Strategic Division. Management
Category: Bank Management
Banks have the monopoly of the creation of means of payment necessary to the circulation of capital between economic agents. It can be cheques or credit-cards or even more sophisticated systems; their production and management are very complex and costly and need an adequate technological structure.
As in any firm, the main missions of general management of a credit institution are the following:
To determine and organise and conceive bank strategy.
To make sure this strategy is successful.
Objectives and strategy
To determine the objectives of a bank, General Management depends on the information and the data given by the various departments in the bank; so the strategy is conceived at these different levels.
The firm plan assesses what the future positioning of the bank is for a long period in terms of activity (all purpose bank or specialised bank, regional, national or international bank, customers or firms oriented.).
This plan has to be understood by the staff to encourage staff to adhere.
Medium and long term plans (3-5 years)
Every division in a bank is given an intermediary objective depending on the environment, it can be economic, financial, commercial or technical. These plans are mostly applied to the financial function, the marketing function and investments.
Annual plans for each activity
An annual plan is developed for each activity sector, so that general management can follow up results and take the necessary corrective actions to reach objectives.
Carrying out the strategy
To reach objectives, General Management must implicate all members of the bank, using two different links.
Hierarchical organisation
Credit institutions have always had a rigid hierarchy; this hierarchy can be based on technical or managerial abilities.
Transversal connections
Many projects are to be carried out by different functions; so General Management should facilitate co-ordination between them.
Limitations to the action of general management
General Management is dependent on:
The General Assembly of the shareholders it must report to. Its legitimate position and its powers are the decision of the board of Directors.
The staff has a right to influence upon the decisions of General Management through different committees and syndicates.
The supervisory bodies have a permanent control upon banking activities (Part 1).
Consumers get together to defend their interests they can express in the media.