MGMT20144: Business Case Analysis of Commonwealth Bank of Australia

This essay provides a comprehensive business case analysis of the Commonwealth Bank of Australia (CBA). It begins with an introduction and synopsis, outlining CBA's international presence and diverse financial services. The essay delves into CBA's business structure, emphasizing its alignment with product delivery and customer needs, and the roles of key management personnel. It examines environmental factors influencing CBA's performance, including regulations and climate change, and identifies the top three risks the bank faces, such as falling AUD, the housing market, and capital requirements. The analysis further explores CBA's business practices, highlighting its commitment to integrity, transparency, and sustainable practices, and details its functional departments, including sales, product control, compliance, and finance. The essay concludes by summarizing the key findings, emphasizing CBA's customer-centric approach and effective management of operations and risks.

Management

Management 1
Contents
Introduction...........................................................................................................................................2
Synopsis................................................................................................................................................2
Business structure..................................................................................................................................2
Environmental factors influencing bank’s performance........................................................................3
Top three risks face by the bank............................................................................................................4
Business practices adopted and influence to performance/decision making..........................................4
Functional departments of bank.............................................................................................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

Management 2
Introduction
The management has been deliberated as a system of authority. It is the procedure of
planning, organising, directing, leading, inspiring and controlling the human resources. The
management assists an organisation to attain its goals in the successful and effective manner.
It enables a business environment where members of the organisation can work together and
attain business objectives effectively. The report comprises the business structure of
Commonwealth Bank of Australia (CBA) offering financial services. The environmental
factors influencing CBA’s performance has been described along with the risks faced by the
bank. Further, the business practices have been defined along with the functional departments
of the bank.
Synopsis
CBA is an international bank having operations in Asia, Fiji, US, UK and New
Zealand. The bank provides a variety of financial services comprising business, retail, funds
management, institutional banking, insurance, pension and retirement management,
brokerage services and investment. CBA is efficient enough in managing its operations
through focusing on the customer amenity and engagement. The clienteles make usage of
online social networks and online banking. The bank has revitalised all the frontline customer
interfaces to assist customers by a wide IT revolution majorly for mobile, online and social
services. CBA has automatic back-end core competences along with consolidating data
centres. It is the management of the bank which enables it to sustain increased rate of change
with maintaining greater reliability.
Business structure
Commonwealth Bank Australia (CBA) is one of the leading financial organizations of
Australia. The bank is also having operations in Asia, UK, New Zealand, and US. Dr. David
Murray, managing director of CBA and made changes in the organisational structure so that
vertically unified business could be formed. The structure of the bank aligns with the
advancement of the product and delivery of the facility to the customers and variations in the
leadership team accountabilities. The structure seeks bank to meet the customer requirements
with the compound wealth management requirements and modest transaction banking
services. Moreover, it concentrates on the wealth management through business and
institutional customers. While formation of the business structure, the business units were
regulated by the persons stated below:

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 Michael Katz is liable for the finest financial services who was earlier head of the
institutional bank.
 John Mulcahy for the retail banking services. He was earlier head of AFS (Australian
Financial Services).
 Michael Ullmer for institutional and business services.
 Garry Mackrell for the global financial services.
 Less Cupper group HR (Human Resources).
 Russell Scrimshaw for operations, technology and obtaining.
 Adrian Cosenza for office of CEO.
Environmental factors influencing bank’s performance
There are several norms and environmental standards which influences to the bank’s
performance. The states generally have different environment regulations and liability laws
for instance, in US- Florida and Texas have varied liability articles in the instance of
calamities or environmental calamity. In the same way, European nations propose healthy tax
breaks to the organisations that operate in the renewable sector. CBA is affected by
environmental standards whenever bank decides to enter in the new market or new business
in the existing market. The environmental factor influences to the CBA’s performance are
weather, climate change, recycling, laws controlling environmental pollution, air and water
pollution rules in bank’s industry, waste management in banks sector, rare species, attitudes
toward green products and attitude toward and sustenance for renewable energy (Parkes,
2017).
The bank has started using technology in the form of mobile banking applications to
reduce usage of paper. It has also minimised the need of the persons to visit branch and

Management 4
handle affairs. On the other hand, climate change has possibility to influence the CBA in the
form of financial and non-financial risks (Wright, Ville & Merrett, 2019). The extreme
weather events and influence of transitioning to a low carbon economy have latent to disrupt
business activities in the form of assets and customer’s capability to repay loans.
Top three risks face by the bank
CBA has fixed clearer expectations of the business to attain improved quality
information on the risks Regulatory risk: Commonwealth Bank faces regulatory risk to act
both rapidly and conclusively on that information. The management at bank has undertaken
phases to enhance rigour of governance over non-financial risks through forming a non-
financial risk committee (NFRC). The committee has significant role in uplifting the
implication of non-financial risk and making it a foremost significance for the executive
leadership team (Tang, et al. 2018). CBA is having focus on recognising and comprehending
evolving trends, risks and problems across all the material risk. It offers bank an enhanced
perception to enable decision making. The top three risks faced by the bank have been stated
below:
Falling AUD: The Australian dollar has been plunged in the last years and it has been found
by the specialists that there is abundantly of room left to fall. It makes international
stakeholders to extract money from the local markets or majorly from the nation’s greatest
yielding stocks. It has driven markets higher in the recent years (Khorana & Martínez‐
Zarzoso, 2020).
Housing market: The housing market is one of the foremost gusts faced by the banking
sector. CBA and Westpac Banking Corp’s housing market is one of the Australia’s
exaggerated property market. A huge upturn in mortgage lending has assisted in growing the
bank’s profits higher currently but it can cause fall in the bank’s shares to fall heavily in the
price.
Capital necessities: It is well known’ that capital necessities are likely to be forced on
Australia’s big 4 banks. Considered ‘too big to fail’, banks can be necessitated to hold up to
$30 billion more capital in deputy to support against a latent economic slump (Yip & Bocken,
2018). It restricts the bank’s return on the equity along with the capability of growing or
sustaining current dividends.

