École des Hautes Études Commerciales

The Evolution of Organizational Identity: A Discursive Study

par Samia Chreim Service de la direction et gestion des organisations

Thèse présentée à l’École des Hautes Études Commerciales en vue de l’obtention du grade de Philosophiae Doctor (Ph.D) en Administration

Juin, 2000

©Samia Chreim, 2000

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Identification du jury

Président-rapporteur :

Alain Chanlat École des HEC

Président du Comité de surveillance :

Jean-Marie Toulouse École des HEC Nicole Giroux Université de Montréal Karen Golden-Biddle University of Alberta

Membre du jury :

Examinateur externe :

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Résumé La notion d’identité organinisationnelle a suscité beaucoup d’intérêt dans la littérature sur les organisations ces dernières années. Cet intérêt coïncide avec les changements qui se passent dans les organisations et autour de celles-ci. L’identité organisationnelle fournit une réponse à la question, « qui sommes nous ?» Plusieurs auteurs suggèrent que la réponse donnée à cette question indique ce qui est central, distinctif et persistant pour l’organisation (Albert et Whetten, 1985; Dutton et Dukerich, 1991; Scott et Lane, 2000). D’autres auteurs, par contre, ont indiqué que l’identité organisationnelle n’est pas forcément persistante; elle peut changer avec le temps (Gioia et Thomas, 1996; Fiol, Huff et Sarason, 1996). Ces derniers auteurs énumèrent les changements qui se passent dans les organisations. Lors des changements, les organisations tournent leur attention vers des questions ontologiques et les réponses données a ces questions ne dèmontrent pas toujours une compatibilité avec le passée, d’où la remise en question des notions de continuité et persistance dans l’identité. Cette étude vise a explorer le développement de l’identité dans un contexte de changement. Les questions de recherche adoptées sont les suivantes : quels aspects de l’identité organisationnelle sont remis en question dans un contexte de changement? Est-ce que l’identité évolue dans un contexte de changement ? et Comment? Quels sont les facteurs contextuels associés avec l’évolution? Le cadre théorique adopté dans cette étude met l’accent sur l’importance du discours des dirigeants dans l’élaboration de l’identité organisationnelle. En présentant l’identité aux auditoires, les dirigeants expriment et construisent l’identité de l’organisation (Scott et Lane, 2000). Comme macroacteurs (Callon et Latour, 1985), ils possèdent plus de povoir que les autres groupes d’intérêt (stakeholders) dans la définition de cette identité. Ceci est surtout le cas dans un contexte de changement où les stakeholders accordent beaucoup d’attention au discours des dirigeants (Schweiger et DeNisi, 1991).

L’étude suit le développement des « thèmes » dans le discours de ces entreprises. ainsi que le contexte dans lequel ce discours est énoncé. Dans cette approche. Pour effectuer l’étude du développement de l’identité dans le discours. Le chercheur part d’une question large qui définit le sujet d’intérêt mais qui ne vise pas a établir le lien entre une variable dépendante et une variable indépendante (Strauss et Corbin. l’identité dans le discours évolue de façon incrémentale avec le temps. L’analyse des données démontre qu’il y a des aspects de l’identité organisationnelle de ces deux entreprises qui évoluent avec le temps. La littérature sur l’identité organisationnelle ne fournit pas de réponses claires à la question concernant la continuité ou le changement dans cette identité.qui . et cette richesse se cerne mieux à partir des données qualitatives (Miles and Huberman. Plus précisément une étude des « thèmes identitaires » a été effectuée. C’est pourquoi nous avons choisi d’effectuer une étude exploratoire qui utilise l’approche de la théorie ancrée (grounded-theory approach) proposée par Glaser et Strauss (1967) et Strauss et Corbin (1990). Cette approche est pertinente pour l’étude des données qualitatives qui sont bien les données étudiées dans cette recherche. la théorie émerge des données. on remarque des petits changements dans les thèmes identitaires mais l’agrégation de ces petits changements résulte en un changement de taille. Les aspects distinctifs qui sont mis en évidence dans le discours changent eux aussi. Les thèmes centraux et la constellation qu’ils forment avec les aspects différents de l’organisation changent avec le temps.iv Cette recherche vise a étudier le développement de l’identité organisationnelle dans le discours des dirigeants. L’étude met en évidence qu’en general. 1990). 1989). Ces changements sont associés avec trois facteurs : 1) les acteurs . D’une année à l’autre. et d’autres qui persistent. 1994). Les facteurs contextuels associés avec le développement de ces thèmes identitaires sont alors tracés. Le discours identitaire de ces deux entreprises dans les rapports annuels des années 1985 à 1997 (inclusivement) a été tracé. deux entreprises qui ont vécu des changements des dernières années ont été choisies comme sujets de recherche : la Banque Royale et la Banque de Montréal. L’étude du discours doit tenir compte de la richesse du contexte (Hanks.les dirigeants .

Une contribution majeure de cette étude est le fait de mettre en évidence les aspects de l’identité organisationnelle qui changent avec le temps et ceux qui demeurent. Cette étude démontre qu’au lieu de faire des généralisations sur la persitance ou le changement de l’identité. la continuité dans l’identité est maintenue dans le discours par l’utilisation de mots clefs identititaires qui eux persistent même si le sens qu’on vient donner à ces mots-là change avec le temps. D’autre part. et 3) le contexte externe. 2) les chagements stratégiques entrepris par les organisations. Jusqu’à maintenant les chercheurs étaient divisés en deux écoles de pensée : ceux qui affirment la persitance de l’identité et ce qui affirment qu’elle change. il vaut mieux essayer de cerner les aspects de l’identité qui changent et ceux qui persistent avec le temps. notamment la façon dont l’organisation est perçue par les publics externes.v influencent les traits par lesquels les entreprises sont définies. .

3 Centrality 2.vi TABLE OF CONTENTS Page LIST OF TABLES LIST OF FIGURES LIST OF ABBREVIATIONS 1.5 Temporal continuity 2.2 Identity and strategy 3.2 Identity in organizational theory 2.5.1 Macro level organizational identity 2.2.4 Units of analysis 4. and communication 2.3 Context 3.1 Centrality and management discourse 2.3.1 Continuity.2 The organizations 4.2 Proposed measures of organizational identity ix x xi 1 5 5 6 7 8 10 12 14 16 17 17 19 22 22 24 26 26 27 27 27 27 28 28 31 32 32 33 34 35 39 . change and management discourse 2.3.2.2 Identity.6 Organizational identity.3 Research design 4.1 Operationalizations of organizational identity in the literature 4. CONCEPTS AND APPROACH 3.4.6.1 Research questions 3.6.4 Distinctiveness 2.3.3. LITERATURE REVIEW 2.1 Distinctiveness and management discourse 2.1 Identity and culture 2.1 What is organizational identity? 2.1 Written discourse 3.4. strategy and culture 2.4.4 Approach used 4.2 Definition of organizational identity 3.2 Content 3. RESEACH QUESTIONS.3 The role of top managers in the elaboration of identity 2.3 Top management discourse 3. INTRODUCTION 2. METHODOLOGY 4. social interaction.2.1 Research questions and approach 4.

3 Commitment to stakeholders 6.1.1.3.vii 4.d North American 5.6.1.2 Presentation.b Oldest bank 5.1.d Large 5.7 Reliability and validity 4.2.1 Royal Bank 6.e Commitment to stakeholders 5.3 General discussion 6.3.7.b Fee-and-income generating ability 5.a Quality service to customers 5.5.2.2.2.2.1.1 Data coding 4.2.1.2.1.2.e Leader 5.2.2 Other organizational and industrial information 4.f The Identity Paradox 6.4 Continuity and change 41 41 42 43 43 44 45 45 45 47 48 48 49 49 57 60 64 68 71 71 72 72 73 77 83 88 116 120 121 121 126 131 134 135 140 140 146 151 157 158 160 163 165 .1 Shifts in distinctiveness 6.2.2.6.2.1.2. DISCUSSION 6.5 Sources of data 4.1 Historical overview 5.4 Large 6.6 Data analysis.1 First 6.2.3 Bank-financial institution 6.2 North American 6.2.3.2 Validity 5.2.1 Reliability 4.a First 5.c Innovative 5.7.5 Leader 6.3 Shifts in centrality 6.3.2.c Bank-financial institution 5.1 Annual reports 4.2.2.2.2 Bank of Montreal 5.1. analysis and discussion 4.2 Identity themes 5. DATA PRESENTATION AND ANALYSIS 5.1 Royal Bank 5.2 Projected.1 Historical overview 5. presentation and discussion 4.5.1. realized and unrealized identity 6.1 Quality service to customers 6. Fee-and-income generating ability 6.2.2.2.2 Identity themes 5.1.2 Bank of Montreal 6.1.

3 Conclusion 8.CONCLUSION 7.2 Limitations and future research directions 7. REFERENCES 170 170 172 173 175 .1 Contributions 7.viii 7.

Commitment to stakeholders Table 12. Large Table 5. Fee-and-income generating ability Table 3. Commitment to the community Table 16. Bank-FI Table 4. Central themes and their constellations 50 57 60 64 68 73 74 75 77 84 89 94 101 107 113 117 129 . Quotations from the 1991 MTS Table 9. The identity paradox Table 17.ix LIST OF TABLES Page Table 1. Leader Table 6. Commitment to customers Table 13. Quality service to customers Table 2. First Table 7. Innovative Table 10. Commitment to shareholders Table 14. North American Table 11. Commitment to employees Table 15. BMO’s age Table 8.

Quality service as a core theme Figure 2. Institutionalization/Erosion/Abortion of identity attributes Figure 13.x LIST OF FIGURES Page Figure 1. Factors that influence the evolution of organizational identity 124 125 125 128 132 133 137 140 143 149 150 162 164 . Leadership as an umbrella theme Figure 8. Increasing complexity in identity Figure 7. Increasing complexity of geographic scope Figure 12. North American theme developmental trajectory Figure 11. FI theme developmental trajectory Figure 6. Quality service developmental trajectory Figure 3. The two meanings of the “first” theme Figure 9. Quality service: From normative & core to instrumental & peripheral Figure 4. Fee-and-income generating ability developmental trajectory Figure 5. First as an umbrella theme Figure 10.

xi LIST OF ABBREVIATIONS BMO: Bank of Montreal FI: Financial institution MTS: Message to shareholders RB: Royal Bank .

Ann Langley and Jean-Marie Toulouse who. Nicole Giroux.xii I would like to thank Alain Chanlat. provided enormous support and constructive feedback. . Christiane Demers. at different stages of my studies.

Grace and Christina who showed unfailing patience. .xiii To Gary. support and encouragement throughout my studies.

Organizational identity is said to refer to the central. 1996. mergers and acquisitions. traditionally recognized for their branches where tellers offered clients a relatively limited number of financial services. they may attempt a re-elaboration of their self-definition. 1991. Organizations in different industrial sectors are increasingly turning their attention to ontological issues and addressing questions such as "Who are we?" and "What do we want to be?" As organizations face major and rapid-paced changes deriving from globalization. have been moving into offering comprehensive financial services through virtual banking operations. we see government agencies around the world resorting to privatizing services that were initially considered to be part and parcel of the public service identity. 1985. we need to answer more questions: “How different is the ‘new’ identity from the past? How is the ‘new’ . Dutton and Dukerich. Scott and Lane. When we look around us. Telephone companies previously considered as utilities have come to redefine themselves as integrated communication services companies. changes can lead to an erosion of the attributes by which organizations have traditionally defined themselves. These observations prompt the following question: “How is the self-definition elaborated in a context of change?” If we find that the re-elaboration places emphasis on past attributes.1. technological breakthroughs and other events. 2000). Ashforth and Mael. however. deregulation. INTRODUCTION Identity is a subject which evokes images of persistence and stability through time. distinctive and enduring attributes of an organization (Albert and Whetten. If. This interest coincides with the occurrence of major changes in organizations and their environments. It is thus not surprising that interest in organizational identity has been rekindled in recent years. the notion of organizational identity as persistent would still hold. As these examples indicate. we find the self-definition to be built on elements which did not prevail in the past. Banks. The notion of organizational identity as persistent can leave an observer quite perplexed. downsizing.

1996). and therefore provides excellent information on organizational identity. 2000). so does the organization’s self-definition. environmental jolts may be perceived as dilemmas. The evolution of the self-definition also has major implications for implementation of strategy (Ashforth and Mael. Thus. Carpenter. This study thus traces the development of identity themes as revealed in top management discourse. Of particular relevance and significance is top management’s discourse on identity. Boal and Hunt. As the context changes. opportunities or aberrations (Meyer. which allows legitimacy to be maintained.2 identity elaborated? Does it build slowly into a difference from the past? Or are the relations with the past abruptly severed?” To answer these questions. Top management is invested with authority to speak on behalf of the organization. Meyer. This is what this research attempts to achieve. In addition. It also reports on contextual factors that appeared to be associated with the development. The way an organization defines what it is and what it would like to be impacts the legitimacy it can secure from its different stakeholders (Scott and Lane. the self-definition affects what the organization sees as an opportunity or threat (Daft and Weick. It is important to understand how identity is elaborated with time. Formal discourse provides rich information on the persona and attributes that an organization seeks to portray (McMillan. 1984. 1987). one needs to study how organizational identity develops (changes or remains stable) over a longitudinal period of time. Nutt (1997) proposes that top managers can facilitate . 1996). 1998. 1994). 1982) as well as what strategic alternatives are considered and how they are evaluated (Fox-Wolfgramm. 1994). It explores how change and continuity in identity themes in the organizations’ formal discourse were elaborated and how shifts in the centrality and distinctiveness of these themes occurred. the elaboration of identity reflects the preferences of such powerholders (Ashforth and Mael. 1982) and the strategic fit of an organizational unit may be seen as positive or negative depending largely on how the organization defines itself (Carpenter. It traces how two organizations’ self-definition evolved over a period of thirteen years during which major changes occurred in the organizations’ internal and external environments.

.to denote the . This future-oriented identity becomes the basis for actions taken at the organization. 1994. Gioia and Chittipeddi. Furthermore. A few studies (for example. and to determine if different components develop in different ways. The research involves a longitudinal study of identity elaboration in top management discourse for two Canadian financial institutions for a period of 13 years. 1991) have been conducted on organizational identity in a context of change. the grounded theory approach is adopted. by providing a compelling projected identity. Systematic tracking of different identity themes should allow us to look at the components of identity. Czarniawska-Jorges. Section 4 provides a discussion of the methodology used.such as “identity evolution”. In Section 3. This thesis is organized as follows: In the next section. please note that throughout the thesis I use a number of expressions . In Section 6 the findings are discussed and Section 7 concludes with the contributions and limitations of the study. To explore this issue. they did not trace the systematic evolution of identity themes over a longitudinal period of time. but these studies relate to non profit institutions and not business organizations. Understanding the evolution of the self-definition provides clues for understanding the development of interpretation and action at the organization.x – x - The purpose of this thesis is to explore how identity develops in a context of change in an organization’s formal discourse. “identity construction strategies used by management over time” and “identity elaboration in management discourse” . We can then make more accurate statements regarding the aspects of identity that change or persist with time. I will present a review of the relevant literature on organizational identity.3 the implementation of major change in an organization by providing a compelling vision of the organization .that is. Czarniawska and Wolff. I address the research questions and the central approach I use to answer these questions. Before reading on. Yet we know little about how business organizations’ self-definition evolves with time. Data and analysis are presented in Section 5. 1998.

Furthermore. 1987. McMillan. top management’s presentation of the organization reflects and creates identity (Barr and Huff. whether intentionally or not. and the purpose of this thesis is to uncover these strategies and not to determine the degree of intentionality that lies behind them. 2000). speak. it is of no consequence to the discussion whether or not intentional construction strategies were used by organizational authors.4 same phenomenon or process. in fact. it should also be remarked that although the discussion often refers to how organizations “speak” about themselves. As will be discussed later. The fact is that some strategies were used. . Rather organizational messages are composed by human actors bestowed with the power to speak on behalf of the organization. In addition. Scott and Lane. organizations are social constructions and abstract entities which do not. 1997.

1987:4). I provide an overview of the concept of organizational identity. identity took on the meaning of essence . This is followed by a detailed discussion of the dimensions of centrality. following W.to speak about sameness in different individuals. define the aspects of identity. It was seen as being rooted in unconscious . After I address the limitations of these dimensions. This section concludes with a discussion of the differences between the concepts of identity. Since then. LITERATURE REVIEW In this section. culture. I argue that identity is expressed and elaborated through discourse and communication and that top management plays a major role in this communication. but in separate individuals. brothers born of the same parents are identical with each other. identity has become a central term in the study of social life and has received attention from different thinkers. "the new meaning of 'identity' was established as primary. To Aristotle."an essential element in the continuity of personality" (Mackenzie. and the old metaphor in effect 'died'" (Cheney and Tompkins.5 2. By the beginning of this century. and strategy. 1978. Albert and Whetten (1985) indicate.1 WHAT IS ORGANIZATIONAL IDENTITY? Cheney (1991). I argue that although identity has been conceived to be persistent. 2. distinctiveness and temporal continuity which. it can also evolve and this evolution is elaborated in top management discourse. Mackenzie found the term to appear later in Roman and Medieval thought in connection with the Trinity. Mackenzie. they are the same thing. quoted in Cheney and Tompkins. I elaborate on how each is manifested in management discourse. 1987:4)." after which I review its use in the organizational literature. I describe briefly the origin of the term "identity.identitas in Latin . indicates that the origin of the term "identity" can be traced to Aristotle who coined the word tautotes . With the romantic poets.

Identity. race. Like other terms that describe an individual person's activities or attributes. Mead. In . is not only assigned by the external world. as Albert and Whetten (1985) indicate. as well as at the level of the group from different social perspectives that examine collective identity based on gender. social psychology and symbolic interactionism. although some earlier organizational theorists also dealt with this concept (for example. It is also an integral element of all human systems (Tannenbaum and Hanna. transacting. Levitt and Nass (1994) indicate that societies are anxious to assign an identity or identities to the entities they deal with. owning. 1989). 1991). is a concept which is typically associated with the individual person (Christensen and Cheney. modes of analysis. Freud. Identity today. In the same sense that we have come to speak about organizations as acting.6 processes and emotional attachments by S. is not a single concept or theory but a diverse set of ideas. allows placement of the entity within a social category which enables prediction of behavior and definition of what constitutes legitimate conduct. and propositions. as being socialized by G. planning and communicating.2 IDENTITY IN ORGANIZATIONAL THEORY Identity has been researched at the level of the individual from the perspectives of developmental psychology. 1957). 1994) and which provides an answer to the question "Who am I?" (Ashforth and Mael. we have come to see organizations as having identities. and as being politicized by H. however. psychodynamics. What the identity literature offers. whether these entities be of an individual or a collective nature. 1994).including organizations which allows them to maintain a sense of self and an ontological distinction from the environment (Christensen and Cheney. Increased interest in the organizational level of analysis has been manifested during the last few years. Lasswell (Cheney. it has been appropriated by organizational scholars to denote particular aspects of the organization. 2. Assignment of an identity. ethnicity and nationality (Ashforth and Mael. Selznick. 1985) . 1996). these authors argue.

Building on Albert and Whetten's conceptualization.1 Macro Level Organizational Identity At the macro level. a widely accepted conceptualization of identity is provided by Albert and Whetten (1985). enduring. For example. and temporal continuity for an organization (Albert and Whetten. thus leading to a discussion of goals and values. Gustafson. 1985). 1996. and Van Maanen speaks of an individual's organizational identity in relation to a change situation. The development of organizational identity is highly influenced by communication. "In some cases. which is the level of interest in this research. some authors define organizational identity as a set of constructs organizational members believe to be the central. . also placing emphasis on the members' perspective. 1994.2. Dutton and Dukerich. 1995). These two authors indicate that a statement of organizational identity provides an answer to the question "Who are we?" Identity becomes investigated when questions of information and expected utility do not provide satisfactory answers. Sarason. distinctiveness. 2. Demarie and Mullane. and distinctive character of their organization (Ashforth and Mael. 1991. reference has been made to the organizational identity for the individual. It refers to what is of centrality. a review of the literature indicates that organizational identity has been utilized to denote two different concepts. At the micro level. Reger. Stoecker (1995). one at a micro level and the other at a macro level. a shift into a new work situation may result in a dramatically altered organizational identity for the person" (1978:20). indicates that collective identity constitutes the universe of members' frames that are often linked together. To emphasize that identity refers to the attributions made specifically by organizational members. Dutton and Dukerich distinguish it from "image" which they define as the way organizational members "believe others see the organization" (1991:520). Ashforth and Mael (1989) indicate that the organization can provide one answer to an individual's question regarding who he or she is.7 fact.

The distinctive and central aspects of the organization become the subject of a cognitive representation which is broadly shared by the collectivity (Dutton and Dukerich. At the level of the individual. In fact. 1991). Selznick (1957) argues that. Taylor. identity is established with time. Through communication. 1996). the notion of organizational identity implies a convergence onto a representation of the organization. an individual. that is they become coincident" (1985:85). This is the organizational identity. The system develops meanings and interpretations that emerge from its attempt to assert itself and to cope with the world surrounding it. Giroux and Robichaud. Johnson. as a system (individual. concepts come to embody similar meanings for two or more individuals. These coincident interpretations include a representation of the organization. Interactions can become patterned. Bougon and Donnellon indicate. As Gray.8 2. it is through interactions that organizational identity develops. 1971). 1994). "Social interactions. 1974. Cooren. By relying on communication. 1977. In formal discourse. is able to articulate his/her similarity to. Communication plays a major role in the social construction of organizational identity as well. Through communication. Social Interaction. organizations take on a distinctive character. the organization . giving rise to interpretations that are bracketed (Weick. a young person's interactions and communications with other significant individuals and groups constitute a major factor in the shaping of identity (Laing. transmitted and sustained. this system (Christensen and Cheney. and distinctiveness from. 1985). are the primary vehicles by which coincident interpretations of reality are created. and communication in particular. 1983. In other words. and Communication Communication is a principal element in the formation of identity. Communication precedes every organization since it is the foundation of agents' interactions and transactions (Hawes. Basically. The maintenance or evolution of this representation of the organization is highly influenced by the formal discourse on the organization. 1979) and sustained. as a result of their adaptive experiences. Putnam and Pacanowsky.2 Identity. embedded in a broader social system. group or organization) interacts with its environment (Tannenbaum and Hanna.2. an individual presents or affirms self-identity and confirms or disconfirms the other's identity.

Giddens talks about individuals "forging their self-identities" (1991:2). for organizations.5). ". and sort them into the ongoing 'story' about the self" (Giddens.. It must continually integrate events which occur in the external world. if she is to maintain regular interaction with others in the day-to-day world.9 is presented to internal and external constituents. In fact. cannot be wholly fictive." (1994:242)...organizations can. As Levitt and Nass point out.. the self is a reflexive project consisting "in the sustaining of coherent.. Although the society must eventually accept the claim to identity . biographical narratives" (p. "there is a human being behind each organizational message" (1987:42). becomes an important contributor to identity itself" (Christensen and Cheney. memory or understanding of the behaviors of each individual or organization. impels us to look for the author(s) of organizational identity presentation messages. the elaboration of organizational identity is strongly influenced by the preferences of powerholders like top management. identity is elaborated through narratives told by organizational authors (Czarniawska-Joerges. At the organizational level. Some individuals or groups in the organization are invested with the authority to speak on behalf of the organization or to represent it. The individual's biography. No group is more prominently invested with this authority than the top managers of the organization. Self-identity involves a reflexive understanding by the person of his or her biography. Yet claiming that an organization plays a major role in the construction of its identity through its discourse. 1994). as for individuals.identity is always externally granted . A person's identity is to be found "in the capacity to keep a particular narrative going. As Ashforth and Mael (1996) point out. Top managers are the macro-actors who have "authority to speak or act on . the organization reflects and constitutes its persona or identity (McMillan. communication about identity becomes a major input into identity itself. to a large extent.the entity can have a great deal of involvement. To him. construct their own identities. an entity has unique claims to knowledge of its previous behavior and the meanings of those behaviors.. In a fragmented and atomized society.. 1987). yet continuously revised. 1991:54). 1994:229). particularly at points when identity is challenged from the 'outside'. As McMillan indicates. Furthermore. society does not have a detailed knowledge.. an entity's presumed superior knowledge of its own behaviors gives a priori authoritativeness to its own constructions of its history.. "The telling of one's own story. Through its formal discourse.

However.3 The Role of Top Managers in the Elaboration of Identity Numerous authors have emphasized the role of leaders in creating meaning for organizations (Barnard. 1991). these actors play a particularly significant role in the elaboration of identity in a context of change. Pfeffer (1981) indicates that frequent communication by management. 1981. During organizational change. 1957. Schweiger and DeNisi. these actors engage in the expression and construction of organizational identity (Scott and Lane. Selznick. 1982). 1991. 1985). individuals and groups affected by the change attempt to reduce the experienced ambiguity and become highly attentive to communication from management (Schweiger and DeNisi. 2000). Top management can influence the cognitive representations people have of the organization through its interpretation of environmental events and organizational capabilities (Dutton and Jackson. Communications from management are particularly important in a context of change since stakeholders’ previous knowledge and understanding of the organization and its environment may no longer apply. 1938. these shared meanings. People who experience ambiguity often look for clues in the environment that may help them interpret the situation (Weick. 1991). 1992. 1992) and through its translation of cues into meaning (Daft and Weick.2. The role of top managers in the construction of identity is particularly significant during times of change. Pondy. 1984). 1987. 1985:279). “These understandings. 1979. Pettigrew. 1978. Lyles and Schwenk.10 behalf of" the other actors in the organization (Callon and Latour. provide organizational participants with a sense of belonging and identity as well as demarcating the organization from its environment and assisting in the control and commitment of those within the organization” (1981:13). leads to the development of a common set of understandings about the organization and the environment. top management cannot control completely the meanings which . 2. As Watzlawick points out "confusion triggers off an immediate search for meaning or order to reduce the anxiety inherent in any uncertain situation" (1976:27). Lyles and Schwenk. through informational social influence. By presenting the organization to stakeholders. Change constitutes a context of high ambiguity in organizations (Gioia and Chittipeddi. Smircich and Morgan. As I will point out below. Pfeffer.

1978:91-92). The purpose of this thesis is to explore the identity elaboration processes in a context of change through the study of top management discourse. Through the careful use of language. He further argues that an individual who can make sense of things and put them into language meaningful to other people is in a position to gain enormous leverage. 1985:125). “Labels carry their own implications for action. Symbolic resources are subject to interpretations (Christensen and Cheney. This. it can set the stage . the socially accepted role of top management as a strategist and macro actor. as well as the ambiguity of the situation. Yet.for the discussion of identity. “The values of these powerful people often affect what the organization becomes” (Weick. the more influential actor in the representation of organizational identity. People who can resolve ambiguities in an organization gain power. 1985:128). despite constraints. “Language is a major tool of social influence” and one of “the least visible of (such) influences” (Pondy. the meaning of the group’s action becomes a social fact. should not divert attention from the fact that top management can carefully choose labels and expressions that are evocative of particular desired images of the organization. despite the importance of top management discourse about the organizational identity. As top management is best placed to propose labels to define the situation. Thus. grant particular importance to management’s representation of the organization’s identity. nevertheless. 1994).11 stakeholders will attribute to its statements of identity. top management may be able to influence how different stakeholders view the organization and their relationship to it. and that is why they are so successful in the management of ambiguity” (Weick. no study has attempted to systematically track how this identity is presented in top management discourse for a business organization. a situation of change in the organization is one of high ambiguity and is one where top management is looked at for explanations. top management remains. Pondy (1978) indicates that when a group’s experience can be put into words. In general. Weick argues that people who can find labels that bring order into ambiguous situations are able to direct organizational action. in general. As mentioned above. .and manage the context .

Ashforth and Mael indicate that the notion of centrality implies the positioning of an attribute in a hierarchy of attributes. 1996. the central character refers to a self-contained cosmology. This character often reflects the needs and preferences of organizational powerholders" (Ashforth and Mael.. 1996). The peripheral attributes are minor and solitary in comparison to the core elements which are fundamental and strongly interconnected. 2. values. Sarason. 1995. These two authors also draw a parallel between individual identity and organizational identity: "Research on individual identity suggests that central self-conceptions tend to be well-elaborated and densely connected. we can think of organizational attributes as being located on a continuum ranging from the central to the peripheral. Thus.x - Organizational literature has indicated that organizational identity is defined by a number of dimensions. These core aspects are supported by peripheral ones which may not be subject to widespread consensus and which relate to subgoals. some persistent (Albert and Whetten. Lyles and Schwenk (1992) indicate that in organizations there are both core and peripheral "shared beliefs". providing strong cues for cognition.. Dutton and Dukerich.typically anchored to the organizational mission . 2000) and others changing over time (Gioia and Thomas. Schultz and Corley. Huff and Sarason. Scott and Lane. behavior and affect. Fiol. some expressing distinctiveness. a system develops a number of attributes which may range from the boundary of the system to its center . I will discuss these dimensions and how they are reflected in management discourse. 1996. 1996).. The core aspects are subject to widespread agreements and "facilitate understanding about the firm's general purpose. In sum.12 . In what follows. mission and competitors" (p. 1985. a more or less internally consistent system of pivotal beliefs. norms .what the authors call "the system's core of identity" (1985:102).3 CENTRALITY Tannenbaum and Hanna indicate that with time. some central. 1991. organizational identity refers to the focal or core set of attributes that denote the essence of the organization. Ashforth and Mael.that informs sense-making and action. Gioia.x .160). 2000. . In a similar vein.. Similarly.

lack of consistency can create dissonance. 591). present themselves differently depending on the context. Albert and Whetten (1985). Such is the case of agricultural cooperatives and universities that demonstrate both. organizations can resort to selective categorizations. McMillan argues that the central determinant of identity in organizations is technology. they may nevertheless. 1996). which may create contradictory frame subsets within the collective identity and lead to identity disputes" (1995:113). Funk and Mihra (1997) observed how the process of producing a high tech machine was enmeshed with the construction of the group's identity. Over time.utilized here in the wide sense of the word which structure time and space helped shape the collective identity. which in principle.13 As the above indicates. or replace various subsets of frames. In a study of a work group in a Japanese factory. constituent groups "may emphasize. and Whetten and Foreman (1994) talk about "hybrid organizations" or organizations with "multiple identities" in referring to institutions that reflect a mixed heritage or "multiple organizing logics". "technologies sustain the crafting of selves" (p. implies a consistency between the components of identity. a normative character and a utilitarian one. and possibly contradictory central attributes. Stoecker remarked that consistency in the frames composing identity is important. Thus. In his study of a social movement organization. Kilduff. alter. the notion of centrality as involving self-conceptions that are densely connected. we are what we do" (1987:38). a central aspect of the organization is derived from its line of business. For organizational members. Thus. This led the authors to conclude that the technologies . are at odds. And although most organizations cannot be said to be hybrid or to reflect multiple identities according to the definition given above. highlighting alternate attributes depending on the issue requiring an affirmation of identity (Elsbach and Kramer. an organization may persist despite its possession of inconsistent. In another vein. Nevertheless. "in short. .

He states that different identities in organizations are associated with diverse domains of discourse or fields of argument. Cheney notes that organizations that produce seemingly contradictory statements of identity may reveal their core when questioned. managers may make reference to the organization being a progressive employer. an organization's top management may evoke the aspects of identity which speak of the organization's strategic orientation. In other words.and sometimes contradictory . Expression of different identity attributes corresponds to the enactment of different roles in diverse social scenes (Dubar. 1995). he indicates that: .14 2. More importantly however. it is likely that top management's presentation of the organization will vary with the aim for which a self-definitional statement is required. such as being an innovator or prospector. in justifying the undertaking of an unconventional merger and acquisition. affirming that an organization has an identity which is central to it. but as a description of the facts of self-classification to be examined and explained" (1985:268). but multiple and equally valid statements: "We treat the problem of imprecise. In his study of the U. is not inconsistent with the notion that this organization produces different statements of identity. possibly redundant. In Albert and Whetten's view.domains partly because of their ability to manage rhetorically their identity. In addressing the reasons for implementing flexible workplace policies. Here again Cheney's arguments are pertinent. nor as a deficiency of the concept of identity. or even inconsistent multiple classifications at different levels of analysis not as a methodological problem to be solved.1 Centrality and Management Discourse Albert and Whetten (1985) point out that managers resort to a classification of the central attributes when called upon to answer the identity question.S. Catholic Bishops' drafting of The Challenge of Peace. there may be no one best statement of identity. and the classification scheme evoked depends on the purpose underlying the need for a statement of identity. a document that speaks against the expansion of nuclear weapons. Cheney (1991) argues that organizations are able to operate in different .3. Given the multiple interests that must be heeded by the organization. For example.

