HSBC's Restructuring in India
|
Case Code: BSTR148 Case Length: 12 Pages Period: 1999-2004 Pub Date: 2005 Teaching Note: Not Available |
Price: Rs.300 Organization: HSBC India Industry: Banking Countries: India Themes: - |
Abstract Case Intro 1 Case Intro 2 Excerpts
"We had to deal with structural issues and we were already behind the competition... We want to change the structure of the organization so that there are more people operating on the selling and marketing side. As such, we are restructuring the skill set to drive sales and at the same time, restructuring the basic terms and conditions (of employment) to lower cost structure."
- Niall S K Booker, CEO, HSBC India.
Introduction
The Hong Kong and Shanghai Banking Corporation Limited (HSBC) entered India as early as 1959. Despite being one of the oldest and well-established foreign banks, HSBC had been lagging behind local private sector banks and other foreign banks in India in terms of business network and growth. HSBC's competitors and industry experts regarded it as a conservative bank that lacked competitive spirit. Commenting on HSBC, the head of direct sales of one of its rival banks said, "HSBC isn't seen as being as aggressive as its rivals in the market. It has extremely good relationships with its branch customers and serves them very well, but it is just not seen as being aggressive in the rest of the market." HSBC's complacency was reflected in the bank's financial performance. Local private sector banks like ICICI and HDFC were far ahead of HSBC in all business segments. When benchmarked against foreign banks, HSBC fared badly. HSBC's net profits fell by over 25 per cent for two consecutive years in the fiscal 2000-01 and 2001-02, while rival banks like Citibank posted a rise of 37 per cent in profits for the same period.
On November 2002, Niall S K Booker (Booker) was appointed Group Manager and Chief Executive Officer (CEO) of the HSBC Group in India. Booker soon realized that HSBC India followed a conventional approach to doing business and retained its old bureaucratic structure and culture. He believed that the much criticized laidback work culture was the reason for the lacklustre financial performance of the bank. Booker decided to transform the bank's work culture so that HSBC could shed its bureaucratic and conservative image and gear up to face new challenges. He wanted HSBC India to be proactive and aggressive like its competitors. To achieve this, Booker concentrated on giving the bank a new direction by launching a major restructuring program....
Buy this case study (Please select any one of the payment options)
| Price: Rs.300 |
Price: Rs.300 | PayPal (7 USD) |
