Business Case Assignment: Organizational Management of Commonwealth Bank
This is a business case assignment of 1600 words (+/- 10%)
1. You must first select ONE of the following five organizations as the subject of your business case.
– Commonwealth Bank (https://www.commbank.com.au)
– Australian Broadcasting Corporation (https://www.abc.net.au)
– Beaurepaires (https://www.beaurepaires.com.au)
– Red Rooster Foods Pty Ltd (https://www.redrooster.com.au)
– Woolworths Group Limited (https://www.woolworthsgroup.com.au)
2. Conduct research on your chosen organization by selecting one of the below-mentioned topics, with a focus on critically analyzing the impact of a range of internal and external contextual factors on the performance and decision making of your chosen organization:
1) What is the governance structure of your chosen organization and how does it ensure the effectiveness of the organization's corporate governance?
2) Which external environmental factors are influencing your chosen organization’s performance and/or decision-making?
3) What are the major risks your chosen organization face and how are they influencing its performance and/or decision making?
4) What business practices does your chosen organization adopt and how are they influencing its performance and/or decision making?
5) What functional departments does your chosen organization have and how are they supporting its business activities?
3. Your business case analysis must include at least eight (8) peer-reviewed academic references published post-2010.
The main purpose behind preparing this paper on business case assignment is to present an overview of several organizational aspects of the Commonwealth Bank of Australia along with its business structure. The researchers analyze and identify some of the significant business aspects that affect the business operations of CBA. While preparing this paper, researchers have considered not only the business structure of the Commonwealth Bank but the significant business practices, that have some impact on the overall performance of the business. The paper includes a clear description and critical analysis of several business practices adopted by the organization. It also discusses how these different factors influence the decision-making and business performance of CBA. CBA or Commonwealth Bank of Australia is such a company that is locally owned having a separate existence irrespective of its owners.
Business practices of Commonwealth Bank of Australia
Commonwealth Bank of Australia that is also quite well-known as CBA is one of the most well-known multinational banking organizations that are currently dealing with several financial services besides banking services. The several financial services that the organization provides include business, retail, investment and insurance services, premium banking, wealth management, private and institutional banking, fund management as well as several products or services that are somewhat associated with broking. Commonwealth Bank of Australia is found on the list of Securities Exchange of Australia that follows the CBA code. The bank operates its business in various countries besides Australia. It runs business operations in United States, United Kingdom, New Zealand, South Africa, and several Asia-Pacific regions. However, Commonwealth Bank has it’s headquarter in Sydney.
Business practices in CBA that affect organizational performance
It is already mentioned before that CBA or Commonwealth Bank deals with retail, business and premium banking, institutional banking, private banking, fund management practices, investment or insurance-related services, and wealth management practices. The banking organization, CBA is adopted several business practices for coping up with such a diverse range of services. The bank is found responding to the various risks to which the organization is exposed currently. The organization is adopting several business practices for coping up with all the services(www.commbank.com.au, 2021). The business structure of CBA emphasizes modifying and reviewing the credit limit on a regular basis. It does it as per the current economic conditions and the changing market.
Business strategies and measures for enhancing performance
The banking organization is also performing some scenario analyzes and stress tests so that it can effectively work in some critical business conditions. Also, the CBA is found to maintain some huge funding sources of various or distinct geographies, products, entities, and currencies. The business structure of Commonwealth Banks of Australia is also putting some limits on some short-term as well as off-shore funding sources. It enables them in maintaining liquidity buffers and surviving in the long run however it may lead to the disruption of cash. CBA works on reinforcing the governance framework for becoming more customer-centric as well as accountable with their corporate culture transparently. The banking organization is found formulating some structured approaches for identifying the strategic business, combating the strategic risk, and dealing with them at present times much proactively. The CBA or Commonwealth Bank also performs some climate change analyzes for understanding all sorts of probable impacts due to the changes happened (Walker, 2016). It enables them in undertaking improved decision-making prior to the occurrence of any climate changes. The banking organization also puts its efforts to mitigate the operational risks that associate with data management and cyber security.
Financial-wellbeing of CBA
The CBA on behalf of the Australian Government leads the Productivity Commission’s Inquiry to enter the Australian Financial System. According to the organization, a competitive banking system must be efficient, fair, stable, and safe throughout the economic cycle so that it is acceptable by the Australian economy, as well as shareholders and customers. The organization works hard for creating a better bank that is leading operational standards and compliance, driving industrial innovation, focusing on the wellbeing of customers, and contributing to the community and economy by reflecting the heritage and size (Andrews&Taxpayers’Alliance, 2018). As per CBA bank, it becomes significant for delivering customers a highly competitive proposition by assuring about responsibility as a financial institution. The organization has found out some industrial opportunities that improve customer outcomes. CBA continuously strives for understanding the customer's views and focuses on the individual concerns of each unhappy customer.
Improving the Commonwealth Bank of Australia
Commonwealth Bank of Australia is reiterating the significance of maintaining resilience as well as stability of the financial system. It also ensures the customers’ security and promotes competition for customer benefits. The systemic failures in the case of banking operations lead to some socio-economic as well as fiscal outcomes (Freebairn, 2018). The strength and stability of the financial system depend on the strong reliance among the offshore wholesale funding and financial system of Australia. The reliance of Australia’s economy on credit ratings and the capability of accessing offshore markets enable Commonwealth Bank in providing $135bn to Australian customers for new lending. According to the organization, the regulatory framework of Australia is comprehensive, robust, and well-balanced for promoting competition and innovation, protecting customers, maintaining stability as well as the resilience of the financial system(Haisken-DeNewet al., 2019). The organization is found accepting several Draft findings from the Draft report and also rejecting some that bring competition in the implications of market structure, customers’ capability of applying competition pressure, and many more.
