Essays on Commonwealth Bank versus ANZ Bank Case Study

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The paper "Commonwealth Bank versus ANZ Bank" is a perfect example of finance and accounting case study.   The success of any given enterprise profoundly relies on how the top leadership is vibrant and proactive in its response to the ever-changing business dynamics (McNamara 2011). The Great Telecoms Crash in the early 2000s is a recent example of the management caught offside by the changing business dynamics. The results are awful, as it follows massive layoffs of employees who don’ t know where to start their next life. Companies that caught up in the telecommunication industry unaware had to embark on unscrupulous methods of survival including fraudulent accounting tricks.

However, to avoid such scenarios the management is required to be sharp, vibrant, and visionary studying market trend continuously (McNamara 2011). The banking sector, in particular, due to its competitive nature, requires leaders that are continually innovative and proactive to retain the business in the market. Commonwealth Bank founded in 1911, and ANZ established in 1835, (Australian Trade Commission 2011) are among the top banks operating in the Australian market and beyond but have displayed sharp contrasting fortunes.

The varying successes of the two companies simply trace to the extent to which Henri Fayol’ s management techniques were properly or improperly applied. Just recently, in 2008 to be precise, IndyMac Bank collapsed making it one of largest bank failures in history with reasons attributed to lack of proactive measures to salvage the bank from the 2007-2009 financial crises (Australian Trade Commission 2011). In that case, this paper will show evidently how proper application of the said management techniques can propel an enterprise to a success similar to one witnessed in Commonwealth Bank while misapplication can leave the company rocked by challenges seen in ANZ Bank.

The most common management functions as outlined by Henri Fayol include leading, planning, organizing and controlling, but others can be as and when the need arises. Planning is one of the most critical management functions that require organizations to set realistic goals and objectives and institute plans that will see them achieved (McNamara 2011). However, in setting the said goals and objectives, the management should take into consideration the limited resources in the form of time, human and other resources that might be needed.

In Commonwealth Bank, planning is at the core of any agenda they would want to be undertaken. The management of the company recognizes that effective planning is imperative for the success of any assignment. After the 2008 financial crisis, Commonwealth Bank embarked on a five-year core banking modernization plans using the SAP solutions ("Commonwealth Bank Of Australia" 2013). The intention of the bank then was to attain customer-centric and profitable expansion using a simple, flexible program that will see them attend to their customers 24/7.

Besides, CBA also wanted to accelerate its market growth for innovative and feature-rich products, as well as streamline their business processes and lower operational hitches and risks brought about by legacy systems ("Commonwealth Bank Of Australia" 2013). Fortunately, at the end of five years, Commercial Bank successfully implemented the SAP program and got the full benefits it yearned for (Morrow 2012). The company institute planning strategies right from the branch level to ensure it succeed without any hitches. ABZ Bank, on the other hand, took a different turn failing to plan at all levels, a situation that is attributed to their current woes.

One of their outright absences of planning is shown by their failure to penetrate the Asian market (Morrow 2012). The company did not conduct a feasibility study to establish the comparative advantage that any Australian bank might have in Asian markets. Although the company has termed their retreat from the Asian market as something not of a worry, it is just but another show of ANZ Bank’ s management failure to plan during their expansion plans.

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