Vancity Case - Group 6 Royal Court

[Lindsay Lin]

Dear professor Gibson,

We, Group 6, have some to a consensus that Vancity should reprice their creditlines based on the financial and economic fluctuations. For example, they can provide an open prime rate on their creditlines to minimize the current financial loss, which loss can be transferred to its customers/owners. Once the loss is minimized, the customers are able to return to their original prime rate of credit portfolios when Vancity sees fit. This way, Vancity can demonstrate their commitment in shaping a democratic and cooperative structure by adapting to both external environment changes and customer demands.

-- 

Lindsay Lin

BBA Honour Program Candidate

Finance and Human Resource Management

Beedie School of Business | Simon Fraser University

P: 604.375.6604 | E: lind...@me.com/ql...@sfu.ca

On Friday, 19 October, 2012 at 8:11 PM, Steve Gibson wrote:

Here is the case that is being presented next week by the two groups. Please read the case and CEOs please take note of what is required by your group (part B).

Vancity case page 164

A. You should do a little update research on Vancity.

B. All teams in the class should come up with a position on the re-pricing of the loans and send, in advance, an e-mail to Tatiana and me with a brief justification of their decision (1 paragraph).

C. This is more of an open ended case so feel free to add additional information and insight…i.e. go outside of the questions I have laid out.

D. I will be a little more open on the time allotment on this case because it is meatier and more open ended, so should it be warranted, you may go to 25 minutes but don’t feel you have to.

TEAM A

1. Summarize the situation and the causes of that situation that Vancity is facing.

2. Discuss the environmental factors that have caused this crisis at Vancity.

3. What is the problem or is there even a problem?

4. Talk about “boundary spanning” in this situation.

5. How could Vancity have “buffered” against the financial crisis?

6. What is different about Vancity compared to a normal commercial bank?

a. What are the goals and strategy of Vancity?

b. Who are the customers of Vancity?

c. Who are the owners of Vancity?

d. Who are the stakeholders of Vancity?

e. How does Vancity measure success?

7. Discuss stakeholder and goal conflict.

8. Meet with Team B at least 2 days beforehand to discuss your presentation. The purpose or the meeting is so Team B can present any differences in analysis it may have. The teams do not need to be in agreement.

TEAM B

1. Discuss any significant differences you may have with team A on questions 1,2,3,6 and 7.

2. Why is the case titled “Doing good, Doing well?”

3. Should Vancity do the rate increase? Why or why not?

4. Assume you go ahead with rate increase. How do you inform members? Do you expect success?

5. Why do “for profit” businesses bank at Vancity?

6. I am a for profit business who banks at Vancity-convince me of the “righteousness” of your decision to raise rates- i.e. convince me to sign!

7. What is your “plan B” if the rate increase fails?

8. Do you have a better alternative than what Vancity came up with?

9. What is at risk to the objectives of Vancity if they do not make this work?

10. Can Vancity do anything in the future to prevent this type of situation arising?

11. As a business owner would you have signed the new agreement? Why/ Why not?