Note:

Please provide answer to above Case Question.

National Bank is an excellent example of a highly successful organization that has been able to maintain its success in a rapidly changing environment through an incremental adjustment process. During the 1990 s, changes occurred in the environment of Indian financial institutions. Introduction to Management =27 These included rapid deregulation of the financial services sector by the Indian government. The critical moves involved were the partial convertibility of the rupee, foreign institutional investors' (FII) participation in the financial market in India, foreign equity participation, and foreign direct investments (FDIs) in the Indian industry (including banking). As a result, a number of foreign-owned banks started operating in India. From its inception, the bank's strategic focus has been merchant banking (investment banking). In the 1980s, the bank commenced a process of diversification. However, with deregulation in the 1990s, it diversified further, building up strength in specialist markets, particularly in highvalue-added niches (market segments) like corporate services, mutual funds, insurance-product selling, and project financing. The pace of diversification in subsequent years required the bank to manage the organizational change with multi-pronged strategies. Apart from growing with diversification, the bank also acquired some regional banks to consolidate its market position. Change in National Bank has been a process of constant adjustment. Continuous change is embedded in its corporate philosophy. In all change processes, the bank adopts the partnership concept. The idea behind this is to let the process of change evolve, rather than to impose it. With the rapid growth in its product mix, the bank had to increase its workforce, creating the increasing problem of coordination in a collegial/partnership system. In a collegial/partnership system, product heads are hardly required to report to the CEO, as every unit runs like an independent business unit. To deal with the increase in size and the complexity of operations, the bank had to create additional structures, systems, and controls, much against the collegial/ partnership system. However, fresh recruitment of professionals was not adaptable to the collegial culture. Although an attempt was made to frame strategies for well-articulated goals and objectives, an internalized collegial culture of collaboration was in direct conflict with the same. The management at National Bank then focused on creating autonomous profit centres, achieving cross-functional synergies. More emphasis was laid on systematic communication across the profit centres to supplement the effort of coordination. Unfortunately, various strategies like adopting a consultative style of management, forming more executive committees to take participative decisions, and an open-plan office could not yield any result. CASE QUESTION National Bank has approached you at this point of crisis. Suggest an action plan to ease the situation