Organisational Structure And Cross Cultural Management Icici Bank Commerce Essay

Organisational Structure And Cross cultural Man daysment Icici marge Commerce EssayThis story explores the linkage between organisational social social system and cross-cultural counsel. It suggests that a mobile and continuously evolving structure enables effective cross-cultural management. In support of this, the paper reports on the experience of the second largest avow in India and the largest private sector situate in India by merchandise capitalization. The coin bank has a net break by of 2,509 discriminatees and 5,808 ATMs in India, and has a presence in 19 countries, including India. ICICI chamfer offers a broad(a) range of banking products and financial services to corporate and retail customers through a variety of lecture transmit and specialization subsidiaries and affiliates in the atomic number 18as of investment banking, life and non-life restitution, venture capital and asset management. ICICI banking concern is excessively the largest issuer of c redit cards in India. ICICI banking concerns sh ars are listed on the stock exchanges atBSE,NSE,Kolkataand Vadodara (formerly Baroda) itsADRs trade on the smart York fall supersede(NYSE).The banking concern is dining in oerseas markets and has the largest international balance sheet among Indian banks. ICICI curse now has wholly dedicate subsidiaries, branches and representatives forces in 19 countries, including an offshore unit in Mumbai. This includes wholly owned subsidiaries in Canada, Russia and the UKoffshore banking units in Bahrain and Singapore, an advisory branch in Dubai, branches in Belgium, Hong Kong and Sri Lanka, and representative offices in Bangladesh, China, Malaysia, Indonesia, southmost Africa, Thailand, the fall in Arab Emirates and USA. Overseas, the shore is targeting the NRI (Non-Re human facent Indian) population in particular.ICICI reported a 1.15% rise in net dough toIndian rupee1,014.21 crore on a 1.29% increase in total income toIndian rup ee9,712.31 crore in Q2 September 2008 over Q2 September 2007. The banksCASA ratioincreased to 30% in 2008 from 25% in 2007.ICICI aver is one of the plentiful Four marginsof India, along withState assert of India,Punjab National BankandCanara Bank its main competitors.Introduction internationalistic handicraft houses are increasingly operating with multicultural thrash forces. One key to competitive gain for these business houses is effective cross-cultural management. Even conservative business houses such as traditionalistic banks are finding that the thrust of arguing requires them to manage diversity in their reportforces. An example of one such traditional bank is ICICI Bank. ICICI Banks performance and aspirations are under(a)pinned by a toughened organizational culture of dynamism, meritocracy, excellence in execution and high standards of professional integrity that acquire helped us become an industry leader. The bank runs a leadership development program which aims to build leadership talent in spite of appearance the organization. The program attempts to splash into the potential drop drop of employees and develop them into global leaders. It has in like manner extended its role beyond economic growth concerns to directly take part in the pursuit of human development.CROSS- CULTURE MANAGEMENTSmiths Work ViewSmith (ICICI MD) and his original team up did well. ICICI prospered. Their 8-8 banking service set a new benchmark in the industry BUT its grown as well as vast. Smith is surrounded by people who do not present the true status of the cripple retail dissatisfactionSmith has become risk averse and has appointed people whove been around him for eld, as heads of divisions. They do not have the same drive and enthusiasm as Smith and hence the stagnation. The need of the minute is to expand infrastructure, bring in younger people in the top management (people in 30s and archeozoic 40s). and ofcourse until then, ICICI merchantma n be avoided.Work culture at ICICI BankIt is a tech-savvy, non-hierarchical, work surround where former(a) responsibility and independent decision-making enable each employee to reach his/her potential. Coupled with this is a strong performance management placement that has built a meritocracy where high performing-high potential individuals are duly rewarded.Employees SatisfactionEven during break ICICI Bank did not cut back on employees But instead announced a policy of No promotion No bonus but no attrition too This policy is helping twain purposes for ICICI bank, cutting down employee cost and employee retention.Employees also feel that as an employer the bank extends a banding of authority along with justified accountability.Employees perceived the working culture at ICICI bank to be unfeignedly collaborative in nature. It can be owed to the fact that the bank is highly segmented with a multitude of overlapping and mostly distinct roles and responsibilities.The Employ ees also considered that ICICI bank offers them with a lot of financial benefits ranging from your family health insurance to your kids school donations.But certain concerns in terms of Lack of sequence for fulfilling social responsibilities And more sales oriented culture are there.Dress CodeICICI Bank would issue dress to be ill-defined by all Progamme Participants. This dress, as laid down, would be worn for all classes and former(a) nonionized activities. savings bank the time the participants are issued with the dress they would abide by the quest dress code (a) Gentlemen(i) Formal office trousers and shirts with a tie. Most acceptable colours for trousers would be black, brown, blue and grey. Preferable pastel colours for shirts.