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CASE STUDY ON ANZ BANK AUSTRALIA
- 1. CASE STUDY ON ANZ BANK AUSTRALIA
- 2. Introduction ANZ Australia, being the pioneer of financial literacy in the country, is accountable in maintaining significant contribution and development of a national economic standard
- 3. CSR hub, ethics and sustainability • ANZ has 96% of CSR/ ESG ranking compared to 17268 companies • Transparency, liability, and quality are three key concern of ANZ • KPMG has assured their role for independent conduct
- 4. Rationale of accounting theories and models • Ethical code of this organisation • Economic decisions • Violation of organisational CSR ethics
- 5. Discussion of 5 issues • Issues in the maintenance of fairness and ethical conduct • Fraud and data security
- 6. Contd… • Labor rights and employee well being • Customer experience • Social responsibilities
- 7. Critical analysis of operational activities • ANZ and 10 of their trades has identified to make manipulative approach • Racism and gender discrimination is another negative aspect
- 8. Recommendation and Conclusion • Acquisition of positive customer feedback is majorly significant in operational contexts • The evaluation of ethical conducts and other operational issues are addressed here respectively
- 9. References • sustainability report of ANZ bank, 2018 OUR 2018 REPORTING SUITE [online] Available at: • <https://shareholder.anz.com/sites/default/files/au22289_anz_sustainability_review_2018_fa_online.pdf > [Accessed 4 April, 2019] • CSR issues of ANZ , 2018 ANZ defends corporate social responsibility practices at AGM [online] Available at: <https://www.abc.net.au/news/2014- 12-18/anz-defends-corporate-social-responsibility-practices/5976592> [Accessed 4 April, 2019] • CSR pyramid of Carroll, 2018 Carroll’s Pyramid of Corporate Social [online] Available at:< Responsibilityhttps://www.mbaknol.com/business- ethics/carrolls-pyramid-of-corporate-social-responsibility/> [Accessed 4 April, 2019] • Ehie, I.C., 2016. Examining the corporate social responsibility orientation in developing countries: an empirical investigation of the Carroll's CSR pyramid. International Journal of Business Governance and Ethics, 11(1), p.42755. • Krasodomska, J., 2015. CSR disclosures in the banking industry. Empirical evidence from Poland. Social Responsibility Journal, 11(3), pp.406-423. • Laidroo, L. and Sokolova, M., 2015. International banks’ CSR disclosures after the 2008 crisis. Baltic Journal of Management, 10(3), pp.270-294. • Bartlett, J.L., 2016. Multiple voices shaping CSR meaning and practice. • Rayman-Bacchus, L., 2017. Perspectives on corporate social responsibility, Abingdon: Routledge. • anz.com.au, 2019 Available at: <https://www.anz.com.au/personal/> [Accessed on 10th May 2019] • Kiliç, M., Kuzey, C. and Uyar, A., 2015. The impact of ownership and board structure on Corporate Social Responsibility (CSR) reporting in the Turkish banking industry. Corporate Governance, 15(3), pp.357-374. • Dewi, I.G.A.A.O. and Dewi, I.G.A.A.P., 2017. Corporate social responsibility, green banking, and going concern on banking company in Indonesia stock exchange. International journal of social sciences and humanities, 1(3), pp.118-134. • Lentner, C., Szegedi, K. and Tatay, T., 2015. Corporate social responsibility in the banking sector. Pénzügyi Szemle/Public Finance Quarterly, 60(1), pp.95-103. • Adapa, S. and Roy, S.K., 2017. Consumers’ post-adoption behaviour towards Internet banking: empirical evidence from Australia. Behaviour & Information Technology, 36(9), pp.970-983. • Al‐Hadi, A., Chatterjee, B., Yaftian, A., Taylor, G. and Monzur Hasan, M., 2017. Corporate social responsibility performance, financial distress and firm life cycle: evidence from Australia. Accounting & Finance. • Brody, G., 2018. When banking eats its customers. Arena Magazine (Fitzroy, Vic), (155), p.7. • Williams, B., 2016. The impact of non-interest income on bank risk in Australia. Journal of Banking & Finance, 73, pp.16-37. • Liu, M.H., Margaritis, D. and Qiao, Z., 2016. The global financial crisis and retail interest rate pass-through in Australia. Review of Pacific Basin Financial Markets and Policies, 19(04), p.1650026. • Apergis, N. and Cooray, A., 2015. Asymmetric interest rate pass-through in the US, the UK and Australia: New evidence from selected individual banks. Journal of Macroeconomics, 45, pp.155-172.
