Learning Organization Ethics and Moral Principles

Question: Discuss about the Learning Organization for Ethics and Moral Principles. Answer: Introduction Ethics are moral principles and values practiced by the organizations to govern their business functions maintaining the organizational culture. However, in recent years many companies have been identified with respect to ethical scandals that affect the business operation and sustainable growth (Janney and Gove 2015). Organizational learning theory provides guidance to improve efficiency and accuracy of the business functions maintaining the ethical standards (Lodhia 2015). Discussion In current scenario, it has been observed that the Commonwealth Bank of Australia experienced ethical scandals and was facing competition and challenges from the competitors. The issue was brought into notice by a group consultancy while entering a contract of tender with the Commonwealth Bank. The Board of Directors conducted several meetings and sessions to discuss the ethical scandals within the organization and methods to overcome the scandals by following the guidance of learning organizational theory (Commbank.com.au 2016). On conducting the meetings certain scandals were identified that affects the organizations reputation of being one of the largest multinational banks in Australia. It was noted that the level of discount and high rate of interest charges affected the trust of investors and consumers in dealing with the bank. The Board of Directors analyzed the ethical issues with respect to employees self- interest in several transactions and act of biasness towards certain clients (Reid et al. 2015). The bank also faced the ethical scandals with respect to whistleblower at the banks life insurance department and the investigation revealed that the corporate regulator obtained documents over 50,000 regarding the issue. Other ethical issues that brought to the notice of the directors were fraud in certain deals with the customer by charging excess deposit money (Commbank.com.au 2016). Additionally, The Commonwealth Bank also faced ethical issues in context to organizational culture for which the bank received litigation in the year 2013 with respect to storm disaster amounted to $270 million approximately. Further, the organization faced several scandals in financial planning that reflected greed, forgery, dishonesty and offensive commission charges from the clients. These ethical scandals resulted in incurring huge loss by the citizens of Australia amounted to around $3.00 billion in the year 2013. Other scandals involved fraud bonus payments, brokerage charges and commission charges for getting additional clients, which was never the business policy in the guidelines of bank. It was recognized that one of the planners paid around $400 in cash as a commission fee to a teller official if he get clients (Commbank.com.au 2016). However, during the meeting and sessions, the chairperson of the bank along with the Board of Directors ensured that the management would take steps to resolve the issues following the organizational learning theory. The Chief Executive clarified that the bank would refund the losses and extra charges borne by the customers to build the trust and to maintain the profit sustainability (Commbank.com.au 2016). Conclusion It is very essential for the organizations to maintain the ethical standards the best business practices to maintain sustainable growth and strong customer relationship. Though the Commonwealth Bank is one of the most profitable multinational banks in Australia but faced various ethical issues affected the trust and faith among the clients. However, the management and Chief Executive of the bank taking measures on resolving the issues and paid compensation to the clients around $51 million. Reference List Commbank.com.au. 2016. Personal banking including accounts, credit cards and home loans - CommBank. [online] Available at: https://www.commbank.com.au [Accessed 6 Aug. 2016]. Janney, J.J. and Gove, S., 2015. Firm Linkages to Scandals via Directors and Professional Service Firms: Insights from the Backdating Scandal.Journal of Business Ethics, pp.1-15. Lodhia, S., 2015. Exploring the transition to integrated reporting through a practice lens: an Australian customer owned bank perspective.Journal of Business Ethics,129(3), pp.585-598. Reid, A.M., Ledger, A., Kilminster, S. and Fuller, R., 2015. Can the tools of activity theory help us in advancing understanding and organisational change in undergraduate medical education?.Advances in Health Sciences Education,20(3), pp.655-668.