Dissertation: Successful organizational change in banks relies on situational specificity and power relationships
After the financial crisis in 2008, bank organizations in Finland as well as globally had to adapt to increasing regulation. At the same time, many banks also ended up seeking cost savings and efficiency, for example, by reducing local offices or centralizing their operations.
In her dissertation’s case study, Kinnunen examines a Finnish cooperative banking organization, which represents structurally a decentralized organization. At the heart of the study is the centralization of the strategic performance measurement system within the organization and finding a balance between the differing views of the central organization and local banks.
“The key actors of the organization are able to make use of the surrounding situation when creating narratives to make the local actors of a decentralized organization yield to centralization,” says Anniina Kinnunen from the Jyväskylä University School of Business and Economics. “For example, tighter national and international regulations have been used as such a narrative in the examined organization.”
Centralization requires clarity and balancing acts
Frustration or resistance is felt more easily at the local level if the organization tries to change several big things at the same time. However, some changes are not finalized but continue going around in circles, especially if the management does not advance the change process or clearly announce it has been completed.
According to Kinnunen, when centralising decentralized organizations, it is important to pay attention to local actors’ sense of independence and autonomy: even though power and control would be centralized further, local operators should be allowed to maintain ways of thinking and operating models that are suitable for the unit and its operating environment. This local autonomy and maintaining of locality can be supported by creating so-called safeguarding spaces for local actors. In this case the central organization, that is, the main office of the organization, aims to take care of bigger challenges and gives local banks an opportunity to focus on their own work and cooperation with local actors. This means that a successful change also requires that obligations are centralised along with power.
“On the other hand, excessive centralization of power and control, consolidation of local banks or units and, for example, physical relocation of accounting professionals’ offices to the central organization may lead to questioning this trend at the local level,” Kinnunen says. “For accounting professionals, there already is a noticeable shift back to the decentralized model and local offices.”
The public defence of Anniina Kinnunen’s dissertation, Balancing localness and centralization in strategic performance management, will be held on Friday, 15 November 2024 at 12:00 in the Main Building of the University of Jyväskylä, room C4. The opponent is Professor Kirsi-Mari Kallio (University of Turku, Pori unit) and the custos is Professor Antti Rautiainen (University of Jyväskylä). The language of the event is Finnish.
You can view the event remotely in Moniviestin.
Read Anniina Kinnunen’s dissertation in the JYX digital repository.
Anniina Kinnunen completed her matriculation examination in 2010 in Äänekoski. She graduated with a master’s degree from the Jyväskylä University School of Business and Economics (JSBE) in 2018, after which she started doctoral studies as part of JSBE’s SALP research group. Kinnunen has also worked as a grant researcher and a doctoral researcher at JSBE. Currently she is a university teacher of accounting and corporate finance at the University of Jyväskylä and a university instructor at Tampere University.
