ANZ Bank Management: Organizational Transformation And Challenges Faced - Essay.

Main features of organizational transformation during McFarlane’s Tenure in ANZ Bank

Discuss about the Case Study on ANZ Bank Management.

This is report which will evaluate a case study on ANZ Bank which is among the largest and most successful companies in Australia. ANZ bank provides a range of banking and financial services to their consumers in the market. The report will identify the features of organization implemented during the temerity of McFarlane along with the challenges faced by the managers in implementing these transformational strategies. The report will depict the internal cultural change of the organization and provide examples to illustrate the key attributes of the leaders in ANZ and the role of leadership in implementing change management within the organization.

ANZ bank had been performing very badly during the 90s and the organization had been forced to appoint a new CEO, John McFarlane. McFarlane developed a new organizational transformation program along with the new management so that ANZ bank can achieve long term sustainability and competitive advantage in the market. McFarlane had been instrumental in providing the organization with increased performance over the years and has been the main reason behind the success of the organization (Javanparast et al. 2018).  The banking sector in Australia at that had been in an awful position due to the increase in distrust among the consumers about these banks. The consumers had the perception that the banks were not contributing towards the consumers, employees and the community by any means. McFarlane had been the first one to implement the concept of corporate social responsibility within the organization.

McFarlane had analyzed the fact the banks were themselves responsible for harming their reparation and business.  The lack of profits and underperformance within the organization is one of the major reasons that the banks were forced to close branches. However, McFarlane was the first to cease the close of different branches and focused on gender equality and corporate social responsibility (Davis and Fifolt 2018). The far sightedness of McFarlane let him analyze future trends which provided ANZ with market competitive and trust of the consumers.  These were the results of the continuous implementation of drastic measures to maintain sustainability of the organization.

McFarlane started by taking cost cutting and risk management measures where McFarlane released thousands of employees to reduce the organization and changed the risk profiling by exiting from the emerging market to ensure sustainability (Fukuda 2018). This shows that McFarlane had streamlined the operation and brought about a huge restructuring within the organization. ANZ Bank had the worst ROI among the major banks in Australia due the focus of the organization on corporate clients and McFarlane had shifted their focus on to the retail consumers.

Challenges for managers in implementing transformation strategies

The organization transformation strategy developed by McFarlane was named as Perform, breakout and grow which had been developed to provide the organization with a human face. The in depth analysis of the banks culture has been able to identify various discrepancies in the existing organizational culture, value system of the employees and their perception about the organization.  The result showed that there were both positives and negatives in the organizational culture.  The organization has goal oriented which is appositive but bureaucracy, hierarchy, silo mentality and control information are the demerits which had led to the poor performance of the organization (Martinsuo and Hoverfält 2018). McFarlane developed values based on the input of the employees and not solely based on the perception of the senior managers. The main strategy of the organization was Breakout which aimed transformation of the organization culture where the organization wanted to create a different culture for the employees along with the other stakeholders.  This was the method of removing the bureaucracy with the organization by providing the people with freedom, responsibility and feedback. 

The organization developed a policy that was aimed at transforming the culture of the organization by using dedicated breakout. The three major breakout initiatives taken by the organization included charters, consulting and workshops.  The Breakout workshop has focused on developing the personal and emotional side of the workforce within the organization.  The break charter had emphasized on the process changes which are relevant to the cultural transformation of the organization. The business consulting unit had been developed to maintain the sustainability of the achieved culture within the organization (Liao and Teo 2018).  Therefore, this shows that employee engagement was an essential component of organizational transformation. Moreover, performance  management is also a key concept applied by McFarlane in order to examine the success of the implemented strategies. Therefore, performance planning, coaching and assessment was essential to identify the progress of the organization in term of their change in the organizational culture. Moreover, the organization at the same time implement talent management so that the future talents gets the opportunity for growing at personal and professional level. 

This shows that McFarlane has been instrumental in using employee engagement, performance management and talent management as the three key strategies for bring about change in ANZ Bank.  The workforce of any organization depicts the cultural value of any organization and McFarlane had developed strategies for employee growth and management.

The major challenges faced by the transformation team and McFarlane was implementation of the engagement strategies supporting the transformation of culture throughout the organization.    The size of ANZ Bank has always been huge consisting of large number of departments, branches and employees so effective implementation of these strategies into the organizational business model had been tough. Therefore, in order to effectively implement these strategies the leadership team implemented the changes at both top and bottom level at the same time instead of using management down approach (Schmitt, Raisch and Volberda 2018).  The managers also faced the issue of appointing the correct individual for a particular position. Therefore, hiring talents and placing them into suitable positions was difficult for the managers in the organization.  Talent management has been difficult for ANZ Bank especially due to the immense width of organization. The implementation of the breakout for the organization has been tough for the managers due to diversity among the workforce within the organization. Moreover, ANZ Bank was the bank that had been exposed to the boom in the US market which resulted in big write ups in the market.

