Report on leadership project on banking industry

introduction of leadership project on banking industry

This study will be discussing about the banking industry and the role of leadership required in banking industry. The reader will gain the knowledge about how leadership is going to be ensuring progress in banking business and how they face the complex challenges involved into the operations. The study will also be made about the “Seven Structure” theory as how it is being implemented in the chosen organization and how can it benefit them. There would also the analysis made on major differences between chosen organization and its competitors which gives the deep insight into the industry.

This study discusses about the leadership and how they contributed their role when major challenge arrives. This study will benefit the reader in terms of having knowledge on how banking sector evolved and the role of information technology into its development. The whole study will be discussed in the scenario of chosen organization, its competitors and the overall industry.

1. Research, Science and Characteristics of Organizations Identify and Assess

a. Seven structures and systems present in your organization

“HSBC Bank Oman” has been operating effectively and efficiently in the Oman market through modern practices and latest technology in place. The Seven structure model has been implemented by the “HSBC Bank Oman” in order to achieve its objectives, discussed in the following.

Strategy of leadership project on banking industry

“HSBC Bank Oman” has been in placed a strategy of targeting the youth market of Oman which is highly profitable and less risky. The Oman’s youth is willing to invest into innovative products and extracting out the economic returns (Forrestr, 2016).

Structure of leadership project on banking industry

“HSBC Bank Oman” has been in placed an easy hierarchical organizational structure which supports quick decision making process and allows grasping the market opportunity in country like Oman where economy is growing (Jeffer, 2014).

Systems of leadership project on banking industry

“HSBC Bank Oman” has been in placed proper check and control system which ensures high operational efficiency, improved procedures and democratic working process (MURALEEDHARAN, 2014).

Shared Values of leadership project on banking industry

The environment is very respectful where management respects the ideas being presented by the employees to achieve the one big organizational goal (Forrestr, 2016).

Style of leadership project on banking industry

“HSBC Bank Oman” has been in placed a democratic working style where it is believed that employees can provide more valuable input in decision making process because they are directly dealing the challenges involved on ground (Marria, 2018).

Staff of leadership project on banking industry

“HSBC Bank Oman” has been in placed highly professional, experienced and capable staff who knows how to grow the banking investments in profitable sectors and lending through strict scrutiny (Forrestr, 2016).

Skills of leadership project on banking industry

The top management of “HSBC Bank Oman” is deeply conversant with the Oman’s market and investing their resources in the most profitable areas (Newman, 2019).

b. Present leadership value systems and structures in organization

The present leadership of the bank creates an example out of them and makes the people following the rules, policies, procedures, system and overall structure.

Hierarchical Organizational Structure

The top leadership has designed the hierarchical organizational structure, developed reporting lines and frameworks. Everyone is supposed to and responsible for follow the system and design made by leadership. There is no room or mercy for anyone who misconducts or vioalates the reporting lines or framework. This is the key secret of success behind the HSBC bank in Oman and things are going smoothly. The top leadership is equally accountable if they break the law (Team, 2019).

Follow the Discipline of leadership project on banking industry

Top leadership is following the discipline and not coming office late or violating the procedures. This is a true leadership and helps them leading to the management and employees working in the organization. HSBC in Oman is very-well known for its discipline working culture (Marr, 2019).

c. Consider and analyze differences to your competitors (local or global)

HSBC has various local and international competitors and having major differences discussed in the following.

Target Market of leadership project on banking industry

HSBC has been mainly targeting the specific group of people who provides higher returns and low risk. These people are in aged between 25 and 45, all educated and having Smartphone technology. This is how they are developing products more suitable to them and through aggressive marketing they get them as customers. In the contrary, its competitors local or international are targeting the more diversified market and focusing less on one main segment which makes them not design the product as attractive as HSBC does on small segment. Those banks which expand their target market without plan, they always lose their own market where they were good at. According to the business management rule, you do not have to expand the operations and targeting next market, once you cannot control it (Jeffer, 2014).

Level of Network of leadership project on banking industry

HSBC bank in Oman does not have big major network of branches all over the Oman comparing to the competitors. The reason has already been mentioned above that they are catering little market and does not need massive network all over. This is the secret of their success and the vision provided by leadership that always play quality and not in quantity. This is the reason HSBC ensures maintaining the quality and not losing the customer (Team, 2019).

d. To what extent are these differences positive points of differentiation or negative traits of the organization?

