primary decision makers or executives in a central headquarters with offices and meeting areas for leaders to discuss business.

3.3.2 Mechanistic & organic

The mechanistic structure us very much like a bureaucracy and has extensive departmentalization, high formalization, a limited information network, and little participation by low-level members in decision making.

From the above chart, ASB bank has the mechanistic structure with high horizontal differentiation, rigid hierarchical relationships, fixed duties, high formalization, formalized communication channels and centralized decision authority.

On the contrary, the organic structure is much like boundaryless organization with low horizontal differentiation, collaboration, adaptable duties, low formalization, informal communication and decentralized decision authority.

3.3.3 Formal & informal

The formal organizational structure is a structure in which all roles are specifically defined. Formal structures are typically detailed in writing, leaving little room for interpretation. The informal organizational structure consists of the social structure of the organization, including the corporate culture, behaviors, interactions and social connections that occur within an organization. Many organizations have both a formal, written structure and a more informal, cultural structure. ASB Bank adopts the formal structure that it defines the roles clearly in the whole company.

3.3.4 Span of control, coordination & control

A span of control is the number of people who report to one manager in a hierarchy. When the more people under the control of one manager, it is the wider the span of control. On the contrary, the less means a narrower span of control.

From the structure chart of the company, ASB bank has the narrow span of control that the manager controls less employees in each branch. This enables ASB gain many advantages. Firstly, a narrow span of control allows a manager to communicate quickly with the employees under them and control them more easily. Secondly, feedback of ideas from the workers will be more effective. Thirdly, it requires a higher level of management skill to control a greater number of employees, so there is less management skill required.

The coordination refers to the management of dependencies among independent activities. The choice of a specific coordination mechanism results in a unique organizational form and/or processes that have consequences for achievement of organizational goals. At ASB bank, coordination is a constituent application of systems thinking in the sense that it requires ASB bank wide examination in how a change in one component of the organization affects other components of the same system. The aim of coordination of ASB Bank is the improvement of performance.

4. Leadership, motivation and delegation

4.1 Leadership theory

Chan and Maubourgne (1992, p37) defined the leadership as “the ability to inspire confidence and support among the people who are to achieve organization goals.”

A leadership theory that is adapted within ASB bank is the trait theory. Trait theory assumes that leaders possess certain characteristics or traits, which set them apart from others including intelligence, assertiveness, ability to take risks, self confidence, high energy and task competence. The managers of ASB bank have the abilities to take risks and self confidence to operate the business in various sectors. Also, with the strong intelligence and assertiveness, the managers can effectively inspire others. Also, most leaders in ASB bank have enough high energy related to the work such as attending the education courses in order to improve their skills.

4.2 Comparison leadership styles

Greenberg and Baron, (2000, pp 180-184) described three types of leadership including “authoritarian, democratic, and Laissez-faire.”

ASB managers have not strong authoritarian styles that they do not control tightly and tell the staff everything. Also, ASB managers have no Laissez-faire styles that they do not give up all task control as go with the flow. It is appropriate to describe the leadership styles of ASB managers as democratic styles that they encourage the members to make decisions as the consulting guides.

4.3 Motivation theory

One motivation theory observed in ASB bank is Herzberg’s two factor theory.

Herzberg’s two factor theory suggested that the work characteristics associated with dissatisfaction were quite different from those pertaining to satisfaction, which prompted the notion that two factors influence work motivation including hygiene factors and motivators. Providing hygiene factors will eliminate employee dissatisfaction but will not motivate works to high achievement levels. The manager should remove dissatisfiers to provide hygiene factors sufficient to meet the basic needs and then use motivators to meet higher level needs and propel employees to greater achievement and satisfaction. In ASB bank, the managers introduced the monthly award system for the staffs who finish the assigned tasks. It will eliminate employee dissatisfaction but will not motivate workers to high achievement levels.

4.4 Delegation

Delegation process refers to the assignment of responsibility to another person for carrying out some particular tasks. Delegation is giving authority to subordinates for handling of a certain task. The person not only gets authority but is also accountable for the delegated work.

The successful delegation should choose the task well, choose the person well. It should clarify what is required and the expected finished outcome. It needs to establish reporting routines, and establish authority limits. It should monitor and agree with the individual. Also, it needs to review the delegation to learn lessons and hand out praise for things well done and to be constructive about anything that did not go as well as expected.

ASB leader conducted the delegation to assign some tasks to employees who work independently, such as the financing specialists have authorities to serve the customers in their ways. The delegation process of ASB starts from the identifying a desired outcome and the people agree that they want the desired outcome as well. Second, it determines the standards and guidelines of a successful job. Third, it helps them to identify their resources. Fourth, it makes sure the responsibility has clear rewards and consequences. Fifth, it gives them time to practice. Sixth, once they’re ready, it gets out of the way and let them have total responsibility for the project. Seventh, it budgets a specific time to monitor their progress, so that it can reward the delegatee for a job well done, or enforce the consequences of a job poorly done.