Investor Confidence and Organizational Downsizing in Financial Institutions

8 Pages Posted: 11 Mar 2009

See all articles by Ananya Rajagopal

Ananya Rajagopal

HSBC Mexico; Anahuac Univeristy, Mexico City

Dr. Rajagopal

EGADE Business School, Tecnologico de Monterrey (ITESM) - Mexico City Campus; Metropolitan College, Boston University

Date Written: February 2, 2009

Abstract

This paper aims innovative perspectives on strategy development in financial institutions to overcome the current global financial recession. Organizational restructuring is argued in reference to proactive and reactive financial and human resource strategies. It is observed that growth of many financial institutions is jeopardized due to primary market downfall, falling investor confidence, liquidity crisis, misjudged lending, high operational costs and blurring corporate image among markets. Authors suggest proactive and reactive measures which may be employed in responding to the current financial crisis. Among many proactive roll-on strategies, banks need to urge government to provide a guarantee that bonds and securities created out of mortgages or out of loans to companies do not become irrecoverable and seize yielding. Financial institutions may manage human resource during the period of economic crisis in a financial institution is to pursue defensive downsizing rather than strategic restructuring, as a result of both internal and external constraints on restructuring strategies.

Keywords: Lending policies, investor confidence, outsourcing, defensive downsizing, risk management, cost effectiveness

JEL Classification: E 50, F 34, O15, O16

Suggested Citation

Rajagopal, Ananya and Rajagopal, Dr., Investor Confidence and Organizational Downsizing in Financial Institutions (February 2, 2009). Available at SSRN: https://ssrn.com/abstract=1356786 or http://dx.doi.org/10.2139/ssrn.1356786

Ananya Rajagopal

HSBC Mexico ( email )

Corporate Office
Mexico City, DF
Mexico

Anahuac Univeristy, Mexico City ( email )

Av de las Torres 131,
Olivar de los Padres, Álvaro Obregon
Mexico City, 01780
Mexico

Dr. Rajagopal (Contact Author)

EGADE Business School, Tecnologico de Monterrey (ITESM) - Mexico City Campus ( email )

Carlos Lazo, 100
Santa Fe
Mexico City, DF 01389
Mexico

HOME PAGE: http://prof-rajagopal.com

Metropolitan College, Boston University ( email )

United States

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