Strategic Management of Handelsbanken †MyAssignmenthelp.com

Question: Discuss about the Strategic Management of Handelsbanken. Answer: Organization Description Handelsbanken is a Swedish bank providing with global banking solution. The services provided by Handelsbanken includes: Traditional corporate transaction, investment banking and consumer banking products. It is one of the major Swedish banks with over 460 branches. Since 1990, the bank is expanding its operations in other Nordic countries. The largest banking operations are in Britain with around 207 branches as of April 2016. It holds a strong position in the market and across the globe with an effective networking in other Nordic countries (Lindsay and Libby, 2007). Handelsbanken Culture The bank has an incredible strength in terms of corporate values. The organizational values act as a backbone for every single employee. The proactive culture allows in decision making, behaviour and communication. It has a positive result that turns values into culture, culture into customer experiences. This is creating a bottom line experience for the employees. The organization is driven by value system and doesnt believe in fancy slogan. Our Way describes how Handelsbanken be supposed to demeanour banking operations: how it should choose customers and employees, how it ought to grant loans, how it should communicate and lot many things (Kroner, 2011). The banking culture has a primary motive of being different with a motive to meet customers need. The goal is to gain higher return on equity, creation of a unique customer experiences and a higher profitability. They are focusing on personal services and advisory to allow an effective decision making. The culture took a long-term approach and be patient by Building a culture that yields results. The focus of Handelsbanken is to make leaders cultural ambassadors. Possibly the most significant thing is to develop an effective communication to make leaders effective culture-bearers. They are the one passing on the exceptional features in internal meetings and meetings with customers (Larsen, et al 2015). The focus of culture is to manage the entire internal channels in order to gain competency not in home country but in abroad as well. The culture fosters a uniform set of rules and regulations. The corporate culture is repeatedly professed by the HR Department located in every country (Lerpold, 2007). Entry mode in foreign market In the 1980s, Handelsbanken opened numerous branch offices in other countries, in order to sustain corporate banking activities. 1990 onwards the bank has acquired several smaller Norwegian, Finnish and Danish banks in the other Nordic countries. In 1998, the bank has started its operations in Denmark, Finland and Norway in an effective way. In 1999, Handelsbanken determined to increase in the United Kingdom by organic growth. In 2002, the bank started operating in the UK as the other regional bank (Bartholdi, 2013). As far as mode of entry is concerned, Handelsbanken enters the international market by opening a branch. The Swedish bank is constrained by both domestic and foreign regulations. The National regulations only allowed minor operations in foreign markets. Other countries did not permit foreign banking ventures to operate in mainland. The Swedish banks choices and possibilities for internationalisation were clearly constrained. Since the 1990s circumstances have changed due to foreign and domestic deregulation, permitting Swedish banks to expand their foreign ownership and increase internationally (Jakobsson, Edvardsen and Henriksson, 2009). The rapid growth of the bank has taken place due to a strong financial position of its Swedish parent group. The unconventional approach adopted by the company helps in expanding the business operations. The key strategy adopted is to see growth is that the bank. The keen focus is on "prudent" lending and keeping losses on bad loans down slightly th an branching out into shorter-term relationships with customers. . Handelsbankens organisation is strongly decentralised, and based on the customers requirements. This permits an effective decision making regarding individual customers relationships with the Bank. The bank directly works in coordination with the customer (Vasankari, 2010). Handelsbanken has more satisfied customers than any of its peer banks. The bank is one of the most cost-effective listed full-service banks in Europe. The bank has had higher return on equity than the average of its peer banks. In late 1991, the bank introduced telephone banking services and on 10 December 1997 online banking followed (Bergheim and Ings, 2014). Impact of Handelsbanken culture on entry mode Handelsbanken has a faith on Oktogonen, its profit-sharing scheme. The organization provides growth to every individual employee. They are following a simple standard by giving an equal share of the banks profits to individual employee. The money earned is used to buy Handelsbanken shares for each staff member. It can be accessed only when employees attain the age of 60. The ultra-equitable approach allows the bank teller to receive the same payout from Handelsbanken on retirement as its chief executive (Crane and Matten, 2016). The goal is to gain higher return on equity, creation of a unique customer experiences and a higher profitability. They are