Analysis of Current Internal and External Policy

As one of the largest financial services institution across the globe, HSBC believes in offering equal career opportunities to people from all walks of life (HSBC Career, 2009). As a result, the organization encourages qualified individuals to apply for the various career opportunities when there are vacancies. Additionally, this financial services organization provides a wide range of initiatives that are geared towards establishing and supporting a diverse workforce. Through these initiatives, HSBC also support the professional growth aspirations of members of its workforce. HSBC’s human resource practices are guided by internal and external policy relating to various human resource aspects such as staff turnover, qualifications, government policy and labor market competition.

One of the current policies utilized by this financial institution for its human resource practices is the Global or International Talent Management policy for attracting recruiting and motivating employees (Loewenberger, 2014). Through this policy, the organization utilizes an ethnocentric approach in recruitment and hiring employees. This approach helps in ensuring that the recruitment process of the firm differs from country to country because of consideration of cultural differences when hiring employees. The second internal HR policy utilized by HSBC is an inclusion policy that facilitates the recruitment of people from diverse cultural and ethnic backgrounds. The inclusion policy is geared towards establishing a diverse workforce in HSBC’s workplace because of the increased diversity of the modern business environment due to increased globalization.

The external policies affecting human resource practices at HSBC include the Employment Ordinance, which is the major piece of legislation that governs employment conditions in Hong Kong (Labor Department, 2015). This regulation affect HSBC’s HR practices through covering a wide range of issues relating to working conditions, employment protection, and employee benefits. Some of these issues include salaries and wages, unionization, and termination of employment contract. The other external factor that has an impact on HR practices at HSBC is Competition Ordinance, which helps to ensure fair competition in different sectors in Hong Kong’s business environment including the banking sector.

The Global or International Talent Management effectively deals with staff turnover through ensuring that suitable recruitment and selection practices are adopted when hiring new employees. One of the strengths of this policy is that it enables HSBC to carry out comprehensive processes that ensure the right candidate is hired for the right job. This helps to avoid staff turnover by ensuring the banking institution recruits and maintains the right talent for the right job.  However, the limitation of this policy is that it seemingly focuses on recruitment of senior managers rather than recruitment and selection of employees for all job positions. The inclusion policy is also a crucial regulation relating to qualifications of candidates for vacant job positions at HSBC. The strength of this policy is that it focuses on ensuring that HSBC’s workplace is characterized by a diverse workforce from different cultural and ethnic backgrounds. However, the limitation of this policy is the increased emphasis on culture as the premise for promoting diversity. This policy ensures the cultural and/or ethnic considerations are made when making decisions about a candidate’s qualification for a job position or vacancy. These are important considerations given the increased significance of a diverse workforce in the modern business environment.

The strength of the Employment Ordinance is its focus on handling different aspects relating to working conditions, employment benefits, and employment protection while its limitation is the lack of a specific focus on the banking sector. Nonetheless, this governmental policy is crucial for HSBC’s operations because it provides the foundation with which the banking organization develops and implements it HR policies and practices as well as creating a suitable work environment. On the other hand, the strength of the Competition Ordinance is its focus on ensuring fair competition in the country’s entire business environment through the First Conduct Rule (Brown, n.d.). However, its limitation is the general approach in handling competition issues, which implies that it does not specifically focus on the banking industry. This policy helps in guiding business practices adopted by HSBC towards recruiting and maintaining a high-qualified workforce and business operations.

Critique of HSBC’s Organizational Design

Organizational design and structures have been the subject of increased scrutiny in the field of business management. As a result, several business management scholars and researchers have developed several theories and concepts that help in examining and understanding organizational design and structures. According to Weber (1997) and Mintzberg (1987), an organization is divided into three major dimensions including the strategic apex, middle line, and the operative core (Lunenberg, 2012). The strategic apex basically includes the organization’s top management while the middle line refers to the lower management level such as supervisors who work with employees to ensure the accomplishment of respective tasks based on daily job targets. On the other hand, the operative core refers to employees who are involved in carrying out various job responsibilities and tasks on a daily basis towards the realization of established business objectives and goals.

