Overview of Commonwealth Bank

Discuss about the Strategic Management Of Commonwealth Bank in Australia.

The purpose of this report is to demonstrate the strategic objectives of the chosen organization. The organization that has been selected for this organization is Commonwealth Bank in Australia. The corporate governance is a very important for the organizations to discuss upon. The organization is one of the biggest organizations in the banking industry. The organizations have to think upon the ways on how they can improve upon their business operations. In this paper, many important things will be discussed to overview the systems that are responsible for the betterment of the organization. The objectives and goals of the organization has to be fulfilled in order to be successful. The stakeholders will have to be involved in a better manner so they can make the suggestions on how they can improve their performance. The management of the organization should always look forward to improve the ways of their business operations. The value chain analysis on the organization will have to be done here. Another analytical tool that will be used in this paper is the VRIO analysis. The strategic group diagram will be designed to understand the market position of the organization.

The Commonwealth Bank is one of the largest banks in the country. They have branches in many countries like Asia, New Zealand, North America, Europe and many other regions (Commbank.com.au, 2018). The corporate governance of this organization is of very high standard. They always thrive to maintain the highest standards of corporate governance. They complete their business activities in a manner that the organization can yield the best results. The bank is very much committed towards maintaining the well-being of the customers. They maintain the best practices indeed to provide the best financial practices. The headquarters of this organization is located at Sydney in Australia. The Commonwealth Bank has more than 1000 branches all over the world. The company has been very successful in governing their employees in a good manner indeed (Commbank.com.au, 2018). The role of the bank is to develop the employee performance in a way that they can provide the best outcome for the company indeed. They also have their focus on the corporate social responsibility. This will enhance their brand reputation indeed. The management team of the company always provide the employees with the better opportunities for the career growth,. The stakeholders of the organization are also very much aware of their responsibilities. They look to enhance the business communities in a way that most people can be benefitted (Martín, Miguel & Sánchez, 2013).

Objectives of Commonwealth Bank

The objectives of the bank are very much directed towards the betterment of the organization. They put much stress on the diversity (Commbank.com.au, 2018). This helps them to get a better place in the competition market (Coelho & Henseler, 2012). They aim to provide the best opportunities for the financial well being of the people of Australian business class and the common people. They provide their customers with the integrated financial services all over the world. This helps them to gain the customer trust and loyalty. They thrive to support their employees and protect them always. They also take very quick actions about any reports of the unethical behavior from any of the stakeholders (Bourne, 2016).

The ownership structure of the company is also very much useful for the employees to understand their roles and responsibilities (Lunenburg, 2012). The leaders of the organization are very much committed towards the implementation of the different frameworks for the betterment of the organization. The long term strategies of the Commonwealth Bank always provide the best options for the security of the employees and the different stakeholders. The market conditions are very much tough so the organization will have to cater to these changes properly indeed. The leaders of the bank always work very hard to meet the expectations of the shareholders properly. The economic environment in general has been declining so it would be highly profitable for them to make the profits (Lunenburg, 2012). The hierarchy managers always guide their subordinates to perform even better all the time and help the organization grow stronger.  The leaders of the organization are very much concerned about maintaining the diversity of the organization. The leaders use the technology specifically to connect with the employees all over the world and review the progress of the organization (Martín, Miguel & Sánchez, 2013). The running of the operations will be enhanced by the use of the technology based mediums. The revenues of the organization will be increased by the proper communication between the employees and the management (Coelho & Henseler, 2012).

The corporate governance mechanisms are very important for all the organization to maintain properly. The governance mechanisms of the organizations are generally categorized in two sets. These are the internal governance mechanisms and external governance mechanisms. It is a very much important aspect for the Commonwealth Bank as well. The internal governance mechanisms of Commonwealth Bank are used to control the overall progress of the organizations towards betterment (Wintoki, Linck & Netter, 2012). If the operations of the Commonwealth Bank are not being directed towards the measured objectives of the organization, the internal governance mechanisms will take up the proper actions to redirect it. These governance mechanisms always tend to provide the best ways to direct the organization towards the success by managing the internal stakeholders of Commonwealth Bank like the managers, employees and the owners. The internal audits will have to be made properly for the development of the business as well. The CEO regulates the internal governance mechanisms of the company. He has to discuss upon taking the positive strategies to cope up with the different material risks associated with the company. The internal governance mechanisms will always work to enhance the business profits and increase the level of customer satisfaction. The CEO always formulates the strategies for making sure that the market closes at good points in the share market. As a part of the internal governance mechanism, the performance reviews of the employees are done on a regular basis. The strategic objectives of the organization will have to be met properly by the organization as well (García-Morales, Jiménez-Barrionuevo & Gutiérrez-Gutiérrez, 2012).  

