Bank alfalah project

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PREFACE

The project report “Management of Bank Al-Falah” is about the all views of its

management, including the current & past over all progress & process of Planning,

Organizing, Leading, Controlling, Ethics, Culture & Organization design.

The process which is being followed & running presently, of Planning, Organizing,

Leading, Controlling, Ethics, Culture, Organization design and Position of whole

Organization in our Nation are also being discussed in detail in this report.

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Introduction of Bank Al-Falah-------------------------------------------------------------------------05

Mission & Vision----------------------------------------------------------------------------------------08

Chairperson’s Message---------------------------------------------------------------------------------09

Historical Overview-------------------------------------------------------------------------------------10

Board of Directors---------------------------------------------------------------------------------------11

Management----------------------------------------------------------------------------------------------12

1. Planning----------------------------------------------------------------------------------------------14

1.1. Definition---------------------------------------------------------------------------------------15

1.2. Types of Planning------------------------------------------------------------------------------

15

1.3. Goals / Objectives-----------------------------------------------------------------------------16

1.4. Process of Planning----------------------------------------------------------------------------17

1.5. Types of Strategy------------------------------------------------------------------------------18

1.6. Internal & External Factors-------------------------------------------------------------------18

1.6.1. Internal Factors-------------------------------------------------------------------------

18

1.6.2. External Factors------------------------------------------------------------------------19

1.7. SWOT Analysis--------------------------------------------------------------------------------20

1.8. BCG-Matrix------------------------------------------------------------------------------------22

1.9. Decision Making Authorities-----------------------------------------------------------------

23

2. Organizing-------------------------------------------------------------------------------------------24

2.1. Bank al-Falah’s Structure---------------------------------------------------------------------25

2.2. Purpose of Organizing------------------------------------------------------------------------26

2.3. Bank Al-Falah’s Management Chart--------------------------------------------------------26

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2.4. Finance Department---------------------------------------------------------------------------27

2.5. Marketing Department------------------------------------------------------------------------28

2.6. IT Department----------------------------------------------------------------------------------29

2.7. Centralization vs. Decentralization----------------------------------------------------------30

2.8. Type of Organization--------------------------------------------------------------------------30

2.9. Human Resource Management (HRM)-----------------------------------------------------31

2.10. Communication---------------------------------------------------------------------------

-----33

3. Leadership--------------------------------------------------------------------------------------------

35

3.1. By Early Leadership Theories---------------------------------------------------------------36

3.1.1. Formal vs. Informal-------------------------------------------------------------------36

3.1.2. Traits of Leader------------------------------------------------------------------------36

3.1.3. Type of Leaders------------------------------------------------------------------------37

3.1.4. Managerial Grid------------------------------------------------------------------------

37

3.2. By Contingency Theories---------------------------------------------------------------------38

3.2.1. Fiedler’s Model------------------------------------------------------------------------38

3.2.2. Situational Theory---------------------------------------------------------------------38

3.2.3. Goal-Path Model-----------------------------------------------------------------------38

3.3. Leadership Behaviors-------------------------------------------------------------------------39

3.4. By Motivation----------------------------------------------------------------------------------40

3.4.1. Early Theories of Motivation--------------------------------------------------------41

3.4.2. Contemporary Theories of Motivation----------------------------------------------

41

4. Control------------------------------------------------------------------------------------------------43

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4.1. Testing the system of internal control-------------------------------------------------------44

4.2. Separation of Duties---------------------------------------------------------------------------45

4.3. Security------------------------------------------------------------------------------------------

45

5. Ethics-------------------------------------------------------------------------------------------------46

5.1. Approaches to Ethics--------------------------------------------------------------------------

47

5.1.1. Utilitarianism Approach--------------------------------------------------------------47

5.1.2. Individualism Approach--------------------------------------------------------------47

5.1.3. Right Approach------------------------------------------------------------------------47

5.1.4. Justice Approach-----------------------------------------------------------------------47

5.2. Strategies for Managing Stakeholders------------------------------------------------------48

5.2.1. Confrontation Strategy----------------------------------------------------------------48

5.2.2. Damage Control Strategy-------------------------------------------------------------48

5.2.3. Accommodation Strategy-------------------------------------------------------------48

5.2.4. Pro-active Strategy--------------------------------------------------------------------

48

6. Culture------------------------------------------------------------------------------------------------49

6.1. Types of typologies----------------------------------------------------------------------------50

7. Organization design---------------------------------------------------------------------------------52

7.1. Types of Organization Design---------------------------------------------------------------

53

8. Conclusion & Suggestions-------------------------------------------------------------------------54

8.1. Conclusion--------------------------------------------------------------------------------------55

8.2. Suggestions-------------------------------------------------------------------------------------55

Reference-------------------------------------------------------------------------------------------------56

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Bank Al-Falah was incorporated on 21st June, 1997 as a public limited company under the

Companies Ordinance 1984. Its banking operations commenced from 1st November, 1997.

The bank is engaged in commercial banking and related services as defined in the Banking

companies ordinance, 1962.

