Name: Abdulla Sabah (TP022250)

MANAGING BUSINESS
BM027-3-2-MBUS, INDIVIDUAL ASSIGNMENT
HAND OUT: 10 JAN 2011 HAND IN: 07 FEB 2011

LECTURE: DALRENE JOHN

Assignment Question

Why do you think that many firms fail to recognize the importance of customers until they are faced with a crisis?

Learning Outcomes

y Demonstrate theoretical and applied knowledge of the use of

contemporary benchmarking standards and how these may inform a repositioning of the organisation to its stakeholders.

y Demonstrate critical analysis of the development in international

management standards from a procedural to process based approach to management and the importance of this in sustaining quality goods and services.

y Justify the recommendation of techniques through which an organisation

may achieve measured business excellence.

Contents
Assignment Question................................ ................................ ................................ .......................... i
Contents ................................ ................................ ................................ ................................ ........ ii

1. 2. 3. 4. 5. 6.

Introduction................................ ................................ ................................ ............................... 1 PART-one International standards and Benchmarking with application to Bank of Maldives ...... 2 PART-two process and procedures to provide fair and quality service to the customers .............. 7 PART-three methodologies to measure business excellence in Bank of Maldives....................... 10 Conclusion ................................ ................................ ................................ ............................... 12 References ................................ ................................ ................................ ............................... 13

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1. Introduction
Bank of Maldives is said to be the peoples bank of Maldives incorporated on 11th November 1982 and the first bank to be listed in Maldives stock exchange (Ibrahim, 2009). Auditors general report revealed that Bank of Maldives has given 80% of the bank deposits to a two politician as loans which are against the rules and procedures of central bank (Naeem, 2008). Due to this bank of Maldives is facing dollar shortages and lending

difficulties and as a result lot of customers has moved to other banks. To resolve this crisis bank introduced whistle blowing to the bank, sending physical mails directly to the CEO and adopting corporate governance code to show transparency and quality for the customers (Annual report, 2009). This assignment is based on 3 parts. PART-on is how Bank of Maldives can use

international standards for benchmarking during repositioning the organization. PART-two will explain how Bank of Maldives can use its process and procedures to provide fair and quality service to avoid incidents such as lending 80% of deposits. PART-t r will explain on techniques how to measure business excellence for

sustainability and development.

2. PART-one International standards and Benchmarking with application to Bank of Maldives

ISBGS (2008) defines benchmarking as a value of some measure or derived measure, which is indicative of the relationship between an organisational attribute and the values of that attribute maintained in a benchmarking repository. It can be internal benchmarking where example, how is the Bank of Maldives compared to the banking industry standards or external benchmarking such as, is all the departments in Bank of Maldives performing equally.

International Organisation for Standards (ISO) is the most common standards used by manufacturing, service organization. These standards help the customers requirements in the ability of organization to deliver services consistently meeting their needs and expectation (department of trade, 2010).

ISO 9000 family standards such as ISO 9000, ISO 9001 and ISO 9004 can be used for quality management system in bank of Maldives. This strategy will help Bank of Maldives to achieve the goal of being number one retail bank in Maldives by 2015 (Annual report, 2010).

ISO 9000 on Quality Management.

To impellent ISO 9000 standards, Bank of Maldives need to establish a quality management system based on the following principles.

Principle 1: Customer Focus In order to apply the standards Bank of Maldives must do a research on customers need and expectation. These needs and expectation must be linked to the companys objective. Once the objective is written it has to be communicated throughout the organization so that each and every employee knows what is to be delivered to the customers. During the operation bank must analyze the feedbacks from customers to understand the satisfaction achieved. However, the policies should not be based only on customers but also other stakeholders such as employees, owners and the local community must be taken into consideration.

Principle 2: Leadership Leadership is to motivate the employees in achieving the objectives. Here it stars from the establishment of mission. Eg, Bank of Maldives mission is to become financial leader in South Asian Association for Regional corporation or SARC group (BML, 2010).

So to achieve this leadership, Bank of Maldives must be able to inspire the employees in achieving the challenging goals at the same time eliminating fears of investors and owners by showing that the goals can be reached. It also includes providing resources, training and freedom of responsibility with accountability for employees in achieving the company mission.

Principle 3: Involvement of people Involvement of people means allowing the participation of employees from all levels in the organization. It helps to perform ownership of problem and responsibility.

Eg: Bank of Maldives may want to find why the profit in Penang is dropping. So the employees from all levels can contribute ideas to mind map and bring solution by sharing the knowledge and experiences.

Principle 4: Process approach The first step is to write the activities to be performed in the organization. Activates are assigned to departments and responsibilities are given to achieve the expected result. Example if Bank of maldives wants to launch Mobile banking the first thing is to assign the task to the IT department and provide the resources required. During this process all the departments must be communicated.

