University Assignment: Change Management Analysis of ANZ Bank Report

This report provides an analysis of change management theories and models, using the Australia and New Zealand Banking Group Limited (ANZ Bank) as a case study. It examines the bank's organizational transformation, the challenges faced by managers, and the role of leadership, particularly under CEO John McFarlane. The report explores issues such as employee morale, customer dissatisfaction, and the impact of branch closures and rising fees. It applies the McKinsey 7S model to identify potential problems and uses various change management theories to explain the bank's challenges. The report also discusses the bank's commitment to corporate social responsibility and its goals for expansion. The report concludes with recommendations for improvement and offers insights into the complexities of change management within a financial institution, emphasizing the importance of leadership in influencing, directing, and managing the process of change.

Running head: CHANGE MANAGEMENT THEORIES AND MODELS
CHANGE MANAGEMENT THEORIES AND MODELS
Name of the Student
Name of the University
Author Note

1CHANGE MANAGEMENT THEORIES AND MODELS
Executive Summary
The following report mainly aimed at the analysis of the case of the Australia and
New Zealand Banking Group Limited, the ANZ Bank and the identification of the problems
that the financial institution has been facing. ANZ has been known to be one of the oldest
financial organizations of Australia that had started its journey during the 1830s. The bank
had faced major problems during the 19th century when the common man had lost all trust in
the banks due to the frequent closures of the branches of the bank and the increase in the
charges that were levied by the bank. The bank had been forced to bring about a change in
the management and appointed John McFarlane as the new CEO. The report had shed further
light on the problems faced by the bank and attempted to explain the same with the help of
the various theories of change management. The report finally finds a conclusion with the
overall evaluation of the case.

2CHANGE MANAGEMENT THEORIES AND MODELS
Table of Contents
Introduction....................................................................................................................3
ANZ Bank..................................................................................................................4
Evaluation of the features of Organizational transformation at ANZ Bank..............5
Challenges faced by the managers in the implementation of the changes.................7
Role of leadership in the influencing, directing and managing the process of change
at ANZ....................................................................................................................................9
Recommendations........................................................................................................10
Conclusion....................................................................................................................12
References....................................................................................................................13

3CHANGE MANAGEMENT THEORIES AND MODELS
Introduction
Change generally refers to the process that causes a function or a practice or even a
thing to become somewhat different in manner than the present or the past ways. Change is a
common term that is used to describe the outcomes or the effects of the transformation or the
transition of some function, thing or even methods (Hornstein 2015). Changes form a very
important part of the everyday life and forms a part of the natural way of life. In order to
manage the concerned business on a successful manner, organizations have to implement
various changes at the different points of time during their operations (Burke 2017). Change
management generally refers to the disciplines that guides the preparation, equipment and the
support that is extended to the individuals to help them to successfully adopt the changes so
as to derive the organizational outcomes and successes (Langley et al 2013). The concept of
change management refers to the transformations in the concerned business organization that
are in compliance with the changing trends of the business environment which might help the
concerned business firm to grow as well as achieve the targets that have been set by the
concern (Hayes 2014).
There have been a number of different models of change management that have been
developed by the theorists in order to assist the managerial staff to implement the changes in
the concerned organization in an effective manner. In the cases that involve the financial
institutions such as banks, the implementation of changes become an added responsibility for
the managers and the other leaders pf the organization due to the high amount of the
interaction that these organizations have with the general public. Theorists like Bridges,
McKinsey, Kotter, Kubler-Ross, Lewin and many such others have put forward certain
models that find application in the matters pertaining to the change management till date
(Shirey 2013; Worley and Mohrman 2014).

