Ethics and Sustainability in Commonwealth Bank of Australia

The report discusses the issues of ethics and sustainability in Commonwealth Bank of Australia. It analyzes the stakeholder theory and alternative solutions to overcome the issues. The report recommends transparency in policies and proper conveyance of information to the clientele.

Running head: ETHICS AND SUSTAINABILITY
ETHICS AND SUSTAINABILITY
Name of the Student
Name of the University
Author Note

1ETHICS AND SUSTAINABILITY
EXECUTIVE SUMMARY
The following report discussed the issues that regard the ethics as well as those that deal with the
sustainability within the given business organization. The report opened with the summarization
of the scenario that is faced by the Commonwealth Bank of Australia, the organization in
discussion. The report proceeded to discuss the stakeholder theory and thereafter analyzed the
conditions that are faced by the concerned organization in terms of the stakeholder theory. The
report further discussed some of the alternative solutions that might help in overcoming the
issues that are faced by the organization. The report concluded with the discussion of the best
possible solution that might help the organization to put forth an improvement in the overall
performance of the Commonwealth Bank of Australia.

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Table of Contents
Introduction..........................................................................................................................3
Summary of scenario.......................................................................................................3
Stakeholder Theory..........................................................................................................4
Analysis...........................................................................................................................5
Alternative solutions........................................................................................................7
Recommendation.................................................................................................................8
Conclusion...........................................................................................................................9
References..........................................................................................................................10

3ETHICS AND SUSTAINABILITY
Introduction
The following report aims to discuss the issues that regard the ethics as well as those that
deal with the sustainability within the given business organization. The report opens with the
summarization of the scenario that is faced by the Commonwealth Bank of Australia, the
organization in discussion. The report proceeds to discuss the stakeholder theory and proceeds to
analyze the conditions that are faced by the concerned organization in terms of the stakeholder
theory. The report then proceeds to discuss some of the alternative solutions that might help in
overcoming the issues that are faced by the organization. The report nears a conclusion with the
discussion of the best possible solution that might help the organization to put forth an
improvement in the overall performance of the Commonwealth Bank of Australia.
Summary of scenario
The Commonwealth Bank of Australia is one of the most prestigious financial
organizations that has been existing within the territorial boundaries of Australia. The financial
organization is known to be a multinational organization that was founded in the year 1911. The
multinational organization is known to have branches in many countries like Asia, Fiji, New
Zealand, United Kingdom and the United States (Gordon, 2018). The organization is known to
have a huge number of shareholders that amount to almost 800,000 shareholders all over the
world. The employee strength of the company is known to have been more than 52000
(Commbank.com.au., 2018). The company is recognized to be the best company that is active
within the Australian territories as well as the organization that provides the best services to the
clients of the organization. The bank is most popular for the overall services that it offers to the
clients of the organization (Eyers, 2014). The financial advisors of the organizations, however, in

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the recent occasions have depicted a lack in the ethical behavior. This in turn has led to the
conditions that deal with the issues of the various misdeeds in the banking sector.
Stakeholder Theory
The stakeholder theory of business ethics and the organizational management aims at the
addressal of the values and the morals that are maintained by the concerned members of the
organizational management. The stakeholder theory was first proposed by Freeman in his
famous book entitled “Strategic Management: A Stakeholder Approach” (Jones, Wicks &
Freeman, 2017). According to Freeman, the stakeholder theory attempts at the outlining of the
ways in which the management of an organization can aim at the satisfaction of the interests if
the various stakeholders of the given business organization. The stakeholder theory in discussion
aims to argue that the management of the concerned organization is not answerable to the
various shareholders of the organization. The theory suggests that the key purpose of the
business is to create a certain amount of value for the stakeholders of the organization (Hörisch,
Freeman & Schaltegger, 2014). The theory further states that in order to maintain the
sustainability of the concerned organization in discussion, the executives that have been serving
the concerned organization should ensure the fact that the various stakeholders of the company
do hold the similarity in their views towards the overall successful performance of the
organization (Harrison, Freeman & Abreu, 2015). There should be an alignment in the views of
the several stakeholders and the views of the concerned management of the organization as well.
Experts of business ethics and organizational management like Freeman (2015) argue
that the stakeholder theory helps in the creation of a value within the shareholders regarding the
organizational policies and the improvisation of the environmental conditions of the area wherein
the concerned organization has been featuring. There are however, criticisms on the usefulness

