organizational structure and design in the private sector banking companies of bangladesh

8/12/2019 Organizational Structure and Design in the Private Sector Banking Companies of Bangladesh

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Organizational Structure and Design in the Private Sector Banking Companies of Bangladesh: A Case Study of Southeast Bank Limited Laldighirpar Branch Sylhet

Organizational Structure and Design in the Private Sector

Banking Companies of Bangladesh: A Case Study of Southeast

Bank Limited Laldighirpar Branch Sylhet!

Chapter ": #ntroduction

Prelude:

Organizational structure is the process of building a team of highly talented, professional,

ambitious and enthusiastic individuals to achieve a set of goals and targets (Ashkenas,

Ulrich, 1995! Organization structure is an organization"s frame#ork as e$pressed by itsdegree of comple$ity, formalization, and centralization(%avis, & ' eckler, % 199)!

%esigning organizational structure needs e$tra*ordinary management skills, dedication

and perseverance! +ffective organization structure and design relate to companyperformance by contributing to employee and customer satisfaction, productivity, and

development of a favorable reputation of the firm in the industry!

O$%ective of the study

he main ob-ective is to assess the organizational structure and design practices of

.ommercial /anks in /angladesh #ith special reference to 0outheast /ank td! (0+/!

he specific ob-ectives of this report are as follo#s2

Specific O$%ective:

1! o represent the overall scenario of organizational structure and design practices

of .ommercial /anks in /angladesh by taking consideration of 0outheast /anktd!

3! o identify various techni4ues and components of organization structure and

design and their application those are practiced at he 0outheast /ank imited!! o identify the factors influencing the effectiveness of organizational structure

and design in the 0+/!

6! o assess the shortcomings of practicing organizational design and practices in

0outheast /ank imited, and provide some suggestions in this regard!

1


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Organization of the Study

he aim of this paper is to identify various techni4ues and components of organizationstructure and design and their application that are practiced at he 0outheast /ank

imited!

his report paper is arranged as follo#s2

7art 1 provides details on ob-ectives of the study, scope of the study, methodologies that

are used to conduct the study, and limitations that hinder the progress of the study!

7art 3 provides a general background of organization structure and design and its

components such as unity of command, authority and responsibility, span of control,division of labor, departmentalization, mechanistic and organic organizations, technology

and structure, relationships bet#een culture and structure!

he background of 0outheast /ank imited, its structure and performance are providedin part ! his section also describes vision ' mission of 0+/, their core values '

strengths, and management structure of 0+/!

8n part 6, the details of the actual organizational structure and design practices in

0outheast /ank imited are given!

0O analysis of 0outheast /ank imited are presented in part 5 by e$amining their

e$ternal ' internal environment!

he data collected through field survey is presented in part )!

7art provides the details of the problems related to organizational structure and design

that have been identified through field survey!

:elevant suggestions to tackle the problems are presented in this section ;!

3


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Scope of the Study!

he scope of the studying organizational structure and design is as under2

o 8mpact of organizational structure and design on effective performance!

o +mployee motivation!

o eadership!

o roup behavior, po#er and politics!

&ethodology of the study

0ekaran (3?? clarifies research methodology as a regulatory frame#ork for thecollection and evaluation of e$istent kno#ledge for the purpose of arriving at, and

validating ne# kno#ledge! A methodology simply does not frame a study, but it

identifies the research tools and strategies!

.ertain methods and techni4ues #ere utilized to collect data for this report! he present

study is based on empirical as #ell as theoretical analysis! All the informationincorporated in this report has been collected both from the primary resources as #ell as

from the secondary sources!

he @7rimary sources are as follo#s2

7rimary data #ere collected from the respondent by using 4uestionnaire through

direct intervie#ing and personal communication!

Bace*to*face conversation #ith the respective officers and staffs of the branch!

7ractical #ork e$perience in the different desks of the department!


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he @0econdary sources are as follo#s2

Annual reports of the 0outheast /ank td!

ebsite of 0outheast /ank td!

0tatement of Affairs!

8nternet search!

Limitations of the study

A number of dra#backs appeared during preparing the report and hindered the total #ork

process! he report may have some shortcomings due to some of the limitations

mentioned belo#2

&ost of the information is confidential, so the bank officials #ere averse to

provide the precise information!

his report may be too narro# because 8 #orked only in one branch instead of

different branches located in different location of /angladesh!

