Font Size: a A A

A Study On Organization System Design Of Commercial Banks

Posted on:2015-10-15Degree:DoctorType:Dissertation
Country:ChinaCandidate:Z J GongFull Text:PDF
GTID:1109330428975161Subject:Business management
Abstract/Summary:PDF Full Text Request
In the context of weak globale conomic recovery and increasing uncertainty,China is facing foreign trade slowdown, diminishing capital investment, total factor productivity decline, insufficient domestic activity,under-developed market mechanism, high level of local government debtand active cross-bordercapital flowsand a series ofseverechallenges. Under this circumstance, the environment for commercial banks will undergo fund amental changes, such as increasingly stringent regulatory environment, an increasing lydiverse financial need, the breakdown of competitive land scapeand traditional industry profit model, etc. For commercial banks,the key to adapt to the post-crisis era is to accelerate thepace of transformation.On September16,2013, China Banking Regulatory Commission Chairman Shang Fulin, said at China Banking Association in the thirteenth member of the General Assembly:"blindly expanding in scale is unable to meet the development needs of the commercial banks transformation. Commercial banks should focus on their unique characteristics and adapt according to local conditions to develop comparative advantage and enhance market competitiveness." The nature of the transformation of the commercial banks is that:growth should shift from looking from the outside to from the inside; development mode should shift from extensive expansion to intensive growth; profit model should shift from relying on interest margin to providing high-quality, high-fit, high value-added financial services. In order to achieve the changes, one of the most critical tasks is to design and optimize the organization system of commercial banking. Organizational system covers commercial bank’s organizational structure, management and control mode, and business processes. It influences the quality, cost, efficiency, risk of commercial bank’s operation. It is the foundation of the transformation of commercial banks and also the guarantee of lean management. The organizational structure of Chinese banks suffers from the following problems:the misalignment between organization structure and development strategy; the overlook of customer-centric operating philosophy; the difficulty of division transformation; and further improvements of process reengineering. Experience from the development of Citigroup, HSBC, Deutsche Bank and other world-renowned commercial banks showed that with the transformation and development of the world economy, strengthening the capability of organization system design and optimization can effectively improve organizational flexibility and interoperability of commercial banks, promote flat management, centralized operations and business specialization, improve management efficiency and risk resistance capability, and finally to create a solid foundation of sustainable business.Following the structure of literature review-initial building of conceptual modeland research propositions structural quation modeling analysis status description exploratory case study" and using organization and management theory, process management theory, and organizational economics theory,this study focuses on the operating practice of commercial banks and adopts exploratory case study method and structural equation modeling analysis method. The dissertation analyzes the relationship between organizational structure, process reengineering and performance and proposes commercial banking organization system design, division transformation design and process reengineering design. There are four parts of this dissertation:The first part includes the chapter2and chapter3. It systematic review and sort the basic theory and research on commercial banking organization and process reengineering, and conducts empirical analyses on the relationship between commercial banking organization system and bank performance. Firstly, the study derives the theoretical foundation of commercial banking process reengineering and organization restructuring by combing social systems theory, value chain theory, and the theory of process reengineering. Meanwhile, through the process of understanding current research on organization and process reengineering of commercial banks enables the study to find out its research reference and expected innovation. Second, after reviewing and discussing the theoretical literature, this study proposes the conceptual model and initial hypotheses on the organizational structure, process reengineering and performance of commercial banks. It then uses structural equation model to test the relationship between the organizational structure, management and control model, the key capabilities, and performance of commercial banks. The empirical results show that:(1) the multi-branch bank organizational structure will change to the business unit organization structure system;(2) division structure can effectively improve the performance of commercial banks. The key of divisional structure is the flattened and vertical organizational structure, simple and standard process, and the improvements of key specialized capabilities; and (3) process reengineering is the key to improving efficiency of commercial banks, it also can effectively enhance the performance and financial performance.The secondpart includes chapter4. It presents the "customer-centric" business bank division system design plan andprocess. First, it clarifies the meaning of and trends in commercial banking organization system design, and conducts comparative analysis oflinear functionmode,divisionmode, matrix mode, hybrid mode and network modeand other mainstream banking organization system model, and conduct in-depth analysis of the internal logic of the evolution towards the division mode; Second, it analyzes four factors that influence commercial banking organization system design, namely organizational