ORGANISATION STRUCTURE PDF

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ORGANASATION STRUCTURE...

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A DETAIL STUDY AND ANALYSIS ON ORGANIZATIONAL THEORY, DESIGN AND CHANGE FOR HDFC BANK

SUBMITTED BY: KRISHNA KUMAR (RB18007)

Submitted in the partial fulfilment for the requirement of the award of the certificate of PGCBM-33

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DECLARATION I, KRISHNA KUMAR, do hereby; declare that this project report is submitted by me for partial fulfilment of the Master of Business Administration in Xavier’s school of management, this report is exclusively prepared by me and has not been submitted to any other institution or published anywhere else.

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ACKNOWLEDGEMENT During the research on my project work, I have received valuable guidance and suggestions from some eminent professionals.

I am enormously thankful to Prof. Gloryson R. B. Chalil for his kind permission and making the necessary arrangement to help me to do my project work on “Organizational theory design & change”.

I am obligated to my project guide Mrs Pratima Verma of HDFC Bank for his valuable guidance all across my project work. Her kind co-operation and guidance during my project work made the dream real that thrive me to complete the project work.

At the outset, I would like to express my deep gratitude to Prof. Ashis K Pani [Dean] & all the faculty members and Staff members of Xavier’s school of business for their kind cooperation during the project work.

Last but not the least; I am very thankful to all the members of different persons who have instructed me with the up-to-date information.

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ABSTRACT Organization structure plays an important influence on the elicitation of the anticipated risk-taking behaviour in HDFC bank. Risk-taking can be observed as the vulnerability to complications such as moral threat, conflict of interest and contrary choice that are triggered due to the decision background and handiness of evidence. Different operational forms have different informational properties and, consequently, the competence to enable clearness and risk control. This study reviews the organization structure and risk types in banking and studies the probable relations between the structural contingency and incidence of risk. The conclusions may provide assistance in decisions about organization structure of banks.

Keywords: Organizational structure, Functional

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HDFC BANK – A BRIEF INTRODUCTION Brief History On August 30th 1994, HDFC Bank Limited was Incorporated with its registered office in Mumbai, India. A new private sector Bank sponsored by housing Development Corporation Ltd. A premier housing finance company with 88,253 permanent employees as on March 31st 2018. In January 1995, HDFC Bank began operations as a Scheduled Commercial Bank. The bank is having the distinction of receiving the first license for setting up a new private sector bank after the introduction of financial sector reform in India. The bank started with an edge over other public and other old private sector banks in terms of putting in place the state of art technology in the area of IT. This is mostly true for other new private sector banks set up consequent to the financial sector reform. Capital Structure As on 30th June 2018, the authorized share capital of the Bank is ₹650 crores with the paid-up share capital ₹520,83,15,734 /- which is including of 260,41,57,867 equity shares of the face value of ₹2/each. The HDFC Group has holding of 20.86% of the Bank's equity and around 18.16% of the equity is held by the ADS / GDR Depositories, 33.44 % of the equity is held by FIIs and the Bank has 5,48,942 shareholders. Growth in recent years FY 2015-2016

FY 2016-2017

FY 2017-2018

7,40,796 12,296 4,64,594 5,46,424 43% 4.2% 44.3% 0.28% 15.5%

8,63,840 14,550 5,54,568 6,43,640 48% 4.3% 43.4% 0.33% 14.6%

10,63,934 17,487 6,58,333 7,88,771 43.5% 4.3% 41% 0.40% 14.8%

Balance Sheet Size (₹ Crore) Profit After Tax (₹ Crore) Advances (₹ Crore) Deposits (₹ Crore) CASA Ratio Net Interest Margin Cost-to-income Ratio Net NPA / net advances Capital Adequacy Ratio Other data facts:

EARNING PER SHARE (₹ ) 67.8

CREDIT CARDS (Nos. in lac ) 106.9

57.2

85.5

48.8

2015-2016

72.8

2016-2017

2017-2018

2015-2016

2016-2017

2017-2018

Source: Annual Report and Investor Presentation

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Departments of the HDFC Bank: a) Finance Department b) Marketing & Sales Department c) Wholesale Banking d) Foreign-exchange and NRI Department e) Human Resource Department f) Personal Banking Department Unique advantages of HDFC Bank: a) National Geographic Presence b) High leverage of Digital Technology c) Corporate Governance d) Motivated Workforce Current Business Challenges: Recent business challenges and threats faced by HDFC bank are follows: 1. Pressure due to increase in demand of accessing low cost electronic services. 2. Tough competition by Global players 3. Twofold responsibility, to safeguard customer’s privacy and guard against fraud. a. Need of detailed understanding of customers to identify customers’ requirements and wants. b. Need of maintaining transparency has increased significantly due to major increase in customers’ awareness. c. Need to safeguard customer’s privacy as now customers conducting banking transactions online. Hence, it directly enters into banking records that creates fear to reveal the identity of the customers. d. Need to increase awareness on e-banking to reduce cost of cost of operations e.g. Physical presence of branches. e. Need to develop adequate infrastructure in relation with current telecommunication and bandwidth scenarios as internet facility providers claim to provide speedy and high bandwidth, still the problem of high speed internet prevails. f. Need to develop proper security measures to protect its customers against “net – jacked” or from frauds. The threats of e-banking are as below: 1. The most usual way of fraud with the information is the cracking user credentials (login and passwords) of e- banking. 2. High trafficking of queries results into jamming computer network, Hence, Denial of services. 3. Due to Data Diddling the information and data can change in an unlawful way and It can affect in getting higher amount bill relatively than real amount to be paid by customers. 4. Due to Session Hijacking, Hijacker has become an unauthorized intermediary between the customer and the server and hijacker can capture the data and restricts it to reach the appropriate target.