Bank Al-Falah Limited is a Pakistan-based bank, engaged in commercial banking and related

services. The services offered by the Company include Branch banking, Consumer banking,

Electronic banking, corporate banking and Treasury and Investment.

Its Branch banking services include direct and indirect Foreign Currencies Remittance

facility, Foreign Trade and Correspondent banking and safe Deposit Locker facilities.

Through Consumer banking, the Company offers Credit cards, Home Loans, Rupee Traveler

checks, Auto loans, and Money-Gram, which is a person-to-person money transfer service.

Its Electronic banking services include Phone banking, Automated Teller Machines (ATM)

and On-line banking. Its Treasury and Investment services include Financial advisory

services, and services for the money market and foreign exchange market. Its corporate

banking activities include Trade finance and structured finance.

The Company offers services through a network of 142 branches and 59 ATM machines.

These branches are in the following cities of Pakistan.

Abbott Abad

Ahmedpur East

Arifwala

Attock

Bahawalpur

Bannu

Bhalwal

Burewala

Chakwal

Chaman

Chichawatni

Chiniot

Chitral

D.G.Khan

D.I.Khan

Daharki

Daska

Fasialabad

Ghotki

Gilgit

Gujranwala

Gujrat

Hafizabad

Hangu

Haroonabad

Hasilpur

Hayatabad

Heart

Hyderabad

Islamabad

Jhang

Jhelum

Karachi

Kasur

Kharian

Kohat

Kotla

Lahore

Lala Musa

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Larkana

Mandi

Bahauddin

Mansehra

Mdardan

Mian Chunnu

Mingora/Swat

Mirpur Khas

Multan

Nawabshah

Okara

Pakpattan

Peshawar

Quetta

Rawalpindi

Rhaim-Yar-

Khan

Sadiqabad

Sahiwal

Sailkot

Sargoda

Sheikhupura

Sukkar

Toba Tek Singh

Wah Cantt

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MISSION & VISION

Mission

“To develop and deliver the most innovative services, products, manage customer experience,

deliver quality service that contributes to brand strength, establishes a comprehensive

advantage and enhances profitability, in this way providing value to the stakeholders of the

bank.”

Vision

“To be the premier organizations operating locally & internationally that provides the

complete range of financial services to all segments under one roof.”

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CHAIRPERSON’S MESSAGE

“Our core philosophy of honesty, transparency in customer dealings, product innovation,

excellence in customer services and our commitment to being a responsible corporate citizen

pervades this website.”

Since the inception of Bank Al-Falah, by the grace of the Almighty Allah, we have moved

rapidly in expanding our branch network and deposit base, along with making profitable

advances and increasing the range of products and services. We have made a break-through

in providing premier services at an affordable cost to our customers.

Keeping in view our valued clients and the need for constant and effective communication of

information, we have designed this website to be as user-friendly as possible.

As we pursue the path of excellence, customer satisfaction remains our priority. It is only

when we know our customers better, can we deliver a higher quality of services, thereby

adding synergy to our existing management expertise, financial strength and profitability.

This is yet another channel of communication for the delivery of quality products and

services that enhance value to our stakeholders.

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HISTORICAL OVERVIEW

Bank Al-Falah Limited was incorporated on June 21st, 1997 as a public limited company

under the Companies Ordinance 1984. Its banking operations commenced from November

1st, 1997. The bank is engaged in commercial banking and related services as defined in the

Banking companies ordinance, 1962. The Bank is currently operating through 104 branches

in 36 cities, with the registered office at B.A.Building, II.Chundrigar, Karachi.

Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the

management of the bank has implemented strategies and policies to carve a distinct position

for the bank in the market place.

Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals

set out by its board of management, the Bank has invested in revolutionary

technology to have an extensive range of products and services.

This facilitates our commitment to a culture of innovation and seeks out synergies with

clients and service providers to ensure uninterrupted services to its customers. We perceive

the requirements of our customers and match them with quality products and service

solutions. During the past five years, we have emerged as one of the foremost financial

institution in the region endeavoring to meet the needs of tomorrow today.

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BOARD OF DIRECTORS

H.E. Sheikh Hamdan Bin Mubarak Al NahayanChairman

Mr. Abdulla Nasser Hawalileel Al-MansooriDirector

Mr. Abdull Khalil Al MutawaDirector

Mr.Khalid Mana Saeed Al OtaibaDirector

Mr. Ikram Ul-Majeed SehgalDirector

Mr. Nadeem Iqbal SheikhDirector

Mr. Sirajuddin AzizDirector & CEO

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MANAGEMENT

Mr. Sirajuddin AzizChief Executive Officer

Mr. Parvez A. ShahidCo-Chairman Central Management Committee

Mr. Shakil SadiqChief Operating Officer

Mr. Arfa Waheed Malik

Group HeadCorporate & Investment Banking

Mr. Ijaz FarooqGroup HeadIslamic Banking

Mr. Adil RashidGroup HeadConsumer Finance

Mr. Nadeem Ul HaqGroup HeadOperations

Mr. Mohammad YousufGroup HeadCredit & Collections

Mr. Bakhtiar KhawajaGroup HeadTraining & Development

Mr. A. Wahid DadaGroup HeadCommercial Banking

Mr. Hamid AshrafGeneral ManagerLegal Affairs & Company Secretary

Mr. Zahid Ali H. JamallChief Financial Officer

Mr. Mohammad Iqbal SaifeeGroup HeadAudit & Inspection

Mr. Talib RizviGroup HeadPriority Banking & Wealth Management

Mr. Tariq MirGeneral ManagerInternational Business

Mr. Ather ShehabExecutive InchargeEstablishment & Administration

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Mr. Mahmood AshrafGeneral ManagerCredit Monitoring

