Comparative Analysis of Barclays' Strategies, Management, and Activities: UK vs US

International Business

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Introduction

This report aims to evaluate Barclays Bank, a multinational financial services company in London, and its operations under diverse markets with major concentrations in the United Kingdom and the United States. This paper aims to analyse UK’s Barclays in different markets to decipher how determinant factors like national culture, social values, and business ethics impact the strategies, functioning, and performance of Barclays within these unique markets. It is important to understand all these elements in the modern world where to sustain competitive advantage organisations have to continue operations across cultures, societies and within ethical contexts.

The basis for this work is the growth of international business management, and even more so for a major financial organisation like Barclays. Each market under consideration is rather specific regarding its characteristics, which affects the financial sector; thus, analysing these peculiarities contributes to understanding an organisation’s activity in a complex environment. Also, this project will enable us to explain how national culture, social norms, and business ethics which are central to the discourse of international business interact with each other. Thus, further discussion of these topics will reveal important factors, which may help Barclays to preserve its global position, making adjustments to the conditions of the given country’s market.

Selecting Barclays as the main focus of this research is justified by its large operations in both the UK and the US, which are countries that have markedly different cultural and social environments. Barclays is based in the United Kingdom and it is established in a legal environment that embraces tradition, good banking systems and a stable financial system. However, in the case of the US, Barclays faces a rather more competitive environment marked by innovation with entirely different regulatory and social issues to deal with.

The scenarios covered in this report including national culture, social norms, and business ethics, give a clear guideline to enhance the understanding of Business management. In the following two areas about Barclays’ operations in the UK and US, these topics are likely to be analysed.

Literature Review

This section discusses the theory, model, and framework adopted to analyse national culture, social norms and business ethics concerning Barclays Bank operations in the UK & US. These frameworks are important to appreciate how these elements influence international business strategies and decisions.

The Hofstede’s Cultural Dimensions Theory

Hofstede’s Cultural Dimensions Theory is one of the most prominent tools for analysing national culture. This model breaks down culture into six dimensions: PDI, IVS, MVF, UAI, LTO, IDV and RS. To use Hofstede’s model for Barclays PLC, now let us understand different facets of the organisational culture of the two most affected countries – the UK and the US (Cox and Soobiah, 2018).

For instance, the UK is moderately high on individualism and low on power distance which means that it is a culture of self-employment and equality. In this regard, the US ranks higher in individualism and the relatively lower score in uncertainty avoidance gives it a more risk-reward or entrepreneurship basis for business. This differentiation is useful to understand why Barclays can change its leadership and risk management patterns when in the United States compared to the more cautious strategy in the United Kingdom (Block, Landgraf, and Semrau, 2019).

Employing Hofstede’s model is justified because it incorporates a range of indices aimed at comparing cultures – a parameter critical for any organisation that has a global network like Barclays. However, critics have taken a stand and said that this kind of model underplays the dynamics of culture and change. However, this is not without some limitations that further make it a good starting point for studying how culture impacts business (Kyeremeh, Prempeh, and Afful Forson, 2019).

Social Norms Theory

Social Norms Theory is aimed at studying how behavioural norms, recognised by members of a specific community, affect actions and activities in that community. As regards Barclays, social norms are an essential component to address in customer relations and staff management in various markets. Changes in social norms apply to almost all areas of consumption and many aspects of interpersonal behaviour in organisations and other settings (Elster, 2020).

In the UK the people‘s manners tend to be more formal, and people are generally less touchy-feely, especially at work. At the same time, while communicating with business partners in the US, the interactions are more liberated, and less formal compared to Russian business ethical values. All these differences help Barclays to adapt to the ways it serves customers and communicates internally to fit with local practices (Aleri, 2017).

In particular, the Social Norms Theory is useful for a company like Barclays, which works in different cultural contexts because a failure to consider and accommodate social norms may cause various misinterpretations and, consequently, low levels of customer satisfaction. But, as it was already noted, this theory can be criticised as inapplicable to minority groups or subcultures which also affect the business activities.

