HAS IT REALLY LOST ITS

IDENTITY...?!!

This case was written by Rabia Mahmood1, Bakhtawer Hameed, Mehreen Khalid, and Firdous Karim
students of BBA (HRM) under the supervision of Miss Komal Khalid 2, lecturer of Management Science
department, NUML. The case was prepare for class discussion rather effective or ineffective handling of an
administrative situation. All name and places has been disguise.

1
rabia_mahmood_paracha@yahoo.com
2
komal@jinnah.edu.pk
 HAS IT REALLY LOST ITS IDENTITY...?!!

A Case study

It was really unpredictable that what will be going to happen in a situation when the
standard chartered bank needs full cooperation from the employees in order to compete
with other banks. All the management is disturbed with the environment prevailing due to
the change and every one is feeling itself in trouble and thinking that how to get rid off
the situation…

The International Bank (a brief over view)

International bank has a history of over 150 years in banking and is in many of the
world’s fastest growing markets. It has an extensive global network of over 1,200
branches (including subsidiaries, associates and joint ventures) in 56 countries in the Asia
Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the
Americas. As one of the world’s most international banks, Standard Chartered employs
almost 44,000 people, representing 89 nationalities, worldwide.

International bank strengths lie in its breadth, diversity and balance and is trusted across
its network for its standard of governance and corporate responsibility. The bank is
committed to all its stakeholders by living its values in its approach to managing its
people, exceeding expectations of its customers, making a difference in the communities
that we operate in and working with its regulators. It uniquely derives 95% of profits
from Asia, Africa and the Middle East. Serving both Consumer and Wholesale Banking
customers, the bank combines deep local knowledge with global capability to offer a
wide range of innovative products and services as well as award winning solutions.

The Local Bank (a brief overview)

Established in 1991 and backed by a major Middle Eastern Group, The Local Bank today
is the preferred choice of thousands of satisfied customers throughout Pakistan. With 53
branches in 20 cities and a correspondent banking network of over 300 banks in 85
countries, union Bank is rapidly gaining ground in the global financial market.

The management at the Local Bank comprises of seasoned professionals in the fields of
banking and finance thereby encouraging a culture of innovation, and total customer
satisfaction. Union Banks vision is to provide its clients with complete banking solutions.

But now the international bank acquired that local Bank in September 2006, the new
entity the international Bank (Pakistan) Limited was incorporated in Pakistan on 30
December 2006
Reason of this Acquisition:
49% of the shares of The Local Bank were of the Saudi investors. 20% shares were in the
market. Remaining was of at minor investors. It gives 35% dividend to their customers
which make it largest dividend giving bank in Pakistan. The major reason of this
acquisition is that the major shares holders were not taking much interest in it and
want to sell.

SCB purchased the Local Bank in $523 millions, just because of its good repute in the
local market. Union bank also acquired two banks before its own acquisition. These were
Emirates bank and Bank of America. As now the policy of State Bank of Pakistan is to
reduce the number of banks. It wants to prevail few but strong economy so Union is
being merged with SCB.

Human Resource Management Practices

• Recruitment:

The bank has its own company named Price solution Pakistan limited. The candidates
send there resumes to Price Solution and then send to Karachi head office. After that
interviews are conducted by the concerning authority and final documents are verified
and a call letter for a final interview is send to the candidates those who are selected are
recruited on the 6 months probation.

• Compensation:

The bank offers attractive compensation packages that vary from the designation and
experience of the employees. However when the International and The Local Bank
merged, the employees of The Local Bank thought that they were being compensated
unfairly and the employees of International bank of the same designation are paid more.
This led to the increase in the employees’ dissatisfaction level and different conflicts
were also arising at the same time due to this.

• Cultural Diversity:

Even though due to the merger of the two banks, one local and one international, a
difference in culture also led to the difficulty for the employees to adjust according to the
environment. The employees of International bank used to work in centralized
environment where even a minute decision is required to be approved by the head office
where as the employees of The Local Bank were working in decentralized environment.