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of the stakeholder theory in the matters pertaining to the organizational performance and the
various sustainability issues that are faced by the organization in discussion. The stakeholders of
an organization take into account all the members of the organization along with the clientele
that is served by the organization, the governmental bodies that are active within the given
territorial boundaries wherein the organization has been featuring (Flammer, 2015). The opinions
of the stakeholders of the organization is known to have been important for the survival of the
business in the given organization. The stakeholder theory is known to contradict with the
shareholder theory as is discussed by Milton Friedman (Ferrero, Hoffman & McNulty, 2014).
Bento, Mertins and White (2017) state that the shareholder theory as opposed to the stakeholder
theory suggests that the concerned organization should take care only of the shareholders of the
organization and not all of the other stakeholders of the company.
Analysis
The issues that are faced by the concerned organization in discussion, Commonwealth
Bank of Australia refers to the various malpractices that are implemented within the
organization. The major ethical issues that was faced by the concerned organization refers to the
fact that the concerned officials at the managerial levels within the hierarchy of the organization
took to the several malpractices and fraudulent behaviors in a desire to increase the revenues that
are earned by the concerned organization. However, the implementation of the stakeholder
theory in this case reveals that the concerned organizational management had focused majorly on
the benefits that were reaped by the organization and did not attempt to consider the stakeholders
of the given organization in discussion, the Commonwealth Bank of Australia. The stakeholder
theory argues that the management of the concerned organization is not answerable to the
various shareholders of the organization (Freeman & Ginena, 2015). The theory suggests that the

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key purpose of the business is to create a certain amount of value for the stakeholders of the
organization. The theory further states that in order to maintain the sustainability of the
concerned organization in discussion, the executives that have been serving the concerned
organization should ensure the fact that the various stakeholders of the company do hold the
similarity in their views towards the overall successful performance of the organization.
According to the stakeholder theory stated by Freeman, the concerned business
organization, the Commonwealth Bank of Australia, should have implemented policies that
would have helped in involving the stakeholders of the organization in the various decisions that
were undertaken by the organization. The involvement of the stakeholders within the various
decisions that are undertaken by the management of the organization ensures the participation of
all the stakeholders as well as abides by the fact that the implemented policy benefits all the
stakeholders of the organization (De Gooyert, Rouwette, Van Kranenburg & Freeman, 2017).
The implementation of the stakeholder theory further ensures the involvement of both the
internal and the external stakeholders of the organization. This helps in the prevention of the
tarnishing of the brand image of the concerned as well as takes care of the issues that might arise
on implementation of a certain strategy.
In this case the implementation of the malpractices within the organization led to the
tarnishing of the brand image as well as the imposition of the penalty within the organization.
The situation in this case might be viewed through the utilitarianism as discussed by the famous
philosopher Immanuel Kant (Patrick & Werkhoven, 2017). The implementation of the
utilitarianism within the given organizational scenario reveals the fact that the interests of the
stakeholders were not considered during the implementation of the various strategies that led to
the scandalous conditions within the given organization. The Commonwealth Bank of Australia

