Organizational Analysis of Barclays Bank
In this paper, Barclays Bank is chosen as the subject for organizational analysis since it is a top performing bank that has encountered grave issues in the recent years. Barclays is a prominent UK bank, which makes it a good target for criticisms. Naturally, it attracted attention of experts when it faced problems in sales. Subsequently, this paper offers a comprehensive analysis of the said company through Kotter’s 8-step approach. The main thesis of the paper is that Barclays corporate has been the source of a high rate of customer complaints, which led to the decline in sales. Finally, recommendations are presented for improvement.
Barclays Bank is a financial institution that has been earning well in its operations globally. Without a doubt, the said organization is a leading company in the banking industry. John Freame and Thomas Gould founded the company in 1690. It was the first financial institution to provide loans to merchants and businessmen. The capital investment that led to the establishment of Barclays came from the marriages in the Freame and Gould families. In 19th century, Barclays was one of the biggest banks in England due to its merging with other large banks (“The early history of Barclays Bank,” 2011).
Currently, Barclays Bank also operates in London and is considered as one of the largest and most profitable banks in the world. It is engaged in wealth management, credit cards, retail banking, investment and corporate banking. Its success can be gauged through its eight million customers in approximately 50 countries, which shows the broad scope of the operational activity of Barclays as a financial institution (“The early history of Barclays Bank,” 2011).
Unfortunately, it faced serious challenges recently because of high rate of complaints from its customers about its inefficiency. But before it encountered problems, Barclays Bank had been prominent in the banking industry in the UK. As stated in its financial account, Barclays performed very well every year based on its revenue growth from 13.4B GBP to 16.3B GBP. However, its impressive financial status started to decline annually, and its total revenues significantly decreased between 2010 and 2013. The total revenues in British Pounds during the said period were as follows: 25,849.0 (2010), 25,466.0 (2011), 21,697.0 (2012), and 24,870.0 (2013) (“Barclays plc (BARC: London),” 2014).
Moreover, in a report that was released by the UK government in 2014 for Barclays, the said year was declared not good for the company. One of the reasons for such an assessment was the US lawsuit about an unexpected £900m PPI charge, which affected the bank’s profits in that year. US authorities emphasized that Barclays had serious legal issues that had to be litigated. For that matter, the said financial institution disclosed £900m in provisions connected with PPI. Consequently, Barclays suffered a decrease of 7pc in profits because of sloppy performance in investment (Titcomb, 2014).
As part of the diagnosis, Barclays has to resolve its problems when it comes to its considerable number of customer complaints. Its poor performance is a reflection of its high standing in the customer complaints aspect. More specifically, Barclays Bank registered 251,563 complaints in 2011 in the UK. When the top executives of Barclays diagnosed the origin of the company’s problems, they found out that the issues were quite complex and required strategic analysis. The top officials also admitted that the reputation of their company would depend on the trust and confidence of the clients. Customer complaints would further damage the reputation of the company if not resolved immediately (Read, 2011).
One of the root causes of the problems is the organizational structure. The company has to adapt to the current trends in the organizational management and evolve from the old form, which is characterized by strict hierarchy and authority, into a more flexible one. The management model of Barclays may no longer be suitable in the current environment, which is quite dynamic and global.
Also, this standardization scheme of the service providers of Barclays may be ineffective in today’s generation because of cultural differences. If Barclays intends to expand internationally or globally, it has to cope with cultural diversity of its clients around the world, their varied traditions and beliefs. For that matter, the staff of Barclays should be trained in inter-cultural interaction. To address the said issue, Barclays would also have to formulate and implement a stronger corporate culture that would influence every member of staff so that they deal with clients more effectively.
It would seem that Barclays has problems with the behavior and performance of its staff that can be traced into its corporate culture. With that number of customer complaints, it would be observable that its staff is not that efficient and effective in dealing with customers. Banking industry is basically founded on the services provided by the bank employees. They are the front-liners of banks and the company’s reputation is highly reliant on how they provide the services. This makes the corporate culture very crucial to Barclays since it is the aspect that inculcates values and manages the perception of everybody working for the mission and vision.
