National Australia Bank’s Business Ethics


This paper is based on the topic of business ethics and corporate social responsibility. It looks into the topic through analysis of a single company selected from the database of the world’s most ethical companies. Key issues which are discussed include how the company behaves in a socially responsible manner towards its consumers, employees and the environment. Other issues which are discussed include how the socially responsible behaviour can affect the company’s bottom line as well as recommendations on how the company can improve its policies to enhance its relationship with the consumers, employees and the environment. The paper is based on various academic readings about the topics of business ethics and corporate social responsibility.

The company under focus in the paper is the National Australia Bank (NAB). The bank’s main products include consumer banking, wholesale banking, business banking, insurance and wealth management (Murray, Poole & Jones 2006). The consumers of the bank include individual bankers, private and public institutions, businesses and community groups. According to the bank’s Chief Executive Officer Mr. Clyne Cameron, the bank’s strategic policy is aimed at putting the customers at the center in all operations to ensure that they realise their full potential.

Review of the Related Literature

The concept of corporate social responsibility is generally used to refer to the relationship between businesses and their environment. All businesses operate in social, political, economic, and natural environments. The concept therefore takes into account how businesses interact with these environments, either positively or negatively. The topic of corporate social responsibility can be broken down into four main components namely the ethical, economic, philanthropic and legal components.

The ethical component of corporate social responsibility comprises the requirements or expectations of any business by the society. Such requirements or expectations include things like doing what is just, fair and right, using the law as the basis of organisational behaviour, avoidance of questionable practices and doing business in a manner which is above the minimal requirements (Carroll 1979).

The economic component comprises taking care of the interests of the shareholders, investors and customers, profit maximisation, the minimisation of the costs of undertaking a business and the formulation and implementation of strategic policies which propel the business forward (Aras & Crowther 2010).

The legal component comprises the respect and compliance of a business to various laws such as environmental laws, consumer laws, laws which protect the employees, as well as the respect of contractual agreements between an organisation and its clients or employees (Carroll 2008).

Finally the philanthropic component entails giving back to the society by a business. A business may do this in a variety of ways like establishing or supporting programs which directly benefit the society like health and education programs as well as programs which boost harmonious living of people from diverse backgrounds (Wulfson 2001).

Theoretical Perspectives to Corporate Ethics

Ethics can be defined as principles which govern the conduct and behaviour of certain groups of people in a given context. Ethics are found in various professions such as law, medicine, social work and counseling among others. Ethics comprise the code of conduct which practitioners in various professions should abide with so as to guard the public from unprofessional practice (Kizza 2010).

One of the theoretical perspectives to business ethics is the normative approach. This approach constitutes of utilitarianism and deontology. The two vary in terms of how they contextualise business ethics. However, they have one thing in common, that is, they are characterised by centralisation of decision making on issues touching on ethics. In both utilitarianism and deontology therefore, employees play minimal or no role in setting the ethical climate of organisations (Jamali & Mirshak 2007).

In business ethics, utilitarianism is about considering several courses of action, considering the costs involved and choosing the course of action which produces good outcomes for the maximum number of people irrespective of the negative effects of the good outcomes if any (Britannica Educational Publishing 2011).

Utilitarianism is an ethical model of reasoning which emphasises on the maximisation of good and happiness and the minimisation of the reverse of happiness and good. Its key proponents are John Struat Mill and Jeremy Bentham. According to them, the principles of human interaction are based on the overall good. In this sense therefore, good is looked from an objective sense in that what is good is seen as what produces good outcomes for the maximum number of people (Scarre 1996).

Utilitarianism can be explained using the principle of ‘the end justifies the means’, meaning if the end of a process or action is good, then the means of arriving at that end are also good and justifiable. According to the model therefore, for an action to be considered as ethically correct, it should have an outcome which benefits the maximum number of people. What this means is that people should focus on the end of a process but not the means of arriving at that end.

It is for this reason that utilitarianism is considered a consequentialist theory in that it focuses on the consequences of an action. An action may therefore be both correct and incorrect or moral and immoral at the same time. Take the example of killing, which is considered by many as immoral and illegal. But from a utilitarian point of view, the killing of one person to save the lives of a hundred people may be justified in that the killing of that person has an intrinsic value, that is, the saving of lives of a hundred people (Scarre 1996).

