Bank alfalah project


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Bank alfalah project

  1. 1. PREFACEThe project report “Management of Bank Al-Falah” is about the all views of itsmanagement, 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 wholeOrganization in our Nation are also being discussed in detail in this report. 13
  2. 2. Introduction of Bank Al-Falah-------------------------------------------------------------------------05Mission & Vision----------------------------------------------------------------------------------------08Chairperson’s Message---------------------------------------------------------------------------------09Historical Overview-------------------------------------------------------------------------------------10Board of Directors---------------------------------------------------------------------------------------11Management----------------------------------------------------------------------------------------------121. 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----------------------------------------------------------------- 232. 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 13
  3. 3. 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--------------------------------------------------------------------------- -----333. 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---------------------------------------------- 414. Control------------------------------------------------------------------------------------------------43 13
  4. 4. 4.1. Testing the system of internal control-------------------------------------------------------44 4.2. Separation of Duties---------------------------------------------------------------------------45 4.3. Security------------------------------------------------------------------------------------------ 455. 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-------------------------------------------------------------------- 486. Culture------------------------------------------------------------------------------------------------49 6.1. Types of typologies----------------------------------------------------------------------------507. Organization design---------------------------------------------------------------------------------52 7.1. Types of Organization Design--------------------------------------------------------------- 538. Conclusion & Suggestions-------------------------------------------------------------------------54 8.1. Conclusion--------------------------------------------------------------------------------------55 8.2. Suggestions-------------------------------------------------------------------------------------55Reference-------------------------------------------------------------------------------------------------56 13
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  6. 6. Bank Al-Falah was incorporated on 21st June, 1997 as a public limited company under theCompanies Ordinance 1984. Its banking operations commenced from 1st November, 1997.The bank is engaged in commercial banking and related services as defined in the Bankingcompanies ordinance, 1962.Bank Al-Falah Limited is a Pakistan-based bank, engaged in commercial banking and relatedservices. 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 Remittancefacility, Foreign Trade and Correspondent banking and safe Deposit Locker facilities.Through Consumer banking, the Company offers Credit cards, Home Loans, Rupee Travelerchecks, 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 advisoryservices, and services for the money market and foreign exchange market. Its corporatebanking 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 • Chitral • Haroonabad • Ahmedpur East • D.G.Khan • Hasilpur • Arifwala • D.I.Khan • Hayatabad • Attock • Daharki • Heart • Bahawalpur • Daska • Hyderabad • Bannu • Fasialabad • Islamabad • Bhalwal • Ghotki • Jhang • Burewala • Gilgit • Jhelum • Chakwal • Gujranwala • Karachi • Chaman • Gujrat • Kasur • Chichawatni • Hafizabad • Kharian • Chiniot • Hangu • Kohat 13
  7. 7. • Kotla • Mirpur Khas • Sadiqabad• Lahore • Multan • Sahiwal• Lala Musa • Nawabshah • Sailkot• Larkana • Okara • Sargoda• Mandi • Pakpattan • Sheikhupura Bahauddin • Peshawar • Sukkar• Mansehra • Quetta • Toba Tek Singh• Mdardan • Rawalpindi • Wah Cantt• Mian Chunnu • Rhaim-Yar-• Mingora/Swat Khan 13
  8. 8. MISSION & VISIONMission“To develop and deliver the most innovative services, products, manage customer experience,deliver quality service that contributes to brand strength, establishes a comprehensiveadvantage and enhances profitability, in this way providing value to the stakeholders of thebank.”Vision“To be the premier organizations operating locally & internationally that provides thecomplete range of financial services to all segments under one roof.” 13
  9. 9. 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 citizenpervades this website.”Since the inception of Bank Al-Falah, by the grace of the Almighty Allah, we have movedrapidly in expanding our branch network and deposit base, along with making profitableadvances and increasing the range of products and services. We have made a break-throughin providing premier services at an affordable cost to our customers.Keeping in view our valued clients and the need for constant and effective communication ofinformation, 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 onlywhen we know our customers better, can we deliver a higher quality of services, therebyadding synergy to our existing management expertise, financial strength and profitability.This is yet another channel of communication for the delivery of quality products andservices that enhance value to our stakeholders. 13
