Managerial differences despite Isomorphic forces
A comparative study of Handelsbanken and Nordea
Master’s Thesis 30 credits Department of Business Studies Uppsala University
Spring Semester of 2020
Date of Submission: 2020-06-03
Sophia Björklund Olivia Stern
Supervisor: Professor Kerstin Sahlin
Acknowledgements
Firstly, we would like to thank our supervisor Kerstin Sahlin, professor of Public
Management in the department of Business studies at Uppsala University for guidance and support throughout our semester of extraordinary circumstances. Further we would like to thank Handelsbanken and Nordea for participating in our study, enabling us to investigate the topic of our personal interest. Last but not least we would like to thank our peers that have filled our Master’s with wise discussions and joy.
Abstract
In this comparative case study between Handelsbanken and Nordea, the homogeneous industry of banking is investigated together with the phenomena of management consulting.
The two banks are scrutinized under the same laws and regulations, offering the same products and services and tend to recruit similar people. Hence, they are under the same isomorphic pressures. At the same time, it has been acknowledged in the media that the two big banks clearly have different opinions towards management consulting, which additionally is a business area that has increased dramatically over the past years. With this in mind it is interesting to examine why the two actors take such different stands towards the usage of management consultants? In order to answer the research question, theories within management consulting, isomorphism, organizational identity and culture are presented.
Semi-structured interviews are used as a primary method and the result of our study is twofold. First, the banks have different ideas about what a management consultant
contributes with. Second, the result emphasizes the importance of organizational culture to a greater extent than expected. Hence the cultural palette and the existing understanding of management consulting in these two banks are crucial in order to understand the differences within a homogeneous industry.
Keywords: Management, Banking, Institutional Isomorphism, Organizational Identity, Organizational Culture, Management Consulting
Table of content
1. Introduction ... 1
1.1 Background ... 1
1.2 Problematization and Research Question ... 2
1.3 Purpose of study ... 3
2. Theoretical framework ... 4
2.1 The bank ... 4
2.2 Isomorphism ... 6
2.2.1 Coercive ... 6
2.2.2 Mimetic ... 7
2.2.3 Normative ... 8
2.3 Organizational Identity and Culture ... 9
2.3.1 Identity ... 9
2.3.2 Culture ... 10
2.4 Management consulting ... 11
2.4.1 Introducing management consulting ... 11
2.4.2 Expertise ... 12
2.4.3 Fashion Setters ... 13
2.4.4 Scapegoating ... 14
2.4.5 Storytelling ... 15
3. Methodology ... 17
3.1 Choice of method ... 17
3.2 Data selection ... 18
3.3 Data collection ... 20
3.3.1 Interview process ... 20
3.3.2 Triangulation ... 20
3.3.3 Ethical guidelines ... 21
3.4 Operationalization ... 22
3.5 Evaluation of study ... 23
3.6 Data analysis ... 24
3.7 Method criticism ... 25
4. Empirics & Analysis ... 27
4.1 Similarity ... 28
4.1.1 Laws & Regulations ... 28
4.1.2 Products & Services ... 29
4.1.3 Recruitment ... 30
4.1.4 Analysis ... 31
4.2 Attributes ... 33
4.2.1 Identity ... 33
4.2.2 Culture ... 35
4.2.3 Risk ... 36
4.2.4 Analysis ... 37
4.3 Competence ... 38
4.3.1 In-House vs Outsourced ... 38
4.3.2 Attitude Towards Management Consultants ... 39
4.3.3 Impact on Leadership ... 41
4.3.4 Analysis ... 42
4.4 Supporting Documents ... 44
4.4.1 Analysis ... 47
5. Discussion ... 48
6. Conclusion ... 50
6.1 Future Research ... 50
References ... 51
Oral References ... 55
Appendix ... 56
1. Introduction
“The Swedish big banks have distinctively different approaches towards the hiring of management consultants” (Hägerstrand, 2016)
1.1 Background
Within all organizational fields, there is some degree of normative forces. These forces are assumed to be both general, as well as global. Therefore, organizations within the same area or industry tend to resemble each other and thus pushed towards homogenization.
(DiMaggio & Powell, 1983)
Within the financial sector, companies and banks are to a high degree structured in line with such institutional ideas. Banks per se are strictly limited by ideas of how it “should” be (Hoffman, 1997, p. 28) and are therefore not only seen as more traditional, but also more affected by cultural manifestations than other industries. These ideas characterize banks in general and thus results in a high degree of similarity (Lundgren, 1999, p. 51). The process of organizations becoming homogeneous is best explained with the concept of isomorphism (DiMaggio & Powell, 1983). One definition of organizational isomorphism is “the tendency to similarity that creates clear structures for how one should act within the organization or in social contexts and thus contributes to the construction of reality” (Hoffman, 1997, p. 36).
Another field interpreted as homogeneous is the growing industry of management consulting (Windell, 2007; Sturdy, 2011). The usage of management consultants or consultants in general has increased dramatically over the past years (Sturdy, 2011), both in the private and the public sector (Sveriges Radio, 2014). The concept of management consulting is broad, but one definition expresses it as: “an advisory service contracted for and provided to
organizations by specially trained and qualified persons who assist, in an objective and independent manner, the client organization to identify management problems, analyse such problems, and help” (Greiner & Metzger, 1983).
The Swedish Association of management consultants (Sveriges Managementkonsulter, 2019) states that there are about 15 000 management consulting businesses in Sweden today. These management consultants offer their services within a wide range of industries such as bank and finance, property, retail, healthcare, technology and the public sector, just to mention a few (KPMG, 2019; Deloitte, 2019; Centigo, 2019). In addition to all of the management consulting firms offering advisory in various industries, there are also branch-specific firms.
For instance, consulting firms that are experts in the business of banking (Bank Solutions Group, 2019). In fact, by 2008, 23 percent of the global end users of management consulting services operated within the financial sector (O´Mahoney, 2010, p. 75).
1.2 Problematization and Research Question
Media possess the ability to contribute to rational myths or truths (Schultz et. al, 2014) and has drawn attention to the fact that a majority of the Swedish big banks1 use external expertise from management consultants (Hägerstrand and Källberg, 2016). One example is Nordea, as during the period of 2007 - 2015, hired a large number of consultants from McKinsey (Hägerstrand, 2016). According to Hägerstrand (2016), the usage of consultants did not only lead to large expenses for Nordea – it also led to several of the consultants being recruited for prestigious positions within the bank. Svenska Handelsbanken is on the contrary the only Swedish big bank that completely shuts out management consultants (Hägerstrand &
Källberg, 2016). “We do not hire management consultants” are Wallqvists’, press chief of Handelsbanken, own words which refer back to the bank’s long tradition of values, leadership and culture. Handelsbanken and Nordea can therefore be seen as opposite extremes in the question regarding the usage of management consultants (ibid). This, even though the banks operate in a homogeneous environment, being exposed to the same normative forces, offering the same products and services (Lundgren, 1999, p. 58).