As the bishops participated in both domains of discourse . "Precise classification may be impossible and more importantly.they were pushed and pulled by groups who wanted them either to stick to one set of terms (in the case of the political right) or work with both sets (in the case of the left). Because of this equivocality. In fact. The central aspects are there. organizational authors take advantage of the equivocality inherent in words and labels to project different meanings. the literature indicates that central attributes may be hierarchically ordered in alternative ways.such as 'efficient' or 'socially responsible' . while at the same time appearing consistent (Christensen and Cheney. 1985:268). and more likely to find variations on particular themes. while at the same time maintaining the appearance of being consistent. points out that identity can be thought of as a "theme with variation". undesirable" (Albert and Whetten. the literature does not indicate how attributes can increase or . following Lichtenstein. For most organizations. organizations adapt the self-referential discourse to different audiences.can be used with different connotations depending on the context. In communicating with different publics. Ultimately the bishops argued in both fields but clung to their moral-theological identity when they were challenged by critics" (1991:178). By relying on the flexibility of symbolic resources. top managers may intentionally refrain from providing very clear and precise statements of identity. we are less likely to find contradictory themes in different statements of identity articulated by top management. This is consistent with Eisenberg's (1984) argument that engaging in strategic ambiguity in organizational communication may be a political necessity since it allows different stakeholders to apply different interpretations to the symbols used. a key term or expression used to describe an organization .using terms of the Church as well as those of secular interest groups . Holland (1978:452). 1994).15 "(The bishops) struggled to speak both as moral-theological leaders and as technicalpolitical leaders without embracing the "identity" of technical-political spokespersons. but these may be expressed or presented in various ways. In brief. However.

By maintaining a distinction between the self and others. 1994:228). 1994). But here again. Carpenter (1994) indicates that organizations that belong to the same sector share industry characteristics that may contribute to the content of the statement of identity. While human systems may be actively involved in the management of their distinctive identities. 1982). Coercive. 1995). between sense and nonsense" (Christensen and Cheney. "Being on the one hand open and indissolubly connected with the environment. the system is able to persist as a relatively autonomous entity whose relationship with the environment is confirmed through communication (Christensen. mimetic and normative pressures in the institutional environment act as mechanisms leading to the isomorphism of organizations (DiMaggio and Powell. industry recipes are likely to emerge in strategic groups which are followed by organizations within a group. Furthermore. organizations need to affirm their adherence to established social norms and values since this confers legitimacy upon them and helps them secure necessary resources (Meyer and Rowan. They view identity as an essential drive of living systems to specify a world of their own by which the boundaries between the self and the environment are delineated. making them quite similar (Huff. an organization can only draw on a limited number of categories which are available . there are institutional and industrial forces that lead organizations to converge on a set of attributes. their attempts are partly shaped by the external forces of socialization (Christensen and Cheney. Declarations of distinctiveness are often evident in organizational stories. In fact. However. Neither does it tell us how possible shifts in central aspects are presented to stakeholders. 2.4 DISTINCTIVENESS Christensen and Cheney (1994. Thus. the inner drive to establish a distinctiveness from the surroundings is in constant interplay with forces external to the organization. the living system on the other hand articulates ontological separations between the self and the nonself. 1977). 1983). following Morin) state that identity is a center of knowledge about the self as separate from the environment.16 decrease in centrality with time and what implications such shifts have for the structure of identity.

and to compare the organization with those groups.5 TEMPORAL CONTINUITY I had pointed out previously that organizational identity emerges from interactions which are bracketed. This identity "reflects the irreversible element in experience and choice" (Selznick. 2. 2. Dukerich and Harquail. Feldman.4. Still. an organization's claim to uniqueness is paradoxically expressed through manifestations which are not unique. Kramer. 1993). To Selznick (1957). the uniqueness is reinforced with the company-specific details provided. 1989. 1957:40). In their study of seven types of stories which make claims to uniqueness. The more positively distinct identity is made to appear with reference to a comparison group. As Martin. Hatch and Sitkin (1983) argue. that allow it to appear distinctive. What contributes to the distinctiveness of an organization is basically the unique combination of the different attributes that have been reinforced with time (Nizard. they demonstrate that such stories occur in identical form in a variety of organizations. Managers often choose to address those identity attributes. 1994. an organization's character is the result of the historical patterning of its responsive interaction and reflects its specific experiences. Dutton. such as the names of individuals involved. what badges were worn.17 to other organizations as well. leading to the convergence on a collective representation of the organization. However. When an organization is attributed central and distinctive traits. more research is needed to investigate how the distinctive aspects of identity shift with time and how management presents the erosion or building up of distinctiveness in its self-definitional discourse. the more attractive it may seem to organizational stakeholders (Ashforth and Mael. A "distinct identity" evolves as an organization becomes infused with values and develops unique outlooks and habits.1 Distinctiveness and Management Discourse Organizational literature tells us that management resorts to selective categorizations of identity attributes and comparison groups in order to maintain the organization's distinctiveness when faced with an identity threat (Elsbach and Kramer. 1983). these traits are . where the action took place and so on. 1996).

members perpetuate the organizational identity. this expression is used to denote a situation of loss of personal sameness and historical continuity. Memorial was a hospital that cherished self-reliance. 1990). 1980) specially when these meanings emerge from past organizational successes (Miller. These actions. organizational identity. . implying that identity and change are incompatible. By doing so. Tannenbaum and Hanna indicate that "as constructed or developed by a system through time. helped reinforce the identity and perpetuate it. To Erikson (1968). 530). The antithetical relationship between identity and change is clearly reflected in the expression "identity crisis". In other words. Memorial's actions constituted a re-affirmation of the attributes of reliance. The term "fixities" captures well the crystallization of identity attributes with the passage of time.namely a doctors' strike . identity is defined by a number of system attributes. that organizational members evoke the organizational identity in making decisions and in defining the basis for their transactions within the organization and with external groups. Organizational identity was evoked in making decisions regarding actions to be taken. "The administrators' benevolence was further emulated by physicians" (p.it "absorbed the strike's impact and protected socially embedded organizational attributes by opting to deplete financial reserves rather than lay off employees" (p. and care for employees. in their study of the Port Authority. like other bracketed interpretations or meanings. firms can be said to experience an identity crisis when they have to face the prospect of a "new" identity which is not consistent with their history (Levitt and Nass. further reinforcing the organizational attributes. in turn. Gagliardi (1986) indicates that organizations' primary strategy involves the maintenance of their cultural identity. Hinings and Greenwood. Similarly. 1979. 1994).18 drawn on continuously in the further interactions and transactions of members. At the organizational level. Ranson. stability and commitment to employees. can take on enduring or structural properties and thus exert influence on further interactions (Giddens. A good example of the identity perpetuation process is provided by the Memorial Hospital case in Meyer's (1982) study. stability. Dutton and Dukerich (1991) found out. or fixities" (1985:101). 533) who cooperated during the strike. When this hospital had to face an environmental jolt . Thus.

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2.5.1 Continuity, Change and Management Discourse The above issues compel us to ask what happens to identity in a context of change. Can identity change? To start with, it should be noted that affirming that identity tends to endure does not mean that it remains static. Identity is never completely fixed. It is constantly subject to revision as the context shifts. Nevertheless, organizational identity can, and does, maintain its core content as long as the context within which it is embedded calls for no major re-evaluation. If we cast Levitt and March's (1988) argument in the terms used in the present discussion, we can say that the organizational identity can be flexible enough to allow change in operational routines without altering the core of identity itself. This is consistent with Fox-Wofgramm et al's contention that "organizations can change without necessarily changing their identities" (1998:121). These authors talk about "plasticity" in identity to refer to the fact that identity can be expanded without breaking or changing in essence. One can still question, however, how far an identity can be expanded before we can talk about a change in identity. A number of authors who have studied organizations in a context of major change have challenged the notion of temporal continuity as one of the basic dimensions of organizational identity. Gioia and Thomas (1996) - in their study of change in academic institutions - indicate that a key question is whether identity can be enduring if strategic change is to occur. A similar question is asked by Fiol et al (1996). In general, identity tends to endure despite some changes in the organization. These are incremental or first order changes (Watzlawick, Weakland and Fisch, 1974). More fundamental changes in the system, or second-order changes, are likely to entail major modifications in identity itself. We would expect such changes in identity to occur in cases of reorientations which involve discontinuous shifts in most aspects of the organization (Tushman and Romanelli, 1985) or when the organization changes from one archetype to another (Greenwood and Hinings, 1993). If we consider again the notion of "identity crisis", we will note that while it suggests the difficulty of changing, it also carries within itself allusions to a possible turning point. A

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"loss of... sameness" also implies possibilities for change (Erikson, 1968:16). Today's organizations carry out their operations in increasingly complex environments and with increasingly sophisticated management options that offer them multiple opportunities for self-redefinition. Giddens (1979 and 1984) affirms that a fundamental element of human agency is reflexivity. Agents are capable of monitoring and adjusting their actions. Through their creativity, human actors can produce changes in established structures (Poole, Seibold, and McPhee, 1985). Reflexivity and creativity are manifested when a major change is initiated by agents in an organization. Such a change could imply a transformation in identity.

Planned major changes in organizations are undertaken by top managers (Tushman and Romanelli, 1985). As mentioned previously, top managers are the macro-actors invested with authority to speak and act on behalf of the organization (Callon and Latour, 1981). They exert a high influence on the new course for the organization, and the attributes by which it should come to be defined. When they plan major changes for the organization, top managers introduce new themes into the organizational discourse. They provide a statement of vision (Gioia and Chittipeddi, 1991) or future identity. This statement provides a projected identity for the organization. In other words, it provides a future image of the organization (Gioia and Thomas, 1996), or a future representation to be fulfilled through implementation of the proposed changes. This vision can help propel organizational action in the direction of implementation of the needed changes to achieve the vision. Since major change may threaten identity and induce resistance, most articulations of a "new" identity by top management seldom sever completely the ties with the past. In his longitudinal study of Imperial Chemical Industries, Pettigrew (1985) found that even when major changes are desired, they are often sought in a context of some continuity. Whiting indicates that "only when certain matters can be depended upon to stay in place will resources become available to modify others" (1976:197).

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A new statement of identity which diverges highly from the prevailing one has a low likelihood of penetrating the organization's cognitive filters (Reger et al, 1994). Thus, management may frame the upcoming changes so they do not seem to be widely divergent from the organizational identity. This will increase the probability that the change will be accepted (Reger et al, 1994). Pondy and Huff's (1985) study of a school shows how proper choice of language helped frame a decision to utilize computers in the educational process as ordinary and routine, thus downplaying the discontinuity with past attributes and practice. The use of computers was portrayed by the president as an extension of the shared organizational attribute of instruction in the basic skills rather than as a break with familiar ways. By presenting the change as consistent with the institution's identity, the resistance to the change that may have resulted otherwise was prevented. Thus, the organization's past was reframed so it seemed consistent with the changes desired at the organization (Levitt and Nass, 1994). However, empirical studies also tell us that changes in organizations are not always framed as being compatible with the organization's previous self-definition. For example, in her study of the U.S. Post Office Department reorganization, Biggart (1977) found that top managers, who had the mandate to effect the change, resorted to a discreditation of the attributes of the organization prior to the change. Former policies, management style, structural arrangements, logos, were all denigrated, while new arrangements and attributes and those who complied with them were praised. In this case too, the organizational history was reinterpreted so as to provide justification for the change. Ironically, however, it was reinterpreted and portrayed in a negative light. Organizational scholars have devoted considerable attention to studying changes of different types and magnitudes. However, very few studies have researched the discursive presentation of identity during these contexts. Yet, as the above discussion indicates, top management discourse about the change and its impact on identity may strongly influence how the change is perceived by organizational stakeholders and the latter’s acceptance of the change. More research should be devoted to understanding the identity elaboration strategies

6.with more or less success . 2.1 Identity and Culture Several reviews of the literature point out that there are numerous perspectives to organizational culture and each defines the concept differently (Allaire and Firsirotu. Albert and Whetten declare that: "What we will define as important about an organization will depend on how we characterize the organization as a whole.x - The above constituted a review of what the literature says and does not say regarding centrality. but they do not define or discuss what they mean by culture. Establishing a distinction between identity and culture depends on the definition adopted of each of these two concepts.. frequently asked questions which arise revolve around the difference between identity and other concepts that may seem similar to it. Smircich. In the following. The difference between the two has not been the subject of a consensus among organizational theorists. Nizard (1983) argues that culture is a subset of identity and a powerful expression of it. Is culture part of organizational identity? The relation of culture or any . Authors who have written about organizational identity often attempt to distinguish it . For example. Research should also address how persistence in identity is established in discourse. I will move on to discuss the differences between organizational identity. indicate that identity is a larger concept than culture. -x . 1983)..6 ORGANIZATIONAL IDENTITY.from related concepts such as organizational culture and organizational strategy. Consider the notion of organizational culture. 1984. distinctiveness and temporal continuity of identity and how these dimensions are expressed or created through top management discourse. Ashforth and Mael (1996).22 used by management in a context of change. 2. STRATEGY AND CULTURE When the subject of organizational identity is evoked. culture and strategy. Similarly. I discuss the distinctions between identity and culture as well as identity and strategy.

Laroche. and recognizable by group members (p. Mendoza and Pulicani (1991). I agree with Hatch (1993) that culture involves a dynamic interaction between values. distinctive. A similar distinction between identity and culture is made by Reitter. I personally subscribe to a definition of organizational culture which is broader than organizational identity. assumptions. they may not be conscious and may be so internalized. constitute two opposing views of organizational culture. Identity. Fiol however. on the other hand. argues that a)culture as unobservable and unspoken rules and b)culture as behavioral manifestation. Rather than seeing them as opposing notions. In other words. It also includes the system of collective symbols (pp. all of which are components of the organizational culture. I see them as complementary and as different aspects of organizational culture. organizational identity constitutes a subset of culture. is a coherent set of characteristics developed by the group throughout its history. . Like Fiol (1991). 21). Chevalier. namely the part which speaks particularly about the organizational attributes. identity and culture constitute two fundamental levels of group life. Given this perspective. However. distinctive and enduring) and a theoretical one (Does the theoretical characterization of the organization in question predict that culture will be central. one can ask "Is identity part of organizational culture?". and say that the answer depends on the theoretical perspective which is taken to the notion of culture. I propose that identity provides the link between two aspects of culture: one constituting a set of unobservable and unspoken rules or underlying beliefs and the other constituting of behavioral manifestations.23 other aspect of an organization to the concept of identity is both an empirical question (Does the organization include it among those things that are central. Unlike the authors mentioned above. by the same token. that they strive without being expressed. symbols and artifacts. and an enduring aspect of the organization)" (1985:265-266). 24 & 274). Some cultural phenomena cannot be verbalized by actors. Identity can be verbalized by group members. To these authors. Culture includes collective practices deriving from a local knowledge which all group members must possess to function properly within the group.

Dutton and Dukerich (1991) give an illustration of how identity can affect action and strategy in organizations. Mintzberg and Waters.24 2. and a core distinctive competency. Describing the nature of the relationship between strategy and identity depends largely on how these two concepts are defined. Miles and Cameron (1982) talk about a "corporate character" which is approximated by an organization's peculiar mix of relatively enduring features including its strategic predisposition. Thus. the issue of dealing with homeless people on the premises managed by the organization. she indicates that there is a reciprocal relationship between the two. dominant values and beliefs in the process of critical decision-making. In their study of the New York Port Authority. Ashforth and Mael (1996) clarify well the distinction between the two concepts: "Identity refers to an organization's central. Identity impacts strategy through the vision of managers that drives strategic behavior. and strategic behavior impacts identity. whereas strategy refers to an organization's goals and the activities intended to achieve them. for example. 1985). although identity and strategy are reciprocally related such that identity is enacted and expressed via strategy. especially as participants gain a sense of the organization by observing what it does. The impact that identity and strategy have on each other is also explained by Sarason (1995). 1984). authors usually point out to the organization's identity as viewed by top managers. This relationship has received some interest in a number of studies. they show that managers' view of the organizational identity affected their interpretation of. and inferred. Identity can serve as a wellspring for strategy. and enduring character.6. modified or affirmed from strategy. In discussing the relationship between identity and strategy. Carpenter (1994). 1990. Arguing from a structurational perspective (Giddens. and reactions to. distinctive. explains that the decision to divest an organizational unit is related to the top management .2 Identity and Strategy Strategy has been defined in numerous ways in the literature (Mintzberg. typically anchored to its mission. an organization which describes itself as having an innovative strategic predisposition and which believes it has a distinctive competency in technology is likely to pursue the strategy of being the first to introduce computer-based sales and services in its industry.

. . Both. central and enduring attributes of their organization.25 team's shared gestalt of the distinctive. strategy and identity are strongly influenced by top managers' worldviews. I provide the research questions which guided this research and discuss the central approach I used to answer these questions.x . In the next section.x - In this section. I provided a review of the literature pertinent to my research subject.

CONCEPTS AND APPROACH In this section. it is a major element in the expression and elaboration of organizational identity. I present the research questions which focus on unresolved issues in the past literature on organizational identity. . The aim of this thesis is to explore how identity in top management discourse develops over time in a context of change. I then describe how I approach the study of identity evolution in top management discourse. this involves the application of the grounded theory approach which allows for the emergence of theory from the data analyzed. I propose the following conceptualization of organizational identity. I present the research questions that guided the study and the central approach I adopted. Thus. specially in a context of change. RESEARCH QUESTIONS. The research questions that guided the study are: What aspects of identity are addressed in a context of change in top management discourse? Do these aspects evolve. I pointed out that authors have been in disagreement with respect to whether identity changes or tends to persist. how? What contextual factors are associated with the evolution? To answer these questions. As this study focuses on the evolution of organizational identity in top management discourse. I then provide the definition of organizational identity which I adopt in this study and which is based on elements discussed in the literature review. I will explain where a researcher can possibly look for such discourse. and if so. I also indicated that top management discourse on identity has not been systematically researched in the literature and yet. 3. and that this issue needs to be researched further.1 RESEARCH QUESTIONS Previously.26 3.

3 TOP MANAGEMENT DISCOURSE 3. 3. is. can find his/her object of interest in top management’s day-to-day conversations and interactions with different individuals and/or groups. Based on these affirmations. distinctive and enduring attributes of the organization.2 DEFINITION OF ORGANIZATIONAL IDENTITY The literature indicates that organizational identity is construed through discourse whereby statements of self-definition reflect and help create identity. 1993). reliance on written organizational texts was most appropriate.1971:531) and is hard to retrieve post facto. top management helps maintain or change an organizational representation. 1971. Because this study focuses on top management’s identity-revealing discourse. The researcher could also find the object of interest in written organizational texts.2 Content There is a multitude of ways that a researcher can approach written texts. These texts can be retrieved and re-analyzed (Ricoeur. It also indicates that top management has a pre-dominant role in defining the organization to stakeholders. Conversations are ephemeral (Taylor and Van Every. influencing stakeholders’ view of what the organization was. spoken discourse “has the character of a fleeting event” (Ricoeur.3. 1989). these dimensions can shift with time depending on the context. Since the interest of this study lies in organizational identity in management discourse over an extended period of time. Written texts. Furthermore. 3. and will be. although some definitions of organizational identity have placed emphasis on the central. I define organizational identity as a representation of the organization which refers to the central and distinctive attributes as well as to the enduring and shifting attributes of the organization. emphasis was placed . Hanks. on the other hand. This representation emanates in great part from a discursive elaboration on the part of top management.3.27 3. Through its statements of identity.1 Written discourse A researcher looking for statements of identity in top management discourse. tend to endure.

these themes are revealed in key words and expressions.1990).4 APPROACH USED Since this is an exploratory study and since the area of organizational identity is in an early stage of development. identity themes.3. I thus adopted the approach of contextualizing top management statements on organizational identity. led to my reliance on qualitative data. The importance of gathering information on contextual factors to understand discourse on identity cannot be overemphasized. or if they have been identified they are “conceptually underdeveloped” (1990:37). in turn. I consulted numerous organizational and industrial documents. without taking the next step of situating the artifact in a broader … context” (1989:98). and their evolution constituted the subject of the study. This. Strauss and Corbin indicate that a major assumption underlying this approach is that not all the concepts pertaining to the phenomenon being studied have been identified. Internal and external context factors have an impact on top management discourse on identity and must be taken into consideration in explaining the evolution of this discourse. 1967. I adopted the grounded theory approach (Glaser and Strauss. 3. More specifically. Strauss and Corbin. Such words and expressions derive much of their meaning from the context within which they are articulated. this approach has been extensively utilized to analyze qualitative data. A rich contextualization of phenomena in research entails the use of qualitatively-based information (Miles and Huberman.28 on the content of management’s statements of identity. As Hanks indicates. 3. “it is doubtful whether any approach to discourse that posits text-works can limit itself to the textual artifact alone. In fact. 1994). As will be explained in detail in the methodology section.3 Context To be able to understand and explain the context within which discourse on identity developed. Identity .

The research question in a grounded theory is a statement that identifies the phenomenon to be studied” (Strauss and Corbin. and provisionally verified through systematic data collection and analysis of data pertaining to that phenomenon. The initial question is broad and is progressively narrowed down during the research process as relationships between concepts are discovered. The grounded theory approach was described by Glaser and Strauss (1967) as involving the “constant comparative method” of analysis whereby data is gathered and analyzed. 1990:23). data collection. then prove it. Concepts and ideas regarding this subject are fragmented and sometimes inconsistent. developed. Applying the grounded theory approach to the study of identity evolution in top management discourse entails looking for markers of identity in the content of texts. “does not entail statements about relationships between a dependent and an independent variable. it is discovered.x . That is. Rather. . one begins with an area of study and what is relevant to that area is allowed to emerge (Strauss and Corbin. and theory stand in reciprocal relationship with each other. leading to the emergence of conceptual categories. however. their development is traced for the period under study. in turn. bold in the original). Therefore. 1990:38. Contextual factors associated with identity development also have to be identified and traced. Once these markers have been identified. The patterns that surface form the basis for a theory that emerges from the data. analysis. Furthermore.29 evolution in management discourse has not been systematically researched in the literature. “A grounded theory is one that is inductively derived from the study of the phenomenon it represents. This. Narrowing down the question.x - . using the grounded theory approach implies that the researcher does not start out with a narrow research question. One does not begin with a theory. leads to more data gathering and analysis until categories and their properties can be integrated leading to an emerging theory. as is common in quantitative studies because the purpose is not to test this kind of hypothesis.

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In this section, I provided an overview of the questions that guided the research. I also discussed the major conceptual building blocks for the study, including the definition of organizational identity I adopt and the aspects of top management discourse which become relevant in a study like the current one. I concluded by indicating that the concepts in the area of organizational identity and identity evolution are not sufficiently developed in the literature. Thus, using the grounded theory approach will allow elaborations and new concepts to emerge from the data. In the next section, I turn to the methodology employed in this research.

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4. METHODOLOGY
As I indicated before, this is an exploratory study of organizational identity. The purpose of the research is to trace the process of identity development in top management discourse in a context of change. To explore this issue, I effected a longitudinal study of managerial discourse for two Canadian chartered banks for the years 1985 to 1997 inclusively. During this period, these banks had undergone substantial changes that affected their identity. Since organizational identity as an area of study is still at an early stage of development, the concepts in this area are not well elaborated. Therefore, I used the grounded theory approach the aim of which is to generate theory from the data. I also relied on relevant recommendations provided by different authors on research methods and techniques related to studying a limited number of cases, as well as those related to qualitative data analysis. In what follows, I describe in detail the methodology used. I present again the research questions, and then discuss the cases selected, the research design, the units of analysis, the sources of data, data presentation and analysis, as well as the issues of reliability and validity.

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4.1 RESEARCH QUESTIONS AND APPROACH As mentioned in the previous section, the aim of this thesis is to explore the process of identity development in top management discourse in a context of change. The research questions that guided the study are: What aspects of identity are addressed in a context of change in top management discourse? Do these aspects evolve, and if so, how? What contextual factors are associated with the evolution? To answer these questions, I adopted the grounded theory approach the aim of which is to generate theory from the data. The data for this research was taken from two organizations that have undergone change.

4.2 THE ORGANIZATIONS Two Canadian chartered banks constitute the subject of this study: the Royal Bank (RB) and the Bank of Montreal (BMO). RB and BMO are comparable in terms of size. They ranked among the top three banks in Canada during most of the study period. However, a reading of these two banks' written documents indicates that the identity attributes they emphasize differ in several respects. RB ranked as the largest of all financial institutions in Canada in terms of revenue at the end of the study period (1997). It considers itself the leader in many respects. BMO is Canada's first bank (established in 1817) and ranked third among financial institutions in Canada at the end of the study period. BMO is the only bank which has retail banking operations in the United States and considers itself a North American bank. The following statements of corporate profile taken from the banks’ 1997 annual reports (the last year of the study period) illustrate concisely the aspects of identity that these banks emphasize: Royal Bank Royal Bank is Canada’s largest financial institution as measured by market capitalization, revenues and net income. We have leading positions in most Canadian financial services markets and operations in 36 countries… In Canada,… Internationally… Bank of Montreal Bank of Montreal, Canada’s first bank, is a highly diversified financial services institution offering a full range of services in all three NAFTA countries. These are the companies that serve you:….

They therefore constitute interesting cases to study. globalization. I was able to see how the organizations defined themselves before these major changes occurred and the impact that these changes have had on the evolution of identity. major regulatory change occurred relating to the banking sector in Canada and this had a major impact on the identity of the organizations under study. the factor that played a major role in my choice is the fact that. For a previous study I had undertaken. have left the financial industry landscape substantially modified if we compare it today with the mid-eighties. All these changes have had a major impact on the institutions in question and in the way they are defined by management.3 RESEARCH DESIGN The research involved the study of two organizations. 4. and customer expectations. technological advancements. By considering 1985 as the beginning of the study period. The process of identity evolution for these two organizations was studied for a period of thirteen years. and substantially upgraded the services they provide during the last thirteen years. From a theoretical standpoint. I analyze and discuss identity development for each of the two . obtaining these documents was difficult indeed. of the Big Five chartered Canadian banks. In addition. choice of these two chartered banks as study cases is justified by the fact that they have different histories and. and are of comparable size. made a number of acquisitions in related but then nonbanking areas. from January 1985 to December 1997. these institutions have dealt with a number of significant changes during the last decade. increasing competition. RB and BMO are the only ones which have their Archives department in Montreal. although they operate in the same industry. as their Archives and Public Relations departments are situated in Toronto. However. I had made numerous attempts to obtain documents from the other members of the group of Big Five Canadian chartered banks. In 1987.33 Although the choice of these two financial institutions can be justified on a number of theoretical grounds. Changes deriving from de-regulation. as the corporate profile indicates. define themselves by different attributes. Both financial institutions in the study have undertaken numerous restructurings. Following Eisenhardt’s (1989) recommendations. international economic developments.

4. This intraorganizational analysis is followed by an interorganizational analysis whereby the findings for the two banks are contrasted. To date. In the few empirical articles on this subject. most articles on organizational identity have been of a conceptual nature. I review different operationalizations of organizational identity and propose an operationalization which is discourse-based. . different operationalizations have been adopted. In what follows.4 UNITS OF ANALYSIS Studying organizational identity empirically depends on how the concept is defined.34 organizations separately. The idea is to become intimately familiar with each organization and its unique patterns before trying to generalize. Similarities and differences are discussed and some general conclusions are made.

Identity strength referred to the extent to which members held the values and identity of their institution. one employed a survey. a 'can-do' organization" (1991:526-7). 401). It was measured on a seven point Likert scale through questions such as "To what extent do top administrators feel your institution should not be competing for students as if they were clients or customers?" (p. 100 percent of our informants called the Port Authority a professional organization with a uniquely technical expertise. First.35 4.. we can see that there are smaller percentages of informants who endorse the attributes. they measured it by asking informants about their views regarding the characteristics that distinguished their organization. ill-suited to social service activities. and altruistic. a fourth of our informants expressed a view of their organization as distinctive in terms of being a fixer. Third. One can argue that there are two caveats in the above operationalization.1 Operationalizations of Organizational Identity in the Literature Of the different studies that research some aspect of organizational identity. It should be noted that the authors' major aim was not to undertake an in-depth study of identity per se. In a cross-sectional study. Gioia and Thomas (1996) tested the proposition that strategy and information processing structure are related to organizational identity. high quality organization and a provider of superior service. scandal-free. Identity type referred to whether the top management team saw the institution as more utilitarian or more normative. Should an attribute mentioned by 25 percent of respondents be considered an aspect of organizational identity? Walsh (1995) questions whether an aggregation of individual knowledge structures can be taken to represent the collective . 36 percent described it as a first-class. identity type and strength of identity. Finally. informants (44%) referred to their organization as ethical.. Fourth.. as the list of characteristics goes on. They found that there were six attributes that summarized the informants' views: "First. It was also measured on a 7-point Likert scale through questions like "To what extent do the top management team members of your institution have a strong sense of the institution's history?" (p.4. they measured two aspects of identity. Dutton and Dukerich used a different approach to study identity. In their study of the New York Port authority. Second. In their survey of academic institutions. but to test how different aspects of strategy and structure were related to it.401).

36 knowledge structure. It is possible that a different set of attributes would have surfaced if organizational participants were questioned about their perceptions of the organization with regard to another issue. Common themes that emerged from the responses were analyzed and used to develop items for use in a questionnaire. Second. It is clear that the identity dimensions that were studied relate to the strategic orientation of the organizations. strategic focus. . tolerance for risk. what words you use? (and) 2) If you were to use adjectives to describe your company in comparison to competition. "By framing identity as the address of the ongoing question "Who are we?". In fact.it is something routinely created and sustained through reflection and the testing of evolving ideas of identity. such as a major expansion project. The questionnaire items measured. the degree of aggressiveness. distinctive and enduring aspects of organizational identity. we are trying to capture the continuous reflection involved in identification.that of homeless people on the premises managed by the Port Authority. We want to emphasize that identity is not something that is just given . cost structure. These issues are not addressed by Dutton and Dukerich. Fiol et al (1996) propose that instead of placing emphasis on the central. They indicate that two questions proved effective in investigating the evolution of organizational identity: "1)If you were to use adjectives to describe your company in comparison to the other RBOCs. that the questions asked and the questionnaire items mentioned above do not gauge the evolution of identity. the above characteristics attributed by organizational participants were relevant to a particular problematic issue salient at the time . on a 5 point Likert scale. This more general question is how stakeholders address the question. "Who are we?". bureaucracy. however. Fiol et al report on their study of the Baby Bells or regional Bell operating companies (RBOCs) in the United States. for example. researchers focus on "the more general question that helps form the glue that holds organizations together. It should be mentioned. customer focus." In their paper. speed of moving and constraint for each organization in their study. what words you use?" These questions were presented to eighteen senior executives of one RBOC. the object of their research revolves around the interrelation between organizational strategy and identity.

He analyzes the frames elaborated at these levels at different time periods. He concludes that different frames can converge or diverge. 200). more properly. he indicates that the identity of a social movement organization is constructed from frames elaborated at different structural levels including the community. She takes a broad process view of identity which allows her to analyze the multiple factors that impact identity. A process approach to identity is adopted by Stoecker (1995) in his study of a social movement organization. the authors relied on different sources of data to track the changes in identity and strategy with time. and re-cast the past so it remains consistent with the present image which the public sector attempts to legitimate. analyzes the labels used and their sources. She thus shows how the public sector . In fact. identity construction as a continuous process of narration" (p. the appropriate analogy is one "between organizational narratives and autobiographies as narratives constituting identity" (p. the movement. Stoecker. 1996. 1995). She looks for the different authors of the narrative. She views identity as a narrative "or. Gioia and Thomas (1996) suggested that researchers focus on the vision of top managers. To overcome this limitation.198). More specifically. 1996. Fiol et al. and examines the rhetoric used by the public sector in the presentation of identity. Elsbach and Kramer. in an attempt to get a reliable definition of a number of universities' enduring identity dimensions. especially in studies of organizational change (Gioia and Thomas. searched .narrate identity using labels and concepts from the private sector. Viewing identity as a set of stable criteria anchored to the past is said to be particularly limiting. Czarniawska-Joerges (1994) also adopts a process approach in her post-modernist study of the Swedish public sector organizations. Thus.37 These questions are most likely to capture identity as a product and not as a process. and to portray how identity is narrated with time. or what they call "the projected image of the organization" as a substitute to institutional identity in studies of change.and the consultants working for it . thus affecting the movement's identity and actions. The identity of an organization can also be inferred from a variety of written organizational documents. and the social movement organization level.

"small/friendly culture"). values (e. As can be noted. type of institution (e. "technical"). "participatory culture". The operationalizations are as varied as the objectives of the studies and the methodological perspectives taken. .g. "elite students")..g.. "entrepreneurial". and a variety of other attributes including "renowned university" and "strong alumni". that roughly fit the prototypes: "our school is an X type of school". "diverse students". "a central dimension of our school is X". "work ethic"). They list the identity dimensions that surfaced from their investigation for each of the schools (p. the above attributes address a variety of organizational domains and is consistent with a relatively broad view of identity. approach (e.for statements regarding the unique and defining characteristics: "We focused on statements. A reading of these dimensions indicates that they include the following: type of culture (e. type or quality of students (e. there is no single approach to operationalizing organizational identity. "global program".38 organizational records .453). As the above indicates.namely university catalogs for five years . type of program (e.g. "public institution"). "academic values".g. "our school is different from most schools on dimension X". "quantitative program"). or "we have always been a type X school" (1996:451).g.g.

