Co-operative Bank Case Study

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Abstract

With focus on the Cooperative bank, the aim of this report is to provide a better

understanding of its operations. This is considered in light of the fact that the Cooperative

bank as an entity, has been able to successfully integrate cooperative values into

contemporary management approaches, and as a result, it attained and sustained a

competitive edge in the highly competitive retail and commercial banking sector. To this

regard, the report will first review the company’s operations in terms of the 4Vs, as well as its

operational performance objectives and its operations strategy. This will be followed by a

look at the challenges encountered by the Co-operative Bank partners as result of the

application of the ethical approach. And finally analyse the information that is obtained from

the stakeholder that have an impact in the strategic planning of the Bank, hence the

operational strategies.
Table of Contents

1. Introduction.........................................................................................................................4

2. Co-operative Bank’s retail and commercial banking in terms of the 4Vs, and operational

performance objectives and operations strategy........................................................................4

2.1. The four V’s model and Co-operative Bank operational management.......................4

2.2. Operational performance objectives and operations strategy Co-operative Bank......7

3. Stakeholders and quality management challenges posed by the Bank’s current ethical

policy........................................................................................................................................10

3.1. Shareholders..............................................................................................................10

3.2. Customers..................................................................................................................10

3.3. Staff and their families..............................................................................................11

3.4. Suppliers....................................................................................................................11

3.5. Local communities....................................................................................................12

3.6. National and International Society............................................................................12

3.7. Past and Future Generations of Co-operator.............................................................12

4. Four stakeholders and significant information.................................................................13

4.1. Customers..................................................................................................................13

4.2. Suppliers....................................................................................................................13

4.3. Staff and their families..............................................................................................14

4.4. Shareholders..............................................................................................................14

5. Conclusion and Recommendations...................................................................................14

6. References.........................................................................................................................16
1. Introduction

The Cooperative Bank has applied various strategies and each is considered by the parties

before implementation of the strategystrategy (Cowling et al., 2008; Sheu et al., 2005).

Flexibility is the competitive advantage that the company has integrated to sustain the

changing environments as the company grows (Sheu et al., 2005). The aim of this report is to

review the Cooperative Bank’s case in order to provide a better understanding of its

operations. The paper first scrutinises the companies on the scale of the 4V’s. The report also

presents the challenges encountered by the Co-operative Bank partners as result of the

application of the ethical approach. Then the paper explores the significant information that

can be obtained by the bank as to aid the operating strategy from the selected number of

partners.

2. Co-operative Bank’s retail and commercial banking in terms of the 4Vs, and

operational performance objectives and operations strategy

2.1. The four V’s model and Co-operative Bank operational management

According to Cowling et al. (2008), all companies have a similar operational process,

although variations occur with reference to the volume, variety, difference in the output, as

well as the customer’s visibility of the service. Hence, the ITO Model is reinforced by the

four V’s model

Figure 1. The four V’s model

Source: Goddard et al., 2004.

Volume (Low)

The Bank ensures the introduction of new services at least annually, where the services may

be either manually attained or mobile accessed (Cowling et al., 2008). Because of the firm’s

structural organisation and the continuous invention and assimilation of the new techniques,

the company has sustained and maintained low prices for services (Sheu et al., 2005).

Consequently, the firm has strived to be flexible enough by shaping all their services in

accordance to the consumers’ needs (Seity et al., 2011). Moreover, this attracts a huge

number of customers as they are assured that the firm is always on the move to diversify the

services they offer (Neville and & Menguc, 2006). The company has a history of replacing

the services if the consumers rates the service as low and unsatisfactory particularly when the

rate of service overdo is considered higher compared to the competitors.

Variety (High)

Due to the rate of volatility demand for secure and accessible banking, Co-operative Bank

has ensured an incessant integration of new inventions and technologies that will enhance the

services offered by the firm (Sheu et al., 2005). The Bank has countered the high demand by

highly capitalising on the industry by heavily investing on the security phoenix and the

service coverage that is offered (Klefsjö et al., 2008). Consumer uncertainty is caused by the

fluctuation of the currency and may be the up-rise of the cybercrime, hence the firm has made

sure there is increased flexibility to counter the uncertainty. Unlike the competitors, the

company has assured the consumers of security by attaining the most complex system of

security, and this has helped in the service offering of the firm. Additionally, to aid in the

coverage the company has stretched in other regions of the globe, which has enabled the low

cost of operational input (Espino-Rodrı́guez and& Padrón-Robaina, 2004).

