Professional Documents
Culture Documents
1. BACKGROUND INFORMATION
2. POINTS TO PONDER
Should other Chinese banks follow suit and go on a shopping spree of foreign
banks?
Our Analysis and Supporting facts
3. ANECDOTES ON M & A
BACKGROUND
INFORMATION
Founded 1996 as CMBC limited.
First Private Commercial Bank Of China
Concept of acquisition through UCBH, USA
First mainland Chinese institution to invest in a US Bank
Initial offerings were providing financial services, and was the first to prepare
financial statements according to International Acc. Standards.
Listed it’s A-shares on Shanghai Stock Exchange, Dec 19th, 2000
Adopted “Three Cards” project-
2. Bank of China
Purpose of Formation:
1. Exercised China’s macroeconomic policies and carried out macro economic
control for economic development.
2. Took over government directed spending functions, of the 4 state owned banks.
1. Anxiety and Uncertainty : When move from stable to unstable- confidence loss
2. Helplessness and Rejection : Worried about next role, lack of control over
circumstances, and outcome that shapes life and career in the corporation
3. Divided Loyalties : Loyalties change when newcomers enter
4. Withdrawal and Avoidance : Workers reduce level of commitment and use
energy to cope up with anxiety
5. Conflicts over New Values : New leadership could create conflict. So
employees are demoralized.
QUESTION 2
The solution that CMBC might use post acquisition are:
1. New Structure and Systems :
Programs that re-affirms basic structures and clarifies reporting relationships.
Acquired company could get clear interpretation of the situation, and vision of
the future.
2. Power of Outsiders :
Make team of staff from both companies. Treat this as merger and treat all with
respect.
3. Territorial Battle :
Founders of UCBH can help to interface with process to make it a developed
organization.
4. Who fits in ? :
Proper clarifying and supporting interventions can be made.
5. Start-up Problems :
Educational training on cultural changes is required with common objectives and
values.
QUESTION 2
Their motive:
Business model was to build everything around the
customer; core idea in management is to create value for
customers; the business operation is market and
customer-oriented. They have successfully reshaped
themselves from a department-bank into a process-
bank.
2 key ideas underpinning a viable process-based organization.
1. First, a company is divided into basic organizational units which are
organized around core processes.
2. Second, other type of processes are added to these units so that they
can operate in a effective and efficient way.
QUESTION 2
QUESTION 2
TYPES OF PROCESSES NEEDED TO DEVELOP PROCESS STRUCTURE
1. First, there are customer processes which are those processes that add value for
external customers.
2. Second, development processes such as product development, product/market
innovation, technology innovation etc that allow the organization to work
effectively on a longer time horizon.
3. Third, planning and control processes focus on particular management tasks. It
is useful to make a distinction between planning and control processes that are
linked to the execution of the customer and development processes -
management of the relationship with third party people, the management of
distribution channels.
4. Finally, staff and service processes have to be recognized as well. They play a
role as an enabler of all the other types of processes.
QUESTION 3
Should other Chinese banks follow suit and go on a shopping spree of foreign banks?