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Company Core Strategy and Structure
Staci Barfield
MGT500 Management
Instructor Dr. Derrick Esplin
November 30, 2022
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Introduction
The last essay talked about what the Bank of America was and what it stood for in the
last essay (Mission Statement, vision, values, corporate responsibilities). As was previously said,
Bank of America is an international company that provides financial services to individuals from
various social and economic backgrounds. This essay will concentrate on Bank of America's
main strategy and how the market structure affects it. The paper will also examine how the
strategy of Bank of America's rivals impacts its short-term operations and how it develops longterm strategies to stay competitive and relevant. The discussion will examine several questions as
it contrasts the Bank of America and the way it is structured, including how the strategies are
similar, how they vary, whether the organizational structure has an impact, and whether the same
environmental factors impact them.
A summary of the company's strategy
Following its general strategy, Bank of America Corporation must increase earnings and
profitability through cost-effective business models and aggressive growth initiatives. The
corporation's business strategy, which incorporates internet banking to preserve competitiveness
via technological advancement, is the foundation for such a business strategy. The general
strategy needs to support Bank of America's objectives for enhancing and growing its
competitiveness (Bank of America, n.d.). Conversely, in a situation of rapid expansion, strategies
should align with the financial services industry's long-term development and related strategic
goals, considering market circumstances involving other companies in a healthy competitive
environment. The business model establishes the corporate framework for carrying out business
strategies and producing value for Bank of America and its clients (Bank of America, n.d.). With
its strategic location as among the largest financial services companies, the business architecture
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provides an example of effective organizational advancement for competitiveness through
strategic planning that incorporates the proper blend of generic and intensive growth strategies.
A competitor’s strategy
The top three competitors in the banking and finance services sectors for the Bank of
America include JPMorgan Chase & Co., Wells Fargo & Company, and Citigroup Inc.
JPMorgan is global banking and holding firm (Donnellan & Rutledge, 2019). The firm is a
significant competitor of the Bank of America in the financial service sector. To strengthen the
four primary cornerstones of opportunity—employment and capabilities, new business
development, community rehabilitation, and financial stability—JPMorgan Chase integrated its
business and policy expertise, resources, and analytics.
Different markets have standards or environmental restrictions that could have an impact
on how profitable a firm is. Within one country, states frequently have varying legal and
environmental requirements (Donnellan & Rutledge, 2019). In the US, Florida and Texas, in
particular, have different liability laws in the case of accidents or ecological degradation. Similar
to this, most European countries provide significant tax breaks to companies operating in the
renewable energy sector (Heart, 2018). Before entering new markets or starting a new operation
in an existing market, the company should carefully evaluate the environmental requirements
necessary to operate in such locations.
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Assessment of both strategies
Similarities in their strategies
JPMorgan and Bank of America are two corporate finance institutions that are increasing
their focus on transactions solutions as digital banking becomes a top imperative. Even while the
bank's rivals in the bubble category were also hit by the decreased trading volumes, the decrease
was not as severe as it was for some of its rivals. JP Morgan has also avoided serious crises and
regulatory sanctions that have beset several of its rivals (CB Insights Research, 2020). Due to
growth within the client financial services and wealth management segments, favorable
economic and regulatory updrafts for the banking industry, noticeably higher interest rates, and
dynamism underneath President Trump's tax plan, JPMorgan enhanced its market capitalization
by over $60 billion in 2017. Amongst bulge bracket institutions, this growth ranked second
highest during 12 months.
Equally, discussing digital banking strategies and technology investment took up some of
Bank of America's Q1 2017 and Q3 2017 earnings calls. The bank invested $2.25 billion in
digital efforts in 2017, according to CEO Brian Moynihan (CB Insights Research, 2020).
Additionally, the bank observes that 1 in 5 deposit transactions are made using mobile devices.
Differences in their strategies
The strategic drivers of inclusive development are at the center of JPMorgan Chase's
impact model, which reflects what they see as the necessary components for generating longlasting effects for its communities, clients, and workers. The company is implementing this
approach by making large, sustained, and data-driven expenditures in global communities (CB
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Insights Research, 2020). For instance, the firm pledges to invest over $150 million within five
years to sustain innovativeness and expand its opportunities.
