INTRODUCTION

Bank Alfalah Limited came into existence on 21st June 1997 as a

public limited company under the Companies Ordinance 1984
however; its banking operations started off from 1st November 1997.
Since then the bank has been engaged in commercial banking and
related services. Currently, the Bank is operating through 195
branches in 74 cities, with the registered office in Karachi.

So far, the management of the bank has been successful in

implementing strategies and policies to carve a distinct position for
the bank in the market place. The Bank has invested a lot in
technology to have an extensive range of products and services, with
a backing and banking of the Abu Dhabi Group.

Over the years, through sheer commitment to a culture of

innovation, Bank Alfalah has provided uninterrupted services to its
customers who has in return, gained them synergies with clients and
service providers. They have ensured that their customers get quality
products and service solutions.

This report gives an explanation about how Bank Alfalah is

affected by the general economic environment of Pakistan and how it
is coping to with the overall situation.

Sources

In order to compile this report, we used several sources including

books, websites, articles and newspaper reports, which included
websites such as; yahoo, Google and tutor2u; books such; as A level
business by Peter Stimpson, A level Business by Dave Hall and
Introductory Economics by Stanlake and articles from The News
business column. All these sources helped us a lot to analyze and
evaluate the different concepts mentioned latter in this report.

Limitations

Bank Afalah: The caring Bank 3

Since the organization under question was a Bank, there were a lot of
confidentiality issues which hindered our overall analysis due to non
availability of some core documents. Nonetheless, the bank personnel
and management were very generous in helping us in any possible
way

Explain mission, values and highlight the objectives of the chosen

organization

VISION
“To be a premier organization operating locally & internationality that
provides the complete range of financial services to all segments
under one roof.”

Vision is a shared look at the future and the future is filled with hope
and promise to achieve the desired goals and objectives or being able
to see where you are going and what are your desired goals and
objectives.

The above mentioned Vision of Bank Alfalah states the same thing in
a bit different and attractive way that is to be a premier and leading
bank in the market operating locally and internationally in order to
provide all the financial services to all the customers of all segments.

MISSION
“To develop & deliver the most innovative products, manage
customer experience, deliver quality services that contributes to
brand strength, establishes a competitive advantage and enhances
profitability, thus providing value to the stakeholders of the bank.”

A mission statement is a formal short written statement about the

purpose of a company or organization. The mission statement should
guide the actions of the organization, spell out its overall goal,
provide a sense of direction, and guide decision-making. It provides
"the framework or context within which the company’s strategies are
formulated

A mission should:

Bank Afalah: The caring Bank 4

 1. Define what the company is
2. Define what the company aspires to be
3. Limited to exclude some ventures
4. Broad enough to allow for creative growth
5. Distinguish the company from all others
6. Serve as framework to evaluate current activities
7. Stated clearly so that it is understood by all

OBJECTIVES
“An objective is a personal or organizational desired end point
in development. It is usually endeavored to be reached in finite time
by setting deadlines.”
(Answers, Date Accessed 15/10/2009)

It is important for a business to have well defined objectives.

They help the business to be clear about what it wants to achieve.
The objectives of any organization are set by the stakeholders of the
business and those stakeholders which have great influence on the
business are the ones who direct and set the objectives.

Range of objectives generally for an organization:

Mainly there are two types of Objectives:

• Long term objectives
• Short term Objectives

Long term objectives are concerned with futuristic planning

whereas short term objectives are set to achieve the long term
objectives by dividing the timeline to achieve the desired goals.
Apart from this, objectives are further needed for each key area of
an organization. Some of the main key areas for which an
organization has objectives are as follows:

1. Financial Objectives
Financial objectives of the business refer to the objectives
that involve or contribute to earning of profit and also other
objectives that are necessary to be pursued to achieve the
profit objective. These objectives signal commitment to such
outcomes as good cash flow, creditworthiness, earnings growth,
an acceptable return on investment, dividend growth, and stock
price appreciation etc.

2. Strategic Market Objectives

Bank Afalah: The caring Bank 5

 Strategic market objectives emphasize on the
organization determination to keep up and enhance the
company’s long term market stance and competitive
capabilities by creating customer value.

Strategic market objectives emphasizes on providing

innovative standard product and services with less cost
comparing to competitors to gain market share and
international recognition.

