Ethical Dilemmas and Strategic Responses at Westpac

Westpac has maintained a significant presence in Australia and New Zealand's banking sectors by leveraging effective corporate and business-level strategies, positioning itself as one of the top four banks. The analysis explores Westpac’s diverse service offerings that contribute to its market dominance while also addressing contemporary issues such as competition from digital disruptors and ethical challenges stemming from lending practices to controversial entities. By examining these dynamics, the report provides a comprehensive view of how Westpac navigates strategic opportunities and threats in an evolving industry landscape.

Running head: INTRODUCTION TO MANAGEMENT
Introduction to management
Name of the student
Name of the university
Author note

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Executive summary
The aim of this report is to discuss about the business approach of Westpac in their existing
market of Australia and New Zealand. Moreover, the issues being faced by them in the recent
time in due course of their operation are also being discussed in this report. The growth strategy
of Westpac from their initial stage to the present time is being analyzed along with identifying
the corporate strategies being initiated by them. This report also discussed about the internal
environments of them in order to determine the threats and opportunities. This, report concludes
that, Westpac is being considered as one of the major banking institutions in Australia and New
Zealand. Moreover, it is also being found that, though, they have faced various issues in the
recent time, but due to their heritage, they are being able to maintain their reputation and
goodwill in the market.

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Table of Contents
Introduction......................................................................................................................................3
Organizational vision and mission...................................................................................................4
Vision statement..........................................................................................................................4
Mission statement........................................................................................................................4
Corporate strategies initiated by Westpac.......................................................................................5
The 1800s.....................................................................................................................................5
The 1900s.....................................................................................................................................5
The 2000s.....................................................................................................................................6
Criticisms of business practices of Westpac....................................................................................7
Lending to Unethical organizations.............................................................................................7
Remuneration offered by Westpac New Zealand........................................................................8
Determination of the competition for Westpac...............................................................................8
Determination of the internal environment of Westpac................................................................10
Westpac Leadership.......................................................................................................................11
Organizational culture...................................................................................................................12
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................14

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4INTRODUCTION TO MANAGEMENT
Introduction
Financial market in Australia is hugely competitive in nature. This is due to the reason
that, Australia is having good number of established players in the market including the top 4
banks of Australia (Our history | Westpac, 2018). Thus, in order to cope up with the competition
in this market, financial institutions should involve extensive marketing and business policies.
Westpac is one of the top four banks of Australia having their market presence in New Zealand
also. This is due to the reason that, Westpac is the largest bank in the Australia in terms of the
banking network with having more than 1400 branches around Australia. In addition, Westpac is
the second largest bank in Australia in terms of the assets. They are also having their market
presence in New Zealand also, along with having the status of second largest bank in New
Zealand.
This report will discuss about the mission and vision statement of the Westpac bank of
Australia in order to determine their competitive approach to the business and their stakeholders.
In addition, the implementation of the corporate level strategies will also be discussed in this
report to identify the types of strategies being implemented by them in their course of operation.
The differences in the approaches will also be discussed in this report. Westpac bank has
indulged in different criticisms in past due to their unethical business practices. Two of their
most important criticisms will be discussed and analyzed in this report. The business
environment of Westpac will also be discussed along with determining their key threats and
opportunities. The internal management of them including the organizational culture and the
style of leadership being practices in Westpac will be discussed.

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Organizational vision and mission
Vision statement
The vision statement of Westpac states that, they will strive to maintain their market
leadership status in their existing market of Australia and New Zealand along with entering in
new markets in the foreign countries in order to enhance their market presence and market share.
Moreover, their vision statement also covers the sustainability and stakeholders also (Our history
| Westpac, 2018). According to their vision statement, they are willing to be the best employer in
terms of the management of the human resources and enabling the customers to gain the
sustainable future. Dealing with the environmental challenges is also one of the key aspects
being mentioned in their vision statement.
Thus, it can be concluded that, the vision statement of Westpac is covering all the viable
aspects of their business operation along with considering all the requirements of their
stakeholders.
Mission statement
Mission statement of Westpac bank states that they are offering diverse financial services
to their millions of customers in Australia and New Zealand. Moreover, the mission statement of
them also concentrates on building effective relationship with their customers. In accordance to
that, they are having various customer related approach to enhance the value for their customers
(Our history | Westpac, 2018).

