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CD Incharge,

Habib Metro Bank,


F7 markaz
branch,
Islamabad.

ACKNOWLEGEMENT:
We are honoured to take this
opportunity to dedicate our this effort and
dedication to our mentor and our highly
respectable teacher Mam Talat Rehman, who
taught us the the new ways to explore
different aspects of an organization and we
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have put in tremendous effort to get


ourselves align with the guided principles she
has taught us.
This is not an easy work to do, we have
faced a lot of troubles and confusions, but we
always took help from the things that has
been taught by her and we got the solutions
accordingly. We are looking forward to follow
the lessons you have taught us in future
aswel.

Habib Metro Bank

Introduction of organization:

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One of the most leading and successful organization in


the field of banking is none other than Habib metro bank.. The
Bank ranks within Top 10 in Pakistan with a strong vision to be the
most respected Financial Institution. HMB has its primary focus on
retail banking and trade finance and also offers highly innovative
E-Banking solutions and Consumer Banking to its customers. The
Bank's Islamic Banking Division is fully capable of catering to
customers seeking Shariah compliant products.
The HBZ Group is heir to a rich tradition of banking and
commerce dating back to more than 160 years. The group's
flagship and HMB's principal, HBZ (incorporated 1967) enjoys
International ranking of 687 in terms of capital. With
Headquarters in Switzerland, the HBZ Group also operates in
Hong Kong, Singapore, United Arab Emirates, Kenya, South Africa,
United Kingdom and North America.

The Pakistan Credit Rating Agency (PACRA) has allotted both


long-term and short-term ratings of Habib Metropolitan Bank
Limited at AA+ (Double A plus) and A1+ (A one plus),
respectively. These ratings, being the highest amongst the local
private sector Banks, denote a very low expectation of credit risk
emanating from a very strong capacity for timely payment of
financial commitments. Habib Metro bank is one of the top midsize bank of Pakistan. It is based on a foundation of trust, to be
the most respected financial institution, delighting customers with
excellence, enjoying the loyalty of a dedicated and hardworking
team, meeting the expectations of regulators and participating in
social causes while providing superior returns to shareholders.
Habib metro is focused on providing excellent services through
filling the banking needs of customers.

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Basically the focus is on, Fulfillment of the needs of customers


Teamwork among the employees and working with unity
Commitment and exceeding expectations of customers Respect of
the customers is the first priority Building and maintain the
relationship with trust and integrity
Habib Metro bank is a organization that enjoys a perspicuous
vision, robust reputation and a treasured legacy of trust. These
are also bulwarks of Habib Metros corporate spirit that you have
inherited by rites of passage- and hence must strive to protect. It
is a progressive institution with a continuously expanding
spectrum of products and services driving its growth.

EXTERNAL/ENVIRONMENTAL
Metro BANK:

FACTORS

EFFECTING

Habib

Habib metro bank is basically not established in


older time period but it established recently, so in order to make
up the place in the already established and highly competitive
market is very crucial, but at the same time very important as
well, so the first and crucial pressure for Habib metro bank is to
make its place in the market in such a way

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The second external pressure faced by the bank is that not only
Habib Metro but all the commercial banks of Pakistan are being
governed by regulatory authority State Bank which is basically a
Government bank, all the policies and circulars and changes in
working routines are made due to direction by State Bank. State
Bank take decisions which become mandatory for all the
commercial banks to follow them. State Bank is a governing
authority and HMB have direct impact on its procedures if State
Bank take any action.
Than the other factor that affects HMBs decisions are the
government policies. Like, recently government put withholding
tax on with-drawls and onlines which in result affected the banks
deposit mobilization. People became less willing now to move
their deposits from one bank to another because of this tax. They
are not willing to move their funds in other banks without any
strong reason or need.
Habib metro is also impacted by the economic conditions. People
make investments in companies and dont go for term deposits
when the economic conditions are good and companies are giving
high profits and the reason is HMB term deposits offer people
riskless investments and when the risk is low the return is
obviously low. So when the economic conditions are good making
the investments becomes a better option for people to earn high
profits instead of going for risk-free investments because they
have opportunity to earn high returns.
In past few days the conditions of Karachi were not good and
there were strikes happening in Karachi which in result impacted
the bank because it was closing its branches in that area and
when the branches are closed the bank is unable to facilitate
customers and make transactions happened and that in result
impacted the banks profitability.

