STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT HABIB BANK LIMITED PAKISTAN Project Report
Submitted to: Sir Fazl-e-Muqeem Prepared by: M.Athar Jamil BBA-B08-018 Course: Strategic management
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Table of contents DECDICATION………………………………………………….…………….…03 ACKNOWLEDGEMENT…………………………………………………..….…04 EXECUTIVE SUMMARY…………………………………………..…………..05 Chapter 1 INTRODUCTION………………………………………………………………….06 1.1 History………………………………………… History……………………………………………………………..…….…..0 …………………..…….…..06 6 1.2 Present Status……………………… Status………………………………………………… ………………………………..….…06 ……..….…06 1.3 Privatization…………… Privatization……………………………………… ………………………………………...…………0 ……………...…………07 7 1.4 Economic Landscape………………………… Landscape………………………………………………..……0 ……………………..……07 7 1.5 Financial Highlights………………… Highlights…………………………………………… ………………………………..….08 ……..….08 1.6 Future Outlook…………………… Outlook……………………………………………….… ………………………….……….…..08 …….…..08 1.7 STRATEGY……………… STRATEGY………………………………………… ……………………………………..…………..09 …………..…………..09 1.7.1 Vision…………………………………………… Vision……………………………………………………..……………09 ………..……………09 1.7.2 Mission………………… Mission…………………………………………… …………………………………….………..09 ………….………..09 1.7.3 Objectives OF HBL……………………………………………… HBL………………………………………………….09 ….09 1.7.4 Values………………… Values……………………………………………… ……………………………………………….09 ………………….09 1.8 HBL Culture ………………………… ……………………………………………………… …………………………………....10 ……....10 1.9 HBL HIERARCHY………… HIERARCHY……………………………………… ……………………………………..………..11 ………..………..11 1.10 PRODUCTS AND SERVICES………………………………………....12 SERVICES………………………………………....12 Chapter 2 ANALYSIS OF INTERNAL ENVIRONMENT……………………………..13 2.1 Organization Structure and Design………………………………….13 2.2 Decision Making and Policy Making…………………………………14 Making…………………………………14 2.3 Organizational culture………………………………………… culture………………………………………………….18 ……….18 2.4 The Environment…………………………………… Environment…………………………………………………………20 ……………………20 2.5 Corporate Social Responsibility ………………………………………22 Chapter 3 STRATEGIC MANAGEMENT ANALYSIS…………………………………23 3.1 HBL STRATEGIES…………… STRATEGIES………………………………………… ………………………………………..23 …………..23 3.2 STRATEGY’S ANALYSIS…………………… ANALYSIS………………………………………………2 …………………………25 5 3.3 SWOT ANALYSIS……………… ANALYSIS…………………………………………… ……………………………………….26 ………….26 3.4 STRATEGIC MANAGEMENT…………… MANAGEMENT……………………………………… ……………………………28 …28 CONCLUSION……………………………………………………………………29
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DECDICATION
With the help of Allah almighty and the prayers of my parents and teachers I was able to complete this project well in time. Without their prayers and guidance I would not be able to complete it so I would like to dedicate my project to them. God Bless Them.
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ACKNOWLEDGEMENT
This report is the combination of sincere hard work and dedication. While working on this project I came across very cooperative personals both in HBL and university. With the help of whom whom I was able to complete complete my project. project. I would thank Sir Fazl-eFazl-eMuqeem Muqeem,, his compet competent ent sugges suggestio tions ns and guidan guidance ce helped helped me in defini defining ng goals, goals, objectives and in finalizing this report in different aspects. I would also thank Mr. Arsh Arshad ad Barl Barlas as Bran Branch ch head head HBL HBL (G-1 (G-13) 3) for for bein being g coop cooper erat ativ ive e and and prov provid idin ing g assi assist stan ance ce thro throug ugho hout ut my proj projec ect. t. I will will high highly ly appr apprec ecia iate te su sugg gges esti tion ons s for for impr improv ovem emen ents ts in this this repo report rt and its its cont conten ents ts from from ever everyo yone ne,, espe especi cial ally ly from from teachers as I strongly believe that nothing is perfect in this world and there is always a room for improvement.
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EXECUTIVE SUMMARY Thi This s repo report rt refl reflec ects ts the the Stra Strate tegi gic c mana manage geme ment nt effo effort rts s done done at HBL HBL and thei theirr outcomes on Global level. It shows that how strategic management is helping HBL Bank in creating, maintaining and retrieving the information when required. It starts with company’s general overview, the brief history, Values of HBL, the organogram, the the chal challe leng nges es the the prod produc uctt line lines s and and deta detail il info inform rmat atio ion n rega regard rdin ing g diff differ eren entt automated systems used by them in taking timely decisions. The report consists of my best best effor fforts ts whi which I did did in gath gather eriing info inforrmati mation on regar egardi ding ng Str Strateg ategiic management at HBL Bank. This report elaborates that HBL is clearly the first choice of everyone who believes in qualita qualitativ tive e approa approach ch of banking banking.. It pertai pertains ns envir environm onment ent of highly highly respon responsib sible le workforce. Bank is enjoying a healthy market share and taste of good status in terms of its operative features and customer support. HBL is experiencing a good reputation reputation and reasonable reasonable mark up with respect respect to prevailing prevailing market mark up with assurance of satisfaction and support. The management style is a kind of participative management in which employees are encouraged to share their ideas in decision making which enables bank to utilize knowledge, skills and abilities of its employees and meets its objective efficiently and being more innovative. As the motivation and reward system of HBL bank are also up to the expectation of employees so that employees are very much satisfied and it helps them to retain their valuable workforce. Ultimately the report projects that HBL inherits strong organizational culture having values for leaders as well as for employees and the organizational behavior is up to the mark for any company in Pakistan.
