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The report is an in depth analysis of the multinational bank ABN

AMRO. The report was aimed to study their managerial set-up,
how they go about their business, what problems they have been
facing and how can they further improve their presence in the
current environment.

In the end, we would like to thank all those people who were
instrumental in the completion of this report & took out time from
their very busy schedules to help us, ABN AMRO in trusting us
and providing us with their data, and last but no the least, we
would like to thank Madam Iffra who 'will' take out time from her
busy Schedule to check our report no matter how boring she thinks
it to be and for constantly tolerating our mistakes and
shortcomings.

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 INTRODUCTION

The aims and objectives of this report

are as follows:

 To conduct an analysis of the existing management

structure of the firm.
 To study the hierarchical setup of the firm & to
study the flow of information within this structure.
 To study the application of “Organizational
Behavior” for routine (structured) decisions and
exceptional situations (unstructured) decisions in the
firm.
 To study any innovations brought about by the firm
in order to fulfill its needs.
 SWOT analysis of the firm (strategies).
 To suggest various solutions to overcome any draw
backs within the organizational structure and
decision-making process of the firm.

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 HISTORY
ABN AMRO is a prominent international bank, its origins going
back to 1824. ABN AMRO ranks 11th in Europe and 18th in the
world based on total assets. It’s network is comprised of over 3,000
branches in more than 60 countries, a staff of about 104,000 full
time employees and total assets of EUR 637.5 billion (as at 30
September 2004).

ABN AMRO Pakistan was established in 1948 and was the first
foreign bank to be granted a license by the Government of
Pakistan. Over the last four years, ABN AMRO has significantly
enhanced its profile in Pakistan, and is comfortably ranked
amongst the top 3 foreign banks in the domestic market. The Bank
currently has a presence in 3 cities namely, Karachi, Islamabad &
Lahore and employs 300 employees countrywide.
A network of seven online branches strategically located in all the
major cities supports an extensive and rich Consumer Banking
foundation.

ABN AMRO invests heavily in employee development by

structuring personalized development plans for each employee.
The employees are trained in core banking skills and latest

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developments. They pride themselves in building and maintaining
a corporate culture that is conducive to high performance,
teamwork and responsive to change.
With total assets of over PKR 46 Billion, equity of PKR 3.1 Billion, and
deposits of almost PKR 35 Billion, ABN AMRO is placed and well
positioned as one of the larger foreign banks in Pakistan. They have
posted pre-tax profits of nearly PKR 1.3 Billion in 2002, and the ROE
of almost 43% is amongst the highest in its peer group. Over the last
four years, ABN AMRO has significantly enhanced its profile in
Pakistan, and is comfortably ranked amongst the top 3 foreign banks
in the domestic market.

Introduction Of ABNAMRO
ABN AMRO Pakistan boasts an extremely diverse and
demanding corporate and financial institution's customer
base. And as such, they have developed products and
services that focus on meeting these specific needs of their
customers. In essence, they believe that these products and
services have been a direct outcome of years of interaction
with and feedback from their customers in Pakistan and
around the globe.

Their local and regional product management units

meet regularly to improve upon and introduce state of the
art products and services to help keep in line with the
changing needs of their customers. They have also
developed strong strategic liaisons with other external

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solution providers (local banks, couriers, security
companies, etc.), and are able to extend their domain into
areas where they feel niche suppliers provide advantages
which they can extend to their corporate customers. They
offer long-standing expertise and experience in Consumer
Banking, Corporate Banking, Investment Services, Treasury,
Cash Management Services (allowing customers to provide
payment and disbursement instructions electronically), and
Correspondent Banking (for local and international
transactions).

VISION STATEMENT
‘To be the best of the best and the only place to work’.

MISSION STATEMENT

‘We strive towards service excellence’.

ABN AMRO's mission is to create maximum economic value for the

shareholders through a constant relationship focus on the financial
services needs of the chosen client segments and a strict adherence to

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the financial targets. It is operating in three principal customer
segments, aiming to maximise the value of each of these businesses
as well as the synergies between them. Excellence of service to the
clients and leadership in the chosen markets are of paramount
importance to the long-term success.