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Corporate strategies initiated by Westpac
The 1800s
In the initial stage of their business operation, network level strategies are being initiated
by them. This is due to the reason that, according to the data available in their official website,
the major expansion for the company was being initiated in 1851, when they started the
operations of buying gold for the miners and traders (Our history | Westpac, 2018). Thus, with
the help of the network level strategies, they had been able to increase their business boundaries
along with enhancing the operational areas. This was needed at their initial stage due to the
reason that, at that there aware various challenges being faced by them and they do not had brand
value to push their services in the market (Drnevich and Croson, 2013).
The 1900s
This century came with economic slowdown and challenges for Westpac. However, in
this case, they also initiated certain corporate strategies to overcome the challenges. One of the
key strategies being initiated by them is the corporate level strategies. With the help of the
corporate level strategy, they had acquired the commercial bank of Australia in 1982. Following
which, they went on to initiate the process of strategic partnership and acquisitions of different
financial institutions including the Challenge bank limited in 1995, acquiring the trust bank New
Zealand in 19996 and bank of Melbourne in 1997 (Our history | Westpac, 2018). This helped
them to gain the position of the market leader with having acquired majority of their competitors.
However, with the rapid acquisitions, there are various challenges being faced by them including
covering the added responsibilities and dealing with the different organizational structures in
these firms.

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The 2000s
This century proves one of the most diverse for the Westpac due to the fact that, they
have involved various strategies in their business operation along with dealing with some of the
major criticisms that they have faced. In accordance to the diverse environments being faced by
them, various strategies including the corporate and business level strategies are being involved
by them. One of the key business level strategies being initiated by them is to diversify their
service offerings to cover more number of customers along with identifying the potential target
markets in the foreign countries. Moreover, differentiation strategy is also being initiated by
them in order to create distinctive image in the market.
The service offerings of them are being made more customized to suit their target
customers along with providing personalized financial services. This helps them to gain
competitive advantages in the market and to provide unique experiences to their customers
despite of having huge competition (Liu, 2013). On the other hand, Westpac also initiated the
corporate level strategies in order to further expand their business. One of the prime examples of
their initiation of corporate level strategies is the acquisition of Rothschild Australia Asset
management, BT financial group and Hastings funds management limited. Moreover, in 2008,
Westpac merged with St. George Bank Limited. Thus, with the initiation of both the business
level and corporate level strategies, Westpac is being able to solidify their position in their
existing markets along with marinating the market leadership position. All these mergers and
acquisitions helped them to be the largest bank in Australia in terms of branch network.

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Criticisms of business practices of Westpac
Lending to Unethical organizations
Along with other leading banks of Australia, Westpac is also being accused in funding
the firms around the world who are being indulged in unethical business practices. It is being
accused that, by funding the unethical business practices of other business organizations,
Westpac is also involving in having unethical business practices. One of the key accusations
being faced by them is the lending of money to the palm oil giant Wilmar (Schwarten, 2018).
This is due to the reason that, according to the reports, Wilmar is infamous for their land
grabbing incidents. They are also been named as the least environment friendly companies in the
world. Thus, by funding their projects, Westpac has faced criticisms.
One of the key challenges being faced by them from the emerged criticism is the negative
word of mouth. This is due to the reason that, emergence of this accusations caused negative
impact on the customers. Westpac has gained the impression of being an unethical business
organization even without being indulged in unethical practices by own. However, they have
initiated various steps in order to reduce the implications of the criticisms. One of the key steps
being initiated by them is to offering a public apology regarding the case. They have stated that,
they will stop lending to their clients who are accused of having unethical business practices.
Moreover, they have also stated that, from now on, they will closely monitor the activities of
their client before providing services to them. Initiation of the public apology helped to reduce
the negative impression on their customers along with informing them that Westpac is not
supportive of these unethical issues.

