Analysis of Change Management Strategies at HSBC Bank

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Understanding and Leading Change
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Table of Contents
Introduction..................................................................................................................................2
P1..................................................................................................................................................2
M1..................................................................................................................................................3
P2..................................................................................................................................................3
P3..................................................................................................................................................5
M2..................................................................................................................................................6
D1..................................................................................................................................................7
P4..................................................................................................................................................7
M3..................................................................................................................................................8
D2..................................................................................................................................................9
P5..................................................................................................................................................9
M4................................................................................................................................................10
D3................................................................................................................................................11
Conclusion.................................................................................................................................12
References.................................................................................................................................13
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Introduction
In the current fast moving global scenario, changes are unavoidable. The main reason
for this has been the raise of competitiveness and volatility to a further extent then what
have experienced so far. Organizations are seen to come up with newer technological
innovations. Besides, there is deregulation of markets, and booming competition at the
international level (Doppelt, 2017). The present study will examine the impact of
changes over strategy and operation of the organization. The influence on decision
making will also be brought forward. Several barriers that would require leadership to
come up to tackle such changes are also highlighted. The organization that has been
chosen for this study is HSBC, which is one of topmost banks of the world (Hsbc.co.uk.
2019). The Company has four business groups under its control known as Commercial
Banking, Global Banking and Markets, Retail Banking and Wealth Management.
P1
Compare different organisational examples where there has been an impact of
change on an organisation’s strategy and operations
There are consorted strategies that have adopted by multifarious organizations. For
instance, the Lloyds group was at the edge of bankruptcy during the financial crisis. The
induction of new technologies has made it able to regain its situation. These new
technologies have made banking simpler and easy for the customers. The innovative
technology has helped in reducing the operating costs too over the next three years
(Iveroth and Hallencreutz, 2015).
HSBC is one of the foremost competitors of the bank. It is also looking to cover up its
operations with newest technologies. It has also aimed to generate better products that
would enable the customers to manage accounts in a better way.
On the other hand, Barclays Bank, UK has made a lot of basic promotions within
corporate and investment banking unit. These promotions were parts of digital
strategies. Implementation of these strategies has become top priority of the bank. The
bank expects pursuing new opportunities for earning of revenue with implementation of
these strategies (Anderson, 2016).
The bank has taken appropriate measures to enhance the global market electronic
platform. Such measure has significantly enhanced client offering and enabled them to
avail best kind of algorithmic reading, technology and pricing.
In the same way, HSBC is required to frame its banking operations in such a way where
less human effort is needed. Human effort is needed to explore for research and
development functions.
The technological innovation has several downsides as well. For instance, the
construction companies in the country are seen to eliminate jobs due to be performed
by the human forces. Jobs that required strong human presence earlier days are now
done off-site. These are brought to the site for assembling. Though the implementation
has made the companies to be at edge over their competitors, but delays would cause
penalties too.
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M1
Assess the different drivers for change in each of the given examples and the
types of organizational change they have affected
● Digital transformation
Digital transformation has helped HSBC to align the processes, systems and various
touch points. Such alignment helps them to offer better treatment to customers. In fact,
customer behaviour is the prime factor that made the companies to resort to such
measures of transformation. While, one segment of such transformation induces the
companies to put right technologies as well as system in place for tracking and
understanding customer behaviour better, other part helps in bringing about involves
driving internal changes through process re-engineering. Customer centricity has thus
ingrained within culture of the organization (Hansen and Sia, 2015).
In the same way, adoption of digital transformation has helped Lloyds and Barclays to
become more customer-centric. Now the company has gained reputation around the
world for its customer-oriented practices.
Digital transformation has helped Barclays in particular to device more products that
could be helpful for the company to generate more revenue-earning products. These
companies have increasingly felt the needs to adopt technology.
● Adoption of Technology
Adoption of technological advancements forms the centre of any innovative change.
Adoption of data helps in empowering the data system, helps in bridging the ecosystem
across the enterprise, and helps in enabling the project management and collaboration.
The adoption of technology is also effective communication with the customers, tracking
and identifying risks proposed to arise in due course (Dong and Yang, 2015).
