The given case study presents Mountain Bank as an American bank that provides such services as retail, mortgage, and corporate banking, real estate, and consumer lending. The bank has 25 percent of the consumer lending market and less than 10 percent of the real estate and mortgage banking markets. Currently, Mountain Bank is working on increasing the two latter mentioned markets shares. The current paper discusses the business strategy, human resource (HR) practices, and strategies that the bank should utilize to improve its overall performance.
Talking about a business strategy that Mountain Bank could employ, it seems reasonable to suggest that the cost leadership business strategy will help the bank achieve a competitive advantage and increase its market share. The core idea of the cost leadership strategy is that a firm should offer its products and services at prices lower than the competitors do (Porter, 1997). Low prices will turn into a competitive advantage for a firm and assist it in increasing its market share. With respect to Mountain Bank, the use of the cost leadership business strategy to provide customers with lower services costs and interest rates. This could be achieved through the enlargement of Mountain Bank which became possible due to the deregulation of the banking industry. Hence, the cost leadership business strategy should be employed by Mountain Bank to decrease interest rates and services costs, and this way achieve a competitive advantage and increase market share.
A great role in meeting customers satisfaction is played by Mountain Bank’s tellers. According to Stewart and Brown (2019), customers’ needs could be satisfied only when a firm’s employees are skilled, experienced, and motivated. Since, as it is noted in the case study, the interaction between tellers and customers is the single factor that drives satisfaction of the latter, it could be inferred that the current HR practices being used by Mountain Bank include training and selective hiring. Constant training of employees is important because it helps them to develop their skills in explaining, promoting, and selling services offered by the bank. Besides, bank tellers perform numerous tasks that require accuracy and attention. For example, they have to balance currency and checks at the end of every shift, keep records of money used in transactions, and check cash and payout money. Selective hiring is an effective way to employ people that would perform the listed functions in a decent manner and without any mistakes.
In addition to the already existing HR practices, Mountain Bank shout establish performance-based compensation, promotion of the best workers, regular training not only for new employees but also for the experienced ones, and encouraging initiative of employees. The study conducted by Milliken et al. (2015) reveals that it is essential to create an atmosphere in which employees will feel safe to express their opinion and make suggestions on what and how could be improved. This will positively influence employees behavior and attitude to their responsibilities and, hence, improve their performance. The other three previously mentioned HR practices should be implemented in order to keep staff members skilled and motivated to work hard. Training is essential not only for newcomers but also for all tellers because that is a way to develop skills and reach new heights continuously. More precisely, regular attendance of specialized seminars could help tellers to boost their skills of persuasion. Therefore, they would become able to sell more services offered by the bank, and it, consequently, will be beneficial for the bank’s performance.
Choosing between the committed expert, free agent, loyal soldier, and bargain laborer HR strategies, I would recommend Mountain Bank use the first one. This strategy is based on the assumption that only candidates who possess the required and specialized skills deserve to be hired. The committed expert HR strategy emphasized the significance of workers experience and skills because they directly relate to a company’s performance. Since Mountain Bank wants to possess a larger market share, it should not only lower the costs of services and interest rates but also sell these services to more people. At this point, skilled tellers might be immensely useful since their skills would allow them to quickly perform all the financial transactions, persuade a customer to purchase some service, and leave a good impression on the bank. In other words, the committed expert HR strategy should be chosen because it corresponds with the business strategy of the bank described in the second paragraph of the essay.
To conclude, to increase the market share, Mountain Bank should lower the costs of its services and interest rate. This could be achieved through mergers with other banks. It is highly recommended for Mountain Bank to encourage the initiative of the employees, conduct regular training and promote workers with the best performance. Regarding the HR strategies, it seems that the implementation of the committed expert HR strategy will make the bank better off since the core assumptions of this strategy correspond with the requirements proposed by the bank’s business strategy.
Milliken, F. J., Schipani, C. A., Bishara, N. D., & Prado, A. M. (2015). Linking workplace practices to community engagement: The case for encouraging employee voice. Academy of Management Perspectives, 29(4), 405-421.
Porter, M. E. (1997). Competitive strategy. Measuring business excellence.
Stewart, G. L., & Brown, K. G. (2019). Human resource management (4th ed.). John Wiley & Sons.