The points mentioned above as differences of HSBC to the competitors can be described in both ways as positive and negative, discussed in the following.

Missing the opportunities  of leadership project on banking industry

There is no doubt that HSBC in Oman has been successfully targeting the limited market of youth and enjoying higher profit margins. They are missing several other economic business opportunities because Oman is a growing economy and lots of economic activities taking place. HSBC needs to be expanding its operations as much as possible so that they can extract more from the Oman’s economy in the form of profits and re-investing into the more profitable areas. This would be considered as the negative point of HSBC on the basis of them is differing to the competitors. HSBC has to be expanding though on firmly basis, so that they can also target the missing opportunities and enhance the business profits (Forrestr, 2016).

More Focused of leadership project on banking industry

This would be the positive point of HSBC as they are differing to the competitor and only focusing on short limited niche market so that they can develop the best product which best meets their needs and then offer them in the market. This is how they are the market leaders and enjoying highest market share in their targeted market which is also profitable at highest point. HSBC is marginalizing lots of its profits through the focused strategy because they more believe in quality instead of quantity. There is no doubt that more focused is always the positive point because focus is going to make big difference. Even the smaller sizes of firms can win to big firms if they are more focused (Morrow, 2019).

2. Understand your organization’s structure consider your organization ‘s sector, critically analyze.

a. How has your sector evolved?

Since, HSBC has been operating in banking sector and Oman banking sector is flourishing and growing over the time, especially in modern times. Oman banking sector was used to be consisting of the government banks and majorly deposits were enjoyed by government based banks. After the private sector has experienced the growth and Oman’s economy is experiencing liberalization to some extent, the private banking sector has also enjoyed the growth and large number of deposits. This is the reason an international banking chain started its operations in Oman and financing the economic activities taking place in Oman. This is the good decision because Oman is a rich country, people are enjoying prosperity and they want to live quality life style. This is why HSBC and other banks have been targeting them to finance their lifestyle and business to extract profits (Team, 2019).

There is lots of potential available in the Oman’s banking sector because it has been regulated by the international standards and technology embracement is also good. Oman’s people are also technology-friendly which makes them all operating their online banks accounts and other technology. Otherwise, this is a major problem in several other countries where economy is growing but people are not technology friendly (Shevlin, 2019).

b. How you differ to the competitor local or international?

The differences have been occurred in several other ways, discussed in the following.

Adaptability of Technology of leadership project on banking industry

HSBC is more adaptable to the latest technology and keep upgrading them over the time. This is not the case with local competitors which are mainly enjoying their advantage of being local and customers gives them preference of their being local bank. HSBC has been improved a lot through adopting the latest technology and offering various other online services which makes the customers comfortable. Oman is a place where large number of foreigners living actually Oman is not their home country, HSBC has been targeting them also through latest technology and they are more profitable customers of the banks. It is always good to be first in technology adaption because technology is going to help you out moving faster and having access to potential buyers quickie than your competitors (Jeffer, 2014).

Designing the Product of leadership project on banking industry

There is also a major difference of HSBC to the competitor. HSBC is always being design the product which more innovative, modern and specific to the youth. In the contrary, other local banks as competitors better understand the traditional needs of local vendors, businessmen and households what they need and how they need. Local competitors are targeting them to meet their traditional needs who are not willing to adopt modern lives and just want to live simple old-fashioned life style. In the decision making process of designing the product, this change is the major difference between HSBC and its competitors (Pera, 2019).

Financing the Oil and Non-Oil Companies

HSBC has been mainly financing the non-oil companies such as start-ups, SME’s and financing the youth activities. In the contrary, its international competitors have mainly penetrated the market to capture and benefiting from oil companies in Oman. Oil is a huge profitable industry everywhere and international banks to take the exploiting of it from Oman oil companies. This is the major difference between the HSBC bank and other international banks as competitors in Oman (Forrestr, 2016).

c. To what extent are these differences positive points of differentiation or negative traits of the organization?

It can be said that both positive and negative points in the differentiation between HSBC and its competitors local and international both, discussed in the following.