Stakeholder Theory in Business Ethics

Stakeholder Theory is hence one of the key guides to business ethics, which define the interactions between a business and employees, customers, stockholders, and authorities. Also known as the stakeholder theory it argues that organisations must manage the demands of all stakeholders in the organisation and not only those of the shareholders. To Barclays in particular, ethical business practices are key, especially given previous scandals connected with banking irregularities and manipulation of the market (HENRIQUES, 2019).

Barclays is set to engage in ethical business practices that suit the Stakeholder Theory after the adoption of the theory. The financial regulation is highly transparent and there is sustained consumer pressure for corporate responsibility. It was noted that there is a difference in the ethical orientation between these two regions impacting Barclays’ operations in both areas implying that different approaches are necessary to enhance the organisation as per stakeholders’ expectation.

Analysing Stakeholder Theory, one can stress that it is sometimes difficult to reconcile the stakeholder’s interests may harm others, create inefficiency in the best scenario, or even ethical dilemma. Nevertheless, it is still a significant platform that will help to avoid making incorrect decisions from an ethical standpoint and consider essential values from the standpoint of the community (Andriof et al, 2017).

Case Study

Comparative Analysis of Barclays' Strategies, Management, and Activities: UK vs US

Barclays as an international bank has different strategies, managerial activities and business operations in its home market, which is the UK and in the global market, which is the US. Comparing these two markets will show how Barclays moved to these different environments and economic, cultural and regulatory structures (Sheikh and Kimencu, 2017).

Strategies

While cost leadership is a popular and well-developed model in the UK Barclays opts for a less risky, more traditional approach based on its historical experience in the financial industry. The bank is highly focused on risk and compliance topics as well as customers’ trust following the manipulative activity scandals. At Barclays, investment priorities are intended to be spread across retail banking, wealth management, and investment banking. This applies to its UK strategy which enhances the carrying out of its business based on the UK regulatory framework that has strict rules on financial stability and ethical practice (Haouimi, 2022).

In contrast, Barclays adopts a more aggressive, innovation-driven strategy in the US market. The UK market, characterised by a higher tolerance for risk and a more dynamic business environment, has led Barclays to focus on investment banking and digital innovations. Barclays’ acquisition of Lehman Brothers' North UK operations in 2008 highlights its aggressive expansion into the US, where it seeks to capture more market share in capital markets, trading, and investment banking services.

Management

The bank’s management also has some differences depending on the two markets where it operates. The decision-making is a little more autocratic in the UK because the leadership is more formalised as compared to the US. This is because, in matters concerning formal organisations, the culture of the UK is considered to be high in power distance as pointed out by Hofstede. The UK management is also concerned about the regulation and the UK financial industry is under thorough regulation (Van Greuning, and Bratanovic, 2020).

In the UK, such a position is less rigid and centralised than it is in the home country and therefore Barclays has a more flexible managerial approach. Analysing the reasons that drive Barclays’ management to favour decentralisation, we can see that it is directly linked to the UK organisational culture that prevails in the company: people there are more individualistic and use quite an informal language when communicating.

Activities

In the UK, most of Barclay's operations involve offering basic services including retail banking and wealth management which targets a more conservative client. On the other hand, in the US, the bank is mainly concentrated in investment banking and capital markets. To justify such needs, the US market requires Barclays to offer innovative and risky financial products that include derivatives trading and private equity investments.

Collective Analysis of National Culture, Social Norms, and Business Ethics

The three topics of discussion are interrelated, and they include; national culture, social norms, and business ethics in Barclays that define its strategies and operations in the UK and the US markets. In order to provide a comprehensive examination of how Barclays deals with these different environments it would be appropriate to see how these topics relate to one another and contribute to the bank's operating model.

National Culture

The national culture thus has a central impact on the business strategies and the ethical demands of a business. Barclays has maintained a substantially centralised decision–making process which it underpins with risk aversion as a result of the cultural background in the UK which is characterised by hierarchy, tradition and compliance with regulatory frameworks. According the Hofstede’s Cultural Dimensions Theory, British business cultures have a very high intolerance to uncertainty, so Barclays has to apply stringent reconsiderations of risks and has to pay extraordinary attention to the issues of trust with the clients (Gallego-Álvarez and Ortas, 2017).

