The Handelsbanken Essay: Impact On Market Entry And Decision Making.

1.Handelsbanken is known for its culture being different from that of its competitors.

Characterise Handelsbanken’s culture and discuss how the culture is spread and kept alive in the bank.

2.What entry modes into foreign markets has Handelsbanken applied throughout its history?

Discuss what impact Handelsbanken’s culture has had on the choice of entry modes into different foreign markets. Would there have been different options if the bank had had a different culture?

3.Like all internationalised organisations, Handelsbanken is facing the global-local dilemma.

Discuss how this dilemma is handled in practice. What is done globally and what is done locally?

4.How is Handelsbanken making sure that its culture is kept alive in an expanding organisation and how can this culture be kept alive during further expansion?

5.Your recommendation to the CEO or 2018 and beyond.

In your recommendation consider that the bank’s culture had a major impact on how the internationalisation was undertaken. Is a strategy that involves being radically different a wise choice. How different can a strategy be? For how long? Which advantages and risks are associated with radical difference

Handelsbanken's Unique Culture

1.The culture within Hadelsbanken is believed to be effective as it has allowed them to implement effective workforce culture. This culture is significantly different from that of all the rival banks of the Scandinavian country. One of the important aspects of the bank’s culture is due to the practice of decentralization. This system has given the branches more power that has helped them to deal with the situation and implement decisions. The process of decentralization was applied within the banking service by Jan Wallander. The process of decentralization was one of the revolutionary in the matter of change program that are implemented by the bank. The culture within the organization also witnessed change.     

With the help of the culture related to decentralization, it is possible to deal with most of the challenges related to effective decision making process (Jani?ijevi? and Milovanovi? 2015). As more workers of all levels are involved in the process of decision making, it is possible for the bank to empower the employees. This is believed to be one of the effective that are used to motivate the workers and help them to develop the required organizational skills. The process of decentralization was welcomed by most of the managers within the bank as they will now have the authority to provide their suggestions in the decision making process. The managers also took high level of pride as they are able to involve the participation of most of the workers. With the help of the process of decentralization, it is possible to implement solutions that are related to motivate the workers. There is also the advantage due to the fact that burden of the decision making are relieved from the top management of the bank. The workers within each of the bank are responsible for the making the major decisions related to the market level entry. The culture of decentralization has also been effective due to the fact that process of decision implementation can be lowered significantly. This culture has make the bank be quickly able to respond to the issues that are encounter by the customers, thereby able to provide better quality of customer service. The bank has also been able to expand in new dimensions and open up for the new branches with help of the quick methods of decision implementing process.

   As the workers are able to get high level of working motivation, with the help of the system of decentralization, it is possible to improve upon the motivation level of the workers. The organizational structure is also modified as more power is being given to the workers at every level. The free decision making process is also needed in this context, which will help to ensure that maximum number of workers are able to participate in the decision making process (Dooley 2017).

Impact on Market Entry

2.The entry level of the Hadelsbanken was initiated by the fact that they were the Swedish Bank to have representative at foreign office. This encouraged many other Swedish business firms to expand in foreign Nation and develop upon their facility. The main idea of entry into the foreign market was improved by the fact that all banks were able to collaborate with each other and understand the nature of the foreign market. The Hadelsbanken was the first bank to initiate this policy of entering into the foreign market.

This was initiated during the period of late 1980 as new policies were implemented within the bank’s strategy.  It can be said that the foreign mode of market entry depends upon the degree of risk that are involved in the external environment.  It is important to mention that companies need to analyze the condition of the market in order to properly implement their business plan. The organizational culture has a significant impact on the planning of market level entry at the foreign nations. It was not possible for Hadelsbanken to enter the foreign market as they had the past policies, which did not encourage any kinds of organizational changes.

However, with the implementation of decentralization policy, it has encouraged to the bank to initiate the principles of foreign market entry. The bank was able to expand in other European Nations including Denmark and Norway. With the culture of decentralization, it is possible for the foreign representatives of bank to have the power of implementing operational decisions.  This has ultimately helped to improve upon the organizational performance of the bank in foreign market. Hadelsbanken did not face any type of disturbance foreign market and was able to expand continuously in the foreign nation. The organization has taken high level of cautious at the entry level, which has not allowed them to take high level of risk.