On the other hand, deontology requires employees to perform their duties as per the given instructions, leaving no room for them to give their opinion regarding the consequences of their actions as they perform their duties (Britannica Educational Publishing 2011).

The other perspective to corporate ethics is the decision making model, which begins with clarification of the issues on which ethical decisions are to be made. After doing the clarification, what follows is the evaluation of the clarified decisions, which paves the way for arriving at a precise decision on the most appropriate course of action. The decision is then implemented with the necessary modifications (Bratton & Gold, 2007).

This model is similar to the normative approach in that during the implementation stage, the guiding principle is mainly the maximisation of profits and minimisation of the cost of doing business. The aim of doing this is to ensure that an organisation realises its objectives using the minimum resources possible. Just like the normative approach, the decision making model exclusively involves the corporate leaders with the employees playing insignificant roles in the same.

Analysis and Evaluation

One way in which the bank behaves in a socially responsible manner towards its consumers is through the provision of quality services at fair prices. The bank also aims at having a relationship with consumers which is based on the principles of advice, guidance and help. The provision of quality services to consumers reflects a socially responsible behaviour because it ensures that consumers are protected from any form of unfair treatment such as fraud, exploitation and poor services.

The other way in which the bank behaves in a socially responsible manner towards its consumers is through building prosperous communities. The bank believes that prosperous communities are based on prosperous economy and that is why it helps the communities to flourish by investing in industries and organisations which bring people together in groups for economic prosperity. Such groups are financed by the bank to tackle various issues such as social inclusion and education. Through its micro finance scheme, the bank provides loans to the groups at very affordable rates so as to enable them start or strengthen their business enterprises (Visser & McIntosh 1998).

In 2004, the bank launched a customer relationship management system which made it to win the Cap Gemini financial innovations award in 2006. It also launched what it referred to as Ubank, a system which provides customers with an option of transacting business online with the aim of making them more satisfied by accessing banking services right at their homes or any other places of their convenience.

In regard to the environment, the bank has established very clear guidelines in form of a policy which outlines its relationship to the environment. One way in which the bank behaves in a socially responsible manner towards the environment is through compliance with all laws and regulations which are put in place to protect the environment. For instance, it takes the necessary actions to ensure that its operations do not negatively affect the environment either directly or indirectly. Such a policy is a pointer of a socially responsible behaviour because environmental pollution by corporates affects the health of the consumers. Having a clean environment ensures that the consumers enjoy a healthy environment and lead a healthy life.

The bank also invests in providing its customers with services and products which help them understand their environmental challenges and how to mitigate risks associated with the environment. The bank uses this approach because it believes that for sustainability purposes, it must capacity build the customers to enable them understand their environment and take good care of it.

In regard to the relationship between the bank and its employees, the bank has a policy in form of employee code of conduct. The policy is guided by the principle that all employees should be treated fairly and accorded the dignity and respect which they deserve. This policy reflects a socially responsible behaviour because the respect of employees is central to the success of any organisation. Treating employees with respect and dignity not only makes them motivated but also enables them get the intrinsic value of work.

The bank also embraces the concepts of cultural diversity and gender sensitivity in its employment policy. It does this by ensuring that employees are not discriminated based on race, gender or color. The policy has seen many women rise to the top positions of leadership of the bank.

The bank also ensures that employees are trained from time to time so as to enhance their capacity to discharge their duties. The training is part of the bank’s initiative to ensure that the customers get quality services at any given time. Training of employees is a socially responsible behaviour because it not only improves the quality of services but also makes employees grow in their career. Such training is also important to the employees because once they leave the company, it serves as an asset by giving them a competitive edge over other job seekers thus increasing their chances of being employed in other companies.

If the bank keeps the spirit of treating employees with dignity, taking care of the environment and providing quality services to customers, it has a potential of increased growth which may see it open more branches in other countries. The fact that the bank has a policy which ensures that there is no discrimination based on gender and race can make it the preferred employer of many qualified employees. The nondiscrimination policy can also attract talented employees who like working in reputable and respectable organisations. Having talented and highly qualified personnel would inspire innovation which would trigger growth and expansion thus giving the bank a competitive edge over its competitors.

