Mgt503 Assignment No. 1 fall 2011 Oct, solution material

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Assignment No. 1

MGT503 (fall 2011)

The external environment refers to the forces and factors outside the organization but they are directly related to the organization's performance. Take any multinational organization working in Pakistan and briefly discuss how external environment affects its performance. Include at least four such factors.

Solution:-

I would like to choose ABN AMRO BANK and effects of Enternal environment on it. There are a number of challenges that have emerged following the most recent Macroeconomic developments in the domestic and global economy.

These are what I would like to call as external challenges.

S. No Factor Effect on the Organization

Interest Rate Variations

Depends upon KIBER (Karachi Inter Bank Exchange Rate) So ABN EMRO BANK cant select a fix interest rate whole year & tats cause variation in I.R.

2 Consumer-Durable Demand

The robust growth of auto and mortgage finance in preceding two years has significantly increased the prices of these assets, and thus has created inflationary pressures in the economy.

3 Equity Stock Investment Given the volatile nature of the equity markets, banks’ investment in equity stocks needs a cautious approach.

E-Banking

Another area where still a lot of progress should be made is the E-banking. This will not only lower the transaction costs but will also help in improving the customer services. The ATM penetration ratio is still quite low in Pakistan and the efforts are needed to not only further expand the ATM network more aggressively but also to improve upon the security standards.

5 Islamic Banking Islamic banking is a relatively new concept in our banking system. More and more banks are seeking license to open Islamic bank Branches. At present two full fledged Islamic banks having 37 branches are operating in Pakistan.