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Cultural Web Analysis of Barclays Bank’s Investment Arm

Discuss about the Barclays Bank Investment ARM.

Hammerich and Lewis (2013) opined that corporate strategy allows the company in creating value across the business industry. Furthermore, corporate strategy also allows the company to incorporate competitive strategy based on RC lesson relates to business that can create unit and add value. 

This particular assignment firmly focuses on exploring the corporate strategy with a special case study of Bonuses and ‘Gaming’ at Barclays Bank. The key aim of this assignment is to explore cultural web of Barclays Bank’s investment arm. Moreover, issues and problems that faced by the bank currently also explain here. The main aim of this study is to identify and explain the changes that can correct the current issues and problems for Barclays bank in future.

Barclays Paradigm: Barclays was established around three hundred and twenty years ago. London Quakers founded this organization. The organization expanded into investment banking from traditional banking. Bob Diamond’s, CEO of Barclays, sudden resign from his post made Rich Ricci, the owner of the Barclays investment banking, very sad (Johnson et al. 2013). In addition to that, another special employee of organization, Jerry del Missier’s exit also shaken Rich. Despite of all this depressing occurrences, Rich knew that all these changes were directing to a bigger organizational change (Ali and Azmi 2014). A interest rate rigging outrage at Barclays makes the partition or contracting of its speculation keeping money arm more probable, given more prominent administrative and political interruption and the exit of the trio of venture financiers at the highest point of the bank.

Organizational Structure: The organizational structure of Barclays promotes collaboration within a group but competition against the others. The basic power of the organizational culture is cantered to the management executives but the employees also gets to state what they feel (Mossop et al. 2013). Therefore, in some the power is decentralized.

Rituals and Routines: The normal employees of the organizations very much keen in participating in the changes. The employees gets a handy bonus from the organization so they keep quiet about the issues that matters less (Williams and Conley 2015).

Stories: As per the analysis done by Mike Trippitt, analyst at Oriel, the flight of Bob Diamond ought to disperse a significant part of the emotive issue connected with a correction of administration's methodology far from investment banking.

The battleground between investment bankers and conventional bankers normally concerned pay and assets. The reward round in a investment bank is the most essential time of year. Miss the point and the business disentangles; pay an excessive amount of and benefit is shot to strips. In an all inclusive establishment, the retail and business brokers regularly, perhaps dependably, feel that excessively numerous of the speculation benefits are being paid to staff and definitely disdain the way that investment bankers’ rewards are greater than their own (Taibbi 2013). As far as it matters for them, the speculation brokers dependably expect that the administration needs to fabricate the investment side at little to no cost.

Explanation of the Problems and Issues Facing the Bank

Symbols: The business was at that point reshaping under weight as benefits have been crushed from holding more capital for their exercises, the euro zone emergency cuts incomes and shareholders need broker pay cut. English banks must discrete and "ring-fence" household retail managing an account from less secure territories (Model 2015). In present environment, the organization handled the exit of two major management executives and carrying on the innovation activities extensively. This proves that Barclays is capable of handling risky situations.

Shareholder power: The shareholder pressures on Barclays could prompt to broader pressure on the bank to move its plan of action far from investment banking and change perceived disappointments in its business culture (Benniemaclean.com 2017).

Control Systems: The investment bank's 3 billion pound benefit a year ago spoke to 53 percent of the Barclays add up to. Be that as it may, controllers have been uneasy (Johnson et al. 2013). It developed for the current week that Britain's money related controller cautioned the Barclays board in February that its way of life was excessively forceful and must change.

Less Amount of Revenues than Other banks: Enhancing return to the equability initiates with the Barclays’ top line. The process of turning the dollars into bottom-line profits is associated with the quantity of capital Barclays brings relative to its assets. In terms of raw dollar items, the bank falls short than most of the banks. In addition to that, the percentage of the assets is also low (Tima 2013). The table 1 demonstrates the point, evaluating individual bank's straggling 12-month revenues with the complete assets as of 31st December 2015. The higher the resulting rate, the more noteworthy the bank's capacity to create income from its benefits. Barclays raises the back at only 2.34% (Jenkins 2017).

Bank

Revenue (TTM) (billion)

Total Assets (billion)

Revenue/Total Assets

Barclays

$38.80

$1,660

2.34%

JPMorgan Chase

$93.50

$2,352

3.98%

HSBC

$59.80

$2,410

2.48%

Table 1: Compression of Banks

(Source: Jenkins 2017)

Bonus Culture: Bonus culture is another issue in the Barclays Investment Banking. Barclays was condemned for keeping on paying high rewards to staff even after the money related emergency of 2008–2009. BBC's Panorama ascertained that in 2010–11 installments to shareholders had added up to £1.4 billion while installment of rewards for staff added up to £6 billion (Johnson et al. 2013). Martin Taylor met on the Panorama program, contended that, basically, shareholders were sponsoring the installment of rewards and that the extra levels were unjustified.