Editor's Notes
- Five CSR issues of ANZ Bank In this section, the challenges that the company faces in meeting their corporate social responsibilities have been discussed. These issues were raised by various stakeholders of the company. 1. Issues in the maintenance of fairness and ethical conduct In the sustainability report of the company, this issue has been ranked the highest. A bank should operate in an ethical and fair manner in order to build the confidence of the stakeholders for gaining sustainability. However, the customers, employees, and shareholders of the company have reported against the various conduct issues in the company. Moreover, various issues related to the financial incentives have been reported by the stakeholders of the company that has resulted in poor customer outcome and poor quality products and services. Issues related to breach of ethical code of conducts are affecting the work culture of the organisation leading to poor quality of service and lower level of customer satisfaction. According to the customers and other stakeholders, the company is not enough transparent regarding their product disclosure policy, bank fees and charges and policies regarding debt collection, etc. According to Clarke’s theory, CSR involves environmental assessment along with stakeholder management for effective risk management. A company should first recognise the CSR issues, analyse the drivers of it and then should develop business strategies accordingly so that the company can gain sustainability easily by managing the risks associated CSR process. Here ANZ should also try to be transparent about their financial policies to the stakeholders and should try to follow the rules of business ethics in order to prove themselves to be trustworthy (Krasodomski, 2015, p.406). 2. Fraud and data security In a banking organisation, data security is essential to prevent unauthorized persons to access confidential information regarding customer accounts. However, some issues related to customer security and fraud cases have been reported against the company. This can adversely affect the reputation of the company and lower its position in the industry market. According to Carroll, the strategies of a business organisation should satisfy the ethical requirements of the consumers, shareholders, employees and the surrounding community in order to gain sustainability in the industry market. The company also thinks in the same way and is trying its best to improve its data security system in order to prevent any kind of forgery. Moreover, the company is trying to educate the customers about the risks associated with online transactions and online account accessing along with the measures to prevent such risks (Laidroo and Sokolova, 2015, p.270). The company has set targets for ensuring the safety of the customers and to improve their service quality and have achieved 32% of their targets and 65% are in progress. However, the company could not achieve 5% of its targets (sustainability report of ANZ bank, 2018).
- 3. Labor rights and employee well being The employees and labors are facing various ethical issues related to the work culture of the organisation. This can be considered to be a severe risk which may affect the service quality of the organisation. Employees and labors are important stakeholders of a business organisation as the reputation of the company more or less depends on their efficiency and conduct. Therefore, the interests of them are not valued, otherwise, it may indirectly lead to the low level of customer satisfaction. Carroll also thinks that the ethical responsibility of an organisation is to value the interests of employees and labor. An organisation must ensure the well being of the employees in order to improve the quality of products and services. ANZ bank has taken various initiatives to improve the work culture of the organisation. The company has implemented new policies for maintaining the physical and mental health of its employees. Moreover, the company has promised fair and equal wage to the labors along with freedom of association so that the labors realize that their interests are valued and their rights are protected in the organisation (Ehie, 2016, p.42755). 4. Customer experience The success of a business organisation is directly related to customer experience. Therefore, the organisation should give utmost importance to the requirements of the customers. However, the requirements of the customers are changing with time. Therefore, it is a big challenge to satisfy the diverse needs of customers. According to Becker Olsen, corporate social responsibilities of a company is associated with strategies for improving financial performance. Improvement of financial performance can be possible by satisfying customer requirements (Bartlett, 2016, p.44). The customers of the company reported against the poor quality of products and services of the company during the last few years. Therefore, the company has taken various initiatives in order to provide a better customer experience. The company has given the right to the customers to report against all matters that hurt their emotion or goes against the ethical code of conduct of the company. The company has followed the recommendations in the Retail Banking Remuneration Review of Stephen Sedgwick and has decided to strengthen the alignment of retail bank incentives and practices for improving the customer experience. Moreover, the company has promised to maintain transparency in disclosure of financial policies and other terms and conditions related to deposit and transactions (CSR pyramid of Carroll, 2018 ). 5. The bank defends its social responsibilities In 2014, there was a dispute centering the bank’s social responsibility to help the farmers. The bank does not have any policy for helping the farmers. According to Gonski, the chairman of ANZ, the AGM of the bank has given utmost importance to investments for large financial and construction projects that can ensure a high-profit gain. Gonski says that moral police is more responsible to help the farmers rather than a bank. A banking organisation must focus on gaining high profit and sustainability in the industry market (CSR issues of ANZ, 2018 ). It is true that the main focus of a business should be the improvement of its profitability level. In various theories of CSR, it has also been acknowledged that a business organisation must be profitable to improve the economy of the nation that eventually leads to the improvement of the communities. Carroll has also considered profitability as one of the social responsibility of an organisation. However, according to Carroll, it is the philanthropic duty of an organisation to take initiatives for the improvement of its community and the overall society.
- At the end of the chapter it can be concluded that the ANZ bank Australia has been accountable to several issues in the current business environment. On the other hand, the financial institution is already on a potential marketing segment that needs to be maintained throughout their operating period. It could surface an understanding about the corporate social responsibility maintenance of the business organization and it overall estimation would be highly incorporative if the associated issues are mitigated accordingly. Customer experience is quiet an important factor in present day business environment and that is why the acquisition of positive customer feedback is majorly significant in operational contexts. It would also substantiate that employee rights and social well being are some of the major components associated with business CSR reports and if an entity scores good rank in this criterion, then customer experience would automatically be positive. The evaluation of ethical conducts and other operational issues are addressed respectively in the business context of ANZ Bank and data security and fraudulent activities are also discussed in this aspect. The chosen financial industry must address these issues reigning in the operational sector and elimination of such activities would enhance the market reputation of the organization eventually.