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Organizational Structure

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Submitted By christoferyacoub
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Organization Structure
Christofer Yacoub
University of Phoenix

The organization that I have chosen to write about is Chase Bank. This is my employer and I am quite familiar with how this business is laid out as well as how it functions. Now, for the sake of time and the length of this assignment, I will only focus on the United States division of our corporate structure and functions. We do extend even further as we offer international services.

Chase Bank follows a divisional structure. This allows for the company to manage the profitability for each individualized department. We have the Consumer and Community Banking department (consumer banking and lending), Commercial Banking (business banking and lending), and our JPMorgan division (investment services) (Client Services, 2015) Within each of these three divisions, there are departments for research and development, marketing, sales, accounting, etc. Now the fear of having a divisional structure is that many employees end up doing the same position, therefore creating a lot of redundancies and causing an overall inefficiency. However, as we are a financial institution, this method works out quite well as many people are double and triple checking the work being done. The concern of inefficiency is mitigate by the absence of potential business risk.

If we were to follow a functional structure, we would run into legal concerns when it came to our investment services. Due to federal regulations, we are not able to even speak about investment products inside of an FDIC insured area. We have special rooms within our branches that are designed to speak about insurance products. That being said, as two of our lines (Consumer and Commercial banking) are under insurance of the FDIC, we cannot mingle our funds with those of the JPMorgan division. FDIC coverage protects the asset owner from corporate bankruptcy or legal closures of our business. FDIC coverage does not protect investment assets as those funds are not guaranteed and are subject to overall investment risk. We could get sued as a firm for customer losses in the stock market due to client confusion over what portion of their money is covered via insurance.

Much of the same concerns carry over if we were to employ a matrix structure to our business. With a matrix structure, employees work within a certain department but have the ability to work on projects of a different divisions. Aside from our potential legal issues that were previously discussed, this form of business structure can lead to confusion of chain of command. In a financial institution, that is a very bad thing. We have to follow strict regulations and guidelines on a daily basis. As every department has their own rules and regulations, you could easily be following a regulation that is geared toward department A when in actuality you are violating regulations tied to department B. More legal issues could spark and the employee could very easily lose his or her job.

Now that we have defined that the organizational structure that Chase has employed is the only one that fits its line of business, let's look into how the functions of the business impact the business. The daily operations of our business certainly dictate how we do our business. As mentioned several times before, we are bound to a multitude of federal regulations and laws. It is because of these rules that we have to keep our lines of business completely segregated. Prior to 2008, there was a bank by the name of Washington Mutual that collaborated many of its divisions into one mass segment (Form 10-Q, 2008). This is why when the economy collapsed, it forced the bank to go out of business and have Chase absolve them (JPMorgan Chase to Buy Washington Mutual, 2008). Washington Mutual did not have the resolve to battle its losses because one hand was feeding the other. After the collapse of 2008, federal laws were passed that regulated how banks did their business and in turn helped protect financial institutions from going under in times of a temperamental economy.

In turn, Chase Bank made a drastic turn to a customer service and customer based culture. The press was quite negative following 2008 and we needed to revamp our efforts to not be such a sales based company. We had to actively demonstrate that we do actually care about our clients. This, unfortunately, was not the perception before. We had to do this in an emphatic manner across all lines of business. This needed special attention from every individual within the company, and needed to be managed by each manager in their respective department. As each department is significantly different from the other, individualized plans to increase our customer satisfaction were created. For the consumer banking portion of our business, we created a measurable scale called OSAT (Overall Satisfaction) that is based upon random phone surveys from clients that had been in our branches recently. This gave us a tangible number to an otherwise intangible measurement. OSAT gives us something to work with, improve upon, and measure up previous successes or opportunities to.

Overall, Chase Bank has done the right thing in formulating the business in a divisional structure. This structure allows for individualized departments with specialized management and ensures that we, as a company, are getting it right for our customers as well as abiding by all of the federal regulations. We have organized our company based upon client need, governmental restriction, and business profitability. While we could employ different organizational structures, we would have to completely revamp every last one of our lines of business and create a whole new company for our investment services. Not to mention, we would have to completely restructure our basic organizational functions in order to accommodate this new structure. At the end of the day, I firmly believe that we would not be able to succeed if we were in a different structure.

Bibliography:

Client Solutions | JPMorgan Chase & Co. Retrieved October 18, 2015.

JPMorgan Chase to Buy Washington Mutual. Retrieved October 18, 2015.

Washington Mutual Form 10-Q. (2008, June 30). Retrieved October 18, 2015.

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