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Management

Assignment No. 2

MBA-1

Hunain Aziz AM 551522 Banking & Finance

Acknowledgement
I would cordially like to thank Mr. Zahid Nazir who is the Chief Operating Officer in Bhara Kahu Branch, Islamabad and all the staff who helped and assisted me in collecting the important data about the company.

Organizational Structure
Introduction
Organizational structure is a formal system of job relationship that coordinates employees to achieve a company's goals. It is the formal arrangement of jobs within an organization. Organizational structure is the framework, typically hierarchical, within which an organization arranges its lines of authority and communications and allocates rights and duties. Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. It is a way to organize employees into some kind of structure to meet goals. Organizational structure helps us to coordinate activities by clearly identifying that which individuals are responsible for which tasks. An organizational structure regulates the activities of a business and sets the hierarchy within which the employees of the company must function. Different types of structures in an organization affect the procedures and schedules of a business in different ways. It explains everyday roles employees need to fulfill and the tasks allocated to each role, necessary actions that must be committed to achieve the business mission, the coordination of the relationship between job profiles, the standard operating, reporting and supervisory mechanismsthese are all determined by the organizational structure of a company. The organizational structure can depend on demographical regions, products, departments or hierarchy.

Importance of Organizational Structure


The significance of an organizational structure is establishing a clear form of operations so employees understand their responsibility and tasks in alignment with accomplishing company goals. It sets the individual and companys goals to be achieved by the employees and organization.

Purpose of Organizational Structure


Organizational structure is a very important part in the communication flow of organization. It helps us to achieve goals and targets set by the company efficiently. Purpose of organizational structure can be to: Divide work to be done into specific jobs and departments. Assign tasks and responsibilities associated with individual jobs. Coordinate diverse organizational tasks. Cluster jobs into units. Establishes relationships among individuals, groups and departments. Establishes formal line of authorities. Allocates and deploys organizational resources.

Organizational Design
Organizational design is also a very important part of the organization. It helps to coordinate between individuals, groups and departments and creates flow of directions and commands in the organization. Six key elements are involved in the design are:

1. Work Specialization
It is a very important part in the organizational design of the company. It is the process of dividing activities into separate job tasks. Individual employees specialize in doing part of an activity rather than the entire activity in order to increase output. It also results in time saving and efficient working.

2. Departmentalization
In departmentalization common activities are groups together so that work gets done in a coordinated and integrated way. The way jobs are grouped together is called departmentalization. Every company has different department which are doing a specific kind of work.

3. Chain of Command
The chain of command is the line of authority extending from upper organizational levels to lower levels, which clarifies who reports to whom. Authority refers to the rights inherent in a managerial position to tell people what to do and to expect them to do.

4. Span of Control
Span of control means that how many employees can a manager efficiently manage. It determines the number of levels of managers in an organization. It is important as it tells us the efficiency of an organization.

5. Centralization and Decentralization


Centralization is the degree to which the decisions making takes place at upper levels of the organization. If more lower-level employees provide input or actually take decisions, then it is called decentralization.

6. Formalization
Formalization refers to how standardized an organizations jobs are and the extent to which employee behavior is guided by rules and procedures.

Types of Organizational Structures


There are different types of organizational structures and a company should choose the one that best suits their needs.

Traditional Structures
These are the structures that are based on functional division and departments. These are the kind of structures that follow the organization's rules and procedures to the T. they are characterized by having precise authority lines for all levels in the management. Various types of structures under traditional structures are:

Line Structure - This is the kind of structure that has a very specific line of command.
The approvals and orders in this kind of structure come from top to bottom in a line, hence the name line structure. This kind of structure is suitable for smaller organizations like small accounting firms and law offices. This is the sort of structure that allows for easy decision-making and is also very informal in nature. They have fewer departments, which makes the entire organization a much decentralized one.

