MGMT20144: Report on the Commonwealth Bank of Australia Analysis

This report provides a comprehensive analysis of the Commonwealth Bank of Australia (CBA), examining its business and governance structure as a corporation with a democratic governance style. It explores the environmental factors impacting CBA, including political, economic, social, technological, legal, and environmental influences, and how these factors affect the bank's performance. The report identifies and assesses the various risks faced by CBA, such as market, credit, operational, country, and psychological risks, and their impact on the bank's performance. Furthermore, it highlights CBA's business practices, including transparent stakeholder relations, diversity and inclusion initiatives, human rights protection, and environmental sustainability efforts, and their positive effects. The report concludes by outlining the functional departments within CBA, such as retail banking, loan servicing, and electronic banking, emphasizing their integrated approach to providing high-quality financial services. The report is based on the assignment brief for MGMT20144.

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Contents
Introduction.................................................................................................................................................3
Case synopsis..............................................................................................................................................3
Business and governance structure of Commonwealth Bank of Australia...............................................3
Environmental factors affecting Commonwealth Bank of Australia performance...................................4
Risks faced by Commonwealth Bank of Australia and its influence on performance..............................5
Commonwealth Bank of Australia business practices and its impact on performance.............................6
Functional departments of Commonwealth Bank of Australia................................................................7
Conclusion...................................................................................................................................................8
Bibliography................................................................................................................................................9

Introduction
The report is based on Commonwealth Bank of Australia that discusses about style of
governance and business structure and various environmental factors that affects the functioning
of the business. The first part of the report discusses about its business structure and governance
style and the second part discusses about various environmental factors that affect the
functioning or performance of the bank. The third and fourth part discusses about the risks and
innovative business practices adopted by the organization that affects its performance. In the last
part various functional departments of the banks are discussed.
Case synopsis
The Commonwealth Bank of Australia is one of the renowned multinational banks that is
located across New Zealand, United states, Asia and United kingdom (Ball, 2016). The bank
provides diverse financial services to its clients in the field of banking, retail, and institutional
banking. The multinational bank was founded in 1911 by the government of Australia but was
fully privatized in 1996. It comes among the top four banks of Australia, which was listed, on
Australian stock exchange in 1991. The current CEO of the company is Matt comyn who is also
its managing director. The bank is affected by various factors that influenced its profitability and
growth in past years (Banks, 2016).
Business and governance structure of Commonwealth Bank of Australia
The governance structure followed by Commonwealth Bank of Australia is democratic which
involves the participation of all types of employees. In the bank, the top management and middle
level management of the company follows the democratic ways in areas of decisions making and
communication where the members from all the business positions and levels are involved. It
also ensures that the rights of every employee are taken care of effectively. The business
structure of the Commonwealth Bank of Australia is Corporation as it came into existence with
the enactment of the company law. Many renowned personalities have their stake in the
Australian bank.

Environmental factors affecting Commonwealth Bank of Australia performance
Various environmental factors affect the Commonwealth Bank of Australia that include political,
social, economic, technological, legal and environmental. These factors affect the performance
of the bank in terms of profitability and growth of the company.
Political-
The high level of political instability due to power race had exploited the environment for the
banks to conduct their transaction safely (Baral, 2016). Moreover, Australia has connections with
several top-notch global organizations thus making it tough for the banks to get their interests
accomplished. Although there is some sort of political instability in the country but transparent
nature of the government makes the bank to take the advantage of investment opportunities
(Baral, 2016).
Economic –
Australia holds the thirteenth position in the world in terms of GDP that suggest the good
economy of the country. Australia has been doing well in terms of per capita income thus
offering great environment for Banks to flourish. In the recent times, various controversial issues
have affected the economy of the Country thus affecting the performance of financial sector. The
issues included Amazon fire tragedy that reflected the Government‘s callous attitude in
controlling it (Batool, 2016).
Social-
There are three types of classes who live in Australia; they are upper, middle and working class.
The upper class comprise of 10 percentage of the population while the highest percentage of
Australians are middle class. The middle class has tendency to imitate the lifestyle of upper-class
thus increasing the revenue of the banks through loans raised by middle class (Bell, 2015).
Technological-
Australia is also among the tech-savvy nations of the world that is moving towards the great
technology revolution. The technology has incorporated the net banking in the country thus