3. Internal Operational Objectives

Internal operational objectives concentrate on keeping up
organization’s core competencies and also emphasizes on
business functions which carries importance in making clients
satisfaction and worth.

4. Management objectives:
Management objectives concentrates on carrying out vital
operational proceedings like research and development,
production, marketing, customer service, distribution, finance,
human resources.

5. Operational objectives:
Operational objectives concentrates on administering vital
company’s sub divisions(plants, sales districts, distribution
centers) and other vital functional assignments(materials
purchasing, inventory control, maintenance, shipping,
advertising campaigns) along with business.

6. Small Business Unit (SBU) Objectives

These objectives focus on each level of management, as in
each manager should have objectives and be responsible for
achieving them. Objective setting needs to be based on
priorities in order to guide lower-level managers and
organizational units towards outcomes that support the
achievement of overall business and company objectives. A
priority based process aligns aims and plan of actions of the
organization as well as it integrates the internal efforts of the
company with the selected strategic plan.

7. Innovative and Learning Objectives

These objectives concentrate on the proceeding that helps to
make firm base for the organization, which in future will be
helpful for them in competing any sort of challenge and to gain
competitive edge over its competitors.

Bank Afalah: The caring Bank 6

(My Strategic Plan, Date Accessed 17/10/2009)

Review and evaluate the current mission statement and objectives of

the chosen organization, critically analyzing the short comings in
detail

OBJECTIVES OF BANK ALFALAH

As the objectives are steps to meet the mission and the vision
of the organization. So just like any other organization, Bank Alfalah
starts with a vision and moves forward to making a mission. They
define their purpose of existence as:

“To be the premier organization operating locally &

internationality that provides the complete range of financial
services to all segments under one roof.”

(Bank Alfalah, Date Accessed 18/10/2009)

Moreover their vision gives birth to their main objective, being the
mission of the company. Defined as:

“To develop & deliver the most innovative products,

manage customer experience, deliver quality services that
contributes to brand strength, establishes a competitive
advantage and enhances profitability, thus providing value
to the stakeholders of the bank.” (Bank Alfalah, Date
Accessed 04/05/2008)

• Innovation
• Quality service
• Profitability
• Providing value to the stakeholders

The above mentioned terms are the core basic objectives and values
of the bank.

Bank Alfalah stands firm for one value, as its slogan says “The
Caring Bank”; their most important objective is to ensure customer
satisfaction. For them their customers are everything.

In Addition the main strategic objective of the bank is the

carrying out of a set of managerial, HR, technological and technical

Bank Afalah: The caring Bank 7

changes to ensure conditions for the successful development of the
bank as a stable financial institution capable of taking a strong
position in the Pakistan banking system.

Apart from this they have a range of other objectives covering

all the aspects of an organization from strategic, functional, financial
and internal operations. They have both long term and short term
objectives, starting from national level, then branch level, team level
and individual level objectives.

Bank’s Key Objectives:

• To gradually reach the international standards in all

sectors of the banks functions.
• To increase the quality of the bank’s management by
introducing a systematic approach to all areas of the bank’s
operations.
• To promote appropriate corporate culture and
professional training in order to enhance the standard of the
banks human resources.
• To concentrate on targeted market segments and to
develop a market oriented organizational set up.
• To regulate the functions, products and assistance.
• To carry out extensive research into the demand and
requirements of the target sections of the consumers
portfolio.
• To introduce a program for the quantitative calculation of
the quality of provided services.
• To make sure the participation of the organization’s work
force in the process of systematic up gradation of the
banking functions.
• To widen the origins of income and capabilities.
• To upgrade the method of administration of the banks
regional setup.
• To establish a supportive advance communication set up
across all the segments of the bank.
• To construct vast, financially rewarding credit and
investment portfolios which should take in to the
consideration the most important concerns of the large non-
state industrial enterprises.
• To keep close control over lowering costs for operations.
• To develop an inspirational set up for the practice of HR
policies in order to retain the experience and skilled work
force.

Now moving onto their segmented objectives:

Bank Afalah: The caring Bank 8

To create a business diversified in area and structure.

Objectives:

• To develop a corporate business primarily in priority

branch segments and target groups.
• To enter international financial markets.
• To establish a bank with its branches spread throughout
all the regional and national markets and having the
capability to compete in this dynamic set up properly.
• To focus on developing innovative products and services.

