Discussion
Commonwealth Bank in Australia is a multinational bank that operates in Australia along New Zealand, United States, United Kingdom and some countries in Asia. The services this bank provides varies from different financial services like retail, business and investment and fund management. The foundation of the bank was in 1911 and now this bank is regarded as one of the big fours (Brown, 2017). The bank provides retail banking which deals with the common customers of the bank. Retail banking involves opening and managing the account of the consumers along with providing loan to the consumers. On the other hand the bank deals with the investments in the money market and wealth management (Gilligan et al.2017). All these activities are related to the corporate and investment banking. While doing the business it is important for renowned bank like Commonwealth Bank to maintain the ethics. There is a relevance of ethics while taking decisions regarding the business direction of Commonwealth Bank. The main objective of this paper is to evaluate the ethical relevance in the decision making of Commonwealth Bank. Apart from that importance of the ethics in business is discussed in this paper. The conclusion is made on the basis of the factors in the paper.
Relevance of the ethics in the business decision:
As one of the largest bank in Australia it is the responsibility of the Commonwealth Bank to maintain the business ethics while making a decision. The presence of ethics maintains the sustainability of the business. It can be said that there is a difference between the application of the moral ethics and the business ethics (Dowding and Martin 2017). The circumstances of the business ethics depends on the environment which is different from the social environment. The main objective of the business ethics is to achieve the business goals with maintain the sustainability.
It is the responsibility of the Commonwealth Bank to maintain the business ethics in the decision making procedure (Cull and Melville, 2018). This bank is needed to be more concerned about maintain the business ethics as there were some allegations against this bank. In mid-2012, Commonwealth Bank had rolled out their IDM without conducting proper risk management which was not according to the business ethics (Apergis and Cooray 2015). Apart from that AUSTRAC alleged that the criminal syndicates are using the cash deposit machine to deposit cashes anonymously.
Some of the business policies that the Commonwealth Bank has taken in order to maintain the business ethics are-
- Honesty: The Commonwealth Bank provides clarity in the services and all the terms and conditions presented in front of the users are true. Apart from that the bank does not mislead its consumers regarding the policies in the banking service provided by them. This also includes presentation of true data.
- Integrity: The employees in the bank are bound to be responsible for presenting integrity and ability to do the right thing under great pressure. The employees are needed to follow the principals of the organization.
- Fairness: Commonwealth bank promotes fairness while doing the business in the organization. According to Commonwealth Bank, the fairness indicates that the bank will not take any advantage from the consumers (Woodcock 2016). Apart from that the bank will provide right information to the consumers and help them accordingly.
- Reputation and morale: The bank is aware about the brand value of the Commonwealth Bank. Regarding this this banking organization is bound to serve the services with standard quality (Hollow, Akinbami and Michie 2016). Apart from that, through the application of ethics, the reputation and morale of this banking organization would be high.
- Accountability: The management of the banking system will acknowledge the ethical accountability in the organization.
Relevance of Ethics in Business Decisions
Relevance of ethics in making the business decisions of Commonwealth Bank:
Commonwealth Bank has written rules and regulations regarding the business that have to be maintained by all the employees of this banking organization (Hollow, Akinbami and Michie 2016). The relevance of the ethics in the business decisions for Commonwealth Bank can be discussed through the ethical theories.
Individualism: Individualism is also known as economic theory states that the expansion of the business and maximization of the profit can be done along with maintaining the laws and regulations. Commonwealth Ban abide by the laws and regulations of Australia. However, there were some allegations against this bank. AUSTRAC alleges to the court that Commonwealth Bank did not operate within the Australian Law as the risk assessments were not done in a proper way (McIlroy 2017). However, the management of the bank admitted the mistake and reformed the functioning of the banking procedure. This enhances the productivity and the good will of the bank. Apart from that the activity of the bank would follow the laws of Australia.
Kantianism: Kantianism is the ethical viewpoint where it is judged weather an action is right or wrong. According to this theory the source of any business action is goodwill of the organization. From this ethical point of view it can be said that Commonwealth Bank maintains the goodwill through providing the consumers standard services (Hollow, Akinbami and Michie 2016). Apart from that the activity of the organization is justified and have clarity along with the accountability. However, there was an allegation against Commonwealth Bank was that this bank was not very concerned about the law regarding the monitoring of the transaction of money. According to AUSTRAC, if the proper monitoring was done by the bank, some of the suspicious transactions could be spotted by this banking organization (Tucker and Jubb 2018). This raised the issue regarding the rampant use of money laundering by criminals. However, commonwealth Bank was able to detect the fault in the organization and is able to carry out the monitoring process in a successful way.
