4. The three different sales channel is assigned with specific roles to perform. The direct sales channel is responsible to acquire new customers; basically to penetrate new markets. The branch banking channel is mainly responsible for providing customer services to satisfy the existing customers and to retain them. The alternative delivery banking channel caters to the probable customers as well as the existing customer needs as and when required by them through Phone Banking, Mobile Banking, Net Banking, ATM, etc. So there is no overlapping of activities.
5. Greater penetration of the market and retention of the existing as well as new customers has been possible with ease through the three (3) sales channels.
6. As the sales force is divided according to territory and each territory is being headed by a Regional head, it is easier to evaluate the sales force performance region-wise. The M.D. can assess which region is doing well and which region is not performing as per expectations. And thus the regions in which attention is needed can be detected.
7. The sales force structure has smaller span of control. So, the constant information flow, which is necessary for success in a dynamic market, occurs easily through the channels. So it is easy for the top management to keep track of each activity of the subordinates. Also the implementation of any strategy becomes flawless because of one-to-one interaction. E.g. publishing of new Audit Circulars throughout the channels.
8. The chances of any information loss (e.g. customer specific information) down the hierarchical levels are very minimal due to vertical sales organization structure.
9. Clearly defined policies, procedures, targets and hierarchical relationships allow sales executives to have a clear idea of organizational expectations and the criteria upon which their performance would be evaluated.
10. Since, decision making is restricted to the top management; the junior level managers should not be bothered to align the sales activities with the organization’s short term and long term objectives. The top management takes up the responsibility to do that.
11.
12. Lack of lateral communication between the different channels. E.g. if a sales personnel receives any customer specific or competitor specific information, he cannot pass it to the other channels.
13. Since the structure is vertical in nature, it has many hierarchical levels. So maintaining additional supervisory staff enhances the overall cost to the company. E.g. in the above mentioned structure, the posts of Circle Heads may be removed for better cost management.
14. In exceptional cases, top management approval becomes necessary sometimes, hence delaying the TAT**. E.g. for opening a Current account, one needs to give the “Initial Pay” cheque from his existing current account which he is maintaining elsewhere. But, if it is a new business, then he can give the IP cheque from his personal account. For this, it has to be approved by the Cluster Head after confirming the KYC of the company.
15. Decision making authority is restricted to the Top-Management only. So sometimes decisions might be taken without considering the feedback of the ground level executives. This can lead to dissatisfaction among the sales executives due to setting up of unrealistic targets.
16. * KYC - Know Your Customer ; **TAT – Turnaround time
20. It is often observed that the same customer is being pursued by two or more channels at the same time. This not only confuses the customer, but also it is wastage of effort, time and duplicacy of work for the organization.
22. It is further observed that the sales force normally has a target which is quantitative and not qualitative. So, most of the time they give mis-commitments to the customers to fulfill the targets. The same dissatisfied customer when comes to the branch, he does not get adequate attention as his account was not sourced through the branch channel.
25. The system used by all the three sales force channels should be integrated, so that every bit of customer information is updated in the same platform and made accessible to all the channels.
26. The Direct sales force is responsible for acquiring new customers. It needs information from the existing database. Hence, they should be permitted to access to the organization’s data so that they can wrap up the whole process fast and can be more competitive.
27. While deciding on the sales target the top management should consider the feedback of the ground level executives. Because, otherwise the top management fixes unrealistic targets. To meet up the target, the ground level executives give mis-commitment to the customers and as a result HDFC Bank makes customers dissatisfied.