Variation in Demand (High)

Co-operative Bank is known as the swift and flexible firm, for it has the capability to fulfil

the needs of the consumer (Goddard et al., 2004). The firm has the capability to acquire a

high number of inquiries regardless of the format regarding about the services they are

offering. This aids in the speculation of the behaviour of the targeted market, thus allowing

the firm to be swifter in its market approach and demand control, making the company to be

market driven. Otherwise, the company has assured introduction of a new service annually,

so the company attains the status of flexibility, which means availability of the expected

services (Neville and & Menguc, 2006). Consequently, the company has expanded the

market share, and has been able to accommodate an increase in number of customers

(Espino-Rodrı́guez and & Padrón-Robaina, 2004).

Visibility (High)
Low tolerance is a trait that is attributed to the consumers. If the consumers come across a

situation where the service provider is inefficient and dissatisfying, they tend to evade that

service (Hall and& Martin, 2005). Therefore, as to counter and mitigate such situation, the

bank has deployed a variety of techniques. For instance, the bank deploys persons with well-

equipped communication skills in order to enable the company to maintain an irrefutable

public image, where the customers are equally treated. Also the Bank has integrated a staff

rating system, which gives the consumer a platform to state their level of satisfaction of the

services accessed (Klefsjö et al., 2008). Although with the annual replenishing of the

services, the customers are highly satisfied since there is room for more amendments by both

the staff and the consumer. However, the high number if visibility has necessitated for high

investment that the firm has to endure, including sustenance of the competitive advantage and

attainability of the operational cost (Kannan and& Tan, 2005).

2.2. Operational performance objectives and operations strategy Co-operative Bank

The operational strategy encompasses all the tactical decisions and practices that are in place

to the role, objectives and the operations that are active (Cowling et al., 2008). Hence, the

operative purposes (objectives) form the operation strategy as component and for the bank, it

is mostly directed to the rates and the cost of services, service quality, service delivery and

the flexibility (Seity et al., 2011).

Quality of the service

This aim of the Cooperative Bank is that it ought to offer satisfactory services to the

consumers, both external and internal (Neville and& Menguc, 2006). The firm has integrated

the Quadrant Team and Performance Evaluation. These schemes contribute the validation of

the loop holes and the strong areas in the services provision (Kannan and& Tan, 2005). Not

only has it helped in the performance validation, but the technique has additionally helped the

company to debate and ensure proper allocation of the staff, thus improving the service
offering (Fonteyne, 2007). The merge of the Quadrant Team has also enabled the company in

colour coding, which each team is guided by a specific purpose and objective as allocated by

the management (Seity et al., 2011). Additionally, as to improve the loop holes the company

has integrated a platform where by the consumer can make any suggestion, located at the

official website.

The cost and rates on services

This is a core factor to be considered in the operational sustainability and maintaining of the

competitive advantage. In the banking industry, rates are the core factor the consumer

consider before enrolment (Cowling et al., 2008). More so, the cost assures enhancement of

the potential target to increase the administrative structure. The co-operative Bank sustains

the low rates for the service provision and the transaction (Espino-Rodrı́guez and& Padrón-

Robaina, 2004). The firm has been able to set reasonable rates of the services, because of the

inflation rates in various regions, which enables a quick response to the demand of service

and sustainability of the range of dividends (Seity et al., 2011).

Service delivery

Service delivery is highly dictated by the highest level of dependency and speed of the

service (Kannan and& Tan, 2005).

Dependency: In the operational content, this means the scheduling and structuring of the

entire organisation so as to deliver the services regardless of time and place (Neville and&

Menguc, 2006). To achieve this, the Bank has assimilated the schemes that allow fast

delivery of services, such as activating a 24 hours’ system service (Hall and& Martin, 2005).

For instance, the company has activated an online service whereby the consumer can access

their personal bank accounts at any time without any hitches. Consequently, this has

enhanced the high rate of dependency of the consumer to the Bank (Klefsjö et al., 2008).
Speed: this refers to the time frame between when the consumer order for the service to the

time the order is executed. This objective highly influences the consumers rating of the Bank.

More so, it influences the decision making structure, as the rate of the output is dictated by

the rate of input. The banking industry is one of the most competitive, thus Co-operative

Bank, has assimilated use of technology in the acceleration of the speed (Kannan and& Tan,

2005). For instance, the website is subscribed to a host that has enabled it to manage high

number if traffic, this assures the top managers a wide coverage of the consumers at the

fastest speeds (Espino-Rodrı́guez and& Padrón-Robaina, 2004).

