Table of Contents
Part 1
Introduction
Social ethical initiative of ANZ Bank
Organisational culture of ANZ bank
Social ethics and organisational performance
Organisational culture and organisational performance
Social ethical issues at ANZ Bank New Zealand Limited
Unethical selling practices
Pressure on staff
Modern social ethical issues
Workplace bullying
Workplace discrimination
Data privacy
Recommendations
Ethical selling
Prefer workplace health and safety
Part 2
Global economy and market
Economy and banking industry
Modern business practices at ANZ bank
Empowering women leadership
Caring about our environment
Global economy and modern business practices
Legal
Currency fluctuations
Organisational goals
Global economy and organisational goals
Nature of business
Economic impacts
Recommendations
Go energy efficient
Be compliant
References
Introduction
Australia and New Zealand Bank is the oldest bank in New Zealand. The history of bank started back in 1840, when Union Bank of Australia opened its first branch in Petone in New Zealand which later shifted to Wellington. After 111 years in Union Bank of Australia and Bank of Australasia merged and formed Australia and New Zealand bank. After 9 years, a third bank named Scottish and Australian Bank merged with Australia and New Zealand Bank and formed Australia and New Zealand Banking Group. After forming ANZ Banking Group, the bank shifted its headquarters to Melbourne, Australia (ANZ Bank New Zealand Limited, 2019).
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In 1979, New Zealand Parliament passed an Act which allowed ANZ Banking Group to incorporate bank’s branches in New Zealand as Australia and New Zealand Banking Group (New Zealand) Limited. Four years after this permission ANZ introduced its New Zealand head Office in capital city Wellington. Another achievement recorded when ANZ New Zealand bought The National Bank and brought that bank under ANZ brand (ANZ Bank New Zealand Limited, 2019).
Social ethical initiative of ANZ Bank
ANZ Bank New Zealand Limited is supporting our environment, several organisations, New Zealanders on international stage and communities. ANZ Bank is showing their social responsibility by setting goals related to industry, customers, employees and the community. In Corporate Sustainability Review 2017, ANZ declared that they are responsible products and services, creating a diverse workforce and enhancing the financial knowledge and capability of communities (ANZ Bank New Zealand Limited, 2019).
ANZ bank acknowledged that their operations have impacts over our environment. In a publication named “ANZ’s approach to the environment”, the bank stated different operations which have impact on our environment. They included energy which bank is using in daily operations, travel, procurement and disposal of goods as environment impacting activities. ANZ is doing their best to reduce the impacts of these business activities by setting targets (ANZ Bank New Zealand Limited, 2019).
Organisational culture of ANZ bank
ANZ Bank New Zealand Limited has a great value for diversity. The bank employs about 8000 people in New Zealand. Their employees have different backgrounds, skills and specialisations and the bank has a great value for the richness of diversity which employees from different background are bringing to the bank. ANZ bank is one of the biggest employers in the country and they acknowledged that their employees are behind the success of organisation. Due to this ANZ is doing its best for making the bank an excellent work workplace which has value for individual goals and contribution in success of organization (ANZ Bank New Zealand Limited, 2019).
The culture of recognising and celebrating is making the ANZ an excellent workplace for employees across the nation. The bank values to create a culture where everyone ideas, beliefs, attitudes and skills are valued. The recognising and celebrating culture at ANZ encourage employees to fully contribute in the success of organisation. ANZ received three rewards from Young Women’s Christian Association in 2015, 2016 and 2017 in relation to equal pay. The bank received Camellia Supreme Award in 2016 in relation to women empowerment. Achievement of these rewards is showing that ANZ bank has a great value for women leadership in their organisation (ANZ Bank New Zealand Limited, 2019).