:espondents do not al#ays provide the right data and also some data varies due to

different situations! he data may not be verified because of short time period!

ime #as a ma-or constraint in preparing the report! he duration of time allo#ed

to complete the report #as too limited to cover every aspect of the given topic!

6


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Chapter ': Organizational Structure and Design: A

(heoretical Overvie)

Organizations according to %aft (3?? are considered social entities that are goal*

directed, designed as deliberately structured and coordinated activity systems and linked

to the e$ternal environment!

he key element of an organization is not a building or a set of policies and proceduresC

organizations are made up of people and their relationships #ith one another! Anorganization e$ists #hen people interact #ith one another to perform essential functions

that help attain goals (%aft 3??!

Organization can be both formal and informal! According toales

(199) authorized structure in the organization is attributed as formal, #hen it is notsanctioned formally but e$ists for the practical needs is defined as informal!

Organizational structure refers to ho# an organization is put together! 0tructure reflects

some of the underlying #ays that people interact #ith one another in and across -obs or

departments (0ims 3??3! Organizational structure refers to ho# -ob tasks are formallydivided, groped, and coordinated!

hen organization becomes big it needs to maintain dynamism to bring more resultsthrough adaptation! he evolving nature of the organization is e$pressed through gradual

changes in structure, strategy, people and culture! Alignment among all these gives

ability to the enterprises to ad-ust #ith the changes (Daidoo, 3??3C Anthony and >ales,199)

ushman and OE:eilly (199) describe a pattern by #hich organizations evolve through

change focused on structure and strategy, culture and people! hey claim organizationsevolve through periods of incremental change!

Fouzes and 7osner (19; found that successful organizations are those led byindividuals #ho kno# their o#n strengths and #eakness as leadersC #ho learn ho# to

inspire and motivate others to#ards a common purposeC #ho ac4uire ne# skills in

building a cohesive and spirited teamC and #ho practice these skills more regularly than

others!

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Organizational Structure

Organizational structure is the process of building a team of highly talented, professional,ambitious and enthusiastic individuals to achieve a set of goals and targets! +ffective

employee management and business e$pansion are the main reasons for the necessity of a

systematic organizational structure and design!

he scope of the #ord "organization" is very #ide! An organization can be a company, a

business or even a school or a college! A small business #ill re4uire a simple

organizational structure, #hile large multinational companies or universities #ith severalcolleges under its control #ould need a large or comple$ organizational structure!

hether small or large, the first step in forming an organization is to set up a

management team #hich #ill supervise the #orking of the entire organization! hemanagement team includes the chairmanGpromoter of the organization, board of directors

and non e$ecutive chairman! he mission and the vision of the organization should bedefined by the management!

Defining Organization Structure * Design

here are several definitions that must be understood as a precursor to understanding

Organization structure and design!

A! Organizing is the process of creating an organization"s structure!

/! Organization structure is an organization"s frame#ork as e$pressed by its degree of

comple$ity, formalization, and centralization!

.! .omple$ity is defined as the amount of differentiation in an organization!

%! Bormalization is the degree to #hich an organization relies on rules and procedures

to direct the behavior of employees!

+! .entralization is defined as the concentration of decision*making authority in uppermanagement! %ecentralization is the handing do#n of decision*making authority to lo#er

levels in an organization!

B! Organization design is the development or changing of an organization"s structure!

)


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+nity of command

+nity of commandis defined as the principle that a subordinate should have one andonly one superior to #hom he or she is directly responsible!

1! 8n the classical vie#, unity of command #as strictly adhered to! 8n the rareinstance #hen the principle had to be violated, it #as clearly designated that there be an

e$plicit separation of activities and a supervisor responsible for each!

3! 8n the contemporary vie#, the unity of command principle is vie#ed as logical

#hen organizations are simple!


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A! .hester /arnard presented the acceptance theory of authority #hich proposes that

authority comes form the #illingness of subordinates to accept it!

1! hat determines if subordinates accept ordersH

3! According to /arnard, the follo#ing conditions must be met!

a! hey understand the order!

b! hey feel the order is consistent #ith the purpose of the organization!

c! he order doesn"t conflict #ith their personal beliefs!

d! hey are able to perform the task as directed!

/! 7o#er is defined as the capacity to influence decisions!

Span of control

Span of controlis defined as the number of subordinates a manager can direct efficiently

and effectively!

1! he classical vie# favored small spans, typically no more than si$, in order tomaintain close control!

