Final Report Management

8/3/2019 Final Report Management

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S u b m i t t e d t o :

M s S a i r a F a r o o q i

S u b m i t t e d b y :

W a j i h a S h a u k a t

N a z i s h T a r i q

H i r a I k r a m

Final ProjectMBA Semester 1, Batch: 2010-2013

ManagementAnalysis Dubai

Islamic Bank


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Management Analysis Dubai Islamic Bank

Principles of Management: Final project Page 2

Acknowledgement

We are very thankful to everyone who all supported us, for we have completed our

project effectively and moreover on time.

We are equally grateful to my teacher Ms. Saira Farooqi. She gave us moral

support and guided us in different matters regarding the topic. She had been very

kind and patient while suggesting us the outlines of this project and correcting our

doubts. I thank her for her overall support.

Last but not the least, we would like to thank Mr. Waqas Shaukat who helped us a

lot in gathering different information, collecting data and guiding us from time to

time in making this project .Despite of his busy schedules ,he gave us different

ideas in making this project unique.Thanking you all.


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Contents

Executive Summary 4

COMPANY PROFILE 5

PLANNING 7

Organizing 10

Staffing 16

Leading 22

Controlling 25Recommendations & Suggestions 29

References 30


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Executive Summary

In this report firstly we have given overview of the organization that Dubai Islamic Bank

originated on 1975, and in Pakistan bankcommenced operations in 2006. Since then, DIBPL has

undertaken major initiatives to expand its branch network across the country.

Mission of the bank is to provide Sharia compliant financial services and products through the

best of innovation, talent and technology. The bank has the following departments:

Corporate banking Consumer financing Deposits priority banking ShariahThis report also give reader full information about the hiring process of the bank. Types of

Recruitment, the training process is also described in this report, the performances of the

employees are appraised yearly at Dubai Islamic Bank.

Our project would focus the different aspects of the management, leadership style, management

structure, and role of mangers that how they motivate their employees and guide them to achieve

the targets.

At the end, the controlling managerial function is described that how the bank control its

employees, and how they measure effective performance.

The core of this project is to describe the various aspect of management in the organization and

analysis of management practices.


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COMPANY PROFILEDubai Islamic Bank has the unique distinction of being the worlds first full-fledged Islamic

bank, a pioneering institution that has combined the best of traditional Islamic values with thetechnology and innovation that characterize the best of modern banking. Since its formation in1975, Dubai Islamic Bank has established itself as the undisputed leader in its field, setting thestandards for others to follow as the trend towards Islamic banking gathers momentum in theArab world and internationally.

Islamic banking and finance is now one of the worlds fastest-growing economic sectors thatcomprise more than 400 institutions with assets under management in excess of US$ 1 trillion(US$1,000 billion). In this context, the role of Dubai Islamic Bank is even more impressive. Yet,the bank remains true to its roots as a customer-centered organization where close personalservice and understanding form the basis of all its relationships. Tradition and heritage join with

a commitment to flexibility, innovation and modernity, so that customers of every nature areprovided with comprehensive solutions to all their financial needs.

Dubai Islamic Bank Pakistan Limited (DIBPL)

Junaid Ahmed - CEO

DIBPLcommenced operations in 2006. Since then, DIBPL has undertaken major initiatives toexpand its branch network across the country. DIBP is pursuing an aggressive expansion planand already has 18 branches in nine major cities including Karachi, Lahore, Rawalpindi,Islamabad, Peshawar, Faisalabad, Multan, Gujranwala and Gujrat.

Under its consumer banking division, the bank is offering state-of-the-art Sharia compliantproducts that effectively compete with those being offered in the market by conventional banks.It also has expertise in providing Retail, Private, Small and Medium Enterprises, Corporate,Investment Banking and Advisory services.

The Bank launched Pakistan's first Islamic Visa Debit Card and introduced financial productscovering Home Financing, Auto Financing, and Depository products.

DIBPL has also introduced Priority Banking and Internet Banking, both of which are beingrecognized as benchmark products in their respective categories. Besides regular bankingservices, the Bank is committed to bringing foreign investment to the country. DIBPL's corporate

wing has actively pursued foreign investors and convinced world renowned giants from the GCCto be part of Pakistan's economy.

