Is the title of the article appropriate and clear?
One of the most critical moments when a person chooses to either read an article or not is what its title looks like. In this case, Sohail and Al-Jabri (2014) create an appropriate and clear title that defines three main elements mobile banking, user-non-user difference, and attitudes. The reader does not have additional questions or difficulties in understanding the main idea.
Is the abstract specific, representative of the article, and in the correct form?
There is a well-developed abstract under the title that specifies the nature of the study. It is correctly organized as the authors mention some background information (extant and past research) and the reasons for conducting the current investigation (lack of cultural analysis and importance of innovations in the banking system). Then, Sohail and Al-Jabri (2014) explain their purposes to define the attitudinal influences of MB users and non-users and connect them to innovation. The abstract also contains a brief mention of the preferred research design that is empirical research, and the importance of the project for different financial and telecommunication institutions. However, the authors do not inform the reader about the chosen instruments (a survey with a questionnaire) and statistical significance. Therefore, the abstract was organized in a point-by-point format, and misunderstandings and concerns could be avoided.
Is the purpose of the article made clear in the introduction?
In the introduction of the article, much background information, an overall evaluation of the situation in the banking industry, and the purposes of the study are discussed. To prove the importance of their goals, the authors admit that the increase in mobile services is not as high as it is expected (Sohail & Al-Jabri, 2014). Therefore, it is necessary to understand what may influence non-users preferences. Besides, not much research has been developed to learn the MB situation within the banking sphere. The decision to assess IT among Saudi Arabia consumers helps advance many vital processes. Regarding the above-mentioned needs, the major aim is to investigate MB users and non-users characteristics and attitudes, and additional purposes of focusing on demographic factors and comparing attitudes are established (Sohail & Al-Jabri, 2014). After reading the first two pages of the article, it becomes clear to the reader what to expect in this study.
Are the study design and methods appropriate for the purpose of the study?
The article under consideration contains a literature review that serves as a background for the study. The authors discuss the impact of demographic factors on MB usage and the existing attitudes toward MB in terms of observability, trialability, compatibility, preserved risks, and complexity. They use a survey instrument to gather information and find the answers to their research questions about the relationship between personal characteristics and attitudes. There are two parts of a questionnaire to identify demographic characteristics and to learn what affects MB adoption. This research method is adequately described, citing several credible articles and sharing personal thoughts about the offered approach. Attention is paid to the way of answers measurement (a Likert-scale) and the quality of data analysis (the application of the ANOVA statistical model).
Are there statistical methods appropriate?
A questionnaire is a quantitative research instrument that is used to choose the right participants and gather enough information within a short period. Sohail and Al-Jabri (2014) sent 1500 questionnaires to potential participants and got 496 replies, with 30 being discarded because of incompleteness. The differences between answers and seven variables are compared on the basis of a chi-square test. Cronbachs coefficients are applicable to conclude the reliability of constructs and strengthen the analysis. ANOVA models are created to compare overall findings in the study. The authors add a brief description to each type of assessment and mention p-values to explain the probability of the results.
Do you find errors of fact and interpretation?
After analyzing the findings described in the article, several minor errors may be defined. For example, in conclusion, Sohail and Al-Jabri (2014) say that cultural differences between the representatives of the West, East, and Middle East are insignificant. They talked about Finland and China, while their participants were citizens of Saudi Arabia. Therefore, their conclusions may be subjective as they are related to their interpretation of the studies conducted several years ago. Still, the remarks about MB profile in Saudi Arabia (males, young age, high income, and education) are supported by evidence from empirical articles and an original study.
Is all of the discussion relevant?
The discussion of the results is well-structured and supported by credible sources. The authors state that all demographic characteristics of MB users and non-users are presented in Table 1 and conclude in which groups significant differences may be found. Their next steps are related to the discussion of other tables (there are four tables in the article in general) and their relevance to the topic. Although it can be difficult for an ordinary reader to understand the worth of ANOVA models and values, this approach proves the credibility of the offered information. Therefore, instead of using complex terms and deviations in the study, a simple discussion of the findings is recommended.
Has the author cited the pertinent and only the pertinent literature?
In the article, there are approximately two pages of references being cited in the project. In most cases, the authors rely on the findings of peer-reviewed articles published between 2000 and 2012. At the same time, several past studies developed at the end of the 20th century are used to show the progress of the banking system in relation to mobile technologies. Several statistical reports enhance the discussion about Saudi Arabia and available means of communication in the region. The choice of the sources is reasonable and appropriate in regard to the topic and the purpose of the study.
Have any ideas been overemphasized or underemphasized?
From the beginning of the article, the reader gets enough information about the current study, its purposes, and its variables. However, despite the fact that Sohail and Al-Jabri (2014) set clear goals to investigate certain aspects of MB, there are several drawbacks to the chosen statements. In case of revision, the main recommendation is to add several research questions or hypotheses. This improvement is necessary to comprehend the worth of research and the applied statistical analysis. Investigation of characteristics and attitudes may have different outcomes and discoveries. Therefore, it is better for a researcher to have one specific aspect and answer particular questions.
Are the authors statements clear?
To conclude the work done, the researchers make several recommendations and admit the limitations that can be improved in further studies. One of the main assumptions is that MB continues to become an emerging trend in Saudi Arabia. Banks and other financial organizations should gain a better understanding of IT, mobile communication services, and other innovations. Although such limitations as the sample size and the duration of the study prevent making one-sided judgments, the developed assumptions and tasks motivate researchers and the banking staff.
The quality of the content highly depends on how well the authors combine their findings with the already presented evidence. In this article, innovation attributes help predict peoples attitudes towards using MB or avoiding such technologies in financial operations. Relying on the information obtained from questionnaires, the authors identify that customers are eager to use MB if they experience a lack of complexity. Therefore, it is correct to say that professional support and counseling are preferable as a part of banking services. Not to be subjective in their findings, the authors use different articles and show what other authors think about the same issue. In general, this article contributes to a better comprehension of Saudi consumer behavior, the worth of banking operations, and the role of innovation in business relationships.
The paper delves into the important peculiarities of research demand of the Bahrain Development Bank (BDB) and provides the precise and detailed analysis of the major concerns related to its functioning.
Furthermore, considering the great impact HR have on the functioning of various companies nowadays, there is also the investigation of employees performance and the factors which might impact it. Finally, it is also crucial to evaluate the training programs implementation and its impact on the general performance. For these reasons, the paper conducts a research and provides the analysis of the relevant literature devoted to the given issue. The given information is crucial to increase comprehending of the BDBs demands and the main tendencies related to the institution
Yet, the importance and relevance of the given research are also evidenced by the increased importance of HR under the modern conditions (Asal, Brown, & Schulzke, 2015)
Papers objectives
To achieve the training, learning and acquisition of knowledge by the employees to enhance their skills and competencies to accomplish organizational goals.
To equip employees with necessary knowledge and expertise to face future challenges that might lead to less productivity.
To identify support and assistance systems through the training program that the bank can employ to conduct the advisory and support needs to the employees who engage in the learning process while on the job.
To identify and develop ways of assessing learning at the working station to facilitate the employees skills and competencies.
To come up with logical methods of enhancing training programs in the firm such as improving the working environment and productive staff relationships.
To identify ways of integrating training capability and focus on the organizational processes through skills acquisition by the employees.
To discover the means to supporting learning, training programs and developing the entire ethical need of encouraging the mission requirements of the bank.
Significance
The given research could be characterized by the great practical use.
It tends to analyze the most important aspects of the relations between training and employees skills, which becomes one of the most important modern tasks.
The precise evaluation of the correlation between training and employees skills will help to increase the competence and promote the better understanding of the issue.
The study will also help in knowledge acquisition concerning the training with an aim of enforcing the evidential benefits in the realization of the team and the organizational set targets and needs.
