| Corporate management of foreign banks is different from that of Chinese banks to agreat extent. It is not only intrinsically determined by the management philosophy abank pursues for, or maybe further by the framework of the bank share and by thecorporate governing system of its own but also extrinsically demonstrated by itsstrategy and organization implementation ability for positioning, marketingdevelopment and risk management. The behavior of these two levels is interactive.However, being taken in more accurately, the management philosophy fixes the policiesto be carried out in a bank, which reflects the management theory "thinking determinesactions". By the case study of actions made by Bank of Montreal Guangzhou Branchand Guangdong Development Bank Head Office Business Department in theirrespectively conducting a specific business-intermediate business, their ownmanagement patterns and characteristics are compared and analyzed, with a purpose ofclearly revealing distinct banking management strategies as well as their effects.1.Positioning StrategyThough a bank's positioning does not completely represent all of strategies, thisposition is very essential because it definitely helps to well understand the sectorenvironment and its competitors, also prevents the bank from both over evaluating its erown strength so as to blindly expand and adversely under-estimating itself resulting inlessening market share or loosing new markets.When Bank of Montreal entered into China Market, what they took into accountmost is the positioning issue for the purpose of finding out their own competitive edge.Based on their internal resource allocation and future development in China, BMOclosed the foreign exchange center in Singapore and moved it into Guangzhou, in orderto enlarge aggressively their business in China Mainland. After several years ofdevelopment, BMO Guangzhou Branch nowadays plays an important role in ChinaForeign Exchange Center, being designated as market maker by CEEC, anddistinguishes their operation characteristics from other foreign banks in China, posing aantecedent and predominant advantage. Appropriate positioning definitely helps thebank to choose a diversified target market and a reasonable marketing portfolio, henceto occupy market share as well as enlarger profitability.Guangdong Development Bank has kept on adjusting development strategy for thelast two years, setting down its positioning strategy, i.e. basing on its internal resource,focusing on a few developed regions, advancing step by step, aiming at closecooperation with private enterprises. Guangdong Development Bank launched a moredetail plan for its position, with maintaining the sound quality of its current credit assetand its excellent profitability, penetrating into the intermediate business market anddigging out high-valued clients in order to change the pattern of management anddevelopment and thus carving out a new and characteristic way for managing the bank.Having realized the importance of positioning, the managers began to lay out a neworganization structure by setting up different units of strategy as a trial to promotemanagement revolution in which "Line of Business"mode is introduced for theexploitation of intermediate business market. Operation results will be tested with timelapse. Whatever it would be, focusing on intermediate business has been made as anindispensable strategy.2. Marketing Development StrategyMarketing development strategy mainly relies on the following two managingmeans: One is about human resource, which modern theorists deem it a kind of treasureresource as a economy resource, motile and treasure capital. The other is diversitymanagement on products and services. To achieve an energetic marketing, the bankmust own its specialty defines the management purpose of satisfying the need forservicing in a niche market, of digging out potential clients, of marketing over targetmarkets, and of differentiating oneself from others to win the business.Since its coming into China, Bank of Montreal has localized its human resource toa great extent, absorbing well-experienced personnel with in-deep knowledge ofbanking according to business development, meanwhile internally elevating staffs.Adopting objective management approach in performance evaluation and creating aflexible working environment, Bank of Montreal Guangzhou Branch has built up astable team in some area. Foreign exchange and international settlement business aremain product and services of Bank of Montreal.Product and service marketing strategy that Guangdong Development Bank adoptsbelongs to self-expanded orientation. For the past few years, to rapidly increase assetand liability have being the first issue for the Bank's development. Personal relationshipmarketing acts as predominant means due to the performance management dependingon the concept of "deposit is lifeline". Stimulation focus on relationship marketing, withmuch more rewards or bonus being heavily used to support so called relationshipbuilding-up. Even the employment and promotion also focus on target accomplishmentwithin a quite short term run. Notwithstanding, it brings outcome instantly, side effectsaccompany together with, such as no core competence for the bank.3. Risk Management StrategyThe framework of implementing bank's credit control usually contains two aspects:the first is to constitute self-restriction and self-controlling mechanism, diversifying anddiverting risks by effective capital allocation and internal responsibility system so as toguarantee the capital's security and liquidity on the condition of reasonable profitabilitycontributed, and to minimize or eliminate the credit risks as well; the second is toconstitute credit risk control system including credit assessment, project examinationand credit follow-up etc. so as to fulfill risk control.Under a rigorous monitoring and self-restriction, Bank of Montreal has beenkeeping developing and expanding in more than 100 years'history. Following its HeadOffice's credit risk control policy without exception, that Guangzhou Branch adoptscredit control and managing mode is a kind of vertical and matrix management withLines of business directly under Head Office's control, internal Lines of businessbalancing each other, operation department and dealing department reporting directly toHead Office.Chinese banks'credit control is always charged by the first hand, which mode is inaccordance with the Eastern management way. For example, when the manager ofbusiness department of Guangdong Development bank Head Office is responsible forthe whole department's credit risk, he is also in charge of exploring the business, takingthese two inter-restrictive functions in concurrence, which leads the position to aconflict. Due to no sound credit control system exiting in the organization, risk controlheavily depends on individual and his ethics.4. Guangdong Development Bank's Strategy on Development managementAfter a rapid development period, the bank comes to a vital phase for their furtherprogress. In order to survive the severe competitiveness in domestic banking sector andexplore the future expansion, the bank need to think it over more the road totomorrow's development when considering the solution to historical problem, and totransfer the existing focus to strategy management.It is high time to set up an organization structure system suitable for both employeestimulation and marketing management, to facilitate the growth of outstandingmanagers as well as provide them with a broad stage for their exerting abilities byaccelerating the improvement on bank's management system and organizationresources. |
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