3! he contemporary vie# establishes that more and more organizations are

increasing their spans of control! he span of control is increasingly beingdetermined by looking at various contingency factors!

Division of la$or

Division of la$ordescribes splitting a -ob into a number of steps #ith each step being

completed by a separate individual!

he more that tasks are divided into separate -obs, the more those -obs are specialized and

the narro#er the ranges of activities -ob incumbents are re4uired to perform!


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Departmentalization

Departmentalizationis another area in #hich classical and contemporary vie#s differ!

1! 8n the classical vie#, activities in the organization had to be specialized and

grouped into departments! he approach to grouping selected activities should be the one

that best contributes to the attainment of the organization"s ob-ectives and goals! here#ere five approaches to departmentalizing!

a! Bunctional departmentalization grouped activities by functions performed!

b! 7roduct departmentalization grouped activities by product line!

c! .ustomer departmentalization grouped activities on the basis of common

customers!

d! >eographic departmentalization grouped activities on the basis of territory!

e! 7rocess departmentalization grouped activities on the basis of product or

customer flo#!

3! 8n the contemporary vie#, most large organizations continue to use most or all

of the classical departmental groupings!


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(echnology and structure

+very organization uses some form of technology to transform inputs into outputs! #o

research studies on the relationship bet#een technology and structure have beensignificant!

Joan Woodwardfound that three distinct technologies had increasing levels ofcomple$ity and sophistication!

a! Unit production describes the production of items in units or small batches!

b! &ass production describes large*batch manufacturing!

c! 7rocess production describes continuous*process production!

Charles Perrow looked at kno#ledge technology rather than manufacturingtechnology!


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he culture moves the organization ahead in very practical #ays #hen it sets out the -obs

that have to be done and the division of labor to do them!

Chapter ,: Overvie) of Southeast Bank Limited

0outheast /ank imited (0+/ is the leading private sector bank in /angladesh offering

full range of 7ersonal, .orporate, 8nternational rade, Boreign +$change, ease Binance

and .apital &arket 0ervices! 0outheast /ank imited is the preferred choice in bankingfor friendly and personalized services, cutting edge technology, tailored solutions for

business needs, global reach in trade and commerce and high yield on investments,

assuring e$cellence in /anking 0ervices!

0outheast /ank imited #as established in 1995 #ith a dream and a vision to become a

pioneer banking institution of the country and contribute significantly to the gro#th of

the national economy! he /ank #as established by leading business personalities andeminent industrialists of the country #ith stakes in various segments of the national

economy!

0outheast /ank is run by a team of efficient professionals! hey create and generate an

environment of trust and discipline that encourages and motivates everyone in the /ankto #ork together for achieving the ob-ectives of the /ank! he culture of maintaining

congenial #ork environment in the /ank has further enabled the staff to benchmark

themselves better against management e$pectations! A commitment to 4uality and

e$cellence in service is the hallmark of their identity!

-ision of S.BL:

o be a premier banking institution in /angladesh and contribute significantly to thenational economy!

&ission of S.BL:


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Commitment to Client20outheast /ank td is a customer friendly banking institution thriving fast in bothearning and ability to stand out as a leading banking institution in /angladesh! he bank

delivers unparalleled financial services #ith the touch of our heart to :etail, 0mall and

&edium 0cale +nterprises (0&+s, .orporate, 8nstitutional, >overnmental and

8ndividual clients through the outlets of branches across the country! /ankEs businessinitiatives center on the emerging needs of the clients! /ankEs commitments to the clients

are the follo#ing2

7rovide service #ith high degree of professionalism and use of modern

technology!

.reate long*term relationship based on mutual trust!

:espond to customer needs #ith speed and accuracy! 0hare their values and beliefs!

>ro# as customers gro#!

7rovide products and service at competitive pricing!

+nsure safety and security of customersE valuable in trust #ith us!