Social ethics and organisational performance
The theory of social ethics has a great impact on organisational performance. Employees of an organisation is the most important thing which impacts the organisational performance in both positive and negative way. Following the theory of social ethics build and enhance the employee trust by creating a trusting environment inside the organisation. It encourages employees when a business is using ethical practices and acting in the best interest of every stakeholder of the business. Transparency in business is an important ethical practice which helps in enhancing organisational performance. Transparency in business operations enhance trust among both employees and customers. For employees, transparency creates an excellent workplace and contribute in organisational performance. Employees of an ethical business always prefer to make efficient use of organisation’s resources like office supplies and energy. This efficient use reduces the overall cost of organisation and enhance the business performance (Lister, 2019).
Organisational culture and organisational performance
Organisational culture has an important role in defining the organisational performance. Many researchers put a lot of efforts in context to organisational culture and performance. Individual performance in an important factor in this era of competition, no matter the competition is between employees or organisation has competition with other organisation. Employees performance is totally dictated by the organisational culture. A positive culture inside the organisation encourages employees to participate effectively, stay committed, communicate openly, sharing ideas and innovation. These factors have a direct relation to organisational performance. Effective implementation of these factors always helps in enhancing the organisational performance (Siew Kim Jean Lee & Kelvin Yu, 2004).
Social ethical issues at ANZ Bank New Zealand Limited
Unethical selling practices
A survey conducted by Consumer New Zealand disclosed the unethical selling practices of banking industry in New Zealand. In this survey 20% of customers stated that bank offered them products which they never requested and in various cases customers do not want offered products. The annual survey of Consumers New Zealand disclosed that 16% customers felt pressure from bank employees in relation to financial products which they do not need (Edmunds, 2019).
Some customers stated that bank employees are offering products like new credits cards, increasing limit on existing credit cards, life insurance and personal loans without request. Bank employees put pressure on customers in relation to these products and putting customers in debt which they do not want. This issue of unethical selling practices resulted in ANZ received customer satisfaction rating below the average. Consumers New Zealand stated that banks in New Zealand advised to make necessary changes in selling practices by authorities. Recent survey by Consumers New Zealand is not showing any improvement in selling practices of banks in New Zealand (Edmunds, 2019).
Pressure on staff
In 2017, banks in New Zealand was in news media due to issue of sales pressure on staff and authorities advised all banks in New Zealand to sort this out. In 2018, a report showed that pressure on banks staff in relation to sales was increasing even authorities warned all banks in this issue. Last year a survey which included 600 bank employees from Bank of New Zealand, Westpac bank and ANZ Bank New Zealand Limited revealed that the pressure related to sales was increasing in comparison to year 2017. A major part of employees, 87% felt themselves under pressure for selling products like kiwi saver, insurance and credit cards. The sales pressure was more in 2018 as comparing to year 2017, stated 50% of employees in this survey. In this issue Financial Markets Authority and Reserve Bank of New Zealand asked all banks in New Zealand to prove that banks were not dealing badly with employees (Mandow, 2018).
Modern social ethical issues
Workplace bullying
Workplace bullying is very common unethical practice in New Zealand. A survey which included 1700 persons revealed a shocking truth. This survey rated New Zealand second worst place in relation to workplace bullying. This survey disclosed that 1 in every 5 workers faced workplace bullying. Various organisations in New Zealand implemented a zero-tolerance policy in relation to workplace bullying but the problem is still big for nation. New Zealand government put workplace bullying as a serious hazard under workplace health and safety legislation (Redmond, 2016).
Workplace discrimination
Discrimination is another unethical practice which exists at workplace in New Zealand. Government protects the people in New Zealand from any kind of discrimination under Human Rights Act 1993, but the problem exists in the country. Workplace discrimination is at number second in all kinds of discrimination in New Zealand. The highest number of people faced discrimination in New Zealand are Asians. The most common reasons for discrimination in New Zealand are skin colour, race, ethnicity and nationality (Stats New Zealand, 2012).
Data privacy
Privacy of data is another issue about which New Zealanders are concerned. Recently Facebook faced Privacy Commissioner New Zealand in relation to privacy breach. Reports are showing that New Zealanders are concerned about information which children are putting on internet, credit card data, identity theft, businesses sharing information without consent. In New Zealand 62% people prefer not to share data due to various security risks (Mitchell, 2014).