(ii) Suits for nut occasions.(iii) Formal footwear(iv) Well groomed.(b) Ladies(i) Silk or cotton (starched) sari(ii) Formal western wear (formal trousers/skirts with a top or a jacket) or salwar kameez.(iii) Formal footwear.(iv) Well groomed.Rol e Of Women In ICICI BankChanda Kochhar knew zippo about retail banking when she took over ICICI Banks fledgling retail operations in 1998 at the age of 36. That made Citibank and separates think ICICI was only doing a small flirtation, she says, and they underestimated the growth in the market. They also underestimated this smart, assertive woman, cognize for her colorful saris and carefully matched jewelry.Today ICICI, Indias second-largest and fastest-growing bank, is the market leader in retail banking, with more than 15 billion customers, accounting for more than a third of Indias total retail credit. And Kochhar No. 37 on this years list of the worlds most powerful businesswomen added corporate banking to her portfolio in April and is a leading candidate to become managing coach and chief executive of the Mumbai bank when the job becomes vacant at the end of 2008.That a woman should get hold of such success in a male-dominated industry, in an economy where women often p lay subservient roles, tycoon be a surprise at any other Indian bank. ButICICI(Charts) has made a name for itself by recognizing female talent. Three of the five members of the banks executive board are women, as are 13 of its 40 top managers and one of Kochhars two rivals for the chief executive job Shikha Sharma, the 47-year-old managing director of ICICI Prudential.in one case dubbed the petticoat brigade by Mumbais chauvinistic banking fraternity, these highly competitive women have helped build a business inhabitn for its aggressive, risk- fetching attitude and its growth from a sleepy, bureaucratic development institution into Indias most diversified and customer-oriented bank. to the highest degree all the leaders we have picked have succeeded, and most have been women, says K.V. Smith, ICICIs CEO, who has been responsible for empowering them.Kalpana Morparia, a lawyer and the other joint managing director, retires next May. Her peers at other banks say she has been the b ackbone of ICICI for the past ten years, looking by and by the raising of funds and the regulatory environment. She says she stayed at ICICI, when she could have earned far more elsewhere, because the empowerment gives an entrepreneurial framework, where you have all the support systems.Sharma, other aboriginal achiever and fast shapeer, admits she is fiercely competitive. When she was 33 she headed ICICIs side of a securities joint venture with J.P. Morgan, initially knowing little about markets. That led to a two-year stint at Morgan, after which she ran ICICIs corporate planning discussion section and started its retail banking operation. In 2000, knowing nothing about insurance, she set up the joint venture with Britains Prudential, which is restricted by government policy to a 26% equity stake and has only a minimal management presence. That leaves Sharma in charge of Indias largest private-sector insurance company, with 12.5% of the market. She says women are reliable at succeeding without prior experience because they have smaller egos than men, and its easier for me to say, Hey, I know nothing about this. Technology DepartmentVery aggressive Bank in terms of adopting the lift out praxiss, technology and takng business for a young entrant a very good opportunity to learn and growExtreme work instancys makes one to learn to respond quickly and efficiently and absorb pressure a trait useful for the futureSenior management backing for new initiatvesFairly transperant executing Appraisal systemOpen to changes in department for employees, allowing employees to growVery professional, Good place to workIt need only to fail product, brand awareness is high, very strong in systems, minimum paperwork, good training opportunities, opportunities given to do varied things other than the regular job. Excellent place to learn merchandising and strategy. Unearthly working hours usual. Less involvement from HR regarding welfare of employees, some open manag ers tend to press out down people who dont perform instead of hand holding them, demotions in roles very common, even if you are a good performer. Senior Management care more for your