Organisational Behaviour: Ethical Dilemmas at Commonwealth Bank

This essay examines the unethical actions of the Commonwealth Bank, focusing on a case involving a senior manager's fraudulent activities. The paper details how the manager, Lee Zaragoza, transferred funds to his personal account and blackmailed an employee to conceal his actions. The analysis covers the ethical issues, particularly the violation of honesty and loyalty, and proposes ethical solutions. The essay applies virtue ethics to understand the ethical decision-making process, highlighting the importance of ethical behavior and its impact on stakeholders, including employees and customers. The conclusion emphasizes the need for strict measures and policies to prevent similar incidents in the future, offering a comprehensive overview of the ethical dimensions of the case and its implications for organizational behavior.

Running head: ORGANISATIONAL BEHAVIOUR
ORGANISATIONAL BEHAVIOUR
Name of the Student:
Name of the University:
Author Note:

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Introduction:
The aim of this paper is to discuss the unethical actions and decisions taken by one of
the most important and reputed bank in Australian namely, The Commonwealth Bank. There
are several issues have been identified with this bank but the corruption within the
management has shocked the entire nation. The news article also reveals the fact that
direction for gambling along with lavish lifestyle of the senior manager of Commonwealth
Bank of Australia brought him under investigation by police. This identified his purchasing
of expensive electronic goods and Infiniti car. Along with this, Zaragoza also bought Range
rover with the bank's money. He asked his assistant to repair this money and told her that if
she did so Zaragoza will not escalate this matter by reporting to the bank policy. Therefore in
one hand the senior manager of Commonwealth Bank of Australia had committed fraud with
the money of bank which is the property of the stakeholders like employees and customers
and blackmailed Kathy Ung to hide his incident. The article reveales that both the accused
Kathy Ung and senior manager Zaragoza have been dismissed. This paper will be discussing
the article in details and find out the important ethical issues associated with this incident of
fraud. This paper will also find out the ethical solution and ethical decision making process.
Summary of the article:
In this news article published by Poposki, the incident of hiding half million dollar
which is the property of the bank is mentioned (Poposki, 2019). The article reveals that the
senior manager of the commonwealth bank named Lee Zaragoza had fraudulently transferred
an alleged $64,000 to his personal account until the police had discovered these money. This
senior manager was a part of the payment operation unit of the bank and all of his fraudulent
actions were known to his team members especially one of the female employees of the team.
Lee Zaragoza is a self-proclaimed result driven manager who developed addiction of

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gambling for long and hiding money from the account of the bank to his own between 2013
and 2018. The report of the police has found that this person has uncovered a series of
different suspicious transaction in the internal account of the bank directly linked with the
account of the female employee previously mentioned.
There are 107 illegal transaction done by Lee Zaragoza secretly with the help
of the female team member named Ms Kathy Ung who disguised this payment as
reimbursements between 2015 and 2016. This organisation has been accused to commit fraud
against the employees and customers by hiding information for a long time. The
Commonwealth Bank of Australia has been charged for several serious cases of systematic
problems within its business which can cost the customers as well as the employees millions
of dollars. The news published in 27th august 2019 in Dailymail by Claudia Poposki has
mentioned about the $500,000 fraud by the Commonwealth Bank manager (Poposki, 2019).
The news points about how the police has and travelled the truth after the investigation of his
purchase of luxury car and enjoyment of lavish lifestyle for long years.
The spokesperson from the banks side it has mentioned that the bank will not tolerate
any type of illegal behaviour. It has also revealed that this fraudulent by senior manager will
not affect the customers and their money. The Commonwealth Bank of Australia has zero
tolerance for any illegal activities and behaviour irrespective of their position in the bank.
Any employee who intentionally chooses side of unethical decision will be dismissed and
they will be referred to the police if any criminal conduct is seen. Zaragoza has been charged
with three counts of obtaining financial advantage dishonestly. Therefore he has been
sentenced to 2 years in prison and non-parole period of 14 months from July. He will face
imprisonment as well as intensive correction for two years. He has also been required to pay
the compensation back to the bank.

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Important ethical issue:
Ethics are our moral principles of the society that effectively guide the attitude and
behaviour of the human beings. This relates to the most critical strategy of fraudulent
behaviour and showing dishonesty to the stakeholders. There is no clear ethical standard and
rules regarding dishonesty and hiding the truth from the employees and customers. The senior
manager of the Commonwealth Bank of Australia has done an unethical action for which the
associated team members and the employees will be suffering. In this case the accused person
Lee Zaragoza health thought about his personal interest without taking care of those who are
dependent upon him. For a senior manager the loyalty must be shown to the team member’s
first, then other employees and customers. However for attending his own Desire of gambling
he has dishonestly exploited one of his team members and harmed the interest of the other
stakeholders. Not only he has done and unethical measure by taking the public money
secretly but also blackmailing the female team member so that he can stay out of any
problem. This is a severe problem relating to ethical rules which needs punitive measures
immediately (Ogbari et al. 2016).
Ethical solution:
As this is a case of dismissive behaviour from the higher management of a company,
hence an exemplary measure has to be taken to restore the dependability and reputation of the
stakeholders. Bank is a place which provides security to the stakeholders in terms of their
financial property. This is related with trust, loyalty and dependability of the people or
customers associated with the organisation where there feel their property and money will be
safe in this case the person in power has misused and exploited the position he has occupied
in order to cater his personal interests and desires (Pearson 2017). This incident has
negatively impact in the minds of the employees as well as the customers. The employees