ORGANIZATIONAL CULTURE

1. Integrity
Above all, it is committed to integrity in all that it does, always,
everywhere.
2. Respect
It respects every individual, draws strength form equal opportunity
and diversity, at the same time supporting personal growth and
development. It benefits from the entrepreneurial spirit of each
individual.
3. Teamwork
Teamwork is the essence of its ability to succeed as a universal and
international network bank. The overriding loyalty is to the good of
the whole organisation, requiring all to learn from each other and to
share skills and resources worldwide for customers’ benefit.
4. Professionalism
In the service of customers, it is committed to the highest standards
of professionalism, pursuing innovation, deploying imagination,

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being open to new ideas and acting decisively and consistently. It
determined to deliver outstanding quality so that the relationships
with the customers are long lasting and close.
Despite of this, it believes that people come first. “It’s the people, not
money that makes the difference” is its motto. ABN AMRO is an
ambitious institution, committed to continuous improvement in
everything it does. The success depends on excellent performance
and a solid reputation. Transparency and dialogue are of crucial
importance in all relationships to maintain its reputation as a
respectable and reliable institution.

Based on its four Corporate Values, it has formulated Business

Principles to guide all employees in their daily work.

Their Business Principles are:

• We are the heart of our organisation
• We pursue excellence
• We aim to maximise long-term shareholder value
• We manage risk prudently and professionally
• We strive to provide excellent service
• We build our business on confidentiality
• We assess business partners on their standards
• We are a responsible institution and a good corporate citizen

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 • We respect human rights and the environment
• We are accountable for our actions and open about them
• Business Principles alone are not the answer to every problem,
but they do challenge us to translate their spirit into our daily
practice and shift our horizons beyond short-term profit to
long-term value creation through sustainable development.

ABN AMRO EMPLOYEES: THE HEART OF THE ORGANISATION

1.They are the heart of their organisation

Their spirit, the pleasure and pride they take in their work, shows the
importance they attach to fulfilling their mission, living their Values
and meeting the expectations of their audiences. They all have a
responsibility to create and maintain an open culture, based on
respect, loyalty and trust. This is the foundation for organisational
success as well as their personal development and satisfaction.

2.They pursue excellence

They shape the future of ABN AMRO by delivering the highest
quality service to their clients while maintaining their solid
reputation and adhering to financial targets. Meeting their
organisation's ambitious goals requires excellence in performance
and behaviour. They recruit the best-qualified people and

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continuously develop them in view of providing competitive
advantage in their chosen markets. They also assess their
performance thoroughly and regularly.

THEIR EXTERNAL AUDIENCES: THE WORLD IN WHICH THEY LIVE

AND THEIR BUSINESS PRINCIPLES

3.For their shareholders they aim to maximise long-term

shareholder value
The measure of the success of their business is the growth of its long-
term shareholder value. In seeking to maximise this value, they
manage the interests of clients, employees and capital providers, as
well as society and the environment. Capital and other resources are
allocated according to where they can best realise this objective of
long-term shareholder value.

4. They manage risk prudently and professionally

Judging and managing risk is fundamental to successful banking.

They take a prudent and professional approach to all types of risk,
from credit to operational and reputation risk, while meeting their
clients' needs and seizing suitable business opportunities.

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5.For their clients they strive to provide excellent service

Without their clients they have no business. They aim to be the

proactive and trusted financial partner in all phases of their clients'
lives. They listen to their clients and offer customised and state-of-
the-art advice and service, based on their vast expertise and extensive
network.

6. They build their business on confidentiality

Confidentiality is the foundation for long-term relationships that
benefit both their clients and their own organisation.

With Their Business Partners

7. They assess business partners on their standards
They also expect their clients, business partners, suppliers and
other audiences such as Non-Governmental Organisations (NGOs) to
practice high standards consistent with their own legitimate
purposes. They take their standards into account when assessing
ABNAMRO’s mutual relationship.

8.In society they are a responsible institution and a good

corporate citizen

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 They are aware of and act on their broader responsibilities to
the societies and communities in which they operate. They behave as
good citizens, working closely with local regulators and complying
with their regulations. They play an active role in local communities,
as well as in the global community and suitable international forums.

9.Theyrespect human rights and the environment

Respecting human rights and the environment is an integral
part of responsible social behaviour and corporate citizenship.

COMPLIANCE: THEIR BUSINESS PRINCIPLES ARE FOR REAL

10.They are accountable for their actions and open

about them
Accountability and transparency are great business strengths
and important in all their relationships. They are accountable for all
activities over which they have management control. They provide
relevant, timely and correct information in an open way. Within the
boundaries of confidentiality, they are open to dialogue with parties
who have a sincere interest in them.

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 ENVIRONMENT

ABN Amro's main objective is to provide sustainable value for their

clients, employees and shareholders. To help achieve that aim, they
run their business responsibly: with integrity and openness. That
implies that they also consider the interests of other stakeholders in
society, minding environmental, social and ethical issues and looking
after the interests of future generations.
Companies can have a 'direct' impact on society and the
environment – through their employees and facilities – or and
indirect impact – through their business activities.