Principle 5: System approach to management Understand the interrelated process in the organization to improve efficiency and effectiveness. Example when the bank wants to introduce a new product or service they will always undergo risk analysis. Suppose if Bank of Maldives wants to introduce Mobile banking and offshore Banking as two projects, both of them must go risk analysis. So if the risk analysis is conducted by different departments then the company is having duplication of process. The best way for this is to do the analysis by one department so that the resources are used wisely and the reports will be more comprehensive.

Principle 6: Continual improvement Guidelines and rules have to be written to measure improvements on process and product. This allows companies to adapt flexibility and opportunities. Example in the 1980s Bank of Maldives was catering the customers manually. But with the evolvement of internet, banking process has changed to online banking. This is an improvement we have seen. Improvements have to be made continuous along with the technological improvement.

Principle 7: Factual approach to decision making This will help companies to make decisions based on facts. This can be applied to Bank of Maldives on decision making by gathering enough data which is accurate. Example if Bank of Maldives wants to put an ATM in Addu Airport they need to analyze the population in Addu Airport and study the number of transactions take place in the current ATMs in the Airport. Also need to balance review on past experiences to make it more accurate in making decision to place a new ATM at Addu Airport.

Principle 8: Mutually beneficial supplier relationships This will help to strengthen the relationship between partners and suppliers by building relationship for mutual benefits. Example Bank of Maldives can establish long term relationship between ATM suppliers and security providers so that they can give at a lower price at the same time suppliers can benefit from customer lifetime value. They also can share information between parties for future plans to get good quality products at a better price. The followings are the different areas to be surveyed in order to benchmark (APQC, 2010). Financial Management
y y y y y y y y y

Accounts payable and expense reimbursement Accounts receivable Customer credit and invoicing Finance organization General accounting and reporting Internal controls Payroll processing Planning and management accounting Sales and order management

HumanCapitalManagement
y y y y y y y y

The HR organization (key dashboard of indicators for HR) Create and manage HR strategy Source, recruit, and select employees Develop, train, and counsel employees Reward and retain employees Manage pay, report time, and process payroll taxes Redeploy and retire employees Manage employee information

Supply Chain Management

y y y y

Supply chain planning Procurement Manufacturing Logistics

Ares listed on page 5 have to be analyzed and documented as a report. Once the report is completed then we need to select the best company in the industry to bench mark. It is important that the company information is up to date (Clevenger, 2008) Example, Bank of Maldives can select HSBC which is a world ranking bank. Then they have to compare their survey reports which they have prepared with the informations from that bank. Information from HSBC can be gathered from annual reports, news articles and journals. Ones comparison is over we need to write a new report on HSBC high performance areas and ways to achieve those up to that level or higher. And then communicate the new strategies with employees and follow up. Benchmarking helps companies to keep their customers without switching to the competitors. Because when a company benchmarks, they are improving their quality to a better which will make the customers happy and they will remain with the company.

3. PART-two process and procedures to provide fair and quality service to the customers
Process is a set of activities that are interrelated or interconnected with another. It uses the resources and converts input into output. Process is interconnected because the output of one level becomes the input in the next level. Procedure is the ways of carrying out process or activities and they have steps (Wade, 2001). Procedures may or may not be documented. But ISO 9001expects companies to document procedures. This will help companies to provide high quality service with the standardization of procedural work and making the employees work much clear (Praxiom, 2010). Process and procedures differs along the hierarchy. Employees at the lower level have a more detailed and specific written procedures for the process. The following is an Eg of process and procedures.

Source: http://www.stc.org/ConfProceed/2000/PDFs/00118.pdf

Process based approach

Bank of Maldives can use service process based management system in providing service to the public. It starts from providing things right for the first time with the minimum human errors (John, 2011). Unlike manufacturing service like banking is more sensitive during the interaction and communication. If the service is bad then it is possible for the customers to switch to the competitors.

Source: http://www.zilog.com/docs/qcc1479.pdf

Bank of Maldives will have procedures for each activity. Here I will explain the reconciliation process with steps. But procedures have to be written for all the activities in bank.

Step 1 2 3 4 5 6

Description Identify the reconciling items. Reconcile the suspense account for those items selected. Produce vouchers for each reconcile item. Arrange the times in fixed asset order. Record this data in the software for Auditing. Provide the full report at the end of the month to the head of the Department.

So the bank follows the process and procedures then there wont be any problem. The 80% of deposits given as loan is because they did not follow the procedures. Auditors report have highlighted that they have skipped the inspection due to the orders from president office. For missing the important step in the process of inspection the bank is now facing US$50.3 million as doubtful debts (Haveeru, 2009)

4. PART-three methodologies to measure business excellence in Bank of Maldives.

Business excellence is a model used to review the companys performance and understand target areas to improve (Tidd, 2005).