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Chapter 1 INTRODUCTION Bank is an important institute of an economy. In modern times a strong banking system is necessary for economic prosperity of a country. Banks are necessary for maintaining a sound financial position of Government and for running trade and industry.
1.1 History Habib Bank Limited (HBL) was established established on 25th August 1941; 1941; just one year after the historic Pakistan resolution was adopted in Lahore for carving an independent homela homeland nd for the Muslims Muslims of subcont subcontine inent. nt. It was founde founded d with with the blessi blessing ng of Quaid-e-Azam (Great Leader) Mohammad Ali Jinnah, the architect and founder of Pakistan. HBL is proud of the fact that the Quaid-E-Azam demonstrated his faith and confidence in HBL by opening his personal account in our Bombay branch in the year 1946. The first prime minister of Pakistan Quaid-e-Millat Liaqat Ali Khan, on the independence day of Pakistan (August 14, 1947) appreciated the service of the bank in these words. “I wish every success to HBL and hope that it will continue to play an important and useful role in the industrial and commercial life of the Muslim nation” The The commit commitme ment nt of HBL towards towards the cause of the economic economic uplift uplift of Pakist Pakistani ani people was successfully tested when the subcontinent was partitioned in 1947. The new born country faced serious financial difficulties. Habib Bank joined hands with the government of Pakistan and placed all its services at their disposal for nation building activities. Throughout the decades, HBL has held the mantle of a dynamic leader, by adding value to the lives of its customers. It was HBL that introduced products such as Debit Cards, Cards, ATMs, ATMs, Travel Traveller lers s Cheque Cheques, s, etc., etc., to the Pakist Pakistani ani market market.. Manage Managemen mentt at Habib Bank caters to the needs of millions with our quality products & services. Tod Today ay,, Habib abib Bank ank is trul truly y the the bank bank of the the peop people le,, prov provid idin ing g its its cust custom omer ers s convenience and satisfaction all over the world. Habib Bank Plaza, the second tallest building in Pakistan, is the proud symbol of HBL’s leadership in Pakistan’s corporate arena.
1.2 Present Status
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The Habib Bank Group is leader in Pakistan’s services industry. Today, HBL has more than 1,400 branches all over Pakistan and presence in 25 countries across five continents. With a revamped customer oriented philosophy, HBL are pursuing new avenues of leadership through innovation, as HBL gear up to face the challenges of the new millennium. A huge network of 1425 domestic branches, with largest bank in Pakistan and 55 international branches have enabled HBL to provide comprehensive services that meet customer needs. This has ensured thriving client relationship that forms the backbone of the Bank’s operations. Today, HBL plays a central role in Pakistan’s financial and economic development. It has come a long way from its modest beginnings in Bombay in 1941 when it commenced operations with a fixed capital of 25,000 rupees. Impressed by its initial performance, Quaid-e-Azam Mohammad Ali Jinnah asked the bank bank to move move its its oper operat atio ions ns to Kar Karachi achi afte afterr the the cre creatio ation n of Paki Pakist stan an.. HBL HBL esta establ blis ishe hed d itse itself lf in the the Quai Quaid’ d’s s city city in 19 1943 43 and and beca became me sy symb mbol ol of prid pride e and and progress for people of Pakistan. Habib Bank has a pioneer in providing the innovative banking services. These have included the installation of the first main frame computer in Pakistan followed by first ATM and more recently internet banking facilities fa cilities in 1425 domestic branches.
1.3 Privatization The year 2003 was marked by the implementation of the Government of Pakistan’s program for privatizing the Bank. Amongst the qualified bidders, the Agha khan Fund Fund for for Econ Econom omic ic Deve Develo lopm pmen entt (A (AKF KFED ED)) offe offere red d the the high highes estt bid, bid, whic which h was was accepted accepted by the the Governmen Governmentt of Pakistan Pakistan in Decembe December. r. HBL’s HBL’s privatizat privatization ion is the the largest in Pakistan’s history and management takes great pride in fact that the bidding took place within four months of the commencement of the due diligence process in September 2003. With this change the anticipates further progress as AKFED brings considerable expertise in international finance and business and is familiar with conditions in Pakistan, where it already has extensive operations in various fields.
1.4 Economic Landscape The country is now in the process of warming its relations with the neighbours. Consequently the political stability has translated into direct economic benefit for Pakistan. G.D.P. growth has exceeded. The capital market performance has been, once again, very impressive and KSE has performed at par with all other stock markets of the world.
