Task 1
Management can be defined as the process through which organizations coordinate activities that serve the purpose of achieving defined business objectives (Linstead, Fulop and Lilley, 2012, pg. 14). In management, managers are responsible for the integration and coordination of activities in an organization. Besides, managers ensure efficient management practices since they oversee the activities of a company including the staff so as to ensure the company is kept on track to meet its goals. In the essay, Barclays will act as the case study. In addition, the essay will cover tasks such as; background information of the company, analysis of the organization structure of the company, effective modern management approaches, industry analysis and innovative strategic objective of Barclays Bank.
Barclays Bank is a British multinational transatlantic bank headquartered in London. The company operates in over forty countries and offers services such as personal banking, wealth and credit management, corporate banking and investment management. Barclays was originally a goldsmith baking business established in the year 1690 by Thomas Gould and John Freame in London. However, in 1736, Freame’s son known as James Barclay, became a partner and his name became a constant presence in the business (Barclays, 2018).
Barclays operated as a family company until 1896, when several banks in London including Barclays, united to form a new bank known as Barclay and Company limited. Since then, Barclays has grown to be a major bank globally, and as of 2018, the company has about 79,900 employees. Barclays Bank PLC acts as the trading name of Barclays as its registered in England and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Besides, Barclays is a public company that operates in the financial services industry. It also holds a market capitalization of about 36.48 Billion and total assets value of about 1.525 billion pounds (Ycharts, 2018).
Barclays is a global company and therefore, to manage its operations, it applies the functional organizational structure in order to ensure efficiency. An organizational structure refers to a framework of command that makes possible the application of process management whereby the activities of an organization can be organized, planned, directed and controlled (Mullins, 2016, pg. 596). Organizational structures are divided into; matrix, flat, functional, and divisional structures. Barclay’s organizational structure has changed over the years so as to be able to create an enhanced focus, bring together complementary business operations, and also drive efficiency in the group’s resilience (Barclays, 2018). For example, Barclays International and Barclays UK operated within the legal confines of Barclays Bank PLC. However, in April 2018, Barclays UK was made a legal entity which would cover the UK only. Therefore, Barclays has been able to focus more on its international clients within the Barclays Bank PLC.
Figure 1:1. Barclays Functional Organizational Structure.
Barclays has structured its organization as it prepares for Brexit. Since Barclays is a transatlantic bank, it understands that its European operations are essential to the strategic ambitions of Barclays international. Therefore, due to UK’s decision to withdraw from the European Union, the bank has redefined its organizational structure in order to preserve market access for its clients. With the Barclays Bank PLC division handling the international operations of the bank, this will be a game changer for Barclays. Barclays has centered the expansion of its existing subsidiary Barclays Bank in Ireland. Barclays has plans that in case the negotiations on Brexit go through and a hard Brexit is agreed on, the Ireland Bank will act as the legal entity that will serve the European Economic Area (EEA). It will help in preserving the market access for the European clients. The functional organizational structure has brought about advantages and disadvantages.
|
Advantages |
Disadvantages |
|
Company’s complimentary businesses have been brought more closely together |
Crippling of services due to absurd expectation on Brexit outcome. |
|
Sharper focus on client offering and preposition has been created. |
Barclays subsidiaries in Africa face struggles due to the organization structure. |
Task 2
Management approaches are essential in determining the best way to achieve an objective or goal in a company (Pettinger, 2012, pg. 4). Since management has evolved over the years, modern management approaches have been created so as to handle organizational objectives efficiently. Modern management approaches include; contingency, systems, classical and human relations approaches. On the classical approach, prominence is more on common principles of organization, formal structure and purpose. Secondly, the human relations approach puts emphasis the behavior of people, groups and social factors at work (Mullins, 2016, pg. 67). Thirdly, systems approach puts more emphasis on the prominence of the organization within the external environment and the socio-technical system. Lastly, on the contingency approach, there is no best design for the organization. Success is dependent upon a range of situational variables (Mullins, 2016, pg. 67).
With the awaited Brexit move, Barclays bank can adopt the contingency modern management approach. This approach is effective since the success of the organization is dependent on situational factors because it discards the universality of management principles. Since the Brexit outcome is not yet confirmed, Barclays can identify techniques which can assist it to perform well under the harsh market conditions. This is because the economic conditions can change from time to time. Therefore, using specific management principles may at times cause failure of business objectives.
