Company Background
1. History:
Bank Al Falah
Limited was incorporated in June 21st, 1997 as a public limited company under the companies Ordinance 1984. The bank commenced
its operations from November 1, 1997. The bank is engaged in commercial banking
and related services as defined in the Banking companies ordinance 1962.
After a few
years, the bank introduced its new identity of H.C.E.B after the privatization
in 1997.The management of the bank has implemented strategies and policies so
the bank would become a major player in the market.
By building partnership
with the Abu Dhabi Group the position of the bank became stronger which allowed
the bank to invest more in revolutionary technology to increase its range of
products and services. This facilitates their commitment to a culture of
innovation and seeks out synergies with clients and service providers to ensure
uninterrupted services to its customers.
2. Bangladesh
Chapter:
On the 16th of May, 2005 Bank Al
Falah Ltd. Formally took over the Bangladesh operations of Shamil Bank Of
Bahrain for US $17.88 million and renamed it to Bank Al-Falah. This was the
first branch of the bank outside Pakistan. Currently there are five branches of
the bank in the country, three being in Dhaka and others being in Chittagong
and Sylhet.
3. Corporate
Slogan:
Bank Al-falah Ltd. Promotes “The Caring
Bank” as their corporate slogan. This slogan implies that this bank ensures
high quality customer service to create long lasting customer relationship.
4. 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.
5. Vision:
To be the premier organizations operating locally
and internationally that provides the complete range of financial Services to
all segments under one roof.
6. Company Profile:
Headquarters: 168,
Gulshan Commercial Area-2, Dhaka-1256.
Managing Director: F A
Masrur
Products: Loans,
Credit Cards, Savings, Consumer Banking etc.
No of Branches: 05
Location: Gulshan.Motijheel, Dhanmondi (Dhaka) Agrabad
(Chittagong),
Mirabazar (Sylhet).
Paid Up Capital: BDT 2000 Million
Authorized capital: BDT
3500 Million
Revenue: BDT
15.783 Million [2009]
Net Income: BDT 3.130 Million
Website: www.bankalfalah.com
7. Competitive Advantages:
- Becoming increasingly competitive.
- Bank’s customer base is expanding and strong customer loyalty.
- Excellent in Islamic Banking System.
- Getting idea from customer to develop services.
Company Management System
Management means the administration
and the governing body that is concerning the whole organization. All the
decision and strategies are been proposed and evaluated the management of the
organization. At Bank Alfalah, the management is pretty strong and there is lot
centralization in the whole network of the bank. The management at Bank Alfalah
has been divided into 3 major parts i.e. Board of Directors, the Top
management, and the group of middle managers, supervisors and the employees.
1. The Board of Directors:
The upper most part of the management
is the Board of Directors or the Executives. The Board of Directors is
responsible for the first phase of the management process, i.e. planning. So,
all the decisions and the strategies are being proposed and implemented under the
instructions and the supervision of the board of directors or the executives.
Also the policies and the overall objectives of the Bank are being proposed at
this level of the organization.
2.
The Top Management:
The top management involves the
branch managers and the chief managers of the bank including the operations
managers as well. The major responsibilities include the strategy formulating
for the bank and supervising the whole staff at the branch. They define and
interpret the objectives and vision and then formulate policies for their
completion.
3. The middle management, supervisors
and the employees:
Departmental
heads constitute this level of management at Bank Alfalah. They are directly
responsible for planning and controlling the activities of officers. Finally,
the employee’s activities are monitored and controlled according to the desired
objectives.
Management Functions
1. Planning:
1.1 Definition:
It is the establishment of overall strategies for achieving organization’s
goals and objectives and developing a comprehensive set of plan to integrate
& coordinate organization work. Bank al Falah also plan for its operation.
1.2. Type of plan:
Bank al Falah use both formal and informal type of planning. In informal
planning, their planning is not written down, short term focus and specific to
an organization unit. In formal planning their planning is not written down,
specific long term focus & involves shared goals for an organization.
1.3. Goals & Objectives:
Goals and objectives are factors through
which the company’s devotion and commitment to the job can be seen. If the
goals are realistic and achievable, than surely that organization is doing its
job. Bank Al Falah also has certain goals and objectives which it is trying to
achieve, through its various strategies and operations. The goals and
objectives are mentioned below:
- To create a sound base, and through efficient systems achieve modern banking throughout Bangladesh.