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Remuneration offered by Westpac New Zealand
Another criticisms being faced by them in the recent times is regarding the payment
structure of the top boss of Westpac in New Zealand. This is due to the reason that, according to
the reports, George Frazis, top head of Westpac in New Zealand is the highest paid executives in
the whole country by attracting an annual package of USD 5.59 million (Banker's $5.5m package
'unethical', 2018). However, it was being heavily criticized by the employee union due to the
reason that, the national economy is being going through economic slowdown. In addition, they
have also stated that, being the fact that Westpac is supported by deposit guarantee scheme of the
government, providence of this much salary will have the impression among the customers that,
their deposited money is being using. This accusation caused damage in the overall reputation
and goodwill of the organization in the market of New Zealand.
However, in defending the move, Westpac has given the statement that, the annual
package of their boss is being reduced and the salary is being calculated based on their internal
rules and regulations. It was also being told by them that, their CEO held important posts in his
previous institutions also and thus, he is eligible to have that salary. However, in this case,
Westpac has not being able to deal with the situation effectively as they have done in the
previous case.
Determination of the competition for Westpac
Threats of new entrants  Threats of new entrants in the financial market of Australia
are less due to the reason that, it involves huge investment.
 Moreover, goodwill and reputations matters most for the
customers and thus established players enjoy the non-

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existence of new players in the market.
 However, there are various smaller organizations offering low
cost services to their customers, which may grow in the
future.
Bargaining power of
suppliers
 Banking organizations are having dependent on different
suppliers due to the reason that, they cats as the middle man
between the process of lending and accepting deposit.
 Suppliers are having more bargaining powers due to the
reason that, they can determine the rate of lending of Westpac.
 Thus, the more will be the higher bargaining power of the
suppliers, the less will be the profitability of the banks.
Bargaining power of
buyers
 There are huge number of buyers are available in the market
along with having numerous players.
 Buyers are having diversified requirements from the banks.
 With the increase in the competition in the market, the
bargaining power of the buyers will get increased further.
Threats of substitutes  In the recent times, there are various unconventional
substitutes such as online payment bank and Bitcoin are being
emerged in the market.
 Already, there are various competitors plying in the market,
which is further increased the competition.
 Thus, the threat of substitutes is more for Westpac.
Industry rivalry  With having the presence of various competitors, the rivalry is

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more in the market.
 Moreover, more intense competition in the market will further
reduce the profitability of Westpac.
 Thus, the intensity of the industry rivalry is high for Westpac.
Determination of the internal environment of Westpac
Strengths  Highest number of branches in Australia helps them to cover
more number of customers.
 Having rich heritage helps them to gain positive word of
mouth in the market.
 Having the market presence outside of Australia helps them to
reduce the dependency on single market.
Weaknesses  Huge competition in the market is reducing the profitability.
 Having their overseas operations only in New Zealand.
 Emergence of various criticisms reduced their goodwill and
reputation.
Opportunities  Acquiring and merging with some of their competitors helped
them to cut off the competition and increased the market
potentiality.
 Initiation of latest technologies will be able to cover more
number of customers.
 Entering in the developing market will further enhance the