They as a bank make the biggest contribution to sustainable

development indirectly through their choice of business partners (i.e.
clients and suppliers), how they work with them, and how that
affects the environment and society.

ABN AMRO is committed to promoting sustainable development

actively across their industry and in business in general. They believe
this will help to raise the standards of international business and
restore trust among stakeholders, following the crisis of confidence in
corporate integrity.

MAKING CHOICES

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 Whatever choices they face, they know that focusing on the
areas where they can have the most impact is crucial to their
effectiveness.

Their responsibility towards society and their business objectives

create the need to make balanced and transparent decisions. To help
them focus, ABNAMRO have formulated six themes that are key to
its sustainability performance:

1.Being accountable and transparent;

2.Protecting its assets;
3.Providing responsible financial services;
4.Being an employer of choice;
5.Minimizing our impact on the environment; and
6.Supporting local communities.

ABNAMRO’s approach to these themes mirrors its approach to

business: They aim to create value, by embedding sustainability in
their decision-making and operational structures.

They know they still have a lot to do, and that they are not perfect.
ABNAMRO is on an ambitious, ongoing journey and will continue to
engage with stakeholders, as this will enable it to improve further.
They believe sustainable development is the right way forward, and

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that this should be underpinned by the allocation of dedicated
resources throughout their organization.

Size Of abnamro
ABNAMRO operates 7 branches all over the country, 4 in Karachi, 2
in Lahore and 1 in Islamabad. It is seeking for more areas to grow its
network.

 Karachi Branches

• Main Branch (Country Head Office) Defence

16-Abdullah Haroon Road.

• Defence (Mini Branch)

• Shaheed-e-Millat Branch
• Gulshan-e-Iqbal Branch

 Lahore Branches

• Main Branch (Shahrah-e-Quaid-e-Azam).

• Cavalry Ground Branch

 Islamabad Branch

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• Main Branch 15 Markaz F-7

DEPARTMENTALISATION AND SET-UP

ABN AMRO is a multinational. They don’t follow a normal

organizational structure. They call their structure a ‘Silo’ despite of
the fact that this structure is more evident at lower managerial levels
than at the top. At the top, one would expect to see direct functional
lines and connections between managers and the heads. This is not
so. Being a multinational, ABN AMRO has a completely different set-
up. Let’s just assume that for the time being, we will be concentrating
on the set-up that exists in Pakistan.
Naveed A. Khan is the Country Representative. All employees work
under his leadership and he is answerable to the bank’s corporate
headquarters and the regional one.

THE MARKETING DEPARTMENT: A CLOSER VIEW

ABN AMRO provides its customers with numerous services. They

normally cater to (types of customers and services that they are
provided are according to their needs:

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 1. Consumer Clients
2. Wholesale Clients
3. Working Capital Group
4. Financial Markets

The Marketing department is mainly responsible for the following:

1. Increasing sales.
2. Advertising of new/existing products and services
3. Strengthening relationships with existing customers.
4. Establishing relationships with new customers

As is the case with the rest of the departments, the marketing

department plays a vital role in fulfilling the ABN AMRO vision i.e.
“Relationship Banking”. This is not an exaggeration. In reality, the
marketing department IS one of the major driving forces behind a
firm, especially if it is of a similar set-up as is ABN AMRO i.e. an
organization that provides its customers with services.

 Consumer Clients
These are the normal clients, like in any other bank.
One can operate your accounts from any ABN AMRO branch in the
country, or through 24-hour ATMs and Non Stop Banking Centre's
(NSBC).

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 Wholesale Clients
Aimed at a more specific customer class, these services aim at
fulfilling specific needs of customers. These products and services
have been a direct outcome of years of interaction with and feedback
from customers in Pakistan and around the globe.

 Working Capital Group

Working Capital Group provides cash management, trade services,
custody and clearing solutions to corporate clients, financial
institutions and the public sector. It has the reach and expertise to
manage the financial and commercial functions of both corporate and
financial institutions to the greatest effect. Emphasis is laid more on
the 'global level'.

 Financial Markets
ABN AMRO's Financial Markets (FM) business draws on an extensive
global network ensuring complete coverage for all markets. Through
the comprehensive product range and high degree of professional
commitment offered by the bank, they aim at offering their clients a
solid foundation upon which to develop and grow long-term
business relationships. By organising its FM business under the
disciplines of origination, trading and distribution, ABN AMRO is
able to optimise product delivery and product development, and

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fulfil the sophisticated requirements of both its public and private
sector clients. As a major player in Pakistan's foreign exchange and
money interbank markets, FM remains well poised towards
providing unparalleled service to its corporate and institutional
clientele.