Finally, it could provide the information needed for the creation of the new efficient training and its implementation in the structure of a certain company to increase its performance and create close relations within a collective and certain teams.
Literature Review
Training and Development
The paper rests on the credible and relevant sources which are used to obtain the information needed for the precise analysis of the main aspects of the functioning of BDB. Additionally, the statistical data related to the functioning of the given organization is also used.
Numerous sources analyzed in the body of the paper evidence the main idea and provide the basis for the investigation.
The research states the fact that training is a key strategic tool that organizations can use to achieve its goals and objectives. It could promote the increase of companys efficiency and guarantee its further evolution. Yet, this fact is evidenced by numerous sources analyzed in the paper. Furthermore, the research highlights the fact that an analysis and appreciation of the idea of employee training and development requires an understanding of the changes associated with training and development(Pallisera, Fullana, Palaudarias & Badosa, 2013), and that is why it accepts training as one of the most important activities needed to support the evolution of a certain company or organization.
Nature of Training and development
The paper also revolves around the nature of training and its definition. It provides the idea that training is the process aimed at the improvement of certain skills and acquisition of new knowledge to improve the companys showings and performance.
Yet, there is also the scheme which demonstrates the direct correlation between training and final outcomes.
Training and development need = Standard performance Actual performance (Ikhlas, 2012)
It evidences the fact that the constant training is the key to the efficient functioning of every company. Continuing the investigation of the relevant literature, the paper states that employee development is the term that elucidates training and education plans in the place of work with the focus on the individual development of the workforce. It means that the training and education should be distinguished as they impact various aspects of performance and contribute to the evolution of various skills.
Impact of Training on Employee Performance
Employee training is among the factors that influence organizational growth and development.
Organizations that train their employees have a better position to face competition and remain beneficial than organizations that do not train their employees.
Existing literature on employee training and development reveals that training generally improves employee performance (Abdel-Razek & Alsanad, 2013).
Organizations can use effective training and development to change the competencies of their employees. Therefore, training is not limited to improving the overall performance of workers and execute their current tasks but also improve their understanding and skills so that they can handle future tasks thus achieving superior organizational performance (Osborn, 2016).
One should accept the great importance of the given process and its contribution to the evolution of a certain company and its survival.
Methodology
The paper considers training independent variable as it is one of the determinant factors for employees performance while the last one is accepted as the dependent variable as it depends on the level of training and the competence.
A mixed approach that integrates exploratory, descriptive and explanatory research is used for the study. Consequently, quantitative and qualitative approaches are used.
The wide scope of the study requires the diversified aspect that can identify effective learning options, investigate the effectiveness of evaluation models, and discover effective managerial strategies for employee learning and development.
Quantitative methods are suited for developing descriptive knowledge and investigating possible relationships while qualitative methods are suitable for developing meanings on possible phenomena.
The advantageous character of the given approach could be proven by the numerous possibilities provided by various methods used within the paper.
Population, Sample
The statistical data was obtained from the companys annual 2014 report.
Employees comprise the population of the research. Their number is about 200. Besides, a sample size 1600 is derived from the population. The fact is that the small population size predetermines the given sample size.
The sampling procedure implies the separation of population into several segments which have their own unique characteristics. Thus, stratified random sampling is used to obtain the credible and relevant data needed to accomplish the precise analysis and obtain clear results that will prove the hypothesis and create the basis for the further investigation of the given issue.
The chosen method helps to obtain the credible results and lead to the significant increase in the credibility of the obtained findings.
Data collection, analysis, and ethical issues
Quantitative data is analyzed with the help of Statistical Package for Social Sciences (SPSS).
Descriptive statistics used in the given study helps to identify the major training and development programs to which the banks employees have been exposed, perceived effectiveness of the techniques, and those programs that the employees believe can be effective.
Regression analysis and analysis of variance is used to analyze possible effects of the training and development programs on employees productivity and to validate perceived effectiveness of encountered programs based on data on employees productivity.
Researchers appreciate the privacy and autonomy of the respondents and consider them the major concerns of the given study. The given approach ensures the relevance of the research and guarantees that all respondents will be satisfied with the obtained results.
Results and Findings
The highest number of respondents was 62 which represented the highest percentage of 39%.
The age group equivalence is 26-35.
The lowest registered number of respondents included six and contributed to 4% of the total sampled population.
In consideration of the age factor, the lowest percentage contributions relied on the 56-65 years.
About the highlighted data, the other portion entails 29%, which derived from the age group of 36-45. Besides, 18-25 age brackets that represented 21 respondents ensured 13% of the employees in the bank.
Conversely, the 24 of the respondents were from the ages between 46 and 55 and involved 15%.
The analysis conducted shows that the sampled population majorly constituted the young staff (Amba& Abdulla, 2014).
Results and Findings
Gender, education level, work experience
The investigation evidences that male respondents settled at 61% and that of the female showing 39% of the total sample while the male sample summed up to 98 employees while that of the female being 62 persons. It means that the male population presented in the bank is higher than that of the female
There were 40 diploma holders. The bachelors degree holders were 70 employees and representing 44% while the masters degree holders being 50 individuals contributing to 31% out of the sample. It means that the analysis rests on the data provided by the educated professionals who have the high level of competence and could provide the reliable information related to the functioning of BDB.
The work experience was also significant. The investigation shows that the high average experiences conditions the individuals great competence and great working skills.
Results and Findings
Morale, effectiveness of training and the final results
The conducted research prove the fact that the larger proportion of the employees feel happier and are committed to their work.
The boosted morale of the staff contributes to the meeting the business target through the quality services offered without feeling exhausted.
The organization provides excellent training services to the clients although some of them feel there exist certain barriers to commitment.
Many of the employees admitted that they are willing to work, and this fact conditions the better understanding of the staff motivation after the training process.
The paper concludes that training programs positively contribute to the employees focus concerning the work flexibility and increases the level of performance greatly.
The correlation analysis shows that training and employee work positively correlated regarding effectiveness (r= 0.782, p<0.01). Besides, training and the worker work were positively and highly correlated regarding efficiency (r= 0.683, p< 0.01). Nevertheless, the correlation between education and staff commitment was positively and highly (r=0.683, p< 0.01). Finally, the employee work efficiency proved to be the strongest relationship from the data obtained from the respondents, (r=8.13, p<0.01). The Company has an influence on the staff performance due to positive correlation.
The staff is confident about the work they do and crave for achieving the organizational goals as outlined in the mission and vision statements. On the other hand, the data shows that Bahrain Development Bank provided its employees with the relevant training services and committed towards work.
Conclusions
The usefulness of the training program conducted by the BDB employees enhances work satisfaction and is significant on their performances.
The research shows that the employees are committed to the organizational requirements that mostly constitute their job regulations. In relation, the current firms tend to make use of the available resources to enforce permanent training programs to their employees.
The firms that crave for the training of its staff, obtain relevant and current data about the market, and able to carry out implementation process; stand a chance to have the competitive advantage over the related organizations.
The business should engage in the course of getting current knowledge and imparting to enable the employees to improve on their competencies that lead to innovations.
Recommendations
The conduction of the training programs should embrace the international standards due to the reason that the employees need to compete in the world market in the job market.
The program should focus on updating the system to facilitate the acquisition of the new technology, and the methods of new researches and studies improve on the learning and teaching methods.
The training process should be supported by the management and observe the durability requirements as long as the organization tends to exist.
The program should include the leadership development to have quality skills regarding administration in the service provision in the field of banking.
The training program should benefit the improvement of performance incentive and as well as the reward.
References
Abdel-Razek, R. H., &Alsanad, D. S. (2013).Mapping Technological Innovation: Methodology and Implementation.In Global Conference on Business & Finance Proceedings (Vol. 8, No. 2, p. 175). Institute for Business & Finance Research.