![A REPORT ON THE SALES FORCE STRUCTURE OF HDFC BANK LIMITED Submitted By DEBALINA CHOUDHURY ENROLLMENT NO.- 08BS0000662 ICFAI BUSINESS SCHOOL A report submitted in partial fulfillment of The requirements of MBA Program of ICFAI Business School Prof. SHIBASHIS CHAKRABORTY Faculty, IBS - Kolkata Acknowledgment In this report I have attempted to capture the facets of activities performed so far during our project. The project has been very important and has groomed our skills and nourished our practical knowledge. It had been an excellent learning process for me. First I deeply express my gratitude to ICFAI Business School to give me an opportunity to learn so much about the sales force structure of HDFC Bank, which is the number 1 private bank in India. And also gave me a chance to know the advantages and disadvantages of the existing sales force structure. I am very grateful to our faculty guide, Prof. Shibashis Chakraborty for his valuable and timely guidance throughout the project. His practical knowledge and experience has been very useful in preparing the report. I would like to thank Mr. Sumil Dam, Branch Manager, HDFC Bank Ltd., for guiding me by providing the necessary inputs and helping me at every juncture of the project. TTABLE OF CONTENTSSr. No.PARTICULARSPAGE No.1.ABSTRACT22.INTRODUCTION4a. Background Of HDFC Bank Ltd.4b. Objectives Of The Study53.SALES FORCE STRUCTURE 64.ADVANTAGES & DISADVANTAGES 95.CONFLICTS116.TIME OF FORMATION & RECOMMENDATIONS TO CHANGE 127.REFERENCES13 INTRODUCTION At the very onset and before going into the intricacies of my project, I would like to give a brief introduction about the importance of the sales force in an organization. Organization is a group of individuals striving jointly to reach qualitative and quantitative objectives, and bearing informal and formal relations to one another. The sales organization is not an end itself but rather the vehicle by which individuals achieve given ends. A sales organization’s main component is the sales force, which is guided and supervised by the sales managers. The effectiveness of a sales organization depends on the efficiency of its sales force in achieving both qualitative and quantitative objectives We should know the background of HDFC Bank Ltd. and its business before focusing on its sales force. BACKGROUND OF HDFC BANK LTD.: The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India and commenced operations in January 1995. The Bank at present has an enviable network of over 1412 branches spread over 528 cities across India. Business Focus: HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. Capital Structure: As on 31st March, 2009 the authorised share capital of HDFC Bank is Rs. 550 crore. The paid-up capital as on the said date is Rs. 425,38,41,090/- . The HDFC Group holds 19.38% of the Bank's equity and about 17.70 % of the equity is held by the ADS Depository. 27.69 % of the equity is held by Foreign Institutional Investors (FIIs) and the bank has about 5,48,774 shareholders..Credit Rating & Corporate Governance Rating: The Bank has its deposit programs rated by two rating agencies - Credit Analysis & Research Limited (CARE) and Fitch Ratings India Private Limited. The Bank's Fixed Deposit program has been rated 'CARE AAA (FD)' [Triple A] by CARE. Fitch Ratings India Pvt. Ltd. has assigned the
AAA ( ind )
rating to the Bank's deposit program. The bank has been assigned a 'CRISIL(Credit Rating Information Services of India Limited) GVC (Corporate Governance and Value Creation) Level 1' rating which indicates that the bank's capability with respect to wealth creation for all its stakeholders while adopting sound corporate governance practices is the highest. Business (Products & Services Offered): HDFC Bank has three key business segments: Wholesale Banking Services: The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporates and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. Retail Banking Services: The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard, Maestro debit card as well. Treasury: Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. Sophisticated risk management information and fine pricing on various treasury products are provided through the bank's Treasury team. OBJECTIVES OF THE STUDY: To assess the sales force structure of HDFC Bank Ltd. To identify the advantages and disadvantages of the sales force structure. To find out the reasons behind the conflicts arise while following the existing sales force structure. To know when the sales force structure was formulated and if the existing structure needs to be changed. SALES FORCE STRUCTURE OF HDFC BANK LTD. HDFC Bank Ltd. follows a formal organizational structure. Hence, there exist clear-cut reporting relationships in between two hierarchical levels which help to avoid confusion and overlapping of activities. It also maintains a vertical structure with a large number of hierarchical levels and a narrow span of control for managers. As HDFC Bank caters to its target market with a wide range of products (e.g. Wholesale Banking Services, Retail Banking Services and Treasury), it has a line and staff type of organizational structure. The sales force of HDFC Bank operates through three (3) channels, like ,[object Object]](https://image.slidesharecdn.com/projectonsalesforcestructureofhdfcbankltd-12575559661851-phpapp02/85/Project-On-Sales-Force-Structure-Of-Hdfc-Bank-Ltd-1-320.jpg)