- By the end of every accounting year there is an increase in deposits. As the deposit rate during 2006 was approx 72 million and the same has been increased in 2009 by 97 million.
- To create unit banking network in all the branches of Bank Al Falah, the end of the year. This means that all the operations of the bank, i.e. deposits to advances, imports, exports, L/C Opening, foreign currency and many more aspects under one roof, so that the customer can be facilitate in one visit.
- Islamic Banking is one of the goals of Bank Al Falah though it has been initiated in the last fiscal year and it is very acceptable for general public. In this regard the Bank is opening specific Islamic Banking Branch under the supervision of its Islamic Banking Division.
1.4. Process of planning:
(a) Mission: To develop and deliver
the most innovative products, manage customers experience, deliver quality
service that contributes to brand strength, establishes a competitive advantage
and enhances profitability, thus providing value to the stakeholders of the
bank.
(b) Strategies: Strategies of
Bank al Falah are giving loans and accepting deposit.
(c) Plan: Plan of bank al
Falah is short term advance and deposit.
(d) Program: Program of Bank
al Falah are up to one year or more then one year advance, fixed account,
current account, etc.
(e) Policies: Policies of Bank
al Falah are profitability by making profitability advance and customer
satisfaction by providing best services at on affordable cost.
(f) Rules: Their rules are
depending upon by upper level of management according situation.
(g) Budget: Bank al Falah
always met its budget.
1.5. SWOT Analysis:
1.5.1 Strengths:
Strengths
are the core competencies of any organization & as far as BAFL is concerned
the core competencies of this organization are:
§ Target
Achievement
§ Policies
& Procedures
§ Controlling
Standards
§ Priorities
§ Rewards
& Benefits
§ Job
Security for the Employees.
§ Favorable,
friendly & Healthy Working Environment.
§ Documentation
System is so much accurate.
§ Accounting
& Banking System is Accurate & Reliable One.
1.5.2 Weaknesses:
Weaknesses
are the lacking points which every organization must avoid in order to make its
operational effectiveness. The weaknesses of BAFL are:
§ Hectic
Working Environment.
§ Work
load.
§ Lack
of Self Marketing Department.
§ Low
Training & Coaching.
§ Human
Resource Department is not so much effective.
§ Appraisal
is not done frequently.
§ Low
salary packages as compared to other banks.
1.5.3 Opportunities:
In
fact, when we study all our weaknesses critically & deeply than we come to
know that we can convert our weaknesses into strengths. So basically these are
our opportunities. The opportunities for BAFL are:
§ On
the job training & coaching sessions can be conducted.
§ Work
sharing activities should be started so that a person who is working
continuously for 9 hours can get
relax.
§ Marketing
department should be started in order to promote the name of BAL.
§ Appraisal
should be conducted frequently so that employees get motivated & do their
work as a loyal employee.
§ Attractive
salary packages should be awarded.
1.5.4 Threats:
Though
Bank Al Falah has a strong footing and maintain a good number of loyal
customer, still bank has threats in various sectors. When we see the possible
threats for BAFL, the threats are prevailing such as:
§ The
conventional banks those having high growth rate and high market share are
always being a threat.
§ There
is an average not low turnover rate, mainly because of low incentives as
compared to the other banks.
§ Large
business parties have fewer attractions in being a client of BAFL-IBD, mainly
because of excessive amount of documentation.
1.6. Porters Five Forces Model
For
further analysis of Bank Al Falah
environment, Porters Five Forces Analysis is also applied on the bank. This
analysis takes in to consideration the following factors:
1.6.1 Availability of Substitutes:
Substitution of
one product with another one increases the rivalry within an industry. Although
perfect substitute of banks are not available in the market Bangladesh but
people still have choices of saving or investing their money. They can either
save their money at homes or put their money in the banks which give protection
to their assets. Aside from saving one can invest money in stock market in form
of shares / bonds or in real estate. These kinds of substitutes increase the
rivalry in the banking sector.
