Commonwealth Bank of Australia (CBA) : Assignment

Running head: COMMONWEALTH BANK (CBA)
Cultural Change at the Commonwealth Bank of Australia (CBA)
Name of the student:
Name of the university:
Author note:

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COMMONWEALTH BANK (CBA)
Q1:
An overview of the stakeholder trust crisis experienced by CBA with one to two illustrative
examples:
There are instances when Commonwealth Bank (CBA) had been in news for various kind
of stakeholder trust crisis. One of such instances is of criminal gangs and money launderers who
had illegally accessed the bank’s intellectual teller machines (Ryan, 2018). The consequence of
the incident was a strict action from the bank's chairman Catherine Livingstone who had
announced that bonuses for executives would be cut to zero (Ryan, 2018). According to
Hörisch, Freeman & Schaltegger (2014), the purpose of business should strictly be aligned to
satisfy the trust of stakeholders, not just the shareholders. A business needs to be benefitting the
customers, employees, suppliers and the shareholders. This also means that both stakeholders
and shareholders need to be given utmost importance. This is only possible when the business
organizations give the utmost significance to ethical practices.
Alienation of such practices with corporate social responsibility:
It appears as if the Commonwealth Bank (CBA) has in a way violated the corporate
social responsibility (CSR). According to the corporate social responsibility (CSR), it is
necessary that the business maintains a balance between the economic, legal, philanthropic and
ethical responsibilities (Cha, Yi & Bagozzi, 2016). The identified case seems to have violated the
ethical responsibilities or else the money launderers and the criminal gangs could not have access
to the bank's intellectual property. According to the CSR principle, a business should utterly
meet the ethical standards which it committees to fulfill. Customer builds up a perception that
they will be getting a specific kind of service from their target business. This is why it is

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COMMONWEALTH BANK (CBA)
necessary for a business to be ethically oriented or else customer will lose their trust in the
employer (Story & Neves, 2015).
In case of CBA, the incident that has been highlighted does not at all look like as if it had
just happened. It probably appears as if being planned which may or may not have the executives
involved in the incident. However, allegations made on them just prove that they are under
surveillance of both the bank and its customers. The announcement that the chairman had made
regarding the bonus cut apparently reveals a desperate repair from the bank (Ryan, 2018). They
are trying every possible step to repair the damages that have badly been done; however, time
will only tell how much such strategies were helpful for the bank in winning back the trust of its
stakeholders. Time will also prove whether the announcement was sufficient enough for the
identified issue.
The crisis at the CBA can also be aligned with the stakeholder management theory that
identifies the business as satisfactorily fulfilling the interconnected needs of different
stakeholders (Tantalo & Priem, 2016). In the incident that has happened at the CBA, customers
might find this as a violation of their values because they might distrust their security with their
provider. On the other hand, employees may also feel as to being wrongly penalized if they were
not the part of the highlighted crisis. Both the circumstances are in violation of stakeholder
management concept.
Q2:
Implications for business and human resource of the transformation of corporate culture
from shareholder value to stakeholder value: