Today banking has become far more competitive and less regulated. Thus allowing Washington Mutual to compete with traditional banks like Bank of America or Wells Fargo as well as brokerage houses such as Merrill Lynch. This portion of their business could be viewed as their marketing department who is responsible for generating new products as quickly as possible. Some of the new products are the recently announced no charge ATM, free checking, business checking accounts, home mortgage loans, equity line, and car loans. The marketing department is an open system based and needs to communicate internally to the employees as well as their customers. Again, security is extremely important with this system to ensure their customer s trust, so the company can continue to grow.
Washington Mutual is consistly collecting information and then supplying their databases with this newfound information. The term recently merged as data warehousing and data mining is used to describe the collecting and storing of all sorts of the information collected. Some of the information collected is customer preferences, what Washington Mutual s competitors are up to, and new advances in technology. This allows Washington Mutual to keep up to speed with other banks. In order to do that, Washington Mutual needs to make sense of that information and then use it to their competitive advantage. Information is power, and by collecting information companies need to know how to truly mine it. Even though databases have been around for years, they usually in the form of a sequential file. This means you start at the beginning and just continuously add to the end of it. There was some structure to how the format was captured, but it was difficult to retrieve it. With a relational database, it allows Washington Mutual to pull information quicker then ever before. Today, relational databases are based on indexed fields and sophisticates algorithms searches which can return a response in milliseconds. This simple fact allows Washington Mutual to work with greater number of customers per teller then we ever have been in the past.
Computers have allowed Washington Mutual to advance immensely in productivity because timely feedback is now available for management. It wasn t too long ago when information had to flow from the field back to head quarters so upper management could analyze and make business decisions. Today Washington Mutual systems collect the information continuously in the form of relational databases that allow upper management to review information instaneously and in a format of their choosing. It is also allows them to play what if with this information. For example. What if the interest rate all of a sudden drops by one full percentage point? What would the impact be on our business? This is just another benefit of how today s technology has affected a local company.
Another form of benefit the IT is it has provided standardization. Previously, a teller in LA would manually enter an amount and a customer s passbook. A teller in San Francisco would be responsible for doing the exact same thing. However, that system was vulnerable to human error. With today s IT the human error is greatly reduced improving Washington Mutual s bottom line. Today standardization is truly the key. The teller in San Francisco does exactly the same thing as a teller in LA. To make a deposit of $100 into a savings account the teller must enter the amount and then hit the deposit key. This immediately updates the customers account balance company wide. All information is entered, filed, stored, and updated the exactly the same way regardless of the tellers abilities or location.
With all the benefits IT technology has provided us Washington Mutual still have a ways to go. The systems still are vulnerable to outages. These outages are more costly today then ever before. The systems have to be operational 7X24X365. The demand for information continues to out strip Washington Mutual s technologies. Thus driving the company deeper and deeper into a technology Catch 22. As Washington Mutual strives for more information, the bank needs more and more technology in less and less time making Washington Mutual more dependent on computers.
Changes In Technology
Technology has definitely changed the way Washington Mutual does business. Before technology began to progress, Washington Mutual had to do all of its work by hand. But today, Washington Mutual does everything by computer. Technology has made banking easier, and Washington Mutual has been able to be more efficient. Not only has technology improved the services Washington Mutual can provide, but it has also changed the organization and environment of Washington Mutual.
Before computers and technology were established in society, banks were forced to do everything by hand. This made banking difficult, and it was hard to be effective. Banks could only make loans and issue notes for money deposited since they had to do everything by hand. However, currently Washington Mutual offers many services, including checking accounts, PC banking, a VISA check cards, automatic teller machines, direct deposits, pay by phone, and also many other services. All of these improvements have arisen because of the use of technology.
