BUS 200 group project, semester 2, 20057 March 2011 business organisation and management (Photos: Entrance hall UBS headquarters in Basel, Aeschenvorstradt ; Counter hall UBS headquarters in Zurich, Bahnhofstrasse; UBS headquarters in Zurich, Bahnhofstrasse 45; UBS in Zurich, Paradeplatz) a glimpse of UBS Authors: Philipp Bircher 40808459 Meike Brünk 40594432 Valery Crottaz 40638626 Andreas Eiman 40811840 Anssi Ihaniemi 40794067 Executive summary As one of the leading wealth management companies in the world, a premier global invest- ment and asset management bank, UBS’ situation represents a good example of the chal- lenges an organization in the financial sector faces today. Beginning with a short outline of its historical roots, we try to shed light on UBS’ organizational culture. In this context it is cru- cial to understand that the values and norms within a company serve as guiding principles on a firm’s way to success. Thus, we analyse the values the organization promotes and discuss the implications this might have on its business. Many principles that are reflected in UBS’ organizational culture today have their roots in the bank’s constituting parts. Furthermore, the views on leadership and its emphasis on entrepreneurial thinking can only be fully understood if one takes into account the bank’s very diverse background which is a result of its history, its global business operations and its, in terms of culture and age, very heterogeneous work- force. Based on these facts and thoughts, we address the question of UBS’ strengths, weaknesses, opportunities and threats and summarize the organization’s situation in a SWOT Analysis. In terms of strengths, it turns out that the organization comes up with an efficient human re- source management, which focuses on satisfied employees, who are recognized by UBS as a key factor in the company’s success. Other aspects that reflect UBS’ comparative advantages over other firms are its emphasise on entrepreneurial leadership, its long-term setting of tar- gets by its elaborate “Performance Measurement and Management” (PMM) System, and the fact that UBS manages to integrate the business processes of its different parts in a way that allows to take advantage of synergies. On the other hand, UBS faces some significant shortcomings like financial risks, which are inherent in a bank’s business, legal problems that influence the favourability of the company’s image, diversity issues which arise as a consequence of the bank’s heterogeneous background, and UBS’ size which implies high costs in order to maintain an effective information system. Potential opportunities for UBS are the general liberalisation and deregulation of the financial market in the course of the ongoing globalization process, the possibility to grow in a strategi- cally advantageous manner by acquiring other companies, the continuingly strong growth rates of the countries in the Asian-Pacific region, and the political and economic integration process in Europe which now extends to the eastern European countries, that represent new, emerging markets with a great potential for investments. 2 Finally, threats that UBS has to deal with are the growing technical complexity of today’s business operations and, as a consequence thereof, the dependence on efficient technical solu- tions. Furthermore, UBS faces - due to business cycle fluctuations and its strong position in investment banking - considerable market risks. Geopolitical instabilities and crisis could cause UBS severe problems as well as the intensified level of competition, which may be the downside of globalization. After having agreed on UBS’ shortcomings in diversity issues and the company’s size as its main weaknesses, we provide some ideas on how a new company could turn these into strengths. It turns out that diversity and a company’s size are strongly associated with each other. By downsizing our company we ensure that it can operate, albeit in a more restricted market, in a more flexible manner. At the same time problems that arise due to a too hetero- geneous workforce is alleviated, since we mainly focus on Europe as our location of business. In sum, our strategy comprises that we focus on quality and flexibility by adapting a simpler organizational structure and as a result thereof get the possibility to manage diversity proac- tively, which is not possible for UBS in the current situation. Hence, our firm would then be able to have a competitive advantage UBS does not have. 3 Table of Contents Executive summary ............................................................................................................................................... 2 A Glimpse of UBS - Introduction......................................................................................................................... 5 Organizational Culture ......................................................................................................................................... 6 UBS’ Culture today ............................................................................................................................................ 6 Leadership .......................................................................................................................................................... 6 SWOT-analysis ...................................................................................................................................................... 8 Strengths ............................................................................................................................................................. 8 Weaknesses ......................................................................................................................................................... 9 Opportunities .................................................................................................................................................... 10 Threats.............................................................................................................................................................. 11 Our Road to Success ........................................................................................................................................... 13 The Organization .............................................................................................................................................. 13 Diversity ........................................................................................................................................................... 13 The Size ............................................................................................................................................................ 13 Recommendations and Implementation ............................................................................................................ 14 Appendix A – The Making of UBS .................................................................................................................... 15 Historical Outline ............................................................................................................................................. 15 Integration of Different Cultural Values .......................................................................................................... 15 Appendix B – Structure of UBS ......................................................................................................................... 17 Management ..................................................................................................................................................... 17 Businesses ........................................................................................................................................................ 17 Appendix C – UBS’ Market ............................................................................................................................... 19 Market Description .......................................................................................................................................... 19 UBS’ Performance in this Market .................................................................................................................... 20 Conclusions ...................................................................................................................................................... 21 Appendix C 1 .................................................................................................................................................... 22 Appendix C 2 .................................................................................................................................................... 23 Bibliography ........................................................................................................................................................ 24 4 A Glimpse of UBS - Introduction Being one of the leading financial companies in the world, UBS was founded as a result of the merger of the Union Bank of Switzerland and the Swiss Bank Corporation in 1998 (for infor- mation about the history of these two constituents of UBS see Appendix A – The Making of UBS). In 2000 UBS AG acquired Paine Webber Inc. in 2000 to become the world’s largest wealth management firm for private clients. UBS AG (1998) 2000 merger with Paine Webber Inc (founded 1879)