To develop the client and resource base

Objectives:

• To adapt such policies that can enhance the stance of the

bank in the market for its share holders and clients.
• To develop and practice a unique and compatible
marketing strategy.
• To improve the bank's rate policy taking regional markets
into account.
• To improve the bank's client-oriented approach.
• To improve the bank’s image.

To create an effective system for the bank’s management

Objectives:

• To improve and maintain the bank's organizational

structure.
• To optimize the bank's management and risk control
systems.
• To improve the HR development system.
• To introduce a statistical and analytical system.

To create a good working environment for employees

Objectives:

• To provide the work force with a healthy and safe environment.

Bank Afalah: The caring Bank 9

 • To build a work environment where every employee feels highly
engaged to apply their individual talents to deliver sustainable
business performance.
• To create a workplace that encourages employees to achieve
their full potential.

To create a technologically advanced bank

Objectives:

• To adopt new technology to the possible extent.

• To devise and practice effective programs for technical and
technological improvements.
• To set up a system in order to have a close look on the balance
between banks functions in the segment of information
technologies and international quality standards.
• To establish an effective and up to date system for the
administration of the bank.
• To obtain an international credit rating.

Identify the stakeholders of an organization and demonstrate the

influence of stakeholders
STAKEHOLDERS
A corporate stakeholder is a party/person who affects, or can be
affected by the company's actions.

Bank Afalah: The caring Bank 10

Examples of common stakeholders

Stakeholders Example of Interests

Owners Profit, Performance, Direction
Private/sharehold
ers
Government Taxation, VAT, Legislation
Employees Performance, Targets, Rates of Pay,
Job Security
Trade Unions Working Conditions, Minimum wage
Customers Value, Quality, Customer Care
Creditors Credit Score, new contracts, Liquidity
Local Community Jobs, Involvement, Environmental
issues, Shares

(Source: Wikipedia, Date Accessed 20/10/2009)

STAKEHOLDERS OF BANK ALFALAH

1. Owners: Abu Dhabi Group of Companies.
2. Employees.
3. Customers.
4. The Community.

Objectives of Abu Dhabi Group of Companies:

• To earn profit.
• To provide market competitive services.
• To ensure employee satisfaction.
• To direct the major decision making of the business.
• To increase their own power and status from business growth.

Objectives of employees:

• To receive fair wages.

• To ensure good working conditions.
• To secure their jobs.
• To feed their self esteem by good performance and promotion.

Objectives of Customers:

Bank Afalah: The caring Bank 11

 • To obtain good value for their money.
• To receive high levels of customer service.
• To receive after sales service.
• To ensure that their finance is in secure hands.

To what extent are their objectives achieved?

If we analyze the financial performance of the bank, we would come
to the conclusion that the objectives of the stakeholders are satisfied
to quite a great extent. As the financial statement of the bank shows
that the profits of 2007 are almost double than the 2006 profits. In
2007 the bank’s profit before provision of taxes stood at RS.6906.419
million compared to RS.3263, 625 million the previous year,
registering an increase of 111.62%. The earning per share in 2006
was RS.2.91, where as in 2007, it’s RS.4.82, which clearly shows that
the profit has been almost doubled. This increase in profits shows that
the objectives of the owners are being satisfied greatly. Their profits
are increasing, their status and power is increasing, and the image of
the company and the brand is improving day by day. As far as the
customers are concerned, the profits also clearly shows that because
of the quality services people are preferring Bank Alfalah and because
of its caring nature, customers are getting good value for their
money. Then moving towards the employees, as mentioned in the
responsibilities and objectives of the owners, employee satisfaction is
very important to them. Yearly 30% raise in the salary, appraisal
bonuses, quick promotions, yearly trainings and other incentives
clearly shows that the bank cares a lot for its employees and of
course because of so many rewards the employees are satisfied and
this satisfaction is what helps them achieve their objectives easily.

RESPONSIBILITIES OF ORGANIZATION
GENERALLY
As there has been an increase in the awareness of environmental and
ethical issues, so, the social responsibility of the organizations has
been increased to quite a great extent. Issues like environmental
damage, improper treatment of workers, and faulty production
leading to customers inconvenience or danger, are highlighted in the
media. Since business operates in a society by utilizing its scarce
resources, the society expects something in return for its welfare. No

Bank Afalah: The caring Bank 12

activity of the business should be aimed at giving any kind of trouble
to the society. If business activities lead to socially harmful effects,
there is bound to be public reaction against the business sooner or
later. Social corporate responsibility of a business includes:

• Production and supply of quality goods and services.

