Managing in a Complex World: Role of Government and Managerial Functions in Commonwealth Bank of Australia

Running Head:MANAGING IN A COMPLEX WORLD
MANAGING IN A COMPLEX WORLD
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1MANAGING IN A COMPLEX WORLD
Introduction
Commonwealth Bank of Australian is considered to be one of the leading banking and
finance company in Australia. This public bank has more than 1000 branches with over 4300
ATMs. As per the report of Chalmers and Worthington (2019), in 2017 the organisation
collected a revenue of AU$26 billion. Based on this understanding, it can be argued that
Commonwealth Bank shared a huge market capitalisation in Australia. However, the
organisation faced severe issues like money laundering, bank fraudulence and so on. Amidst of
the severe issues regarding bank fraudulence and money laundering issues, it became a serious
threat to the Australian government to take adequate measures in order to prevent further bank
frauds and money laundering issues. In this context, this report is going to discuss, the role of the
government in influencing the banking business activities and the way it affects the managerial
role in Commonwealth Bank of Australia.
Discussion
Government and regulation
As per the government regulation in Australia, it became an important aspect to deal with
the growing illegal banking business in the country. As a result of that the advisory committee of
the government suggested a separate body to investigate misconduct in banking, superannuation
and the financial service industry. The Banking Royal Commission was set up in this context in
2017. However, the Australian financial regulation was monitored and controlled by two
separate bodies that already enacted a number of measures to prevent further illegal activities in
Australia. The Australian Securities and Investments Commission (ASIC) and Australian

2MANAGING IN A COMPLEX WORLD
Prudential Regulatory Authority (APRA) were the principle regulatory bodies entitled to create
transparent regulatory framework for the banking and financial transaction all over the country
(Howell 2015, p. 544).
ASIC has the responsibility to integrate the market and the consumer protection and
regulation of investment banks and financial companies. In this regard, ASIC also introduced an
autonomous function in the name of External Dispute Resolution schemes (EDRs) (Cummings
and Durrani 2016, p. 32). Based on this there are basically two EDRs that are currently activated
in Australia in terms of the Financial Ombudsman Service and the Credit and Investment
Ombudsman. Both the body are non-governmental not for profit organisations funded by banks
and financial advisers.
On the other hand, APRA is a governing body with the purpose to provide licensing and
prudential service facility of Authorised Deposit-taking Institutions (ADIs), insurance companies
and the superannuation funds (Salim, Arjomandi and Seufert 2016, p. 121). All the listed
countries have to report to APRA on a periodic basis and APRA is also responsible to set
guidelines for the banking and financial organisations who are neither licensed nor regulated
under the Banking Act. Moreover, both of those autonomous governing bodies are also
connected with the Australian Competitor and Consumer Commission (ACCC) in order to
provide better transaction environment in the banking and finance sector of Australia (Liu 2015,
p. 433).
Despite of such rigorous and detailed regulatory structure and responsible organisations
that are entitled to provide effective environment for banking, the Royal Banking Commission
was came in permanence. The draconian advices and regulatory advices of the Royal Banking