The HSBC and the other two companies have really gained from such adoption. HSBC
is one of the most customer-oriented organizations around the world. Lloyds is known to
provide best automated solutions for the issues generated to the customers in its home
country and to the people of the world at large. Barclays has also been able to bring
about several products in the market to serve their customers in better ways.
P2
Evaluate the ways where internal and external driver of changes affect leadership,
team and individual behaviour within an organization
PEST Analysis
Political The company is facing the consequences of political uncertainty
surrounding EU
The company requires abiding by the legislations regarding banking
companies in order to establish an effective banking operation in the
countries it exists. Proper adhering to the policies and customer-
oriented attitude have worked in excelling reputation.
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Economic HSBC has encountered harmonious growth in major economic
regions
Fluctuation in interest rates has affected the operational aspect of the
company
The growth of the company is also dependent over several economic
factors. These include foreign exchange rates. Global and
Commercial banking has propelled the revenues to a different level.
Social The entire process has been digitized making customer operation a
smooth and oriented process.
The company is capable to diversify the workforce available to it. This
ensures availability of experts in the right places at the right time.
The education program generated by the company has also helped in
making better control over the situation and go for diversified
management techniques.
Technologica
l
The company feels the need for further automation and digitization of
the processes. These are thought to become more customer oriented.
The company has launched operations like ‘Move Money’ and
‘Linkscreen.’ The educational program demonstrates a detailed
literature of these programmes in their website as well as into various
public demonstration channels.
The company uses one of the top appropriate technologies to
counteract cyber attack on the sites. Therefore, customer data are
entirely protected now. This has been done from the viewpoint of
experience gained from the aspect of data stolen during previous
years causing loss of customers to competitors.
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SWOT ANALYSIS
Strengths Weaknesses
Availability of Geographic and Business
line diversification
Ability to infuse capital as and when
required
Satisfaction of stakeholders as they are
getting high dividend
Strong financial status
Operating costs has increased over the
last few years.
In the European countries, the company
suffers from lack of customer experience.
Opportunities Threats
The company has identified sound
prospects for growth in Asia. It has thus
resolved to put best effort in capitalizing
the markets there.
The proposed transition has helped the
growth of leadership at the senior level.
The company has benefited to explore the
opportunity of capital market by much
extent.
The scope of hacking in the sites of the
company products had been a continuous
threat to the progress. The company has
thus resorted to rigorous changes in its
system for better data protection.
The money laundering at the operation in
US caused a great damage to the existing
reputation of the company. The Brand
loyalty has also suffered due to the
process.
P3
An evaluation of the measures adopted by the organization in order to minimize
the negative impacts of changes over organizational behaviour
While minimizing the risks of cyber attacks on sites, it is required to have knowledge
about the external and internal vulnerabilities involved in it (Al-Haddad and Kotnour,
2015). Hackers do always look for loopholes in managing affairs. HSBC uses it
informational sources to get an idea about the cyber fraud schemes.
The companies possess huge data that are soft target to the hackers. The companies
thus adopt the method of encryption while protecting the various data. The tools thus
employed to make such encryption viable are installed by HSBC through methodical
electronic and systematic devices. Staffs across globe are also trained over the whole
affairs. Such processes are not supposed to take much time and system speed is not
also suffered.
Every piece of hardware system with HBSC across the world is authoritatively secured.
This is done to negate any possibility of hacking. The security system is fitted with
provision to debar any attempt to take loads of information away. In order to ensure, the
systems are kept locked down.
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The company is known to be one of the topmost technology-enabled banking
organizations. All the employees working at different parts of the world are aware of the
ways that would help them in minimizing the risks of cyber crime,
It needs to be remembered that hacker can even pave their way to private information
through cracking of emails. They can also attempt to penetrate through apps and other
software sources. Therefore, companies like HSBC have resorted to researches and
tracking of information to keep such possibilities at bay (Davis, 2018).
M2
Apply appropriate theories and models to critically evaluate organizational
response to change.