• Adoption of fair trade practices.
• Contribution to the general welfare of society.
• Provision of welfare amenities.
• Protection of the environment in which it operates.
• To reduce disparities among nations.
• To raise general standard of living.
• To contribute to the revenue of the country.
• Creation of employment.
• And to contribute in the development of the society and the
country.

In fact some consumers have become increasingly sensitive to the

CSR performance of the companies from which they buy their goods
and services. These trends have contributed to the pressure on
companies to operate in an economically, socially and
environmentally sustainable way. Therefore it puts on a huge
responsibility on the organization as they have to invest for the
betterment of the society as well as have to increase their revenues.

Apart from the social corporate responsibilities, an organization

has internal operational responsibilities as well, which includes the
overall management responsibilities of the managers, the
responsibilities assigned to the different departments, for example;
HR , marketing or finance department and then the responsibility of
each individual working to contribute in achieving the organizational
goals.

RESPONSIBILITIES OF BANK ALFALAH AND THE

STRATEGIES IN RESPONSE
Corporate Social Responsibility:
The bank as a responsible corporate citizen has
some social corporate responsibilities because it operates in a society
by utilizing its scarce resources, so the society expects something in
return for its welfare.

Bank Afalah: The caring Bank 13

 The bank endeavors to fulfill its social corporate obligations
through effective contribution towards well being of society as a
whole. They have “Alfalah Education” scheme which provides
contingency provision for depositor’s child’s tuition fee in the
unfortunate event of death of the main breadwinner. For example;
donations of RS. 36.173 million have been made during the year
2007, mainly to the education and health services organization.
Moreover as its tag line says “CARE makes us Bank Alfalah”; they
ensure customer satisfaction and care for their customers.

Furthermore, they sponsor different events which also adds up

to the CARE that Alfalah has for its customers and for the society. For
example; they have sponsored several cricket series in Pakistan in
2006 and 2007.

Internal Operational Responsibilities:

Following are the main responsibilities of Bank Alfalah at Branch

Level.

• Financial Responsibilities:

Some of their financial responsibilities are as follows:

1. Every year a branch is suppose to make an increase of

1.5 billion in their deposits. For example in 2007 the
branch under study had to deposit 4 billion RS. So, now in
2008 they are suppose to deposit round about 5 Billion
RS.
2. They have to show an increase in loan sanctions. For
example; every branch has to show at least 10 to 15%
increase in their loan sanctions per year.

• Managerial & Departmental Responsibilities:

Their internal operations are bound to different types of

responsibilities for departments and then for the organization
as the whole.

Some of the internal operational responsibilities are as follows:

Bank Afalah: The caring Bank 14

 1. R & D Responsibilities: Their research and development
department has been given the responsibility to create new
innovative products that can compete well in the market. For
example, in 2007 they were given the responsibility to come
up with a plan by which they can get more penetration in the
market and can serve better to their customers. The R&D
department suggested opening Sales and Service Centers at
the locations where the bank doesn’t have any branch. For
example if in Sadar they have one branch so in the rest of
the area in Sadar they have Sales and Service Centers,
which are open 24 hours a day and provide services to the
customers.
2. Marketing Responsibilities: Their marketing department
has to ensure quality promotion and advertising of their
services. Recently they have been given the responsibility to
do quality promotion of Priority Banking, which is a new
service of Bank Alfalah and which they are trying to launch
before June, 2008.

HR Responsibilities: HRM Department plays a vital role in achieving

the objectives of the organization. It is responsible for quality
recruitment and selection of employees, further more it focuses on
employee satisfaction. They are responsible for carrying out job
evaluation every year, a 30% increase in the salaries and for
performance appraisal bonuses every year, which are most likely to
be four for each deserving employee.

In Addition, HR department conduct two to three trainings every

year for the employees to improve their working skills and to ensure
their constant learning. Moreover as the branch is being affected from
decentralization so HR department has been given the responsibility
to centralize it so that work can be done quickly and easily. Then
there is redundancy of work and no proper span of control so the HR
department is given the responsibility to do proper distribution of
work and to make sure that there is no over supply of employees.
They have also been given a responsibility to introduce the new
employee scheme, which would have loan facility and employees
would be offered low rates such as 3 or 5%. Where as, generally the
bank does not offer personal loans to the customers.

