Leadership and Change Management Portfolio: CBA Case Study Analysis

This portfolio delves into the leadership and change management practices within the Commonwealth Bank of Australia (CBA). It begins with an overview of the Australian banking industry, highlighting its reliability and historical evolution. The assignment then reviews relevant literature on leadership and change management, emphasizing transformational leadership and its application in the financial sector. The core of the portfolio focuses on CBA, examining the leadership style of former CEO Ian Narev, identifying leadership and change management issues, and analyzing the gaps between the two. It explores leadership approaches, change management initiatives, and the impact of leadership decisions on organizational performance. The portfolio concludes by developing a new leadership and change management plan for CBA, analyzing its potential benefits, and referencing supporting literature. The analysis includes aspects like the charismatic leadership style, the impact of ethical issues, and the importance of change management practices within the organization.

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LEADERSHIP AND CHANGE MANAGEMENT PORTFOLIO
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Table of Contents
Logbook a........................................................................................................................................2
Background of the Australian banking industry..........................................................................2
Literature review on best leadership and change management...................................................2
Leadership and change management on the organisation...........................................................4
Logbook b........................................................................................................................................5
Brief of the leader and change issues in CBA.............................................................................5
Leadership approaches in CBA...................................................................................................6
Change management in CBA......................................................................................................6
Gaps between change management and leadership in CBA.......................................................7
Logbook c........................................................................................................................................9
Developing new leadership and change management plan.........................................................9
Analysis of the new plan............................................................................................................10
Reference.......................................................................................................................................12

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Logbook a
Background of the Australian banking industry
As far as the Australia banking sector is concerned, it can be stated that the banking
sector in Australia is reliable and transparent. Historically, the Australian banking industry has
no such distinction between the retail banks and the investment banks. A progressive
transformation and the deregulation and privatisation forged the Australian banking industry as
one of the most profitable and flourishing industry within the country. The financial institutions
in Australia is comprised with a large number of authorised deposit-taking institutions (ADIs’)
that collectively encapsulate approximately 55% of the assets
(Financialservices.royalcommission.gov.au 2018). Moreover, the ADIs can be segregated into
different types of the financial institutions like banks, building societies, credit unions and the
others. In this regard, the contribution of the financial sector in Australian economy is also
important \. The government report claimed that at the end of the financial year of 2017, the
Australian banking sector held $4.6 trillion in assets (Janda 2018). Most of the financial
institutions are entitled to make systematic investment in the real industry with a gross value of
9%. Moreover, in terms of employment as well the financial and insurance services comprised
around 3.4% of the total employment in 2017 (Eyers and Frost 2018). Therefore, it can be stated
that the Australian financial sector is highly profitable and creates a number of opportunities for
the economic and industrial boom within the country. .
Literature review on best leadership and change management
For any organisation, it is essential to underline the process of making effective means of
leadership that will render strategic advantage and ethical business practices for doing banking

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business. In this context, most of the country that are chosen for this research are generally
underdeveloped. The purpose of choosing the small countries is to understand the challenges that
the managers are facing in such countries and the mitigation strategies that they formulate
(Mozammel and Haan 2016). Based on this understanding, the research of Advani (2015) dealt
with the financial sectors in Pakistan and tried to point out that in Pakistan the financial
organisations follow the purpose of providing sustainability of economy and strengthen the
financial condition so that it will help the boost the economy of the nation. It seems quite
important role that the banking and financial sector of Pakistan is playing in the name of
contributor to the economic stability within Pakistan (Holten and Brenner 2015). Based on this
understanding, it can be stated that the transformational leadership is the best style of leadership
that has close resemblance with the financial sector.
There are four core components of the transformational leadership in terms of the
inspirational motivation, intellectual simulation, individual consideration and the idealised
influences. For the banking and financial sector it is important to focus on the talent management
practice and hire the best people within the banking services. Moreover, from the research of Sun
et al. (2016) it can be seen that the transformational leadership quality is best possible leadership
style that enhance the organisational performance effectively. On the other hand, Adeyemo,
Terry and Lambert (2015) opined that the leadership practice is highly associated with the
environment and the emotional intelligence related to the work life. The reason behind choosing
the transformational leadership over autocratic or laissez faire style can be identified as one of
the most crucial and important part of the leader. In this aspect the emotional intelligence plays a
pivotal role in order to establish effective means of leadership within an organisation. Work life
quality is highly linked with the leadership quality and emotional intelligences are highly