I will be relying on formal written texts to study what identity themes emerge and how these themes are elaborated with time. manage costs.which is selfreferential and which is talked about as being central.as well as to make continuing investments in staff training . I propose that an identity theme is revealed by a word or an expression . Temporal continuity (or lack of it) was gauged by references to time. Distinctiveness was gauged by such qualifiers as "best" and "highest": references to the bank’s superior ranking on some attribute within a comparison group.4. It is the basic reason for everything else we do. has been a strong point at the Royal. Evidence of centrality was also provided by the number of issues revolving around the theme. As I mentioned previously in my discussion. present and future. The following paragraph from the Royal Bank 1985 message to shareholders (MTSs) is an example: "Serving customers well remains at the heart of the Royal Bank's mission.39 4. Traditionally.all are ultimately aimed at one primary goal: serving customers' needs well" (italics in the original).a label .2 Proposed Measures of Organizational Identity The approach used by Elsbach and Kramer (1996) which involves analyzing written documents for statements of identity seems particularly pertinent for my study. new service-delivery methods and new technologies . Huff indicates that "the use of the same word and its synonyms… is called a theme" (1983:169). Serving customers' needs well is an attribute that appears in this and other annual reports. attention to customer needs. allows the researcher to study how identity changes. From the above paragraph it can be seen that this is an attribute which is considered . Relaxing the requirement that a theme be considered identitarian (“identitaire”) only if it is enduring. such as the past. Another measure of centrality is the number of references that are made to a particular theme. The frequency with which an item is mentioned is a measure of importance (D'Aveni and MacMillan. Evidence of continuity is also provided by the continual appearance of the theme over the years. the 'personal touch'. "basic reason for everything we do". It remains a constant. improve productivity. distinctive and/or enduring. Centrality was gauged by such terms as "at the heart of our mission". 1990). devise and introduce new products. It also allows the tracing of those themes that increase in centrality and/or distinctiveness with time. All our efforts to preserve the Bank's financial soundness.

the “fee-and-income generating ability” theme for RB and the “innovative” theme for BMO do not occur frequently in the MTS within the first few . To avoid death by data asphyxiation (Pettigrew. I used the same theme title in all discussions and elaborated on how the labels changed. at the RB. I used throughout my discussion the expression “North American” to refer to the geographic scope theme since this is the label that dominates throughout the study years. nor their meanings remain fixed over the years.and to avoid making the discussion confusing. studying process requires looking at the past.40 central ("basic reason for everything else we do"). Another example can be provided from BMO’s identitarian discourse. present. For example. As Pettigrew (1990) indicates. Indicators of projected attributes used were such expressions as "Our major objective is…". 1990). BMO calls itself initially a Canadian bank. such terms as “customer service”. five of the RB themes that were most frequently recurring and/or that did not occur frequently at the beginning of the period. Particular attention was paid to variations on a given theme. and "Our vision is to become…" It should also be mentioned that written documents by organizations may contain varied and numerous self-references. projected identity attributes also constitute themes of interest. because my interest is in the elaboration of identity over time. Instead of using the labels that were used by the banks . and future.which changed from year to year and sometimes within the same year . Projected identity attributes are revealed as major objectives or parts of a vision. Furthermore. “quality service”. For example. “meeting customer needs” seem to be used interchangeably to denote particular aspects of the bank-customer relationship. It should also be noted that although I used a single label or expression to speak about what I call “a theme”. but became frequent and central later on (or vice versa). distinctive ("a strong point") and enduring ("traditionally" and "it remains a constant"). neither the labels. all references to how the bank served customers were discussed under the title “quality service to customers” which was considered an identity theme. For example. I emphasized. for example. then a North American bank and later still a NAFTA bank in referring to its geographic scope that evolved with time.

This limitation of the study. Because these texts are produced annually. we hope instead for a … picture which might resemble an old jigsaw puzzle that we drag out of the attic on a rainy day. is a minor one since the purpose of the study is not to provide a full account of all attributes that constitute the banks’ identity. they allow the researcher to trace the process of identity development. since “size” is a theme that was traced for RB and it subsumes in part the “retail banking operations”. and/or history as well as letters to shareholders – all of which can be found in annual reports – provide a wealth of information on top management’s representation of the organization. 4. Rather the study aims at discerning identity construction strategies used by the organizations over time. some themes like “retail banking operations” for RB appear as distinctive in size and this issue recurs in the MTS. 4. However. The themes that were tracked for the two organizations provide ample evidence of such strategies.1 Annual Reports A variety of written texts appearing in the annual report are used as the major source of data in this study.5 SOURCES OF DATA Mintzberg and McHugh (1985) state that the best method for tracking strategies is to reconstruct them after the fact.5. As McMillan indicates: “Realizing the impossibility of overturning every rock and stone within the organization. These themes were tracked and analyzed. the latter theme was not discussed separately. As mentioned in the preceding chapter. written texts tend to endure and therefore provide excellent information for tracing the development of identity. They do become more central towards the end of the study period.41 years of the study. Furthermore. but at least we know at the end of our labors whether we have a ship or a puppy” (1987:23). . One such written text is the annual report. vision. Statements of corporate profile. Reconstruction after the fact applies to identity elaboration strategies in top management discourse as well. Several pieces are missing. values. however.

1984. its major future objectives. House organs constitute part of the organizational public statements which disseminate the organization's history and values and which call forth a "significant past" and provide "the symbolic impetus to propel the organization into the future" (McMillan. In addition to the message to shareholders. Although the first draft of the letter to shareholders is prepared by public relations writers. D’Aveni and MacMillan. I consider these to be major sources of data as well. they constitute a reliable source of information on the evolution of the organization's identity in top management discourse. its significant undertakings and changes during the year. it has to be read and approved by different top officials (Staw et al. Staw. Salancik and Meindl. and the external factors that are heeded by management are most often addressed in the message to shareholders. they provide an excellent information base from which to infer management's identity construction strategies. . 1990:640). "Letters to shareholders are particularly good indicators of the major topics that organizational managers attend to" (D'Aveni and Macmillan. and/or history. from January 1985 to December 1997. These written documents were analyzed for a period of thirteen years. Organizational documents included the review of operations and other segments of the annual report. 1983). I consulted other organizational and industrial documents. An organization's central attributes.5. In fact. 4. Barr and Huff. as well as the house organ for the period under study. vision. 1990. because they are signed by the top manager(s) of the organization. 1997. Mckechnie and Puffer. values. Bettman and Weitz. 1983). 1983. 1984).2 Other Organizational and Industrial Information To understand and explain the context within which identity-construction discourse developed. what is written in the letter to shareholders is thus taken to be top management's account (Salancik and Meindl. some annual reports give a brief overview of the organization's corporate profile.42 Numerous researchers who have done longitudinal studies have relied on annual reports as the single or the major source of data (for e. The house organs provided a wealth of information. Since the messages to shareholders are produced annually.g.

which is a more conceptual category or second-order code (Gioia et al. PRESENTATION AND DISCUSSION Different approaches to the analysis of qualitative data are available.43 1987:37). The overriding approach I used is the grounded theory approach which I described previously. In my initial coding of the primary sources. These are first-order codes that remain very close to the terms utilized by the source of data (Gioia. In fact. 4. Clark and Chittipeddi. Thomas.6 DATA ANALYSIS. For example.6. Industrial information was taken mainly from the business press. The information gathered from these interviews was also used as a source of contextual information. but also "integrating categories and their properties" (Glaser and Strauss. “Mexico”. other organizational documents. “geographic scope”. “U. 4. the interviews with organizational informants and industry information were carefully read and searched for information that could confirm or disconfirm the emerging patterns in the analysis.”. Later these codes were aggregated into a single code. 1967:105). 1994). These documents and interviews were also used as a source of information on contextual variables. I attempted to stay very close to the data and to use codes derived from the terms utilized in these sources. It involves a process of travelling back and forth between the data and the emerging theory (Elsbach. five interviews per bank were conducted with middle or senior managers. 1994). “NAFTA”. I initially had the following codes: ‘Canada”.S. The operating review in the annual report. “North America”. 1994).1 Data Coding The major units of analysis that were coded are the references to identity themes (and related issues) in the primary sources of data. I also relied on recommendations provided by different researchers who have subscribed to qualitative methods. the constant comparative method prescribed by the grounded theory approach involves not only "comparing incidents applicable to each category". . In addition. in coding the BMO data.

A number of general conclusions are provided. 1996) of the theme’s evolution. for RB.I report those quotations that are representative of a significant state in the theme’s trajectory. The final coding scheme that emerged was used to recode all the documents. Analysis and Discussion For some of the themes studied. Following Eisenhardts’s (1989) recommendations. For example. 4. change code names. Tracks were used to briefly show the progression of the theme along with the contextual factors associated with the evolution.2 Presentation. Only a portion of these quotations are presented in the thesis. Later when I attempted to code the data for BMO using the coding scheme developed for RB. I present the data for each theme in tables arranged according to chronological order. and search for words or expressions with relative ease. The evolution of some of the themes lent itself to presentation along tracks (Van de Ven. Instead of presenting all those quotations -which would have increased substantially the volume of the thesis and again would lead to death by data asphyxiation . The process of coding was facilitated by the use of the ATLAS ti Software for Visual and Qualitative Data Analysis (Version 4. a discussion is provided for each bank which is followed by a general discussion addressing the similarities and differences between the two banks. Additional codes (such as “paradox”) were added to the coding scheme to take account of these issues. It allows the researcher to code quotations of different sizes. Thus the developmental trajectory (Kimberly and Bouchikhi.1). Following the recommendations of Miles and Huberman (1994). 1990). group codes. a large number of quotations were generated. 1995) for each theme was presented. Recoding documents using the final coding scheme strengthens the reliability of the study (Huff. in contrast to RB. The conceptual . I found that the codes had to be reelaborated. This is followed by a narrative description (Langley. retrieve quotations under a given code. For example. 1992).6. BMO consistently presents paradoxical aspects of identity which are thereafter demystified. there are 31 quotations coded with “leader” in the MTSs alone.44 I had started by coding the data for RB.

4. In addition. 4. 1990:278). By making explicit what research methods and analytical techniques were used. Some of the concepts that emerged are consistent with the literature.2 Validity Two main types of validity are given attention to by qualitative researchers: internal validity and external validity.7. substantial chunks of raw data in the form of quotes are provided throughout the analysis. in part. to whether they are credible to the people studied and readers.7. Strauss and Corbin tell researchers that referencing literature in . and to whether they are "an authentic portrait of what we were looking at" (Miles and Huberman. "A reliable procedure should yield the same results from the same set of phenomena regardless of the circumstances of application" (Krippendorff. since the documents analyzed are public and are referenced in the thesis. on the assessment of the reliability and the validity of the research. These steps help strengthen the reliability of the study. This implies that the same codes and categories were applied to the data from the two organizations.45 insights that emerged from the study are discussed. as well as what documents and data were analyzed.7 RELIABILITY AND VALIDITY The evaluation of any research project is based. Internal validity relates to "truth value". 1990). Furthermore. Others seem to diverge from extant literature and provide avenues for extending existing concepts. to whether the findings of the study make sense. 4. To strengthen the reliability of the study. 1980:129). I used the final coding scheme to recode all documents. I allow other researchers to track the process by which I arrived at my results. they are available for consultation to other researchers.1 Reliability Reliability is a measure of consistency across time and across researchers (Miles and Huberman. I applied a number of measures.

1989). 1990:52). processes and contexts may be undertaken by other researchers (Miles and Huberman. 1994). Generalizability is a major limitation of research which relies on a small number of organizations (Eisenhardt. External validity.x - In this section. "Or you might want to point out how yours differs from the literature and why" (Strauss and Corbin. since I have provided extensive information about the sample. I discussed the methods used in the study. on the other hand. comparison with other samples. - x . the process and the context.46 appropriate places gives validation of the accuracy of the findings. to its "transferability" to other contexts (Miles and Huberman. Nevertheless. I now turn to the data presentation and analysis. . 1994). refers to the generalizability of the study. This is a strategy I used throughout.

The data for each theme is presented in a table organized by chronological order.47 5. . Each of these two sub-sections opens with a brief overview of the bank’s history. Data presentation for each theme is followed by a narrative description and analysis of the theme whereby its evolution over the years is described and contextual factors that are associated with the theme are presented. This is followed by data presentation and analysis. Quotations in the tables are taken from the annual report and are presented verbatim. Each quotation is preceded by a “-“ sign. one for RB and the other for BMO. It must be noted that the order in which the themes are presented for both banks is of no particular significance. DATA PRESENTATION AND ANALYSIS This section has two sub-sections.

1 ROYAL BANK 5. Royal Bank …became Canada’s largest bank in terms of assets. September/Oct 1993.1. CEO. the most notable of which are Dominion Securities. In 1869. the MTS. president and/or COO. the bank obtained a federal charter and the name was changed to the Merchants’ Bank of Halifax. its name was changed to The Royal Bank of Canada. “In 1920. the head office was moved from Halifax to . p. founded by a close-knit group of merchants as a private enterprise in Halifax.1 HISTORICAL OVERVIEW (Source: Interest Magazine. Thus.400 branches in Canada and an international network of 106 offices in 35 countries around the world (Annual Report.” From 1941 until very recently it consistently maintained this ranking (Interest Magazine. In 1901. Between the years 1910 and 1925. Starting in the late 1980s. the bank had total assets of $274. and Voyageur Insurance. Royal Bank grew by opening new branches and largely through the acquisition of five major banks in Canada.royalbank. as well as Europe. Sept/Oct 1993. The period under study saw the succession of three executives to the top positions of chairman of the board. Royal Trust. 1.23). Since then the bank has made several acquisitions. During its early existence the bank pursued a strategy of national development as it opened branches across different areas of the country.48 5.399 million. the four pillars in the financial industry sector in Canada started to crumble. Montreal. the main source of data for this study was signed by the following executives: and in 1907. The late nineteenth century and early twentieth century saw the bank expand into international locations including south. central and North America.com/history) Royal Bank started off in 1864 as the Merchants’ Bank. and www. 1998). In 1998.

a Quality Service to Customers The quality of the service offered to the customer appears as a self-defining attribute for RB at the outset of the study period. 2)fee-and-income generating ability. 5. “quality service”. Remark that the RB data does not reveal significant differences between the documents signed by different executives. 5. Thus. “customer service”. Here are the themes presented and analyzed for RB: 1)quality service to customers. 4) large. .2. The following table provides the quotes related to this theme. These labels were grouped under the code “quality service to customers”. and 5) leader.1. Quality service is referred to in a number of ways which I considered to be variations on a theme.C. 3) bank-financial institution.2 IDENTITY THEMES In the Methodology section.1. Frazee (Chairman and CEO) and Allan Taylor (President and COO) Allan Taylor (Chairman and CEO) Allan Taylor (Chairman and CEO) and John Cleghorn (President and COO) John Cleghorn (Chairman and CEO). “meeting customer needs” are all interrelated labels referring to how the bank defines an important aspect of its relationship to the customer.49 1985: 1986-1989: 1990-1994: 1995-1997: R. I described how identity themes were chosen for analysis.

Quality Service to Customers -Serving customers well remains at the heart of RB's mission. 1986 1987 . to provide career opportunities for our employees and competitive returns for our shareholders. manage costs. All our efforts to preserve the bank's financial soundness. It is the basic reason for everything else we do.. and by doing so. -Central among our goals.profitability is a signal that value is being provided. devise and introduce new products. -The central goal of the management team is to build on our track record for topflight customer service. attention to customer needs. which allows us to deliver more value for the price of a service… Another is product innovation… (and) investment in technology… The Bank’s continuing investment in (staff)… is aimed in the end at assuring that good service is delivered knowledgeably and with sensitivity to the customer. -We are committed to serving customers well and in doing so. has been a strong point at the Royal. as I said in this space last year.50 1985 Table 1. Among these is productivity improvement .. It remains a constant. to substantially improve profitability. -Expanding into .. is to serve customers well. the "personal touch". in the eyes of the people who purchase our service. -The Royal's strength springs ultimately from a consistent track record of service to customers. Commitment to quality service is a distinctive RB trademark.all are ultimately aimed at one primary goal: serving customers' needs well. improve productivity. new service delivery methods and new technology -as well as to make continuing investments in staff training . -(Consumer deposits) come to us.. By serving customers well. and stay with us. we aim over time to substantially improve profitability. -Delivering value (to customers) requires supporting… staff with enormous resources… It also requires unremitting attention to many of the strategic priorities discussed in past Annual reports. and to build on that strength we must continue to expand our range of services to meet growing customer needs.. -.new service areas is vital to one of our central corporate goals: to be recognized by our customers as a consistent leader in the value of our products and customer service.. because of the quality and convenience of the service provided through our network of branches and Personal Touch Banking machines. Traditionally.

At large corporations like the Royal -with millions of clients and a large existing market share . better able to increase benefits to shareholders and employees. for example. Our formal customer surveys which are carried out regularly tell us our customers are more satisfied now than in the past. Business success can only be built on serving customers well. -We are convinced that quality of service -as perceived by the customer . indicates a positive correlation between the investment returns of various companies and the perceived quality of their product brands. which brings definition and focus to service initiatives at every level.is the primary factor determining long-term performance..that such leadership can only be achieved and sustained by the provision of nothing less than the best service available to customers in the marketplace. Our resolve to serve customers well has not diminished. For RB an absolutely top priority continues to be improvement in the quality of our service. -In the past two years. The fight for customer loyalty and market share will become increasingly intense as more players enter the financial services sector on various fronts and customer expectations continue to grow. we have made genuine progress in our quality of service initiatives.. cut into business growth potential. But we are not resting on our laurels. is a business fundamental . more so than product innovation and pricing. Common sense tells you the same thing. but in terms of profitability as well. -The bank's operating performance showed progress in 1990 on most fronts. -A strong commitment to customer service is fundamental to our business strategy. on the other hand. technology and government regulation. We further refined our customer focus. of course. The key to this.51 1988 -We intend over time to lead the Canadian financial services industry not only in terms of size and scope of business. -Our continued success will be influenced by three important factors: customer service. A recent market survey. A senior bank officer has been made responsible for our service quality group. 1989 1990 . Dissatisfied customers. -There is no doubt that the quality of service will be the major competitive arena in the 1990s.satisfied customers provide a springboard for effective sales and marketing. technology and investment banking subsidiaries".. staff training. -Our drive to improve service quality is designed to generate solid returns from heavy investment in branches. -We are intent upon improving all aspects of our business as we enter a new decade so that we are better able to serve our customers and therefore..

providing them with what they want at a competitive price.52 1991 1992 -We made good progress in 1991 towards our objective of differentiating ourselves from our competitors by being the clear leader in service quality. and expect from us. one customer at a time. want. -Higher levels of employee satisfaction and rewards tied to corporate goals should lead to enhanced customer satisfaction. -In 1997. improved cost management and higher profitability. Feedback from the large number of customers surveyed during the past year suggest that our service quality initiatives are paying off in terms of improved customer satisfaction. -The reduction (of branches following the merger with Royal Trust) will take place gradually… to ensure the redeployment of staff is handled effectively and service to our customers is not impaired. perhaps even a little better. technology and time to devote care and attention to their clients. more was done than ever before to learn what our customers need. These surveys also help us measure and monitor performance against specific quality targets. We have earned our customers' business by anticipating and meeting their needs. -We became Canada's leading financial institution. customer satisfaction. -Extensive surveys and other measures of customer satisfaction tell us that we are doing as well as the best of our competitors. we will continue to reduce the number of branches and reconfigure the network to be more responsive to our customers. We will achieve this by continuing to improve service quality. Providing value is where the battle for competitive advantage is being fought in the financial services sector. 1993 1994 1995 1996 1997 . and profitability. through our commitment to delivering innovative and high quality products and services. diversifying and expanding our global businesses and developing our fee-generating business. A great deal of effort was also devoted to developing the effective measuring and monitoring techniques that we believe are essential to winning the battle for customer loyalty. we are raising the targets for customer satisfaction and providing employees with the training. -Providing customers with value means providing a level of service that consistently meets or exceeds their expectations at a reasonable and competitive cost. we added customer satisfaction and performance relative to the competition as further criteria for (employee compensation) payouts. In 1991. -Increased revenue generation from traditional and emerging businesses is our top priority. -As customer acceptance of alternative delivery channels… grows. -For our customers. -Solid progress was made towards our goal of being the leading provider of financial services measured in terms of service quality.

The notion that better service leads to better profit is a constant in the bank's communication and remains so throughout the years under study. in the 1987 message to shareholders. for example. more than half of the message to shareholders revolves around the quality service issue. scope and profit” 1988) than as an end in itself. Nov/Dec 1985:21). In 1988 and 89. a primary goal. as well as a central goal of management. a strength. It is a theme in the organization's discourse that stands above other themes.. This is clear from the presentation of customer service as a mission. It should be noted that a Canada-wide survey conducted on customers in 1985 indicated that the RB was perceived as the best run bank by seven in 10 of the RB's main customers. TD. In 1987. A continuity in the supremacy of customer service is noted in the 1986 message to shareholders where customer service is said to be a matter of track record. a similar study indicated that RB tied NB and Canada Trust in corporate reputation attributes and finished second to them in service delivery and pricing attributes. the ratings do not show the RB to be ahead of the competition in terms of this attribute.. . it is clear that the bank still holds the belief that service quality leads to higher profits and remains committed to the principle of providing quality service. a constant. In fact. for example. profit is said to be “a signal that value is being provided in the eyes” of the customers.53 Description and analysis For RB. a tradition. In 1985. and a reason for everything else the bank does (1985). and BMO. Interestingly. BNS. In 1985. whereas only "five or six customers in 10 at the other major banks say their bank is best run" (Interest. What makes their statements in 1988 and 89 different from those in 1985 is the fact that service quality emerges more as a means to an end (“size. quality service to customers is a major self-defining attribute throughout 1985 and 86. serving customers well is still mentioned as a central goal but no more as a distinctive feature of the bank. Interest magazine reports that "while our customers are satisfied with our performance (in terms of service provided by well trained and experienced employees) other major banks fall short of their customers' expectations"(Nov/Dec:1985:22). the RB consistently ranked ahead of CIBC. However. consistent leadership and distinctiveness at the bank.

Jan/Feb 1993:10). there is emphasis on "improving" service quality. the ratings do not show RB to be ahead of the competition in terms of this attribute. In 1990.54 The service-profit relationship becomes more explicitly and rigorously defined in 1988.Retail Banking as saying that "For the second year in a row. Other banks had been making a headway in different measures of the quality service attribute. of being recognized as distinctive from the competition in this particular attribute. and just staying the leader will be in itself a formidable task" (Interest. does underscore the importance that the bank places on improving quality.which appeared in 1985. An article reported in Interest Magazine in the Jan/Feb 1993 issue. Service quality is now portrayed as an aspect of the bank to be improved and a means to higher profits and success rather than a distinct trademark. the competition is making noticeable progress. other banks could have been leaders on one or more of these . Some tremendous initiatives by staff are taking place across the country . of utmost strategic importance. for RB. Quality service becomes the weapon that will allow the winning of the battle for customer loyalty which has to be fought for on many fronts in the competitive arena. This is a quite different statement from 1985's "(consumers) come to us and stay with us".. a constant and the basic reason for everything else the bank does. that is.and they are clearly having an impact.remains a top priority for improvement. is reflected in the arena metaphor. Furthermore. entitled "Royal Bank leads Big Six in customer service" reports RB's senior executive VP .. in fact. Creation of a new senior position to deal with quality. While our challenge is to truly differentiate ourselves. This is reflected in the message to shareholders for 1991 and 92. The emphasis on the objective of achieving a "clear" differentiation from the competition demonstrates the importance. (1991 and 92). 86 and 88. we lead the other banks. In fact. but which became a more common expression than “customer service” in 1990 . In fact. This article. the RB led the other banks in quality of service (except in ABMs for 1992). “quality service” . It can be seen as an attempt to reinforce and consolidate a desired identity attribute. the belief in the bank that quality is a source of competitive advantage and therefore. states that for two years in a row.

Furthermore. In 1994. the references to “learning what customers need. The progress made in 1991 is qualified as “good”. major bank competitors were catching up. and is placed at the same level as other procedures like diversification and expansion. The battle metaphor . In fact. the 1993 message to shareholders provides only minimal references to quality service. Quality & Service Planning is quoted as saying: "We're doing many good things. In addition. from 1993 to 1997. possibly implying that the bank is moving towards narrowing the identity gap that had been created by its slipping position in quality service relative to competitors. the battle involves providing value. The Nov/Dec 1993 Interest Magazine issue reports on two major 1993 customer satisfaction surveys which indicate that while RB held its own.is re-iterated. it is "perhaps" better than the best of its competitors. Currently among banks.55 measures. Despite this fact. The VP. Our goal is to have RB lead the industry"(p. there's no significant difference. providing customers with value (service at a competitive price) is portrayed as a competitive advantage to be obtained by winning the battle against the competition. The Sept/Oct 1994 Interest Magazine features an article entitled "Customer satisfaction rises but competition .) Interestingly. In 1994. the price element (“a competitive price”) . the Senior Executive VP.which first appeared in 1990 when RB did not seem to be making superior advances in quality service relative to its competitors . The article further points out that RB is still as good or better than other banks. but our competitors are pushing hard and the bar is rising quickly". want and expect” and to “developing effective measuring and monitoring techniques” imply that the bank’s knowledge retained from the past had to be updated to serve as a guideline for ensuring a leadership position in quality service. improving service quality is clearly portrayed in the second quotation for 1994 as a means to some other priority.11. in 1992 as “solid”. references to “quality service” decrease substantially. Retail Banking mentions that "Retail Banking's number one strategic priority is to differentiate ourselves from the competition by setting the standard for quality service.” In this same article. although its overall quality service position has weakened "as some competitors have improved at a greater rate.deemed less important than service quality in 1990 . the bank has not been able to present itself as the "clear" leader in quality.is factored in.

56 heats from other banks". The targets for customer satisfaction have been raised. at virtually the same level as TD. Customer satisfaction has been established as one of the employees' performance objectives. In summary. (a notion which is reiterated in 1997. and appears to be a major factor through which the bank achieved its leadership position.) In the 1996 message to shareholders the quality service is brought in again. talk about customer service gets cast in metaphorical terms referring to battles that have to be won against the other banks. Customer satisfaction is now the responsibility of employees as individuals (“their customers”). In 1995. While RB's score rose slightly since last year. Scotiabank and BMO. The change in the bank’s rating with respect to the competition. customers are one of the four groups of stakeholders mentioned in the message and about whom the bank speaks in terms of objectives. "but so have competitors… RB is in the middle of the pack (after the credit unions and Canada Trust). The bank’s distinctiveness. This article again reports on two national surveys that show that RB has improved in terms of customer satisfaction. it can be noticed that “quality service to customers” evolves from a constantly held distinctive identity attribute in 1985-86 to an objective. the message to shareholders makes no reference to quality service. Gradually. the three other banks have all improved since 1992" (p. lies in its leadership position as a financial institution and not in its providing the 'highest' quality service. customer service loses its supremacy as a reason for everything else the bank does and becomes one of the things the bank does to achieve higher revenues and profits. In this year as well. In 1997. or a desired and projected identity attribute as the bank's customer service ratings become less distinguishable from the competition's. appears to have an influence on the evolution of this identity theme. As the bank loses some of its grounds to the competition. .16). customer satisfaction is said to be part of the corporate objectives. Responsiveness to customers lies in the reconfiguration of the delivery network (which includes decreasing the number of branches). however. which is an external context factor.

It should be noted that at the beginning of the study period. As well. wealth management.is our top priority. 1991 1994 1995 . However. We will achieve this by continuing to improve service quality. -Fee-based consumer businesses with the greatest opportunities for expansion include insurance. The following table provides quotations on this theme. mutual funds and retail brokerage.2. -Increased revenue generation . when the issue of “fee-generating services” (1986) is addressed. fee-and income generating ability is not presented as part of the bank’s tradition. is our ability to generate fee income. The association is made explicit towards the end of the study period (1996) when fee-based business is said to provide “high ROE… and above average prospects for profitable growth”.57 5. Fee-and-income generating ability 1986 -Another strength. diversifying and expanding our global businesses and developing our feegenerating businesses.from our traditional banking and newer emerging businesses and from cross-selling opportunities within the bank . lasting and profitable relationships with customers. In addition. which now accounts for almost a quarter of total net revenue and helps to counterbalance the effects of relatively slow commercial asset growth. -Revenue growth and diversification will be achieved by strengthening the traditional consumer businesses. Table 2. Further improvements will result from the emphasis we have placed on fee-based and trade services. as the years go by. -Our stronger retail orientation has significantly lowered Royal Bank's risk profile. I have treated them both as aspects of the same theme. the fee-and income generating ability theme takes on a more central place in the bank’s communications and operations.b Fee-and-income Generating Ability Another self-defining attribute which appears in the MTS is RB’s fee-and-income generating ability. business banking and financial institutions and trade hold prospects for further growth and increased profitability. fee-generating services will increasingly play a vital role in helping to build strong. and by selective international growth. Unlike quality service. Fee income from retail banking services and foreign exchange trading operations were key earnings contributors.1. evident in the year's results. by expanding fee-based businesses. we see no explicit association between this issue and the issue of high income generation ability.

and in most cases generate high returns on equity. investment management. and one of its most profitable. 1997 Description and analysis In 1986. This allowed other income to rise to 46% of total revenues from 41% in 1996. -As Canada’s premier. -We want to continue to provide top quartile returns to our shareholders by continuing to lead the industry in ROE. global financial institutions dealing with one in three Canadians. retail brokerage. paying particular attention to businesses with relatively high returns on equity. securities custody. “fee-generating services will increasingly play a vital role in helping to build strong. an exceptionally strong position in high-growth fee-based businesses… -We will look for profitable growth that builds and strengthens our market competitiveness and shareholder value. it is linked to customers and the bank’s relationship with them. and investment banking and trading. They include a leading market position in Canada in most of our businesses. superior returns for our shareholders and all our initiatives are undertaken with that goal in mind. as we have done in the past. these services are seen to decrease risk. in securities custody and retail brokerage…. as well as insurance and trade finance. -We recorded solid growth in personal and small business lending. -The pursuit of our objectives of revenue growth in high-return businesses and (other objectives) should allow us to generate solid returns for our shareholders. earnings growth and valuation. global private banking. Like most other spheres of activity at the time. and excellent performances from fee-based businesses such as mutual funds. high price/earnings multiples and aboveaverage prospects for profitable growth… We intend to grow rapidly in highpotential businesses. lasting and profitable relationships with customers”. Our three main acquisitions this year (in insurance. we will continue building on our strengths. The bank projects that fee-based services will be increasingly vital in the future. need relatively little capital. retail brokerage and securities custody) all fall in this high-potential segment and attest to our commitment to growing this important side of our operations. fee-generating ability is portrayed as a strength at the bank as it contributes revenues and growth. Our recent acquisitions. which are the wealth management businesses…. have been in such businesses. -We intend to grow high-ROE fee-based businesses. These businesses are largely fee based.58 1996 -Our focus is on securing consistent. In 1991. In 1994. revenue generation is said .

In fact. These businesses are said to hold “prospects for… increased profitability”.59 to be the bank’s “top priority”. and the development of fee-generating businesses. other income constituted 46% of total revenues . RB’s ROE exceeded 16%. In summary. a mark of distinctiveness. In 1997. an explicit association is made between feebased services and the bank’s distinctively high ROE. again indicating distinctiveness in achieving high earnings. the emphasis is clearly placed on the shareholders. became more integrated with the bank operations. in 1995 it is said to serve the shareholder. In both 1994 and 95. By 1997. indicating a shift in stakeholder focus: while in 1986. This association between revenue generation and fee-based business expressed in 1986 becomes more elaborate in 1994 and 1996. “the best performance of all major Canadian chartered banks” (Annual Report.a substantial increase from almost 25% in 1986. This evolution in the theme is . an expression previously reserved to quality service. and so does the association of revenue growth to fee-based businesses. It should be noted that 1994 marks the year in which Royal Trust. the bank raised its target for ROE to a range of 16-18% reflecting its “desire to be in the first quartile of the 40 largest North American banks”. Royal Trust business is largely fee-based. although fee-generation is mentioned as early as 1986. The bank will continue its pursuit of fee-based businesses which require little capital and therefore generate a high ROE. revenue generation was said to benefit the customer. we can observe a continuity with the recent past in the emphasis on feebased businesses and “continuing to lead the industry in ROE”. In fact. its implementation efforts involve acquisitions which all fall in this category of business. This same year. 1995). global diversification and expansion. During the later years. Here. the latter being the focus of the bank and the center of “all … initiatives” at the bank. In 1996. acquired by the bank in 1993. Revenue generation is said to be achieved by improving service quality. it is not before 1994 that it assumes a central role in discourse and not before 1996 that it is presented as a mark of distinctiveness. In 1995. the emphasis on revenue growth as an objective continues. 1995 marks the year the bank’s shares became listed on the New York Stock Exchange. the bank is said to have a position in high-growth fee-based businesses which is “exceptionally strong”.