The effective theories for identifying the different stages required by the respective
company for changes that will take place to benefit their operations are significant. In
this regard, Kotter's eight step change management theory, Kubler Ross 5 stages
model and ADKAR model can be used. Lewin change management model is another
model, which can be used in this regard. In the first stage, which is known as unfreeze
stage of Lewin change management theory, the actual level of change is determined. In
the second stage, which is known as freeze stage communication is established with
the employees and in the final stage, which is also known as unfreeze stage, the
change is applied. In this way, the employees can establish stability in the organisation.
Kotter's change management theory
Kotter's change management theory suggests 8 steps by which can be determined that
whether the employees of the organisation has accepted the idea of change or not. The
first step is to increase urgency. It is followed by building a guided team (Pollack and
Pollack, 2015). The third one is to develop a particular vision. The fourth step includes
communications among different leaders for the perspective of change. The fifth step
includes empowering the change as needed. The 6th step suggests creating short term
targets. The 7th step says not to lose control over the ideas and the final steps suggest
sticking to the change that the company or organisation wants to include.
HSBC must follow these 8 steps to achieve the organisational goals in order to sustain
in the banking industry. It must bring certain technological advancements which will
facilitate the customers. Improvements in new customer service strategies like mobile
and net banking and introduction of SAP which will ensure quick service to the
customer. Moreover, centrally operated day ends are also proposed to be done in this
bank. With accordance to the model, the bank must bring in the following changes in
this section and act accordingly.
AKDAR model
It is a model that is based on awareness, desire, knowledge, ability and reinforcement.
In this organisation the awareness for the employees regarding the change is very
important (Tandelilin, 2016). The desire to attain the required changes is expected by
the leaders. The knowledge step actually acknowledges the step to bring the change
and facilitate the same into organisational culture. Reinforcement is referred as the
process by which new ideas are injected into the organisation and through which the
employees are motivated. Ability is the process through which the changes are being
enacted and brought forward. In HSBC the company is planning to implement the same
and apply the changes as referred in AKDAR model.
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Kubler Ross 5 stage model
As mentioned by Kubler Ross, there are 5 stages of this model. They are denial, anger,
bargaining, depression and acceptance. The organisation faces denial from employees
while implementing the changes. This will be followed by denial and anger. The
company should explain the consequences and steps of changing the process which
will lead up to the last stage that is acceptance. As we know that this steps will bring a
change to the organisation and will facilitate better customer service in future.
D1
Draw conclusions and recommendations with valid justifications for planning
effectively for change and applying change impact analysis.
The organisation will benefit in leaps and bounds by implementing these strategies as
mentioned above. Improvisation of customer service through net and mobile banking,
introduction of SAP and centrally operated day ends will have a huge impact on the
organisations day to day work. The customer base will also increase.
It can be recommended that with the help of Kotter, AKDAR and Kubler ross 5 stages
model, the company can implement the changes as required to hold and acquire market
share by the company. The proper training facilities must also be provided to the
employees regarding the proposed changes in the organisation.
P4
Explain different barriers for change and determine how they influence leadership
decision-making in a given organisational context.
There are different barriers that influence leadership decision making in HSBC. HSBC
being a UK based banking company is facing a vital technological changes and which is
influencing their leadership decision making. Here, the following reasons are being
analyzed in details.
● Limited understanding of the change and its significance
The change that is being introduced in HSBC is quite unfamiliar with the existing
environment of the company. Being equipped with the traditional methods of
banking, the respective organization is facing a huge difficulty to deal with the
changing scenarios of banking business. The policy and framework of the
organisation needs some changes to be addressed on the basis of which the
leaders of the organisation will determine the decision making process of the
leaders.
● Limited Resources
The banking system requires huge inflow of money for its functioning. As the
resources are limited, there is always a delay in formulating new policies relating
to the change that they are having. It is very important for a bank like HSBC to
understand the change as quickly as possible and to manage and train the
existing employees as per the required change. HSBC must train its branch
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managers and other employees with respect to net banking and other modern
facilities that the bank is providing; moreover it should hold training sessions and
seminars to communicate with its employees and to hear their problems that they
are facing.
