ANZ Bank Case Study
Discuss about the Implicit Contracts and Acquisitions Strategic Resource.
It is believed that any change is extremely hard to accept in the beginning but in the end it always provides fruitful results if it is executed properly. The management of the organisations plays a vital role in carrying out the change. As stated by van den Heuvel et al. (2013), implementing any change is not a difficult task but sustaining that change depicts the success and failure of that change. Every organisation requires proper resources, tools, techniques and most importantly a proper plan in order to implement a change in an organisation.
An organisation implements change because of various situations like when the organization fails to achieve its goals in spite of doing every possible thing. A change is often implemented when the management finds that the change could bring immense success to the organisation. As stated by Shirey (2013), change are also implemented looking at the external factor like change in government’s policies.
In this particular report the pros and cons of change management will be highlighted by analysing the case of the most successful bank of Australia and Newzealand which is ANZ bank. ANZ bank is one of the most popular companies of Australia which has been extremely successful in satisfying its customer for more than 170 years. More than 35000 employees works in this particular bank and it has around 6-7 million customers (Altamony et al. 2016).
ANZ bank is considered to be the most advanced bank not only in terms of technology but also because of their managerial decisions that the bank has taken over the year. The bank successfully implemented various change management strategies in the year 2000 under the leadership of their CEO John McFarlane. The change brought huge success in the business of the bank but the bank also faced huge internal challenges.
There was a time in the mid 90s when the organisation was going through a tough phase as there were huge bad debts. The customers also became dissatisfied with the approach of the employees and the employees were also extremely demotivated. That was the time when the Bank appointed John McFarlane as the CEO of the company. There were 3 main strategies implemented by McFarlance in the year 2000 which were Performance, Growth and Breakout (Azanza et al. 2013).
These three strategies had the aim to deliver extremely good financial performance and giving value to their customers and all their 376813 shareholders. It also aimed to make the brand stronger and to build a foundation which could provide the bank long term success.
Pros and Cons of Change Management
In the late 90s customers of ANZ bank became extremely annoyed because of increase in fees and bank closures. MacFarlane sensed that the banking scenario was getting worsen day by day and hence immediately stopped the bank closure. ANZ bank was the few banks that time that became successful in doing so and as a result of which gained huge trust specially from the rural community (Baker et al. 2013).
CSR or corporate social responsibility has become one of the key aspect of any business. It changes the public perception. MC Farlance was forced the employees and focus more on CSR activities.
Before McFarlance joined the organisation there was hardly any female employee who was working in the upper management. After he joined he provided a lot of employment to women who are qualified for the job role and also gave them respected positions in the higher level management (Bateh et al. 2013). This step also gave huge spotlight to the company and slowly the public perception about the bank began o change. In that period ANZ was the only bank who was implementing such changes in the organisation because of which it moved ten steps ahead from its competitors.
Every organisation tries to focus on 2 main strategies that is to make maximum profits by maintaining low cost of operations. McFarlane implemented some of the cost cutting strategies like bailing out investment to emerging countries. This reduced the bank’s financial risk hugely. He changed the entire operational structure of the organisation. He started doing outsourcing of various operations and emptied the head office. Within 10 years the entire scenario of the bank was changed and both the customers and the employees were extremely satisfied with the change that took place in the organisation (Büschgens et al. 2013).
McFarlane with his vast experience used to understand the importance of the organisational culture for any organisation. He understood that the organisational culture can only remain positive when the employees and the upper management can work together with proper communication (Cummings et al. 2016). In order to implement this internal cultural change of the organisation ANZ hired MCkinsey and Co to investigate the cultural issue that the company is facing. This investigation highlighted few things that helped Mcfarlane to enforce the change properly. He got to know that though some of the employees were satisfied with the culture there was a section of employees who believed that there is bureaucracy and the communication from higher and lower management is nit transparent enough. Some of the employees felt that there is always control over information which was unnecessary. All these employees were extremely disappointed with the organisational goals. This is the time when McFarlane changed the leadership style to transformational leadership where inputs from every employee were taken before implementing any major decisions. It was not only the senior managers who were taking every decision (Hafsi and Turgut 2013). There were also various motivational plan that were taken by the management which helped the company to gain trust of the employees. The concept of reward and recognition was also implemented where employees were given rewards for their contribution to the organisational success. There was also lot of other motivational plans that got introduced which helped the organisation’s culture to become healthy (Handley and Benton 2013).