Internal Governance Mechanisms

The external governance mechanisms, too, are very important for the betterment of the organization indeed. These mechanisms are controlled by the people who are outside the organization but still have an impact of the business operations of the organization. The external governance mechanisms for Commonwealth bank are the suppliers, Federal Government of Australia, the different trade unions and the business regulators (Thomsen & Conyon, 2012). The different issues raised from the external governance mechanisms are reported to the external business stakeholders of the company (Bushee, Carter & Gerakos, 2013).The external stakeholders have to handle a huge role in the mitigating of the risks and be an active member of the risk management plans. The suppliers and distributors are the ones who must be able to guide the risk management plans in a proper way. The organization’s Group Risk Appetite Statement will have to be reviewed by the organization committee and recommend some actions to be taken by consulting with the government properly. The external stakeholders should be allowed to voice their opinions about the ways the performance reviews can be developed and risk management strategies can be implemented properly (Bushee, Carter & Gerakos, 2013).

The cost leadership strategies should be implemented in such a way that Commonwealth bank can achieve the competitive advantage over the other organizations in the banking industry (Wagner & Hollenbeck, 2014). The organization will look to cut down the maintenance and other additional costs to a minimum level so they can achieve the better customers service and provide the customer satisfaction in a better way indeed. If the Commonwealth bank provides the customers with the better products and services they will surely go on to get the competitive advantage as well. The higher prices will not attract the customers as customers will always want to get their job done by spending the minimum money. This is a very important development strategy that the Commonwealth Bank has taken over the years. The costs for maintaining the business units will definitely help the organization to thrive better in this competitive business environment (Babatunde & Adebisi, 2012).

There are many ways in which Commonwealth bank will improve their strategies to get higher number of customers (Campbell, Coff & Kryscynski, 2012). In order to enhance the cost strategies, the organization Commonwealth Bank will look to improve their productivity through the recruitment of their efficient employees (Teeratansirikool et al., 2013). The employment costs will have to be distributed properly as well. The Commonwealth Bank will like to use the bargaining power to lower down their productivity costs. However, they make use of the technology to get the maximum feedbacks and supports from their valuable stakeholders. The lean production methods are also used by the Commonwealth bank to curb down their operational costs. Commonwealth bank has been keen on using the best effective distribution channels so they can make the most of it in terms of gaining the trust of the customers. Commonwealth Bank can be posed at a very high position in the banking industry than their major rivals.

External Governance Mechanisms

They have also used their money on providing the cyber security for the accounts of their customers. This has been one of best differentiation strategies to get the trust of their customers. They have always put more focus on the better customer service and this tends to make them unified all the way. They maintain all the ethical guidelines in terms of doing the businesses indeed. One of the best differentiation strategies for the company is their organizational culture. This always motivates their employees to work harder as the integration is very high enough. They invest in various processes like the talent management, people development and many others (Vaiman, Scullion & Collings, 2012). The needs of the customers are continuously evolving. This is why they have applied the use the best technologies so they can provide the best banking services like preparing the banking accounts, debit cards, preparing the transaction history and other things within a minute. Commonwealth bank also makes way for new and innovative processes that help their customers to get the new services indeed. Thus the level of customer satisfaction always increases.  

The value chain analysis is one of the most useful analytical tools to measure the effectiveness of the strategies taken up by the organizations. Commonwealth bank is also such an organization that has to be measured according to their value chain analysis as well. The activities of the Commonwealth Bank can be analyzed through this tool as well. The cost and differentiation strategies of the organization are the basic things for the development of the Commonwealth bank (Gereffi & Fernandez-Stark, 2016). The company has aimed at providing the customers with the better quality services at the cheapest price. If Commonwealth bank is successful in competing in this competitive market, this will surely enhance their business capabilities as well (Fearne, Garcia Martinez & Dent, 2012).

Inbound logistics

The services they provide to the customers are distributed by the suppliers within the proper given time. This helps them to provide the customers the best products and services within the given timeframe.

Operations

The operations of the company deal with providing the banking services to the customers. They provide the value added services to the customers for earning the benefits for the company. The different strategies will have to be implemented to provide the customers with the best services most of the times (Fearne, Garcia Martinez & Dent, 2012).

Cost Leadership Strategies

Outbound logistics

The different services and products are delivered at the door step of the customers properly within the time. If the customers get the products and services within the proper time, this will lead to the customer satisfaction and might probably increase the revenue rates as well (Robson, 2015).

