Strategic Management Accounting
INTRODUCTION
The case study below, discusses in depth the organisational architecture of the Scanavian bank Svenska Handelsbanken and how Dr Jan Wallander implemented his new management.
The case study analyses the decision rights, performance evaluation, rewards system and then depicts whether or not the organisational architecture is in balance alongside its soft culture.
The last segment is a comparison of the budgeting systems used for both Svenska Handelsbanken and AV Jennings, in regards to beyond budgeting, traditional budgeting, budgetary slack and budgetary difficulty.
TASK 1
a) Decision Rights
Svenska Handelsbanken, under new CEO Dr Jan Wallander became a bank very focused on decentralisation. The reasoning behind this was said to be that, employees at branch level, were better situated with customer knowledge when making decisions (Lindsay & Libby 2007, 627) therefore allowing for better customer service. In the restructure of the bank, half of Handelsbankens branch staff had authority on decision making, allowing customers readily given answers to their queries. Few decisions were rarely able to be made at branch level and further pushed to regional management with a response available within 24 hours. This upward hierarchy on decision making gave way for better customer service, as it took away the added time it would take to reach a decision from a higher manager in regards to the customer needs.
b) Performance Evaluation
Wallander, implemented a performance measurement system, whereby all Handelsbanken branches and regions are compared with each other respectively through a cost-to-income and return-on-equity ratio basis (Lindsay & Libby 2007, 633). The bank as a whole is measured in comparison to competition from other banks and all performance evaluation is measured quarterly. The incentive for employees is to see their respective branch, region or Handelsbanken itself, do well amongst internal and external competition on a ranking
The case study below, discusses in depth the organisational architecture of the Scanavian bank Svenska Handelsbanken and how Dr Jan Wallander implemented his new management.
The case study analyses the decision rights, performance evaluation, rewards system and then depicts whether or not the organisational architecture is in balance alongside its soft culture.
The last segment is a comparison of the budgeting systems used for both Svenska Handelsbanken and AV Jennings, in regards to beyond budgeting, traditional budgeting, budgetary slack and budgetary difficulty.
TASK 1
a) Decision Rights
Svenska Handelsbanken, under new CEO Dr Jan Wallander became a bank very focused on decentralisation. The reasoning behind this was said to be that, employees at branch level, were better situated with customer knowledge when making decisions (Lindsay & Libby 2007, 627) therefore allowing for better customer service. In the restructure of the bank, half of Handelsbankens branch staff had authority on decision making, allowing customers readily given answers to their queries. Few decisions were rarely able to be made at branch level and further pushed to regional management with a response available within 24 hours. This upward hierarchy on decision making gave way for better customer service, as it took away the added time it would take to reach a decision from a higher manager in regards to the customer needs.
b) Performance Evaluation
Wallander, implemented a performance measurement system, whereby all Handelsbanken branches and regions are compared with each other respectively through a cost-to-income and return-on-equity ratio basis (Lindsay & Libby 2007, 633). The bank as a whole is measured in comparison to competition from other banks and all performance evaluation is measured quarterly. The incentive for employees is to see their respective branch, region or Handelsbanken itself, do well amongst internal and external competition on a ranking