WESTPAC BANK ETHICAL PRACTICES 14 Westpac Bank Ethics and Culture: Students Name: Institutional Affiliation: Professors Name: Date: 1.0 Introduction
1.1 Westpac Background
Westpac Banking Corporation was started in the early 1817 as it was among one of the first banking institutions in Australia. The institution has expanded to different branches in the country including the other main parts of the world such as London, Singapore, Hong Kong and New York. The corporation has created employment opportunity too many individuals as it has more than 34000 worker that helps in the daily activities of the institution (Lee, 2017). In all the institutions, ethics and culture are some of the aspects that really need to be taken into consideration as far as the daily operation of the bank is involved. This tries to prove and show transparency in the organization trying to curb some of the immoral activities that are likely to happen in any institution (Pandey, et al. 2016).. This becomes a mirror for the organization to see what is good and needs to be avoided in the organization. Just as most of the organization, Westpac Bank is also prone to different unethical practices that are likely to affect them. This in a way affects the operation of the company, the company image and may also have an effect on the performance of the organization in terms of sustainability (Moroko, et al. 2016). 2.0 Ethical practices at Westpac
For an organization to be termed as a success, it has to prove various aspects in the business part from only the point of financial reporting as this is not only success aspect of an organization. One has to keep in mind the bank culture, management philosophy and ethical practices as its very important to determine the relationship between employees and customers. Having a good relationship acts as a motivation factor to the company as this may help it grow as attracting more customers to the organization. For all this to successful, there is need to take in mind the aspects of moral practice in the organization (Ford and Richardson, (2013). As from the past review, its proved that an organization that takes into consideration the ethical practices of the employees takes less time in making their decisions as this is seen from the contributions from the loyal employees who are more than willing to participate to see their organization move forward. Employees gets motivated when they are given opportunity to air out their views in any decisions made in the organization. This also improves their loyalty in the organization which reflects to the success of the business (Moroko, 2016). Ethics in the organization does not only improve the performance of the organization. At a different point this also improves the company image from the outside. It would be very devastating for the customers to learn that there are a lot of unethical practices that are being practiced in their banking institution. This would make some of them to quit the organization and join other companies which are more appealing in terms of their services to the customers (Trevino, et al. 2016). Performance is very vital as any potential investors would need to review the banking records and the financials reports before they can invest as they would be more than willing to only invest in organization whose future prospect of promising. By ethical measures means that the organization needs to be open regarding the advantages and the problems that are associated with their banking facilities (Bowie, 2017). 3.0 Analyzing of this scandals using learning theories
Westpac has been faced with many financial problems during the past financials years as among them was allegation that the bank was asserting for interbank rate. Also there was some claims that the big four banks have been dismissing traders whose expenses had gone up with yet this is in accordance to the ethical practices which is expected in any banking institution (Westpac Sustainability Report, 2016). This went further to an extent where a salesman was sacked and this led to the organization being sued as he claimed that the increased expenses was associated with his medical bills. This raised alarm to many employees making them to leave the organization as there are also some of bad cultures that are irritating at workplace (Carrol et al. 2014). The bank organization had to improve its corporate social responsibility so as to improve their ethical practices. Taking into consideration some of the important theories would improve the organization image and performance as this include; virtue ethics, intellectual virtue, and moral virtues, teleological and deontological ethics (Moroko, et al. 2016). 4.0 Barriers affecting ethical practices
Westpac faces many difficulties in their organization, this can be related to the case where a manager was bullied and ignored at one point when he raised his own concerns regarding the technological advancement at the organization. This discourages even other employees who may be willing to take part in views as there is that fear of them being bullied. This proves very difficult in enhance ethical practices in the business and abide by them as if the management does not lead as an example, its very difficult to promote this culture in the organization (Chell, et al. 2016). 4.1 Effects on financial position
Unethical practices have effects on the financial performance of the company. Taking back to the recent financial years, its reported that the organization has set lower profits as expected. This can be as a result of the decreased customer satisfaction which makes some of them to even reconsider moving to the other banks. There has also been recorded the bank to have a huge debt which reduces their profit margin. However the organization reports shows that the company has more cash as compared to the previous years although the dividend payout ratio for the organization has been said to be decreasing with time (Ford, et al. 2013). The decrease in the profit is an aspect that reflects different thing in an organization. This has a direct effect on the return on equity. The effect on cash can be related to the sale of the Australian wealth management business. There is also a decrease in the profit after tax as their also a reduction in the operating income by around 3% (Lee, 2017). 4.2 Impact on company public image.