• Decision Making:

The entire decision making was done by the board that consists of all the heads of
branches. Meetings are conducted monthly to get to know that current performance level
and which thing could be include improving those. Similarly any new business practice is
to be introduced it requires a change according to the Pakistani banking environment.

• The Competitors:

The major competitors are Faysal bank, Saudi Pak bank, and ABN Amro. Because that
these are also international bank prevailing in Pakistan. The main reason of the merge of
these two banks was to became strong enough in those banking field in which the
International bank is weak and The Local Bank is strong and in ordered to serve the
customers in a better way and more conveniently. Also it is predicted that central bank of
Pakistan is going to announce its new policy regarding bank that “FEW BUT
STRONG”. It means that in the future the numbers of banks will go on decrease and
only those banks will exist that are financially strong. So that’s the two strong banks
(International and local join there hands in advance).

The Local Bank (Islamabad branch now as Standard Chartered)

Mr. Saeed Hassan was working in union bank from about 11 years. Before he had a 5
year working experience with HBL. He’s an active 39 years old person who devoted his
entire life for serving to his bank. He’s fully committed and loyal to his work, very active
member and all the employees really feel comfortable under his supervision. Mr.Saeed
Hassan is the Operational Manager. Based on his skills, good leading and problem
solving skills he is still on his same post even after the merge of the two banks.

• Leadership Style:

Mr. Saeed Hassan was a visionary leader having an eye on the future perspective of
decision and actions. He believed in participatory management style. All the staff should
fully involve in every issue and matter, contracted by his branch as well as bank over all.

• The Staff:

It comprises of a combination of old, new, local and foreign employees and employers.
All the local employees are hired by the branch manager and he always looks that how
much flexible the other person is? Will he be able to adjust in the banking environment or
not?

• The Meetings:

Meetings are conducted under the supervision of bank manager so that it provides a
platform for an open communication with the employees of each and every level. They
discuss their general problems regarding the issues they are facing.
The Change of Management:
A change of management leads to an increase in employees’ dissatisfaction level and the
ratio of turnover are also increasing. According to the Operational Manager Mr. Saeed
Hassan most of the human concerns would remain the same. Mature people have more
positive attitude towards change. No major change would occur in respect to HR. Change
in working conditions and working hours would be there. It would be now better because
The International Bank is operationally better than The Local Bank. Working hours
would exceed to 6 hours which add an ease to their customers. More leaves for
employees, as International bank is a foreign bank so their Saturdays are off. Training
programs would be more enhanced because of their world wide postings. Now employees
are rewarded with competitive incentives to encourage them to achieve their potential
within the Bank.

As far as employees concerns, they feel confusion that either they completely lost
their identities also or they have so far as individually of The Local Bank would
vanish. A mixed reaction is seen from the employees. As they have a fear to loose their
identity, it’s a threat to increase turnover rate. Some are taking it positively and some are
unwelcoming it just because of doubts which are prevailing in their minds. Also the
employees have the fear that as the International bank is a global bank and have
comparatively different policies as compared to local banks. So again the employees have
a fear regarding this that might be they will not evaluated properly and hence will not get
rewards for this they feel that the chances of promotions becomes less for them. So again
it’s a problematic issue that would also lead towards decreasing the employee retention
factor and hence badly affects the organizations human assets.
 Has It Really Lost its Identity...?!!

Teaching notes:

Synopsis

The International Bank is the largest international Bank in Pakistan. The Bank has been
operating in Pakistan for over 140 years when it first established its operations in 1863 in
Karachi.

After the acquisition of Union Bank in September 2006, the new entity The International
Bank (Pakistan) Limited was incorporated in Pakistan on 30 December 2006 as a
subsidiary of Standard Chartered PLC.

The bank (as of January 1, 2007) has a network of over 115 branches across 22 cities in
Pakistan. The International Bank employs a workforce of over 9,000 employees in its
Pakistan operations. However its head office is in the Karachi and almost al important
decisions are made in the head office even n employee cannot open up an account
without taking approval from Karachi branch.

