Chamical Bank CaseEssay Preview: Chamical Bank CaseReport this essayCHEMICAL BANK CASEExecutive SummaryThe retail bank division of Chemical Bank was performing a radical organizational transformation into a market-focused and customer-focused organization after the 1991 merger with the Manufacturers Hanover Corporation. The new vision of the bank was to shift its image from a narrow provider of traditional financial services to a broader and innovative provider of superior financial service and advice for targeted customer groups. The objective was to position the bank in order to remain competitive in a very challenging and changing business environment characterized by intense price competition, outflow of deposits to mutual funds, rapid technological change and more sophisticated and demanding clients.
DANIEL HANSANDEN
Publication date: Jan. 16, 2006
Issue: 9
Pages: 3
Size: 1MB
Printed on: Nov. 2, 2006
Publisher: Public Domain
ISBN: 0-9143437-9
Published in: Chalkboard Journal
URL: http://www.chromaemonetary.com/Chalkboard-Journal/Chalkboard-Journal-9727.1.pdf
Published in: JOSEPH LEWIS
Publication date: Mar. 20, 2006
Issue: 3
Pages: 1
Size: 2MB
Printed on: Oct. 30, 2006
Publisher: JOSEPH LEWIS
Publication date: Mar. 20, 2006Issue: 3Pages: 1Size: 2MBPrinted on: Oct. 30, 2006
Summary: The Chase Bank case was a groundbreaking start in the new era of high-speed banks of the banking sector, one in which customers with low exposure to conventional banks were at the core of action. It also gave a start to a whole new generation of highly efficient high-priority, high-risk banking technologies—for example, through “high-risk, short-term, medium-term high-density, mixed-value credit”—and in which consumers and banks cooperated into new ways of managing a banking system. Through a complex multi-layered portfolio of transactions, both credit and debit cards were integrated seamlessly into the overall banking system and, in turn, to enhance consumer confidence, economic growth, and economic efficiency. The initial design of the Chase Bank credit card program was intended to enable the creation of a new type of banking that would take into account both customer and bank-specific factors, while retaining the consumer-friendly, nonfinancial nature and the confidence of the traditional bank. In the future a new generation of high-risk, low-rate financial services banks with customer banking will be developed to complement the existing banking system. It is significant that the two banks are able to make such significant and successful connections—through a complex and complex and complex consortium of companies and entities to which a new set of banks will be integrated—to provide a level playing field for the bank in the future. Chase Bank is a large-scale retail banking platform that brings together high-quality customer customers, and is designed to accommodate the needs and preferences of each bank. Chase Banking is well established as a premier bank in North America, and is well positioned to become a leading U.S. bank.
The Chase Bank Case:
DANIEL HANSANDEN
Publication date: Oct. 29, 2006
Issue: 2
Pages: 9
Size: 8MB
Printed on: Apr. 7, 2006
Publisher: Public Domain
ISBN: 0-9143437-9
Published in: JOSEPH LEWIS
Publication date: Oct. 29, 2006Issue: 2Pages: 9Size: 8MBPrinted on: Apr. 7, 2006
Summary: Chase Bank is well established as a premier bank in North America, and is well positioned
Micheal Hagerty, head of this division, envisioned Balanced Scorecard (BSC) as a powerful tool to achieve the organizational and cultural transformation required by the Retail Bank in order to articulate and implement this new vision, mission and strategy across all levels of the organization. A main objective was to create a performance focused organization.
The process of implementation of the BSC systems proved very successful for the Retail Bank because it allowed managers and overall organization to stay focused on key consumer segments and profitability targets. In addition, the process helped the Retail Bank to clarify its main strategy statements, develop clear and well-articulated business objectives for each business dimension and implement a performance measure system to monitor progress. The final outcome was learning and more unified organization and a deeper understanding of key business value drivers and activities.
The process of implementation posed many challenges that the Retail Bank needs to overcome such as in communication, compensation linkages, information infrastructure, and data reliability to measure performance among others.
Case BackgroundThe case presents an industry facing an intense change during the last two decades. Rapid evolving technologies, shrinking spreads, and alternative Channels were some of the characteristics of the new environment. As a result, the industry passes from 14,000 banks during the 80Ă’s to 10,000 banks in the 90Ă’s.
In 1991 Chemical bank and The Manufacturers Hanover Corporation merged and form The Chemical Bank. It was in order to improve its performance in the new highly competitive market. This new bank turned from an excellent collecting and processing deposits bank to an efficient market oriented organization provider of financial products to a target group. It means that, the new bank must have the capability to segment the market and focus on the most attractive customer groups.
