Reference no: EM133065938

Question - Bank location and consistent high quality customer service are important. Bancorp's 18 banks are well located, and the three new bank acquisitions planned for next year are in prime locations. Increased operating costs appear to be directly related to the individual banks' aggressive marketing efforts and new programs. Specifically, expenditures increased for advertising and for the special materials and added personnel related to the "packaged" accounts. (Packaged accounts are a type of current bank account that comes with additional features).

For the past three months Bankcorp's executive management has been meeting with the individual bank presidents to review Bankcorp's recent performance and seek improvements. One recommendation that appeals to executive management is to make the organisation's structure more centralised. The specific proposal calls for reducing individual bank autonomy and creating a centralised individual bank management committee of all bank presidents to be chaired by a newly created position, Vice President of individual bank operations. The individual banks' policies would be set by consensus of the committee to conform to overall Bankcorp's plans.

REQUIRED -

1. Discuss three (3) disadvantages of Bankcorp's current decentralised structure. Support each disadvantage with a specific example from Bankcorp's situation.

2. Evaluate the proposed centralised structure and provide a justified recommendation of whether they should proceed or not.