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Term Paper

Service Marketing
Submitted to:
S.S.M Sadrul Huda
Faculty of Business Administration
MBA Program
East West University

Submitted by:
Md Yeahyea Kabir



Letter of Transmittal

S.S.M Sadrul Huda

Faculty Member
Master of Business Administration Department
East West University

Subject: Submission of Term paper.

Dear Sir,
It is our pleasure to submit the report on Ethical Misconduct in Dutch
Bangla Bank as a part of our term paper. We have enjoyed preparing this
term paper which enriched our practical knowledge of the theoretical
concept. We tried to reflect the practical operational aspects of the
organization which is complementary to the theoretical lessons.

Sincerely yours,

Md Yeahyea Kabir
On behalf of the group

Table of Content




Dutch Bangla Bank Profile

Ethics in Service

Ethics & banking Sector

The Opportunity for Ethical Misconduct in Service

Issues that Create Ethical Conflict


Controlling Ethical Decision Making




Ethical misconduct disasters constitute serious costly risks to the
continuity and survival of a business. Regular headlines reveal that
breakdowns of integrity collectively cost businesses billions of dollars in
litigation, fraudulent financial acts, increased costs, fines, reputation and
image damage, customer/client trust, lost sales and recovery costs, and
potentially land senior management in prison. No company is immune
from these threats. Prudent businesses must plan to manage integrity
continuity by assessing their vulnerability to ethical disasters, taking
proactive measures, and preparing their organizations to mitigate and
survive when such scandals break. In service sector its a common
Bank is the important financial institution in the economy. The economic
development of a country depends on the development of banking
sector. Todays modern banks are not only providing traditional banking
services but also expanding many financial services.
Foreign Exchange Division occupies an important place in a nations
economy because of its intermediary role; it ensures allocation of
resources and keeps up the momentum of economic activities. A banking
institution is indispensable in a modern society. It plays a pivotal role in
the economic development of a country and forms the core at the money
market in any country. In a developing country like Bangladesh the
banking system as a whole has a vital role to play in the progress of
economic development.
This term paper emphasizes on the ethical misconducts opportunity,
Issues, & controlling the ethical decision making. Its our pleasure to
submit our Term paper Titled Ethical Misconduct in Dutch Bangla Bank
While preparing this term paper, we have tried to gather as much
information as possible and to gather all the information pertaining the
subject to enrich it. We believe that it was a fascination experience to

analysis the service sector and it has enriched both our knowledge &

Dutch Bangla Bank Profile

Dutch-Bangla Bank started operation is Bangladeshs first joint venture
bank. The bank was an effort by local shareholders spearheaded by Md.
Sahabuddin Ahmed (Founder chairman) and the Dutch company FMO.
It is the largest bank in Bangladesh by market capital. DBBL was
established under the Bank Companies Act 1991 and incorporated as a
public limited company under the Companies Act 1994 in Bangladesh
with the primary objective to carry on all kinds of banking business in
Bangladesh. DBBL commenced formal operation from June 3, 1996. The
Bank is listed with the Dhaka Stock Exchange Limited and Chittagong
Stock Exchange Limited.
From the onset, the focus of the bank has been financing high-growth
manufacturing industries in Bangladesh. The rationale being that the
manufacturing sector exports Bangladeshi products worldwide. Thereby
financing and concentrating on this sector allows Bangladesh to achieve









Responsibility (CSR). Even though CSR is now a clichs, DBBL is the

pioneer in this sector and termed the contribution simply as social
responsibility. Due to its investment in this sector, DBBL has become
one of the largest donors and the largest bank donor in Bangladesh.
The bank has won numerous international awards because of its unique
approach as a socially conscious bank.
DBBL was the first bank in Bangladesh to be fully automated. The
Electronic- Banking Division was established in 2002 to undertake rapid