HSBC has a decentralized organizational structure in which different organizational departments are coordinated based on the three aspects of organizational structure developed by Mintzberg. As shown in its group structure, HSBC is headquartered in the United Kingdom and spreads across different regions across the globe including Asia and Latin America (The HSBC Group, 2016). Based on this group structure, the firm’s major decisions are made in the United Kingdom i.e. the headquarters and spread down to the other branches, which implement the decisions. In this regard, HSBC’s organizational design is based on vertical decentralized through which power is distributed down the chain of command (Kumar, 2015). Despite the vertical decentralized, the major drawback of HSBC’s organizational design is bureaucracy. Bureaucracy emerges from the fact that the organizational design is based on autocratic leadership, which is disadvantageous in some cases (Hendry, 2013). This organizational design creates an extremely controlled work environment that could hinder employee creativity while increasing work burdens. Additionally, HSBC’s employees are seemingly excluded from key decision making processes because of this organizational design.

HSBC’s Organizational Culture

One of the most important components of HSBC’s operations is organizational culture, which plays an important role in determining the nature of the work environment and employees’ contribution towards work processes. The significance of organizational culture in the modern workplace has attracted considerable attention among scholars and researchers to an extent that several concepts and theories have been developed in attempts to explain organizational culture. An example of a theory that was developed to explain organizational culture and its various components is Schein’s Structural Model of Organizational Culture that suggests different levels of organizational culture. According to Schein (1992), an organization’s culture can be understood as comprising different layers since the organization is a focused social system. The levels/layers of organizational culture are artifacts, espoused values, and basic underlying assumptions (Kong, 2003). Artifacts are relatively difficult to decipher since they are visible organizational structures and processes whereas espoused values are promoted justifications such as strategies, philosophies, and goals. On the other hand, the basic underlying assumptions refer to the eventual source of organizational values and actions though they are perceptions, feelings, beliefs, and thoughts that are usually taken for granted or occur unconsciously.

Currently, HSBC’s organizational culture has these three levels of culture that are geared towards promoting and ensuring effective operations. The current organizational structure is a decentralized organizational design in which decisions are made by the top management and passed down the chain of command. Based on this structure, the top management guides organizational processes at HSBC as leaders are involved in managing and supervising employees’ input and contributions. With regards to espoused values, HSBC’s organizational culture promotes the establishment of a diverse workforce and leadership team (HSBC Culture, n.d.). As a result, the organization not only focus on hiring and retaining people from different national and cultural backgrounds but also encourages employees to adopt flexible and alternative working methods. The organization also promotes sustainability i.e. responsible operations towards effective management of the environment and society it operates in.

For its IT department, HSBC’s top management manages and supervises employees’ initiatives towards providing services to customers and technical support provided to other departments. Additionally, individuals in this department are encouraged to identify and utilize different and alternative ways of working that help improve work flows and processes. However, for HSBC to achieve its strategic goals, its important to establish a culture of innovation that helps in providing digitized banking products and solutions to customers. While the current culture has played an important role in the firm’s effective operations since inception, the achievement of strategic goals in the increasingly competitive market requires creation of an innovative organizational culture. One of the ways to integrate IT into overall HSBC operations is to encourage employees to recommend and/or develop new products offerings and solutions that are centered on digital platforms. Secondly, the organization should incorporate innovation as one of the performance objective and measurement metrics in order to foster an innovative organizational culture. In this case, the evaluation and corrective mechanism for employees’ input to work processes will be based on creation of digitized products and their performance.


HSBC is one of the leading financial services organization across the globe given its tremendous profitability and success through the years. This success is attributable to strategic operations adopted by the firm’s top management and the establishment of a suitable organizational structure and culture. However, in light of increased competition in the banking industry in the recent past, HSBC can enhance its operations through providing innovative digitized banking products and solutions to customers such as process apps. This would require integrating IT into overall workflow processes through creating an innovative organizational culture. This would require encouraging employees to recommend and/or develop new digitized product offerings and solutions and incorporating innovation as one of the performance objectives and measurement metrics.


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