CO/. -AL+.S

8ntegrity

Bairness


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CO/. S(/.01(2S O3 S.BL

ransparent and 4uick decision making

+fficient team of performers

0atisfied customers

8nternal control

0killed risk management

%iversification

&A0A1.&.0( S(/+C(+/. O3 SO+(2.AS( BA04

0outheast /ank is blessed #ith a #ell*designed management structure #ith clearly

defined responsibilities, delegation of authority and proper accountability! :esultantly,

there is transparency in decision*making and management activities!

he bank has appropriate organizational structure manned #ith 4ualified professionals

for proper planning, e$ecuting, controlling and monitoring functions! he .hairman is

the


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Organizational 2ierarchy at S.BL

7resident ' &anaging %irector

%eputy &anaging %irector

0enior +$ecutive Iice 7resident

+$ecutive Iice 7resident

0enior Iice 7resident

Iice 7resident

Birst Iice 7resident

0enior Assistant Iice 7resident

Assistant Iice 7resident

0enior 7rincipal Officer

7rincipal Officer+$ecutive Officer

0enior Officer

Officer

=unior Officer

Assistant Officer

Officer (.omputer

.ash Officer

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Chapter56: Organization Design and Practices in South5east

Bank Limited

Learning and Development:

0+/ recognizes that it is essential that they have the best people e4uipped #ith the rightskills and kno#ledge to perform their roles to the highest standards! hey #ent talented

professionals,#ho seek self development opportunities including continuing professionaldevelopment! 8n return the /ank offers e$cellent training and development! hey focus

development on #here they believe that they #ill get the greatest return, by developing

employees strengths!

Orientation:

+very staff member -oining 0+/ has to attend a 3*day comprehensive orientation to get

a feel about the /ank and its business! his orientation program provides a good chance

to meet #ith seniors ' colleagues and to build up the team spirit!

Product (raining:

7roduct training is provided e!g! cash product training, operational training etc!to help the

related staff to learn more about the products that the /ank is providing!

Skill (raining:

he bank provides a lot of skill related training e!g! credit #orkshop, sales ' negotiationskills, pro-ect management, etc! to help staff enhance their skill in particular aspects!

On5%o$ (raining:

0taff members are continuously involved in the learning process in the form of on*-obtraining! hus, a lot of on*-ob training opportunities and -ob rotation to increase staffEs

e$posure are provided!

Self5learning:

he bank sends out .%s and books to staff for them to study on trade kno#ledge, credit

kno#ledge, etc! and staff #ill decide #hen heGshe #ill attend the rade 0kill Assessment(0A and .redit 0kill Assessment (.0A!

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&anagement Development (raining:

8n this training program, the employees are given strategic perspectives and business

goals management skillsC people management, net#orking and customer focus abilities to

better understand and manage their -obs!Specific Competency (raining:

0pecific .ompetence raining is to ensure that the staff e$cels in product kno#ledge,regulatory and uni4ue techni4ues needed for the particular position!

Compensation and Benefits in S.BL:

At 0+/, the compensation package provided to the employees can be divided into t#o

categories! One comprises of the sales personnel #ho are compensated on their ability to

meet their targets! 0econd is compensating the e$ecutives #ho are responsible for the

overall functions of the /ank!

Compensating the Sales Force:

he key to a successful sales compensation program is achieved in three steps2

1! .learly defining sales goals that are realistic but challenging

3! racking and measuring performance against goals

! :e#arding achievement #ith competitive and motivational compensation

0ales compensation packages typically comprise 1 or more of the follo#ing components2

1! /ase 0alary!

3! 7eriodic incentives tied to short*term goals!! Annual 8ncentives tied to longer*term sales activities!

6! .ommission*based incentives!

5! 7er4uisites to facilitate sales efforts!

Executive Compensation:

he #ay the /ank pays its top management plays an important role in motivating the

critical performance needed to run it effectively! /ase salary is not the only component of

the typical e$ecutiveEs compensation package! +$ecutive compensation packagestypically comprise the follo#ing components2

1! /ase 0alary3! Annual 8ncentives

1)


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! ong*erm .apital Accumulation

6! %eferred .ompensation Arrangements

5! 0upplement /enefits and 7er4uisites)! 0pecial 0everance and :etirement Arrangements

! +mployment and .hange of .ontrol Agreements!

/e)ard * /ecognition:

0+/ aims to re#ard the talented and high performing employees competitively! heyregularly conduct salary surveys to ensure that the re#ard package remains competitive

in the market place! hey encourage continuous discussionC encourage regular revie# ofemployees performance and development! his provides feedback to the staff about ho#

they are doing! he management links this to financial and non* financial recognition!8n addition to this, the bank provides various incentives in the form of bonuses to

encourage the employees and motivate them to continue #ith their high performance!

hese include2

1! 0pot A#ard J :s! 5??? as cash prize

3! 0urprise A#ard! /est 7erformer A#ard

6! 0ervice Kuality A#ard

5! L+0( Lear of +$cellent 0ervices A#ard!