One of the new and considerable advances Washington Mutual uses is PC (online) banking. There are many features to Washington Mutual s PC banking system: accounts, transfers, paying bills, and more services. With the account feature, screens are provided that give an account summary, a detail of accounts, and transaction details. The transfer feature allows a person to schedule a transfer or learn details about transfers. The PC banking system also allows customers to use quick pay, schedule a payment, or look at their payment history. Other services offered by the PC banking system permits customers to reorder checks, look at their check history, and read messages. Without technological advances, Washington Mutual would not be able to provide this convenient service to its customers.
There are both advantages and disadvantages to Washington Mutual s PC banking system. An advantage to this PC banking system is customers can use their computers and a telephone modem to dial in from home or any site where they have access to a computer. Other advantages are that Washington Mutual s services are available seven days a week, 24 hours a day; transactions are executed and confirmed quickly; and the range of transactions is fairly broad. Although PC banking has helped Washington Mutual improve their services, there are some disadvantages. Data entry is necessary before numbers can be handled successfully and switching software or banks can mean re-entry of data. Even with the disadvantages, it is obvious that PC banking has helped Washington Mutual become more productive, and the advantages far outweigh the disadvantages.
As well as improving the services Washington Mutual provides, technology has also changed the organization and environment. There are four different kinds of structural organizational change that Washington Mutual could have taken because of information technology. The first one is automation. This is where the computers are used to speed up the performance of existing tasks. The second kind is rationalization of procedures. This structural organizational change is the streamlining of standard operating procedures so that the operating procedures become more efficient since obvious bottlenecks are revealed. The third kind is business process reengineering, which is the redesign of the flow of business processes with the intention of reducing the costs of business. The final kind of change is paradigm shift. This shift is the extreme restructuring of the nature of the business and the organization. Washington Mutual took on the automation form of organizational change. The intent of Washington Mutual was to not radically change their business, but just use technology and information systems to enhance their current duties and help make their business more efficient. By using computers, Washington Mutual can calculate paychecks and payroll registers which gives their bank tellers instant access to customer deposit records, and allows them to provide the wide variety of services that they now offer.
With the new technology used by Washington Mutual, some concerns arise about changes in the organization. These concerns are the difficulties Washington Mutual may have with managing change, and trying to fit the technology into the organization. The natural inactivity of organizations slows the development of information technology and information systems significantly, which makes it difficult to manage the change. This is especially difficult of large system-building efforts, where massive changes to jobs, business processes, and other parts of the organization are effected in order to get the company to continue working towards its common goal. Although this is a concern when implementing technology to organization, Washington Mutual did not have major problems with this concern. The goal of Washington Mutual has remained the same throughout the years; they are still a savings and loans bank, and act in small town communities in order to receive the best relationship with their customers. Technology has not changed the goal and organizational culture of Washington Mutual. Therefore, the concern of running into difficulties arises with the implementation of technology into organization, Washington Mutual feels it has not really encountered this concern, and believes technology has improved the way they do business.
Another concern with changes in technology is trying to fit the technology into the organization because it may create problems with jobs. Technology can be a threat to humans because people can be replaced by technology or it may create less job opportunities. However, at Washington Mutual, technology has created more jobs rather than less because it has created an information systems (IS) department. People such as programmers, highly trained technical specialists who write software instructions; systems analysts, those who translate business problems into information requirements; IS managers, leaders of teams of programmers, analysts, and others; and end users, the employees outside of the IS group for whom the applications are developed. These people are now needed to manage the new technology, update the programs, and build new systems for Washington Mutual to use. Problems with availability of jobs is not a problem Washington Mutual has encountered because they feel as the business grows, the technological side of Washington Mutual must grow correspondingly.
With technology creating many new jobs, Washington Mutual was forced to generate training programs for its employees. These programs were implemented so that the employees would understand the new information systems, and so they can constantly be updated with any new software or programs. When an employee of Washington Mutual attends a training program, they go offsite to training facilities. At these training facilities, there are people who are knowledgeable of the systems used by Washington Mutual, and they teach and train the employees on all the new systems. With these training systems, it is easier for the corporation to implement the system into the organization. Washington Mutual also uses a system called Words to Bank By, which is a newsletter that goes out once a week to all the branches, and this allows everyone to be constantly updated with any changes in the information systems.