employees, they are more than just another email id Find ways to understand whats happening on the field, its very different from whatever pictorial matter you haveFlexibility in terms of changing job profiles power and authority assigned at each level is very motivating employees feel very powerful in ICICI as compared with other organisations.Literature ReviewThe author reviews the theoretical and empirical literature to examine the traditional perception that the following trade-off exists between economic efficiency and stability in the banking system a competitive banking system is more efficient and therefore important to growth, but market power is necessary for stability in the banking system. That this trade-off exists is not clear. Market power can have positive implications for efficiency, and the potentially negative implications of opposition on stability may be manageable through prudential regulation. Neither extreme (perfect competition nor monopoly) is likely ideal. Rather, it may be optimal to facilitate an environment that promotes competitive behaviour (contestability), thereby minimizing the potential costs of market power while realizing benefits from any residual that remains. It can be very catchy to assess the contestability of a banking market. Recent work suggests that the number of banks and the degree of concentration are not, in themselves, adequate indicators of contestability. Other factors play a strong role, including regulatory policies that promote competition, a well-developed financial system, the effects of branch networks, and the effect and uptake of technological advancements.Classical views of organizational structure have emphasized the perdurable arrangements in spite of appearance an organization. Jackson Morgan (1982) define organizational structure in line with the classical view as the comparatively enduring allocation of work roles and administrative mechanisms that creates a pattern of inter-related work activities, and allows the organization to conduct, coordinate, and control its work activities. This definition of organizational structure with the caveat that work arrangements need not always be relatively enduring.Early writers on the subject, including Taylor (1911), Fayol (1930), and Weber (Gerth Mills, 1958), had stipulated an ideal-type of organizational structure for all situations. In the late sixties and passim the 1970s, the one best form fits all view was replaced by the contingency approach. A contingency office such as that of Lorsch Morse (1974) prescribes that an alignment should exist between structure, task, technology, the environment, and people. This approach takes into account that structures can be conciliative and responsive to change. Contingency theorists such as D uncan (1977), Lawrence Lorsch (1967), Burns Stalker (1961), Minzberg (1979), Miles Snow (1978), and Galbraith (1973) recommended that organizational structure should be either entire or mechanistic depending on the nature of the external environment. A steadfast external environment called for a mechanistic structure, while a turbulent environment required an organic structure one plastic enough to evolve. The power of the contingency theory was validated in two countries from the non-English speaking world by Boseman Simonetti (1975), indicating that non-traditional notions of structure apply in a variety of cultural contexts.In the past twenty-five years several researchers have made a case for viewing organizational structure in terms of transient features rather than durable ones. Duncans work (1977) was among the earliest in this genre. Duncan advocated a bifurcated initiation and implementation structure for creative organizations. It then became possible to envisage s tructures that were bifurcated in other ways, such as those that have organic and bureaucratic structures existing conterminously as described by Peterson (1981). Here, the segment of the organization that engages in creative activities is separated from the rest of the organization, which is essentially bureaucratic. Just as creativity exerted a pressure for organizations to adopt transient structures, lately, knowledge generation and transfer in high information-intensity and focal ratio contexts have likewise exerted pressures for looser structures. Miles Snow (1995) have argued for flexile networked structures for such organizations. In their literature review piece, shaver McGrath (2001) too note how continuously changing structures, are de rigour in knowledge based organizations.Coulson-Thomas (1991) has predicted that corporations dealing with complex operations would opt for flatter and more fluid organizational structures that can develop into networks, as well as ha ve great flexibility and responsiveness to customer needs. This would be accompanied by a management approach which pushes organizational hierarchy to individuals, who require access to expertise and specialists.Pepper (1995) ripe(p) an even more dynamic perspective on structure, which incorporated such