Kotter's 8-Step Approach
In order to introduce some significant changes, Kotter’s 8 Step Approach is very useful for Barclays. Kotter’s 8-Step Approach is known for diagnosing critical organizational problems, particularly behavioral and operational ones. In this sense, the approach gives a broader and more comprehensive insight on the overall operation of the company by diagnosing it through 8 steps. After which, the approach would also suggest viable recommendations for the improvement of the operation of any company (Mind Tools, n.d.).
Step 1: Create Urgency
In order to change the system of Barclays, one must develop a sense of urgency. The sense of urgency would increase motivation among employees since it would serve as inspiration or sparks. It is important that the change is seriously accepted by the employees and they should talk about it in order to actualize the plan. In this matter, it is suggested that the top officials should meet with the employees and explain the changes that are to be introduced. But, in order to do that, it is very important to explain to the employees that sales are going down and the reason is the high rate of dissatisfaction of the clients with the services. Moreover, the top officials have to sincerely discuss the value of the reputation of the bank in increasing sales. The sense of urgency has to be emphasized by the dismal figures of the recent years of operation. In other words, employees have to be fed with facts or information that are true and create an impression of urgency.
Step 2: Form a Powerful Coalition
In step 2, the main objective is to create groups that will help in the implementation of change. The top officials have to identify leaders in every department who will take a lead on the changes implemented by the management. It is highly essential that these people are truly convinced about the plan for change. This is an important step for Barclays because change cannot be executed effectively unless it is supported by influential groups in the company. An organization usually has small groups that are separate from the official groups. With the powerful coalition initiated by the top management, the change will proliferate gradually among all employees eventually.
Step 3: Create a Vision for Change
The third step is to create a vision to guide the change for the company. For this, Barclays has to formulate new vision for the formation of a new corporate culture. The vision has to stress fairness, efficiency and effectiveness, honesty, good governance and corporate social responsibility in dealing with clients around the world. The said values would be able to motivate staff to perform ethically as they deal with clients in every transaction. These values would boost the image of Barclays if inculcated by every member of staff.
Step 4: Communicate the Vision
The next step is to communicate the vision to the employees. This can be done in many ways. One of the initial steps is to organize a general meeting with the employees and discuss in details and comprehensively the new vision and what should be done in the future. The speakers of the meeting should communicate clearly the values that are needed for the success of the company. Any reactions or suggestions during the meeting should be entertained with enthusiasm and constructively by the top management in order to have a harmonious relationship with the staff while the change is being implemented. After this, the top management should communicate consistently the values and vision in the daily operations by means of written or verbal communication (memos, announcements, etc).
Step 5: Remove Obstacles
Undoubtedly, there will be obstacles for change. The top management has to reward those who comply with the introduced changes through incentive programs and performance appraisals. The new programs would gauge the contribution of every employee and increase motivation. But, those who are resisting the change, they have to be met by the leaders and human resource personnel. They should be counseled and trained for the new systems or values needed by the company. Also, the top management might need to hire new employees that will suit the new corporate values.
Step 6: Create Short-Term Wins
To sustain the change, the top management has to generate a project that will spark a short term win, which means that any project proving that the change is a success will further convince every employee in the new direction. For instance, the top management may conduct a survey about the rate of customer satisfaction or complaints after the change has been implemented. If there is any improvement in the rate of complaints of Barclays, it has to be announced to all employees as a short term win.
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Step 7: Build on the Change
After conducting a survey of rate of complaints, the top management has to reassess the weaknesses and build on the strengths of the new program. The management should not celebrate one-time victory but has to continuously reassess the opportunities for change and strengthen the new corporate culture.
Step 8: Institute Change
In order to make change more permanent, the top management has to introduce it into the policy and integrate it into the corporate culture. For this purpose, anybody who violates the new program should be penalized. The behavior of every employee should comply with existing corporate culture so that the change can be inculcated permanently.
In conclusion, Barclays has to introduce radical changes in terms of its organizational structural and more specifically its corporate culture. As shown above, the decline in sales was caused by weak corporate culture. It can be changed through the 8 steps of Kotter, which were discussed above. Barclays operates in an industry that is built on trust and confidence of clients. In this context, reputation is crucial and is dependent on the values carried by every employee. Thus, a change in corporate culture is recommended as well.
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