focusing on personal services and advisory to allow an effective decision making.The other significant feature that distinguishes the bank from its counterpart is as follows: - The bank does not pay bonuses, with the exclusion of a small number of staff in its investment banking sector - They do not have any financial plans - They dont have a sales target - They do not set long-term goals and has no central marketing budget; - The bank doesnt foster a credit exemption mechanism. -The most notable feature is the small number of staff (Dossa and Kaeufer, 2014). The local branch handles all the queries and makes requisition too. Branches source all their services locally by handling all the operations. Handelsbanken customer does not deal with a call centre. For any query, they can reach to a branch manager until the work is been outsourced. The customer experience at is dissimilar no matter which originate away in the middle of major British banks. They are focusing on personal services and advisory to allow an effective decision making (Englund, 2015). The culture took a long-term approach and be patient by Building a culture that yields results. This cross-cultural effective approach helps in managing the functions in the most appropriate way. The banking design helps individual to make a smart investment. This helps in achieving a sustainable growth on the foreign land (Johansson, 2016). They are no glass barriers in the branch. The customers can walk into a branch in Sweden and greeted by educated people. In spite of this enthusiasm for the bank, Handelsbanken share surprisingly perform well with a given record of outperformance. Only one of the 32 analysts covering the bank has a buy recommendation on it. Until 1970, the bank was run like most other banks. All through the 1960s it engrossed all the smartmanagement techniques from the US banking industry. This has helped the banking mechanism in gaining effectiveness. It has an effective operating mechanism more or less the same worldwide model that most large lenders run today. Effective measures undertaken by Handelsbanken to overcome global-local dilemma In a speedily globalizing world, it is important for the business organizations to operate at a large scale. In order to do so successfully they face the dilemma on operating the functions globally or either they should firmly rooted in local cultures, markets and power networks. For Multi National Organizations (MNOs), this dilemma focuses on a precise field ofmanagement knowledge, Human Resource Management. The idea of the organization is to maintain effectiveness on how employees think about their work is based on an apprehension for the long-term interest. The Success depends upon the short-term gains. The bank is following the Prudence as their guiding principle. Risk should primary be handled by working with economically sound customers (Johansson, 2016). Cost efficiency is highlighted within this very all-purpose frame for banking operation. In order to gain productivity, the message about decentralization and empowerment is particularly pronounced to gain appropriateness. The branch is seen as a platform to address the risks and to deal with the majority of issues. The organization is looking onto the changing banking scenario to support those who are truly doing business. Employee working at each branch has to follow the rules and guidelines. The appropriateness depends upon the effectiveness of work carried out at the branch. The employees in the bank are supposed to discuss throughout. Every branch located at different places receives an acknowledgement letter reminding the ideas through monthly letters from the CEO. These letters are complemented by the regional managers views on regional matters. The matter related to the current issue is been formulated to reflect the core ideas. In order to understand the mechanism it is important to understand the core ideas as a strong socio-ideological control necessary to believe a number of its HRM processes: career planning and promotion, training, personnel networks and recruitment policy. In addition, the se processes sustain practice-based knowledge withmanagement customers and loans. The unconventional approach adopted by the company helps in expanding the business operations. The key strategy adopted is to see growth is that the bank. This process helps in connecting with the local authorities in order to gain sustainability. In order to gain desired results, the process is to manage the bank in coordination with the local rules and regulations. The decentralized culture allows the branch to gain definite results by aligning the structure in the best possible way (Nilsson, Nordstrm and Bredmar, 2014). Actions taken to keep the culture alive The branch is more active in UK with majority of effectiveness. Despite having over 200 branches in the UK, the banking organization have effective culture modesty is the name of the advertising. The company doesnt believe in brand represents depends on actions. It is however essential to match up with the ongoing expectations in order to keep in pace with the changing mechanism. Their way of working is foundation concept that there is a complete connection between customer satisfaction and commercial success. Handelsbanken is doing pretty well in the market. It has achieved corporate goal of a higher