Shanghai Bank (SB) is a bank that began operations locally in 2010. SB is the local arm of a major participant in the EU banking sector. The local banking industry is very volatile, with about twenty players vying for a fair part of the cake, although the market was dominated by four large payers, two of which were located locally and two of which were based internationally. To stand out from the crowds and kick-start its operations, the Bank implemented one of the most attractive employment conditions on the market. It hand-picked employees based on proven competence and experience in the Financial Sector and head-hunted and hired the best in the market in each field. So much so that little needed to be spent in terms of formation and a simple induction overflying the Bank’s services and procedures was enough to get the recruit fully operational. The Staff was regularly called upon to brainstorm in structures similar to quality circles, where the discussions helped to improve the process and service delivery, so much so that SB was perceived as a young and innovative Bank. Hence, the Bank was able to valorise and set up a very motivated and ambitious workforce 150 strong. Furthermore, so as to ensure that processing & delivery was rapid & accurate, SB purchased the ‘state of the art’ in terms of hardware & software and these were regularly updated. SB also opened five branches, which were designed by high level architects and used state of the art material & furniture. This was in line with the segment targeted, the high end spectrum of income owners. The aim was that both the customers and the staff felt themselves valorised to operate in this environment. This reinforced the unique selling proposal of the Bank : “Personalised Service”. With a change in Management three years ago, things changed drastically. The style of Management imposed was very autocratic, where little place was left to discussions and suggestions. Staff participation in the affairs of the Bank was left to a minimum and whenever they were called upon in Committees, it was systematically to be taken to task. To add on to this, Management installed a closed circuit monitoring system, with cameras set up in places that were highly litigious and the images were used to harass the Staff. This situation, coupled with the fact that there has been no job evaluation and no review of job structure and salary for the last five years, had led to a lack of motivation among staff. The industrial relations within the bank had degraded significantly over time and the Joint Negotiating Council, that was set up as a platform for discussion and negotiation with the Trade Union, was inoperative, hence causing several disputes to be sent to the Tribunal for resolution. Staff moral rapidly plummeted and Staff exodus gathered momentum - in 2015, 55% of the personnel left and in the period 2014/2015, there was an equivalent of a total staff turnover. In a market where 10-12% yearly attrition is considered as the ceiling, the impact on the affairs of the Bank was considerable. Furthermore, even though all Human Resources activities were done in-house, the bank has never really set up a structured Performance Management System nor a proper Human Resources Department to scan, analyse and understand the market. So much so that SB’s management has little knowledge of the evolution, trends and composition of the market and hence the Bank had developed a certain complacency which had seriously put its future in jeopardy. As a consequence, a sudden sharp increase in the fees structure of the Bank, on the high end when compared to competitors, led to an outburst of complaints and an erosion of the Bank’s customer base. This caused a sharp fall in the Bank’s turnover and profits and resulted in the CEO being sacked How do we learn? 3 theories have been offered to explain the process through which we acquire patterns of behavior. Explain fully each theory by taking into consideration the case study, giving as much examples.
Case study
Shanghai Bank (SB) is a bank that began operations locally in 2010. SB is the local arm of a major participant in the EU banking sector. The local banking industry is very volatile, with about twenty players vying for a fair part of the cake, although the market was dominated by four large payers, two of which were located locally and two of which were based internationally.
To stand out from the crowds and kick-start its operations, the Bank implemented one of the most attractive employment conditions on the market. It hand-picked employees based on proven competence and experience in the Financial Sector and head-hunted and hired the best in the market in each field. So much so that little needed to be spent in terms of formation and a simple induction overflying the Bank’s services and procedures was enough to get the recruit fully operational.
The Staff was regularly called upon to brainstorm in structures similar to quality circles, where the discussions helped to improve the process and service delivery, so much so that SB was perceived as a young and innovative Bank. Hence, the Bank was able to valorise and set up a very motivated and ambitious workforce 150 strong.
Furthermore, so as to ensure that processing & delivery was rapid & accurate, SB purchased the ‘state of the art’ in terms of hardware & software and these were regularly updated.
SB also opened five branches, which were designed by high level architects and used state of the art material & furniture. This was in line with the segment targeted, the high end spectrum of income owners. The aim was that both the customers and the staff felt themselves valorised to operate in this environment. This reinforced the unique selling proposal of the Bank : “Personalised Service”.
With a change in Management three years ago, things changed drastically. The style of Management imposed was very autocratic, where little place was left to discussions and suggestions. Staff participation in the affairs of the Bank was left to a minimum and whenever they were called upon in Committees, it was systematically to be taken to task. To add on to this, Management installed a closed circuit monitoring system, with cameras set up in places that were highly litigious and the images were used to harass the Staff.
This situation, coupled with the fact that there has been no job evaluation and no review of job structure and salary for the last five years, had led to a lack of motivation among staff. The industrial relations within the bank had degraded significantly over time and the Joint Negotiating Council, that was set up as a platform for discussion and negotiation with the Trade Union, was inoperative, hence causing several disputes to be sent to the Tribunal for resolution.
Staff moral rapidly plummeted and Staff exodus gathered momentum - in 2015, 55% of the personnel left and in the period 2014/2015, there was an equivalent of a total staff turnover. In a market where 10-12% yearly attrition is considered as the ceiling, the impact on the affairs of the Bank was considerable.
Furthermore, even though all Human Resources activities were done in-house, the bank has never really set up a structured Performance Management System nor a proper Human Resources Department to scan, analyse and understand the market. So much so that SB’s management has little knowledge of the evolution, trends and composition of the market and hence the Bank had developed a certain complacency which had seriously put its future in jeopardy.
As a consequence, a sudden sharp increase in the fees structure of the Bank, on the high end when compared to competitors, led to an outburst of complaints and an erosion of the Bank’s customer base. This caused a sharp fall in the Bank’s turnover and profits and resulted in the CEO being sacked
How do we learn? 3 theories have been offered to explain the process through which we acquire patterns of behavior. Explain fully each theory by taking into consideration the case study, giving as much examples.
*Please integrate the case study as much as you can in the question
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