Use of Cloud model for CBA’s business operations
CBA is said to achieve some payoffs from the standards-based as well as the multi-provider cloud model. The organization provides pay-as-you-go IT services. This helps in reducing the application costs and enhancing market efficiencies. The resources CBA gets from the cloud model are somewhat scalable and flexible(Schlagweinet al., 2014). These IT resources are found adjusting with the dynamic workloads. The configuration of the cloud model of CBA is easy to use. It accesses several providers, checks application needs, and focuses on the cloud provider performance. The utilization of blueprints reduces the time to market for IT services and products. It clears the fact that environments for software development can be deployed in the cloud both automatically as well as rapidly. The multi-provider cloud model increases the speed of application development for CBA(Willcocks& Reynolds, 2015). It also maintains the infrastructure for innovative work and higher value.
According to CBA, a good business practice is empowering people and is strengthening communities. Keeping this in mind, the banking organization is focusing on balanced, sustainable as well as transparent decisions, policies, and practices, which lead to some positive environmental, economic as well as social outcomes. The organization’s Code of Conduct is setting out some expectations of how they are acting, solving, and making decisions. This also helps them in connecting expectations, purposes, values as well as the Group Policies for delivering the appropriate outcomes for their shareholders. On the other hand, the anti-bribery and corruption policy and framework followed by the organization is outlining zero tolerance in case of any corruption, bribery as well as facilitation payments for contractors, directors, employees, and suppliers who work for the organization. CBA is working for strengthening the compliance program for anti-financial crime (Botha et al., 2020). It is investing significantly by making sure about managing, mitigating, and identifying the financial crime within the business units. The organization is uplifting its processes continuously in order to monitor, manage reports, and control financial crime by ensuring increased confidence.
Role of Social media in CBA’s business operations
CBA gets the idea of utilizing social media for enhancing their business operations. Social media is facilitating the way information is collected during an online crisis. News gets spread to a large audience through social media. It can be stated that public participation gets standardized during crisis management these days. It becomes imperative for CBA to prioritize the utilization of social media during a crisis. They also need to capitalize on virtual communities that emerge from social media. The digital media-dominated era is compelling the organization for having an online presence, even without considering the nature and size of the business. CBA makes use of social media for handling the crisis caused for several allegations (Hussain et al., 2017). The consistent interactions among the bank and its stakeholders are significantly reducing the negative impacts caused due to online crisis.
After going through research and analysis the researchers in this paper, have come to a conclusion. It becomes significant for all sorts of the organization to consider the various organizational aspects which are somehow offering the business growth and sustainability. The organization may belong from any business nature be it any financial industry, or banking industry, or anything else. It becomes important for CBA or Commonwealth Bank of Australia to consider all the forces from outside or inside of the business environment. It is quite obvious that the business structure of the organization, Commonwealth Bank of Australia operates through diversified countries. The researchers are identifying the factors from the external and internal environment which also affects the business performance of this banking organization of Australia. The CBA’s business structure is modifying continually in order to operate the business in several countries. It is also quite clear that at present, the economic condition of the banking industry of Australia is not good. This affects the operating environment of Commonwealth bank.
Andrews, T., &Taxpayers’Alliance, A. (2018).Submission to the Productivity Commission on the Draft Report into Competition in the Australian Financial System. Available at: https://www.pc.gov.au/__data/assets/pdf_file/0004/226138/subdr077-financial-system.pdf (Accessed: 6 April 2021).
Botha, F., de New, J. P., &Nicastro, A. (2020).Developing a short form version of the Commonwealth Bank–Melbourne Institute Reported Financial Well-being Scale. Commonwealth Bank of Australia and Melbourne Institute Financial Well-being Scales Technical Report, (5).
Freebairn, P. (2018). Competition into the Australian Financial System. Policy.Available at: https://www.pc.gov.au/__data/assets/pdf_file/0004/226759/subdr119-financial-system.pdf (Accessed: 6 April 2021).
Haisken-DeNew, J., Ribar, D. C., Salamanca, N., Nicastro, A., & Ross, J. (2019). Improving the Commonwealth Bank of Australia-Melbourne Institute observed financial wellbeing scale.Retrieved 6 April 2021, from https://fbe.unimelb.edu.au/__data/assets/pdf_file/0009/3045708/CBA_MI_Tech_Report_No_3.pdf
Hussain, S., Ryan, M., Cripps, H., & Lambert, C. (2017). Role of social media in handling a crisis situation: A case study of Commonwealth Bank of Australia (CBA). In The proceedings of 2nd Business Doctoral and Emerging Scholars Conference (p. 98). Schlagwein, D., Thorogood, A.Willcocks, L.P. (2014). How Commonwealth Bank of Australia gained benefits using a standards-based, multi-provider cloud model. MIS Quarterly Executive, 13(4).
Sumner, M., & Caro, J. (2018).Business Payoff to the Cloud. Retrieved 6 April 2021, from https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1051&context=mwais2018
Willcocks, L., & Reynolds, P. (2015). The Commonwealth Bank of Australia–strategizing from outsourcing to the cloud part 1: perennial challenges amidst turbulent technology. Journal of Information Technology Teaching Cases, 4(2), 86-98.Retrieved from https://journals.sagepub.com/doi/abs/ www.commbank.com.au, 2021