BANK OF ABYSSINIA

ORGANIZATIONAL DESIGN AND STRUCTURE

ANALYSIS

Introduction:
In this assignment, we will delve into an overview of
the Bank of Abyssinia, a prominent financial institution in Ethiopia. The
objectives of this assignment include analyzing the bank's historical background,
its current status, key financial figures, service infrastructure, corporate social
responsibility initiatives, strategic partnerships, and its current capital situation.

Importance of Organizational Design and Structure in Shaping Organizational Behavior:

Organizational design and structure play a crucial role in shaping the behavior and performance
of any organization, including banks like the Bank of Abyssinia. Here's why:

Clarity of Roles and Responsibilities: A well-defined organizational structure clarifies the

roles and responsibilities of individuals within the bank. This clarity helps in improving
coordination, reducing conflicts, and enhancing overall efficiency.

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  Communication Channels: Organizational design determines the flow of communication
within the bank. An effective communication structure facilitates the dissemination
of information, fosters collaboration, and ensures timely decision-making.
 Adaptability and Innovation: The design of an organization influences its ability to adapt
to changes in the external environment and promotes innovation internally. Flexible
structures encourage experimentation and creativity, essential for banks operating in
dynamic and competitive markets.
 Resource Allocation: Organizational structure dictates how resources are allocated
within the bank. A well-designed structure ensures optimal resource
utilization, maximizes productivity, and supports strategic goals and initiatives.
 Employee Morale and Engagement: The design of an organization impacts
employee morale and engagement. A supportive structure that provides opportunities
for growth, recognition, and involvement in decision-making fosters a positive
work culture and enhances employee satisfaction.
 Customer Focus: Organizational design influences the bank's ability to deliver value to
its customers. Customer-centric structures prioritize customer needs and preferences,
leading to improved service quality and customer satisfaction.

Overview of the Organization

Introduction to the Bank of Abyssinia:

The Bank of Abyssinia, originally established in 1905 as the Bank of Ethiopia, is one
of Ethiopia's oldest and most prominent private financial institutions. It plays a pivotal
role in the country's banking sector, offering a wide range of financial products and
services to both individual and corporate clients.

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Industry it operates in:
The Bank of Abyssinia operates in the banking and financial services industry within Ethiopia. It
provides banking solutions such as savings accounts, loans, investments, and other
financial products to meet the diverse needs of its customers.

Historical background:
Founded in 1905 as the Bank of Ethiopia, the institution was inaugurated officially in 1906 under
the patronage of Emperor Menelik II, marking its significance as a cornerstone of
Ethiopia's banking sector. Over the years, the bank has undergone various transformations,
including a period of nationalization under the Derg government in the mid-20th century. It
emerged as a re- established private share company in 1996, reclaiming its status as a leading
player in Ethiopia's financial landscape.

Mission statement:
The mission of the Bank of Abyssinia is to drive economic growth and financial empowerment
within Ethiopia by providing innovative and trusted banking solutions. It aims to foster
sustainable development, promote financial inclusion, and contribute to the well-being of
the community.

Size:
Number of employees: The exact number of employees is not provided, but given the
extensive network of 901 branches across Ethiopia and its significant market presence, the bank
likely employs a substantial workforce.
Market presence: With its long history, extensive branch network, and diverse range of financial
products and services, the Bank of Abyssinia holds a prominent position in

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 Ethiopia's banking sector. It serves over 10.2 million customers and operates through 901
branches, indicating a widespread market presence and influence within the
country's financial landscape. Additionally, the bank's total assets amount to ETB 188.55
billion, reflecting its substantial market presence and influence.

of Abyssinia's Understanding of Organizational

Assessment of the Bank
Design and Structure

Assessing the Bank of Abyssinia's understanding of organizational design and structure requires
a comprehensive analysis of various aspects, including the methods employed for evaluation, the
perception of organizational design and structure concepts within the institution, the alignment of
design with strategic objectives, and the impact of design on organizational effectiveness. Let's
delve into each of these areas:

1. Evaluation Methods Employed:

The Bank of Abyssinia may utilize a variety of methods to evaluate its organizational design and
structure. These could include:

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  Interviews: Conducting interviews with key stakeholders, including top
management, department heads, and employees, to gather insights into their perceptions
of the current organizational setup.
 Surveys: Distributing surveys to employees at different levels to gauge their
understanding of the organizational structure, communication channels, and effectiveness
of workflows.
 Discussions: Hosting focus groups or brainstorming sessions to facilitate open dialogue
on organizational design challenges, opportunities for improvement, and alignment with
strategic goals.
 Analysis of Key Performance Indicators (KPIs): Reviewing KPIs related to operational
efficiency, employee satisfaction, customer service metrics, and financial performance to
assess the impact of organizational design on these areas.