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Internal forces of change


Managers and supervisors are close to the action. It is their teams
who must change how they do their jobs for the change to be
successful
In any organization there are two types of change constantly
happening: top-down initiatives launched by senior leaders
(macro-changes), and responses to daily demands from
customers and suppliers (micro-changes). Managers and
supervisors support their employees through both types of
changes. That is one of the internal pressure faced by the bank
usually
The attitude and actions of a manager will show up in his or her
people, whether the attitude is one of support or one of
opposition towards change process.
The internal organizational structure is basically the internal force
of change, the change in organizational structure directly impacts
the authority delegation.
Changes in management strategies and Employees attitude
matters a lot, a good and positive attitude will make and satisfy
the customer and make happy to come again in the organization.
Employees attitudes and mental models matters a lot. Changes in
management strategies made by regulatory authority (State
Bank) push them towards change and adopt a new way of
working. In the practices they are following now this practice and
it push them towards change.

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CHANGES OCCURRED WITHIN THE BANK:


Basically, there happens to be two major change initiatives that
has been taken by the management of the bank to increase the
efficiency and productivity of the operations of the bank.
The bank took decision to introduce biometric verification for
opening an account in Habib metro and also at the time of deposit
and withdrawn of cash amount from the bank.
The second major change initiative that has been taken by the
bank was that they also introduced a new and latest software
program known as Oracle for the efficient and proper way for
keeping the personal records (information) of the customers.
Another change that has been observed in the bank was that In
order to improve the customers services and facilitating
customers in most of the branches it made compulsory for staff to
come on Saturday; which is basically a holiday, from 10am to
2pm.

PURPOSE OF CHANGE:
Inorder to introduce change within the organization means that
the organization wants to change the status quo and move
towards new and latest perspectives.
Habib metro also took these initiatives for increase in productivity
and efficiency.
The first change initiative has been taken by the bank for safety
and security purposes, now a days, the banking and transaction
frauds are at its peak, and the bank also faced such situations on
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and off, so in order to make foul proof arrangements and to take


efficient security measurements. As the biometric verification of
customers makes it easy and convenient for them in order to
minimize the fraudulant activities while transactions has been
taken place and also at the time of opening an account in the
bank
The second change has been implemented for the purpose of
privacy and confidentiality of the personal information of the
customers. Moreover, the software Oracle is also very beneficial
for the employees aswel, because they manually record
customers details and personal information, now because of this
software, they can easily find out all the customers details and
information with just one click, so it can consume less time and
less effort. So this software may be successful in coming ages for
the bank.

WHY PEOPLE RESISTED CHANGE:


When something new has been introduced somewhere and
when people do not have idea how to deal with it, the resistance
is obvious.
Now, for the first change, customers and employees both resisted
the implementation of biometric verification process, as for
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customers they consider it insulting that they have to verify


themselves every time at the deposit and withdrawn from the
account, secondly, it is also time consuming and hectic for them
to undergo this process every time whenever they have to make
transaction with the bank. Because banking is very sensitive and
people try to follow the same patterns as it sounds riskless,
adopting changes might become harmful, they believe if the
change is implemented that would be dangerous for them. They
give priority to follow the same practices instead of adopting
changes.
Now, for the second change, the resistance has been observed by
the management from the concerned employees who are using
the new software oracle. Well, the employees were of the view
that they do not know how to use this software and creates
learning anxiety for them that they have to learn this new
software and the have to leave their mental models regarding the
process they were using prior to the implementation of this
software. They also resisted this change because they think that
there is no need of this software and it is very costly to implement
this software.
These were some of the reasons employees resisted the change
initiatives being taken by the management of the bank.