Mr. Falak SherChief Compliance Officer

Mr. Imtiaz Ahmad SheikhGeneral ManagerInformation Technology

Mr. M. Mudassar AqilGeneral ManagerHuman Resource & Quality Assurance

Mr. Haroon KhalidGeneral ManagerRisk Management

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PLANNING

1.1. Definition

Planning is

Defining organization’s goals and objectives.

Establishing overall strategies for achieving those goals.

Developing a comprehensive set of plans to integrate and coordinate

organizational work.

1.2. Types of Planning

Bank Al-Falah use both formal and informal types of planning.

1.2.1. Informal

In informal planning, their planning is not written down, short term focus and

specific to an organizational unit.

1.2.2. Formal

In formal planning, their planning is written down, specific, long term focus

and involves shared goals for the organization.

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1.3. Goals / Objectives

Financial strength and Profitability by making profitable advances

Customer satisfaction by providing higher quality of services at an affordable cost

Growth by expanding branch network and deposit base

1.3.1. Short-term Objectives

Profitability

1.3.2. Long-term Objectives

Profitability

To optimize the use of resources

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MissionStrategies

PlansProgramsPoliciesRules

Budget

1.4. Process of Planning

Process of Planning

Mission

Mission of Bank Al-Falah is to develop and deliver the most innovative products,

manage customer experience, deliver quality service that contributes to brand

strength, establishes a comprehensive advantage and enhances profitability, in this

way providing value to the stakeholders of the bank.

Strategies

Strategies of Bank Al-Falah are giving loans and accepting deposits.

Plans

Plans of Bank Al-Falah are short-term & long-term Advances & Deposits.

Programs

Programs of Bank Al-Falah are up to one year or more than one year advances, fixed

account, current account etc, debit card, credit card etc.

Policies

Policies of Bank Al-Falah are profitability, by making profitable advances and

customer satisfaction by providing best services at an affordable cost.

Rules

Their rules are defined by upper level of management according to situation

Budget

Bank Al-Falah always met its budget.

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1.5. Types of Strategy

There are seven kinds of strategy:

Cost Leadership Strategy

Differentiation Strategy

Focused Strategy

Bank Al-Falah is following the focused strategy. They are focusing on

customers by advancing and depositing.

1.6. Internal & External Factors

1.6.1. Internal Factors

HRM

HRM is playing both positive and negative role in the performance of

organization. Positively, HRM is performing its functions and managing the

human resource properly. On the negative side, sometimes HRM adopts the

policy of favoritism due to political pressure in managing human resource.

Structure / Infrastructure

Bank Al-Falah has sound structure and infrastructure.

Organizational Policies

Policies of Bank Al-Falah are favorable for customers.

Nature of Organization

Financial Institution.

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1.6.2. External Factors

Technological Factors

Technologically, Bank Al-Falah is weak and this element is threatening to Bank Al-

Falah. Online Banking (advances, deposits, transactions etc.) is not working properly.

Political Factors

Politically, people are influencing on the performance of Bank Al-Falah. Particularly,

agricultural people get benefits due to relation to politicians. Such people are getting

advances and jobs on favoritism.

Physical Factors

Physical structure of Bank Al-Falah is very sound.

Demographic Factors

Population of Pakistan is a big number, which is supportive for bank.

Economic Factors

Population of Pakistan is rich which is beneficial for the bank.

Legal & Ethical Factors

Bank has legal entity and is taking care of ethics which is giving it advantage in

attaining customer attention.

Social & Cultural Factors

Social and cultural factors are affecting the bank. Majority of the population is un-

educated and unaware of the benefits of banking sector. They have low saving and

want to keep money with them.

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1.7. SWOT ANALYSIS

The SWOT analysis is an extremely useful tool for understanding and decision-

making for all sorts of situations in business and organizations. SWOT is an acronym

for Strengths, Weaknesses, Opportunities, and Threats.

Strengths

Following are the strengths of Bank Al-Falah:

Brand

Decent customer dealing

Rapidly expansion in branch network

Weaknesses

Following are the weaknesses of Bank Al-Falah:

Poor employee development and promotion

Improper online Banking

Opportunities

Following are the opportunities of Bank Al-Falah:

Improvement in online banking

More customer satisfaction

Growth Strategy (+ , +)

Stability Strategy (+ , -)

Stability Strategy (- , +)

Retrenchment Strategy (- , -)

Strengths (+)

Weaknesses (-)

Opportunities (+) Threats (-)

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Threats

Following competitors are threats to Bank Al-Falah:

MS Global

Saudi Pak Bank

Habib Bank

Standard Chartered Bank

1.7.1. Essence of SWOT Analysis

Since Bank Al-Falah has decent strengths and opportunities in the market, its market

share is increasing and it is expanding its branch network rapidly, so the situation

tells us that Bank Al-Falah is adopting and implementing on Growth Strategy.