In a short span of two years Dubai Islamic Bank Pakistan has emerged as one of the fastestgrowing banks in Pakistan

DIBPL is 100% owned by Dubai Islamic Bank PJSC (Public Joint Stock Company) and itsnominated shareholders. The parent company is a listed company in Dubai. Dubai Islamic Bank


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Pakistan brings with it a legacy of outstanding success, constant innovation and a solidcommitment to practice Islamic financing to the letter and spirit. Dubai Islamic Bank Pakistan isa wholly owned subsidiary of Dubai Islamic Bank headquartered in UAE. As the worlds first

Islamic bank, Dubai Islamic Bank has maintained its status quo as an undisputed market leaderin Islamic financing since its inception in 1975. DIB is the leading arranger of Sukuk issuances

globally and has led the single largest Sukuk in the world. DIBs Sharia expertise is respectedglobally. DIB is proud to have received numerous prestigious awards for its innovative IslamicFinance deals. Having set a standard of excellence in the UAE, The Bank offers state-of-the-artIslamic banking solutions and creates a centre of excellence in Pakistan. DIB is committed toproviding Shariah compliant solutions to major local and international companies as well asprivate individuals.


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PLANNING


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PLANNING:

Planning involves selecting missions and objectives as well as the actions to achieve them, which

requires decision making i.e. choosing a course of action amongst all alternatives. It is the basic

primary function of management of any organization. It determines in which direction an

organization has to move and the steps to be taken to achieve objectives. Its a sensitive part of

management and every successful organization gives it due importance.

PLANS AND GOALS OF DIB:

The organization has both long term and short term plans and goals. They are already operating

worldwide and their success can be measured by their successful operations internationally. They

plan to prove themselves leaders in Islamic banking. Their vision and mission statement present

such a picture.

Vision:Dubai Islamic Bank Pakistan will be the leading provider of world class bankingthe Islamicway by being the first choice of our customers and our employees.

Mission:

Dubai Islamic Bank Pakistan provides Sharia compliant financial services and products through

the best of innovation, talent and technology.

Short term planning:

They basically have per annum planning.

At the beginning, each year, they set goals to be achieved in the current year keeping inmind the goals of the organization and the environment around.

A monthly performance review is also carried out to ensure accomplishment of goals. Midyear evaluation is also carried out to keep the organization in the right direction. They carry out a year end evaluation of their performance and further plan accordingly. Their per annum goals are further divided into achievable sub goals.

Decision making (DM)

Decision making is a tough and crucial matter but DIB relies on its efficient and

experienced managers and good decision makers. Before making any decision

The current situation is kept under consideration and alternatives identified. Keeping them in view, best possible decisions are made. Decision making is also subject to their managers keen acumen and vast

experience.

After taking a decision, the results are then evaluated and changed accordingly. They make value maximizing decisions including the risk factor.


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They have a conceptual and behavioral style of DM for day to day issues. They try to communicate well with their workers to avoid confusion.

Conflict resolution:

Almost all the day to day operations of the bank are well structured. For suchproblems they follow pre structured policies and procedures. If any ill structured

problem occurs, managers come to action. They are pretty competent enough to

face such issues. Also they try to help and guide their sub ordinates as well in this

regard. Also they have formed a policy formation process for such problems.

Policy making:

It is very important for organizations to review their policies from time to time

especially when the environment is highly disruptive and unpredictable. Policies

need revision to be effective at different times.

Intense scrutiny of the workforce and the environment is done. Management takes up the affairs and conducts board meetings (presided

by the CEO) and an agenda is prepared.

Management discusses issues and policies with concerned people. Any suggested policy is approved by the board of directors. The upper management after making policies communicates to respective

departments or branches.

The policies are implemented as soon as possible and the follow upprocess is very strong.

Lower management can only give suggestions but its the upper management

which holds the authority of policy making.

The bank has a comprehensive framework of written policies and procedures on

all major areas of operations such as Credit, Finance, Treasury operations, internal

audit and compliance approved by the board.