HOW RESISTANCE WAS BEING MANAGED:


It is obvious that there is also resistance for change. People do
not just accept the change you asked for, they have their own

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concerns and issues regarding the change initiatives being taken


by the organizations.
Now, for Habib metro, employees and customers resisted the
change and the management used different methodologies and
methods to manage and minimize the resistance shown by the
employees.
First of all, The management conducted different workshops and
conferences for both the customers and employees and to convey
the message that the change has been taken under the best
interests of the organization and all the stakeholders in the
process that directly or indirectly suffered through the change
process. Helping employees to understand the new patterns of job
and motivate them with different rewards
In order to secure the customers from any fraudulent activities
and to save their interest, the biometric verification system was
being implemented. Thats the way management convinced their
customers to motivate them in the change process. Secondly, the
management identified key potential individuals and gave them
the task to motivate and influence the employees in order to
accept the change and be a part of change process.
An outside consultant was being hired for giving training to the
employees for using both biometric verification devise and for the
new software Oracle.
Apart from that, the management also motivated the employees
by increasing their incentives and the compensation packages so
that the other employees who are resisting the change will be
influenced could be managed through conducting the training
programs and seminars through which employees should make
aware of importance of implementing change and when they
would be properly trained they would be more willing to adopt
change and they also accept the change wholeheartedly and play
their efficient role in implementing the change process..
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The third change initiative taken by the management was also


resisted by the employees, now it was also being managed by
Employees become resistant to change as it was wasting their
holiday. Bank offered its staff allowances and extra rewards for
coming on Saturdays which in result motivated the staff to come
on Saturday. It helped the organization a lot as customers were
becoming more satisfied by the services of banks. They became
loyal to organization and it became competitive edge for HMB as
it was providing services to customers on Saturdays as well

DESCRIBE CHANGE:
Basically change was a kind of programmatic change, as
because both the biometric verification devise and the software
Oracle was already established and was complete functionary at
the time of implementation, all a bank was to just give training to
the employees how to use the software and to bring about
awareness among the customers that the biometric verification is
for their own safety and security, the bank has nothing to do with
the insult or disgrace of their valued customers. . Some old
employees who cant adopt the change like any new technological
innovation. It will be difficult for them to learn these technologies
so they resist and forces to follow the old pattern. They are having
threats of losing their jobs and they follow the old patterns.

Now, if we talk about the type of changes then we can say that
change was radical, because change has been quickly
implemented within the organization.
As the biometric
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verification devise and the software Oracle was already


established and was complete functionary at the time of
implementation, all a bank was to just give training to the
employees how to use the software and to bring about awareness
among the customers that the biometric verification is for their
own safety and security, It is for large discontinuous changes
implemented rapidly over shorter time frame. The replace the
existing structure, processes and people with newer one. It also
occurs frequently.
On the other hand, we might say that the change was also
incremental type as because It refers to small changes,
continuous changes introduces in organization over a longer time
frame. They are not build on the existing structure and process.
HMB follow this, they come up with small continuous changes and
they are build on new strategies and processes like Oracle and
biometric verification of the accounts of the customers.

HOW CHANGE WAS COMMUNICATED:


Change has different perspectives and once it started, it just
spread everywhere like a fragrance in the air that suddenly
influence the surroundings and the environment.
Constant
change has almost become a norm, so challenge the status quo
regularly to help employees become aware of the need for
change, either now or in the future
Habib metro adopted different means to spread the change within
the customers and the employees. One of the effective way was
that the management of the bank choses different key potential
individuals within the organization who has the highest credibility
and who enjoys goodwill in the bank to spread the change
process and to influence the people within the organization so
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that they play an effective role in change process. Moreover,


change message was communicated to middle level staff through
meetings by top management. And to the other branches staff it
was communicated through emails and circulars aswel.

Change Initiative and Leadership Role:

The ultimate goal of change management is to engage


employees and encourage their adoption of a new way of doing
their jobs. Whether it is a process, system, job role or
organizational structure change (or all of the above), a project is
only successful if individual employees change their daily
behaviors and workflows. This is the essence of change
management.
In Habib metro bank, there is a whole system of people in the
organization responsible for supporting employees in making this
transition. From the highest levels of leadership to frontline
supervisors, effectively managing change requires a system of
actors all moving in unison and fulfilling their particular role based
on their unique relationship to the change at hand.
In the mentioned change initiative, the management of Habib
metro holds this view that one cannot simply send someone to
change management training or send them a memo and expect
them to fulfill their role. They will first need awareness of why it is
important and a desire to fulfill their role. To build these first
steps, you will have to make a compelling case for the value
change management delivers and how it directly supports the
work the person does. This conversation may sound very different
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for the CEO than it would for a frontline supervisor, but in the end
you must connect effectively managing change with what the
person cares about. While, for this thing, the bank hired outside
consultant/expert who will play a role of not only provide training
to the employees but also acts a change leader who is being
assisted by a team of managers who gives suggestions and core
information to the consultant because he do not know much
about the bank and its operations and about the employees
aswel, so basically, the most important task is to change the
existing mental models of the employees and the customers
regarding the new change perspectives.