Recommendations to Management

Regarding the consumers

One area where the bank needs to improve its policy on consumers is in regard to the number of staff in its branches. According to the naked office website, it is claimed that the bank places a lot of emphasis on cutting costs (Naked office 2014). This practice makes it have few employees in the branches to serve the constant or increasing number of customers. The employees therefore feel overworked without any additional compensation which is a form of exploitation. For the bank to make its customers more satisfied, there is need to recruit more employees to ensure that customers are served without delays. If it is not able to increase the number of employees, it needs to ensure that the employees are paid overtime so as to motivate them.

The bank also needs to improve the efficiency of its online accounts so that customers using them are able to enjoy faster and reliable online services. There are claims that the bank’s online systems are sometimes very slow which may be embarrassing to the customers (Wilcke 2004).

Regarding the environment

In regard to its relationship with its environment, the bank needs to allocate more funds to environmental conservation. There is no evidence of significant activities which the bank undertakes to conserve the environment. It needs for example to contribute towards the management of greenhouse gases which cause global warming. It can also partner with other governmental and non governmental organisations to launch comprehensive environmental conservation programs both at the national and international platform.

The bank needs to not only educate its customers on environmental management but also all members of the community where it has operations. This would ensure that it reaches as many people as possible thus increasing the impact of its efforts towards environmental conservation.

Regarding the employees

According to the naked office website, the bank has been accused of having poorly trained and inexperienced personnel at top leadership positions (Naked office 2014). While it pays attention to the training of other staff, it has neglected the training and capacity building of its leaders and therefore, there is need for change so that it can have leaders who are not only experienced but also visionary and well equipped with the necessary skills and techniques of leadership. Such leadership would ensure that the bank comes up with strategic business decisions which would propel it towards excellence (Baken 2004).

The bank needs to as well scale up its employee motivation efforts by introducing more employee motivation programs and policies such as sponsorship programs for employees to further their studies, provision of retirement benefits, medical scheme for the workers and promotions based on merit.


The National Bank of Australia is one of the companies listed in the data base of the world’s most ethical companies. The bank behaves in a socially responsible manner towards consumers, the environment and employees through policies and guidelines which govern its business strategy and operations.

It ensures that the consumers are provided with high quality services at affordable prices at any given time. It also has policies which require employees to be treated with respect and dignity as a way of motivating them to be more productive. In regard to the environment, the bank provides its customers with information on environmental risks and how to mitigate them.

These socially conscious policies have the potential of increasing the competitiveness of the bank in the banking industry, attracting talented employees and increasing innovativeness. However, the bank can do better through deployment of more staff, payment of overtime for the employees and provision of employees with more benefits for them to become more productive. It also needs to partner with other organisations to launch comprehensive environmental conservation programs as a way of scaling up its efforts towards environmental conservation.

Reference List

Aras, G & Crowther, D. 2010, A handbook of corporate governance and social responsibility corporate social responsibility series, Gower Publishing Ltd, Farnham.

Baken, J 2004, The Corporation: the pathological pursuit of profit and power, Constable, Vancouver.

Bratton, J & Gold, J 2007, Human resource management: theory and practice, Palgrave, Macmillan.

Britannica Educational Publishing 2011, Thinkers and theories in ethics, The Rosen Publishing Group, New York, NY.

Carroll, A.B 1979, ‘Three-Dimensional Conceptual Model of Corporate Social Performance’, Academy of Management Review, vol.4, pp.497-505.

Carroll, A.B 2008, A History of Corporate Social Responsibility, Oxford university press, Oxford.

Jamali, D & Mirshak, R 2007, ‘Corporate social responsibility (CSR): Theory and practice in a developing country context’, Journal of Business Ethics, vol. 72, pp.243-262.

Kizza, M 2010, Ethical and Social Issues in the Information Age, 4th ed, Springer, New York, NY.

Murray, P, Poole, D, & Jones, G 2006, Contemporary issues in management and organisational behaviour, Thomson Learning, South Melbourne.

Naked office 2014, NAB (National Australia Bank), Web.

Scarre, G 1996, Utilitarianism, Routledge, New York, NY.

Visser, W. & McIntosh, A 1998, ‘A Short Review of the Historical Critique of Usury’, Accounting, Business & Financial History, vol. 8, no. 2, pp.175-189.

Wilcke, R 2004, ‘An appropriate ethical model for business and a critique of MiltonFriedman’s thesis’, The Independent Review, vol.9, no.2, pp.187-209.

Wulfson, M 2001, ‘The ethics of corporate social responsibility and philanthropic ventures’, Journal of Business Ethics, vol.29, pp.135-145.

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