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Written by: Manraj, Zach, Sukhdeep, Derek and Brendan
Sunday, October 24, 2010
BOH4MT-A
Scorcia, J
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T ABLE OF CONTENTS
1.
Title Page
2.
Table of Contents
3.
Executive Summary
1. Introduction
2. Current Business Information
2.1 Current Business Strategy
3. Analysis of Issue – Advantages, Disadvantages and Results
4. Recommendations and Implementation
5. Conclusion
6. References
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Executive Summary
Through dominance in environmental adaptation and predictability, TD Canada Trust
has truly shown perseverance in the acquisition of competitive advantage in the rapidly
changing workplace environment.
TD Canada Trust utilizes a resilient, unfaltering and adaptable business strategy, which
continually illustrates that TD Canada Trusts is build upon strong roots and a solid
foundation. The form of departmentalization that TDBFG uses is a divisional structure,
which is systematically organized by product or service.
There are six principal environmental changes that continually challenge TD within the
workplace atmosphere. The six changes comprise of intellectual capital, careers,
diversity, technology and globalization. Capitalizing on these six, is the keystone in the
foresight and anticipation of the rapidly changing workplace environment,
TD’s devotion to its economic, legal, ethical and social responsibilities are unparalleled
among many corporations in its respective field. The integration of cooperate social
responsibility into their organizational goals has fostered a clean activist reputation
among customers and communities. This is a testament to its flexibility, consistency and
dependability in the fast paced changing workplace environment.
Ultimately, TD’s commitment to the six principal factors of organizational variation is a
key factor in both its success and stability in regards to its future. With its proficiency of
fulfilling five out of the six factors in environmental change, TD has shown its
prominence in its respected field. Bearing witness that TD Canada Trust has attained a
resilient foothold in the changing nature of banking and investment management.
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Background
The Toronto-Dominion Bank (Commonly known as TD) was not always officialy known as
the Toronto-Dominion Bank. It was initially founded in 1855 as the Bank of Toronto. At
that period of time, Canada was without the official currency, the dollar. As a result, banks
were permitted to print personalized notes for their individual usage. Throughout this time,
The Bank of Toronto showed prosperity and success in innovation and economic climate.
However, this prosperity was interrupted by two World Wars as many of the staff had to
enlist to fight in these two wars. After the wars ended, The Bank of Toronto merged with
another significant bank at that time, The Dominion Bank. The result of the merger was the
Toronto-Dominion Bank.
The next big advancement was the introduction of the bank’s first computer system in 1962.
This was a breakthrough for banks, because it drastically reduced the workload of the
employees. Through its success, the official TD brand logo was instituted in 1969 and
established the TD name an easily identifiable brand. TD was also one of the first banks in
Canada to create an ABM (The automated banking machine). Their creation, The Green
Machine, was introduced in 1976 and was a momentous breakthrough for banks. The
routine jobs of deposits and withdrawals were taken care of by the machines, which left
freedom so that the higher-level services, such as investments and ventures could be taken
care of by a teller. Consequently, their adaptation in the field of technology was once again
shown through the technological breakthrough of online banking. As the popularity of the
Internet and electronic banking drastically grew, TD adapted by setting up a user-friendly
website where clients could view their bank records, and even make transactions.
In 1996, Waterhouse, a discount brokerage company joined TD in hopes of increasing both
organization’s success. Soon after in 2000, TD merged with Canada Trust, with a shared
philosophy of business: to emphasize customer service and product knowledge. The next
step forward and most recent acquisition was the American powerhouse bank company
Commerce Bancorp in 2007.
Current Business Information
From a current standpoint, The Toronto-Dominion bank is demonstrating both prosperity
and wealth in an economic, social and ethical scope. It has continued to increase its profits
by 7% each year despite the profound financial strife in the economy, which began in 2008.
TD has shown more resilience and adaptability than many American banks, which have
more or less lost money or have faded away due to bankruptcy. This increase in profits can
be fundamentally traced back to its increasing share in the U.S market. Furthermore, it
currently has $587 billion of assets within its holdings, over 2,000 branches across Canada
and the U.S, and over 11 million customers.