1.6.2 Rivalry among existing firms:
There is tough
competition among various banks. As variety of public and private banks are
already existing in the market, offering products on competitive prices. If we
look at Islamic Banking products then, Islamic Bank Bangladesh Ltd., Al Arafah
Islami Bank, Prime Bank and many others are offering wide range of products in
this sector in Bangladesh. The tough competition among these banks gives rise
to the challenges which the competitor banks have to face. The competition
among various banks increases the switching of the customers form one bank’s
product to the other bank.
1.6.3 Threat of new entrants:
The
banking sector of Bangladesh has always chances of growth and competition so
many new banks enter and leave the market. Mostly foreign banks step in the
developing countries like Bangladesh for expanding their branches, not only
this mergers between foreign and local banks take place at large scale but
Bangladesh present economic condition and government instability has arose the
feelings of awe and terror among most of the foreign banks to enter in the
market. In future due to uncertainty and
security problems in Bangladesh investors will not be willing to invest here.
Due to overall financial problems in the whole world new banks will not be
entering in to the banking industry.
1.6.4 Bargaining Power of Buyers:
Bargaining
power of buyer is low where the products substitutes are not available and
customers are large in number. In case of banks, there are lots of other banks
and banking intermediaries, having wide range of products in Bangladesh. So
power of buyer in banking sector is high. The bank cannot force any customer to
buy the desired product because this directly affects its reputation, but can
convince its customers by giving them special discount or rewards. If we look
at Bank Al Falah, we will find that
the competitors are also offering products due to which customer feel in power
by saying that they can go to some other bank in case of dissatisfaction.
1.6.5 Bargaining power of Suppliers:
As
in banking sector, suppliers do not exist so there is no bargaining power of
supplier.
1.7. Decision Making:
1.7.1 Top Level Managers:
Important
and overall decisions of the bank are made by top level managers.
1.7.2 Regional Managers:
Make
decisions at regional level.
1.7.3 Branch Managers:
Make
decisions at branch level.
2. Organizing:
An organization is a deliberate arrangement of people to accomplish some
specific purpose. Your banks, Universities is an organization, college, Govt.
department all organization because they have three common characteristic.
2.1. Organization structure:
Organizing structure of BAFL is composed of
both mechanistic and organic to create business performance and to build
competitive advantage. Major portion of BAFL organization is decentralized
because managers of all levels have the power of decision.
2.1.1. Finance Department:
Finance is responsible in terms of money in
all departments or monetary policies. It is concern with more in flow of the
cash that outflow of the cash in terms of BAFL. They use structured finance
unit.
2.1.2. Marketing Department:
Marketing department performs
different functions in term of BAFL including sales, need identification,
positioning, targeting and promoting.
2.1.3. I.T Department:
This department deals with ATM
network service, online banking and phone banking.
2.1.4. HRM:
HRM means to put the right people,
for the right job, at the right place .HRM deals with the fair job description
in BAFL. It uses road-map of HRM which helps BAFL to process human resource.
2.2. Purpose of organization:
- Work to be done into specific jobs and department in Bank Al Falah
- Co-ordinate diverse organization task in Bank Al Falah.
- Establishes former line of authority in Bank al Falah.
- Allocates and deploys organization resources in Bank Al Falah.
2.3. BAFL management chart:
Management performs different type
of functions in BAFL.
2.3.1. Chief Executive Officer:
o Controls
the whole management affairs in BAFL.
2.3.2. Executive in charge:
o Establishing
the environment of strategic planning and aware of to hold the global market.
o Manages
the HRM and assign work to individual for betterment.
o Divide
the credit in different place ways and allocation to safer place.
o Controls
the administration activities and carries on the establishment process for the
betterment of BAFL.
o Investigates
the business development reports that our business gets profit or loss.
o Analysis
the audit and inspection division for efficient work.
o His
work is to divide the cards in best manner, just like debit cards, credit
cards, ATM cards and Hilal cards in BAFL.
o He
did his work for internal and treasury division in BAFL.
o Divided
IT.
o Supports
the corporate and home finance.
o Monitors
the credit division.
o Investigates
the local affairs.
3. Leading:
The leader is needed by the every
field & organization , as well as the BAFL has its leader in the form of
High qualified & skilled managers, which are working hardly to put the peak
level as well as achieving the organization’s pre-selected goals.
