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Bank of America
Student’s name
Institute of Affiliation
Course
Date
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Summary
In a rating of banking institutions done by the Financial Stability Board, Bank of America
was viewed to be among the banks that made it to the top 30 list in 2022 (Gelsi, 2022). It is noted
that the banks on the list had not changed. However, slight changes were noted for the banks as
they featured differently from each other. As noted from the article's content and context, Bank of
America is a market not short of the competition. This can be observed in the efforts put in by the
competitors to improve their positions to be among the top banking institutions. The competition
can also be noted from the fact that the top list has not had new inductees, and the names that
feature in the listing are the same.
Bank of America, in the described circumstances, has done well for itself to be on the list
as one of the globe's important banks. From the article, Bank of America in the previous listing
had been categorized in bucket two. Bank of America has since moved up from bucket two to
bucket three. This leaves it one spot away from the top bucket that has, at the moment, only one
banking institution. Bank of America improved its value of additional loss absorbency by +0.09%
and, as such, moved up the bucket list (Gelsi, 2022). This comes at a time when other institutions
that still made it to the list dropped in value and consequently moved down a bucket list. Bank of
America could, in the future, move up the bucket list to upset standings that have been set. The
financial institution can continue allocating resources and channeling effort into acquiring the
additional loss absorbency that qualifies it to feature as a baking institution rightfully for the fourth
bucket level. With consistency in the activities that have helped level up, Bank of America could
eventually top the listing.
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References
Gelsi, S. (2022, November 21). JPMorgan keeps its rank as largest global systematically
important bank; Bank of America moves up the list. MarketWatch.
https://www.marketwatch.com/story/jpmorgan-keeps-is-rank-as-largest-globalsystematically-important-bank-bank-of-america-moves-up-the-list-2022-11-21
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Bank of America
Staci Barfield
MGT500 Management
Instructor Dr. Derrick Esplim
November 22, 2022
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The Bank of America is a multinational organization that offers financial services to
people from all social and economic groups. The headquarters of the organization is in Charlotte,
North Carolina. The bank was opened in San Francisco, where it was first known as the bank of
Italy. In 1930, it changed its name to Bank of America. It has ever since grown into one of the
largest banks globally. The bank's primary services include wealth management, commercial
banking and investment. In 1998, the bank faced a significant loss, leading to the bank being
acquired by the Charlotte-based Nations bank. This is one of the essential acquisitions in history
(Carosso, 2022). The acquisition led to the bank quickly gaining a considerable market share,
leading to rapid growth. The Bank of America Cooperation has built a solid customer base since
it focuses on the client's financial needs. The organization has been facing several challenges,
leading to a slight profit drop. It is, therefore, necessary to assess the organization's culture and
environmental factors to create strategies that will increase profits in the organization.
Organizational culture of the company
Organizational culture determines the quality of service given to customers. The cultural
system in the Bank of America defines the employees' beliefs, values and behavioral
expectations. The organizational culture in the bank guides the leaders and shapes the human
resource department (Rofcanin et al., 2017). The cooperation has also initiated strategies,
policies and programs that lead its cultural development.
Bank of America's organizational culture is for ethics and teamwork in the company's
multinational operations, with cultural traits that motivate employees to abide by the
organization's philosophy and core values. The resulting human resource management situation
reflects the company's needs in terms of culturally supporting its competitive advantages in the
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financial services industry (Rofcanin et al., 2017). The organization's culture includes ethical
conduct, leadership accountability, team orientation and discipline management.
Leadership accountability in the organization is a significant focus. Leaders are required
to be accountable for their decisions and actions. The organization also constantly reviews
policies and strategies implemented in the organization. This provides every leader with the
opportunity to explain and give a summary of their progress. Ethical conduct in the organization
is also very essential. The organization has codes of conduct that apply to every stakeholder. The
culture reinforces a multi-prolonged approach. The approach includes recognition programs for
employees who follow ethical conduct fully. Ethical conduct and organizational culture are
crucial because it helps in building a peaceful work environment where people work in harmony.
Another culture in the organization is discipline management of risks. Risk management
is essential because it helps mitigate and prevent loss. It is also necessary because a culture of
identifying and solving problems is built. This culture is continuously reinforced in the
organization through training. The organization also employs a risk and control team whose
primary responsibility is to prevent, identify and manage risks. The organization also puts effort
into team orientation. The organization has several branches in different parts of America. The
organization encourages teamwork by orienting its workers to work together and provide the best
services to its customers. Team orientation is essential in an organization because it promotes
innovation.
The Bank of America organizational culture has been influential for the past decade.
However, it is time for the organization to make slight changes because the market is changing.
Business trends keep on changing. Therefore, the organization should change its culture to fit its
customers' and customers' needs. The organization should introduce a culture of training and
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sharing ideas and knowledge. The organization recorded a slight decrease in the profit margin.
