Grade: B Good work.
ROSS ABERNATHY AND THE FRONTIER NATIONAL BANK
BY
ANANYA PATEL
ACKNOWLEDGEMENT
I would like to sincerely thank Mrs. Jayashree Rammohan, for her valuable suggestions and help in completion of the case study.
EXECUTIVE SUMMARY
Frontier National Bank was incurring losses and on the verge of being merged with another bank. The founder’s family member and CEO was about to retire and the board was looking for someone who couldcan turn things around. Name of Ross Abernathy came up. After hesitation Ross took the challenge. He will have to make a team of twelve members consisting of four members each from FNB, Chicago team and outside experts. In the time span of three years he will have to target new projects like credit cards, pension fund schemes, traveler’s cheque, international banking to improve profitability and change the geriatric approach of staff.
OK. Good E/S
(1) SITUATION ANALYSIS
Frontier National bank was one of the oldest and biggest banks. But towards the end of Wworld war two it was making losses. In spite of the losses and inefficient staff it had $7 billion worth of assets. When the founding family member was near his retirement, the bank faced a threat of being merged with a smaller bank from the comptroller because of rapidly falling profitability, declining liquidity and inadequate capital. Name of Ross Abernathy, who had been a banker right since his high school and had been responsible for making his Chicago based bank successful, was suggested. The board and comptroller were more than happy. When Ross got the offer to lead Frontier, he was hesitant considering that it would take him another 3 years to shape and restructure it. But banking was in his blood and this was what he loved doing. So he accepted the offer. He knew a lot was to be done to restructure the bank. And the most important part was building a new team. Frontier executives were old and unenthusiastic. Moreover the younger staff was even more dispirited. Formation of new team and turning around the conservative approach were the challenges for Abernathy. OK... (2) PROBLEM DEFINITION
The position of Chief Executive Officer was vacant and the bank was under threat of being merged with another bank due to declining profitability, capital and liquidity. No.. the problem Ross faced was how to form the right team to face the challenges before him.. (3) DECISION CRITERIA
Improve profitability Build a competent and dynamic team Raise the morale of the staff
(4) OPTIONS You need to state the options here first... Below, you refer to option one... where is it?
Formatted:
Highlight
If Ross takes option one he would have to make a whole team consisting of fairly old executives who are not good enough according to him. The advantage will be that his team would be quite familiar with the work environment of the bank. The threat of being thrown out if targets are not achieved may work positively in his favor. But the disadvantage is that it will take backbreaking work for Ross to generate morale and enthusiasm in the team.
If Ross opts for option two the whole team will be of his known associates and all of them will have good trust in Ross’ ability. Work will be done very fast and Ross will be able to achieve good results in rather short time. The disadvantage would be that Ross may face mutiny from staff and possibly from board. If Ross takes the third option the team can do wonders for the bank since the whole team consists of experts. The board would not have any problem accepting this decision. But the disadvantage can be that the staff members may face hard time accepting the new team and it would take a lot of time to gain trust. Ross should build a team of twelve members which consists of four members from Frontier, four from his Chicago team and four experts of banking field. After choosing the team he should put one from each team in respective four divisions of finance, marketing, human resource and operations. The members of his old team would work very efficiently with Ross and it would help Ross to keep tabs on each department. The Frontier members would appreciate Ross for choosing them and they would be a great help for outside team and Chicago team to understand the working of FNB. The outside team will h elp in producing effective results. OK.... (5) RECOMMENDED COURSE OF ACTION
Within the first month Ross will have to recruit four best possible members from Frontier, from outside Frontier and from his Chicago team each who are experts and performers their fields. And make four teams of three members.* (as shown in hierarchy) He should do a thorough SWOT analysis of FNB. In the time frame of one year, The Operations team should start working on building new projects and simultaneously find out about what is going on wrong with the current projects. New projects should concentrate on bringing larger corporate clients, pension fund schemes and international business since FNB didn’t do well in these fields. Since FNB had assets worth $7 billion, they should try and exploit
them for the new projects like credit cards, pension fund schemes, investment plans for corporate, loan schemes for smaller customers. The Marketing team should start finding the new corporate accounts; invest some money in advertising the new face of FNB and the new schemes they have announced. Analyze that which schemes and accounts would offer the most potential growth and which accounts should be closed. Introduce the idea of credit cards to customers. Using the tie ups with the international banks introduce traveler’s cheque for international travelers. The Human resource team should start working on current staff for boosting their morale, start conducting workshops of team building, reward the hard workers and get rid of the inefficient staff. Start hiring young people who are ready to work on challenging tasks. Start taking feedback froms of staff to improve their satisfaction level. The Finance department should start analyzing the losses and reasons for that. They should work on acquisition of funds with the help of the marketing dept. which will bring new accounts and then allocate the funds in new projects which would yield better profits than current projects. In the time span of the next two years they should start working on full-fledged marketing of credit cards to generate better revenue, work on getting even bigger corporate accounts than they brought in first year, analyze and overcome the mistakes they were making before and during first year. Work on staff welfare and rewards to keep the efficiency and morale high. Ok... Though slightly long... a bullet form presentation would have been better. (6) Monitoring
Keep a vigilant eye on competitors Quarterly previews and SWOT analysis of four teams and bank Keep tabs on progress and results Keep looking for new ideas and project opportunities Feedback and employee welfare and satisfaction.
Ok..
Good analysis.... a little word y but clear....
*HIERARCHY
Ross Abernathy
Finance Team
Member from Frontier
Member from Chicago team
Operations
Expert of Finance from outside
Similar team for marketing and hu man resource. Good presentation...
Member from Frontier
Member from Chicago team
Expert of Operations from outside