elements as working relationships, actual experiences of members, and interpretations of occurrences. Pepper suggested that structure should be treated like a document that is authored by organizational members.Weick (1995) also postulated a dynamic view of structure. Weick talked about enacting organizations which are a function of organizational members preferences. He observed, Organizing is a continuous flow of movement that people try to co-ordinate with a continuous flow of input. victorious off from the notion of enactment, is that of inverted firms. Anderson, Finkelstein, Quinn (1996) have recommended that hierarchies be dispensed with in certain contexts instead, structur es be organised in the form of patterns tailored to specific needs.Also closely related to the notion of enactment is that of extemporization. improvisation connotes flexibility of form, an area a few contemporary researchers are presently discussing. Volberda (1999) holds that the extent of flexibility of a firms structure should be aligned to the extent of turbulence prevalent in its environment. Additionally, a firm may on the whole be averagely flexible but have some(prenominal) a unit that is super flexible and a unit that is extremely rigid, functioning inwardly it. Gold Hirshfeld (2005) have demonstrated how the principles of improvisation underlying jazz music can be employ to promote strategic renewal within organizations.McHugh Wheeler (1995) described a particularly fluid structure called holonic network. This is a set of companies that acts integrated and organically it is constantly re-configured to manage each business opportunity a customer presents. Each co mpany within the network go forths a different process capability and is called a Holon. This capacity for frequent re-configuring has been termed more belatedly by Eisenhardt Galunic (2001) as architectural innovation. Here, the different capabilities of an organization, including its structural components are re-combined in various ways to stir performance.Table I Consider how our view of structure has changed over time IFrom durable structures to flexible structuresTheoristEssence of TheoryPeriodWeber, Taylor, FayolOne best form of structure that is largely unvarying, durable and bureaucratic. Focus was on establishing order and maintaining predictabilityEarly 20th CenturyDuncan, Lawrence Lorsch, Burns Stalker, Minzberg, Miles Snow, and GalbraithStructure should not be consistently unvarying. A stable environment necessitates a mechanistic structure, while a turbulent environment calls for an organic and flexible structure. The type of structure adopted should be continge nt on the nature of the environment.1960s 1970sDuncan, PetersonA creative organization should have certain elements of structure that are flexible.1970s early 1980sChild McGrath, Miles SnowA knowledge generation and transfer organization should have a flexible structure.1990s early 2000sTable II Consider how our view of structure has changed over time IIDifferent imperatives for flexible structuresTheoristEssence of TheoryPeriodCoulson-ThomasComplex, high-performance organizations require flat, fluid, flexible structures that enable responsiveness to customer needs. These structures can develop into networks.1991McHugh WheelerComplex, high-performance organizations require a fluid structure that enables re-configuration suited to each business opportunity that arises. These structures can develop into colonic networks.1995Pepper superior organizations require flexible structures capable of incorporating such features as actual experiences of members, etc. These structures ena ble employee participation in and ownership of organizational processes1995Weickhigh-performance organizations require flexible structures that enable employees to enact their work-related preferences. These structures promote efficiency and employee participation.1995Anderson, Finkelstein, Quinn superior organizations sometimes require inverted structures that enable the removal of hierarchies. These structures can be tailored to specific needs.1996VolberdaHigh-performance organizations should be internally differentiated so that units have varying extents of flexibility. This promotes efficiency and alignment with the environments demand.1999Eisenhardt GalunicHigh-performance organizations should stress the architectural innovation capability of its structure. This enhances performance.2001Gold HirschfieldHigh-performance organizations require structures that are capable of improvisation. This enables strategic renewal.2005 tone at organizational structure in terms of a histor ical perspective is useful, since it underscores the fact that its components do not have to be durable. Thus due to several imperatives, organizational structures are assuming flexible forms. Cross-cultural management can be a further reason why organizations should adopt flexible structures with transient features. That personnel can have preferences for structural forms that reflect their cultural heritage is