2. Perception of Organizational Design and Structure Concepts:

It's essential to understand how employees perceive organizational design and structure
concepts within the Bank of Abyssinia. This involves evaluating:

 Clarity: Whether employees understand their roles, reporting relationships, and how their
work contributes to organizational goals.
 Flexibility: Perception of the organization's ability to adapt to changing market dynamics,
technological advancements, and customer needs.
 Communication: Effectiveness of communication channels within the organization,
including vertical and horizontal communication, and the accessibility of information.
 Collaboration: Views on teamwork, cross-functional collaboration, and the extent to
which silos hinder or facilitate organizational effectiveness.

3. Alignment of Design with Strategic Objectives:

 The effectiveness of organizational design depends on its alignment with the
bank's strategic objectives. This involves:
 Reviewing the bank's mission, vision, and strategic priorities to determine how
they influence organizational structure, processes, and resource allocation.

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  Assessing whether the current design facilitates the achievement of strategic goals, such
as market expansion, product innovation, customer satisfaction, and financial growth.
 Identifying any misalignments between organizational structure and strategic
priorities and developing strategies to address them, such as restructuring
departments or reallocating resources.

4. Impact of Design on Organizational Effectiveness:

Finally, it's crucial to evaluate how the design of the Bank of Abyssinia's organization
impacts its overall effectiveness:

 Operational Efficiency: Assessing whether the current structure enhances or hinders

operational efficiency, productivity, and cost-effectiveness.
 Employee Engagement and Satisfaction: Examining the relationship
between organizational design and employee morale, job satisfaction, retention rates, and
overall engagement.
 Customer Experience: Analyzing how the organizational structure influences the delivery
of products and services, customer interactions, and satisfaction levels.
 Financial Performance: Evaluating the correlation between organizational design and
financial metrics, such as revenue growth, profitability, and return on investment.

By conducting a thorough assessment using these methods and criteria, the Bank of
Abyssinia can gain valuable insights into its organizational design and structure,
identify areas for improvement, and make strategic adjustments to enhance its
effectiveness and achieve its long- term goals.

Key Organization Design Process for the Bank of Abyssinia:

1. Identification of Organizational Design Needs:

 The Bank of Abyssinia, as a prominent financial institution operating in Ethiopia,
continuously assesses its organizational structure to ensure alignment with its
strategic objectives and the dynamic external environment.

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  Identification of organizational design needs begins with a thorough analysis of internal
and external factors impacting the bank's operations, such as market trends,
regulatory requirements, technological advancements, and customer expectations.
 Through regular reviews and feedback mechanisms, the bank identifies areas
for improvement or adaptation within its organizational design to enhance
efficiency, innovation, and customer satisfaction.

2. Analysis of Structural Elements:

 Hierarchy: The bank likely maintains a hierarchical structure typical of large
financial institutions, with clear lines of authority and reporting. Departments may be
organized based on functions such as retail banking, corporate banking, risk
management, IT, human resources, and marketing.
 Specialization: Each department within the bank likely exhibits a high degree of
specialization to efficiently handle specific tasks and responsibilities. Specialization
ensures that employees possess the necessary expertise to deliver quality services in their
respective areas.
 Coordination Mechanisms: Given the bank's extensive branch network and diverse
service offerings, effective coordination mechanisms are crucial. This may involve
the use of cross-functional teams, regular communication channels, performance metrics,
and IT systems to facilitate collaboration and alignment across departments.

3. Decision-Making Process Regarding Design:

 The decision-making process for organizational design at the Bank of Abyssinia likely
involves multiple stakeholders, including senior management, department heads, and
possibly external consultants or advisors.
 Decisions regarding design changes are based on comprehensive assessments of current
organizational performance, future growth opportunities, industry best practices, and
regulatory requirements.
 Senior management plays a pivotal role in setting the strategic direction and priorities for
organizational design, while input from department heads and employees informs
specific structural adjustments to optimize operations and achieve strategic goals.

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4. Implementation Strategies:
 Implementation of organizational design changes requires careful planning and execution
to minimize disruption and maximize effectiveness.
 The Bank of Abyssinia may adopt a phased approach to implementation, starting
with pilot programs or specific departments before scaling changes across the
entire organization.
 Communication and training initiatives are essential to ensure that employees understand
the rationale behind design changes, their roles within the new structure, and any
associated procedural adjustments.
 Continuous monitoring and evaluation allow the bank to assess the impact of
design changes on key performance indicators, employee satisfaction, and customer
experience, enabling iterative improvements as needed.
 Leveraging technology, such as the T-24 core banking system, can streamline
implementation by automating processes, improving data visibility, and enhancing
operational efficiency across the organization.