On the other hand, the Bank of America utilizes an intensive growth strategy. The main
aggressive expansion strategy used by Bank of America is market penetration. The company
wants to increase the sales of financial services in its existing areas with this investment
program. Market development has been crucial to Bank of America's growth and achievement of
its current competitiveness (CB Insights Research, 2020). To ensure the competitiveness
progress of the financial services industry, the company also uses other high-impact growth
strategies, such as market and product innovation.
Impacts of organization strategy on organizational structure
The corporate structure of Bank of America is mostly hierarchical, with a top leadership
team in charge of the firm's expansion and growth. The corporate structure acts as the
overarching design and architecture that shapes the bank's business services operations and
specifies divisions of resources and activities (Paramio-Salcines & Llopis-Going, 2022). Due to
Bank of America's scale and international network, the organization needs a structural
framework that can adapt to changes in the global market. A history of mergers and acquisitions
with other financial firms has impacted the type of corporate structure the corporation currently
possesses. Further M&A may therefore result in alterations to the existing structural architecture,
but Bank of America's generic strategy for competitiveness and intensive growth tactics have
mainly stayed constant over time.
The organizational structure supports the organizational strategy of JPMorgan firm. The
market division of JPMorgan Corporation is transforming to provide a seamless digital
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experience. All of their client's needs are considered when designing digital solutions. In order to
create differentiated, personalized experiences at scale, for instance, the company is investing
(JPMorgan Chase & Co., n.d.). This will speed up time to market, increase customer satisfaction,
save costs, and use common platforms and capabilities.
A better strategy
While both strategies employed by the Bank of America and JPMorgan firms have
considerable benefits to respective organizations, JPMorgan's strategy is more effective as it
targets to enhance its pillars of opportunity: jobs and skills, small company expansion,
community rejuvenation, and financial health (Heart, 2018). It combines business and policy
knowledge, capital, and analytics (JPMorgan Chase & Co., n.d.). Through the expansion
strategy, J.P. Morgan is renowned for taking control of companies and restructuring them to
create them more sustainable and lucrative.
How to improve corporate strategy at the Bank of America
However, there has been fierce rivalry from other businesses for The Bank of America.
The company must reconsider its culture, strategies, and risk management procedures in light of
a recent modest decline in profitability. The culture of the company needs to be altered to be
more inclusive. In order to strengthen a worker's ability to adapt to market changes, regular
retraining and alignment should be included. There are numerous uncertainties in the finance
sector (Paramio-Salcines & Llopis-Going, 2022). Therefore, the company must implement
innovative loss-reducing tactics. The initiatives will also assist the company in capitalizing on
market trends.
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References
Bank of America. (n.d.). Bank of America's ethical business
practices. https://about.bankofamerica.com/en/our-company/business-practices
CB Insights Research. (2020, June 26). JPMorgan Chase competitive strategy Teardown: How
the bank stacks up on Fintech and
innovation. https://www.cbinsights.com/research/jpmorgan-chase-competitive-strategyteardown-expert-intelligence/
Donnellan, J., & Rutledge, W. L. (2019). A case for resource‐based view and competitive
advantage in banking. Managerial and Decision Economics, 40(6), 728737. https://doi.org/10.1002/mde.3041
Heart, L. B. (2018). JPMorgan chase, bank of America, Wells Fargo, and the financial crisis of
2008. International Journal of Business Communication, 55(2), 237260. https://doi.org/10.1177/2329488417753952
JPMorgan Chase & Co. (n.d.). Small business
expansion. https://www.jpmorganchase.com/impact/our-approach/small-businessexpansion
Paramio-Salcines, J. L., & Llopis-Goig, R. (2022). Key strategic decisions and their influences
on the management and success of the bank of America Chicago Marathon and the
marathon Valencia Trinidad Alfonso. International Journal of Financial Studies, 10(3),
74. https://doi.org/10.3390/ijfs10030074
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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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