Since the usage of management consultants is growing, even in a traditional sector such as banking (O´Mahoney, 2010, p. 75), we believe that the question why the approach amongst these two actors differ, is of great interest. Studies have been investigating the phenomenon of isomorphism (DiMaggio & Powell, 1983; Perkmann & Spicer, 2008), banking (Elliot, 1985; Cäker & Siverbo, 2014; Lundgren, 1999) and management consulting (Windell, 2007;
Sturdy, 2011; Kantola, 2009) separately. To our knowledge, only a few studies have
1 Swedish big banks refer to Handelsbanken, Nordea, SEB & Swedbank (Svenska Bankföreningen, 2019a).
discussed the degree of isomorphism within the banking industry (Lundgren, 1999;
Deephouse & Carter, 2005; Deephouse, 1996), for example how isomorphism can legitimize the organization and its operation (Deephouse, 1996). Other studies have further shown that banks follow each other in trends and external forces, such as environmental issues and sustainability (Lundgren, 1999, p. 20). However, the literature leaves room for further investigation. Our contribution is consequently to bring in a third-party aspect - management consulting - into the homogenous and traditional industry of banking. By examining two actors in the Swedish banking industry we would like to answer the following research question:
In the homogeneous industry of banking, how come two actors take such different stands towards the usage of management consultants?
1.3 Purpose of study
The purpose of this study is to compare two out of the four Swedish big banks' approaches towards the usage of management consultants. In order to investigate this and answer our research question, we will perform interviews with people that have executive roles within the two banks. The case study of Handelsbanken and Nordea will thus contribute to the field of isomorphism within banking.
This study will strengthen our theoretical knowledge within organizational isomorphism, management consulting, organizational identity and culture. The empirical data will be
collected by performing semi-structured interviews. It is therefore important to remember that this qualitative study does not correspond to a universal truth, but rather as a case study of two Swedish big banks. Thus, the study aims to investigate why two actors within the homogeneous industry differ in the matter of management consulting.
2. Theoretical framework
In this part of the study the theoretical framework will be presented, consisting of theories within banking, isomorphism, organizational identity, organizational culture, and
management consulting. The theories of isomorphism, organizational identity, organizational culture and banking will help us to understand how banks operate within a homogeneous environment whilst the theories within management consulting helps us investigate why companies do or do not use their services.
2.1 The bank
In this section of the thesis, we will present the bank as an institution along with its history and social perceptions. This in order to understand how and why certain cultural and social norms have arisen within the banking industry. In other words, we want to understand the isomorphic forces that the banks are being pressured by.
To begin with, the bank can be viewed as a corporation where its core service is to buy and lend money. Banks further act as brokers of transactions and advisors of savings and
investments. In short, the product of a bank is financial means (Lundgren, 1999, pp. 51-52). It is suggested that the phenomena of the bank started as early as in the 1400’s. However, the private bank or the modern bank as we view it today was first founded during the 1800’s (Bankhistoria, 2020). Handelsbanken was established in 1871 (Handelsbanken, 2012) whereas Nordea has its roots in a merger of several banks, started during the early 1820’s (Nordea, 2020b). In the following section, we will speak of “the Bank'' as a phenomenon rather than the two banks being compared, since the purpose is to understand how the development of the banking industry has evolved, not the two banks per se.
The Bank is a rather traditional organization, sometimes viewed as an institution. An institution is built on blocks that represent cultural practices and unique symbols for the certain institution (Thornton et al. 2012, p. 54). These blocks specify how the preferences and interests of the organization are guided by certain principles and assumptions (Friedland &
Alford, 1991).
The Bank is viewed as rather conservative, partly due to its technological limitations, laws and regulations as well as the institutionalized environment (Lundgren, 1999, p. 51). Banks are strictly bound to preconceptions of how the Bank “should be” (Hoffman, 1997, p. 28) which reflects the idea of a traditional sector (Lundgren, 1999, pp. 50-54). Additionally, the Bank is permeated by social constructions and institutionalized ideas of what characterizes a Bank, how one should act within a Bank or in relation to it (ibid). Another explanation for the consistency of the Bank is its members wanting to maintain the social order. New recruits resemble each other and do not tend to challenge the established norms and values (ibid), which according to DiMaggio & Powell (1983) is a conscious way to structure organizational fields. Lundgren (1999, pp. 54-55) calls this homosocial reproduction, since the aim is to reconstruct the social attributes that the Bank is defined by. The internal norms are thus maintained, which in the long term might lead to organizational stability. A practical example of homosocial reproduction is the fact that employees often resemble each other due to their educational background; same schools, degrees, business journals and management literature (ibid).
Consequently, one of the most characteristic qualities of the Banks is their similarity. The Swedish industry of banking is comparable with an oligopoly, since four big actors, referred to as Swedish big banks, hold 90 percent of the market share. Oligopoly often arises due to problems related to barriers of establishment, regulation and control (Lundgren, 1999, pp. 29
& 54). These isomorphic and traditional forces within the banking industry have made the sector slow and less recipient for new ideas and trends (ibid). Further, the products and services in an oligopoly tend to resemble each other, which also is the case in the Swedish banking industry. This means that when one bank acts, for instance when regulating the mortgage rates or developing a mobile application, others tend to follow (ibid).
To sum up, the Swedish banking industry is undeniably pressured by the three institutional isomorphic forces. These isomorphic forces and how they differ from each other will be presented in depth in the next section. Theories about banking have been presented in order to help us understand the history and emergence of banks and how they are affected by the environment and social pressure. Further, inspiration has been taken from Lundgren’s dissertation (1999) about isomorphism within banking, both in terms of theory and methodological approach.
2.2 Isomorphism
In contrast to other theories of modern organizational forms explaining corporations’
dissimilarities (Woodward, 1980; Hannan & Freeman, 1977), DiMaggio & Powell (1983) instead aim to explain homogeneity of organizational forms and practices. Organizational fields tend to present various shapes and different approaches initially. Over time however, homogeneity within the organizational field occurs, as a result of the field becoming well established. This process, or transformation, of organizations becoming homogeneous are best explained with the concept of isomorphism (DiMaggio & Powell, 1983).
