Report on the HSBC and its organizational

This study will be discussing about HSBC and its organizational structure which is being implemented in present time. This study would also discuss about how top leadership and management values the system development and whether or not they intervene into the jobs of others. This is important if leadership and top management do not respect the powers of lower hierarchies and their boundaries, then it would not be possible to develop the system. This study would also discuss about how HSBC have been competing against its local and global competitors and what are the major differences among HSBC and its competitors.

This study would also make discussion on how HSBC have built its reputation and what was its strategy to stand different and unique from competitors. It is very important to understand because HSBC have been competing against its giant sized competitors which have huge capital base and network. In this study, the discussion would also be made upon how banking sector evolved and what it has become in the modern time. It is also going to be discussed about whether or not HSBC have embraced the changes in banking industry and whether or not they have adapted themselves to bring the major changes internally so that they can become modern bank in future.

From a consideration of the theory, research, science and characteristics of organizations identity and assess.

a. The seven structures and system present in HSBC Bank.

There are mainly two types of organizational structure implemented in HSBC Bank, the overall organizational structure is consist of “hierarchical structure” in which different levels of management with authorities have been divided into each hierarchy. Every hierarchy and its employees are controlled and monitored by the manager of that hierarchy, it establishes the separate reporting lines and frameworks within the hierarchy and then the manager of lower level hierarchy would report to the manager of next level hierarchy. HSBC have been managing its huge sized global level operations through its hierarchical organizational structure which allows the management to run the operations with full of discipline and smoothly (Smith, 2018).

The second type of organizational structure is being implemented in HSBC Bank is “Team-Based Organizational Structure” in which HSBC working culture supports the project assignment to the teams of highly qualified individuals and competent, who can accomplish and achieve the most challenging project for HSBC management. Its management promotes the team structure because this is the modern practice to accomplish the most challenging jobs by the few competent individuals who also supports each other and coordinate with each other in the pursue to follow the same goal. These two organizational structures are playing the key role to the success of HSBC and this resulted as they have been expanding its operations globally and increasing the number of branches outlets (Pollock, The Future Of Banking: Is It All Bitcoin And Blockchain?, 2019).

b. Analyze and describe how the present leadership value system and structures in your organization impact on leadership, management and staff.

The present leadership of HSBC have been giving full value to the developed system of HSBC which have been developed on the basis of organizational structure. This leadership is valuing the system through not interfering in the managerial matters of other hierarchies, they are not crossing their boundaries of authority and they do not make the undue advantage of their power. They allow the system to be working in a manner as it is designed, everyone is following the business processes and so they are followed by top management and leadership. It helps the HSBC to become the mature organization where system and laws are above the personalities and powers (Turpika, 2020).

If its top management was not valuing the system and organization structures, they would never be able to grow globally and competing against one of the highly competitive global banks. As far as value the system have good impact on leadership. It has been allowing the functional and middle level managers to grow and emerge as the leader in their hierarchies and capacities. HSBC Bank has been producing leaders in the banking sector only because top management does not intervene in their jobs and trust them on their part of work. Similarly, functional managers are showing their trust on the employees and also letting they grow (Shevlin, Who’s Better: Digital Banks Or Traditional Banks?, 2020).

c. Consider and analyze differences to your competitors

These differences can be compared on two different types of competitor’s basis, local and global; each is discussed in the following.

Local Competitors

HSBC have been competing against its local competitors in different way. They adopted tailored approach to offer its specific and well-designed financial services to the customers. The range of these tailored made services starts from investment banking to personal mortgage. Since HSBC have vast experience of banking and they exactly know that what specific measures needs to be taken so that we can serve our clients in the most efficient manners, this is how they are competing against local competitors, instead of increasing number of services to defeat local competitor, they design tailored made banking services which exactly meets the needs of the local client. HSBC is mainly different from its local banks competitors, as local banks are depending upon offering large number of general banking services, whereas HSBC have been offering specialized limited banking services (Pollock, HSBC Moves $20 Billion From Paper To Blockchain In One Of The Biggest Financial Deployments, 2019).

