Ross Abernathy and the

Frontier National Bank

Situation Analysis
▪ Frontier National Bank was once the biggest and the most
profitable banks in its region. A conservative bank which
has always been led by the founding family members, it
failed to update its methods of doing business adequately
and is now suffering from falling profitability, inadequate
capital and declining liquidity. The Comptroller of the
currency has hinted a merger of the bank with one its
younger, more dynamic and better-managed competitors.
The Board, in response to this proposal, appointed Ross
Abernathy, a well-known banker who has proven
credentials in turning around businesses, as Frontier’s new
CEO and Chairman.
Situation Analysis
▪ Abernathy was clear about what needed to be done to
revive the bank. Frontier lacked large corporate business,
pension-fund business and international business, but had
assets worth $ 7 billion and close ties with leading banks
abroad. Ross needed a team to support him to execute his
plans. However, he was not impressed by Frontier’s
executives and its work culture. He zeroed in on three
options.
1) A new team of external professionals not known to him,
but with proven credentials.
2) A team from the existing employees of FNB.
3) A team of professionals with whom he has already worked.
Situation Analysis
▪ At FNB, the retirement age was 70. Ross didn’t find the
existing workforce to be spirited or performance-driven,
although he acknowledged their technical capabilities.
However, building a team out of these people would
require a lot of time and effort. Ross could create a team
out of his old cronies in Chicago. Such a team would be
having Ross’s trust, knowledge of Ross’s methods, and
some proven credibility. He could also create a team of
people who are not his cronies but have proven their
potential in the banking industry. For hiring such a team,
no one would be ever able to point fingers at Ross.
Decision Problem & Alternatives
Available

Problem Statement:
▪ To form a team that would help Ross to turn around FNB.

Alternatives:
▪ A- Inside Team.
▪ B. My Team.
▪ C. Outside Team.
 Evaluation Criteria

Proven
Goal Oriented Trust
Credentials
Evaluation of Alternatives

Alternatives Inside Team Outside Team My Team

Criteria

Goal-Orientation Very Low High Very High

Credentials Low Very High High

Trust Low Moderate Very High