4CHANGE MANAGEMENT THEORIES AND MODELS
The following report focusses its attention on the recurring issues that are faced by
theAustralia and New Zealand Banking Group Limited, popularly known as the ANZ Bank
and applies the 7S model proposed by McKinsey for the identification of the possible reasons
for the same. The report further proceeds to analyze the problems that have arisen within the
concern and makes an attempt for providing reasons for the problems with the help of the
proposed change management theories.
ANZ Bank
The Australia and New Zealand Banking Group Limited, popularly known as the
ANZ Bank, is one of the five most successful banks that have been operating in the country
of Australia. The bank had set its initial steps in the industry almost 170 years ago when it
had stemmed from the Bank of Australasia (Anz.com 2018). The Australia and New Zealand
Banking Group Limited, popularly known as the ANZ Bank is at present headquartered at
Melbourne, Australia. In the current scenario of the financial market, the bank comprises of a
staffing pool of almost 35000 employees and has been a publicly listed organization. The
organization further bears the position of being one of the most trusted among all banks that
operate all over the world. ANZ Bank has secured the rank of 92 on the Forbes list of 2000 as
per May 2017 market cap report (Forbes.com 2018).
The financial organization aims to serve the huge customer base consisting of about
six million people of the population of the world. The number of shareholders of the
Australia and New Zealand Banking Group Limited is almost over 376813. The concerned
financial organization continues to serve its clients in over 30 different countries all over the
world (Anz.com 2018). The services provided by the bank are known to majorly operate over
five major divisions that are inclusive of New Zealand, Australia, the Asia-Pacific area, the
shared and the institutional services. It might be noted that the concerned financial
organization, the Australia and New Zealand Banking Group Limited, popularly known as

5CHANGE MANAGEMENT THEORIES AND MODELS
the ANZ Bank, has been facing a huge number if problems since the inception of the same.
The financial institution has gone through a number of changes in the organizational structure
and the concerned departments in order to make the necessary improvements in the
performance of the bank.
Evaluation of the features of Organizational transformation at ANZ Bank.
According to De Grauwe (2013) and Mesnard et al. (2016), the major potential threats
that are posed to the financial organizations are the low morale of the employees and the bad
debts. The company in discussion, Australia and New Zealand Banking Group Limited,
popularly known as the ANZ Bank, has been undergoing several issues pertaining to the poor
organizational activities, dissatisfaction of the concerned customers, the low morale of the
concerned employees and the bad debts that they had been facing until the middle half of the
1990s. The major banks of Australia had faced a situation during the later years of the 1990
decade which had led to a widespread ill-will and mistrust among the customers. The bank
had appointed Jon McFarlane as the CEO during the late 1990s following the conditions of
poor performance that had been delivered by the concerned bank.
There had been occurrences of increment of the fees and the branch closures that had
taken place all over the country. This had led the clients of the concerned financial
organizations to believe in the fact that the banks were not serving the clients, the employees
or the communities in an appropriate manner (Thompson 2013). The then CEO of ANZ
Bank, McFarlane had highly criticized the move of the financial organizations that dealt with
the closure of the branches of the banks in the rural areas. McFarlane introduced a freeze on
the closure of the rural branches of the bank. McFarlane also made an attempt to ensure the
addressal of the issues that pertained to the lack of female employees in the senior ranks of
the concerned financial organization (Munjuri and Maina 2013). This had helped in the
enhancement of the diversity that exists within the organization and has also helped in

6CHANGE MANAGEMENT THEORIES AND MODELS
providing the employees with the much needed motivation. McFarlane had been one of the
first among his contemporaries to have taken the concept of “corporate social responsibility”
in a very serious manner. The then CEO of the organization had introduced outsourcing of a
number of services that might have led to the severe cost cutting on the part of the bank.
The financial organization had taken its preliminary steps towards the transformation
in a scenario pertaining to the organizations in the year 2000. There were a number of
revelations regarding the discrepancies that were found to be existing among the personal
values of the employees of the concerned financial organization and their perceptions
regarding the same. The revelations also put forth some of the issues that pertained to the set
of values that were put forth as well as practiced by the bank. The recent studies have thrown
light on the issues that the financial organization had been facing regarding the finances that
the bank had been borrowing in order to provide loans to the concerned clients of the
organization (Kwambai and Wandera 2013). The nature of the equity market as well as the
provided debt had been very volatile. This had led the concerned clients to put up a curb in
the issues related to the expenditure which in turn had led to the erosion of the confidence
that the people needed to place on the banks. According to Ogechukwu (2013), the breach of
the ethical code of conduct might pose to be a serious issue within any industry that might be
clubbed under the banking industry. The financial institution in discussion, the Australia and
New Zealand Banking Group Limited, popularly known as the ANZ Bank, had several
commitments towards the responsible practices in the concerned field of business. ANZ Bank
had faced an issue in 2008 which forced them to turn these commitments into corporate
realities in their sector of business (Graetz et al 2010). The financial institution also faced an
issue that dealt with the resignation of the staff, who, according to a report, published
internally, had been involved with a broking house which had tasted failure in the operations
that it had undertaken. The report stated that the identified employees had breached the

