Case Study Description of Barings Collapse (A): Breakdowns in Organizational Culture & Management
Gives an overview of the collapse of a prestigious financial institution and the organizational failings that contributed to it. Outlines the history of Barings Bank, the creation of its securities business, particularly in the Far East, and how Nick Leeson, a Barings trader in Singapore, was able to run up massive losses in derivative trading, which caused the collapse of the bank. Identifies the cultural clashes, remuneration system, control failings, and other issues that severely weakened the effectiveness of the matrix management system, an important contributor to the collapse.
Authors :: Stewart Hamilton, Donald A. Marchand, Alicia Bernard
Swot Analysis of "Barings Collapse (A): Breakdowns in Organizational Culture & Management" written by Stewart Hamilton, Donald A. Marchand, Alicia Bernard includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Barings Collapse facing as an external strategic factors. Some of the topics covered in Barings Collapse (A): Breakdowns in Organizational Culture & Management case study are - Strategic Management Strategies, Corporate governance, Organizational structure, Performance measurement and Technology & Operations.
Some of the macro environment factors that can be used to understand the Barings Collapse (A): Breakdowns in Organizational Culture & Management casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing commodity prices, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
there is backlash against globalization, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Barings Collapse (A): Breakdowns in Organizational Culture & Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Barings Collapse (A): Breakdowns in Organizational Culture & Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Barings Collapse, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Barings Collapse operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Barings Collapse (A): Breakdowns in Organizational Culture & Management can be done for the following purposes –
1. Strategic planning using facts provided in Barings Collapse (A): Breakdowns in Organizational Culture & Management case study
2. Improving business portfolio management of Barings Collapse
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Barings Collapse
Strengths Barings Collapse (A): Breakdowns in Organizational Culture & Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Barings Collapse in Barings Collapse (A): Breakdowns in Organizational Culture & Management Harvard Business Review case study are -
High switching costs
– The high switching costs that Barings Collapse has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Barings Collapse is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Barings Collapse is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Barings Collapse (A): Breakdowns in Organizational Culture & Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Barings Collapse has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Barings Collapse to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– Barings Collapse (A): Breakdowns in Organizational Culture & Management firm has clearly differentiated products in the market place. This has enabled Barings Collapse to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Barings Collapse to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Barings Collapse in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Barings Collapse has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Barings Collapse (A): Breakdowns in Organizational Culture & Management Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Barings Collapse is present in almost all the verticals within the industry. This has provided firm in Barings Collapse (A): Breakdowns in Organizational Culture & Management case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Barings Collapse
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Barings Collapse does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Barings Collapse digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Barings Collapse has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Barings Collapse in the sector have low bargaining power. Barings Collapse (A): Breakdowns in Organizational Culture & Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Barings Collapse to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Barings Collapse is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Stewart Hamilton, Donald A. Marchand, Alicia Bernard can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Barings Collapse are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Barings Collapse (A): Breakdowns in Organizational Culture & Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Barings Collapse (A): Breakdowns in Organizational Culture & Management are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Barings Collapse (A): Breakdowns in Organizational Culture & Management, it seems that the employees of Barings Collapse don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Barings Collapse has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Barings Collapse needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Barings Collapse supply chain. Even after few cautionary changes mentioned in the HBR case study - Barings Collapse (A): Breakdowns in Organizational Culture & Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Barings Collapse vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Barings Collapse (A): Breakdowns in Organizational Culture & Management has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Barings Collapse 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Barings Collapse (A): Breakdowns in Organizational Culture & Management, in the dynamic environment Barings Collapse has struggled to respond to the nimble upstart competition. Barings Collapse has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Barings Collapse (A): Breakdowns in Organizational Culture & Management, is just above the industry average. Barings Collapse needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Barings Collapse (A): Breakdowns in Organizational Culture & Management HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Barings Collapse has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Barings Collapse (A): Breakdowns in Organizational Culture & Management HBR case study mentions - Barings Collapse takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Barings Collapse has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Barings Collapse (A): Breakdowns in Organizational Culture & Management should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Barings Collapse is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Barings Collapse (A): Breakdowns in Organizational Culture & Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Barings Collapse (A): Breakdowns in Organizational Culture & Management | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Barings Collapse (A): Breakdowns in Organizational Culture & Management are -
Building a culture of innovation
– managers at Barings Collapse can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Barings Collapse to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Barings Collapse can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Barings Collapse (A): Breakdowns in Organizational Culture & Management suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Barings Collapse has opened avenues for new revenue streams for the organization in the industry. This can help Barings Collapse to build a more holistic ecosystem as suggested in the Barings Collapse (A): Breakdowns in Organizational Culture & Management case study. Barings Collapse can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Barings Collapse can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Barings Collapse (A): Breakdowns in Organizational Culture & Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Barings Collapse can use these opportunities to build new business models that can help the communities that Barings Collapse operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Barings Collapse in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Barings Collapse has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Barings Collapse (A): Breakdowns in Organizational Culture & Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Barings Collapse to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Barings Collapse to increase its market reach. Barings Collapse will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Barings Collapse to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Barings Collapse can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Barings Collapse is facing challenges because of the dominance of functional experts in the organization. Barings Collapse (A): Breakdowns in Organizational Culture & Management case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Barings Collapse can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Barings Collapse (A): Breakdowns in Organizational Culture & Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Barings Collapse (A): Breakdowns in Organizational Culture & Management are -
Shortening product life cycle
– it is one of the major threat that Barings Collapse is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Barings Collapse (A): Breakdowns in Organizational Culture & Management, Barings Collapse may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Barings Collapse in the Technology & Operations sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Barings Collapse needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Barings Collapse needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Barings Collapse can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Barings Collapse can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Barings Collapse (A): Breakdowns in Organizational Culture & Management .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Barings Collapse.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Barings Collapse business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Barings Collapse needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Barings Collapse can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Barings Collapse
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Barings Collapse.
Stagnating economy with rate increase
– Barings Collapse can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Barings Collapse demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Barings Collapse (A): Breakdowns in Organizational Culture & Management Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Barings Collapse (A): Breakdowns in Organizational Culture & Management needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Barings Collapse (A): Breakdowns in Organizational Culture & Management is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Barings Collapse (A): Breakdowns in Organizational Culture & Management is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Barings Collapse (A): Breakdowns in Organizational Culture & Management is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Barings Collapse needs to make to build a sustainable competitive advantage.