Bank of America Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Bank of America Case Study Analysis

The values of Bank of America are considered to be open and clear communications, which respect the contribution of each employee working for the organization. Retaliatory conduct mainly involves harassment, threats, suspension, demotion, discharge and other discrimination manners concerning employment terms and conditions, because of the performance of any unlawful act in connection with such reporting. Considering the personal ownership of risk management; it is known to contribute sustainability and strength of the organization and supporting the work or services provided to the customers, employees, clients, shareholders and communities.

CSR Initiatives:

One of the key elements to be considered for sustainability approach is based on the development of a place to work for employees. The corporate governance, ESG, and Sustainable Committee of Bank of America is known to be associated with the responsibility for the succession process of Lead Independent Director as part of overall succession plan of the Board leadership.

Major Components:

Philanthropic:

The organization has successfully delivered around $2 billion in the philanthropic investments since the year 2009. In the year 2019, the delivery of about $250 million in philanthropic investments were reported of deriving social progress and economic mobility in the communities served by the organization.

Economic:

The organization is known to provide an assistance to the individuals of wide-ranging socio-economic backgrounds that are considered for meaningful employment, mainly including pathways followed by the organization. The hiring and development program of the community is known for the provision of entry-level jobs and career training facilities for all individuals in Consumer and Small Business for the neighborhood of LMI. Currently, the organization has significantly hired approximately eight thousand employees from such communities, which has put the organization at over 80 percent of its 5-year goal to hire the approximate of ten thousand employees in a period of two years.

Similarly, the organization has also doubled the investment in the program of Tory Burch Foundation Capital, which is known to be committed to approximately $100 million in capital for connecting the women to small business owner, providing the opportunity to get affordable loans. Since the launch of the program that is around five years ago; not less than 3200 entrepreneurs have received an approximate of $54 million in loans by CDFIs, which has done so to provide them an assistance in growth and helping them in refining their businesses.

Legal:

The Bank of America is known to be among the top investors of tax equity in the United States of America since the year 2015. The portfolio of the organization by the end of 2019 was around $9.4 billion of the investment for tax equity in renewable energy. Similarly, the understanding of climate changes is known to represent the risks associated with the business community and is considered to be very crucial for the organization to articulate the ways by which risks are being managed. The issuance of TCFD – Task Force on Climate-related Financial Disclosures report in the year 2020 is to make sure that the communities, clients and stakeholders are aware of the potential financial risks of the climate change in the business and the risk management. The Bank of America has also continued to increase its focus towards transparency and driving the data within the company.

Triple Bottom Line:

People:

In the year 2018, the employees at the organization were known to encounter approximately 2 million hours and directing $77 million for the communities across the globe through individual giving and matching the gift programs of the bank.

Planet:

Since the initiation of environmental business commitment; the organization has successfully deployed approximately $158 billion to bring reduction in the carbon emission across the globe. Similarly, the carbon neutrality has been achieved through reducing the emissions of Scope 1 and 2 from the available facilities that are based on the purchase of about 100 percent renewable electricity and purchase of carbon offsets to remaining unavoidable emissions.

Bank of America is considered as the leader of green binds at global level since the year 2007. The securities of Bank of America has underwritten with not less than $49 billion on the behalf of more than hundred clients, which supports not less than 288 deals and is associated with the provision of critical funding for environmental projects.

Profit:
The revenue growth of the organization has been demonstrating a significant increase for past three consecutive years. In the year 2019, the total revenue of the organization was estimated to be around $91,244 million as compared to $91,020 and $87,126 in the year 2018 and 2017 respectively. The Bank of America represented highest total cumulative shareholder return in the year 2019 i.e. about $214 in comparison to S&P 500 i.e. 174 and KWB Bank Sector Index i.e. 172. Similarly, the highest stock price recorded in the year 2019 was estimated to be approximately $35.52. In contradiction, the amount of loans booked in the year 2019 by the small business was about $6.3 billion and had generated around $325 million in loans from the investment of about $1.5 billion in 255 CDFIs. About $6.35 billion has been raised by the five corporate green bonds for the projects of renewable energy.

Organizational structure & design

The organizational structure of the Bank of America is predominately hierarchical with the executive team that directs the growth and development of the company. The company fosters the culture of open communication, collaboration and innovation, which in turn provides competitive advantage to the company due to the fact that the company is not stranger to the disruptive innovation and has been voted as most Innovative Investment Bank of 2017, in the Banker magazine’s annual award.

The hierarchical organizational structure lead provides various advantages to the company in shape of the clear chain of command, clear path of advancement, specialization and promotion opportunities to motivate the employees to be productive.The easier definition of the roles and responsibilities, more frequent opportunities for the promotion and the greater scope for developing expertise provides a solid foundation of the hierarchical organizational structure. Additionally, the company encourages the employees and team members to continuously focus on and take personal ownership of risk management as an integral part of the business activities and practices.

Recommendation

Taking into consideration the corporate governance structure of the company; it is recommended to clarify the role of the board in the strategy and recognize that risk governance is the responsibility of the board. The company could improve the corporate governance by increasing diversity, ensure timely and valuable information, prioritizing the management of risk as well as evaluate and monitoring the performance of the board.

In addition to this, the company is threatened by the intensified and the rigorous market competition, due to which the company needs to compete on thehigh quality services. The premium productivity and service quality play significant roles for the customer while evaluating the service provider performance, whichis the key to the gain customer satisfaction, customer loyalty and to build a long term customer relation due to which the company needs to improve the quality of services to retain the existing and attract the new customers.

Furthermore, the company should ensure that the business is committed to the ethical behavior and perform operations with the honesty and integrity as well as compliance with laws, rules and regulations. The ethical behavior within theorganization could be improved by developing a code and making an ethical performance one of the greatest priorities and measuring the effectiveness of the ethics programs.The company should maintain the effective policies and procedures and high ethical standards to protect its reputation in the market. The company should also promote the diversity and inclusion in its workforce and set and uphold the diversity and inclusion goals and practices.

Moreover, the company should improve the corporate social responsibility by educating and communicating with community and employees, and focus on developing the sustainable technologies, products and processes. The company should mitigate the environmental footprint and address the climate change through energy efficient operations, appropriate policies and strategies, development of renewable energy and other alternative technologies.

The company could improve the financial standing in the highly competitive market by capturing and exploiting the opportunity of tapping the unmet markets for the purpose of increasing the profit returns and market share. The company should expand the business operations outside the home market due to the fact that the other nations provide good opportunities to prosper and establish.Additionally, the company should make considerable amount of investment in new and advanced technologies in order to receive the desired returns. By using the advance technologies to deliver the contextual offerings, building the collaborative and innovative culture, and developing new customer insights; the company would be capable to drive the positive change within the organization.

Conclusion

Bank of America has been operating well in all the division, and is actively involved in each initiatives taken by the management of the organization. The consideration of the management tends to be associated with the concern over bringing a significant improvement in the organizational structure in terms of ethical standards and policies, governance and organizational structure. Although the performance of the organization has been well, based on the increase in employee base, loans, and investment in CSR initiatives, which is significantly evidenced by an increased revenue growth represented by the organization. Furthermore, the existing business processes and strategic approach can be improved through increasing its focus on the overall strategic approach of the organization in order to remain competitive in the financing industry across the globe.................................

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