INTRODUCTION
The primal focus and purpose of this report are to conduct an ethical overview in correlation with public relations and how ethical codes get broken in business organizations repeatedly. This report is going to focus on the ethical practices and necessities in terms of managing a company profusely well, also the organizational barriers that may hinder proper management and implementation of ethical practices in PR will be discussed as well. We will also focus on the stakeholders’ analysis factors, branding impacts, press releases, ethical management, and PR management in depth. We will vigorously discuss the ethical practices and the guidelines in PR factors, how to overcome ethical practice related problems to restore proper ethical management and PR in organizations such as a Bank located in Australia named CBA.
REPEATED ETHICAL SCANDALS THROUGH THE LENSE OF PR THEORIES AND PRACTICES
For any kind of organization regardless of its size and shape, the operations of the business start with one factor and that is if the company will be capable of having social responsibilities or not. Business organizations do not get started on their own but people start them, work on them brick by brick to take it further. While all kinds of activities are taking place regarding the business, an enormous responsibility falls on the people who are related with the company, the responsibility is to maintain the business based on ethics through the operations of PR practices.
Behind every successful business organizations or any kind of corporations, ethical management, and PR based ethical practices are responsible. Typically ethical practices are dictated by the management of the company but are followed by the employees of the company (Pages.uoregon.edu. 2018).
Individuals working in a bank or any other kind of business organizations are constantly under the influence of several issues like- cultural, political, economic factors. A person’s upbringing has an enormous impact on how he/she will react and act as a grown-up person, how she/he will handle corporation activities and how they will manage the ethical codes.
PR also was known as Public relations is most of the times considered as a profession that only works behind the curtains and handles problems’ silently. It is a necessity to know that, PR is one of the most fundamental corporate conscience which imposes business ethics and social responsibilities of different kinds of businesses such as a bank. PR standards contain-
• Ensuring effective behavioral guidelines to the members of the company
• Educating the management regarding PR
• To differentiate PR from workers who only use the title do not really understand the PR practices and theories and giving this profession a bad image because of it (Kang, 2010).
Even if a corporation has several ethical codes in it, it will not guarantee that all the employees, workers and the management itself will act based on the ethical codes based on the PR practices. There are some very common and dominant reasons behind unethical activities due to lack of PR practices and comprehension of it and the causes of repeated unethical practices within a company and they are-
• Sometimes organizations give an advantage to shorter usage over long-term gals
• Not having enough or any written ethical codes to follow up
• Ethical dilemmas take longer to show up in the company so, its reduction or eradication cannot be so easily implemented, but solving them too fast can leave the residue of unethical practices behind, that means the solving took place only over the surface and not from the roots (Bivins, 2012).
• It is also a cause of repeated unethical problems is that, considering ethical codes just as a legal policy, not as a lifestyle (Grunig, 2014).
• Lacking in integrity and not maintaining integrality and honesty while dealing with business operations.
• Incompetence in keeping loyalty and managing confidentiality.
Australia’s one of the largest and most reputed banks is CBA Bank and they are recently been accused of breaching anti-money laundering rules. By doing so, they are now on the verge of facing billions of dollars in fines from the court by the regular ASTRAC. Due to lack of the implementation of Rules of the Money Laundering Prevention Act-2002, this organization is now facing numerous charges against them.
EXISTING BARRIERS TO THE ORGANIZATIONAL LEARNING AT THE BANK
CBA bank is going through potential financial troubles and unethical charges against them. As financial planning is one of the most rudimentary parts of a company especially if the company is a bank, so focusing on its safety and safer transactions are a must. However, several pieces of evidence have come to the surface regarding financial provision and advice and not enough compliance offering in the banking industry, not enough ethical banking decisions and such.
In the year 2013, the Sydney Morning Herald (SMH) had published a report on unethical and rogue financial activities taking place in CBA also known as Commonwealth Bank of Australia (Yeates, 2018). The report stated that this bank in the last four years has exposed to misconduct in financial activities and continued unethical behavior. SMH did not stop there and kept reporting on CBA on unethical practices over three years (Pria.com.au. 2018). They have also found to be guilty of encouraging unethical behavior by continuing to give incentives to financial planners unethically in a form of commissions, bonuses and luxury vacations overseas. Financial planners who were able to meet their targeted sales were provided with unethical incentives for several years. These are the two biggest barriers which are holding this company to move forward towards betterment and organizational learning.
An organization can have several bigger and major barriers to organizational learning which can create dilemmas, major internal problems within the company, unethical practices and so on. A bank just like any other business corporations can have certain barriers to its’ learning processes and the barriers that have taken place in CBA bank to the organizational learning are-
• Employee resistance to change- CBA bank’s employees were provided with incentives after doing good work, but the incentives were unethical and since 2013, they are not trying to change whatsoever (University, 2018). They have gotten used to unethical commissions, bonuses, and trips overseas.
