Organisational change and the computerisation of British and Spanish savings banks, circa 1950-1985
by Bernardo B?°tiz-Lazo and J. Carles Maix?©-Alt?©s
Mechanization and automation in a fragmented but long established mutual organizational form. Cross country comparison.
Archival research on the evolution of savings banks enables comparing and contrasting the ‚Äòlate‚Äô adoption of mechanicals in the accounting function, general purpose technology (i.e. mainframe computers) and industry specific applications (e.g. automated teller machines, EFTPOS) in two different competitive environments (as represented by Spain and the UK). Information technology was instrumental in reducing saving banks‚Äô apparent scale disadvantages but in this process savings banks had to develop new capabilities to compete (some times organically and others through collaboration). As a result where the same organizational form evolved into distinct business portfolios and relative success in contesting retail bank markets. In turn, this allows exploring the extent to which the process of automation associated with the adoption of divisional (M Form) organization replaced functional organizational structures in retail finance.
The discussion within this article goes to the core of the theoretical and empirical debate surrounding the financial system. This as each of the two competitive environments responded in its own way to the processes of technological an organizational change. The long-term nature of historical analysis enables a better understanding of the similarities and differences affecting mutual financial organisations. In other words, what we observe are cross-country variations in the presence of convergence and globalisation (see Gardener, 1994; Flier et al., 2003; B?°tiz-Lazo, 2004).
Surviving records of British savings banks are few and far between. Instead we examine contemporary secondary sources while looking for the informational, economic and organizational forces that influenced mechanization (in the form of mechanical and electro mechanical accounting machines) and automation (in the form of the adoption of computer technology). Especially useful for our study are savings banks‚Äô (TSB Banknotes) and manufacturer‚Äôs (NCR Post) in-house magazines. These were complemented with journal articles in the Journal of the Trustees Savings Banks Institute and newspaper articles in The Times. Equally important in these sources was reporting on the process of amalgamation of British savings banks.
An international comparative study will emerge by looking at the leadership of the Confederation of Spanish Savings Bank (‚ÄòConfereraci??n Espa?±ola de Cajas de Ahorro‚Äô or CECA) in enabling technological change within the Spanish savings banks. Spanish savings banks remained largely independent organisations but since 1971 they delegated the process of computerisation to CECA‚Äôs Committee for Organisation, Automation and Services (‚ÄòComisi??n de Organizaci??n Automatizaci??n y Servicios‚Äô or COAS). Surviving records of Technology Secretariat of COAS include internal papers, minutes of meetings, and memoranda. These were complemented with contemporary secondary sources from CECA‚Äôs Library including a series of computer-oriented pamphlets called ‚ÄòCuadernos de la COAS‚Äô (aimed at informing middle managers of independent banks of technological advances and decisions taken by COAS) and relevant journal articles in CECA‚Äôs in-house magazine (‚ÄòAhorro‚Äô).
The analytical framework is based on Chandler‚Äôs ideas on corporate growth and technology (1990: 627; Chandler and Cortada, 2000; Chandler, 2001) and related literature (Whittington and Mayer, 2002). Inductive analysis will then bring history back to the concepts using as evidence comparative historical cases in the UK and Spain (see also B?°tiz-Lazo, 2004). The purpose being researching technology and corporate strategy in their social and historical context, that is, the dynamics of the design, construction, development, implementation and use of retail financial services (Orlikowski and Barley, 2001; Bridgman and Willmott, 2006).
A central argument of our comparison involves the dynamics around first mover advantage: the UK characterizes by a long industrial tradition and source of technological innovation (e.g. LEO and Pegasus) while Spain industrialized well into the 20th century and was typically a net importer of business applications of computer technology. When compared with other established providers of retail finance in their own milieu, neither British nor Spanish savings banks were early adopters of computer technology. But while at the time of their adoption computers and computer applications helped to addressed important issues for British savings banks; on balance, Spanish savings banks benefited from a lack of legacy systems and the adoption of cheaper, thoroughly tested and more powerful technology (i.e. lower down the ‚Äòtechnology curve‚Äô).
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