KURT LEWINS MODEL:


UNREEZING:
In unfreezing stage, the bank changes the mindset and
mental models of the employees and customers for the change
process by communicating the change message by key potential
individuals among all the employees of the bank.

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This was one of the way to drive the employees towards the
change initiatives and to unfreeze the status quo and current
practice being undergo by the employees.

CHANGING:
Now, this is the phase where the actual change initiative took
place and the management actually implement the biometric
verification devise and the Oracle software and all the activities
and documentation related to these changes were undertaken as
to get the outcomes of this change as soon as possible.

REFREEZING:
Now, when the change process has been completed in the bank,
Its time to penetrate that change among the corporate culture
and the mental models of the employees so that they completely
accept the change as it is, and the bank will get the desired
outcome and to fulfil the reason they took this change initiative.

SWOT ANALYSIS:

STRENGTHS:

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capital base.
Rank in top 10 bank of Pakistan.
Continuous growth in ROE.
The banks management realizes the necessity of existence
of effective internal controls to ensure smooth operations in
the current technical and swift business environment.
Loyal management.
The bank has efficient and experienced management making
significant.
Credit rating in long-term AA+ and in the short term
A1+.
The financial statements, prepared by the management of
the bank present fairly the state of affairs.
Loans are given only to known, reputable clients to avoid
chances of fraud. Very low nonperforming loan.
Effectively handled the current economic recession.
Bank is continuously focusing on developing new and
innovative products to attract their target market.
Strong customer relationship.
Asset utilization is very good.
WEAKNESSES:

Only valued client is important.


Bad portfolio diversification (54% advances to Textile
industry)
Advertisement on electronic media has not been seen.
Declining standards of banking after merger. Interorganizational conflicts after merger.
Compromises upon polices to keep customers happy.
Old Management. (No creativity)
No further growth in branches.
Majority of shares are owned by the one family.
Low consumer finance.
Less job satisfaction of employees.

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Customers facing problem of NADRA verification while


opening their accounts because its process is time
consuming.
Promoting generally on seniority basis.
Attitude of senior manager at head office has to change
towards junior staff.

OPPORTUNITIES:
Scope in Islamic Banking.
To go global fully
Low exposure to consumer banking providing opportunity to
explore the segment.
The year 2010 will prove to be another demanding year for
the bank with scattered. Diversification, innovation and
mission driven approach are the key to success which bank
should adopt.
Progressive but cautious business expansion with strategic
branch network extension and introduction of innovative
products in all areas of business. Branch network need
extension.
Should emphasize much on e-banking. Profit margin will be
good.
The bank being Swiss incorporated, it bank follows dual
banking regulation i.e. of Pakistan as well as Switzer-land
which attracts foreign investors.
SBP policy to allow Islamic Banking business separately.
Bank introduces Islamic banking in country that attracts
large number of people.
Greater profitability can be achieved through strong internal
control.
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New schemes for deposits and finances should be introduced


regularly.
Opportunity to open branch in ruler area to increase its
branch network and gain more profit.

THREATS:
Adverse impact of Credit Crisis can badly effect on HMB.
Facing a strong competition by its competitors. High
reliability on only one market segment i.e. Textile. (54%)
Inconsistency in government policies.
Increasing competition in the banking sector. Entry of many
foreign banks.
Strict policies of the State Bank of Pakistan.
Geopolitical condition of country.
Global liquidity crisis has constrained banks to stop lending.
Current economic crunch.
Political instability.
Rising deposit rates.
Foreign banks in market having more marketing budgets.
People losing trust in banks.
Decline in private and public sector credit due to tight
monetary policy.

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Conclusions:
It was simply a matter of time, performance and politically
positioning oneself for the change to be at the right place at right
time Habib Metro Bank can certainly improve the quality of its
operations by giving proper training to employees regarding
technology, customer services and other related aspects of the
Bank.
Habib metro is the one of the largest bank in Pakistan with a huge
network, largest number of branches, it is very difficult to control,
organize and keep the institute on a progressive way. The role of
change management is just like a hub to manage its human
capital in order to meet the organizational goals and objectives.
And the growth and development should be the result of both the
bank and employees responsibility.

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