Strategy of National Bank Australia

Question: Discuss about the Strategy of National Bank Australia. Answer: Introduction NAB is the national Australian bank in Australia that is ranked as forty first largest banks in the world. It is one of the four largest financial institutions in Australia in terms of market capitalization and finance. The branches of NAB are spread across not only Australia but also New Zealand, it operates 1,590 branches and service centers in the two countries. The strategies used by the company affects the working of the company. Strategies of the company play an essential role in the management of the organization. The companys success depends on its strategies. Proper formulation of strategies helps the organization achieve its goals, mission and objectives. Competitors play an essential role in determining the strategies for the company (Bratton and Gold 2012). Various external and internal factors affect the working of the business. SWOT and PESTELL analysis tool is used to conduct an analysis. The focus of the company should be on the strength and opportunities that should be used for the advantage of the company while its weakness and threats are used to improve the performance of the company. The bank is spread across two geographic regions and organized into eight divisions. The company aims at achieving competitive advantage by properly formulating the strategies. Mission, vision and competitive advantages The main aim of the bank is guide and serves people financial. It aims at becoming the leading bank for people. The values and mission covers the daily aspect of consolidated entity. The motto of the bank is not just money but also more than money. The vision of the institution is to emerge as the successful bank in the world. The companys mission is to solve the queries that the customers face regarding the utilization of money not only in present but as a future perspective as well. It also includes providing high quality service to its customers and builds a permanent relationship of trust with them. The mission of the financial institution is to make a positive contribution towards the preservation of the environment and the society. It not only aims at increasing the customer satisfaction but also employee satisfaction by proving good working environment and condition to them (Ferguson 2015). Profitability also plays essential role for the bank, as their motto is to maximize pro fit by utilizing the available resources. It is a peoples bank and aims at increasing the value of customers. National Australia Bank aims at helping the customers with guidance, help and advice so that the customers are able to get good financial outcomes. Te tagline or slogan of the bank is A little word for a big life; More give, less take(Nab.com.au 2016). The main aim of the company is to achieve competitive advantage. The financial institution provides much service such as wealth management plan, banking and investment planning services. Company also provides debt and risk management and investment products to its clients (Hoovers.com 2016). The competitors of National Bank of Australia are Westpac Banking Corporation, Australia and New Zealand Banking Group limited and Commonwealth Bank of Australia. The service provided by National Bank Australia also includes internet banking, loans, credit cards, debit cards and calculators. The other competitors of the bank are HSBC, Bank of America and Citigroup. Surviving the competition for the new firms become difficult due to rise in the number of competitors. The brand loyalty for the company and the product is strong that helps the organization achieve competitive advantage. Strategies used by National Australia Bank The strategy of National Bank of Australia has not changes over the years and the company follows the same strategies as stated by the CEO of the bank. The bank aims at delivering quality service and experience to its customers. It aims at becoming as the worlds leading bank and emerge as the most respectable bank in Australia and New Zealand. The institute provides various banking services through various channels such as nab trade, NAB broker, Ubank and NAB (Metcalfe 2013). The approach of the company towards corporate social responsibility is to affect the society and environment in a positive way. The firm believes in building a stronger relationship with its stakeholders and customers. The main expertise field of banks includes education, agriculture, health, property and government. The bank provides loans increase education and improve the health of the people in a community. Australian banking sector of National Australia Bank includes fixed income, debt markets, Currencies a nd Commodities (FICC), asset servicing and treasury and specialized finance (Prez et al. 2013). The contribution of the bank towards the corporate social responsibility is immersive. The National Bank of Australia works with four hundred communities and organizations every year. It also takes part in twenty two thousand activities voluntarily. The bank had established a village of are five hundred millimeter square in February 2014. Every year the bank holds meeting and gatherings where the customers of banks can put forward their query. The main aim is to connect with clients and customers through these meetings. The meeting areas includes, meeting room, drop-in desk as well as casual areas like the garden and the square. The company conducts an exclusive research before formulating the strategies. The research contributes to programmes that focused on leadership and critical issues (Nab.com.au 2016). The strategy of the bank is to help the people with the management of their money. The company employs 35,000 employees that services approximately 10 million customers. It not o nly deals with larges business houses also helps the small and medium business enterprise achieve their goals and objectives. Its strategy is based on innovation and is inclusive in nature. Criticism of the strategies used by NAB There have been many criticisms of the business practices that the company has pursued in the recent years. The company was accused for the unethical behavior in the past. There