Utilitarianism: From this theoretical viewpoint, it can be said an act or rule is said to be tight if the consequences of that work has good impact on the larger number of people. The present working of the Commonwealth Bank has positive impacts on the consumers of this bank. The high level of the service and implementation of the advanced technology in the banking sector have made the banking experience better for the consumers of this bank. This enhances the goodwill of the banking organization. Apart from that this also helps the banking organizations in the expansion of the business. Commonwealth Bank is currently operating in New Zealand, Australia, UK, USA and some of the Asian countries (Tucker and Jubb 2018). The goodwill of this banking organization would help to expand the business on the other parts of Asia and Europe.
Relevance of Ethics in Making the Business Decisions of Commonwealth Bank
Virtue theory: Virtue theory examines the individuals if they have the virtue to become better person or entity. This theory is based more on the entity than the actions or the consequences of action. Commonwealth Bank is doing well in the business. However, management should appoint a leader who can manage the functioning of the organizations in a proper way. Apart from that there needed to be certain virtue present in that leader so that it can reflect the functioning of the Commonwealth Bank. The business values are needed to be present in the selected leader so that he or she can lead the Commonwealth Bank in a proper way. Apart from that the right leadership will help this banking organization to abide by the Australian laws and regulations.
The way Commonwealth Bank uses ethics in decision making:
There are certain allegations against Commonwealth Bank regarding the functioning of the bank. This includes not monitoring the transactions in a proper way and not conducting the risk analysis in the organization. However, the Commonwealth Bank has agreed with these mentioned misconduct in the organization and has improved the system that strictly follows the Australian laws and regulations (Clarke and Boersma 2016). This eventually improves the functionality of the organization. While making the decisions for this banking organization, following the rules and regulations of Australia is not enough (Willcocks and Reynolds 2015). There are other consequences like profit from the action and the acceptability of the consumers are needed to be considered before making a decisions (Gustafson, 2018). It has been seen that the allegations against the Commonwealth Bank has negative impact on the business of the bank (Hollow, Akinbami and Michie 2016). However, Commonwealth Bank authority was concerned about the fact and has changed way of the functioning of the business so that the modified business plan can be improved and can follow the Australian Law. This reformation has accepted by the consumer base positively.
From this discussion it can be said that maintaining ethics is an important part in the decision making process of the organization (Hollow, Akinbami and Michie 2016). Maintaining ethics in the decision making will help the organization to operate business without interruption for accusing laws and orders.
Relevance of ethics in small business:
Commonwealth Bank is a multinational banking organization that is operated in different countries (Willcocks and Reynolds 2015). It has been seen that ethics has played an important role in the decision making of Commonwealth Bank (Banhalmi-Zakar 2016). In this context, it has to been seen if these theories of ethics are applicable for the small business.
The Way Commonwealth Bank Uses Ethics in Decision Making
It has been seen for the small business the consumer base is small. Apart from that the capital investment in the small business farms is less. Considering all these factors, it can be said that maintain ethics in the decision making system for the small business is important (Boersma 2015). The ethical practices in the business decisions will help the organizations to do the business in a right way that will help to achieve the goodwill of the organization. This will help the small farms to expand the business.
Clarity:
There is a certain tendency that the small business farms are interested to do business on their own way. Apart from that the rules and regulations of doing business are not followed in a proper way for some cases (Dell’Atti et al. 2017). However, these kind of practices are not acceptable as it can harm the goodwill of the organization. This will become the constraint for the growing phase of the business in the organization.
Not maintain the rules and regulations in a proper way may lead to the small business farms to the legal issues (Rothlin and McCann 2016). The products, quality and services of the small organizations may not meet the minimum standard set by the quality control board.
Maintaining ethics in the decision making will help the business organizations to maintain clarity for the internal functioning. Apart from that the consumers can trust the organizations. This will expand the consumer base (Hollow, Akinbami and Michie 2016). It can be said that from the discussion is that it is equally important for the small business firms to maintain ethics in the decision making process.
Conclusion
The discussion is regarding the ethical aspects of doing business in Commonwealth Bank. In this context different perspective of ethics has been discussed in a proper way. From the discussion it can be said that the main driving force of the Commonwealth Bank is the goodwill of the bank. This goodwill has achieved through providing the proper services to the consumers and maintain the quality of the banking service. Apart from that for the managing of the corporate market and the investment banking of the bank, the decisions are made by the experts. So, the position of the Commonwealth Bank is stable in the global finance market. However, there were certain allegations against the bank which had a bank impact on the business of the bank. However, the bank was concerned about the factors and has modified the mistakes proper way. This modification leads to the improvisation of the overall banking system in the organization. The application of ethics is also important for expansion of the small business. It can be concluded from the discussion that the application of the ethics is important from both large scale and small scale organization.
References
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