Recommendations:

DIB should promote its service of E-Statement through different programs. In a short span of two years Dubai Islamic Bank Pakistan has emerged as one of the

fastest growing banks in Pakistan, recording an incremental growth of 152 percent in its

total asset base which stands at PKR 21 billion as of Dec 2007. DIBP customer base has

grown by 228% to approximately 21,000 customers in 2007; up from 6,400 in the year

2006.DIB should maintain its growth rate by launching unique projects.


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ORGANIZING

Organizing:


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The Organizing plays an important job of getting the work done. The basic concept of organizing

is to divide the organization into different departments according to its specialization. In simple

words, it can be described by using the word, departments.

Nature of Organization

Decentralization:

It is the tendency to disperse decision making authority in an organized culture. It is a

fundamental aspect of delegation to the extent that authority that is delegated is decenteralized.

Dubai Islamic Bank follows Decenteralization. The process of delegation in the Bank involves:

Determining the results expected from a position Assigning tasks to the position Delegating authority for accomplishing tasks Holding the person in that position responsible for the accomplishment of the tasks.

The Board of Directors set the goals and targets and then delegate authority for the

accomplishment of these goals.

Hierarchical Structure

The hierarchical structure of the bank is given below. The bank has 10 departmental heads.

Corporate banking, Consumer banking and distribution department have further 3 regional

heads. Then they have supported staff which includes senior managers, managers, assistant

managers and clerical staff. All other departments have supporting staff directly.


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Board of Directors

CEO

Head of

corporatebanking

Regional

Heads

Support

Staff

Head of

ConsumerBanking

Regional

Heads

Support

Staff

Head of RiskManagement

Support

Staff

Head ofdistribution

Regional

heads

Support

Staff

Head ofLegal

support

staff

Head ofOperation

Support

staff

Head ofcompliance

Support

Staff

Head ofHR

Support

Staff

Head offinance

Support

Staff

Head treasu

Supp

Sta

Internal audit Shariah Board

Shariahadvisor


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Organizational structure &Functional departmentalization

The organization is divided into different departments that are based on the functions they

perform. And the organizational structure indicates authority and responsibility

Departments:

Corporate banking Consumer financing Deposits priority banking Shariah1- corporate banking:

Banking institutions execute transactions directly with customers rather than corporations or

other banks corporate banking offers tailor made products. DIBPL provides a wide range of

services specifically designed to assist Pakistani businesses.

Key Features of Corporate Banking

Cash Management Services Trade Related Services Investment Banking Services Services for Small and Medium sized Enterprises

2- Consumer financing:Finance packages are designed to meet our needs and with DIBPL Internet Banking service,we can manage our finances with a click of our mouse!

Key features of consumer banking

Auto finance Business finance Home finance

3- Deposits:DIBPL offers a variety of depository account types.

Key features of deposits

Current Account


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Saving Account

Saving plus Account

Fixed Deposits

Lockers

4- Priority Banking:Priority Banking, where a world of luxury, convenience and financial innovation awaits you.Dubai Lounge Priority Banking experience with 100% Sharia compliant banking facilities.

Key features of priority banking

Dedicated Relationship Managers (RMs) and Customer Relationship Officers (CROs) Dubai Lounge - VISA ATM/Debit card Priority Service to all DIBPL branches 24 Hour Dedicated Phone Banking Valet Parking

5- Shariah:It is a banking system which provides banking services and products in line with the rules andprinciples of Sharia and is conducted under direct supervision and audit of Sharia scholars.

Key features of Shariah

Following are the most commonly used modes of Islamic banking and finance:

MURABAHA: It is a sale contract in which an individual/entity sells an asset at cost plusan agreed profit. The sale price could be paid on spot or deferred.

IJARA: It is a leasing contract in which the owner of an asset or its usufruct sells theusufruct of the underlying asset to the lessee for an agreed rental.

MUDHARABA: is a form of partnership where one party provides the funds while theother provides management services against a pre-agreed share in the profit of theinvestment. However, if there is any loss, it is borne solely by the capital provider.

MUSHARAKA: is a partnership with all the parties contributing to the capital of theMusharaka on the basis of profit and loss sharing. The profit shall be shared as per the

agreement but the loss will be borne pro rata. SALAM: It is a kind of sale in which payment is made on spot while the delivery of the

goods is deferred. ISTISNA: It refers to a sale in which the buyer orders the would-be manufacturer to

produce and deliver a fully described commodity .from raw materials of its own. It isbasically an order to manufacture.


