Vancity: Doing Good, Doing Well – Case Study Example

The paper "Vancity: Doing Good, Doing Well" is an excellent example of a business case study. The case “Vancity: Doing Good, Doing Well” revolves around describing the circumstances that faced a Canadian company known as Vancity in the wake of the 2008 financial meltdown. Owing to the crisis, stakeholders in the financial sector developed an environment which employed a monetary policy aimed at not only stimulating the economy but also preventing key Canadian institutions from going under. The intervention had adverse effects on a number of companies operating within the financial sector, including Vancity. This paper analyzes the case by listing important points related to the company’s urgent problems, likely causes, decision criteria, and potential solutions. Urgent problems: Interruption in the external environment as demonstrated by the monetary policy that was being employed to stimulate the growth of the economy through repricing loans (Daft & Armstrong, 2015, p. 171). The structure of the company as a member-owned cooperative institution (Daft & Armstrong, 2015, p. 171). The social finance strategy and the resultant community engagement in the company’s operations (Daft & Armstrong, 2015, p. 175).  Likely Causes: Interruption in the external environment was caused by the fact that Vancity was operating in a complex environmental regime, which forced the company to interact with and become influenced by numerous diverse external elements. The financial crisis was also to blame for triggering instability within the external environment (Daft & Armstrong, 2015, p. 171). Vancity was a member-owned cooperative institution, implying that it was not only owned and controlled by its customers (members) but also operated to serve the needs and expectations of this group of the population (Daft & Armstrong, 2015, p. 175). The structural orientation of the institution could not allow it to shift its operating policies with the same ease as happened in other traditional companies in the banking sector. Indeed, the structural orientation was vertical in communication, mechanistic in management, and unable to compete favorably during times of rapidly changing environments (Class Slide, Chapter 4, p. 20; Daft & Armstrong, 2015, p. 156-157). The social finance strategy became a problem because it was difficult for Vancity to maintain its overriding principles of social justice, environmental sustainability, and community engagement. The difficulty, it seems, was caused by external interventions involving the reduction of key overnight lending rate by the Bank of Canada (Daft & Armstrong, 2015, p. 176). Decision Criteria: Ensuring that Vancity is able to deal with the uncertainties and risks arising from the external environment (financial crisis); Ensuring that the company is able to keep its products and services in the market by sustaining its social finance strategy; and Facilitating the financial institution to adopt a more focused structure while still maintaining its close engagement with community members and other stakeholders. Potential Solutions: The interruption in the external environment could have been addressed by enhancing the internal integration of the company and shifting its management style to more organic processes. Such interventions were likely to increase Vancity’s capability to respond quickly to unanticipated shifts occurring in the external environment (Class Slide, Chapter 4, p. 21; Daft & Armstrong, 2015, p. 157). The sustenance of Vancity’s social finance strategy could have been addressed through engaging in planning and forecasting activities that encouraged organizational learning, continual adaptation, and innovation (Daft & Armstrong, 2015, p. 157). Benchmarks needed to be developed on how the strategy could fit into the company’s external environment. Additionally, innovative ideas could have been developed and implemented to ensure the financial institution continued to remain profitable and had the capacity to adapt to an uncertain environment.  Finally, the company could have adopted a more focused and business-oriented structure by forming joint ventures and partnerships with other like-minded companies. Joint ventures result in the development of new organizational units that are officially independent of the parents, thus their firmness in minimizing uncertainty through legal and binding relationships (Daft & Armstrong, 2015, p. 162-163). Partnerships promote the business case by developing structures that ensure that liabilities arising from uncertainties within the external environment are equally shared.