1 Company Core Strategy and Structure Staci Barfield MGT500 Management Instructor Dr. Derrick Esplin November 30, 2022 2 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 3 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. 4 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 5 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 6 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. 7 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 1 Managing Strategies Staci Barfield MGT50 Management Dr. Derrick Esplin December 13, 2022 2 Implementing a formal performance evaluation process The Bank of America, like any other company, would be foolish not to have some kind of formal performance review procedure. It's a typical dilemma among business leaders. Managers are aware of the need of providing workers with feedback and the potential benefits of doing so for improving performance and output (Ali & Anwar, 2021). Nevertheless, the majority of managers and many workers are unhappy with the current performance management system procedure. That might be accomplished by adopting a pay-for-performance mindset in which all employees are compensated fairly regardless of their level of performance. Equal compensation for equal labor may also be ensured by conducting regular evaluations, under the watchful eye of the Board and other top executives, and enforcing rules and procedures that uphold this principle. For over a decade, I have spoken with compensation specialists before making year-end compensation choices and adjusted compensation as needed. Reward system The incentive plan would consist of giving the worker something they want right after they do it. The impact of the award is contingent on time. When a reward is given too late after an employee has completed an accomplishment, it loses some of its power to influence future actions. Rapidly acknowledge and reward good achievement. When workers are adequately compensated and satisfied, they are more likely to remain with the firm. This is why a comprehensive compensation package is so important. Staff retention may be improved by competitive pay and benefits (Communication and Perception, 2012). The absence of employee turnover due to loyalty saves businesses time and resources. Employers that invest in building a competent staff see lower turnover and more stability in their workforce. Also, they are dedicated to the group and perform a good job as a unit. Paying employees fairly demonstrates respect for 3 them as individuals and as workers. When employees believe their contributions are being recognized, they are more enthusiastic about going to work. People are more enthusiastic about coming to work and doing their best, and the firm as a whole benefits (Ali & Anwar, 2021). In addition, the promise of financial incentives like commissions or bonuses may spur workers to achieve even greater success. Plans for additional income based on achievement, such as bonuses and commissions, rise to the forefront of the workforce. Rolling out and managing the change process Businesses need to develop and adapt in order to roll out and manage the change process in response to a wide range of threats, including advances in technology, the emergence of new rivals, changes in government regulations, and even fundamental shifts in economic patterns. Stagnation, if not failure, might result from failing to take this step. I would; Prepare the Organization for Change A company's preparedness to explore and implement change depends on its current state of preparation on both a practical and cultural level. Culture readiness is the first step to taking your company to the next level, before you even think about logistics. At this juncture, the manager's first priority should be to win over the support of the team members who will be affected by the impending change (Ammad khan, 2016, February 3). They highlight the many problems the firm is having, which are contributing to the present climate of dissatisfaction. Craft a Vision and Plan for Change It is the responsibility of upper management to implement change when it is evident that workers are ready to do so. The strategy needs to describe: Long-term plans: When it comes to the organization's long-term objectives, how exactly will this new policy help? Statistically 4 Significant Metrics: To what extent will we evaluate our success? What adjustments should be made to the metrics? Where should we start when assessing the present state of affairs? Implement the Changes Once the strategy has been prepared, all that remains to be done is to implement the measures outlined within it to achieve the intended outcome. Depending on the specifics of the project, various adjustments may need to be made to the organization's structure, strategy, systems, processes, staff habits, etc. Embed Changes within Company Culture and Practices After a successful change initiative is completed, the status quo can no longer be reinstated without the intervention of a change manager. This is crucial for any kind of business process-related transformation, including new workflows, cultures, and strategies. Review Progress and Analyze Results It's possible that not all successful transformation projects really were. Organizational leaders may get insight into whether or not a change effort was successful by conducting a "project post mortem" to evaluate and assess the initiative's outcomes. In addition, it may provide useful information for future attempts to bring about change. Strategy in managing the change In order to manage the change, I would use the following strategy; Work with a change management model Leaders face a number of challenges while trying to execute change, including the company's established standards, the organization's momentum, and the psychology of the 5 individuals involved. They need efficient means of bringing about transformation. Using change management models to connect business strategy to action may help leaders increase their chances of success. Change management frameworks abound, with names like Prosci's ADKAR, Lewin's, and Kotter's all making appearances. While there is some variation across the various models, they all have the common ground of focusing on what's lacking and making a strategy to fix it. Beehive has chosen Prosci's change management model because it: emphasizes the function of communication in change; integrates the psychology of individual and organizational change; and has a worldwide foundation of more than 20 years of study. Transparency in communication I would be absolutely transparent in communicating with all members of the organization while at the same time keeping some of the compensation information confidential. This is due to the fact that leaking sensitive company information may have devastating effects on the company and its stakeholders if the information isn't kept secret (Seeker, 2013). But for the sake of the organization and its stakeholders, it is important that its inner workings be made clear. Therefore, it is essential that the organization maintain a delicate equilibrium between privacy and openness. The management of the company has to adopt a principled stance, one that recognizes and understands conceptually that privacy and openness are distinct but complementary goals. Roadblocks to organizational change Improperly assessing the difficulty of transitioning to new circumstances Complex issues may have hitherto unsuspected difficulties. It's possible that we'd be helpless in these circumstances if we had the necessary expertise, advice, or strategy. When 6 dealing with change, it's important to be flexible enough to make course corrections if things go awry. Insufficient responsibility Managers and frontline staff alike should be incentivized to take part in the transition. That way, they'll take ownership of the result and develop a strong feeling of personal agency. Open-door policies, regular town hall meetings, and anonymous surveys are just a few of the methods that upper and middle management can use to encourage employee participation. Expecting a smooth transition Realize that many obstacles will be in the way of the change, and that overcoming them will be difficult. Those at the top of an organization don't always realize how much their decisions will affect those lower down the chain of command (Tiron-Tudor e al., 2021). Little thought is given to the implications of a resistant corporate culture or the allocation of new resources. Misguided organizational structure Managers, team captains, and frontline employees all need a forum where their voices can be heard. A cross-departmental group working in tandem with higher-ups is one possible structure for enacting such an arrangement. 7 References Ali, B. J., & Anwar, G. (2021). The mediation role of change management in employee development. Ali, BJ, & Anwar, G.(2021). The Mediation Role of Change Management in Employee Development. International Journal of English Literature and Social Sciences, 6(2), 361-374. Ammad khan. (2016, February 3). Chapter 8 Performance Management and Appraisal. Slideshare.net. https://www.slideshare.net/Ammadkhan6/chapter-8-performancemanagement-and-appraisal Communication and Perception. (2012). Lardbucket.org. https://2012books.lardbucket.org/books/a-primer-on-communication-studies/s02communication-and-perception.html Seeker. (2013). The Big 5 Personality Traits. In YouTube. https://www.youtube.com/watch?v=oWpRKJPCI7M Tiron-Tudor, A., Deliu, D., Farcane, N., & Dontu, A. (2021). Managing change with and through blockchain in accountancy organizations: A systematic literature review. Journal of Organizational Change Management.
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