Assessment of Types of Organization Structure at the Bank of Abyssinia

1. Current Organizational Structure Analysis:

The Bank of Abyssinia's current organizational structure embodies a hierarchical
model commonly found in large financial institutions. This hierarchical arrangement is
characterized by a tiered system of management, where authority and decision-making flow
from top executives at the apex down through various levels to branch managers at the
operational level. Such a structure ensures clear lines of authority, accountability, and
reporting, essential for managing the complexity inherent in the banking industry. At the top
of the hierarchy, executive leadership sets overarching strategic goals and provides guidance
for the bank's overall direction. This tier is typically comprised of roles such as the CEO,
board of directors, and executive management team, who are responsible for making high-
level decisions regarding the bank's operations, investments, and long-term vision.

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Beneath the executive level, the organizational structure of the Bank of Abyssinia likely
encompasses multiple departments, each specializing in distinct functions such as retail banking,
corporate banking, operations, risk management, and customer service. These departments
function as discrete units within the hierarchy, with their own respective managers overseeing
day-to-day operations and coordinating with other departments as needed. This
segmentation allows for specialized focus and expertise in different areas of banking,
optimizing efficiency and effectiveness in delivering services to customers. Additionally, it
facilitates the delegation of responsibilities and the efficient allocation of resources,
ensuring that each department contributes to the overall success of the bank while
maintaining alignment with strategic objectives.

Within each department, there may exist further subdivisions or teams organized according to
specific functions or product lines. For instance, the retail banking department may have separate
teams handling areas such as deposits, loans, mortgages, and wealth management. This granular
level of organization enables the Bank of Abyssinia to cater to diverse customer needs
and effectively manage the complexities associated with different types of financial
products and services. Moreover, the hierarchical structure fosters a framework for
communication, collaboration, and performance management, essential for driving
operational excellence and achieving the bank's overarching goals.

2. Strengths of the Structure:

a.Clear Chain of Command: The hierarchical structure provides clarity in roles and
responsibilities, ensuring that each employee knows whom to report to and who is responsible for
decision-making at various levels.

b.Efficient Decision-Making: With a clearly defined chain of command, decision-making

processes can be streamlined. Important decisions can be made swiftly by higher-
level management, while routine operational decisions can be handled at lower levels.

c.Specialization: The hierarchical structure allows for specialization within different

departments, enabling employees to focus on specific tasks and areas of expertise. This can lead
to increased efficiency and effectiveness in carrying out job responsibilities.

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d. Centralized Control: Centralized control inherent in this structure can lead to consistency in
policies, procedures, and operations across the organization, promoting uniformity and alignment
with organizational goals.

3.Weaknesses of the Structure:

a.Communication Barriers: In a hierarchical structure, communication tends to flow vertically,
often leading to delays or distortions as information moves up and down the chain of command.
Horizontal communication between departments may be limited, hindering collaboration
and knowledge sharing.

b.Bureaucracy: The hierarchical structure can sometimes lead to bureaucratic red tape, slowing
down decision-making processes and stifling innovation. Layers of management may
create administrative burdens and impede responsiveness to changes in the external environment.

c.Limited Flexibility: The rigid hierarchy may make it challenging for the organization to adapt
quickly to changing market conditions or customer needs. Decisions may need to be escalated
through multiple levels, resulting in slower responses to emerging opportunities or threats.

d.Potential for Micromanagement: In a hierarchical structure, there's a risk of

micromanagement, where higher-level managers excessively control and monitor the work
of subordinates. This can lead to reduced autonomy and morale among employees.

4. Relationship Between Structure and Organizational Goals, Communication,

Decision-Making, and Coordination:
a.Organizational Goals: The hierarchical structure can support the achievement of organizational
goals by providing a framework for accountability and alignment. Clear reporting lines ensure
that employees understand how their roles contribute to broader objectives.

b.Communication: While the hierarchical structure facilitates vertical communication,

efforts should be made to encourage horizontal communication between departments. Cross-
functional teams or regular meetings can help bridge communication gaps and foster
collaboration.

c.Decision-Making: The hierarchical structure influences decision-making by delineating

authority levels. Strategic decisions may be made by top management, while operational
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decisions are delegated to lower levels. Efforts to empower lower-level employees can enhance
agility in decision-making.

d.Coordination: Effective coordination is essential to ensure that different departments

work together harmoniously towards common goals. While the hierarchical structure
provides a framework for coordination, mechanisms such as cross-functional teams or
interdepartmental committees may be needed to facilitate collaboration and integration across the
organization.