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Star (H, H)

?Question

Mark(H, L)

Cash Cow (L, H)

Dog (L, L)

Low

Low

High

High

Business Growth Rate

Relative Position (Market Share)

1.8. Boston Consulting Group (BCG – Matrix)

Star

“The businesses, whose growth rate as well as market shares are very higher, and

those are leader of market, are categories as star.”

Cash Cow

“The businesses have big market share but their growth rate is low, and they

earn a large amount of cash due to their reputation, are categories as cash cow.”

? (Question Mark)

“The businesses, which are growing highly but their market share is low than

star’s businesses, are categories as question mark.”

Dogs

“The businesses, which have very low growth rate as well as market share, are

categories as dogs.”

Essence of BCG Matrix

“Bank Alfalah lies under the category of STAR in the BCG matrix, as their

growth rate and market share is very high.”

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1.9. Decision Making Authorities

1.9.1. Top Level of Management

Important and overall decisions of the bank are made by top level of

management. For example: Chairman

1.9.2. Regional Manager

Regional manager makes decisions at regional level.

1.9.3. Branch Manager

Branch manager makes decisions at branch level.

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ORGANIZING

Managers work in organization. But what is an organization? An organization is a

deliberate arrangement of people to accomplish some specific purpose. Your banks,

university is an organization, colleges, govt. departments are all organizations because

they have three common characteristics.

First, each organization has a distinct purpose. This purpose is typically expressed in

terms of a goal or set of goals that the organization hopes to accomplish.

Second, each organization is composed of people. One person working alone is not an

organization and it takes people to perform the work that’s necessary for the organization

to achieve its goals

Third, all organization develop some deliberate structure so that their members can do

their work.

2.1. Bank Al-Falah’s Structure

Sweden’s premiere bank is one of the largest banks in the Nordic region. Lars

Grunted(pictured),president and group chief executive, oversees a business that is

organized around a decentralized structure with a network of some 540 branches in

Norway, as well as in nine European countries and six countries outside Europe. He

believes that the bank’s 30-plus years of developing its branch network has allowed it

to consistently grow market share and achieve a return on equality above the average

of its Nordic competitors are starting to copy Handelsbanken’s structural model.

Handelsbanken’s branch managers can choose their customers and product mix.

They also set staffing numbers and decide salary levels. All customers, private and

corporate, no matter what size, are the responsibility of a local branch.

Handelsbanken’s flat management structure and emphasis on personal responsibility

and consensus approach is well suited to the Swedish culture.

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2.2. Purposes of Organizing

Divide work to be done into specific jobs and departments in Bank Al-Falah.

Assign tasks and responsibilities associated with individual jobs in Bank Al-Falah.

Coordinates diverse organizational tasks in Bank Al-Falah.

Establishes relationships among individuals, groups and departments in Bank Al-

Falah.

Establishes formal lines of authority in Bank Al-Falah.

Allocates and deploys organizational resources in Bank Al-Falah.

2.3. Bank Al-Falah’s Management Chart

Management performs different functions in Bank Al-Falah.

C.E.O (Chief executive officer)

o Controls the whole management affairs in Bank Al-Falah.

Executive Incharge (E.I)

o Establishes the environment of strategic planning and aware of to hold the

global market.

o Manages the HRM and assigns work to individual for betterment.

o Divides the credit in different ways and allocation to safer place.

o Controls the administration activities and carries on the establishment

process for the betterment of Bank Al-Falah.

o Investigates the business development reports that our business gets profit

or loss.

o Analysis the audit and inspection division for efficient work.

o His work is to divide the cards in best manner, just like debit cards, credit

cards, ATM’s cards and Hilal cards in Bank Al-Falah.

o He did his work for international and treasury division in Bank Al-Falah.

o Divided the I.T (information technology).

o Supports the corporate and home finance.

o He monitoring the credit division.

o Investigates the legal affairs.

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2.4. Finance Department

Finance is responsible in terms of money in all departments or monetary policies. It

is concern with more inflow of the cash that outflow of the cash in terms of Bank Al-

Falah.

Structured Finance

Established in 1998 in order to provide innovative investment banking services to our

valued clients.

A team of handpicked professionals, dedicated to syndicated loans and structured

products. The team’s expertise is well known in the marketplace with its capability to

assist public & private sector entities, major financial institutions, multinational

corporations, domestic & international institutional investors in innovative financing

including underwriting & private placements.

The scope of SFU’s activities also encompasses advisory assignments, such as

privatization, Mergers & Acquisitions (Man’s), domestic listings, IPOs and

restructuring.

During the past few years, SFU has been successful in sourcing and participating in a

number of prestigious transactions involving large amounts.

Some of the value added services offered by SFU include the following:

Loan syndication

Public floatation of Term Finance Certificates (TFCs) and equity

Private placement of Term Finance Certificates (TFCs) and equity underwriting

Guarantee syndications

Financial restructuring

Mergers & Acquisitions (M&As)

Fostering joint ventures

Privatization – Sale side and buyers side advisory

Structuring new financial instruments

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In the future, SFU is envisaged to supplement the enhanced profile and profitability

of Bank Al-Falah Limited through its value added services, through both asset

building and income generating aspects.

2.5. Marketing Department

Marketing department performs different functions in terms of Bank Al-Falah.

2.5.1. Sales

In Bank Al-Falah sales gets only in the light of the customer.

2.5.2. Need Identification

First of all, you identify your customer and how is your dealing with that

person.

2.5.3. Positioning

In Bank Al-Falah, what is your position to deal that person?

2.5.4. Targeting

What is your long term goal and short term goal according to Bank Al-Falah?

2.5.5. Promotion

It is concerned with all types of advertisement. Its purpose is to get more

customers in terms of promotion according to Bank Al-Falah.

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2.6. IT Department

2.6.1. ATM’s

Bank Al-Falah through its commitment to provide superior and improved

services to its valued customers, has unveiled a nationwide network of ATMs.

For your convenience, you now have access to instantaneous cash availability,

24 hours a day, 7 days a week.

Our ATM network is geared up to exploit the latest technology, and is

equipped to meet the highest standards of security and efficiency.

With your new Hilal-Card you can now:

Withdraw Cash

Use our convenient, user-friendly fast cash option

Make a Balance Inquiry.

Get an instant printout of your account balances

Get a printout of your last transactions (Mini-statement) on the spot.

Change your PIN (Personal Identification Number).

Bank Al-Falah is pleased to introduce 55 state of the art ATMs, deployed at

the most convenient and accessible locations. Bank Al-Falah is a founder

member of the 1-Link Switch, thus making a country wide network of ATMs

available.

2.6.2. Online Banking

Bank Al-Falah now offers the facility of on-line banking to its customers

through its country wide network of branches. Customers can use the ATMs

or the banking counters of any branch for day-to-day banking needs,

irrespective of branch where they maintain their accounts.

For Corporate customers centralized Cash Management facility is also offered

through on-line banking.

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2.6.3. Phone Banking

"Al-Falah Phone Banking” is available to all customers on a countrywide

basis. Customers can dial 111-225-111 (without any city code/prefix) from

their respective cities i.e. 21 cities where Bank Al-Falah is present, and can get

prompt services from the Centralized Phone Banking Services.

Customers enjoy 24x7 Round the Clock Phone Banking Services.

Bank Al-Falah is the first bank in Pakistan to offer Centralized UAN

connectivity from 21 cities to its Call Centre with Hunting & ACD facilities.

2.7. Centralized vs. Decentralization

Centralized describes the degree to which decision making is concentrated at a

single point in the banking organization. If top managers make the banking

organization’s key decision with little or no input from below, then the

banking organization is centralized.

In Bank Al-Falah the major portion of organization is ‘Decentralized’, because

the Managers of all levels have the power of decision making.

2.8. Type of Organization

2.8.1. Tall vs. Flat

Bank Al-Falah is a Tall organization.

2.8.2. Multinational vs. National

Bank Al-Falah is a multinational organization.

2.8.3. Mechanistic vs. Organic

Bank Al-Falah is an organic organization.

2.8.4. Single vs. Branch

Bank Al-Falah is a branched organization.

2.8.5. Big vs. Small

Bank Al-Falah is a big organization.

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2.9. Human Resource Management (HRM)

HRM means to put the right man, for the right job, at the right time and at the right

place, so HRM deals with the fair job description as a whole in Bank Al-Falah.

Road-Map of HRM

The road-map through which HRM helps the managers to organize the activities of

man-power in Bank Al-Falah.

2.9.1. How HRM is important

A banking organization HRM practices have been found to have a significant impact

on organizational performance.

2.9.2. HRM process

Activities necessary for staffing the organization and sustaining high employee

performance in Bank Al-Falah.

2.9.3. HRM training and development

Bank Al-Falah’s HR management believes in developing the potential of the Bank’s

employees to the fullest extent. Training & Development Centre of the Bank is

housed in custom-built, state of the art facility on the 4th floor of the Head Office

building at Karachi. The centre is responsible for providing multi-level high quality

training programs to all staff members in the following areas:

Consumer banking operations

Credit marketing & credit proposals

Credit administration/documentation

Trade finance operations

Marketing & selling skills

Customer service skills

Performance appraisal skills

Time management & personal effectiveness

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It is obligatory for each staff member of the bank to attend at least one training program.

Wherever the Training Department is unable to provide focused training for certain

groups of staff, reputable external training providers are invited to fill the gap.

HRM Trade Department

Inspired by a challenging spirit and an unyielding desire to create a sound and reliable

networking of correspondent relationships, the bank has placed great emphasis towards it

growth. Accomplishing something for the first time requires a special focus. It demands

foreseeing possibilities. In our endeavor, to do so, we successfully surmounted problems

and difficulties arising out of issues relating to weak economic conditions of the

economy and a continuous deteriorating status of country risk.

The incertitude and skepticism of the international banking community towards financial

institutions from emerging markets remained intact. Our persistence during the past four

years allowed us to make significant inroads into the arena of correspondent banking.

Large international banks, after critically evaluating us, agreed to enter into relationship.

During 2002 we added 81 banks to our network of correspondents, bringing the total

number over 170. Of these relationships, there are now several banks that rank amongst,

the top financial institutions in the world. Our geographical coverage now extends to

over 100 countries, which is adequately compatible with our trade flows.

Our correspondents, during the year extended us unqualified support, which enabled us

to undertake a healthy quantum of foreign trade business. There are many challenges

ahead for the bank, in the coming year, our bank will not only continue to review its

efforts on existing correspondents to make the relationship more beneficial, but will also

add more correspondents to establish a comprehensive international networking to

facilitate our customer’s transaction as well as the Bank’s proprietary needs.

We have provided against the list of correspondents their world and country ranking.

These ranking have been taken from The Bankers Almanac – July 2001 issue.

We would like to emphasize that correspondent arrangements do not necessarily imply

the existence of account relationship. We are in the process of rationalizing our current

nostro account relationships. We shall continue to open new accounts in various

currencies based on our trade flows and business requirements.

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CommunicationThe flow of information in Bank Al-Falah.

2.9.4. Direction of communication

Bank Al-Falah communication can flow downward, upward, laterally, or

diagonally.

Down-ward Communication

Any communication that flows downward from a C.E.O to employees is

downward communication.

Up-ward Communication

Any communication that flows upward from employees to C.E.O.

Lateral Communication

Communication that takes place among employees on the same level is called

lateral communication.

Diagonal Communication

Communication that cuts across both work areas and organizational levels.

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2.9.5. Communication Model

Message

Any type of message of Executive Incharge (E.I) to be conveyed.

Encoding

Converting a message into symbols.

Channel

The medium a message travels along.

Decoding

Retranslating an Executive Incharge (E.I) message.

Receiver

The seven elements involved in transferring meaning from Executive Incharge (E.I) to

another.

Feed back

Any disturbance that interfere with the transmission, receipts or feed back of a

message.

2.9.6. Types of Communication

Verbal & Non-verbal communication

Verbal communication means audiotape-communication conferences, radio in

Bank Al-Falah. Non-verbal communication means visual, sign board,

newspapers in Bank Al-Falah.

Audio - Video

Audio - Video means multimedia presentations, video conferences and

meetings in Bank Al-Falah.

Formal & Informal communication

Discussion between C.E.O and Executive Incharge is Formal communication.

Discussion between employees in Bank Al-Falah is Informal communication.

42

LEADERSHIP

“The process of influencing a group of people towards the achievement of pre-selected

goals is called leadership.” & “The person who makes this process or who can influence

others / group of people and who has managerial authority is called a leader.”

The leader is needed by the every field & Organization, as well as the Bank Al-Falah has

its leader in the form of High qualified & skilled Managers, which are working hardly to

put the bank at the peak level as well as achieving the organization’s pre-selected goals.

3.1. By Early Leadership Theories

3.1.1. Formal vs. Informal

The leaders, Bank Al-Falah have, are the Formal leaders.

3.1.2. Traits of Leader

The leaders of Bank Al-Falah have the following Traits & Skills in

themselves.

Decision making

Risk taking & Risk bearing

Stress taking & Stress bearing

Communication Power

Honesty

Strong Vision

Interpersonal skill

Market forecasting skill

Consistency

Step forward

Discipline

Competitive skill

Believe on Equality

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3.1.3. Type of Leader

There are three basic types of leaders;

Dictator

Democratic

Laissez-fair

But the Bank Al-Falah has the Democratic leaders.

Democratic leader

The leaders, Bank Al-Falah have, are the types of “Democratic”. Because the

major portion of bank is ‘De-centralized’, that’s why the each leader has the

complete power of decision making, but they are working “Collaboratively” in

whole organization with each other. All leaders of bank are involved in decision

making, delegating their authorities to their higher qualified employees,

encouraged the participation of their employees in work and gives them

opportunities of coaching in well manners.

3.1.4. Managerial Grid

“A two-dimensional

grid of two leadership

behaviors, concern for

people and concern for

production / output,

which resulted in five

different leadership

styles is called

managerial grid.”

The behaviors of leaders of bank Al-Falah are lies in the “Team / Ideal Management”,

because all the managers are doing their work collaborative with each other and also

with their whole team of workers, they have as well.

Concern for Output

Concern for

People

Impoverished Management

Task Management

Team / Ideal Management

Country Club Management

Middle of Road Management

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3.2. By Contingency Theories

3.2.1. Fiedler’s Model

“A leadership theory that proposes that effective group performance depends

upon the proper match between a leader’s style of interacting with his / her

followers and the degree to which the leader to control and influence is known

as Fiedler’s model.”

The leaders of Bank Al-Falah have the proper match between the leaders’

styles and the degree.

Least preferred co-workers

All the leaders of Bank Al-Falah are Cooperative with their followers, and NO

one possess uncooperative attitude.

3.2.2. Situational Theory

“The leadership contingency theory that focuses on the follower’s readiness.”

In the Bank Al-Falah, this theory is also applicable because the followers /

employees of leader(s) are ready every time for do any task / mission or any

kind of work given by their leader(s). And all the Leaders or Managers are

also careful for giving any task or work to their followers that they are see

firstly that either their followers are ready for this job or not.

3.2.3. Goal-path Model

As above the all Leaders of Bank Al-Falah are very cooperative to each other

as well as with their followers, that’s why they are also providing the right

‘Path / Direction’, after finding, to their followers on through they and their

followers could achieve their targets and goals.

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3.3. Leadership Behaviors

The leaders of Bank Al-Falah, in their behaviors, are;

Directive They provide the proper schedules, direction and guidance etc. to

their followers / employees, from through the employees can do the

specific work or task which has been given to them, to achieving their

and organizational objectives as well.

Supportive The leaders also give the proper attention on their followers /

employees and also help them in case of any trouble in achieving the

targets and tasks.

All the work is done in friendly atmosphere in the Bank Al-Falah.

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3.4. Motivation

“The process that account for an individual’s willingness to exert high levels of effort

to reach organizational goals, conditioned by the effort’s ability to satisfy some

individual need is known as Motivation.”

The motivation has a great role in the success of any field. The success ratio goes

higher when the leader motivates his / her followers to do the work or complete the

task, given to them in time. Sometimes the employees perform certain kind of

difficult & hectic tasks, that’s just because they get motivated by the employer /

concerned authorities.

The Leaders / Executives / Managers of Bank Al-Falah motivate their employees in

the above mentioned manner to achieve the best results.

3.4.1. Early Theories of Motivation

Maslow’s Hierarchy of Needs

The Leaders / Executives / Managers of Bank Al-Falah are very well

familiar with all the basic or extra needs, like Physiological needs,

Safety needs, Social needs, Esteem needs and Self-actualization needs,

of their employees.

That’s why they are handling their employees in same manner that

they are providing the basic, physiological and safety, needs to their

employees but when their employees perform with greater efficiency

for the Bank, then the concerned authorities or concerned management

staff provide them the Social, Esteem needs and Self-actualization’s

things as reward or as any else.

McGregor’s Theory X &Y

The Bank Al-Falah has the both type of employees ‘X’ & ‘Y’ in it. The

mostly employees of bank are the type of ‘Y’, so that the Leaders /

Executives / Managers of Bank are only motivates them, due to their

Activeness, Effectiveness and Seek Responsibilities, but the other type

of employees ‘X’, are Punished (not heavily) and Motivates by the

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Leaders / Executives / Managers of Bank due to their some Laziness,

Avoiding of Responsibilities and Non-proper Interest in work.

Herzberg’s Hygiene Theory

Some of the employees of type ‘X’, in the bank feel like hygiene from

their job. That’s why the Leaders / Executives / Managers of Bank

have to face some difficulties to motivate them. But they are fully

managing them as well as whole organization in the best way. And

they are still removing those factors which are cause of the

dissatisfaction for their employees.

3.4.2. Contemporary Theories of Motivation

These theories and approaches are representing the current explanations of

employee’s motivation. These theories are;

Three – Needs Theory

Goal-Setting Theory

Reinforcement Theory

Equity Theory

According to these theories, the Leaders / Executives / Managers of Bank Al-

Falah motivate their employees in the same sense that their employees do the

work for achievements and they behave in the best way with everyone, so to

make a friendly atmosphere in the whole organization, for making a good

relationship with everyone.

The Leaders / Executives / Managers of Bank Al-Falah also provide the

sustention support to their employees that they make their full intentions

towards their goals for the best result.

The Leaders / Executives / Managers of Bank Al-Falah also provide the suitable

atmosphere to their employees, which belongs to category ‘Y’, that they ignore the

factors like goals, expectations of management and needs etc. but they should only be

focused on “What happen to a person when he / she do / takes some action?” This step

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is helps to the employees of category ‘Y’ that they should do more than before for

organizational development, and they will get more benefits like Job Enlargement, Job

Scope, Job Enrichment and Job Satisfaction etc.

The Leaders / Executives / Managers of Bank Al-Falah are very careful regarding the

issues of ‘Discrimination’ and ‘De-motivation’ due to any discrimination. They are

fully avoiding those rules and regulations and anything which causes discrimination in

their organization. That’s why all the leaders believe on the ‘Equity’ and they are also

motivating their each of the employee as well.

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CONTROL

4.1 Testing the System of Internal Controls

The general objective of testing controls is to obtain reasonable assurance that the

controls are in use and operating as planned. Sampling techniques are used in Al-

Falah bank. Tests should meet the following criteria:

4.1.1. Data Integrity

Are the controls in place to ensure the integrity of the data?

Are records up-to-date and accurate?

4.1.2. Documentation

Are all systems, functions, processes, procedures, programs, and

activities clearly documented?

Is the documentation readily available for examination?

Are operating procedures adequate?

4.1.3. Recordation

Are there records that show that controls are in use?

4.1.4 Supervision

Are appropriate procedures in place for assigning, reviewing, and

approving work?

Do the employees adhere to procedures for assigning, reviewing, and

approving work?

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4.1.5 Authorization

Are appropriate controls in place to ensure transactions and other

significant activities are authorized and executed only by authorized

personnel?

Do employees adhere to the requirements of authorization only by

authorized personnel?

4.2 Separation of Duties

Are key duties and responsibilities such as authorizing, processing,

recording, and reviewing separated among individuals?

4.3 Security

Are appropriate procedures in place which limits access to resources

and records to authorized personnel?

Do employees adhere to security procedures?

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ETHICS

Ethics is a branch of philosophy which seeks to address questions about morality, such

as what the fundamental semantic, ontological, and epistemic nature of ethics or morality is

meta-ethics, how moral values should be determined, how a moral outcome can be achieved

in specific situations, how moral capacity or moral agency develops and what its nature is

moral psychology, and what moral values people actually abide by descriptive ethics.

5.1. APPROACHES TO ETHICS

5.1.1. Utilitarianism Approach

What is good for the most number of people states the utilitarianism

approach.

5.1.2. Individualism Approach

Any Ethical decision that can be for self interest until or unless it is not

harmful for anyone else.

5.1.3. Right Approach

In right approach, basic fundamental rights of human being are

protected until or unless yours decision are ethical

5.1.4. Justice Approach

In justice approach we treat everyone equally, fairly & consistently

Justice Approach is being adopted in Bank Alfalah

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5.2. STRATEGIES FOR MANAGING STAKEHOLDERS

5.2.1 Confrontation Strategy

In such a strategy one confronts the claims upon one’s self. The

company doesn’t admit the claims. Rather they prefer to face

the challenge.

5.2.2 Damage Control Strategy

In such a strategy we admit the claims and positively respond

to those claims by properly controlling the damage caused.

5.2.3 Accommodation Strategy

In this sort of strategy, the company provides the compensation

on the claims to the victims.

5.2.4 Proactive Strategy

The company is already prepared to face any kind of situation

in this type of strategy.

Bank Alfalah practices both damage control strategy as well as accommodation

strategy on the basis of the situation.

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CULTURE

6.1 TYPOLOGIES RELATED WITH CULTURE

1st Typology

i) Traditional Culture

ii) Employee Involvement Culture

Traditional Culture

It is such a culture in which tall management structure as well as centralized decision

making is involved.

Employee Involvement Culture

In this culture flat management culture & decentralized decision making is adopted.

Employee Involvement culture is being adopted in Bank Alfalah.

2nd Typology

i) Baseball team culture

ii) Club Culture

iii) Academy culture

iv) Fortress Culture

Baseball team culture is being adopted in Bank Alfalah.

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3rd Typology

Bank Alfalah lies under the category of Entrepreneural culture.

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7.1. TYPES OF ORGANIZATION DESIGN

Mechanistic organization design

Rigid hierarchy structure

High Formalization

Decision making is Centralized

Specialized jobs are narrowly defined

Emphasize on individual working

Communication is Top Down

Organic organization design

Collaborate hierarchy structure

Formalization is Weak

Decision making is decentralized

Improved both ways Communication

Jobs are broadly defined

Emphasize on group working

Boundary less organization design

Collaboration is within and outside the organization

Formalization is low

Communication is both ways

Decentralized decision making

Jobs are broadly defined

Emphasize on teamwork outside the organization

Bank Alfalah has organic organization design

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CONCLUSION & SUGGESTIONS

5.1. Conclusion

The Bank Al-Falah has a significant progress in the banking sector, and it has

achieved this position in a very short time period, just in 3 years in Pakistan. The

Bank Al-Falah has a great share in the market as well as high growth rate as compare

to the all other banks, due to its best Customer dealing, Compensations to Customers

and Employees as well and Organizational Control due to the best & powerful

Planning, Leading and Controlling sectors.

As there is no doubt that Bank Al-Falah is best in its field, but it has also some weak-

points like some of resources are still un-utilized and the political pressure of

References regarding the posts in the organization.

Over all the Bank Al-Falah has proved to be the best bank in the whole banking

sector, due to the fact that its weaknesses are not more than its strengths.

5.2. Suggestions

Following are the some suggestions, which will help the Management of bank Al-

Falah in more effective control and greatest position, are;

The bank should improve its On-line banking.

They need to eliminate the Reference culture from their bank.

The bank needs to expand the Network of their Braches, overseas.

They should try to minimize their threats by proper planning.

They need to focus more on the Consumer banking, because this field requires

more attention and growth.

They need to improve & grow the Employee development progress & plans.

They need to decrease their rate of interest on deposits to compete their

competitors.

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REFERENCES

1. Visit of Bank Alfalah, College Road – Branch

2. www.bankalfalah.com

3. www.en.wikipedia.org

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Bank alfalah project

Education

Transcript of Bank alfalah project