return on equity than competitors for 45 straight years The lack of marketing expend that marks it out as extraordinary. In fact, Handelsbanken is incredible of an anti-bank, an organisation that seems to conceit itself. The organization has however provided with unusual 'computer says no' centralised credit-approval process. As a substitute it operates a decentralised system predicated to anyone familiar with the task. This helps in managing efficiency by coordinating with the people in a most appropriate way. They make requisition to the head-office regarding the change in service. The branch manager is the head of the bank. The bank invests its assets on each of its local managers. By focusing on the strategies, the bank is able to align its goals in the most appropriate way. The organizational structure and culture allow them in gaining effective results by organizing the most appropriate funds. In this way, the organization is able to formulate the long term sustainable goals. This will allow in meeting the reliable goals set in the memorandum. The effectiveness at the bank is formed in the same way that helps in gaining appropriateness (Nilsson and Nordstrm, 2013). Recommendation to the CEO for 2018 and beyond There is an extreme change in the economy that is creating a necessity to strengthen the banking structure. The culture in an organization should foster a continuous growth. Employees should be happy about working in an organization. It is important to develop an effective work culture in the third country. An excessive exposure of banking sector to risk is affecting the economy. It is necessary to protect the data against any exposure. This will help in managing the effectiveness. Moreover it is necessary for the banking organization to develop appropriateness. This is only possible if the organization is able to gain competitiveness. Especially, in UK it is important for the bank to develop an effective law and procedure considering the consequences of Brexit. This is important for the banking organization to develop an appropriate policies and procedure that allow in gaining sustainability at work. In a long term it is necessary to generate appropriateness at work. Work culture must foster effectiveness. This will help in gaining desired results within the given time frame. Policies need to be considered keeping in mind the needs of the local consumers. The bank has an explicit expansion strategy in terms of attaining a market advantage. Although, in coming years it is recommended to develop an effective plan to attain competitive advantage against local banks. Conclusion As per the research made it is concluded that, the bank follows a process in which the branches decide the costs of the head office. They examine the overall costs. They make requisition to the head-office regarding the change in service. The branch manager is the head of the bank. The bank invests its assets on each of its local managers. Certainly, its corporate motto is the bank is the branch. By giving an authority to the branch, managers have total authority within their restricted area to make a decision on every feature of how the bank is run its operations. A decision regarding the promotional functions depends upon the individual branch manager. In a banking industry, Handelsbanken has taken a diametrically opposite approach by decentralizing its operations. References Bartholdi, C., 2013. Can low risk in the Swedish banking sector pay in the long run?. Bergheim, R. and Ings, M., 2014. Local Management Culture Overseas: Handelsbanken Sweden and Handelsbanken UK. Blvarg, M., Handelsbanken-personalised banking in the digital era.Ban?ni vestnik, p.62. Crane, A. and Matten, D., 2016.Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. Dossa, Z. and Kaeufer, K., 2014. Understanding sustainability innovations through positive ethical networks.Journal of Business Ethics,119(4), pp.543-559. Englund, P., 2015. The Swedish 1990s banking crisis. InRiksbank Macroprudential Conference. Jakobsson, C., Edvardsen, D. and Henriksson, O., 2009. Foreign Exchange Risk Management Practices: A Study of Swedish Medium-and Large-sized Companies. Johansson, K., 2016. Internet banking by Swedish banks. Johansson, K., 2016. The advantages of adopting Internet banking-Comparing customer and bank perspective. Kroner, N., 2011.A blueprint for better banking: Svenska Handelsbanken and a proven model for more stable and profitable banking. Harriman House Limited. Larsen, M.K., Nissen, J.L., Lueg, R., Schmaltz, C. and Thorhauge, J.R., 2015. Can the business model of Handelsbanken be an archetype for small and medium sized banks? A comparative case study. Lerpold, L. ed., 2007.Organizational identity in practice. Routledge. Lindsay, R.M. and Libby, T., 2007. Svenska Handelsbanken: Controlling a radically decentralized organization without budgets.Issues in Accounting Education Teaching Notes,22(4), pp.53-71. Nilsson, V., Nordstrm, J. and Bredmar, K., 2014. The need for liquidity and the capital structure of Swedish Banks following the financial crisis.International Journal of Finance Banking Studies,3(2), p.10. Nilsson, V. and Nordstrm, J., 2013. The Capital Structure of Swedish banks-Development after a financial crisis. Vasankari, P., 2010. HandelsbankenOur Way. InLean Enterprise Software and Systems(pp. 154-154). Springer, Berlin, Heidelberg.