Line and Staff Structure - Though line structure is suitable for most organizations,
especially small ones, it is not effective for larger companies. This is where the line and staff organizational structure comes into play. Line and structure combines the line structure where information and approvals come from top to bottom, with staff departments for support and specialization. Line and staff organizational structures are more centralized. Managers of line and staff have authority over their subordinates, but staff managers have no authority over line managers and their subordinates. The decision-making process becomes slower in this type of organizational structure because of the layers and guidelines that are typical to it. Also, let's not forget the formality involved.

Functional Structure - This kind of organizational structure classifies people


according to the function they perform in their professional life or according to the functions performed by them in the organization. The organization chart for a functional organization consists of Vice President, Sales department, Customer Service Department, Engineering or production department, Accounting department and Administrative department.

Divisional Structures
These are the kinds of structures that are based upon the different divisions in the organization. These structures can be further divided into:

Product Structure - A product structure is based on organizing employees and work


on the basis of the different types of products. If the company produces three different types of products, they will have three different divisions for these products.

Market Structure - Market structure is used to group employees on the basis of


specific market the company sells in. A company could have 3 different markets they use and according to this structure, each would be a separate division in the structure.

Geographic Structure - Large organizations have offices at different place, for


example there could be a north zone, south zone, west and east zone. The organizational structure would then follow a zonal structure.

Matrix Structure
The third main type of organizational structure, called the matrix structure, is a hybrid of divisional and functional structure. Typically used in large multinational companies, the matrix structure allows for the benefits of functional and divisional structures to exist in one organization. This can create power struggles because most areas of the company will have a dual management--a functional manager and a product or divisional manager working at the same level and covering some of the same managerial territory. A matrix structure provides for reporting levels both horizontally as well as vertically. Employees may be part of a functional group (i.e. production) but may serve on a team that supports new product development. This kind of structure may have members of different groups working together to develop a new product line.

Other Organizational Structures


Following are some other types of organizational structures that deserve a worthy mention here:-

Bureaucratic Structure - This kind of structure can be seen in tall organizations


where tasks, processes and procedures are all standardized and this type of structure is suitable for huge enterprises that involve complex operations and require smooth administration of the same.

Pre-Bureaucratic Structure - This structural form is best exemplified in flat


organizations where administration and control are centralized and there is very little, if any, standardization of tasks.

Network Structure - In this kind of structure, the organization managers are required
to maintain and coordinate business/professional relations with third parties such as clients, vendors and associates in order to achieve a collective goal of profitability and growth. Most of the time, these relations are maintained and tasks are coordinated via telecommunications and electronic media and, hence, this type of structure is also known as Virtual Structure.

Team Structure - Organizations with team structures can have both vertical as well as
horizontal process flows. The most distinct feature of such an organizational structure is that different tasks and processes are allotted to specialized teams of personnel in such a way as a harmonious coordination is struck among the various task-teams.

Practical Study of Organization


Bank Alfalah Limited
History

Bank Alfalah Limited was incorporated on June 21st, 1992 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st ,1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through various branches in Pakistan, Bahrain, Bangladesh & Afghanistan, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Bank Alfalah Limited is a private type bank of Pakistan that is owned by the Abu Dhabi Group. In Pakistan, Bank Alfalah became functional in the year 1997. Bank Alfalah has a partnership with the Abu Dhabi Group that allows the bank to invest advanced and effective technology in order to widen the range of its services and products. Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services.

Branches & Employees


The bank is currently operating through more than 400 branches domestically and an international presence in Afghanistan, Bangladesh and Bahrain, with the registered office at B.A.Building, I.I.Chundrigar, Karachi. Currently 7580 employees are working in different branches of Bank Alfalah. It also has 85 Islamic Banking branches. Some of the main branches are located in all of the major cities like: Chakwal, Hyderabad, Lahore, Kasur, Islamabad, Gawadar, Peshawar, Faisalabad, Quetta, D.I.Khan, Raw alpindi, Sargodha, Sheikhupura, Sukkur, Sialkot, Multan, Murree, Attock District, Gujranwala, Pirmahal, MirpurKhas, Lodhran, D.G.Khan etc.

