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Management of Core Capabilities in Mexican and European Banks

Author

Listed:
  • Bernardo Batiz-Lazo
  • Douglas Wood

Abstract

This research considers the way in chinc banks have altered their strategies as regulatory change (ie deregulation) and information technology (IT) innovations created more opportunities for service delivery and extended the range of potential competitors and forms of competition. These external changes provided new diversification and growth opportunities but also modified prior expectations about the way managers defined and controlled their bank's core capabilities in pursuing current and potential business. The main research instrument used was a one hour, semi-structured interview; and in total 55 managers of commercial banks, investment banks, management consulting firns and regulators from Mexico, Spain, and the UK participated. Qualitative and quantitative analysis established that the great majority of banks responded to changes in growth opportunities through diversification moves but with no clear link to core capabilities. IT management played a secondary role in the design of bank strategy but at the same time, IT applications were perceived as an important force to modify competition in bank markets by supporting radical re-engineering of service delivery in ways that undermined previous advantagees of scale and scope.

Suggested Citation

  • Bernardo Batiz-Lazo & Douglas Wood, 2002. "Management of Core Capabilities in Mexican and European Banks," Industrial Organization 0211014, EconWPA.
  • Handle: RePEc:wpa:wuwpio:0211014
    Note: Type of Document - pdf; to print on HP/PostScript/Franciscan monk; pages: 12
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    File URL: http://econwpa.repec.org/eps/io/papers/0211/0211014.pdf
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    References listed on IDEAS

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    1. Benston, George J & Smith, Clifford W, Jr, 1976. "A Transactions Cost Approach to the Theory of Financial Intermediation," Journal of Finance, American Finance Association, vol. 31(2), pages 215-231, May.
    2. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    3. Canals, Jordi, 1994. "Competitive Strategies in European Banking," OUP Catalogue, Oxford University Press, number 9780198773504.
    4. Gilbert, R Alton, 1984. "Bank Market Structure and Competition: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 617-644, November.
    5. Baltensperger, Ernst, 1980. "Alternative approaches to the theory of the banking firm," Journal of Monetary Economics, Elsevier, vol. 6(1), pages 1-37, January.
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    Cited by:

    1. Bernardo Batiz-Lazo & Kassa Woldesenbet, 2006. "The dynamics of product and process innovations in UK banking," International Journal of Financial Services Management, Inderscience Enterprises Ltd, vol. 1(4), pages 400-421.

    More about this item

    Keywords

    Banks; competition; IT innovation;

    JEL classification:

    • L - Industrial Organization

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