The research delves into the United States banking sector approaches and managing of geographical and cultural turmoil among the employees. The capacity to overturn geographical and cultural turmoil among the employees is vital to enhance the performance and profitability of the banking institutions in the United States. Therefore, the study streamlines the research based on the; – a.) Evaluation of the geographical and cultural turmoil among the employees in the U.S. banking sector. b.) Examination of the uncertainties in the U.S. domestic economy and cultural turmoil results. c.) Assessment of the impacts of uncertainties in the U.S. domestic economy and cultural turmoil. d.) Determination of the aspects of deindustrialization and its parameters on how they affect the banking sector in the U.S. e.) Scrutinizing of the prevalence of cultural problems, political and social unrest, and their impacts on the financial institutions’ conduct. The five objectives are essential to address the problem and provide critical recommendations sufficiently. Furthermore, the analysis of how uncertainties in the U.S. domestic economy, deindustrialization effects, and downward mobility affects the culture of the banking sector in the United States. Thus, it negatively impacts on the employee performance, productivity, and profitability of the banking sector.
Table of Contents
The paper critically examines the capacity of the banking sector in the United States to manage geographical and cultural turmoil among the employees to enhance profitability. The employees act as the primary unit of the functionalities and operations of the banks. This presents the employees as an integral unit towards the profitability of the financial institutions in the banking sector. In the world of rapid transformations and technological advancements, the change in the banking model, performance capacity, and market structure act as core components of impacting of geographical and cultural influences among the employees. The paper conducts extensive research on existing literature to attain vast insights on the functionality of the employees in the banking sector. The use of scholarly, journal, peer-reviewed, among other verified materials, is essential to inform the study with empirical evidence. Thus, facilitate improving the stability and efficiency potential of the banking markets in the United States.
The research delves into the geographical and cultural turmoil among the employees in the U.S. banking sector with a primary focus on Citigroup. The evaluation of the banking markets depicts a prevalence of uncertainties in the U.S. domestic economy characterized by the culture disorders emanating from the practices of the banks. That is, with the financialization of everything in the advancement of the global capitalist economy, the banking market in the U.S. has led to the supremacy of financial actors, institutions, markets, and motives of their operations (Storm, 2018). This affects the regulatory framework and cultural setting of the banking practices in the country. Hence, evaluation of impacts of deindustrialization and the parameters applied, downward mobility and its implications on the cultural costs, cultural problem manifestation, and the assessment of political and social unrest impacts on the financial institutions are core components of the research.
The key research objectives are aligned to five core categories that help streamline the investigation on the practices and performance of the banking sector in the United States. The aims can be analyzed to include the following: –
The geographical and cultural turmoil erodes the capacity of the employees to operate in the banking sector in the U.S. the performance, productivity, and organizational culture of the employees in the banking sector is bound to diminish. The common problem constitutes the loss of jobs, economic crisis, the demographic distribution of wealth, and how the impact of the aspects on the employees in various regions in the country. For instance, the extinction of the steel manufacturing industries in different parts of the country and how they impact on the conduct of the employees in the banking sector of the United States. Also, the cultural turmoil is a result of the erosion of ethical practices and culture, an increase in regulatory frameworks making it impossible for the banks to comply, overreliance on micro-loans, micro-insurance, credit cards, mobile money, and digital currencies (Andries & Galasan, 2020; Chen, 2019; Dickens, Triest & Sederberg, 2017). The problem exists as a result of the financialization of everything in modern-day society.
The study on the geographical and cultural turmoil experienced among the employees in the United States banking sector is fundamental in mapping areas of improvement. The continued transformations of the banking markets and financial activities, providing the best conducive environment is paramount to employee productivity (Kalleberg & Von Wachter, 2017). The increase in financialization prospects that have seen bank models, performance, and market structure are vital aspects in determining the stability and efficiency of the banking sector (Storm, 2018). The existence of numerous regulatory frameworks and demands posit a profound challenge in successfully mitigating the cultural turmoil that undermine the functionality of the employees (Newman, n.d.). Thus, the insights in the paper are essential for the advancement of the banking practices and care for the employees to ascertain their commitment and passion for financial operations.