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attached with the organisational performance due to the integration of job security, prize system
and the opportunities for promotion and learning (Stoffers, Kurstjens and Schrijver 2015).
Mental demands and quality techniques are also intricate with the leadership practice and the
transformational leadership is the best option to get adequate opportunities and exposure.
In addition to this, Mainzer and Luloff (2017) articulated that the leadership style is
highly associated with the organisational change. Therefore, it is best possible act for the
organisation to set its leadership quality having a clear perception regarding the effective quality
of change management. In this regard, the role of the force field analysis of Lewin is keenly
associated with the transformational leadership quality (Hossan 2015). Force field analysis is
associated with the practice of making an effective change by not only focusing on the basic
aspects rather strategically analysed the risk factors. On the other hand, the transformational
leadership puts focus on the employee satisfaction above all (AlManei, Salonitis and
Tsinopoulos 2018). Therefore, it will be relevant and effective enough to choose both the
transformational leadership style and the force fold analysis model in order to design a change in
a banking sector.
Leadership and change management on the organisation
As far as the leadership is concerned in Commonwealth Bank of Australia, it can be
states that the leadership style of former CEO Ian Narev was not so strategic and pro-active. As a
result of that it created problem for the organisation to retain its employees. According to the
report of Pash (2018) it can be stated that in the year 2017, the banking organisation was alleged
to sack 7,000 part time staffs. It is also associated with the organisational policy where the
organisation was suspected to practice under-wage practices. The trade union found out that
there was an underpayment plans prevalent within the organisational structure and the company

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leadership highly appreciated such unethical practices (Durkin and Gray 2018). It was a result of
the charismatic but ineffective decision making from the end of the leaders or executives that led
to havoc violation of the Fair Work regulations in Australia. In this context, the literature review
articulated that the transformational leadership quality will be identified as the best style in
banking sector. Moreover, putting emphasis on the porter’s generic model is also associated
with the change in practice that the organisation must have taken in order to bring more efficacy
into the business. From the point of view of Eyers (2018) the transformational leadership in
conglomeration with the force field model of change can bring strategic advantage to the
business orientation.
Logbook b
Brief of the leader and change issues in CBA
Based on the APRA report on the organisational leadership in Commonwealth Bank of
Australia (CBA), it can be stated that there is huge difference between the leadership in CBA and
change management that can facilitate effective organisational development. As far as the
analysis of Janda (2018) it can be stated that there are huge leadership issues and problems in the
decision making process that jeopardized the effective organisational performance in CBA. In
his interview with ABC News also the current CEO of CBA, Matt Comyn alleged the leadership
quality of Ian Narev that was full of indecision and lack of far sightedness resulted in huge
ethical issues for the organisation. It was more associated with the practice of a charismatic
leadership where the main characteristic of the organisation is to deal with the lots of attractive
and apparently significant changes but de facto insignificant for the organisational change. As a
matter of fact, from the research of Gebert, Heinitz and Buengeler (2016) it can be argued that