Amba, S. M., & Abdulla, H. (2014).The Impact of Enterprise Systems on Small and Medium-Sized Enterprises in the Kingdom of Bahrain.
Asal, V., Brown, M., &Schulzke, M. (2015). Kill Them AllOld and Young, Girls and Women and Little Children : An Examination of the Organizational Choice of Targeting Civilians. Political Science Research and Methods, 3(03), 589-607.
Ikhlas, K. (2012). The Impact of Training and Motivation on Performance of Employees.IBA Business Review, 7(2), 84-95.
Pallisera, M., Fullana, J., Palaudarias, J., &Badosa, M. (2013).Personal and Professional Development (or Use of Self) in Social Educator Training. An Experience Based on Reflective Learning. Social Work Education, 32(5), 576-589.
Osborn, C. (2016). What Do Employees Think About Their Training?.Training, 53(1), 120-123.
The article by Ben S. Bernanke is devoted to the episodes of the history of US Central Banking that have been given the epithet great . The author believes that they demonstrate the evolution of the role of the Federal Reserve and provide the information on the central banking mechanisms.
The author begins with the creation of the Federal Reserve. The Great Experiment, according to Bernanke, was aimed at ensuring the financial stability, and the Fed establishment was aimed at preventing financial panics, a seasonal occurrence at the time (3). Established in 1913, the Fed soon had to support the country during the war, and the organization could start working in normal, non-stress conditions only in 1923.
The policy for this work was suggested by the Board and included ensuring financial and economic stability by supporting the business through liquidity increase or decrease. As a result of being procyclical, Feds actions increased volatility, and the institution failed to respond to the panics of the 30s. The Fed was not ready for the Great Depression, as suggested by the author, and its mistakes could have resulted from the lack of adequate experience. Other complications included political development and the abandonment of the gold standard. As a result, the Fed was to change dramatically, which it did.
Its goals now included employment maintenance (though rather informally or, possibly, articulated in a different way before the Federal Reserve Reform Act 1977), while the stability goal was at least partially delegated to other institutions (Exchange Commission, for example). The independence of the institution was legally improved, and the controlling body was reorganized to restrict the control of the Treasury over the Fed, even though it was relatively ineffective until after the World War II.
For the next step, the Great Inflation and Disinflation, however, the Fed was independent in terms of policy. At the time, the two objectives (stability and employment) were achieved through the influence on the federal fund interest rate, which caused the stable inflation of the 50s and the first part of the 60s. After that, however, the control over the inflation became dubious. The responding policy of Fed was caused by a faulty interpretation of the reasons for the inflation and included wage and price control, which did cause the Great Inflation of the 70s (Bernanke 9).
As a result, the Fed had to change the policy again (with the help of Chairman Paul Volcker) and promote a new understanding of inflation as a monetary phenomenon. Other lessons of the period included greater caution (or reduced optimism) in the terms of the economic development, the understanding of the difference between the real and nominal interest rates, the recognition of firm anchor and the willingness to respond to inflation faster.
The Great Moderation (1984-2007) was grounded on the Disinflation and pursued the goals of price stability and maximum employment with noticeable success. It was achieved through motoring and responding to threats and shocks actively and adequately. The important lessons of the time included the gradual understanding of the importance of communication and transparency for central banks around the world, which increased the effectiveness of the Feds policy and public accountability. As Bernanke points out, it is a highly important outcome for a democratic country (10).
According to Bernanke, it is a widely spread supposition that the financial crisis of 2007, the Great Recession, could have resulted from the calmness of the Moderation and is, therefore, its logical continuation, a new stage in the development of the history of economics (9). The lessons of the crisis, according to Bernanke, include the forgotten truth of the danger of financial instability that needs to be controlled by the central bank, which brings forth the initial goal of the Fed, that is, the prevention of panics. Bernanke concludes by analyzing the steps that can be taken to ensure the stability and points out the importance of the experience gained and the dynamic nature of the central bank policy development in the constantly changing environment.
Works Cited
Bernanke, Ben S. A Century of US Central Banking: Goals, Frameworks, Accountability. Journal of Economic Perspectives 27.4 (2013): 3-16. American Economic Association. Web.
Central banks hold significant power over financial institutions and business enterprises. Their decisions, especially the interest rate movements, can influence the value of assets and affect already undertaken liabilities. Usually, the central banks operate from the macroeconomic perspective and take steps to solve problems on the national level. As a result, their decisions might be beneficial for the economy as a whole, but particular entities may suffer severe losses. In addition, financial transactions may be negatively affected by various factors not related to interest rate movements. Those risks should also be taken into account by financial analysts and business owners.
Interest Rate Risk
Interest rate risk comes into consideration when the entities acquire interest-sensitive assets or undertake interest-sensitive liabilities. For instance, the central banks movement of the interest rate can affect such assets as municipal or national bonds. A bond dealer who uses their equity to buy Mexican debt risks losing funds if the Bank of Mexico or the Federal Reserve moves the interest rate. Investing in a municipal bond portfolio might pose a risk as well since those bonds would be significantly affected by intervention from the central bank. The central banks decisions can also influence mortgage loans, making them a risky investment.
Credit Risk
Credit risk emerges in transactions that involve giving or taking out a loan. There will always be a risk of a commercial loan not being returned in time. For example, entrepreneurs might face difficulties in establishing new businesses and not repay the loan in time. A purchased entity might have financial liabilities which can be risky to undertake for the new owner. The risks related to credit are common, so the banks usually have security departments, which evaluate the clients financial metrics. The level of scrutinizing depends on the scope of the deal.
Foreign Exchange Rate Risk
Foreign exchange rate risk becomes a factor in international transactions when the procedure requires the currency exchange. This type of risk is common for companies working on the global markets. For instance, the transaction between a French bank and a British entrepreneur would require an exchange within the EUR/GBP currency pair. However, a deal like that would not create a significant risk since both the euro and the British pound are stable currencies. The risk would be much greater if a Russian-based company decided to purchase German equipment since the Russian ruble is more volatile than the euro. A possible risk mitigation solution would be buying more stable currency at a favorable exchange rate and holding it for the right moment. Another way of avoiding the risk would be adding the possibility of price adjustment in case of severe exchange rate fluctuation.
Sovereign Risk
Sovereign or country risk manifests in political decisions, affecting the transaction or even nullifying the deal. Force-majeure situations like war or sudden legal changes on the national level can liberate the parties from liabilities and associated risks. However, less drastic situations could be more harmful since they would cause losses without a way of mitigating them. For example, a Japanese bank might lose a chance to acquire an Austrian one if the Austrian government blocks the deal. In that case, even the losses-free termination of the transaction would be a failure since the goal of acquisition would remain unachieved. Dealings with less-developed countries also pose a significant risk of losses due to their governments unexpected political or economic decisions.
Technology Risk
Technology risk in transactions comes from the technical and IT aspects when the lack of cybersecurity or equipment malfunction leads to eventual losses. For example, contemporary digital financial services create the risks of corporate or personal data theft, account compromising, or file destruction. In addition to that, merging and acquisition might create an overly complicated IT environment, which would cause severe losses (Deloitte, 2018). Therefore, the Japanese banks attempt to acquire its Austrian partner for facilitating the clearing operations might fail due to the technological differences. A possible alleviation of technological risks could require a standardization of technological processes before the acquisition and cybersecurity enhancement.
Measuring Interest Risks
Financial transactions of significant scope demand careful planning since they are susceptible to various types of risks. While some of those risks are predictable or reliably manageable with common sense, the interest rate risks require conducting a special analysis to reveal them. One of the popular interest risk measurement methods duration gap analysis-serves to evaluate how long the entity holds the interest-sensitive assets and how quickly it pays the liabilities.