In regards to the challenges faced by the management in ANZ Bank it can be seen that the extent to which the change processes can be planned. The organizational capabilities, conditions and processes are required for facilitating the implementation of the change management within the organization.  The extent of change required is also a big issues faced by the managers as the organizational levels, structure and width determine the extent to which change management can be implemented (Schalock,  Verdugo and van Loon 2018). This is the sole reason that managers faced it difficult to implement the changes to all the levels both at higher level and lower levels simultaneously. The development of a new organizational culture means that there will be change in the basic values, beliefs and attitude of the organization. Therefore, change in the organization values and beliefs means over all change in the organizational guidelines.  Drastic change within the organizational culture poses challenges like maintaining the effectiveness and efficiency of the organizational processes. The change management programs are developed in such a way that it will address a particular level of hierarchy within the organization. However, in order to reduce the bureaucracy and stringency within the organization complete changes were and implementing changes at both levels of the organization had been the biggest challenge faced by the organization. The organization structure can be of different types such as functional, hierarchical and matrix structure. The implementation of change management policies becomes tougher with the degree of change and the organization structure and the same scenario is faced by the managers in ANZ Bank due to the complexity of the change management process and the degree of implementation required.

John McFarlane had been a transformational leader and had been effective in motivating the subordinates to perform in a much better way. John McFarlane has been instrumental in preserving the values of the organization.  McFarlane had to be make some tough throughout its tenure as it shows the decision making capabilities of the most successful leader of ANZ bank.  Leaders at every organization have to make some choices that are required for the sustainability and profitability of the organization (Oreg et al. 2018).   In the case study, initially after taking over as the boss of ANZ Bank, John McFarlane had to let go at least half of the employees as a measure for cost curtailing.  This resulted in the attrition of large number of employees which was absolutely necessary for reaching sustainability in the business as the income on cost was very low for the organization when compared to other banks in Australia.   Therefore, drastic measures were necessary at that time and he was bold enough to take such a decision.

The diversity management capability of the leader is a key attribute that has been identified within John McFarlane. McFarlane had been the first leader to introduce gender equality within the organization. The diversity in the workforce provides diverse perspectives which is important for developing effective strategies. McFarlane introduced inclusion of more female employees into the organization along with increase in female representatives at senior level of management. This enables communication at all levels of the organization thereby promoting two way communication (Caniëls, Semeijn and Renders 2018).  This enables the employees to align their goals along with the goals of the organization. John McFarlane had implemented change management policies by focusing on managing the human resources in a better way where the organization wanted to acquire quality workforce by reducing the number of employees.

The transformational leadership of John McFarlane can be well understood by the implementation of the breakout strategy, performance management and quality control. The organizational workforce changed drastically due to better interaction between the individuals and managers. He had been able to develop an organizational culture where equal importance was given to all the stakeholders and every employees can suggest changes for the betterment of the organization. This shows that John McFarlane used democratic style of leadership where he provided encouragement to all the employees to contribute to the organization effectively. This facilitates in management of talent within the organization.

As stated by Mikkelsen and Olsen (2018), leaders play an important role in the change management process and act as the central character for influencing change within the organization. The leaders are instrumental in developing followers that would facilitate on realizing the objective of the organization.  The subordinates have the choice of voicing their opinion in change management processes which is reflected on the democratic style of leadership followed by John McFarlane. The behaviour and the skills of the leader is critical in identifying the different factors responsible for influencing the subordinates. Change has a broader aspect and implementing change on a large scale is quite tough given the continuous changes in the macro environment and the risk of losing sustainability. In this case, John McFarlane has implemented a huge change management process within the organization only because of the leadership capabilities (Kark, Van Dijk and Vashdi 2018). ANZ Bank had been in a dicey situation at that time and there were imminent threat on the organization at that time.  ANZ required large amount of changes and John McFarlane has been able to communicate with the employees to identify the changes required. Moreover, he took drastic measures to save the organization from dissolving. These shows that an effective is able to analyse the current needs of a company and develop effective strategies to mitigate the issues.

The leadership style determine how the organizational workforce will react to the change. Resistance to change is natural in most organization and in this case the implementation of the change initiatives were across all levels of hierarchy within the organization.  The success of the change management plan is only possible if an effective leader is there to guide the organization. The leaders work according to their vision and develop effective changes along the way to reaching their goals. The increase in employee engagement, performance management and focusing on corporate social responsibility were key ideas that were the stepping stone in maintaining the sustainability of ANZ bank for decades (Rogiest,  Segers and van Witteloostuijn 2018).  The leaders are revolutionary in providing change in the organization and they provide guidance for achieving the goals set by the stakeholders.  The change management process is the collective effort of the leader and their subordinates to address their objective of change management. John McFarlane had been instrumental in identifying effective way of eliminating bureaucracy within the organization and have united the workforce together to reach the common goal.  The success and revival of ANZ Bank had been due to the efforts of John McFarlane which is the reason for their present success even after operating in tough external environments. Therefore, leadership is directly proportional to change management where the leaders’ ability will determine the success of the implementation plan.

Conclusion

The analysis of the case has presented some crucial facts which has depicted the importance of leadership in change management. The case study of ANZ Bank has been analysed to present relevant findings in the study.  The drastic transformation in the organizational culture by John McFarlane showed the leadership skills required to make changes to the organization. This case is a classic example of leadership skills required to survive in the industry even if some radical decisions have to be taken. The conclusion drawn from the report is that John McFarlane had a charismatic personality, farsightedness and risk taking ability which resulted in the huge transformation.

References

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