Executive summary Frontier National Bank is in a complete adverse times because of declining profitability and low liquidity

Executive summary

Frontier National Bank is in a complete adverse times because of declining profitability and low liquidity. The effect of poor performance of bank is that it causes decline in morale level of the employees and in the end productivity of all. To get out of the current situation and expand in other regions a core team has to be formulated to increase the performance.

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Situation Analysis

Introduction:
The current condition of Frontier National Bank (FNB) shows lack in Vision, Motivation and Direction which results in making the employees discouraged and demotivated .Over the time the working environment within the organization has become excessively orthodox and results in regular falls in profitability and market share. If the current working environment continues then organization will lose its credibility and reputation with in their old customers also. Moreover, FNB is losing its position and now is sixth in terms of profitability and third in terms of assets. The condition gets more bad when the founding family member was near his retirement and the bank faced the threat of getting merged because of rapidly falling of profitability, declining liquidity and inadequate capital. Then name of Ross Abernathy, who had been responsible for making his Chicago based bank successful, was suggested. The comptroller(A comptroller is a management level position responsible for supervising the quality of accounting and financial reporting of an organization.Wikipedia) and board were more than happy. When Ross got the offer to lead Frontier, he was at first hesitant consider that it would take him another three years to restructure the organisation. But he loves banking. So he accepted the offer. He knew a lot was to be done to restructure the bank. And the most important task for him was to build a new team.

Facts and Inferences:

• Fact: -The main share of business activity was with old and traditional customers
Inference-The main population of the customer constitute of old customers who are loyal toward the bank but in long run if they are not getting proper benefits they may move out of the bank.
• Fact: – At the age retirement of head man he suggested the name of his grandson to be in his shoes but the board balked.
Inference- The Headman want to continue the heridator system in the selection process and the board want to change this type of system. The reason of board is because of the support the headman was giving to the proposal for merger of the bank with younger competitors.

Problem Statement

A decision has to be taken regarding whom to select as a members of the new core team considering the financial position, moral state of employee and commitment of the options available.

Options

Following are the options that can be considered for taking decision:
• Formation of team out of FNB’s human resources
• Recruiting a core team from Chicago Bank.
• Recruiting a core team of professionals with proven capabilities.

Evaluation of options

Option 1: If Abernathy takes option 1st then he would have to make a whole team consisting of fairly old executives who are not good enough according to him. The advantage for him is that he will be having a team which would be quite familiar with the work environment of the bank. The threat of being fired if targets are not achieved may work positively in his favor. But the disadvantage is that it will be tough work for Abernathy to generate enthusiasm and morale in the team.

Option 2: If Abernathy opts for option 2nd then the whole team will be of his known and trusted associates and on the team side also all of members will have good trust in Abernathy’s ability and decision making. So, Work will progress very fast and Ross will be able to achieve good results in shorter period time. The disadvantage would be that Ross may face disobedience from staff and possibly from board.

Option 3: If Abernathy takes the 3rd option then the team can deliver the best for the bank since the whole team consists of experts. The board would also not have any problem in accepting this team. But the main disadvantage can be that the workforce may need good amount of efforts in accepting the new team and it would take a lot of time to gain trust.

Decision

Option 3rd is more suitable and practical to choose in both long and short term as only in this option both organization growth and healthy work environment is considered. In option one only work environment is valued and on the same page only growth is considered in second option which have aderse effect on work environment
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Action Plan

The Action Plan should follow following steps
Step 1 A team of twelve members can be build which consists of following:
1. Four members from Frontier
2. Four from his Chicago team
3. Four experts of banking field

Step 2 0ne member from each team can be dedicated work in respective four divisions of organization i.e. finance, marketing, human resource and operations.this will help to strenghn the core four pillers of the bank.

Expected outcome
• The members of his old team would work very efficiently with Abernathy as they had already worked with him and it would help Ross to keep tabs on each department.
• The Frontier members would appreciate Abernathy for choosing them and they would be a great help for outside team to know the challenges and the working of FNB.
• The 0utside team will help in producing effective results by their working experience