Flexibility

This is the ability of the firm to change. More so, how far can the firm diversify, in relation to

the service offered regarding to the consumer needs. The industry of banking is highly

volatile in demand (Neely, 2002). This makes the services provider in the domain approach

the need in various ways. Unlike other banks, Co-operative bank has assimilated the

personalisation technique (Seity et al., 2011). The company has integrated an initiative

namely, Engaging Everyone. The initiative necessitates for the involvement every person in

the decision making process and in order to achieve this, the company has ensured the

development of various initiatives that speed up the process of understanding the needs of the

consumer (Espino-Rodrı́guez and& Padrón-Robaina, 2004). Consequently, the firm has

grown prone to customer dissatisfaction (Sheu et al., 2005). Additionally, this scheme has

made the company more diversified as the company has the capability to adapt to situation of

the market endeavours.

3. Stakeholders and quality management challenges posed by the Bank’s current

ethical policy

3.1. Shareholders

The Co-operative Bank is the largest cooperation as the company is owned by eight million

British consumers (Hall and& Martin, 2005; Neely, 2002). The shareholders are said to be a

party of interested individuals in the company a can be affected or they can impact the

bossiness activities. The shareholders are divided into external and internal shareholders.

Consequently, due to the number of huge number of shareholders, the company may

experience numerous challenges. This is often caused as the company face misalignment of

the goals of the stake holders (Kannan and& Tan, 2005). For instance, in the cooperative

bank ethics such as the Ethical Products and Services, the firm supports any activity that will

aid the society to attain any service regardless of their position in the society (Birchall and&

Ketilson, 2009). This has made the firm to be involved in a lot of the projects, whereby these

process are seen to be non-profit setting. Some of the projects are aimed at environmental

conservation and this also necessitates for expenditure as well (Neville and& Menguc, 2006).

This has drained most of the management quality as there are threats of withdrawal of the

shareholders, whose objectives differs from the rest (Klefsjö et al., 2008).

3.2. Customers

The bank hosts over five million bank accounts, which comprise of personal and co-operative

accounts (Seity et al., 2011). The consumers in this context are the recipients of the services.

The company has an array of services that are to entice the consumer’s trust. With the Ethical

Campaign, the company believes that it can make the biggest difference in the society

(Espino-Rodrı́guez and& Padrón-Robaina, 2004). This gives the company a stand whereby it

contributes a lot to giving back to the society. However, this scheme makes the company
prone to failure, in that the company has to outstand other companies in the projects (Sheu et

al., 2005). The partners are involved in the Brand marketing, and this affects the rate of

marketing, thus the quality management.

3.3. Staff and their families

The company has embarked on employing staff regardless of their background, which makes

it an employer to over four thousand employees. The company has impacted thousands of

families in various projects (Klefsjö et al., 2008). For example, in the Co-operative setting,

the Ethical Workplace and Culture, is an ethical stand that has allowed accommodation of the

individuals of different backgrounds added to the workforce. This has benefited the

consumers as they are served differently (Neville and & Menguc, 2006). However, top

management is deprived of the quality management traits, for the diversity emanated a lot of

uncontrolled conflicts among the staff. Moreover, there is segmentation based on the ethnic

forces among the staff. The company is seen to face the segmentation especially in the lower

levels of the management (Hall and& Martin, 2005; Swink et al., 2007).

3.4. Suppliers

The bank is being affiliated with various companies which has enabled it to expand its supply

chain in various regions. It has integrated a tendering system, like the paper company to

supply the cheque books (Seity et al., 2011). The Bank has been able to acquire status of the

supplier especially to the managed companies. The supply chain of the company has been

affiliated with four hundred and eighty companies as either the supplier or the recipient

(Fonteyne, 2007). For instance, Cooperative Bank ethical credentials, ensures it is not

affiliated with any kind of company that may be involved in the violation of the human

rights. This ethical disclaimer has made a frozen stalemate to most of the relations the

company was involved in, hence affecting the retail consumers’ response.
3.5. Local communities

The bank has special commitments to the society whereby it contributes to the wellbeing of

the society around it (Hesse and& Chaka, 2007). This has made then bank to outstand the

competitors though it carries along some challenges. With the Ethical Campaign, the

company believes that it can make the biggest difference in the society (Neville and&

Menguc, 2006). This scheme makes the company prone to failure, in that the company has to

outstand other companies in the projects assistance (Hall and& Martin, 2005; Hesse and&

Cihak, 2007). The partners are involved in the brand marketing, and this has affected the rate

of marketing, thus the quality management (Hesse and& Cihak, 2007).

