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Case Title:

Deutsche Bank- Managing Growth

Publication Year : 2006

Authors: Amy Sonpal, Dr. A.V Vedpuriswar

Industry: Banking, Insurance and Financial Services

Region:Germany

Case Code: GRS0104A

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:

In 2005, Deutsche Bank AG (Deutsche), one of the leading financial services providers in the world with € 840 billions in assets; employed more than 65,400 people, with operations spread over in 74 countries. The group reported net profits of € 2.5 billion ($3.2bn; £1.7bn) in 2004, 87% higher on y-o-y basis.

In spite of the huge profits, Deutsche's management team had triggered off a controversy by announcing job cuts at a time when Germany's unemployment rate was at its highest since the 1930s. The bank’s management had been accused of wrong doing in the Vodafone takeover bid by paying high bonuses. The restructuring drive undertaken by the bank involving employee lay-offs was also highly controversial. With Deutsche planning to cut a total of 6,400 jobs from its domestic and global workforce, German politicians accused the company of lacking social responsibility.

The job cuts were aimed at bringing Deutsche’s cost base in-line with its international competitors. The current weakness in the German economy and high labour costs could have a negative impact on Deutsche’s profitability. With the banking industry consolidating globally, would Deutsche be able to sustain its growth?

The case describes the growth strategies followed by Deutsche. It highlights the dilemma faced by the bank to operate efficiently in the competitive global banking and financial services industry while balancing the labour cost in a highly protected German economy.

Pedagogical Objectives:

  • To understand the German economical environment in which Deutsche bank operated
  • To discuss the growth strategies followed by the Deutsche bank
  • To analyse the dilemma faced by Deutsche to operate efficiently in a competitive environment
  • To understand the structure of banking and financial services industry (globally), the consolidation wave and its impact on Deutsche bank
  • To debate the goal duality of social responsibility vs. profitability.

Keywords : Growth Strategy; Labour market; Germany; Social responsibility; Globalisation; Growth Strategies Case Study; Restructuring organisations

Contents : 
About Deutsche Bank
Restructuring the Organization
Growing through Acquisitions
Controversies surrounding Deutsche
German Unemployment
Global Locations
Customer Mix
Financial Highlights

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