7CHANGE MANAGEMENT THEORIES AND MODELS
security code of the bank by involving themselves with the afore-mentioned broking concern.
He report further stated that the concerned employees did hold accounts in a manner that
might be considered to be improper. The future goals that are set by the financial institution
in discussion is to bring about a significant growth in the presence of the same majorly in the
Asia-Pacific area. The bank also aims the maintenance of the opportunities and the business
environment that it holds in the countries of Australia and New Zealand.
Challenges faced by the managers in the implementation of the changes.
In the case of the Australia and New Zealand Banking Group Limited, popularly
known as the ANZ Bank, the change in the structure was necessary due to the issues that the
financial organization was facing based on the dissatisfied customers of the concern and the
low morale of the existing employees of the bank in the early 1990s. The financial
organization appointed John McFarlane as the new CEO of the company in the year 1997
which set the required changes rolling as per the chronology. The company had been
overcrowded with unnecessary staff which resulted in the hampering of the organizational
management and thus led to the poor performance of the concerned financial institution. This
problem that the company had been facing had its roots in the poor organizational structure of
the bank. McFarlane, on taking charge of the responsibilities of the bank, implied new
strategies that that followed the concurrent trends in the banking industry. The management
needed to change the old and worn out strategies followed by the bank that led to the
concerned issues being surfaced.
John McFarlane had noticed that the daily processes that were followed by the bank
were not in compliance with the basic rules of the organization and lacked equality in the
participation. The CEO also observed that the financial institution had been ignoring the rural
communities that have been contributing to its growth. The financial institutions had lost the
faith of their clients due to rise in the bank charges and the closure of a number of branches

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which led the customers to a vulnerable position. According to the McKinsey model for
change management, these problems had resulted from the change in those systems of the
financial organization that helped to form the daily processes of the ANZ Bank, the distance
from the rural communities was considered to be one of the reasons for the same (Singh
2013).
The major challenges that were faced by the company while implementing the
changes in the organization refer to those that were faced by the then CEO and his team in the
fields of bringing forth an engagement among the employees of the bank on all levels. The
CEO had also faced a number of challenges in the fields that aimed at the building of a
support for the necessary cultural changes that had been taking place within the financial
institution. The financial organization had implemented the changes in both the upper levels
of the institution as well as the lower levels. The employees were encouraged to share the
issues that they had been facing in their respective fields of work. The financial organization
had been spread over a large area of operation which led to difficulties in the implementation
of the employee engagement all over the organization. There might have been phases where
some employees serving the organization at areas other than the headquarters might have
raised issues that led to the lowering of the employee engagement. However, the other
employees at the same area acted as advocates of the employers and helped the management
to deal with the problems that arose within the organization.
The CEO of the organization, John McFarlane has introduced the system of internal
surveys of the staff that had been working at the banking organization. The surveys revealed
the fact that there had been a significant amount of improvement in the satisfaction of the
staff of the organization. These results that were achieved from the changes that were
implemented by McFarlane, resulted in the staff of the company to focus more on the issues
of the employee engagement as well as advocate the issue on the behalf of their employers.