The department consists of only five employees who work full time.
Being a small team, decisions are made faster and relationships,
which exist between the departmental employees, are cordial. The
department works keeping in view the objectives. The marketing
head is in charge of both the Assets and Liabilities products, which in
turn have their heads in the form of product managers. The product
managers each have one subordinate who are termed as ‘helpers’.

 Responsibilities
This department is entrusted with a lot of challenging tasks to
accomplish. It is in charge of producing different campaigns for
publicity and brainstorming over new products. It has to work
keeping in view the company’s long-term mission. Besides this, the
department has to coordinate its activities with the bank’s advertising
agency (ASIATEC) and their researchers A C NIELSON. Apart from
that, this department also has to ensure as to how customers perceive
the bank.

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 Products and services offered
The department is involved in the provision of two products; assets
and liabilities. Liabilities include current account, savings and term
deposits. The assets include the loans, which the bank offers to
households and firms. The department also has a big say as to how to
carry out advertising campaigns and generates ideas for prospective
new products. Creativity is this department’s hallmark.

THE IT DEPARTMENT: A CLOSER VIEW

The IT department plays a major role in facilitating tasks at ABN
AMRO. Technological advances in the past few years have increased
the scope and availability of such helpful machines, which could only
be read about in science fiction novels only a few years ago. Utilizing
this new technology to the fullest is essential if a firm is to survive in
this competitive world ABN AMRO is always on the look out for
methods through which it can gain an edge over its competitors.
When it took the decision to computerize its tasks and environment,
it must’ve thought that this was probably one of the best decisions
that it has taken for a long time.

ABN AMRO prides itself for the strong computer network that it has
recently installed at its head office. In doing so it has also been able to
establish connection with its seven branches all over Pakistan so as to
monitor them and retrieve information from them as soon as

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possible. Connectivity is established by the use of various mediums
and in turn, the head office is connected with the global server of
ABN AMO.
The bank mainly uses the IS in the following categories:
• Operations support and
• Communications.

The whole information system is custom built and comprises of

various smaller software’s that help in various departments such as
accounting software’s, teller software’s, ATM software’s, Human
resource database management systems etc. all these software’s help
a lot in providing the customers with better and on time services.
Information is communicated by a very strong internal memo
system. Every document is written (stored) and then passed on to
others in clear, concise language. Documentation is properly
implemented. All employees are given direct lines and specific e-mail
accounts such that they can easily communicate with their superiors.
There is a lot of emphasis on accountability and communication
channels are open. A great effort is made that information is neither
misinterpreted nor lost and thus every one to whom the memo is sent
is bound to give an endorsement. Besides this employees are given
the opportunity to remove their grievances by answering various
questionnaires. The bank makes extensive use of BBS, groupware,
teleconferencing etc.

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 THE HUMAN RESOURCES DEPARTMENT: A CLOSER VIEW
As is the case in any other organization, the Human Resources
department at ABN AMRO plays a key role in running the bank. The
HR department is responsible for the following:
1. Selection.
2. Training.
3. Motivation.
4. Leadership
5. Evaluation of employees.
6. Reward System.

The HR department is of uttermost importance to any firm. It is

probably one of the most important support departments present.
Truly said, ‘Organizations don’t change, people working in them do’.
But, nowadays, it is pretty evident that an organization is reflected in
the people it employs. Had there been no people, organizations
wouldn’t exist at all. People form a major link in the whole
economical process of households and the firms catering to them. In
case of ABN AMRO, one cannot take a capital-intensive approach to a
business such as this. It involves a lot of dealing with customers and
who can do that better but people themselves? Thus the bank

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emphasises that it employ only the best of which the labour market
has to offer.
1.SELECTION:
Employee selection process at ABN AMRO is pretty rigorous.
Advertisements are placed in leading newspapers. Applications are
scrutinised and interviews conducted. Employment criteria at ABN
AMRO are of two types, contractual and permanent.
Permanent employees at ABN AMR are known as ‘internal
customers’ every employee first has to pass through the contractual
phase. If he/she is good enough, his employment is made
permanent.

2. TRAINING:
The story doesn’t end here. People are kept under constant
check. The HR department is always on the lookout for good work
and talent within and out of the organization. After selection, there
are times when training sessions are held.
These training sessions are one daylong procedure. More like
orientation of the new employee. The session is one day long
and includes detailing the employee about the following:

 Standards of company.
 Dealing with customers.
 Obligations towards others are told.