Recommendations
Ethical selling
The issue of unethical selling was highlighted by news media in the country and left all banks in New Zealand with a warning from authorities. For resolving this issue of unethical selling practices, I recommend ANZ bank to adopt ethical selling practices. ANZ bank need to consider the financial wellbeing of customers before offering or putting pressure for buying a credit product. It is good for ANZ bank to act fairly with all customers for financial wellbeing of society.
ANZ New Zealand declared on their website that they are concerned about the financial wellbeing of communities and working hard to enhance the financial knowledge of public for creating a financially strong nation. ANZ also mentioned this as a corporate responsibility of organisation to aware people about financial wellbeing (ANZ Bank New Zealand Limited, 2019). On the other hand, ANZ New Zealand is one of the banks which is putting pressure of customers for buying financial products without taking care of debt and making the nation financially weak. In my opinion, ANZ bank need to review their corporate responsibility policies and to act according to published policies.
Prefer workplace health and safety
The issue of sales pressure on employees is common in every bank. This issue left all banks in New Zealand with a warning from Financial Markets Authority and Reserve Bank New Zealand. I recommend ANZ New Zealand to follow the instructions of authorities to resolve this unethical issue. It is good now to prepare an accurate report and submit it to authorities. Any inaccurate information or hiding any information from authorities will create a big issue for organisation in future.
Both the authorities identified sales incentives as major cause for this reason, but employees referred job security as a reason for bearing the pressure of sales targets. Both the authorities advised all banks including ANZ New Zealand to submit prescribed report in this issue and stop selling incentives at all levels (Stock, 2018).
As a recommendation, ANZ Bank New Zealand Limited must need to stop sales incentives at all levels as soon as possible and submit a compliance report to both the authorities. Moreover, it is also recommended to submit the prescribed report about past allegations to authorities before the due date. Impartiality in preparing reports will be helpful in resolving the issue properly.
Global economy and market
Global economy and market in these days is totally different from past. In past, use of technology was not much and nations did not have much impacts on each other. With huge advancement in technology, nations are more linked with each other in terms of global economy and market. Both individuals and businesses have access to products manufactured in different countries. This open access to products enhances the rotation of currencies between the nations. This enhancement in global trade has a major impact over global economy and market (Economy Watch, 2010).
More than a decade ago, we faced a downturn in global economy which further gave birth to 2009-10 global recession and global economy was threatened by this. New Zealand was also under the influence of this global recession. The core banking system was disturbed in New Zealand. The 2008 downturn in economy continued in 2009 and gave birth to global recession. Asset valuations and bad debts disturbed the balance sheet of every bank in New Zealand (Reserve Bank of New Zealand, 2012).
Economy and banking industry
The relation between economy and banking industry is very close. The inflation was at lower level between 1980 and 2000 but now the scenario is totally opposite. Changes in economies are very quick these days and nations are also responding very quickly to these changes. The banking industry of New Zealand has a strong relation with global and national economy. Both the economies have an important impact over banking industry in New Zealand. About all the market valuation and lending decisions in banking industry are very closely linked with both global and national economy. At present, banking industry in New Zealand funded a lot of businesses and individuals for personal and corporate needs. It will be very hard for both individuals and corporates to return the money, if a downturn in economy will occur like downturn which we faced in 2008. It is very risky to lend money in an economy downturn due to which economies play an important role in decisions of banking industry (Alan Bollard & Tim Ng, 2009).
Modern business practices at ANZ bank
Empowering women leadership
ANZ Bank New Zealand Limited is supporting women employment and leadership. They received three awards regularly in three years from 2015 to 2017 from Young Women Christian Association for empowering women and equal pay rights. ANZ bank partnered with Global Women which also supports women empowerment and women in leadership (ANZ Bank New Zealand Limited, 2019). Empowering women employment and women leadership is modern business practice. According to an article published by Harvard Business Review, women are the drivers of economy. Women are making most of the decisions regarding domestic purchase. Women have 90% contribution in spending every dollar in household (Michael J. Silverstein and Kate Sayre, 2009). All these things make women empowerment a modern business practice.