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the charismatic leaders were good speakers but not god managers to lead the organisation
towards effective organisational development. In case of the CBA, the charismatic leadership of
Ian Narev obscured the process of making better changes in the organisational framework. As a
matter of fact, during the term of Narev, CBA did not have any specific organisational change
practice. It can be seen during the financial scandal that damaged the reputation of the banking
institution robustly. Nevertheless, Narev was incapable to carry out any changes that could be
beneficial for CBA.
Leadership approaches in CBA
Based on the leadership quality of Ian Narev, there are some characteristics of his
leadership style have been identified that is clearly attached with CBA. First of all, the burden of
leadership is considered to be one of the major facet of the charismatic leadership. According
to ::::::::::::: the reliance of the leaders can reduce credibility and ability of the employees
because for any minute problems also the staffs were depended on the leader. In case of CBA,
the entire workplace practice was depended on the decision making of Ian Narev. Therefore,
issues like breaching in 2014 cost huge financial loss for the organisation. On the other hand, it
can be argued that lack of visionaries are also a major aspect for the charismatic
leaders. ::::::::::::: advocated that the charismatic leaders were put high confidence on themselves
and as a result of that it created difficulties for the organisation to envision the future as it was
entirely controlled by the leader only.
Change management in CBA
After the recruitment of Matt Comyn as the new CEO of CBA, some potential changes
had been carried out in order to deal as a damage control measure for the organisation. For
instance, In addition to this, the statement of the Chair of CBA, Catherine Livingstone was

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clearly pointed out the negative change management culture that was prevalent in the term of Ian
Narev. She argued that organisational culture was one of the most important thing and it is the
responsibility of the leader or the CEO to encourage and nurture the process of change
management. However, under the leadership of Ian Narev was under the investigation of CBA
management and Comyn questioned his contribution to the practice of change management
practice within the organisation. From this arguments it can be confirmed that there was no such
contingency theory or practice of change management plan existed during the term of Ian Narev
and it created a grave p0rblem for the organisation to mitigate the issues effectively. As per the
new management team in action, it can be stated that the role of the CBA executive team is
purely shifted from change in organisation to bring stability within the organisational
performance. For Ian Narev, it was an important aspect to put more focus on the cultural
diversity. It was identified as one of the major indecision of Ian Narev as the CEO of CBA
because might be diversity in workplace was a good thing but the issue of financial loss due to
money laundering could not be mitigated through the superfluous change in progress.
Gaps between change management and leadership in CBA
In this regard, the article of Grabo, Spisak and van Vugt (2017) clearly argued over the
gap between the quality of leadership and the change management practice prevalent in CBA
during the era of Ian Narev. From the individual perception, it can be seen that the Narev was
highly appreciated by the people and always had a good image among the employees and the
executives apart from the last days of his working (Grabo and Van Vugt 2016). However, the in-
depth analysis on the leadership quality can be argued that there was huge gap between the
change management need and the leadership quality of Ian Narev. There are some key elements

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that can provide a comparative study between the change management need and the leadership
culture of Narev (Barnes et al. 2016).
For instance, lack of identification of the risks is the most crucial point that was
undermined by Ian Narev. It became proved in course of implementing the cultural diversity in
the organisation in a time when the company was suffering with ethical issues like money
laundering. From that point of view, it was clearly understood that the huge gap was present in
the decision making process that facilitated more damage for CBA. In addition to this, lack of
effort to satisfy the employees was also caused fatal damage to the organisational perspective.
Due to the financial loss, the CBA management decided to reduce the incentives of the
employees where the staffs were not responsible for any data breach in the CBA financial
system. It also perturbed the organisational development in CBA and high employee turnover
placed CBA at the front page of the newspapers. From the discussion of Mittal (2015) it can be
clearly articulated that the role of the leader was irrelevant and never went with the change
management practice. As a result of that huge gulf between the change management plan and the
leadership quality was quite obvious.
On the contrary to this, the findings from the literature review confirmed that the
transformational leadership is the best possible leadership style and best suitable for CBA. One
of the primary information from the literature review confirmed that the transformational
leadership in the financial and banking sectors are highly committed to bring positive
development within the organisation. Moreover, there are some additional advantages of the
transformational leadership quality in terms of the high skill of adaptability and engaging the
employees in the organisational decision making that is lack in the context of using the
charismatic leadership. In addition to this, linking with the change management is also an

