Transform the Institution into an International Merchant Bank

 

41 percent of total assets in 1984), as opposed to either improvements in interest dollars (which dropped from 2.212 percent of total assets in 1980 to 1.95 percent of total assets in 1984) or reductions in non#interest expense (which increased from 1.86 percent of total assets in 1980 to 1.91 percent of total assets in 1984).

A definitive assessment in the change in financial performance at Bankers Trust from 1980 to 1984 can not be made over a basis of only the comparative performance data presented within the case.

Different perspectives with respect to profit maximization is but a single difference which usually arises among stockholders and managements. Some managements prefer to maximize causes other than profit##managerial salaries and also the corporate environment, as examples. Maximization of either of these reasons tends to conflict with maximization of profit. Therefore, an additional source of conflict among stockholders and management is established. A single view of corporate manage holds that the real control of the company belongs with the operating management and board of directors. The opposing view is that a organization belongs to its stockholders, regardless of who they are, or how lengthy they've held the stock. Inside development of strategy, these opposing views of corporate control needs to be negotiated, and, in your strategy to be successful in leading on the attainment of organizational performance goals, management needs to be comfortable with and supportive in the strategy. The management at Bankers Trust opted for long#run performance improvement, as opposed to short#term benefits. As a consequence, many in the financial performance measures more than the 1980#1984 period deteriorated. More than the long#term, however, there's a reasonable expectation that these unfavorable trends will probably be reversed. In accordance with the experience of Bankers Trust during the 1970s, it is also reasonable to assume that the measures of financial performance that deteriorated in the 1980#1984 period under the new strategy would have deteriorated to an even higher extent under the old strategy, and that over the long#term, these performance measures would have continued to deteriorate, instead of being reversed.

 

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