The following table traces the evolution of the Bank-FI theme. chartered in 1869. it can be noted that RB refers to itself at the beginning of the study period as a “bank” and that this reference gets replaced eventually by “financial institution” or variations thereof. Given the right regulatory climate. All other unreferenced quotations were taken from the MTS.1. It will substantially expand the range of services for clients. as well as by the bank’s listing on the NYSE. and clearly reinforces our position as Canada's leading financial institution. 1985 1986 1987 .2. This is a significant milestone in the Royal's 118-year history.60 accompanied by the bank’s acquisitions of Royal Trust and other companies that are highly reliant on fee-based business. Quotations from the Corporate Profile section are preceded by an indication that this is the case. we plan to move from being Canada's largest chartered bank to become this country's leading provider of financial services. Dominion Securities. on December 1. while remaining a prominent force in selected international markets. The later years also show an increased emphasis on the shareholders who stand to benefit the most from the bank’s high returns. before the MTS.one example is that with deregulation in Canadian financial markets. Bank-FI -From Corporate Profile: The Royal Bank of Canada. 5. -Longer term market trends demand that the Royal Bank set for itself ambitious goals. The latter usually appears within the first two pages of the annual report.c Bank-Financial Institution (FI) In its self-presentation. In later years. It should be noted that the quotations provided here are derived from two sections of the annual report: the MTS and the Corporate Profile. we reached an agreement in principle. is Canada’s largest chartered bank… Two fundamental goals have always been paramount: excellence in banking service across Canada and vigorous participation in international financial markets. to acquire 75% of Canada's premier securities firm. -Opportunity was seized equally decisively . Table 3. RB uses the title “Who We Are” instead of “Corporate Profile” to give a synopsis of itself.

-We completed strategic acquisitions which.. RBC Dominion Securities Limited. Other subsidiaries include discount brokerage services. is Canada’s leading investment dealer.. Royal Bank Investment Management Inc. Inc.for which Royal Trust has a world-class reputation.61 1988 -From Corporate Profile: The Royal Bank of Canada. not just in banking. It has also allowed us to increase market share in core banking products like residential mortgages. Canada’s leading investment dealer. Portfolio management and mutual fund services are offered in Canada by another subsidiary. Royal Trust has brought with it strength and leadership in such businesses as personal and institutional trust. travel and health-related insurance business… -In 1993. Two fundamental goals are paramount: excellence in a full range of financial services across Canada and vigorous participation in selected international financial markets. 1989 1990 1993 1994 . -In 1990. The acquisition of Royal Trust in 1993 greatly expanded the strengths of the Royal Bank group in the areas of personal and institutional trust services. but in providing a broad range of bank-based financial services to all sectors of the market. consumer loans and deposits where we rank first among Canadian banks. securities custody and investment management. Royal Bank moved closer to becoming a fully integrated financial services group. -Our goal in 1994 is to complete this integration and to take full advantage of the opportunities to broaden client relationships across the Royal Bank group. -From Corporate Profile: The Royal Bank group is among North America’s largest providers of integrated financial services with more than eight million personal and business clients. as well as in such high-growth areas as mutual funds where we now rank second among all financial institutions. further strengthened its capital base and built on its position as Canada's leading provider of bank-based financial services. chartered in 1869. represent solid progress in our transition from a bank to a more broadly-based financial services enterprise. is Canada’s largest bank.. Royal Bank recorded solid results from its core businesses. marketed under the name Action Direct. We rank first among all financial institutions in Canada in…. Our developing businesses will play a key role in achieving this goal. …A key subsidiary. mutual funds. investment management and securities custody services . -Increased revenue generation from traditional and emerging businesses is our top priority. by putting the Royal Bank group in the investment banking and investment management markets in Canada. Investment banking activities are carried on by RBC Dominion Securities. -Our overall objective in Canada is to be the leader. and a substantial credit.

Our recent acquisitions. have been in such businesses. more recently. the bank is again said to have “moved closer to becoming a fully integrated financial services group”. the bank reached an agreement to acquire Dominion Securities. -From Corporate Profile: Royal Bank Financial Group has leading positions in Canada in most financial service markets. The move is described as reinforcing the bank’s position as “Canada’s leading financial institution”. Description and analysis As the study period opens. Voyageur Insurance Company. Clearly the acquisition moves the bank a step closer to the goal stated in 1986. In 1988. the Corporate Profile still defines RB as a “bank” with a major goal of providing “a full range of financial services”. Outside Canada. with a strong presence in selected markets abroad. it is said to be a “provider of integrated financial services”. we will focus largely on the wealth management businesses. In 1991. a fundamental goal of which is “excellence in banking service across Canada” (1985) with an ambitious goals of “mov(ing) from being Canada’s largest chartered bank to become this country’s leading provider of financial services” (1986). the bank is said to provide “a full-range of banking services” and in 1993. As with the . The MTS for this year indicates that “strategic acquisitions” represent solid progress in the bank’s “transition from a bank to a more broadly-based financial services enterprise”. one of the few references the bank makes in its MTS to its history. the bank’s objective to provide “a broad range of bank-based financial services” shows continuity with its stated objectives in 1988. Achieving this goal is impending on the regulatory climate. In the more traditional business lines. personal lending and banking for small businesses. as we have done in the past. Our acquisitions of Dominion Securities. we can see that RB defines itself as “Canada’s largest bank”. In 1989. which in 1986 was stated as a goal. and. we see further opportunities in card services. Royal Trust gave us the foundation we wanted as the largest broad-based provider of financial services in Canada. a move described by the bank as “a significant milestone in the Royal’s 118-year history”. in securities custody and retail brokerage. In 1987.62 1995 1996 1997 -Most of our efforts in the past decade have centered on broadening our financial services franchise with individual and corporate clients. -Revenue growth and diversification: We intend to grow high-ROE fee-based businesses. with deregulation. In 1993.

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Dominion Securities acquisition, the bank is said to be moving closer or effecting its transition. In 1988, the transition was said to be towards a “broadly-based financial services enterprise” whereas in 1993, the move is toward becoming “a fully integrated financial services group”. Each acquisition brings the bank towards more comprehensive services in the financial industry. In this same year (1993), the Royal Trust acquisition is said to have increased the bank’s market share “in core banking products” as well as “in high growth areas such as mutual funds”, which apparently were not considered then core banking products. In 1994, the bank’s priorities lie in increasing both, the “traditional and emerging businesses”. What would have been the core business in the past is now referred to as traditional. “Traditional business” is a term that appears in subsequent years (1996 and 1997). We see a transition from a self-definition as a “bank” (1985) to a “financial institution… provid(ing) banking and related financial services” (1989) to “(one of the largest) providers of integrated financial services”(1993) to having a “leading position in… most financial services markets” (1996). This is accompanied by an evolution in labels from “core businesses” (1990 and 93) to “traditional business” (1994) which refer to “card services, personal lending and banking for small business” (1997). The

“emerging businesses” (1994), on the other hand, include “high growth areas as mutual funds” (1994). By 1997, what used to be the “core services” up to 1993 are still referred to as “traditional” whereas the term “emerging” is no more used, possibly indicating that “high ROE fee-based businesses… as securities custody and retail brokerage” (1997) are now considered regular and not just emerging businesses for the bank. As RB makes acquisitions in different areas of the financial services industry, and as it achieves a higher proportion of its revenues from such businesses, it narrows the identity gap and considers itself more as an integrated-service financial institution than as a bank. Note that this is accompanied by a change in the bank’s name from Royal Bank to Royal Bank Financial Group.

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5.1.2.d Large Without exception, for every year of the study period, RB’s Corporate Profile makes reference to some measure of the bank’s size and its rank with respect to a comparison group. The MTS also includes several references to these measures. The table below provides quotations on size and the variations thereof. Different labels are used to refer to the bank’s size: “large”, “leading market share”, “most extensive”, “first rank” (in terms of size). To simplify the discussion, I will refer to this theme as “large”. Table 4. Large -From Corporate Profile: The Royal Bank of Canada, chartered in 1869, is Canada’s largest chartered bank, with assets at the end of fiscal 1985 of $96 billion….The Royal Bank’s extensive network of branches, subsidiaries and affiliates comprises more than 1680 operating units in 44 countries. One of the world’s largest retail banks, the Royal is also North America’s fifth largest bank overall. -The Royal is not only Canada's largest financial institution, it is one of the country's largest and most respected service businesses. -Given the right regulatory climate, we plan to move from being Canada's largest chartered bank to become this country's leading provider of financial services, while remaining a prominent force in selected international markets. -The partnership of Canada's largest financial institution and its largest securities dealer will create a uniquely Canadian force in the market. -We intend, over time, to lead the Canadian financial services industry not only in terms of size and scope of business, but in terms of profitability as well. -From Corporate Profile: The Royal bank of Canada, with assets of $114.7 billion, is Canada’s largest financial institution and the fifth largest bank in North America. It provides banking and related financial services to eight million retail and business customers through its 1,560 Canadian branches and specialized business centres and 2,324 banking machines - one of the largest networks in the world. -(We have) the largest proprietary network of banking machines in North America…

1985

1986

1987 1988 1989

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1990

-At the end of the year, total assets stood at $125.9 billion, making Royal Bank the third largest bank in North America. -Royal Bank has some distinctive strengths that set us apart from our competitors. We have an extensive and well-developed network of branches and other customer service units which, like our system of automated banking machines, is the largest in North America. We have a sizeable customer base and a substantial share of market in most sectors. -From Corporate Profile: Royal Bank is Canada’s largest financial services enterprise and one of North America’s largest banks. We rank first among all financial institutions in Canada in terms of assets, capital and stock market value. We also command the largest market share of consumer loans, mortgages and deposits in the country…. Investment banking activities are consolidated within RBC Dominion Securities inc., which dominates the Canadian market in size and performance. -Royal Trust has brought with it strength and leadership in such businesses as personal and institutional trust, securities custody and investment management. It has also allowed us to increase market share in core banking products like residential mortgages, consumer loans and deposits where we rank first among Canadian banks, as well as in such high-growth areas as mutual funds where we now rank second among all financial institutions. -Looking ahead, 1994 will mark our 125th year as a Canadian chartered bank. We were founded on the Halifax waterfront by eight enterprising merchants. From these modest beginnings, we have grown with Canada. Because Canada is a trading nation, we also expanded internationally to become one of the largest banks in the world. But, size for its own sake is not the objective. Our focus in the months and years ahead will be on building a profitable business that succeeds by providing value to our customers and better returns to our shareholders. -From Corporate Profile: Royal Bank Group is among North America’s largest providers of integrated financial services with more than 9.5 million personal and business clients. We rank first among all financial institutions in Canada in stock market capitalization and total assets, and first or second in almost every type of financial service provided in the Canadian Market, except insurance. Our services are provided through one of the largest banking networks in the world - almost 1,600 Canadian branches and special business units, over 3900 banking machines, 4422 self-serve account updaters and over 30,000 point-of-sale merchant terminals. -To reduce costs, we continued to streamline the branch network in 1994, closing or merging 41 of the 141 branches of Royal Trust. In addition, we reduced the number of Royal Bank domestic branches by 90. The bank has one of the most extensive and efficient retail branch networks in North America and one of the largest proprietary electronic banking networks in the world.

1991

1993

1994

With 1. and the greatest number of small and medium-sized clients of any financial institution in Canada. -We derive a much higher proportion of our deposits from individuals than do other Canadian banks. it indicates that it has “one of the most extensive and efficient retail branch networks in North America and . We have leading positions in most Canadian financial services markets… We serve nearly 10 million individual and business customers around the world. consumer deposits and consumer loans. after the bank announces that it has streamlined its retail branch network. delivery network. Our domestic delivery network includes more than 1. but also its partners or acquisitions. 570 self-service account updaters. market capitalization. a significant advantage as these deposits are more stable than wholesale funds. -From Corporate Profile: Royal Bank is Canada’s largest financial institution as measured by market capitalization.66 1995 -Royal Bank's strength derives largely from our leading share of the domestic retail financial services market. Royal Direct is among the world’s largest alternative delivery channel providers… 1997 Description and analysis As the above quotations indicate. Similarly. In Canada we have leading market shares in residential mortgages. personal loans and deposits and business loans. residential mortgages and other consumer loans. Even in 1994. revenues and net income. Its distinctiveness derives from the bank’s rank relative to other organizations with which it compares itself.000 point of sale merchant terminals. market share for a variety of products and services. revenues. Different measures of the bank’s size are touted: its assets. We have the largest market share of residential mortgages. Thus DS is said to be “Canada’s largest securities dealer” (1987) and RT is said to have brought with it “strength and leadership” making RB first or second among Canadian banks in terms of a number of financial products (1993). Approximately 75% of our earnings today come from providing banking and related services to individuals and small and medium-sized business customers. size seems to be an integral component of the bank’s self-definition. The centrality of this theme derives from its association with strength in the industry (for example. which are attractive because of their relatively stable and low loss ratios. We are the largest money manager and the third largest provider of mutual funds (first among bank-owned funds)….3 million customers. and 84. 4. net income… The bank defines not only itself in terms of size.400 branches. 1995). represent a much higher percentage of our overall lending than for the other Canadian banks.200 automated banking machines.

In 1995 when the bank’s leading share of the domestic retail market as compared to competitors is mentioned. First. the largest bank in Canada. In fact. centrality and distinctiveness. A self-description of the bank provided in a 1993 issue of Interest magazine(Sept/Oct 1993) at the occasion of the RT acquisition. In 1988. Second. Two issues are noteworthy here. being the largest bank in Canada. The issues that evolve with time are the particular measures of size the bank evokes and the particular membership groups which are used as a reference for the comparison. This appears more clearly in 1993 when we are told that size for its own sake is not the objective.67 one of the largest proprietary electronic banking networks in the world”. Evoking its distinctive size is a constant in the bank’s discourse over the years. the bank’s goals of leading the industry in size is associated with that of leading in profitability. and for the next 21 years was in a see-saw battle for top spot with Bank of Montreal. Interestingly. Since 1941. Royal Bank has remained on top. . RB has been. the Royal Bank edged out Bank of Montreal to become Canada’s largest bank in terms of assets. In other words. a battle is said to have been waged for taking up the “top spot” or top rank in size. the bank addresses mainly those measures of size that allow it to claim distinctiveness within a particular reference group. Rather the objective is to build a profitable business.” It should be noted that the above quotation represents one of six landmark events the bank chose in order to portray its 125-year history in the above-mentioned publication. This is associated with financial stability which is portrayed as a strength. These statements lead us to infer that size leads to profitability. points out that: “In 1920. 93 and 95 indicate. seems to be an issue of historical relevance. for a good part of its history. size is associated with financial and competitive strengths as the quotations in 1988. Size is one of RB’s attributes which confer upon it distinctiveness since it ranks higher than other organizations in the industry along a number of measures of size.

-As we move forward. Table 3 provides the quotations for the “leader” theme. -Our overall objective in Canada is to be the leader. Our strong international presence and our position as Canada's leading bank abroad over many decades have been significant contributing factors in achieving dominance at home.2. -Given the right regulatory climate. securities custody and investment management. we plan to move from being Canada's largest chartered bank to become this country's leading provider of financial services.1. based on top-caliber leadership and highly respected professional talent. The key to this. -Royal Trust has brought with it strength and leadership in such businesses as personal and institutional trust. is a business fundamental . of course. to lead the Canadian financial services industry not only in terms of size and scope of business.e Leader An attribute of RB which appears consistently in the bank’s discourse is its position as a leader. over time. -We made good progress in 1991 towards our objective of differentiating ourselves from our competition by being the clear leader in service quality. -be a leading employer committed to excellence. -We have a sizeable customer base and a substantial share of market in most sectors. particularly at the client servicing level. -Dominion Securities Limited has a track record of excellence in service and profitability. 1985 1986 1987 1988 1989 1990 -Our leadership in systems and technology. And we are the leader in developing and implementing bank-related technology. but in terms of profitability as well. Leader -From Corporate Profile: The Royal Bank is a leader in the application of new technologies for efficient operational management and in making possible a variety of sophisticated new services. -…one of our central corporate goals: to be recognized by our customers as a consistent leader in the value of our products and customer service. is a competitive advantage that we intend to exploit. our broad objective is to be the leading Canadian financial services enterprise globally.68 5. -We intend. 1991 1992 1993 .not only in the marketplace but also in the community.be the leading Canadian financial institution best positioned globally. Table 5. Royal Bank's business strategy will continue to be driven by four corporate objectives…:. not just in banking. but in providing a broad range of bank-based financial services to all sectors of the market…Outside Canada.that such leadership can only be achieved and sustained by the provision of nothing less than the best service available to customers in the marketplace. -We are immensely proud of the leadership Royal Bankers demonstrate .

We do know. -(We have) leading-edge work/family/life. is the fact that bank’s symbol includes a lion. applies to a variety of objectives (projected identity attributes) as well as achievements including the bank’s size. based on top-caliber leadership”. or why this seems to be a central issue for it.S. In 1991. from our leading share of the domestic retail financial services market. however. that a leadership position implies the bank’s ability to perform better than its competitors and therefore is a mark of distinctiveness. -As Canada’s premier. RB indicates that “being the clear leader in service quality” allows the bank to differentiate itself from the competition. the “Leo”. foreign exchange market (1989). The bank’s partners or acquisitions are also said to be leaders in their field: “Dominion Securities Limited (acquired by the bank in 1987) is said to have “a track record of excellence in service and profitability. to name a few. 89. market share position (1992. As important. The bank does not explicitly address why it seeks leadership.69 1995 1996 1997 -Royal Bank's strength derives largely. as well as in its MTS.96). 90). gender gap and diversity policies and programs… Description and analysis In its statements of Corporate Profile. and ROE and HR practices (1997). for example. The leadership label. however. scope and profitability (1988). 95. earnings growth and valuation. U. as it is referred to by bank . the bank frequently refers to its leadership position. providing a broad range of bank-based services (1989). They include a leading market position in Canada in most of our businesses. we will continue building on our strengths. system and technology (1985. and Royal Trust acquired by the bank in 1993 is said to have “brought with it strength and leadership”. Even “Royal bankers demonstrate (leadership)…in the marketplace (and) the community” (1990). however. and one of its most profitable. revenues and net income. We have leading positions in most Canadian financial services markets… -We want to continue to provide top quartile returns to our shareholders by continuing to lead the industry in ROE. The “leader” label persists throughout the years and is used to refer to a variety of aspects of the bank. global financial institutions dealing with one in three Canadians. -From Corporate Profile: Royal Bank is Canada’s largest financial institution as measured by market capitalization.

The following are excerpts from an article entitled The one and only Leo in Interest magazine: “In the minds of staff. Furthermore. and superiority.. while the globe indicated the bank’s worldwide scope. In the next section.x- In this section I traced the developmental trajectory for RB themes. having persisted since at least the 1960s. the familiar Lion and Globe symbol . the Leo is said to represent the bank’s “public identity” and everything the bank stands for: leadership. Leo adorns just about everything connected with the bank… and together with the name “The Royal Bank of Canada”…has served as the bank’s trademark since the early 1960s…. The lion continued the idea of “royal” which stood for quality. Feb/Mar 1985:20). -x . Taylor” (Interest.has come to represent the Royal Bank and all it stands for. Leo was created to fulfill this far-reaching role. scope. “was a radical transformation of our public identity.70 employees and bank publications. We thus see that the leadership theme is part and parcel of the bank’s persona . I turn to BMO. customers and the general public”. one that may have been one of the most important policy changes made in the early sixties” according to Chairman and CEO Rowland C. . customers and the general public.what it stands for to “the staff.better known by his nickname of “Leo” . quality. Frazee and COO Allan R. this attribute seems to be of historical relevance. The adoption of the Lion and Globe symbol and the unique lettering for the Royal Bank name. In this article. The committee of bankers and designers formed (in the 1960s) to select the new trademark… agreed the symbol must reflect the Royal’s image as Canada’s leading bank and should indicate the scope of the Royal’s business not only in Canada. A crown complete with fleur-de-lis tops off the logo to reinforce the idea of superiority. but throughout the world….

Inc.bmo. With this. the building of Canada’s first canal (Lachine 1821-1825). The Montreal Bank provided its own bank notes which were “an acceptable and reliable circulating medium”( A Short History. In 1987. p. for example. the bank was represented directly in 11 countries and had a network of correspondents around the . “Here the Bank’s early history was a story of “firsts” funding. 1992 and www. At the time. and neither had a currency of its own.3). In 1984. the bank established a permanent agency in New York which was followed in 1961 by another agency in Chicago..2. the Bank was called upon by Finance Minister Alexander Galt to become the new federal government’s banker”( A Short History. the bank has increased the range of services it offers. Bank of Montreal banknotes which had been issued since 1817 were phased out over a period of fifteen years. the bank expanded into different areas of Upper and Lower Canada.71 5.1 HISTORICAL OVERVIEW (Source: A Short History of Bank of Montreal: A Tradition of Leadership. p. 1832-36)”. In 1822 it was granted a charter under the name of Bank of Montreal. When Confederation was finally achieved in 1876. Shortly after its establishment. “Bank of Montreal strongly supported the movement for union of the British North American provinces.7). The bank grew by opening new branches and through mergers and acquisitions. Bank of Montreal.com/history. it acquired the securities dealer Nesbitt Thomson.Lawrence. the bank acquired Harris Bankcorp. With the falling of the four pillars. In 1859.) The Bank of Montreal was founded in 1817 under the name of Montreal Bank by nine merchants. Upper and Lower Canada were British colonies. Inc.2 BANK OF MONTREAL 5. In 1992. The Bank ceded its role of central bank in 1934 and the Bank of Canada took on the exclusive right to issue currency. and its first railway (Champlain and St. following the patterns of trade. a retail bank in the Chicago area.

At several occasions. Thus. and a bank committed to its four stakeholders. Bank of Montreal had total assets of $222. 5. the MTS.2 IDENTITY THEMES A number of identity themes surface in BMO’s discourse. with a few occasional remarks on national and economic issues. The period under study saw the succession of three executives to the top positions of chairman of the board. CEO. it made a major investment in Mexico’s Bancomer and became “the first NAFTA bank” (Annual Report. which takes on two different meanings in the bank’s discourse: “oldest” and “innovative”. it is used in two different senses: 1) sometimes it refers to BMO being the oldest bank in Canada.2. and 2) at other times it is used to indicate that the bank was the first among other institutions in Canada to undertake some strategy or .590 million. 1996). Barrett emphasized the bank. In 1998. I will point out how Barrett’s discourse showed a continuity or a break with Mulholland’s.72 world. but which became prominent with Barrett. Notable among these are the bank’s self-definition as Canada’s “first” bank.2. In fact. and social issues directing attention more to the external environment than to BMO itself. These are the themes analyzed in this section. political.2. the main source of data for this study was signed by the following executives: 1985-1989: 1990: 1991-1997: William Mulholland (Chairman and CEO – CEO only until 1988) Matthew Barrett (Chairman and CEO) and Tony Comper (President and COO) Matthew Barrett (Chairman and CEO) The BMO data analyzed reveals a large difference between the style of Mulholland and that of Barrett. These differences are reflected in my analysis. BMO also defines itself as a North American bank. 5. While Mulholland spoke at length on economic.a First “First” is a label that did not appear with Mulholland. president and/or COO. In 1996.

However. refers to the bank’s innovative stance. as well as in the second whereby “an old tradition” and “a real first” for “Canada’s first bank” are juxtaposed. 1991 1993 1999 Table 6. In this statement it alludes to BMO’s being Canada’s “oldest” bank. Montreal. As can be seen. In 1817 we became Canada's first bank.bmo. The first two quotations are taken from the MTS. Consider the following quotations which refer to the bank’s age: . but not accompanied by the “first” label. First -In 1992 Bank of Montreal will celebrate its 175th anniversary. We were the first bank in Canada. The third quotation is taken from BMO’s statement of history (www. for Canada's first bank. at 32 St. And that's as it should be.b Oldest Bank It must be noted that the term “first” appears for the first time in 1991 with Barrett’s second MTS. Because both meanings of the “first” label seem to be self-defining for the bank.com). The following quotations provide examples of the two meanings attributed to “first”. 5. “first” is used to refer to the bank’s being the oldest FI in Canada in 1991 and 1999. continent-wide banking -…our North American strategy is both an exhilarating new departure. the reference to BMO’s being one of Canada’s oldest banks does appear before 1991. launching the connections essential to this country's growth…And in 1993 we continued to set the pace for the Canadian industry with our newest first. “first” assumes both meanings in the first quotation. We first opened our doors on November 3. Paul Street. therefore. I traced them separately. Canada’s first bank: Bank of Montreal is Canada’s… oldest bank. In 1832 we financed the first Canadian railway.2. with immense promise for all our stakeholders.2.and a real first. and we have been in business ever since -Being first is a Bank of Montreal tradition.73 procedure and. and a natural development from our proud Canadian past. It's an old tradition . In 1993. 1817.

The old age theme’s centrality is further demonstrated in 1990 with Barrett’s reference to the importance of a sense of identity. Not only is BMO the first and oldest bank in Canada. 1993 Description and analysis The first two quotations in the table above.For most Canadians the canoe and the snowshoe are now sports equipment. This Bank. occurred during Mulholland’s time. While Mulholland refers to BMO in 1985 as one example of a number of old banking institutions. but it is also a responsibility which comes with more than 170 years of honorable service. In fact. in part because we financed the first canal and the first railway. Actually the use of “first” here is . contemporary corporate family… -We were the first bank in Canada and we have been in business ever since. -It is clearly in our interest to uphold these values (of integrity and prudence). In later years. aspects of major economic and social impact for Canada and Canadians. it is also a source of distinctiveness. it is also associated with the first and oldest canal and railway. Not only is the bank’s age a central issue. Age here is portrayed as a sign of the bank’s capacity to offer stability and service. . Barrett presents it as the most distinctive banking institution with regard to age. With this the bank’s age is intertwined with the bank’s historic achievements and possibly innovations. has an unbroken record of service for 168 years. we are also a multi-faceted. as well as an attribute that confers responsibility on the bank in terms of upholding values that will safeguard the interests of different stakeholders. for instance. While we are Canada's oldest bank. Barrett takes the old bank theme one step further than Mulholland. -Planning is vital to success. “oldest” bank is replaced by “first” bank in the MTS. Being Canada’s oldest bank is a mark of distinctiveness that can never be surpassed by any other bank. and we have been in business ever since” indicates a continuity with Mulholland’s statements regarding an “unbroken record of service” throughout many years. BMO’s age -…the Canadian banking system … has a history of extraordinary stability and service. longer than the life of most countries. But a clear sense of purpose and identity are also essential. Their sense of identity involves a recognition of the bank’s age. “we were the first bank in Canada.74 1985 1989 1990 1991 Table 7. In 1991. -In 1817 we became Canada's first bank.

Instead. We were the first bank in Canada. One thing is clear in the 1991 MTS: the history of the bank is closely associated with the history of Canada. we are unsure of our ability to earn our living in the world's markets and give our children a better life than ours and. to preserve our natural heritage and do our duty to the less fortunate..000 miles of track and. The 1991 annual report is a celebration of the bank’s 175th anniversary.000 people and lived by the fur trade. Paul Street. We are deeply divided on our constitutional future. its existence before Canada and its role in building Canada are detailed. and grown mightily…We have grown with Canada . it is a sign of the bank’s notoriety as well as its social responsibility.75 ambiguous. for me. in part because we financed the first canal and the first railway. and we have been in business ever since. a humbling thought that only a tiny minority of all the human beings who ever lived have been as fortunate as Canadians . In recent years.not only in material things. 80 years later. Through it all. oldfashioned ignorance . The bank’s achievements. In this 1991 Annual Report we therefore look both forward and back. it is hard for the reader to tell whether the label is intended to refer to oldest or most innovative. 1992 will also be the 125th anniversary of Canada’s Confederation. In a time of bewildering change. Canadians have seemed more and more unsure of the way ahead. For most Canadians the canoe and the snowshoe are now sports equipment. It is timely to remember these things. Quotations from the 1991 MTS In 1992 Bank of Montreal will celebrate its 175th anniversary.ignorance of our country and of all we have achieved and.. governed from London. Bank of Montreal has survived. 1817. Here are most of the quotes from the 1991 MTS: Table 8. Yet this anniversary is also a time to pause and take stock. That calls for a celebration. We first opened our doors on November 3. performance and objectives for the year do not receive a single mention in this year’s MTS.and we have helped Canada to grow. but in the intangibles of peace and freedom. at 32 St. for two reasons. And the stress is showing…Underlying all these unhappy symptoms is simple. and few people have more to celebrate than Canadians… It is. even . both in millions of individual lives and in our undertakings as a nation. as the quotations in the table below indicate. Change has been enormous and is still accelerating. 1817 was an unimaginably different world. the bank’s past achievements. Montreal had 16. Our loans helped lay Canadian Pacific's 3. at the same time. we financed Churchill Falls. And so is the bank’s responsibility to remind Canadians that they have an exceptional country. Canadians traveled by canoe and snowshoe. Canada was a colony. Today we are still working with Canadians. Montreal.

where one roof covers many hearths and a just balance has been struck between individual and collective rights. “first” is used mainly to refer to the bank’s innovative stance. For this special Annual Report we asked eight Canadian writers of standing to bring us a vision of Canada…Together.76 more. This resembles in some ways Mulholland’s 1989 statement indicating that upholding values is a “responsibility which comes with more than 170 years of honorable service”. we believe we can best celebrate Canada's anniversary and our own by reminding Canadians how rich we all are through the astonishing variety of the regions and peoples that make up the Canadian totality. While the bank’s age and its implications are given attention in the MTSs until 1993. We can best thank Canada by helping Canadians to know their country. At Bank of Montreal. they paint "A Portrait of Canada" which we hope will bring the Canadian reality home to our shareholders and our friends in Canada and abroad. because over 175 years we have seen that even the less-than-ideal Canada of the past has worked…But in the broadest view. references to its age are dropped in subsequent reports. At Bank of Montreal. In those reports. Several references are made to the fact that BMO not only preceded Canada as a sovereign state. The table below provides quotes on this theme. BMO considers it a part of its responsibility to bring the “Canadian reality home” to the readers. A number of issues emerge from this MTS. pluralist society. and I hope you will all read it with profit and pleasure. It has certainly been good to Bank of Montreal. Far from it. Let us look at the bank’s selfdescription as an innovative creative bank. but also helped build this country. as well as a source of social responsibility. We are committed. . This special Annual Report is our way of doing that. we are unequivocally committed to the Canadian ideal of a democratic. Canada has been good to many people. the second meaning associated with the “first” label. for knowing it is the first step to rebuilding it with ample room for all its people. The bank’s history and legacy seem to be a source of notoriety and therefore distinctiveness. ignorance of each other. objective and impartial. We are not doing this to give the public one more study that aspires to be detached.

the massive flow of capital to North America. Together they are a radical change in the way we do business. we intend to become the informed bank. rapid technological change with its concomitant explosion of financial innovation and a chronic oversupply of financial services. The following table provides quotations on this theme. giving it to them. In a contracting market for small business credit.2. and “a bank that leads change”. Table 9. In 1832 we financed the first Canadian railway. And in 1993 we continued to set the pace for the Canadian industry with our newest first. These include “innovative”. we were the first bank to establish a national electronic connection. And although we know this will be a long haul. Innovative -This past decade has witnessed dramatic growth and significant structural changes in international financial markets.…uses technical innovation intelligently. -In June we announced our North American strategy for the 1990s. linking all our branches to a central computer. In 1817 we became Canada's first bank. Among the most important were the virtual disappearance of boundaries to capital flows in the western world.. By the early years of the new century it will make us the first full-service financial organization to span North America. -In five years. launching the connections essential to this country's growth. the bank of choice. We shall invest. continent-wide banking. will always be our home and our number one market. We are the only bank to offer a Small Business Lending Rate tracking 1% below prime… There is more…We have a pilot project to help viable businesses through temporary setbacks.. of course.3% in just two years. Bank of Montreal works actively with emerging segments of the business community such as women entrepreneurs and Aboriginal business people. Vision 2002. And the results are showing. sunrise industries that will help make Canada prosperous tomorrow. and compete more vigorously than ever in this country. Almost 150 years later. Each of these actions is a small step forward in itself. innovate. -Being first is a Bank of Montreal tradition. Canada. for the knowledgebased. whenever possible. 1990. -Supporting small business and agriculture means paying attention to what our customers want and. We have kept our prime rate below our competitors’ for over 389 days since August 1. and is sensitive to the 1989 1992 1993 1994 . “creative”. our market share has risen by 2.c Innovative BMO uses different labels to talk about its being the first institution to undertake a number of initiatives. we have established a reputation as a bank that leads change.77 5. Thus Vision 2002 is also our creative response to the ever-increasing integration of the world's economies.2.

1995 -Banking is an inherently conservative business. 1994 especially has been a year to remember in the long history of our Bank. The first is the vision and values we adopted in the Bank's 1990 Strategic Plan.78 evolving needs of our customers and employees. But despite its scope. has an idea that could transform the way we do business. and about our preparedness with the right blend of competencies and capabilities. And we are also rethinking and re-imagining the relationships between the Bank and its customers. -In this flux we have two fixed points. but we can shorten our response times and look continually and critically at the structures and received ideas we have inherited from the past. the Bank and its employees. The first purpose-built corporate facility of its kind in Canada.about our own performance in relation to it. customers.our shareholders. perhaps the proverbial inventor in a garage. however. but the values themselves are inherent in the very nature of what we do. We cannot know what that idea is. 1994 brought two excellent examples. Although we review and renew our Plan. It will probably be remembered longest. keeping it attuned to new times. the Institute will receive over 15. stability and sustained returns can only come from an open and inquiring mind. technology and the community . We are also acutely aware that somewhere someone. -The second fixed point is our determination to take nothing for granted. and the Bank and the communities in which we work and live.. the IFL is only the latest stage of the commitment we made five years ago to give our employees the finest opportunities for learning in the financial services industry. as you can see. We must of course continually find fresh ways to put our values into practice.000 students a year. coming from all the companies in the Bank's family. for the opening in May of our Institute for Learning in Scarborough. Our depositors and our shareholders rightly prize stability. But the central paradox we face is that as the twentieth century ends. We are endlessly curious about our environment .in business. We seek continually to redefine our business systems and our workplaces. Ontario. I cannot imagine circumstances which would lead us to abandon or seriously modify our commitment to our four stakeholders . -And we became the first Canadian bank ever to be listed on the New York Stock Exchange… -We have come a long way in five years and. employees and the communities in which we do business. The tension between the maintenance of order critical to the care of other people's . Our It is Possible marketing campaign made the tools of basic financial planning available to all Canadians for the first time. and we have put it at the core of our values..