indicated by the INSEAD field of battle of Stevens (cited in Hofstede, 1991).In this take up, MBA students from Great Britain, France and Germany were presented with a caselet about and interpersonal problem in a corporation. The students were pass to present a solution that involved re-engineering the structure. The interpersonal problem was that two department heads could not visualize eye to eye. The British students diagnosed the problem as cosmos one of poor communication between the department heads. The problem could be resolved, according to the British students , by providing training in interpersonal skills to the feuding department heads. The french students suggested that the problem be referred one level up to the president of the corporation. The German students recommended that there should be greater clarity regarding the roles, responsibilities, and spheres of activity of the two department heads. These roles, etc. the German students opined, should be described and specified unambiguously.Stevens study specifically suggests that flexible structural forms may be appropriate in cross-cultural management contexts. Changs (2002) paper written notes that culture has implications for job design. Thus, managers from individualistic ethnic cultures will value personal accomplishments. Meanwhile managers from collectivist cultures would place a premium on working harmoniously with others. The challenge is to design structures so that managers from both types of cultures can work productively together.We present here the experience of ICI CI Bank as indicative that a fluid, flexible structure enables cross-cultural management. The fluid, flexible structure at ICICI Banks enabled managers from different cultures (collectivist and individualistic, high power-distance and low power-distance, etc.) to work synergistically with each other. Flexible structures obviate the sense that a structure or work pattern is being imposed by one cultural group on others. It provides a mechanism whereby culturally different work patterns can be reconciled in a meaningful fashion. (Reconciliation is a term used by Trompenaars (1993) for the process he developed to work through the tensions created by cultural differences.)RESEARCH attackThis study constitutes an exploratory effort. Its purpose is to examine how a fluid, flexible organizational structure facilitates cross-cultural management. Huberman Miles (1994) have recommended that when a deeper understanding of management contexts is sought, soft research designs may be appropria te. Similarly, organization theorists like Marjoribanks (2000) and Vogel (1996) have deliberately used fine-grained case studies to capture how institutional diffusion occurs. The present study employs qualitative methods and a substantive case study to observe and report the co-evolution of a fluid, flexible organizational structure and cross-cultural management practices.ICICI Bank has a vast and a well-connected network of branches offering scarce banking and other financial services to its customers. You need not look far for anICICI bank branchand can get all the relevant information regarding the address, phone number and other information about the adjacent branch of ICICI bank in your area using an online tool of branch locator to locate an ICICI bank branch. The ICICI bank has established its branches in easily accessible market places across India enabling its customers to avail a variety of retail banking products offered by the bank.The ICICI bank branches are spread t hroughout India and the world having1,488 branches both in India and18countries. The customer care executives at branches are willing to help in order to provide assistance in all sorts of bank related products and services. The current office timings of ICICI bank branches are 8AM-8PM which has been proposed to 9AM-6PM.The bank has spread its reach far across the globe with branches inCanada, USA, Singapore, Malaysia, Thailand, Sri Lanka. It has established its presence in places such as Kuala Lumpur, San Francisco, San Jose, New York, Californiaetc.As the bank is playing an important role in countrys Political, Socio- economic, Technological environment as it provides many facilities to many customers throughout many countries and future plans are to expand the branches across the borders to meet the pace of Globalization and contribute to maximum Optimum utilization of resources in a well structured manner.ICICI BankBackground in briefIn 1955, The Industrial Credit and investmen t flock of India hold (ICICI) was incorporated at the initiative of World Bank, the Government of India and representatives of Indian industry, with the objective of creating a development financial institution for providing medium-term and long-term project financing to Indian businesses. In 1994, ICICI established Banking sight as a banking subsidiary. Formerly known as Industrial Credit and Investment Corporation of India, ICICI Banking Corporation was later renamed as ICICI Bank Limited. ICICI founded a