Technology and Job Design Alignment

Technology and job design alignment within the Bank of Abyssinia plays a crucial role
in shaping the organization's overall structure and effectiveness. Here's a detailed evaluation of
how technology and job design are aligned within the bank, their relationship with
organizational effectiveness, and potential strategies for improvement if necessary.

Evaluation of Technology and Job Design Alignment:

1.T-24 Core Banking System: The utilization of the T-24 core banking system indicates a robust
technological infrastructure. This system likely facilitates various banking operations, including
customer accounts management, transactions processing, and data analytics. Job roles associated
with utilizing this system would involve banking operations specialists, IT professionals
for maintenance and troubleshooting, and customer service representatives.

2.Service Infrastructure: The extensive network of branches, ATM machines, virtual

banking centers, and POS terminals suggests a comprehensive approach to providing banking
services. Job designs within these facilities may include tellers, customer service
representatives, IT support staff, and security personnel. The technology deployed in these
locations, such as ATM machines and POS terminals, directly interacts with customer-facing
roles, emphasizing the importance of aligning job tasks with technological capabilities.

3.Capital Growth and Technological Investment: The significant increase in capital from ETB
50 million to ETB 18.59 billion demonstrates a commitment to investing in technological
advancements. This infusion of capital likely supports the adoption of new technologies,
software updates, and the implementation of digital banking solutions. Job roles affected
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by
these technological advancements may include digital banking specialists, software developers,
and cybersecurity experts.

Relationship between Technology, Job Design, and Organizational Effectiveness:

1.Efficiency and Productivity: Well-aligned technology and job design can enhance efficiency by
automating repetitive tasks and streamlining processes. For example, the T-24 core banking
system likely reduces manual data entry for employees, allowing them to focus on more value-
added tasks. This, in turn, contributes to higher productivity levels and smoother
operations across branches.

2.Customer Experience: Technology plays a crucial role in shaping the customer

experience within the banking sector. Job designs should ensure that employees are equipped to
leverage technological tools effectively to provide excellent service. For instance, customer
service representatives should be trained to assist customers with digital banking platforms,
enhancing overall satisfaction and loyalty.

3.Innovation and Adaptability: A well-aligned technology and job design framework

fosters innovation within the organization. Employees empowered with the right technological
tools and training are more likely to innovate and adapt to changing market dynamics. This
adaptability contributes to the bank's competitiveness and long-term sustainability.

Strategies for Improving Alignment if Necessary:

1.Training and Development Programs: Implement comprehensive training programs to ensure

employees have the necessary skills to leverage existing and emerging technologies effectively.
Continuous learning opportunities can help bridge any knowledge gaps and facilitate smoother
integration of technology into job roles.

2.Cross-Functional Collaboration: Foster collaboration between IT departments and

business units to ensure technology solutions are aligned with the specific needs and goals of
different job roles. Regular communication channels can facilitate feedback loops,
enabling timely adjustments to technology implementations as needed.

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3.Performance Metrics Alignment: Align performance metrics with technology adoption
and utilization. Recognize and reward employees who demonstrate proficiency in
utilizing technology to enhance job performance and achieve organizational objectives.

4.Feedback Mechanisms: Establish feedback mechanisms to gather insights from

employees regarding the usability and effectiveness of technological tools in their respective
roles. Actively soliciting feedback can uncover potential areas for improvement and inform
future technology investments.

5.Flexibility in Job Design: Maintain flexibility in job designs to accommodate technological

advancements and evolving customer preferences. Regularly review and update job roles
and responsibilities to ensure they remain aligned with the capabilities of existing technology.

Recommendations for Improvement

Based on the detailed analysis of the Bank of Abyssinia's current situation, here
are recommendations for improvement focusing on organizational design and structure,
alignment with strategic objectives, and an implementation plan:

1.Organizational Design and Structure Enhancement:

 Departmental Review: Conduct a comprehensive review of existing departments

and their roles to ensure alignment with strategic objectives. This includes
assessing the efficiency of each department in contributing to the bank's goals.
 Hierarchical Optimization: Streamline the hierarchical structure to improve
communication, decision-making, and agility within the organization. This may involve
reducing unnecessary layers of management to promote faster response times and
smoother workflow.
 Talent Development: Invest in talent development programs to enhance employee skills
and competencies. This can include leadership training, technical skill workshops,
and cross-functional training opportunities to foster a culture of continuous learning
and innovation.