Duration gap is a quantitative technique used for interest risk measurement. Gup et al. (2007) define duration as the weighted average time (measured in years) to receive all cash flows from a financial instrument (as cited in Chattha et al., 2020). Therefore, the duration gap means the difference between the duration of the assets and liabilities. In simpler terms: the longer the assets or liabilities being held in proportion to the opposite metric the bigger the gap.
The duration gap evaluation might reveal the interest rate-related risks and prevent the losses to overly-risky transactions. Kagan (2020) provides three possible general conditions of the gap:
zero gap: an ideal situation, in which the company is reliably protected against the interest rate movements;
positive gap: a situation in which interest-sensitive assets exceed interest-sensitive liabilities;
negative gap: an opposite situation, in which interest-sensitive liabilities exceed interest-sensitive assets
The use of the duration gap analysis technique can improve risk management of business entities. A research of Chinese banks by Ausloos et al. (2020) showed that the joint-stock banks which performed the duration gap analysis showed a better risk control ability under the influence of interest rate liberalization. In that regard, those banks managed to outperform state-owned and local commercial banks (Ausloos et al., 2020). Therefore, the duration gap analysis proved its usefulness for measuring and managing the interest rate risks in the Chinese case.
The duration gap analysis is also helpful for discovering concerning trends in financial institutions. For instance, Chattha et al. (2020) claimed that a big duration gap of Islamic Commercial Banks (IBCs) makes them vulnerable to a significant loss of net worth and economic value equity. The use of the duration gap technique helped reveal that ICBs constantly allow the mismatch of their assets and liabilities (Chattha et al., 2020). Without a measurement, those problems would have likely remained hidden, leaving the ICBs susceptible to interest rate movements.
Overall, the big or negative duration gap is not necessarily harmful; however, it reflects the entitys susceptibility to transaction risks associated with the interest rate movements. Therefore, financial analysts should pay attention to the duration gap metric before giving or taking out loans or purchasing bonds. A negative duration gap of a significant amount can send a warning sign, vital for calling off a risky deal and saving the company from the potential losses.
China and the United States are two of the largest economies in the world that are competing to dominate the banking industry. According to the article, there are four banks in each of the two countries with assets that surpass the $1 trillion mark. The banking sectors in the two countries are competing for global dominance. However, while Chinese banks are growing in size, American banks are stagnant about growth because they are afraid of further expansion (Bove par.1). This means that Chinese banks could dominate the world banking industry if they continue to grow and the American banks maintain the same size. Statistics reveal that the four largest banks in the U.S. have assets worth $8.1 trillion while Chinas four largest banks have assets valued at $11.8 trillion (Bove par.2).
The shift in financial power is further demonstrated by the profits of the banks. The American banks report annual profits of $86.4 billion while the Chinese reports annual profits of $141.2 billion (Bove par.3). The growth achieved by Chinese banks is astounding. For instance, Chinas smallest bank (Bank of China) among the four largest has more assets than the biggest bank in the U.S (JP Morgan Chase). China is achieving this growth by implementing policies that encourage the expansion of its banks. Partnerships between China and Russia have raised the status of the Yuan into the second global reserve currency (Bove par.5).
Also, it has partnered with Brazil, South Africa, India, and Russia to create a new world bank referred to as the Asian Infrastructure Investment Bank (Bove par.5). The United States has not yet joined the new bank. Chinese banks are facilitating the penetration of china into new markets including Africa and Latin America. In contrast, the U.S. is implementing policies that are forcing big banks to shrink their assets.
Significance in a global setting
The banking sector is an important pillar of the global economy. The policies implemented by both China and the U.S will have certain effects. The United States will give way to China as the leader in global banking and provide a great competitive advantage. China will continue to implement policies that allow it to dominate the world banking industry. Chinas domination of the banking sector will neutralize competitive threats from other great economies, facilitate the exploitation of market opportunities, and encourage low-cost trading with other countries. The dominance will be a great resource that will provide a competitive advantage in international markets and the global economy.
The U.S will lose its dominance and competitive advantage in the global economy if it does not review its policies to encourage its banks to continue expanding and growing its asset base. China will use its dominant banking sector to face its other sectors thus fostering their growth. Besides, it will use its financial power and competitive advantage to penetrate emerging markets such as India and Africa.
Mobile banking refers to banking activities that are carried out using mobile devices, for instance, cell phones and tablets (Market Reports 2015). Mobile banking has transformed the way people conduct business transactions by eliminating the inherent need for face-to-face transactions. Mobile banking, also known as m-banking, enables users to execute financial transactions through the internet without the need to visit a bank branch physically.
One key feature of mobile banking is its ability to offer services to customers at significantly low fees. Mobile banking does not involve the traditional costs associated with physical banking such as paying rent (Jeong & Yoon 2013). The money saved is then used to extend discounts to customers.
Mobile banking has made it easier to shop by eliminating the need to carry cash everywhere. In the United Kingdom, a large number of people have adopted mobile banking services. It is estimated that about 34% of adults use mobile banking (Market Reports 2015). This figure indicates a tremendous shift from physical to mobile banking in the UK. Conversely, mobile banking raises issues of cybersecurity and the safety of customers money when transactions are conducted via cell phones (Akturan & Teczan 2012). Therefore, the writer wishes to investigate the numerous impacts of mobile banking because the burgeoning phenomenon may entirely replace traditional banking in the near future, specifically in the UK.
The study will be guided by the following research question: How has mobile banking transformed how consumers approach and perceive banking? Despite the existence of a wide body of research on the topic of mobile banking, there is little research on how customers view mobile banking.
This study seeks to examine the various impacts that have been occasioned by this change on customers in the last five years. This goal will be achieved by interrogating the attitudes and views of different customers regarding the change. The aim will be to determine what customers feel regarding the shift from traditional to mobile banking. The writer appreciates that while most customers may be optimistic about this transformation, others, especially the older generation, maybe apprehensive. Millennials are ordinarily believed to be tech-savvy. Hence, they are assumed to be more welcoming of technological changes relative to their parents. This research will also be seeking to determine the validity of this assumption by relying on a sample of people of different ages.
Literature Review
Mobile banking began toward the end of the 1990s when Paybox, a German company working together with Deutsche Bank, commenced its first service (Shaikh & Karjaluoto 2015). This service was then deployed for testing in the European countries, among them Germany, Sweden, Spain, Austria, and the United Kingdom. Later, Kenya introduced the text-based M-Pesa service in 2007 (Jack & Suri 2011).
By 2012, the number of registered M-Pesa users in Kenya had grown to 7 million, owing to the convenience of the use of this new service (Mbiti & Weil 2011). SMS-banking was the oldest form of mobile banking in the UK (Mojtahed, Nunes & Peng 2013). At the time of its emergence in the UK, mobile banking was slowed by the limited functionality of mobile phones (Shanmugam et al. 2015). The high cost of data, as well as slow connections, also served to limit its growth (Sohail & Al-Jabri 2014). With the advancement of technology and the reduction in prices of mobile phones, mobile banking has become more accessible. Today, it is estimated that 34% of adults in the UK use mobile banking options (Market Reports 2015).
Mobile banking has revolutionized customers interaction with banks (Sohail & Al-Jabri 2014). The ease of use of mobile banking has facilitated its rapid growth in both developed and developing countries. Services, which are available to customers through mobile banking, include checking account status, making payments, money transfers, and selling stock (Johnson & Verdegaal 2016). Communication with the bank on a portable mobile device has also been classified as a mobile banking service (Akturan & Teczan 2012).
Mobile banking in the UK is credited for the increased convenience of banking. The phrase banking anywhere, anytime has been coined to explain this convenience (Jeong & Yoon 2013). Kundu and Datta (2012) assert that people are becoming less interested in lining on queues for a long period waiting to be served in the traditional banking setup (Akturan & Teczan 2012). The structures of traditional banking involved the client having to move to the physical bank carrying documents that would allow him or her to access the required services.
