Task Force Committee Report

Task Force Committee Report: Issue and Solutions
Chakon KarnchaweeStrayer University
Rufus E. Robinson, Ph.D.

BUS520 Leadership and Organizational Behavior
October 22, 2018
Bank of America was one of the biggest banking and financial services organizations in the United States. It was established through NationsBank’s acquisition of BankAmerica in 1998. Bank of America’s headquarters are located in Charlotte, North Carolina. The bank’s history begins in 1904 when Amadeo Peter Giannini opened the Bank of Italy in San Francisco. It eventually advanced into the Bank of America and was for a time owned by Giannini’s holding company, Transamerica Corporation. It expressed the first bank credit card, BankAmeriCard, in 1958. (The first universal credit card, which could be used at a variety of establishments, had been introduced by the Diners’ Club, Inc., in 1950.)
Describe the Organization and the Issues to Resolve
Bank of America was one of the biggest banking and financial services organizations in the United States. Starting in 1968 the newly named BankAmerica Corporation was organized in Delaware as a holding company for Bank of America NT ; SA and other financial subsidiaries. (Britannica, 2018) One of BankAmerica’s most important holdings, was the 1983 purchase of Washington state bank Seafirst Corporation, which was the biggest U.S. interstate bank merger to date. Bank of America because a strong company, that served the banking industry and its’ customers very well. After purchasing its major competitor in California, Security Pacific Corporation, in 1991, Bank of America became the first bank to offer coast-to-coast operations in the United States (Britannica, 2018) Because of their smart business move, Bank of America was able to attract more customers from a larger area.
Deciding that they wanted to establish themselves globally, Bank of America wanted to work with other countries. They expanded into New England with the acquisition of FleetBoston Financial Corporation in 2004, and by the early 21st century it was operating more than 5,500 bank branches in more than 20 U.S. states and conducting corporate and investment banking in numerous countries worldwide (Britannica, 2018). After making international partnerships, Bank of America was able to grow further as a large banking organization. The firm enlarged its credit-card business by acquiring National Processing, a transaction-processing firm, in 2004, and its merger with MBNA Corporation in 2006 made Bank of America a leading issuer of credit cards (Britannica, 2018). Because of the plethora of technology that was offered at the time, Bank of America had decided to issue both debit and credit bank cards to its’ customers.
Even though Bank of America was already successful, and having expanding profits they wanted to become stronger than before. To gain a strong position in the wealth-management business, Bank of America in 2007 acquired U.S. Trust Corporation, an investment firm that manages investments for high-net-worth individuals. (Britannica, 2018) However, during the year 2008 there was a major financial crisis affecting the economy at the time. As the global financial crisis emerged in 2008, numerous institutions began to struggle, notably Countrywide Financial, the largest American mortgage lender, and Merrill Lynch & Co., Inc. (Britannica, 2018) Because of the financial pressure, many organizations had to declare bankruptcy or merge with other partners to survive in the business world.
During that time, companies had to decided to merge together; in order to prosper and survive through the hard times. That year Bank of America bought both companies, and the acquisitions proved costly (Britannica, 2018). Despite their efforts, many banks including Bank of America had to seek government assistance to stay afloat. In January 2009 Bank of America announced that it would receive $20 billion in U.S. government aid and an additional $118 billion in guarantees against bad assets incurred as a result of the acquisition of Merrill Lynch. (Britannica, 2018). Speculation around Bank of America’s bad activity, problems started to arise for this banking organization. Bank of America subsequently faced a number of state and federal lawsuits regarding claims that it had defrauded investors. (Britannica, 2018)
Facing publicity, Bank of America wanted to negotiate any financial difficulties quickly.  In 2012 it agreed to pay $2.43 billion to settle a class-action suit involving allegations that the company had failed to disclose to investors the true financial health of Merrill Lynch. (Britannica, 2018) The trouble didn’t end there for Bank of America, because they still had financial difficulties in regard to bad mortgage deals for their customers. Under scrutiny were the mortgage operations of both Bank of America and Countrywide. In particular, they were accused of having made risky mortgage loans and then misrepresented the quality of those loans to investors. In 2013 the U.S. government sued Bank of America for financial fraud, and the following year the company agreed to pay $16.65 billion. (Britannica, 2018)
What you know about it and how it impacted the company.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

What I know about the issues that affected Bank of America’s corporation throughout the world, was due to the issues that they faced with the U.S. government. Federal prosecutors sued Bank of America for $1 billion on Wednesday, alleging that the bank’s former Countrywide unit concocted a mortgage scheme it called the “Hustle” in order to sell thousands of fraudulent and otherwise defective mortgage loans to Fannie Mae and Freddie Mac. (HuffPost, 2012) Like this case and many others, Bank of America faced quite hefty lawsuits. “In order to increase the speed at which it originated and sold loans … Countrywide eliminated every single checkpoint on loan quality and compensated its employees solely based on the volume of loans originated,” the lawsuit, filed in Manhattan federal district court, alleges. (Huff, 2012)
Analyze Current Corporate Culture
Bank of America’s vision, value, and goals are based on taking care of customers’ financial needs as well as helping customers become successful financially. The company’s vision is by “taking care of the customers both empathically, and sympathetically. The vision is very important, so the employees care about the needs of the customer and make sure that they are being met. We believe in the importance of treating each client and teammate as an individual and treating every moment as one that matters. We strive to go the distance to deliver, with discipline and passion. We believe everything we do for clients, employees and the communities we serve is built on a solid foundation that delivers for shareholders. (Bank of America, 2018)
Bank of America’s values are placed on delivering together, acting responsible, realizing the power of our people, and by trusting the team.