This means that in the context of the US, a more individualistic and venture-oriented culture composes Barclays into a more innovative and more flexible-orientated company. The risk-takers and the freedom to experiment that is characteristic of the US business environment provide Barclays with the conditions necessary to advance with more risky investment banking models that would fit the fast-growing market.

Social Norms

Social norms further refine how national culture influences business operations. In the UK, social norms emphasise formality, cautious decision-making, and respect for traditional practices. This leads Barclays to prioritise customer loyalty, clear communication, and maintaining a conservative image. These lead Barclays to focus on customer retention, clarity of communication, and low profile image. The norms indeed are manifested in the bank’s retail operations which provide safe and sound services in line with customer expectations (Augar, 2018).

In the US, social norms favour more informal business interactions, quicker decision-making, and customer-centric innovation. Barclays’ activities in the US are tailored to meet these norms through digital innovation, customer-focused products, and more flexible management structures.

Business Ethics

Business ethics hold these elements together because they define the ethical standard that Barclays implements in the two markets. Ethical practices in Barclay’s Bank UK subsidiary are in line with their country's expectation of transparency, regulatory benchmarks, and the avoidance of reputational damage. At the same time in the US, although the value of ethics is still upheld here the market competition makes performance and profitability more dominant which again alters the balance between ethical accountability and economic policies.

Interrelationship Among National Culture, Social Norms, and Business Ethics

The primary determinant for defining business norms and rules in different countries comprises national culture and social norms together with business ethics, thereby affecting the business environment of huge multinational companies such as Barclays. Together they manifest the phenomenon that defines how the bank adapts its strategies and its operations within distinct markets with a focus on the UK and the US.

National culture and social norms

National culture builds up the societal structures as social norms within the specific society. Many of these practices, however, come from the culture bowl of the larger society and are referred to as social norms. For instance, it is insufficient to analyse a nation’s culture in the context of leadership by merely pointing to the agencies of that culture in the context of leadership in organisations and society as shown by the UK culture that admires hierarchy and traditionalism in the social and organisational life. This is evident in Barclays’ professional writing and presentation, their risk-averse approach to business, and adherence to all norms of legal proceedings.

For instance, the social and cultural factors that drive or influence the US include individualism which results in the creation of a culture of ingenuity, casualness, and adventurousness. These norms affect Barclay's operations in the US since the country’s environment has provisions for a flexible chain of command, quicker decision-making processes, and high-risk, high-return investment practices.

Social Norms and Business Ethics

Ethical cultures in societies are directly influenced by the societies’ social norms in terms of their expectations from businesses. Ethically or unethical data in the business climate may characterise oneself based on socially acceptable standards of a given country. English culture, particularly in the UK, tends to be as formal and stringent as possible and more than anywhere, business ethics are closely tied to corporate transparency and reporting, observance of laws and rules as well as public image.

The US for instance has other standards of business ethics due to competitiveness and innovation. Even though there is always an emphasis on ethical conduct, there is higher risk tolerance and novelty, which means that businesses similar to Barclays are likely to pursue competitiveness and profitability in the market despite ethical issues.

National Culture and Business Ethics

Thus, national culture offers the fundamental reference, which in this case is ethical, for organisational messages. Ethics in the UK banking system is influenced by the following culture that has been embraced in the country; Stability and risk aversion hence most of the ethical value embraces long-term relationships and scandal-free banking. In contrast, the increased tolerance to risk in the US permits management to concentrate on the immediate profits while maintaining ethical behaviour but the proportion of ethical to competitive strategies may not be the same as with the UK.

Theories & Models

To uncover the relationship between these variables including national culture, business social norms, and business ethics in Barclay's operation, the operation of theories, modes and frames that work within International business (IB) is significant. Cultural Dimensions Theory by Hofstede offers a way of understanding how the national culture affects organisational culture. For example, high uncertainty avoidance with high power distance means that in countries such as the UK formal and risk management is more pronounced while in countries like the US, lower uncertainty avoidance means that the approach is more pronounced and more innovative. It also aids in evaluating how Barclays handles the robustness of strategies to cultural differences of these markets (Ali, 2018).