Source: http://pejuta.com.my/index.php?option=com_content&task=view&id=68

Business excellence model works similar to total quality management (TQM). It works as a non-prescriptive base with nine criteria divided in to enablers and results where 5 of them are enablers and 4 results (Pak, 2006). How Bank of Maldives can use this model is by comparing the bank against the model. The impact or results of services on people, customers and the society have to be found out. And also on Enablers - leadership, policy and strategy, people management, resources and process management. This assessment must be done very carefully since these are the areas which will be compared in the model. Understanding the organization is system is important when analyzing the Bank. This means we cannot take departments as a single entity. Then score the organization on each criterion. Eg: if the Bank process and procedures are well documented with ISO standards then it may
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get 30% and the banks expectation is 90% we need to bring improvement to the existing procedures. So the management can bring up plans such as redesigning work and procedures for improving quality. Improvements can be brought up by establishing a culture. Example Bank employees can exchange knowledge on job so that new employees and low performance workers can improve. Ones a culture is created, direct action on the system have to be taken to for necessary changes (Seddom, 2009). The arrow with result is due to the enablers and the result helps the company to innovate and better in terms of quality products and services. The assessment is endless and diagram below show a diagrammatic presentation of what is explain previously.

Source: http://www.systemsthinking.co.uk/6-3.asp

Business excellence in general will help the management to understand the performance of the bank and to improve before it drops under customers expectation. Crisis happens when the performance drop under expectation and it will take a long time for the management to take the business to normal.

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5. Conclusion
We have seen process and procedures, benchmarking and business excellence. In each of them the main focus is customers and how to improve quality to keep the business sustainable. If the process and procedures are not good then the customers will switch to the competitors because the process is complex and customers don not like to wait for time consuming services or products with quality. Or if we benchmark a wrong company then we will be providing not the service customers expecting. So if the process and procedures, benchmarking standards or business excellence are written and practiced to give best for the customer there wont be any need to remind the customers even if there is a crisis since everything was created by keeping customers as the main focus.

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6. References

Market Survey Repots

Annual report.(2010). BML strategic objectives [online]. Available from http://www.bankofmaldives.com.mv/SiteCollectionDocuments/Annual_Report_200 8_English.pdf [Accessed: 27/02/2011] Department of trade. (2010). Quality Management System [online].United Kingdom: trade Available from http://www.businessballs.com/dtiresources/quality_management_systems_QMS.pdf [Accessed: 30/01/2011] Ibrahim, A.(2009). Chairmans Review [online]. Male: BML. Available from hhttp://www.bankofmaldives.com.mv/Information/Documents/BML_Report_2009 %20%28English%29.pdf [Accessed: 27/01/2011] Naeem, I. (2008). Bank of Maldives audit report 2008 [online].Male: Audit office Available from http://www.audit.gov.mv/dv/agreports.php [Accessed: 27/01/2011]

Online Video
Clevenger,B.(2008). Benchmarking standards - voltage and Prime95. .[Online video]. September 16th. Available from: http://www.tomshardware.com/forum/245374-29benchmarking-standards-voltage-prime95 [Accessed: 1st February 2011]

Websites
APQC. (2010). Open Standards Benchmarking Assessments.[Online].Available from http://www.apqc.org/open-standards-benchmarking-assessments . [Accessed on 1st February 2011] BML. (2010). Company Background. [Online].Available from http://www.bankofmaldives.com.mv/InvestorRelations/cb/Pages/default.aspx. [Accessed on 27th Jan 2011]

Haveeru.(2009) Audit report reveals BML in dire straits.[online] Available from http://www.haveeru.com.mv/english/details/25587 [Accessed: 30/01/2011]

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IBGS. (2008) International Software Benchmarking Standards Group [online] Available fromhttp://www.isbsg.org/isbsgnew.nsf/WebPages/C7B3FCC5CE6308F7CA25745 80013F206/$file/ISBSG%20Benchmark%20Standard%20V1.0%20Draft.pdf [Accessed: 30/01/2011] Pak,S.(2006).Business Excellence Model. [Online].Available from http://www.saferpak.com/business_excellence.htm .[Accessed on 3rd February 2011] Praxiom.(2010). ISO 9000, 9001, AND 9004: Quality Management Definitions. [Online].Available from http://www.praxiom.com/iso-definition.htm .[Accessed on 1st February 2011] Seddom, J.(2009). System thinking for service organization. [Online].Available from http://www.systemsthinking.co.uk/6-3.asp .[Accessed on 3rd February 2011] Tidd,J.(2005). Managing Innovation Tools. [Online].Available from http://www.managinginnovation.com/tools/Business%20 xcellence%20 odel.pdf .[Accessed on 3rd February 2011] Wade, J. (2001). Comments on the definition of process, procedure and work instruction.[Online].Available from http://www.bin.co.uk/PPWI.pdf . [Accessed on 1st February 2011]

Lecture Notes
John, D. (2011). Process based approach, BM027-3-2. [Lecture notes] Service Process Approach. Managing Business Module. UCTI, business, Room L1-1, 22nd November 2010

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