Question

The key point of the case is : 6000 traditional bank jobs to go and 2000 new digital position created as NAB aims to move 60 percent of its business online over three years. redundancies are expected to cost up to $800 million. despite record underlying cash profit of $6.6bn, shares fall on cost blow out. Question? Using istitutional theory,explain how your chosen theory applies to the NAB case, and what each groupshould do as a result of following the theory.(Make sure you relate your discussion to the NAB case and each of the affected groups under your chosen theory). Compare and contrast this theory and stakeholder theory and identify which of these theories is most important from the banks perspective and explain reasons why you think your chosentheory is the mostimportant.

Answer 1

Institutional theory considers the processes by which structures,including schemes,rules,norms and routines,become established as authorative guidelines for social behaviour.Different components of institutional theory explain how these elements are created,adopted and adapted over space and time and how they fall into decline and disuse.In other words we can say that "Institutional theory is policy making that emphasizes the formal and legal aspects of govrnment structures."

The job losses will cut across all section of NAB's workforce,but will be mitigated by a recruitment drive that will see 2000 new roles created for people with distinct skills in data sciences,AI and robotics automation.Nab expects to take a one-off impairment charge of upto $800 million as part of the restructure and invest an additional $1.5 billion in preparing the bank for a new era of competition.

However ,the net job loss would be closer to 4000 as 2000 new digitally focused positions will be created.The 6000 workers represent 18% of the bank's 33,400 workforce.NAB will also establish the redundancy program for employees leaving nthe where workers can access support and resources for a period of upto six months after leaving the bank.NAB aims to move 60% of its business online and as i mention above it will invest extra 1.5billion focused on the technology transformation and simplifying internal processes.

Stakeholder theory looks at the relationship between an organization and others in its internal and external environments.It also looks at how these connections influence how the business conducts its activities.Stakeholders can come from inside or outside of the business.

Stakeholder theory suggests that the purpose of a business is to create as much value as possible for stakeholders.In order to succeed and be sustainable over time,executives must keep the interest of customers,suppliers,empoyees,communities and shareholders aligned and going in the same direction.