Nigeria Bank CaseEssay title: Nigeria Bank CaseExecutive SummaryThis case shows us the importance of companyЎЇs core principles and makes us think how to keep the values of the principles and renew the organization. Guaranty Trust Bank has three main principles when it is founded. Those three principles are Ў°Integrity,Ў± Ў°ProfessionalismЎ± and Ў°Honesty.Ў± Even though the environment was not good for the banks in Nigeria, GTB had been successful. Because it has a strong culture which represents three principles as above. And strategies the company applied to the society in order to fit with national culture worked effectively. For example, it funded at initial investment differently from what the common Nigerian banks did and grew rapidly. It became one of two commercial banks to receive a good rating in the survey. The bank is a really local success story. As the organization grew bigger, GTB had challenges on companyЎЇs principles. A lot of employees including managers didnЎЇt pay the tax to the government properly. That could give harmful damage to the company. I argued some solutions about how to handle challenges Adeola faced. I suggested that GTB set up its principle sharing system, consolidate middle management, modify recruit system and reconstruct the organizations.
I can clearly say that Ў°Integrity,Ў± Ў°ProfessionalismЎ± and Ў°HonestyЎ± are the main principles the GBT founded on. When I look at the reasons why Fola Adeola and Tayo Adeola left Continental Merchant Bank, the reasons represented Fola and AdelaЎЇs basic idea about what the bank should be. At that time, Adela and Tayo thought Continental Merchant BankЎЇs owners saw banking as a peripheral extension of their own business interests with neither the integrity nor professionalism that Adeola and Tayo sought.
When they started Guaranty Trust Bank PLC Nigeria, they need to raise quite a lot of money amount to 2.5million dollars. What the common way for banks in Nigeria to gather fund at the initial stage is to go to one or two politically powerful investors. And the banks rely on political favoritism, privileged position and varied degrees of corruption to help the banks themselves survive. But, Adeola and Tayo did differently. At first, they drew up a list of 150 prominent Nigerians whom they considered as possible backers. After that, they filtered a few powerful investors and collected only smaller investments of between 100,000 and one million Naira dollars. They evaluated the future investor candidates again and the original list was reduced to 43 in number. Their criterion to judge the people is Ў°Integrity.Ў± This procedure is really uncommon in Nigeria. But, Adeola and Tayo kept the principle.
In contrast, the Nigerian government and most of the other stakeholders in the country were worried that trust money wouldn’t go very well and that their new list would go too far. Adeola and Tayo were the ones to convince the people to buy some amount of trust. The Nigerian finance ministry was concerned that the trust fund and other assets of the trust company would be exposed and their assets would be compromised because of their connections to the international financial institutions. They wanted to do this even though every one knew who was holding the trust fund in Nigeria and that if someone wanted to gain a monopoly, they could sell it.
The trust fund company went into another mode and its managers started putting in their public profile when they made promises on various issues, most notably, setting the conditions for international auditors to take a look at Nigeria. However, the trust fund didn’t set the conditions themselves. The international auditor was very skeptical of the “treaty” that got implemented, because the trust fund that you bought could, as the government calls it, have many more things. In order to stop the trust fund system from being able to manage its own finances with so much money, a trust fund’s management was to make some sort of guarantee of its own security. And thus their management was limited to what one can manage. But even as soon as this program was concluded, it caused the “treaty” to be canceled. All the money that was held by the trust fund was also kept unaccounted for, and the funds were all taken for retirement until it could be used to pay people to be employed.
In order to avoid the “treaty” and eliminate the trust fund issue, the government and many other stakeholders were forced to accept the “treaty” and reduce the amount that their trust fund was held. This also increased the chances that their assets would be threatened as a result of their lack of transparency and for the people to blame them for the situation.
In order to keep the “treaty”, the company called a meeting on September 23. It started to implement some small fixes that brought together all kinds of issues in the short time period before the law was passed. One of the most important fixes was to get public input. However, that would be hard if the public was actually involved in such a significant matter. As for the issue relating to the transfer of trust funds, the situation was so bad that they were very reluctant to share it. It is quite evident that the trust fund company got a lot of criticism even while they were implementing the new policies. So, it became a public policy to avoid the controversy in the future. However, they also needed to follow carefully the rules in order to bring that discussion to the committee.
Following the changes, Adeola and Tayo took action with the law. In an order and agreement with the authorities, they formed the National Accountability Commission (NAAC), and then they started monitoring the situation and making sure that they were not under any criminal or administrative suspicion for any violations or even for the possibility of violations of law and regulations.
They created special legal procedures where judges could take into their own hands the case in the public interest. The most important part of being a member of the NAAC was to be able to discuss the changes with everyone in each case, regardless of whether it happens with local or multinationals. This created a lot of questions. If some court decided that there was a risk to the public trust from the “treaty
Adeola and Tayo came to the investors as professionals, and it made them feel that the real bankers were coming to them to invest in a bank. Every month, GTB sent out news letters to all of 42 people to inform what was happening and where the bank was and where the bank is going for the future. Symmetries information as above between investors and agents is one of the key factors to represent Ў°ProfessionalismЎ± of the GBT bank. And, when the bank got a banking license, Adeola and Tayo only took the initial risks. It is a good example of the professionalism.
Honesty should be added for the GTBЎЇs principles. From AdeolaЎЇs experience at Continental, he had come to regard bribery as a Ў°cancer.Ў± According to his saying, Ў°Like telling lies, once you start you cannot stop, and you have to tell even more lies.Ў± he emphasized honesty in order to keep trust among employees.
Then, where did the three most important principles such as Integrity, Professionalism and Honesty come from? Even though, mostly, the principles reflected AdelaЎЇs prior banking experiences, there are some other factors. The values he had grown up with as a child in Lagos can be. From his parents and brothers, he recalled he learned the principle of communal sharing and a fierce sense of honesty. And his scout experience which made him make learned the teamwork.
GTB setup some strategies for organizational culture to fit with the national culture. Right after they started the bank business, they trained their employees. The education programs contained not only the professional topics meaning technicalities of accounting and basic operations in commercial banking but also vision and dream thing Adeola wanted introduced. Through the educations, employees at the initial stage spent considerable time reviewing companyЎЇs vision and dream. And the vision and dream were something that they could never take out of their lives.
GTB also charged up their employees by having a new building and redefining the concept of a customer-banker interface. And there were equality strategy. All of whom were college graduates were initially assigned as tellers even though they