The major reason of the acquisition of TIB and The Local Bank is that the major shares
holders were not taking much interest in it and want to sell. Also as it is expected that
the Central Bank of Pakistan is going to announce its new policy “FEW BUT STRONG”
so that’s why the banks join there hands. But the problem arises by this acquisition is the
top management in the union bank seems to be satisfied but people at the operations level
are not satisfied they feel like they loose there identities. Because of which the decided to
leave the bank and the bank is facing a problem of employee retention and there
dissatisfaction.
Teaching Objectives:
• To make clear about the concept of HR philosophy ; Employee Retention
• To make clear that what can be the reaction of employees towards changing the
structure.
• To discuss about the ways how can be the employees be handled in such
situations.
• To discuss about the issues of cultural change and diversity.
• To discuss about the HR practices of the organization.

Discussion question:

1. What are the general criteria of recruitment and compensation?

2. How the cultural diversity leads to a change in the attitude of the employees?

3. What are the qualities of Mr. Hasan Razi that made him a successful leader?

4. If you are Mr. Hasan’s place, what would have you done in this scenario?

5. If you are one of the employees at the operative level how you would make Mr.
Saeed Hassan to realize about your problems and feeling about the change?
 Discussion question & Their Solutions:

1. What are the general criteria of recruitment and compensation?

The bank has its own company named Price solution Pakistan limited. The
candidates send there resumes to Price Solution and then send to Karachi head
office. Then with a through proper channel all the process is verified and
interviews has been conducted. As now with the merger of international and the
local bank, recruitment and selection criteria becomes comparatively more tuff.
Until and unless the competitive person who possesses all the necessary skills has
not found, they does not hire any contrary person. Compensation and benefit
packages of the bank are very attractive. But When the International and The
Local Bank merged, the employees of The Local Bank thought that they were
being compensated unfairly and the employees of International bank of the same
designation are paid more. So there is a need to implement a fair and equal pay
distribution system.

2. How the cultural diversity leads to a change in the attitude of the employees?

Cultural diversity is one of the important factor which leads to change in attitude
of the employees. As it’s a merger of a local and an international bank, so both
have their own behavior and working style which ultimately affects your
corporate culture. For example; employees of International bank used to work in
centralized environment where even a minute decision is required to be approved
by the head office where as the employees of The Local Bank were working in
decentralized environment. So they might face resistance to adjust with each
others.

3. What are the qualities of Mr. Saeed Hassan that made him a successful
leader?

He’s an active 39 years old person who devoted his entire life for serving to his
bank. He’s fully committed and loyal to his work, very active member and all the
employees really feel comfortable under his supervision. He has a participatory
leadership style.

4. If you are Mr. Hassan’s place, what would have you done in this scenario?

Based on his skills, good leading and problem solving skills he is still on his same
post even after the merge of the two banks. So if I would be in the place of Mr.
Hassan, I become very disappointed and more over as the culture changed the
organization rapidly, empowerment level came lower, so in these circumstances, I
was feeling so uncomfortable to prolong his job here so I would initially suggest
the top management that how to avoid these things e.g. turnover rate. If they
would not consider my suggestions and keep on implementing the same decisions
then I’ll decided to leave the bank.
5. If you are one of the employees at the operative level how you would make
Mr. Saeed Hassan to realize about your problems and feeling about the
change?
Well as the acceptance of change is very difficult thing especially where the
whole infrastructure would go to change, the employees at the operative level
really feel difficulty to realize its management that what problems and feelings
they are having for change. So as Mr. Hassan is a very participatory leader who
listen what the other person is saying so we on the behalf of employees go to him
and tell all the problems which we are facing and also feedback about the change.
Mr. Hassan is an operation manager they must understand the problems and needs
of empowerment at operative level to the employees so he would defiantly realize
it and forward it to top management.

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