According to DiMaggio & Powell (1983) isomorphism can be divided into two categories;
competitive and institutional. These are separated from each other in several ways;
competitive isomorphism is mostly relevant for fields where open and free competition exists, and focuses more on resources and customers (Hannan & Freeman, 1977) whilst institutional isomorphism is a useful tool in order to explain and understand the politics within organizational life (DiMaggio & Powell, 1983).
Unlike competitive isomorphism, Meyer & Rowan (1977) explains institutional isomorphism by saying that irrespectively of the efficacy resulting from institutionalized practices and procedures, organizations still often implement these in their operations. Institutionalized products, services and techniques thus function as myths, which organizations come to adopt ceremonially (ibid). Institutional isomorphism is further divided into three subcategories:
coercive, mimetic and normative (DiMaggio & Powell, 1983; Aizawa, 2018). Each of these three mechanisms result from its own antecedents and will be defined below (DiMaggio &
Powell, 1983). Henceforth, this paper will concentrate on institutional isomorphism rather than the competitive one since we believe it will address the focus of our research better.
2.2.1 Coercive
Firstly, coercive isomorphism refers to the process when organizations become similar due to formal and informal pressures. These pressures either derive from hard law or informal rules, so called soft regulations, imposed by organizations that the organization relies on (DiMaggio
& Powell, 1983). Soft regulations refer to principles that are not legally enforceable such as environmental programmes (Furusten & Werr, 2016) whilst hard law refers to legal
regulations such as tax law requirements. The organizations that resemble each other due to coercive isomorphism therefore act in a common legal environment, thus affected and
comprised by the same laws and regulations. Consequently, organizations covered by coercive isomorphic forces are directly affected by and based on political decisions in order to maintain legitimacy (DiMaggio & Powell, 1983).
Another way in which coercive isomorphism is being expressed is through the similarity of organizations expertise, structures, staffing and hierarchies. According to Katopol (2016), any new organization that proudly differentiate itself from other organizations within the same field, often ends up being similar to the others anyway. This is due to the fact that the organization otherwise will not achieve legitimacy from important actors such as the
government, or from skilled professionals looking for their future workplace (Katopol, 2016).
The result of a common legal environment is visible in several parts of the organization, such as the structure and internal behavior (DiMaggio & Powell, 1983). Institutional rules that are legitimized by the state are to a higher degree mirrored in social life and organizational structure (Meyer & Rowan, 1977). Consequently, the degree of homogeneity within certain fields increases due to rituals that align with wider institutions (DiMaggio & Powell, 1983).
2.2.2 Mimetic
Secondly, mimetic isomorphism refers to when organizations resemble each other due to uncertainty. Uncertainty within organizations is a powerful force that encourages mimetic behavior and imitation of organizations in the same field. Some conditions when
organizations imitate each other are for instance in the event of poorly understood
technologies, unclear goals or symbolic uncertainty (DiMaggio & Powell, 1983). Uncertainty within organizations refers to “perceived lack of information, knowledge, beliefs and feelings necessary for accomplishing organizational tasks” (Driskill & Goldstein, 1986). This
uncertainty might lead to organizations model themselves based on other actors within the same industry, in order to achieve success and/or legitimacy. Hence organizations become homogeneous. (DiMaggio & Powell, 1983)
In other words, when ambiguous situations arise, organizations tend to look for solutions in other organizations that seem successful. This is a natural reaction in the state of uncertainty since modeling and the usage of best practices reduces uncertainty and creates hope within an organization (Katopol, 2016). Another motivation for this mimetic behavior in the state of dissatisfaction is often that the organization “are at least trying to improve” their current
situation (DiMaggio & Powell, 1983). Further explanation for this behavior is that despite attempts to enhance diversity, there is too little variation to be selected from, in terms of organizational structures. This imitation occurs, despite the lack of evidence regarding whether the adopted model is effective or not (ibid).
2.2.3 Normative
Last but not least, normative isomorphism stems from professionalization and the standardization within certain professions. Due to the normative powers existing within professional fields, people tend to resemble each other (DiMaggio & Powell, 1983). Thus, normative isomorphism is based on moral and ethical social obligations (Lundgren, 1999, p.
27) which can be as strong as laws and regulations assigned by the state (DiMaggio &
Powell, 1983). There are several explanations for how or why these normative rules
continuously remain the same. DiMaggio & Powell (1983) as well as Katopol (2016) states that academic education and professional training are important tools in the process of shaping individuals within one specific field. Business schools are one example of an important actor that contributes to this phenomenon (Fougére, Solitander & Young, 2013;
Engwall, Kipping & Usdiken, 2016). Due to similar education within a field, independently on the school’s geographical location, the professionals’ course of action towards different issues becomes almost inseparable (Katopol, 2016).
Recruiting of staff is another example of how normative isomorphism takes shape. Within certain professions, certain people are hired (Lundgren, 1999, p. 27). Thus, personnel within the same profession are often perceived as indistinguishable. For example, the same type of language and clothing are used (DiMaggio & Powell, 1983). According to Brunsson (1989, p.
168) normative forces are especially strong within businesses such as banks. It is important to understand that people within the organization but in different departments differ in terms of the socially taken-for-granted rules. However, people in the same fields tend to resemble each other regardless of employer (DiMaggio & Powell, 1983).
In summary, although there is a lack of evidence whether the institutional isomorphic processes increase efficiency within organizations, they are still expected to proceed. When organizational efficiency appears, the success is often explained by the way the organization adapts after coercive, mimetic and normative forces (DiMaggio & Powell, 1983). In
summary, coercive isomorphism refers to when organizations become similar due to
regulatory and legal forces, whilst mimetic isomorphism refers to when organizations become similar by imitating each other in a more competitive sense. Normative isomorphism refers to the similarity within organizations due to normative forces such as social norms, education and taken-for-granted values.
2.3 Organizational Identity and Culture
Even though Handelsbanken and Nordea operate within a homogeneous environment where they are under similar isomorphic forces, there are also several theories describing why companies differ from each other. For example, the concepts of organizational identity and culture are relevant here. Throughout the theoretical literature, it can be difficult to
understand the difference between identity and culture since they can be perceived as intertwined. In fact, some organizational identity scholars only use different vocabulary and therefore actually refer to the work of culture (Rivaso, 2016, p. 67). However, if trying to determine a theoretical difference between the two terminologies, identity refers to meaning structures such as organizational symbols, focusing on for example how members express their organizational sense of self, whereas culture is composed of material and ideational elements (Hatch & Schultz, 1997). In this section, the most common theoretical framework of identity and culture will be presented.