automation and bring modern banking services into this field. Full
automation was completed in 2003 and hereby introduced plastic
money to the Bangladeshi masses. DBBL also operates the nations
largest ATM fleet and in the process drastically cut consumer costs and
fees by 80%. Moreover, DBBL choosing the low profitability route for
this sector has surprised many critics. DBBL had pursued the mass
automation in Banking as a CSR activity and never intended profitability
from this sector. As a result it now provides unrivaled banking
technology offerings to all its customers. Because of this mindset, most
local banks have joined DBBLs banking infrastructure instead of
pursuing their own.
Vision of Dutch-Bangla Bank:
To become a leading banking institution and play a pivotal
role in the development of the country
DUTCH BANGLA BANK dreams of better Bangladesh, where arts and
letters, sports and athletics, music and entertainment, science and
education, health and hygiene, clean and pollution free environment
and above all a society based on morality and ethics make all our lives
worth living. DBBLs essence and ethos rest on a cosmos of creativity
and the marvel magic of a charm life that abounds with sprit of life and
adventures that contributes towards human development.
Mission of Dutch-Bangla Bank:
Dutch Bangla Bank engineers enterprise and creativity in business and
industry with a commitment to social responsibility. PROFIT ALONE
does not hold a central focus in the banks operation; because man
does not live by brain and butter alone .
Core Objective of DBBL:
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill
its customer needs and satisfaction and to become their first choice in
banking. Taking cue from its pool esteemed clientele, Dutch-Bangla

Bank intends to pave the way for a new era in banking that uphold and
epitomize its vaunted Marques Your Trusted Partner
To earn and maintain CAMEL Rating Strong
To establish relationship banking and improve service quality through
development of Strategic Marketing Plans.
To remain one of the best banks in Bangladesh in terms of profitability
and assets quality.
To introduce fully automated systems through integration of information
To ensure an adequate rate of return on investment
To keep risk position at an acceptable range (including any off balance
sheet risk)
The Board:
The board is comprised of directors having diverse skills, experience
and expertise to add value towards better corporate governance of the
bank and maximizing value for all stakeholders. The board discharges
its responsibilities itself or through various committees. The Board
meets on a regular basis to discharge its responsibilities.
The Board is made up of 10 (ten) Directors including a Chairman and
five Directors representing shareholders, one independent Director, two
Directors from depositors and the Managing Director.
Principal Activities:
The principle activity of the bank is banking. The banking business
includes obtain deposits through account opening, offer credit to
corporate organizations, as well as retail and small & medium
enterprise, trade financing, project financing, lease and hire purchase
financing. The modes of banking include conventional banking. It also
performs merchant banking function under the license by Securities
and Exchange Commission, Dhaka, Bangladesh.
Customer Service:

DBBL has wide span of customer service. As DBBL has huge number of
customer. So does they are maintaining a good customer service

Ethics in Service:
Ethics is a branch of philosophy dealing with what is good and bad and
with moral duty and obligations, the principles of moral conduct
governing an individual or group. The basic concepts and fundamental
principles of decent human conduct. It includes study of universal
values such as the essential equality of all men and women, human or
natural rights, obedience to the law of land, concern for health and
safety and, increasingly, also for the natural environment.
Code of ethics is simple. The individuals shall honor their responsibility
to the public by promoting public understanding of the professions, by
supporting the development of services designed to fulfill the unmet
needs of the public, and by providing accurate information in all
communications involving any aspect of the professions, including the

dissemination of research findings and scholarly activities, and the

promotion, marketing, and advertising of products and services.
Ethics & Banking Sector:
In todays competitive scenario, every bank wants to become the
market leader, capture maximum market share and have maximum
customer base. To achieve this objective various kind of marketing
strategies and communications are undertaken. The communications
are extremely important in case of services to create powerful images
and a sense of credibility, confidence and assurance for the consumers.
However, in the banking sector, marketing communication elements are







Moreover, for the growth and survival every business has to tradeoff
between profit and ethical issues concerning their marketing
strategies. In general, ethics are defined as a branch of philosophy
dealing with what is good and bad and with moral duty and obligation.
Opportunities for ethical misconduct with in service sector abound and
they can be attributed pre dominantly to the intangibility, heterogeneity
and inseparability dimensions inherent in the provision of services.

