Frameworks - Sustainable and Financial Innovation

Question: Discuss about the Frameworks, Sustainable and Financial Innovation. Answer: Introduction Organizational culture is a system of assumptions, values and beliefs undertaken by the members through mutual experience and thought procedure. Culture of an organization is valuable in term of enforcing strategy and formulating plans. Cultural analysis is important in terms of focusing on the strategies and business environment while enumerating policies. Barclays is Britains second largest bank undergoing cultural changes. This case study is based on analyzing Cultural Web model given by Johnson to enumerate culture of the organization (Model, 2015). Organizational culture plays a major role in framing organizational strategic decisions. The analysis is necessary to formulate the strategy for Barclays. Cultural analysis helps managers to encourage the employees to achieve high goals. Before 2012 the culture of Barclays was considered as a culture of gaming or bonus. The managers while setting the budget considers the high bonuses for the employees. This helped the organization in understanding the cultural background of Barclays and helped in finding aspects of the existing culture while enabling future strategy. The bank suffered international criticism due to its bonus culture. The bonus culture has dominated the industry for a quiet long time. This has determined the attitude of the employees but hinders implementation of new strategy. It is advised to take serious measures while abandoning old practices and adopting new without resistance (Cervellati, Piras, and Scialanga). Cultural web model Cultural web model helps in managing the challenges with the help of suitable strategy. The Routines and Control System of Barclays helped in understanding the issues. Barclays employees main aim is to run process to clear and settle transactions. Their day includes managing correct document and report the transactions and investigating breakage in the cash account. The employees are working day and night to make profit for Barclays. The control system of the Bank refers to the reward system given by the bank to the employees in order to motivate them (Polke, 2012). The bonus of the employees depends upon their performance. High performance is equal to high bonuses.. The employees are even using unethical measures to attain high bonus. Hence it is evident that Barclays requires hard-working and high performance from employees to achieve high end process (Ireland.et al, 2012). Cultural web model is a comprehensive assessment used by Barclays to define its limitations. Every individual has different perception regarding the culture. It is recommended to assess the issues in advance and to analyze it in group to each other while interpreting the significant result (Car, 2016; Wendt, 2015). Problems and issues faced by the bank The major issue faced by Barclays before 2012 was due to gaming at Barclays. The organization is based on disbursement of excess bonuses. The case study suggests that Barclays major issue is due to its culture. The company is paying unjustifiable bonuses to its employees. Moreover employees are focused on earning bonuses no matter whether its ethical or unethical. This has created a global tension in the banking sectors. Employees are opting for wrongful mean to earn bonuses that was based upon engaging more clientele base (Myners, 2012). From past 20 years Barclays has been working aggressively to outperform. They have developed a consistent focused program to enhance employees productivity. Another problem faced by the organization as per the given case study is an average career pattern for the employees. The employees do not get appreciation at work place which is causing accumulated pressure on them.. There are no set standards mentioned by the company to make business. Employees are using asymmetrical means to conduct business. Under such a situation it has become difficult for the other companies in the market to serve the purpose (Williams, 2016). Barclays has a culture of fierce tribal bonding. People who are working for Barclays are primarily driven by money but they are afraid of being powerless. It is one of the special requirements while working with a banking company. Job security is one of the major issues at Barclay. People who are not performing well are fired from the job. This has created a sense of fear in the mind of the employees. They are forced to perform well either through ethical or unethical mean. Bob diamond is known to imbibe Wall Street values in the internal culture of the Barclays. It has caused rigorous competitive environment both internally and externally. They believe in taking extreme risk for the purpose to retrieve maximum profit. They believe in generating huge profit for the traders as well. Barclays is being accused of using unethical ways to evade taxation obligation. They have been accused on incorporating capital market tax planning system for the purpose of tax avoidance. This has caused arrival of tensed environment not internally but externally as well (Salz and Collins,2013). Recommendations Barclays should take measures while contributing to an effective regulatory system. They should ensure implementation of business standards across all its business functions. Barclays need to keep a consistent and clear approach while operating business functions through performance management and reward system. It is the duty of the board to promote and safeguard the trust of people in the organization. It is necessary to build trust of every individual related to the organization by reporting regularly its objectives. Leaders should support the business standards of Barclays by reflecting its ambition among its peer organizations. The senior leadership team has a duty to promote the idea of the organization in the manner it help the organization to enhance productivity. It needs to keep a transparent approach while communicating business. It needs to keep a high standard while communicating with the customers. the value of an organization exists in meeting customer's expectation it should publish data stating the internal and external progress to the customers. Barclays should promote learning programmes to encourage frequent discussion by imbibing values among staff with a focus to resolve the issues. Senior management should actively participate in addressing the issues carefully to the participant. Progress of the organization needs to be managed carefully by building an ethical environment. These discussions need to be tailored as per the necessity. Barclays should speak its progress with openness in order to gain support from the public(Elliott, 2016). Conclusion Barclays should state the global code of conduct that should be based on the statement of value and purpose by stating the high standard to the employees. This will help the board to challenge the performance of the management more effectively. Strong risk management system will ensure great level of understanding (Aldrick, 2013). There is a necessity to keep a check over the unethical practices in order to set an example for the society. Barclays model is based on bonus system which is affecting the overall banking system. It has already hampered the values of the organization to a great extent. Hence it is recommended to build an atmosphere that fosters ethical value system. Strict regulatory measures need to be taken in order to keep a check as mentioned in the case study that Bonuses and Gaming at Barclays Bank is Turing out to be a threat for the future of the banking business. It is advised to keep a check in order to manage the internal and external disturbances (Barclays: ban king on cultural change,2016). Refrences Aldrick,P. 2013. (Online). How it all went wrong at Barclays Available at: .https://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9969642/How-it-all-went-wrong-at-Barclays.html Accessed on : 20 December 2016 Barclays: banking on cultural change,2016.(Online). Available at: https://www.hermes-investment.com/wp-content/uploads/2016/04/T3852_ESG_Case_Study_Barclays_BIC.pdf Accessed on : 20 December 2016 Car, R., 2016. The Libor Case: A Focus on Barclays. InManaging Reputation in The Banking Industry(pp. 59-78). Springer International Publishing. Cervellati, E.M., Piras, L. and Scialanga, M., Corporate Culture and Frauds: A Behavioral Finance Analysis of the Barclays-LIBOR Case.CORPORATE OWNERSHIP CONTROL, p.447. Elliott, D.2016. (Online). Barclays Need for a Culture Change .Available at: https://dealbook.nytimes.com/2013/04/03/barclays-need-for-a-culture-change/?_r=0 Accessed on : 20 December 2016 Ireland,R. et al.2012,Understanding Business Strategy Concepts Plus, Cengage Learning Model, C.W., 2015. Cultural analysis and strategy formulation. Myners, P.2012.Online. Barclays' corporate culture showed complete disregard for honesty .Available at: https://www.theguardian.com/business/2012/jun/30/barclays-corporate-culture-disregard-honesty Accessed on: 20 December 2016 Polke,C.2012. Business Strategy in the Online Industry: Market and Network Strategy in Multi-Layered Industries,Springer Science Business Media Salz, A. and Collins, R., 2013. An independent review of Barclays business practices.Online. Available at: https://online.wsj.com/public/resources/documents/SalzReview04032013.pdf Accessed on : 20 December 2016 Wendt,K.2015. Responsible Investment Banking: Risk Management Frameworks, Sustainable Financial Innovation and Softlaw Standards,Springer Williams,C.2016. MGMT, Cengage Learning