Free Custom «The Organizational Change» Essay Paper

Organizational change is defined as those actions or set of actions that alters in the way businesses carry out their organizational work. The change is usually planned by leaders of the organization or can originate from within the organization.  Organizations experience change as they move through life and this can happen for various reasons but whose goal is to better meet their goals and ensure that they grow. Change is necessary, but for the change to retain its relevance in the world of business, the change must be driven by knowledge (Darby, M et al., 2000). This paper will analyze organizational change at two banking institutions; Abbey National Retail Banking and Santander bank in the United Kingdom especially in their retail banking section.   

Santander UK is a leading UK personal financial services company and one of the largest providers of mortgage and savings in the UK. The company has had several organizational changes aimed at streamlining its services and bring fresh challenge to its 150 year history of banking. The bank bought Abbey in 2004 and added Alliance and Leicester to its portfolio in 2008. Abbey customers can now access the bank’s services at any Santander branches regardless of the group they are affiliated with as well as continue using Abbey cards until renewal when they will be changed. The bank thus was involved in a massive rebranding exercise and thus a shake-up at the bank was definitely forthcoming. Head of banking, Kevin Mountford said that the bank will be keen to maintain its position as a major retail banker in the UK and challenge any rivals by offering competitive rates unique to its customers (Merrison, 2010).

 

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In 2004, Abbey had been acquired by Santander in deals worth more than €1 billion and thus the need for organizational change. The deal created such a huge bank, in fact 10th largest by market capitalization in the world. Santander had the plans of expanding into Europe (Hitchins, 2005). Abbey National has about 750 branches across the UK with more than 1,400 portfolio sites in all with many major official sites, call centers and IT centers. In order to guarantee operational and strategic flexibility, the company sold its entire property portfolio to a third party. The deal was a demonstration of how Abbey National was innovative to maintain and increase efficiency in business. The project was a major step in the bank’s bid to alter its property necessities.    

As at April 2011, Santander bank which is part of the Santander group announced a sovereign bank restructuring in its retail business: a new organizational structure that will integrate retail and small businesses bank activity. It was announced that Nuno Matos who was the managing director of retail banking will take a new position of the bank’s all retail businesses. The move was taken to centralize on the oversight of all retail and small business product development, sales distribution and small business development at the bank. Matos is a member of the bank’s management executive committee, a member of the board of directors and he reports to the company’s president who also doubles as its CEO Mr. Jorge Moran. According to the president, the organizational changes reflect the importance Retail Business and the bank’s quest to expand into new markets outside the UK (Sovereign Bank). The reasons for the organizational change at the bank was said to be due to poor ratings by retail customers who voted the bank as the worst in retail services.

According to a retail programme director, Tony Teague, change is in the works at Abbey National Retail Banking. Tony who heads a strong team of 12o managers shares his dream of building a world class management team. He is poised to use techniques that will help him transform programmes at Abbey. The techniques, he believes will help the company improve its business performance and thus be at a position to gain competitive advantage in an era of global economics and e-commerce. Dinsmore et al. (2006) says that the abbey national retail change program was a successful example of a bank that went under radical transformation through integrated project management with strong sponsorship (234).

A founder of virtual business school pentacle, Dr. Obeng, based in the UK helped set the management master classes for the managers who were involved in retail transformation and they were later followed by the project managers. The managers were introduced into delivery, planning, stakeholder and implantation management. The Health Manpower Management reports that a recent survey of the bank indicated that its executive managers believed that they operated from a common set of values that were paramount and gave them a competitive advantage. Evidence from the U.S. further supports the assertion that companies driven by value are very successful than any other company.

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Reindorp says that within a span of 10 years, Abbey had increased its employees from 400 to 4,000 and thus it was important to concentrate on some areas. And with more projects to be delivered by the bank, they had to change the way the bank works. According to Obeng, to deliver the projects in time and this can be done by focusing solely on the task at hand, to focus on the people instead of the task or to grief and strife in the team (which is not a good option). Therefore, to make it a success, companies have to have a clear vision and mission, clear set of objectives and a defined but flexible strategy.

For Santander bank, it stands out for its international expansion that started in the 1980s by small acquisitions and alliances. Such changes have to be very strategic as they can change the very nature of the organization (Fasnacht 147). Mangers then have to know that future oriented and strong leadership skills are key to surviving strategic change especially in uncertainty phases because it takes time to create an organizational conduct (48). According to Guillén’s, research shows that the rise to prominence of Santander bank was in response to an increasingly a competitive environment in the UK. Experience in retail banking allowed the bank to prosper during this time. During the financial crisis, most banks were affected but Santander so far did relatively well. It is argued that the bank’s strong position attributable both to its regulations and the banks well established reputational management risk helped it survive.

Conclusion

Different Organizations experience change as they move through life and this can happen for various reasons but whose goal is to better meet their goals and ensure that they grow. Organizational involves all those actions or set of actions that alters in the way businesses carry out their organizational work. The change is usually planned by leaders of the organization or can originate from within the organization. We have seen that although change is necessary, it must to retain its relevance in the world of business and ought to be driven by knowledge. Santander had to reorganize itself to attract and be able to retain its customers banking on its 150 years experience on the business. A shake up was therefore necessary to give the bank efficiency as a global bank and a challenger to established names in the financial sector.