Case Study

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International Management II (Core Competencies)

Case Study Bank of America (A)

by Alexander Beil Christoph Hillgärtner Florian Schlegelmilch

Harvard Case Study: Bank of America

List of Contents
1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction / Definitions Overview “Bank of America” Product development processes Strength and weaknesses of the systems Learning through experimentation Conclusion / Learnings Summary Questions for group discussion References

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Harvard Case Study: Bank of America

1. Introduction / Definitions
Description of the case study “Bank of America (A)” * The case study describes how Bank of America is creating a system for product and service innovation in its retail banking business. Emphasis is placed on the role of experimentation in some two-dozen real-life "laboratories" that serve as fully operating banking branches and as sites for testing new ideas and concepts. Focuses on: 1) 2) 3) how learning from experimentation can be maximized; incentive and reward systems that motivate employees to experiment in "life" environments; the challenges of managing innovation in an industry that eschews risks, failure, and change.

*Reference: http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml?id=603022

Harvard Case Study: Bank of America

1. Introduction / Definitions
Process: which activities are to be taken, in which order* Organization: who (person, team or department) is involved (who is responsible for what)?* Management: how to get things done (how to keep the process running effectively)?* Culture: which habits and traits support the process and the people involved (which values are necessary to be successful)?*

*Reference: www.wpelz.de/d_index.html, Guide for the case study "Bank of America"

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Harvard Case Study: Bank of America

1. Introduction / Definitions
Innovation: Innovation is the implementation of a new or significantly improved idea, good, service, process or practice which is intended to be useful. Scholars who have studied innovation generally differentiate among four main types of innovation1 Experiments: An experiment is a set of actions and observations, performed to support or falsify a hypothesis or research concerning phenomena. The experiment is a cornerstone in the empirical approach to knowledge.1 Test: A session in which a product or piece of equipment is placed under everyday and/or extreme conditions and is examined for its durability, etc.2 Learning: Learning is the process of acquiring knowledge, skills, attitudes, or values, through study, experience, or teaching, that causes a change of behavior that is persistent, measurable, and specified or allows an individual to formulate a new mental construct or revise a prior mental construct (conceptual knowledge such as attitudes or values).1 1 Reference: 2 Reference:

www.en.wikipedia.org www.en.wiktionary.org

Harvard Case Study: Bank of America

2. Overview “Bank of America”
Organization
Until relatively recently, Bank of America had never made innovation a priority. It lacked any formal infrastructure for developing new ideas. However, recognizing several years ago that it needed to improve its innovation performance, the bank decided to create a new corporate unit called the innovation and development (I&D) team.1 Exhibit 4: Section of Bank of America´s Organizational Chart2

Ken Lewis CEO

Consumer/Commercial Bank

Quality & Productivity (Milton Jones)

Innovation (Amy Brady) (Waren Butler)
1Reference: 2Reference:

www.bcg.com/publications/files/Profitable_Innovation_in_Financial_Services_Apr04_FS_OfA.pdf Stefan Thomke, Case study Bank of America (A), p. 17

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Harvard Case Study: Bank of America

2. Overview “Bank of America”
Culture
Core values of Bank of America:1 • • • • • Doing the right thing. Each of us has the freedom, authority, and responsibility to do the right thing for our clients, customers, communities — and each other....
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