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Q. 1 Answer: Analysis on diagonally opposite quadrants of competing value framework Decades ago, the professors of university of Michigan were researching the key indicators of efficient organizational performance. And an extremely valuable model for organizing and understanding a wide array of organizational (and individual) topics came out by this research. Also, these include concepts on Organizational Effectiveness, Corporate Culture, Leadership Competencies, Stages of Life Cycle Development, Financial Strategy, among others.

FLEXIBLE COLLABORATE

CREATE







Do things together Long-term development



Do things first Breakthrough

INTERNAL

EXTERNAL

CONTROL

COMPETE







Do things right Incremental



Do things fast Short-term performance

FOCUSED This typical model is the Competing Values Framework, developed by Robert Quinn and Jon Rohrbaugh. It is based on statistical analyses of a broad list of effectiveness indicators, Quinn and Rohrbaugh discovered two key dimensions underlying thoughts of effectiveness, focused on: 1. Organizational Focus - This dimension distinguishes an importance on flexibility, discretion, and dynamism from a stress on stability, order, and control. 2. Organizational Preference for Structure - The second dimension distinguishes an internal orientation - with a emphasis on integration, collaboration, and unity - from an external orientation - with a focus on differentiation, competition, and rivalry. Collectively, these two dimensions form four quadrants. The diagram envisages the framework and places name for respective quadrants:    

Marketing Consultancy Department Human Resource Department Research Department Finance Department

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Marketing Consultancy Department

Human Resource Department

Finance Department

Research Department

Here we are stressing on the HR Department & Finance Department of HDFC Bank which performances as an opposite quadrant in relations of tools & techniques, work culture, collaboration, talent management, techniques, interpersonal relationships, and empowerment goes entirely in opposite diagonal direction which does pretence a high risk & increases discoordination. The major reason for selecting these two departments is Increase in mutual trust  Increase in coordination  Decrease in work repetition  Increases mutual understanding  Increase in sharing information  Increase in sales  Decrease in conflict The efficiency standards differ due to: Human Resource Department

Finance Department

Corporate Politics

Corporate Politics

Lack of Incentives

Huge Incentives

Complex Structure

Open Structure

Rigid in Nature

Less Rigid

Informal Structure

Formal Structure

Q. 2 Answer: The key stake holders’ conflicts involving outside stakeholders of the organization are as follows: Potential conflicts between internal & external stakeholders in HDFC Bank Business Decisions

Likely to be supported by

Possibly opposed by

Job conflict

Shareholders bank

Employee local community

Time conflict

Management, Suppliers

Local community

Work conflict

Customer, Shareholders

Employees

Accountability conflict

Shareholders

Employees

Pricing policy conflict

Shareholders

Customers

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The coalition’s partners representing matrix grid:

High Keep Satisfied

Main Players

Power Minimal Effort

Keep Informed

Low

Role of Inducement & Contribution in regard to this coalition on aspects of shareholdersKey stakeholders in HDFC Bank are the main players in the organization, holding high power to influence the organization and high level of interest in it. They are more likely than any other stakeholders to create difficulties in resolving conflicts if their needs are not attended. Keep wellversed the organization stakeholders have great interest in the organization (land owners, neighbouring residents, public in general, groups of interests, environmental bodies) and may be severe rivals to it but have limited power to influence project decisions. Keep-satisfied stakeholders, on the contrary, hold high power to influence the organization decisions (investors, authorities, legislative bodies, investors, media), but are often passive, meaning that conflicts with them may be avoided if they feel happy with the implementation of the organization. The last set of stakeholders is the negligible effort group, who have muted interest in the organization, so hovering on conflicts, and are not able to have a huge impact on the results (for e.g. trade and industry) . It is worth observing though that the instances given above among brackets resemble to usual stakeholder positions in conventional constructing organization, but they may assume other positions sometimes.