Lewin’s Change Management Model
McFarlane started a lot of leadership program where proper training was provided to the managers. Managers from all segment of the organisation were involved in this program. New talents were hired and this helped the organisation to prepare their future leaders ready.
Implementation of change is never easy. There has to be some negative effects. According to Hornstein (2015), change management has both positive and negative impacts. Some of the common challenges that an organisation faces are as follows.
- Employees working in an organisation for a long perioid of time get used to a structure. A sudden change in the organisation often acts as a major reason of demotivation. Some people also have to lose their jobs because of these changes. As in the case of ANZ when outsourcing was introduced by McFarlane huge number of people lost their jobs. Though it helped the organisation to increase their profitability as their operational cost was reduced but still it created dissatisfaction among the existing employees as well. So it is quite natural that a majority of the section employees opposed to these changes.
- It is not only the employees who react negatively towards organisational change. The higher level manager also reacts negatively towards the change. In the case of ANZ bank when McFarlane started to take employee feedback and also allowed the employees to participate in the decision making process there were some managers who did not took this in a light note. The managers who were used to a different culture had to face these challenges as the way of work was changed (Isaacs 2016).
- Diversity in the organization and in their workforce will also prove as a challenge for the managers in implementing the process of the change management (Mukerjee 2013). This is due to the reason that, diversified workforce comprise of employees from different social and cultural backgrounds. Therefore, the particular approach of the change management process may not adhere to the different requirement and expectation of the employees. In the case of the ANZ bank, they are having their market presence in different locations around the world. Thus, different locations will have different level of acceptance towards the organizational culture. It will be a challenge for the managers to initiate the process of the change management according to the need of different cultural and social criterion.
In the previous section of the report the entire scenario of issues related to ANZ bank has been discussed. In the following section the solutions to those identified issues will be analysed with the help of Lewin’s change management model.
Lewin’s change management model has mainly 3 stages which are unfreezing, moving to a new level and refreezing.
Unfreezing: As stated by Sarayreh et al. (2013), change cannot take place until there are some challenges faced. This particular stage focuses on challenging the beliefs and behaviours of the employees working in the organisation. For example in the case of ANZ bank when McFarlane first started the outsourcing process many people have lost their jobs. This resulted a situation of tension among the other existing employees and because of which they git extremely demotivated. So whenever any change is being implemented every employee should be given a proper justification about the change where the reason behind the changes has to be mentioned in a transparent manner. So that the employee does not have any doubts and should not feel that the organisation is not thinking about them and acting selfishly. The most important thing about this particular stage is that the positive aspects of the change have to be highlighted properly.
Moving: Once an organisation goes through the unfreezing stage this stage begins. This particular stage is very important a the management has to keep an close eye of the process of the change. Proper and frequent communication is extremely important at this stage. For example in the case of ANZ bank where it is seen that both the higher level management and the employees were dissatisfied with certain aspect of the change (Roberts 2015). So it is the duty for the organisation to keep taking updates from the employees about the progress of the change. They need to make them understand that they are also part of this change. It might happen that it can take some time for certain employees to get adapted to this change but that employee should not be ignored. If any employee gets afraid of getting fired then the change can never be implemented successfully.
Unfreezing
Refreezing: This is the stage when the management has become almost successful in implementing the change. It is the stage where employees have almost understood that they are the part of this change and it is extremely beneficial for them as well as for the company’s objective. For example in the case of ANZ it was seen that the customers were extremely dissatisfied with the behaviour of the employees. It was also seen that hiring a female employee or promoting a female employee was never really part of the organisational culture of ANZ. But when these changes were brought the public perception about the company was changed. The trust of the people that was lost was back on the bank and the bank gained huge competitive advantage. So every organisation should provide proper support to the employees to their employees during these changing phases with proper training and proper communication (Hafsi and Turgut 2013).
Conclusion
From this particular analysis it can be concluded that change comes with both positive and negative affect for any organisation. There will be always a revolt for any change but if the benefits of the change can be shown properly through proper training and communication then there will be always a positive sign. Anz bank was going through an extremely difficult situation which almost destroyed the image of such an old and reputed organisation but McLaren make sure that the company comes back in track and with his vast experience and innovative leadership skills successfully implemented some changes that took the bank to next level.
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