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The banking sector has played an a n important role in sustaining this growth: consumer financing has enhanced purchasing power and created new demand while the low interest rates has contributed to making exports price competitive. The state bank of Pakistan (SBP) has played a supportive monetary policy role to sustain and improved the current growth improved current growth momentum.
1.5 Financial Highlights HBL HBL now now rank ranks s amon amongs gstt the the top top corp corpor orat ate e enti entiti ties es in Paki Pakist stan an in term terms s of profitability. This large jump is also reported profit the net interest income and profit growth of the bank has been achieved in an environment that can be termed unique for the sector in Pakistan. The improved economic fundamentals have allowed the government to slash its borrowing requirements and this , combined with substantial inflows of remittance , has resulted in a large build up of excess liquidity in the banking sector.
1.6 Future Outlook For a bank to deliver quality services, it is imperative that technology be an integral part of all aspects of its operations. At Habib Bank, strategy has been to utilize cutt cuttin ing g edge edge tech techno nolo logy gy to serv serve e cust custom omer er effi effici cien entl tly y and in a cost cost effe effect ctiv ive e manner manner.. HBL striv strive e to accomp accomplis lish h this this while while mainta maintaini ining ng a strong strong person personali alized zed approach in our customer relationship. HBL embarked on an ambitious plan in 2009 to revamp its technology platform. The technology initiative includes:
Online inter-branch funds transfer
Alternate delivery channels e.g. POS terminal
ATM network for cash cash withdrawal, fund transfer, transfer, payment of utility utility bills etc
E-commerce
Internet banking
PC based banking for corporate customers
Automation of treasury and trade finance
HBL corpor corporate ate websit website e has recen recently tly been been revam revamped ped and now provid provides es a customer friendly, information rich and technologically advanced environment to its clientele. Enhancement of the Bank’s communications network to provide online connectivity to:
More than 200 branches, corporate centers and regional offices in over 30 cities throughout Pakistan
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More than 100 ATMs covering most of cities
Over 1000 nationwide ‘point of sales’ terminal.
Habib Bank’s corporate email users Implementation of a Virtual Private Network (VPN) yielding the following benefits:
Centralized processing of batch branches offering daily consolidation of data for customer service and risk management
Implementation of technology in HBL international centers as with our other areas of operations, HBL recognized that at international centers too, technology is a key consid considera eratio tion n for bank bank to ensure ensure the compet competiti itive ve edge edge and mainta maintain in effect effective ive internal control. To that end significant steps have been taken towards automation and offering technology related faculties at our overseas centers.
1.7 STRATEGY 1.7.1 Vision HBL's vision statement is to be a leading financial institution and their focus is on impr improv ovin ing g perf perfor orma manc nce e in each each of thei theirr busi busine nesse sses s to achi achiev eve e cons consis iste tent nt and and superior returns for their highly valued clients. And their focus is also on enabling people to advance with confidence and success.
1.7.2 Mission To increase the profitability of our customers through investing in financially sound and profit earning projects, to make our customers prosper, our staff excels, and create creates s value value for shareh sharehold older ers. s. Along Along with with this this openin opening g new horizo horizon n and fresh fresh perspe perspecti ctive ve of trust, trust, depend dependabi abilit lity y and servic service e throug through h 14 1439 39 branch branches es and 11 112 2 overseas offices with a comprehensive range of financial products.
1.7.3 Objectives OF HBL Following are the main Objectives of HBL: To earn profit for the bank itself and for its shareholders. To promote and boost up business sector inside the country. To provide employment opportunity to the people. • • •
To help in development and industrialization of the country. To provide loan and advances to help out in self employee schemes.
• •
1.7.4 Values
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HBL’s values are the fundamental principles that define its culture and are brought to life in its attitudes and behavior. It is company’s values that make its unique and unmistakable. Company values are defined below:
Excellence: This is at the core of everything HBL does. The markets in which HBL oper operat ates es are are beco becomi ming ng incr increa easi sing ngly ly comp compet etit itiv ive, e, givi giving ng thei theirr cust custom omer ers s an abundance of choice. Only through being the very best - in terms of the service HBL offers, its products and premises - can it hope to be successful and grow. Customer focus: HBL understands fully the needs of its customers and adapts its products and services to meet these. HBL always strives to put the satisfaction of its customers first. Progressiveness: HBL HBL bel believes eves in the the adv advanc ancemen ementt of soc society iety thro hrough ugh the adoption of enlightened working practices, innovative new products and processes, and a spirit of enterprise. Humility: HBL encourages a culture of mutual respect and treat both our team members and customers with humility and care. Integrity: For HBL, HBL, integr integrity ity means means a synerg synergic ic approa approach ch toward towards s abidin abiding g our core core values values.. United with the force of shared values and integrity, HBL employees form a network of a well-integrated team. Meritocracy: At HBL on every level, from selection to advancement, leadership has designed a cons consis iste tent nt sy syst stem em of huma human n reso resour urce ce pract practic ices es,, base based d on obje object ctiv ive e crit criter eria ia throughout all the layers of the organization. They are, therefore, able to achieve a specific level of performance at every layer of the organization. Team Work: HBL’s team strives to become a cohesive and unified force, to offer customers a level of service beyond expectations. This force is derived from participative and collective endeavors, a common set of goals and a spirit to share the glory and the strength to face failures together. Culture of Innovation: HBL aims to be proactively responsive to new ideas, and to respect and reward the agents, leaders and creators of change.