2.3.1 Identity
A lot of research within the field of organizational identity has been done during the years, but according to Glynn (2008, pp. 413-427) the definition of Albert and Whetten (1985) seems to be prominent. To answer the question of organizational identity it is crucial to focus on central, distinctive and enduring attributes in order to define the essence of an
organization. In other words, organizational identity can be viewed as what makes an organization unique and different from other actors in a certain field (Glynn, 2008, pp. 413- 427).
Organizational identity further refers to what members of an organization perceive and feel about the organization. In an external point of view, organizational identity is more a question of marketing in how the organization expresses itself and what makes the organization
different. Identity is thus central in what characterizes an organization and is assumed to be related to commonly shared values within the organization and can thus also be viewed from an internal perspective. Even though the organizational identity is communicated from the
top management, it is the members of the organization that live and maintain the identity.
(Hatch & Schultz, 1997)
Organizational identity can be viewed as a social product in which people within the organization strive to mirror their self-image and thus create a sense of belonging to the organization, as well as an external tool to create competitiveness (Furusten & Werr, 2016).
Further, Whetten (2006) stresses the relationship between organizational identity and a sustainable competitive advantage. In fact, the will of maintaining a certain public perception has led to identity driving change in strategic decisions (Ravasi, 2016, p. 67).
2.3.2 Culture
As stated above, the concepts of identity and culture sometimes overlap. This has led to a discussion about clarifying the differences between the two concepts (Ravasi, 2016, p. 68).
Unlike identity, culture refers to how the organizational reality is supposed to be interpreted.
For example, culture refers to beliefs and assumptions and the correct way of how to feel and think about a certain reality. Cultural patterns are something deeply ingrained into the
organization that is developed over time which makes the organizational culture something that the members cherish and protect (Rivaso, 2016, p. 68 & 72). Studies have shown that when cultural patterns become questioned and threatened, a resistance of change can intensify (Canato, et al., 2013).
According to Rivaso (2016, p. 69) members of organizations tend to search for answers in the organization's cultural past and established cultural practices. This in order to find guidance in important questions and when threatened by change. Further, studies suggest that culture is an important referent for organizational identity (Albert & Whetten, 1985). This means, for example, that when members try to answer the identity question of “Who are we?”, culture seems to be a part of that answer (Rivaso, 2016, p. 68).
To sum up, organizational culture refers to deeply ingrained values and assumptions that exist within the organization. The organizational culture often helps to guide members in times of change and uncertainty (Rivaso, 2016, p. 69). Organizational identity, in contrast, refers to the way members of an organization mirror their self-image in the organization and thus create a sense of belonging, but also to the way that organizations are viewed from an external part of view (Glynn, 2008, pp. 413-427).
Theories about isomorphism within organizations and theories about how organizations become different help us to understand how and why the banking environment is exposed to pressures making organizations become similar, but also how internal patterns can create differentiation amongst companies. We will now go into the concept of management consulting and what theories there are to explain the usage of their services.
2.4 Management consulting
Management consulting is defined as “an advisory service contracted for and provided to organizations by specially trained and qualified persons who assist, in an objective and independent manner, the client organization to identify management problems, analyse such problems, and help” (Greiner & Metzger, 1983). For instance, management consultants work with providing expertise, extra staff and further help the management with strategic
discourses (Sturdy, 2011).
2.4.1 Introducing management consulting
During the period of 1980-2008, the industry increased from 3 billion to 330 billions of dollars, based on the 75 largest consulting firms in the world (O´Mahoney, 2010, pp. 2-20).
Having that said, if success was only measured in economic growth and influence, there is no other industry to compare. Additionally, the societal influence of management consultants is remarkable in several ways: management consulting is now the top one choice for graduates, a big cost item for corporations and a major player in governmental strategies (O´Mahoney, 2010, pp. 2-20). However, the flourishing industry of management consulting has not always looked like this. In 1965, studies showed that there was one consultant for every hundred managers, while in 1995 the ratio was one for every thirteenth (McKenna, 2006, p. 8). All of a sudden, the students with the best grades were offered jobs at the elite consulting firms and MBAs acted as certificates in order to allow graduates to advise on executive strategies (McKenna, 2006, pp. 2-3).
Some analysts explain the growth of management consulting by the overall expansion in the American economy, in accordance with increased global competition and complexity in management. However, this is not the whole picture. There are as stated above several benefits that follow with management consulting, such as an increased control of transaction costs, which partly explains why companies are willing to pay for external help (McKenna, 2006, p. 9). Others explain the growth by the increased demand for external expertise in the
financial and governmental sector due to the expansion in IT related services, as well as the high degree of mergers and acquisitions. This demand for external expertise made the consulting industry flourish (O´Mahoney, 2010, p.17).
The emergence of management consulting has faced both criticism and admiration. Critics have primarily focused on the question of legitimacy and to what extent management consultants should influence society in both matters of organizational and governmental context (Sturdy, 2011). Others mean that management consulting in fact is beneficial in terms of specialization, knowledge transfer and cost reduction (McKenna, 2006, pp. 6 & 11).
Regardless of what opinion one carries, management consultants have had a great impact on society and management per se (Sturdy, 2011).
Since management consulting has been widely discussed (Sturdy, 2011) several concepts have been brought into theory in order to explain why management consultants have become common amongst management and leadership (Sturdy, 2011; Windell, 2007; Kantola, 2009;
Furusten & Werr, 2016). Some of them will be explained below.
2.4.2 Expertise
One explanation for the growing phenomena of management consulting is that we live in a so-called expert society, which refers to how we are constantly exposed to experts and specialization in different fields (Furusten & Werr, 2016). In this concept, experts are individuals characterized by superior knowledge in a given area, prepared to guide others.
Within the expert society people are expected to listen and follow advice regardless of your position as citizen, individual or manager (ibid).
Classic professionalism and expertise often refer to certain and clear professions such as medicine, law or auditing. Here, experts are legitimized and certified by specific regulations, codes of conduct and specific education and degrees (Furusten & Werr, 2016). Hence, it is quite easy to identify an expert in these fields. Yet, in the case of finding an expert within consulting, it looks a bit different. Consultants are legitimized and recognized by experience- based trust and word-of-mouth and do not have clear guidelines for how to become certified.