The final concern with trying to fit technology into the organization is that it may be hard to align with the way the organization currently operates. When first trying to apply technology into the organization, many companies have problems with it working with the current procedures used by the company. However, this was another concern that Washington Mutual avoided. As mentioned earlier, before technology, Washington Mutual did all of its business by hand, and now they do everything using computers. Trying to utilize the computers into the past system of doing everything by hand was never a problem for Washington Mutual because the new systems that were created were very user friendly, and therefore it was extremely easy to input the hand-kept data into the computers. The only problem Washington Mutual currently encounters because of the transition is since everything is stored in computers, if the computer system goes down, then it will be extremely difficult for Washington Mutual to do business. The only hard copies of information they have are signature cards, however these do not have enough information about the customers for Washington Mutual to continue business regularly. Other than this problem, trying to adapt technology into the operating system of Washington Mutual has only improved business, and not harmed it.
Ethics in WAMU
Ethical issues in business can be a very controversial subject. Some people even claim that the term, business ethics is a paradox. For many years now, when people consider business, words such as conniving, stealing, or cheating come to mind. In order to break the mold of ruthlessness commonly referred to in today s business world, certain ethical principles have been accepted from which we, as business people, are supposed to maintain.
The idea of ethical principles can only exist if everyone is willing to abide by these rules . It only takes one person to make everybody worse off. This can be seen in the idea of a prisoner s dilemma where if everybody complies by the rules then everybody is better off. However, if one person breaks the rules then that person is better off, but everyone else is worse off. Also, if everyone breaks the rules then everybody is better off, but not as well off as they would have been if everyone involved had complied. The implication of this idea is that we must all abide by these ethical principles in order for them to be effective.
In everyday life this is normally all agreed upon, however, in the business world some people seem to think there exists a different agenda by which to live by. These people believe that the only reason business endures is because of a profit motive. Opponents of this belief tend to think that profit is not the only goal of businesses but that being a role model for society is also their responsibility. At Washington Mutual the latter is what they believe in. They believe that, In order to have a successful business, you must make sure you have support from your society. In order to accomplish this you (as a company) must take the initiative in making your customers feel welcome and being a role model for all those you meet and work with. In other words if you want profit as an eventual outcome you need to be ethical in order to gain trust from the customers that are going to ensure this profit. This is where the ethical principles come into play.
There are many ethical principles we must abide by in business; some of the main ideas are presented here. First, there is the Golden Rule which we have all been told since we were little kids. It states that you should do unto others as you would have them do unto you. The golden rule, like other ethical principles, is only effective when everyone follows it. This rule is applied in the every day life of the employees of Washington Mutual. The belief is the customers should get what you (as an employee) would want if you were the consumer. For instance, interest rates are always of concern to banking customers when they need loans or are investing. Since we, as employees, would want the greatest benefits from our loan or investment, we would want the prime interest rate the bank has to offer, so we give this interest rate to our customers as well. Another example of this rule (in every day life) is lying: you would never want to be lied to, so you should never lie to anyone even in a business setting when it may seem like lying would be beneficial.
The second ethical principle is Kant s categorical imperative, which claims if an action is not right for everyone then it is not right for anyone. Kant claims there are two rules that make up this categorical imperative. First, the action must be universally accepted, and second, the action must not treat people as means to ends but just as ends in themselves instead. Referring back to the example of interest rates, if one customer gets a prime interest rate, and another customer of equal financial status does not get this interest rate it is hardly fair for the party who is receiving less. This is why Washington Mutual uses an equality policy, which simply states that people of the same financial status receive equal benefits. This principle helps people to see that if something should not be done to one person, it generally should not be done to anyone else either.