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Recommendations:

There should be no hidden charges or any conditions which would create problem in longrun at the time of repayment

Should increase their management department strength specially the marketing side as itlags behind in this sector.

It should also promote ATMs and other customer based departmental network (which aredirectly involved in providing services) instead of opening a full fledged high cost branch.


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STAFFING


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Staffing

Staffing covers everything from hiring to training the employees till they leave the organization.

The basic concept behind staffing is to hire and retain right man for the right job. All things

related to human resources management are covered in staffing.

Thus Staffing is the policies and practices involved in carrying out the People or human

Resource aspects of a management position, including recruiting, screening, training, rewarding

and appraising.

In Dubai Islamic Bank all the processes regarding Staffing are carried out by the HRM

department.

HRM department of Dubai Islamic Bank:

Like other organizations HRM department acts as the mind of the organization.HRM department

works hard for the success of organization. The department performs the following function:

Conducting job analysis Planning labor needs and recruiting job candidates Selecting job candidates Orienting and training new employees Managing wages and salaries Providing incentives and benefits Appraising performance

Interviewing Counseling Disciplining Training and developing managers Building Employee Commitment Policy Making Retention Program Improve Working Relation of Employees

Recruitment:

Recruitment is the development of a pool of applicants for jobs in the organization.


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Eligibility criteria:

The eligibility criteria of the bank for most of the posts are as follows:

Education: All degrees should be from reputable and HEC recognized institutions. Experience: Candidates with relevant banking experience will be preffered.

Types of Recruitment in the Bank:

There are two types of recruitment in Dubai Islamic Bank:

1. Internal2. External3. ReferralsInternal Recruitmentincludes in-house placement and in house notice. The transfer and

promotion of employees from one department to another is included in it. Internal

recruitment is very reliable for top management positions of the bank.

External Recruitmentincludes hiring and retaining of new people. The bank hires fresh

graduates in their MTO program every year.

The external Recruitment is further divided into two categories:

Direct Recruitment: Direct hiring is the one in which employees drop their CV at the bank or

apply online.

Campus Recruitment: Campus recruitment is the most reliable source to hire competent

students. Professional teams go in different universities to select students. The screened

students are, then, interviewed by a panel.

Referrals: Whenever there is a vacancy in the bank, People within the organization andfrom outside the organizations are recommended to the top management. They are then

called for an interview. Referral is a very secure and effective way of hiring people.

Recruitment of interns:

Dubai Islamic Bank offers 4 to 6 weeks internship program in summer vacations. Students

are given a chance to work in the department of their choice. Students can drop their CV

directly in the office or they can apply online. Selected students are called for an interview.


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Orientation of Employees:

The orientation of employees takes place at both training centre and on first day at the Bank. It

includes:

General Introduction of the Bank Printed Employee Hand book of the Bank Introduction to the existing employees Introducing the work units of the Bank

Nature of Job:

The bank hires both permanent and contractual employees.

Training at the bank:

Following are the basic steps in training employees in Dubai Islamic Bank:

Need analysis In structural design Validation Implementation Evaluation and follow up

Training managers and faculty is hired for training purposes.

Dubai Islamic Banks management believes in enhancing the skills of the employees. The

training centre of the bank is in Karachi. The centre is responsible for providing multi level high

quality training programs to all the employees of the Bank. It trains people in the following

areas:

Consumer Banking Operations Credit Marketing and Credit Proposals Credit administration

Credit documentation Marketing skills Corporate banking Customer services leadership and management skills Grooming of the employees Performance appraisal skills


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Time management and personal effectivenessIt is compulsory for each new employee to attend the introductory training session.

Performance Appraisal system:

Performance Appraisal system is evaluating an employees current or past performance relative

to his or her performance standards. From the very first day till the employee leave the

organization, the behavior and performance is being analyzed, observed, evaluated and written

by the immediate boss and counter signed by the departmental head. All the career of an

employee is dependent upon this appraisal.