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With more than 100,000 employees in nearly 3,600 branches and
offices around the globe, ABN AMRO uses annual objectives to
manage employee performance. Smart Objectives are a key part of
this process, providing the criteria that managers use to create
employee goals and objectives. In just four weeks, Centrax
Corporation developed an interactive CD-ROM for ABN AMRO that
provides managers with information and techniques for conducting
objective-setting meetings with employees.

ABN AMRO has traditionally conducted management training in

stand-up classroom sessions using hardcopy materials. Recently,
ABM AMRO began looking for a training solution that could be
delivered without regard to time, distance, or location. Their
continuing goal is to improve training availability and consistency,
while reducing travel costs and time away from the job.

ABN AMRO enlisted Centrax Corporation, an online learning

development and design firm based in Chicago, to develop a Smart
Objective multimedia training application. Centrex’s challenge was to
create a visually engaging and interactive adaptation of the
classroom training in only one-month. There was no time or budget
to shoot live video in a classroom, but they wanted to make the
content come alive.

Centrax required an authoring environment that would allow them

to simulate an instructor-led classroom environment using still

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photos, audio, and animation. The final application also had to be
deliverable as a CD-ROM as well as over the company's Intranet as a
downloadable course.

Centrax chose Authorware to create the courseware because it

enabled them to integrate a full range of rich-media components into
a single interactive training application. By employing lightweight
Flash animations instead of digital video, ABN AMRO kept the
application small, facilitating delivery of the training over the
company's Intranet.

"We've utilized a wide variety of authoring tools in the past, but

recently we standardized on Macromedia."

The goal of the Smart Objectives Manager's Toolkit training is

twofold: to teach managers about the Smart Objectives process, and
to teach them how to present the Smart Objectives process in a
traditional stand-up training session. The existing Smart Objectives
training material consisted of a 12-page toolkit, which offered
suggestions to managers on how to conduct a Smart Objectives
training meeting, and 12 handout sheets and a brochure to be
presented to the participants during the meeting.

3. EVALUATION:

Employees are evaluated according to the following job constructs:

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  Punctuality
 Attendance
 Communication skills
 Work Habits
 Efficiency
 Accuracy
 Enthusiasm
 Value added to business

Each and every employee is evaluated accordingly and the high

achievers are appraised every June and December. Their names are
sent to the regional office for further evaluation and promotions
(Existing employees are the benchmarks).

4. MOTIVATION:
Motivation at ABN AMRO is evident at all managerial levels. Every
employee, no matter what position he/she is at, has the opportunity
to advance through the organization to a higher spot. Contractual
employees always have the incentive of being made permanent.
Permanent employees have the opportunity to advance. Even the
country manager himself has the opportunity of being promoted to
the position of regional manager.
ABN AMRO is firmly opposed to discrimination in
employment, and is committed to upholding employees' right to
work in an environment free of harassment and intimidation. They
have created avenues for employees to voice concerns as
confidentially as possible. ABN AMRO employs about 105,000 full-

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time equivalent staff members in 52 countries and is committed to
embracing diversity.
At ABN AMRO diversity is about each individual coming to terms
with his or her attitudes, beliefs and expectations about others and
gaining comfort with difference.

They are on a journey to become a truly inclusive and equitable

organisation - one that makes full use of the contributions of all
employees. In addition to being a moral and social responsibility,
they believe this is also steeped in good business sense. An
environment where all employees feel included and valued yields
greater commitment and motivation. They not only benefit from the
creativity that diverse perspectives can inspire, they also enjoy the
greater productivity and competitive advantage that comes from
being an attractive employer for talented employees from all walks of
life. What more motivation can there be than a better job position?

5.Leadership and Diversity Programme:

Leadership is the influencing people to follow in the achievement of

common goals. Keeping in view the importance of leaders in an
organisation ABNAMRO have launched its Leadership and Diversity
Programme in the first quarter of 2005 with a group of 80
participants. This programme is a medium-term modular
programme focusing on gender and other diversity issues.
Participant groups come together four times during a five-month
period to cover modules that explore their unique personal
leadership style in relation to working in a diverse setting in terms of
both gender and culture.

The programme focuses on building up participants' self-

awareness of their leadership style and how they can bring their own
unique talents to the surface. It also examines what effect they can
have on the work environment to ensure that others feel comfortable
expressing themselves. Between modules, personal coaching is

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provided to help participants apply what they have learned to
specific contexts and goals. This programme is targeted at
VPs/Directors with at least one year of experience in ABN AMRO,
across all BUs.