This means that consultants' degree of expertise often relies on and will emerge over time (ibid).
McKenna (2006, p. 2) argues that business schools informally certify management consultants by offering Master of Business Administration (MBA), since firms within management consultancy primarily recruit MBA students. Hence, it has arised a new type of expert where consultant services are more situational and adopted to local factors without scrutiny compared with traditional ones that are more generally applicable and formally authorized (ibid). Some suggest that this leads to a lack of transparency, since there is no clear definition of what management consultants do or what their field of expertise is (Furusten & Werr, 2016).
2.4.3 Fashion Setters
Previous studies have explained the role of management consultants as being significant fashion-setters within the business community (Windell, 2007). This refers to consultants being important in the creation and dissemination of spreading management ideas.
Consultants are acting as fashion-setters for instance when they convert different ideas into management knowledge, when developing new management techniques, or when carrying ideas into organizations (ibid).
Since management ideas constantly change due to trends and fashion, management consulting thus becomes a profession that needs to be up to date. In a sense, managers are guided by fashion (Windell, 2007). Hwang & Powell (2005) talks about this phenomenon but in terms of institutional entrepreneurs. They suggest that consultants act as “actors or groups of actors” that seek to make an impact on how organizations behave in accordance with their own interests. Hardy and Maguire (2008) further explains institutional entrepreneurs as initiators to institutional change using their special qualities, characteristics and abilities to promote alternative ideas and arrangements. Institutional entrepreneurs are a vital group when discussing change and transformation in socially constructed ideas (Windell, 2007;
Hardy & Maguire, 2008) and therefore consultants shape the frameworks that organizations adopt to (Hwang & Powell, 2005). Consequently, consultants have become problem-solvers within corporations and are thus being seen as legitimate experts specialized in cutting costs, increasing productivity and profitability (Windell, 2007). Furthermore, consultants have had and have an enormous impact on today’s society in the matter of management and decision making (Sturdy, 2011; McKenna, 2006).
2.4.4 Scapegoating
Another theory that explains the usage of management consultants is scapegoating. The answer to the question why companies hire consultants has been answered in terms of economic benefits and specialized knowledge. Other benefits that come with hiring external staff is for example the outsourcing of responsibility (McKenna, 2006, pp. 9-11). On the contrary, early philosophers, such as Aristotle and Erasmus meant that it is dangerous to invest too much trust in outsiders (ibid).
According to Sturdy (2011), scapegoating is about “placing more blame/responsibility than is warranted on consultants for decisions, ideas and practices”. The role of the consultant is thus to act as both an advisor, but also as the one taking blame and/or responsibility for the
implemented action. The consultant is viewed to be paid for being in charge of decisions made in the company (ibid). Jackall (2010, pp. 21-22) explains the authoritarian relationship between subsidiaries and their managers, focusing on how managers are pushing details down to subsidiaries instead of managing the details of projects themselves. The main reason for this behavior is that the action of pushing details down, consequently, protects the
managers privilege of authority to explain if a mistake occurs. The subsidiaries are
additionally becoming either the “point men” being acknowledged or the “fall guys” taking the blame, depending on the outcome (ibid).
In the theory of scapegoating, it is easier for the company to hire external consultants instead of identifying and presenting new alternative approaches to innovation and management.
Consultants are here viewed as experts coming from a high-status industry with expensive services that justifies the outsourcing of the organizations’ management.
(Sturdy, 2011)
2.4.5 Storytelling
One challenge within the industry of management consulting is to penetrate new markets in which they can create needs. Inevitably, management consultants have a great impact in today's society, not least in organizational management (Sturdy, 2011). Therefore, the theory of storytelling explains how consultants have managed to create and maintain demand and legitimization. Previous studies have shown that in order to legitimize their work, consultants often use the technique of storytelling. By telling tales, consultants represent themselves and their work by presenting their problem as well as giving advice on how to solve it based on their professional knowledge and skills (Kantola, 2009). Reissner & Pagan (2013) further explains that one of the functions of storytelling in management practice is to translate strategic messages into operational ones.
There are several ways of understanding storytelling. Studies that view storytelling as a tool, often suggest that storytelling is used as a way to generate income and a way to promote consultancy services. This way of understanding storytelling suggests that the reason for using the technique solely is the economic imperative (Reissner & Pagan, 2013, pp. 18-25).
However, these studies might be biased in this manner since there also are value adding effects for organizations using storytelling. The management can benefit from storytelling for instance in the manner of sensemaking, culture and creativity (ibid). Kantola (2009) suggests that some professionals are dependent on creating images and tales of their own
professionalism. These professionals are in between different industries, sometimes defined as hybrids, and it's therefore crucial for them to sell their own services in the market. In other words, these professionals must create a trustworthy image of their expertise. Thus,
storytelling is a way of explaining how certain professionals, such as consultants, legitimize their image and expertise (ibid).
To sum up, the theories of expertise, fashion setters, scapegoating and storytelling are ways of explaining why companies, in this case banks, do or do not use the services of
management consultants. In short, expertise refers to how management consultants contribute with specialized knowledge and skills within a new expert society, fashion setters refer to the way management consultants have had an impact on today's business and society. The theory of scapegoating suggests that management consulting is a way of putting the blame on someone else in order to free oneself from responsibility and storytelling refers to the way that management consultants can translate strategic messages into operational ones.
Theory Sub-theory Related to Research Question
Institutional Isomorphism
Previous research and history about banking
Coercive Isomorphism Mimetic Isomorphism Normative Isomorphism
The Bank
In the homogeneous industry of banking,
Organizational Identity &
Culture
Management Consulting
Organizational Identity Organizational Culture
Expertise Fashion Setters Scapegoating Storytelling
How come two actors take such different stands towards the usage of management consulting?
Table 1. Overview of theoretical framework in relation to the research question. Here, the research question is divided into two parts. The table shows what theories explain what part of the research question.
3. Methodology
In this section the choice of method will be reviewed. Here we will further explain how our purpose and research question will be investigated and answered. Firstly, the choice of method will be presented, followed by data selection, data collection, operationalization, evaluation of study, data analysis and lastly method criticism. This will be done in order to explain in what way and format the study is performed and how data is collected.