  10. 10. HISTORICAL OVERVIEWBank Al-Falah Limited was incorporated on June 21st, 1997 as a public limited companyunder the Companies Ordinance 1984. Its banking operations commenced from November1st, 1997. The bank is engaged in commercial banking and related services as defined in theBanking companies ordinance, 1962. The Bank is currently operating through 104 branchesin 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, themanagement of the bank has implemented strategies and policies to carve a distinct positionfor the bank in the market place.Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goalsset out by its board of management, the Bank has invested in revolutionarytechnology to have an extensive range of products and services.This facilitates our commitment to a culture of innovation and seeks out synergies withclients and service providers to ensure uninterrupted services to its customers. We perceivethe requirements of our customers and match them with quality products and servicesolutions. During the past five years, we have emerged as one of the foremost financialinstitution in the region endeavoring to meet the needs of tomorrow today. 13
  11. 11. BOARD OF DIRECTORS H.E. Sheikh Hamdan Bin Mubarak Al Nahayan ChairmanMr. Abdulla Nasser Hawalileel Al-MansooriDirector Mr. Ikram Ul-Majeed Sehgal DirectorMr. Abdull Khalil Al MutawaDirector Mr. Nadeem Iqbal Sheikh DirectorMr.Khalid Mana Saeed Al OtaibaDirector Mr. Sirajuddin Aziz Director & CEO 13
  12. 12. MANAGEMENTMr. Sirajuddin AzizChief Executive Officer Mr. A. Wahid Dada Group Head Commercial BankingMr. Parvez A. ShahidCo-Chairman Central ManagementCommittee Mr. Hamid Ashraf General Manager Legal Affairs & Company SecretaryMr. Shakil SadiqChief Operating Officer Mr. Zahid Ali H. Jamall Chief Financial OfficerMr. Arfa Waheed MalikGroup HeadCorporate & Investment Banking Mr. Mohammad Iqbal Saifee Group Head Audit & InspectionMr. Ijaz FarooqGroup HeadIslamic Banking Mr. Talib Rizvi Group Head Priority Banking & WealthMr. Adil Rashid ManagementGroup HeadConsumer Finance Mr. Tariq Mir General Manager International BusinessMr. Nadeem Ul HaqGroup HeadOperations Mr. Ather Shehab Executive InchargeMr. Mohammad Yousuf Establishment & AdministrationGroup Head Mr. Mahmood AshrafCredit & Collections General ManagerMr. Bakhtiar Khawaja Credit MonitoringGroup HeadTraining & Development 13
  13. 13. Mr. Falak SherChief Compliance Officer Mr. Haroon Khalid General Manager Risk ManagementMr. Imtiaz Ahmad SheikhGeneral ManagerInformation TechnologyMr. M. Mudassar AqilGeneral ManagerHuman Resource & Quality Assurance 13
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  15. 15. 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. 23
  16. 16. 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 23
  17. 17. 1.4. Process of Planning Process of Planning Mission Strategies Plans Programs Policies Rules Budget  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. 23
  18. 18. 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. 23
  19. 19. 1.6.2. External FactorsTechnological FactorsTechnologically, 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 FactorsPolitically, people are influencing on the performance of Bank Al-Falah. Particularly,agricultural people get benefits due to relation to politicians. Such people are gettingadvances and jobs on favoritism.Physical FactorsPhysical structure of Bank Al-Falah is very sound.Demographic FactorsPopulation of Pakistan is a big number, which is supportive for bank.Economic FactorsPopulation of Pakistan is rich which is beneficial for the bank.Legal & Ethical FactorsBank has legal entity and is taking care of ethics which is giving it advantage inattaining customer attention.Social & Cultural FactorsSocial 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 andwant to keep money with them. 23
  20. 20. 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. Growth Stability Strengths (+) Strategy Strategy (+ , +) (+ , -) Stability Retrenchment Strategy Strategy Weaknesses (-) (- , -) (- , +) Opportunities (+) Threats (-)StrengthsFollowing are the strengths of Bank Al-Falah:• Brand• Decent customer dealing• Rapidly expansion in branch networkWeaknessesFollowing are the weaknesses of Bank Al-Falah:• Poor employee development and promotion• Improper online BankingOpportunitiesFollowing are the opportunities of Bank Al-Falah:• Improvement in online banking• More customer satisfaction 23
  21. 21. Threats Following competitors are threats to Bank Al-Falah: MS Global Saudi Pak Bank Habib Bank Standard Chartered Bank1.7.1. 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. 23
  22. 22. 1.8. Boston Consulting Group (BCG – Matrix) ? Star Question High (H, H) Mark Business (H, L) Growth Rate Cash Cow Dog Low (L, H) (L, L) High Low Relative Position (Market Share) 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.” 23
  23. 23. 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. 23