Inseparability complicates the consumers ability to evaluate the

quality of service provided

Heterogeneity reflects the difficulty in standardization and quality


Inseparability reflects the human elements involved in the

services delivery process.

All three dimensions contribute to consumer vulnerability to and reliance

upon the services providers

ethical conduct during the service

The Opportunity for Ethical Misconduct in Service Marketing:
Services are intangible. It cannot be seen. Services are being provided
by human beings, deliverance of service is different from person to
person hence it cannot be standardized. Due to all these factors there











Few Search Attribute:
Due to intangibility of the services, consumers can not physically
examine the services before purchasing; consequently, consumers have
little pre-purchase information about the services. Here customer have
little information before available to help them make an informed,
intelligent decision. Consumer of service often must base their
purchase decisions on information provided by the service provider.
As an example customer dont know that how well the ATM can give
service to the customer.
Technical and specialized services:
Banking service is technical in nature. It is not easily understood and or
evaluated. A customer cant know that how the banking service is
running. This evaluation is taken based on the appearance of the bank.
How they are informing socially.
As an example, DBBL is socially sound bank. They are donating huge
money socially. This creates a brand image so that customers are

Time Lapse between performance and Evaluation:

Services like bank are mostly done for future. For example the success
and failure of retirement planning may not be realized before retirement.
Here banks are getting the benefit. They are giving service for a distant
future. Such as DPS, this is a program designed for future. Customers
cannot determine the failure or service in the future.


Service Sold without guaranties and warranties:

Services are sold without guarantee and warranty. DBBL account is
opened by the unskilled employees. Thus any problem can occur during
the production process. Credit card is another example for the service
sold without guaranties and warranties, because for any problem
customer might have to do that again. It will take time.

Service Performed by boundary Spanning Personnel:

Many times services are provided outside the physical premises of the
bank. For example most of the Credit Card application form is filled up in
the residence/ office of the customers, as a service gesture bank official
visit the customer at their place. Due to this service provider often are
not under the direct supervision. Physical distance is also come to the
Accepted Variability in Performance:
Due to heterogeneity, standardization and quality control measures
cannot be implemented in service deliverance. Each individual is
different in their transaction. It is unavoidable in nature. In DBBL different
bank teller employee can perform differently. Some are superfast and
some are slow.
Outcome Based Reward System:
Reward system in an opportunity for ethical misconduct. DBBL banks
commission for bank opening is a reason. Thus employees are focused
only for earning money rather that giving standardized service. Thus
they earns more but fails to provide standard service.

Customer Participation in Production:

People think that with involvement of the customer in the Bank service
encounter, there will be fewer opportunities for ethical misconduct. But

the things are vice versa, the Consumers involvement in the whole
process enables a service provider to influence the consumer through
fear or greed for the product.
As an example during opening for a Bank account customer service
employees focuses to take more deposit from customer. Thus they earn
more. They make an impression to the customer that this is the best
policy for you.
Issues that Create Ethical Conflict:
In banking institutions personal selling is highly used and reliable media
of Communication. DBBL is not the exception. Each and every day









individuality of service provider and consumer, the chances of ethical

misconduct increases due to greed, self-interest, profit maximization, to
accomplish targets etc.
Conflict of Interest:
In this scenario Service provider can be in close proximity to the
customer, consequently the service provider can experience conflict of
interest. For example a DBBL Bank employee can guide the customer to
divide his whole amount of investment in FDR within family member and
increase the number of account to misguide the Bank & income tax
authorities. In this scenario, customer and employee are in win situation,
but the government does not get actual data about the potential of the
Organizational Relationships:
Working relationships formed between service providers and various role
partners such as customers, peers, suppliers subordinates. As an
example in unethical manner, Bank employees can provide share
dividend information to the outsiders. Here employee is providing
sensitive information to the outsider. This is an unethical activity.


