Strategic Impact of Corporate Social Responsibility

Question: Discuss about the Strategic Impact of Corporate Social Responsibility. Answer: Introduction Strategic development is necessary to ensure the business sustainability in a competitive market. The enhancements of the competition among the different industries have become quite prominent in this current market. Each of the organisations tries to implement the innovative strategies in order to ensure profitability (Cummins and Santomero 2012). However, such implementation process even requires identifying several market segments. The financial industry even has been facing several direct competitions in this current scenario (Lember, Kattel and Kalvet 2014). National Australia Bank is holding the leading position among the other financial companies in Australia and New Zealand. Unlike others, the company has been paying attention towards the strategic development to ensure the customer base. The major focus of the company is to promote the better customer service experience that will be helpful in strengthening the business position (Klettner, Clarke and Boersma 2014). It is imp ortant to keep the concentration on the mission and vision statement of the company. Simultaneously, the identification of the competitive market is also essential. It has been seen that due to the increasing level of the competition, the company has been facing several criticisms as well. The environmental analysis will be justifying the internal strengths and weakness of the company. Depending on such analysis, the preferable recommendations will be presented accordingly. Vision and Mission of the Company The mission statement of a company provides the idea of the business functionalities that are needed to be undertaken. The vision of the company is to achieve the success and strengthen the organisational position in this current competitive scenario. The mission of the company is stated further: The company is focusing on providing the relevant solution for the future and current requirements of the target customers (Nab.com.tr 2016). The company is trying to improvise the corporate social responsibility to bring development in the environment. The establishment of the proper relationship by concentrating on the high-quality services is also a major concern for National Australia Bank Motivating the employees by increasing their self confidence can ensure better performance outcome. The company has been recognising the importance of profitability to determine the long term success. Criticism faced by National Australia Bank There are several criticizing reports presented against National Australian Bank. In maintaining the Australian Financial Standards, NAB has faced enormous criticism. It is noted that the Australian Prudential Regulation Authority (APRA) raised a concern regarding several financial statements (Voanews.com 2016). NAB was alleged due to the irregularities visible in the foreign currency training operations. The continuous irregularities are affecting the foreign investment procedures. It was notified that in the month of January, NAB informed about the loss of $US270 million revenues. The company even fired several senior managers, which caused mismanagement of the internal organisational scenario. In fact, APRA accused NAB for not taking proper decision regarding the standard risk management procedures. Whereas Chinas Central Bank started implementing the plan of tightening credit by raising the reserve requirements for the countrys financial structure, NABs performance degraded to th e lower level. Hence, it was clearly seen that the decreasing performance level was the major reason behind such criticisms that National Australia Bank had to face. Environmental Analysis While developing any strategies and making the business decisions, it is important to analyse the internal and the external market (Goodhart 2013). It helps in recognise the market potentiality, which can be beneficial for the business sustainability. Moreover, when the company has been focusing on the customers needs, it is important to understand the environment more specifically. PEST analysis is thus significant enough in understanding the political, economical, social, and technological market for business operations. The further description is presented below: Political Scenario: The regulations imposed on the Australian banking industry are affecting the financial management in a very specific way. It is noted that the high interest rate is affecting the capital investments. Due to the high inflation rate, the renowned financial banking companies like Commonwealth Bank, National Australia Bank, and Westpac, have been facing the real challenges (Laby 2013). It is noted that the National Australia Bank established the partnerships with other banks in order to increase the revenues. However, the complex regulations faced by the companies are creating the troublesome surrounding more prominently (Florey 2012). Hence, it can be inferred that the political regulations are not so much in favour of the banking strategies. Economic Scenario: The constant improvements in the financial structure are considering the significant impact on the banking industry. Due to the emergence of competition, the funding costs have been declining easily. The banking companies have therefore started accumulating capital over the increasing target (Huang, Zhou and Zhu 2012). Another most effective change has been seen in the Liquidity Coverage Ratio. This particular segment reinforced the banks to manage the probable risks associated with the financial banking process. However, the increasing level of the different risks may sometimes create the hazardous situations for the renowned financial services (Stoeckl et al. 2013). It is required to strengthen the financial pricing system, which increases the competition among the lenders. Social Environment: It is noted that the National Australia Bank has been trying to focus on the customers needs. Therefore, the company is much concerned about the corporate social responsibility (Boulouta and Pitelis 2014). The company has been promoting the personal banking system to make the financial transaction simpler to the customers. The major focus of the business is the stakeholders. Therefore, the company has been implementing the strategies to engage more supports of the target customers. The company believes that involvement of the more customers is important in order to gather idea about the needs and expectations of the community (Florey 2012). In fact, the company can even identify the potential challenges by associating more customers. The advisory council is also associated with the company in order to suggest the justified initiative that the company needs to undertake. The maintenance of sich social responsibility is thus useful for the company. Technological Scenario: National Australian Bank aims to offer the leading customer