RBS Case Study Analysis Help With Solution
The case background:
The Royal Bank of Scotland is one of the largest banks in the world. Founded in 1772, it experienced the greatest degree of growth between 2001 and 2009 via a series of aggressive acquisitions engineered by CEO Fred Goodwin. In 2002 Forbes magazine named Goodwin businessman of the year for his “brilliantly strategised hostile takeover” of NatWest. The successful acquisition of NatWest was also remarkable given the high rate of failures for similar banking acquisitions. As well as the successful take-over, the three-year integration of NatWest with RBS was also celebrated by the industry as a great success.
This case is about how RBS successfully managed the integration process after the acquisition of NatWest Bank in 2000. In part (A), you are required to analyse and evaluate the case with focus on the integration and the changes the bank made to succeed.
Faced with the 2008 financial crisis and burdened by many other over-ambitious acquisitions, RBS’s capitalisation sunk to such an extent that it became necessary for the UK government to provide the cash-flow to keep them solvent; which suddenly made the UK government a majority owner of one of the largest banks in the world. CEO Fred Goodwin then stepped down and Stephen Hester became the new CEO of RBS, and with that change of CEO and unique government ownership-over-sight came many unique and dramatic changes.
After a five-year effort to turn the bank around by shifting away from capital markets and investment banking back to traditional retail and corporate banking to improve profitability, Stephen Hester too stepped down. Now RBS is putting extra efforts implementing the customer focused strategy in attempt to satisfy a legitimate public concern over the bank’s sustainable competitive position.
A. RBS with the success of Natwest acquisition and integration (70%)
1. Summarise the changes that RBS dealt with after the acquisition of Natwest: what did RBS do to master the integration?
2. Using theoretical concepts and frameworks that we have learned from the course to critically evaluate the changes RBS made to integrate with Natwest
• The theoretical concepts and framework should help you to explain why they did or did not do the integration successfully
• You can structure your analysis based on different frameworks and issues such as, but not necessarily limited to: organizational design (strategy, structure, process and culture), resistance management, human resource policy and learning to motivate individuals and empower teamwork.
B. RBS’s current strategic focus and future outlook (30%)
After the financial crisis in 2008 and the resignation of Stephen Hester, RBS’s management team is now putting extra effort in implementing their strategic change focus on customers. You are required to watch the following videos and critically analyse and evaluate the change which RBS is now focusing on and their future outlook of this change enacting. To support your analysis and evaluation, you are required to use the theoretical concepts and frameworks we have learned in the class; namely, but not necessarily limited to: the position of customer as stakeholder, the role of culture, the process change, employee engagement, team and the communication of change.
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