This approach can be of help to Barclays managers since the approach contends that organizational phenomena is structured in a logical framework. Therefore, it can be easy for the managers to understand and interpret various situations hence being able to frame their management styles. This would help achieve business objectives easier. However, the contingency approach has both advantages and disadvantages.
|
Advantages |
Disadvantages |
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The approach is adaptive and flexible. |
When put in practice, the approach is complex to adopt. |
|
The approach widens the scope of leadership hence widening a manager’s understanding. |
The approach is not always feasible since there are different variables considered. |
Strategy refers to the patterns of decisions, objectives or purposes adopted by an enterprise to achieve a range of business goals (Nickols, 2016, pg. 1). Strategies can be used to serve both long-term or short goals depending on the objectives an organization or the period allowed for a particular project. On the other hand, strategic management refers to the systems approach of both identifying and measuring organizational performance as well as making changes as an organization moves towards its vision (Wells, 1998, pg. 4). Besides, strategic management is a continuous process and therefore, a culture of an organization can change if a need arises.
Porters five model forces framework refers to forces that evaluate the competitive attractiveness and intensity of a market (Martin, 2018). The framework is also used to analyze the corporate strategy of a company. The porters five model forces may be a useful strategic tool to Barclays in some ways. One, it may help to examine the bargaining power of customers as well as their effect on quality and pricing. Two, it may be essential in evaluating the threat of substitute services from competitors hence determining the pricing of its services.
Industry analysis of Barclays bank using the porter five forces framework.
To begin with, we have the bargaining power of suppliers. For Barclays, the power of suppliers is low since the bank has a high number of suppliers globally. Secondly, we have the bargaining power of customers. For Barclays, the customer’s power is low since the bank has millions of customers globally. Thirdly, we have the threat of new entrants. Since the banking industry is crowded and large capital costs are required for capturing the market, Barclays faces no threat of new entrants. Fourthly, we have competitive rivalry. Barclays faces intense competition from other financial companies such as Credit Suisse and ABN AMRO since the companies have a large market share. Lastly, we have Threats of substitute products. Barclays offers services that other banking companies provide. Therefore, customers may switch to alternatives.
Barclays has adopted the expansion strategy as an innovative objective. Barclays is expanding its Ireland Subsidiary bank and it is projected to become the legal entity for serving the European Economic Area in case Brexit affects the UK’s financial services (Barclays, 2018). This means that Barclays is already prepared in case there is a hard Brexit, Soft Brexit or Teresa May’s Chequers Brexit plan.
Conclusion
Barclays understands that hard Brexit could be a disaster and therefore, they are on target to prepare adequately for the outcome. The expansion strategy will be of assistance to them since they will be able to provide services to the Europeans without further interests. In addition, the contingency management approach will be crucial incase another European country decides to exit the European Union. This is because the economic climate is not straightforward hence evaluating situational variables will be essential in ensuring performance. However, the bank has the potential to grow due to the strategic management of its objectives.
References
Barclays (2018). Barclays. [online] Available at: https://home.barclays/who-we-are/our-strategy/preparing-for-brexit/ [Accessed 19 Nov. 2018].
Linstead S., Fulop L., and Lilley S. (2012) Management and Organization: A Critical Text. 2nd edition. London: Palgrave Macmillan. pp. 43-89
Martin, M. (2018). Porter’s Five Forces: Analyzing the Competition. [online] Business News Daily. Available at: https://www.businessnewsdaily.com/5446-porters-five-forces.html [Accessed 19 Nov. 2018].
Mullins L. J. (2016) Management and Organizational Behavior, 11th edition., Harlow: Pearson. (pp. 1-1013)
Nickols, F., 2016. Strategy, strategic management, strategic planning and strategic thinking. Management Journal, 1(1), pp.4-7.
Pettinger R. (2012). Management: A Concise Introduction. London: Palgrave Macmillan. pp. (1-89)
Wells, D.L., 1998. Strategic Management for Senior Leaders: A Handbook for Implementation. Department of the Navy, Total Quality Leadership Office. pp. 1-142
Ycharts.com. (2018). Barclays PLC Total Assets (Quarterly) (BCS). [online] Available at: https://ycharts.com/companies/BCS/assets [Accessed 19 Nov. 2018].
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