Honesty is partner of truthfulness, integrity and trustworthiness.
Violating the honesty is an ethical misconduct. DBBL employee can give
a misleading commitment that you will get your ATM card after 3 working
days. If that cannot be fulfilled by the bank then that is breaking of
Fairness means impartial treatment.Fairness is an outcome of just
treatment, equity and impartiality. Clients should be treated equally and
deals based on favoritism should be avoided. Its a true fact in DBBL that
if a customer is financial sound, maintains good balance in bank, that
customer will get warm welcome and all the kind of services will be
provided to him on his doorstep, vice a versa is also true if a customer is
not having very sound financial condition, nobody will bother to look
towards that customer and resolve his issues.
Ethical issue arises when DBBL bank communicates information to the
customers or prospective customers. In one advertisement DBBL claims
that they have fastest banking service. In reality they have the slowest
banking service. This is afalse claim. The communication is not correct.

Controlling Ethical Decision Making:

DBBL can control the Ethical decision making to reduce the adverse
effect of unethical decision. By the following steps unethical activity can
be controlled.
Employee Socialization:

Employee socialization is the process by which new employees

understand the company's policies, the internal culture, how the
company hierarchy works and the ways to function effectively in the
organization. Developing programs and policies that integrate new
employees into the company helps the company maintain a consistent
corporate culture.
As an example DBBL can recruit or train employees to go on with banks
norms and policies, So that they can work ethically.
Standards of Conduct:
As a part of the socialization process, formal standards of conduct can be
presented tpo bank employees through code of ethics. A code of ethics
document may outline the mission and values of the business or
organization, how professionals are supposed to approach problems, the
ethical principles based on the organization's core values and the
standards to which the professional will be held.
As an example, DBBL should provide the standard of conduct so thus
employees can know how to work on a certain situation.
Corrective Control:
Corrective control is the mix of reward and punishment to enforce firms
code of ethics. For service firm its an effective measure to control
unethical activity. Research indicates that employees of firms that have
code of ethics are more prone to believe that violators of ethical conduct
will be punished.
As an example DBBL can communicate the corrective control policy to
the employees thus it will be controlled.
Leadership Training:
Teaching of leadership qualities, including communication, ability to
motivate others, and management, to an individual who may or may not
use the learned skills in a leadership position. Thus they can take ethical
decisions in comply with the supervisors.

As an example Management Trainee Officer in DBBL is an example of

leadership training. Who tend to comply with their supervisors to
demonstrate loyalty.
Service / Product Knowledge:








products/service features allows you to present their benefits accurately

and persuasively. Customers respond to enthusiastic sales staff that is
passionate about their products and eager to share the benefits with
them. Employees need to know the updated service knowledge to
provide right service to the customer. If ay shortcoming happens
informing the customer is another aspect of the knowledge. Thus
unethical behavior can be controlled.
As an example in DBBL employees are given training regularly for the
updated information. It will control the misleading behavior.
Monitoring of Employee Performance:
Another way to control ethical decision making is to measure employee
performance. Here employees performance is measured against the
organization ethical standard. This result must be communicated to the
employee. If any employee performs good or least performed, the result
must be communicated to employee. Thus employee will be cautious for
ay unethical activity.
As an example DBBL must maintain a monitoring to measure employee
performance. Thus ethical decision can be controlled.
Stress Long Term Customer Relationship:
Service provider must build trusting relationships between themselves
and their customer to promote a long term mutually beneficial
relationship. This can be done aong with the employee. Company may

give misleading information to the customer for a certain reason.

Employees can stress that to long term relationships between the
customers and bank. It can minimize the unethical decision making.
As an example DBBL can mislead information for a quick sale of bank
account. Here employees can build a long term relationship with the
customer. Thus it will minimize the unethical decision making.

Dutch Bangla Bank Limited should be true professionals and should
adopt best practices of the industry and should comply to the rules
strictly. If any illegal or unethical activity is suspected by a financial
service provider then it should be discouraged and if required should
report to the concerned authorities. There should be independence,
meaning that service provider should not be biased by personal










compensation. In financial services risk and return factor should be

placed accurately so that customer can make a prudent decision,
secondly organizations as well as customers secrecy should not be
compromised for personal gain.