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CHAPTER 2 – FOUNDATION OF THE STUDY

South African Banking

David (2008) aptly describes South African the factors that allowed South African banks was the innovation and sophistication of Dutch bankers in the industry during the twentieth century. This enabled leader in Africa, on a par with the SA banking industry surpassed America, such as Canada and Australia. During SA’s period of isolation sector continued to develop in parallel developed world. Even before 1994 SA in international markets,SA incorporated banks, as well as the increased interest by forei expanding their footprint in the SA market.David (2008) also examines incorporated into the SA banking environment international capital flows between countrie for banks by international capital markets;markets, restricting financial intermediation by banks for access to capital (companies that access capital directly in the c(depositors finding better returns for deposits);changes and central bank restrictions; transcend geographic boundaries and time the competition that exists between banks due to deregulation, liberalisation of capital flows, lifting of price controls, financial disintermediation and new entrants into the financial markets.As stated in the South African National Payment System Framework and Strategy (1995) document, any country’s economy can be illustrated as a series of layers of an inverted pyramid, where each layer is supported by the layers beneath it. As depicted in Figure 2.1 above, the broadest layer represents the real economy and the financial markets i.e. the buying and selling of goods and services throughout the country. This in turn is supported by the country’s banking system i.e. the provision of payment services. The next layer consists of a limited number of inter-bank fund transfer systems which permit the processing of payment transactions. The final layer represents the central bank, whose role is essential for the effective functioning of the economy, by allowing the settlement of payment transfers across accounts held by banks with the central bank (www.reservebank.co.za). It is important to note that the banking system is intertwined with the payment system. Banks are regarded as providers of payment services in the market economy.The above outline describes the fundamentals of South African banking and the financial industry. To gain deeper insight into the case study at hand, a brief overview of Bank X’s history will be provided. Cassiem (2009) has consolidated and presented Bank X’s history from 1991 to 2010 (this also comprises Retail Bank, among Bank X’s other entities) (see Figure 1.1). Bank X’s history depicts a very eventful and purposeful existence as an organisation thus far. Bank X was formed in the early 1990s through the merger of various smaller banks.This made Bank X the largest financial services group on the African continent, with assets in excess of R50bn. The amalgamation led to many successes, as evidenced by the increase in the share price of Bank X from R7 to R11.40 within the first few months of 1991.In 1992, the Bank X group continued with its strategy of mergers and acquisitions.This resulted in the demise of a few reputable financial companies. Furthermore, during this year, Bank X succeeded in increasing its asset base to beyond R80bn,thereby becoming a leader in the market of mortgage loans, savings and term deposits (although Bank X still lagged behind its main competitors in relation to cheque accounts and corporate banking). The merger also resulted in the following developments: an immediate increase in the market share of installment financing from 15% to 32%, and the leasing market from 11% to 32%; Bank X also gained a unique understanding of and deeper insight into the SA market through its acquisition of truly SA-based banking institutions. The most fundamental occurrence at that time was the integration of individual computer systems from the above-mentioned SA banks, retaining only what was considered to be best in its class and abandoning the rest.A change in leadership and strategic direction was introduced by the hiring of a new CEO and Chairperson in 1993. During this period, Bank X opted to operate 5 divisions. Bank X’s leadership embarked on a bold move to restructure and rationalise the new organisation, and this resulted in the reduction of costs, which was well received at this point in time.

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1 CHAPTER 1 – ORIENTATION
1.1 INTRODUCTION
1.2 RESEARCH CONTEXT
1.3 RESEARCH PROBLEM
1.4 OBJECTIVES OF THE STUDY
1.5 LIMITATIONS AND DELIMITATIONS OF THE STUDY
1.5.1 Limitations:
1.5.2 Delimitations:
1.6 ASSUMPTIONS OF THE STUDY
1.7 IMPORTANCE OF THE STUDY
1.8 OUTLINE OF THE RESEARCH REPORT
2 CHAPTER 2 – FOUNDATION OF THE STUDY
2.1 SOUTH AFRICAN BANKING
2.2 FORMULATION OF STRATEGY
2.2.1 Strategic Analysis
2.2.2 Bank X’s Formulated Strategy
2.3 IMPLEMENTATION OF STRATEGY
2.3.1 Key Strengths
2.3.2 Key Weaknesses
2.4 SUMMARY
3 CHAPTER 3 – LITERATURE REVIEW
3.1 INTRODUCTION
3.2 WHY STRATEGIC IMPLEMENTATION FAILS
3.3 CONSEQUENCES OF A FAILED STRATEGY
3.4 REQUIREMENTS FOR IMPLEMENTING A STRATEGY SUCCESSFULLY
3.5 SUMMARY
4 CHAPTER 4 – RESEARCH METHODOLOGY
4.1 INTRODUCTION
4.2 AIM AND OBJECTIVES OF THE STUDY
4.3 RESEARCH STRATEGY
4.3.1 The Case Study
4.3.2 Research Paradigm
4.3.3 Method of Data Collection
4.3.4 Design of Interview Questions
4.3.5 Data Analysis
4.4 SAMPLE DESIGN
4.4.1 Sampling Method
4.4.2 Research Population
4.4.3 Sample Size
4.5. ETHICAL CONSIDERATIONS
4.5.1 Protection from Harm
4.5.2 Informed Consent
4.5.3 Right to Privacy
4.5.4 Honesty
4.6. RIGOUR
4.7. VALIDITY AND RELIABILITY OF DATA
4.8. LIMITATIONS AND DELIMITATIONS
4.8.1 Limitations
4.8.2 Delimitations
4.9. ASSUMPTIONS OF THE STUDY
4.10. SUMMARY
5 CHAPTER 5 – ANALYSIS AND FINDINGS
5.1 DISCUSSION OF MEASURING INSTRUMENTS
5.1.1 Interviews
5.1.2 Participant Observations
5.1.3 Physical Artefacts
5.2 BIOGRAPHY / POPULATION (GROUP VS RETAIL)
5.3 RESEARCH RESULTS
5.3.1 Responses from Retail Executive Staff Members
5.3.2 Responses from Retail Senior Managers
5.3.3 Responses from Retail Middle Managers
5.3.4 Reliability of the measuring instruments
5.4 INTERPRETATION OF RESEARCH RESULTS
5.4.1 General Observations
5.4.2 Research Objectives, associated Themes and Findings
5.4.3 Additional Themes
6 CHAPTER 6 – DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
6.1 INTRODUCTION
6.2 LIMITATIONS OF THE STUDY
6.3 DISCUSSION
6.4 INSIGHTS GAINED
6.5 CONCLUSIONS
6.6 RECOMMENDATIONS
6.6.1 General Recommendations
6.6.2 Recommendations based on the views from different management levels
6.7 FURTHER RESEARCH
7 LIST OF REFERENCES
8 APPENDIX 1
SECTION A – INFORMED CONSENT FORM
SECTION C – RETAIL BANK’S CURRENT STRATEGIES AND STRATEGIC FORMULATION
SECTION D – IMPLEMENTING STRATEGY AND MEASURING STRATEGIC PERFORMANCE AT RETAIL BANK
SECTION E – COMMUNICATION OF STRATEGY AT RETAIL BANK