The paper is profoundly significant as it provides critical insights into dealing with arising problems in the banking sector such as the employee productivity (Khan, Ahmad & Chan, 2018). The employees and advancements of technology in the banking sector are in a continuous conflict path. The increase in regulatory requirements and specifications leads to the cultural turmoil that impedes employee functionality (Wilson, 2017). The negative aspect of geographical and cultural unrest among the employees undermines the profitability of the banking sector. In turn, banking shocks and vulnerabilities continue to escalate the worse situation in the banking sector. Thus, the understanding of the leading causes of the geographical and cultural turmoil creates an opportunity to strengthen the employees’ capacity (Newman, n.d.). Hence, project a level of resilience and commitment towards enhancing the profitability of the banking sector in the country.
Newman (n.d., p. 113) states that the “dilemma in the banking sector is asymptomatic of a widespread disease generated by long-term structural changes in the domestic economy.” The changes adopted in the domestic economy has resulted in the stagnation of wages among the American works, growth of income inequality, and high rates of unemployment. The cultural setting of the regulatory frameworks crisis after crisis intensifies the vulnerability and local shocks on the domestic economy (Doerr & Schaz 2019). Buch and Dages (2018, p. 60) support the argument with the assertion that “the post-crisis market environment and changes to the regulatory framework have had a marked impact on the banking sector globally.”
According to Doerr and Schaz (2019), geographical diversification of the banks is fundamental to the success of the loan portfolio. That is, diversification increases stability through improving the ability to raise additional funds necessary in the times of distress and spillover impacts in the banking markets. The adverse results can be mitigated through geographical diversification of the banks allowing the employees access to diverse experience in various parts of the country. The geographical turmoil that has characterized the banking sector over the years culminate in the increase in vulnerability to local shocks, which banks cannot shelf themselves (Doerr & Schaz 2019). Thus, resolve on risk and competition vulnerability is critical for the profitability of the banks in any country (Shair, Sun, Shaorong, Atta & Hussain, 2019).
Song and Thakor (2018, p. 59) argue that culture in the banking sector is contagious with the incorporation of “safety-oriented culture in some banks causes others to follow suit.” The capacity to maintain high culture impacts on attainable outcomes associated with incentive contracting (Song & Thakor 2018). The argument is supported by Storm (2018, p. 302), who observes that “banks have long had undue influence in the society.” The practices of the banking sector following massive financialization of everything erodes the cultural concept of the banks as an entity of finances-friendly policies (Storm 2018). In turn, culminate in cultural turmoil and distrust of the banks as only a profit-oriented machine at the expense of the stagnating economy.
Storm (2018, p. 302) discusses that the advancements of financialization as a mode of conduct in the banking sector “underwrites the narratives and discourses which emphasize individual responsibility, risk-taking, and active investment.” The competition between social claims and distributive outcomes is manifested as a mechanism in which an ‘invisible hand’ of the ‘blind’ financial markets operates (Storm, 2018). This culminates in a culture characterized by a lack of trust in the banking systems among the employees. In turn, it makes it challenging to attract huge commitment and dedication to the operations of the bank. (Song & Thakor 2018; Song 2018)
The uncertainties experience amidst massive economic stagnation leads to extensive job losses, high unemployment rates, income inequalities, deindustrialization, among other social factors that erode the social fabric trust in the banking systems (Newman n.d.). This impacts in geographical and cultural turmoil that protect the society from economic shocks and vulnerabilities. Employees’ inability to trust and find the long-term value of the financial sector undermines the profitability capacity. Thus, economic deficits lead to poor economic performance, which further erodes the relationship between the banks and the employees (Shair et al., 2019).