Another helpful model is Carroll’s CSR model, which categorises the responsibilities of business into four dimensions; economic, legal, ethical, and philanthropic responsibilities. This model assists Barclays in achieving compliance and social responsibility in the Organisation’s operations due to better compliance standards in the UK than in the US, as well as possible competitiveness in the American market.

Institutional Theory also explains how external rules – written (in the form of Barclay’s Articles and other regulating bodies) and unwritten (culture and traditions) – construct Barclays’ business ethical and unethical conduct across global markets.

Conclusion

In this report, we first analysed Barclays through a domestic lens of national culture and social norms in its home country, the United Kingdom, and second through an international lens of the United States' national culture and social norms. Using Hofstede’s Cultural Dimensions, Carroll’s CSR Pyramid, and Institutional Theory, we assessed how these factors operate together to influence Barclays’ operations in various markets. Therefore, the comparative analysis showed that Barclays’ strategies in the United Kingdom are more cautious, owing to the broad organisational culture of hierarchy, aversion to risk and rigidity of the regulations. On the other hand, it ventures a more liberal and creative characterisation of its operations in the United States because of the Spirit of the New World. Cultural values and other social practices in every market also affect Barcleys’ managerial practices corporate values and business moralities; the UK is more legalistic and formal while the US is results-orientated. In summary, this report reveals the need for organisations to internationalise their strategies in compliance with the cultural, social, and ethical standards of the respective market. Thus, awareness of the interconnectedness of these factors allows Barclays to remain competitive in the global market, as well as support its ethical activity and adapt to the cultural environment of its operations in different countries.

References

Aleri, K.D., (2017). Customer Learning Strategy and Product Innovativeness of Barclays Bank of Kenya (Doctoral dissertation, University of Nairobi).

Ali, A.A., (2018). Impact of Online Banking on Financial Performance of Commercial Banks: A Case Study of Barclays Bank of Kenya (Doctoral dissertation, United States International University-Africa).

Andriof, J., Waddock, S., Husted, B. and Rahman, S.S., (2017). Unfolding stakeholder thinking: Theory, responsibility and engagement. Routledge.

Augar, P., (2018). The bank that lived a little: Barclays in the age of the very free market. Penguin UK.

Block, J., Landgraf, A. and Semrau, T., (2019). The differential impact of societal cultural practices on part-time and full-time self-employment: A multi-level, multi-country study. International Small Business Journal, 37(1), pp.2-8.

Cox, P. and Soobiah, D., (2018). An empirical investigation into the corporate culture of UK listed banks. Journal of financial regulation and compliance, 26(1), pp.1-14.

Elster, J., (2020). Social norms and economic theory. In Handbook of monetary policy (pp. 1-13). Routledge.

Gallego-Álvarez, I. and Ortas, E., (2017). Corporate environmental sustainability reporting in the context of national cultures: A quantile regression approach. International Business Review, 26(2), pp.7-13.

Haouimi, S., (2022). The impact of Total Quality Management in the banking sector in the UK. University of Wales Trinity Saint David (United Kingdom).

HENRIQUES, I., (2019). Stakeholder Theory in Management. The Cambridge Handbook of Stakeholder Theory, p.2-11.

Kyeremeh, K., Prempeh, K.B. and Afful Forson, M., (2019). Effect of information communication and technology (ICT) on the performance of financial institutions (A case study of Barclays Bank, Sunyani Branch).

Sheikh, M.A. and Kimencu, L., (2017). Influence of Competitive Strategies on the Performance of Barclays Bank in Garrisa County, Kenya. International Journal of Contemporary Aspects in Strategic Management (IJCASM), 1, pp.01-8.

Van Greuning, H. and Bratanovic, S.B., (2020). Analyzing banking risk: a framework for assessing corporate governance and risk management. World Bank Publications.