Career 1ro)th:

0+/ offers great platform to build an employeeEs carrer #ith learning and career gro#th

matched #ith compatible compensation and benefits in a en-oyable, enabling, and ethical

#orking condition! 8t offers a #ide array of careers for individuals of various educationaland e$perience backgrounds!

At 0+/, every employee,starting from =unior Officer is evaluateed for promotion after years! Bor the lo#er level posts #hich are belo# -unior officer, this duration is 3 years!

7o$ Analysis

1


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=ob analysis is the process for determining the duties and skill re4uirement of a -ob and

the kind of person #ho should be hired for it!

At 0+/, -ob analysis is conducted #hen the organization #ants to open a ne#

branch,setting up ne# technology or ne# services etc! the purpose of -ob analysis is2

1! o collect information about the different level of activities to be performed!

3! o collect the data about education, skills, e$perience, personal 4ualities!

! o select the suitable person for the right -ob!

7o$ Analysis for (op level &anagement

he -ob analysis for top management is done directly by the


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8f ther is any vacant post at middle level staff #hich includes operational manager and

head of all concerned departmentE then the /ranch &anager #ill give re4usition to the


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department #here they are established to achieve both, the short*term as #ell as long

term ob-ectives!

%otivation and &ncentive Sstems:

0ometimes the psychological components are not enough for motivating the employees!

8n this case, monetary incentives play a vital role for increasing the commitment of theemployees to#ard their -obs and in return enabling them to have -ob satisfaction! hese

monetary incentives and re#ards are given in various forms to the employees #ho act as

a strong motivational factor! hese could be given as21! 0pot A#ard J :s! 5??? as cash prize

3! 0urprise A#ard

! /est 7erformance A#ard

6! 0ervice Kuality A#ard

Ergonomics:

+rgonomics is the study of #ork! 8t deals #ith building a good interface bet#een the man

and the machines ! Feeping this in vie#, the /ank has been designed in such a #ay sothat the employees are comfortable #orking there!

Discipline

%iscipline is the set of rules and regulations for people to follo# usually in organizations!

8n 0+/, there are set of rules and regulations #hich are very important for every

employee to follo#! hese rules and regulations are2

1! 8n 0+/, minimum ;5M attendance is a must! he bank does not compromise on

attendance! here are no e$cuses for formal absentees! 8f the attendance record ofany employee is found belo# ;5M, then strict action is taken against himGher!

3! he #orking hour of 0+/ is from 1? am to ) pm! 8f any person is late from 1?

am then action is taken against him!

! 8f anybody misuses the property of 0+/, then organization takes strict actionagainst him!

6! +very employee should come in proper dress to the office!

5! &isbehavior #ith customer is not allo#ed!)! 0moking is prohibited inside the organization! he rule is applied to all

employees aa #ell as to customers!

! Anything #hich harms the image and re#putation of the organization is strictly

prohibited!

.mplyee relation

+mployers and employees each have their o#n sets of needs and values, and sucessful

relationship bet#een these t#o sides re4uires that some sort of balance be struck! his

balance often takes the form of a psychological contract, an understood agreementbet#een employer and emplyees that defines the #ork relationship!

3?


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8n vie# of the above, the


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Chapter : S9O( Analysis of Southeast Bank Limited

0O Analysis is an important tool for evaluating the companyEs 0trengths,eaknesses,Opportunities and hreats! 8t helps the organization to identify ho# to evaluate its

performance and scan the macro environment, #hich in turn #ould help the organizationto navigate in the turbulent ocean of competition!

Strengths

Company /eputation

0+/ has already established a favorable reputation in the banking industry of the

country particularly among the ne# comers! ith in a period of fifteen years, 0+/ hasalready established a firm footing in the banking sector having tremendous gro#th in the

profits and deposits! All these have leaded them to earn a reputation in the banking field!

Sponsors:

0+/ has been founded by a group of prominent entrepreneur of the country!+ach of

them belongs to large industrial conglomerate of the country!

(op management:

he top management officials have #orked in reputed banksC and their years of banking

e$perience, skill, and e$pertise #ill continue to contribute to#ards further e$pansion of

the bank! At 0+/, the top management is the driving force and the think tank of theorganization #here policies are crafted and often cascaded do#n!

&arket share profita$ility20+/ has established a firm footing among the ne# comers in the banking industry of

/angladesh! hey have already achieved a high gro#th rate accompanied by an

impressive profit gro#th rate in 3?1?! he number of deposits and the loans ' advancesare also increasing rapidly!