This section evaluates the impacts of the banking system size on their performance. The size of the bank matters – in the assessment of the geographical locations and vast reach the bank has across the country. The research through literature review of existing resources analyzes large banks such as JPMorgan Chase & Co., Wells Fargo, Bank of America, Citigroup Inc., PNC Financial Services, Morgan Stanley, U.S. Bancorp, etc., as compared to the employee performance in the small community-based banks (Bord, Ivashina & Taliaferro, 2018). The large banks occupy a vast geographical region making it difficult and profoundly challenging to managing large areas of operations (Wojcik, Knight, O’Neil & Pazitka, 2018). The geographical turmoil erodes the employee functionality, which has prompted the most significant – the top megabanks in the U.S. to be listed as some of the worst companies in America. All the top four banks – Wells Fargo, JPM Morgan Chase & Co., Citigroup Inc., and the Bank of America shows the prevalence of scandals, higher fees, unfriendly policies, and fewer free accounts – making them unlikable even to the employees (Bord et al., 2018). In turn, it erodes the functionality of the employees and productivity.
The small community banks cover minimal geographical regions within the areas of operations, making them accountable to the local clients. The small banks offer lower fees on credits, transaction charges, and free accounts (Doerr & Schaz, 2019). As well, more personalized attention is essential to create a good relationship between the employees and the customers, the employees, and the banks. This impacts the provision of higher ethical standards and quality services in which employees commit to achieving (Andries & Galasan, 2020). The minimal geographical locations allow the banks to constitute a few numbers of employees, allowing their involvement in decision-making processes. Hence, the impact on the stability and productivity of the banks culminating in their profitability. Unlike the small banks, large banks’ geographical vastness does not allow the accommodation of the employees in decision making with ease (Shair et al., 2019). Thus, undermine the employees’ commitment to the banks and limit their productivity.
In a study conducted by Bord et al. (2018, p. 1), “despite the offsetting expansion of banks, the net effect of the contraction in credit was negative, with lower aggregate credit deposits growth, and lower entrepreneurial activity through 2015.” The size of the bank and the geographical area they cover constitutes one of the vital system risk indicator (Varotto & Zhao, 2018). The banks create an overriding concern of “too-big-to-fail” affecting the productivity of the bank and the employees. The large banks have a likelihood of experience massive revenue falls in case of arising issues in geopolitics and geo-economics (Wojcik et al., 2018). In turn, this creates a spillover effect that is bound to affect the employee performance and productivity in the bank across all locations of the bank (Andries & Galasan, 2020). Thus, increase the risk and competition of the profitability of the large banks more than the small banks (Shair et al., 2019).
The cultural turmoil in the banking system in the United States is associated with the compensation structure, lack of capital rules, board oversight, compensation levels, and management risks understanding (Ali & Puah, 2019; Andries & Galasan, 2020; Bianchi & Fiordelisi, 2017; Engler, 2018; Varotto & Zhao, 2018). This constitutes of the impacts of the regulatory creep on employee performance (Zhang & Broadstock, 2018). The lack of capital rules and board oversight sight a potential breakdown of the cultural values and principles guiding the employees conduct in the banking system. The large banks operate intending to primarily attain the set objectives without prior concern of the employees. Consequently, work stress undermines the adoption and integration of cultural values and standards into banking practices (Chen, 2019).
The erosion of the adaptation capacity of the banks to set the right culture for the employees is a profound feature of setting the cultural practices in the banking system. Ethical practices from the top of the employees and standards of conduct are critical features of cultural principles in the banking sector (Song & Thakor, 2019). Amid increased scandals, routinely listing as worst organizations for the employees, and lack of commitment to the employees among the large banks such as Wells Fargo creates a prevalence of cultural turmoil (Doerr & Schaz, 2019). The consequence of the practices comprises of the erosion of the culture among the employees and the banking practices. In turn, commitment, employee loyalty, and ethical standards are bound to be significantly affected. The impact constitutes a cultural turmoil that undermines the functionality and productivity of the employees (Hacker, 2019). Thus, subsequent failure and lack of competitiveness is the likely phenomenon following poor policies and lack of addressing the employees’ needs and required in large banking institutions.
