Operations relationships in the
ny organization, however large or small, only thrives if there is a
sense of purpose, pride and contentment prevailing across it.
This idyllic situation is unlikely to be there on a constant or
permanent basis and will fluctuate as pressures and changes routinely
occur. Nevertheless a carefully structured organization that recog-
nizes the collective as well as individual input and issues is more likely
to be successful, and more likely to overcome short-term problems
than a disjointed group or business units however talented they may
In the financial markets there is an environment that presents a very
real challenge to the managers. There is a mystique about money and
the financial markets in general often enhanced by both the positive
thought of being at the very heart of the financial process that drives
the domestic and global economy and the negative publicity of events
such as the Mirror Group pension scandal and rogue traders and
spectacular collapses of firms such as Enron. Then there are also the
highly publicized mega-salaries that can be earned. There is also a
variable level of business influenced by the economic outlook of
countries and continents that leads to often very long hours being
worked by many in what is a complex and diverse industry. Money,
and how it works, is intriguing to everyone so this volatile cocktail
makes the financial markets an exciting and potentially hugely
rewarding occupation and attracts recruits from a wide-ranging
background. In reality there is a lot of routine, some very tired people
and not always the golden egg everyone assumes there will be. This
environment described above also includes a whole plethora of mini-
challenges that make relationship management one of the most
important roles of the Operations manager.
Structures and relationships
As we have already said, there are no set structures for organizations
although different types of businesses will have generic structures. A
retail bank has a structure quite different from that of a merchant
bank and where financial markets are de-regulated and we have
investment banks there will be several different structures within the
same organization. Although structures may differ, the functions at a
high level do not and so we can have the type of generic structure we
looked at in Chapter 1.
Simplistically we have a dealing, investment or trading function or
functions and a support function. Within the dealing, investment and
trading function, or ‘front office’ as it is usually termed, we have
principal and client activity. The client activity may be further broken
down into institutional clients, private clients, corporate clients and
retail (see Figures 2.1 and 2.2).
We can look at a hypothetical structure in a global investment bank,
Global Bank Inc., to illustrate the complex nature of the business and
how the structure within the bank creates a series of support or
Operations functions. Structures are usually vertical or horizontal
and are related to considerations such as product, client, market,
Relationship and Resource Management in Operations18
Figure 2.1 Principal trading structure
Relationship and Resource Management in Operations20
geographical location, etc. A head office or similarly termed function
will exist and, depending on the diversity of the company’s business
and its global reach, there will be one or more branch, subsidiary or
part-owned businesses in other locations. If you get hold of a copy of
a major bank’s Annual Report you will see just how many branch and/
or subsidiaries and part-owned businesses make up the ‘Group’.
Many of these companies are established for legal or tax reasons.
Some are directly controlled from the head office, others are semi-
autonomous and occasionally fully autonomous. The amount of
interaction between these various companies may be significant or
non-existent. The core business functions do interact: for instance,
the fund management business will often utilize various services and
products supplied by the principal trading arm of the group such as
research or administration.
Within Global Bank Inc. there are several key business areas:
䊏 Sales – Retail
䊏 Sales – Institutional
䊏 Corporate Finance
䊏 Operations and Administration
Figure 2.2 Client/retail structure
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