Commonwealth Bank Analysis and Strategy

This assignment requires an in-depth analysis of the Commonwealth Bank of Australia (CBA). Students must examine the bank's current position by identifying its strengths, weaknesses, opportunities, and threats (SWOT) using provided information. The analysis should also consider emerging trends in the banking industry, such as fintech competition and digital transformation, and assess how CBA is adapting to these changes. Students are expected to demonstrate critical thinking and analytical skills to evaluate CBA's strategic direction and potential future challenges.

Running head: ORGANISATIONAL CHANGE MANAGEMENT
Organisational Change Management
Name of the Student
Name of the University
Author Note

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ORGANISATIONAL CHANGE MANAGEMENT
Executive Summary
In present day scenario, organizations are continuously experiencing a need for change, in
order to cope up with the volatile environment of corporate culture. Digitization in banking
sector is now generating new competitors for the banking sectors but is also providing banks
an opportunity to adapt to new change in order to develop a better understanding about their
customers and to co-operate with their stakeholders. The report aims to analyse the change
management plan of Common Wealth Bank of Australia under the light of digitalization and
acquisition. The report also highlights some of probable environmental factors that is capable
of affecting the banking market of CBA.

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ORGANISATIONAL CHANGE MANAGEMENT
Table of Contents
Introduction................................................................................................................................2
Scenario Construction................................................................................................................2
Diagnostic tools..........................................................................................................................5
Kotter Change Management 8-Steps Model..........................................................................5
Lewin Change Management Model.......................................................................................6
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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ORGANISATIONAL CHANGE MANAGEMENT
Introduction
In present day scenario, organizations are continuously experiencing a need for change in
order to cope up with the volatile environment of corporate culture. Commonwealth Bank of
Australia (CBA), is an Australian multinational bank having their business across United States,
United Kingdom, New Zealand, Asia and Fiji (Commbank.com.au. 2017). It provides a variety of
banking services like transaction accounts, savings accounts, personal loans, insurance, term deposits
and international payments (Commbank.com.au. 2017).
PayPal took less than three years to establish themselves as a powerful medium for online
payment options. Apart from PayPal, there are Apply Pay, Google Wallet, Alipay, rolling out their
own digital payment solution (Tinnilä 2012). This digitization is not only generating new
competitors for the banking sectors but is also providing banks an opportunity to adapt to new change
in order to develop a better understanding about their customers and to co-operate with their
stakeholders (Tinnilä 2012).
The report aims to analyse the change management plan of Common Wealth Bank of
Australia under the light of digitalization and acquisition. The report also highlights some of probable
environmental factors that is capable of affecting the banking market of CBA.
Scenario Construction
One of the principal challenges faced by the Common Wealth Bank of Australia is the
increase in the trend of the disruptive new technologies on their retail payment business (rise
of the FinTech). This is fundamentally changing the landscape of the retail payment markets
and thus threatening the dominant market position of the bank. Thus this advent of
digitalization, competition coming from the non-retail banks and change in customer
preferences with influence e-commerce and social media payments have potential to impact
the performance of CBA.

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ORGANISATIONAL CHANGE MANAGEMENT
Apart from technological innovation, the key performance driver for the over the next
five years include entry by the new competitors, merger, and increase in competition for key
staff.
Name of Factors Reason
Technical innovation It helps in strengthening the relations with one of
the world’s fastest growing economies, China
(Commbank.com.au. 2017)
New Competitors CBA was not kept cyber-security as second
thought and is years ahead in cyber security
program. However, increase in the number of
market competitors have lead t cut down on their
profit margin
Merger AIA Group Ltd. has agreed to buy CBA’s
business of life insurance for A$3.8 billion and
will team up with CBA for 20 years (Hu 2017)
Competition for key staff With the increase in the number of bank and
digitalised mode of banking operation there is a
dearth of key banking staffs (Mustafa et al. 2015)

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ORGANISATIONAL CHANGE MANAGEMENT
Figure: Competitors of CBA
(Source: Financials.morningstar.com. 2017)
New competitors and technological innovation can be considered to be an optimistic
scenario. During 2013, CBA has announced a profit margin of $7.8 billion and this figure is
significantly higher than the amount reported by any other Australian Bank. CBA have
retained the profit margin via cutting the cost. However, there was no decrease in customer
care service and employee retention (Motley Fool Australia 2017).
Technological innovation may sound to be negative but CBA approached it with an
optimistic approach. The bank has shifted its operating model to more focused on digital
platforms which is similar to separate domains. There business is now getting more intimate
with the IT and thus they are successful in obtaining a creditable reputation around
technology (McLean 2017).
Decrease in the number of the key banking staffs can be taken as a pessimistic
scenario as it will lead to loss of productivity and increase in the cost of production.