-For the Bank of Montreal Group of Companies. with their skills as their capital. -This message gives an account of how change is bringing higher expectations of our performance in every field. That is why …we seek the creative blending of people and technology . while the accompanying stories give examples of the groundbreaking initiatives that form our response. . -Together with our capabilities in Canada and the United States. we are providing unprecedented opportunities for learning in every line of business. Together. Mulholland’s only reference to innovation in the MTSs studied appears in 1989. but it is perhaps in the workplace that its effects are first brought home for most people… Our response as a bank is to prepare a new contract with our employees. 1996 has been a year of much solid achievement and many creative new departures. but in our long history it will be remembered for one initiative above all others. Description and analysis As the above indicate. He speaks. . -The ground-breaking disclosure standards set by this Report have won major awards on several occasions. and are prepared to take responsibility for their futures by investing in themselves. the strategic alliance with Bancomer makes us the first NAFTA bank. While reviewing some of the occurrences in the past decade. an entirely new virtual banking enterprise designed to meet the needs of financially active consumers across North America at the highest standards of speed.79 1996 money .of which mbanx is the prime example. Its concept is unique and its potential unlimited. he mentions among other things the “explosion of financial innovation”.and creative innovation must be skillfully managed if success is to be sustained in a financial services institution. convenience and service quality.Change is all-pervasive. The paternalism of the past is being replaced by a professional relationship between the Bank and employees who are essentially independent entrepreneurs. . we have planted an acorn from which a truly mighty oak will grow.We understand that in the midst of a technological revolution it is critically important to choose the technology. as they define them. With the founding of mbanx on October 16. technological power and excellence in execution can give us banking free from the boundaries traditionally imposed by space and time. For those who welcome continuously expanding career horizons. that best serves our customers' needs. 1996 is the year we launched mbanx. one that defines us as a learning organization.

This is a reference to the changes at the bank since Barrett took over the chairmanship. In the second quotation in 1992. It must be noted that references to changes and innovations are interspersed with references to continuity. but also with respect to the bank’s recent history. the second quotation in 1993 makes three different references to the bank’s innovative stance: Vision 2002 is said to make BMO “the first full-service organization to span North America”. It is mainly with Barrett that BMO is presented as an innovative bank. Similarly. the above table indicates that with the years. In 1992. and this not before he had been in the chairman’s position for three years. After listing a number of first moves historically undertaken by the bank. sunrise industries” (generally known to be innovative) are all examples of the bank’s innovative stance. in a general sense and does not refer specifically to BMO. the importance of these steps or undertakings lies not only in the fact that each constitutes an innovation in itself. Barrett indicates that Canada “will always be” the bank’s home and priority market. The latest innovation involves their North American strategy for the 90s. In other words. more references are made to the bank’s being innovative and creative. In 1993. and their strategy is said to be “our creative response”. innovation and creativity are first mentioned. However. working with “emerging” segments of the business community. changes which are of a significant magnitude when put together. implementing a pilot project. After mentioning that Vision 2002 will make the Bank a North American financial organization. Innovative pricing. a number of initiatives are mentioned. the term “first” appears in its “innovative” sense. a customer segment which had become the target of BMO. the bank is said to continue to “innovate” in Canada. some of which refer to the bank’s progressive undertakings in comparison to the competition. becoming the “bank of choice for knowledge-based. These labels appear in the opening paragraph and are associated with small business. “continentwide banking”. Barrett mentions the latest.80 however. In fact. labeled Vision 2002 which is portrayed in the second quotation as “our creative response” to the integration of economies. but that “together they are a radical change in the way we do business”. after mentioning that Vision 2002 is the . the innovation stands not only with respect to the competition. Furthermore.

In other words. bringing tools of financial planning to Canadians for the first time. after mentioning several major changes that have occurred in the bank’s environment (including the ideological divisions of the world. The first is the vision and values adopted in the strategic plan in 1990 which. is also portrayed as “the latest stage of the commitment we made five years ago”. but as a reflection of some pattern that has persisted. he adds that “We shall continue to be an international bank”. The values themselves (the commitment to the four stakeholders) are said to be a fixed point in the flux. as in 1992 and 93. In fact. Yet. our concepts of community etc.). show some continuity with the past. however. the first such corporate facility in Canada. Barrett indicates that the bank has two fixed points in the flux. implying a renewal in practicing the commitment to stakeholders. “fresh ways” must be “continually” found to put these values into practice. is reiterated in the second quotation in 1995. This emphasis on continuous renewal which may be seen as a mark of the bank’s innovativeness. although it may appear as a major move. in fact. so that the innovation is not portrayed as a major break with the past. we see that references to innovations and changes are often followed by references to continuity.81 bank’s creative response to the increasing integration of the world’s economies. it is a continuation of the commitment the bank made to the employees before. It is also noteworthy that in 1994 Barrett moves away from the notion of “first” as old and adheres to the notion of “first” as innovative. outlined the bank’s commitment to each of the four stakeholders. which is said to be an undertaking of some scope. Of the events that occurred during the year. the opening paragraph itself indicates that “being first is a bank of Montreal tradition” implying a continuity in leading change. one is singled out as a reason for which 1994 will be remembered in the bank’s long history: The Institute for Learning which is said to be the “first” facility of its kind in the country. In 1995. BMO is said to have “a reputation as a bank that leads change” and another series of firsts are mentioned: the listing on NYSE. it does. as will be explained later. the IFL. Here again. the capabilities of technology. In 1994. There the bank’s . and opening the Institute for Learning.

talk about “groundbreaking” initiatives and undertakings at the bank. The second quotation in 96 -and the last one as well . we see the bank engaged in a proactive search for change and innovation as evident in the expressions: “we are endlessly curious about our environment”. perhaps the proverbial inventor in a garage. The third quotation in 1995 addresses explicitly the stability/change and the maintenance-of order/creative-innovation paradox. has an idea that could transform the way we do business”. indicating that the need to seek innovation is not specific to BMO. is said to have a “unique” concept again implying the bank’s innovation. These traits are portrayed as necessary for achievement of financial stability and success. but the tension is one that can be skillfully managed. These innovations are the bank’s response to higher expectations brought about by change. mbanx. This portrait of the bank as an innovative and creative organization continues with rigor in 1996 as is evident in the expression “many creative new departures” whereby each of the last three words in itself is an indication of innovation. yet this pursuit of innovation is an attribute which itself is persistent. That there is a tension between the maintenance of order and creative innovation is explicitly mentioned. Clearly the 1995 MTS shows a continuity with the1994 MTS in the sense that BMO is portrayed as an innovative and creative bank that seeks change. “we seek continually to redefine our business systems and our workplaces”. “we are also rethinking and reimaging the relationships…” The references to the bank’s pursuit of innovation are many. “we are also acutely aware that somewhere someone. Interestingly though. but a general condition for success in the industry. The crux of the bank’s . again a sign of innovation.82 pursuit of change and innovation are mentioned whereby the bank’s “determination to take nothing for granted” is said to be a fixed point in the flux. “Stability and sustained returns can only come from an open and inquiring mind”. It is noteworthy that Barrett speaks about the need to manage the tension in “a financial service institution” and not at BMO in particular. Barrett presents the need to be inquisitive as the condition through which stability can be maintained. “we can …look continually and critically at the structures and received ideas we have inherited from the past”. the latest creation. In fact.

A third area of innovation and change in 1996 involves the bank’s relation with employees. is mbanx which exemplifies the “creative blending of people and technology”. “first”. extending the bank’s position into Mexico brings additional change and makes BMO “the first” bank to cover all three countries. “thinking” and “imaging”. In response to the many changes occurring in the environment. In fact. and the pre-fix. “learning”. the pursuit of the NAFTA strategy. Finally. 5. As of 1992 the MTSs are rich in references to: “invention”. an innovation that has won major awards on several occasions. the areas in which the bank demonstrates innovation and creativity become more numerous.d North American Another theme which appears in BMO’s self-definitional discourse relates to its North American scope. whereas others relate to specific undertakings of the bank. some references to innovation relate to the bank in general. “new”. redefining the relationship with employees. different areas of innovation are mentioned in 1996: mbanx whose concept is unique and which represents the creative blending of people and technology.2. we can note that the ‘innovation’ theme which is mentioned by Mulholland in reference to financial products in general. the bank is preparing a new contract with employees. a fourth area of innovation is its disclosure standards. “creative”.83 innovative undertakings in 96. “re” applied to “defining”. This blending allows the bank to surpass the traditional boundaries imposed by space and time (third quotation). . “innovative”. In summary. “departure”. This contract is one that defines the bank as a “learning” organization and the employees as “entrepreneurs”. The bank refers frequently to its North American posture which. In brief.2. Another area of innovation in 1996 is the undertaking of the NAFTA strategy. the disclosure standards adopted by the bank. “ground-breaking”. Although this strategy shows some continuity with the past and is consistent with Vision 2002 previously announced in 1992. does not re-appear in the MTS again until 1992 when it persists and becomes more frequent. As the years go by. both terms often used in conjuction with the ability to create and innovate.

of increased competition from American banks in the Canadian market. is distinctive with respect to other Canadian banks. however.S. we expect to maximize the potential inherent in this strategic association. of course. In 1994 we strengthened that position by acquiring Suburban Bancorp Inc.S. and a natural development from our proud Canadian past..As the only bank with full service capability in Canada and the U. of Chicago and merging it with Harris. Canadian customers desirous of exploiting opportunities in the United States will find that we are able to place at their service a unique capability. we have a distinct competitive advantage in North America. By the early years of the new century it will make us the first full-service financial organization to span North America. sooner or later. accessible to them through a single Canadian-based banking relationship. . -…our North American strategy is both an exhilarating new departure. and compete more vigorously than ever in this country. we have consolidated our position as the only financial group to offer a full range of services across Canada and in our chosen markets in the United States. Table 10. Unless Canadian financial service institutions are able to offer fullservice banking in both countries. establishing goals. for Canada's first bank. with immense promise for all our stakeholders. .and a real first. The table below provides the quotation on the “North American” theme. will always be our home and our number one market. when we look south of the border we see that the vast American market is a natural extension of our home market… The United States is a market with a potential for steady growth that can’t be profitably matched anywhere else. It's an old tradition . In this way. -In June we announced our North American strategy for the 1990s. the emphasis will be upon defining the respective organizational roles and markets. is the benefit to our Canadian business which stems from our unique position in the United States.We welcome the added assurance which ratification of the trade agreement brings and expect to continue to expand and rationalize our U. North American -The Harris acquisition has proceeded smoothly and is living up to our expectations… Since it is not intended to integrate management. they may find themselves at a serious competitive disadvantage . business. At least as important. We intend to build sensibly but aggressively on that platform.and miss an exceptional opportunity for growth. and building the spirit and habit of teamwork upon which an effective and well-coordinated overall performance depends. Canada. . Vision 2002. Vision 2002 becomes a strategic initiative to meet the certainty.84 in some ways. embracing a full range of quality banking services in both countries. our United States 1985 1988 1990 1993 1994 .In the same five years. innovate. At the same time. We shall invest. And that's as it should be. When we look in the other direction.

in North America and worldwide . -In the six years we have earned these returns. an entirely new virtual banking enterprise designed to meet the needs of financially active consumers across North America at the highest standards of speed. The rules of international trade and investment. And we became the first Canadian bank ever to be listed on the New York Stock Exchange . It was a major acquisition which gave BMO access to retail branch operations in the United States. BMO had acquired the Harris Bank in the United States.85 bank. And as mbanx realizes its full potential in the United States and Mexico. The Bank of Montreal Group of Companies is now uniquely. This is especially. positioned to take part in the rapid growth of trade and investment among all three NAFTA partners. followed by Mexico and. true in North America. 1995 1996 1997 Description and analysis In 1984. virtually all the goalposts and finish lines have been moved. exchanging our sovereign risk involvement for a 16% equity stake (20% voting interest) in Grupo Financiero Bancomer. -Our North American base and our responsiveness to the communities in which we do business have stood us in good stead as our international reach has grown in the nineties… And by acquiring Burns Fry Limited and merging it with Nesbitt Thomson in September 1994 as Nesbitt Burns Inc. -Geographic diversification has centered mostly in the United States. the strategic alliance with Bancomer makes us the first NAFTA bank. continent-wide cross-border banking will be a reality readily available to all our customers. The regulation of the financial services industry. where Canada does almost 80% of its trade and where NAFTA is making political boundaries across markets less and less relevant. in 1988. Together with our capabilities in Canada and the United States. we not only forged the pre-eminent Canadian investment firm but also created a powerful base for our planned expansion into selected markets in the United States and overseas. This unique . to a much lesser extent. Mexico's finest financial services organization. In March 1996 we reallocated our exposure to Mexico without increasing it.. bringing us much closer to our goal of a 120branch network in Greater Chicago. Later.. selective markets in East Asia.and the look of the North American industry as it undergoes an unprecedented wave of consolidation… -1996 is the year we launched mbanx. under the Harris name.a clear signal of our lasting commitment to the North American market. he talks about BMO’s “unique position in the United States”. Our response has been decisive. convenience and service quality. This acquisition is referred to by Mulholland as a “strategic association” in 1985.. -A world with fewer boundaries also means that more and more of our clients expect us to serve them wherever they require financial services.

Canada and the U. Barrett’s discourse on the bank shows a continuity with Mulholland’s: BMO is presented as “the only bank with full service capability” in both countries. In 1990. conferring on it a mark of distinctiveness among other banks.S.S. of course. the bank’s uniqueness stems not simply from operating in the U. however. which indicates the centrality of the North American theme to BMO. In fact. As usual. “Vision 2002”. a condition for attaining competitive advantage and growth. This is considered a mark of distinctiveness and a source of competitive advantage.. BMO was the only bank to own a retail branch banking subsidiary in the U. Barrett immediately addresses some element of continuity: “Canada. “By the early years of the new century. will always be our home and our number one market”. in announcing some change or innovation at the organization. In a sense we see a discursive strategy similar to Mulholland’s regarding the . Both. expanding into the U. the uniqueness of the North American posture and the bank’s ability to provide full services across both countries will reappear in later years in association with each and as self-defining elements. BMO’s uniqueness stems from the combination of the two: a full-range of services in the United States. their North American strategy is labeled Vision 2002. In the first quotation.S. “to offer full service banking in both countries”. in general. Note the futuristic tones in this label. In other words. thus minimizing the scope of the change undertaken. among which is a reference to the ability of Canadian financial services institutions. In this MTS different labels are used to talk about the North American theme: “North American strategy”.86 capability includes “a full range of quality banking services” in both countries.S nor from its offering a full range of services. The 1993 MTS is devoted almost exclusively to the bank’s North American posture and strategy. market is a strategy that ought to be pursued by all Canadian financial institutions if success is to be attained. it will make us the first full-service financial organization to span North America” is a statement that joins again two major identity themes: “first” and “full-service financial institution in North America”. A number of arguments are made in this quotation to justify the need to pursue the North American strategy. Barrett then presents the American market as “a natural extension of our home market”.

The bank has made a major investment in Mexico and is now pursuing a NAFTA strategy. even the acquisition of Burns Fry which is said to create the pre-eminent Canadian firm is portrayed as providing the bank with the opportunity for expansion in the U. North America as the reference group continues into 1995 whereby in addressing the changes that have occurred in the financial services industry. the bank’s customers in the three major countries of operations (Canada. “Consumers across North America” are seen as a single mass or group. we are told that the bank consolidated its position “as the only financial group to offer a full range of services across Canada and the United States by making an acquisition in the U. “a natural development from our proud Canadian past” and “an old tradition” indicate a continuity with the past. This is also apparent in 1996 where consumers whose needs are being met by mbanx are those across North America. BMO became “the first Canadian bank ever” to get listed on the NYSE. for while “exhilarating new departure” and “real first” are signs of innovation and change. there is an almost complete shift to North America from Canada.S. This is another occurrence of the association of two major identity themes “innovative” and “North American”.S. In this quotation. We thus see that the . In fact. The bank’s geographic scope is often mentioned to be of a North American scale. Interestingly. BMO is said to be “the first NAFTA bank” and not just a North American bank with operations in Canada and the U. we see again that the BMO is said to be “first” in undertaking such a move. In the second 1996 quotation. as of 1994.S. the industry in North America (and not in Canada) is mentioned.S. In fact. the U. Barrett comes back to a variation of the theme of change and continuity at the Bank. cross border banking”. most references to Canada are followed by references to the U. and Mexico) are referenced separately. And to conclude. In 1995. During this year as well. but the quotation concludes with reference to mbanx providing the opportunity for “continent-wide. we see an alternation of references between North American and NAFTA. In this last statement. further strengthening the NA stance. In 1994.S. In 1994 the bank’s base and capabilities are now said to be North American and not Canadian.87 Canadian financial services industry.

in a separate section. The “commitment to stakeholders” (all four of them) theme is discussed below. The first is entitled “Vision” and the second is entitled “Values”. 5. The quotations related to the “commitment” identity themes have been taken from three sections of the annual report: .e Commitment to Stakeholders One way BMO defines itself is as an institution committed to its stakeholders.2. which are articulated in reference to the four stakeholder groups. allowing BMO to call itself a NAFTA bank. further propelled the bank’s geographic scope to include Mexico. The launching of mbanx and the additional investment in Bancomer in Mexico.customers.S. employees and the community . two pages in the annual report precede the MTS. Commitment to the individual stakeholder groups will then each be discussed in separate sections. 1997 brings a re-affirmation that the bank’s diversification and expansion priorities include first the U. we see that the bank’s full-service capabilities on a North American scale are portrayed as a mark of uniqueness and distinctiveness and that self-reference shifts from “Canadian” to “North American” to “NAFTA”. the 1994 MTS is dedicated to reviewing how the alleged commitment had been fulfilled and this commitment is further re-affirmed. Later. In these two pages the bank’s philosophy as well as values. the year Matthew Barrett became the chairman of the board of directors. In 1986. and then Mexico. shareholders.2. In 1990.88 bank’s geographic posture evolves from Canada to North America to NAFTA. This commitment is mentioned at times in relation to all four stakeholders and at others in relation to a particular stakeholder group. indicating further intention to consolidate the NAFTA position. are outlined. Quotations are provided in the table below. Vision 2002 was an expression of the bank’s strategic intent to pursue a North American strategy and its acquisition of Suburban Bancorp lent substance to this intent. a full page in the annual report entitled A Commitment to People: The Bank of Montreal Tradition outlines the foundations of the bank’s general commitment to people and then spells out the bank’s commitment to each of its four interest groups . In summary.

customers and employees depends greatly upon the preservation of this supportive consensus.89 the MTS. the community and shareholders. Table 11. more than most other businesses. are integral components of every business relationship. employees. employees and shareholders. is under increasing pressure. While the Bank has changed dramatically in the intervening years. But our success also depends on how we meet the needs of our employees. Together. All unreferenced quotations have been taken from the MTS. -From Values: Our values are what each of our stakeholders can expect of us. shareholders and neighbours has been a cornerstone of our reputation since Bank of Montreal first opened its doors as Canada’s first permanent financial institution in 1817. employees. 1986 1988 1990 . as well as for the public. -As a result of … ethical lapses and of an over-emphasis upon short-term gain.customers. From our predecessors we inherit an institution of stability. without whom we could not succeed. and the basic trust between business and society. and the 1990 statements of Vision and Values.customers. Commitment to stakeholders -Our business rests. on public confidence. -From Vision: Our Philosophy: We are dedicated to excellence in everything we do. employees. -At Bank of Montreal. (we are committed to our customers. not just in our financial stability but also in our integrity and fairness and in our ability and willingness to perform the roles which society expects of us. The preservation of a bank as a healthy. our goal is to provide a distinctive level of service to our customers. and our shareholders. the 1986 A Commitment to People. to meeting or exceeding the performance expectations of our principal constituencies. Quotations taken from the latter two are identified as such. therefore. Our founders’ commitment to ethical business practice. strength and character. growing institution and its capacity to serve the interests of its shareholders. its commitment to its own people and those it serves has remained constant. shareholders and the communities where we live and work)… We are proud of our traditions and our place in history. these groups constitute the Bank's "stakeholders" those who have a stake in our business. We must ensure. On this foundation we can build confidently for the future. -From A Commitment to People: The Bank of Montreal Tradition: A commitment to people . Together these principles have guided us through more than a century-and-a-half of growth and expansion… Today. that ethical principles and concern for the well-being of our customers. the social contract. high professional standards and responsible conduct has also endured. as in the past. the communities we serve.

but also rewarding and enjoyable. and which contributes to the creation of wealth for shareholders and for society at large. and a natural development from our proud Canadian past. will help us attract and retain the best employees. I hope you will see how banking without boundaries means a brighter future for all our stakeholders . but the values themselves are inherent in the very nature of what we do.our shareholders. By serving each. we serve all. confidence in . I cannot imagine circumstances which would lead us to abandon or seriously modify our commitment to our four stakeholders . 1996 Description and analysis In 1986. They will be the foundations of a bank where all the factors of production work in harmony to shape an enterprise that continuously builds on its own success for the benefit of all stakeholders. reinforcing employee productivity. The first is the vision and values we adopted in the Bank's 1990 Strategic Plan. for example. customers and employees of a bank depends greatly on public confidence. and especially. We must of course continually find fresh ways to put our values into practice. The needs of these constituencies are the driving force shaping and informing our approach to the business of banking. The values of integrity. Although we review and renew our Plan. Higher productivity will release resources to invest in extraordinary levels of training and development. To work in it is always challenging. who stand to benefit the most as we welcome the challenge of expanding horizons. Such a bank is an immensely valuable partner for the communities in which it does business. keeping it attuned to new times. -We define our values in relation to our four stakeholder groups… -In this flux we have two fixed points. who as they come to know their long-term customers will learn how to add more value. compensation. growth and loyalty. These in turn will produce a cost advantage difficult to match. -…our North American strategy is both an exhilarating new departure. employees.90 1993 1994 1995 -Our stakeholders are interdependent. value investors and lowering the cost of capital for further investment in the creation of wealth. communities. our shareholders. reduce costs and improve service quality.our customers. -Yet as always amidst all the changes there will be a powerful element of continuity. employees and the communities in which we do business. Mulholland indicates that serving the interests of the shareholders. accountability and respect for human beings that permeate all our strategies will not change. sustainable growth. customers. It is a bank in which the interests of all stakeholders are in harmony. while yielding the steady profits that appeal to long-term. Steady. -And as you read. with immense promise for all our stakeholders.

“a cornerstone of our reputation since the bank first opened its doors” and a “constant” despite the dramatic changes at the bank. communities and shareholders. places emphasis on BMO in particular. In short. “duty”. the bank’s commitment to each of the four stakeholders is spelled out and such commitment is couched mainly in terms indicating “fairness”. The bank’s philosophy (which constitutes a part of the Vision statement) as well as its values are articulated in terms of what the bank is willing to provide the stakeholders and what the latter can expect of the bank. they are also central as the 1988 quotation indicates. In a later section of this same text. Barrett makes the “commitment to stakeholders” theme a central one in his first annual report to shareholders in 1990. both the philosophy and values statements go into the details of the bank’s relation with each stakeholder group as will be shown later. however. BMO is not addressed specifically. high professional standards and responsible conduct” which were upheld by the bank’s founders have also “endured”. The “ethical business practice. rather reference is made to “a bank”. employees. Furthermore. In fact. This commitment is exercised by adhering to ethical business conduct which is a central requirement for BMO (and should be for other financial institutions). This section indicates that fulfilling the financial. integrity. the bank’s commitment to people is an enduring attribute. An association is made here between a commitment to the bank’s four stakeholders and a commitment to ethical and professional business conduct. although . Ethical principles are not only enduring at the bank. and “social responsibility”. this commitment is a self-defining attribute which has normative implications for the bank.91 the financial stability. fairness and willingness of the bank to perform the roles society expects. Another section of the 1986 annual report. As is typical of Mulholland’s discourse. “Ethical principles and concern for the well-being” of the four stakeholders should be “integral components of every business relationship”. In other words. and should be at other financial institutions. ethical and social responsibilities are components of BMO’s commitment to four groups. the 1990 MTS starts by attributing success to customers. This “commitment to people” appears as a major self- defining element of the bank since it is said to be a “BMO tradition”.

1994 thus shows a continuity in the articulation of the bank’s commitment. In 1995. Recall that the vision and values centered around the bank’s relation to the four stakeholders. 1996). showing a continuity with Mulholland. In fact. This commitment to stakeholders is reiterated in later years. is an implicit indication that the interests of these four stakeholders are not divergent. For example. Barrett calls these four groups “the Bank’s stakeholders those who have a stake in our business” . as a self-defining attribute of the bank.92 primacy is given to customers. references to new developments at the bank are said to be advantageous to all stakeholders. we serve all”. re-establishes the bank’s commitment to the four stakeholders. “By serving each. Barrett indicates that the fixed points in the flux are the vision and values adopted in 1990. and the bank’s determination to take nothing for granted. The 1990 MTS. but rather compatible. in this as in later years (for example. The bank’s values are said to be defined in terms of the relation to the four stakeholders.which is partly presented as a new departure . a reiteration of what was mentioned in the annual report issued during Barrett’s first year as Chairman. The 1994 MTS is devoted to a review of the bank’s undertakings during the previous five years which correspond to Barrett’s chairmanship of the bank. the first signed by Barrett as Chairman. The needs of these stakeholders are central. individually and collectively. The . after having enumerated a number of major changes that had occurred in the bank’s environment during the past years.a label which was not used in the MTSs signed by Mulholland. they are “the driving force shaping and informing our approach to the business of banking”. Reassuring all stakeholder groups that they stand to gain from changes at the bank provides justification for undertaking such changes.will be beneficial for all stakeholders. although the commitment to each of the four stakeholders spelled out during Barrett’s tenure differs in some ways from that spelled out during the Mulholland years. Barrett thus introduces into the bank’s discourse a term which will be often referred to in subsequent years. 1993 re-affirms that the bank’s North American strategy . The expectations of each of the four stakeholders from the bank are articulated and their interests are said to be interdependent.

how this commitment is practiced may change as indicated in “we must continually find fresh ways to put our values into practice”. we see with Mulholland “a commitment to people” implying integrity and social responsibility as a self-defining attribute of the bank which has endured since the founding days. In the third quotation.93 bank’s commitment to the stakeholders is also enduring: it is said to be fixed. and society at large in general. banking without boundaries is said to mean “a brighter future for all our stakeholders… and especially our shareholders”. appeared in Barrett’s first MTS in 1990. This again indicates an overemphasis on the shareholder group. the “values of integrity. However. with an emphasis on the benefits to be derived by shareholders in particular. This stands in contrast to the overriding emphasis the bank placed on customers back in 1990 when the vision and values were articulated. In fact. In 1996. although the relationship with the stakeholder groups is affirmed to be continually re-thought. and a virtuous circle linking the needs of different stakeholders is elaborated. however. accountability and respect for human beings that permeate all our strategies” are said to be constant. the shareholders are singled out as the group standing to gain the most as the bank expands its horizons. the bank’s commitment to customers which seemed to have taken primacy in 1990 eventually gives way to a predominant commitment to the . it is clear that some fresh ways are found in 1996. mentions of change and new strategic initiatives are followed by references to some element of continuity. The quotation ends. It is referred to in 1993 when major undertakings occur at the bank and is re-affirmed in 1994 when the accomplishments of the first five years of Barrett’s tenure are reviewed. Interestingly. This commitment to people becomes articulated as a commitment to “stakeholders” with Barrett in 1990. In fact. These values are said to be the foundations of the bank “that continuously builds on its own success for the benefit of all stakeholders”. As is common of other MTSs signed by Barrett. In fact. In 1995. In brief. this brings back a theme (integrity) that was articulated by Mulholland. this commitment is said to be a fixed point in the flux. and was dropped thereafter from discourse.

A more realistic view would be that the security and stability which size can bring are based on our traditional and continuing service to the smallest as well as the largest customers. -The opportunities afforded by deregulation also present formidable challenges for financial institutions. fairly treated and served to the best of our ability. credit. As the forthcoming sections will indicate. securities market. we will protect our customers’ deposits and honour their privacy. but it is also essential to maintain adequate control. In the next pages. a decent respect for the standards of society. These include honesty. safekeeping and record keeping services. Commitment to customers -One myth holds that we are big and therefore bad. Let us start with the customers. one legacy of deregulation is the need to be better informed about what our customers want and be prepared to respond with appropriate products of a high quality delivered to the highest service standards. Customers will have a greater level of personal choice in the selection of financial products and in the financial institutions that provide them.94 shareholders in 1996. -One of the Bank's objectives is to provide convenient. Table 12. -From A Commitment to People: We are committed to our customers: Every individual with whom we deal is respected. Thus. fairness. Commitment to customers The following table provides the quotations related to the “commitment to customers” theme. through a single contact point. accessible options for Canadians of modest means to invest a portion of their savings in the economy without being exposed to undue risk. In upholding the public trust vested in us. the bank’s commitment to each of the four stakeholder groups will be discussed in turn. Another is to provide financially active Canadians with access. and 1985 1986 1988 . capable of providing service of acceptable quality at a reasonable cost. savings. -Automation is necessary not only to maintain an efficient operation. to transactional. -There should be no fundamental difference between the values of the marketplace and those we apply to other aspects of our daily lives. the relationship with the different stakeholder groups do get re-thought throughout the years.

giving it to them.000 small businesses across Canada. our goal is to provide a distinctive level of service to our customers. without whom we could not succeed. These changes have forced banks to …seek new ways to add value to their customer relationships.(leading to the) explosion of financial innovation and a chronic oversupply of financial services. and our shareholders. We are the only bank to offer a Small Business Lending Rate tracking 1% below prime. And we are working hard with governments to create a more effective legal and regulatory environment for small business.3% in just two years. Together they are a radical change in the way we do business. we have done this without lowering our high standards of creditworthiness and asset quality. -From Values: Our customers come first: They will be served at all times by friendly.Supporting small business and agriculture means paying attention to what our customers want and. This was achieved despite a substantial increase in technological.. we put small business firmly front and center among our priorities for the Bank. and we know beyond doubt how important they are to us… When we adopted our Corporate Strategic Plan three years ago. Our goal remains a supportive credit environment… . -Today..Each of these actions is a small step forward in itself. the communities we serve. caring responsive and well-trained employees. professionalism. training and other investments to improve service quality. But our success also depends on how we meet the needs of our employees.95 1989 acceptance of the obligation to give value and useful service in return for the rights and privileges which we enjoy and for the trust placed in us by our fellow citizens. Our service will be characterized by fairness and respect. -From Vision . quality. 1990 1992 . In a contracting market for small business credit. -We deal with more than 320. …The recession has not changed our credit practices. And the results are showing. a distinctive level of service and high ethical standards in all our dealings with them.Our Philosophy: We will provide customers with value. in the teeth of the longestdrawn-out recession most of us can remember. whenever possible. -Rigorous cost control measures held non-interest expense growth to 5%. -This past decade has witnessed dramatic growth and significant structural changes in international financial markets ….. Employee satisfaction leads to customer satisfaction… -At Bank of Montreal. we are making that commitment a reality.. Better yet.. integrity and ethical conduct. our market share has risen by 2..

with wider perspectives and more complex needs… We are committing more and more electronic and human resources to building relationships tailored to our individual customers . an entirely new virtual banking enterprise designed to meet the needs of financially active consumers across North America at the highest standards of speed. and we have put it at the core of our values. especially in the independent business sector. 1996 is the year we launched mbanx. -The evolving needs of our customers are the principal force for change in financial services today.96 1994 These are achievements of which we are rightly proud. -Although we review and renew our Plan. Our customers have rewarded us with substantial growth in market share. -Sensitivity to our customers’ needs is paralleled by our response to the rising standards that communities are setting for corporations everywhere. -Let me review briefly some key achievements of this strategy in the last five years and in 1994 in particular. -As customers’ demand for financial services grows in intensity and sophistication. Our It is Possible marketing campaign made the tools of basic financial planning available to all Canadians for the first time. This annual report is our thanks to them. your Bank is constantly seeking ways to meet or exceed their expectations. We have customized Personal and Commercial Financial Services to meet the unique needs of 234 communities across Canada…. we moved to build on that achievement by creating the Institute for Small Business. professionalism and added value. low-cost access to all our electronic distribution channels and its individual portfolio managers for every client. where we are now the highest-rated bank in Canada. -In five years. I cannot imagine circumstances which would lead us to abandon or seriously modify our commitment to our four stakeholders… -Our depositors and our shareholders rightly prize stability. which will allow our independent business customers to learn from us while we learn from them. with its easy. In personal banking. convenience and service quality. 1994 brought… excellent examples.relationships whose core is first-class professional financial advice. keeping it attuned to new times. 1995 1996 1997 . In 1994. -We owe our customers the highest standard of service. mbanx. even as we recognize that it is our small business customers who have made them possible. demographic trends are bringing us mature customers who are experienced and knowledgeable. we have established a reputation as a bank that …is sensitive to the evolving needs of our customers and employees. embodies both these strategies.