1.8 HBL Culture HBL HBL has has crea create ted d a chal challe leng ngin ing g envi enviro ronm nmen entt that that enco encour urage ages s crea creati tivi vity ty and and commitment. HBL focused on attracting, developing and retaining the best talent in the marketplace. HBL dynamic culture offers diverse growth opportunities across Pakistan and in 55 countries around the world. 10
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HBL HBL fost foster ers s a work work envi enviro ronm nmen entt wher where e empl employ oyee ees s can can real realiz ize e thei theirr pote potent ntia iall whether locally or in the international arena. Thus, enable its employees to achieve their professional goals while keeping in synch with the bank’s overall objectives.
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1.10 PRODUCTS AND SERVICES HBL provides a large range of products and services to its business and individual customers some of which are as follows.
1.10.1 PRODUCTS HBL Muhafiz Rupee Travellers Cheques HBL Auto Finance HBL Flexi Loans for salaried personnel HBL Lifestyles Financing Scheme HBL i-Card HBL House Financing Loans HBL Easy Access HBL Fast Transfer Haryali Agricultural Loans • • • • • • • • •
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1.10 PRODUCTS AND SERVICES HBL provides a large range of products and services to its business and individual customers some of which are as follows.
1.10.1 PRODUCTS HBL Muhafiz Rupee Travellers Cheques HBL Auto Finance HBL Flexi Loans for salaried personnel HBL Lifestyles Financing Scheme HBL i-Card HBL House Financing Loans HBL Easy Access HBL Fast Transfer Haryali Agricultural Loans HBL E-Bank • • • • • • • • • •
1.10.2 SERVICES Retail banking Commercial banking Corporate banking Phone banking Islamic banking Cash management Asset management Agriculture loans Commercial banking Corporate banking Islamic banking Investment banking Working capital Procurement of inventory Procurement of machinery Expansion of production facilities Import of raw materials Exports Guarantees Project finance, Debt capital markets & syndications Equity capital markets & advisory. • • • • • • • • • • • • • • • • • • • • • •
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Chapter 2 ANALYSIS OF INTERNAL ENVIRONMENT
2.1 Organization Structure and Design The The HBL HBL is divi divide ded d in main main grou group p in its its orga organi niza zati tion on stru struct ctur ure. e. The The one one whic which h performs the core business activities and the second which perform the support activities to achieve the business object effectively and efficiently. Further division of these groups is given below.
HBL is an organization that provides opportunities for its staff to have a challenging and rewarding long-term career. To this end the Human Resource Group (HRG) encour encourage ages s and motiva motivates tes its employ employees ees to excel excel in the respon responsib sibil ility ity that that they they have in the organization. At HBL it is believed that creativity and innovation comes from from tale talent nt,, know knowle ledg dge e and and expe experi rien ence ce and it is our our ende endeav avor or to prov provid ide e and and maintain an environment which not only nourishes these strengths but also provides
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opport opportuni unitie ties s for the staff staff to have have a career career which which has multid multidim imens ension ional al growth growth opportunities. In doing so, HBG has been restructuring and redesigning the overall structure of the organi organizat zation ion,, which which includ includes es ration rationali alizat zation ion,, cuttin cutting g down down the decisi decision on layer layers, s, improv improveme ement nt in staff staff traini training ng and hiring hiring profes professio sional nals s and MBAs MBAs at entryentry-lev level el management. The overall direction of HRG has been towards nurturing the strengths of the human capi capita tall to its its maxi maximu mum m with with a defi defini ning ng prin princi cipal pal to help help crea create te a prog progre ressi ssive ve envir environm onment ent and sus sustai tain n a thorou thorough gh commi commitme tment nt of our staff staff toward towards s focuse focused d customer service. HRG therefore recognizes the need to proactively invest in staff training and develop courses on a regular basis. Under the umbrella of our Management and Organization Development Division (MODD) our Management Development Institute (MDI) with its three fully equipped chapters at Karachi, Lahore & Islamabad regularly conducts and outsou outsourc rce e techni technical cal and person personal al develo developme pment nt course courses s for our all level level of staff staff enabling them to meet the challenges of the ever-changing business requirements and customer needs. During 2009, 529 courses, workshops, skill development clinics and seminars in the disciplines of Service & Attitude, Market Research & Selling, Manage Manageme ment nt & Commun Communica icatio tion, n, Credit Credit & Financ Finance, e, I.T. I.T. & e-Banki e-Banking, ng, Treasur Treasury y & Trade Finance, Global/ Domestic Banking Operations and on other diverse subjects were conducted by In / Ex-House professionally skilled, qualified and certified faculty and industry experts for 10,233 people of senior / middle line management & staff carving 1,334 days training days. There is no budget limit for Training and Education at Habib Bank. HR Group aims to maintain and further improve the service-oriented culture and to make employment not only satisfying but also enjoyable.
