Case Study – Royal Bank of Scotland acquisition of NatWest
Case Study – Royal Bank of Scotland acquisition of NatWest At 7.30am on 6th March 2000, the Royal Bank of Scotland (RBS) announced its ‘acquisition’ of NatWest to the stock exchange. This was an unusual acquisition of a larger institution (£186 billion assets, 64,400 staff) by a smaller one (£75 billion assets, 22,000 staff) amongst the Big Five retail banks. The news relayed to NatWest staff as soon as possible (who had been kept informed of the bidding process, which had also received a lot of media attention), with emails awaiting them at around 8.30am the same morning. Within three days, RBS had closed down the NatWest head office and chosen only the best employees to remain. The acquisition process was dealt with ‘rationally’ by keeping staff informed on every aspect of change. In the words of the Group CEO, Fred Goodwin, ‘we believe that it is important to remove uncertainty for staff as quickly as possible.’ The imposition of the RBS system of technology into ‘the NatWest branch’ was justified as saving the company around £1million a day. QUESTIONS TO ANSWER: Start by identifying what elements you recognise in the case study that require attention and discussion. Then move on to present a theoretical model of change that was applied in this situation. How could it have been done differently? Questions you can ask/answer are: What methods can be used to further investigate the presented situation? What other organisational processes come to mind that may play a role in this scenario? How can the presenting problem and these processes be addressed? What interventions would be put in place? How? How would you plan to evaluate their effect on the employees? CRITERIA: Take the role of an organisational consultant addressing organisational leaders when writing up this assessment. Use evidence to support your argument. Use subheadings to structure your report. Business reports start off with an executive summary, similar to the abstract that is included in academic write ups. Assessment Criteria: Assessment and Feedback will be based on three main aspects of your report, namely: Content: Knowledge and understanding of theories, concepts, issues and research relevant to the addressed topic Critical evaluation of the relationship of psychological theory to practice (description as well as discussion) Use of example(s) to support your answer Structure: Introduction includes a statement of topic importance and outlines the report content. Several paragraphs with one main idea per paragraph (Content is to be presented in a logical coherent order) Conclusion which summarises the report and also answers the report question. Expression: Use of formal scientific language appropriate for academic writing Use of APA style Inclusion of a references list
Sample Solution
Executive Summary This executive summary provides an overview of the Royal Bank of Scotland's (RBS) acquisition of NatWest in March 2000 and a discussion on how the process could have been handled differently. The RBS announced its 'acquisition' to the stock exchange at 7.30am, followed by emails informing NatWest staff shortly after. Within three days,RBS closed down the head office and chose only the best employees to remain. It was evident that uncertainty for staff was removed as quickly as possible in order to ensure rational decisions were made throughout this process. A theoretical model of change which could have been applied is discussed, alongside potential interventions and evaluation methods which could have been used in order to address any psychological issues related to such a large-scale organisational change. Introduction In March 2000, Royal Bank of Scotland (RBS) acquired NatWest in a rather unusual takeover; where a smaller institution (£75 billion assets with 22,000 staff) acquired a larger one (£186 billion assets with 64,400 staff). Despite being part of one organisation now, attention must be paid to how this transition has taken place - especially if there are any psychological impacts it may cause for those affected by the ‘acquisition’ in both banks.
Theories & Concepts Relevant To This Situation In order for successful transitions from one organisation into another - such as what happened when RBS took over NatWest - it is essential that adequate attention is given to human factors surrounding such changes so that everyone involved can adjust properly during times of transformation and adaptation.. Numerous theories exist regarding peoples responses within organisations experiencing change; particularly important ones include Lewin's force field analysis theory which proposes that humans respond better when direction and criticism comes through feedback rather than command-style management; additionally Saba’s Theory X & Y highlights two significantly different approaches people take towards their work ethic: passive/complacent or active/assertive.
Interventions & Evaluation Tools Any intervention must consider all aspects from both parties concerned: those leaving NatWest due to redundancy or transferral need just as much support as those staying behind who would face new roles and responsibilities under RBS control.. Such interventions proposed include implementing more open communication between management teams across divisions so that change can be addressed collaboratively rather than unilaterally; also providing specific training courses tailored towards individuals who will become managers/supervisors internally should help cultivate an environment where engagement with employees remains at high levels during time periods when morale may suffer greatly due to amounts of disruption caused by external forces like acquisitions like these taking place.. Finally measures should be put in place evaluate performance objectively before,, during and after implementation changes led by external forces such as mergers or buyouts: gathering data on employee satisfaction surveys or conducting interviews regularly can provide vital insights into exactly how people feel about particular events impacting them personally over time - offering invaluable information when looking back long term upon past decisions too..
Conclusion The merger between RBS and NatWest had many positive outcomes including cost savings but it also created challenges around ensuring staff felt supported whilst going through major upheaval., By analysing various theories regarding organisational behaviour we can come up with feasible solutions which involve taking proactive measures against reducing stress for employees transitioning from one company culture into another., Appropriate interventions must focus on developing open communication between departments along with regular objective evaluations over time so leaders remain aware of general feelings amongst workers whilst further improvements continue consistently too