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important aspect for the leads in order to bring more efficacy and achieve success in the new
change in practice. Moreover, the force field analysis model of Lewin is also relevant in this
context that not only points out the change in practice but also figures out the possible risk
factors that can create obstruction into the change management process. Therefore, it can be
argued that both the transformational leadership and the force field change model are highly
effective to resolve the issues in CBA.
Logbook c
Developing new leadership and change management plan
Based on the force field, it can be stated that the driving factors are highlighted at first.
Bucciarelli (2015) argued that the driving forces were pushing the leaders to initiate a change in
practice. In this regard, the driving forces of changing leadership and organisational culture in
CBA are enhance the organisational proficiency, building effective organisational
communication and developing the confidence of the employees positively. Nevertheless, there
are some resisting forces that creates obstructions to the change in process. For example, the lack
of security in jobs, cooperation among different managers and organisational image in the public
sphere are the most concerned risk factors.
The purpose to build up effective organisational activities is to cope with the loss that
was incurred due to lack of strategic planning by Ian Narev. In this context, the ethical
considerations are also played significant role in order to bring efficacies into the organisational
context. Moreover, organisational performance also helps to develop a better image of the
organisation. The more the organisation will proficient the more it will get profitability through
high range of organisational practice. It can be stated that the role of the employee satisfaction

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and a flexible working environment is highly important for the organisation. Therefore, putting
more emphasis on the employee satisfaction will be effective for CBA to refurbish its business.
In addition to this, the organisational communication is also pertinent in order to connect
different actors under one canopy of organisational decision making. Moreover the motive for
bringing down effective organisational planning is related to the objective to ensure transparency
in the organisational activity. It will also engage the employees with the organisational aims and
objectives. As a result of that the entire process of making effective communication in
organisation will be achieved. On the other hand, Karanges et al. (2015) articulated that an
important aspect of the better communication facility leads to pro-active attitude of the managers
and the employees because the risk factors will be identified properly.
Boosting the employees and injects confidence into their mind is also an important part of
the transformational leaders. It will help the staffs to take decisions and develop their skills
effectively. The skill development practice is a unique feature of the transformational leadership.
Henceforth, it is pivotal for the managers to focus on that aspect (Hoch et al. 2018). In addition
to this, the employee confidence build up is also an important aspect to enhance their
commitment with the organisation. Satisfaction of the employees has also been served through
the process of developing confidence of the employees.
Analysis of the new plan
For the leadership and change management plan, the CBA executive has to focus on three
specific aspects such as the communication, collaboration and the commitment. Communication
with the employees is considered to be one of the principle measure. Therefore, more resilient
and clear perception of the purpose of the organisational change is an important aspect. It has to

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be resembled with the organisational values and objectives so that both the intrinsic and extrinsic
objectives can be achieved. The leaders or the managers has to keep a strong focus on the impact
of their interaction with the staffs so that any kind of risk factors can be mitigated effectively.
Besides this, the collaboration between the employees and the management can also be
established by the development plan. It is important for CBA to mitigate the serous issues and re-
establish its brand image so that only the effective relationship between the leaders and the
employees can bring success to that cause. As a matter of fact, for the important decision making
it is impossible for the management to deal with every types of problems. Incorporation of the
employees can revitalise the confidence of the executives also and it shares a transparent and
productive workplace culture of the organisation. For CBA, this practice has to be implemented
extensively to resolve the ethical issues in a pro-active manner. From the previous leadership
style of Ian Narev, it can be stated that for the development of the organisation it is important to
build up a strong communication between the employees and the managers and in case of CBA
this strategy is highly pragmatic and relevant.
Moreover, a commitment from both ends will also be established due to the
implementation of the leadership and change management. It is obvious that the change is
difficult to implement but the persistent nature of the leaders and the willingness to make a
change can bring more efficacies into the change management process. In this regard,
commitment of both the employees and the organisation. The transformational leadership will
prepare a better environment for the organisation. Therefore, it is important for the CBA
management to consider the force field analysis with the implementation of the transformational
leadership quality and bring a strategic advantage for the organisation in near future.

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