Its branches in Canada are dispersed all across the country; while in the U.S, they operate
only across the Northeast and Mid-Atlantic. This is set to change very soon following
TDBFG's acquisition of The South Financial Group, which will result in The South
Financial Groups banks in Florida and North and South Carolina becoming TD branches.
As of 2009, more than 80% of their adjusted earnings are from retail banking (providing
services directly to individuals and small businesses), whereas most American banks get the
majority of their earning from investment banking (buying and selling financial securities).
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Current Business Strategy
TDBFG (The Toronto Dominion Bank Financial Group) embodies a mildly mechanistic
organizational structure that shows its organic nature through an array of flexibility, such as
alternative work schedules, personal goal setting and innovation and creativity among
employees. The businesses’ mechanistic traits are shown through its definite banking rules
and procedure, which is essential in maintaining clarity, sustainability and foresight within
the business,
TDBFG plans to continue expanding throughout the US beyond just the East Coast. This
expansion will continue to drive and magnify its profits. The corporation's superior
financial durability following the recession illustrates its competitive advantage over its
competitors, which will have a definite impact in the support of its expansion. As TDBFG
gains a larger US market share, it strives to preserve the following guiding principles.
-The Enhancement of Our Brand
-The Delivery of Legendary Customer Experiences
-Being an Extraordinary Place to Work
-Operating on a Daily Basis With Excellence
-Understanding Our Business
-Taking Only Calculated Risks We Understand and Can Manage
-Increasing Shareholder Value
The company feels it is important to have legendary customer service because such service
would keep customers and bring in more - thus increasing long-term revenue. Remarkably,
TD conducted 600,000 interviews with customers to gain feedback to improve their service.
In addition, the corporation wishes to be an extraordinary place to work, which attracts and
retains enterprising, intelligent, and diverse employees and develops them, which is critical
to TD's success.
Employee continuance involves a variety of activities, including having employees
participate in employee engagement surveys, providing paid time off for volunteer activity,
actively seeking and mentoring women and visible minorities, compensating employees for
the cost of further education, and providing exceptionally flexible work hours to suit
employees.
Analysis of Issue – Advantages and Disadvantages
Advantages
Through a divisional structure, the TD Bank Financial group has been able to disperse
different operations such as retail banking, commercial banking, investment services and
insurance. This has led to the development of different branches such as TD Bank, TD
Canada Trust, TD Waterhouse and TD Ameritrade. These separate product and process
structures allow for better expertise focused on specific customers and banking operations.
Also, this structure allows for increased flexibility in dealing with environmental changes,
clear lines of responsibility and easier upsizing by adding divisions.
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TD has understood the significance of their intellectual capital and diversity among both
employees and customers in the new workplace. They have applied initiatives and frequent
accolades to retain intelligent and highly skilled employees in their organization. TD Pulse
is a company-wide internal survey conducted twice a year. Through this survey, TD collects
the feedback of employees on topics of the organization and their work environment.
TD has put forth an immense commitment regarding diversity in their organization. It has
launched a program, which assists new Canadians to obtain positions in the bank. The
continual effort of giving women opportunities in leadership positions has led to 34% of
their vice-presidents being women. Furthermore, it is clearly evident that the nature of the
workplace has changed. Careers in the new economy won’t necessarily be uniformly fulltime and limited to a single employer. Perceptive individuals recognize these changes, and
TD actively tries to attract these intelligent individuals to help them grow and thrive within
the organization. The exact activities that TD has done to do this are to provide mentorship
programs for younger employees, and even pay for tuition fees for career advancement.
It is evident that the world has become dependent and driven by technological development
in the workplace. TD has taken advantage of this, in order to display their flexibility and
expand their customer base to reach a larger demographic. Instead of having customers
come to a TD Bank or TD Canada Trust branch in order to do their banking, TD has created
an online banking system. Through this, customers are able to access their bank account
from their computer at home to check their balances and pay their bills. The utilization of
technology has allowed TD to create a convenient banking experience for customers, while
providing flexibility and ease of use for their customer base.