business relationship and involves a moral responsibility and obligation towards the “fellow citizens”. fair treatment. the bank’s commitment to customers is manifested in the bank’s respect. That the bank’s relationship with customers is a matter of social responsibility is again re-iterated in 1988 where there is talk about “the obligation to give value and useful service in return for the rights and privileges which we enjoy and for the trust placed in us by our fellow citizens” (third quotation). Again here. In 1986. There is thus. Deregulation has brought a challenge for financial institutions as customers will have greater choice in the selection of services and the institutions that provide them. The bank’s relationship with the customer thus has normative overtones. regardless of whether they are small or large. Mulholland indicates that providing service to customers.97 Description and analysis In 1985. It goes beyond an instrumental. is a matter of tradition and continuity at the bank. In fact. the relationship is also an issue of strategic importance. products should be “of a high quality”. who are catered to by the bank: those “of modest means” and those who are “financially active”. catering to customers appears as a matter of . some of this commitment emanates from the “public trust” vested in the bank. a “need” to be better informed about customers’ wants and to respond with products “of a high quality delivered to the highest service standards”. Thus. In other words. and privacy honouring. service “to the best of our ability”. 1989 shows a continuity with 1988 in that a number of major changes are said to have “forced” banks to rethink their strategies including the search for “new ways to add value to their customer relationships”. The instrumental aspect of being informed about customer wants and meeting these wants appears in this statement. However. the bank’s service to customers does not appear as distinctive. It is also noticeable that the qualifiers used here are stronger than those used in 1985. Mulholland addresses two classes of customers. Furthermore the service provided by the bank is said to be “of acceptable quality”. and should be “delivered to the highest service standards. deposit protection. namely Canadians. part of the bank’s commitment to customers is a social responsibility.” In 1988 as in 1985.

as is evident in a number of quotations. In addition. Furthermore. 1990. appear subordinated to customers. In other words. the customer theme takes more centrality. and distinctiveness in customer service becomes a goal at the bank. talks about banks and financial institutions in general and not about BMO in particular. the customers appear as having priority over the other stakeholder groups which are addressed jointly in the second statement. however. The bank’s commitment to small business has remained constant despite adverse factors in the environment (second quotation). “quality” and “high ethical standards”. He also attributes success mainly to customers. we are told that the bank had made major investments intended “to improve service quality”. A variety of steps taken by the bank to meet these wants and needs. The opening statement of the MTS indicates that it is the bank’s goal “to provide a distinctive level of service” to the customers who are said to be a major reason for success. re-iterates many of the customer sub-themes put forth by Mulholland. introduces the notion of distinctiveness in customer service as a goal for the bank. the 1992 MTS is dedicated almost exclusively to the small business customer segment who were placed “firmly front and center” among the bank’s priorities in the Corporate Strategic Plan. Noteworthy among these distinctive procedures is the bank’s Small Business Lending rate which for over a year . with Barrett.98 necessity. implying that the quality of service was not at its best. The bank’s attentiveness to customer wants and needs is reiterated in the third quotation. Some new issues not addressed by Mulholland surface as part of the bank’s commitment to customers such as a “distinctive” level of service. In 1990. are outlined. another stakeholder group. In fact. some of which are said to be distinctive to the Bank. In other words. Continuity in the bank’s commitment to and practices towards the small business customer segment is emphasized. The emphasis on customers’ underlying the bank’s success continues in 1992. the annual report was prepared under Barrett’s chairmanship of the board. Later. in a typical manner. employees. Mulholland. Here again. Barrett. The commitment to customers addressed in the Vision statement reiterates some of the sub-themes articulated by Mulholland including “value”.

though. In this respect. The MTS ends with the attribution of success to the small business customers which is a variation on the ‘customer leads to success’ issue previously mentioned in 1990. but “together they are a radical change in the way we do business”. The commitment includes owing customers “the highest” standards of “service. 1992 shows a continuity in the ‘commitment to customer’ theme with emphasis on a particular customer segment . Here the bank’s distinctiveness in the sector of independent business is emphasized as the bank is said to be “the highest-rated bank in Canada”. Here the “first” theme is joined to the “customer service” theme. Part of the bank’s success is again attributed to customers who are said to have “rewarded” the bank with growth in market share in the small business sector in particular. In brief. this commitment does not refer to fairness and integrity which were mentioned in 1990 by Barrett and before that by Mulholland. The rise in the bank’s market share refers to the previous two years. professionalism and added value” which reiterates aspects of the commitment mentioned in 1990. the bank and the customers to learn from each other. The 1994 MTS is dedicated to a review of the bank’s achievements during the previous five years and to a re-iteration of the bank’s commitment to the four stakeholders. Interestingly. The last quotation in 1994 indicates that the bank has established a reputation for. Each of the procedures used by the bank in meeting the needs of small business customers is “a small step forward”. the bank builds the Institute for Small Business thus allowing both. In an effort to further consolidate this distinctiveness. being sensitive to its customers’ needs.99 was one of the lowest in the country.which gained in strategic importance since Barrett’s mandate as chairman.small business . Barrett appears to be diverging from some of the major sub-themes articulated earlier. among other things. it is a near past (since Barrett’s ascendance to the chairmanship and the bank’s adoption of the Corporate Strategic Plan). . In fact. An example of this sensitivity is that the bank has provided “Canadians” with basic financial planning tools for the first time. Some of the achievements during the first five years of Barrett’s tenure are also outlined. This last statement allows us to conclude that the change is radical with respect to the bank’s past ways of doing business.

It is also noteworthy that emphasis is placed on “the highest standards” of speed. it caters to the needs of “financially active” customers across N. but the bank’s commitment to them will remain. in turn. This continuity refers to its commitment to the four stakeholders among whom we find the customers (who in this case are not singled out). the bank’s values are said to derive from what is prized by depositors (customers) and shareholders. customers themselves are said to push the changes. The relationship with these stakeholders may be redefined and re-imaged. deregulation and technology were pushing the changes in customer needs which. For Mulholland.e. Then. With Barrett. and technology provides a means to satisfy these needs. continuity in a time of change.100 In 1995. knowledgeable” and to have “more complex needs”. convenience and service quality. This is a more forceful role which is attributed to customer needs than was common with Mulholland.A. who in 1996 are said to be “mature”. The latter indicated in 1988 that deregulation led to a higher level of customer choice and in 1989 that technological change had an impact on customer expectations. namely stability.” The expression “financially active” designating a group of customers was used by Mulholland in 1988 in speaking about one of the bank’s objectives. The second quotation in 1996 indicates that “the evolving needs of customers are the principal force for change in financial services”. Advanced research and segmentation techniques are used to understand customers and the right blend of . Here we see that depositors (a customer segment) are placed at par with the shareholders in influencing bank values. seem to take a more central role in discourse since Barrett took over. convenience and quality echoing the few superlative qualifiers of customer service used at BMO. created the necessity for banks to readjust their strategies. In 1996. Mulholland distinguished between Canadians of modest means and financially active Canadians. i. the MTS addresses a number of major changes that have occurred in the bank’s environment and this is followed by a reference to the fixed points at the bank in the flux. “experienced. the bank launches mbanx which is defined in terms of meeting customer needs. Customers. In the second quotation. at “the highest standards of speed. More specifically. Customer needs are attributed a causal force for change.

the bank was said to have established a reputation for such sensitivity. and which involved providing “service of acceptable quality” (1985) and protecting customer desposits and privacy (1986). The bank’s “sensitivity to …customers’ needs” is reiterated. and through prudent management. Commitment to shareholders Table 13. In brief. a customer segment. In fact. namely small business. BMO is said to have established a reputation as a bank that is sensitive to the needs of its customers.101 technology and people is sought in other to meet customer expectations. to maintain the continued prosperity of the Bank. The quotation in 1997 addresses shareholders directly and informs them that their bank “is constantly seeking ways to meet or exceed (customer) expectations. Commitment to shareholders -From A Commitment to People: We are committed to our shareholders: We have a duty to our shareholders to optimize the return on their investment.” This underscores the centrality and the strategic importance that the bank grants to meeting customer needs and expectations. In 1992. we see that the commitment to customers (and fellow citizens) which was portrayed as part of the bank’s social responsibility and moral obligation with Mulholland. In 1994. By then. when the bank’s commitment to customers is re-affirmed. but with some different terms. the bank’s goal is said to be to provide a “distinctive” level of service and customers seem to have primacy over other stakeholder groups. In 1994. The 1996 statement places particular emphasis on meeting the needs of financially active consumers. This is portrayed as an instance of the bank’s sensitivity to customer needs. is singled out as the subject of the annual report and the bank’s distinctive service to this customer group is outlined. Then. the whole concept of mbanx is centered around meeting individual customer needs. whom mbanx . -Faithful attention to (the fundamentals of prudent management) will provide 1986 1989 .a major bank development -was targeting. becomes part of the bank’s vision and values with Barrett in 1990. BMO is said to be “the highest rated bank in Canada” in the small business sector. During 1994 as well. this commitment makes no reference to the protection of customer deposits.

Naturally. -It is the Bank of Montreal Group of Companies' decisive response to those 1991 1994 1995 1996 . in fact. -From Values: We manage the Bank on behalf of our shareholders: Our first responsibility to them is to provide sound . above all.Our Philosophy: We will provide shareholders with an attractive and continuing return on their investment. a consistent return on their investment. and we have put it at the core of our values. We will be responsive to emerging threats and opportunities. we are encouraged by this achievement.that in no small measure we continue to owe our success. I cannot imagine circumstances which would lead us to abandon or seriously modify our commitment to our four stakeholders… -Our depositors and our shareholders rightly prize stability. and we are keeping it in today's more prosperous times. -It is to them .102 1990 added assurance that the Bank and its shareholders will not only be protected against the impacts of the inevitable adverse developments but will also be wellpositioned to take advantage of the opportunities which the future will bring.or divest . the real meaning of our 1995 results is that we are fulfilling our commitment to give our shareholders a solid and. -From Vision . -Although we review and renew our Plan. because earning a consistent return is fundamental to our whole business strategy. our annual ROE was the Bank's highest in six years. We kept it through the worst days of the recession.our customers and shareholders . Shareholders can expect to see their investment steadily increase in value and achieve an annual return that is competitive with other banks.accordingly. We made that commitment when we adopted our Corporate Strategic Plan in 1990. just as the business cycle began to turn down. -We reported our fifth consecutive year of record earnings. Overall. -Our shareholders are entitled to a competitive rate of return and the prudent management of their investment. and will invest . keeping it attuned to new times. We are one of only two North American banks in our peer group to achieve these results…For me. while sustaining our solid and consistent return on equity. responsible management and to keep them fully informed. We will maintain a prudent risk profile and a strong credit rating to protect shareholder investment. however. our financial track record for the nineties places us firmly among the top-performing major banks in Canada and the United States. -In 1995 Bank of Montreal reported net income of $986 million for our sixth consecutive year of record earnings. But we are particularly gratified that 1995 is also the sixth consecutive year in which we earned a return on equity of over 14%. We will do everything we can to maintain our record.

In 1986 and 88. Your Bank is the only major bank in Canada and the United States to have produced ROE exceeding 14% for the last eight years. Yet we remember that we are first and foremost a commercial enterprise.7% above the level in 1996. -The ground-breaking disclosure standards set by this Report have won major awards on several occasions.. Several experts in these fields have recently judged your bank to be on the leading edge of contemporary risk management capabilities. and especially.. year-end brings with it the obligation to give the fullest possible accounting of the initiatives and events that produced growth in shareholder value. -During the severe recession of the early 1990s.4 billion for the year. you can read about the seven consecutive years of record profits which show how effectively our Bank has been managing the drivers of change in the 1990s….a gain of $5. 11.And as you read. with an overriding responsibility to create wealth for our shareholders. In A Commitment to People. your Bank achieved record earnings. -For the management of the Bank. The pages that follow in this Annual Report and the extensive disclosure contained in the Management analysis of operations section combine to assure that shareholders are well informed.1%. as well as opportunity to report on plans for sustaining the creation of shareholder wealth in the future. but be proud to own a part of it. Increased disclosure also goes naturally with effective corporate governance. We have a stakeholder strategy. Return on equity (ROE) was 17. employees. our shareholders. which we have continued to refine.9 billion . communities.our customers. It is an important guarantee that our shareholders can not only profit from their company. -Fiscal 1997 saw the bank of Montreal Group of companies report record earnings for the eighth consecutive year. I hope you will see how banking without boundaries means a brighter future for all our stakeholders . Elsewhere in this Report. Description and analysis In the MTSs signed by Mulholland there are very few references to shareholders as a separate interest group. shareholders are one of the three or four groups whose interests should be looked after by the bank (see the “commitment to stakeholder” theme analyzed before). As a result the market value of your Bank at year-end rose to $15. because we believe it is the most effective shareholder strategy. who stand to benefit the most as we welcome the challenge of expanding horizons. the bank’s duty 1997 .103 possibilities that makes our shares an investment to buy and to keep. while some of our competitors stumbled. This was due in part to the risk management disciplines already in place.

there is a single mention of shareholders. the shareholder group. and “through prudent management (maintaining) the prosperity of the Bank”. does not emerge as the principal stakeholder group. The bank is also committed to maintaing a “prudent” risk profile. unlike the customer group in 1990. . This is an indication that the bank has been fulfilling the commitment to shareholders it pledged in 1990 when it pointed out that it would be providing them with an attractive. echoing statements made during Mulholland’s times (1986) as well as Barrett’s (1990).104 towards shareholders centers on optimizing their ROI. No references to shareholders are made in 1992 or 93. consistent and steadily increasing return. Although the bank’s commitment to shareholders under Barrett seems to go beyond that under Mulholland. the bank’s commitment to shareholder could be summarized in the duty to provide a prudent management style as well as to provide optimal returns. 86 and 88) through prudent management. “an attractive” but also a “continuing” return on investment which they can expect to see “steadily increase in value” and which is “competitive with other banks”. the bank’s commitment to shareholders includes providing not only. During Mulholland’s tenure. We see that the bank has been reporting record earnings since Barrett took over as chairman. are given credit for the success of the bank. Prudent management as a requirement for the protection of shareholders is again re-iterated in 1989. It is noteworthy that 1994 marks the year the bank’s stock became listed on the NYSE. who along with customers. The shareholders’ entitlement to “a competitive rate of return and the prudent management of their investment” is again reiterated in 1994. Barrett reviews the bank’s performance for the preceding five years corresponding to his tenure as chairman and re-affirms the bank’s commitment to its four stakeholders. Another of the bank’s commitments to shareholders articulated during Barrett’s first year as chairman and not prevalent before includes keeping shareholders fully informed. With Barrett. In 1994. In 1991. This latter statement shows a continuity with Mulholland’s articulations regarding “protecting” shareholders in 1989 (and all interest groups in 1985. It also marks the year that references to different measures of the bank’s profitability start appearing in the MTS.

are also the core of the bank’s values. with an overriding responsibility to create wealth for our shareholders. a consistent return on their investment. The bank’s continued commitment to shareholders along with the other three stakeholder groups is re-affirmed. our shareholders. and a source of pride. The last quotation for 1995 indicates that the values of two stakeholder groups.” The last two sentences appear to induce shareholder identification with the bank: they stand above other stakeholder groups and their owning BMO shares is both an investment to keep for the long-term. the shareholders are also told that the bank’s shares constitute “an investment to buy and to keep” and that the bank’s “shareholders can not only profit from their company. The predominance of the shareholder group becomes very clear in 1996 whereby this group is singled out from the other stakeholder groups in two quotations: -“… you will see how banking without boundaries means a brighter future for all our stakeholders… and especially. above all. because we believe it is the most effective shareholder strategy. depositors and shareholders. We made that commitment when we adopted our Corporate Strategic Plan in 1990…” This commitment was fulfilled despite adverse circumstances in the external environment and will remain a central issue. “fundamental to our whole business strategy”. who stand to benefit the most as we welcome the challenge of expanding horizons” and -“… we are first and foremost a commercial enterprise. This identification-inducement continues in 1997 as the following statements (and several others) indicate: . but be proud to own a part of it. however. We have a stakeholder strategy. the real meaning of our 1995 results is that we are fulfilling our commitment to give our shareholders a solid and.” Not only is the shareholder group singled out from the other groups as being catered to most by the bank. Here we see that these two stakeholder groups take more prominence than the others.105 In 1995 the bank’s fulfillment of its commitment to shareholders is explicitly addressed: “For me.

Between 1991 and 1993 only one reference is made to shareholders in the MTS.” In these statements the bank addresses shareholders directly as is evident in the expression “your Bank” which appears at least seven times in the 1997 MTS. made additional issues part of the bank’s commitment to shareholders. Most of these statements talk about measures the bank has taken or is taking to succeed. These include the fact that BMO is the only major bank in Canada and the U. as in the past (1990. 94 and 95) that the bank is fulfilling the commitment it proclaimed in 1990. notably the bank’s responsibility to keep them informed and the commitment to provide them with returns that are not only attractive. In 1994. however. In brief.106 -“Your Bank is the only major bank in Canada and the United States to have produced ROE exceeding 14% for the last eight years. Furthermore. it is noteworthy that several references to “your Bank” are accompanied by some mark of distinctiveness of the bank. Furthermore. while some of our competitors stumbled… Several experts in these fields have recently judged your bank to be on the leading edge of contemporary risk management capabilities. This emphasis on return and prudent management is re-affirmed by Barrett at the beginning of his chairmanhip. Barrett. giving the readers (shareholders) additional reasons to identify with the bank. we see that with Mulholland. your Bank achieved record earnings. the bank’s commitment to shareholders is articulated in terms of providing an optimal return and prudent management of their investment. to achieve ROE exceeding 14% for eight years while competitors stumbled and that the bank was judged by experts to be on the leading edge of risk management. references to the bank’s high profitability and extensive disclosure indicate.S. There is an overriding tendency throughout the whole MTS to speak directly to shareholders about matters that are of concern to them. but also consistent.” -“During the severe recession of the early 1990s. the bank’s commitment to shareholders is re-affirmed and emphasis . This emphasis on the shareholder shows continuity with 1996 when the shareholder group was singled out as the most significant among the stakeholder groups.

Multiply this many times over and it is not difficult to see how easy it is to risk destruction of the very basis of the political consensus on which a market economy ultimately rests. The bank’s extensive disclosure. The strategic importance of the customers continues until 1997. We support equal opportunity and advancement in accordance with ability for all staff. -Those engaged in takeovers and acquisitions argue. We are dedicated to their personal and professional development and well-being. identification-inducement strategies appear in the MTS and the shareholders are placed above the other stakeholders on the bank’s priority list. Commitment to employees Table 14. In 1996. this is a tough argument to sell. Their loyalty is prized as are their skills and experience. This continues in 1997. references to the bank’s profitability and the bank’s fulfillment of its commitment to provide attractive and consistent returns to shareholders is emphasized. In 1996. consistent and high returns.107 is again placed on the bank’s responsibility to provide competitive returns and prudent management. that they serve a legitimate economic and social purpose. it is clearly the shareholder who takes center stage in the bank’s discourse and retains it in 1997. Even when true. In 1995. and prudent management practices are again reiterated in 1997. where the MTS seems to be addressing primarily the shareholder concerns and talking explicitly to them by referring to BMO as “your Bank”. try selling it to the employees of a business that is dismembered or a plant that is shut down to help finance the acquisitor's purchase or to turn a quick profit. in 1990. were placed above other stakeholder groups. -It will continue to be necessary to… enhance the professional skills of our management and staff… -From Vision . but not the bank’s predominant commitment to them.Our Philosophy: We will offer employees the opportunity for a 1986 1989 1990 . They identify areas of opportunity and by their actions force a more efficient use of capital. But. sometimes correctly. specially while addressing some distinctive achievements by the bank. Commitment to Employees -From A Commitment to People: We are committed to our employees: They are special. The bank’s commitment to shareholders offers an interesting contrast to its commitment to customers who.

Their results today are our opportunities for tomorrow. and this message is above all one of thanks to them for everything they have achieved. We are absolutely determined to have the best people in the financial services industry.. have made the 1993 1994 1996 .) -But despite its scope. -And to our employees we offer equitable conditions of work. demographic and attitudinal changes. place it at the service of our stakeholders. and to provide the opportunity for a full and challenging career. The Bank is committed to attracting. Nothing would have been possible without them. -Finally. we have established a reputation as a bank that …is sensitive to the evolving needs of our customers and employees. our state-of-the-art education and training centre. the IFL is only the latest stage of the commitment we made five years ago to give our employees the finest opportunities for learning in the financial services industry. We have already made notable progress along that road. to be a fair and equitable employer. They have rewarded us with five years of growth. -Change is all-pervasive.relationships whose core is first-class professional financial advice. teamwork. Employees can expect us to demonstrate respect for the individual. and when the Institute for Learning. and hold it in trust for the future. a strong customer orientation. innovation and record financial results. developing and retaining the best people. leadership. Nothing else is mentioned regarding sensitivity to employee needs. And we will provide opportunities for continuing professional development through training and mobility within the Bank. a sensitivity to public concerns and actions which are at all times socially responsible. we can count on the great and growing excellence of our people.108 full and rewarding career. We will offer competitive compensation and benefits. -…we are committing more and more electronic and human resources to building relationships tailored to our individual customers . respect and a strong work ethic. anywhere in North America. (Examples are then given relating to sensitivity to customer needs. and will nurture a culture based on mutual loyalty. opens early in 1994 it will give us an advantage the competition will find hard to match. The Bank in turn seeks from every employee: commitment to the Bank’s principles and goals.. -From Values: Employee satisfaction leads to customer satisfaction. and will recognize and reward personal achievement as well as teamwork. together with sweeping technological. with excellent opportunities for personal and professional growth. but it is perhaps in the workplace that its effects are first brought home for most people. Rising customer expectations. -In five years. -Today’s Bank of Montrealers draw upon a prized tradition.

The importance of caring for employees is again evident in the second 1986 quotation where Mulholland indicates that the “more efficient use of capital” is a tough argument to sell to employees of a business that has been dismembered or a plant that has been shut down in order to turn a quick profit. part of which applies to how they treat employees. -Our response as a bank is to prepare a new contract with our employees. A Commitment to People spells out how the bank’s commitment is exercised towards employees. In this quotation. and are prepared to take responsibility for their futures by investing in themselves. which today is the only lasting competitive advantage in banking. Mulholland is speaking about general business practices and exposes the fragility of the consensus on which a market economy rests. In 1989. one that defines us as a learning organization. Many employees in financial services are learning for the first time that their jobs will not be there. the profitability of the enterprise will prosper in the new century. we are providing unprecedented opportunities for learning in every line of business. Over time. Mulholland . The steady decline in full-time transactionprocessing positions will continue. -To work in (such a bank) is always challenging. but also rewarding and enjoyable. This commitment has some paternalistic overtones as is evidenced by the emphasis on employees’ being “special”. as a result. which did not exist a few years ago. such as the portfolio managers of mbanx. The paternalism of the past is being replaced by a professional relationship between the Bank and employees who are essentially independent entrepreneurs. and responded by preparing themselves for a new kind of banking. Description and analysis In 1986. Implicit in Mulholland’s statements is the indication that businesses have a social responsibility. our reward will be to have the highest quality of human capital. on the prize the bank places on employees’ “loyalty” as well as the bank’s “dedication” to their “well-being”. Over time.109 ability to manage value-adding relationships the essential qualification for more and more employees. even as the demand for new skills increases in occupations. They will have understood what is happening. -The consequences for the traditional banking model of security and hierarchy are profound. For those who welcome continuously expanding career horizons. with their skills as their capital. only those who consistently contribute to the wellbeing of our customers and.

This quotation. thus some continuity is maintained with 1986 statements. 1994 is also the year the IFL started operations and this is said to be “the latest stage of the commitment” made to employees in 1990 when Barrett became chairman. With Barrett (1990). like 1986’s A Commitment to People. also indicates that the bank is counting on employees’ “great and growing excellence”. thanking employees for all they have achieved appears in 1994 when we are told that “nothing would have been possible without them”. This MTS reiterates the bank’s commitment to offering employees “equitable conditions of work. references to employees are accompanied by references to the Institute for Learning (IFL). In the closing paragraph of the MTS. rather we are told that “employee satisfaction leads to customer satisfaction”. It places emphasis on how the bank fulfilled its commitment to the different stakeholders during the previous five years. the 1990 statement of vision includes nurturing a culture of “mutual loyalty”. However. the employees do not appear as special. In 1993. however. but the emphasis on “loyalty” will be dropped. This seems to place employees in an instrumental position to achieve customer satisfaction. the 1990 vision and values statements include offering employees “the opportunity for a full and rewarding career” and for a “full and challenging career”. with excellent opportunities for personal and professional growth” which echoes . In fact. Bank of Montrealers are thus the perpetuators of the Bank’s prized tradition which they place at the service of stakeholders. This emphasis on “rewarding” careers will be taken up in later years. a “state-of-the-art education and training center” slated to open in a short while.110 spells out some of the steps the bank should take in the future and they include enhancing the professional skills of employees. Note the identification-inducement overtones in the expression “Bank of Montrealers” as well as in placing the latter in a position of responsibility to draw on “a prized tradition” and to “hold it in trust for the future”. As mentioned previously. Unlike the 1986 statements. the 1994 MTS reviews the bank’s achievements since Barrett took over. “Bank of Montrealers” are said to draw upon a prized tradition and to place it at the service of the bank’s stakeholders. in addition to boasting about the IFL.

1996 shows the most discontinuity with the past in its address of the bank-employee relationship as the expression “change is all-pervasive” indicates. The bank’s reward is to have.” To demonstrate this sensitivity. Full-time transaction processing jobs will continue declining while demand for new skills which did not exist before will continue to increase. The contrasts between the past on one hand. Working in such a bank is said to be “challenging”. and the present and the future on the other. “enjoyable” and “rewarding”. are remarkable. More importantly. No quotation speaks about radical change as forcefully as do the ones appearing in 1996. the MTS goes on to give examples of its commitment to customers. “human capital” of the highest quality. is the fact that of the different years studied. In 1996. The onus is on the employees to understand what is happening and to prepare themselves for “a new kind of banking”. the most essential of which is managing value-adding relationships. It is important to note that employees are again . unlike 1990. Changes in customer expectations as well as sweeping technological and attitudinal changes have dictated the need for new employee qualifications. “electronic and human resources” -which are placed at the same level are said to be committed to building relationships with customers. Thus the consequences are said to be “profound” for the traditional model of banking where security and hierarchy prevailed. however. over time. but not to employees.subordinated to customers in this statement: “only those (employees) who consistently contribute to the well-being of our customers …will prosper in the new century”. the statement of vision and values pledges that the bank will offer employees the opportunity for a full and rewarding career. the 1996 MTS says nothing about “mutual loyalty” between the bank and employees. the bank’s commitment to employees . The bank is also said to have “established a reputation as a bank that… is sensitive to the evolving needs of customers and employees. However. The bank is further said to be providing employees who have an entrepreneurial spirit “unprecedented opportunities” to invest in themselves. Remark that in 1990.111 statements in 1986’s A Commitment to People. This kind of banking involves a “new contract” with the employees and replaces the “paternalism of the past”.as in 1990 . In 1996.

112 is maintained as long as the latter are ultimately able to contribute to the bank’s bottom line. The bank’s commitment to provide employees with rewarding careers is reiterated. it is presented as a step in the bank’s commitment to employees. that the bank prizes their loyalty and skills and is committed to their personal and professional development and well-being. but maintains the emphasis on mutual loyalty between the bank and employees and the bank’s commitment to their professional development. Paternalism (as the 1986 quotations implicitly declare) is considered in 1996 to be a thing of the past. In brief. . as well as some continuities. 1996 brings some major discontinuities with the past. therefore. Only when the employee takes responsibility in ensuring that his/her relationship with customers “consistently contributes … to the profitability of the enterprise”. As the IFL gets completed and operational. neither does it revert to the normative realm. which in 1994 is again reiterated in terms of providing the latter with “excellent opportunities for personal and professional growth”. in 1986. The bank’s commitment to employees does not appear as a matter of social responsibility. BMO introduced mbanx which is portrayed in all BMO’s publications as a totally new concept in banking and as a revolutionary step in the bank’s history. Only those employees who are able to contribute to customers’ well-being and. It further indicates that it offers employees the opportunity for “a full and rewarding career”. the statement of vision and values makes no indication of the employees’ special status. In 1990. the bank’s commitment to employees indicates that the latter are “special”. It must be noted that in 1996. but that is done under the terms of a new contract between the two parties whereby the employees take responsibility for investing in their skills and for acting as entrepreneurs with their skills as their capital. Rather it is based on a calculated exchange relationship. will the bank fulfill its commitment to the employees. will find employment under this new contract. Its commitment to employees is contingent on the employee-customer relationship. Working under such conditions is said to be “rewarding” which implies a fulfillment of the bank’s 1990 commitment to provide employees with challenging and rewarding careers. the bank’s profitability.

and that support should never be abused nor taken for granted. Commitment to the community -From A Commitment to People: We are committed to the communities where we live and work: We have traditionally observed the responsibilities of corporate citizenship. and the interests of consumers and local businesses in communities nationwide. -One troubling development during the course of the last decade has been the lapse in ethical standards and behaviour experienced in the financial world. These actions have been rightfully held up to public censure. This we will achieve by serving the public interest. -Communities look to us for quality services unique to their needs. Our staff voluntarily contribute time and talent to community activities. -From Values We do business with the permission of the communities we serve: Communities expect us to consistently demonstrate social responsibility as an employer and as a corporate citizen.betrayals of values that have always been as essential to success in business as they are to our personal lives.Our Philosophy: We will be involved in the communities we serve. health care and sports programs. and will always demonstrate high standards of social and corporate responsibility. research and education. civic projects. and their unfortunate consequences underscore the need to earn and to preserve the trust of the community. 1986 1989 1990 1992 1994 . Failures of ethical conduct in the investment industry have been especially conspicuous for the magnitude of the sums involved. -We have decentralized so that virtually all our small business loans are approved within the communities where they operate. and for a commitment to the public interest. -From Vision. cultural. responsibly and in the best interests of the community. cultural programs. and provide financial and other assistance to educational. -We are an active and responsible member of every community where we do business. …They were all simply breaches of basic trust .113 Commitment to the community Table 15. supporting charities. greater responsibility will fall on financial institutions to impose disciplines on themselves and to demonstrate consistently that the powers granted to them are being used prudently. all businesses operate only with the support of society. Ultimately.making the community a better place to work and live. We will encourage our employees to participate in community activities. -With added powers.