service experiences to the target customers. Therefore, the company has been concentrating on involving simpler, stable, agile, and secure technologies to ensure effective customer services (Bryson, Daniels and Warf 2013). It is noted that in this current world, customers are much attracted by the sophisticated technologies used in different industries (Jaumotte, Lall and Papageorgiou 2013). In keeping focus on such requirements, the National Australia Bank has also implemented the technological strategy to attract more customers. The instant banking system and the advanced transaction process are much commendable and easier to use. Hence, it can be inferred that the technological development has created the significant impact on the business performance of National Australia Bank. SWOT Analysis The SWOT analysis represents the recognition of the internal strength and the weakness of the company while conducting business in a competitive market. Apart from identifying the strengths and weaknesses, it is also essential to understand the potential threats and the opportunities underlying the external business. The recognition of such segments would be helpful enough in understanding the potentiality of the company of strengthening the business position in the competitive market. The analysis of such segments is presented further. Strengths: The strengthened brand image and the effective financial services are effective enough to attract the customers interests. The company has captured the leading position in the financial industry. The product and service diversifications are the major strengths of the company to ensure the business success (com.au 2016). The company ensures the proper revenue and fruitful interest income. In comparing the asset amount, National Australia Bank has captured the leading position. Weaknesses: The absence of the global acclaim is the major weakness for the company. The continuous declines of the revenues have been affecting the growth and development in a very significant manner. Opportunities: The diversification portfolio will be beneficial for attracting more customers towards the financial service offered by the company. The business expansion in the other countries will help in conducting the business globally. The joint ventures and acquisition will be preferable to increase the revenues. The company will be able to avail the chance of working with the larger asset management sector. Threats: The direct competition with the other financial services can be considered as the potential threat for the company. The repeated changing of the government regulations and the emergence of the financial crisis like recession can be harmful for the company. The recognition of such analysis has been indicating that the company is trying to cope with the current scenario of the financial business. However, it has been previously mentioned that the company had faced numerous criticisms due to the fall of revenues. Hence, in such cases, the company needs to keep the focus on the proper strategic decision making process in order to ensure the growth of the revenues in this current competitive market. Moreover, the identification of the strengths is signifying that the company is capable of conducting business in a competitive scenario. However, it is important to structure the organisational procedure to eliminate the underlying risks and ensure the business profitability. Depending on such recognition, the further recommendations are provided to ensure the business growth in the future. Recommendation The obtained idea from the above analysis has been indicating that the company needs several improvements in the business functionalities. The first and foremost recommendation is to structure the resource allocation procedure in a cohesive way. The company has the commendable strengths, which ate much powerful for ensuring the strengthened business position in a competitive market. NAB needs to utilise the resources properly. Therefore, the management training and development process is necessary. The efficient employees performance can bring the specific changes in the business functionalities. Moreover, if the company can structure the idea of the resource allocating by taking the advices from the experts, it would be beneficial for the future business implications. Another weakness was found in the declines of the revenues. In order to avoid the continuous fall of the revenues, the company needs to undertake the proper strategy. It has been seen that merger and acquisition with the foreign financial services can ensure the benefits by investing a good number of capital. When the responsibilities will be divided, the management will also collaborate. In such cases, the resource allocation process will be easier. In fact, there will be less chance to face the loss. Hence, it is important to implement the proper business strategies in order to ensure the establishment of the business in a competitive market. Implementation of such recommendations will be beneficial for the company in ensuring the future benefits. Conclusion The study has been providing the idea of the strategic implementation of National Australia Bank, which has captured the leading position in the financial market. The company has been mainly focusing on offering the better customer service experiences to the financial investors. Therefore, the company has been undertaking the proper strategies to strengthen their position in the competitive market. However, it has been recognised that NAB had to face huge criticisms due to the repeated fall of the revenues. The separation from Westpac Bank was also quite an insignificant step undertaken by the company. Hence, it is important to understand the proper strategic implementation that can be beneficial to the company for the future prospects. In order to consider such strategy, the environmental analysis is necessary. The internal and the external environmental analysis is considering the potential challenges that the company might face in order to conduct the business globally. It is note d that the company has the strengthened brand position and customer supports to grow further. Therefore, it is necessary to pay the attention on the proper resource allocating process and the internal business functionalities. In addition to this, if the company can establish the business partnerships with the other financial services, the risks of facing loss will be minimised. Hence, following the recommendations will be beneficial for the company to establish their strengthened business entity in a competitive market. References Boulouta, I. and Pitelis, C.N., 2014. Who needs CSR? The impact of corporate social responsibility on national competitiveness.Journal of Business Ethics,119(3), pp.349-364. Bryson, J., Daniels, P. and Warf, B., 2013.Service worlds: People, organisations, technologies. Routledge. 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