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may think that they also can do such things and be free from trial. The customers on the other
hand may think they will not get any security regarding money from this bank. It will hurt the
policies and reputation of the company. In order to solve this issue, strict measure against Lee
Zaragoza has to be taken so that no other senior manager can do such thing in future. New
manager in the place of Lee Zaragoza must be appointed so that the post is not vacant. In
addition to this, more policies of the organisation regarding ethical decision making has to be
implemented so that no other employee can get engaged in this type of fraud in the
organization further.
Ethical decision making process:
The seven moral philosophies in ethical decision making process are associated with
honesty and loyalty autonomy, dignity of human life, humanness and common good of the
others or society (Belle 2017). in this case of ethical decision making regarding fraudulent
behaviour of the senior management of a bank situated in Australia the philosophy of honesty
and loyalty are to be discussed (Dierksmeier et al. 2016). The virtue ethics maybe the most
fitted moral philosophy for Lee Zaragoza which is a part of normative ethics. The virtue
ethics is associated with the individuals connected with moral and virtues which details the
ethical duties and consequences of their actions (Fernando and Moore 2015). The virtue
ethics supports the fact that honesty and loyalty to the stakeholders is a necessity and it is the
duty of every individual to work honestly to reach their goal (Heimo et al. 2018). This theory
supports the idea of consideration of the interest of the others were the persons work
charitably and benevolently for others' good (Phillips and Moutinho 2018). This theory
focuses on the duty of the persons towards the society and those who are associated with their
decisions and actions. Ethics discusses understanding, values, attitude, characters and ethics
of the people that are examined through their decisions and actions (Dierksmeier et al., 2016).
For the Welfare of the others, one's own interests are to be sacrificed so that the person can

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do his or her duty ethically (Crossman and Doshi 2015). The employees who are associated
with fraudulent behaviour regarding the money of the customers and employees in in one of
the most reputed Bank of Australia, have brought the lives of the stakeholders at risk (Crane
et al. 2019). These people have become most vulnerable because of greed and dishonest
behaviour of the senior manager and his associate. This reveals that serving the duty ethically
is one of the most important thing in society that teaches people not to harm others for own
interest.
Conclusion:
Therefore it can be concluded that Lee Zaragoza and Kathy Ung have committed
unethical action in Commonwealth Bank of Australia which has affected the interest of the
stakeholder in this Bank. For his addiction of gambling Zaragoza has transact a huge amount
of money to his personal account and blackmailed Kathy for support. Both of these persons
are associated with the victimization of customers and employees who have trust and
dependability on the money they have secured in the bank. The action however is unethical
and discussed under the light of virtue ethics. This discussion can lead to find out proper
solution so that this type of incident to not take place in any other Organisation in future.

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References:
Belle, S.M., 2017. Knowledge stewardship as an ethos-driven approach to business ethics.
Journal of business ethics, 142(1), pp.83-91.
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press.
Crossman, J. and Doshi, V., 2015. When not knowing is a virtue: A business ethics
perspective. Journal of Business Ethics, 131(1), pp.1-8.
Dierksmeier, C., Amann, W., Von Kimakowitz, E., Spitzeck, H., Pirson, M. and Von
Kimakowitz, E. eds., 2016. Humanistic ethics in the age of globality. Springer.
Fernando, M. and Moore, G., 2015. MacIntyrean virtue ethics in business: A cross-cultural
comparison. Journal of Business Ethics, 132(1), pp.185-202.
Heimo, O.I., Harviainen, J.T., Kimppa, K.K. and Mäkilä, T., 2018. Virtual to virtuous
money: A virtue ethics perspective on video game business logic. Journal of Business
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Ogbari, M.E., Oke, A.O., Ibukunoluwa, A.A., Ajagbe, M.A. and Ologbo, A.C., 2016.
Entrepreneurship and business ethics: Implications on corporate performance. International
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Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
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Phillips, P. and Moutinho, L., 2018. Business ethics. In Contemporary Issues in Strategic
Management (pp. 178-194). Routledge.

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Poposki, C. (2019). Commonwealth Bank manager's fraud revealed as 'lavish' lifestyle
shown. [online] Mail Online. Available at: https://www.dailymail.co.uk/news/article-
7397063/Commonwealth-Bank-managers-500-000-fraud-unravelled-lavish-lifestyle-
exposed.html [Accessed 5 Sep. 2019].
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