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Expert System

Introduction, Situation Analysis, Instructions, Technical Background

Case 12 Saving a Savings Bank

Setting: Bank; Your Position: President and Chief Executive Officer

You are CEO of a small, local savings bank. Deregulation in the financial institutions has posed difficult challenges, and many of your former competitors have closed their doors due to insolvency or been taken over by much larger institutions. The bank examiners have just left, insisting that many of your commercial real estate loans be written off, thereby depleting an already precarious capital position. As you were aware, your bank is in serious danger of being closed by the regulators.

When the financial problems first surfaced, some of the top executives left to pursue other interests, but fortunately, you were able to replace them with three highly competent younger managers. They had no prior acquaintance with one another, although each is a product of a fine training program of a much larger bank in which they rotated through positions in each banking function. Since you have been busy exploring solutions to the bank's financial plight, you have had to give them a great deal of autonomy, and they have responded admirably. In fact, they seemed to resent the few attempts that you have made to give them close direction.

Your extensive experience in the industry leads you to the inevitable conclusion that the only hope is a two-pronged approach involving reduction of all but the most critical expenses and the sale of assets to other banks. The task must be accomplished quickly since further deterioration of the quality of the loan portfolio could result in a negative capital position, forcing regulators to close the bank.

The strategy is clear to you, but you have many details that will need to be worked out. You believe that you know what information will be needed in order to get the bank on a course for future prosperity. You are fortunate in having three very knowledgeable executives to help you out. While they have had little or no experience in working together and are accustomed to independence, you know that each is dedicated to the survival of the bank. Like you, they know what needs to be done and how to do it.

Your answer: Consult Group

Decision SignificanceHow important is the "quality" of the decision, i.e. to what extent does the decision have material, strategic impact on your clients or beneficiaries inside or outside of the organization. (click for details)   Group ExpertiseDoes the group collectively have the necessary knowledge to solve the problem and or make this decision? (click for details)
Importance of CommitmentTo what degree will the implementation of the decision require the support and cooperation of the group to be effective? (click for details)   Interaction ConstraintAre there time or geographic constraints which would prevent you from bringing the team together (physically or by telecom) to make the decision? (click for details)
Leader ExpertiseTo what extent do you, the leader, have the necessary knowledge to solve the problem or make this decision? (click for details)   Team Competence How competent is the group at working together as a team in solving problems or making decisions. The issue is not their factual or analytical technical knowledge, but rather their ability to work together synergistically. (click for details)
Likelihood of Commitment How likely is it that the group would accept your decision as the best course of action even though not included in the decision making process itself. (click for details)   Time/Dvpt PreferenceChoose the importance of time and development individually or use the values specified by either the Time or Development Driven model.(click for details)
Goal AlignmentTo what degree are the members of the group committed to the achievement of the oganization goals which are at stake in this decision? (click for details)      Value of TimeThe value of time varies with the number and intensity of other activities confronting you and your group. Considering your current workload, rate the value of time. (click for details)
Likelihood of DisagreementHow controversial is this decision likely to be among the members of the group? (click for details)      Value of DevelopmentHow important is it to you to develop the capabilities of your group or team, i.e. increasing their knowledge, their commitment to the organization, and their effectiveness in working together? (click for details)
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