HBL established operations in Pakistan in
The economic policies
1947 and moved its head office to Karachi.
With a domestic market share of over 40%,
HBL was nationalized in 1974 and it
continued to dominate the commercial
banking sector with a major market share in
inward foreign remittances (55%) and loans
to small industries, traders and farmers.
International operations were expanded to
include the USA, Singapore, Oman,
Belgium, Seychelles and Maldives and the
Netherlands.
On June 13, 2002 Pakistan's Privatization
Commission announced that the
Government of Pakistan had formally
granted the Aga Khan Fund for Economic
Development (AKFED) rights to 51% of the
shareholding in HBL, against an investment
of PKR 22.409 billion (USD 389 million).
On February 26, 2004, management control
was handed over to AKFED. The Board of
Directors was reconstituted to have four
AKFED nominees, including the Chairman
and the President/CEO and three
Government of Pakistan nominees.
PRIVATIZATION:
When HBL was privatized in 2004 at the
price of Rs.22.4bn. Some major issue that
AKFED is facing during privatization
process is due to a major change in its
structure and policies. This change was
necessary to overcome key problems Such
as:
Over-staffing:
Before privatization they have more than
31000 employees and they intended to
reduce this number to 27000 employees with
the help of its new policies.
Political Pressure:
They also facing political pressure as before
privatization they are under the government
policies
Before privatization HBL was highly
influenced by the governmental policies as it
was the largest financial institute under
government control.
of the country were also affecting the bank’s
policies. The problem occurred mainly
because of the unstable political situation in
Pakistan which was causing the huge
fluctuations in governmental policies
resulting in the inconsistency of HBL’s
policies which led to the inefficient results.
The motive of privatization was to make
HBL as independent as possible.
Drastic transformation from public owned to
private company gave origin to resistance
from the employees as a sudden change in
structure was unacceptable to them as they
were used to work with previously defined
policies and system. It was hard for the
employees to accept the new policies and
overall system, they resisted as they felt that
new policies were not employee friendly and
this clash of interest ultimately resulted in
conflicts.
Example: HBL’s re-entrenchment program
was one of the bones of contention between
the employees and the management. HBL’s
aim was to create space for more non
operational non clerical, technology savvy
staff to generate more effectiveness they
aimed to remove the permanent clerical staff
and get them on contractual basis. This
sudden change generated the feeling of
uncertainty and disrespect among the
employees and resulted in a huge retaliation.
HBL however provided them with
compensation, packages and even provided
them new jobs in other organizations but
despite these efforts to gain the satisfaction
of employees failed to gratify employees
and there are still few cases in litigation.
In 2002: HBL employees perceived that it is
their right that their child / children get
employed at HBL but HBL followed merit
based system and they were interested in
hiring skilled employees to satisfy the
company’s as well as stake holders’
expectations.
The dispute resolution at HBL does not
assure management that employees can
safely and effectively challenge
management. This is because such an act is
not possible with employees who do not
have enough resources or power to raise a
voice making them insecure of their own
jobs. moreover employees have a great
degree of fear in their minds of authoritative
management situation which does not aim at
collaboratively discussing issues and then
implementing an offer or demand rather just
order employees in shape of surprises or
written messages .therefore, employees do
not have a say in their own organization and
this fear and lack of understanding with
HBL’s management leave most of the
conflicts un surfaced and unresolved
portraying a fake picture of happy and
content employees towards management.
LACK OF EFFECTIVE
COMMUNICATION:
Lack of Effective communication is another
problem that makes dispute resolution at
HBL inappropriate and unsatisfactory. A
classic example was seen at two events.
Firstly, due to lack of communication in
HBL among departments regarding the code
of ethics and specifically organizational
culture, most managers of HBL Sukkur
branch, were being seen to wear shalwar
kurta and having tea while sitting on the
floor giving rise to an immediate clash of
opinion between the directors and those
managers. Therefore, no or
miscommunication left un-uniformity
among the different branches of the same
bank.
Secondly, on the occasion of employee
redundancy due to downsizing, employees
got mixed messages of them being departed
from their organization in the form of
rumors and ‘grapevine’. Hence, this resulted
in lack of trust in management for the
employees who were being affected and also
for those who were not making them feel the
next to become the culprit of management
sudden decisions and surprises. Such
distorted communication channels lead to
employees giving different meanings to the
same picture since every organization
comprise of diverse mental filters causing
more conflicts at personal level between
employees
due to miscommunication in the dispute
employee misunderstand the facts and
further resistance arises when employee
have incorrect perceptions and
misunderstandings about whether a change
is good or bad for them. When sometimes
management shared a little bit information
about the change, employees also did not
believe what they hear because of a lack of
trust in the management of HBL.
Quatotions
The full privatization means the company will
have complete freedom of management.
Yoku Ihara
"Problems are only opportunities in work
clothes." -Henry Kaiser