Organisational Effectiveness and Business Context

Question: Discuss about the Organisational Effectiveness and Business Context. Answer: Introduction: Innovation is a key for the sustainable market success of the modern companies. The entrepreneurial approach is a supporting factor for successful promotion and implementation of the innovative ideas within a business. For successful completion of this report, the author has discussed the approach of Commonwealth Bank Australia towards innovation and entrepreneurship. The author has divided the report in four parts, in the beginning, the key factors related to Commonwealth Banks business has been briefly described. Then, the entrepreneurship and innovation and its implication upon Commonwealth Bank has been discussed. Then the influential domestic and international factors to the companys operation have been identified by the author. Then he has concluded the report with a summary of the discussion. Key factors related to the business of Commonwealth Bank Australia: As discussed by Kanagaretnam, Lobo and Wang (2015), the modern organizations follow complex business structures. Commonwealth Bank is also following the structure of a company which shareholders and board of directors. Being a multinational company Commonwealth Bank is vulnerable to a number of situational variables like the socio-political changes or the legal requirements. In the Australian market the company is operating with immense success and customer preference in favour of the brand. However, with the tremendous change pattern of the technology and its utilization in banking service sector the company is concentrating on technological innovation. By focusing on employee engagement, the company follows a High Performance Work Practices. Entrepreneurship and innovation and its implication upon Commonwealth Bank Australia: As mentioned by Beck et al. (2016), in the competitive world of modern business, introduction of innovation in the business model and the product offerings is essential to address the ever widening requirements of the consumers and obtain a competitive advantage. Innovation is greatly associated to the resilience nature of the companies. The companies which are flexible enough to change its strategy or product line opt for renewal of its business approach and gain a substantive level of competitive advantage. As mentioned by Souto (2015), with the renewal the companies become able to serve the unfocused area of consumer demand and it drives a revolution in the industry by changing its fundamentals. In the context of Commonwealth Bank Australia, the company understands the importance of being resilient for incorporating the contextual factors in their service or business operations. Hence, the company is continuously investing a significant amount from its revenue on the innovation mainly on the sector of online banking and providing more convenient transaction or banking services (Schlagwein, Thorogood Willcocks, 2014). Innovation can be of a sustaining or disruptive one. As discussed by King and Baatartogtokh (2015), the sustaining innovation involves the year-by-year incremental improvement of the existing products of a company. On the other hand, disruptive innovation talks about introduction of products or services (not essentially better than the existing ones) those are more convenient or less expensive than the existing products. With disruptive innovation, the companies can create a new channel of demand for the customers (Dixon et al., 2014). In the context of Commonwealth Bank Australia, the company is focusing on both the sustaining and disruptive innovation pattern. As mentioned by the company website, it was the first bank in Australia that offered an online banking service to the consumers. As mentioned by Bajada and Trayler (2015), the introduction of the online banking can be identified as a disruptive innovation, and the company has essentially changed the way of the banking industry in Australia with its offer of online banking and transaction services. However, in the recent years, the company is typically focusing on the sustaining innovation pattern. The CBA is focusing on improving its services in the sectors like mobile application- CommBank App, Net banking, ATM etc. the company is largely focusing on providing better security services to the customers in online transaction. With the strategy of sustaining innovation, the company is now providing services like financial tool kit, online statement in the net banking service (Personal banking including accounts, credit cards and home loans - CommBank, 2017). On the other hand, the company is following an open innovation process. As discussed by Henry Chesbrough, open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology (Felin Zenger, 2014). Commonwealth Bank of Australia largely believes that the innovative minds and ideas can be scattered all over the world. Hence, the company has innovation labs in various countries (Personal banking including accounts, credit cards and home loans - CommBank, 2017). As mentioned by Kelly Bayer Rosmarin, the Group executive of Institutional Banking and Markets, Commonwealth Bank, these labs will allow them to partner with the brightest minds across the citys accelerator, government, university, start-up and financial technological groups to further develop original and innovative solutions for their clients all over the world (Personal banking including accounts, credit cards and home loans - CommBank, 2017). For encouraging innovation Toyota promotes creativity and innovation. The company opts for a decentralised organization which supports collaboration. With a focus on the norm of idea generation and risk taking, the company focuses on promoting diversity in the human resource, as the company believes that Different people bring different experiences and it leads to diversity in thoughts (Personal banking including accounts, credit cards and home loans - CommBank, 2017). For supporting innovation, positive entrepreneurial skills are required among the management (Montague, Larkin Burgess, 2016). The board and the leaders of the Commonwealth Bank are concentrated on identifying the new market opportunities. With an organizational statement of being a jetski in the context of situational changes, the company largely supports the climate of innovation. The major innovative step the company took with the idea of addressing the future demand was the introduction of the net banking system. It can be identified as a promising Entrepreneurship skill in the leadership of the bank (Adriansyah Afiff, 2015). The company is successfully utilizing the innovation lab to collect thoughts as an opportunity register, identify the potential risks and promoting adaptive execution with the help of other credible organizations. PESTLE analysis: As discussed by Bajada and Trayler (2015), identification of the situational or contextual variables is important for the companies for lay down a successful business strategy and implement it for the best utilization of the domestic and international contextual factors. Political: As mentioned by Willcocks and Reynolds (2015), the liberal capitalistic democracy of Australia is indulging the financial companies to invest on the business sectors and consumer consumption. The banks are open to the business lending which is typically supported by the liberal government. It was the major factor of CBAs change to the peoples bank to a private organization (Personal banking including accounts, credit cards and home loans - CommBank, 2017). Economic: With the economic deregulation in the international sector, the Commonwealth bank has prosperity in the growing economies like India or China. Moreover, in the Australian sector, as discussed by Cummings and Durrani (2016), CBAs capital strength is neutral. Therefore CBA is strengthening its capital levels with the help of the Basel III regulatory capital framework which is likely to have stronger influence on CBAs neutral capital setting or have better outcome on individual bank capital management philosophies. Social: As mentioned by Willcocks and Reynolds (2015), the Commonwealth Bank plays an immense responsibility in supporting and promoting the communities by serving financial literacy programs and providing aids in working together with community organization. The society of Australia is grown enough to support the business of this organization. Moreover, the financial literacy among the educated group is helping the company in operate with success. Technological: As mentioned by the company website, it is the first Australian bank offering its customer real time settlement and banking. It also provides a 24 hr access to banking service through EFTOS and ATM or telephone banking. It is the most famous online broker providing facilities like Net bank and Comm Sec (Personal banking including accounts, credit cards and home loans - CommBank, 2017). Environmental: The growing environmental concern in the Australian and international market has directed the company to focus on Carbon Reduction Target and investing on the low carbon economy. The company is focusing on replacing inefficient lighting and other electric consumptions. These have great impact on commonwealth bank; therefore in 2012 CBA won sustainability awards for built environment (Personal banking including accounts, credit cards and home loans - CommBank, 2017). Legal: Being an Open Advise Review program conductor, the Commonwealth Bank negotiates with the independent parties, prepare and focus on customer documentation etc. as a commercial bank it conforms to the Acts like Anti-Money Laundering and Counter-Terrorism Financing Act 2006, the regulations of The Reserve Bank of Australia and many more (Kanagaretnam, Lobo Wang, 2015). In the international sector, the company follows the legal frameworks on the issues like reserve rate, the rate of interests, laws regarding employee benefits etc. Conclusion: In conclusion, it can be said that the commonwealth bank is serving in the international sector. Hence, a number of contextual factors are influencing the business of the company. In the volatile world of business, the company is focusing on sustaining innovative practice to address the un-approached parts of the customer demands. 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