PNB Case Study

1. Introduction

This case study focuses on PNB Housing Finance Limited, an Indian firm with a primary focus on reform and proper preparation for an Initial Public Offering (IPO) based on structural, technological, and behavioral changes across various businesses. Evaluating the implementation-based evolutions that drive a company’s expansion is central to this business case. PNB Housing Finance Limited Company has succeeded partially due to already implemented changes, but more is needed (Press Trust of India, 2022). In tandem with this, the reasons that are accountable for the modifications that have taken place in the organization will be identified. In addition, some responses to the opposition to the proposed changes will be offered. Additionally, consideration will be given to the transformation-based management plan. Beyond this, the PNB Housing Finance Limited Company’s transformation-based execution methodologies will be acknowledged.

2. Company Background

PNB was a crucial contributor to the growth of its Housing Finance department. In the onset, the accord between the stakeholders in the housing business and the lenders culminated in the development a deposit-taking property firm in India under the NHB act of 1987. This law was passed to create the National Housing Bank. Over time, the organization faced an increasing amount of risk due to its restricted access to long-term financing, notably for self-sufficient units and residences. PNB disposed of its investments in PNB Housing in the same year since they were according to an extended plan to consolidate its operations with Destimoney Enterprises. At the close of the year, Destimoney transformed its stock into its firm. PNB took a risky step in November 2016 when it launched its first initial public offering (IPO) (Initial Public Offering). Due to this, the company was able to increase its revenue by three thousand rupees. PNB is still a significant participant in the housing business, even though this adjustment may have given the impression that it lessened the company’s power in that segment.

3. Issue

Removal of professional functions causes misalignment of relationships because of insufficient operating company models and institutional characteristics on reporting. Further, it has come to light that there is a deficiency of underwriting-based policies and other Standard operating procedures. In addition, the key issue is the low level of staff communication aimed at sustaining high corporate performance. It has also been discovered that the problems were not concealed; the personnel and numerous other stakeholders were aware of the challenges and concerns. In addition, the board of Punjab National Bank Housing Finance Limited Company did not get an independent value study for commensuration of the pricing, violating different association articles. As a result, it became crucial to identify the components based on transformations that offer workable answers to the problems. Also, the solutions based on the transformations necessitated using these particular strategies in their implementations.

4. Evaluation of Issues

The company needed help with talent development and talent acquisition. Poor public perception of PNB made it difficult for the firm to attract top talent to build its core strengths. A mist of uncertainty surrounded the new administration as rumors and official information circulated, making workers nervous. Thus, PNB’s efforts to establish a performance-based culture ran with resistance. The company needed help maintaining credibility among current workers and new hires while simultaneously juggling the demands of its constantly evolving culture and day-to-day business—lots of the company’s practices needed to be updated and updated. There also needed to be more operational alignment, accountability for results, and a policy for promoting internal employees. Growth necessitated a systematic approach to management, the identification of suitable individuals for key positions, and a plan for their future management and leadership.

There was a noticeable lack of enthusiasm among workers to improve output and surpass targets. A robust performance plan, career plan, and succession plan, as well as the identification and recruitment of the most qualified candidates for open positions, were all vital steps on the road to expansion, which necessitated a systematic approach to talent management. The company needed help keeping up with the times in this age of the digital revolution due to its antiquated infrastructure. The company’s NPS scores were above the industry average, but some still saw PNB as a casual corporation with a weak corporate infrastructure and limited customer service requirements (Reuters, 2022). As a result, the website failed to provide a channel for communicating directly with customers and receiving their comments.

5. Alternate Issues

With the help of the decisions it was mandated to make before entering the market, PNB could reduce its sourcing expenses. If PNB had delegated its borrowing to an organization offering a lesser interest percentage, it might have provided loans at a cheaper cost than the contenders; this would have been the best course of action. Some business owners believe that hiring an outside agency to handle their marketing is the greatest way to expand their company, both in terms of the number of consumers they serve and the quality of their service. Instead of investing in new infrastructure, the company should have put that money into employee education and perks. This would have strengthened the company’s resolve, improved customer service, and helped it stay competitive. Employees get access to training opportunities and other benefits. The entire company must adhere to a policy of complete transparency and trust.