• Ignoring the elephant in the room- even though they are fully aware of their unethical activities and the problems created due to the unethical activities, no strong action has been taken against it.
• Lacking in leadership and training- this bank is a world known bank and its employees are heavily trained but not trained enough in terms of ethical practices.
• Disregard of team success- CBA bank lacks in illustrating new skills and especially in terms of organizational learning.
• Short term focus- lacking in employee motivation and encouragement in handling long-term goals for the betterment of the company, short-term goals are more focused on which denies organizational learning and encourages unethical practices.
• No motivation for growth- it is established that CBA bank’s employees are more than enough motivated and that too unethically, but they are not accurately motivated which will make the company a proper follower of organizational learning and ethics (Smallbusiness.chron.com. 2018).
• Complexity- when a company is working based on unethical practices when a company and its people have gotten away from organizational learning; barriers are natural to come, creating complexities along with them. Not trying to change positively and reforming are two primal barriers caused by complexity.
STAKEHOLDERS ANALYSIS
Policymakers- CBA bank’s policymakers are their management, administrators, financial department and planners. This bank or any other business organizations’ policy makers are in charge of making ethical policies based on PR theories and practices in order to operate their businesses. Lacking from this department can cause tremendous problems for the company and the people who are associated with the company (Bowen, 2018). A central bank, government management board, stake and shareholders, employees- this bank is constantly in association with its stakeholders and shareholders, employees and they are bound to abide by government rules. If the organization is charged with unethical money laundering, it not only affects the company authorities but also it negatively affects all its stakeholders, its employees who were not involved in the money laundering.
Local administrators, Former clients, Auditors/analyzers-
A bank is in constant communication with its previous clients, auditors continuously associate with banks and a bank’s reputation is dependent on the goodwill of these stakeholders.
Trainees, Low level staff, Charity foundations, Competitors- Trainees, Low-level staff, Charity foundations, Competitors-
Bank has numerous trainees who come to learn how to become good employees with efficiencies, who want to be bankers, financial planners; they rely on the bank’s administration and ethical policies. If they lack in training, then the company itself is responsible for it. A bank is also associated with charity foundations who receive loans from the bank in order to handle their foundation objectives. A bad reputation may jeopardize a long-term relationship with charity foundation based companies.
IMPACT ON BRANDING
Public relations in the banking industry are fundamental due to its necessities and benefits to maintain proper communication and credibility with the clients. PR ensures the communication-based usefulness of banking industries, PR handles- media analysts, policymakers, policy influencers, customers and all kinds of stakeholders (Pages.uoregon.edu. 2018). If a bank is lacking in PR practices and theories’ implementation, chances are all these management factors are lacking more or less. A bank’s brand image and its status depend on a mixture of elements of corporate factors, its personality, functions, emotional benefits, basic messages, ultimate objectives, and goals, and its reputation are completely interrelated with internal and external audiences which will directly impact on building the brand image. A bank’s responsibility is to increase the comprehension and fullest commitment to the company entirely depending on the public relations’ theories and practices to make the company sustainable, impressive, and credible and of high-quality (Kang, 2010).
ROLE OF PR IN MANAGING THESE CRISIS
Crisis, especially in terms of ethics, can easily intervene in the normal flow of a bank or any other company for that matter. Ethical crisis can easily intimidate the company from the core and lack of instant action may increase the crisis even more. Public relations theory and practices is a profession which ensures highest quality crisis management and a bank like CBA who is going to unethical charges related issues, should heavily focus on PR based crisis management. A crisis is capable of causing threats to public safety, a crisis can determine financial loss and this is exactly what CBA is going through presently and a crisis can cause reputation loss which CBA faced due to their money laundering issue (University, 2018).
PR in crisis management-
• PR ensures signal detection- public relations’ theory is known for their detection of the crisis almost immediately.
• PR determines probing and prevention- it definitely ensures immediate prevention planning for the risks and crisis especially relating to money (Bivins, 2012).
• PR focuses on damage containment- PR’s primal focus is to manage the damage and make further plans to contain it somehow.
• Ensures recovery of the company- a company after going through a crisis suffers badly, PR ensures that their recovery takes place shortly.
• PR ensures the learning of the entire company- PR is a profession that encourages overall company’s learning of PR activities, theories and how to apply them in real life (Grunig, 2014).