The Bank Al Falah has formal way of
leadership style (Formal vs. Informal).
The leaders of Bank Al Falah are Democratic.
Because the major portion of bank is ‘De-centralized’ that’s why the each
leader is able to use the complete power of decision making, but they are
working “Collaboratively” in whole organization with each other. Al leaders of
bank are involved in decision making, delighting their authority to their
higher qualified employees, encouraged the participation of their employees in
work and gives them opportunities coaching in well manner (Type of leader).
The behaviors of leaders of BAFL are lies in
the “Team Management”, because all the managers are doing their work
collaborative with each other and also with their team of workers, they have as
well (Managerial Grid).
The
leader of Bank Al Falah has the following Traits & Skills in themselves
(Traits of leader):
o Decision
making
o Risk
taking & Risk bearing
o Stress
taking & Stress bearing
o Communication
Power
o Honesty
o Strong
vision
o Inter
personal skill
o Step
forward
o Discipline
o Believe
of on equality
3.2. By
contingency leadership theories:
All the leaders of BAFL are cooperative with
their followers and no one possess uncooperative attitude (LPC Theory).
(Situational
As above the all leaders of BAFL are very
cooperative to each other as well as with Their followers, that ‘s why they are
also providing the right “Path/Direction”, after friendly, to their followers
on through they and their followers could achieve their targets and goals
(Goal-Path Model).
3.3. Leadership
behaviors:
They provide proper schedules, direction,
and guidance etc. to their followers, from through the employees can do the
specific work which has been given to them, to achieving their and
organizational objectives as well (Directive).
The leaders also give the proper attention
on their employees and also help them in case of any trouble in achieving the
targets and tasks (Supportive).
3.4.
Motivation:
The leaders of BAFL use motivation to
encourage their employees to achieve the best result.
3.4.1.
Early Theories of motivation:
The leaders of BAFL are very well familiar
with all the basic or extra needs, like physiological, safety, social, esteem
and self actualization needs. That’s why they are handling their employees that
they are providing the basic needs to their employees and provide them higher
level rewards if the employee performs better.
The BAFL has the both type of employees ‘x’
and ‘y’ in it. So, manager motivates the employees according to their behavior.
Some of the employees of the type ‘x’ in
the bank feel like hygiene from their job, That’s why managers face some
difficulty to motivate them.
3.4.2.
Contemporary Theories of motivation:
These theories and approaches are
representing the current explanations of the employee’s motivation. These
theories are; Three- needs theory, Goal-Setting Theory, Reinforcement Theory,
and Equity Theory.
According to these theories, the manager of
BAFL motivate their employees in the sense that their employees do the work for
achievements and they behave in the best way with everyone, so to make a
friendly atmosphere in the whole organization, for making a good relationship
with everyone.
4. Controlling:
4.1. Definition:
Controlling is the process of monitoring activities to ensure that they
are being accomplished as planned and of correcting and significant deviation.
4.2. Importance of control:
Control is very much important because it is the final link in the
management function. It is the only way manager know whether organizational
goals are being met or not and the reason why?
In Bank Al-Falah the importance of control can not be neglected because
it’s a services base organization and deals with finance. Every employee in
this organization has direct and indirect interaction with financial activities
and finance playing the key role in the progress of the bank.
4.3. Types of Control:
Bank Al-Falah follows two types of control. One is Feed forward control
in which problem is identified and resolved before accruing and another is
Concurrent control in which problem is identified and resolved while that is
accruing.
4.4. Division in Bank Al-Falah for
Controlling:
Following are two divisions in Bank Al-Falah for
controlling purpose.
Credit Monitoring Division; credit
monitoring division monitor all the activities related to following areas:
o
Credit card
o
Hilal Card ( debit card)
o
Auto loans
o
Homes Loans
o
RTC
o
Money Gram
Audit and Inspection Division; this
division in Bank Al-Falah conduct the internal audit at the inspections of all
the activities in Bank Al-Falah to insure the accuracy of work and the
performance of the bank.
4.5. Control Criteria
4.5.1 Data Integrity:
- Are the controls in place to ensure the integrity of the data?
