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BA 101 WFU-1 GROUP 5

CASE 3: CAPITAL CITY BANK

I. POINT OF VIEW: President of CCB

II. PROBLEM: What should be done to improve coordination among the departments of the CCB?

III. AREAS OF CONSIDERATION


1) Recent changes in the management
A small group of investors took over CCB and reorganized its structure as part of the new management's
strategy to recover from recent years' performance. Many top level managers were changed, main operations
emphasized on lending activities and new divisions were introduced, namely Corporate Banking and Trust.
2) Size of the company
Even before the change in management, CCB had nearly 1,000 employees, which included all levels of
management. Given its nature of operations, most of the employees were assigned either to Corporate Banking,
Trust, or Branch Banking Division.
3) Mechanics of the deposit drive
With the more aggressive management taking over, the deposit drive was a hard-line approach in
marketing and selling the various lending and trust services of the bank. All departments were eligible to
participate, which caused the Oriental Account incident.
4) New organization structure
The new management employed a new organization structure that divided the company into four major
divisions: Corporate Banking, Trust, Treasury, and Branch Banking. Under the president are two staff functions:
controller and personnel.

IV. ASSUMPTIONS
 The groups assumed that the time frame of the case is 2010.
 CCB's clients range from top domestic and multinational corporations to SMEs and individual accounts.
 The Oriental Account incident was due to the eagerness of employees to win in the deposit drive.
 Each division has their respective heads which directly report to the president.
 Corporate Banking, Trust and Branch Banking have account officers who are responsible in marketing bank
offers to clients and acquiring new accounts.
 Employees are still adjusting to the new management's aggressive approach and new organization structure.
 The company has enough resources to install an integrated IT system.

V. ALTERNATIVE COURSES OF ACTION & EVALUATION


1. Have a separate marketing committee to streamline processes (Refer to next page).
A separate marketing committee will be formed that will streamline all the marketing efforts by different
divisions in acquiring new accounts. This committee shall be classified as a staffing function that will directly
report to the president of the bank. They will consolidate all the marketing activities by account officers assigned
to different divisions and coordinate with them to avoid miscommunication among branches and other divisions.
With this, the company does not only minimize the risk of miscommunication due to lack of proper coordination
but also establishes a sense of accountability to each department head, since there will be marketing protocols
and policies to be followed. Formally segregating the duties such as approving bank offers and generating new
accounts also decreases the potential for errors and irregularities, as shown otherwise with the Oriental Company
incident, since it sets the boundaries as to the scope of authority per division. This committee will also be in
charge of monitoring progresses made by each account officer vis-à-vis their expected quota for specific products.
BA 101 WFU-1 GROUP 5

2. Install a banking information system.


Having a common platform that facilitates President
greater communication among departments will
ultimately increase the efficiency and effectiveness of
the bank's operations. With an integral information Controller Personnel

system, the bank can promptly disseminate relevant


information across divisions, such as interest rates, Marketing
and monitor updates on particular transactions and Committee
offers. Direct supervisors may also receive digests on
results of day-to-day operations and keep track of the Corporate
Trust Treasurer
Branch
Banking Banking
department's progress. The lack of proper
communication means directly resulted to the loss
from the Oriental Company account, to which having Banking Branch
Treasury
Division Division
an IT upgrade addresses. This, however, requires
huge financial requirement and extensive training of
Account Branch
employees in using the new system. Operations
Management Marketing

3. Form executive committee and Support


Credit Group
conduct cadence meetings. Services
The executive board will be composed of all
division heads and department heads, having the division heads as executive officers. Conducting executive
meetings will put pressure on the executive members, since they know they are closely monitored by the
president. This also informs other officers of what are the progresses, challenges, and other matters faced by
different divisions. They are also compelled to perform their tasks properly since they have to report on their
progress every week and have regular meetings with all of the employees. This entails at least an hour or two of
the supervisors’ time every week to regularly meet and discuss. This may also not be cost-beneficial, since the
time and effort allotted to these meetings should also be considered.

VI. RECOMMENDATION: (1) Form a marketing committee and (2) Install a banking network system.

We recommend forming a separate marketing committee that will focus on streamlining the process of
acquiring accounts and consolidating all marketing activities by all divisions. Before making an offer of, say, a loan
offer to a client like Oriental Company, the account officers will inform the committee of such offer, in order to
check if other officers have pending offers to the same client. If there are none, then the committee shall send a
go-signal to the account officer. Otherwise, the officer may not proceed with the prospective offer. A more formal
authority will coordinate the work of various activities by different divisions.

A supplementary recommendation is installing an integrated IT system that will show all necessary
information that an officer needs. There will be an intranet that connects all branches to the head office and share
information such as interest rates, account balances, etc. Having an intranet may be costly, but the returns in the
form of improved efficiency and effectiveness, which translate to increase in quality of service and profits, will be
worth more than the initial investment.

As for the incentives such as the deposit drive, the management should take into account the effects of
involving all employees in such. The deposit drive should have been restricted to marketing officers only, since
there must be a task-work specialization to be followed.