However, banks realized the need to save the customer from this challenge by introducing similar services in their (clients) mobile phones. Mobile banking apps were introduced to take advantage of the existing formidable telecommunications chains. Popular mobile apps that are operational even today include MyDeposit and Popmoney. This changing attitude is a result of people realizing that mobile banking saves time and/or offers the convenience of accessing ones bank details at any time (Slade et al. 2015).
Mobile banking has increased access to banking services since most people now own a mobile phone (Shaikh, Karjaluoto & Chinje 2015). Between May and August 2015, 58% of adults in the UK used their mobile phones to access the internet (Personal Banking 2015). Personal Banking (2015) further revealed that by June 2014, about 14.7 million mobile banking apps were downloaded. The impact of this development is that more people are embracing banking services, especially the young generation (Shaikh, Karjaluoto & Chinje 2015). Market Reports (2015) observes that mobile banking has changed how both customers and service providers view banking. For instance, banks are now using SMS and apps to communicate with their customers about account updates.
Akturan and Teczan (2012) argue that mobile banking has increased competition in the banking industry. Due to the availability of many options, customers are now less likely to remain loyal to one bank. Instead of clients relying solely on the banks advice regarding secondary services such as mortgages, bankers now prefer to do the research themselves (Jeong & Yoon 2013). Mobile banking is also eliminating the need for generic customer services since customers now prefer customized experience during the rare occasions when they need to visit the bank (Arabo & Pranggono 2013). Banks are shaping their services to become customer-oriented to cope with this new trend.
The reason for creating customer-oriented services is to improve effectiveness and customer satisfaction (Arabo & Pranggono 2013). Chang (2016) asserts that mobile banking has made customers feel more in control of their banking experience, as opposed to traditional banking where the bank is in control.
Customers view mobile banking as fast and efficient (Chang 2016). People lead busy lives. As such, they have limited time to spend banking (Akturan & Teczan 2012). Through mobile banking, they no longer need to queue at the banking hall for hours or even set aside time to visit the bank (Sohail & Al-Jabri 2014). This advancement is seen as an advantage because the time that was traditionally used for banking can now be channeled to other activities.
Through mobile banking, services are processed rapidly, a situation that has led to ease of shopping (Akturan & Teczan 2012). According to Sohail and Al-Jabri (2014), mobile shopping has become a popular mode of payment at groceries and gas stations among other payment points. People do not need to carry cash when going shopping (Marriott & Williams 2016). As a result, their security is enhanced. Mobile devices have the latest security technology such as face and fingerprint recognition. Hence, users are confident that intruders cannot access their (users) personal information (Personal Banking 2015).
However, the issue of security regarding mobile banking raises concerns (Choi et al. 2013). Many users are often concerned about the safety of their money due to the high incidence of cyber-attacks (Arabo & Pranggono 2013). Viruses, spams, and Trojans can be used remotely to hack into customers banking details (Shaikh, Karjaluoto & Chinje 2015). In addition, mobile devices are small. Hence, they can be easily lost or stolen (Arabo & Pranggono 2013).
Loss and theft of mobile phones are some of the biggest threats that threaten mobile banking (Jeong & Yoon 2013). Each year, more than a million mobile devices are either lost or stolen in the UK. Android-based mobile devices store large amounts of personal data, including banking details, which can then be accessed by intruders once the device is lost or stolen (Shaikh, Karjaluoto & Chinje 2015). The latest devices can run many programs simultaneously, a situation that increases the chances of malicious programs operating in the background without the knowledge of the user (Market Reports 2013). According to Bagunas, Sophia, and Matriano (2016), mobile banking security is challenging banks to develop effective mechanisms to counter the loss of money by their customers.
Issues such as the ease of mobile banking and its usability depend on technology acceptance. Sharma et al. (2016) reveal how age influences how people view mobile banking in the UK, either positively or negatively. Younger people are likely to accept mobile banking relative to their parents generation that still prefers traditional banking (Zhou 2012). Akturan and Teczan (2012) agree with this finding by asserting that older people perceive mobile banking as insecure.
Hence, many of them shy away from using it. The findings by Market Reports (2013) reveal how mobile banking has risen dramatically in the last few years among young adults aged 16-24. Market Reports (2015) further observes that despite the rapid growth of mobile banking, the older generation is still not responding as positively as the younger one. For this reason, banks are retaining their branches to serve this niche of their clientele who prefer physical service at the bank (Market Reports 2015).
This project relates to the above literature on mobile banking. The writer has observed that little literature exists regarding how customers perceive mobile banking, despite the expansive literature on the benefits of mobile banking. Therefore, this study seeks to bridge this gap by carrying out an investigation on people in the UK regarding their experiences and perceptions. This study is informed by the assumption that perception and experience with mobile banking depend on the age of the customers.
Methodology
This study will rely on both primary and secondary research. Qualitative and quantitative data will be collected. For the primary research, surveys will be conducted to customers outside bank branches. In-depth interviews will be used to collect data from the participants. 5-10 interviewers will approach participants and ask them to talk about their experiences and perception of mobile banking. A phenomenological design will be used to analyze responses from the depth interviews. Polit and Beck (2013) explain that phenomenological research is essential in bringing out the lived experiences of people.
For quantitative data, participants will be asked to provide responses to predetermined questions contained in the questionnaire. Each question will include four multiple choices as a way of guiding the participants responses. These questions will be designed according to responses obtained from the in-depth interviews. The quantitative description is important to researchers when they wish to focus on measurable aspects of data, for instance, magnitude and size (Polit & Beck 2013).
In terms of focus groups, data will be categorized according to the age groups of the participants. Three categories will be included, namely, Baby Boomers, Generation X, and Generation Z. These categories are based on the assumption that the age of participants will determine their attitude toward mobile banking.
Between 100 and 150 participants will take part in the survey. The participants will be of different age groups based on the assumption that the acceptance of mobile banking differs between the older and younger generations. Data obtained from the study will be analyzed using SPPS version 194.0. Cross-tabulations will be used to calculate descriptive data. The software will help in indicating percentages between independent and dependent variables.
The presentation of the findings will be done in the form of diagrams that will be made via MS Excel. SPSS will also be instrumental in producing additional graphs, for instance, the means from the different categories of age groups. The researcher will also use ANOVA to analyze statistical differences in perception and experience across the three age groups. According to Polit and Beck (2013), ANOVA is useful in testing mean group differences where three or more groups are involved.
Resources
Any research is expected to use various resources that range from money, labor, and time. It estimated that the researcher will spend about 3 hours every day in 4 days conducting the survey. The researcher will target customers outside the bank branches. The money used for traveling to conduct the survey is also identified as a resource for the purpose of this research. It is crucial to point out that the participants will not be in one fixed location. As a result, the researcher will be required to travel, sometimes with a vehicle, to access the respondents. Additional resources for this study will include funds to acquire questionnaires for the survey and software packages. Software packages to be used include SPSS version 14.0 and ANOVA.
Ethical Issues
The project will also address the various ethical issues that the researcher needs to consider when gathering data from the participants. As such, the researcher will not include children and people with sensory needs in the study. Additionally, the express authority of participants will be sought beforehand. Hence, only individuals who will agree to participate will be involved. They will not be forced to take part in the interviews.
Reference List
Akturan, U & Tezcan, N 2012, Mobile banking adoption of the youth market: Perceptions and intentions, Marketing Intelligence & Planning, vol. 30, no. 4, pp.444-459.
Arabo, A & Pranggono, B 2013. Mobile malware and smart device security: Trends, challenges and solutions, IEEE, New York.