6.REWARDS AND OTHER INCENTIVES:

With a better job position come more incentives. ABN AMRO
provides its employees with numerous incentives for example free
memberships at famous clubs, sports complexes etc. These incentives
and a higher pay are enough to serve as motivation for the
employees. Employees have to work hard for being promoted
though.
Competition at ABN AMRO is very tough as they hire top class
people only. All these evaluations and so-called ‘Appraisals’ are
carried out twice a year i.e. during June and December.
Permanent employees too have a time limit. Retired employees of
ABN AMRO are provided Appreciation gifts and free medical
services. Retirement also results in a golden handshake.

DECISION-MAKING AND THE COMMUNICATION PROCESS.

Decision making on a strategic level involves the regional office and

the local bank’s headquarters. All the important decisions are made
in the boardroom with the country representative chairing the

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meetings. Decisions are made and then conveyed to employees. Very
rarely is input taken from employees in the middle or lower level.

Apart from that, decisions on a day-to-day basis involve a lot of

employee participation and input. It is these decisions due to which
employee morale is increased as employees reap the benefit of
participative approach of management. Input is taken from all the
stakeholders and then is vetted for being feasible.
Decisions are communicated not by word of mouth but in writing
and through the strong computer network within the building. The
VP’s and other line managers enforce implementation of decisions.
Weekly meetings and other performance evaluating forms are used
to gather information about the status of the given task and
diversions from this are easily spotted when the minutes are made.

Goals of ABN AMRO:

The goal of ABN AMRO is to create value for its clients. Key in our
relationship approach is a constant focus on the financial services
needs of our client segments. It is through the professionalism and
motivation of our global staff that we realize this value, resulting in
superior service and integrated financial solutions.

Both locally and globally, our clients increasingly require a

comprehensive span of products, professional skills and service.

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"ABN AMRO's core strength are:"a broad product range,
international reach, sector expertise and a pool of human talent.
Managing for Value contributes to the most effective integration of
these assets to the client's service. It is this client-led strategy that will
drive the development.

Our goal is to be recognized as a leader in service, quality and client

satisfaction. We aim to achieve our objectives by working in
partnership with our clients, employees and stakeholders. We aim to
achieve our objectives by working in partnership with our clients,
employees and shareholders. We endeavor to create a stimulating
work environment where our employees can leverage their skills and
experience to build a unique product and service offering for our
clients.

ABNAMRO has adopted a focused approach to sustainability,

comprised of five main goals, which are as follows:

 delivering responsible financial services;

 being accountable and transparent;

 being a great place to work;

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  supporting local communities; and

 minimizing direct impact on the environment.

Delivering responsible financial services :

ABN devotes the largest section to the area in which its core business
has the greatest impact on sustainability: delivering responsible
financial services to clients. This discusses the bank’s overall
approach to risk management, followed by that of its three business
units. In terms of its overall approach, the following points are of
particular interest.

 Being accountable and transparent :

ABNAMRO approach is of accountability and transparency, such
as corporate governance, a transparent financial system, embedding
sustainable development in the organisation and stakeholder
engagement. The bank has developed a number of policies in these
areas, notably an instruction manual containing internal governance
policies (not available to the public), a global Client Acceptance &
Anti-money Laundering Policy and a Whistle-blowing Policy.

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ABNAMRO was among 11 banks to develop the Wolfsberg
Principles, a set of global anti-money laundering guidelines for
commercial banks.

 Being a great place to work:

ABNAMRO manages human resources on a decentralized basis,

though it is rolling out an enhanced group-wide human resources
information system. Four main issues are addressed: professional
learning, health and safety, employee engagement and diversity.
ABNAMRO identifies a number of important goals, notably to
conduct a survey across all business units in order to measure
employee engagement and also to develop a corporate strategy on
diversity.

 Supporting local communities:

Similarly, ABNAMRO adopts a decentralized approach to

supporting local communities. The bank currently lacks a group-
wide strategy for donations and charity. Through initiatives at the
local level, the company gave a total of €58,201,000 in sponsorship
and donations. It highlights some examples of support to local
Communities through local business units.

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 Minimizing direct impact on the environment :

While acknowledging that its main environmental impact is indirect,

through its financing and investing activities, it focuses on the bank’s
in-house environmentalmanagement, including energy consumption,
waste and travel.