Marketing and Sales

The marketing work is done by the organization in a good manner in this age of globalization. The best eligible products are marketed by the organization as compared to the other competitors. The promotional activities of the bank are done through the social media platforms. The customers can contact the branches through their websites and give the proper feedbacks as well (Jobber & Ellis-Chadwick, 2012).

Service

The Commonwealth bank has the biggest network of the ATMs and branches. Thus their employees solve all the banking related problems of the organization. They provide services like loans, debit and credit cards, savings accounts and others.  

Firm infrastructure

The infrastructure of the organization is very well designed. The communication between the hierarchy and the lower level managers is very smooth and friendly. This gives the organization a chance to build a good organizational culture and the employees can very well fit into this organization.

Procurement

The source materials for providing the banking services to the customers are well mapped and they are able to obtain the best profits in the market. The procurement challenge for Commonwealth bank remains to get the best service quality as per their allotted budget.

Human Resource Management

The HR department of the Commonwealth Bank always aspires to provide their customers with the best service. In order to do so, they recruit the best personnel in the market. This adds to the brand value reputation of the company as well. The HR managers give them the proper motivation that will help them them to build their careers.

Technology

The use of technology in the organization is immense. The use of the technology and computers help them to eradicate the use of the papers. Another advantage is they can send all the information in a faster method.

Valuable

The products and services Commonwealth bank sells are very much valuable from the customers’ end. They provide the customers with the better savings account facilities and other transaction facilities. This gives them the proper competitive advantage over their competitors (Jobber & Ellis-Chadwick, 2012).

Rare

Commonwealth bank always caters to create the best value added services for their customers for their customers that work as a very important source for their competitive advantage. The resources that are very rare add to gain the competitive advantage of the company (Baden-Fuller & Haefliger, 2013).  

Improvement Strategies

Imitability

The resources that are used for Commonwealth bank are generally very costly. It is very problematic for the other banks to imitate their resources. This is why there are high chances that Commonwealth bank will achieve the needed competitive advantage over their rival companies (Cardeal & Antonio, 2012).

Organization power

The management structure and the organizational culture of Commonwealth Bank is very much organized. The different processes, policies and structures are very helpful to gain the edge. They have the potential to live up to the highest expectations (Baden-Fuller & Haefliger, 2013).

The most important factor for the Commonwealth bank is to gain the competitive advantage over their rivals in Australia, New Zealand and other countries. The implementation of their policies regarding the corporate social responsibility will be very important to lead them gain the better of the other organizations in their industry (Schwartz, 2017). The product and quality standards of the Commonwealth Bank will have to be developed much more than the current times. The efficiency of the employees will have to be increased as well. The Commonwealth Bank has focused on improving their brand image to a higher level and this will be highly important for the organization as well (Urbancova, 2013). The most important priority for the banks is providing the best customer service. They have focused on the improvement of their business banking services, developing the technological and operations and gaining the team spirit by practicing the dynamic leadership (Caligiuri & Tarique, 2012). They will look to focus more on involving with the business communities and earn their trust. Another strategy to gain the competitive advantage will be to develop the lean processes (Schwartz, 2017). More efforts will be put on building the team spirit properly. These things will help the organization to be more effective in collaborating with the powerful suppliers. Thus their effectiveness will increase and they will sustain their competitive advantage properly.

Some recommendations can be given in terms of improving the working of the Commonwealth Bank. They will have to work hard on some of the areas where they must provide their customers with the best services altogether.

• Commonwealth bank will have to upgrade their risk management policies to cover the customers from any problem being occurred.
• The shareholders will have to be more responsible in providing the customers with the best opportunities so they could invest more in Commonwealth Bank.
• The use of the technology will have to be increased between the higher authorities of the bank and the subordinate employees. The customers will also have to be updated with all the relevant news as well.
• Commonwealth bank should be more active in managing the day to day activities and providing their employees with more facilities to retain them.
• More rewards and incentives should be given to the employees who perform well.

Conclusion

This report can be concluded by saying that the chosen organization Commonwealth bank is considered to be one of the largest banks in the banking industry in Australia. Its worldwide business activities have been very much in talk since they are the giants. The organization is very much confident about their processes and policies and they will look to implement their business practices for the betterment of their business. The strong corporate governance mechanisms will help the organization to achieve better results indeed. The different ways to attain the competitive advantage will be helpful for them to be the real market leaders in the industry. The challenges can be overcome by putting the business practices into the right direction. The organization will look to implement certain policies about customer service and leadership that will surely lead them towards the major organizational success.

References

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