Canadian Pacific and International Bank

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Introduction

A SWOT analysis aims at identifying the Strengths, Weaknesses, Opportunities and Threats of a firm. The following apply to CPIB’s case.

Strengths

Strong distribution network
Working customer relationship

Weaknesses

Poor innovative technical skills
Lack of innovative banking

Opportunities

Opening of new distributive channels and markets
Opportunity exploitation

Threats

Increased competition
Share holders demanding more decision making rights

What are some significant challenges facing CPIB?

The first challenge the bank is facing are threats from smaller banks and credit unions which are able to provide more personalized services that larger banks like CPIB and Royal Bank cannot offer because of inroads they have made in electronic banking.

Another challenge arises from virtual banks which provide between 4-5% interests on small balances irrespective of the type of bank account. They also offer loans on cheaper rates because they do not incur overhead costs. If CPIB was to compete with them, it would lose advantages of traditional banking, security and reputation.

Currently, the bank is facing a test of falling victim to hackers and computer viruses which paralyze trading and in some instances wipe out the whole computer memory e.g. the 2000 when the “love burg” infected more than a million computer files around the world causing damage exceeding US$1 billion. The risk element is likely to grow in future when banks over rely on computers.

Finally, the bank is very vulnerable to political and economic uncertainties in foreign countries e.g. recent significance slow down in several Asian economies resulting in massive losses to major banks including CPIB.

The high regulation environment of Canada on approval of mergers is an example of a political challenge to the operations of CPIB. Sudden changes in government policies prohibiting repatriation of capital profits is also a major concern for CPIB.

What are the specific implications for the human resource function?

The bank’s human resource has adopted a one way (horizontal) system of management. The firm has a competent human resource director who is trying so much to fit into the shoes of his predecessor whose leadership contributed to the firm’s current achievements.

For example, the bank through its human resource department is committed to progressive human resource management practices in all its operation. It prides itself as the first bank to institute standardized selection and appraisal procedures, a well designed human resource planning system, a detailed counseling system for its employees.

Through out the firms HR’s analysis there is no evidence of participation of employees. The consequence of such a strategy is lack of morale from employees because of lack of their input.

What suggestions do you have for the current challenges faced by the firm’s HR function?

It is obvious that the current Firm’s human resource department is doing its best in ensuring that the bank’s employees remain competent and well motivated so that the financial goals of the organization are not compromised.

Apart from committing itself to progressive human resource management practices in all its operations the human resource manager could also adopt a participatory management strategy.

Through his system the manager could seek opinion of employees on what the human resource should do to address current problems among employees. He would raise the gender balance issue in such a forum.

Employees, especially female ones could raise the difficulties they encounter in their endeavors to move up the ladder. The human resource manager could then adopt some of strategies or come up with better ways of addressing the current problems.

In addition, the manager could encourage team working in the bank. Bank employees working at a branch would comprise a team. The branch manager would then be the team leader. Occasionally the team could go out for a retreat or picnic to help team members to bond.

Employees who are working as a team are more likely to help each other in various areas in the operations of the bank. Each team would be encouraged to work in the best interest of the bank and that of members.

A team would form a small component where minor problems of individual workers can be addressed. Picnics and retreats would not only be a way of bonding the team members but also away of refreshing team members after a long duration of office work.

Performance appraisal could also be done at the level of the branch. Working as a team leads to high performance because many people like working in a team rather than as individuals.

Individual evaluation leads to competition and in extreme cases hostilities among employees making employees lose focus from the main objective of the bank and start competing among themselves for promotions or attention from seniors.

Team working gets rid of tensions arising from individual appraisal methods. Team leaders should be people with very high social skills to inspire members to work towards hitting the targets prescribed at the head quarters.

Each branch would have a different target on the basis of prevailing market conditions of the community where the branch is located.

About the gender imbalance issue in the firm the human resource could put affirmative action measures in place to address the issue of very few female employees holding managerial positions. The affirmative action could run for a certain period, say five years and then stopped when gender balance is achieved.

Situation analysis

CPIB being a profit making organization, financial goals are the major driving force behind its externally focused strategies. The management seems to recognize that financial goals of the bank can be achieved by recruiting and hiring competent and highly motivated employees-whether they are senior executive or clerks in remote branches.

The bank’s human resources department has done an excellent job by committing itself to progressive human resource management practices in all its operations. The bank ensures that all its employees are motivated by facilitating a standardized selection and performance appraisal procedures, a well designed human resource planning system, detailed counseling for employees and financial assistance for university education.

The main purpose of all these incentives is to ensure that the bank’s man power maintains its relevancy even in times when market conditions are changing at a break neck speed.

Performance appraisal procedures encourage employees to increase production. The system therefore recognizes talent and hard work and then rewards it.

Finally, the bank needs to do more to be gender sensitive so that it has a proportional number of both males and females holding managerial positions. A situation where one out of eight vice presidents is female and less than 5% of top managers are female despite female employees scoring higher on tenure and overall productivity at lower levels of the bank does not send a good picture at all.

The bank’s human resources could even consider introducing affirmative action when promoting female employees to senior management positions so that the number of female employees in the organization is reflected in senior management positions.

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