In September 2017, the Commonwealth Bank of Australia (CBA) announced that it would abolish the fee charged to non-customers who withdraw cash from its Automated Teller Machines (ATM) (i.e. foreign ATM fees). The decision to remove foreign ATM fees was quickly adopted by Westpac, ANZ and NAB.
Assume you are a business consultant recently hired by the Board of Directors of CBA. The Board has asked you to prepare a business report which evaluates the impacts of removing foreign ATM fees on its business firstly, using arguments developed from an agency theory approach and secondly, using arguments from a legitimacy theory approach. The board has also asked you to use institutional theory to explain why the other major banks removed foreign ATM fees. Based on your arguments and explanations, conclude and reflect whether CBA made the correct decision in removing the foreign ATM fees.
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