Strategic Development of Management Global Changes

Question: Discuss about the Strategic Development of Management for Global Changes. Answer: Introduction Change and strategic development are closely interrelated. While all successful organisations are designed to handle the current scenario and be successful; they are not the external changes that may affect the organisation periodically. The various external changes include improvements in technology; political situation in the areas of operations; global changes in economics as well as geo-politics; and competition to name just a few. Thus, the success of organisations in the future is dependent on their ability to adapt to the changes that would occur in the complex business world (Burnes Cooke, 2012). Furthermore, all organisational change must necessarily be studied after considering several factors, including but not limited to, the link between the organisational performance and the change processes; time; processes and the actions associated with them; history; as well as comparison both international and cross-cultural. It is often seen that customisation, receptivity, seque ncing, duration and periodicity of change are also factors that are related to the ability of organisations to adapt to change (Pettigrew, et al., 2001) Chosen Company: National Australia Bank (NAB) Development and Growth The process of development and growth of organisations is intricately linked to the manner in which they manage to plan, develop and implement their strategic plan. Since the meaning conveyed by the two terms is similar, it would be accurate to interchange the terms strategic development and strategic planning. Strategic development is essential for the creation and running of any business. It is made up of four components, namely, awareness, planning, development and results. Strategic planning and development thus helps focus energy and efforts, set priorities, allocate resources, encourage team work towards the organisational goals and strengthen overall organisational operations. The Australian banking sector has continued to grow through the adoption of new technologies, processes and products. Interestingly, most of the changes have been through the adoption of ideas from outside rather than from within the organisation. Thus, the growth is dependent on adoption of innovative products and practices rather than self-innovated products and processes. The success of the implementation of the innovative practices can be seen in the financial success of the organisation (Roberts Raphael, 2003). Strategic development is a disciplined effort that is essential for the organisation and the top management to make fundamental decisions and initiate actions that helps steam line the functioning of the company in the present as well as focus on the future potential. Management Strategies The history of the National Australia Bank spans more than 150 years. The banks operations can be traced to 1858 under the name the National Bank of Australasia. The expansion of its activities coupled with mergers and acquisitions helped the bank grow into the conglomerate it is today. The acquisitions within the country commenced in 1918 with the absorption of the Colonial Bank of Australasia. The National Australia bank began its overseas initiatives with the acquisition of the Clydesdale Bank located in Scotland in 1838. The bank continues to provide core banking solutions in addition to several selective financial services. The bank is focussed on providing efficient, professional and competitive services and retains its position of eminence in all its areas of operations (National Australia bank Limited, 2016). Criticisms There have been many criticisms of the business practices that company has pursued over the years. The corporate governance strategy is an essential part of the management philosophy at National Australia Bank. The lack of public accountability and good management practices have been identified as the reasons for the collapse of several large companies in the country (Thomson Jain, 2006). National Australia Bank too is included in this list of failures following the significant losses being incurred by the company as part of its international acquisitions as well as unauthorized trading in foreign currencies, creating a high operational risk (Thomson Jain, 2006) that was not covered through adequate prudence margins or identified beforehand because of inadequate processes and precautionary measures. The lack of cost efficiency and inadequate risk management was also identified as a reason for the failure of corporate governance at National Australia Bank (Ferguson, 2016). Environmental Analysis PESTEL analysis of General environment at National Australia Bank Understanding PESTAL facts: Several facts influence business and they can be easily classified into various factors like politics, economics, social, technology, environment and legal as well. However, PESTLE analysis is being considered in order to determine the ease with which the company is able to adapt to the given situation. Political Impact on business: This includes, intermittent elections, political scenario both within the country and outside as we as well Political unrest and so on. Marketing strategies need to consider this factor when developing strategies that would impact the organisations. In the case of National Australia Bank this includes the political party in power and the manner in which this would affect trade in the country as a whole as well as its impact on giants like National Australia Bank in particular. Economic impact on business: The economic considerations are a major determining factor of strategies for the growth and development of any organization. For banking giant like National Australia Bank this includes factors like ease of cross border trade, economic sanctions and so on. Social impact on business: The social media is growing by leaps and bounds. This exponential growth has now made the forum an important factor for generating good will, improving sales and creating a brand value of the organization a The National Australia Bank can use social media to improve its standing in the local community by highlighting its various causes, corporate governance or corporate social responsibility. Technological impact on business: This refers to the new and emerging technologies that are impacting the manner in which these organizations conduct their business. The tools like video conferencing help the multinational conglomerate operate across borders without incurring the extra cost of physical travel. Impact of environment on business: The environment plays a key role in the success for any organisation in modern times. Customers are highly selective as well as well informed and tend to exhibit a marked tendency to associate with companies that are associated with saving the environment, achieving carbon neutrality and so on. Impact of legal proceedings on business: This aspect refers to the laws and regulations that are put in place from time to time by the governing bodies of all the