Term Paper
On
Service Marketing
Submitted to:
Submitted by:
Name ID Signature
Md Yeahyea Kabir 2012-1-95-065
1
S.S.M Sadrul HudaFaculty of Business AdministrationMBA ProgramEast West University
Letter of Transmittal
S.S.M Sadrul Huda
Faculty Member
Master of Business Administration Department
East West University
Subject: Submission of Term paper.
Dear Sir,
It is our pleasure to submit the report on “Ethical Misconduct in Dutch Bangla Bank” as a
part of our term paper. We have enjoyed preparing this term paper which enriched our
practical knowledge of the theoretical concept. We tried to reflect the practical operational
aspects of the organization which is complementary to the theoretical lessons.
Sincerely yours,
__________________
Md Yeahyea Kabir
On behalf of the group
Table of Content
2
SL Topic Page
1 Introduction 4
2 Dutch Bangla Bank Profile 5
3 Ethics in Service 8
4 Ethics & banking Sector 8
5 The Opportunity for Ethical Misconduct in
Service Marketing
9
6 Issues that Create Ethical Conflict 11
7 Controlling Ethical Decision Making 12
8 Conclusion 14
3
Introduction
Ethical misconduct disasters constitute serious costly risks to the continuity and survival of a
business. Regular headlines reveal that breakdowns of integrity collectively cost businesses
billions of dollars in litigation, fraudulent financial acts, increased costs, fines, reputation
and image damage, customer/client trust, lost sales and recovery costs, and potentially land
senior management in prison. No company is immune from these threats. Prudent
businesses must plan to manage integrity continuity by assessing their vulnerability to
ethical disasters, taking proactive measures, and preparing their organizations to mitigate
and survive when such scandals break. In service sector it’s a common scenario.
Bank is the important financial institution in the economy. The economic development of a
country depends on the development of banking sector. Today’s modern banks are not
only providing traditional banking services but also expanding many financial services.
Foreign Exchange Division occupies an important place in a nation’s economy because of
its intermediary role; it ensures allocation of resources and keeps up the momentum of
economic activities. A banking institution is indispensable in a modern society. It plays a
pivotal role in the economic development of a country and forms the core at the money
market in any country. In a developing country like Bangladesh the banking system as a
whole has a vital role to play in the progress of economic development.
This term paper emphasizes on the ethical misconducts opportunity, Issues, & controlling
the ethical decision making. It’s our pleasure to submit our Term paper Titled “Ethical
Misconduct in Dutch Bangla Bank” While preparing this term paper, we have tried to gather
as much information as possible and to gather all the information pertaining the subject to
enrich it. We believe that it was a fascination experience to analysis the service sector and it
has enriched both our knowledge & experience.
4
Dutch Bangla Bank Profile
Dutch-Bangla Bank started operation is Bangladesh’s first joint venture bank. The bank
was an effort by local shareholders spearheaded by Md. Sahabuddin Ahmed (Founder
chairman) and the Dutch company FMO.
It is the largest bank in Bangladesh by market capital. DBBL was established under the
Bank Companies Act 1991 and incorporated as a public limited company under the
Companies Act 1994 in Bangladesh with the primary objective to carry on all kinds of
banking business in Bangladesh. DBBL commenced formal operation from June 3, 1996.
The Bank is listed with the Dhaka Stock Exchange Limited and Chittagong Stock Exchange
Limited.
From the onset, the focus of the bank has been financing high-growth manufacturing
industries in Bangladesh. The rationale being that the manufacturing sector exports
Bangladeshi products worldwide. Thereby financing and concentrating on this sector
allows Bangladesh to achieve the desired growth. DBBL’s other focus is Corporate Social
Responsibility (CSR). Even though CSR is now a clichés, DBBL is the pioneer in this sector
and termed the contribution simply as ‘social responsibility’. Due to its investment in this
sector, DBBL has become one of the largest donors and the largest bank donor in
Bangladesh. The bank has won numerous international awards because of its unique
approach as a socially conscious bank.
DBBL was the first bank in Bangladesh to be fully automated. The Electronic- Banking
Division was established in 2002 to undertake rapid automation and bring modern
banking services into this field. Full automation was completed in 2003 and hereby
introduced plastic money to the Bangladeshi masses. DBBL also operates the nation’s
largest ATM fleet and in the process drastically cut consumer costs and fees by 80%.