Modern Technology in terms of benefits

There is no one going to say that the modern latest technology is bad for banking sector or other industries, its adaption is going to lose the business as this is not the truth. This is the positive difference of HSBC bank with its competitors. They are taking the competitive advantage of latest technology and easily following the banking regulations in Oman. They have installed better served based data application which makes them capable of managing the data easily and also provide the analytical skills. They also develop the customer data based in order to design their next financial product which best suits and meets the needs of potential customers (Silver, 2016).

Designing product process and its Scope

It has also been mentioned above that HSBC has limited and specific designing product process, they do not go for the traditional and old market of Oman. It is important to mention that the youth they have been targeting which is educated and technology friendly is not in major, the major market is actually being targeted by local banks which gives them advantage. This would neither a positive or negative point; it all depends upon the business strategy (MURALEEDHARAN, 2014).

Exploitation of Oil Revenues

HSBC Oman has not been involved in any political activity or exploiting the oil revenues in Oman. Its management has simply been engaged in financing the start-ups, SME’s and youth market which is in the best interest of both economy and bank itself (Team, 2019).

3. Critical assess an analyze how to ensure your organization’s continued growth and success, organizations need to undertake transformation and growth.

The critical analysis has been made in order to maintain the competitiveness and continued growth, discussed in the following

a. What kind of changes are taking place in your sector and what do you believe the most successful organizations transforming according to that

There have been lots of major changes taking place in banking sector not only in Oman but internationally, accordingly transformation is essential all discussed in the following.

Money Laundering Regulations

The world has become global village and the actions of each country affect the whole world intensely. To finance the terrorist’s activities has become the major issue and challenge for the world and banks are being used for such financing. Therefore, FATF and other similar institutions have been placing the strict regulations on banks and making them follow the specific procedures. This is very complex and challenging because leadership needs to provide the training for the staff and overall transformation is challenging. Banks were never used to be following such strict regulations which makes banking sector more complex but it has to be happened to stop terrorist financing (MURALEEDHARAN, 2014).

All those banks which were unable to following these regulations and implementing the standards in their banks, kicked out by the FATF and no other banks are allowed to make transactions with them listed under FATF. This requires HSBC and other banks to be meeting the FATF standards and remain the part of banking industry, otherwise you are out of the banking industry and unable to enjoy big profits. There is a strict punishment and license can also be cancelled if banks are involved into the money laundering intentionally or un-intentionally. Therefore, it is obvious that banks have to pay the extra attention because it is more than a business (Pera, 2019).

Scrutiny of the Account Holder of leadership project on banking industry

This is another big change coming in banking sector where scrutiny process of new account holder at the time of opening the account is complex now. The regulators require more deep scrutiny which also makes the account holders more uncomfortable at that time. This can challenge the bank existence as they can leave if they feel uncomfortable without opening the bank account. All banks have to be transforming themselves and design the most efficient scrutiny process which does not take much days and also allow automation instead of irritating the customer. In this area, modern technology again can play vital role into reducing the bad debts through lending only quality loans where they need most and lender is more willing to pay it back (Forrestr, 2016).

b. To what extent is your organization at the forefront of the transformation? Give Examples.

HSBC is the international banking chain and one of the largest ones. They have been maintaining the international standards and following the all new requirements coming into the industry, same is the case with HSBC in Oman. They have been applied all conditions, sources of data and money trail thing into the banking practices. This is because they can track the source of income and money which enter their banks. For Example, “Know Your Customer” is mandatory for the all banks under the FATF and other regulatory authorities. HSBC ‘s leadership and management has set the procedures and regulations which requires lots of deep information about customer so that they can know well who is their account holder and later going to deposit the funds and transferring the funds. It is important because a terrorist can also open the bank account and transfer the money to finance terrorist activities or money laundering purposes (Marr, 2019).

HSBC has ensured that they have designed the strong network of all inflows and cash flows occur within their bank. They also have implemented the information system which is highly confidential and secure would not be allowing data hacking which can also be using for wrong purposes. Its leadership is also very committed to the clean banking operations and not gets involved into any terrorist or illegal activity. For Example, its top management has been directly involved with FATF institutions and closely studying their new standards, regulations and requirements (Pera, 2019). They have allocated the enough resources to middle level management and empowering them to implement such a system which complies with FATF. This is the future of world banking industry and otherwise banks have to leave the industry. Its leadership has been in close contacts with FATF and delivering all essential things to own management instantly basis. Though, terrorists have also become intelligent and they find the ways of money laundering but banks have to be more intelligent and need to catch them or stop them. This challenge was never before two or three decades ago to the banks , this is a new phenomena.

