The following report aims to discuss the issues that regard the ethics as well as those that deal with the sustainability within the given business organization. The report opens with the summarization of the scenario that is faced by the Commonwealth Bank of Australia, the organization in discussion. The report proceeds to discuss the stakeholder theory and proceeds to analyze the conditions that are faced by the concerned organization in terms of the stakeholder theory. The report then proceeds to discuss some of the alternative solutions that might help in overcoming the issues that are faced by the organization. The report nears a conclusion with the discussion of the best possible solution that might help the organization to put forth an improvement in the overall performance of the Commonwealth Bank of Australia.
The Commonwealth Bank of Australia is one of the most prestigious financial organizations that has been existing within the territorial boundaries of Australia. The financial organization is known to be a multinational organization that was founded in the year 1911. The multinational organization is known to have branches in many countries like Asia, Fiji, New Zealand, United Kingdom and the United States (Gordon, 2018). The organization is known to have a huge number of shareholders that amount to almost 800,000 shareholders all over the world. The employee strength of the company is known to have been more than 52000 (Commbank.com.au., 2018). The company is recognized to be the best company that is active within the Australian territories as well as the organization that provides the best services to the clients of the organization. The bank is most popular for the overall services that it offers to the clients of the organization (Eyers, 2014). The financial advisors of the organizations, however, in the recent occasions have depicted a lack in the ethical behavior. This in turn has led to the conditions that deal with the issues of the various misdeeds in the banking sector.
The stakeholder theory of business ethics and the organizational management aims at the addressal of the values and the morals that are maintained by the concerned members of the organizational management. The stakeholder theory was first proposed by Freeman in his famous book entitled “Strategic Management: A Stakeholder Approach” (Jones, Wicks & Freeman, 2017). According to Freeman, the stakeholder theory attempts at the outlining of the ways in which the management of an organization can aim at the satisfaction of the interests if the various stakeholders of the given business organization. The stakeholder theory in discussion aims to argue that the management of the concerned organization is not answerable to the various shareholders of the organization. The theory suggests that the key purpose of the business is to create a certain amount of value for the stakeholders of the organization (Hörisch, Freeman & Schaltegger, 2014). The theory further states that in order to maintain the sustainability of the concerned organization in discussion, the executives that have been serving the concerned organization should ensure the fact that the various stakeholders of the company do hold the similarity in their views towards the overall successful performance of the organization (Harrison, Freeman & Abreu, 2015). There should be an alignment in the views of the several stakeholders and the views of the concerned management of the organization as well.
Experts of business ethics and organizational management like Freeman (2015) argue that the stakeholder theory helps in the creation of a value within the shareholders regarding the organizational policies and the improvisation of the environmental conditions of the area wherein the concerned organization has been featuring. There are however, criticisms on the usefulness of the stakeholder theory in the matters pertaining to the organizational performance and the various sustainability issues that are faced by the organization in discussion. The stakeholders of an organization take into account all the members of the organization along with the clientele that is served by the organization, the governmental bodies that are active within the given territorial boundaries wherein the organization has been featuring (Flammer, 2015). The opinions of the stakeholders of the organization is known to have been important for the survival of the business in the given organization. The stakeholder theory is known to contradict with the shareholder theory as is discussed by Milton Friedman (Ferrero, Hoffman & McNulty, 2014). Bento, Mertins and White (2017) state that the shareholder theory as opposed to the stakeholder theory suggests that the concerned organization should take care only of the shareholders of the organization and not all of the other stakeholders of the company.
The issues that are faced by the concerned organization in discussion, Commonwealth Bank of Australia refers to the various malpractices that are implemented within the organization. The major ethical issues that was faced by the concerned organization refers to the fact that the concerned officials at the managerial levels within the hierarchy of the organization took to the several malpractices and fraudulent behaviors in a desire to increase the revenues that are earned by the concerned organization. However, the implementation of the stakeholder theory in this case reveals that the concerned organizational management had focused majorly on the benefits that were reaped by the organization and did not attempt to consider the stakeholders of the given organization in discussion, the Commonwealth Bank of Australia. The stakeholder theory argues that the management of the concerned organization is not answerable to the various shareholders of the organization (Freeman & Ginena, 2015). The theory suggests that the key purpose of the business is to create a certain amount of value for the stakeholders of the organization. The theory further states that in order to maintain the sustainability of the concerned organization in discussion, the executives that have been serving the concerned organization should ensure the fact that the various stakeholders of the company do hold the similarity in their views towards the overall successful performance of the organization.
