Commonwealth Bank Case Study Analysis

This assignment requires you to analyze the Commonwealth Bank of Australia's organizational learning practices and culture. You need to identify specific challenges faced by the bank related to organizational learning, using a SWOT analysis framework to highlight strengths, weaknesses, opportunities, and threats. Furthermore, you'll examine the role of knowledge management technologies and corporate social responsibility (CSR) in addressing these challenges. The analysis should draw upon academic literature and real-world examples like the recent money laundering scandal involving CBA staff.

Running Head: Learning Organizations
LEARNING ORGANIZATIONS
Commonwealth Bank of Australia

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Executive Summary
Commonwealth Bank is known to be one of the largest banks when talked about financial sector.
An organization becomes this large due to its stakeholders hard work and new ideas. Ethics play
a very important role when organization sustainability is the purpose. A few unethical moves and
the organization collapses. Commonwealth bank sure had to face some ethical dilemmas due to
which it came down in the eyes of the customers. This report shows as to how it came down,
what its unethical moves were and how it can become an ethical organization in future.

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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Company Background.....................................................................................................................3
Learning Organizational Process.....................................................................................................3
Structural Roles Related to Organizational Learning......................................................................4
Technology and Knowledge Management......................................................................................4
Analysis of ethical issues- Common Wealth Bank of Australia......................................................5
Organizational Learning Theories and Analysis.............................................................................6
Barriers to the organizational learning at the Commonwealth Bank...............................................7
Recommendations to Commonwealth Bank...................................................................................7
Corporate Social Responsibility......................................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
When Commonwealth bank lost its positive image in 2015 due to the unethical activities, its
customer strength decreased a lot. Their customers even went to social media to complaint about
its negligent behaviour towards them. Later, they disconnected themselves from this bank by
removing their accounts for the bank. In this report, we have discussed about the learning
organization process, methods, commonwealth bank scandals, the theories of learning
organizations and the barriers to become a learning organization and recommendations.
Company Background
Commonwealth Bank, also known as CBA, is a multinational chain of banks which provides
multiple financial services all over the globe. Some of the services provided by the bank are:
Stock services, Insurance, Business banking, retails, investment, funds management etc. Since
2015, it made its mark as the largest Australian company on the Australian securities exchange.
The headquarters of the bank is located in Sydney and it also operates in New Zealand, Fiji, Asia
and US. It has about 11,000 branches and has about 51,800 employees in total. Until 2016, the
total assets of the bank were US$740 (Corporate Finance Institute, 2018).
Learning Organizational Process
Organizational learning is a process in which an organization creates, retains and transfer
knowledge (Gilaninia et al., 2013). These are the three key things on which the organizational
process works.
Knowledge Creation: Creation of knowledge actually means embedding the experience within
the company. Experience comes when the knowledge directly connects with the subject. This
exposure is through the tasks that involve all the processes, needs and the atmosphere of the
company.

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Knowledge transfer: When the experience spreads and stays with the organization, it is knows as
Knowledge transfer. It can be evaluated with the learning curves that show the improvements in
process as the company progressed and also with the number of hours of labour are reduced.
Knowledge Retention: This process is usually concerned with the type of knowledge that is
absorbed in the organization. It is quantified by the cumulative knowledge that is sustained in the
organization from a longer amount of time and it is kept in the repository.
Structural Roles Related to Organizational Learning
The structure of an organization gives it a process and a proper alignment to run itself. There are
three common structures of learning organization (Caveo Learning, 2018).
 Centralized Structure: In this kind of structure, there are going on learning activities and
learning programs which is usually handled by only a single leader or a manager. This
structure gives a good connection between the activities that are helpful for the small
organizations which have fewer resources to work in or it also is good for larger
organizations when resources have standard skills and new learning can be provided to
them. This type of structure helps in reducing the costs of the organization.
 Decentralized Structure: This structure, as the name also suggests, is the opposite of the
centralized structure. It does not provide the coordination between the activities and
neither the reporting is to any one leader for all. Though some of the best leanings and
practices might be given in this structure as well. This provides flexibility in the system
and variety too. Since there is no problem with the budget too, the budgets for learning
are directly aligned with the activities being done in the organization.
 Federated Structure: The Federated structure is actually the combination of both the
above shared structures. It provides centralized leadership as the services are shared and
decentralized as it easily leverages the shared services. This one is the best for the
organization.
Technology and Knowledge Management