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  25. 25. ORGANIZINGManagers work in organization. But what is an organization? An organization is adeliberate arrangement of people to accomplish some specific purpose. Your banks,university is an organization, colleges, govt. departments are all organizations becausethey have three common characteristics.First, each organization has a distinct purpose. This purpose is typically expressed interms 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 anorganization and it takes people to perform the work that’s necessary for the organizationto achieve its goalsThird, all organization develop some deliberate structure so that their members can dotheir 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. 34
  26. 26. 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. 34
  27. 27. 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.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 34
  28. 28. • Mergers & Acquisitions (M&As) • Fostering joint ventures • Privatization – Sale side and buyers side advisory • Structuring new financial instruments 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. 34
  29. 29. 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. 34
  30. 30. 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. 34
  31. 31. 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 34
  32. 32. 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. 34
  33. 33. Communication The 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. 34
  34. 34. 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. 34
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  36. 36. LEADERSHIP“The process of influencing a group of people towards the achievement of pre-selectedgoals is called leadership.” & “The person who makes this process or who can influenceothers / 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 hasits leader in the form of High qualified & skilled Managers, which are working hardly toput 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 42
  37. 37. • Believe on Equality 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 Country Club Team / Ideal grid of two leadership Management Management behaviors, concern for people and concern for Middle of Road Concern Management production / output, for which resulted in five People different leadership Impoverished Task Management Management styles is called managerial grid.” Concern for Output 42
  38. 38. 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.3.2. By Contingency Theories3.2.1. 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 42
  39. 39. ‘Path / Direction’, after finding, to their followers on through they and theirfollowers could achieve their targets and goals. 42
  40. 40. 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. 42
  41. 41. 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 42
  42. 42. 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 42
  43. 43. focused on “What happen to a person when he / she do / takes some action?” This stepis helps to the employees of category ‘Y’ that they should do more than before fororganizational development, and they will get more benefits like Job Enlargement, JobScope, Job Enrichment and Job Satisfaction etc.The Leaders / Executives / Managers of Bank Al-Falah are very careful regarding theissues of ‘Discrimination’ and ‘De-motivation’ due to any discrimination. They arefully avoiding those rules and regulations and anything which causes discrimination intheir organization. That’s why all the leaders believe on the ‘Equity’ and they are alsomotivating their each of the employee as well. 42
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  45. 45. CONTROL4.1 Testing the System of Internal ControlsThe general objective of testing controls is to obtain reasonable assurance that thecontrols 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? 56
  46. 46. 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? 56
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  48. 48. ETHICS Ethics is a branch of philosophy which seeks to address questions about morality, suchas what the fundamental semantic, ontological, and epistemic nature of ethics or morality ismeta-ethics, how moral values should be determined, how a moral outcome can be achievedin specific situations, how moral capacity or moral agency develops and what its nature ismoral 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 56
  49. 49. 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. 56
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  51. 51. 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. 56
  52. 52. 3rd Typology Bank Alfalah lies under the category of Entrepreneural culture. 56
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  54. 54. 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 56
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  56. 56. CONCLUSION & SUGGESTIONS8.1. 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.8.2. 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. 56
  57. 57. REFERENCES 1. Visit of Bank Alfalah, College Road – Branch 2. 3. *~*~*~*~*~*~*~*~*~* 56
  58. 58. REFERENCES 1. Visit of Bank Alfalah, College Road – Branch 2. 3. *~*~*~*~*~*~*~*~*~* 56
  59. 59. REFERENCES 1. Visit of Bank Alfalah, College Road – Branch 2. 3. *~*~*~*~*~*~*~*~*~* 56