An Introduction to Ethics (PDF)

Introduction
The present report highlights the ethical issues in the Commonwealth Bank of Australia (CBA)
as the company faced several ethical issues in the past. The company had to face several ethical
scandals in a row, which has substantially damaged the reputation of the company. It is
important that the organization learn from its past experience and initiate changes in the
organization, which can positively impact the results of the organization. The unethical behavior
of the employees was inspired by negative organization culture, in which the employees were
coerced to generate maximum output without adherence to the ethical policies. The top
management of CBA should learn from these experiences so that these incidences are not
repeated again in future. The corporate scandals invoke systematic change and impact the
communication process in the organization. In the present report, the corporate scandals of CBA
are analyzed through the lens of organization learning policies and recommendations are
provided so that Commonwealth bank can become an ethical organization.
Analysis of the Ethical Scandals through the lens of organization learning theories
There were several accountability problems in the CBA, which resulted in the large
number of corporate scandals. Although there were numerous small scale scandals occurring in
the bank, the case that stands out is the money laundering scandal of the organization. The bank
was accused of more than 53,000 breaches in the anti-money laundering and counter-terrorism
financing law. The bank has blamed that the breach has occurred due to single IT error. The case
also impacted the shareholders as it declined the market position of the organization. The
stakeholders of the organization suffered a net loss of the 5% decline in the shares value. The
company was aware of the decline in the value of the shares in 2015; however, chose to say
nothing till 2017. It shows that the organization was following unethical principles and did not
form ethical principles. The failure in the proper disclosure to the market resulted in issues in
corporate governance (Yeates, 2017). The corporate scandal can be analyzed through learning
theories, namely, experiential learning theory, adaptive and generative learning theory and
assimilation theory. The experiential learning is the process of learning through different
experiences or more specifically through reflections of the past experiences.
The adaptive and generative organization learning is the most common organization
learning theory. Adaptive learning is about coping with the change. It is single-loop learning,
which emphasize on regular experimentation and feedback in the organization. It solves the
current problems. On the other hand, generative learning is referred as “double-loop learning”. It
is the process of continuous experimentation and feedback to improve the current process. There
are various terms associated with generative learning is system thinking, shared vision and team
learning (Chiva, Grandío, & Alegre, 2010). In the present context, it can be stated that the
organization did not implement a learning process as the organization failed to learn from the
past experiences. The assimilation learning theory is a cognitive theory, according to which
people learn in the best manner if they can link it or assimilate it with the past knowledge

(Rademakers, 2014). It creates meaningful learning as the learners can understand the
information and retain it within the organization.
Analysis of the Existing barriers to Organization Learning
Organization learning is important to combat the current challenges in the organization. There
should be application of knowledge, skills, and beliefs, which can improve the performance of
the organization. However, there are certain challenges to the organization such as focus on the
program, limited resources, passive leadership and non-learning culture. If the organization is not
having appropriate resources, the learning cannot be fostered in the organization. However, it is
important that the organization create a learning culture within the organization (Sarder, 2016).
The success or the failure of the learning organization depends on certain factors.
Broadly, there are several factors, which can impede organization learning. These factors include
resistance to change, ignoring the elephant in the room, lack of leadership, and disregard to team
success, lack of motivation for growth, complexity and short-term focus of the management. The
resistance to change is a major challenge in the organization learning. The management should
communicate effectively to the team members the need of change. The change should be able to
increase motivation of the employees in the organization. In the present, it can be stated that lack
of proper leadership and employee training negatively impact the organization learning process.
The managers should be trained in leadership so that they can boost the morale and effectiveness
of the organization. Other than that, there is complex organization culture in CBA, which might
overwhelm the current employees. In digital workplace, the employees have to face several
performance related challenges; therefore, in this situation, it is important that the employees
abide by the ethical guidelines.
Recommendations to Commonwealth Bank to become an ethical organization
In the present section, a few recommendations are made so that the organization can establish an
ethical culture for the employees.
 CBA can create ethical environment by empowering its employees. The employees
should be given more power to complete their work. The employees should be provided
an ethical code to manage the outcomes of the work. In this way, they will be more
responsible and answerable to the management (Argote, 2012). The employees will be
able to yield better results for the organization. It will assist the employees to act
ethically.
 CBA should also improve its communication policies and procedures so that there is
smooth information flow between the employees and employers. It will help the
managers to train each employee and communicate regarding the right action at the
common ethical dilemmas. It is easy for the employees to report unethical behavior to the
senior managers.