3.1 Choice of method
This thesis is performed as a qualitative study using an abductive approach. This means that the data is collected by performing a qualitative study in order to base the thesis on broad data deriving from semi-structured interviews and documents, rather than big samples of data (Bryman & Bell, 2015, p. 578). An abductive approach is a mix of a deductive and inductive approach (Hallin & Helin, 2018, p. 43). A deductive approach refers to when the researcher uses knowledge and theories of a certain domain in order to create a hypothesis that the empirics will scrutinize in order to certify or reject. An inductive approach on the other hand refers to when the researcher infers the implications of the findings and further applies it to the theory (Bryman & Bell, 2015, p. 23). Therefore, an abductive approach refers to when combining the theory with the empirical material continuously (Hallin & Helin, 2018, p. 43).
In this thesis, semi-structured interviews are chosen as a method since it enables us to evolve a deeper understanding of the empirics (Fitzgerald & Dopson, 2009, p. 469). The method of semi-structured interviews is appropriate when using the abductive approach (Hallin & Helin, 2018, p. 43). Semi-structured interviews further mean that questions are prepared in advance, for instance in the appearance of a study guide, in order to cover the most critical areas. The interviewee will still, however, be able to freely speak and express their own thoughts and opinions in a language natural for them (O´Gorman & Maclntosh, 2014. p. 119). Bryman &
Bell (2015, p. 481) explains semi-structured interviews as when the researcher holds a so- called interview guide with certain topics but lets the interviewee freely affect how the answers end up. This interview process is flexible and emphasizes what the interviewee finds relevant and important (ibid).
Further, this thesis is a comparative case study in which we conduct empirical data from multiple sources in order to investigate the phenomenon of management consulting in the industry of banking. According to Fitzgerald & Dopson (2009, pp. 465-166), a comparative case study premise that data is collected from different sources in order to investigate certain units, such as organizations, divisions or parts of an organization or characteristics in a certain context. Further, they suggest that a case study can provide in-depth and multifaceted data on a certain field (ibid). Our comparative case study is thus based on the phenomena of management consulting within the homogeneous banking industry, where Handelsbanken and Nordea provide us with an in-depth understanding of the phenomena in order to enable us to answer our research question.
Method inspiration is taken from a doctoral dissertation performed by Maths Lundgren (1999), in which he examines how environmental issues become institutionalized within the homogeneous environment of banking. Based on theories within isomorphism the study aims to understand the environmental impact on Swedish banks. In his dissertation, Lundgren (1999, p. 33) performs a qualitative study in which he bases his data on open and
unstructured interviews. We motivate our choice of semi-structured interviews as most appropriate for our study, since we are, unlike Lundgren, performing a comparative study.
Semi-structured interviews thus make the data collection more standardized than by performing unstructured interviews. Similar to Lundgren (1999), we use the method of triangulation in order to increase the credibility of the study. For this, internal as well as external documents from the banks are used, which will further be presented in part 4.
3.2 Data selection
In this section of the study, we explain what underlies our choice of interview candidates.
When selecting candidates for our interviews, it was crucial to find persons that are able to answer questions in relation to our research question. Since some of the questions concern culture, leadership, and expertise the interviewees are people with executive positions.
Snowball sampling was used as a method when finding interview candidates. Snowball sampling refers to when the interviewers use the first contact to find others that are of
relevance for the research. It is thus not a random sample. However, the researcher would not have reached the interviewees without the first contact. One potential drawback of such a sampling is that the respondents might not be representative for the entire population (Bryman & Bell, 2015, pp. 434-435). As stated earlier, the reason why we wanted to
interview candidates from Handelsbanken and Nordea is that they act as opposite extremes in the question of management consultants.
Furthermore, it is important to not choose a too small sample in order to avoid difficulties in data saturation, theoretical saturation or informational redundancy. However, a too big sample size can lead to challenges in taking out the main point of the answers (Bryman &
Bell, 2015, p. 436). According to Hallin and Helin (2018, pp. 35-36), the number of
interviews should reflect the amount of data needed in order to get the research interesting. A good benchmark is to conduct interviews until saturation, meaning when further interviews don't provide additional information (ibid). Consequently, we have chosen to interview three persons á 60 minutes from each of the two banks.
Respondent Area Years within the bank
Handelsbanken
1 Concern management 41
2 Human resources 27
3 Branch manager 19
Nordea
1 Leadership 19
2 Human resources 7
3 Diversity and inclusion 4
Table 2. Demonstrating interview respondents: area of employment and number of years within the bank.
3.3 Data collection
In this section we will explain the interview process, the method of triangulation and what ethical guidelines will be taken into consideration.
3.3.1 Interview process
In order to perform the interviews, access to relevant interviewees is crucial. In this study, the method of two-step-selection was used. This refers to the process starting with deciding candidates of interest and thereafter finding candidates within this group to interview (Hallin
& Helin, 2018, p. 34). In accordance with the two-step-selection, we have contacted people within the given banks to ask if they or somebody they know was able to meet for an interview. Thereafter, the method of snowball sampling was used.
According to Hallin & Helin (2018, p. 37) it is common to schedule the interview for one hour. Our interviews were around sixty minutes long and consisted of around ten questions.
In order to inform our selected candidates about our research topic and purpose, we sent a side letter in which we shortly summarized our research field and question. In the letter we also explained why we were interested in interviewing him/her and how long the interview was estimated to be. The interviews were performed person to person to the extent that was possible, rather than over phone since we believed that it was easier for us to mediate our research purpose. Bryman & Bell (2015, pp. 215-220) suggest that it enables the interviewer to interpret feelings and body language. However, if the interviewee was not able to meet, we were flexible with digital alternatives. The interviews were recorded in order to enable us to be fully present during the interviews, but also in order to enable us to go back in our findings and transcribe the interviews correctly before analysing the data. Without recording, there is a risk that the interviewer might distort the answers (ibid). According to Hallin & Helin (2018, pp. 66-67) this is a proper way of documenting the interviews in order to properly record what is said during the interviews.
3.3.2 Triangulation
In order to enhance the credibility of a study, we have chosen to use the technique of
triangulation. According to Bryman & Bell (2015, p. 402) triangulation refers to the method of using more than one source when investigating a social phenomenon. Even though the technique is most often associated with a quantitative approach, triangulation is also applicable in a qualitative one. Thus, triangulation aims to “cross-check” findings within
research and it is suggested that a combination of methods is optimal when making the study as valid and reliable as possible (ibid). Further, Fitzgerald & Dopson (2009, p. 469) suggest that triangulation is a good way of completing the findings from the interviews. Through the usage of triangulation, we have compared and verified the findings from our interviews with documents from the two banks in order to make sure that the data and empirics we found is correct and corresponded to reality.
