JPM Chase is an international American company whose headquarters is in the New York City. The company offers both banking and financial services, and it is the largest bank in the U.S with total assets of approximately $2.5 trillion. According to the Forbes, JPM Chase is the fourth largest company in the world based on a composite ranking. The company operates through commercial banking, corporate and investment bank, and consumer and community banking. The segment of the community and consumer banking offers investment and deposit product and services to its consumers. The deposit and investment products include residential mortgages, cash management, deposit, and lending (JP Morgan, 2015).
JPMorgan Chase alongside with its subsidiaries operates in an environment that is highly competitive. The company faces competition from other leasing companies, mortgage banking companies, credit card companies, trust companies, insurance companies, hedge funds, brokerage firms, and banks. JPM Chace often competes by innovation, transaction execution, and the quality and variety of their products and services. Competition usually varies based on the location, industry, and the type of customers. Concerning some of its products the firm competes globally and concerning others, JPM Chase competes on a regional basis (Adrian " Shin, 2009).
The vision statement of the JPM Chase and the principles have influenced the management in several ways. The alignment of the firm’s vision and strategies has made the management to focus on how they safeguard, strengthen, and grow JP Morgan Chase over time. The management has been committed to working with the company’s vision to make JP Morgan Chase one of the most respected banks in the world. The strategy of JPMorgan is to take a comprehensive approach to increase economic opportunity through the company’s resources, and global scale to create partnerships and make investments in four major areas. The four areas include community development, financial capability, small business expansion, and workforce readiness (Fries " Taci, 2005).
Managerial Style and Philosophy
The philosophy of JP Morgan Chase is that the private equity investments must offer a return enhancement to the overall public equity portfolio. The objective of this philosophy is investing with the best partners that have specific and meaningful relations. The partners of JPM Chase have expertise that enables them to develop and access best firms with best management teams and entrepreneurs. Additionally, the firm has an exceptional investment selection policy. JP Morgan Chase has a highly opportunistic and selective investment approach that make it invest in a small number of deals they find. Besides, thoughtful due diligence enables the company to gain access to numerous investment opportunities. The management of JP Morgan Chase reviews approximately more than 500 investment opportunities yearly. The firm’s objective is to assess and review suitable investment opportunities and choose the best ideas.
The asset management of JP Morgan Chase offers both fixed, and equity income separately managed accounts through different sponsor platforms. Moreover, a separately managed account offers direct ownership of securities. SMAs are often professionally managed to allow customers to access the expertise of skilled managers. JPMorgan Chase Company is managed by a board of directors that is composed of 12 members. The organizational also has an operating committee headed by the Chief Executive Officer and Chairman. Additionally, other members of the firm’s operating committee include the chief risk officer, chief information officer, asset and wealth management CEO, chief financial officer, and general counsel. Therefore, the management team of JP Morgan Chase is composed of the board of directors and operating committee.
The Relation of key Management Principles to Current Status and Future of JPM Chase
JPMorgan Chase has numerous ethical ways of management that make the company be one of the largest financial institutions in the world. First, the managers are supposed to carry out their responsibilities with integrity, diligence, and honesty at all times with the best of their knowledge. Second, the management of the company is obliged to comply with the necessary government rules and regulations of local, states, and federal governments as well as other regulatory agencies. Besides, the management is not permitted to mislead, manipulate, or coerce, independent auditors of the company either directly or indirectly. Moreover, the management and other employees are required to adopt reasonable measures in protecting the confidentiality of private information relating to the company and its customers (JP Morgan, 2015).
Similarly, JP Morgan Chase has several ways of managing their working capital and optimizing cash flow that makes them be a competitive financial institution in the region. The firm has increased its scrutiny of financial performance related to managing working capital. The initial step in managing the working capital JPMorgan Company starts with conducting a baseline evaluation of its current status. This is usually done by identifying the patterns with incoming and outgoing receivables and assets and convert them to the required working capital (Fries " Taci, 2005).
The organization also tracks its overall performance by collecting data in planning their management strategy. This process is essential to current capitalization success, and so it is vital to develop dashboards and management reports that will monitor and track compliance in the organization, both horizontally and laterally. The management ensures their efforts remained consistent and focused on partnering with the internal audit team that will own the strategic implementation.
Additionally, JP Morgan Chase management also creates an action plan in the process of managing and optimizing their working capital. The firm creates realistic and measurable action plans with its target and accountability dates for the outcomes. The key initiatives for creating action plan include the implementation of a robust supply chain risk management policies.