ABNAMRO itself acknowledges that it has ‘a long way to go’ and for
each priority issue has identified key goals and initiatives to
spearhead its efforts.
These include:

 developing a bank-wide program to raise staff awareness and

build skills related to sustainability;

 further integrating sustainable development into business

processes through policy development and implementation for
sensitive sectors;

 stepping up the development of bank products addressing

environmental, social and ethical issues;

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  expanding the range of sustainable investment products
available to clients;

 developing the bank's sustainable development strategy

through dialogue with both internal and external stakeholders,
especially on topics of community development, green
buildings and supplier diversity;

developing a group diversity policy, as well as a group policy for

procurement that integrates social and environmental criteria; and
 Encouraging business units to develop energy reduction plans

and targets.

We strictly follow a relationship approach, which keeps clients'

requirements clearly in focus and provides excellent service through
the professionalism and motivation of our employees across the
globe. Adhering to the principles of Managing for Value - allocating
resources to where they earn the best long-term returns and
measuring the results - and exploiting synergies between the bank's
businesses maximizes economic value for our shareholders. The ABN
AMRO Values and Business Principles are the framework within
which we conduct all our business.

The ABN AMRO Foundation seeks to make a direct contribution to

the United Nations' Millennium Development Goals, particularly to

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the first goal of eradicating poverty and extreme hunger. The
Foundation supports and stimulates entrepreneurship within
communities, and educates and empowers people to create the
conditions that will lead them to sustainable livelihoods. This makes
it possible for communities and individuals to improve their
standard of living and generate income. By empowering people
through the projects we support, we can make a real and sustainable
difference to their lives.

STRATEGIES
ABN AMRO is an international bank with European roots. They have
a clear focus on consumer and commercial clients in their local
markets and focus globally on select multinational corporations and
financial institutions, as well as private clients. Their business mix
gives them a competitive edge in their chosen markets and client
segments.

ABNAMRO’s strategy is built on leveraging its advantages as a

Group to create the best value for – and with – its clients. It is
summarised in five points.

1. Creating value for their clients by offering high-quality

financial solutions that best meet their current needs and long-
term goals.
2. Focusing on:
• consumer and commercial clients in their local markets in
Europe, the Americas and Asia, and globally on
• selected multinational corporations and financial
institutions
• private clients

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 3. Leveraging their advantages in products and people to benefit
all their clients.
4. Sharing expertise and operational excellence across the Group.
5. Creating 'fuel for growth' by allocating capital and talent
according to the principles of Managing for Value, their value-
based management models.

They aim for sustainable growth that will benefit all their
stakeholders: their clients, their shareholders, their employees, and
society at large. The ABN AMRO Corporate Values and Business
Principles provide the framework within which we carry out their
operations.
They are active in four principal customer segments:

 Personal Banking
 Private Banking
 Business and Commercial

 Corporate and Institutional.

Focus on the mid-market

Although they serve a broad range of clients, their strategic focus is

on the mid-market segment. This is the client area where they have a
strong and distinctive competitive advantage and where they feel

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they can be most profitable in the future.

The consumer mid-market consists of clients who require more than

a basic banking package (mass affluent and private clients), but who
don't yet fall into the small category of their top-end private clients.
The commercial mid-market ranges from mid-sized companies in
their home markets to a smaller number of large multinational clients
and financial institutions.

Still, clients in their other segments are essential to providing

sufficient scale and ensuring product innovation. The success of their
focus on the mid-market depends on their continuing presence at the
top end of the market and the mass-market segment. The focus on
our primary target clients will also guide their future investments
and acquisitions to enhance profitable revenue growth.

One Group
Another key element of their strategy is deriving more value from
being one Group. The creation of a shared product organisation
comprising payments and trade, called Transaction Banking, and the
creation of a Group Services organisation that oversees all services
and operations in the Business Units and in Group Shared Services,
will enable us to leverage their global advantaged capabilities and
increase the impact of their investments in these areas.

The mid-market franchise outlined above will be the growth engine

of the Group, and they have therefore created two global cross-BU
segments: a consumer segment and a commercial segment. These two
segments will drive growth by working across our Business Units.

Unique delivery
The ABN AMRO Group is well positioned to capitalise on its focus
on the mid-market segment. Success requires a combination of local
and international capabilities:

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 • local relationships
• an extensive and competitive product suite
• efficient delivery
• sector knowledge (in the case of corporations)
• international network
ABN AMRO is one of the few banks in the world that can deliver on
all of these, in many cases, uniquely so.

SWOT analysis

 Strengths:
• ABN AMRO's greatest strength is the name and what people
associate with it. Its projects that are for the betterment of
society make customers loyal to it.
• Most of the employees working at ABN AMRO are qualified
MBA's.
• ABN AMRO has always emphasised on good service, and that
is exactly what they provide their clients with.
• ABN AMRO’s open door policy gives a sense of ‘homeliness’ to
its clients thus attracting more of them.
• A diverse and strong MIS with numerous software to assist in
day-to-day office work and the decision making process.
• Well-established credibility (inter nationally as well as
nationally).
• Strong and well planned marketing strategies

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 • Good training of employees and development of current
business.
• A diversified skill set.