4. Every organization faces challenges and problems, which can be driven from rapid growth or serious decline. Identify and critically assess.

It is correct that new challenges and problems are raised once the organization starts growing or decline, discussed in the following.

a. Top two or three big issues your organization is facing

These are the two big issues faced by the HSBC in Oman, discussed in the following.

Liquidity Issues of leadership project on banking industry

HSBC Oman has been facing liquidity issues through growing or expanding the business operations. The liquidity management is always complex in order to run massive level businesses and relatively easier for small businesses. Therefore, HSCB has been growing in size and also having complex liquidity issues. They have to be managing the deposits in short-term and long-term, accordingly lending them as short-term and long-term. If it does not happen as planned or predicted, the banks often run of cash and they have to borrow from central bank which has its own cast affects the business profits. HSBC has to pay back the loan on interest rates which means liquidity crisis also affects the business profits (Jeffer, 2014).

Increased in Bad Debts of leadership project on banking industry

It is evident that when HSBC started growing in Oman and has increased its loan. It also increased the bad debts or rescheduling which became the problem or challenge later. Once the bad debts start increasing, it reduces the profitability and affects the business performance. Therefore, it would not be wrong to say that a business growth comes with lots of minus and negatives in business. Every loan does not get matured and returned successfully, certain percentage of that becomes bad debt (Morrow, 2019).

b. Key actions your organization needs to take to put it on a path of future sustainable success.

There are various key actions required to implement which can ensure the future sustainable success, discussed in the following.

Improve the Scrutiny Process of Borrower

HSBC Oman has to be improving the lending scrutiny process and better make more arrangements to investigate the borrower and his true intention of borrowing. Management needs to introduce new procedures and regulations at the time of lending, it is better to demand more information of lender personal and business both. This initiative can drastically reduce the amount of bad debts because of good investigation (Pera, 2019). It is studied that borrowers are borrowing with the intention of becoming bad debtors and never intended to pay back the money. Such frauds can be eliminated through deep investigation.

Maintain the higher amount of liquid assets or cash

As it is mentioned above that the liquidity crisis is a big challenge since HSCB started growing its operations. Its management needs to be investing more in liquid assets and not to go for less liquid assets. Secondly, they have to be maintaining the higher current ratio means currents assets are way more than current liabilities. This can be made possible through effective managerial practices and then the threat of liquidity crisis can be eliminated. HSBC should be maintaining the larger cash deposits because they also have been targeting small market and this can be possible from them. This is how they can maintain the liquidity into the bank (Forrestr, 2016).

Vigilant Management

Vigilant management is the key to the success and can root out all the problems and issues mentioned above. Management has to be vigilant and closely monitoring the numbers of HSBC as own bank and industrial ones. Any abnormal activity or stats has to be taken and monitored carefully as what is wrong which led these numbers raised (Newman, 2019).

Conclusion of leadership project on banking industry

It is concluded that HSBC has been targeting the limited and profitable market in Oman. They have not been engaged in targeting each and every segment of the society which can lead to bad customer service and un-satisfaction level of banking operations. They have been targeting young and educated market who wants to start their business, consumer loans and financing their entertainment. Its leadership has been taking all initiatives and measures to keep its money clean and not be involved into the terrorism activities. They are the part of FATF instituting and have been following their standards very much. HSBC’s leadership is very much concerned because they do not want to be part of any illegal activity and lose the customer’s confidence. They are willing to maintain their confidence among the customers in the market. 

It is also concluded that they are having a challenge of liquidity crises as the business grows. They have been facing liquidity issues because banking is a complex industry where flow of cash needs to be maintained on regular basis to meet the cash need of the banking customer. Oman’s financial market is not developed much which is also leading to the major liquidity crisis. Moreover, its leadership has been playing an important role implementing the latest technology into operations so that modernization can be introduced and so the innovative financial services. Its leadership are more willing to be implementing technology in the scrutiny process of the borrower to bring operational efficiency and reduce the bad debts.

Bibliography of leadership project on banking industry

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