METHODOLOGY

The case studies will be compiled from information gathered on both

companies through senior managers and junior staff. The idea is to
have perspectives from those persons integral to the decision-making
process as well as those directly affected by these decisions.

The data will be analysed and a PESTEL analysis done to determine the
major environmental factors, the impact on the organisation and the
effectiveness of the responses to the respective changes.

A summary comparing both organisations determining similarities and

differences will be outlined and we will identify the type of approach
both companies have adopted.
Historical Background

Scotia Group Ltd.

Bank of Nova Scotia Jamaica Ltd. began in 1889, 120 years ago with
their head office in Canada and one Kingston office. Today it boasts
42 branches island wide and the largest ATM network in the island. It
has grown consistently since 1889, changing with the times and
adapting to the prevailing cultures of the land. Scotiabank Jamaica
operates in a competitive environment and has been championed as
the Bank of the Year for 3 consecutive years.

Core business lines comprise Corporate and Commercial Banking,

Retail Banking, Small Business Banking, Wealth Management,
Insurance and Mortgages. All these services are provided to the
Jamaican populace through the Branch networks and respective
subsidiary offices islandwide which are equipped with professional,
courteous and expert staff. In October 2006, Scotiabank Jamaica
announced its intentions to acquire DBG. The merger was successful
and in 2008, the name was changed to Scotia DBG. This move
strengthened the wealth management arm of the Bank and broadened
the customer base significantly. It also played a pivotal role in the
renaming of the Group to Scotia Group Jamaica Ltd. which according to
then CEO Bill Clarke sped up the acquisition process.

In 1998 the Scotiabank foundation was formed out of a desire to give

back to the Jamaican public. The startup endowment of J$100 million
now stands at J$284 million. The core principles of the foundation
include assisting economically and socially disadvantaged Jamaicans in
the alleviation of poverty, deprivation and distress. The foundation is
also committed to understanding and addressing the root causes of
these ills. Areas of Health, Education and Community Outreach have
benefitted greatly from the SJF to a tune of $J362 million with some
projects receiving annual donations in the millions.

In 2004, total number of employees was about 2100, 250 of which

were contractors while the remaining 1850 were complement staff.
The current staff complement now stands at 2251 which includes
Scotia DBG staff. For the last five years, 70% of the staff is female and
30% male.

According to former CEO Bill Clarke, “Our record results remain

grounded in our core strengths, and focused on sound fundamentals –
solid execution of our plans, careful management of risks and
expenses, and a total commitment to customer satisfaction.”

The Bank of Nova Scotia Jamaica Limited

Bruce Bowen
President & Chief Executive Officer

The Scotia Jamaica Building Society

Gladstone Whitelocke
Vice President & General Manager

Scotia Jamaica Life Insurance Company Limited

Mrs. Jacqueline Sharp (ACTING)
Vice President & General Manager

Scotia DBG Investments Limited

Miss Anya Schnoor
President & Chief Executive Officer
HISTORICAL BACKGROUND

J. WRAY & NEPHEW LTD.

Wray & Nephew is the oldest company in Jamaica, a hallmark of
excellence since 1825 and its name synonymous with the blending
and marketing of the finest rums to over sixty countries around the
world.

The headquarters of the company is in Kingston, Jamaica and

occupies 28.8 hectares on both sides of the Spanish Town Road, the
main industrial artery of the island’s capital. The complex houses
the company’s corporate centre, state of the art laboratories,
warehouses and blending & bottling facilities in one of the most
extensive and modern industrial parks in the Caribbean.

The company’s over 3000 employees represent an impressive

range of skills in the art of making and marketing rums, wines and
spirits as can be found anywhere in the world. The company is as
proud of the high calibre of its people as it is of the quality of its
products.

Wray & Nephew is a major agro-industrial enterprise, operating

three large estates, namely Appleton, Holland and New Yarmouth
estates. Appleton- one of the most beautiful estates in Jamaica,
provides the basis for the company’s great rums. It is also the
focus of the company’s involvement in tourism, the centrepiece of a
tour that gives visitors to the island a chance to visit the distillery
sampling the wonderful rums made by Wray & Nephew.

In addition to rum, Wray & Nephew produces, under licence, a wide

range of wines and other spirits, including a number of well-known
international brands. Among these are Smirnoff Vodka, Bols
Liqueurs, Gilbey’s Gin and Stone’s Ginger Wine.

In 1992 the company established a subsidiary in the United

Kingdom, J. Wray & Nephew (U.K.) Limited, with head offices in
London, bringing its services closer to its growing market in Britain
and Europe.
PESTEL ANALYSIS FOR SCOTIA GROUP JAMAICA LTD.