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market opportunity for Westpac.
Threats  Uncertainty in origination of the accusations and criticisms.
 Emergence of economic slowdowns.
Westpac Leadership
Being one of the leaders in banking sector of Australia it is important for Westpac to
incorporate to incorporate appropriate leadership style to gain competitive advantage by
managing the workforce and directing the team towards growth. Being a customer service
provider, it is important for directing the focus towards the customer satisfaction by engaging the
employees. The extreme pressure of the competition in target market demands the leader to be
motivate and encouraging for overcoming the workload in the industry (Belás, 2013). This led
Westpac to incorporate a mixture of service leadership and the transactional leadership for
keeping the employees motivated. The transactional leadership has two primary dimensions that
are contingent rewards and management by exception (Clarke, 2013). The contingent reward
helps the leaders to encourage the workforce with the benefits of providing extreme support to
the organization, whereas, the management by exception makes the leaders to focus to the areas
in need. The service leadership on the other hand helps the organization in providing the
customers extremely satisfactory experience its customers across the channels (Jiang, Chuang
and Chiao, 2015). This leadership style requires the leaders in sharing the activities of their
employees.
Though Westpac is successful in providing quality service to their customers and is
successful in positioning themselves as one of the leaders in the market, they can explore greater

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efficiency using the transformational leadership style. This style of leadership is believed to
bring employee satisfaction and potentially increase the employee performance and their
organizational commitment. The four primary component of this leadership are charisma,
inspiration, individualised consideration and intellectual stimulation (Braun, Peus Weisweiler
and Frey, 2013). This allows the leaders to have greater administration over the employees,
which in turn makes them focus on the evaluation employee performance for offering them
reward according to the service provided. This will also communicate the termination of the
employees for performance lag. This further encourages the employees by appealing to the self-
actualisation (Choudhary, Akhtar and Zaheer, 2013).
Organizational culture
Organizational culture is a unique phenomenon particular to the specific organization.
This is considered as a powerful force that play active role in determining the organizational
behaviour. Culture of an organization is based on the mission, values and beliefs held by it
(Kaufman and McCaughan, 2013). Other elements of culture as identified by Al-bahussin and
El-Garaihy (2013) are control system, organizational structure, power structure, and rituals and
routines. Westpac has integrated a high level of discipline system in their organization for
focusing on their mission and vision. Moreover, they believe in providing their customers the
best service in the region. Their focus is to provide the high quality customer service through the
integration of high performance workforce and culture. The business is driven by the core values
of the organization that are:
 Formulate economic solution to the environmental change
 Provide assistance to the customers for attaining sustainability in the financial future.

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The company aims to address these values through their business activities. They seek to
delight their customers by understanding their needs and provide service as one single team. This
concept of one team helps the organization in creating respectful and discipline workplace
environment (Anon, 2018). Integrity further facilitates in attaining high level of organizational
discipline.
Conclusion
Thus, from the above discussion, it can be concluded that, Westpac with the help of their
effective corporate and business level strategies managed to gain the major market share in the
Australian and New Zealand market. With having their diverse service offerings, they are being
considered as one of the top four banks in Australia. However, this report has analyzed different
issues being faced by them in the recent times. Moreover, the impact of the competition along
with the opportunities and threats are also being discussed in this report.

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Reference
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Belás, J., 2013. The leadership style and the productiveness of employees in the banking sector
in Slovakia. Journal of Competitiveness, 5(1).
Braun, S., Peus, C., Weisweiler, S. and Frey, D., 2013. Transformational leadership, job
satisfaction, and team performance: A multilevel mediation model of trust. The Leadership
Quarterly, 24(1), pp.270-283.
Choudhary, A.I., Akhtar, S.A. and Zaheer, A., 2013. Impact of transformational and servant
leadership on organizational performance: A comparative analysis. Journal of Business
Ethics, 116(2), pp.433-440.
Clarke, S., 2013. Safety leadership: A meta‐analytic review of transformational and transactional
leadership styles as antecedents of safety behaviours. Journal of Occupational and
Organizational Psychology, 86(1), pp.22-49.
Drnevich, P.L. and Croson, D.C., 2013. Information technology and business-level strategy:
Toward an integrated theoretical perspective. Mis Quarterly, 37(2).