Omnipotent or Symbolic View of management In HBL, managers are also responsible for the success or failure of the organization but there are also some factors that have great effect on organization and that type of affairs are out of control of managers.
2.2 Decision Making and Policy Making Decision making process at HBL has following points:
Centralized
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All major policies, plans, rules and regulations and controls etc. are devised by head office of Habib Bank Ltd in Karachi. Then these policies are conveyed to the regional heads and branch heads.
Decentralized All All rout routin ine e matte atters rs are are deci decide ded d at bran branch ch leve levell by the the resp respec ecti tive ve head heads s of departments with permission of branch head. If any problem or matter is beyond limits of branch, then it is referred to the Regional Head quarter. 2.2.1 Decision Making Process:
Identification of a Problem
Identification of decision Criteria
Allocation of weights to criteria
Development of alternatives
Analysis of Alternatives
Selection of Alternative
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Implementation
Evaluation
2.2.2 Management Functions: In HBL the management functions are performed as follow Planning In HBL, decision making is highly centralized because all the decisions and plans are made at the top level of management. Organizing No autonomy is provided to HBL employees. HBL strives to become a cohesive and unified force, to offer the customer, a level of service beyond their expectations. This force is derived from participative and collective endeavors, a common set of goals and a spirit to share the glory and the strength to face failures together. And there is also a high degree of interaction among department managers. Leading The leadership approach established in HBL is team leadership and the positive attitude attitude of HBL employees employees towards their job is because of increasing increasing employee employee job satisfaction. Controlling HBL HBL impose pose exter xterna nall cont contrrol on its empl employ oyee ees s and and the cri criter terion us use ed by management to evaluate the employees is their performance. Annual reports are sent to the top level management about each and every employee which evaluates their performance. 2.2.3 Mangers Decisions: Mostly at HBL, managers’ decisions are Rational and intuition base. Role of Intuition: Experiencebased
Affectinitiated
Values or ethics- based
Intuition
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Subconscious mental
Cognitivebased
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Types of Problems Usually the middle managers face structured problems and they have the authority to deal with them without consulting the top managers. Apart from this programmed or more complex problems are solved by the top executives. Management Styles and Policies At the moment is the management is following the revamping and reengineering policies. The VSS (voluntary Separation Scheme) is offered to the employees to redu reduce ce the the numb number er of empl employ oyee ee whic which h is firs firstt towa toward rd resha reshapi ping ng of unde underr new new management. Collective Participation in Decision-Making Decision-Making Department heads meet frequently with each other and discuss problem with each other if any. They seek advice from each other and also the branch head is also available to all department heads to review or control the functions of bank.
Employee Participation The The manage manageme ment nt is recept receptive ive to new ideas like like for marketi marketing ng some some facili facility ty or improving any procedure, etc.
Delegation of Power Delegation means giving the authority to lower management. In Habib Bank Limited, top management makes the major decisions. So there is a centralized control. These are limits of authority approved for different levels of management at branch level. The branch operation manager and chief manager, takes active part in the decisionmaking. The lower level employees can make routine decisions relevant to their work.
2.2.4 Control Function: There is a strict control in Habib Bank Limited. There is strict diligence over the activities of the branch by the regional head quarter and Head office. Both keep themse themselv lves es comple completel tely y inform informed ed by the activ activiti ities es of branch branches es throug through h differ different ent type types s of repo report rts. s. Rule Rules s and and regu regula lati tion ons s are are stri strict ctly ly foll follow owed ed.. Poli Polici cies es are are
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implemented through the supreme authorities at each branch. Too keep the works going; back up of each critical or important seat is given. Few authorized officers duly sign most of documents. Head office, State Bank of Pakistan and external auditor conduct annual audit to check that bank operations have been satisfactory completed. Accounts department strictly controls expenses. Employees are instructed and encouraged to abide by the rules and follows the policies of bank. Each employee, who operates computer, has his own password and access to other passwords is prohibited.
2.3 Organizational culture At HBL, HBL, managem management ent has create created d a challe challengi nging ng enviro environme nment nt that that encour encourage ages s crea creati tivi vity ty and and comm commit itme ment nt.. In our our purs pursui uitt of exce excell llen ence ce,, they they are are focu focuse sed d on attracting, developing and retaining the best talent in the marketplace. Our dynamic cultur culture e offers offers diver diverse se growth growth opport opportuni unitie ties s across across Pakist Pakistan an and in 25 countr countries ies around the world. HBL fosters a work environment where employees can realize their their potent potential ial whethe whetherr locall locally y or in the intern internati ationa onall arena. arena. Thus, Thus, HBL enable enables s employ employees ees to achiev achieve e their their profes professio sional nal goals goals while while keepin keeping g in synch synch with with the bank’s overall objectives.
2.3.1 Dimensions of Organizational Culture
Attention to Detail Outcome Orientation
Innovation and Risk Taking
Organizational Culture People Orientation
Stability Aggressiveness
Attention to Detail
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Team Orientation
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The employees in HBL are expected to exhibit precision, analyses and attention to detail.