POLITICAL

In 2007, the passing of political baton from PNP to JLP saw a change in
policies that affected Scotiabank both positively and negatively. An
increase in commercial banks’ reserve requirements by Bank Of
Jamaica (BOJ) in December 2008 reduced the total amount that the
lending institutions could distribute as loan funds. This change
impacted the Bank’s bottom line in terms of earnings which resulted in
the institution adopting more cost control measures to replace the fall
in revenue. As a result, staff was encouraged to support the cost-
cutting measures implemented in order to improve efficiencies. Buy-in
was had from all units and subsidiaries and incentives given to those
branches that saw a reduction in expenses. On a wide scale however
plans are made to be robust across changing political administrations,
and as an institution that has ninety per cent of government’s
accounts there has been no material impact.

ECONOMIC
The most significant economic impact over the last five years is the
current global recession. One positive effect on the organisation is
that there has been an inflow of clients from competitors as well as
from those institutions perceived to be financially weak. On the other
hand, the resultant increase in unemployment has meant an inability
on the part of affected customers to make loan payments and invest
funds, thereby resulting in a high debt portfolio. Customers have
shifted their disposable income to higher “priority ones”. In order to
stem the growth of the debt portfolio, the Bank proactively employed
the Customer Assistance Program (CAP) which sought to alleviate loan
payments for qualified customers over a twelve month period. CAP
was rolled out to retail and commercial customers and was aimed at
reducing monthly payments and easing the debt burden for clients.
Another strategy employed involved reduction in base lending rates to
stimulate growth in the productive sector. This move engendered
loyalty and trust from staff and customers alike and further cemented
Scotiabank’s position as the leading institution of choice.

The global economic recession exposes the organisation and forces

senior management to make prudent decisions that facilitates efficient
and effective organisational structures. It is a given that the economy
will grow at any robust pace once the global recession abates, but the
company continuously changes its organizational structure to make it
more closely aligned with the expected growth areas. Management of
the organisation has benefitted somewhat from the global recession in
that it enhanced management practices since there is a vigilant
attempt to remain competitive and stay ahead of the game by
employing best practices to reduce costs and improve service and
profitability levels. Learning acquired from failed institutions and
markets are valuable in helping them steer clear of certain strategies.

The labour market is vibrant as many companies have been laying off
workers making available a rich and diverse talent pool. Excellent
Jamaican talent that had gone abroad to study and work are returning
home to seek local opportunities due to the fall out in the international
market. While this is a good thing for those seeking talent, the
employment level within Scotiabank has remained stable and there
has even been a cap on hiring in response to the global recession.

SOCIAL
Greater consumerism has resulted in a larger appetite for consumer
loans over the last five years. The nation’s streets are flooded with
cars as persons standard of living has risen to some measure making
certain things more available to the common man. Credit cards are
hotly pursued as customers seek to cash in on extended credit not
minding the high interest rates to be applied when these cards are not
properly managed. The demand for greater explanation on fees /
charges has also arisen, causing the bank to go back to the drawing
board to ensure that the rationale for every fee adjustment can be
easily explained by staff. Therefore, some fee adjustments have had
to be delayed, negatively impacting our Non-Interest Revenue growth.

A remarkably well educated and more sophisticated workforce is

available at Scotiabank. A high percentage of the employees have a
University level education. A plethora of educational institutions have
come on the scene to prepare individuals for better job opportunities.
Staff is encouraged to develop themselves and further their education
and Scotiabank through its Training and Development Centre provides
training and other various means of support to enable them to achieve
their goals.

Greater awareness of work-life balances in developed countries has

resulted in fewer people willing to go beyond the call of duty (e.g.
overtime, weekend work, etc.). The cable revolution has created a
more materialistic culture where young adults expect to gain the
various trappings within a few years on entering the workforce.
Therefore, there are increased incidences of frauds, geared at
accelerating this time-line. The company has made many adjustments
in its internal audit and operation management division in an attempt
to decrease or eradicate fraudulent activities.

Dress codes have been adjusted and new standards of dress

introduced for all classes of staff as a result of shifts in societal norms.
The bank has a reputation for professionalism and in the recent past
has had to realign its position on staff deportment in order to protect
and preserve its image. This approach has worked in favor of the bank
as generally staff complies.

TECHNOLOGICAL
Technology has been an ally, as this has served as the launching pad
for many of Scotibank’s alternate service delivery channels for its
products. Internet has also been an ally and as such many manuals
and other learning aids have been implemented and are available to
staff anytime. There are plans to better exploit the e-commerce
market and the bank’s data-mining capabilities have increased
significantly, based on its ability to better utilize information in its
database.
The International Banking Platform was introduced in 2005 which has
seen much advancement and has benefitted the Bank in terms of
improving sales and service delivery. Plans are currently afoot to make
signature cards available online for easy reference across the Branch
network. This should improve service delivery and reduce wait time
for customers in branches as the demand for higher turn-around time
at service delivery points from the younger generation have been the
most impactful. Scotiabank has been improving its alternative delivery
channels such as ATMs, internet banking and telephone banking while
staying ahead of technological advances.