It is important to mention in the context that the culture within the organization have a significant role in the entry mode of the organization in the foreign market. It is essential to have a sophisticated treatment of the working culture in the entry mode of the market (Song 2014). The organizational culture within Hadelsbanken has encouraged them to deploy workers from different foreign nations in order to improve upon their cultural diversity in the workplace. Hence, it can be said that without the culture of diversity encouragement and decentralization, it would not have been possible for Hadelsbanken to have high level of market entry in the foreign nations. This is mainly because without the help of decentralization, it is not possible for the foreign representative to have direct control over the market operational plans.

Handling Global Dilemmas

3.The major global dilemma that was faced by Hadelsbanken at the entry level in the foreign market is due to the fact that at initial stage, none of the managers within the organization have not accepted to implement change within operational process. There were many cases where, banks have suffered financial loss at the entry level of foreign market. Moreover, due to financial crisis, all the major banks in Sweden have suffered financial loss. Due to the fact that most of the organization, it is not possible to deal with the challenge of the foreign nation and also have full control over the market operations.

It is important to mention in the context that the process of internationalization of Hadelsbanken was limited due to the Banking Regulation that existed in 1980s. The banking regulations did not allowed the operation to continue beyond domestic market. Due to lack of communication, among the workers Hadelsbanken had faced issues related to the market level entry at the foreign nations. There was also dilemma from the senior management of the bank due to the fact that they have to form partnership with the rival organization. This was mainly needed due to the fact that they have to share the cost of market level entry and implementing business plans in respective markets.

Another major dilemma was due to the fact that the foreign market of Sweden was closed for competition for foreign competitors. However, with the liberalization of the financial market, the scenario changed completely. This has provided opportunity to many banks like Hadelsbanken in order to regulate the activities related to the business operations.

In the local market Hadelsbanken has bring about Revolutionary changes that include decentralization of banking operations. The bank had also bought the share of other small scale financial organizations that are needed in the process of bringing about suitable change and also help them in the process of market expansion. Offices were open in different places in order to improve upon the customer service and captured the local banking market. The policies were also implemented to encourage cross border trade and define cards of Sweden and neighboring Nations. Above all, due to the policy of decentralization the local managers of the bank at dependent branches are able to take necessary decisions. Due to the fact that most of the banking operations are dependent upon the portfolio of the customers, it is essential that most of the important service operations are implemented according to the demand of the customers. The new CEO of Hadelsbanken had the ability to predict the trends of the future that had helped him to change the culture within the organization.

Keeping the Culture Alive

On the other hand, at the global scale, the idea of Decentralization has helped the company in order to expand and get proper information related to the foreign market. Hadelsbanken have initiated the policy of slow entry in the foreign market. At the initial scale, only one of the branches had initiated their policy of operations. With the help of most of the cases, it is also possible to deal with the policy related to foreign operations.

4.It is essential for Hadelsbanken to keep the decentralization culture alive in order to motivate the worker and improve upon the level of performance. This is done by the process of regularly monitoring the operational management programs. As the organization is expanding in foreign Nations,   it was possible for them to improve upon the cultural diversity in the workplace. This has allowed our organization to recruit people from different background and thereby improve upon the skill of the employees. The bank also started to acquire other small scale financial Organization in order to ensure that they are able to expand and sustain in the respective market. With the concept of decentralization,   the bank has able to improve upon the working skills of all the employees and motivate them for future improvement.

