Research On Commercial Bank Value Management Based On Process Theory

With the development of economic integration, financial globalization, conglomerated operation and information technology, great changes have been radically and unprecedentedly taken place in external surroundings of China's commercial banks. Value creativity and value-based management (VM in short) is attached more importance in China's commercial banks. Commercial banks seek to improve their performance and rebuild the core competition by the innovation of value philosophy and management methods. This paper studies on the China's commercial banks'pattern of VM and innovation of its operating mechanism, which is of practical significance.This paper follows the research methods from the general to the specific and from theory to practice. It gives theoretical review and creative study of VM and BPR. It also offers horizontal comparison and vertical development study as well as case study. Based on the body of literature and the excellent research results from predecessors, this paper starts from the process reengineering as the breakthrough of VM, and aims to give some advice on establishing the effective VM system, which will improve bank value creativity and maximize bank value of China's commercial banks.This paper studies VM based on the whole process of commercial bank, and divides it into three links, including foreground, middleground and background in according to customer-focus principle, so as to mix value management and process management together. Therefore, value management based on process contains: value created by foreground business process, value controlled by middleground risk management process and value insured by background comprehensive management process. It adequately addresses the content of commercial bank value management based on overall process of commercial bank, and it mainly researches China's commercial bank VM based on process as follows:This paper researches on value creation mechanism of business process. Foreground business process is the important channel to create value and it puts important influence to the efficiency and the effect of value creation. Modularization is one of the attribute of foreground business process and it is the best choice to re-engineer foreground business process. Accordingly, to study the value management pattern of foreground business process means studying the relation and operation of module. This paper theoretically and practically analyses foreground business module separation principle, benchmark and confirms customer-focus classification principle. This paper also studies on relationship and operation among modules. Modularization is the organizational behavior course, which achieves the target of VM under the restriction of some rules of value creation pattern of business process: the characteristic of type structure, interdependence and mutual understanding.As for the risk management system on the basis of front business process modularization and centralized risk management, this paper describes the present conditions of risk management in China's commercial banks, analyzes the impact of foreground business modularization to risk management, and establishes the risk management system on the basis of process modularization. Risk and commercial banks are inseparable and interdependent. The eventual goal of risk management is to maximize bank value, which is attained only when banks keep the dynamic balance of growth, earnings and risk. Risk is embedded in business processes and modules after foreground business modularization. Therefore, business processes become the effective channels and business modules become the main target of risk control. At the same time, business modularization and managing risk in process make it easy to flatten the organizational structure of risk management, and the risk management methods tend to specialization, centralization and being processed.Studying the value insurance system of background based on foreground process modularization. This paper suggests that background can efficiently direct and transmit the highest level strategic intent to performers by the method of budget management and performance management. Budget management allocates resources to the module with high value creativity, monitors and controls operation management of module in case of deviation from organizational goals. Performance management motivates value creation. With EVA core index and various performance management subjects, which include business lines, modules, products and customers, it establishes multidimensional performance management system. In addition, business modular needs the help of informatization to make complex business and management processes electronical, which can provide effective and convenient support to every modular.Combining the achievements of process management and value management, the paper researches on the overall process specifically, and further analyses module of the foreground, middleground and background and process re-engineering route. At the same time it studies innovation of value management pattern. This paper makes huge instructional sense to domestic commercial bank value management practice.