WHAT IS STRATEGY? The case of retail finance and English Building Societies
Strategy is the entrepreneurial quest to gain a sustainable competitive advantage. Firms’ dependency on States during systemic economic crises underscores the need to redefine “sustainable”. At periodic intervals, States have to tackle the democratic deficits that spill over from market failures. States hereby support those entrepreneurs that propose democratic solutions most sustainable from the viewpoint of power holders. State support changes the long-term structure of competitive advantage. Accordingly, I redefine strategy as the quest to provide State-sanctioned entrepreneurial responses to democratic deficits. Drawing on historical evidence of English building societies, I demonstrate how entrepreneurial responses that befit State power holders most in face of democratic grievances, are structurally advantaged, be it through fiscal, regulatory or political means. A combination of strategically and fortuitously accumulated State support allowed building societies to leave behind other members of the friendly society movement during the period 1875-1945, only to reproduce this feat with clearing banks in the 1960s and 1970s. I analyse how building societies’ competitive advantage foundered as they failed to adapt to the changing geopolitical framework of British State sanction.
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- Ronald L. Jepperson, 2000. "Institutional Logics: On the Constitutive Dimensions of the Modern Nation-State Polities," EUI-RSCAS Working Papers 36, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
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