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3acilities and .;uipment:

0+/ has ade4uate physical facilities and e4uipmentEs to provide better service to thecustomers! he bank has computerized banking operations under the soft#are called

/ank Ultimus! .ounting machines in the teller counters have been installed for speedy

service at the cash counters! .omputerized statements for the customers as #ell as for theinternal use of the banks are also available! All the branches of 0+/ are e4uipped #ith

tele$ or fa$ facilities!

#nteractive Corporate Culture2

0+/ has an interactive corporate culture! Unlike other local organization, 0+/Es

#orking environment is very friendly, interactive and informal! here are no hiddenbarriers or boundaries #hile interactions among the superior or the subordinate! he

environment is also lively and since the nature of the banking -ob itself is monotonousand routine, 0+/Es lively #ork environment boosts up the sprit and motivation of the

employees!

(eam )ork at mid level and lo)er level:

At 0+/Es mid level and lo#er level management, there are often team #orks! &any

-obs are performed in groups of t#o or three people to reduce the burden of the #orkload

and enhance the process of completion of the -ob! 7eople are eager to help each other andpeople in general are devoted to #ork!

/elatively less intervention from the Board of Directors compared to other $anks:

At 0+/, the scenario is relatively better in terms of intervention of the board in

management practices compared to other banks! hough, in a private bank there are often

undue interventions from the board regarding the processing of credit facilities!


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%uring its inception, 0+/ has not recruited competent people in filling up its lo#er and

some mid level positions! Other than the recruitment of the 7robationary Officers and

&anagement rainees, people #ho #ere recruited from banks for the lo#er managementare not competent enough to provide the best output! As a result the services of the bank

are being -eopardized!

/eference Appointment:

his is one of the set backs of 0+/ and #ill have a long*term repercussion on the

4uality of eneral /anking %ivision, as there are several

system errors!

Lo) remuneration package:

he remuneration package for the entry and the mid*level management is considerably

lo#! he compensation package for 0+/ entry*level positions is even lo#er than thecontemporary banks! Under the e$isting lo# pay structure, it #ill be very difficult to

attract and retain &/AEs at 0+/! 0ince foreign banks pay double that of 0+/, it #ill

be very difficult to attract competent &/AEs in future for 0+/! herefore 0+/ #illfail to attract competent peoples and retain them if they do not revise their pay structure!

2uman /esources Department2&ost of the


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3e) staff meetings:

8t has been observed that there are very fe# staff meetings and departmental meetings at

the branch level! %uring the last four months there #as only one staff meeting and onedepartmental meeting! his is not a good management practice!

Limitations of the Bank +ltimus:/ank Ultimus is not modern and comprehensive banking soft#are! 8t does not provide

ade4uate support in providing the services! 8t is not user friendly and management should

consider replacing the /ank Ultimus system by a more comprehensive banking system!

Opportunities

Diversification:

0+/ can pursue a diversification strategy in e$panding its current line of business! hemanagement can consider options of starting merchant banking of diversify in to leasing

and insurance! /y e$panding their business portfolio, 0+/ can reduce their business

risk!

Product line proliferation:

here are several opportunities for 0+/ to e$pand its product line! 8n this competitiveenvironment 0+/ must e$pand its product line to enhance its 0ustainable .ompetitive

Advantage (0.A! As a part of its product line proliferation, 0+/ can introduce the

follo#ing products2

A&!

.redit .ards and ele banking!

On*line banking!

8ntroduction of 0+/Es o#n savings scheme!

#ntroduction of corporate scheme:

8n this #ay, the bank #ill be able to attract a lot of corporate clients and in the long run

the bank #ould be benefited by getting business for the bank from the corporate clients interms of G., oans and advances etc!

Threats

&ultinational Banks

he emergence of the multinational banks and their rapid e$pansion poses a potential

threat to the ne# 7./Es! &oreover, the already e$isting foreign bank such as 0tandard

.hartered,


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banks are establishing more branches country#ide and are e$pected to get into for

operation soon! 0ince the foreign banks have tremendous financial strength, it #ill pose a

threat to local banks to a certain e$tent in terms of grabbing the lucrative clients!

+pcoming Banks:

he upcoming private local banks can also pose a threat to the e$isting 7./E0! 8t ise$pected that in the ne$t fe# years more local private banks may emerge! 8f that happens

the intensity of competition #ill rise further and banks #ill have to develop strategies to

complete against an on slaughter of foreign banks!