3.6. National and International Society

The company is multinational one, hence it has the duty to consider all the laws that they are

upheld by the company (Seity et al., 2011). As an ethical company, it has to consider all the

affiliations it is engaged with, for instance, the management may be affected by this as there

many variations in the regions. This makes the company prone to a lot of managerial

challenges that are brought about by the variation in region, such as observing rules and

regulations, and adhering to set requirements (Swink et al., 2007).

3.7. Past and Future Generations of Co-operator

The company has integrated the application of technology that has enticed the young

generation and the elderly. The past of the company is archived in various repositories

showing the ethnicity of the company’s transparency. This has enabled access of the old and

recent data. The company’s transparency has led to mismanagement as some of the data is

not inaccurate, or misuse of the information.

4. Four stakeholders and significant information

4.1. Customers

Customers are the market backbone of the service providing nature of the company.

Consequently, the information that is needed is the market insight that will develop the

approach of the operational system to be adapted (Neville and& Menguc, 2006). The

information that will come from the consumers is ought to shape the strategy that will be

implemented by the company (Swink et al., 2007). Usually, when the Bank attains the

information, they share the knowledge the websites. Occasionally, the firm hosts conferences

that helps in the diffusion of the knowledge (Welz & Wilhelm-Rechman, 2008). As to

deliver quality services to the partner the company has to able to gain the advantage

technique that will keep the company a step ahead in the quality service provision.

4.2. Suppliers

Important information that will affect the operating strategy is the information on the price of

production and the cost of services (Sheu et al., 2005). This information affects the operations

strategy that is to be put in place in that if the service offered is expensive this automatically

influences cost of operation. Often, in tendering situation the Bank imparts the information

on the standardisers, which the selected product should qualify. This helps in the selection

and grading of various companies (Swink et al., 2007) For instance, if the cost of operation of

a particular supplier of paper is high the cost of paper services is automatically raised to cover

the cost of operation. The Bank, has opted to consider the supply chain before the enactment

of the tenders (Hall and& Martin, 2005).

4.3. Staff and their families

The recruitment process is a sensitive process as it demands the integration of an individual

in the workforce, and if the person has contagious trait he/she may carry along it to the other
staff (Klefsjö et al., 2008). The firm often demands for the background check as the person

may have undesirable traits like poor team working capabilities. Prior to the process, the bank

has the duty to inform the public about the available vacancies and expose the individual who

are to leave the workforce, this helps in the termination of fraud instances (Seity et al., 2011).

This may not be indicated on the resume, though it plays an important role, in the execution

of the company’s objectives. This makes the selection process more accurate thus the getting

closer in the attainment of the companies aims.

4.4. Shareholders

Information has significant relevance both to the shareholder and the Bank. As such, the bank

needs to create a platform, whereby it can access the objectives of the shareholder as they

vary with time (Neville and& Menguc, 2006). This helps the bank to monitor the changing

objectives of each stakeholder as this influences the approach the firm to integrate in

pursuance of the quality management under the operational strategy (Hall and& Martin,

2005). The information needed by the Bank to attain this is views on the firm’s objectives

and operations. If the stakeholders are to disregard the operations, they are to be changed and

so as the objectives (Fonteyne, 2007). The bank has a key role in sharing the knowledge of

changing the operations and the objectives, prior to the amendments the bank ought to inform

the stakeholders and the public (Goddard et al., 2004; Hall & Martin, 2005).

5. Conclusion and Recommendations

The Cooperative Bank is one of the main thriving companies as a result of cooperation. The

company has integrated various activities that have enabled it to sustain all the consumers and

the rapid development. The flexibility of the company is rated to be the high.

The company faces a number of challenges driven by the ethical forces with regards to its

partners. Therefore, it should adapt the ethical system whereby it accommodates all the
partners with an aim of eliminating all issues the company is encountering. The ethical

approaches should reduce the level of rigidness accommodate the loop hole it creates in the

execution of the services. In conclusion, the operability of the company is high as it has

successfully outlined strategies that are expected to cover the challenges it encounters. The

satisfaction of the consumers is maintained by the company and regardless the region, the

company has been able to outstand all the competitors.

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operational objectives and performance: a study of hotels in the Canary Islands. International

Journal of Hospitality Management, 23(3), pp.287-306

Fonteyne, M.W., 2007. Cooperative banks in Europe: policy issues (No. 7-159). International

Monetary Fund.

Goddard, J., Molyneux, P. and Wilson, J.O., 2004. The profitability of European banks: a

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