Societal pressures and expectations for moral standards within organizations have
drastically increased. Through the integration of corporate social responsibility into their
organizational goals, TD has fostered a positive reputation and a clean image in the minds
of their customers and communities. TD Bank is one of Canada’s largest corporate
contributors, providing millions of dollars to charities and non-profit organizations each
year. They have also become the first bank, North American based, to be carbon neutral,
which is a definite display of their concern for the physical environment.
Disadvantages
Though there many advantages to TD Bank Financial Group’s divisional structure, there are
still flaws. This can be seen through the different divisions for separate operations, as there
can be a duplication of resources and tasks. In addition, rivalries across different divisions
can develop, which impacts issues such as communication and productivity.
Correspondingly, the divisions may begin to focus solely on their divisional goals, and lose
focus of overall corporate goals.
Globalization is essential for an organization to succeed in today’s rapidly changing
workplace and unpredictable economy. This is an aspect, in which TD Bank Financial
group has been at a disadvantage. This weakness in globalization has limited their business
operations exclusively to North America. Other than a minimal amount of expansion into
the United Kingdom, TD’s market is mainly composed of Canada and the U.S. While
competitors, such as HSBC and the Bank of America, have gained competitive advantage
through the expansion their business operations on a global scale, TD has failed to globalize
outside of North America.
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Results
Through their dominant and unyielding business strategy, TD has been recognized as one of
the top 100 most sustainable companies in the world. In addition, TD has been honoured by
Hewitt Associates, being named one of the “50 Best Employers in Canada” and by
Maclean’s magazine, as one of the “Top 100 Companies in Canada”. Their commitment to
becoming an eco-friendlier company has given them the honour of being named one of the
“30 Greenest Organizations” in Canada. TD Bank Financial Group is also positioned in the
top 1% of global corporate governance leadership, which shows their commitment to not
only economic obligation, but also social and ethical responsibility. Economically, through
the application of their current business strategy, TD Bank Financial Group generated $18
billion in revenues and $4 billion in net income in 2009.
Recommendations and Implementations
A strong international presence is a key facet of creating profit and gaining recognition.
Because of globalization many businesses have to incorporate international relations by
trading resources and operating within other countries.
Banking organizations such as HSBC that have already expanded offices and branches
internationally have shown success with superior clientele in various countries and
continents. To begin to establish themselves as a worldwide brand TD should consider to
expand their banking branches into the United Kingdom. The economy in United Kingdom
is both stable and predictable and has been flourishing the past two years. The UK
expansion could serve not only as an additional generator of revenue but also a means to
continue expansion into Europe.
The source of TD revenue is routine everyday banking rather than long-term investment
banking. They should equip more branches to have a better comprehension and
management of investment banking
In order to correct its divisional structure issues, those who work for TD must understand
their position in the organization. Smaller branches such as TD Waterhouse and TD
Insurance must understand that they are providing their own individual service. However,
they must recognize that they are representing the entire image of TDFBG. As long as each
division or branch comprehends that they are working together to provide a service, there
will be less confusion, less competition and more collaboration among the various sectors.
An example of this would be limited funding for the marketing team. The solution could be
that the two divisions could advertise together to attract a larger market.
Conclusion
TD’s desire to adapt and transcend over environmental changes has truly set them apart
from their competitors. This is uncompromisingly shown through: ethical and socially
conscious views, strong connections with its customers, technological advances, diversity in
the workplace, embracement of intellectual capital and the establishment of short–term and
long-term opportunities.
Throughout its history, TD has proven itself as a leader in the areas of financial and
investment banking, by way of corporate social governance and sound business practices. If
it continues its current path of success, with the implementation of globalization, TD can
one day become a worldwide leader in finance and banking.
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Bibliography and References
http://www.prnewswire.com/news-releases/cfos-say-cash-flow-is-top-concern-andfinancial-priority-for-2011-td-bank-survey-106295698.html
http://www.td.com/investor/2010/q32010_overview.pdf
http://www.cbc.ca/money/story/2010/05/17/td-bank-south-financial-group.html)
http://www.td.com/index.jsp
http://www.eluta.ca/top-employer-td-bank