Contemporary Banks:

he contemporary banks of 0+/ such as %haka /ank, 7rime /ank and %utch* /angla

are its ma-or rivals! 7rime /ank and others are carrying out aggressive campaign toattract lucrative corporate clients as #ell as big time depositors! 0+/ should remain

vigilant about the steps take by these banks, as these #ill in turn affect 0+/ strategies!

Chapter


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2

5

2

3

2

0

1

2

3

4

5

6

Highly

Satisfied

Satisfied Average Lowly

Satisfied

Not

Satisfied

Job Satisfactio

3igure: .mployee 7o$ Satisfaction in South5.ast Bank Limited

&ost of the employees being intervie#ed are relatively satisfied #ith their #ork, #hile a

good number of them are dissatisfied #ith their #ork! #o employees are found to be

highly satisfied #ith their #ork! hey are from the top level of management! hose #hogave the response as @Dot 0atisfied are from .ash %epartment of the /ank!

Salary Structure of South5.ast Bank Limited

!

4

3

0

1

2

34

5

6

!

"#celle t Acce $table %e low Average

Salary Str&ct&re

3


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Bigure2 0alary 0tructure of 0outh*+ast /ank imited

:egarding salary structure, employees from .ash %epartment are found to be dissatisfied

#ith their salary structure and they considered it as @/elo# Average! hey thought theyare paid less than they #ork! hile other employees are found to be very much satisfied

#ith the current salary structure of the /ank!

Bank S)itching

3;


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6'

2!'

6!'

(ill Switch

(ill ot Switch

)o*t +ow

Bigure2 /ank 0#itching (8n erms of 7ercentage

0+/ found to be able to retain employees as indicated by the employees intervie#ed

#hich sho#s that, )M of the employees #ill remain at 0+/ despite having opportunityof s#itching to other banks! hile 3M of them opined that, they #ill s#itch if they get

suitable opportunity in other banks!

Branch &anagement

39


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2

,

21

0

2

4

6

-

10

Highly

Satisfied

Satisfied Lowly

Satisfied

Not

Satisfied

%rach .aage/et

Bigure2 /ranch &anagement

:egarding satisfaction level #ith /ranch &anagement, almost every employee are found

to 4uite satisfied, #ith only 1 person giving e$treme negative response as @Dot 0atisfied!

Participation in /elated Decisions

?


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6!

33

0 50 100

artici$ats

No

artici$ats

artici$ates i

elated

)ecisios

3igure: Participation in /elated Decisions

&ost of the employees ()M are allo#ed in participating critical decisions like

operational procedure, 4uality control and other decisions! hey are being consulted

every time before making any crucial decisions! hile others are only instructed to obeythe decisions, they have no saying in making decisions!

Accounta$ility of .mployees

1


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100'

Acco&tability

Bigure2 Accountability of +mployees

+mployees at 0+/ are found to be 1??M accountable in terms of performing their

defined tasks and ready to do any tasks as re4uired! hey are accountable in terms of

maintaining office time, acceptance and processing of information

Opportunities for Promotion

3


33/42


50

33

1!

0

10

20

30

40

50

Strogly Agree Agree )isagree

$$ort&ities for ro/otio

Bigure2 Opportunities for 7romotion

&ost of the employees believe that they have the opportunities for promotion! hey

believe that, promotion system is based on a combination of seniority and performance!

hile a fe# numbers of them believe that, the people closest to the op*level&anagement only get promotionC and performance or seniority is not a matter at all!

0on53inancial #ncentives


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!2'

2-'

aid

Not aid

Bigure2 Don*Binancial 8ncentives

/esides the monetary incentives, there are certain non*financial incentives, #hich can

satisfy the ego and self* actualization needs of employees! he incentives, #hich cannotbe measured in terms of money, are under the category of @Don* monetary incentives!

Don* financial incentives can be of the follo#ing types2* 0ecurity of service, 7raise orrecognition, 0uggestion scheme, =ob enrichment, 7romotion opportunities! Only a fe#

number of employees are paid non*financial incentives! hey are from the op level of

management! hile the others donEt have such benefits!

7o$ Security

6


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166!