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is observed to have been implementing major malpractices like the forging of the signatures of
the clients, the misleading of the clients of the organization in order to gain the rewards that were
promised for achieving the set target in the sales departments. The concerned organization is also
known to have been implementing the factors that are related to the various malpractices and
misdeeds on the part of the employees of the organization, especially the people who have been
serving at the higher levels within the organizational hierarchy (Shaw, 2016). The practice of
misleading the clientele on the policies and procedures that are followed within the given
organization might lead to the conditions wherein the clientele of the organization might
discontinue the usage of the services that are provided by the organization. The company, in
discussion, the Commonwealth Bank of Australia, is recognized to be the best company that is
active within the Australian territories as well as the organization that provides the best services
to the clients of the organization. The bank is most popular for the overall services that it offers
to the clients of the organization. The financial advisors of the organizations, however, in the
recent occasions have depicted a lack in the ethical behavior. This has in turn affected the brand
image of the organization thereby leading to the conditions wherein there might be a loss in the
number of the clientele of the organization.
Alternative solutions
The major alternative solutions that might be put forth in this scenario might deal with
the transparency in the policies of the financial organization, the discontinuation of the various
malicious and the non-ethical practices within the organization and the proper conveyance of the
various policies that are maintained within the organization. The major issues that are faced by
the organization in discussion might be avoided with the help of the implementation of the
proper transparency in the policies that are followed by the concerned financial institution. Dent

8ETHICS AND SUSTAINABILITY
and Parnell (2018) opine that the transparency on the part of the financial organization in
discussion, the Commonwealth Bank of Australia might help the organization to deal with the
various issues that are faced by the concerned organization.
The other alternative that might be suggested for the betterment of the company is the
introduction of the proper methods of conveying information to the clientele. The financial
institution in discussion is advised to convey the proper information to the clientele (Chell,
Spence, Perrini & Harris, 2016). This might help in the proper retention of the clientele of the
organization and might even lead to the attraction of the potential clients of the financial
organization in discussion, the Commonwealth Bank of Australia.
The company might also be advised to organize internal surveys and interviews in order
to deal with the issues that are prevalent within the organization. The practice of misleading the
clientele on the policies and procedures that are followed within the given organization might
lead to the conditions wherein the clientele of the organization might discontinue the usage of the
services that are provided by the organization (Valentine, Hollingworth & Schultz, 2018). The
Commonwealth Bank of Australia is known to have been imposing the various malpractices
within the operations of the concerned financial organization in order to put forth an increase in
the revenue that was earned by the organization. The organization is advised to implement
checks on the given organization in order to deal with the increase in the malpractices within the
organization which in turn might help in the retention of the clientele.
Recommendation
The major recommendation in this case might refer to the incorporation of the
transparency within the given organization. This might help in the matters that are related to the

9ETHICS AND SUSTAINABILITY
implementation of the non-ethical practices within the organization. The transparency might help
in implementing the required checks on the various malpractices that are practiced in abandon
within the Commonwealth Bank of Australia.
Conclusion
Thus, from the above discussion it might be inferred that the given organization has been
facing a number of issues that relate to the fields of sustainability and the ethics within the given
organization. The issues within the organization are analyzed with the help of the stakeholder
theory that aims at the addressal of the values and the morals that are maintained by the
concerned members of the organizational management. The organization is also advised to
implement the transparency in the dealings with the stakeholders of the company in order to deal
with the retention of the clientele of the organization.

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References
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empirical exploration of the tension between shareholder value maximization and
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Chell, E., Spence, L. J., Perrini, F., & Harris, J. D. (2016). Social entrepreneurship and business
ethics: Does social equal ethical?. Journal of business ethics, 133(4), 619-625. DOI -
10.1007/s10551-014-2439-6
Commbank.com.au. (2018). Retrieved 6 December 2018 from
https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/pdfs/
annual-reports/annual_report_2017_14_aug_2017.pdf
De Gooyert, V., Rouwette, E., Van Kranenburg, H., & Freeman, E. (2017). Reviewing the role
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https://www.afr.com/business/banking-and-finance/financial-services/the-man-who-
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Ferrero, I., Michael Hoffman, W., & McNulty, R. E. (2014). Must Milton Friedman embrace
stakeholder theory?. Business and Society Review, 119(1), 37-59. DOI -
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