According to the stakeholder theory stated by Freeman, the concerned business organization, the Commonwealth Bank of Australia, should have implemented policies that would have helped in involving the stakeholders of the organization in the various decisions that were undertaken by the organization. The involvement of the stakeholders within the various decisions that are undertaken by the management of the organization ensures the participation of all the stakeholders as well as abides by the fact that the implemented policy benefits all the stakeholders of the organization (De Gooyert, Rouwette, Van Kranenburg & Freeman, 2017). The implementation of the stakeholder theory further ensures the involvement of both the internal and the external stakeholders of the organization. This helps in the prevention of the tarnishing of the brand image of the concerned as well as takes care of the issues that might arise on implementation of a certain strategy.
In this case the implementation of the malpractices within the organization led to the tarnishing of the brand image as well as the imposition of the penalty within the organization. The situation in this case might be viewed through the utilitarianism as discussed by the famous philosopher Immanuel Kant (Patrick & Werkhoven, 2017). The implementation of the utilitarianism within the given organizational scenario reveals the fact that the interests of the stakeholders were not considered during the implementation of the various strategies that led to the scandalous conditions within the given organization. The Commonwealth Bank of Australia is observed to have been implementing major malpractices like the forging of the signatures of the clients, the misleading of the clients of the organization in order to gain the rewards that were promised for achieving the set target in the sales departments. The concerned organization is also known to have been implementing the factors that are related to the various malpractices and misdeeds on the part of the employees of the organization, especially the people who have been serving at the higher levels within the organizational hierarchy (Shaw, 2016). The practice of misleading the clientele on the policies and procedures that are followed within the given organization might lead to the conditions wherein the clientele of the organization might discontinue the usage of the services that are provided by the organization. The company, in discussion, the Commonwealth Bank of Australia, is recognized to be the best company that is active within the Australian territories as well as the organization that provides the best services to the clients of the organization. The bank is most popular for the overall services that it offers to the clients of the organization. The financial advisors of the organizations, however, in the recent occasions have depicted a lack in the ethical behavior. This has in turn affected the brand image of the organization thereby leading to the conditions wherein there might be a loss in the number of the clientele of the organization.
The major alternative solutions that might be put forth in this scenario might deal with the transparency in the policies of the financial organization, the discontinuation of the various malicious and the non-ethical practices within the organization and the proper conveyance of the various policies that are maintained within the organization. The major issues that are faced by the organization in discussion might be avoided with the help of the implementation of the proper transparency in the policies that are followed by the concerned financial institution. Dent and Parnell (2018) opine that the transparency on the part of the financial organization in discussion, the Commonwealth Bank of Australia might help the organization to deal with the various issues that are faced by the concerned organization.
The other alternative that might be suggested for the betterment of the company is the introduction of the proper methods of conveying information to the clientele. The financial institution in discussion is advised to convey the proper information to the clientele (Chell, Spence, Perrini & Harris, 2016). This might help in the proper retention of the clientele of the organization and might even lead to the attraction of the potential clients of the financial organization in discussion, the Commonwealth Bank of Australia.
The company might also be advised to organize internal surveys and interviews in order to deal with the issues that are prevalent within the organization. The practice of misleading the clientele on the policies and procedures that are followed within the given organization might lead to the conditions wherein the clientele of the organization might discontinue the usage of the services that are provided by the organization (Valentine, Hollingworth & Schultz, 2018). The Commonwealth Bank of Australia is known to have been imposing the various malpractices within the operations of the concerned financial organization in order to put forth an increase in the revenue that was earned by the organization. The organization is advised to implement checks on the given organization in order to deal with the increase in the malpractices within the organization which in turn might help in the retention of the clientele.
The major recommendation in this case might refer to the incorporation of the transparency within the given organization. This might help in the matters that are related to the implementation of the non-ethical practices within the organization. The transparency might help in implementing the required checks on the various malpractices that are practiced in abandon within the Commonwealth Bank of Australia.
Conclusion
Thus, from the above discussion it might be inferred that the given organization has been facing a number of issues that relate to the fields of sustainability and the ethics within the given organization. The issues within the organization are analyzed with the help of the stakeholder theory that aims at the addressal of the values and the morals that are maintained by the concerned members of the organizational management. The organization is also advised to implement the transparency in the dealings with the stakeholders of the company in order to deal with the retention of the clientele of the organization.
References
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