have been reasons for rise in the controversies and criticism faced by the company. National Bank of Australia faced the pangs of criticisms for various reasons. Tax evasion and customer overcharging: one of the most controversial issued faced by national Bank of Australia was of tax evasion and overcharging of interests from its customers. This was done by one of subsidiaries of the bank that is the National Irish Bank in 1988. The research from the Irish High court suggested that the bank was involved in a scandal of tax evasion and making money through unnecessary means. This also included unethical finding of loans (Yeates 2014). The employees of National Australia Bank has been engaged is systematic misconduct. The inspection found that an employee of the National Bank of Australia was advertising and encouraging the retirees to invest in the financial plan of the National bank of Australia that was actually not the part of the bank. The employee of the bank suggested the clients of NAB to invest in BSI Corp that was not a NAB approved financial plan. A single director of the firm transferred Six thousand two hundred million dollars from the oversea account to the personal account (Powell and DiMaggio 2012). These funds were used by the bank to improve and recover the failed business operations. The employee of the organization was found to be included in a fraud where the peoples money was utilized for unfair means. Various questions were raised on the British Market of National Bank of Australia due to the scandals and frauds that the bank is included in. Company has faced many losses due to the scandals t hat it is included in. Many employees had lost the job due to the scandal that the bank was involved. To compensate they may have to pay a lump sum amount of 3 billion and 4 billion (Dinham 2014). National Bank of Australia was also charged for involving in unethical practices. The bank was charged for giving loans to the industries that were involved in damaging the environment. In 2008, the bank was charged for providing A$11.2 billion to the fossil fuel industry that was involved in extracting green house gases that was harmful for the environment. Concerns and controversies has been raised by the Australian community for providing loans to the industry. This also includes use of ATM that harms the environment. National Australia Bank for such kinds of illegal practices has done more than 20 billion dollars of investments. Wilma one of the customers of The National Bank of Australia is found to be conducting illegal activities in Malaysia and Indonesia. The Australian bank has been found funding Wilma and indirectly involved in the illegal activities. The environmental impact for such banks has been drastic and National Australia Bank is a part of such drastic steps (Jones 2012). The above analysis shows that despite of being one of the four leading financial institutions in Australia the bank has been charged for various reasons. National bank of Australia has claimed to be non guilty of the controversies raised against the bank. However, the data and the inspections show that bank is involved in scams and scandals. It is essential for the organizations to keep a close check in its functioning and keep an eye on employees behavior and attitude. Activities should be properly checked before getting into a partnership and business venture with other organizations and businesses. SWOT analysis Analysis the strengths and weaknesses of the firms is essential to examine the exterior and internal factors that affects the commerce. SWOT analysis is a tool that is used to analyze the strength, weakness, opportunities and threats of the company. Helpful Harmful Internal factors Strengths: The bank has a good brand name and is finically strong. The revenue of the bank is high and is major player in the Australian market. It is involved in proving diverse products and services to its customers. In terms of assets it is the largest financial institution in Australia (Joshi et al. 2013). Weaknesses: Controversies and criticisms against the bank lead to a de line in the profit of the bank. Decline in revenue affects the growth and development of bank. The number of global acclaims is less despite of the bank being spread across the globe. External factors Opportunities: The bank has an opportunity to spread to in other countries. It also has an opportunity to diversify the portfolios for customers. The bank is recognized internationally that will help the company strengthen its position globally. Threats: The major threats are from the competitors. Change in government rules and regulation increases the threats for the bank. This includes recession and fall in the demand and investments of the product in the market (Gagnon and Karolyi 2012). PESTLE analysis The external factors affecting the working of the business is analyzed using Pestle analysis. Political/legal factors: The Company should ensure that the functioning of the company complies with the legal rules and standards. Changes in government rules and regulations greatly affect the working of company. For example open market operations by government greatly affects the interests rate that the bank charges. Australia is politically stable. Economic factors: The economic factors such as price, GDP, growth rate and interest rate affect the functioning of the company. Fluctuations in demand, supply, investment, money supply and other factors affect the rates charged by the bank. Since Australia is a developed country, economic conditions are favorable for the banks. Social factors: lifestyle of people, income, status, age, sex, behavior, attitude and psychology greatly affects the working of business. The bank has committed to adhere to a number of protocols that supports human rights. It is involved in corporate social responsibility programmes and aims at improving the society (Bryant 2012). Technological factors: technology plays a great role in the working of business. The company utilizes technology and devices to connect to its consumers and promote the product. This is done through channeling and distribution of products through e-commerce. The research and development