Ross Abernathy and Frontier National Bank Harvard Case Solution & Analysis

SITUATION OVERVIEW:

The Frontier National Bank was incurring losses and was on the brink of being mixed with another bank. It was the oldest and one of the most expanded banks in the country but after the end of Second World War the business had started generating losses. The organization had already lost its reputation of the leading bank of the country along with its market standing and profitability. Despite of the losses and ineffective staff, it had $7 billion worth of possessions. When the CEO of the bank was near his retirement, the organization faced a risk of being amalgamated with a smaller bank because of swiftly declining profitability,shrinking liquidity and scarce capital.

 The current CEO who belonged to the family of the founder of the company was about to retire and the investors were looking for someone who could turn the fortunes of the organization. The board of the organization reached an understanding with Ross Abernathy.Ross took the task after some initial concerns realized that it would require him another 3 years to shape and restructure it.

 He knew a lot was to be done to restructure the bank. As the previous team members of the Frontier executives were old and unenthusiastic and they had failed to deliver there fore, it was necessary for him to introduce a new team.During the 3 years, he will have to aim new projects like credit cards, pension fund schemes, travelers check, international banking to generate inflows and change the traditional approach of the bank.

PROBLEM STATEMENT:

The problem highlighted in this case for the bank is the development of the new team that can work effectively and efficiently with new CEO.

The organization has been in severe crises and the current CEO is about to retire from his post. The board of the organization reached an understanding on the Name of Ross Abernathy. The new CEO wants to develop a team, which can tackle the current challenges that the bank is facing and take the organization back to the route of profitability and development growth. The current management is quite old and lacks the skills and expertise to tackle the challenges.

ALTERNATIVES:

  1. 1.      Make a team from the Frontier Bank itself.
  2. 2.      Bring in his Chicago team
  3. 3.      Make a 12 member team that consists of four members each of both the Frontier, Chicago and also hire four independent professionals for the team.

Alternative 1

If the new CEO of the organization considers the first alternative, then he would have to create a twelve member team consisting of fairly old executives who are not up to the latest trend and the evolving market according to him. The benefit of this alternative will be that his team of the bank would be quite familiar with the work environment of the organization as they have been working there. The warning of being terminated, if the targets of the bank are not achieved, may put pressure in the favor of the CEO to engage his team to work. However,the drawback is that it will requireintense work from Ross to generate morale and enthusiasm in the team.

Alternative 2

If the second alternative is considered by the CEO of the organization, then the team will be of his well-known associates, and with them he will likely feel comfortable and the whole team will have respect able belief in Ross’ ability. The business decisions will be become very fluent and the CEO will be able to accomplish maximum results in rather little time. The flaw would be that Ross may face uprising from employees and some from the board as well.

Alternative 3

If the third alternative is considered, then the team can work for the organization as the whole team involves professionals of the field. The investors would not have any issue accommodating this assessment. However,the flaw can be that the employees may take long to get an understanding with the new team members as it would take a lot of time to gain trust.Ross Abernathy and Frontier National Bank Case Solution

COURSE OF ACTION AND EXPLANATION OF RATIONALE:

The new CEO should develop a team of twelve members, which comprises of four experts from Frontier, four from the former Chicago team and four independent professionals of banking sector. After developing the team,the CEO should put one from each team in individual four departments of finance, marketing, human resource and operations. The associates of his former team should work efficiently with Ross and this would assist Ross to keep a check on each department............................

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