Q. 3 Answer: Comparison of organization with other organization on the same sector model ITEMS

HDFC BANK

ICICI Bank

AXIS Bank

Establishment

24 Years

24 Years

25 Years

Marketing

Medium

High

Average

High

High

Average

Social Activities

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Macro Environment Demographic, Political, Socio Culture

Micro Environment Customers, Publics, Competitors

Internal Environment Vision and Mission, IT Infrastructure, Customer Service

In relation to dynamism, complexity, uncertainty the skilled resources / working professionals are obtainable abundance in nature & hence it is not unusual in availability. The resource dependence theory linked to the unique specific environment factor.  HDFC Bank depends upon its own Human Resource Department to hire skilled resources which is being hired.  HDFC Bank depends upon its own Research Department for creating new products and services to give unique competitive edge in the market against its competitors. Q. 4 Answer: HDFC Bank follows the functional structure in nature. A design that groups people together on the basis of their common expertise & experience or as they use the same resources. Functional structure is the root or foundation of horizontal differentiation. An organization group tasks into functions to upsurge the efficiency with which it attains its principal goal, delivering customer with high quality products at competitive process. As the function specialize the skills & ability & core competency that elasticities an organization core competitive improvement over others. This benefits in division of labour & allows to provide the work in a complete manner. Business support functions are significant enablers to an organization’s achievement, but they are an overhead and their actions essential to be aligned to maintain the efficient and effective delivery of organizational goals. HDFC Bank is able to assist clients in studying the provision of support services. Exactly, with below-mentioned support:  Product / Services development  Maintenance KRISHNA KUMAR

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     

Information services Supply chain Marketing Logistics Sales IT

It provides advantages for the support functions in the following manner:  It delivers opportunity to acquire from one another & become more specialized & productive.  It offers people with expert in common when they are accumulated into functional group they can develop well-informed with the latest technique for performing a task.  It helps to employ new people as expert people are there with equipped skills to train.  It supports to stick with the group behavior, commanding to division of labor & achieving organizational goals.

Q. 5 Answer: The unique aspects of culture that prevails in HDFC Bank: HDFC Bank trusts that the key to building an organization is People. The philosophy of the Bank can be summarised as: Hiring right talent and retaining them by creating a conducive environment through a combination of financial and non-financial incentives. Besides innovation the organization also fosters a culture of empowerment and ownership. This paid-off during demonetisation when employees went well beyond the call-of-duty to make customers comfortable. In an enormously disordered environment with crises exploding by the day they came up with some very imaginative solutions. To reiterate the five broad pillars of HDFC Bank's People Strategy are:  Resourcing and Hiring: In an industry where agility in talent acquisition and deployment is key to geographic expansion and growth HDFC has leveraged online recruitment along with added channels like job-ready model to grow reach and the quality of hires. It has created a robust leadership pipeline across levels by identifying the right talent within and grooming them for exciting roles. This has resulted in an 84000plus work force that is well motivated and skilled to deliver value to the customer. Improved digitization improved process competences and rebalancing capacities over the years has led to a small decrease in the employee base.  Career Management: HDFC Bank's talent management processes create opportunities for employees to progress and grow. The methodical investment of time in career discussion with employee’s competency assessment and intensive functional as well as behavioral training through the Gurukul programmes restate the Bank's promise to employees on career development.  Employee Engagement: The HDFC Bank has cultivated an enabling performance culture in line with its vision to be a `World Class Indian Bank'. The Performance Management System take into line organization’s goal with key objectives for every business. Role-based scorecards at the employee level coupled with managerial feedback specify clarity and support to help employees excel.

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In addition, HDFC endeavours to strengthen its connect with employees and has conducts some employee engagement events both at local and national levels.  Josh Unlimited: Pan-India Sports event conducted in 27 cities  Stepathlon: An Employee Wellness initiative that saw the participation rise by1000 to about 3500  Hunar: Pan-India in-house talent competition  Corporate Online Library: A knowledge resource available to all employees for accessing nearly 1.5 lakh books  Employees can also participate in the ‘HDFC Bank Voice Hunt Contest' in connection with Shankar Mahadevan Academy and ‘Corporate Photography Contest' which is an inter-corporate event.  Training and Development: Training plans are grown based on analysis of training needs identified in discussion with various businesses. A wide bouquet of training programs is dispensed covering on-boarding product and process training advanced programs and behavioral training. The on-boarding training confirms that new employees are trained expansively and equipped with essential know-how as well as functional and behavioral skills required for the role. The product training and advanced programs enable skill development regular updates and build capability. The training methodology has progressed to application based training including imitations case studies and games. Leveraging technology many of the class room programmes are now being carried through online mode. The role specific learning plan ensures effective use of blended learning method.  Rewards: Value is the driving force in the organisation and objectivity the slogan while rewarding employees on a financial and non-financial basis. This fair and reasonable approach inspires people to give their best. The compensation policy ensures that remuneration is not only competitive but also comprises wealth creation prospects through long-term rewards like ESOPs. HDFC's comprehensive compensation policy is aligned with the advices of the Reserve Bank of India. The ‘Star Awards' is institutionalized recognition programme that occasionally appreciates performers. The ‘Tejaswini Awards' is a distinctive category to recognize women highfliers. No, the latest culture that prevails in the organization focuses on these aspects which emphasizes on the five pillars of the organization culture. The self-motivated environment leads to:  Helps to surge profits & reach the strategic goals of the organization.  It also helps to take the challenges in the organization, since the step of external factors is constantly changing. The link elements of the culture to the unique aspects of specific environment stated:

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Customers

Economic Policy

Techn...