The management style of JP Morgan Chase also makes sure their initiatives are sustainable. This creates a room for improvement since continuous collaboration and analysis is crucial to optimization success and long-term management. The asset management of JP Morgan is one of the leading asset managers for institutions, advisors, and individuals across the world. The company has investment professionals in various locations around the world whose work is to provide strategies for asset classes (JP Morgan, 2015).
Related Organizational Systems, Policies, and Culture
Diversity is an important feature of JPMorgan’s global corporate culture. A diversity program was created to develop and utilize the qualified, diverse business of JP Morgan Chase. The culture of diversity is evident in several aspects of the firm’s supply chain. Moreover, JPM Chase also embraces a corporate culture that is shareholder friendly (Adrian " Shin, 2009).
JP Morgan Chase has policies and procedures in place to support its mission and vision statements. The company maintains compliance processes to ensure that all activities and done according to its policies. JPM Chase is usually involved in numerous legislative initiatives in a wide spectrum of policy areas which significantly influence the operations and outcomes of the organization. The firm regularly expresses its views to public officials and present them with factual briefings that inform their decisions. Furthermore, JPM Chase advances public policies, analyze trends, and monitor legislative activities that benefit the company and its stakeholders. The company’s policies prohibit contribution of its funds to political parties.
Recommendations
JP Morgan Chase and other financial institutions are faced with numerous financial problems as a result of ineffective management styles. An increasing number of banking executives are concentrating on optimizing their operations, trimming payrolls, and cutting costs. Thus, JP Morgan Chase should follow six key strategies for improving the effectiveness and efficiency of their financial plans.
The executive of JP Morgan Chase should focus on business realignment to avoid business lines that have low margins and high costs. The company’s management should instead adopt business lines that are more profitable and cost-effective. For instance, the company should focus more on lending and mortgages. For the firm to be efficient a robust approach to strategic planning must be taken in evaluating the resources required in identifying opportunities that will differentiate the JP Morgan Chase from its competitors (Adrian " Shin, 2009).
Moreover, the management of JP Morgan Chase should opt for channel optimization to evaluate different ways customers interact with the firm to form a cost-effective combination that can be adapted to the specific customer base. JPM Chase can achieve this by reconfiguring responsibilities and duties in all branches and employ new metric to analyze branch technical capabilities to meet customers’ changing expectations.
Besides, many financial institutions often underestimate the opportunity to improve process costs since it involves some nontraditional view of business processes. However, JPM Chase should improve their process cost with an aim to minimize the unit cost-to-value ratio of every transaction such as the cost of creating a loan document or opening an account. The improvement of process costs usually involves continuous monitoring of performance and can be done through benchmarking, mapping, and analyzing various office processes (JP Morgan, 2015).
The management of JPM Chase should also improve their usage of automation tools to improve staff productivity. This will enable the firm to handle more transactions and greater volumes of activities using the same number of workers. However, the company should incorporate technology with other opportunities such as better training and supervision, improved rewards and motivation systems, to improve staff productivity. Moreover, other useful tools that JPM Chase should adopt include performance charts and visible to serve as a motivation to employees.
JP Morgan Chase should also improve its vendor management by enhancing vendor relationships. Vendor management should be focused to derive the maximum possible value from the vendor relationship. The important tools to be used include vendor scorecards and service-level agreements in monitoring performance issues such as response times and system availability.
Conclusion
JP Morgan Chase operates through commercial banking, corporate and investment bank, and consumer and community banking. The alignment of the firm’s vision and strategies has made the management to focus on how they safeguard, strengthen, and grow JP Morgan Chase over time. The management team of JP Morgan Chase is composed of the board of directors and operating committee. The management style of JP Morgan Chase also makes sure their initiatives are sustainable. JP Morgan Chase should follow six key strategies for improving the effectiveness and efficiency of their financial plans.
References
Adrian, T., " Shin, H. S. (2009). Money, liquidity, and monetary policy. American Economic Review, 99(2), 600-605.
Fries, S., " Taci, A. (2005). Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries. Journal of Banking " Finance, 29(1), 55-81.
JP Morgan (2015). Effective Working Capital and Cash Flow Management. Commercial Banking Article https://commercial.jpmorganchase.com/jpmpdf/1320693831329.pdf
Internet source: https://www.jpmorganchase.com/