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  Performance Metrics: Implement clear and measurable performance metrics for
each department and individual employees. These metrics should be aligned
with organizational objectives and reviewed regularly to track progress and identify areas
for improvement.

2. Alignment with Strategic Objectives:

 Strategic Planning: Conduct regular strategic planning sessions involving key

stakeholders to ensure alignment of organizational goals with market trends and customer
needs. This process should involve setting clear objectives, identifying
strategic initiatives, and allocating resources effectively.
 Customer-Centric Approach: Enhance customer-centricity by collecting feedback,
analyzing customer behavior, and tailoring products and services to meet evolving needs.
This may involve leveraging data analytics and customer relationship management
systems to gain insights into customer preferences and behavior.
 Innovation Culture: Foster an innovation culture within the organization by encouraging
creativity, risk-taking, and experimentation. Establish channels for employees to submit
innovative ideas, and allocate resources for pilot projects to test new initiatives
before full-scale implementation.
 Ethical Standards: Emphasize ethical standards and corporate governance practices
to build trust and credibility among stakeholders. This includes promoting
transparency, integrity, and accountability in all business operations.

3. Implementation Plan:

 Timeline and Milestones: Develop a detailed timeline with specific milestones for
implementing the recommended improvements. This timeline should include
deadlines for each phase of the implementation process to ensure timely execution.
 Resource Allocation: Allocate sufficient resources, including budget, manpower, and
technology, to support the implementation plan. This may involve reallocating resources
from less critical areas to prioritize strategic initiatives.
 Change Management: Implement a robust change management plan to
resistance and ensure smooth adoption of the proposed changes. This plan should include
minimize

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 communication strategies, training programs, and stakeholder engagement activities
to facilitate organizational buy-in and commitment.
Monitoring and Evaluation: Establish mechanisms for monitoring and evaluating
the progress of the implementation plan. This involves regularly reviewing key
performance indicators, soliciting feedback from stakeholders, and making adjustments as
needed to stay on track.
Continuous Improvement: Foster a culture of continuous improvement by regularly
reviewing processes, soliciting feedback, and making iterative adjustments to
optimize organizational performance over time.

Conclusion
The Bank of Abyssinia, with its rich history dating back to 1905, has evolved
into one of Ethiopia's foremost private financial institutions. Over the years, it has
played a pivotal role in shaping the country's banking sector, from issuing banknotes in
collaboration with the National Bank of Egypt to navigating through periods of
nationalization and subsequent privatization. In the present day, the bank boasts a
robust infrastructure, serving over 10.2 million customers through its extensive
network of 901 branches and modern technological systems such as the T- 24 core
banking system. Its financial figures reflect impressive growth, with capital increasing
significantly to ETB 18.59 billion and total assets reaching ETB 188.55 billion.
Moreover, the Bank of Abyssinia stands out for its commitment to corporate social
responsibility, actively participating in national projects and initiatives aimed at
improving the well-being of the community. Strategic partnerships with international
organizations further enhance its reputation and market reach.

The organizational design and structure of the Bank of Abyssinia are critical components
of its success and sustainability. The bank's ability to adapt to changing economic
landscapes, regulatory frameworks, and customer demands hinges upon its
internal architecture. By maintaining a flexible and dynamic organizational design,
the bank can respond swiftly to market shifts and capitalize on emerging
opportunities. Furthermore, a well-defined structure ensures efficient coordination
among various departments and functions, facilitating seamless operations and
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decision-making processes. In the case of the Bank of Abyssinia, its evolution
from a state-owned entity to a re-established private share company underscores the importance
of organizational flexibility and adaptability. As the banking industry continues to undergo rapid
transformation driven by technological advancements and globalization, the Bank of Abyssinia
must prioritize innovation and agility in its organizational design to remain competitive
and relevant.

The recommended improvements for the Bank of Abyssinia, including strengthening brand
presence through strategic partnerships, promoting corporate social responsibility, and increasing
capital to support expansion and technological advancements, hold significant potential for
enhancing the bank's overall performance and market positioning. By leveraging strategic
partnerships with reputable international organizations, the bank can access new markets,
technologies, and expertise, thereby broadening its customer base and service
offerings. Moreover, a continued focus on corporate social responsibility not only aligns with the
bank's values but also fosters goodwill and loyalty among customers and stakeholders.
Lastly, the infusion of additional capital provides the financial resources needed to fuel growth
initiatives, innovate product offerings, and invest in cutting-edge technologies, ensuring
that the Bank of Abyssinia remains at the forefront of Ethiopia's banking sector. Overall,
these recommended improvements are poised to drive sustainable growth, reinforce the
bank's reputation, and solidify its position as a leading player in Ethiopia's financial landscape.

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