Overseas
Outside Pakistan, Bangladesh was the first place where Bank Alfalah got the Bangladesh operations of Shamil Bank of Bahrain and after getting its ownership this bank was renamed as Bank Alfalah. In the running time there are total five branches among them three branches are working in Dhaka while two others are in Sylhet and Chittagong. The bank has also its branches in Kabul, Bahrain, Manama and Herat.

Functions
Branch banking, which includes Deposits, Remittances, Foreign trade, Lockers etc. Consumer banking that includes Auto Loans, Credit cards, home loans, consumer
durables, RTCs and etc.

Electronic banking, which includes telephone banking, online banking, ATMs etc. Corporate banking, which includes the facilities and services such as Short/Long
term finance, trade finance, structured finance etc.

Treasury & Investment that includes services such as money market, foreign
market, investment, government securities, correspondent banking etc.

Credit Rating
PACRA, a premier rating agency of the country, has rated the bank AA (double A), Entity Rating for long term and A1+ (A one plus) for the short term. These ratings denote a very low expectation of credit risk, strong capacity for timely payment of financial commitments in the long term and by highest capacity for timely repayment in the short term, respectively. The ratings of first and second and third unsecured listed and subordinated TFC issues of PKR 650 million, PKR 1,250 million and Rs.1, 325 million have been maintained at AA- (Double A minus).

Departments
Bank Alfalah has following departments:

Credit Department Operations Trade department Accounts Department IT Department Human Resource Department Service Quality Assurance Department Data Management System Clearing Department Cash Department Consumer Banking

Organizational Structure
The organizational structure of Bank Alfalah is a functional organizational structure. It is basically divided into different departments of the bank. This hierarchy is very helpful to organization, as the bank has a very strong chain of command. The bank is carrying out its operations very successfully through this organizational structure. The general organizational structure of the bank is:

Chairman

CEO

Country Head

Group Head

Regional Manger

Area Manager

Brach Manager

SWOT ANALYSIS
BAL is one of the fastest growing banks in Pakistan. In the light of these situations we can make an analysis.

Strengths:
Bank is in its growing stages so there is good financial position. Professional and Committed workforce Low cost than other major banks Increasing the number of branches in the country Successfully launching new Product Lines Well experienced and quality staff Efficient internal communication system

Weaknesses:
Although the bank is growing fastly but it has some weaknesses which it should remove to make itself further strong. Less Advertisement Slow in introducing new products Gives its staff less benefits The staff is not satisfied with the salary structure

Opportunities:
Extension of International network of the branches Introduction of innovative products Growing market ATM facility for all customers

Threats
Uncertain economic conditions Action taken by competitors

Conclusion
The organizational structure of Bank Alfalah is very good. It is very balanced structure nor centralized or decentralized. Managers are also doing a great job in achieving company goals and objectives. There is a very calm and friendly atmosphere at Bank Alfalah because of the department and their policies for keeping their employees happy, productive and efficient.

Recommendations
It is observed that the employees were overburdened so they have to stay at branch till late at night. In this way their efficiency is affected and hiring more employees can reduce their work. The employees should be signed jobs for specific period and than they should shifted to other department so that they gain knowledge of other jobs.

Bank Alfalah Limited should properly advertise and Communicate to public about the services provided by it, so that more customers will be attracted. The banks management should give more incentives and pay scale of officers should be revised & improved.

System and operations should be more defined and organized. IT draw backs should be improved.

Administration drawbacks should be improved by the strict control of general issues. Some employees waive the bank charges (Statement charges, cheque book charges etc) that decrease the income of the bank.

Lockers, ATM, all these facilities should be provided to attract more customers. Expenditures must be control, which are very high.

References

www.bankalfalh.com www.wikipedia.com

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