Business Case Analysis Report: Commonwealth Bank (MGMT20144)

This report provides a comprehensive business case analysis of the Commonwealth Bank (CBA). It begins with an introduction and synopsis of the bank, outlining its services and market position. The analysis delves into the bank's business and governance structures, detailing its employee base, shareholder structure, and corporate governance framework, including board committees and delegation of authority. The report then explores the environmental factors influencing the bank, such as the green agenda and sustainability initiatives, as well as the risks the organization faces, including social, technological, and political factors. It examines the bank's business practices, including corporate governance statements, code of conduct, and workforce diversity initiatives. Finally, the report discusses the functional departments within CBA, such as human resources, marketing, and customer service, and concludes with a summary of the key findings.

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“BUSINESS CASE ANALYSIS”

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Table of Contents
Introduction......................................................................................................................................2
Synopsis of Commonwealth Bank...................................................................................................2
Question/Answers............................................................................................................................3
Business structure and governance structure...............................................................................3
Environmental factors..................................................................................................................5
Risks which organization face.....................................................................................................6
Social factors...........................................................................................................................6
Technological factors...............................................................................................................6
Political factors........................................................................................................................7
Business practices........................................................................................................................7
Functional Departments...............................................................................................................8
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
Governance of an organization sets the limit for the organization to conduct their
operations; in this company develop procedure, framework and various business practices so that
the overall objectives of the organization will be achieved (Aguilera, Judge, & Terjesen, 2018).
In the report, Commonwealth Bank is selected to understand their environmental factors which
influence the functioning of the organization. The discussion is also made on describing the
governance and business structure of the company as well as the major risk which company face
in the current business environment. Furthermore, the report also discusses the business practices
which company adopt to improve the performance and to make effective decision in the
organization.
Synopsis of Commonwealth Bank
Commonwealth Bank of Australia is a multinational bank of Australia which was
founded in the year 1911 and which provides various services to the consumers such as financial
services, banking, broking services, funds managements and several other services so that
loyalty of the customers is increased (Corporate Governance Statement, 2019). The company is
in the banking and financial services industry and focuses on developing various policies so that
company can gain competitive advantage and can adopt the internal environment according to
the changes in the business environment. This leads in affecting the company in positive manner
that is in the year 2017, the company earn up to $26.005 revenue (Policies and practices, 2019).
The company adopts various technological aspects for delivering great customer
experience and cutting costs. The decision-making process of the company operates with the

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viewpoint to deliver great customer experience, minimizing additional costs, enhancing market
share and maintaining sustainable employee retention ration. In the present year, company
focuses on developing the policies of responsible procurement in which company develop the
wide range of supplier diversity for effective supply chain management (Portney, 2015).
Question/Answers
Business structure and governance structure
The business structure of Commonwealth Bank is that company has up to 52,000
employees which also include more shareholders that is it is estimated that in the present year
company has more than 800,000 shareholders. The bank highly concentrate on offering the full
range financial services so that it can also supports the employees for building their finance
(Corporate Governance Statement, 2019). The business structure of the bank conducts the
activities though vertical integrated business structure. The company offer retail banking services
for meeting the personal as well as needs and requirements of the small sized business (Policies
and practices, 2019).
Furthermore, it is estimated that bank provide premium financial services, investment and
insurance services and business services so that it can manage the risk. In this bank also adopt
relationship management approach. Due to the changing needs and requirement of the business
environment company sometimes also adopt the matrix business structure which considered the
combination of the functional and divisional structure (Aguilera, Judge, & Terjesen, 2018).
The corporate governance framework includes the board committees which highly
concentrate o the developing the overall objectives of the organization and supports in

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developing the strategies by which the risk of the company will be minimized. In this committees
focuses on managing the values and culture with the overall personal objective of the people.
The boards delegate their authority to CEO and it can delegate it to the executive leadership
team. In this it becomes accountable to the CEO regarding the activities, policies and practices
(Portney, 2015). Further the leadership team delegate the roles and responsibilities to the people
which highly focused on the policies, systems, structure and procedure which can be developed
in the company so that effective functioning of take place in the bank. The company also has
audit committee in which it provide independent assurance as well as advice services and include
internal audit, external audit and other ad-hoc independent advice (Corporate Governance
Statement, 2019).
Corporate Governance Framework
SOURCE: (Corporate Governance Statement, 2019)

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Environmental factors
There are various external environmental factors which affects the functioning of the
company which includes temperature, water activity, maintaining emission rate, radiation, etc.
The green agenda is the major practice which affects the functioning of Commonwealth Bank it
is because of regulatory policies of the government to conduct the business by reducing the
negative impact of the activities in the local as well as global environment (Policies and
practices, 2019). Therefore, the company develop various policies which includes that company
invest more than $15 billion to invest in the lower carbon dioxide projects and reduce carbon
emissions. The company also organizes various policies and practices so that it can educate the
employees regarding the effects of climate change on the functioning of the Bank (Aguilera,
Judge, & Terjesen, 2018).
The bank also concentrates on sourcing the “100% renewable energy. The other
initiative which is taken by the bank is the leasing the office spaces and increase the designing by
reducing their impact on the environment. In this environmental factor Commonwealth Bank
also manage political factors that are the legal policies which allow the organization t conduct
their work on certain terms that is reducing the pollution (Portney, 2015). This affects the
company in both positive and negative manner that s this increase the activities of the
organization and at the same time increase loyalty among the customers.
While decision making, not only environmental factor is considered but various other
factors are also considered such as political factors, economic factors, social factors,
technological factors, etc (Sgobbo, 2018). All these factors help the company to make effective
decision so that organizational objectives can be achieved in the period of time. Therefore,
through estimation it is revealed that these factors affect the overall functioning of the company

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because of dynamic external environment and due to several external policies and practices
(Tretola, 2017).
Risks which organization face
There are various risks which affects the functioning of Commonwealth Bank which
includes:-
Social factors
There are social factors which highly affects the business conduct that is changing in the
buyers decisions and perception. Therefore, in the current year it is the difficulty for the bank to
retain and increase loyalty among the customers because nowadays customers highly viewed and
perceive that company should follow the all the activities within time (Bhattacharyya, 2016).
This affects in negative manner because of developing the policies and structure and changing
continuously according to the requirements of the customers. This influences the decision
making policies and productivity of the company.
Technological factors
There are various technological factors which influence the functioning of the activities
that is changes in the technologies which competitors adopt to attract customers. This influences
the bank in negative manner because of adopting the advanced technology which can increase
efficiency in the business (Christ et al., 2019). Therefore, it is estimated that in the current year
this affects the performance and decision making of the company because of not increasing the
revenue of the company in the similar ratio due to more competition in the external business
environment.

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Political factors
The changes in the policies and structure of the government influence the bank to follow
the activities and to develop the method of working accordingly that is changes in the tax rate
that is the year 2019 the tax rate of Australia for $90,001 – $180,000 is about 37% which is
highly more (Christ, Rao, & Burritt, 2019). This influences the performance because of
increasing the cost of the bank for performing the operations. Furthermore, the other policies
such as Environmental policy, health and safety policy also force the company to develop the
structure, methods and framework which meet the requirements of the government policies and
through which the business is conducted in ethical manner (Tretola, 2017).
Business practices
There are various business practices which is adopted by Commonwealth Bank so that it
secure and improving the financial wellbeing of all the customers and people in the society.
Therefore, bank makes necessary changes in the corporate governance in which it develops the
statement for describing all the key aspects and procedure for risk minimizing. The code of
conduct is also developing so that activities are conducted in ethical manner (Commonwealth
Bank Sustainability Policies , 2019). This overcome the problem of adopting the legal policies of
government, this influence positively because of reducing misunderstanding and reducing
corruption, bribery and provides direction to the employees.
The other business practices are to maintain workforce diversity among the supplier and
employees so that efficiency is maintained and it can overcome the technological and social
problems. It is because of getting opinions from various employees to improve the activities,
these results in increasing the performance by raising revenue of the bank. Furthermore, the bank
also makes donations in the party conferences and other political events and also reduces the

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sustainable practices for decreasing the pollution and reducing carbon dioxide in the company
(Corporate Governance Statement, 2019).
Functional Departments
There are various functional departments in Commonwealth bank which supports the
company to accomplish the objective and to earn more revenue in the long run which includes
human resource department (Aguilera, Judge, & Terjesen, 2018). This department supports the
bank to retain the competent and skilled employees in the bank, in this department the HR
executives develop various policies and structure for providing training and develop employees
in the long run.
The other is marketing department, in this department staff members concentrate on
developing several policies for promoting the services and products of the bank. In this various
marketing strategy is developed so that more awareness can be generated among the customers
regarding the financial services (Sgobbo, 2018). Furthermore, there are various other
departments in Commonwealth Bank such as customer service support department to maintain
contact and to develop relationship with the customers so that loyalty among the consumers is
increased (Commonwealth Bank Sustainability Policies , 2019). The other departments includes
research and development, administrative department, IT support department and legal
department which focuses on examining the legal challenges which is faced by all the
departments of Commonwealth bank.
Conclusion
From the above, it is concluded that Commonwealth bank is one of well-known bank
which offer various services to the customers according to their needs and requirements. The

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governance structure of the bank includes CEO which delegates their authorities to the leaders.
This supports in proper functioning of the operations. Furthermore, the ban k suffered from
political social and technological risk as well as develops the practices of workforce diversity,
developing corporate governance statement to reduce the issues and challenges. The bank also
has various functional departments to increase efficiency of the bank such as human resource,
marketing and various other departments.

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References
Aguilera, R. V., Judge, W. Q., & Terjesen, S. A. (2018). Corporate governance deviance.
Academy of Management Review , 43 (1), 87-109.
Bhattacharyya, A. (2016). Factors associated with the social and environmental reporting of
Australian companies. Australasian Accounting, Business and Finance Journal , 8 (1).
Christ, K. L., Rao, K. K., & Burritt, R. L. (2019). Accounting for modern slavery: an analysis of
Australian listed company disclosures. Accounting, Auditing & Accountability Journal ,
32 (3), 836-865.
Commonwealth Bank Sustainability Policies . (2019). Retrieved from Media Release :
https://www.commbank.com.au/about-us/news/media-releases/2015/commonwealth-
bank-implements-sustainability-policies-and-practices.html
Corporate Governance Statement. (2019). Retrieved from Commonwealth Bank:
https://www.commbank.com.au/content/dam/commbank/about-us/shareholders/
corporate-profile/corporate-governance/corporate-governance-statement.pdf
Policies and practices. (2019). Retrieved from Commonwealth bank:
https://www.commbank.com.au/about-us/opportunity-initiatives/policies-and-
practices.html
Portney, K. E. (2015). Sustainability. Cambridge: MIT Press.
Sgobbo, A. (2018). Urban Water Management 2.0: a review. UPLanD-Journal of Urban
Planning, Landscape & environmental Design , 3 (2), 125-154.

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Tretola, J. (2017). Comparing the New Zealand and Australian GAAR. Revenue Law Journal ,
25 (1), 35-44.