(Solution) Breaking the Mold: Transformation at Sunmark Bank

Solution

Introduction

In modern business environment, a leverage on competitive advantage and profitability is dependent on effectiveness of an organisation leadership. This is supported in Chapter 1 notes on leadership definition as influencing process of leaders and followers for achieving organisation objectives through change. The rationale of this is that leadership are mandated with execution of ten managerial roles of leaders for accomplishing organisation objectives. This is in areas of interpersonal, informational and decisional. This is the phenomenon in “Breaking the Mold: Transformation at Sunmark Bank” case focusing on a United Arab Emirates (UAE)-based bank Sunmark Bank (SB). The hiring of a new leader (Mark Jonathan) was meant for restoring profitability and enhancing change amongst their board of directors. Based on this background, the following questions are answered;

Question 1- Why SB’s Performance was Lagging

In the case study, the 8% annual loss is a major evidence of the organisation SB’s performance. The lagging in performance could be an attribute of different factors including;

Financial Performance– The reduced financial performance by SB is evident from the identified increase in losses from 3% to 8% in 2019 to 2022. Also, at a higher than 37%, Non-performing assets and cost-to-income ratio equally has a significant implication on the organisation performance. All these compounded with the rise in exit of the existing clients owing to reduced net promoter score represent a major indicator of lagging performance.

Traditional systems– In the region banking industry, majority of the organisations had been relying on embrace of digitised operations with a 40% increased performance. This is the not the case in SB which had noted struggles in their online banking strategy with a partly growth of 8%. There has been limited consolidation of the banking sector services provision with all processes lacking appropriate streamlining. The performance would hence remain lagging unless the organisation invest in digital transformation, streamlined practice and seamless clients experiences for achieving expectation of tech-savvy clients.

Lacking flexibility and prompt response to financial needs– The lack of an elaborate flexibility of organisation systems and failure to promptly respond to financial needs represent a significant implication to lagging of performance. In the handling of customers issues, the focus has been on compliance as opposed to innovativeness to compete with other financial institutions. This is an attribute of the organisation structure being inappropriately structured to meet the needs of all their customers. This is while being ready for embracing change and maintaining their competitiveness in the organisation.

Question 2- How SB’s Organisational Values and Culture Hampered its Growth

In an organisation, their set values and culture can hamper or enhance growth as part of their operations. From the case,……

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