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Knowledge is what one gets out of it after experiencing it. Is is well used when one understands
it completely and it could be well imbibed in the organizations as well as can be used again when
needed. To keep the knowledge intact with the system, technology plays a very important role.
Information technology is used to enhance the organizational memory in any organization. This
technology supports the system of learning as well as maintains the guide so that it can be
helpful again. Organizations have the strategic knowledge management which is also known as
KM, effort in place (Tlu, 2011). Technology is used to support that effort. The use of technology
as a tool to assist the management of explicit knowledge is unarguable. The technological
concept to manage knowledge is to capture the data and information. One of the technology
management is a bunch of practices. Type of technology used in knowledge management is
Artificial intelligence technologies. Also which are used for case base reasoning and knowledge
acquisition, computer based simulations, electronic discussion groups, Enterprise resource
planning (ERP), video conferencing, management information systems, expertise locator
systems and information repositories. Knowledge management systems and technology
management work together and affect each other in order to achieve specific goals in the
organizations.
Analysis of ethical issues- Common Wealth Bank of Australia
Common wealth bank is known as the largest bank for financing and profiting market. But it has
been in news a few times because of the controversies it has been into. Earlier in 2015, it had
been in news for supporting reef threatening mining projects and had been providing funds to the
Great Barrier Reef project. Since then the protests against the bank started. Later in 2016 also,
CBA was found guilty in a Ponzi scheme fraud (News, 2018). Also recently in 2017, CBA was
again found guilty for money laundering and breaching issue. The financial agency, Australian
Transaction Reports and Analysis Centre (AUSTRAC) had put civil proceedings in the court of
Australia too for this breach (Mann, 2017). The IDM’s (Intelligent Deposit Machines) which are
also known for producing automated cash for public and which allows the consumer to deposit
or take out money even when the bank is closed , were being used by money laundering
syndicates and using a few of them for drug import and networking. Those syndicates were able
to deposit money anonymously many times out of which once it was shown in the CBA report

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that 21 million Dollars were deposited in 11 CBA accounts. CBA was unable to show the
legitimate data for this.
Organizational Learning Theories and Analysis
There are three organizational theories which are: 1) Experiential Theory 2) Adaptive and
generative learning theory and 3) Assimilation theory.
 Experiential Theory: This theory has been very helpful since its inception as it has
contributed a lot to the leadership and the organizational development. It basically states
that learning will come only after grasping and then transforming it. It has four stages of
the learning cycle - abstract conceptualization (AC) and concrete experience (CE)
comprises of the grasping component, while reflective observation (RO), and active
experimentation (AE) makes up the transforming experience component (Leavitt, 2011).
Analysis: When any scandal takes place, it has a learning imbibed in it. While
experiencing the outcome of the scandal, learning is being done.
 Adaptive and generative learning theory: This is the theory which mostly is used when
the brainy or mental models like images, profound ingrained assumptions, pictures,
generalizations etc. According to Senge, adaptive learning is keeping the foundations of
the existing knowledge as well as creating the new one so that the objective is achieved.
This theory is given much importance in the organizations because of the new knowledge
development.
Analysis: If understanding is done within a firm about it’s efficiency, cost, market agility
and competitive companies, organization can maintain the gaps if any.
 Assimilation theory: This theory is different from the above two theories as this one is
completely based on the behavioral approaches to organizational learning. The action
based changes that take place by the individual’s performance. This performance
actually gives learning a different characteristic such as quantifiable, observable and
rational.
Analysis: An organization should have the clarity and knowledge about itself as an
organization. With clarity, scandals could be prevented.

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Barriers to the organizational learning at the Commonwealth Bank
There are a few barriers for the commonwealth bank. They are:
 Innovation: Organizations learning comes with the innovation of the new knowledge that
is generated and then implemented into the system. When new ideas are generated and
implemented, the organization faces great heights. Now if the organization become as
large as the CBA is, bringing new innovation and changed are a little difficult. The
biggest barrier for the CBA was to not bring that change because it will be very time
consuming and might take forever to implement.
 Regulator: The regulatory barrier should be removed by the organization so that the
financial sector be planned to act in a better way. Like giving retirement products to
women and empower them.
 Misconduct: The CBA has lost many of its valuable customers because of the misconduct
of the staff. The staff of CBA was not performing their tasks on time and also recently it
came out that some of them were also involved in forgery of the huge financial numbers
which lead the bank to a huge loss. The rude and unethical behavior of the staff has led
the bank’s reputation at stake.
 Ineffective control: Control in between the staff makes the staff more disciplined but that
was not the case in CBA. The staff was able to forge the documents and finances due to
the ineffective control. Maintenance of the records should be done properly so that they
can be checked accordingly and whenever required.
 Technological Changes: There were some customers of the bank who had issues with the
inappropriate online services. They even started writing complaints on social media about
this. But CBA did not change it. Ultimately, CBA lost many of its customers (Walk me,
2017).
Recommendations to Commonwealth Bank
 Aim: First of all to create an ethical environment in the bank, the leaders should have a
map as to how they will put their foot forward to make it that way. They should have a