PREPARE A PRESS RELEASE TO THE STAKEHOLDERS
Company LOGO
(Release Date)
Contact Number-
Company Name- Commonwealth Bank of Australia (CBA)
Phone-
Fax-
E-mail-
Street Address-
City, ST, Zip code-
PRESS RELEASE HEADLINE
Dateline
Australia’s one of the largest banks is Commonwealth Bank of Australia which is in charge of handling 80% of the entire nation’s financial planning, they are one of the leading and most profitable companies.
Lately, they have been charged with money laundering case against them due to their unethical behavior going on over a number of years until Jeff Morris shed light into the misconduct taking place in the company. SMH uncovered their covering up the issue of money laundering. In a statement, CBA declared that “Our driving principle is to do the right thing for our customers and put right where we have done wrong. We know from our experience and ASIC reviews of our past remediation processes, the importance of putting in place an approach that is well planned, rigorous and fair.” (Ferguson A, CBA compensation scheme closes amid anger, frustration, 2015). They have been serving the nation for a long time now and their statement sheds light on their desire to change for the better.
Commonwealth Bank of Australia
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They have been involved in unethical practices which were causing incredible difficulties to their employees, to the company image and to the clients the company serves. So it would be a really long journey to see them move forward from their mistakes and bad financial decisions.
RECOMMENDAITONS TO BECOME AN ETHICAL & IN ENHANCING CSR OF ORGANIZATION
- PRACTICE TRANSPARENCY
Transparency in banking or any other business organization is very essential; transparency restores reputation and creates a positive impression in the eyes of the audiences and clients. In this ‘information age,’ every person is competent of exchange of information and data; they are also capable of hiding information from several parties’ involved. It should be the management and the financial planners and employees’ minds that, being dishonest to the people and to themselves is only going to harm them in the long run. Instead of trying to be complicated and over-thinking simple matters, people while working in banks or any other company to take the positive route towards transparency. Maintaining trust and honesty brings more customers and clients, restores reputation in a world of business and takes the company further towards its goal. - MAKE SUSTAINABLE PURCHASING DECISIONS
Any company needs ethically enhanced CSR based employees and planners when a company has these two factors in it, it becomes capable of managing sustainability in decision making. Sustainability is a common issue with clients who stay on the outside and evaluate the company (Yeates, 2018). Spending a few more pennies can save a whole lot of image and reputation than spending less to save money and losing reputation along with it. CSR activities make a person sensible and help him/her take the right decision regarding finances, costs and profitability factors. - PLAYA MORE ACTIVE ROLE IN THE COMMUNITY
Bankers and financial planners are much more incorporation with the society than they think, they have a social and corporate responsibility to maintain (Pria.com.au. 2018). Corporate social responsibility helps a banker and a financial planner to adopt a dual mindset, it makes their decision making sense stronger, more accurate and legal. - SUPPORT THE LOCAL COMMUNITY
A corporate banker, a financial planner, banking industrial people and authorities should step further from their own community towards the local community in order to make other engagements with more people and local businesses. It is important to purchase from local suppliers to make more local events and opportunities to improve the image in the local markets. - ENCOURAGE INNOVATION
Every banking industrial worker should really focus on bringing innovation into their activities and encourage others to become innovative in order to take the company towards its goals. Corporate social responsibility is responsible for this which should be focused by CBA and several other baking companies like this. Innovation and creativity, encouragement and positive attitudes will ensure positive results (Yeates, 2018). - UNDERSTAND THAT CSR COMES FROM THE TOP
Every banking industry, every other kind of industries should genuinely focus on corporate social responsibility in order to profusely use its’ practices and procedures on a daily basis to improve their company, their people and their market image. It is a necessity to know that, CSR comes first which ensures engaging with more and more social responsibility (University, 2018). This will help in employee retention, client’s satisfaction, more ethical activities, and PR maintenance.
CONCLUSION
In conclusion, it can be said that public relations theories and practices, corporate social responsibilities’ maintenance, ethical policies, and procedures’ management will definitely ensure betterment and restoration in the reputation of the company. The company may differ but these procedures cannot change or should get neglected by any means as neglecting these may cause potential threats like- CBA going through unethical charges against them.
REFERENCE
Smallbusiness.chron.com. (2018). Business Ethics Policies & Procedures.
Bowen, S. (2018). Ethics and Public Relations | Institute for Public Relations.
Pages.uoregon.edu. (2018). Public Relations Review,
Kang, J. (2010). Ethical conflict and job satisfaction of public relations practitioners. Public Relations Review
Bivins, T. (1992). A systems model for ethical decision making in public relations. Public Relations Review,
Grunig, J. (2014). Ethics problems and theories in public relations. Communiquer. Revue de communication sociale et publique
Yeates, C. (2018). CBA wants to be ‘the ethical bank’.
Pria.com.au. (2018). Public Relations Institute of Australia.
University, S. (2018). Ethical Issues in the Financial Services Industry.