Management 5
Business practices adopted and influence to performance/decision making
It is the aim of CBA to excel at fortifying and improving the monetary wellbeing of
individuals, businesses and societies. The highest professional standards have been adopted
by the bank to conduct its business practices. The bank conducts its business practices with
the integrity. The business practices of CBA inspire people along with strengthening
communities (Willcocks & Lacity, 2018). The bank is totally concentrated on balanced,
transparent and sustainable practices and policies to assist social, economic and
environmental consequences.
CBA undertakes sustainable business practices with ensuring compliance with the
requirements of different sanctions regimes. The speak up program of the bank inspires
personnel, service providers and suppliers to report concerns about bribery, corruption and
other immoral behaviour (Liu, et al. 2018).
Functional departments of bank
The bank provides financial services like retail banking, business banking, first-class
banking, institutional banking, superannuation, funds management, investment, insurance and
share broking products and services. The bank has been offering financial services in the for
individuals, businesses and communities across the nation. At present CBA has turned out to
be one of the globe’s foremost financial institutions providing, private, retail, business and
institutional banking services in over 11 nations around the globe. (Masli, Porter & Scholz,
2018) The specialist business areas provide superannuation, insurance, share trading,
financial advice and funds management to millions of clienteles in Australia and across
nation.
CBA provide accounts and services to the customers, the way they want. The major
functional departments of CBA comprise:
Sales/ front office: CBA is having front office in some form. The investment banking
comprises sales teams and traders. In retail, it is the branch network, cahiers, branch
managers, mortgage advisors and more (Suresh, Kumar & Venkataramanaiah, 2016).
Product control: It sometimes comprises ‘trader assistance’. This department comprises
persons who know sufficient concerning business and systems than traders. The traders make
sure that the trades have been entered into the system appropriately and also comprises
control checks like credit checking, approved products and more.

Management 6
Compliance: The compliance is also a part of product control. The regulatory compliance is
becoming a great part of the finance industry currently (Hunt & Eburn, 2018).
Finance: The finance department ensure the money bank has, who is spending money and
which accounts’ it is in. The bank ensures that physical settlements match the projected cash
flows.
Conclusion
CBA is efficient enough in managing its operations through focusing on the customer
service and engagement. The business structure of the bank is also efficient enough in
tackling all the departments. The structure of the bank has lined up with the advancement of
the product and distribution of the service to the customers and variations in the leadership
team responsibilities.
CBA has enabled technology to influence bank’s performance. The mobile banking
applications enabled by the bank has minimised the need of the persons to visit branch and
handle daily affairs. The management at bank has undertaken steps to enhance rigour of
governance. It is helpful in tackling the risks faced regularly. Moreover, the bank conducts its
business practices with the integrity to inspire people and strengthen communities. The
functional departments have a great role in conducting operations of the business worldwide.

Management 7
References
Hunt, S., & Eburn, M. (2018). How Can Business Share Responsibility for Disaster
Resilience?. Australian Journal of Public Administration, 77(3), 482-491.
Khorana, S., & Martínez‐Zarzoso, I. (2020). Twenty‐First‐Century Trade Governance:
Findings From The Commonwealth Countries. Contemporary Economic
Policy, 38(2), 380-396.
Liu, H. J., Love, P. E., Smith, J., Irani, Z., Hajli, N., & Sing, M. C. (2018). From design to
operations: a process management life-cycle performance measurement system for
Public-Private Partnerships. Production Planning & Control, 29(1), 68-83.
Masli, A., Porter, C., & Scholz, S. (2018). Determinants of auditor going concern reporting in
the banking industry. Auditing: A Journal of Practice & Theory, 37(4), 187-205.
Parkes, Z. (2017). Newcastle climate activists target commonwealth bank. Green Left
Weekly, (1139), 7.
Suresh, S., Kumar, H. M., & Venkataramanaiah, M. (2016). Scale efficiency of foreign banks
in India-An operations research approach. SAARJ Journal on Banking & Insurance
Research, 5(5), 49-59.
Tang, M., Alazab, M., Luo, Y., & Donlon, M. (2018). Disclosure of cyber security
vulnerabilities: time series modelling. International Journal of Electronic Security
and Digital Forensics, 10(3), 255-275.
Willcocks, L. P., & Lacity, M. (2018). Cloud Computing as Innovation: Cases and Practices.
In Dynamic Innovation in Outsourcing (pp. 197-237). Palgrave Macmillan, Cham.
Wright, C., Ville, S., & Merrett, D. (2019). Quotidian routines: The cooperative practices of a
business elite. Enterprise & Society, 20(4), 826-860.
Yip, A. W., & Bocken, N. M. (2018). Sustainable business model archetypes for the banking
industry. Journal of cleaner production, 174, 150-169.