Underperformance of BZW: Another issue in the Barclays was underperformance of BZW or Barclays de Zoete Wedd under overcrowded and competitive marketing. Martin Taylor proposed to board that BZW lacked scale in an increasingly global market and that Barclays should exit investment banking (Johnson et al. 2013). The board did not acknowledge the contention, trusting that Barclays expected to additionally build up its speculation saving money. They did, be that as it may, capitulate to financial specialist weight on the moderately low returns being created from BZW and chosen to discard its corporate back business, leaving an accentuation on exchanging, Bob jewel's region of mastery. Martin Taylor resigned in 1998.

Changes Should Be Made to Correct the Cultural Problems at Barclays in The Future

Providing purposeful Leadership: Through providing a purposeful leadership, Barclays can model the culture from the top down. In addition, serving as good examples, pioneers have no less than three extra means through which they can cast a more drawn out shadow: correspondence, group elements and ability administration (Wood and Hooper 2014). It is the duty of the leader for managing the talent as per the new culture. The leaders must concern of the fact that the effort of reshaping the culture ought to be composed around groups as principal work units, with a change procedure centered at the group level. Numerous pioneers have encounter executing another technique and structure and are moderately skilled at doing as such (Ferraro and Brody 2015). In any case, few viably utilize the majority of the assets available to them to reshape the hidden culture so it adjusts to and bolsters the business' new concentration and structure.

Genuinely Changing Individuals: It is essential for developing a new culture in Barclays that all the employees along with the leaders of the organization must embrace the change. It is not wise to force change on other people. Genuine and enduring individual change happens just when individuals capably encounter diverse methods for getting things done and prevail at them (Wood and Hooper 2014). In Barclays work on culture change with monetary administrations associations, we have found that the best approach to make an enduring impact on people about the estimation of the fancied individual changes is through experiential learning. For instance, banks seeking after a cross-offering procedure and far reaching client mind system require people who can work together crosswise over hierarchical limits.

Developing Flexibility in Uniformity: Defining and endorsing different sub cultures within the Barclay’s several business areas will enhance the process of establishing new cultures (Ferraro and Brody 2015). Each of these zones is organized in an unexpected way, works contrastingly and faces diverse market flow. Likewise, innovation constitutes a half and half sub-culture – it is particular, yet cuts crosswise over authoritative limits, empowering plans of action and interfacing the back, center and front workplaces.

Conclusion:

The Barclay’s Investment Arm has gone through many critical phases after appointing Bob Diamond as the Chief Executive Officer. The reactions of the employees of the organization after the resignation of CEO prove that the culture of Barclay’s was neither energetic nor suitable for the workers. The organizations put many efforts in recovering its image from the scams it has made. Re-shaping the brand image was one of the most significant factors of the organization in terms of getting hold in the market. It was not possible without a stable organization. Therefore, the organization took the decision of being stable while re-modeling brand image.

References:

Ali, M. and Azmi, C.W.N., 2014. Isl?mic Finance Benchmark: A Possible Solution Revisited. Journal of Islamic Business and Management Vol, 4(2), p.116.

Benniemaclean.com. (2017). Bennie Maclean : News. [online] Available at: https://benniemaclean.com/news.asp?ID=3440&title=What%92s_really_going_on_at_Barclays%92_investment_bank._Two_charts [Accessed 12 Jan. 2017].

Ferraro, G. and Brody, E.K., 2015. Cultural Dimension of Global Business. Routledge.

Hammerich, K. and Lewis, R.D., 2013. Fish Can't See Water: How National Culture Can Make Or Break Your Corporate Strategy. John Wiley & Sons.

Jenkins, J. (2017). The Biggest Problem With Barclays PLC Stock -- The Motley Fool. [online] The Motley Fool. Available at: https://www.fool.com/investing/general/2016/04/21/the-biggest-problem-with-barclays-plc-stock.aspx [Accessed 12 Jan. 2017].

Johnson, G., Whittington, R., Scholes, K., Angwin, D. and Regnzr, P., 2013. Exploring Strategy Text & Cases. Pearson Higher Ed.

Kohn-Wood, L.P. and Hooper, L.M., 2014. Cultural competency, culturally tailored care, and the primary care setting: Possible solutions to reduce racial/ethnic disparities in mental health care. Journal of Mental Health Counseling, 36(2), p.173.

Model, C.W., 2015. Cultural analysis and strategy formulation.

Mossop, L., Dennick, R., Hammond, R. and Robbe, I., 2013. Analysing the hidden curriculum: use of a cultural web. Medical education, 47(2), pp.134-143.

Taibbi, M., 2013. Everything is rigged: The biggest price-fixing scandal ever. Rolling Stone.

Tima, J., 2013. Information system service design and customer service delivery at Barclays Bank of Kenya (Doctoral dissertation, University of Nairobi).

Williams, C.A. and Conley, J.M., 2015. The Social Reform of Banking. In Responsible Investment Banking (pp. 235-250). Springer International Publishing.

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