The managers of Hadelsbanken are highly conscious about the matters related to expenditure. This has allowed them to mitigate all forms of risks that are within the market. Long term sustainability plan that are implemented by Hadelsbanken has also helped them to maintain the culture. The process of Decentralization was accepted by most of the branches of Hadelsbanken, which has allowed them to ensure high level of customer satisfaction. With high speed of international growth, it is possible for Hadelsbanken to ensure that most of the cultural diversity in the workplace is being maintained. It is also important to mention that the cultural policy of Hadelsbanken is from all the rival organizations. The culture with the organization is also maintained due to the fact that the managers and leaders of the organization encourage the employees to improve upon the skills and thereby have high level of skills and therefore will have the opportunity of future growth. Moreover, as the company is expanding in new foreign nations, it is possible for them to improve upon their cultural awareness level of the workers and also increase the cultural diversity. Hadelsbanken has also employed Expert level trainers, who are responsible to mentoring the workers in order to improve upon their skills and cultural awareness. The organization is also using the experience of senior manager, in order to improve upon the diversity and workforce culture. All the key positions within the bank light credit manager and loan manager are fulfilled by experienced employees. The local staffs of the bank are given the responsibility to deal with most important matters relevant to the market entry at diverse level of culture.

Benefits of Decentralization

5.It is relevant that the decentralization policy is the major backbone of the culture of Hadelsbanken, which has allowed them to improve upon the performance and cultural diversity in the workplace. Nevertheless, it is essential for them to implement policy related to decentralization in order to ensure its long-term sustainability in banking operation. It is important to implement decentralization at every aspect of the banking operation on service, which will therefore help in effective flow of management decisions.

It is important for the organization to ensure that there is no level of discrimination.  The future CEO of the bank needs to implement strict policy and punishment for all workers, who defy the legal procedure and protocol of the bank. Every employee should be given proper right, in order to ensure that they are able to resolve all issues related to cultural discrimination (Nica 2013). One of the main aims of the decentralization culture is to ensure that level of productivity is being obtained and all the workers are able to develop leadership skills. The top management needs to hold regular meeting with the managers of all branches of Hadelsbanken. This can help them to monitor all the operational activities that are a part of decentralization process. As the power is given to every worker at their respective level, it is important to ensure that no workers are able to misuse the power that is a part of their responsibility (Dutta 2015). It is also important for the bank to ensure that all the workers from different culture at same benefit and advantages in the workplace. Equal participation of women in the workplace is also one of the major aspect decentralization cultures (Beidokhti et al. 2016).

The future CEO of the bank also needs to identify all types of gaps that exist in the current operational Management process. Development of local agencies is believed to be one of the effective ways in order to deal with the monitoring process of decentralization. This can help to ensure that all operational process is done smoothly. It is also possible to monitor the performance level of every worker at different department of the bank.  

Decentralization is also an important aspect, where an organization provides full assistance to the workers at different levels. This is also possible to deal with most of the advanced level of challenges that exist due to the impact of the cultural diversity within the workplace.

There is also the chance that most of the important decisions related to the operations are implemented with the help of the effective monitoring and thereby able to deal with the gaps and drawbacks that exist within the process. The future CEO also need to regularly collect data from the market. This is due to the fact that in the current times nature of the market undergoes rapid changes. With the help of the latest data from the market, it is possible to deal with the most of the data that are needed to implement decisions related to the operational activities.

References

Beidokhti, A.A., Fathi, K. and Moradi, S., 2016. The Structural Relations of Parameters of School-Based Management Based on Decentralization, Responsibility, Participation, Organizational Culture, and Organizational Commitment. Review of European Studies, 8(2), p.159.

Dooley, B. ed., 2017. Energy and culture: Perspectives on the power to work. Routledge.

Dutta, M.J., 2015. Decolonizing communication for social change: A Culture?Centered approach. Communication Theory, 25(2), pp.123-143.

Jani?ijevi?, N. and Milovanovi?, M., 2015. The impact of information and communication technology on decentralization: The role of organizational culture. Ekonomika preduze?a, 63(3-4), pp.171-181.

Nica, E., 2013. Organizational culture in the public sector. Economics, Management and Financial Markets, 8(2), p.179.

Song, S., 2014. Entry mode irreversibility, host market uncertainty, and foreign subsidiary exits. Asia Pacific Journal of Management, 31(2), pp.455-471.