BMO’s commitment to the “communities where we live and work” is expanded upon.114 1996 -Let me review briefly some key achievements of this strategy in the last five years and in 1994 in particular.or even the whole corporate sector . While it is not realistic to expect that any one company . productive capacity and policy options of society as a whole. cost-efficient financial services for our clients we help them to prosper in their endeavors. we believe that corporate responsibility and corporate profitability are not alternatives. The bank contributes in two ways: as an institution. and the time and effort freely offered by our employees were at least equally significant. creating a major market for our suppliers and investing in the skills and experience of our employees. Each is ultimately made possible by the other. while earning a steady competitive return for our shareholders. We did that to bring the full strength and reach of a major bank into communities where real decision-taking authority lies with people who live and work in the community they serve. Our customers have rewarded us with substantial growth in market share. We have customized Personal and Commercial Financial Services to meet the unique needs of 234 communities across Canada.can completely fill the gap. The first and most fundamental of them is simply to run a profitable enterprise. And by doing all these things we add significantly to the wealth. but it has never been more relevant than today. and as staff vouluntarily participate in . last year the Bank of Montreal Group of Companies gave nearly $17 million in donations and sponsorships. Needs are growing steadily as governments strive to put their financial houses in order. In the final analysis. We also pay taxes and levies to all levels of government which in 1996 once again exceeded the total earnings available to our shareholders. This is one of the oldest traditions of the Bank. It involves a “traditional” adherence to corporate citizenship and the support of a variety of charities and social programs. Description and Analysis In A Commitment to People. We acknowledge and welcome the responsibilities that come with a franchise to do business. money and ideas to the common cause. but interdependent and mutually reinforcing factors in business success. By providing high-quality. -Sensitivity to our customers' needs is paralleled by our response to the rising standards that communities are setting for corporations everywhere. -Such a bank is an immensely valuable partner for the communities in which it does business. -We also fulfill our responsibilities by contributing time.

we can see that continuity is maintained with 1986 in the emphasis on “the communities we serve” and on the bank’s pledge of social responsibility.115 community activities. However. we see the bank as responsive “to the rising standards that communities are setting for corporations everywhere”. Community. In fact. in the MTSs. In 1990. and the bank’s most fundamental responsibility in this regard is “to run a profitable enterprise”. One of the bank’s achievements mentioned is the customization of services “to meet the unique needs of 234 communities across Canada”. In addition. there is an additional reference with Barrett on the bank’s commitment to provide communities with “services unique to their needs”. they can only operate with the support and trust granted to them by the community. In 1996. making a profit is portrayed as meeting community-set standards of corporate behavior. Not only businesses ought to behave in socially responsible ways. and the bank’s commitment to its four stakeholders was re-affirmed. “communities” and “customers” seem to be used interchangeably as the last sentence in the quotation indicates: “Our customers have rewarded us with substantial growth in market share”. 1994. This is one of the few references made during Mulholland’s time to BMO’s role in particular towards the community. With Barrett. How making profits contributes to . In other words. was the year in which the bank’s achievements since Barrett became chairman were reviewed. In this case. the emphasis shifts to BMO in particular. this quotation shows a narrower view of the community (“the communities where we live and work”) than some of the other quotations that refer to the community in a broader sense. here. This latter aspect of the bank’s commitment to the community will continue into later years with Barrett as the quotations in 1992 and 94 indicate. The second quotation in 1986 and the one in 1989 attest to this fact. No mention is made of the responsibilities of business firms in general towards the community. This gives a normative overtone to the need to make profits. Mulholland’s discourse places more emphasis on the social responsibility that financial institutions and businesses in general have towards the community. refers to society in general or possibly to the public. as mentioned before.

an issue which appears in discourse quite often starting in 1990. which “in the final analysis”. BMO is said to be “an immensely valuable partner for the communities in which it does business”. By the end of the period under study. Furthermore. References to BMO’s exercise of social responsibility are scarce and the quotation from A Commitment to People is one of them whereby BMO’s commitment to the communities “where we live and work” is articulated. The normative and instrumental requirements become hereby confounded. 5. This emphasis on business firms’ general responsibility is dropped with Barrett.116 different segments of the community (including clients. but we find continuity in articulating BMO’s commitment to the communities where the bank does business. the bank is said to be fulfilling a responsibility constituting “one of the oldest traditions of the Bank”: “contributing time. namely the bank’s serving the unique needs of communities. 1996 is the first time when a direct and explicit relationship is established between “corporate responsibility” and “corporate profitability”.f The Identity Paradox Before moving to a discussion of the identity themes. After outlining a series of bank achievements and undertakings. we see that with Mulholland. the bank believes are not “alternatives. but then again. However. It relates to the bank’s discourse on identity in .2. money and ideas to the common cause”. In the second quotation. employees and society as a whole) is then exposed. I would like to present an interesting aspect of BMO’s self-reference which emerged from the data and which was alluded to several times in the analysis. In brief. shareholders. This appears as an identification-inducement tactic. the bank contributes as an institution and through its employees. in terms of corporate citizenship. corporate responsibility and corporate profitability are said to be mutually reinforcing factors in business success. As was mentioned in 1986. an additional dimension appears as part of the bank’s commitment to communities. emphasis is placed on social responsibility of businesses in general towards the community at large. with Barrett in 1990.2. but mutually reinforcing factors in business success”. but on a community scale.

of which our new mbanx brand is the symbol. Paradoxical identity attributes -It will continue to be necessary to maintain an up-to-date technological capability. there are a few fundamentals which do not change and of which we need to remind ourselves from time to time. It is clearly in our interest to uphold these values. stability and sustained returns can only come from an open and inquiring mind. -…our North American strategy is both an exhilarating new departure. and we have put it at the core of our values. and to continue to search for ways to add value to the service we provide to our customers. It's an old tradition . to enhance the professional skills of our management and staff. Together they equal the reinvention of the Bank. -Although we have kept pace with the times. Our depositors and our shareholders rightly prize stability. our values have remained constant and untarnished. to maintain a flexible and adaptable structure. This is the tendency for apparently contradictory identity themes to be addressed simultaneously or sequentially in the bank’s discourse. 1989 1990 1993 1995 1996 1997 . but it is also a responsibility which comes with more than 170 years of honorable service. Yet as always amidst all the changes there will be a powerful element of continuity. By identifying those opportunities and incorporating them into a prudent. -Banking is an inherently conservative business. and to seize the opportunities it creates. and success in this era requires the ability to accept and embrace change. to improve productivity.and a real first. and not a particular identity theme. accountability and respect for human beings that permeate all our strategies will not change. Addressing a principle occasions the evoking of a divergent principle which is often made to appear as complementary and not contradictory. -In this flux we have two fixed points. The tension between the maintenance of order critical to the care of other people's money . Remark the quotations in Table 16: Table 16. First and foremost amongst these fundamental values is the integrity of the institution and its people. Amidst all of this change. But the central paradox we face is that as the twentieth century ends. The first is the vision and values we adopted in the Bank's 1990 Strategic Plan…. and a natural development from our proud Canadian past.117 general. -All these responses to change are significant in themselves.and creative innovation must be skillfully managed if success is to be sustained in a financial services institution. -We are living in a time of great change. The values of integrity.The second fixed point is our determination to take nothing for granted. with immense promise for all our stakeholders. however. These are all part of the ongoing challenge of doing business.

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balanced strategy, the management of your Bank believes it has set the course for the sustained building of shareholder value for many years to come. Description and Analysis The above table demonstrates how seemingly contradictory issues are addressed together. For example, in 1989, after Mulholland addresses “all of this change”, he affirms that there are “a few fundamentals that do not change” at the bank. Similar statements are made by Barrett in 1990 and 96. For example, in 1996, “amidst all the changes” is followed by a reference to “a powerful element of continuity”. Almost all references to change at the bank are accompanied by references to continuity or to prudence and stability. Although in a few of the above references, the two seemingly opposed principles (change on one hand and continuity and stability on the other) are simply juxtaposed, in most occasions, we see an attempt to reconcile the two principles. For example in 1993, the North American strategy which is said to be an exhilarating new departure is also presented as a natural development from the bank’s past; in other words, the departure does not constitute a break with the bank’s past general practices. The move to reconcile stability and continuity with change is also apparent in 1995 and 97. In 1995, Barrett addresses the tension that exists between “maintenance of order” and “creative innovation, and declares that this tension can be skillfully managed. If we break down the argument in 1995 to its components, we see the following declarations: we need to provide stable and sustained returns come from innovation stable and sustained returns will only

creative innovation can be skillfully managed to provide such

stability. Similarly, in 1997, the argument seems to flow as follows: change creates opportunities opportunities have to be prudently incorporated in strategy this

strategy helps build sustained shareholder value. Implicit in these statements is the assertion that these seemingly divergent issues are not contradictory, but complementary. There is a move to reconcile the need to change with the need to maintain stability.

-

x - x -

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In this section, prominent identity themes were presented and analyzed for each of the banks. The next section provides a discussion.

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6. DISCUSSION

In this section, a discussion is provided for each theme separately as each theme has some particularities which may not be relevant to other themes. A general discussion of the bank’s identity then follows. The discussion parts relate the findings of this study to extant literature where applicable. These steps are followed for RB in the first section, and for BMO in the second. The third section provides a general discussion of both banks whereby similarities and differences between the two banks are elaborated on, and a number of general conclusions regarding organizational identity and its evolution are presented.

In other words. Consumer deposits are said to come to the bank and stay with it. 1991) or the bank’s reputation (Whetten. describing it as distinctive. it moves from the realm of an actual self-defining identity attribute to a projected identity attribute to be achieved through a number of measures taken at the bank. 1994). In other words. 6. The evolution of the theme with time and the aspects of identity it reveals differ from theme to theme. RB would not be able to continue defining itself as distinctive in terms of quality service and get confirmation for this definition from the different audiences to which its statements of identity are destined. and a reason for everything else the bank does. The bank’s image with the public (Dutton and Dukerich. .1 QUALITY SERVICE TO CUSTOMERS The fading of identity with the fading of image The study period opens with RB placing the most emphasis on its quality of service attribute.1. As RB starts to lose its supreme position among banks in terms of distinctive quality service. and profits are considered an indication that value is being provided in the eyes of the bank’s customers. A big part of the MTS in 1985 is devoted to the quality service theme.121 6. Ultimately identity presentation by an organization has to be confirmed by the external world (Levitt and Nass. the latter is framed as a goal to be achieved. I will discuss each of the five RB themes presented before. The following discussion emphasizes the particularities of each of the five themes that have emerged from the data and relates the findings to extant literature where pertinent. Lewis and Mischel.1 ROYAL BANK In this section. constant. 1992) act as a mirror providing the organization with a reflection that it uses to adjust the way it sees and defines itself.

it is not sufficient that the bank rank highly. it desires to be the “clear” leader in quality service (1991). In addition. However. A senior executive is appointed with responsibility for quality endeavors at the bank. implicit and explicit causal links are made between quality service and profits at different occasions (for example in 1985. a tradition. quality service is said to be a source of competitive advantage and both. In fact. When its continued efforts failed.122 From a core identity attribute to a projected attribute to a peripheral attribute Yet. In addition. it reformulated its objective in more achievable terms . Figure 1 indicates the issues that are said to revolve around quality service in 1985 and 1986. How can the bank’s preoccupation with quality service be explained? Quality service. more effort is placed into learning about customer needs and wants. RB does not simply give up its self-definition in terms of distinctive quality service.and dropped its emphasis on quality service being a desired identity attribute. It appears in the bank discourse as a sine qua non of both: its financial success and its distinctiveness. A core theme is one that is central and is densely intertwined with other aspects of the organization (Tannenbaum and Hanna. and a distinctive trademark of the bank (1985 and 86). So important is this attribute that even the smallest gain in quality service ratings is celebrated (1992). as the bank’s continued efforts to gain their lost position and rank do not lead to the hoped for results. the bank devotes enormous effort to recapture its lost position as leader in quality service.1985). . was a constant. quality service is a core identity theme (as opposed to a peripheral one) and it is difficult for an organization to let go of its core attributes. Losing a long-held supreme position over competitors is hard to accept. 88 and 94).here in some quantifiable term .a projected identity attribute . it is indicated. the bank strives to not only meet customer expectations. discourse about this factor wanes. but also exceed them. Attention gradually shifts from the goal of being in a leadership position in quality service to a certain measure of customer satisfaction. The organization had set for itself an objective . When its distinctiveness in terms of this attribute fades.and had engaged in activities aimed at attaining the projected attribute.

123 From a normative theme to an instrumental theme As the bank loses its supreme ranking among other banks in terms of quality service. and continued efforts to re-establish that rank do not seem to lead to a clear .

124 Figure 1: Quality service as a core theme Prudential management Fee-generating services Staff training Quality service to customers Product innovation Productivity improvement New technology .

125 Figure 2: Quality service developmental trajectory Lower quality ratings in surveys Distinctive and central attribute Projected distinctiveness. central attribute Peripheral attribute Interpretation of lower ratings Failure to achieve clear supremacy despite numerous efforts Figure 3: Quality service: from normative and core to instrumental and peripheral theme Instrumental Theme Periphery Normative Theme Core .

In fact. fee-generating ability emerges as a more central theme in the sense that other procedures and undertakings start to revolve around it. fee-generating ability becomes more entrenched in the bank’s discourse on identity. In fact. Rather than being pursued for its own value. makes acquisitions in businesses that are largely fee-based. pursued to achieve some other purpose which has higher primacy (in this case. achieving higher revenues and income). In the later years. quality service becomes an intermediary goal.2 FEE-AND-INCOME GENERATING ABILITY From a peripheral attribute to a central identity attribute The evolution of the fee-generating ability theme provides an interesting contrast to that of the quality service theme. the theme seems to be more at the periphery than at the core of the bank’s self-definition. Furthermore. At the end of the period. As the bank projects that fee-generating services will increase in importance in the future.1. The loss of distinctiveness precedes the fading of the theme’s centrality. In other words. quality service evolves from being a normative theme to being an instrumental one. Although fee-generating ability appears to have some significance in 1986. Figures 2 and 3 illustrate the evolution of the quality service theme. when distinctiveness in customer service cannot be claimed anymore. generates an increasing proportion of revenues from fee-based businesses. As the bank moves into new areas of business such as investment management and trust company operations with its acquisitions of Dominion Securities and Royal Trust. these businesses make increasing contributions to the bank’s total revenues as the years go by. Meanwhile. such as the bank acquisitions. substantive attributes”. Towards the end of the period. feegenerating services are said to play a vital role in building strong relationships with customers. 6. like other spheres of activity at the bank in 1986.126 distinctive positioning. quality service starts to fade in the bank discourse. . the emphasis on fee-based businesses becomes more pronounced. quality service corresponds to what Gustafson and Reger (1995) call “tangible. it is not a theme that appears frequently in the MTS. fee-and-income generating ability appears as a mark of distinctiveness at the bank (1996 and 97). nor does it seem to be of centrality before 1994.

Increasing centrality implies that the theme moves from the periphery to the core of identity. It also implies that the theme becomes more intertwined and interrelated with other themes articulated at the bank (Tannenbaum and Hanna. A shift in the constellation Fee-and-income generating ability increases in centrality with time. quality service was losing its centrality in the bank’s discourse.127 and achieves an exceptionally strong position in doing so. Table 17 provides quotations indicating the points in time at which each of the two themes appeared as prominently central themes. this identity theme becomes institutionalized. . Evidence of centrality is provided by quotations on different issues revolving around the given (central) theme. Figure 4 illustrates this evolution. as different undertakings and achievements bring it closer to its stated projected identity attribute. thus narrowing the gap between desired and actual identity. 1985). At the same time that fee-generating ability was emerging as a more central theme. to a realized and central attribute to a distinctive attribute of the bank. Fee-and-income generating ability thus progresses from a projected attribute. The fee-and income generating ability theme follows an opposite trajectory to that of quality service to customers. The process of institutionalization is an incremental one.

Mergers and acquisitions .Higher proportion of revenues generated from fee services -Exceptional strength achieved .128 Figure 4: Fee and income generating – ability developmental trajectory Projected attribute Realized and central attribute Central and distinctive attribute .

1994 .Expanding into . 1993 . It is the basic reason for everything else we do.new service areas is vital to one of our central corporate goals: to be recognized by our customers as a Expansion consistent leader in the value of efforts our products and customer service. Bank’s stated 1990 . 1995 . 1985 . fee-generating services will increasingly play a vital role in helping to build strong.Our three main acquisitions this year… all fall in this high potential segment (of high ROE.Our focus is on securing consistent superior returns for our shareholders and all our initiatives are undertaken with that goal in mind.Serving customers well remains at the heart of RB’s Bank procedures and mission.the most basic element of customer service for a financial intermediary. and to build on that strength we must continue to expand our range of services to meet growing customer needs. fee-based businesses). We will achieve this by continuing to improve service quality… 1992 .As well. cannot be assumed. or manufactured.Increased revenue generation from traditional and emerging businesses is our top priority.129 Table 17. it is the inescapable relationship between sustainable earnings and credit risk. Central themes and their constellations Central theme Issues revolving around the theme Quality service fee generating ability relationship Quality service Fee-and-income generating ability Prudential management 1986 . undertakings 1986 . 1985 . lasting and profitable relationships with customers.Increased revenue generation from traditional and emerging businesses is our top priority. Commitment to quality service is a distinctive RB trademark.. It must be earned by a track record of prudential management . 1996 .Confidence.For RB an absolutely top priority continues to be priorities improvement in the quality of our service. 1994 .If there is one lesson we will take away from this recession. in the end..Sound credit risk and loan portfolio management are fundamental to the profitability of the bank. .

We can tell that a theme increases in centrality as different spheres of activity revolve around the theme in question. A central theme draws other themes to it that revolve around it and which are coherent with it. Coherence thus can be found among a given core identity attribute. . other issues such as prudential or risk management. which initially revolved around quality service to customer. Like other aspects of the bank’s activities at the time. the stakeholders who have the most interest in the particular identity attribute. there is a shift in stakeholder focus from the customer to the shareholder.130 In 1986. bank procedures and undertakings. In other words. Let us refer to an identity attribute along with the different spheres of activities that revolve around it and are coherent with it as a “constellation”. the customer is a theme that is more coherent with quality service. Remark the frequency with which these two stakeholders are mentioned in the first and last two years of the study in the message to shareholders: Word frequency count Client(s)+ Customer(s) Shareholder(s) 16 2 14 3 2 8 8 9 Year 1985 1986 1996 1997 In fact. are decoupled from this theme in later years and associated with the fee-and-income generating ability. It is also interesting to note that with a shift in centrality from quality service to feeand-income generation. fee generating services were presented as one of the elements leading to building strong relationships with customers. in 1994. and the peripheral activities undertaken to reinforce the actual and/or desired core identity attribute. In contrast. quality service is now portrayed as revolving around the central theme of revenue and fee-generation. expansion efforts. As an identity attribute changes in centrality. we see a shift in the different constellations. increased revenue generation is said to be achieved “by continuing to improve service quality”. as the shareholder is more coherent with income generating ability. as well as the bank’s stated priorities. fee-generation revolved around the customer service theme. Similarly.

131 To a certain degree. fee-and-income generating ability does not seem to attain the normative status that was once an aspect of the quality service theme.becomes institutionalized. Furthermore.1. reflecting the organization’s undertakings and the way it has adapted to its environment. There is a self-definitional change from “a bank” (1985) to a “more broadly based financial services enterprise”(1988) to being one of the largest “providers of integrated financial services”(1993) and to having a “leading position in… most financial services markets” (1996). What was a projected identity attribute (ability to provide a full range of financial services) eventually becomes an institutionalized identity attribute as the bank makes a number of acquisitions in different areas of the financial services sector (following government deregulation). it appears frequently in the bank’s discourse. with quality service moving from the center to the periphery and fee generating ability moving from the periphery towards the center of identity. it indicates that it would like to become this country’s leading provider of financial services and later that a fundamental goal is achieving excellence in a “full range” of financial services (1988). the self reference as a financial institution . is a process that occurs with time. states its objectives as including increasing revenues from emerging business. It is not portrayed as a tradition or as a value. With time.3 BANK-FI The institutionalization of the FI attribute When the study period opens. as Selznick (1957) indicates. “core” businesses are later referred to as “traditional” and the “emerging” label which . and derives a bigger proportion of its revenues from such businesses.as opposed to a bank . However. While the first theme fades. 6. As mentioned previously. Only time can tell whether it will be expressed as a normative theme in the future. we witness RB defining itself as Canada’s largest bank. this change is accompanied by another shift: that in the reference made to the services the bank provides. In 1986. Institutionalization. the second gets institutionalized with time and appears more frequently in discourse. quality service and fee-and-income generating ability follow opposite trajectories.

Deregulation allowing banks to expand range of services Bank Financial institution - Acquisition of DS Acquisition of RT Increasing revenues from “emerging” business Core businesses Traditional and emerging businesses Traditional and (regular) businesses Royal Bank Royal Bank Financial Group .132 Figure 5: FI theme developmental trajectory .

Increasing complexity in identity FI Bank .133 Figure 6.

are addressed in 1997. Instead. However. With respect to the membership group evoked. other measures of size. RB addresses the criterion of “total assets”. a shift in an identity attribute is accompanied by a shift in the constellation of which it is a part. not evoked during the earlier years such as revenues and net income. In the earlier years of the study period. The bank consistently evokes some measure of size along which it can claim a distinctive rank within a certain group. So for example. This is illustrated in Figure 5. it can be noticed that RB addresses those measures that allow it to claim distinctiveness within the membership group. this criterion is dropped in 1997 when it was in a tie with CIBC for first rank in terms of asset size. RB extols its rank on a North American scale: .1. some change can be noticed over time with respect to two aspects of the bank’s rank in terms of size: a) the particular measure of size the bank evokes and b) the particular membership group which is used as a reference for the comparison. As the transition occurs. Rather. As mentioned before. There is an increase in identity complexity. while in 1991 and 94. RB still includes banking operations. Figure 6 shows the “bank” identity as subset of the “FI” identity. With respect to the measure of size. 6. the process of institutionalization of the FI attribute is incremental. we notice a shift with time as well. as a financial institution. rather than a configurational shift in identity.134 accompanied new businesses in 1994 is dropped in later years likely indicating that these businesses were considered to be regular at the bank by then. The “Royal Bank” name also gets changed to “Royal Bank Financial Group”. Furthermore. RB moves from considering itself as a bank (1985) to a broadlybased financial services enterprise (1988) to a provider of integrated financial services (1993). Here again.4 LARGE A shift in the attribute and the membership group and a continuity in distinctiveness Evoking its distinctive size is a constant in RB’s discourse over the years. RB does not cease to be a bank in order to become something different.

In fact. This is consistent with Elsbach and Kramer’s (1996) findings which indicate that organizations resort to selective categorizations highlighting alternate identity attributes or alternate comparison groups that allow them to portray themselves in the most favorable light. as was indicated previously. Within this group. only membership in the Canadian financial institution group is evoked. royalty is normally charged with leadership functions. A leader stands out from the other members of a group. references to its rank on a North American scale are dropped in later years. 1995). When measured by assets. is associated with other areas of centrality at the bank (such as quality service in 1986. both symbols associated with leadership.includes a lion and a crown. and ability to generate high earnings in 1997). . In fact. The name “Royal” Bank has connotations of leadership. its member companies. The bank’s symbol . is intertwined with a number of symbols and emblems at the bank. Leadership is not only central. and is attributed to the bank’s partners and employees. and employees in terms of leadership in some aspect. worn by many RB employees also consists of the “Leo”. The corporate pin.135 “fifth largest bank overall in North America” in 1985. but also a distinctive attribute. the leadership theme.and what Interest magazine calls their “public identity” .1. RB can still claim its distinctiveness in terms of size. the Canadian banks have been on a downfall (Financial Post. the last few years have seen a wave of consolidation in the North American financial industry and have been marked by huge mergers and acquisitions. “Leader” and its visual counterparts are floating symbols that get attached to a variety of aspects of the organization. 6. and “third largest bank in North America” in 1990. However.5 LEADER Change and continuity in leadership: Leadership as an umbrella theme That leadership is a central theme in the RB’s self-presentation is indicated by the fact that this theme appears constantly in the bank’s discourse. July 29. In the final years of the study period. It appears essential for the bank to cast itself.

its vision and objectives of being a leading Canadian financial institution at home and abroad are expressed. In contrast. broad range of bank-based services (1989). For example. 2000). different aspects emerge. 90 and 92. and ROE and HR practices (1997). leadership in profitability is said to be desired initially (1988) and to be achieved in later years (1997). As mentioned above. 89. By talking about itself as a leader. service quality. market share position (1992. 89 and 90). In other words. They include: size. scope and profitability (1988). U. service quality (1991). we might question what being a “leader” means. A similar argument applies to areas where leadership is said to have been already achieved at the bank.S. foreign exchange market (1989). in 1986. When the bank is more specific with respect to the areas in which leadership as an objective is desired. although the aspects that confer distinctiveness on it may change with time depending on the context. While the aspect of the bank to which the leadership label is applied changes with time. “leadership” functions as an umbrella theme (Figure 7) which can group a variety of aspects of the bank because it is ambiguous. References to specific areas of achieved leadership include: system and technology (1985. 95 and 96). the label itself remains constant providing some continuity in the organization’s selfreferential discourse (Gioia et al. the leadership label is a general one which the bank applies to different central themes. investment management (1990).136 Nevertheless. A “leading institution” remains a vague term since it does not apply to a particular aspect of the bank in which leadership should be achieved. -x–x- . customer satisfaction and profitability (1992). Leadership in quality service is generally absent in later years. Initially leadership in quality service is said to be achieved (1986) and later it is said to be desired. and the consumer business (1996). the bank can always appear as distinctive.

Leadership as an umbrella theme Leader Fee – and – income generating ability Quality service New technology HR practices .137 Figure 7.

but one implying increased complexity. The bank’s leadership position is maintained. Thus we see a transition in the self-definition from a bank to a financial institution. The distinctive size attribute endures since the bank resorts to selective categorizations allowing it to claim a superior rank with respect to measures of size and comparison groups that shift with time. not a radically different meaning. With the decline in its distinctiveness. It is minor and incremental when measured from year to year. 1985). the labels themselves can shift with time. and more as an instrumental and peripheral one. the change in the themes is often evolutionary as opposed to revolutionary (Tushman and Romanelli. In summary. Conversely. Thus. We see that by relying on the ambiguity of symbolic resources such as the “leader” label. RB is able to portray its present and projected identity as consistent with past attributes.138 What general inferences might we draw about RB’s identity themes from the previous discussion? The discussion indicates that both continuity and change in identity themes occur. There is. Nowhere in the case do we see a major break in a theme . quality service to customers loses its distinctiveness as the bank’s image with the public declines relative to its past image and relative to other institutions’ image. While the label itself provides continuity. this theme appears less as a normative and core theme. the fee-and income generating ability theme increases in centrality and distinctiveness as the bank projects this ability to play a more important role in the bank’s operations and as the internal and external environments allow the bank to narrow the gap between the projected and the attained attribute. The first is the degree of distinctiveness and centrality of the theme. The change or persistence in identity themes takes place at different levels. a persistence in the bank’s claimed distinctiveness in terms of its size. however. This change in the label is also accompanied by a change in the meaning attached to it: in this case. Continuity and change can also occur at the level of the meanings that are attached to the labels by which the bank defines itself. In addition. but this position differs in meaning in 1997 from that in 1986. the aspects in which the bank is a leader change with time.

139 from one year to the other. None of RB’s identity articulations show an abrupt severance with the past. although the changes follow an evolutionary pattern whereby minor changes can be observed from year to year. Some themes (like distinctive quality service) are left to fade as management addresses them less often or less forcefully in discourse. Other themes (such as fee-and-income generating ability and FI) build slowly into a central position. but over the years. . the aggregate magnitude of the shifts is significant. The pace of change is slow. the magnitude of the change for these three themes is quite large when the difference between the theme at the end of the study period (1997) and the same theme at the beginning of the period (1985) is measured. Yet.

140 6. 6. This is not surprising given Barrett’s views of the past traditions. traditions that seemed to be entrenched at the bank.2 BANK OF MONTREAL In this section. such references are basically absent from the MTSs thereafter. IFL as a first facility of its kind in Canada (1994). the “first” theme is one that is used to refer to two aspects of the bank’s identity (Figure 8). Starting in 1993. At different occasions.1 FIRST Continuity and change in the “first” theme: First as an umbrella theme As was shown in the previous section. he declares the bank to . Barrett derides a number of the bank’s past attributes and practices. all references to “first” are used to portray one innovation or another at the bank such as making tools of financial planning available to Canadians for the first time (1994). Figure 8. References to first as oldest get aborted while references to first as innovative increase in frequency. one that undertakes important moves ahead of its competitors. in an article entitled Moving into the lead. even some of its oldest ones. in addressing employees through articles in the FirstBank News.2. first NAFTA bank (1996). “first” is used mainly to denote bank innovation. I provide a discussion of each of the BMO’s identity themes analyzed in the previous chapter and I conclude with a general discussion of BMO. In later years. For example. The two meanings of the “first” theme First Oldest Innovative While the bank’s age and history receive mention in 1991 and 1993. its being the oldest bank in Canada and its being an innovative bank.

At several occasions. the first corporate built facility of its kind. In 1996. it remains a sign of distinctiveness. it is extensively used in association with different aspects of the bank. These aspects described as first or innovative are self-defining attributes. “First” is intertwined with a persona for the bank. the launch of the IFL. “First” is a floating theme which gets associated with bank publications. The label persists although the meanings attributed to it (Gioia et al. 1995-96). It is also an umbrella theme that can group a number of other attributes of the bank (Figure 9). a sense of continuity. commitment to customers). can be maintained. BMO is said to be the first NAFTA bank. In 1994. In 1993. products and services as well as with other self-defining themes. Remark that regardless of the meaning which is attributed to “first”. For example the employee house organ is called “FirstBank News” and a number of the bank’s mutual funds have apellations including the “first” label. he talks about the need for the people at the bank to contribute to the transformation of BMO into a creative and “learning organization” (FirstBank News. July/August 1992). is announced (which is an instance of the bank’s fulfillment of its commitment to employees). 2000) and the aspects of the bank with which it is associated change with time. the bank’s newest first (North American scope) is announced. BMO cannot be surpassed by any .e. By relying on the ambiguity provided by symbolic resources (Christensen and Cheney. By using this label the bank maintains a sense of continuity over time. This label is also associated with other attributes which are themselves self-defining for the bank. regardless of the meaning that “first” subsumes in the MTSs. 1994). However. As the oldest bank in Canada. In the same year. making tools of financial planning available to Canadians for the first time is extolled (which is an indication of BMO’s “reputation as a bank that …is sensitive to the evolving needs” of customers – i. despite change.141 be adopting a “new system” where “leaders inspire people” as opposed to the bank’s past “system where bosses gave orders and workers carried them out” (FirstBank News.

142 other bank. services and practices ahead of competitors. . As an innovative institution. BMO introduces new products.

143 Figure 9: “First” as an umbrella theme First Introduction of products and services (Commitment to customers) North American (and NAFTA) IFL (Commitment to employees) .

The best example of this is provided in 1995 when Barrett declares: “The second fixed point (in the flux) is our determination to take nothing for granted… We seek continually to redefine our business systems and our workplaces. none provides the possibility of as much continuity and as much change simultaneously as the characteristic of innovation. creative and a learning organization establishes the ability-to-change as a constant self-defining attribute. “creative”. it allows the organization to continually redefine its systems and workplace. Based on the evidence from BMO.” While the determination to take nothing for granted is a fixed and persistent attribute. The latter’s synonyms of “innovative”. one which allows it to undertake several changes without breaking. In 1995. I propose that such an enduring attribute is the ability to innovate. Continuity can thus be maintained in the self-definition while the organization pursues a multitude of changes in different aspects of the bank. creative and learning organization. By defining itself as innovative. one that defines the bank as a learning organization. BMO undertakes changes in different areas and of different magnitudes without there being a change in its self-definition. Gustafson and Reger (1995) posit that an organization operating in a highly changing environment needs an enduring and intangible attribute that allows it to achieve distinctive advantages through a variety of activities rather than through a single one. In 1992. and in 1996. 1998). Being innovative. it is indicated that fresh ways to practice the bank’s values towards its stakeholders are continually searched for. the bank extols a number of innovations it had undertaken with respect to its dealings with small business customers. Of the different characteristics that an institution can attribute to itself. “bank that leads change” appear quite frequently in the MTS starting in 1992. By defining itself as an innovative. . the bank is said to be preparing a new contract with employees.144 Innovation as a fixed and persistent theme that facilitates change The bank’s innovative side is referred to with several terms in addition to “first”. BMO assumes an expansive identity (FoxWofgram et al.

market would play an increasingly important role for Canadian firms. market. Along with other complementary moves.S. (In 1988. banks . Mulholland praises the ability to lend substance to the recognition that the U. An article in the Financial Post (July 29.S. anticipating the Canada-U.S.an indirect reference to the impact they have had on the bank’s identity.” We also know that other Canadian banks could not boast of owning retail operations in the U. 31). 1995. The move.and they should have… The Bank of Montreal has been the only Canadian bank to acquire a U.S.S.S. he declares the following in the MTS: “While it required no special predictive powers to appreciate the current importance and future potential of the United States market. Mulholland’s belief that our future prosperity would depend upon a strong presence throughout North America. underscoring Mr. as BMO was able to. it has positioned us well to benefit from an active and growing economic relationship with the United States. in the acquisition in 1984 of Harris Bankcorp of Chicago. to be able to give substantive expression to what we saw as the future direction for our two countries. Mulholland Retires (p.”) We know that he lent substance to such recognition in 1984 by spearheading the acquisition of Harris Bank in the U. which tells us that Mulholland’s “boldest strategic initiative was the 1984 purchase of Harris Bancorp.145 Personal impact on organizational identity In some occasions when major successful changes and innovations undertaken at the bank are mentioned. Inc. seven or eight years ago when share prices were down and bought up U. Big Six face onslaught by U.S. it is another matter to lend substance to such strategic views. of Chicago. working and trading together. In the 1989 annual report there is a page entitled W.S. . banks) quotes an analyst with Nesbitt Burns as saying that “(The Canadian banks) could have marched into the U. retail bank”. For example. gave BMO the strongest foothold of any Canadian bank in the U. both to Canada and to the Bank. Free Trade Agreement four years later.D.S. We were fortunate. the chairmen make implicit references to these successes having been achieved during their mandate .

the year Barrett took over as chairman. as well as by the business press.an aspect which became self-defining.S”. point out to the role that the two chairmen had personally played in shaping some major innovative aspect of the bank . references to its being a North American bank do not become pronounced before 1993 when Vision 2002 is articulated. Barrett indicates that the measures taken at the bank to serve small business customers are together equal to the re-invention of the bank in 1992. the acquisition of Suburban Bancorp of Chicago.146 Similarly.2. In 1994. The article goes on to say that “(Barrett) says that when the bank looks at executive prospects it focuses less on simple job performance than in the past. -traits which.S. BMO established a reputation as a bank that leads change. In 1994. July 1. 1995). narrows further the gap between actual and projected identity. and now considers other “soft” attributes such as curiosity.2 NORTH AMERICAN Institutionalization of the North American theme Although BMO had retail branch operations in the U. This customer segment became a major target of the bank when the bank announced its strategic plan in 1990. indicates that Barrett’s “willingness to lead the pack became apparent in 1991 and 1992 when B of M regularly lowered interest rates week after week in advance of competitors. and passion for learning makeup”. This simple strategy boosted the bank’s image as the consumers’ friend. An article entitled B of M’s Matthew Barrett: A charismatic decision maker who loves to win (FP. are parts of Barrett’s own 6. “Canada and the U. The vision itself is said to make the bank the first full-service financial institution to span North America. Barrett indicates that in five years. These five years correspond to his mandate as chairman. This vision acts as a projected identity for the bank and is attributed the force to make BMO a North American institution. These claims made by Mulholland and Barrett. not coincidentally. as of 1984. References that appear thereafter to the bank’s geographic posture revolve around “North America” or both. Other bank . and reinforced the view of Barrett as groundbreaker”. lateral thinking.

the acquisition in the U. BMO portrays each level as a step further which builds on and prolongs the strengths of the past. As the years pass. BMO is not the only bank to have full-service capabilities.. more reference is made to the bank’s North American base as opposed to its Canadian one.S. in 1994 and the launch of mbanx in 1996. the previous one. these do not apply to the U. While other banks have full service capabilities. BMO resorts to selectively addressing those identity .S which allows it to offer full services to customers. in its discourse. the launch of mbanx on a continental scope and the generation of higher revenues from North American operations are associated with the gradual institutionalization of the North American theme. The vision. and while they operate in the U. In fact. progression in the bank’s reference to its geographic scope. are also portrayed as part of the achievement of the North American scope. the equity stake in Mexico. The progression (Canadian North American NAFTA) is an incremental one Figure 10 shows the with each level including. They help strengthen the bank’s self-reference as a North American bank.. we see that the North American (or NAFTA) self-reference becomes more prominent in the bank’s discourse. the only bank to own a retail branch operation in the U.. The uniqueness or distinctiveness lies in the combination of two attributes: North American geographic scope + the full service capability. With time. It is however.S. they do not do so with the capacity of retail bank operations. but the end product encompasses the beginning one (Figure 11). but going beyond. The equity stake taken in Mexico’s Bancomer in 1996 further extends the bank’s geographic scope allowing BMO to call itself a NAFTA bank. The uniqueness of its fullservice capabilities in North America are extolled by both Mulholland and Barrett. As these strategic moves are engaged in and as the bank generates more of its revenues from the U.S.S.S. a Canadian firm. Distinctiveness only if two attributes are joined BMO defines itself as a unique North American bank.147 undertakings. such as the acquisition of Nesbitt Thomson. neither is it the only bank to have operations in the U. In fact. and Mexico. the bank’s geographic scope increases in complexity.