Scotiabank is now able to better differentiate the type of service to

different customer segments. Its approach to communication has
changed as the bank is now up-front-and-centre in: (1) quickly
informing the public of product innovations, and (2) offering economic
and investment advice.

ENVIRONMENTAL
An increase in the proportion of the staff having completed higher
levels of studies has enabled Scotiabank to better engage customers
on a variety of current issues. However, there is also a greater level of
restlessness among staff for promotions. The Viewpoint survey is one
tool that is used to assess the performance of managers and
supervisors and is completed by incumbents and junior staff. This
report gives a clear indication of how staff members feel about their
jobs and work environment.
LEGAL
The introduction of the Proceeds of Crime Act has significantly
changed the landscape of how transactions are processed and on how
funds are received by the Bank. It is now incumbent on the staff to
ensure due diligence is exercised when gathering sensitive details
such as source of funds and verifying customer identity. This has
caused a certain amount of apprehension among the staff and the
natural tendency to pass the buck is even more pronounced as
persons respond by shirking this responsibility and referring unusual
transactions to Compliance officers and supervisors.

PESTEL ANALYSIS FOR J. WRAY & NEPHEW

J. Wray & Nephew Limited, like many other organisations, has been
subjected to many external environmental factors. These factors are
large in number, but our analysis will only allow us to examine a few of
the most significant ones. The information was gathered using the
PESTEL technique. Questionnaires were created and circulated to (1)
the Managing Director of the Global Marketing Division (2) the
Manager of the Corporate Affairs Division and (3) the Manager of the
Human Resource Development department. The questionnaires were
designed to identify the most significant environmental functions
influencing the company, and how the company reacted to these
changes to remain competitive and take advantage of the
opportunities.

POLITICAL
The global financial meltdown has been cited as the most significant
change to affect the company in the last five years. This crisis has
affected J. Wray & Nephew in many ways. Distributors for their
products overseas have had to adjust the way they conduct their
businesses: lowering inventory levels as cash becomes scarce. This
has impacted the sales of the company adversely. In order to maintain
sales targets the company has had to work with their distributors to
ensure that their orders, when placed, go out in a timely fashion and
most efficiently.

The crisis has also affected supplies coming into the island. The
company has run out of inputs sometimes e.g. glass, caps, labels etc.,
causing production to shut down and more critically, causing stock out
for certain local products. To eradicate this problem, saw Wray&
Nephew increasing the number of suppliers for certain inputs.

The change in government has also impacted the company. The

company decided to acquire land from the government in order to
cultivate more cane for the production of rum. The negotiation started
with the previous government but the current government has not
taken a decision on that matter.
Our research on this issue led us to deduce that the recent acquisition
of the Lascelles DeMerdcado Group by Trinidadian interests may be
the reason behind the delay.

ECONOMIC
Operations in the current recession have been challenging. J. Wray &
Nephew Ltd. has taken the position to avoid debt. The organisation
focuses more on optimizing cash and monitoring closer the cash cycle
in order to restrict the need to borrow. The company has also become
more aggressive in capitalizing on opportunities.
The recession has required that organisational structures be
scrutinized for inefficiencies. Restructuring has become necessary and
a number of jobs have been outsourced. Roles have also been
consolidated.

J. Wray & Nephew has been affected both positively and negatively by
taxation. The company benefit from the roll back of the 2% customs
user fees. On the other hand, the government increased the special
consumption tax on under proof rums by 1%. The net effect is positive
as the roll back in user fees has positively impacted the bottom line
and the company took the decision not to increase product prices
based on the increase in the Special Consumption Tax.

SOCIAL
Consumers both locally and internationally have become more
interested in premium rums highlighting the quality of rum and its
ability to compete for market share with other premium categories
such as whisky and cognac.
Employees buoyed by their own involvement in new product
development and launch (Jagra), continue to give tremendous support
to the successful marketing and distribution of the brand.
J. Wray & Nephew Ltd has always advocated for continuing education
for its staff. Their new performance appraisal scheme is heavily
weighted on development of their staff.

TECHNOLOGICAL

Technology has allowed J. Wray & Nephew Ltd. to become more

efficient at forecasting, conversion, warehousing and order processing.
Internet technology has been used to market their products globally as
well as connecting global partners with online forecasting.

Protection for intellectual property, particularly in the case of brand

Jamaica, has been below expectations. There are cases of products
being sold bearing the name Jamaica, but made outside Jamaica. Label
standards are not being enforced. Where possible, the legal team at J.
Wray & Nephew Ltd. has been vigilant in terms of protecting its own
intellectual property (brands of J. Wray & Nephew Ltd.).

