|dc.description.abstract||The British economy has always been a trading nation in terms of goods and more recently services. At the heart of the nation and international trading is London, the hub of a global financial empire that unites the globe on a 24-hour basis. Vast revenues are generated by commercial and investment banking institutions, yet research in this sector has been comparatively low. Management researchers have instead gravitated towards the ‘back office’ operations of high street banks or general insurance company call centres (Seddon, 2008). Research has focused on repetitive clerical activities for customers, and how these businesses suffer from ‘failure demand’ and/or ‘demand amplification’ (Forrester 1961) created when a customer is forced to re-establish contact with a call centre to have their issue/concerns reworked (when it should have been ‘right first time’).
Modern commercial and investment banks do not share the repetitive and relatively predictable transactions of call centres and instead, represent extreme operations management cases. The workload placed upon commercial and investment banking systems is incredibly high volume, high value and high variety in terms of what clients’ demand and how ‘the product’ (trades) is executed. At this period in time, the financial collapse of 2008 is still shaping working practices due punitive regulatory environment. Many UK banks are now part-owned by the government, there is social and political pressure to stimulate improvement in banking operations which – it is thought – will herald the return of the banks back to private ownership. This thesis addresses the flow of global “trades” through the operations office and explores how the design and fit of the sociotechnical environment provides effective and efficient trade flow performance.
The key research questions emerging from the literature review establishing the gap in knowledge are 1) How efficient are commercial and investment banking trading processing systems? And 2) What are the enablers and inhibitors of efficient and high performance of industrialised processing systems?
To answer these questions, the researcher undertook an in-depth and longitudinal case study whilst at a British bank that was ‘benchmarked’ as underperforming against its peers (MGT Report1, 2011). The case study strategy was executed using an action research and reflective learning approach (cycles of research) to explore the performance and improvement of banking operations management performance. The findings show that, using systems feedback, the management at the bank were able to develop into a “learning organisation” (Senge 1990) and improve and enhances the flow of work through the system. The study has resulted in significant gains for the case study and a new model of Rolled Throughput Yield is presented that rests on the key concept of “Information Fidelity”. This work marks a contribution to the operations management body of knowledge by exploring “flow” under conditions of high volume and high variety and from within the under-researched context of commercial and investment banking.
1 “MGT” is an anonymised commercial and investment banking industry report into operational efficiency and cost performance. The report was commissioned by the participant banks and conducted by “MGT Consultants” and is considered highly confidential. The researcher was given a copy of the report while working with the case, forming as the catalyst for the research into operational performance. The researcher was unable to receive “MGT Consultants” agreement to ‘directly’ cite the report as part of this study.||en_US