Any organization works hard to maintain a good market reputation as the customers are the main shareholders on any organization (Craft, 2018). Westpac in that case has lost their customers confidence as this is a result of the reduced customer satisfaction and other unethical practices in the organization in the prevailing financial years. This drop is impacted due to the drop on both the home and the non-home loans (Sydney Morning Herald 2016), reports continue to show a lower consumer satisfaction despite the determinations of the organization to fight this immoral practice in the business (Carrol et al. 2014). (Appendix 2) tries to compare the customer satisfaction of different banking institutions. This shows that this has reduced which is the reason as to why most of the clients prefer smaller banks to the major banks. This is an effect of the unethical practice at most of this banks making it hard for the customers to maintain their loyalty with them. This analysis is true as when you do a comparison, Westpac is no different showing this unethical practices impacted the organization negatively reducing their consumer confidence and public image in most of its main marketplaces. (Appendix 3) (Leonidou, et al. 2018). 4.3 Impacts on the CSR
Being one of the member of the Gold Community member of the Global Reporting Initiative. This reports are to date analyzed using a different framework which helps in improving the sustainable reports of the business. In Westpac reports however, the reports also contains the external KPMG which ascertains that the CSR takes into account several indicators in its material disclosure as shown in Appendix 4 (Carrol et al. 2014). 5.0 Recommendation
5.1 Need Analysis
The above analysis shows that there is need for the company to put more efforts. They need to act ethical in all perspectives. This is aimed at improving the financial performance of the company as this would also help them to attain the stated objective and organizational goals (Lee, 2017). For a start, there is need to make some changes as this would improve the organizations ethics and improve the banking sector. For all this to happen, they need to consider improving their public image as gaining the customers confidence can be the key to all the problems at hand. Employees should also be motivated to participate in the day to day decision making in the organization so as to raise their confidence as this would also make them feel they are part of the organization. (Moroko and Duffy, 2016). The decision of selling some of their branches which are not doing well should be encouraged as it would be easier to manage smaller organization both in its operation and decision making (Lee, 2017). 5.2 Ethical training programs
The bank management need to organize for training programs for their employees so as to equip them with knowledge on how they can deal with different customers and as a result this would improve customer satisfaction in the organization. This would reduce unethical scandals in the organization that are mostly violated by the employees instead of sacking them as this shows disunity in the organization. (Moroko, et al. 2016). 5.3 Evaluation
Evaluation is an important aspect in the organization which should be done frequently. The organization needs to do this even thrice a year as this shows the progress in the set strategies of the organization so as to see if there are any positive progress as a result of this changes. 5.4 Implementation
The director should also take part in the implementation of this roles and make sure that all the employees act ethical in their operations. The management needs to change their governance type and adopt other governance strategy. This plus the unethical CSR activities promotes the unethical practices in an organization (Carrol et al. 2014). 6.0 Corporate social responsibility program
The organization has decided to uphold some strategies that would help it in improving its ability and improving their capability to make the most of ethical practices plus providing sustainable environment to both the workers and the customers. This can all be done by adopting some of the CSR that are expected to improve the ethical practice in an organization. The organization has an advantage of being a supporter of climatic and carbon finance, which makes it necessary for them to implement a wider range of initiatives with an aim of achieving most of its initiatives to improve the ethical practices and good culture in the banking sector (Lee, 2017). Plans that are aimed at patterning with other organization to achieve maximum and efficient practice in the organization which be attained by additional training of the employees which would improve the code of conduct of this employees. This at some point would reduce the common scandals that are very similar in most of this organization (Moroko, et al. 2016). If the organization would improve its CSR strategies, this would earn the organization more trust from the customers which in a positive way would improve the image of the company. The organization also tries to prove itself to the operating market as they promote the aspect of social and environmental aspect in the market (Carrol et al. 2014). 7.0 Conclusion
Just as stated in the essay, Westpac just as the other banks is faced with different unethical practices. All this have impacted the organization negatively which necessitates that the bank increases its effort in trying to solve this problems. The current CEO has set up strategies which are aimed at improving the operation of the firm. With time there is hope of the company regaining its public image which would regain its markets share. In the long run all the aspects including the financial performance and the public image of the organization would be improved. This would increase customer satisfaction and earn their loyalty at the same time. The difference in the sustainability reports may be implicated to the difference in the type of material which are used in reporting purposes and that used in implicating the image of the organization. 8.0 References
Bowie, N.E., 2017. Business ethics: A Kantian perspective. Cambridge University Press. Broad, C.D., 2014. Five types of ethical theory (Vol. 2). Routledge. Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and stakeholder management. Nelson Education. Chell, E., Spence, L.J., Perrini, F. and Harris, J.D., 2016. Social entrepreneurship and business ethics: does social equal ethical?. Journal of Business Ethics, 133(4), pp.619-625. Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer Netherlands. Lee, N., 2017. Walking the Second Mile before the First: A Corporate Social Responsibility Conundrum?. In Stages of Corporate Social Responsibility (pp. 139-159). Springer International Publishing. Moroko, L. and Duffy, S., 2016. Trashing the brand: ANZ and CBA could pay a high price for choosing profit over people. The Conversation, 18. Craft, J. L. (2018). Common thread: The impact of mission on ethical business culture. A case study. Journal of Business Ethics, 149(1), 127-145. Trevino, L. K., & Nelson, K. A. (2016). Managing business ethics: Straight talk about how to do it right. John Wiley & Sons. Pandey, S., & Rishi, P. (2016). Linking CSR and sustainability with organisational culture, values and business ethics-a qualitative analysis of Indian IT companies. International Journal of Intelligent Enterprise, 3(3-4), 205-231. Leonidou, C. N., Skarmeas, D., & Saridakis, C. (2018). Ethics, sustainability, and culture: A review and directions for research. In Advances in Global Marketing (pp. 471-517). Springer, Cham. 9.0 Appendices
Appendix 1 Appendix 2 Decline in Consumer Satisfaction Appendix 3 Decline in Consumer Satisfaction in Australia Appendix 4 Highlights of Sustainability Consumer satisfaction among diffrent channel 6 months to mach 2017 internet banking mobile banking branch banking advisor banker phone banking 90.8 90.7 88.5 83.7 79.5 6 months to march 2018 internet banking mobile banking branch banking advisor banker phone banking 89.5 89.7 84.9 80.900000000000006 76.7