The section evaluates the symptomatic impacts of the widespread disease generated by long-term structural changes in the domestic economy. Newman (n.d., 112), notes that “the American job machine seems to be running down characterized by wages stagnation, growth of income inequality, high unemployment rates, and rise in the cost of living.” This culminates in the escalation of the effects of economic decline on the U.S. banking system, making sustainability of quality life-style in the country unmanageable (Kalleberg & Von Wachter, 2017). The uncertainty in the domestic economy across different locations and demographic differences depicts the difficulties the Americans are facing in sustaining economic progress. The domestic uncertainties are a result of the financial crisis that has rocked the world and minimal analysis of its impacts on the employees and citizens of the United States, prompting the country to witness uncertain future (Bernanke, 2018).
The policies adopted by the government show a tendency of continuously putting stringent measures on the economy. This makes it difficult to operate and compete effectively with the banks taking over (Bernanke, 2018). The banks’ expansion priorities at the expense of the employees create an uncertain future for the employees to operate and survive in the U.S. domestic economy. The capacity to homeownership among young people has drastically dwindled with minimal ability to cater for standard living styles. The financial hardships prompt the vast majority of Americans to work full time, creating a culture of fear and frustrations to institutions that do not cater to the needs (Kalleberg & Von Wachter, 2017). The diversification of the income inequalities and the increase in worries of the long-term impact of the bank policies affect the performance and productivity of the employees. This culminates in low profitability as the decline of employee performance is prevalent. The culture of competitiveness, productivity, and massive benefits in the U.S. is on a continuous decline predicting doom for the performance of the banking sector, among others (Newman, n.d.).
The deindustrialization wave kicked in the U.S. in the 1970s and 1980s, affecting the country’s domestic economy and performance of banks in issuing credits and access to more money circulation. The 70s and 80s saw a massive downturn of the U.S. manufacturing sector, especially in the Rust Belt zones of the Northeast and Midwest of the country and Sun Belt states of the South and West of the United States (Newman, n.d.). The massive shutdowns of the manufacturing plants resulted in the “loss of nearly thirty-eight million jobs to runaway shops, plant shutdown, and cutbacks” (Newman, n.d., 116). The results comprise of creation of vulnerability of labor in the wake of increased unemployment. The prospect led to a decline of average wages – including to persons still in employment. The result downward pressure in the affected regions saw the potential of eroding the economic performance of the entire country resulting in poor performance of the banks (Dickens et al., 2017). The policies adopted by the banks in mitigation of downturn performance of the economy and job losses risks eroding the cultural norms and practices in the banking sector. The most affected region’s collective suffering as a result of economic contraction that undermines the banks’ operations.
The economic contraction shows the characteristic of unwelcome cuts, low wages, lack of access to credit, lack of investments, and lack of long-term goals. In turn, the culminating effects constitute the diminishing of the economy – a tendency of both geographical and cultural turmoil in the banking sector and the economic performance of the country (Sironi, 2018). The economic progress, reliability, and stability are vital to creating a conducive environment for sustainable culture across the banking sector. The primarily affected regions by deindustrialization undermine the culture of competitiveness among the employees (O’Connor, 2017)). This follows a lack of enticing compensation packages and low wages as mitigation factors the bad economic state in the country. The shutdowns and relocation of the manufacturing plants to low salaries and non-unionized locations depict the impacts of the uncertain future for the banking sector in the United States (Wilson, 2017). Hence, bad policies that undermine the banking culture, commitment, and productivity of the employees, and the profitability of the banks.
Downward mobility presents the cultural settings amidst the decline of optimism among the citizens. In the United States, the commitment of the employees in the banking sector is highly influenced by the belief that the institutions will impact on the improvement of the respective employee’s life (Newman, n.d.). This is through better compensation wages and terms of employment, leading to job satisfaction and competitiveness. However, amid the decline in cultural values and standards of the banking sector, practices, and intensified scandals associated with the top echelons result in the culture of disloyalty (Sarpong-Kumankoma et al., 2018). The loyalty question between the employees and the financial institutions is affected by tendencies of the disloyalty of corporations towards the employees and incompetent presidents. This culminates in downward mobility leading to the erosion of the culture of optimism among the employees in the banking institutions (Khan et al., 2018).