The performances of the employees are appraised yearly at Dubai Islamic Bank.

The appraisal is of two types in the bank:

Qualitative: It is in subjective form.

Quantitative: It is performa based. The bank has different performa for different departments.

Behavior Appraisal:

In the service oriented industry, behavior is as important as performance on job. Thus each

employee is rated against his behavior.

Incentive Plans:

Incentives are provided to Managers and executives and to Middle and lower level employees.These incentives are:

Attractive salaries Employees provident fund Gratuity fund Medical insurance Life insurance Performance based promotions and bonuses Various types of staffing loans Assistance in pursuing higher education Rewards on completion of professional qualifications


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Pay Plans:

Pay plans of the Bank are establish on the basis of job ratings. All jobs are ranked from top to

bottom, on the basis of compensable factor. Employee with higher rank gets highest pay and

incentives.

Pay plan of permanent employees include:

Basic Salary Bonus Medical facilities Allowances Other long term incentives

Pay plan of contractual employees include:

Basic salary Bonus

Recommendations:

On job Training must be compulsory for every employee. Character building programs should also be designed for all types of employees. The hiring should be fair and more chance should be given to fresh graduates. Advertisement for jobs must be given in newspapers.

The proper human resource department must be developed in every major city ofPakistan.


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LEADING


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Leading is an important function of management. Leading is a process of influencing people so

that they will contribute to organizational and group goals. It is the responsibility of the leader to

create a vision. In order to be a successful leader one has to have enough power and authority.Leader in Dubai Islamic Bank:

In Dubai Islamic Bank, The managers act as leaders. Whatever the roles and actions of the

leaders, the managers have to act accordingly in order to be effective and efficient.

The leadership of the bank is very clear in their vision and they are doing everything to

convert their dream into reality.

Management Structures:

Dubai Islamic bank has a particular management structure which helps to lead the bank in a

proper manner. Basically the leadership styles how the bank leads its employees to achieve

the targets. These targets are given by the top management to the bottom ladder. The

management structure is given as follows:

CEO Group Head Regional Manager Area Manager Branch Manager Assistant Managers

Leadership Style:

The top management of the Bank gives different targets to the heads of all departments.

These heads further delegate their authority to their subordinates. The subordinated are

guided and supervised by their respective heads. The subordinates are continuously analyzed

by their immediate boss. If a subordinate fails to achieve a target then the leader conducts a

meeting to know the reason behind the failure.

Thus Dubai Islamic Bank has a Directive/ Path leadership style; they guide followers in the

direction of established goals by clarifying role and task requirements.

Role of Managers at Dubai Islamic Bank

Motivation:

Motivation is a force giving direction to behavior. Motivation of employee is very necessary.

To become an effective and efficient, the managers should be aware of the needs of the

employees. It is his duty to identify the unsatisfied need of his subordinate.


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Managers at Dubai Islamic Bank use different techniques to motivate their subordinates and

increase productivity. These techniques are as follows:

They offer bonuses to the Employees Awards are given for outstanding performance Promotion is given They personally communicate with their subordinates and appreciate his work.

Developing trust in Stakeholders and subordinates:

A manager must be trusted by Stakeholders and his subordinates. The managers at the bank

have following characteristics:

Integrity Competence Consistency Loyalty

Recommendations:

Young leaders should be encouraged New ideas must be encouraged More authority must be delegated Negative feedback must be avoided by the managers


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CONTROLLING


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Controlling:

Controlling involves monitoring actual performance, comparing actual to standard, and taking

necessary action. It is an efficient way to:

Find out the accomplishments of their goals, and if not, then the reasons behind it.Managers make it sure everything is there where it is supposed to be.

It plays a vital role in empowering employees which can result in effective performance.THE CONTROLLING PROCESS OF DIB:

The controlling process of DIB is as follows:

Measuring actual performance. Comparing actual with the standard. Correcting variations from standards and plans.

Measurement of actual performance:

Managers are responsible for actual performance. Managers are aided by:

Personal observation of the managers. Statistical reports Oral reports Written reports

Comparing with standards:

Managers compare the employee performance with standards (set goal achievements). Any

discrepancy or gap prompts the managers to sort out the underlying reasons.