3.3.3 Ethical guidelines
There are certain things to take into consideration when performing interviews. The Swedish Research Council have published four guidelines that researchers should follow when
performing studies (The Swedish Research Council, 2017). In short, the first requirement refers to the fact that the interviewee must be informed about the purpose of the study.
Secondly, the requirement of consent means that the interviewee must have confirmed that he or she is contributing to this certain study. Thirdly, the requirement of confidentiality refers to how the collected data should be managed and shared. Lastly, the requirement of usage means that the material gathered from the interviews only will be used for this certain purpose (The Swedish Research Council, 2017; Hallin & Helin, 2018, p. 48). These ethical requirements have been presented for the respondents in the side letter before performing the interviews.
For instance, it is of great importance to allow the respondents to be anonymous. We have informed the interviewees about this option in the side letter and the question has also been raised in the beginning of the interviews. Keeping the respondents anonymous is necessarily not a negative thing, on the contrary it might be beneficial. With the option of being
anonymous the candidates might speak more openly without withholding information to the same extent as if the person was not being anonymous (Hallin & Hellin, p. 38). Further, it is important to ask for permission when recording the interviews, since the interviewee always has the option to reject the recording or at any time ask to cancel the interview (The Swedish Research Council, 2017). Therefore, each respondent has been informed about the anonymity of the study and asked about permission regarding the recordings.
3.4 Operationalization
In this part of the study, we will present how semi-structured interviews can work as a method in order to connect the interview questions to the theory. The table below illustrates the connection between the theoretical and the empirical parts of this study. This in order to understand the relationship between them and how we have operationalized during the interviews. In the first column, theories within isomorphism, organizational identity,
organizational culture and management consulting are presented. In the second column, there is a short presentation of its meaning. Lastly, some examples of interview questions are presented in the third column under the column interview guide. The table helps us explain what questions are applicable to theory in order to answer the research question.
Theory Meaning Interview guide
Coercive Isomorphism When organizations become
similar due to formal and informal pressures
• In what way is the bank similar to other banks?
• Are there any strict requirements when recruiting?
Mimetic Isomorphism When organizations resemble each
other due to uncertainty that encourages mimetic behavior
• In what way is the bank similar to other banks?
• How does the bank adapt to external trends?
Normative Isomorphism Stems from professionalization
and standardization within certain professions, leading to
homogenization
• In what way is the bank similar to other banks?
• What personal qualities are you looking for when recruiting?
Organizational Identity What makes the organization
unique and how the members feel about the organization.
• In what way is the bank different from other banks?
• Can you mention a situation where this bank acted differently compared to other banks?
Organizational Culture Deeply integrated values that
guide employees in how to feel and think about reality.
• What characterizes the organizational culture?
Expertise Individuals characterized by superior knowledge in a given area, prepared to guide others
• Why do you think that corporations in general hire management consultants?
• What determines if expertise is kept outsourced or taken in-house?
Fashion setters Consultants create and convert
management ideas into management knowledge
• How does the bank adapt to external trends?
• Do you think organizations become more or less similar when using management consultants?
Scapegoating Placing more blame/responsibility
than is warranted on consultants for decisions, ideas and practices
• How do you think management consultants can affect the leadership?
Storytelling Explains how consultants have
managed to create and maintain demand and legitimization
• Why do you think that corporations in general hire management consultants?
Table 3. Demonstrating the connection between theory and interview questions.
3.5 Evaluation of study
In this part of the thesis we will present the evaluation of the study. This refers to certain tools that help us to measure the quality of the research such as reliability, validity and credibility (Bryman & Bell, 2015, p. 400; Stone-Romero, 2009, pp. 304-305).
The reliability of a study can be divided into external and internal reliability. External reliability refers to the degree to which a study can be replicated. Several things can be done in a qualitative study in order to increase the reliability. For instance, a qualitative study made to replicate another has to focus on a similar social role in order to be comparable to the original research (Bryman & Bell, 2015, p. 400). Therefore, it is important that we are transparent with whom we have been interviewing and in what social context, which in this case is rather simple since this is a comparative study of two specific companies. Internal reliability focuses more on the observer. If there are more than one observer, the reliability aims to assure that the observers have interpreted the same things and agree about what they
see and hear (ibid). Therefore, we will continuously talk to each other in order to assure that we agree. For example, immediately after performing interviews we have discussed what we perceived during the interview. Hallin & Hellin (2018, p. 46) suggest that this is a good way to ensure remembering all the impressions that are not recorded in the voice memo.
Validity can also be viewed from an external and internal point of view. Internal validity refers to the match between the researcher’s observations and the theories that are being used.
This is often seen as a strength in qualitative studies since in-depth studies gives the researcher the opportunity to ensure a high level of congruence between findings and theoretical ideas throughout the study. External validity on the other hand, refers to what degree the findings can be generalized across different settings, which in qualitative studies often tend to be quite low (Bryman & Bell, 2015, p. 400). Our study will, as earlier
mentioned, not generate a universal truth or generalizable answer since it is a case study between two specific firms but might contribute to a deeper understanding of isomorphism within the banking industry. However, the internal validity is ensured by making sure that the theories and concepts make a good fit for our empirical findings.
It is further important to make the study trustworthy and reliable since there are several ways of interpreting social reality. This is often measured in terms of credibility. Credibility refers to the way researchers ensure that a study is performed by good practice and further that the data is correctly understood. It is thus the credibility of a study that determines its
acceptability to others (Bryman & Bell, 2015, p. 401). In order to increase the credibility, we have chosen to use the method of triangulation as earlier mentioned.
3.6 Data analysis
In this section, we will present how we will manage and analyse the collected data. More specifically, we will discuss the methods of transcribing, coding and thematic analysis. The data analysis will later be performed in part four.
The process starts with transcribing the interviews in order to enable the coding. The coding is most often performed as a starting point of qualitative data analysis (Bryman & Bell, 2011, p. 584) and has been done in order to identify concepts of frequency. In line with what Bryman and Bell (2011) suggest about generating ideas that can be connected to the theories, we have coded and identified categories in line with our theoretical framework. The coding is
thus performed in order to sort the data before starting the analysis. We have chosen to perform the coding by using different colors that are connected to our theories.
There are several ways of analysing data in qualitative studies (Bryman & Bell, 2015, p.