- Are records up-to-date and accurate?
4.5.2 Documentation:
- Are all systems, functions, processes, procedures, programs, and activities clearly documented?
- Is the documentation readily available for examination?
- Are operating procedures adequate?
4.5.3 Recording:
- Are the records shows that controls are in use?
4.5.4 Supervision:
- Are appropriate procedures in place for assigning, reviewing, and approving work?
- Do the employees adhere to procedures for assigning, reviewing, and approving work?
4.5.5 Authorization:
- Are appropriate controls in place to ensure transactions and other significant activities are authorized and executed only by authorized personnel?
- Do employees adhere to the requirements of authorization only by authorized personnel?
4.5.6 Separation of duties:
- Are key duties and responsibilities such as authorizing, processing, recording, and reviewing separated among individuals?
4.5.7 Security:
- Are appropriate procedures in place which limits access to resources and records to authorized personnel?
- Do employees adhere to security procedures?
4.6. Process of control:
4.6.1 Measurement of performance:
There are two ways to measure the performance in Bank Al-Falah: Qualitative
and Quantities. In measurement of performance employees of the organization are
being measure qualitatively 40% and quantities 60%.
4.6.2 Comparing actual performance
with standards:
Comparing the performance of the degree of variation between actual and
standards performance. In Bank Al Falah following standards are set to compare
actual performance.
(a) General standards:
- Compliance with law
- Reasonable assurance and safeguards
- Integrity, competence, and positive attitude
(b) Specific Standards:
Team Leader
In the Bank al Falah mostly every executive is working together with
employer under him/her, and every manager is also working together with
employer under him/her and they all are working collaboratively with each other
in all the department of whole organization.
Transformational
&Transactional Leader
The leader of Bank Al Falah is giving guide line and direction of
established goals of these followers by clarifying the rate and task
requirements for the best possible unit. That’s why these leaders of bank are “Transactional
Leader” but not “Transformational leader.”
4.6.3 Managerial
Action:
At lower level in the Bank supervisor and manager ensure the proper
handling of the activities and they assign the targets to their subordinates to
achieves in a given time and at those bases, they asses the performance of the
employee.
Recommendation
Here some
suggestions are given which will enable the bank to compete with other banks
more effectively & efficiently.
o Bank Alfalah Limited should properly advertise
and Communicate to public about the services provided by it, so that more
customers will be attracted.
o The bank’s management should give
more incentives and pay scale of officers should be revised & improved.
o System and operations should be
more defined and organized.
o IT draw backs should be improved.
o Administration drawbacks should
be improved by the strict control of general issues.
o Audit should be held internally.
Rather there should be an Audit Department in the branch to make audit on daily
basis. This can become as helpful as different banks are having this department
of their own.
o Lockers, ATM, all these
facilities should be provided to attract more customers.
o Expenditures must be control,
which are very high.
Conclusion
Bank
Al Falah has a strong historical background of overcoming the challenging
situation. It has strengths against weaknesses to cope with the opportunities
and threats because of changing environment. It also has a strong managerial
style and cares its employees.
Overall
working environment in Bank Alfalah is comfortable. Management of branch cares
a lot of its employees and considers them as the Asset of bank. Behavior of
senior executive of bank is very polite and they are caring about the
individual’s career and their growth. However management is very demanding
about the targets but good reward at the achievement of assigned targets is
awarded.
Employees
at Bank Alfalah are quite efficient. Therefore, they work more than their
working hours and it is all according to their will. It also shows their
loyalty, commitment to organization. Employees are given the benefits like
bonus, gratuity funds, loans, increments, and medical.
So far it is
concerned; all the employees at branch are quite cooperative. They help employees
to understand the activities of a bank to possible extent. Their good attitude gives
employees more confidence to learn more and to ask if they have any query in their
mind. However, by following suggestions discussed
above, BAFL will become a strong competitor in Bangladesh.
Bibliography
- Principles of Management, by Robin peters & Mary Coutler
- Bank Alfalah, Gulshan branch, Dhaka.
- www.bankalfalah.com
- Md. Ashraful Islam, Accounts Officer, Bank Alfalah, Dhanmondi branch, Dhaka.
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