Bagunas, A, Sophia, M & Matriano, M 2016, E-Commerce mobile banking security: A comparative study. Web.
Market Reports 2013, Internet & telephone banking, Routledge, London.
Market Reports 2015, Internet, mobile & telephone banking, Routledge, London.
Jack, W & Suri, T 2011, Mobile money: The economics of M-PESA, National Bureau of Economic Research, Cambridge.
Jeong, B & Yoon, T 2013, An empirical investigation on consumer acceptance of mobile banking services, Business and Management Research, vol. 2, no. 1, pp. 31-40.
Johnson, M & Verdegaal, M 2016, How traditional banks are innovating the basics to provide customers with an Uber-like mobile banking experience, Journal of Digital Banking, vol. 1, no. 1, pp. 33-44.
Kundu, S & Datta, S 2012, A comparative evaluation of customer perception and satisfaction of M-banking and I-banking, Journal of Transnational Management, vol. 17, no. 2, pp.118-136.
Marriott, H & Williams, M 2016, Developing a theoretical model to examine consumer acceptance behaviour of mobile shopping, Springer, Berlin.
Mbiti, I & Weil, D 2011, Mobile banking: The impact of M-Pesa in Kenya, National Bureau of Economic Research, Cambridge.
Mojtahed, R, Nunes, J & Peng, G 2013, Probing future banking service opportunities: a study of the intention to adopt mobile banking among young UK graduates, International Journal of Wireless and Mobile Computing, vol. 6, no. 6, pp. 544-555.
Personal Banking 2015, Markets report, Routledge, London.
Polit, D & Beck, C 2013, Essentials of nursing research: Appraising evidence for nursing practice, Lippincott Williams & Wilkins, Philadelphia.
Shaikh, A & Karjaluoto, H 2015, Mobile banking adoption: A literature review, Telematics and Informatics, vol. 32, no. 1, pp. 129-142.
Shanmugam, M, Wang, Y, Bugshan, H & Hajli, N 2015, Understanding customer perceptions of internet banking: the case of the UK, Journal of Enterprise Information Management, vol. 28, no. 5, pp. 622-636.
Sharma, S, Govindaluri, S, Al-Muharrami, S & Tarhini, A 2016, Predicting mobile banking adoption: A neural network approach, Journal of Enterprise Information Management, vol. 29, no. 1, pp. 1-6.
Slade, E, Dwivedi, Y, Piercy, N & Williams, M 2015, Modelling consumers adoption intentions of remote mobile payments in the United Kingdom: Extending UTAUT with innovativeness, risk, and trust, Psychology & Marketing, vol. 32, no. 8, pp. 860-873.
Sohail, M & Al-Jabri, I 2014, Attitudes towards mobile banking: Are there any differences between users and non-users?, Behaviour & Information Technology, vol. 33, no. 4, pp.335-344.
Zhou, T 2012, Examining mobile banking user adoption from the perspectives of trust and flow experience, Information Technology and Management, vol. 13, no. 1, pp. 27-37.
Specific activities within the company where planning and organizing are performed and how they are interrelated
Resource allocation;
Distribution of funds, expertise, labor, and equipment;
Environmental adaptation;
To improve the companys relationship;
Address problems and opportunities;
Internal coordination;
Internal strengths and weaknesses to maximize profitability;
Organizational strategic awareness;
Systematic management development systems for evaluating past plans.
Resource allocation includes decision about the distribution of the Bank of America Corporations funds, expertise, labor, and equipment (Cherrington, 1994). For instance, the Banks CEO or the Board of Directors may decide not to pay dividends as a means to retain earnings for expansion strategies or the Bank may focus on employee redistribution to meet workforce demands in other regions.
The Bank may use environmental adaptation planning activities to enhance external relations with stakeholders such as customers, governments, suppliers and the public. The Bank uses planning activities in this category to address opportunities and challenges emanating from external factors. For instance, the Bank may decide to increase the number of ATMs at various locations to enhance convenience of customers.
Internal coordination activities at the Bank would focus on handling internal affairs. The Bank uses these planning activities to review its strengths and weaknesses in order to maximize profits. These may hiring the best talents to create human resource competitive advantage or introduce new technologies to enhance efficiency.
Finally, strategic awareness activities ensure that the Bank can review its previous plans against performances. This could be quarterly performances.
The four above-mentioned activities of planning and organizing are interrelated through four business management functions:
Business management:
Planning;
Leading;
Organizing;
Controlling.
Business management involves acquisition, allocation and use of resources through four management functions such as planning, organizing, leading and controlling (Daft, 2014). In this case, the Bank managers must rely on planning to develop effective strategies, policies and various means to achieve organizational objectives. Planning would ensure that possible challenges are identified and solved. Planning ensures that all activities and management functions are interrelated. It offers the direction the Bank may require, set goals for growth and develop a framework for achieving those goals.
During planning and organizing activities, the Bank managers must set goals; evaluate both internal and external environments for challenge and opportunities; assess various options; a chose appropriate plan; implement the plan; and finally control and evaluate outcomes of the plan.
Generally, these processes and activities ideally overlap across management hierarchies and therefore promote organizational unity and coordinated planning.
Two goals for the organization that might be achieved over the next six months
Goal One: To align the segments with how the bank manages the businesses in 2015:
The Home Loans subsegment;
Legacy Assets & Servicing;
A portion of the Business Banking business.
As from January 1, 2015, the Bank decided to realign its various business segments and improve management processes in 2015. These realignment processes should be achieved within six months.
The Bank changed its Home Loans subsegment within Consumer Real Estate Services (CRES) and moved it to Consumer & Business Banking (CBB). At the same time, the Bank created a new segment for Legacy Assets & Servicing (Bank of America Corporation, 2015).
In addition, the Bank reviewed a portion of its Business Banking business depending on the size of the client relationship. This portion was transferred to from CBB to Global Banking. The management will evaluate these changes to ensure conformity with the new segment alignment.
Business Segment Operations Realignment
Home Loans subsegment:
Moved Home Loans subsegment from Consumer Real Estate Services (CRES) to Consumer & Business Banking (CBB).
Business Banking business:
Moved Business Banking business from CBB to Global Banking depending on the size of the client relationship.
Legacy Assets & Servicing:
A new segment.
Studies have shown that strategic planning is imperative for all organizations large or small (Cordeiro, 2013).
The Banks decision to review its business segments and realignment them according to emerging needs, challenges and opportunities reflects planning processes that involved the allocation of resources with regard to personnel and time.
Business realignment is a strategic planning decision that requires a well-formulated plan based on internal and external environments. Without effective strategic planning of business segments and creation of new ones, the Bank may fail in its attempts. Hence, the Bank managers must formulate and implement strategic decisions to achieve organizational business objectives.
Goal Two: To achieve cost savings in certain noninterest expense categories:
Under the Project New BAC, first announced in the third quarter of 2011;
Based on streamlined workflows, simplified processes and aligned expenses;
Achieve $2 billion per quarter by mid-2015 in cost savings.
A part of overall strategic plan and operating principles.
To improve its processes, operational efficiency and realize cost savings, the Bank management introduced the Project New BAC, which was first announced in the third quarter of 2011. Under the Project, the Bank expected to realize cost savings in specific noninterest expense categories as it streamlined workflows, simplified processes and aligned expenses with our overall strategic plan and operating principles (Bank of America Corporation, 2015).
This is a part of the overall strategic plan and operating principles of the Bank. Strategic planning, therefore, is crucial for any organization that wants improve its processes and realize cost advantages.
The Bank planned to realize annual savings of $2 billion per quarter, by mid-2015 or $8 billion every fiscal year. It is expected that the Bank will achieve this goal as planned.
The elements of organization and how they are interrelated within the structure of the company
Human resource:
Layers of management.