Outcome Orientation In HBL the managers not only focus the results or the outcomes but also how the outcome is achieved. Innovation and Risk Taking HBL aim is to be proactively responsive to new ideas, and to respect and reward the agents, leaders and creators of change. Team Orientation HBL strives to become a cohesive and unified force, to offer you, the customer, a level of service beyond your expectations. This force is derived from participative and collective endeavors, a common set of goals and a spirit to share the glory and the strength to face failures together. Stability The organization tries its best to make such decision which should not have any adverse affect on the status of the organization.
2.3.2 The Source of Culture HBL has a strict rule and regulations and employees learn culture by managers, traini trainings ngs are conduc conducted ted,, books books and differ different ent worksho workshops ps are organi organized zed for the employees.
Top Management Organization Founder
Selection of Employees
Organization’s culture
Socialization
How Employees learn culture In HBL, the employees learn culture by stories and by rituals.
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Innovative culture HBL HBL has has inno innova vati tive ve cult cultur ure. e. HBL HBL prom promot otes es the the new new idea ideas s and and appre appreci ciate ate its its empl employ oyee ees s for for givi giving ng new new and and inno innova vati tive ve idea ideas. s. That That help helps s the the empl employ oyee ees s in achieving their goals and, they try to show their best at job. Customer-responsive Customer-respons ive culture HBL has customer –responsive culture. The employees of the HBL are continues in their desire to please the customers and provide good service to their customers and satisfy the needs of customers.
Focus on individual development development HBL focus on individual development, HBL try to create the good culture, in which every employee can adjust, work properly, learn the new thing and give best. Trust and openness In HBL, top management have full trust on their employees. Mostly employees are honest and they Employee’s Empowerment In HBL, managers have trust on their employees and they want that their employees also try to make decisions at their own job level. Toleration of Employees Expression In HBL, there is no toleration of employee’s expression. They want work and
2.4 The Environment
Competitors
Customers
Suppliers Organization
Political groups
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HBL has good relationship with their customers, suppliers. Managers try their best to great good environment with them and solve problems in well manner. The general environment effects on HBL economic. HBL work in legal way, all the decisions of the manage managers rs are legal legal and they they give give benefi benefitt to their their custom customer ers, s, stakeh stakehold older, er, stoc stockb kbro roke kerr and and empl employ oyee ees. s. HBL HBL fulf fulfil ils s the the demo demogr grap aphi hic c cond condit itio ions; ns; HBL HBL is introducing new types of accounts of different age groups, level of education income of family location. Now in HBL, there is a bit change of technology.
2.4.1 Stakeholder relationships HBL have very good relation with his stakeholder and try to provide them better facilities and fulfill their need in proper and good manner. Employee
Customer
Social and Political Actions Groups
Unions
Organization
Shareholde
Trade and Industry Associations
Communities
Su
Com eti etitor tors
liers
Media
Governments
2.4.2 Socioeconomic view In HBL, managers try to maximize the profits for the organization but as well as they make decisions and plans for protecting the society. s ociety. They focus on development and welfare of the society. Social responsibility HBL make the goals and plans for society that gives benefit and they try to do right ethical decisions in a legal way. Social Obligation HBL fulfill its economic need in legal way. Social Responsiveness •
•
•
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HBL make changes in it functions as the society change. They change with environment and provide the best services.
2.4.3 Value-Based Management
Guide Managers Decisions and Actions
Shared Organizational Values
Shape employee Behavior
Build Team spirit Influence Marketing Efforts
2.4.4 Managerial Ethics In HBL, HBL, ther there e are are also also som some rule rules s that that tell tell what what is good good or what what is bad bad for for organization while taking a decision. 2.4.5 Work specialization specialization HBL HBL has has a high high degr degree ee of work work sp spec ecia iali liza zati tion on.. It give gives s jobs jobs to its its empl employ oyee ees s according to their capabilities and their skills. So that they can give their best at their work in the specific field assigned to them. 2.4.6 Departmentalization HBL has functional departmentalization. Chain of Command In HBL, the decisions are made by top level managers and then these decisions extended to the employees at the lower level and they work according to these decisions to maintain this continuous chain of command.
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Formalization The structure of HBL is highly formalized because of high level of standardized job jobs s and and beca becaus use e thei theirr emplo mploye yee’ e’s s beha behavi vior or is guid guided ed by the the rule rules s and and procedures made by their management. •
2.5 Corporate Social Responsibility •
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Corpor Corporate ate social social respon responsib sibili ility ty is manage manageri rial al obliga obligatio tion n to take take action actions s that that protects the welfare of society.
STRATEGIC MANAGEMENT
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HBL international branches particularly their subsidiary in the UK was instrumental in mobil mobilizi izing ng substan substantia tiall funds funds from from genero generous us donors donors to the presid president ent’s ’s relief relief funds. HBL has sports division. It has provided jobs to players as a social responsibility so the players in the field of cricket tennis football, badminton may achieve desired goals of nation. HBL flexi loans can help finance your Children schooling paying the way for their secure & prosperous future.