Financial control:

DIBs performance is measured by its productivity. Financial ratios are much help to them.

Information control:

DIB has strong network of communication i.e. all branches are inter linked thanks to IT.

Information control is critical because managers need to be informed with the right

information at the right time.


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Confidentiality:

Employees are not allowed to discuss/reveal any sensitive information of the bank, during

and after their employment.

Security policy:

Due to prevailing law and order issues, bank has revised its security issues. One or two

guards are posted on gates. Armed guard will not allow any equipment and furniture to pass

the gates without a proper gate pass issued by the Head of Administration/ Head of IT.

Administration dept also maintains a record of the entire gate pass issued.

Correcting variations from standards and plans

Managerial action is taken out. For serious deviations, meetings are held to investigate the rootcause.

Counseling:

A counseling session of the employee causing problem is conducted by the supervisor. If

shortcomings judged, then he is judged under GAP analyses or some kind of training is given

which is mentioned in hisperformance appraisal or immediate supervisors recommendations.

Complaint process:

Complaint process is not only essential for customer satisfaction; but it is also important for

formulation of new policies or a review of the existing ones. Also it helps to indicate anydiscrepancy in services procedure. DIB has the following complaint process:

There is a proper complaint management system in which the customers fill a brochurewhich consists of different questions regarding the opinion about the bank, their

satisfaction level etc which they drop it in a complaint box. All the complaints are

collected and sent to their main branch where they are thoroughly analyzed and reviewed

by the responsible persons and then a committee is formed which further investigates.

Telephone Banking: Dubai Islamic Bank Pakistan Ltd. offers a state-of-the art 24/7Phone banking service which provides quality services and financial solutions to

esteemed customers. Their highly trained Phone Banking Officers are available round theclock to assist and provide their customers with services like Account Balance Inquiry,

Transaction Inquiry etc to general enquiries.

Visa Global Customer Assistance Service (GCAS)this service provides emergency assistance and any query/ complaint reception around

the world


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Shariah board: DIB claims to be a leader in Islamic banking. It has a Shariah Boardwhich keeps an eye on religious aspects of its financial dealings. Its members are widely

acclaimed as leaders in the field of Islamic Finance like Dr. Hussain Hamid Hassan

(Chairman and Shariah Advisor), Dr. Muhammad Qaseem, and Dr. Ajil Jasimal Nashim.

They also offerask Sharia advisor services because any query/objection related to

religious financial matters are dealt here otherwise any slight rumor against DIBs

Islamic way of banking can badly affect them.

Problem Resolution unit: DIB has a special problem resolution unit in Karim Chambers,Karachi Branch. Any problem or query is exclusively dealt here.

Recommendations:

The staff members monitoring expansion are far less than the requirement due toexpansion.

The bank should also try to achieve ISO Award Certificate to gain country widereputation in quality standards.


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Recommendations &

Suggestions DIB should promote its service of E-Statement through different programs. In a short span of two years Dubai Islamic Bank Pakistan has emerged as one of the

fastest growing banks in Pakistan, recording an incremental growth of 152 percent in its

total asset base which stands at PKR 21 billion as of Dec 2007. DIBP customer base has

grown by 228% to approximately 21,000 customers in 2007; up from 6,400 in the year

2006.DIB should maintain its growth rate by launching unique projects.

There should be no hidden charges or any conditions which would create problem in longrun at the time of repayment. Should also increase their management department strength

specially the marketing side as it lags behind in this sector. It should also promote ATMs and other customer based departmental network (which are

directly involved in providing services) instead of opening a full fledged high cost

branch.

On job Training must be compulsory for every employee and character buildingprograms should also be designed for all types of employees.

The hiring should be fair and more chance should be given to fresh graduates andadvertisement for jobs must be given in newspapers.

The proper human resource department must be developed in every major city ofPakistan

Young leaders and new ideas should be encouraged More authority must be delegated Negative feedback must be avoided by the managers The staff members monitoring expansion are far less than the requirement due to

expansion.

The bank should also try to achieve ISO Award Certificate to gain country widereputation in quality standards


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ReferencesWaqas Shaukat (AVP)

Farhan Riaz (Relationship Manager)

Final Report Management

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