Geographical divisions:
North America;
Europe; and
The Asia Pacific region.
Product and service development:
Evolving services and products.
The size of the workforce, which is more than 220,000 employees, influences the structure of the Bank. The large number of employees requires several administrative levels for effective operations (Brews & Tucci, 2004). As the Bank grows, the structure will also expand accordingly.
The Bank must account for several corporate locations in its strategic plans. It has North America, Europe and the Asia Pacific region among others affiliates. The Bank may create autonomous levels at some regions to enhance efficiency.
Over the years, the Bank has increased its portfolio of services and products to cater for diverse needs of the market. Moreover, as it continues to grow, the Bank has created specialized departments for Home Loans, Consumer and Business Banking, Legacy Assets and Servicing.
Control:
Control over the quality.
Distribution of Authority:
Centralized management or Decentralized Management.
Marketplace:
Distribution channels e.g. ATMs, branches, agents etc.
Marketing and sales teams.
Elements interrelate during planning to create future growth strategies and objectives.
The Bank wants to create excellent customer experiences and therefore it has focused on providing quality products and services. Control is therefore strict and enforced with internal controls and rules. Although it deals with mass customers and engages in millions of complex transactions, they must adhere to monetary regulations. Hence, various organizational structures exist to ensure compliance and efficiency.
The Bank may decentralize some operations to enhance efficient management. Therefore, new structures must be created to accommodate communication lines and interactions.
The marketplace has also influenced the Banks structure. The Bank relies on branches, ATMs, agents, online platforms, mobile banking and affiliates to provide its products and services. Various structures are required to manage these marketplace constituents.
These elements interrelate during planning to create future growth strategies and objectives for the Bank. Further, the elements interact to develop the blueprint for structure of the Bank and provide managerial staff levels for effecting strategies.
A Typical Organizational Elements
Management:
Control;
Geographical Divisions;
Marketplace;
Human resources;
Distribution of authority;
Products & Services.
As noted previously, these elements interrelate during planning to create future growth strategies and objectives for the Bank and further, they interact to develop the blueprint for structure of the Bank and provide managerial staff levels for effecting strategies.
If and how planning takes place in the organization
Setting objectives;
Determining a course of action for achieving those objectives;
Evaluating environmental conditions;
Forecasting future conditions;
Decision-making.
Planning involves management roles that focus on setting objectives and identifying a course of action to attain the set objectives. Managers must evaluate both internal and external conditions and forecast potential future situations.
The Bank requires effective planning during decision-making.
There are several planning processes. The fundamental step involves evaluating operating conditions of the business. As a result, the Bank managers may be able to identify vital contingencies that affect their operations based on competitive advantage, economic conditions, competition and customers. Based on the outcomes, the management should strive to predict future business environment and base their planning strategies on the forecast.
Strategic planning:
Analyzing competitive opportunities and threats, strengths and weaknesses;
Positioning for competition.
Tactical planning:
A concrete and specific means to execute strategic plan.
Operational planning:
Organization-wide or subunit goals and objectives and implementation processes.
Types of Plans and Planning
Planning:
Strategic planning;
Tactical planning;
Operational planning.
Strategic planning entails assessing competitive environments, opportunities, threats, strengths and weaknesses and then formulating strategies to compete effectively in the prevailing banking environment.
This is a long-term plan, involves the entire bank and focuses on formulation of strategic objectives.
The Bank must base its strategic objectives on its mission and explain its reason for existence. Senior executives of the Bank must engage in strategic planning.
Tactical planning is an intermediate range planning formulated on a clear, concrete and specific plan to execute the strategic plan. At this stage, the Banks middle-level managers must in the process.
Operational planning focuses on the entire organization or its strategic business units goals and objectives and specific methods to attain them. In this phase, the Bank must focus on short-term planning to support its tactical and strategic plans.
Recommend an organization strategy to reach two goals in order to improve planning and organizing processes
Expand franchises to serve:
Consumers;
Businesses; and
Institutional investors.
The Bank believes its current franchise network is broad enough to serve its clients. The retail distribution has expanded through acquisitions, which has led to increased ATMs and branches for clients. The Bank also increased the number of its employees after acquisition of Merrill Lynch and Countrywide Financial. The employees are specialized in mortgage and financial advice.
Further expansion would ensure that the Bank could develop multiple product lines, create a vast network and develop competitive advantages to serve consumers, businesses and institutional investors (Hansen & Nohria, 2004).
Increased resources would facilitate planning and organizing processes, promote customer focus, and retain for revenue generation for longer periods.
References
Bank of America Corporation. (2015). 2014 Annual Report.
Brews, P. J., & Tucci, C. L. (2004). Exploring the Structural Effects of Internetworking. Strategic Management Journal, 25(5), 429452.
Cherrington, D. J. (1994). Organizational Behavior: The Management of Individual and Organizational Performance (2nd ed.). Boston: Allyn and Bacon.
Cordeiro, W. P. (2013). Small Businesses Ignore Strategic Planning at their Peril. Academy of Business Research Journal, 3, 22-30.
Daft, R. L. (2014). Management (11th ed.). Mason, OH: South-Western, Cengage Learning.
Hansen, M. T., & Nohria, N. (2004). How to Build Collaborative Advantage. MIT Sloan Management Review, 46(1), 2231.
Being an Informational Expert is a very difficult job to do. You should be aware of all possible situations and information which can be necessary to your client. The appearance of innovative computer technologies and Internet have improved the positions of Informational Expert and gave the opportunity receive the necessary information quicker and much trusted (Wagner, 1999). There a lot of banks and there is a great competition between different banks. The Bank managers try to provide some programs of encouraging to its clients, but still the annual percentage rate remains the main while choosing the Bank (Montgomery and Lipshitz, 2005).
I am a new employee of Information Experts. I was given a task to help a client to decide which type of credit card he/she should take up. The bank which offers the incentives is PiggyBank. The offers are the following, to choose the credit card which backs cash when the consumer makes an online purchase, the other option is take the credit card which backs cash when the consumer makes a purchase at a clothing store and the last option is when the client of the bank entry into a sweepstakes whenever the consumer makes a purchase.
To help the client in this case, expert should get to know more information about the client, his or her customs in purchasing sphere. The two options, which Bank offers, are very attractive, and as we should choose only one, we should consider the conditions, which the client should provide, to be able to use the privileges, which Bank offers.
The first privilege is when cash backs when the consumer makes an online purchase. The online shops became widespread with the development innovative technologies. We should get to know how often the client visits online shops and makes online purchases. If we got to know that the purchases are made quite often we should not hurry to accept this offer, we should consider all the variants and choose the most appropriate one.
The second option was about the cash back when the consumer makes a purchase at a clothing store. The frequency of buying close is the main consideration in this option. One more aspect which should be specifies is whether all clothing stores are available, or only some definite clothing stores or brands.
And the last option which is available to us is the entry into a sweepstakes whenever the consumer makes a purchase. The bank makes his limitations here: the customer will be able to receive a prize, making every 1,000 purchase. The Bank comes out of the consideration, that consumer will make an average of 52 purchases a year with the new card.
So, after making these researchers we should consider which option is more appropriate for our client, coming out of his or her preferences. The first option is better for those, who buy goods online, the second for those, who like to buy clothes (it is usually appear to be women), and the last option is for those who do not make much purchases neither in Internet, nor in clothing shops.
It is impossible to say whether this or that option is better or worse as they are meant on its consumers. Different people have different favors, so such things as credit card should be chosen to match the personal requirements. Bank does not loose money while providing such discounts as the more clients it has, the more transaction will be provided. So, neither Bank, nor consumers incur losses, vice versa, they achieve some financial profit.
Works Cited
Wagner, Caroline S. Yezril, Allison. Global science & technology information: a new spin on access Rand Corporation, 1999.
