Medici Bank Essay Example

entities.

The power of the subsidiaries was substantially limited by the structure implemented by Cosimo. He formulated guiding policies to reduce the occurrence of fraudulent activities and operational risks. In order to improve coordination across far-flung branches, Cosimo directed the branch managers to make a trip to Florence every 2-3 years to present any business issues or concerns. These meetings facilitated crucial management decisions and gave out additional instructions for the bank.

For effective management in a global organization, clear roles and responsibilities, risk mitigation, communication, and reporting requirements are crucial. In between general meetings, senior partners and branches communicated through correspondence and relied on frequent written or oral reports to coordinate activities across distances and borders. As the organization expanded beyond the Medici family, positions had to be filled from outside, requiring Cosimo to delegate some power to subordinates due to communication challenges.

Cosimo was recognized for tightly managing his managers, resulting in his reluctance to hire or partner with unsuitable candidates. When it came to the silk and wool industry, Cosimo collaborated with experts possessing the necessary technical knowledge and expertise to produce silk fabrics or woolen cloth, while also possessing management abilities. As indicated by Roover (1946), Cosimo's wise selection of an effective and trustworthy manager was the decisive factor in determining whether success or failure would result (P. 41).

Medici managed risk by distributing power, allowing him to focus on business matters and larger issues instead of day-to-day operations. He aligned the goals of managers with the organization's by sharing profits, keeping each branch and service line focused and increasing employee motivation. Bartlett and Ghoshal's Harvard Business Review article "What is a global manager" concluded

that a true global manager identifies individuals with potential and integrates them into corporate decision-making. Cosimo exemplified this by partnering with responsible, skilled leaders to oversee the company's branches and subsidiaries.

Being a successful manager of a global company entails understanding the governance of different countries and cooperating with their leaders. Cosimo's capability to operate within this capacity is a testament to his expertise as a global manager. In addition to the nine branches outside Florence and several correspondent banks, Medici bank utilized its extensive network and operations to collect taxes for Rome and the Vatican, thus earning them a high status and impeccable reputation in the church and its clientele. Thanks to their close relationship with the pope, the Medici family gained entry into other nations and cities as a trusted financial organization that caters to the affluent and royalty.

In today's global market, it is crucial for global managers to have the capacity to comprehend local cultures and create governmental and business connections. Expanding and succeeding in a global market requires organizations to develop their corporate network and reputation. With more organizations shifting their focus globally, Cosimo's management of the Medici bank can serve as a model for contemporary global managers.

With his skill in balancing flexibility and risk management, Cosimo established a versatile business that could capitalize on new possibilities in various capacities and industries. The experience of Cosimo serves as a model for global managers. Effective coordination across national borders can be achieved if careful attention is paid to outlining personnel responsibilities, roles, and communication. Moreover, attracting, retaining, and developing appropriate resources, particularly human capital, is critical. Success in the global arena may depend

on gaining knowledge of local cultures and handling local government officials and businesses with care. As the head of the Medici Bank, Cosimo illustrated qualities of an entrepreneur and an outstanding global manager that drove the Bank's expansion and success.

Today's global managers can take inspiration from Cosimo's leadership because he embodied many of the qualities required to succeed in the modern business world. Cosimo was clearly ahead of his time, and his example shows that there is much to learn from historical business events, including perhaps Cosimo himself!