South Indian Bank was instituted in 1950. Most of the employees joined as clerks with matriculation qualification in 1950s and in 1960s became the branch managers and Regional managers by 1988. Thus, most of the managers of the bank are matriculates or graduates. These managers have been performing various functions including marketing functions of the bank like purchasing of deposits and selling of advances. Top management of the bank decided to employ candidates with MBA (Marketing) qualification as marketing executives in 1986. The managers of the bank protested against the management’s decisions saying that they could perform, with their long experience, the marketing functions more efficiently than MBAs. But the top management ignored the opposition of the managers and employed MBA (Marketing) candidates as Marketing Executives. MBAs joined the bank in 1987 and assumed the responsibilities of purchasing of deposits, selling advances and recovery of advances.
The performance of the bank was poor during 1987 and 1988 especially in areas like deposit mobilization (by 30%) sanctioning of advances (by 20%) and recovery of advances (by 40%). The personnel department, besides other departments of the bank, was asked to find out the reasons for the declining performance. The newly employed Marketing Executives felt that the old managers would not accept new ideas proposed by them, whereas the old managers opined that the marketing executives thought very high of themselves and did not allow themselves to share others’ experience and ideas. Both felt that there were no special interactions between the two groups.
Questions:
1) Do think that the performance of the marketing executives has fallen?
2) What is the problem in this case?
3) What do you recommend to solve this problem?