separate legal entity, ICICI Bank, to undertake normal banking operations taking deposits, credit cards, car loans etc. In 2001, ICICI acquiredBank of Madura(est. 1943). Bank of Madura was aChettiarbank, and had acquiredChettinad Mercantile Bank(est. 1933) andIllanji Bank(established 1904) in the 1960s. In 2002, The Boards of Directors of ICICI and ICICI Bank approved the reverse merger of ICICI,ICICI Personal Financial Services LimitedandICICI Capital Services Limited, into ICICI Bank. After receiving all necessary regulatory approvals, ICICI integrated the groups financing and banking operations, both wholesale and retail, into a single entity. At the same time, ICICI started its international expansion by opening representative offices inNew Yorkand London. In India, ICICI Bank bought theShimlaandDarjeelingbranches thatStandard Chartered Bankhad inherited when it acquiredGrindlays Bank.In 2003, ICICI opened subsidiaries in Canada and the United Kingdom (UK), and in the UK it established an alliance with Lloyds TSB. It also opened an Offshore Banking Unit (OBU) in Singapore and representative offices in Dubai and Shanghai. In 2004, ICICI opened a representative office in Bangladesh to tap the extensive trade between that country, India and South Africa. In 2005, ICICI acquired Investitsionno-Kreditny Bank (IKB), a Russia bank with about US$4mn in assets, head office inBalabanovoin theKalugaregion, and with a branch inMoscow. ICICI renamed the bank IC ICI Bank Eurasia. Also, ICICI established a branch inDubaiInternational Financial Centre and inHong Kong. In 2006, ICICI Bank UK opened a branch inAntwerp, in Belgium. ICICI opened representative offices inBangkok,Jakarta, andKuala Lumpur. In 2007, ICICI unify Sangli Bank, which was headquartered inSangli, inMaharashtraState, and which had 158 branches in Maharashtra and another 31 inKarnatakaState. Sangli Bank had been founded in 1916 and was particularly strong in rural areas. With respect to the international sphere, ICICI also received permission from the government ofQatarto open a branch inDoha. Also, ICICI Bank Eurasia opened a second branch, this time in St. Petersburg. In 2008, TheUS Federal Reservepermitted ICICI to convert its representative office inNew Yorkinto a branch. ICICI also established a branch in Frankfurt. In 2009, ICICI made huge changes in its organization like excretory product of loss making department and re-stretching outsourced staff or renegotiate th eir charges in consequent to the recession. In amplification to this, ICICI adopted a massive approach aims for cost control and cost cutting. In consequent of it, payment to staff was not increased and no bonus declared for 2008-09.On 23 May ICICI Bank announced that it would merge withBank of Rajasthanthrough a share-swap in a non-cash deal that values the Bank of Rajasthan at aboutIndian rupee3,000 crore. ICICI announced that the merger expand ICICI Banks branch network by 25%.On 18h October 2010, ICICI will inaugurate I-Express, an instant cross-border money transfer option for Non-Resident Indians (NRIs). This service will be available through the ICICI Banks select partners in theGulf Cooperation Council.ICICI Bank is Indias second-largest bank with total assets of Rs. 3,634.00 billion (US$ 81 billion) at March 31, 2010 and profit after tax Rs. 40.25 billion (US$ 896 million) for the year ended March 31, 2010. The Bank has a network of 2,509 branches and 5,808 ATMs in India, and has a presence in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.ICICI Banks equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).Controversies over timeICICI Bank has been in focus in recent years because of assert harassment of customers by its recovery agents. Listed below are some of the related news linksICICI Bank was finedIndian rupee55 lakh for hiring goons (known coloquially as goondas) to recover a loan. Recovery agents had ,allegedly, forcibly dragged out a early days (who was not even the borrower) from the car, beaten him up with iron rods and left him bleeding as they drove away with the vehicle. We hold ICICI Bank guilty of the grossest kind of deficiency in service and unfair trade practice for breach of terms of contract of hire-purchase/loan agreement by seizing the vehicle illegally,No civil society governed by the rule of law can brook such kind of conduct express Justice Kaleem, who was born in Laddhawala, Muzaffarnagar is the president of the consumer commission. 11, 12, 13, 14, 15, 16, 17, 18Four ICICI loan employees arrested on theft charges in Punjab. 19ICICI Bank told to payIndian rupee1 lakh as compensation for using unlawful recovery metho ds. 20RBI warns ICICI Bank for coercive methods to recover loans. 21ICICI Bank drives customer to suicide Four men including an employee of ICICI Bank booked under sections 452, 306, 506 (II) and 34 of IPC for abetting suicide. According to the suicide note they advised him, If you cannot repay the bank loan, sell off your wife, your kids, yourself, sell everything at your home. Even then if you cannot n