Commonwealth Bank Ethical Issues: Analysis & Organisational Learning

This report analyses the ethical issues faced by the Commonwealth Bank of Australia (CBA), categorizing them into individual misconduct by financial planners and the broader impact of the global financial crisis. It examines repeated ethical scandals through the lens of organisational learning theories, highlighting the damage to CBA's reputation and the Royal Commission's concerns. The report also identifies barriers to organisational learning within the bank, including regulatory impediments, internal control deficiencies, and misconduct leading to client attrition. It references specific instances such as the wrongful selling of insurance and unethical practices by staff, emphasizing the need for improved internal controls and ethical conduct.

Analysis of the Ethical Issues for Commonwealth Bank
The ethical issues for the Commonwealth Bank of Australia are divided into the two major
categories. The first category states the individual behaviour of the financial planners who
acted unethically by placing elderly retirees savings into the risky products of the investment,
contrary to instructions and lack of the disclosure. The forging of the documents have been
came across in front of the management. The CBA lost its entire savings and kept all the
tracks hidden (Hutchens, 2018).
Secondly the impact of the global financial crisis on the financial plans industry and their
lack of the social responsibility and the ethical behaviour towards the banking sectors. The
unethical means were adopted to pay the compensation and the remuneration to the financial
planners and this creates a huge loss to the banks. The conflict also arises on part of the
regular running between the clients and the sale of the financial offers made to lure the
customers to purchase it (Stewart, 2017).
Analysis of repeated ethical scandals through the lens of organisational learning
theories
The Commonwealth Bank of Australia accepts that it has sold wrong insurance to 60000
unemployed customers. The Royal Commission warned CBA to cease the volume based
commissions to the brokers who sell the products on mortgage, where the brokers were
involved in the larger than necessary loans and putting the customers at risk. From the
perspective of the organisation learning this scandal pretty much destroyed the reputation of
the CBA, also the Royal Commission was not satisfied with the apologies, rather it was
interested in as to why such an incident happened in the era of the banking sector and what
policy makers shall take as a step to rectify this situation (Hutchens, 2018).
Analysis of existing barriers to the organisational learning at the Commonwealth Bank
The main necessity is the innovation of the organisation in terms of the change and the
advancement in the products and the services. The biggest barrier to bank is the regulator.
There are enormous regulatory policies and impediments which shall be removed so that he
banking sector can grow and this can help the women who are going to retire by providing
them with the assistance of the featuring products that can cater the needs (Bishop and
Connors, 2018).

The second barrier is the misconduct which is found on the part of the Commonwealth Bank
of Australia and this misconduct eventually resulted in the closing of the clients and the
customers. Also in the present year it was found that there was dedication and awareness in
the staff relating to their job responsibility and targets and this unethical behaviour caused a
drastic damage to the reputation of the Commonwealth Bank of Australia (Andersen, 2015).
Since there was lack of internal control, the system within the organisation became hollow
from inside and the staff of the CBA was engaged in the unethical practices namely the
forging of the documents and the manipulating the confidential data of the client. Hence the
biggest barrier is the lack of internal control, the regulatory factors and the misconduct with
the clients and the customers (The conversation, 2018).

References
Andersen, J.A., (2015) How organisation theory supports corporate governance
scholarship. Corporate Governance, 15(4), pp.530-545.
Bishop, P. and Connors, C., (2018) Management, organisation, and ethics in the public
sector. California: Routledge.
Hutchens, G. (2018) CBA admits wrongly selling insurance to 60,000 unemployed customers
[Online] Available from https://www.theguardian.com/australia-news/2018/nov/19/cba-
admits-wrongly-selling-insurance-to-60000-unemployed-customers [Accessed on 29th
January 2019]
Stewart, R.M., (2017) Commonwealth Bank Faces Ethics Check [Online] Available from
https://www.wsj.com/articles/commonwealth-bank-faces-ethics-check-1503945230
[Accessed on 29th January 2019]
The conversation, (2018) Articles on Commonwealth Bank of Australia [Online] Available
from http://theconversation.com/au/topics/commonwealth-bank-of-australia-2606 [Accessed
on 29th January 2019]