The morality play impacted by downward mobility in the banking sector in the U.S. shows the prevalence of cultural turmoil, which undermine the employees’ performance and productivity. The productivity and performance of the employees are enhanced by the belief in the optimism towards their work and the employer (Ali & Puah, 2019). The excellent relationship promotes commitment and values of practice that compel employees to remained focused, innovative, and competitive. In turn, high productivity is ascertained (Khan et al., 2018). However, the large financial institutions that dominate the U.S. banking services frequency of scandals and bad policies prompt the employees to deteriorate in their dream to high performance (Bianchi & Fiordelisi, 2017). Thus, culminate in the erosion of the cultures guiding the employees’ conduct and performance in the banking sector.
The section assesses the regulatory backlash, which is characterized by extensive organizational measures reducing returns. Stanley (2018, 1) states that “the financial crisis laid bare serious issues in the governance of banks and financial firms.” This is followed by widespread misconduct and a lack of adequate internal risk management among the banking and financial firms’ regulators (Stanley, 2018). The extensive regulatory measures act as a way to check the operations of the banks and the conduct of the employees. The robust regulations hurt the banks’ contrary to the optimism of inducing positive values and cultures in the banking sector. Milner et al. (2019) note that this is a failure in organizational and regulatory strategies to sufficient reform of the governance structures in the banking sector. Thus, it undermines the performance and productivity of the employees as well as the profitability of the banks (Stanley, 2018).
The cultural problem is impacted by the adoption of stringent regulations in the banking sector adopted over the years. The implications of the compensation complications affect employee performance in the banking sector. Storm (2018) evaluates the financialization aspect and economic development as informed by the regulatory framework. The vast regulations do not guarantee subsequent returns. Engler (2018) asserts this as a phenomenon bound to limit the productivity and performance of the banks. The regulatory mechanisms negatively impact the culture of the financial institutions prompting a need for relaxed and well-established regulations (Storm, 2018). The capacity to take time in the implementation of rules and involvement of the employees is fundamental to ensure they positively incorporate and practice the values setting course for cultural settings (Jayadev et al., 2018).
Avgouleas and Donald (2018) discuss that balancing employees’ compliance versus getting returns sets a lousy culture. It is of profound importance to effectively establish a competitive and productive culture among the employees. However, the potential to address all interests is destined to create a crash.
According to Avgouleas and Donald (2018, p. 14), “as regulatory change often follows financial crises, it is not surprising that the 2008 Global Financial crisis and the Eurozone debt and banking crisis provoked intense study of financial regulations. The configuration of knowledge, power, and inclination in the 2000s was particularly problematic, both leaving gaps that were unforeseen or unnecessary and creating concentrations of wealth and power at record-setting levels.”
Thus, it marks the epitome of the cultural problems in the banking sector when adopted and implemented in a hurry.
The section examines the effects of political and social unrest in the performance of the banking sector in the United States, leading to an understanding of the culture that political and social unrest helps shape. According to Şanhsoy et al. (2017, p. 998), “political instability, political uncertainty, and political risk determine the inter-temporal expectations and decisions of economic unites.” These include the macroeconomic, meso-economic, and microeconomic fields in which the banks and financial institutions operate (Şanhsoy et al., 2017). The political and social unrest is characterized by political regimes and administrations that come into place in the United States. The regime change sets the course for policies and regulatory approaches to be implemented in the banking sector (Pérez, 2019). The capacity to implement critical policies and regulations impacts on the culture of the banks.
According to Passarelli and Tabellini (2017), the emotions and political unrest in the country are vital in shaping the culture of the banking sector practices. The culture affects the conduct, performance, and productivity of the employees in the banking and financing sector. The regime change sets the course for profound impacts on the stock prices and performance of the banks (Ahmed, 2017). In a country like the U.S., the national government largely influences the federal banking regulations and employee performance. The culture set at the federal mainly affects large financial institutions to a great extent. For example, the change in regime from President Obama to President Trump’s administration – policies of self-protectionist and expansion of domestic economic sect the culture for financial institutions. Hence, it impacts on the productivity and performance of the employees.