● Inadequate management support for the change
When any company expands or brings a huge operational change in the
company, there is always a time gap, when the productivity of the company
becomes lower than before. HSBC is also experiencing the same phase and they
are determined to overcome the change within a short span of time. The leaders
of this organisation need to set and formulate certain policies with accordance to
the changing environment of the organisation. The leaders of the company are
unable to handle the current situation with respect to the existing policies. The
inefficient leadership of this organisation is leading to low productivity, which is
also a reason for low turnover of the bank. The main problem that can cause due
to this change that is happening is increase of nonperforming assets of the bank
or increase of bad loans which will hamper the functioning of the organisation.
● Lack of commitment to change
There is a tendency that can be noticed among several companies that they
always like to function in the way that they are habituated with. So it always takes
time for an organization to operate in different circumstances as it requires
different approaches of work to attain the desired objectives of the organisation.
The leaders need to analyse the consequence of the change and is required to
formulate new plans with accordance to the changes, it becomes very difficult for
the existing employees to focus on the particular objectives that they are
targeting. Without any proper direction, the employees do not have the
motivation to do the existing work in new format.
● Broken communication
There is a huge communication gap between the leaders of the organisation and
its leaders, the leaders need to guide the existing employees and the employees
must support the leaders also while formulating new policies. Any flow of
information within the organisation is known as communication. The flow of
relevant communication stops between the different levels of the business, then
the problem of mismanagement arises that can lead to poor functioning of HSBC.
This is how leadership decision making is affected by different barriers for
organisational change.
M3
Use force field analysis to analyse the driving and resisting forces and show how
they influence decision-making.
Force Field analysis is a method through which it can be analysed the factors that are
responsible for the change with the factors which are against the change. According to
Emmrich et al. (2015), this method brings a consensus among the factors of both sides
and helps the organisation to understand the current consequences that they may face
from the factors. The factors that can favour the change are given below:-
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● The consumers will be hugely benefited if the proposed changes are to be
completed. They will have the facility of mobile banking and net banking, which
will help them in their day to day working.
● The employees of the organisation will also be benefited from this change as
online customer service will reduce the branch pressure and will enable smooth
functioning of the organisation.
● Moreover, the core operations of banking business will be done centrally from the
head office and the day start and day end will be performed centrally.
● The software like SAP will be introduced, which will ensure proper functioning of
the organisation of HSBC.
The factors that are not favouring the change are given below:-
● The organisation is not prepared for such a change at the moment as the fund
allocated for the organisation is not enough to handle the consequences that will
be happening after the proposed changes are implemented.
● The employees of HSBC are not equipped with the changes that are going to
happen in the organisation. They will require proper training and development to
manage the changing organisational techniques.
● Moreover the internal working structure also needs a change to adapt with the
proposed changes.
● The leadership of the organisation is busy in formulating the plans and policies
which is hampering the day to day to business of the organisation.
D2
Critically evaluate the use of force field analysis in the context of meeting
organisational objectives.
The force field analysis helps the company to determine the present factors favouring
and favouring the changes that is proposed in the organisation. The changes that are
proposed in HSBC are essential to compete against its competitors to retain their
market share. There are certain factors also which are becoming an obstacle for the
company to perform the proposed changes.
The force field analysis is more of an assumption and it is not prepared on the basis of
facts. So it is depending on the organisational leaders that the way they want to adapt
the changes and to implement the same in the organisation. If the employees concerns
are taken as consensus, then it might be difficult for them to reach at a common
decision so as to analyze it’s the perspective of implementing the changes. So it is
depending on the leaders that whether they want to apply the changes or not by
keeping the objectives in mind.
P5
Apply different leadership approaches to dealing with change in a range of
organisational contexts
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Leadership approaches are different set of techniques and practices that different
organisation applies for influencing the activities of their respective organisation
(Antonakis and Day, 2017). There are various types of leadership approaches which
different organisation follows. The leadership approaches that HSBC can apply to deal
with changes are given below:-
● Transformational approach - This is the type of leadership approach that
influences both the employees and the internal environmental system of the
organisation (Hayon, 2017). It is set up with the idea to develop the employees
into leaders to achieve the desired organisational objective. HSBC can create
new leaders with accordance to the changes that will be applied in near future.
