Strategic Management Of HSBC And Royal Bank Of Scotland Group

Added on - 27 Jan 2020

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STRATEGICANALYSISPORTFOLIO
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3MAIN BODY...................................................................................................................................3CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................122
INTRODUCTIONStrategic management refers to the continuous process of planning, analyzing, monitoringand assessing all the task which are necessary for an organization in order to meet their goals andobjectives (Cinquini and Tenucci, 2010). In other words, this involves the formulation andimplementation of the main goals and objectives which are initiated by the top management ofthe company. This portfolio describes the strategic management of HSBC and Royal Bank ofScotland Group. Moreover, this report describes the comparison of the strategic choices of eachselected organization. Further, this also gives explanation about the implication of the strategicdecision on the competitive advantage of both the firm (Allio, 2006).MAIN BODYStrategy can be defined as the plan or action which are designed by the firm in order toachieve a long-term goals or the overall aim of the organization. Further, strategic decision is notan easy decisions to be taken by the enterprise, however, this involves range of decisions to betaken and by taking due care (Marren, 2012). It is not always necessary that strategies made bythe corporate always excel, sometimes it also leads to the failure. This is done when the firmdoes not assess the environment in an appropriate manner and also the analytical tools have notapplied in a clear manner. This might impact the firm in an adverse manner and the decline stageof the company may get start if the strategic decisions are not made in an appropriate manner.Thus, for the success of the organization, senior management must do the proper strategicmanagement so that failure of any strategy does not impact the organization's success and growth(Parnell, 2010). Thus, for this context HSBC UK and Royal Bank of Scotland Group have beentaken in order compare their strategic management.HSBC is a British multinational banking and financial services company and it isheadquartered in London, UK. It is the third largest bank in the world by total assets of £1.87trillion. The strategy has been taken by the company's top management for increasing thecustomer base and also to increase the turnover of the bank (Ireland, Hoskisson and Hitt, 2011).The firm decided to advice their clients by giving several alternatives for hiding their savings inorder to prevent themselves from paying the taxes and eventually firm will also be saved fromsaving the tax. Thus, this will help in raising the customer’s loyalty as the clients will get3
attracted towards this company and will invest as per the bank's instruction. This have created awin-win situation where company and their clients both have got benefited from this task. Thisstrategy of hiding the customer's savings got failed as the government recognized this practice ofHSBC (Sekhar, 2009).On the other hand, Royal Bank of Scotland Group is a British banking and insuranceholding company. It is based in Edinburgh, Scotland. This bank is operating its services in awide variety of banking brands and it offers personal and business banking through its officeswhich is located in Europe, North America and Asia (Ulwick, 2005). Further, this bank alsomade the strategy of taking over of ABN-Amro. However, this strategy of RBS got failedbecause they adopted the hostile takeover approach. Due to this, they had to face a lot of issuesin the industry. Thus, these failures had a great impact on the organization and on itsprofitability.There are several reasons due to which strategic failure happens and this impact thecompany in an adverse manner. Some of the reasons of strategic failure are listed below:Lack of Communications:When the organization does not communicate internally in anappropriate manner while doing the strategic planning then the strategies get fail. Further,it can be understood from the examples that the banks who failed in implementing thestrategy (Venter and et.al., 2009). In HSBC, employees do not have clear informationabout the unethical practice going in the company. This strategy was planned by the topmanagement and they did not communicate the aim behind this planning to theiremployees. This is how, the information about such practice got revealed in front of thegovernment. On the other hand, RBS also failed while taking over the ABN-Amro due tothe lack of communication among the staff members.Poor Leadership Style:If the leaders does not apply the proper style of leadership thanalso the company can face the strategic failure (Raynor and Allen, 2005). Thus, in case ofHSBC, leaders were not efficient enough to carry out this strategy in an effective manner.Further, the company had to face unfortunate event. Thus, leaders could not identify thepotentials of their team members and this lead to the occurrence of event. While, the poorleadership as not an issue in case of RBS. The leaders were effective in this firm but the4
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