Caring about our environment
ANZ Bank New Zealand Limited is supporting our environment by setting targets and reducing the impacts of their daily business operations on our environment. ANZ already published the factors of their daily operations those have impact on our environment. ANZ bank also published their environment sustainability policies. They set targets related to environmental funding and reduction in impacts of their business operations. ANZ bank is publicly reporting their progress related to their environment sustainability targets. ANZ bank support the carbon emission reducing goal of governments across the globe (ANZ Bank New Zealand Limited, 2019).
Global economy and modern business practices
In past, nations were isolated and not much closer like today. Advancement in technology brought a big change in global relations and global market. Operating in global economy is a big challenge for businesses as global economy has some major impacts over business practices. Some impacts of global economy are positive, and some are negative (Durden, 2019). Following are two most common impacts of global economy over modern business practices.
Legal
It is possible to expand business globally these days, but several factors need to consider before expanding a business to other city or country. In big countries like United States, legal requirements vary from region to region. It is must for every business to comply with local legislation where the business is operating. Modern business practices like environment support do not have any restriction in most of the nations across the world. Still there might be some legislations in some nations those do not enable a business to carry out modern business practices easily. It depends on the legal grounds of global market whether it is easy or hard to carry out modern business practices (Durden, 2019).
Currency fluctuations
In modern era, every nation has access to global market and this has major impact over global currencies as well. Due to global trade currencies are fluctuating very quickly. Sometimes it is hard for businesses to operate in an economy which has greater value than their own economy. It might be worst in the scenario of a negative fluctuation. Currency fluctuations has an important role in modern business practices of business. There are several factors like fuel prices, interest rates and return on investment which a business need to consider before starting operation in other economy. These factors are very small in nature but together these factors might be a big issue for a business which hinder to carry out modern business practices (Segal, 2019).
Organisational goals
ANZ Bank New Zealand Limited has several goals related to their business performance and other factors which are necessary for a business. ANZ bank published the following environment sustainability goals on their website which represents their environment sustainability policies.
To provide at least 15 billion dollars till year 2020 for environmental sustainability. This includes practices like reducing wastage, reducing carbon emission and water stewardship (ANZ Bank New Zealand Limited, 2019).
By 2020 ANZ bank targeted to reduce 40% consumption of paper in their Australia and New Zealand operations (ANZ Bank New Zealand Limited, 2019).
By 2020, ANZ bank decided to enhance the recycling rates by 12% (ANZ Bank New Zealand Limited, 2019).
Global economy and organisational goals
ANZ bank set a goal to provide 15 billion dollars for environment. This goal is related to financials and other goals of enhancing recycling rates and reducing paper consumption will help in saving money. But both the goals are related to financials due to which global economy must has some impacts over these goals of ANZ bank. Following are the common impacts of global economy over organisational goals.
Nature of business
ANZ bank is operating in banking industry in both countries New Zealand and Australia. Banking industry is dealing with give and take money. For taking money banking industry is paying interest and taking interest for money which the industry is giving to others. The whole business model is totally relying on financials. In the scenario of increasing bad loans or increasing deposits banks including ANZ bank need to prioritise the goals. In downturn economy business survival must be the priority rather than investing in environment (Riley, 2018).
Economic impacts
Financial objectives are very closely related to changes in economy. A negative change in economy always impact negatively the financial goals of businesses. The most common operational goals every business is reducing the costs and increasing the profits. Banking industry in every nation has direct relation to interest rates and currency fluctuation. These are two important factors of global and national economy which has direct impact over financial goals of banking industry (Riley, 2018).
Recommendations
Go energy efficient
ANZ bank is a large organisation and it also published that energy which they are using in their business operations has an impact on our environment. It is common that every business has an option for reducing the use of energy. This do not require any big plans and actions. ANZ bank has several offices in different nations. ANZ bank can save a huge amount of energy if every office start using energy smartly. At a corporate level it must be a big save financially which ANZ bank can use in other operations.