579). One option when analysing collected data is to perform a thematic analysis. This refers to when the researcher points out overriding themes (words, phrases, incidents) that are frequently occurring in the study. Further, this method is sometimes referred to as “quasi- quantification” of qualitative research, since the thematic analysis focuses on what is often or frequently discussed. Themes can be viewed as a higher level of categorization compared to categorizing concepts in the coding process (Bryman & Bell, 2015, pp. 636-637). Since the interview questions are based on the theories (as presented in table 4) the themes identified are therefore related to the theoretical framework.
3.7 Method criticism
The purpose of this section is to present criticism of the chosen method. To begin with, when using the method of semi-structured interviews, there are a few things to be aware of and take into consideration. Firstly, semi-structured interviews are time consuming as well as resource intensive (O´Gorman & Maclntosh, 2014. p. 119). Consequently, a lot of time as well as access is crucial in order to perform this method successfully. Further, when it comes to access, one drawback with the method of snowball sampling, as mentioned before, could be that the candidates recommend each other and may therefore not be representative for the entire population. Secondly, it can be difficult to stay on topic during the interview, which means that good interview skills are required (ibid). Also, since semi-structured interviews leave room for supplementary questions, it is important that the interviewer always stay attentive (Hallin & Helin, 2018, p. 95). Otherwise, there is a risk of missing something important. Lastly and connected to the fact that the method may lack generalization and hence is possibly open for bias (O´Gorman & Maclntosh, 2014. p. 119).
In order to prevent the study from becoming biased, three separate interviews per bank with different candidates have been performed. However, there is a risk that the interviewees from the different banks are not equivalent in terms of professional positions or years of experience within the bank. This might lead to the answers not being totally comparable with each other.
Since this thesis is a comparative study, the results do not correspond to a universal truth, but rather as a case study of Handelsbanken and Nordea.
In addition to the semi-structured interviews, different kinds of documents are used as methods in order to triangulate the study. Some of our internal documents are somewhat old, more specifically from 2008, which makes it important for us to take this into consideration.
In order to prevent using old and irrelevant information, this has been discussed during the interviews. Information published on the internet typically tends to be more up to date, which makes these sources more reliable in the method of triangulation. However, these documents are probably carefully selected and may therefore only represent the bank from a perspective in which the bank wishes to be seen, rather than reflecting the reality.
The purpose with the supporting documents is to verify the interview data. It is important to acknowledge that the documents are not entirely comparable to each other. The reason for this is that we gained access to internal documents at Handelsbanken and not at Nordea. Yet, a lot of the supporting documents are taken from the bank's official documents, such as annual reports and websites. Another aspect to take into consideration is the fact that the documents might be angled in order to highlight the positive aspects of the banks. Again, this is also a possible drawback during the interviews. However, we believe that these supporting documents can help us investigate if the interviewees answers correspond to the corporations.
4. Empirics & Analysis
In this part of the thesis we will present the empirical findings and analysis. The empirical material is based on the empirics from interviews and supporting documents. The interviews have been transcribed and coded. Coding has been used as a tool in order to identify and distinguish three overall themes and subcategories from the transcribed interviews. These themes represent the most frequent fields and concepts in our study and are based on our theoretical framework. In order to clarify how these themes are identified and connected to our theory and empirics, we have chosen to present a table below. The table first illustrates our presented theories. Thereafter the three overall themes similarity, attributes and
competence, which further have been developed into subcategories that together illustrate what areas are included in the overall theme.
Throughout this section, the overall themes will be presented and exemplified with quotes from the interviews, starting with similarity followed by attributes and lastly competence. It will further be analysed by connecting it to our theoretical framework. The quotes have been translated from Swedish, and therefore some of the sentences have been adjusted, in order to clarify its meaning. Further we will also present empirics and analysis based on supporting documents in order to support and verify the empirical data from the interviews.
Theory Themes
Main theory Similarity Attribute Competence
Isomorphism
Coercive Laws &
regulations Products &
services Recruitment Mimetic
Normative
Organizational Identity &
Identity Identity
Culture
Culture Culture
Risk
Management Consulting
Expertise
In-house vs outsourced Attitude towards management consultants Impact on leadership Fashion setters
Scapegoating
Storytelling
Table 4. Presenting the themes that have been identified and how these will be analysed in relation to the theories. For example, the theories about coercive, mimetic and normative isomorphism are connected to the theme of similarity and its subcategories laws &
regulations, products & services and recruitment.
4.1 Similarity
One of the themes identified when analysing the empirics is Similarity. In this part of the study we will present our empirical material and analysis in terms of the subcategories laws
& regulations, products & services and recruitment. In this part of the empirics the two banks will be presented and analysed combined.
4.1.1 Laws & Regulations
Both banks are scrutinized under the same laws and regulations. For instance, the fundamental law of banking and financing business regulates what is required to be authorized to conduct banking. Other central laws are the law of deposit insurance and the money laundering and terror financing act. The banks express the importance of these questions, both in an operational purpose but also from a reputation point of view. Further, there are examples of situations where certificates are required in order to perform certain tasks, such as to give financial advice or to manage housing mortgage loans.
“There are requirements depending on your position. If you for instance work with financial advisory, you must have certain certificates...” (Respondent 2, Nordea)
Even though there are regulations the bank sometimes decides how to interpret these
requirements. For instance, Basel II set requirements for the minimum limit of cash reserves that financial institutions need to hold in order to cover operational risks. Handelsbanken have chosen to set their own level higher than what is formally required. This means that even though the banks are under the same scrutinization and regulations, the outcome is not always the same.
“There is a requirement regarding the minimum limit of cash reserve. However, the board has decided that we are to be a certain level above that. So that is what our management has to relate and adopt to.” (Respondent 3, Handelsbanken)
Another difference that exists within the frames of laws and regulations is the geographical perspective and its influence on the banks. Nordea is not only operating in the Nordics but is viewed as a global bank. Thus, Nordea is not only monitored by Swedish laws and
regulations, but also by European ones.
“One big difference between Nordea and other banks in Sweden, especially Handelsbanken, is that we are a Nordic actor and that our headquarter is connected to the European central bank. So, a lot of the regulations that we follow are legislated not only by the Swedish central bank Riksbanken, but by the European one.” (Respondent 2, Nordea)
4.1.2 Products & Services
Another similarity that has been frequently discussed during the interviews is products and services. According to the banks, there are laws that demand the bank to offer certain products and services. For example, they need to offer everyone the opportunity to open a bank account with payment services. Nordea suggests that from an outside perspective, the banks resemble each other since they offer the same services. Other offers that are not demanded by law, have become so-called hygiene factors due to the competitive environment. These are most often exemplified in terms of digital solutions.
