Organizational Structure Design
Welcome to my blog! On this occasion, I want to talk to you about a highly prestigious financial institution in Peru:
Banco Internacional del Perú, better known as Interbank. Founded in 1897, Interbank has become one of the main financial institutions in the country, offering a wide range of innovative products through more than 200 branches throughout the Peruvian territory.
Interbank stands out for its solid commitment to the quality of the services and products it offers its customers, as well as for its constant search for their satisfaction.
In addition to its focus on external customers, Interbank also pays special attention to its "internal customers", that is, its employees. The organization has managed to stay at the top of the "Great Place to Work" ranking for years, demonstrating its commitment to the well-being and development of its human talent.
Interbank has a clear vision: "To be the Best Bank through the best people". Its purpose is: "To accompany Peruvians in the realization of their dreams, today." Also, these core values are reflected in its organizational culture, which is based on integrity, courage, service vocation, a sense of humor, collaboration, and innovation.
Personally, Interbank occupies a very special place in my life, since I worked in this institution for almost 20 years. Interbank was where I acquired the values that have given my life a solid foundation and where I learned the importance of teamwork and collaborating with my colleagues and leaders to provide memorable customer experiences. I had the opportunity to grow and climb professionally through learning and meritocracy.
In this post, we will explore in detail the internal and external factors that have had the greatest impact on the organizational structure of Interbank as an organization. In addition, I will share with you my opinion on what would be the most appropriate organizational structure to boost Interbank's growth.
External environment analysis
Here are some external factors that would have a major impact on its organizational structure:
Political crisis: Peru has experienced a series of political crises in recent years, including frequent changes of presidents and situations of political instability. These events have generated uncertainty and have impacted the confidence of the Peruvian population in government institutions. The lack of political stability can generate a climate of economic uncertainty, which affects the business environment and investment decision-making.
Economic crisis: As a result of the pandemic times, the existing economic challenges in Peru increased. The economic downturn, increased indebtedness, and falling family income may reduce customers' ability to access bank services or meet their financial obligations. This may affect Bank Interbank's interest margins, asset quality, and credit risk levels. For this reason, it is crucial that leaders carry out a prudent risk assessment and ensure adequate management of their credit portfolio.
Digital transformation: It is an external factor that can significantly impact Interbank's organizational structure. To take advantage of the opportunities and overcome the challenges that come with it, Interbank must be willing to adapt its structure, develop new technological capabilities, and foster collaboration and integration between the different areas of the organization. By doing so, Interbank will be better prepared to face the challenges of the digital environment and continue to offer quality and innovative financial services to its customers.
Internal environment analysis
Here are some key factors that will have a major impact on this organizational structure:
Organizational Tasks: Interbank engages in various activities, such as personal and commercial banking, asset management, and financial services. Each of these tasks requires specialized departments and functional units within the organization. The organizational structure must facilitate efficient coordination, collaboration, and communication between the different departments to ensure smooth operation and optimal customer service.
Goals and strategy: Interbank's goals and objectives have a considerable influence on its organizational structure. These goals fundamentally include improving customer satisfaction, increasing profitability, and fostering innovation. Therefore, the organizational structure must be aligned with these objectives and requires clear leadership and good decision-making processes to ensure the achievement of the goals.
Corporate governance and transparency: Given Interbank's emphasis on corporate governance based on transparency, it becomes a key factor influencing the organizational structure. The structure should reflect a clear chain of responsibility, transparency in decision-making processes, and effective oversight mechanisms. This promotes ethical behavior, regulatory compliance, and stakeholder trust in the organization.
The ideal organizational structure for Interbank
In my opinion, the most adequate organizational structure for Interbank is the functional one. First, this structure allows for greater operational efficiency by grouping similar functions into specialized areas. Each vice-presidency and central management focus on their area of responsibility, which promotes specialization and the development of specific competencies. This translates into greater efficiency in the management of internal operations and allows Interbank to respond more effectively to the demands of the environment. Second, the functional structure facilitates coordination and decision-making at Interbank. Having a clear chain of command and a well-defined hierarchy promotes smoother communication and greater collaboration between different departments and functional areas. This is especially important in an ever-changing business environment, where adaptability and agility are critical. Finally, a functional structure allows for better risk management and regulatory compliance. This is crucial in the financial sector, where regulatory compliance is essential to guarantee the integrity and trust of customers and stakeholders.
Hoping you enjoyed the analysis and see you soon in the next post.
Georgina
International Trade Administration (2022). Peru-Country
Commercial Guide. Retrieved from
https://www.trade.gov/country-commercial-guides/peru-market-challenges
I really enjoyed reading your post Georgina, thank you for sharing your insights of Interbank, a place where you spent good twenty years of your professional career in management. The story you tell illustrates this bank’s organizational structure, clearly based on its mission, and triggers emotions on the reader.
ReplyDeleteI consider that the structure and structural elements match, indeed, the tasks and mission of the company, as, according to what you describe, the bank’s mission is “to accompany Peruvians in the realization of their dreams, today,” which they strive to do with both external and internal customer in mind. The very fact that the bank has managed to consistently be considered as “Great Place to Work” clearly goes to show how much the institution cares about its human talent, hence the heavy dedication they provide to making a functional organization structure that promotes their personal and professional growth while also enhancing performance improvement of the bank itself and how it is perceived by its external customers, generating a plausible win-win kind of situation.
I also think the external and internal analysis are clearly and beautifully explained. The Peruvian political and economic factors appear to be two heavy elements affecting the bank and its clients, due to the constant instability they entail, so again the institution seems to be taking said factors into account when designing its structure in a functional fashion, enabling areas of expertise to be in charge of specific aspects of the business, such as Products and Services, Information Technology, Banking Services, Personal Banking, Fraud Prevention, Agencies, Electronic Channels, etc., which ensures clients are being given the best possible service and that its collaborators’ skills and talents are best used based on their specific professional profiles, which serves to show that the internal analysis is also being taken into account by the institution.
As far as additional structural elements that could have been considered in your post, perhaps an extra explanation of certain banking functions listed within its organization structure, for us readers to more deeply understand what some of them entail, such as, for instance, Fraud Prevention or Electronic Channels, or what the difference between “Lima Agencies” and “Provinces Agencies” is. But again, overall I consider you did an excellent job at introducing your readers into your banking management world and how Interbank, in particular, manages to excel at managing both its external and internal customers applying a clearly defined organization structure to meet its goals.