Be compliant
It is not similar to operate business in every nation. Every nation has their different legislations. In big countries like United States, legislations might vary from state to state. Awareness about all the legal compliances is must for every organization. It is beneficial to find someone local expert before expanding a business to other nation. Local expert must help the business in complying with local legislations.
Alan Bollard & Tim Ng. (2009, March). Coping with global financial and economic stresses. Retrieved from Reserve Bank of New Zealand: https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2009/2009mar72-1bollardng.pdf?revision=fa7744a5-7372-49f0-8408-2a566aba1ce2
ANZ Bank New Zealand Limited. (2019). Corporate Responsibility. Retrieved from ANZ Bank New Zealand Limited: https://www.anz.co.nz/about-us/corporate-responsibility/
ANZ Bank New Zealand Limited. (2019). Our Company. Retrieved from ANZ Bank New Zealand Limited: https://www.anz.co.nz/about-us/our-company/anz-new-zealand/brands/anz/
ANZ Bank New Zealand Limited. (2019). Our Culture and Values. Retrieved from ANZ Bank New Zealand Limited: https://www.anz.co.nz/about-us/careers/culture-values/
Durden, O. (2019, January 25). Challenges of Operating a Business in a Global Economy. Retrieved from Chron: https://smallbusiness.chron.com/challenges-operating-business-global-economy-75865.html
Economy Watch. (2010, October 13). Global Market Economy. Retrieved from Economy Watch: http://www.economywatch.com/market-economy/global-market-economy.html
Edmunds, S. (2019, April 24). Banks pressure people into products they don’t want: Consumer NZ. Retrieved from Stuff: https://www.stuff.co.nz/business/112225167/banks-pressure-people-into-products-they-dont-want-consumer-nz-study-shows
Lister, J. (2019). How Organization Theory of Ethical and Social Responsibility Affects the Workplace. Retrieved from Chron: https://smallbusiness.chron.com/organization-theory-ethical-social-responsibility-affects-workplace-17849.html
Mandow, N. (2018, June 26). Bank staff stressed by conflicted sales targets. Retrieved from Newsroom: https://www.newsroom.co.nz/2018/06/26/131055/bank-staff-stressed-by-conflicted-sales-targets#
Michael J. Silverstein and Kate Sayre. (2009). The Female Economy. Harvard Business Review.
Mitchell, T. (2014). Do Kiwis really care about their data privacy? Retrieved from Marketing Association of New Zealand: https://www.marketing.org.nz/data-privacy
Redmond, A. (2016, August 27). New Zealand has world’s second highest rate of workplace bullying. Retrieved from Stuff: https://www.stuff.co.nz/business/better-business/83618177/new-zealand-has-worlds-second-highest-rate-of-workplace-bullying
Reserve Bank of New Zealand. (2012, August 9). Learnings from the Global Financial Crisis. Retrieved from Reserve Bank of New Zealand: https://www.rbnz.govt.nz/research-and-publications/speeches/2012/speech2012-08-09
Riley, J. (2018). Internal and External Influences on Financial Objectives. Retrieved from Tutor2u: https://www.tutor2u.net/business/reference/internal-and-external-influences-on-financial-objectives
Segal, T. (2019, May 13). Currency Fluctuations: How they Effect the Economy. Retrieved from Investopedia: https://www.investopedia.com/articles/forex/080613/effects-currency-fluctuations-economy.asp
Siew Kim Jean Lee & Kelvin Yu. (2004). Corporate culture and organizational performance. Journal of Management Psychology, 340-359.
Stats New Zealand. (2012, September 10). Working together: Racial discrimination in New Zealand. Retrieved from Stats New Zealand: http://archive.stats.govt.nz/browse_for_stats/people_and_communities/asian-peoples/racial-discrimination-in-nz.aspx
Stock, R. (2018, November 6). Banks given deadline to end high-pressure sales incentives. Retrieved from Stuff: https://www.stuff.co.nz/business/money/108356295/banks-given-deadline-to-end-highpressure-sales-incentives
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