Wednesday, May 6, 2020

Analysis of Barclays Bank in Business Environment

Question: Discuss about the Analysis of Barclays Bank in Business Environment. Answer: With major mergers and acquisitions of a number of Quaker banks, Barclays entered into the investment banking forum. In the view point of Pearl and Rosenbaum (2013), entrant of new companies in the market is good for competition but with the increasing entry of investment banks in US, Barclays failed to match the pace and intense competition of the market and had to face critical issues. Barclay had to face great difficulty in combining the conventional and investment banking coherent model. The Bank was also pointed out towards mis-selling of payment protection insurance by major retail banks and misleading of inter-banking lending rate generated claims of practicing unfair means of profit (Johnson et al. 2013). This action drew great attention and criticism of public that ultimately caused trouble to the Bank. Failed to meet organizational culture: There was a change in the management of the Bank as well. The new CEO was not capable enough to comply with the organizational culture. The newly made CEO was an investment banker and a major deal maker who possessed unimaginable talent but could not meet the expectations of the employees working in the organization. In other words, the managerial quality of the new CEO could not match the psychological perspectives of the employees (Johnson et al. 2013). No investment or positive efforts were made towards improving the culture of the organization that ultimately resulted in slow degradation of the Bank. Paying bonuses after financial crisis in 2010-2011: The most crucial issue and crisis faced by the Bank were related to the problems that attributed to the bonus culture of the Bank. As commented by Cetorelli and Goldberg (2012), Barclays continued to pay high amount of money as bonus in spite of the continuous financial crisis in 2008-09. The problem related to the issue was that the Stakeholders of the organization had to compensate or subsidize this payment. This created a great havoc in the regular business operation of the Bank. It was claimed that major employees of the Bank cannot be driven by money and that paying the bonus to the employees was something unusual that the stakeholders have to ultimately subsidize from their profit margin (Claessens and Van Horen 2015). Therefore, this issue created a crucial issue for the organization. In the recent state of globalization, coming up with a business model and following the same as the business strategy to operate in the highly competitive market is indeed important as well as necessary. In case, if an organization fails to undertake proper precautionary actions against the issues and major challenges then there remained critical chances of the survival of the organization in the market. Reference list: Cetorelli, N. and Goldberg, L.S., 2012. Banking globalization and monetary transmission.The Journal of Finance,67(5), pp.1811-1843. Claessens, S. and Van Horen, N., 2015. The impact of the global financial crisis on banking globalization.IMF Economic Review,63(4), pp.868-918. Johnson, G., Whittington, R., Scholes, K., Angwin, D. and RegnÃ… ½r, P., 2013.Exploring Strategy Text Cases. Pearson Higher Ed. Pearl, J. and Rosenbaum, J., 2013.Investment banking: valuation, leveraged buyouts, and mergers and acquisitions. John Wiley Sons.

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