Bank of America is one of the largest financial institutions not only within the U. S. but around the world as well. Its beginning rooted from a small bank called Bank of Italy that was established by Amadeo Peter Giannini and his son in San Francisco, California in 1904 (Bank of America Heritage. , 2012). At the time of establishment its initial reason of existence was to service those that were turned away from other banks; most were farmers who had come from Italy (“Encyclopedia Britannica “, 2011).
Today Bank of America provides services for almost 60 million consumers its new headquarters is now in Charlotte, North Carolina. In 1958, Bank of America was also the first to create a bank card called BankAmeriCard, which allowed customers to access their accounts and charge purchases to them as well. Corporate Structures There are different types of corporate organizational structures; vertical structures and horizontal structures. The vertical structure consists of a hierarchically structured organization where all management activities are controlled by a centralized management staff (Bateman, T. S. , & Snell, S. A. , 2011).
This is more of a traditional type of organization such as that of Bank of America that often develops strong bureaucratic control over all organizational activities. Unlike a horizontal structure which is one of decentralization of power and or control. At least within specific departments an emphasis is placed on horizontal collaboration, rather than conceiving of leadership as one person always being in control. Leadership is often shared among team leaders and members shifting to the person with the most knowledge or expertise in the matter.
Within the horizontal structure there are also other types of sub organizational structures; The Functional Organization (Departmentalization around specialized activities), The Divisional Organization (units around products, customers, or geographic regions), The Matrix Organization (managers report to two superiors) and The Network Organization (independent mostly single-function firms that collaborate on a good or service), (Bateman, T. S. , & Snell, S. A. , 2011).
A company such as Bank of America may determine if they have the right structure by looking at their firm’s activities and how well they meet their goals and those of the firm’s stakeholders. Bank of America Structure The initial structure for The Bank of Italy (now called Bank of America) in 1904 was comprised of its CEO (Amadeo Peter Giannini) and a small board of directors. The initial corporate structure for this entity could be described as a classic horizontal structure where the CEO occupies the top position and is the senior member of top management.
The top managerial level also included a board of directors without any additional management till the bank began to expand and merge with a variety of other financial corporations. The merging of Bank of America with other corporations such as Nations Bank, Fleet Boston and Merrill Lynch amongst others that had different organizational structures created the need for the new bank to restructure its own organization (Bank of America Heritage 2012).
The current structure is comprised of a CEO, CFO, COO, a board of directors and an international operations team amongst others that report directly to the CEO. Although the CEO is the leading executive; this functional organization also shows indicatives of having a divisional structure because of its departmentalization that groups units around products and geographic regions. This type of organization can be best described as a matrix organizational structure (Joseph, 2012).
The matrix structure is a combination of the functional and divisional structures. The former divides departments within a company by the functions performed, while the latter divides them by products, customers or geographical location. The organizational structure used by the bank is atypical because it brings together employees and managers from different departments to work toward accomplishing a goal. A disadvantage of having a matrix organizational tructure is that it is expensive to maintain (Joseph, 2012). A company’s overhead cost typically increases because of the need for double management; not that this would be a huge problem for a financial institution of this measure (Joseph, 2012). The structure is influenced by the dynamics and size of the corporation; its marketing, finance, human resources, and operations departments can also be found overseas running its international banking institutions.
The matrix structure allows Bank of America to have the flexibility of a divisional structure by helping the separate divisions act almost as separate businesses or profit centers and work autonomously to accomplish the goals of the entire enterprise. While the functional structure used by large companies such as this one may organize along several different functional groupings unique to their businesses; an example is that of Bank of America, having separate management for those in charge of the international and domestic aspect of the business (Bateman, T. S. , & Snell, S. A. 2011).
Conclusion As corporations are born they are simplified in structure, as they grow and possibly merge with other corporations; there comes a time to cater to the new needs and demands of the management structure. With any corporation the foundation is always a CEO or president however how a company decides to structure and organize its employees and decision makers can be the key difference between a failing and successful company.
It takes careful analyzing of the business to accurately determine which structure may best suit the organization’s needs and even then it may take a few changes to find the right fit. Bank of America has come a long way from its beginnings and along the way it has been able to adapt to new structures. Part of its success comes from its organizational structure; Bank of America has thrived and become a successful financial corporation that has since conception not only helped itself but others that in times of great need was able to help finance things such as movie projects, and the construction of the golden gate bridge.