Finance Evaluation

The merger of Grupo Financiero Inverlat and Bank of Nova Scotia (BNS) is a classic example of John P. Kotter’s eight stage process of creating major change. This is conducted over three main lines of effort in an attempt to improve an establish banking organization within Mexico managed by foreign investors. A thorough analysis of this case identifies cultural, communication, and managerial problems that require an innovative approach to facilitate economic growth within the organization.

As I see it the first line of effort is the cultural difference between BNS management and the Mexican managers. It is imperative to overcome this cultural barrier as fast as possible to prevent stagnation and even dissention within the organization. In John P. Kotter’s book leading change he discusses the eight reasons why a firm fails, number one being too much complacency this leads to the first stage of the eight stage process establish a sense of urgency. The longer BNS allows the negative aspects of the organizational culture to remain the greater difficulty they will face in trying to break this negative performance. Although this requires a balancing act, it takes time to conduct assessments and gain understanding of the true cultural environment. When you look at the additional barriers of differentiating cultural norms snap judgment can carry a negative connotation. BNS managers have effectively addressed this and continue to establish a compromise between the cultural norms of the two organizations.

A 16 person Canadian delegation was identified to accomplish stage two creating the guiding coalition to increase leadership capacities. Stage three developing a vision and strategy was addressed during the pre-acquisition phase with both Mexican government and BNS executives. This was imperative to gain an understanding in exactly what the guiding coalition’s parameters to organizational change would be. Although all eight stages are important they took great lengths...