Chapter 3 STRATEGIC MANAGEMENT ANALYSIS 3.1 HBL STRATEGIES 3.1.1 CORPORATE STRATEGIES Strategic Path From From the the very very begi beginn nnin ing g the the main ain focu focus s of the the mana manage geme ment nt of HBL HBL is the the implementation of growth strategies. During the entire period of continuous straggle they they adapted adapted almost almost all types types of strate strategie gies s accord according ing to sit situati uation on and market market demand of that time except restructuring of defensive strategies. HBL never faced any type of liquidation, bankruptcy, sale or removal of any business unit. Their main strength is to avoid insecure financing. It is big organization that ever during their dark dark peri period ods s of stra stragg ggle le;; they they neve neverr lose lose thei theirr mark market et sh shar are. e. If we talk talk abou aboutt GROWTH STRATEGIES they are as followed Incremental Growth HBL’s key areas of operations encompass product offering and services in retail and consumer banking. They introduce their products to expand their client’s base by bringing innovation and improving the channels of distribution. They put their all efforts to reduce the business and make their services accessible for all customers. International Growth
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STRATEGIC MANAGEMENT
With a presence in 25 countries subsidiaries in Hong Kong and the Uk, affiliates in Nepal, Nigeria, Nigeria, Kenya Kenya and Kyrgyzst Kyrgyzstan an and representatio representation n offices offices in Iran and China. HBL is also the largest domestic multinational. The bank is expanding its presence in principal international markets including the UK, UAE, SOUTH AND CENTRAL ASIA, AFRICA and the far EAST.
Merger HBL merged “Standard Bank” in earlier times
3.1.2 CORPORATE LEVEL STRATEGIES HBL has following corporate level strategies . Growth strategy: HBL has adopted growth strategy by expanding its operations. HBL actually have different products and services for both individuals and business customers. HBL product and services for individual customers are credit cards, debit cards, and deposit accounts. HBL product and service for business customer are commercial banking, cash management and asset management.
Related Diversification: Diversification: HBL has also adopted related diversification strategy, because at first function of HBL was only accepting deposit and advancing loans but now HBL has many related functions like flexi loans, ATM and credit cards.
3.1.3 BUSINESS LEVEL STRATEGY Cost Leader Ship strategy: At business level HBL has adopted cost leadership strategy in a way that cost of advancing loans is less as compare to some other well reputed banks like Alfalfa, bank Al habib, MCB. Differentiation Differentiation Strategy: At business level, HBL has also adopted differentiation strategy by introducing some new products into the market earlier to other banks like debit cards.
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3.1.4 DIVISIONAL LEVEL STRATEGY Following are the main divisional level strategy fallowed by HBL To To esta establ blis ish h sound sound rela relati tion onshi ships ps with with top top indu indust stri rial al grou groups ps and and vari variou ous s multinationals. To make the bank customer focused To increase the no of online branches To increase the ATM network to further improve the bank market shares. To implemen implementt the performance performance appraisal appraisal process process to provide provide motivati motivation on and merit oriented culture in the bank To impro improve ve extens extensive ive tannin tanning g to the employ employees ees in the proces process, s, produc products, ts, marketing and selling skills. Upgrading skills level of employees. •
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Evaluation of vision and mission HBL’s all strategies are directly matched with its vision with is; “ ENABLING PEOPLE TO ADVAN ADVANCE CE WITH WITH CONFID CONFIDEN ENCE CE AND AND SUCCES SUCCESS”. S”. They They are are su succ cces essf sful ul in providing their desired value & importance to their internal as well as external customers. HBL proved that its objective is not to bring profit only but to enhance the satisfaction and improve the life style of their stakeholders also.
3.2 STRATEGY’S ANALYSIS 3.2.1 Bouston Consulting Group Model HBL is found in the upper left-hand quadrant of BCG matrix. It offers excellent profit and growth opportunities. It can generate enough cash to fund its own expenses. Sometime only National Bank in Pakistan Creates Problem for HBL but overall it is dominant. 3.2.2 Miles & Snow HBL is a combination of Defender & Prospector Analyzer. It is having stable and predictable environment and pursues low- cost opposition, focusing on efficiency through standardized jobs, formalization and centralization. Environment of HBL is dynamic they focus on innovation & adaptation. They prefer to invest in R & D and marketing to advertise their products either through TV ads or some others sources. 3.2.3 Porter’s model If we talk about HBL in porter’s perspective, they are implementing “BEST-COST PROVIDER STRATEGY”. STRATEGY”. They give their customer more value for the money they are spending to satisfy them in a props way. They focus on innovation as well as low
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cost. It is also because they believe if they facilitate their customers, ultimately will get return in future. HBL’s products cover all the customers belonging from various classes. A salaried person having 3 to 5000 and rich industrialist are entertained equally in HBL.
3.2.4 Intensive Strategies HBL focused on all 3 Strategies in Different periods to get more return. Now days they think the need to implement market pares-ration Strategy Because of growing number of banks opening in Pakistan. HBL played an important role to flourish the banki banking ng sect sector or by intr introd oduci ucing ng thei theirr prod produc ucts ts all all over over the the worl world d espe especi cial ally ly in Pakistan. In this process of wide coverage they follow market development strategy. 3.2.5 Diversification Strategies HBL is mainly focus on related Diversification to provide services and contribute in high self esteem of their customer.
