Metro Bank is a large national bank that prides itself on achieving healthy profits each year. The shareholders are obviously very happy. Metro Bank has several hundred branches but, as with many other major banks, the Board is finding it more and more difficult to justify the existence and operation of smaller branches, particularly in regional areas. For the past few months, the Board of Metro Bank has been discussing ways of generating more profits, and the only thing that everyone can agree upon is to downsize the operations. David Armstrong has been CEO of Metro Bank for 18 months. He was headhunted from a large banking group in the United States, and the main purpose of his appointment is to generate even greater profits for Metro Bank. David’s appointment is for four years. David has been very successful throughout his banking career and is extremely experienced in all facets of banking as a result of his progression through the hierarchy from junior teller to CEO over a period of 15 years. David is known for his directive leadership style and has very few admirers. He wants things his way. Karen Marshall is Group Operations Manager (GOM) for Metro Bank. Karen has been with the company for 17 years and has worked her way up through the ranks from office clerk to GOM. Karen is well liked by everyone. She always makes time to listen to staff, no matter what their problems are, and spends a lot of her time on the road travelling to individual Metro Bank branches to ensure that operations are functioning well and that staff and customers are satisfied. David was made aware of the Board’s recommendation to downsize several weeks ago. He was advised by the Board that unless he could think of another way to increase profits for Metro Bank, he would have to make some drastic changes that would have a negative effect on staff and customers. Quietly and without any input from anyone, David has spent the month analyzing Metro Bank’s financial position and has come to the conclusion that in order to increase profits further, there is no choice but to downsize and completely close several branches. However, because of the influx of technology and Internet banking, David sees no reason why the option of online banking cannot be promoted more to customers, thereby allowing the changes to take place without too much inconvenience. David has decided that 70 regional branches will be affected and the sooner things are under way, the better. David has called Karen to arrange a meeting to discuss the matter or rather, to present the operational strategy loosely detailing how this will take place. The rest is up to Karen to organize, after all, she is the one who is closest to the staff and customers. David is conscious that Karen’s first reaction will possibly be one of disapproval given that the downsizing or closure of 70 regional branches means not only the loss of jobs or relocation of employees, but that thousands of Metro Bank’s customers will be affected. However, as far as David is 2 concerned, his appointed role is to increase profits and that is what he intends to do. There is no other way around it. He has the Board’s backing to go ahead, and that is the most important thing as far as David is concerned. Of course, there is also the $1 million bonus at the end of his four-year term if his performance accords with the Board’s expectations. Karen arrives at David’s office for the 9 am meeting. She is aware that something is in the air, because David never takes the time to meet with her, despite her attempts to develop a good working relationship. The meeting begins, and after ten minutes David has already briefed Karen on his intention to downsize and close some of the branches. Now he wants Karen’s input on how to approach staff and customers. David wants the whole process to take no longer than six months from initial communication with employees and customers to completing the downsizing and closure of the branches. Karen is shocke. She expected something, but nothing as devastating as this. She has no idea what to do, because despite her experience in the banking industry, she has never had to deal with this sort of situation. Questions 1. Based on what you understand from the case about David’s personality and leadership style, how should Karen have initially responded to David when he first joined Metro Bank? 2. If David was a more participative leader yet still had to discuss with Karen the task of downsizing or closing 70 regional branches, how might he approach the issue with Karen? 3. David is a directive leader — he wants the job done, and done in his time frame. However, he has obviously not thought the whole process through and has decided to leave that to Karen because of her excellent rapport with the banking staff. What advice would you give to Karen about handling this situation? For example: (a)How should she initially communicate with staff affected by the changes? (b)What factors will she need to consider in redesigning Metro Bank’s structure after the do