Montgomery, Henry. Lipshitz, Raanan. Brehmer, Berndt. How professionals make decisions. Routledge, 2005.
Investment banking is an area of banking that assists various firms to acquire capital. Investment banking also provides companies with advices regarding various transactions. In the banking sector, various companies have a preference of investing in either commercial banking or investment banking. Although it was illegal for a single financial institution to own both investment and commercial banking in the US, the Gramm-Laech-Bliley Act allowed a single company to operate the two banking sections at the same time. This act was initiated in the financial sector in the year 1999. Many institutions have seen the importance of investment banks, given that many firms are able to raise capital by underwriting securities. The investment banks also act as agents of clients during the issuance of market securities. For amalgamated corporations and firms that are implicated in acquisitions, investment banks assist them in buying and selling a variety of stocks such as rigid income stocks, equities, derivatives and overseas exchange. The major discrepancy between investment bank and moneymaking banks is that an investment bank would never allow deposits. In 1999, the US financial regulations demanded the separation of investment banking from commercial banking. Other G8 countries have not yet appreciated the difference existing between the two sections of the banking sector.
Some analysts recognize that investment banking can be categorized into two types. This involves both the buy side and the sell side (Klyuev 68). The sell side is concerned with trading of marketable securities for either marketable instruments or cash. The sell side further manages advertisements of services in the market through research and countersigning stocks. The acquisition side is concerned with a variety of finances such as the hedge finances, retirement funds and reciprocated finances. The sell side is also concerned with investment in the public. All investment banks are said to have both the sell side and the buy side elements. The investment banking may as well be classified into two business sections that is, private and public sections. The insider information, which cannot be disclosed to the public, is said to be on the side of private function. In the US, the Financial Industry Regulatory Authority and the Securities & Exchange Commission regulate the investment banking sector.
Importance of Investment bankers in the banking industry
Investment banks play important roles in the economy. This implies that they cannot be ignored in any way. Their core functions have enabled the banking industry to gain popularity given that both individuals and corporations gain from financial institutions in terms of advice and profits. The core functions of these banks are as mentioned below.
Raising capital
Investment bankers have for long helped their clients to raise funds for various projects in the capital market. These financial institutions also offer advice to clients regarding both acquisitions and mergers. Analysts claim that many investment banks raise substantial profits through merging consultancy services.
Brokerage services
Brokerage services refer to activities related to trading, as well as execution of various business deals on behalf of clients. The brokerage activities are said to provide the market with liquidity cash. A number of investment bankers provide brokerage services relating to buying and selling of various marketable securities, such as debt instruments, equities and mutual funds. The purchase of marketable instruments ensures that the financial market is provided with adequate information that can be utilized in carrying out other pertinent transactions. Therefore, investment bankers play an important role in providing liquidity cash to the market.
Proprietary trading
The investment banks are also referred to as proprietors since they are involved in trading of marketable instruments using their own money as opposed to that of investors. Their activities, such as those relating to raising capital for various companies by selling debt instruments and equities through the capital market, make these financial institutions strong in the banking industry. Other financial institutions in the banking industry such as commercial banks and retail banks have always been disinterested in raising capital for investors.
Research activities
Research activities are concerned with reviewing the performance of companies, as well as forecasting future performances. Their performances are normally based on buy and sell ratings. A good number of financial analysts argue that, although research could be associated with giving advice to investors, research regarding market performance has been performed by investment banks over years.
Sales and trading
It is the most cost-effective role of many investment banks because it donates a considerable profit. Other divisions of the investment banks contribute small amounts of revenues. During the marketing process, investment banks normally target the purchase of marketable instruments, such as corporate bonds and stocks. They usually aim at making significant profits. The sales division is responsible for finding both individual and institutional investors to purchase bonds and equities that are underwritten by the investment bank. The sales division is also responsible for searching various investors that are willing to sell marketable securities, such as commodities and stocks.
Disadvantages of Investment Banks
Although investment banks play important roles in the economy, they are also associated with various problems, which make them less important in the economy. Before the year 1999, the US and other economies in the world did not appreciate that the banking sector needed to be divided into various sectors to enable easy regulation of the financial market.
Possibility of market manipulation
Regulations and laws governing investment banks such as those provided by FSA and SEC may require investment banks to put in place firewalls that would help to prevent communication regarding decision making. In the 2001 stock market crisis, a number of concerns regarding malpractices in the investment banks were raised. Analysts argued that in 1990s, equity analysts in a number of investment banks bought and sold equities that had encouraging ratings. On the other hand, other business institutions would try to avert investment-banking unless their shares are rated positively. The equity analysts are supposed to instigate insurance services for firms, with an intention of forming links that would lead to beneficial investments in the banking industry. The investment banks are also accused of selling marketable securities that do not match the acknowledged risk profiles of consumers. This could result to sell of extra stocks in the market during public offering. Retail brokerages owned by investment banks carried out these activities in 1990s. Due to this, the public would perceive the stocks in the market as favourable (Aaker 12). Front running is unlawful since a dealer undertakes orders for own account before executing orders earlier submitted by clients. This behaviour of trading may encourage investment banks to take advantage of adjustments in prices regarding the orders. This may lead to unfair practices among investors. Unfair practices tend to destabilize the market since some investors fear venturing in risky operations. It is therefore the role of state authorities to ensure that fair practices are exercised in the investment industry. However, the government should not put too much pressure on investment banks.
Low returns
Most investment banks in the contemporary world pay institutional and individual investors low returns. The checking accounts have been said to earn investors no returns. On the other hand, the savings accounts earn investors small returns ranging from 1% to 2%. Analysts in the financial sector argue that, with huge investments in the investment bank, one is destined to earn paltry returns. Analysts also argue that accounts and Certificate of Deposits pay considerably high returns when compared to those of investment banks. The normal rates earned by the money market CDs and accounts is 5%.
Conclusion
Given that investment banking is concerned with raising capital for firms through capital markets, one would notice that investment bankers are critical to various businesses that would wish to raise external capital. The external capital is normally raised through public floatation and placement of private securities. For firms that are initiating IPOs, functions of investment banks become crucial. A number of analysts argue that the effectiveness of investment banks as regards to IPOs have offered a competitive advantage to many firms. Various companies rely on investment banks for effective pricing of services, provision of auxiliary services and investment banking experience. However, these financial institutions are accused of failing to impose a firewall that would help prevent communication between decision-makers on one side and stock trading and research on the other side.
Works Cited
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The most suitable competitive business strategy, in the case of the Mountain Bank is to build the presence in the market of consumer lending and corporate banking. First, Mountain Bank needs to expand its share in the market for consumer loans, as a significant amount of the market (25%) already belongs to the bank. Following the cross-selling method, Mountain Bank would be able to attract more customers to use the corporate services. As corporate services are described as very profitable, soon the Mountain Bank would be able to use the additional profits from the corporate services to expand its presence in the market of real estate and mortgage banking.
However, in following the strategy, the Mountain Bank should be focusing more on the customer experience and bring the bank tellers on the same level with customer service positions to prevent high turnover. The human resource practices that would benefit the commitment strategy in the universalistic approach while reducing the turnover are selective recruiting based on the companys needs and extensive training courses for new employees. As for the human resource practices for other employees, they might need additional training according to the recommended strategy. Thus, the best suitable options for already existing employees are the encouragement of any suggestions and the broadening of responsibilities.
In terms of human resource strategy, the Mountain bank should prioritize the recruitment, learning, and development area to ensure that not only the teller position is the heart and soul of the bank. Instead, to acquire the image of a company that prioritizes customers experience, the principles used in the work of bank tellers should be equipped by employees in other departments. Moreover, as the new strategy implements the cross-selling method, all employees that communicate with customers must possess the same qualities as the bank tellers.