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ORGANISATIONAL CHANGE MANAGEMENT
Diagnostic tools
Kotter Change Management 8-Steps Model
Activity based working style of CAB in order to adapt the trend of digitalization
Creating Climate for change Engaging & enabling the
organisation
Implementing &
sustaining for change
Create a
sense of
urgency
Build a
guiding
coalition
Form a
strategic
vision and
initiatives
Enlist
volunteer
army
Enable
action
for
removin
g barrier
Generat
e short-
term
wins
Sustain
accelerati
on
Institute
change
CAB has
promoted
the need for
change via
taking a bold
and
aspirational
opportunity.
It has
initiated
transition in
its work
culture via
“activity-
based
working”. It
In order
to build a
guiding
coalition,
CAB has
first
introduce
d 3000
staffs out
of 6000
staff in
the new
process
and had
planned
to
This
special
work-
culture is
done with a
strategic
vision to
promote
the concept
of
digitalizati
on among
the staffs
CAB has
failed to
communica
te the
proper
vision of
the purpose
of new
work
culture.
In order
to
remove
the each
noteboo
k
supplied
to the
employe
e have
been
equippe
d with
location
al
software
They
do not
gave
proper
frame-
work to
access
the
success
They have
sustain the
change
via
deploying
Apple
Macbook
Airs for
all
employees
They have
make the
change to
stick via
making
the entire
organisati
on a
paperless
mode of
work-
process

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ORGANISATIONAL CHANGE MANAGEMENT
has
communicat
ed its
importance
via taking a
new lavish
set-up to
support
technology
friendly
atmosphere.
introduce
d later
3200
when
former
3000
staffs
have
attended
proficien
cy and is
capable
to train
the rest
(Source: Kotter 2018; Commonwealth Bank shifts to activity-based work culture 2011).
Lewin Change Management Model
Merger and Acquisition: AIA’s acquisition on CBA life insurance
Unfreeze: There is no major unfreeze in the organization as the company is supposed
get benefits from this acquisition. It will help to boost its Common Equity Tier 1 capital by
A$3 billion. However, CBA faced numerous law suit along with regulatory investigation over
allegation of wide-stretch breaches of anti-money.
Transition: The transition phase is not smooth. Moreover, the acquisition deal is for
20 years and this extended the transition phase. The transition phase is supposed to get over b
y the end of 2018

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ORGANISATIONAL CHANGE MANAGEMENT
Refreeze: Company is accepted to operate stably via the end of 2018 (Reuters 2017)
Recommendation
Among this two above discussed tool, Kotter 8 force model was more effective is
describing and analysing the change management model. This is due to the fact that its three
major traits which are further subdivided into 8 total trait help in examining the change
management more critically.
In the domain of change management, it can be stated that CBA must have notified
the employees about its merger acquisition plan so that the employee might get certain time
for the mental preparation. `in the field of digitalization, if CBA had a specific evaluation
plan regarding how the employees are adapting the digital change, then it would be helpful
for the managers to implement further revision or modification of the plan.
Conclusion
Thus from the above discussion it can be stated that digitalization along with
acquisition with the AIA have helped them to stay in the competitive world of the corporate
world. However there are certain modifications which CBA might have undertaken in order
to facilitate the smooth transition of the organisational change like proper progress analysis
plan for digitalisation along with proper leadership plan to facilitate unfreeze mode.

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ORGANISATIONAL CHANGE MANAGEMENT
References
Commbank.com.au. (2017). Commonwealth Bank showcases innovation leadership to
strengthen Chinese ties. [online] Available at:
https://www.commbank.com.au/guidance/newsroom/CBA-showcases-innovation-to-
strengthen-Chinese-ties-201703.html [Accessed 11 Jan. 2018].
Commbank.com.au. (2017). Personal banking products - CommBank. [online] Available at:
https://www.commbank.com.au/personal/products.html?ei=mv_banking [Accessed 11 Jan.
2018].
Commonwealth Bank shifts to activity-based work culture, s. (2011). Commonwealth Bank
shifts to activity-based work culture, swanky new head office. [online] CIO. Available at:
https://www.cio.com.au/article/401530/commonwealth_bank_shifts_activity-
Financials.morningstar.com. (2017). CMWAY: Commonwealth Bank of Australia ADR Top
Competitors and Peers. [online] Available at:
http://financials.morningstar.com/competitors/industry-peer.action?
t=CMWAY&region=usa&culture=en-US [Accessed 11 Jan. 2018].
Hu, B. (2017). AIA Buys Commonwealth Bank of Australia's Life Insurance Business for
A$3.8B. [online] Insurance Journal. Available at:
https://www.insurancejournal.com/news/international/2017/09/21/464991.htm [Accessed 11
Jan. 2018].
Kotter. (2018). The 8-Step Process for Leading Change - Kotter. [online] Available at:
https://www.kotterinc.com/8-steps-process-for-leading-change/ [Accessed 11 Jan. 2018].
McLean, A. (2017). CBA preparing for 'digital gorillas' to join fintechs as competitors |
ZDNet. [online] ZDNet. Available at: http://www.zdnet.com/article/cba-preparing-for-
digital-gorillas-to-join-fintechs-as-competitors/ [Accessed 11 Jan. 2018].