● Bureaucratic approach - This is the type of leadership when the employees of
the organisations are divided under several teams and each team has a separate
objective than the other. This facilitates the organisation to focus at various
diversified topics within a short span of time (Mitchell, 2017). This type of
approach would be ideal for HSBC to combat the changes that may happen in
the near future.
● Motivational leadership - This is the form of leadership which includes
motivating the employees to attain certain predetermined objectives as set by the
organisation (Koh, C., 2015). The leader focuses to create a trustworthy and safe
environment so that the functioning of the organisation can be smooth. HSBC
can motivate their employees to work in a challenging environment so that it can
tackle the difficult situations.
● Democratic leadership - This is the form of leadership where the leader obtains
feedback from its employees and before taking a final decision (Iqbal, Anwar and
Haider, 2015) So democratic leadership is ideal for HSBC as the leaders of the
bank can consult with the employees and take their viewpoint regarding the
changes that can be implemented in future.
● Visionary Approach - This is the type of leadership which is based on a
particular vision or organisational ideology which the organisational may follow
(Reeves and Haanaes, 2015). It establishes a strong bond between the leaders
of the organisation and its employees (Bassetti, et al 2017). This approach is
applicable for organisations like HSBC, which requires a structural change on its
outlook to compete with its rivals i the banking sector of UK.
● Transitional leadership model - This model focuses on that how a change can
be addressed through the involvement of leadership and adult development (Yin,
2015). This will help HSBC to achieve its overall objectives that the company is
planning to implement.
● Action centred leadership model - This model is based on the task, team and
individual (Allred, 2015). Communication, counselling and setting objectives is
the primary function of this model. HSBC can adopt this model as the basis of
their working ideology and can work accordingly.
M4
Evaluate the extent to which leadership approaches can deliver organisational
change effectively applying appropriate models and frameworks.
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There are many approaches that the organisation must consider to combat the
changing scenarios. Those approaches are relevant as per the different organisational
needs.
Transformational approach is required by the organisation to adapt to the changes that
will be taking place in the bank i the near future. HSBC must consider this approach to
create a healthy internal working environment, which would ensure proper functioning of
the organization. A proper internal environment motivates the employees to work freely
and gives them the freedom to access their creativity in the working style. Previously,
the concerned company used to follow traditional method of working which needs to be
changed with correspondence to the changes that is happening in the organisation.
According to McKeown, and Carey (2015), bureaucratic approach of the organisation
will enable them to work in a team and the whole work will be segregated into different
groups as per requirement. Motivational leadership will help the organisation to be
integrated and work towards a pre determined aim. While motivational leadership will
also ensure good productivity from the employees as it would motivate the employees
to work for an ideology that will ensure good productivity from employees.
The most important approach among these is the democratic approach. HSBC can
follow this approach to get the viewpoint of their employees and can also obtain their
feedback. They must formulate new policies with accordance to the viewpoint of the
employees so that it becomes easy for them to lay down the policies that would be
formulated later in the future. Moreover the leaders can convey their idea about the way
they want to formulate the policies with the employees and this will result in elimination
of all communication barriers within the organisation.
D3
Critically evaluate the effectiveness of leadership approaches and models of
change management.
The leadership style of HSBC is facing a challenge to evaluate its working culture
according to the changes that would be implemented in the near future. It must adapt to
the changes that the company has to face and must come up with a solution to combat
such changes. This is explained and critically evaluated with the help of 3 models.
These are Lewin’s change model, transitional leadership model and action centred
leadership model.
According to Hussain, et al (2018) the leadership model includes 3 parts unfreeze,
freeze and refreeze. The first phase includes is determining what is the requirement for
change. The second phase focuses on the process communication through all levels of
the organisation. The third phase focuses on applying the changes into the organisation
structure.
Here HSBC have to analyse all its prospect to follow this model as will provide various
advantages to the organisation. This will help to improve the work culture of the
organisation and will also improve the communication process of the organization's
internal structure. It will also provide a disadvantage as this model does not apply to
which works on a team basis.
According to Ciulla, (2017) transitional leadership model will also help to address the
change in organisation through its leaders by the process of adult development. This
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