technique is also efficient and is used to extract the useful information. Environmental factors: The bank aims at improving the environmental condition. National Australia Bank has funded the Environmental Upgrade Agreement (EUA) in the year 2015 for the commercial office buildings (Shamsuddin and Xiang 2012). Specific environment Consumers Citizens of Australia, The Australian traders, The bank account holders Partners NAB aimed to develop a partnership with the merchant customers, Global leaders Verifone systems Industry Banking organizations Unions Stakeholders as well as the financial sector of Australia Competitors Westpac Banking organization, commonwealth bank of Australia etc. Suppliers Investments corporations and the larger banking sectors of Australia. Internal environment Process Pareto chart process, quality activities deployment etc. System Making of loans and the acceptance of the deposits Workers Number of total workers in NAB are 35063 Management Control the operation of wealth management along with the risk management and the relationship management. Organizational culture and leadership style Organizational culture is the behavior and attitude that an employees in an organization hold. Leadership style is the style that the leaders at an organization hold to manage the works effectively. The CEO of the National bank of Australia Andrew Thoburn is one of the most inspiring leaders that the employees and the customers look upon. The personality of the CEO of the bank is good and is very confident while voicing his opinion in front of the media. The bank follows the transformational leadership style (Alvesson 2012). Transformational leadership style is a leadership style where the leaders coordinate with the subordinates to create a vision and formulate strategies to achieve the goals and objectives. This helps the bank keep the employees happy and involved in the decision making of the organization. The leadership skills and behaviors of the CEO are very inspiring and motivational. The company maintains a formal relationship with its employees and maintains the corporate cu lture. The straightforward approach of Andrew Thorburn and the leadership style has been beneficial for the bank internally as well as externally (Hargreaves and Fink 2012). It is categorized as functional organizational structure where the work is divided based on functions and specialization. The responsibility of leaders in an organization is to maintain talent, competition and train the employees in such a way to lead to a situation of win. The cultural values play an essential role in the company. This includes strong work culture and high work values of honesty and integrity. Conclusion The report concludes that the Bank goes through both the good and bad phase in its operation. The strategies formulated by the bank is to achieve the competitive advantage and become the leading world in Australia. The organizational culture is very formal where the leaders maintain a friendly relationship with its employees. References Alvesson, M., 2012.Understanding organizational culture. Sage. Bratton, J. and Gold, J., 2012.Human resource management: theory and practice. Palgrave Macmillan. Bryant, L., 2012. An assessment of development funding for new housing post GFC in Queensland, Australia.International Journal of Housing Markets and Analysis,5(2), pp.118-133. Dinham, A.2014.Banks accused of links with unethical overseas practices. [online] sbs.com.au. Available at: https://www.sbs.com.au/news/article/2014/04/28/banks-accused-links-unethical-overseas-practices [Accessed 9 Sep. 2016]. Ferguson, A. 2015.More woes for National Australia Bank as Senator Sam Dastyari enlists British help. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/comment-and-analysis/more-woes-for-national-australia-bank-as-senator-sam-dastyari-enlists-british-help-20150323-1m5mg0.html [Accessed 9 Sep. 2016]. Gagnon, L. and Karolyi, G.A., 2012. The economic consequences of the US Supreme Courts Morrison v. National Australia Bank decision for foreign stocks cross-listed in US markets.National Australia Bank Decision for Foreign Stocks Cross-Listed in US Markets (September 17, 2012). Johnson School Research Paper Series, (50-2011). Hargreaves, A. and Fink, D., 2012.Sustainable leadership(Vol. 6). John Wiley Sons. Hoovers.com, 2016.!company_name! Names of Competitors. [online] Hoovers.com. Available at: https://www.hoovers.com/company-information/cs/competition.national_australia_bank_limited.24f02479e08cb0ca.html [Accessed 9 Sep. 2016]. Jones, G. ed., 2012.Banks as Multinationals (RLE Banking Finance). Routledge. Joshi, M., Cahill, D., Sidhu, J. and Kansal, M., 2013. Intellectual capital and financial performance: an evaluation of the Australian financial sector.Journal of intellectual capital,14(2), pp.264-285. Metcalfe, B., 2013. The Market Potential of Australia s New Foreign Banks.European Journal of Marketing. Nab.com.au, 2016.About us. [online] Nab.com.au. Available at: https://www.nab.com.au/about-us [Accessed 9 Sep. 2016]. Nab.com.au, 2016.Executive Leadership Team. [online] Nab.com.au. Available at: https://www.nab.com.au/about-us/our-business-at-a-glance/executive-leadership-team [Accessed 9 Sep. 2016]. Nab.com.au, 2016.NAB partners with VeriFone for payments innovation. [online] Nab.com.au. Available at: https://www.nab.com.au/about-us/media/media-releases-2012/nab-partners-with-verifone-for-payments-innovation [Accessed 9 Sep. 2016]. Prez, A., Martnez, P. and Del Bosque, I.R., 2013. The development of a stakeholder-based scale for measuring corporate social responsibility in the banking industry.Service Business,7(3), pp.459-481. Powell, W.W. and DiMaggio, P.J. eds., 2012.The new institutionalism in organizational analysis. University of Chicago Press. Shamsuddin, A. and Xiang, D., 2012. Does bank efficiency matter? Market value relevance of bank efficiency in Australia.Applied Economics,44(27), pp.3563-3572. Yeates, C. 2014.Andrew Thorburn, NAB's new straight shooter with a messianic touch. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/banking-and-finance/andrew-thorburn-nabs-new-straight-shooter-with-a-messianic-touch-20140711-zt40k.html [Accessed 9 Sep. 2016].