Moreover, the State level – geographical turmoil is influenced by political stability, and unrest is the local level. The political risk at the State plays a crucial role in the operations of the banks in the respective state. The assurance of stability and progressive policies at the State level are essential in influencing the financial reporting standards and operating cultures in line with the national government ((Şanhsoy et al., 2017). This impacts the productivity of the employees as they are assured of protection and policies that advance their course. Organizations are responsible for providing the most conducive environment to promote corporate and organizational culture among the employees. The political risk impacts the process and realization of a conducive environment. Thus, it is vital to the functionality of the organization and the competitiveness of the employees.
The study is limited in the number of existing materials rich in empirical evidence to illustrate the geographical and cultural turmoil among the employees in the banking sector. The research covering the banking of the United States – a focus on the large and small-sized banks is essential to determine the impacts of geographical and cultural turmoil among the employees. Data illustrating the relations between U.S. largest banks such as Wells Fargo, Citigroup Inc., JP Morgan Chase & Co., and the Bank of America and the small community banks’ performance at the local level is highly lacking (Bord et al., 2018). This posits research deficits and unavailable of essential data vital to support the arguments in the paper.
Thus, further study analysis of the widespread impacts of geographical and cultural turmoil on the employees in the banking sector is fundamental. The analysis of the topic creates a clear understanding of the significance of culture in the practices of the banks. A particular focus on the four largest U.S. banks – the practices and conduct of the employees is crucial to illustrating how the employees’ functionality can be improved for enhanced performance and profitability of the organization. The data is to be compared with small-sized financial institutions operating at the local level. Thus, the impact on the commitment and value of the employees. Consequently, ascertain increased performance and competitiveness of the employees and the organization overall.
The conduct and practices in an organization are fundamental to building an influential culture among the employees. To improve profitability, the banks have the responsibility to ensure that employees’ welfare is sufficiently taken care of in the organization (Song & Thakor, 2019). This involves the compensation packages, effective communication, and involvement of the employees in decision making. The large-sized banks in the U.S. can learn from the small-sized community banks in ascertaining high levels of ethical standards, quality services, personalization of the employees and the banks to the customers, and inclusion of the employees in decision making (Khan et al., 2018). This is vital to create a good relationship that is designated to the areas of operations. The geographical and cultural turmoil can be resolved in the decentralization of all aspects of the banks, and creating more personalized processes is the local level (Storm, 2018). Thus, it limits unethical practices, scandals, among other adverse impacts, and create an opportunity for the employees to develop a greater connection with the employer (bank) and the customers. Hence, it increases the profitability of the banking institution.
Moreover, regulation of the political and social unrest, as well as uncertainties in the domestic economy, should be adequately addressed. The banking sector can extensively benefit from political stability in the regime change. The establishment of a conducive economic environment in a country creates room for increased competitiveness and performance of the employees. The security of employees’ jobs and proper treatment from the bank is essential to set a culture crucial to the profitability of the bank. The capacity to operate freely in a stable conducive environment eliminates geographical issues that may impede successful operations. Thus, the profitability of the bank is ascertained by the conduciveness of the context in which the employees are made to operate.
Finally, the management of the regulatory framework is paramount to ensure the elimination of redundancies and stringent measures bound to hurt the banking sector (Hacker, 2019). This paper presents that enormous regulations detrimental affect the culture of the banking sector. It is essential to ensure sufficient controls are in place without chocking the industry and employee performance. The culture of cooperation and ethical practices is fundamental to ascertain the profitability of the banking sector (Newman, n.d.). Thus, banks have the responsibility to create a competitive culture based on ethical principles and code of conduct and not vast, unproductive regulations (Song & Thakor, 2019). Hence, give room for the employees to operate at any location based on the code of conduct and principles that guide their decision making and commitment to the financial institutions (Stanley, 2018). Consequently, it leads to high performance and profitability.