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direction. And to have a direction they should be clear with the ambience that is going on
and should have a very positive approach towards the stakeholders (Jones, 2010).
 Method: 1.) First they should empower all the stakeholders of the organization. All
should be able to give and take ideas. 2.) All the internal knowledge should be shared
with everyone. 3.) Leaders should be able to have every small amount of information of
the surroundings as to what is actually happening. 4.) Changes according to the new
policies and new technology or culture should be done irrespective of the people who are
resisting these changes. One should have an open mind for this.
 Evaluation: The evaluation of any learning organizations can be done by SWOT analysis.
SWOT analysis will give a complete understanding of the strengths and weaknesses of
the organization as well as will be helpful for analyzing the opportunities and the threats
too (Techtarget, 2018).
Corporate Social Responsibility
Corporate social responsibility is to be aware of every movement about the impact of the
organization’s business on the stakeholders, customers and the environment. It helps in
maintaining the ethical and developing environment for the organization. CSR includes many
responsibilities such as Human rights, employee evaluation, corporate governance, health and
safety, working conditions and the contribution to the economy on the whole. The aim of CSR
should be to imbibe change for an organization to sustain itself in the market. Whatever unethical
activities were done at the bank, it should have been rectified and make new changes or policies
for this to not happen again in the future (Unido, 2018).
Conclusion
In this report we have discussed how CBA was a hot topic when it emerged as an unethical
organization, what were the unethical moves due to which it had to go through a lot and it lost a
lot because of these activities. The methods for it to become a learning organization are also
discussed. As well as the points like CSR, learning organization theories, process, its structural
roles and the barriers are also discussed in the report.

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References
Caveo Learning. 2018. 4 Keys to Optimizing Learning Organization Structure. [Online]
Available at: https://www.caveolearning.com/blog/4-keys-to-optimizing-learning-organization-
structure. [Accessed on: 17 January 2018].
Commonwealth Bank. 2018. Our Company [Online] Available at:
https://www.commbank.com.au/about-us/who-we-are/our-company.html. [Accessed on: 17
January 2018].
Corporate Finance Institute. 2018. Overview of Australian Banks. [Online] Available at:
https://corporatefinanceinstitute.com/resources/careers/companies/top-australian-banks/.
[Accessed on: 17 January 2018].
Gilaninia, S., Rankouh, M. A. A, and Gildeh, M. A. P. 2013. OVERVIEW ON THE
IMPORTANCE OF ORGANIZATIONAL LEARNING AND LEARNING ORGANIZATION .
[Online] Available at: https://www.omicsonline.org/open-access/overview-on-the-importance-
of-organizational-learning-and-learning-organization.pdf. [Accessed on: 17 January 2018].
Jones, G.R. and Jones, G.R., 2010. Organizational theory, design, and change.
Leavitt, C. C. 2011. A Comparative Analysis of Three Unique Theories of Organizational
Learning. [Online] Available at: https://files.eric.ed.gov/fulltext/ED523990.pdf. [Accessed on:
17 January 2018].
Mann., P. 2017. COMMONWEALTH BANK OF AUSTRALIA—IN THE MIDST OF A MONEY-
LAUNDERING SCANDAL. [Online] Available at:
https://internationalbanker.com/banking/commonwealth-bank-australia-midst-money-
laundering-scandal/. [Accessed on: 17 January 2018].
News. 2018. Commonwealth Bank staff implicated in alleged fraud: report. [Online] Available
at: http://www.news.com.au/finance/business/banking/commonwealth-bank-staff-in-alleged-
fraud-report/news-story/a208534f0e782c8a514c18e1b9f44ea6. [Accessed on: 17 January 2018].
Research Gate. 2018. The role of technology in knowledge management: trends in the Australian
corporate environment. [Online] Available at:
https://www.researchgate.net/publication/228902643_The_role_of_technology_in_knowledge_
management_trends_in_the_Australian_corporate_environment [Accessed on: 17 January 2018].

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Techtarget. 2018. SWOT analysis (strengths, weaknesses, opportunities and threats analysis).
[Online] Available at: http://searchcio.techtarget.com/definition/SWOT-analysis-strengths-
weaknesses-opportunities-and-threats-analysis. [Accessed on: 17 January 2018].
Tlu. 2011. Knowledge Management Technologies. [Online] Available at:
https://www.tlu.ee/~sirvir/Information%20and%20Knowledge%20Management/Framework
%20for%20IKM/knowledge_management_technologies.html. [Accessed on: 17 January 2018].
Unido. 2018. What is CSR? [Online] Available at: https://www.unido.org/our-focus/advancing-
economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-
social-responsibility-market-integration/what-csr. [Accessed on: 17 January 2018].
Walk me. 2017. 7 BARRIERS TO ORGANIZATIONAL LEARNING. [Online] Available at:
https://blog.walkme.com/7-barriers-to-organizational-learning [Accessed on: 17 January 2018].