9CHANGE MANAGEMENT THEORIES AND MODELS
Role of leadership in the influencing, directing and managing the process of change at
ANZ
The CEO had introduced a number of measures that ensures the affirmative action
against the scenario that the bank was facing during the then period of time. McFarlane is
considered to be one of the first among his contemporaries to have considered the concepts
pertaining to the corporate social responsibility in a serious manner. The CEO also displayed
a huge talent for fore-seeing the trends that might get popularized in the industry in the near
future. These initiatives that were introduced by the CEO led to the improvement of the
perception about the ANZ in the eyes of the general public. The then current CEO of the
financial organization, John McFarlane had ensured that the financial organization went
through a number of changes within a very short period of time (Messai and Jouini 2013). He
hastened the cost-cutting drive which resulted in a huge number of job cuts in several
branches of the concerned financial organization. McFarlane helped in the reduction of the
risk profile of the branch by stepping down from the investments in the emerging markets.
According to the McKinsey 7S change management model, skill is a soft factor that
might not be easy to recognize but might often lead to a number of problems. ANZ Bank
lacked the skills that were necessary for the addressal of the changing trends that had been
taking place in the banking sector (Ravanfar 2015). Thus, as a result the company had to face
a number of issues regarding the same. The management body of the concerned financial
organization lacked the skills necessary to identify the causes behind the escalations of the
problems that they have been facing. John McFarlane had demonstrated exceptional skills in
the field of identification of the issues and had immediately initiated the changes that were
necessary. The changes that were implemented by the CEO led to the unemployment of those
employees who had not been performing in accordance to the needed conditions. The CEO
also helped the bank to bail out of the bad investments in the markets that were seen to be

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rising as days passed by which helped in the transformation of the financial status of ANZ
Bank. The other factors, as discussed in the McKinsey’s model of change management,
include the staff of the organization, the style and the values that are shared by the
organization (Arunchand and Ramanathan 2013). The CEO also addressed the issues
pertaining to the employment of the female employees of the company (Yadav and Dabhade
2014). The organization had faced issues right after the resignation of McFarlane from the
post of the CEO of the financial institution. The problem that the bank faced resulted from
the breach of the moral code of conduct that was set by the bank. This had resulted from the
inability portrayed by the then CEO Michael Smith in the matters that pertained to the
management of the staff of the organization.
Recommendations
There have been several areas that need to be attended to in order to avoid the
situations that the concerned financial organization had been facing since its conception. The
organization had been facing situations where they had been incurring bad debts. These
conditions might be avoided by lowering the risk factors that are involved in the overdue
payments that have been turning into bad debts. The financial institution must introduce
greater control in the areas pertaining to the credit matters. The banks must ensure the
conduction of a thorough check of the business houses as well as the referring bodies before
granting the credit to the new clients. The credit limit set by the bank should be fair and
reasonable and must instruct the concerned employee to communicate with the concerned
officials in any condition that involves the client requests for exceeding the credit limit that
had been agreed upon previously. One of the most important assets of the financial
institutions are its staff members. The management needs to look into the matters that pertain
to the motivation of the staff in order to achieve the conditions of low turnover and a high
productivity. The financial institutions might help the staff members by providing them with

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the needed recognition and appreciation for their contributions towards the bank. The
financial institution must introduce perks and incentives that would be awarded to the staff in
order to boost their morale. The management of the bank must allow flexible schedules for
the employees that might be availed under genuine circumstances in order to maintain the
high morale of the concerned staff members. The staff of the bank must be allowed to put
forth suggestions to the management of the society as well as the concerns that they might be
facing while carrying out the duties that have been assigned to them.
The financial institutions might also need to pay attention to the issues that might
have arisen from the factors pertaining to the dissatisfaction of the concerned clients. The
banks should aim to from a deep and realistic understanding of the needs and the wants of the
concerned clientele so as to bring about an improvement in the services that are provided by
the bank towards the concerned customers. Long-term relationships with the clientele might
be developed by introducing comparatively new systems and processes in the operations of
the bank. The banks must introduce the greater employment of the female staff in the higher
ranks of service in order to maintain the equality of the genders within the organization. The
involvement of the female staff in the higher ranks of the organization might also help in the
diversification in the behavioral patterns of leadership. The rural population might contribute
a lot in the potential client base of the financial institution wherein the ANZ Bank is highly
operational. The employees of the organization must refrain from the breach of the ethical
codes that need to be maintained in the organization. The concerned organization must help
the employees to get well-acquainted with the ethical code that is specifically followed within
the organization in discussion, the Australia and New Zealand Banking Group Limited,
popularly known as the ANZ Bank.