ENVIRONMENTAL
The managing director states that “over the past five years the
management style has become very empowering”. A more open
approach has been employed. The recently concluded job evaluation
exercise highlighted fairness and openness to the employees. There
has also been more interaction between senior management and all
employees at the social level.

Over the past 2 years, the company introduced a new mission

statement, motto and core values “SPIRIT”. This has changed the
culture of the organisation as emphasis and reinforcement is placed on
living these ‘values’. A number of new initiatives have been
implemented including departmental recognition awards.

Based on information on the ground, staff morale has fallen due to

recent challenges with the Industrial Disputes Tribunal regarding the
retrenchment of 40 employees. The general uncertainty in the
economy has also contributed to the perceived fall off. The
employment of the Employment Engagement Manager is expected to
create new programmes to rebuild staff morale.

LEGAL
Labour Relations and Industrial Disputes Act – Provision for 21 days
notice to the Ministry for redundancy.

SUMMARY

For any organization to succeed and meet its goals it must not only
consider its internal environment but must also be aware of the
external factors which have a direct impact on its operations. A
comprehensive review of both companies reveals one striking
similarity: that of their customer-centric nature. However it is unfair
to compare both without first identifying the type of production or
transformation activities that determine the end product.

JWN is vertically integrated so nothing is wasted in its production cycle.

They have now become more attuned to customers: an end which was
triggered by maturing of production technologies. At Wray and
Nephew, a manufacturing company where the end product is a
tangible good, the organizational structure is top-down and focuses on
tasks whereas in the banking industry, the organisational structure is
less hierarchical and service is the end product. We recognise that the
relevance of the organisation depends on consumer demand. In that
regard, the processes through technology have been aligned to make
the production and distribution cycle (route to market) reactive to the
customers’ needs. Relationship-focused strategies are employed
thereby the organisation has evolved from classical approach to open-
systems approach.

Scotiabank on the other hand provides intangible goods and services

where the transformation process is focused on being customer
centric.

Scotiabank and JWN are very proactive in identifying the needs of their
customers, exercise prudent corporate responsibility, are intone with
staff and the internal organisation and generally respond similar to the
major changes affecting the respective organisations. Both companies
have displayed the characteristics of an open systems approach to
how the respective organisations are governed.
 Appendix
1. Sample of questionnaire used to gather information
We are research students reading for our Masters Degree at the University
of the West Indies. We are currently studying Organisational Behavior for
which two case studies are being prepared. We seek your assistance in
completing this survey which seeks to determine how dependent an
organisation and its subsystems are on its internal and external
environment.
The questionnaire is divided into the 6 major external factors which affect
every organisation (PESTEL analysis).

Political
1. What is your role at Bank of Nova Scotia Ltd.?

_______________________________________________________________________
_______________________________________________________________________
______________
2. What major environmental changes, internal or external, have
impacted Bank of Nova Scotia Ltd. over the past five years?
 _______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
____________________________
3. How has the change in government and the resultant changes in
policies impacted Bank of Nova Scotia Ltd.?

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
____________________________

Economic
1. How has the current economic recession affected:

(i) The organisation

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(ii) Management of the organisation

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iii)Management/organisational structures
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iv) Employment Levels

_________________________________________________________________
_________________________________________________________________
 _________________________________________________________________
_____________________

2. How Has Bank of Nova Scotia Ltd. been affected by:

(i) Taxation
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(ii) Market route and distribution

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iii) Inflation

_________________________________________________________________
_______
_________________________________________________________________
_______
_________________________________________________________________
_______

(iv) Interest rates and exchange rates

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(v) Change in Consumer Spending

_________________________________________________________________
_________________________________________________________________
 _________________________________________________________________
_____________________

Social
1. Over the past 5 years, what social changes have had the most impact
on your organisation?

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________
How have the following societal changes affected your
organisation?

(i) Consumer attitude and opinion

_________________________________________________________________
_________________________________________________________________
______________

(ii) Education at the workplace

_________________________________________________________________
_________________________________________________________________
______________

(iii)Attitude to work
_________________________________________________________________
_________________________________________________________________
______________

(iv) Shift in values and culture

_________________________________________________________________
_________________________________________________________________
______________
Technological
1. How has technology improved/impeded growth at Bank of Nova Scotia
Ltd. over the past 5 years in respect of:

(i) Information technology

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(ii) Internet (e-commerce, e-learning)

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iii)Intellectual property issues

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iv) Information & communications

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

Legal

1. Have there been any legal changes in the past 5 years relating to:

(i) Employment laws

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
 _________________________________________________________________
____________________________

(ii) Industry specific regulations

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

Environmental
1. What is Scotiabank doing differently over the past 5yrs in terms of:

(i) Management style

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(ii) Organisational culture

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iii)Staff morale
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
____________________________

(iv) Management Structure

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_____________________

(v) Organisational Structure

_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_____________________

References