Management and Business Context | Report

RUNNING HEAD: MANAGEMENT
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Management and Business Context

Management
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Introduction
Businesses run in a dynamic environment that influence directly on how they operate and
whether they will attain their objectives. There are many external environment factors that
impact on the decision making aspect and performance of businesses (Daidj, 2016). In order to
be successful businesses consider these factors and identify risks that impact business operations.
This essay will demonstrate the business structure and governance structure of The
Commonwealth Bank Australia which operates in banking industry in Australia. The essay will
outline the environmental factors, and risks that influence on the performance and decisions
making of the company. At last recommendations will be given followed by conclusion.
The Commonwealth bank of Australia
The Commonwealth bank of Australia operates in financial and banking industry and
founded in 1911 by the government of Australia and fully privatized in 1996 (Commbank,2019).
Bank offer services across Asia, New Zealand, the UK and the US. The bank offers a variety of
financial services that includes retail banking, institutional banking, consumer banking,
insurance, superannuation and broking services. The commonwealth bank is amongst the big
four Australian banks with 51,800 employees and net income of $ 8.6 billion in 2019
(Commbank,2019).
Theoretical Knowledge and Analysis
Business Structure and Corporate Governance
Business structure is defined as the legal structure of the company, this structure impact on
various decisions such as amount of paperwork, tax payment, liability and different sources of
raising funds. The most common form of business structures are sole proprietorship, corporation,
partnership and public private limited company. The selection of business structure depends on
the business objectives and business needs (Lu, & Zhao, 2019).
In the context of the commonwealth bank of Australia, the business structure of the bank is
public limited. The public limited company can raise funds from public by issuing debentures
and equity shares. This business structure is suitable for those companies that have big projects

Management
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and ideas. In this type of business structure ownership is shared between board members,
shareholders, and management. The common wealth bank is a public limited company;
therefore, comply with all rules and practices such as disclosing detailed information about
business activities, publishing annual reports and presenting all information to shareholders.
Furthermore, bank structure includes retail banking services, wealth management, premium
business services and executive leadership. Hence, the business structure of the bank is public
limited company as the bank raise funds from public; disclose its financial information and its
shares are traded in the market.
Corporate governance structure includes the system of practices, rules, and processes by
which a company is controlled and directed. Corporate governance mainly involves taking care
of the interests of a firm’s stakeholders. Practically it encompasses of every sphere of
management, starting from internal controls, action plans and corporate disclosure and
performance measurement (Lu, & Zhao, 2019).
The commonwealth bank of Australia corporate governance framework is given in figure 1.
The board focuses on strengthening the corporate governance at the bank to ensure better
stakeholders outcomes. Further, the board has set clear goals and expectations and has increased
scrutiny and oversight of the risks bank facing. The below figure shows the company corporate
government structure that includes board committees. The committee is responsible for planning
the strategic goals and risk appetite for the bank and for leading the values, culture and behavior
of their workforce (Sheedy & Griffin, 2018). Further, power and responsibilities of board,
committee, CEO and group executives are clearly stated. With that the corporate governance
structure of the bank is strengthening as board along with committees set rules, policies and
practices to enhance culture and values in the organization and with that focusing on fulfilling
expectations of its stakeholders.