Global Competitors

HSBC have also been managing its global level competitors in the efficient manner. The global banks have been enjoying big capital base and political contacts with the governments which also play key role into their business growth. HSBC have adopted the branding strategy in which they have developed their branch so much that once the client hears the name of HSBC and they come to know that HSBC is offering them the same banking services as competitors bank does, they are going to belief the HSBC for availing these services. The major difference between HSBC and its global competitors are the strong brand image, HSBC have been enjoying the strong brand image among all its global competitors (Togoh, 2020).

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

The differences points will be discussed whether it is positive point of negative, discussed in the following.

Tailored approach in offering financial services

This is the major difference of HSBC which makes them distinguish from its local and global level competitors both, this is the strength and positive point of HSBC which makes them outstanding from competitors. HSBC have been offering tailored banking, financial and investment services to its clients which meet their needs specifically, they do not add something extra features which can increase the cost and put the burden on the clients shoulder to pay for what they actually do not want in the service. Therefore, HSBC have made it possible to get exactly what they want and also pay for what they get most. This difference is leading the HSBC into the success path (Press, 2017).

Strong brand image of HSBC and its organizational

HSBC have been enjoying the major difference of its strong brand image comparing to the competitors. Since they have been capturing the limited market and built the very good reputation in it, it makes the HSBC to emerge as the corporate with very good and growing organization. This is another positive point which makes the difference in HSBC overall business growth (Carlin, 2019).

2. Now that you understand your organization’s structure consider your organization’s sector. Critically analyze.

a. How has banking sector evolved?

There is a long history of banking sector which is even longer than two centuries. Therefore, we need to only discuss its modern history and evolution in modern history for fifty years back. Almost, half century ago banking sector was quite different and banks were not offering the same services as they are get used to know. Banks were only for extending loans, transferring the remittances services and securing the valuables in locker room. Now, the banking sector have been offering all modern services from hedging, selling future contracts, modern insurances, consumer financing, investment banking and others (Smith, 2018).

The modern banking sector have been taking too many risks and investing in foreign exchange and commodity future contracts, to earn the income on taking the risk. Banking sector would never get used to selling the same banking and financial services before (Shevlin, The 5 Hottest Technologies In Banking For 2020, 2020).

b. In what way do they differ to your competitors (local or global)?

Mostly local competitors could not evolve themselves as much as the overall banking industry evolved in the global market. Mostly local banks do not sell the services of future contracts and they do not know much about commodity trading in international and future market. This is how local banks are differencing from the evolution in banking industry. As far as global banks are concerned, they evolved too much and put the more focus on modern banking services and facilities, rather than to also stay with the general banking facilities. Modern global banks are more interested in investment banking, commodity future trading and future contracts (Pollock, HSBC Moves $20 Billion From Paper To Blockchain In One Of The Biggest Financial Deployments, 2019).

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

To discuss these differences are, whether these must be considered as positive points or negative traits of the organization, discussed in the following.

Differences of local competitors of HSBC and its organizational

As discussed above, the local competitors failed in matching the evolution of modern banking in the banking industry, this difference emerged as the negative trait because modern banking services have been enjoying higher profit margins and overall growth in its demand. People are demanding more modern banking services such as future contracts, swap services and other banking investment services. Those local banks that could not evolve themselves with the modern banking style, they left behind in the competition and only earning through offering general banking services to their clients. Therefore, it is emerged as the negative trait for those local banks in competition with HSBC (Turpika, 2020).

Differences of Global Competitors of HSBC and its organizational

The global competitors adopted the modern evolution of modern banking industry very well; this became their strength positive point to emerge as the growing banks. All of these global competitors of HSBC which adopted the all modern banking evolution, they also left majority of general banking operations and old operations which used to be modern decades. They confined themselves with the all modern latest banking facilities which were more profitable and could be operated in the disciplinary manner. This can be identified as positive point of the global competitors (Press, 2017).

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

a. What kind of changes are taking place in your sector and rest details?

These are the major changes taking place in our banking sector discussed in the following.

The advent of digital lending of HSBC and its organizational

The banking industry has been running into the digital lending. According to the report of “Grand View Research”, by the end of 2026 the digital lending market will be reached at $25 billion. Every banking expert believes that digital lending will be the future. Once, the digital infrastructure starts growing over the time more rapidly which means more banking clients will be able to make online transactions, eventually the whole banking industry will move to digital lending because they would be having complete record of that individual and personalized digital lending will be increased (Carlin, 2019).

The advantages of digital banking will be it enables the banks to execute the large number of transactions within short span time. This would not only allow the fastest and rapid execution, but this would also allow to extend the loan to the one who can actually repay the loan and almost zero chances of him to become bad debt. Therefore, digital and automatic banking is going to increase the business profits of the company multiple times while the bad debts will be reduced to almost zero percentage. The banking operating expenses will also be reduced very much and the bank’s branches will also be closed down (Turpika, 2020).

This shows that how much difference will be made by digital technology to the banks in future. The information and data based banking is going to bring the refinement in the business processes and the quality will be at its peak in the banking industry (Shevlin, The 5 Hottest Technologies In Banking For 2020, 2020).

Automation and personalized customer experiences

The whole banking operations have been shifting from manual to automation. Shareholders and executives of banks believe that they are spending too much money on repetitive processes which wastes lots of financial resources and banking capital. The automation would not only decrease the cost of production but would also add value-added activities, which will execute the transactions faster and ensure the higher efficiency with improved personal experience of the consumer. There would be several benefits and advantages of the automation and personalized experience (Carlin, 2019)

Block-chain in banking industry

The block chain in banking industry is going to be the next revolution and future. The block-chain is the technology which stores the massive information in digital format and it can be easily accessible by the authorized one. It helps the banking industry to extend the loan process in the fast manner and because of its huge record, industries and businesses can raise the money from various sources of the parties who wants to lend (Turpika, 2020).

Are other banks doing to embrace the changes required to deliver the continued success?

All of the competitors banks especially the global competitors are going to embrace the coming change in banking sector. All big global banks have been working on block-chain technology and developed a plan how to implement the digital infrastructure which supports millions of digital transactions in time. They are also working on building the block-chain technology infrastructure because in future banks cannot meet the growing demand from consumer and client without the block-chain technology (Smith, 2018).

In the future, the man resource will be diminishing because they do not need man expertise any more in banking industry. They more need of digital technology and big data which can help the management in data based informed decision making. This is true that human expertise and talent cannot be competing against the artificial Intelligence. JP Morgan is such a huge financial institution which have been investing huge in modern technology to support and execute the future transactions (Shevlin, Who’s Better: Digital Banks Or Traditional Banks?, 2020).

All big banks like BNP, Mitsuishi Bank, HSBC, Bank of America and others banks have also been shifting from manual to automatic banking operations because it will cut down the cost heavily. The automatic technology will take place which would not require any manual workforce and they will close down the whole physical branch, ten years after the digital technology arrival there will be branch less banking. There will be only online banking and bank have to fire its thousands of employees from its branches (Carlin, 2019).

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

According to the recent financial reports and news, HSBC have been experiencing significant decline in their profits only because HSBC leadership wants to implement long-term vision and goal. HSBC leadership have determined that they have to compromise the present profits for the future business opportunities because they cannot implement the digital infrastructure and introduce modern future technologies without halting the operations in present. Its leadership have been implementing many re-structural plans of its digital and information system, this restructuring will take at least three years and meanwhile they have to be managing the business operations in the most efficient manners (Shevlin, Who’s Better: Digital Banks Or Traditional Banks?, 2020).

According to the CEO Quinn of HSBC, they have also been bringing transformation in other banking areas which needs lots of improvement and those areas also have to embrace the digital transformation. Due to strong leadership of HSBC, they have already started reaping the fruits as “Enhanced Support” for the valuable customers of HSBC through digital channels have been increased in the form of loans and advances by the amount of $64 billion. This shows that HSCB have become one of the primary banks which have been benefiting from digitalization, the credit goes to its leadership and top management who have realized the potential of digitalization in banking industry and they have realized soon banks needs the digitalization to enjoy the business growth and meeting the more market opportunities (Pollock, The Future Of Banking: Is It All Bitcoin And Blockchain?, 2019).