What’s the best choice for the customer – Making sure that all the customer’s needs are met to the fullest.

Individuals as a competitive advantage – It’s based to offer incentives, and benefits to the employees; in order to prevent a turnover from occurring.

Deliver together – believe in the importance of treating each client and teammate as an individual and treating every moment as one that matters.

Act responsibility- believe in the importance of treating each client and teammate as an individual and treating every moment as one that matters.

Realize the power of our people – employees should reach their full potential, and have diverse backgrounds and experiences make us stronger.

Bank of America’s goals are to become the financial services leader in these areas:
Customer service and advice – Acknowledging customer needs and financial goals and help them become successful individuals.
Team member engagement – They provide incentives, and benefits for their employees; in order to prevent an employee turnover from occurring.
Innovation – comparing data collected; in order to become innovative to attract new customers from around the globe.
Risk management – Providing assurance to their customer, that their data is protected against theft.
Corporate citizenship – Contributions made to various communities, creating jobs, and keeping sustainable development in mind.
Shareholder value – Whether purchasing Bank of America Corporation stock for the first time or enrolling your existing holdings, the Bank of America Corporation Investment Plan is a convenient, cost-effective method to invest in shares of Bank of America’s common stock and to reinvest cash dividends. For information and a brochure on this plan, please call Computershare Trust Company, N.A. or view online at the Investor Center. (InvestorBankofAmerica, 2018)
Identify Areas of Weakness
Bank of America’s areas of weakness are:
Low trust level for obtaining a mortgage – many customers started to believe that obtaining a mortgage directly from Bank of America was risky, and that there would be a high level of interest included with it.
Legal issues. Bank of America found themselves involved with hefty lawsuits based on risk mortgages, and other financial problems.
Fined $2.43 billion dollars in 2002, of which they settled a calls-action lawsuit; involving allegations that the company had failed to disclose to investors the true health of Merrill Lynch.
Fined $16.65 billion dollars in 2013 by the US government, for financial fraud. (Britannica, 2018)
Propose Solutions
The solution suggested for Bank of America leaders should show Actions and Accountability. They should be acting; in order to have positive behavior and not negative. Training, and coaching should be done; to be able to enhance the productivity of the employees for Bank of America. Suggesting acting to engage with employees, stakeholders, and customers. We believe in the importance of treating each client and teammate as an individual and treating every moment as one that matters. We strive to go the distance to deliver, with discipline and passion. We believe everything we do for clients, employees and the communities we serve is built on a solid foundation that delivers for shareholders. (Bank of America, 2018).
Executive Summary
Bank of America was one of the biggest banking and financial services organizations in the United States. It was established through NationsBank’s acquisition of BankAmerica in 1998. Bank of America’s headquarters are located in Charlotte, North Carolina. The bank’s history begins in 1904 when Amadeo Peter Giannini opened the Bank of Italy in San Francisco. It eventually advanced into the Bank of America and was for a time owned by Giannini’s holding company, Transamerica Corporation. It expressed the first bank credit card, BankAmeriCard, in 1958. (The first universal credit card, which could be used at a variety of establishments, had been introduced by the Diners’ Club, Inc., in 1950.)
Bank of America was one of the biggest banking and financial services organizations in the United States. Starting in 1968 the newly named BankAmerica Corporation was organized in Delaware as a holding company for Bank of America NT & SA and other financial subsidiaries. (Britannica, 2018) One of BankAmerica’s most important holdings, was the 1983 purchase of Washington state bank Seafirst Corporation, which was the biggest U.S. interstate bank merger to date. Bank of America because a strong company, that served the banking industry and its’ customers very well. After purchasing its major competitor in California, Security Pacific Corporation, in 1991, Bank of America became the first bank to offer coast-to-coast operations in the United States (Britannica, 2018) Because of their smart business move, Bank of America was able to attract more customers from a larger area.
Deciding that they wanted to establish themselves globally, Bank of America wanted to work with other countries. They expanded into New England with the acquisition of FleetBoston Financial Corporation in 2004, and by the early 21st century it was operating more than 5,500 bank branches in more than 20 U.S. states and conducting corporate and investment banking in numerous countries worldwide (Britannica, 2018). After making international partnerships, Bank of America was able to grow further as a large banking organization. The firm enlarged its credit-card business by acquiring National Processing, a transaction-processing firm, in 2004, and its merger with MBNA Corporation in 2006 made Bank of America a leading issuer of credit cards (Britannica, 2018). Because of the plethora of technology that was offered at the time, Bank of America had decided to issue both debit and credit bank cards to its’ customers.
Purpose solutions suggested for Bank of America leaders should show Actions and Accountability. They should be acting; in order to have positive behavior and not negative. Training, and coaching should be done; to be able to enhance the productivity of the employees for Bank of America. Suggesting acting to engage with employees, stakeholders, and customers. We believe in the importance of treating each client and teammate as an individual and treating every moment as one that matters. We strive to go the distance to deliver, with discipline and passion. We believe everything we do for clients, employees and the communities we serve is built on a solid foundation that delivers for shareholders. (Bank of America, 2018).
References
Bank of America, 2018 https://about.bankofamerica.com/en-us/who-we-are/values-and-principles.html#fbid=uS3q2Xq7P7q
Britannica: “The Editors of Encyclopedia Britannica,” Sept. 5 2018 https://www.britannica.com/topic/Bank-of-America-Corporation
Huff Post, October 24, 2012 https://www.huffingtonpost.com/2012/10/24/bank-of-america-mortgage-fraud_n_2009791.html
Investor, Bank of America 2018 http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-contact#fbid=B1e8TUDY6Gn