Levels Of Strategic Planning And Management In Global Banking

By M. Isi Eromosele

Global banks consist of three hierarchical levels or layers of the formal strategic planning process.

Bank level

At this level reside the strategic vision decisions which will guide the entire enterprise into the future, define which types of businesses the bank will be in, organizational structure and allocation of resources.  The decision-makers at this level are the Board of Directors, President and higher executive management.

Business level

At this level reside the core strategies aimed at achieving and maintaining long-term competitive advantage by identifying:

• Target market groups and needs
• Products and services which satisfy those needs
• Geographical coverage
• Critical success factors
• Business objectives
• Performance measures

These strategies are unique to each business defined at the bank level.  The decision-makers are the heads of departments, business or market managers.

Functional/Operational Level

At this level, strategies are designed which consolidate the functional/operational requirements demanded by the composite of businesses of the bank but also constitute the depository of the systems/processes which develop and maintain the unique competencies and sustainable advantage of the bank. The decisions are made on the level of the support unit managers concerning human resources, MIS, technologies and operations.

Sequence Of Strategic Planning And Management Process

Regarding the sequencing and nature of the tasks involved, it is important to distinguish which have a more permanent character.  Although strategic planning is a continuous process throughout the year, there are certain aspects of the process that are not significantly altered in each planning cycle.

Strategic drivers should remain constant for between three and five years. At the same time, specific strategies, programs and budgets will need to be revised during every annual planning cycle.

The definition of strategy resulting from this planning process is expressed as a hierarchy of objectives  from very broad guidelines to very detailed action plans.  Each level and each unit in the bank can find in the definition of strategy a piece of information or goal that applies directly to them.

The essence of the process is neither top-down nor bottom-up.  It is a more complex process requiring a strong participation of key managers at all level.  Objectives are proposed from the top and specific programs and alternatives are proposed from the businesses based on already agreed to solutions between the business and functional units.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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