3333

50

0

10

20

30

40

50

Agree )isagree Strogly )isagree

Job Sec&rity

Bigure2 =ob 0ecurity

he importance of understanding -ob securityEs role has increased #ith the emphasis overthe past decade on employee reactions to ma-or organizational change! =ob security or

insecurity reflects the degree to #hich employees perceive their -ob to be threatened and

feel po#erless to do anything about it (Finnunen, &auno, Datti, '


36/42


Pro$lems )ith Learning * Development

1! he training programmes, specially the Boundation training program, are very

much based on theoretical concept! A person entering 0+/ as a ne# entrant

generally does not have prior idea about banking and find the training program#orthless and boring! 8n addition, traditional one #ay delivery of lecture by the

course instructors is another problem that discourages employees to learn

anything!3! 8n #orking environment, #hen a ne# entrant is assigned under an e$perienced

officer, the senior officer sometimes does not help the ne# entrant in learning

anything out of the fear that the ne# employee may become hisGher directsubstitute!

Pro$lems )ith /e)ard * /ecognition

1! Iarious types of a#ards such as 0pot A#ard, 0urprise A#ard etc, though e$ist inthe books of eneral/anking and often, as the .ash Officers claim, are given lo#er benefits and

compensation related to the officers in >eneral /anking!

A person entering 0+/ as rainee .ash Officer, generally can progress up to 0enior

Officer as found in the :egion under study!

Pro$lems )ith 7o$ Analysis

o#er level staffs are often transferred from one department to another department by

middle level staff (Operational &anager #ithout stating any reason despite performing#ell in the earlier department!

7roblems #ith =ob Analysis can be depicted by the follo#ing figure2

)


37/42


38/42


Chapter >: Suggestions for #mprovement of Organization

Structure * Design in S.BL

Suggestion for #mprovement of Learning * Development Procedure

1! 8n addition to the theoretical teaching, more practical teaching should be

implemented in Boundation and Advanced raining 7rogram!

3! 7roper monitoring system should be implemented to monitor the attitude andbehavior of the supervisor under #hom a ne# entrant is being posted!

Suggestion for #mprovement of /e)ard * /ecognition Procedure

1!


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Some Other Suggestions

he first step in designing organizational structure involves e$plaining each and every

employee, #hat his role #ill be! +mployees #ill not be able to deliver their best, unless

they are completely a#are of their #ork and e$pectations!

Another important thing is a system of accurate evaluation of the employee performance#ithout being partial or un-ust to any employee! Bavoring some employee over the other

#ithout authentic reasons can be harmful for the company"s future!

here should not be concentration of po#er in the hands of a fe# e$ecutives, as this may

lead to grouping and reduced 4uality output!

0atisfying the needs of the employees is of prime importance as this retains the faith of

the employees on the employers! he basic idea is to promote people #ith goodleadership skills! 7resence of employee grievance cell under the supervision of the human

resource department can assure the employees of their security in terms of payment and

position in the company!

he rules and regulations set by the management should be follo#ed by all the employeesof all the departments!


40/42


Conclusion

his paper has been prepared on the topic @Organizational 0tructure and %esign in the

7rivate 0ector /anking .ompanies in /angladesh2 A .ase 0tudy on the 7ractices of

0outheast /ank imited, aldigirpar /ranch, 0ylhet!

An effective organizational structure shall facilitate #orking relationships bet#een

various entities in the organization and may improve the #orking efficiency #ithin theorganizational units! Organization shall retain a set order and control to enable

monitoring the processes! Organization shall support command for coping #ith a mi$ of

orders and a change of conditions #hile performing #ork! Organization shall allo# forapplication of individual skills to enable high fle$ibility and apply creativity!

At 0+/ every employee in confident of his -ob security and has the assurance that he

#ould remain on the -ob for the agreed period! 8n addition to this, the #orkload is

e4uitable divided bet#een the employees and therefore, they #ork #ith peace of mindand tran4uility , resulting in the overall enhanced performance of the employees!

At 0+/ prevails an environment of confidence and mutual trust! he documented

employment policies are honestly implemented to the satisfaction of both management

and employees!

he


41/42


/eferences

Anthony, 7 1996,%anaging culture, Open University 7ress, /uckingham, U0!

Ashkenas, :, Ulrich, %, =ick, ' Ferr, 0 1995, $he 'oundarless organization:

brea(ing the chains o! organizational structure, =ossey*/ass, 0an Brancisco, .A!

%aft, : 3??, Organization heory and %esignE, 0outh*estern, .engage earning!

%avis, & ' eckler, % 199), ) practical guide to organization design, .risp

7ublications, &enlo 7ark, .A!


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organizational structure and design in the private sector banking companies of bangladesh

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