Moreover, its top management has been allocating more financial resources to invest in digital infrastructure. This infrastructure is not same as other types of structures, it has to originate, support and execute the millions of transactions in short time period. Digital structure also has to record the data of millions of transactions with its complete details. This is the major benefit of digital structure and technology as it allows generation of big data analytics, which can be used in forward in decision making process (Carlin, 2019).

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

a. The top two or three big issues your organization is facing

There are mainly two issues faced by the HSBC banks which have become challenge and problem for the organization, discussed in the following.

Huge investment in Europe of HSBC and its organizational

HSBC have huge dependence on the Europe market and they did ensure much concentration of investment all over the world. It resulted as Europe market started having recession into its economy which have been hitting back to the HSBC bank and its profits. The bad debts have been increasing which hurts the capital base of the bank and they cannot afford losing its largest market from where they were generating huge revenues and now the same market have become the source of generating losses for the company (Smith, 2018).

They were investing too much in Europe market because it was very lucrative and profitable market. HSBC’s management were predicting attractive returns and profits, but the mistake they committed was investing too much and put the all eggs in one basket. This emerged as the wrong decision which went against the interest of HSBC and they started losing its major investment (Turpika, 2020).

Regulatory Challenges of HSBC and its organizational

HSBC have been extended big amount of loans to housing mortgages and the regulatory challenges have been emerging. The regulatory challenge is that they will put some restrictions and would not allow the relaxation into the process of housing mortgage because regulators in different countries and regions are afraid of housing mortgage crisis 2008 in which it affected the major economies and caused millions of unemployment. HSBC have been facing regulatory challenges in housing mortgage crisis and they are expected to experience more bad debts from housing mortgage clients once the environment is stricter by the regulators (Smith, 2018).

Therefore, HSBC management needs to reduce the level of lending in housing sector because it is likely that the crisis will be emerged from housing loans and regulators would impose some strict conditions which would be resulted as people cannot afford paying back the loan to HSBC bank. They have to be taking the precautionary measures from now in present to address the future challenges and issues involved in the banking industry (Pollock, The Future Of Banking: Is It All Bitcoin And Blockchain?, 2019).

Role of Leadership in HSBC

After conducting the studies on HSBC and review its major decisions to tackle the challenges and eliminate the threats, also study about how they started implementing digitalization before any time after realizing its potential. This shows that the leadership has been playing its due role in HSBC business growth and overall management. They helped the HSBC to grab the future business opportunities through implementing digital channelization to extend the loans, it helped very much and now HSBC have been issued $64 billion amount more loans compare to the same previous time. The true leadership is the one having vision and they take step in present to exploit the future opportunities (Pollock, HSBC Moves $20 Billion From Paper To Blockchain In One Of The Biggest Financial Deployments, 2019).

They have also made mistakes like everyone does, but they have realized and started taking the precautionary measures such as they have strict internal loan extending process and do not extend the loan that have doubts of repayment in terms of his financial capacity. This leads the HSBC to have fewer bad debts in future and exploit the more market opportunities coming from the digitalization (Carlin, 2019).

b) Key actions HSBC bank needs to take to put it on a path of future sustainable success.

After the foundation of the bank in the market, there are different kinds of challenges that could be faced by the bank as aforesaid. These challenges are required to meet with the proper solution in the market to get the goals and objectives of the banks. To meet the challenges, there must be path on which they have to walk and it is path of sustainability. Sustainability approach is divided in three major areas such as; sustainable finance, sustainable supply chain and employability. Every area of sustainability is started with the real strategies that are forwarded to gain global transition. HSBC also working on the responsibilities to take part in the nation sustainability development goals are framework to help protect the secure the planet to secure from the poverty. It gives consistency in the priorities to invest in the finance in the business.

Sustainable finance aspires to the leadership in management and shaping of the financing to get transition to low-carbon world. Working in the sustainability, it reduces the growth of the small and medium business in the economy. HSBC finds to make sure the financial services that are provided to support in the economic to gain the development in the financial market.