3.3 SWOT ANALYSIS 3.3.1 Strengths: The staff of the bank is skilled, well trained and competent. HBL is having Centralized decision making.
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HBL is the Pioneer in introducing the ATM in the country and are widely used in the business transactions. HBL is the fourth largest bank in Pakistan, having 1449 branches divided in to 19 regions. HBL is having extensive branch network throughout the country .it has now 680 online branches in Pakistan. The reserves of bank are higher. Employees are the valuable assets of HBL. HBL has the fastest mode of home remittance of 3 days. HBL provide courteous services to its customers.
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Every 10th Pakistani is the account holder of HBL. I have also observed that the employees of the bank are dealing with their clients so friendly as if it is their own problem.
3.3.2 Weaknesses: Marketing department of HBL is not so effective.
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Bad debt rate is very high.
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Poor system of recovery. Sense of insecurity in employees due to downsizing. HBL has become victim of political, legal and socio cultural pressure. Employees are not satisfied due to unfair promotion system. There is not a right criterion for promotion; many vacancies are filled at approach basis. Advances of HBL are also a lso very low with respect to its competitors. Non popularity of travelers cheques, deposits of having a large network of branches. Administrative cost is very high. Employees have lethargic attitude especially in main branches.
3.3.3 Opportunities: • •
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IT can establish their branches online. Bank can open more branches in foreign countries in order to make it more stable and strong. HBL is the oldest bank in the country; people can rely on that bank. The presence of more technical and professional staff can help the bank in making progress especially in marketing department. Although ATM and online banking has started but can be make more effective by applying its own ATM network. Steps should be taken to increases banks deposits and as these are less than other competing banks such policies should be adopted to attract customers and the rate of deposit can increased. There is an opportunity to open an entirely separate section for ladies which is a new idea and will attract female customers. HBL has also an opportunity to expand its tale banking and internet banking facilities in order to serve the customer more efficiently.
3.3.4 Threats: • • •
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Profit is becoming low due to higher cost. Poor policies of HBL as compare to other banks are also a threat for HBL. Financial environment is changing day to day, new technologies are introduced by foreign banks that tha t provide customer efficient and quick service. Due Due to low low entr entry y barr barrie iers rs,, ther there e are are more more comp compet etit itor ors, s, so the the glob global al competition has increased.
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Branches are not paying sufficient role in competition due to manual system.
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Because of unfair promotion system and absence of proper and recruitment techniques competent persons may move to other banks. The working condition and the outlook of the building can be a threat for HBL. Growing global technological advancement. Loss of confidence of overseas customers due to freezing of accounts.
3.4 STRATEGIC MANAGEMENT AND SWOT ANALYSIS
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Process
External Analysis Opportunity threats Identify the organizations mission, goals and strategies
SWOT Analysis
Formulate strategies
Implement strategies
Evaluate
Internal Analysis Strengths weakness
This This analys analysis is makes makes the manage managers rs aware aware of the organi organizat zation ions s extern external al and internal affairs and helps them to grip opportunities and exploits the resources.
Strengths
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An old and well established organization
Customers are loyal
STRATEGIC MANAGEMENT
It is a well known organization.
Good reputation
Weakness
Organization is quite behind in the field of IT. Its employees lack IT knowledge.
Out of 1400 branches only 600 branches provide online banking facility.
Overstaffing is serious problem for the organization.
Threads
Other banks have high and new IT technology.
Other banks offer different valuable packages to the customers.
Opportunities Our Our Inte Intern rnsh ship ip Prog Progra ram m offe offers rs prom promis isin ing g stud studen ents ts with with the the exci exciti ting ng opportunity to apply their classroom learning experience to real life corporate assignments.
HBL HBL prov provid ide e good good oppo opport rtun unit itie ies s for for the the empl employ oyee ees s in deve develo lopi ping ng thei theirr careers.
HBL HBL is an organi organizat zation ion that provi provides des opport opportuni unitie ties s for its staff staff to have have a challenging and rewarding long-term career.
CONCLUSION HBL is clearly the first choice of everyone who believes in qualitative approach of banking. It pertains environment of highly responsible workforce. Bank is enjoying a healthy market share and taste of good status in terms of its operative features and customer support. HBL is experiencing a good reputation and reasonable mark up with with resp respec ectt to prev prevai aili ling ng mark market et mark mark up with with assu assura ranc nce e of satis satisfa fact ctio ion n and and support. HBL HBL bank bank mana manage geme ment nt is comp compet eten entt enou enough gh to set set the the stra strate tegi gies es in orde orderr to compete with their competitors and attract more customers.
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The management style is a kind of participative management in which employees are encouraged to share their ideas in decision making which enables bank to utilize knowledge, skills and abilities of its employees and meets its objective efficiently and being more innovative. As the motivation and reward system of HBL bank are also up to the expectation of employees so that employees are very much satisfied and it helps them to retain their valuable workforce. Overall it is concluded that HBL inherits strong organizational culture having values for leaders as well as for employees and the organizational behavior is up to the mark for any company in Pakistan.
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