Moreover, DBBL choosing the low profitability route for this sector has surprised many
critics. DBBL had pursued the mass automation in Banking as a CSR activity and never
intended profitability from this sector. As a result it now provides unrivaled banking
technology offerings to all its customers. Because of this mindset, most local banks have
joined DBBL’s banking infrastructure instead of pursuing their own.
5
Vision of Dutch-Bangla Bank:
“To become a leading banking institution and play a pivotal role in the development of
the country”
DUTCH BANGLA BANK dreams of better Bangladesh, where arts and letters, sports and
athletics, music and entertainment, science and education, health and hygiene, clean and
pollution free environment and above all a society based on morality and ethics make all
our lives worth living. DBBL’s essence and ethos rest on a cosmos of creativity and the
marvel magic of a charm life that abounds with sprit of life and adventures that
contributes towards human development.
Mission of Dutch-Bangla Bank:
Dutch Bangla Bank engineers enterprise and creativity in business and industry with a
commitment to social responsibility.” PROFIT ALONE” does not hold a central focus in
the bank’s operation; because “man does not live by brain and butter alone “.
Core Objective of DBBL:
Dutch-Bangla Bank believes in its uncompromising commitment to fulfill its customer
needs and satisfaction and to become their first choice in banking. Taking cue from its
pool esteemed clientele, Dutch-Bangla Bank intends to pave the way for a new era in
banking that uphold and epitomize its vaunted Marques “Your Trusted Partner”
To earn and maintain CAMEL Rating ‘Strong’
To establish relationship banking and improve service quality through development of
Strategic Marketing Plans.
To remain one of the best banks in Bangladesh in terms of profitability and assets quality.
To introduce fully automated systems through integration of information technology.
To ensure an adequate rate of return on investment
To keep risk position at an acceptable range (including any off balance sheet risk)
The Board:
The board is comprised of directors having diverse skills, experience and expertise to add
value towards better corporate governance of the bank and maximizing value for all
6
stakeholders. The board discharges its responsibilities itself or through various
committees. The Board meets on a regular basis to discharge its responsibilities.
The Board is made up of 10 (ten) Directors including a Chairman and five Directors
representing shareholders, one independent Director, two Directors from depositors and
the Managing Director.
Principal Activities:
The principle activity of the bank is banking. The banking business includes obtain
deposits through account opening, offer credit to corporate organizations, as well as
retail and small & medium enterprise, trade financing, project financing, lease and hire
purchase financing. The modes of banking include conventional banking. It also performs
merchant banking function under the license by Securities and Exchange Commission,
Dhaka, Bangladesh.
Customer Service:
DBBL has wide span of customer service. As DBBL has huge number of customer. So does
they are maintaining a good customer service countrywide.
7
Ethics in Service:
Ethics is a branch of philosophy dealing with what is good and bad and with moral duty
and obligations, the principles of moral conduct governing an individual or group. The
basic concepts and fundamental principles of decent human conduct. It includes study of
universal values such as the essential equality of all men and women, human or natural
rights, obedience to the law of land, concern for health and safety and, increasingly, also
for the natural environment.
Code of ethics is simple. The individuals shall honor their responsibility to the public by
promoting public understanding of the professions, by supporting the development of
services designed to fulfill the unmet needs of the public, and by providing accurate
information in all communications involving any aspect of the professions, including the
dissemination of research findings and scholarly activities, and the promotion, marketing,
and advertising of products and services.
Ethics & Banking Sector:
In today’s competitive scenario, every bank wants to become the market leader, capture
maximum market share and have maximum customer base. To achieve this objective
various kind of marketing strategies and communications are undertaken. The
communications are extremely important in case of services to create powerful images
and a sense of credibility, confidence and assurance for the consumers. However, in the
banking sector, marketing communication elements are misunderstood and irrelevant
from the consumer’s perspective. Moreover, for the growth and survival every business
has to tradeoff between ‘profit’ and ‘ethical’ issues concerning their marketing
strategies. In general, ethics are defined as “a branch of philosophy dealing with what is
good and bad and with moral duty and obligation”. Opportunities for ethical misconduct
with in service sector abound and they can be attributed pre dominantly to the
intangibility, heterogeneity and inseparability dimensions inherent in the provision of
services.