Furthermore they have to introduce new jobs such as HR RM

(Human Resource Relationship Manager). By introducing and starting
this new concept they would be managing hiring and firing on
regional level for all the offices under its supervision. For example as
Peshawar comes under their region NORTH-2, so hiring and firing for

Bank Afalah: The caring Bank 15

Peshawar and all the cities of NORTH-2 would be on regional level and
would be centralized.

Security of Personal Information: The security of their customer’s

personal information and their online credit card sessions is of the
utmost important responsibility of the bank; for this they maintain
strict security standards and procedures to prevent unauthorized
access to their information. For example the account holder’s
statement is not provided to anyone but the account holder itself
(except for a signatured request by the account holder). Moreover the
credit card transactions are handled with a lot of care. The credit card
holder is suppose to activate the card for a specific period of time and
has to give bank the details of his transaction; the bank take cares of
secure transaction and deactivates the card after the requested time
has been used.

Quality Assurance: The new addition to their responsibilities is to

improve the branch environment; for which the branch manager,
manager operations and the mentor is responsible. Every branch has
a mentor, who conducts monthly meetings of the labor force and the
other officers to know their problems and to work out for its solutions.
In this way they maintain a good working environment. Moreover, to
ensure the quality of the bank’s environment and customer services,
the bank has held the quality assurance officer responsible for it. The
officer has to assure the quality of bank’s environment and customer
services for which he gives proper instructions to the management
and frequently observes everything. Firstly he observes different
factors like, bank’s external environment, internal environment,
customer feedback; QA measurements etc and then rate them from 0
to 5 or 10, with writing proper comments. Lastly he works on the area
where there is a need for improvement or calls on a meeting to solve
the problems.

Risk Management: The minimization of risk involved in a business is

a great responsibility on the bank’s management. So in compliance
with the requirements of state bank of Pakistan, Alfalah has in place
an approved integrated risk management framework for managing
credit risk, market risk, liquidity risk and operation risk. A risk
management division (RMD) has been created with the Head RMD
reporting directly to the chief executive officer. It has been structured
to address risk involved in the business. For example; if a customer
comes to get some loan from the bank, the RMD department checks
the CIB (Centralized inter banking data) reports to ensure that there
is no risk involved in the loan sanction.

Bank Afalah: The caring Bank 16

Performance of ATMs: The performance of ATM machines is
supposed to be kept at 95%. For this purpose they daily check the
ATM machine to make sure that it isn’t out of cash and that there isn’t
any cash jam, dust or magnetic card reading problem. They blower
the ATMs every evening to make sure that it works well throughout
the day.

Forecasting: Forecasting is very important for any business to

succeed. Bank Alfalah properly does forecasting, for which the head
office is responsible. Every branch has to send their financial statistics
and other information to help the head office conduct accurate
analysis which would result in good forecasting. Forecasting is done
on monthly, quarterly, half yearly and full year bases.

Complaint Handling Responsibility: To ensure customer

satisfaction, it is very important to give them 24 hours assistance on
any complain and issue related to the services. In order to deal with
this responsibility, the bank has a Complaint Management Unit (CMU).
The complaints received at the website, telephone or offices are
handled by the CMU. The complainant is contacted by the complaint
officer within 48 hours to acknowledge the receipt of his complaint
and to for a brief inquiry regarding the complaint. CMU then forwards
the complaint to the concerned branch or division with one working
day for resolution of the problem. The complainant is then informed
about the resolution or redressed by the CMU normally with in ten
working days. However if the problem requires more time to redress
the issue, an interim response is sent to the complainant indicating
the reason for the delay and expected date for final response. And as
per their policy, they ensure that the process does not take more than
45 working days.

Individual Responsibilities: Every individual is responsible for

contributing to the organization. His behavior towards his work is
what makes the difference. For ensuring good employee behavior, the
employees are given trainings and meetings are held to make them
learn how to deal with their customers. For example, they provide the
cashiers with a document having ten clear points on how to deal with
the customers. The document is titled “10 steps at cash counter”, in
this they are instructed to deal politely with the customers, to make
proper eye contact and to ensure that they don’t leave the bank with
any kind of dissatisfaction or any unanswered query etc.

Bank Afalah: The caring Bank 17