Conclusion of HSBC and its organizational

It is concluded that banking industry has been evolved very much from traditional banking operations to digitalization. The information technology have introduced significant change into the modern banking where the data is available for every transaction executed in the past and it also helps to generate the client report which wants to borrow the money from banks. Digitalization is helping the banks to make the most efficient decisions which must be data-driven; otherwise those decisions made without data would not be effective and serve the purpose.

HSBC is such a bank which has compromised its present profits for the future digitalization. They have experienced decline in profits in recent time and the reason told by CEO is that they have been slowly shifting from traditional to digital infrastructure, which delayed the current business process and operations which further resulted as huge decline in profits. This shows that its leadership is very much commitment with the future and they want promising future for its bank. Its leadership knows that they can take the advantage of digitalization if they implement the whole infrastructure before the competitors.

It is also concluded that HSBC bank has implemented hierarchical organizational structure in which they have developed the clear reporting lines, framework and delegation of authority. They believe in systematic approach and also delegating the authority before expecting the results. They also promote team-oriented culture within the organization where team is based upon the most qualified team members who are all specialized in their diversified fields and then they collectively given the task project to achieve, so that team can help in achieving one big organizational goal.

Recommendations of HSBC and its organizational

·         Create reasonable and responsible culture that should be according to the ethical behavior that is used to maximize profit at any cost.

·         Transparency in the explanation about the requirements that is relevant according to the required regulations by the law.

·         Funds of the management are utilized according to the prudence and transparency to get the treatment of negligence in the management funds. 

·         While granting loans to the people there must be take into consideration about the activities that are responsible to get profit as well as social contribution.

·         Situation analysis must be done according to negotiating power of bank in the market with the information and implementation of the sustainability in the strategies in the market.

REFERENCES of HSBC and its organizational

Carlin, S. (2019, January 19). How Banks Can Turn Millennials Into Lifelong Customers. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/stevecarlin/2019/01/16/how-banks-can-turn-millennials-into-lifelong-customers/#71e1839c6097

Pollock, D. (2019, November 29). HSBC Moves $20 Billion From Paper To Blockchain In One Of The Biggest Financial Deployments. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/darrynpollock/2019/11/29/hsbc-moves-20-billion-from-paper-to-blockchain-in-one-of-the-biggest-financial-deployments/#40408fac18cf

Pollock, D. (2019, July 25). The Future Of Banking: Is It All Bitcoin And Blockchain? Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/darrynpollock/2019/07/25/the-future-of-banking-is-it-all-bitcoin-and-blockchain/#6644223331eb

Press, G. (2017, March 24). The State Of Digital Transformation In Banking And Financial Services. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/gilpress/2017/03/24/the-state-of-digital-transformation-in-banking-and-financial-services/#24f0211b1050

Shevlin, R. (2020, February 03). The 5 Hottest Technologies In Banking For 2020. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/ronshevlin/2020/02/03/the-5-hottest-technologies-in-banking-for-2020/#65afb101c0d3

Shevlin, R. (2020, March 16). Who’s Better: Digital Banks Or Traditional Banks? Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/ronshevlin/2020/03/16/whos-better-digital-banks-or-traditional-banks/#2decee995660

Smith, O. (2018, July 19). HSBC's Global Head Of Digital Says The Bank Is 'Cautiously Looking' At Crypto Use Cases. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/oliversmith/2018/07/19/hsbcs-global-head-of-digital-says-the-bank-is-cautiously-looking-at-crypto-use-cases/#635322343766

Togoh, I. (2020, April 28). HSBC Profits Plunge As Europe’s Biggest Bank Faces Coronavirus Hit. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/isabeltogoh/2020/04/28/hsbc-profits-plunge-as-europes-biggest-bank-faces-coronavirus-hit/#222249d9241f

Turpika, D. (2020, April 21). How To Improve The Financial Services Industry With Artificial Intelligence And Blockchain. Retrieved May 21, 2020, from Forbes: https://www.forbes.com/sites/forbestechcouncil/2020/04/21/how-to-improve-the-financial-services-industry-with-artificial-intelligence-and-blockchain/#e04d64770c64