No organization can make it to the top on its own; rather, it takes the optimization of every facet of a business’s operations. Suppose employees are involved in making decisions, implementing policies, enhancing infrastructure, developing new technologies, or implementing novel ideas. In that case, they are more likely to provide management with accurate data regarding what is working and what is not, as well as their subjective assessments of these factors. This improves the possibility that input to management will be helpful. Consumers insisted on having access to a feedback mechanism. It was insufficient and just as focused and laborious as previously because of this. A stable and long-lasting company culture is the best defense against a potentially dangerous workplace. More than simply hiring more people is required to improve morale in the office. For example, workers of a certain age who have been averse to change or the new expectations placed on them must experience a paradigm shift, and they must do it with openness and zeal.

6. Recommendations

The first recommendation is the fulfillment of the target Operating Model implementation. A target-based functioning model should be designed. This model will optimize the significance that the company provides through specific end-to-end client experiences. It will also incorporate digital and operational-based methodologies to achieve measurable organizational advancements. The second recommendation is functional training. Aged workers who have less understanding of the new technology necessary to receive a technical form of training, while new employees are required to receive training according to the standards. Both groups of employees should be trained. In addition, this form of training encompasses the acquisition of certain abilities that are derived from policies and improvements.

The third recommendation is to cut costs. It is advised that PNB Housing and financing Limited should decrease source-based expenditures, which will lead to higher credit-based performance since reduced costs are directly related to the high credit. The primary objective of this endeavor is to increase customer deposits through the introduction of cutting-edge goods, which will unquestionably lead to an increase in the level of client contentment, which, in turn, will lead to an increase in the number of customer-based intermediaries (Kagan, 2021). Forth is robust processing. Using cutting-edge and forward-thinking business methods will propel the organization well beyond its current horizons of the significant changes technology has brought in various industries, including the pandemic. As a result, technology is an extremely important factor in the organization’s overall success. In light of this, it is highly recommended that PNB Housing and Finance Limited apply machine learning-based robust methodologies to improve the company’s overall performance. Lastly, the changes that take place in the physical foundation. It has been stated that outdated architecture needs to be upgraded to modern facilities to fulfill the prerequisites of specific technological criteria. This is necessary for acquiring sufficient work experience, as it enables employees to perform their jobs in an environment that is pleasant to users, which in turn influences customer satisfaction.

7. Conclusion

Trust earned from customers is one of the most important factors in a company’s overall success. PNB’s ability to meet the needs and expectations of its customers was critical to its business’s success. As a businessman, having a strong presence on social media is critical to the company’s success. They were able to communicate with a significant number of customers as a result of numerous technological advancements, such as going online. As a consequence of this, they might have offered their customers lower interest rates. Consumers have been significantly influenced by the work done in the communication and marketing industries. As a direct result of these efforts and initiatives, strict surveillance was required to quantify the results, identify which company is having the most success, and pinpoint the areas in which each company should make changes. As a direct result of their success in overcoming all of these challenges and obstacles, they have risen to the summit of their industry.

References

Kagan, J. (2021, March 21). Cost of Funds: How Much Interest Banks Have to Pay to Acquire Funds. Investopedia. https://www.investopedia.com/terms/c/costoffunds.asp#:~:text=A%20lower%20cost%20of%20funds

Press Trust of India. (2022, July 3). Domestic housing sector set to grow in next 5 years: PNB Housing Finance. @Bsindia; Business Standard. https://www.business-standard.com/article/markets/domestic-housing-sector-set-to-grow-in-next-5-years-pnb-housing-finance-122070300497_1.html

Reuters. (2022, October 27). India’s PNB Housing Finance profit rises on mortgage demand, shares jump. Reuters. https://www.reuters.com/world/india/indias-pnb-housing-finance-profit-rises-mortgage-demand-shares-jump-2022-10-27/