This could have been caused by changing trends in the market. It is, therefore, necessary to
continuously train employees on the changing trends. The Bank of America should also
incorporate a culture of performance evaluation. Every employee's performance should be
evaluated and compensated accordingly. This will help in keeping track of the progress every
employee is making. The performance evaluation culture can be reinforced by rewarding
employees for performing well. Rewards and good compensations motivate workers to perform
well. Another culture that the organization should adopt is empowerment. The organization
should empower the community members and workers financially. The community members
should be educated about financial responsibilities, which will lead to them opening and
maintaining accounts.
Methods the Bank of America deals with uncertainty in the market.
Markets uncertainty can be described as part of the financial industry. Trade wars,
politics, federal reserves and changes in interest rates cause uncertainty. The Bank of America
has therefore created strategies to help deal with the risk during shifts in the market. The first
strategy is the encouragement of opening fixed accounts with customers. This helps in reducing
equity exposure to changes (Roukny, Battiston, & Stiglitz, 2018). The organization will also
have funds to help mitigate possible losses when a financial crisis occurs. The organization also
sells bonds to its customers. This allows the organization to have finances that care for its growth
while protecting its operations. Using bonds is a commitment to clients and eventually increases
trust between the organization and its customers.
Another method in which the organization deals with uncertainty in the market is through
risk reduction. The organization has employed a risk and control, management team. The team
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focuses on reducing risks that are caused by market uncertainties. The team conducts continuous
research, which helps in predicting outcomes and market changes (Roukny, Battiston, & Stiglitz,
2018). The information gathered helps in making decisions. The third method in which the
organization deals with uncertainty in the environment is finding investors. The investor helps in
raising the value of the organization's stocks. It is essential to ensure that the management is
accountable to the customers because trust is built. Continued research is necessary because it
will help the organization make critical decisions.
The organization's method of dealing with uncertainty can be improved. The organization
should initiate a continuous research program. The research program will gather information
about the customers, their needs, competitors, market trends and organization operations and
help determine how the factors affect each other internally and externally. Another way to
improve the strategy is by evaluating and monitoring the organization's operations. This is
essential. It will help observe progress, predict outcomes and create sustainable methods, which
will help the organization become more resilient to risks.
Environmental factors are impacting the organization.
The Bank of America's performance is affected by several environmental factors
political, economic, social, legal and technological factors. The investment opportunities in
society will lead the opportunities in the market for the organization. Industrial policies also
affect the organization's performance effectively. This is because the policies provide a
framework for performing activities. Another environmental factor affecting the Bank of
America is political stability. A nation's political condition can affect the institution positively or
negatively (Jeucken & Bouma, 2017). The government can support businesses or create a
situation that makes it difficult for the bank to operate. Another aspect is the ideology of the state
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regarding the bank. Public opinion is essential because it can increase or reduce the
organisation's market share.
The third external environment factor is socio-cultural factors which have a significant
impact on the operations and outcomes. The culture of the people affects the decisions they
make. Therefore, the Bank of America must embrace diversity and respect different cultures.
Legal factors also have a major influence on the performance of the institution (Ghisetti et al.,
2017). The government monitors, controls, and regulates activities in banks. The government is
responsible for protecting people’s money and investment. Therefore, it sets rules and
regulations which help in protecting the citizens.
Technological factors have a positive impact on the development of the bank. In the past
decade, technology has been rapidly developing (Ghisetti et al., 2017). This has enabled the bank
to improve effectiveness and efficiency in its operations. Employees in the bank can store and
analyze information. It has also made communication between clients and institutions easier,
leading to better customer relationships. The Bank of America can turn the factors to benefit the
organization. For instance, it can adopt new technology, which will help reduce costs and
increase operations speed. It can also use politics to create a good ideology about the bank in
society. The bank can also encourage cultural diversity, encouraging people to bank with them.
The Bank of America is one of the largest banks in the world. The organization has,
however, been facing a lot of competition from other organizations. Due to a recent slight drop in
the profit margin, the organization should rethink its culture, strategies and risk management
operations. The organization's culture should be changed to become more inclusive. It should
also include frequent training and orientation to increase the flexibility of the worker's blend with
the changes in the market. The finance industry has a lot of uncertainties. It is, therefore,
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essential for the organization to adopt new strategies that reduce the risk of losses. The strategies
will also help the organization to take advantage of the trends in the market.
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References
Carosso, V. P. (2022). Investment banking in America. In Investment Banking in America.
Harvard University Press.
Ghisetti, C., Mancinelli, S., Mazzanti, M., & Zoli, M. (2017). Financial barriers and environmental
innovations: evidence from EU manufacturing firms. Climate Policy, 17(sup1), S131S147.
Jeucken, M., & Bouma, J. J. (2017). The changing environment of banks. In Sustainable Banking
(pp. 24-38). Routledge.
Rofcanin, Y., Las Heras, M., & Bakker, A. B. (2017). Family supportive supervisor behaviors and
organizational culture: Effects on work engagement and performance. Journal of
occupational health psychology, 22(2), 207.
Roukny, T., Battiston, S., & Stiglitz, J. E. (2018). Interconnectedness as a source of uncertainty in
systemic risk. Journal of Financial Stability, 35, 93-106.
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