Inseparability complicates the consumer’s ability to evaluate the quality of service
provided
8
Heterogeneity reflects the difficulty in standardization and quality control
Inseparability reflects the human elements involved in the services delivery
process.
All three dimensions contribute to consumer vulnerability to and reliance upon the
services provider’s ethical conduct during the service encounter.
The Opportunity for Ethical Misconduct in Service Marketing:
Services are intangible. It cannot be seen. Services are being provided by human beings,
deliverance of service is different from person to person hence it cannot be standardized.
Due to all these factors there are lot many chances where the ethical misconduct can be
seen/encountered.
Few Search Attribute:
Due to intangibility of the services, consumers can not physically examine the services
before purchasing; consequently, consumers have little pre-purchase information about
the services. Here customer have little information before available to help them make
an informed, intelligent decision. Consumer of service often must base their purchase
decisions on information provided by the service provider.
As an example customer don’t know that how well the ATM can give service to the
customer.
Technical and specialized services:
Banking service is technical in nature. It is not easily understood and or evaluated. A
customer can’t know that how the banking service is running. This evaluation is taken
based on the appearance of the bank. How they are informing socially.
As an example, DBBL is socially sound bank. They are donating huge money socially. This
creates a brand image so that customers are attracted.
9
Time Lapse between performance and Evaluation:
Services like bank are mostly done for future. For example the success and failure of
retirement planning may not be realized before retirement. Here banks are getting the
benefit. They are giving service for a distant future. Such as DPS, this is a program designed
for future. Customers cannot determine the failure or service in the future.
Service Sold without guaranties and warranties:
Services are sold without guarantee and warranty. DBBL account is opened by the
unskilled employees. Thus any problem can occur during the production process. Credit
card is another example for the service sold without guaranties and warranties, because
for any problem customer might have to do that again. It will take time.
Service Performed by boundary Spanning Personnel:
Many time’s services are provided outside the physical premises of the bank. For example
most of the Credit Card application form is filled up in the residence/ office of the
customers, as a service gesture bank official visit the customer at their place. Due to this
service provider often are not under the direct supervision. Physical distance is also come
to the effect.
Accepted Variability in Performance:
Due to heterogeneity, standardization and quality control measures cannot be
implemented in service deliverance. Each individual is different in their transaction. It is
unavoidable in nature. In DBBL different bank teller employee can perform differently.
Some are superfast and some are slow.
Outcome Based Reward System:
Reward system in an opportunity for ethical misconduct. DBBL banks commission for bank
opening is a reason. Thus employees are focused only for earning money rather that giving
standardized service. Thus they earns more but fails to provide standard service.
10
Customer Participation in Production:
People think that with involvement of the customer in the Bank service encounter, there
will be fewer opportunities for ethical misconduct. But the things are vice versa, the
Consumer’s involvement in the whole process enables a service provider to influence the
consumer through fear or greed for the product.
As an example during opening for a Bank account customer service employees focuses to
take more deposit from customer. Thus they earn more. They make an impression to the
customer that this is the best policy for you.
Issues that Create Ethical Conflict:
In banking institutions personal selling is highly used and reliable media of
Communication. DBBL is not the exception. Each and every day peoples are
communicating with the bank personnel. Due to individuality of service provider and
consumer, the chances of ethical misconduct increases due to greed, self-interest, profit
maximization, to accomplish targets etc.
Conflict of Interest:
In this scenario Service provider can be in close proximity to the customer, consequently
the service provider can experience conflict of interest. For example a DBBL Bank
employee can guide the customer to divide his whole amount of investment in FDR within
family member and increase the number of account to misguide the Bank & income tax
authorities. In this scenario, customer and employee are in win situation, but the
government does not get actual data about the potential of the customer.
Organizational Relationships:
Working relationships formed between service providers and various role partners such as
customers, peers, supplier’s subordinates. As an example in unethical manner, Bank
employees can provide share dividend information to the outsiders. Here employee is
providing sensitive information to the outsider. This is an unethical activity.
11
Honesty:
Honesty is partner of truthfulness, integrity and trustworthiness. Violating the honesty is
an ethical misconduct. DBBL employee can give a misleading commitment that you will get
your ATM card after 3 working days. If that cannot be fulfilled by the bank then that is
breaking of honesty.