countries wherein the organisation operates. For National Australia Bank this includes the changes in banking regulation n both the national and international front. Information gathering needs to be effective and efficient to help the organization succeed at all levels. The process of information gathering is needed to develop adequate strategies or the success of the National Australia Bank. The process of information gathering needs to be streamlined and the accuracy of the data collected needs to be ensured to prevent the development of incorrect strategies and create further problems for the bank. Identification of opportunities can be done by closely monitoring the environment in which the bank operates. National Australia Bank needs to capitalize on the various opportunities that present themselves from time to time. The strategies formulated based on the data gathered needs to be implemented for the various opportunities that would present themselves in front of the bank. Taking action is the primary activity for the business to succeed. Merely gathering information or formulating strategies is of no consequence of the organization is not in a position to implement them at the appropriate time and capitalise on the opportunity before the company. The implantation of strategies according to the various situations will help the National Australia Bank achieve success in its operations. Identification of threats is necessary for the organization to be prepared for all kinds of potential problems that may rise in the organization. Identification of threats is an important step towards formulating apt strategies to overcome all potential; issues that may arise in the bank from time to time. SWOT analysis of National Australia Bank Strengths: Strong brand name and good financial position Good revenue and interest income Leading financial player in Australia Diverse products and services including personal and business services Weaknesses Significant decline in revenues and huge losses due to inadequate risk management and corporate governance Opportunities Customer portfolio diversification Acquisitions, mergers and joint ventures Asset management and wealth management solutions Threats Changes in regulations Global Financial and economic crisis High competition levels Culture and Leadership Style Leadership styles tend to exhibit an important influence on success in financial performance of the organisation. The participative and open leadership styles practiced by the top management have helped the company grow by leaps and bounds. Organisational culture refers to a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in theorganizationand dictate how they dress, act, and perform their jobs. Interestingly, it is observed that the commonly seen change models tend to be insufficient to reflect the diversity of approaches seen in the real world. The proposed changes to a change in organisational values and their formation includes a leader prescribed top-down approach to planned value changes; a spontaneous and decentralised formation of values amongst employees and an interactive formation of values between employees and leaders (Michael, et al., 2012). A quick look at various Leadership theories help understand functional leadership as well as incorporate situational and environmental leaderships that may be transformational or transactional in nature. Michigan Studies broadly classified leadership styles into production oriented and employee oriented. They were further classified as participative, relationship oriented and task oriented. The studies concluded that employee orientation with a general supervision was deemed to be better than production orientation with a close supervision. The former produced better results in the organisation. Synergy is seen to be the best approach when looking at maximising the outcome. It is worth mentioning that the successful iimplementation of change in an organisation is dependent on individual perception on matters like the method of change management, transparency in the priocess communication about the change bewfore, during and after implementation of change (Kavanagh Ashkanasy, 2006) Conclusions It is seen that financial institutions that undertook a larger number of innovative activities; were consistent in their performance and those who continued to positively differentiate themselves from industry norms tend to have a superior performance in the financial front (Roberts Raphael, 2003). It is further observed that a change in the top down approach was reflected in the indifference of commitments by employees despite a change on official values and status quo. Furthermore, it is observed that change in environment, both internal and external tend to have an impact on not only the functioning of the organisation, but also on the functioning of the top management. While the top management tends to play a prominent role in the strategic adaption exhibited by organsations, a tendency to resist the change is also observed.The decentralised, spontaneous alternative displayed marked difference with multiple orientations and valuations amongst employees. The interactive option wa s found to have the maximum impact as both the employees and management were affected (Michael, et al., 2012). Hence, it would be accurate to state that although the primary influence on an organisation continues to be considerable shortcomings that need to be achieved through progressive and ambitious aims of its founders(Burnes Cooke, 2012). References Burnes, B. Cooke, B., 2012. Review Article: The past, present and future of organization development: Taking the long view. Human Relations, 65(11), pp. 1395-1429. Ferguson, A., 2016. Report slams National Australia Bank's risk management. [Online] Available at: https://www.afr.com/business/banking-and-finance/report-slams-national-australia-banks-risk-management-20160515-govh0z [Accessed 06 September 2016]. Kavanagh, M. H. Ashkanasy, N. M., 2006. The Impact of Leadership and Change Management Strategy on Organizational Culture and Individual Acceptance of Change during a Merger. British Journal of Management, 17(1), pp. S81-S103. Michael, B., Neubert, M. J. Michael, R., 2012. Three Alternatives to Organizational Value Change and Formation:Top-Down, Spontaneous Decentralized, and Interactive Dialogical. The journal of Applied Behavioral Science, 48(3), pp. 380-409. National Australia bank Limited, 2016. A Banking Heritage. [Online] Available at: https://www.nab.com.au/content/dam/nabrwd/legacy/about-us/shareholder-centre/Report-archive/Annual-Report-1996.pdf [Accessed 06 September 2016]. Pettigrew, A. M., Woodman, R. W. Cameron, K. S., 2001. Studying Organizational Change and Development: Challenges for Future Research. Academy of Management Journal, 44(4), pp. 697-713. Roberts, P. W. Raphael, A., 2003. The Dynamics of Innovative Activity and Competitive Advantage: The Case of Australian Retail Banking, 1981 to 1995. Organization Science, 14(2), pp. 107-122. Thomson, D. Jain, A., 2006. Corporate Governance Failure. Journal of Business Case Studies, 2(1), pp. 41-56.