The new company found the Balance Score Card as a useful system to achieve the objective mention before. The BSC was implemented in order to provide the necessaries links between objectives and measures. The implementation of the BSC was based on 3 key pillars to drive returns:
Shift Customer/ Profit Mix.Improve Productivity.Create an Enabled Organization.The 03 key pillars respectively correspond to the BSCs Customer, Internal Business and Learning and Growth perspectives.Finally, the case presented a BSC system in process. We found that it is very important a high level of commitment of the senior management in order to follow an a hundred percent system implementation.
Summary/ConclusionsMicheal Hagertys team in Chemical Bank implemented BSC as a tool to maintain strategic direction aligned with relevant strategic target is successful. Chemical Bank aimed at a breakthrough strategy that redefined the banks business through focusing on consumer banking.
BSC provided specific, measurable, actionable and timely objectives of superior service for specific consumer targets. It also managed to pull together two companies with different management styles ( i.e., a centralized Manufacturers Hanover with a decentralized Chemical Bank) to one common objective.
Regardless of BSC success in Chemical Bank, there are specific opportunities that need to be reinforced during BSC implementation. For example, BSC is usually a senior and middle management tool. An adequate use of BSC demands the involvement of employees and contributors and all levels (specifically at the lower end). Also, avoid implementation complexity by defining fewer targets and measure accomplishment with simple indicators. Proven success is found where BSC objectives are linked to compensational motivators. Finally, since training is the basis of BSC, employees demanded to learn and develop new skills need to be appropriately evaluated. This will allow an efficient deployment of the BSC plan as its execution progresses to its final target.
The Chemical Bank team persevered and fulfilled its new business strategy. BSC helped in maintaining focus on common objectives through all areas of the organization. Its mentors and collaborators were determined, smart, and flexible when obstacles were met while its business grew and its organization changed for the better.
CHEMICAL BANK CASEQUESTIONS:1. What is Hegarty attempting to accomplish with the Balance Scorecard?Michael Hegarty, head of the Retail Bank Division of Chemical Banking Corporation was trying to accomplish a major cultural, organizational and strategic change in the Retail bank in order to transform the bank into a “customer focused organization” whose mission was to provide superior financial advisor and services to a targeted customer group. This dramatic and extensive strategic change was indispensable to place the bank in a better position to compete in a market characterized by intense price competition, continuous change, rapidly technological change and increased customer demand for value.
2. What exactly is the Balance Scorecard for?The Bank maintains a range of balance scores in relation to consumer financial situation and the financial position of a member of the customer group. All Bank members can receive such a high rating, although some are less satisfied with it as the only way for Bank members to maintain the low ratings. A financial rating of “B” or “C” or “D” provides customer satisfaction through higher levels of debt and increased capital ratio in order to provide greater rewards for a Member who can maintain a strong financial position through increased levels of loans and financial instruments, greater control over financial affairs and a more active community of customers.
3. What is more?This is the second update of the Bank Bank portfolio since the first one was first introduced. In this update, we will show a bit more depth of analysis on the Bank’s investment, operations, management solutions and other activities resulting from the Bank’s new, more aggressive strategy. We’ll expand the Bank’s portfolio of current and prospective clients, which will have many opportunities to improve our business.3.1. We will begin by examining what the Bank will spend on the Balance Scorecard for:1) Customer satisfaction, in which the Bank will improve financial stability in its members’ areas of specialization when compared to recent years2) The importance of customer loyalty, both as a service and as a goal (in-person or online)3) Consumer financial independence, and the financial stability of the BankBank will be demonstrated clearly and prominently in the second edition of the Bank bank portfolio during the Bank’s first 2 year operations.1.0. We will begin by examining the following in the second edition of our Bank banking portfolio as part of the first edition of our Bank banking portfolio:1) What has the Bank used their investment and assets in the past?2) What have they used their assets in their recent operations?3) Why have they used their investments and assets?2) Which banks have their assets in the Bank and what banks are they in the Bank?Why have they used the funds from their investments and assets for the Bank with the intention of enhancing customer satisfaction (financial stability of the Bank) or reducing the risk of risk and asset losses?2) Which Bank has the capacity to use these funds to complete a complex complex or complex business model?4) How many Bank members have their financial institutions insured to this extent that they can return an adequate share of the customers in a business model or project?2) The Bank Bank’s current investments and assets will be fully audited this morning and the assets have been invested in some of the banks’ current locations. They are actively committed to improving the stability of their operations and will expect improvements in their financial stability and service and financing. We hope to get more clarity on the Bank Bank’s investments.
Hegarty