strategy, organizational size, life cycle and IT; Third, it describes the goal and thread of organization system design, and system atically proposed commercial banking organization system design framework, including five modules:strategic management, business unit, risk management, resource allocation, operational support. Each module needs to be clear about its responsibility and needs to work independently and mutually cooperate. Specific design includes the establishment of a comprehensive, integrated strategy management system, the implementation of both the customer line and product line marketing and management, implementation of police-type or partner-based risk management system, the building of an efficient allocation of resources, and the establishment of a centralized operational support system. Meanwhile, this part conducts deep analyses of six key factors of efficient organization system:corporate governance,"customer-centric" strategy, divisional system, comprehensive risk management, value-orientedresource allocation, and centralize doperation support system;Finally, this part proposes commercial bank organization system design optimization process, including four stages:assessment of the existing system, the target system design, implementation path planning and continuous optimization.The third part includes chapter5. It proposes the design of division reform. First, based on the analysis of the current status of division reform of domestic banks, this study reveals the following problems:the over-reliance on the bank branch system during the reform; the imperfection of division management mode; the misalignment of duty and responsibility; and miscommunication. Second, based on leading practice and under the overall objective of division reform, this part designs corporate finance division and retail finance division. Corporate finance division has two modes: customer-oriented and product-oriented. Retail finance division has three modes: product-driven, channel-driven, and product and channel co-driven. Lastly, this part proposes corporate finance division reform plan from four dimensions:organization structure, functional module division, operating mode, and simultaneous reform of middle and back offices. It proposes retail finance division reform plan from the following dimensions:strategic positioning and business planning, operating mechanism, product innovation, marketing service, and evaluation incentives.The fourth part includes chapter6. It proposes plans for process reengineering of commercial banks. After analyzing the current status of process reengineering of Chinese commercial banks, this part reveals the following problems:the lack of breadth of process reengineering, the lack of depth, the lack of endogenous mechanisms, and ineffective process reengineering, etc. Second, this part systematically summarizes reengineering approach based on Lean Six Sigma management technology tools, elaborates theoretical framework based on PRSS (Six Sigma process reengineering bank), and proposes a more comprehensive management based on the five stages of the Six Sigma process reengineering commercial banks, namely the development of the strategic objectives, the evaluation of original process, the construction of new processes, new and old processes conversion, and sustainable process improvement. Third, this part designs the goals, model, implementation path and enforcement tactic of commercial bank process reengineering. It proposes the principles and objectives of process reengineering and summarizes the main modes of process reengineering:according to the implementation speed, it could be progressive or radical; according to the initiatives of implementation body, it could be induced or compulsory; according to identity of implementation body, it could be demand-led and supply-led. Meanwhile, this part designs seven process reengineering implementation steps, and proposed key strategy from the perspective of corporate culture, organizational systems, information systems and risk control systems, etc., and explains the process by an example of risk management process reengineering. Fourth, this part designs the mechanism to ensure continuous improvement of processes, which include building comprehensive management system of process reengineering, improving the capability of information technology services, establishing centralized data platform and strengthening team building and training mechanisms.The main contribution of this dissertation is:(1) Considering organizational system as an organic system of organizational structure, functional division of labor, management and control model, operational processes, and other elements further enriches and expands the connotation of organizational systems research;(2) By adding process reengineering as an intervening variable, this study builds an empirical model of commercial banking organization system-process reengineering-bank performance, and further enriches our understandingof the relationship between organizational system for commercial banks and performance;(3) Considering the different characteristics of corporate and retail finance services, this study proposes the design ideas, objective, mode selection of process reengineering. It also proposes division reform plan of corporate finance division and retail finance division and contributes to the research of organization structure of commercial banks.This study enriches the study in the connotation and research method of commercial banking organization system, further deepens the study of commercial baning organization system design, division reform and process reengineering. Commercial banks can overcome the challenges brough by changes in operating environments by improving their ability to design and optimize organization system, to conduct division reform and process reengineering, to create core competencies, and to improve lean management level.
Keywords/Search Tags:commercial bank, organization system, organization system design, structural equation model
PDF Full Text Request
Related items