Fairness:
Fairness means impartial treatment.Fairness is an outcome of just treatment, equity and
impartiality. Clients should be treated equally and deals based on favoritism should be
avoided. It’s a true fact in DBBL that if a customer is financial sound, maintains good
balance in bank, that customer will get warm welcome and all the kind of services will be
provided to him on his doorstep, vice a versa is also true if a customer is not having very
sound financial condition, nobody will bother to look towards that customer and resolve
his issues.
Communication:
Ethical issue arises when DBBL bank communicates information to the customers or
prospective customers. In one advertisement DBBL claims that they have fastest banking
service. In reality they have the slowest banking service. This is afalse claim. The
communication is not correct.
Controlling Ethical Decision Making:
DBBL can control the Ethical decision making to reduce the adverse effect of unethical
decision. By the following steps unethical activity can be controlled.
Employee Socialization:
Employee socialization is the process by which new employees understand the company's
policies, the internal culture, how the company hierarchy works and the ways to function
effectively in the organization. Developing programs and policies that integrate new
employees into the company helps the company maintain a consistent corporate culture.
12
As an example DBBL can recruit or train employees to go on with banks norms and
policies, So that they can work ethically.
Standards of Conduct:
As a part of the socialization process, formal standards of conduct can be presented tpo
bank employees through code of ethics. A code of ethics document may outline the
mission and values of the business or organization, how professionals are supposed to
approach problems, the ethical principles based on the organization's core values and the
standards to which the professional will be held.
As an example, DBBL should provide the standard of conduct so thus employees can know
how to work on a certain situation.
Corrective Control:
Corrective control is the mix of reward and punishment to enforce firm’s code of ethics.
For service firm it’s an effective measure to control unethical activity. Research indicates
that employees of firms that have code of ethics are more prone to believe that violators
of ethical conduct will be punished.
As an example DBBL can communicate the corrective control policy to the employees thus
it will be controlled.
Leadership Training:
Teaching of leadership qualities, including communication, ability to motivate others, and
management, to an individual who may or may not use the learned skills in a leadership
position. Thus they can take ethical decisions in comply with the supervisors.
As an example Management Trainee Officer in DBBL is an example of leadership training.
Who tend to comply with their supervisors to demonstrate loyalty.
Service / Product Knowledge:
Service knowledge is an essential skill. Understanding your products/service features
allows you to present their benefits accurately and persuasively. Customers respond to
enthusiastic sales staff that is passionate about their products and eager to share the
13
benefits with them. Employees need to know the updated service knowledge to provide
right service to the customer. If ay shortcoming happens informing the customer is
another aspect of the knowledge. Thus unethical behavior can be controlled.
As an example in DBBL employees are given training regularly for the updated information.
It will control the misleading behavior.
Monitoring of Employee Performance:
Another way to control ethical decision making is to measure employee performance.
Here employee’s performance is measured against the organization ethical standard. This
result must be communicated to the employee. If any employee performs good or least
performed, the result must be communicated to employee. Thus employee will be
cautious for ay unethical activity.
As an example DBBL must maintain a monitoring to measure employee performance. Thus
ethical decision can be controlled.
Stress Long Term Customer Relationship:
Service provider must build trusting relationships between themselves and their customer
to promote a long term mutually beneficial relationship. This can be done aong with the
employee. Company may give misleading information to the customer for a certain
reason. Employees can stress that to long term relationships between the customers and
bank. It can minimize the unethical decision making.
As an example DBBL can mislead information for a quick sale of bank account. Here
employees can build a long term relationship with the customer. Thus it will minimize the
unethical decision making.
14
Conclusion:
Dutch Bangla Bank Limited should be true professionals and should adopt best practices of
the industry and should comply to the rules strictly. If any illegal or unethical activity is
suspected by a financial service provider then it should be discouraged and if required
should report to the concerned authorities. There should be independence, meaning that
service provider should not be biased by personal relationship, personal benefits such as
gifts or other forms of compensation. In financial services risk and return factor should be
placed accurately so that customer can make a prudent decision, secondly organization’s
as well as customer’s secrecy should not be compromised for personal gain.
15
Top Related