making it easier for the working class population to access the facilities of banks. The
technological revolution has increased the revenues of the banks in the most effective manner.
Legal –
Recently due to various political issues in the country, various legal restrictions were imposed by
the government thus affecting the foreign investment laws that led to the decreased clientele for
the bank (Cinimagestudio, 2014).
Environmental-
Various environmental factors affect the workings of the bank. One such environmental issue is
the issue of pandemic Covid-19 that had affected almost every country on globe thus leading to
the extraordinary losses for the all sectors of the economy.
Risks faced by Commonwealth Bank of Australia and its influence on performance
The risks that are faced by the Commonwealth Bank of Australia and its influence on the
performance are-
Market risks-
There are varied market risks that affect the performance of the banks thus affecting their
performance in the long run. Various types of risks that happen in the market due to natural
disasters and other political announcements. These risks affect the performances of the bank
negatively in terms of profits and profitability (Escobar-Rodríguez, 2017).
Credit risk-
The second important risk is of high credits that affect the bank as the people find themselves
unable to repay the amount. The high credits might make them unable to pay back the loan. Such
type of situations runs the risk of making banks file for bankruptcy.
Operational risk-
There are various types of problems that are faced by the banks in the operations of its financial
services. The Commonwealth Bank of Australia also runs the risk of failed internal processes
that might lead to loss to high degrees (Fardouly & Vartanian, 2015). Moreover, various types of

external attacks from unscrupulous organizations might affect the workings of the bank. The
attacks could be targeted to disrupt the organization’s operations to access the profitability of the
organization.
Country risk-
Commonwealth Bank of Australia also runs the risk of non-payment of debts from foreigners.
Such risk affects the organization in a long run. the non-payment of debts could led to the
bankruptcy of the banks (Bell, 2015).
Psychological risk
Bank also run the risk of undermining the psychological contract with the target segment where
the market sentiments could be hurt resulting in rumors and bad political opinions.
Commonwealth Bank of Australia business practices and its impact on performance
Some of the good business practices adopted by Commonwealth Bank of Australia that affected
the performance of the business positively.
Transparent and inclusive stakeholders’ relations-
The transparent and inclusive stakeholders’ relations are helpful in achieving the good working
environment at business. Such transparent relationships results in congenial working
environment thus resulting in higher productivity and growth in the organization (Baral, 2016).
The bank has a goal of involving every important stakeholder in decisions making process of the
organization. The transparent and inclusive relation among the stakeholders builds upon the
long-term trust with the organization thus improving the goodwill of the organization in the long
run.
Diversity and inclusion-
The bank follows on the philosophy of ensuring the high degree of diversity at workplace so that
the talent could be exploited in the best possible manner (Batool, 2016). It focuses on ensuring
the inclusion of every individual in office so that the equality among the workforce can be
achieved. The practice of inclusion of the diverse workforce could be helpful in the exploitation
of the talents of people from various backgrounds thus ensuring the transfer of learning within

the organization. Such productive policies in the organization contributes to the high growth rate
and profitability in the long run.
Protection of human rights-
Commonwealth Bank of Australia has the council for human rights protection where the rights of
every stakeholders of the organization is taken into account (Fardouly & Vartanian, 2015). It is
ensured that the rights of no segment are exploited so that the worker can work with good mental
or physical being. The rights of the weaker section that include females and low-level workers
are taken care of responsibly thus leading to high level of productivity and focus in the
organization as the employees are able to focus productively on their work.
Environmental sustainable initiatives-
Commonwealth Bank of Australia takes every measure to reduce the carbon footprints in the
environment by installing solar panels and wind turbines for energy generation. It ensures that
less footprints of carbon is emitted in the atmosphere for the healthier environment. it has also
deployed various measures in its operations to tackle the issue (Bell, 2015) . Such environmental
initiatives will promote less cost of production and increased operational efficiency of the
organization. it will also promote the improved goodwill for the organization thus leading to high
degree of profitability and growth in long run (Fardouly & Vartanian, 2015).
Functional departments of Commonwealth Bank of Australia
The functional departments of Commonwealth Bank of Australia include retail banking, loan
servicing, deposit operations, investment banking, cash management, commercial banking,
mortgage banking, electronic banking, and institutional banking. These functional areas of the
Commonwealth Bank of Australia are integrated with each other so that the goals of ensuring the
high quality financial services can be achieved. The newly formed functional department of the
bank is electronic banking, as electronic banking gets more rampant due to the advent of
technology in the country (Banks, 2016). The institutional banking is also a new concept as it
promotes the financing of the institutions in the best manner.

Conclusion
Commonwealth Bank of Australia is one of the banks that promote the financial undertaking in
the best manner possible. Its works in the field of finances had helped various people in
achieving their financial goals. The achievement of the goals was possible due to integrated
coordination of the functions in an effective and efficient manner. The bank had been great in
ensuring the protection of human rights of its stakeholders in the best possible manner. The steps
of the bank in the area of ensuring the sustainable business has also been quite great leading
better management of the issues.

Bibliography
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Batool, S. K. (2016). Professionalism: A Key Quality of Effective Manager. Journal of
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motivational-videos-employees
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