Shinsei Case Study Essay example

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Shinsei Bank Case Shinsei bank has a rich history in terms of influence over the Japanese banking sector. Of all the defining moments, there are a few moments that reflect the culture shift of Shinsei bank from the more traditional Japanese approach to the more Western business model. These moments include the denial by Shinsei to forgive 97 billion Yen in debt owed by Sogo, the creation of the Shinsei Securities operations and the institutional banking department, being listed on the Tokyo Stock exchange and the hiring of Tom Pedersen as the Chief Learning Officer All the above moments are important because all reflect the shift from tradition and probably may account for the current lack of culture or rift between the…show more content…
Although I agree with the use of "pay for performance" in theory, I do not agree with the two-tier system as implemented by Shinsei. At Shinsei, it seemed that the two tiered system led to resentment. As one employee put it "Frankly, for much of the first year the atmosphere in the bank was like civil war…Everyone was fighting everyone else." The problem with pay for performance systems is that detracts from team work as motivation for self reward goes against the idea of helping colleagues. On the other hand, pay based on the organization profitability leads to star performers being underpaid as well as social loafing. In order to effectively implement a pay for performance system, an organization must be careful to avoid the negative side effects. What was the aim of the values and vision exercise? How successful was it? The main purpose of the vision and values exercise was to formalize and align the current values that were present within the organization. By doing this, Pedersen hoped to align the values to the banks strategic plans. I think Pedersen has done a great job so far in trying to bridge the gap between the employees and trying to promote an organizational culture based on a common mission. His vision and values exercise was successful. In addition, he adopted a new "360 Performance Evaluation" system for senior executives and coaching session for evaluators so the evaluations were not inflated.
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