 Weaknesses:

o Small tasks require a lot of documentation and there is a

lot of wastage of time and effort.
o The regional office needs to be informed of routine
decisions and in a lot of cases their approval is mandatory
for change made. This makes the whole exercise very
exhaustive.
o There a lot of grey areas in the organizational chart
resulting in lots of personality clash. Besides, there are
some departments like the HR department, which are not
represented in the board meetings. The problem of
parallel authority is very grave as it makes to a degree a
mockery of the authority of the country representative.
o No direct chain of command is evident between lower
managerial levels as well.

 Opportunities:

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 • The economy is growing at a faster rate compared to three
years back resulting in increased demand for loan able funds
from the private sector. This makes the opportunity for
increased profits.
• There are some new products in the pipeline which the bank
hopes would give it competitive advantage over its rivals.
• Government legislation promoting consolidation of business
scale making the bank benefit from its vast assets base.

 Threats:
o Local banks have in recent times attracted their top talents by
offering them very high salaries and other perks which the
bank couldn't offer resulting in at least two of their top
managers resigning in the last two months.
o Local banks are increasingly undercutting the rate at which
they offer loans making the banks offer unattractive thus eating
into its revenues.

THE FIRM: A CRITICAL ANALYSIS

MAJOR PROBLEMS:

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There is a parallel system of organization, which is followed in ABN
AMRO. The country manager is the highest authority to report to in
the country. He/she solves all administrative problems but when it
comes to job assignment to the top leadership; the country manager's
hands are tied. The top leadership gets their instructions directly
from the regional head of that particular department.
Thus, there is duplication of authority and the top managers
have less of an incentive to follow the country manager's orders
whose position in their view is largely symbolic. This makes it
difficult to lead the organization with a single goal besides bringing
in its wake problems of communications.
The regional HQ along with the fringe benefits sets even the salaries
of the top managers. Thus, the top managers have somewhat of a
problem submitting to the authority of the country manager as to
them 'he doesn't have one'.
The HR department is understaffed and not represented at the
highest level. It only employs 4 people. Some of these people are not
in the city regularly and this increases the workload of the others
besides it makes it difficult to debug problems.
The firm sometimes becomes very bureaucratic and small tasks need
approval delaying the task. The red tape problem no matter what is
very much present and ultimately decisions need to be approved by
the regional office.

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A major problem, which has assumed tremendous proportions is
that, the labour turnover has increased a lot in the past few months as
lots of the top managers are attracted by the bank’s competitors. This
is because some have become frustrated with the role of regional
office, others have become tired of the amount of work they have to
put in and yet others are not satisfied with the salary they receive.

SUGGESTED SOLUTIONS

The biggest problem is the parallel structure of organization. The

suggested solution according to our study of management is to
define specific boundaries as to where the authority of the country
representative ends and is superseded by that of the regional office.
This would eliminate a lot of personality clashes besides helping the
other people to contribute gainfully in boardroom meetings and
reduce the grapevine problem.
A feeling of helplessness tends to creep in the managers minds when
sometimes the regional office does not fully assent to their views and
decisions are imposed on them. This can be avoided once the regional
office accepts one employee of each department on the decision
making panel. This would remove the misgivings of the local bank’s
managers to the decisions of the regional office.

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A major problem is that HR department is not represented in the
boardroom meetings. The HR department does not have a VP2. Only
VP2’s have the privilege to sit on the boardroom. Thus, important
points, which affect the whole organization’s employees, are not
raised at all and HR department has to depend on other top
managers to raise problems. The HR department as already stated
employs just 4 employees and these employees are under staffed and
overworked. Diluting authority to a degree can eliminate the
bureaucracy problem but this can only be possible once the regional
office is prepared to give some leeway in this regard. This would
speed up decisions.

FINAL WORDS

Finally, we would like to thank every one who was helpful to us

through out the one hectic in which we worked furiously to meet the
report deadlines. Before closing the document, we would like to
mention a few more things.
The Silo form of organizational set-up was probably the most
interesting thing that was discovered by us at ABN AMRO. How
they continue to function with such a set-up is a wonder to watch as
it does have major disadvantages.

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In the end, we would like to thank Madam Iffra who has taught us all
that we do know about proper management.
With this, we close the document.... only with these last few words...
"It goes on...”

****** The End*****

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