1995) indicates that “Observers believe that Royal has been looking to . all Canadian banks have expanded different operations into the U.) In fact. 1996. An article in the Financial Post (July 29.S. market for it is seen as a market with high potential for growth.148 attributes that allow it to claim distinctiveness within a comparison group (Elsbach and Kramer.

149 Figure 10: North American theme developmental trajectory Canadian Bank North American Bank NAFTA Bank - Vision 2002 Acquisition of Suburban Listing on NYSE - Investment in Bancomer Increased revenues from nonCanadian operations .

150 Figure 11: Increasing complexity of geographic scope NAFTA bank North American bank Canadian bank .

the needs of the four stakeholder groups would have to be heeded by all Canadian banks. However. “principles (that) have guided (the bank) through more than a century-and-a-half of growth and expansion”… In 1990.S. rather by all business firms that would like to succeed.S. It is thus not surprising that references to the bank’s uniqueness with respect to its U. During that same year. a “constant” despite the many changes in the bank. One of the stumbling blocks for any Canadian bank is the fact that U. “a cornerstone of our reputation since Bank of Montreal first opened its doors… in 1817”. In 1994. retail bank but has been unable to identify a suitable candidate. 6. we are told that the needs and expectations of the four stakeholders are placed at the center of the plan. What we know is that the bank’s commitment to its four stakeholder groups receives center stage in its discourse in 1986.S.3 COMMITMENT TO STAKEHOLDERS (COLLECTIVELY AND INDIVIDUAL GROUPS) Centrality and distinctiveness Could we say that BMO has a distinctive commitment to its four stakeholders which sets it apart from other financial institutions? This would be a hard question to answer with any degree of precision. operations are almost always accompanied by reference to the fullservice capability. the bank’s operations for the preceding five years are reviewed and the review focuses mainly on BMO’s fulfillment . retail branch operation is seen as a self-defining element: it is a sign of the bank’s success as well as a sign of distinctiveness. the year the bank’s strategic plan was revealed. In fact. In 1986. It is not surprising therefore. banks are very expensive…Bank of Montreal has been the only Canadian Bank to acquire a U. what is specific about BMO is that it makes the commitment to people or stakeholders a self-defining theme. 90. retail bank”.S. this commitment is said to be “a Bank of Montreal tradition”.S. 94 and 95 and that partial aspects of its commitment to specific stakeholder groups are emphatically presented as distinctive throughout the years. the bank’s vision and values are articulated in terms of its commitment to its four stakeholder groups.2.151 acquire a U. that BMO’s U.

is portrayed in its building and opening of the IFL described as a unique facility in Canada and as the reason why 1994 will be remembered longest in the history of the bank. By 1997. the bank indicates. Furthermore. it had become “the highest-rated bank in Canada” in the small business sector. The above indicates that BMO does not claim to have fulfilled a distinctive general commitment to its stakeholder groups. The bank’s distinctive fulfillment of its commitment to employees. for example. distinctive fulfillment of the bank’s commitment to shareholders is portrayed in each of the years starting with and following 1994 when the bank’s ROE is mentioned. it is indicated that the bank has established “a reputation” as a bank that is sensitive to the needs of its customers (1994 and 96) and its employees (1994). an aspect of the bank- . in fact. For example. providing a lower lending rate than competitors for an extended period of time. in 1992. and these aspects are emphasized in discourse. As another example. Both the 1990 and the 1994 MTSs are dedicated to spell out the bank’s commitment and its fulfillment of this commitment. For example. In this same year. but with respect to the small business customers. it does claim to have achieved distinctiveness in fulfilling specific parts of this commitment. However. but as having a unique institute for learning. By 1994. it does not boast to have a distinctive level of service towards customers in general. distinctive. With respect to whether the bank’s commitment is distinctive. what emerges from the data is that some aspects of its commitment are. the bank’s continuing commitment is further reaffirmed.” In other words. Neither does it portray itself as having a distinct relation with employees. a number of unique measures taken by BMO to serve small business customers are portrayed which include. but are not limited to. Later in 1995. this appears as a central theme in the bank’s discourse. Barrett indicates that he cannot imagine circumstances that could force the bank to change its commitment to the stakeholders whose needs “are the driving force shaping and informing (BMO’s) approach to the business of banking.152 of its commitment. shareholders are told that “your Bank is the only major bank in Canada and the United States to have produced ROE exceeding 14% for the last eight years”.

in articulating the bank’s commitment to each of the four stakeholders. In other words. employees. In fact. and the communities services unique to their needs (1994). the bank narrows the area of activity to that in which it can claim to be distinctive.153 employee relationship which is distinctive. the “commitment to stakeholders” principle remains constant and persists. Although here we see a partial change in labels. a “distinctive” level of service is pledged to be given. throughout Barrett’s mandate. the shareholders consistent and increasing returns (1994 to 1997). but “people” in 1986 is replaced with “stakeholders” in 1990. Let us start with the labels. With Barrett. . the employees rewarding and challenging careers (1994 and 1996). shareholders and the community). This again confirms Elsbach and Kramer’s (1996) claims that the criteria for which uniqueness is claimed are selectively chosen by organizations. but also in some aspect of the commitment. and communities are said to be entitled to services “unique to their needs”. some aspects of the commitment articulated in 1986 are maintained. None of these aspects of the bank’s commitment was mentioned in 1986. not only is there a change in the label. others are dropped and still others are added. In the years following 1990. in 1990. The “commitment” label persists. the bank portrays itself as having remained consistent to its pledges and as having fulfilled them. small business customers are portrayed as having received distinctive service from the bank (1992). with respect to shareholders a “continuing” and “steadily increasing” return on investment. employees are said to be given “the opportunity for a full and rewarding career”. The commitment to stakeholders is enlarged and gets infused with new meanings when Barrett takes over as chairman. in addition to an enhanced level of disclosure are promised. Here are a few of the issues added: with respect to the bank’s commitment to customers. Continuity and change in the “commitment to stakeholder” theme Both change and continuity in the commitment to stakeholders theme can be observed. For example. Thus. the interest groups to whom “people” and “stakeholders” refer are the same (customers. So does the bank’s presentation of its having fulfilled its commitment.

This is an instance where a major break with past attributes and themes appears to be intended. Consider the contrasts between the banking model and skills of the past and those of the present and future as presented in the 1996 MTS: The past “traditional banking model of security and hierarchy” “steady decline in full-time transactionprocessing positions” The present and future “new kind of banking”. in 1996. does change with time for some of the stakeholder groups. However. Most of the changes in the meaning of the bank’s commitment to interest groups are incremental. while maintaining the appearance of being consistent over time. For example. the bank uses an ambiguous term which it interprets in varying ways depending on the occasion (Eisenberg. how the commitment is practiced. For example. 1984). we see a persistence in the “commitment” label and principle but a change with time in how this commitment is practiced. in 1990. which did not exist a few years ago” “prosper(ing) in the new century” “many employees … are learning that their jobs will not be there” “paternalism of the past” “professional relationship (whereby)… employees are essentially entrepreneurs with their skills as their capital” . namely its commitment to provide employees with challenging and rewarding careers. An exception to the gradual change in the commitment theme appears with respect to the bank’s commitment to employees articulated in 1996. Here again. “a new contract” “new skills increases in occupations such as the portfolio managers of mbanx.154 Nevertheless. In other words. the bank declares that a “new contract” is being forged with employees. in articulating the bank’s commitment to stakeholders. The shifts are gradual and piecemeal when followed from year to year. many of the terms of this commitment portrayed in 1986 were retained. this is portrayed as part of the bank’s commitment to employees.

even when a major break is explicitly declared to be occurring. however. we see a partial change in the label referring to the commitment to interest groups. some of the statements of the bank indicate that a continuity with the past is maintained. “hierarchy”. Annual report. In brief. Thus. “paternalism”) whereas the present and future ones are presented with positive overtones (with terms as “skills”. The values of integrity. and a reference to a . This is akin to the destruction of identity attributes described by Biggart (1977) in the case of a radical restructuring of an organization. At no point in time. Furthermore.” Interestingly. the new contract is portrayed as a change in the practice of a persistent principle. As mentioned above. They will be the foundations of a bank where all the factors of production work in harmony to shape an enterprise that continuously builds on its own success for the benefit of all stakeholders. accountability and respect for human beings that permeate all our strategies will not change. 1996). although Barrett mentions that a new contract is being forged with employees. Past identity attributes are destroyed and new ones are reconstructed. do we find a complete destruction and reconstruction. in the bank publications (FirstBank News.155 The past attributes are derided and presented in negative overtones (such as “traditional”. a partial change in the meaning of this commitment. was portrayed as a revolutionary undertaking in the bank’s history. This is evident in the following quotation from the 1996 MTS: “All these responses to change are significant in themselves. despite its magnitude. an element of continuity is mentioned: “Yet as always amidst all the changes there will be a powerful element of continuity. of which our new mbanx brand is the symbol. this shows a consistency in the commitment the bank had made to employees in 1990. this one is followed by a reference to some element of continuity in the bank despite the change. Together they equal the reinvention of the Bank.” Like other references made to change. The destruction. he is persistent in affirming that working at the bank is challenging and rewarding. and addresses the reinvention of the bank. always seems partial. This presentation of past and future identity accompanies the bank’s introduction of mbanx which. after the bank portrays the major breaks with the past. In other words. “professional”).

the bank declares it is effecting a major change and creating a new order. Shifts in these labels are usually accompanied by shifts in the meanings associated with the labels. but the aspects of the bank that they define change with time. .156 major change in this commitment portrayed as a change in the practice of a persistent principle. At no point in the bank’s discourse do we see a complete destruction of identity. The labels persist. This confirms a number of authors’ allegations that when change is desired. providing a sense of continuity. Furthermore. they often come to signify different issues as time passes. 1985. it is often sought within a context of some continuity (Pettigrew. however. The labels used in the self-referential discourse may shift with time such as commitment to people Canadian North American commitment to stakeholders. is presented as conforming to a previously held identity theme: the new contract with employees makes work at the bank challenging and rewarding confirming a continuity in the bank’s commitment to employees. I would like to comment on a few general issues related to the bank’s identity in discourse that have emerged from the data. In fact. The discussion of the different BMO identity themes indicates that change in identity occurs at different levels. In exceptional cases. and NAFTA. This new order. -x–x- To conclude. Whiting. 1976). The shifts in the reference to the geographic scope and the shifts in what the bank’s commitment to interest groups represents are generally piecemeal. even when the labels persist for some time such as “commitment to stakeholders” (from 1990 to 1997) and “first” (as of 1991). references to a change in an identity theme are often accompanied by references to continuity in a complementary theme. Most changes in the identity themes are incremental.

These themes get institutionalized as the organization takes strategic action and as its strategic achievements lead to a realization of these attributes. (Examples: Fee-andincome generating ability. (Example: North American) -Actors’ impact on central identity attributes is explicitly addressed and is noticeable: . (Example: Quality service) -Institutionalization of themes that initially appeared as aspects of vision or strategic objectives (projected identity attributes). (Example: Distinctive (overall) service to customers) -Persistent and indisputable distinctiveness of the theme. (Example: Large) -Erosion of the identity theme with continued absence of external confirmation. General conclusions incorporating a comparison of the two banks follows afterwards.157 6. (Example: Quality service) Bank of Montreal -A shift in the attribute and/or the membership group evoked. Royal Bank -A shift in the attribute and/or the membership group evoked. FI) -Institutionalization of themes that initially appeared as aspects of vision or strategic objectives (projected identity attributes). (Example: First as oldest) -Erosion of centrality with erosion of distinctiveness in the theme. These themes get institutionalized as the organization takes strategic action and as its strategic achievements lead to a realization of these attributes. (Example: Commitment to stakeholders) -Abortion of the projected identity theme with absence of external confirmation. and a continuity in the distinctiveness and/or the general principle depicted by the identity theme. and a continuity in the distinctiveness and/or the general principle depicted by the identity theme.3 GENERAL DISCUSSION What similarities and differences can be found between the two banks? What do the findings allow us to say about identity evolution in top management discourse in general? The following table summarizes the general conclusions reached for RB and BMO and points out the similarities and differences between the two banks.

This theme is associated with other themes that vary depending on the context. RB places extensive emphasis on its size. this attribute was extolled in the MTS. (Examples: all themes) -Persistent use of the umbrella theme. In addition. BMO did not claim to provide customers in general with a distinctive level of service. but rather to be the highest rated bank in terms of its service to small business. a subset of customers in general.Persistent use of the umbrella theme. BMO had to consistently evoke both . Different marks of distinctiveness appeared in discourse. the bank resorts to changing the criterion for measuring relative size. Commitment to stakeholders) the persistence of a given principle. Similarly. As the bank’s rank in terms of size changes. (Example: Leader) persistence of a given principle.1 Shifts in distinctiveness The two banks show a tendency to emphasize those attributes that allow them to claim distinctiveness within a comparison group. evolutionary and incremental. (Examples: First.3. in general. (Example: Leader) -Continuity is maintained through: the persistent utilization of a label.158 (Mulholland and Barrett) -The process of identity change is evolutionary and incremental. This was evident as well in BMO’s discourse. As conditions change. This theme is associated with other themes that vary depending on the context. in claiming its distinctive North American scope. (Examples: all themes) . RB’s relative size changed with time. It also changes the comparison group used to determine its rank. an organization’s standing visa-vis a comparison group may also change. (Example: Commitment to shareholders) portraying innovation as an identity attribute of the bank addressing some persistent or enduring aspect of the bank after addressing change 6. (Example: First) -Continuity is maintained through: the persistent utilization of a label or expression. when the public perception confirmed its higher rating in terms of service quality to customer. Thus. (Example: Large) -The process of identity change is.

Dutton and Dukerich (1991) indicate that an organization uses the image the public has of it (or what is called “the construed external image” by Gioia and Thomas. As its distinctiveness eroded. organizations develop a character as a result of their adaptive experiences. For this claim. but that an organization is able to illustrate distinctiveness by referring to specific people. operations. Instead. confirmation in the form of public opinion and survey results could be obtained. Martin et al (1983) indicate that different organizations’ claims to uniqueness take similar forms. 1996) to adjust the way it views itself. it proclaimed this mark of distinctiveness. This was evident in RB’s portrayal of its quality service attribute. However. a subset of the overall customer group. As Selznick (1957) indicates.) Nowhere does BMO claim to have actually realized the objective of providing distinctive overall customer service.159 criteria: its full service capacity and its U. all organizations can make claims to distinctiveness on the basis of their history. when confirmation for its distinctive service could be obtained through customer surveys.S. This is mainly due to the fact that organizations’ identity claims need to be confirmed by society (Levitt and Nass. BMO extols its superior service to small business. This is the case with BMO’s being the first and oldest bank in Canada. Similarly. In fact. some organizational attributes are indisputably unique and the organization does not need to continually provide proof of their distinctiveness. Continuing to claim distinctiveness in this attribute in the face of eroding status would have created a dissonant situation for the different stakeholders. On the other hand. Initially. BMO declared in 1990 that their goal was to provide a distinctive level of service to their customers. so did its claims. events and places that . and no organization’s experiences can be duplicated. surveys of customer service ratings of the big banks did not show BMO to be superior to the other institutions. This study confirms Elsbach and Kramers’s (1996) allegations that organizations resort to selective categorizations in order to maintain a claim to distinctiveness. (The discussion of quality service for RB provides information on customer surveys on the Big Six banks including BMO and these do not show BMO as leading in customer service. 1994).

It further allows the strengthening of stakeholders’ identification with the organization (Dutton et al. Strategic action was undertaken which allowed the realization of this attribute. a sign of distinctiveness by excellence – one that cannot be disputed or disconfirmed. whether or not based on historical elements. RB had projected becoming a full service financial institution. We can thus understand why claims to distinctiveness in a wide array of aspects appear in this study as a major aspect of the banks’ selfpresentation. In the case of quality service. from the bank’s perspective. Early in the study period. Achieving a full service FI status flowed partly from strategic actions at RB.160 are unique to its experiences. RB’s projected identity of . erosion or abortion of identity attributes.3. does not always flow from the organization’s strategic undertakings. For example. Distinctiveness. It acquires a securities firm. were slow in allowing it to move into new lines of business. and later a trust firm. is what allows an organization to stand out from the environment as opposed to being an extension of it (Christensen and Cheney. RB was partly curtailed in its efforts to become a full service FI by government regulations which. This is more evident in BMO’s discourse than in RB’s. 6. A similar argument applies to BMO’s Vision 2002 which projected BMO as a full service North American financial institution. It is a sign of some superior achievement. realized and unrealized identity Projected identity may or may not become realized and institutionalized. In other words. Constructing identity. it makes acquisitions in insurance and with the years provides more extensive financial products and services. however. We can also understand why so much top management attention is focused on managing and presenting marks of distinctiveness.2 Projected. 1994). first making it a desired projected attribute and then taking different actions to realize it. Figure 12 shows the major aspects of the process of institutionalization. the bank’s history and its being the first bank ever in Canada is a source of notoriety. 1994.) Stakeholders can achieve a positive personal identity by being associated with a distinctive organization. At BMO. the bank took a proactive stance vis-a-vis the FI attribute.

Similarly. BMO indicates in 1990 that its goal is to provide a .161 being the leader in quality service in the early nineties was not realized despite the many efforts made at the bank.

162 Figure 12. Institutionalization/Erosion/Abortion of identity attributes Institutionalization (Realized identity attribute) Projected identity attribute Strategic action Achievement of desired attributes Constraining or facilitating forces Inability to achieve desired attribute Erosion/Abortion (Fading of/unrealized identity attribute) .

RB initially refers to itself as a bank with the goal of becoming an integrated financial institution. a change in the bank’s strategy or strategic achievements. As mentioned previously. and a change in the external context. Barrett took that a step further by announcing Vision 2002.3. notable among these factors are government regulation and the perceptions of the organization held by external publics. the influence of the chairman and CEO is highly noticeable in the case of BMO. Several years later only its service to small business appeared particularly distinctive. Creativity. The discussion of BMO indicated that both Mulholland and Barrett as well as internal and external observers agree that the two CEOs had a major influence on the bank’s identity. In its self-presentation. The second factor influencing the evolution of the central aspects of identity is a change in the bank’s strategy or strategic achievement.163 distinctive level of service to customers. In other words. The discussion has also pointed to a number of factors that influence the evolution of identity. Barrett appeared to have infused the bank with a spirit of innovation. These forces are depicted in Figure 13. Mulholland was the only Canadian bank executive to spearhead the acquisition of a retail bank in the United States and to lay the foundation for a North American bank. In addition. innovating and transforming became important themes in the bank’s discourse after he became CEO and chairman of the bank. there are factors which impact identity over which the organization may have no control. allowing attributes to become more or less central with time. learning. 6. Not clearly evident in the case of RB. The factors that emerged in this study are: the major actors or top managers at the organization. Barrett himself was seen to possess the ability to learn and innovate. while an organization may actively engage in efforts to build or manage its identity. The discussion so far has indicated that these shifts are often piecemeal when measured from year to year.3 Shifts in centrality The data indicates that the central aspects of the organizations shift with time. Major strategic efforts are exerted to achieve the status of an integrated . As the above discussion indicates.

164 Figure 13. Factors that influence the evolution of organizational identity Actors Changes in strategy and strategic achievements Evolution of organizational identity Changes in the external context .

its markets more varied and its name was changed to Royal Bank Financial Group. A similar argument can be made about BMO.4 Continuity and change What can we say about continuity and change in identity? Does identity persist or does it change with time? Should we uphold the definition of organizational identity as constituting of those attributes that persist? Persistence is part of the definition provided by Albert and Whetten (1985) and built upon by other authors (such as Ashforth and . Its major investment in Mexico. RB ceases to define itself as the bank which provides distinctive service and eventually presents itself as the institution with an exceptionally strong position in fee-based business. Another factor which appears to have an influence on shifts in identity attributes is the external context. Thus. RB reports extensively. allowed BMO to become a NAFTA bank. for example. Shifts in the banks’ external image are associated with shifts in identity. The products and services the bank was offering at the end of the study period were substantially more varied and complex than those it offered at the beginning of the period. the strategy it adopted with respect to the small business segment allowed it to achieve the status of the highest rated bank in this sector in Canada. The bank’s strategic achievements and change in mission were related to a major aspect of its self-definition. A major aspect of this context is the institutions’ relative position with respect to a comparison group. 6. Its structure had grown more complex. BMO comes to portray itself as the highest rated bank in the small business sector.165 financial institution. its statements of identity shift correspondingly. For example. on the strategic acquisitions it makes in the various areas of the financial services sector. As the organization’s position or rank changes with respect to the reference group.3. At the end of the study period. allowing it to narrow the gap between being a bank and being an integrated financial institution. often made up of the major competitors. Ashforth and Mael (1996) indicate that an organization’s identity is typically anchored to its mission and MacMillan (1987) points out that we are what we do. RB refers to itself as a financial institution rather than a bank.

whether or not the labels themselves remained constant: RB: Leader BMO: First. The findings of this study indicate that rather than making general statements regarding whether organizational identity persists or changes. Let us summarize those aspects of identity that did change. 2000). 1996. . Srivastva and Fry (1992) claim that organizations change to maintain a sense of identity and continuity. Even the fading of some identity themes appears to take place gradually and undramatically (such as quality service for RB. Could we say that the findings of this study confirm these allegations? The data from the two banks indicates that some aspects of identity persist whereas others change with time. there were shifts in different aspects of identity: 1) The degree of centrality and distinctiveness of some themes changed over the years: RB: Quality service to customers. North American for BMO). 2) Some labels by which organizations referred to their distinctive and central attributes evolved with time. Commitment to shareholders Changes in the degree of centrality of a theme are often accompanied by changes in the constellation that is associated with the theme. I indicated that mainly piecemeal changes could be observed from year to year.166 Mael. Commitment to stakeholders Most of the changes that did occur were incremental when looked at from year to year. In discussing the process of institutionalization of identity themes (fee-and-income generating ability and FI for RB. first-as-oldest for BMO) as the banks address them less often. Scott and Lane. RB: Bank FI BMO: Canadian North American NAFTA Commitment to people Commitment to stakeholders 3) Some of the meanings attached to the labels changed with time. Fee-and-income generating ability BMO: First-as-innovative. The discussion of the different identity themes indicated that over the years. researchers are well advised to look at the components of identity and attempt to differentiate between those aspects of identity that change and those that tend to endure. 1991. Gagliardi (1986) proposed that organizations’ primary strategy is the maintenance of their identity. Dutton and Dukerich.

1992:27). RB makes less reference to such changes than does BMO. these shifts which appear to be small from year to year amount. However. It should be noted that BMO also explicitly addresses the issue of continuity in identity attributes more frequently than does RB. When the study period opened. a few aspects appear to point out to major changes occurring at the banks. distinctive in its ability to generate high revenues and income. some changes entail gradual increases in complexity rather than shifts from one state to another. In the case of the commitment to stakeholders theme at BMO. primarily to sameness sustained through time” (Bateson. and a “new” contract to be forged with employees. RB’s indication that the acquisition of Dominion Securities constituted a milestone in the Royal’s 118-year history is one of the few references made to change of some magnitude at the bank. most shifts are also incremental. the “groundbreaking” initiatives of BMO. BMO defined itself as the oldest Canadian bank. it presents itself as a Canadian financial institution providing integrated services. Continuity is the sense of “ongoingness that links the past to the present and the present to future hopes and ideals” (Srivastva and Fry. When the period ends. in aggregate. Although most aspects of discourse point to small shifts in identity on a year-toyear basis. in contrast. We can think of . When the study period opened. He refers to small changes that together are equivalent to the “re-invention” of the bank. particularly with Barrett as chairman. to a change of significant magnitude. it defined itself as a highly innovative North American (or NAFTA) financial institution. and the North American theme for BMO which included but surpassed the Canadian theme. presents the changes occurring in the bank’s attributes as more dramatic. It refers to “a degree of sameness. When the period ends.167 Furthermore. RB defined itself as a Canadian bank distinctive for its quality service. This is the case of the FI theme for RB which included but surpassed the bank theme. BMO. 1992:2). Could this lead us to conclude that a sense of occurring major changes is accompanied by a sense of continuity in some aspects of identity? Continuity was also observed to occur in identity themes in this study.

1992:27). the severance with the past is only partial. When incremental shifts occur. In both cases confluence occurs. Whiting. even if the meanings they stand for may change with time: RB: Leader BMO: First. Commitment to stakeholders 2) Through meanings or principles that persist or that change minimally throughout the years RB: Large (relating to the retail network. Yet this discussion implying that some continuity in identity can be observed should not mask the fact that most aspects of identity for these two organizations do not remain fixed for long periods of time. 1976). This confirms what several authors have repeatedly indicated. Schmiedeck (1979) talks about “confluence”: streams from the past and present that may combine and flow together in a cross section. When major change is declared. 1985. for example) BMO: Commitment to shareholders (consistent returns. Gioia et al (2000) indicate that an organization’s . Mobilizing the energy to engage in change requires that some aspects of a system’s experience remain persistent (Pettigrew.168 continuity as streams from the past that flow into the present and future. but the values of respect for all human beings remain). 4) By portraying innovation as an identity attribute of the bank: BMO: Innovative (the attribute persists and enables the bank to undertake changes of different magnitude and in different spheres of operations). for example) 3) By addressing some enduring aspect of the bank after addressing a change: BMO: Commitment to employees (a new contract is forged. There are very few situations (if any) where we cannot discern continuity in change (Bateson. The study indicates that continuity is established in discourse in a number of ways: 1) Through the use of labels which are used persistently throughout the years. some aspect of continuity is referred to. At no point in time in the banks’ discourse do we see a complete destruction of the past.

In this study.169 ability to change its identity should be seen as a sign of adaptive instability: it changes to adapt to its environment. Present anchorage helps fill the gap left by those aspects of the past that are discontinued (Schmiedeck. in answering the question “Who are we?”. today. their overriding emphasis is on “We are….” . we see a major tendency for organizational identity to undergo a continuous process of incremental change whereby the anchorage in the present is stronger than the anchorage in the past. The discourse of both banks indicates that in their self-presentations. 1979).

170 7. This study of two Canadian banks indicates that organizational identity is more prone to evolve and change than it is to persist. At the theoretical level. . It further indicates that general statements about change and continuity in identity can mask the fact that there are specific components of identity which are likely to endure and other components which are prone to change. she believes may be a problem rather than a solution in the definition of an organization's identity. Following Alasdair McIntyre. Although this quest allowed me to answer some of the queries. CONCLUSION Czarniawska-Joerges (1994) indicates that organizations have been engaged in a "search" for identity.1 CONTRIBUTIONS This study has both. 7. This. theoretical and practical implications. "The quest suggests that what is sought after will be defined in large part through the process of formulation itself: it is not prepackaged" (Christensen and Cheney. In this section I would like to review the contributions of the study. she proposes that a "quest" for identity is the better way to describe the process of autobiographical narration. This thesis was a stage in a quest to explore what happens to organizational identity in a context of change by using the grounded theory approach. 1994:225). The evolution of organizational identity in the top management discourse of two Canadian banks was traced for a longitudinal period of time during which these two organizations and their environment underwent many changes. it gave rise to many others. it was pointed out at the outset that organizational identity has generally been conceived in the organizational literature as being of an enduring nature. its limitations and the directions for future research that it opens up.

The study also pointed to a number of factors which are associated with the evolution of identity themes. Gustafson and Reger. This finding should be taken as suggestive of a few factors that may have an impact on identity. no study has provided empirical evidence of the aspects of identity that change and those that persist. A third continuity maintaining strategy entails addressing aspects of the organization which are persistent after change in the organization has been addressed. others seemingly curtailing its development. labels that persist although they come to signify different meanings with time. 1996. Although researchers have repeatedly indicated that some continuity is needed for change to occur. Other continuity maintaining strategies involve using the same self-defining labels over the years. A change in the centrality of a theme was shown to imply a change in the constellation of attributes associated with the theme. 1995). top management discourse helps create a state of . at the level of the meanings attributed to identity-defining labels. few have provided empirical evidence of how continuity is maintained in organizations. and at the level of the degree of centrality and distinctiveness of a given identity theme. Although a few studies reported in the literature suggest that organizational identity can change (Gioia and Thomas. It was found in this study that one way to maintain continuity is by defining the organization as innovative which would allow the organization to undertake different changes while maintaining a persistent self-definition. some internal and others external. by an increasing complexity in the particular themes to which the labels apply. The findings of this study also point out how continuity is established in a context of change.171 The developmental trajectories traced for different identity themes show that identity can evolve at the level of the labels which organizations use to define themselves. Changes in labels were shown to be incremental and to be accompanied. These continuity-maintaining strategies demonstrate the extent to which discourse itself provides the links between the past and the present. Far from simply portraying continuity and change in identity. some appearing to propel the evolution of identity in the direction desired by the organization. for the most part.

I propose that organizational identity is one such issue. “However. We do not know to what extent the strategies apparent in the annual reports were chosen intentionally. the form that it takes is a matter of organizational choice. The fact is that annual reports reflect the views of top managers. And whether this choice of strategy is made by design or by accident. What we know is that particular strategies were evident. specially if they come to be by accident. Future research may attempt to study organizational identity elaboration processes in . This study also has practical implications. Cheney (1983) indicates that formal messages from management may contain intended as well as unintended aspects. although they may have been. it is at least theoretically subject to rapid and complete change at the direction of management” (Van Maanen. 1978:21). Barr and Huff (1997:349) indicate that annual reports “reflect and help create needed commonalities” in the interpretation of issues. with confluent streams from the past provided mainly through persistent use of labels and reference to continuity in discourse. Van Maanen (1978) indicates that the extent to which a particular strategy (such as a discursive strategy) is used by an organization is not a natural occurrence in itself. The findings indicate that the two organizations studied are mainly anchored in the present. This study offers practitioners an array of strategies that can be used to maintain continuity or to create change in organizations. and therefore. One such limitation derives from the fact that most of the data analyzed here has been taken from the annual reports. the group most likely to exert an influence on this identity. It sheds light on identity maintenance and change strategies used in organizations. One could argue that these reports reflect only one of different versions of the organization’s identity. The use of the term “strategy” here does not necessarily imply that these identity construction processes were intentional acts. 7. Similarly.2 LIMITATIONS AND FUTURE RESEARCH DIRECTIONS This study has a number of limitations. the group with pre-eminent responsibility for interpreting events to internal and external audiences.172 continuity or a state of change. Making explicit the strategies used by management in its discourse can raise awareness of these techniques.

future research may attempt to verify whether the developmental trajectories that emerged for identity themes in this study would occur in other organizations. as opposed to the past. as conditions in its environment force it to review its normative requirements. has the limitation of not allowing us to make generalizations at large. To what extent will anchorage in the present. However. 1985). Does identity tend to evolve incrementally with subsequent increases in complexity or are there other patterns that can be observed? Do the identity maintenance strategies that emerged in this study also occur in other change contexts? As interesting is the question of identity evolution for different types of organizations. This study. the subject of organizational identity will continue to arouse the interest of researchers. It is my hope that this .173 other public documents such as house organs. Although studies adopting such an approach have appeared in the communication literature. like all research based on a small number of organizations. For example. press releases or public statements by different company representatives and try to establish whether statements made to different audiences emphasize different aspects of identity.3 CONCLUSION As change becomes more prevalent inside and around organizations. 7. It would be interesting to find out how the identity of an organization that subscribes to a normative logic evolves. occur? This study raises a number of exciting questions that can be answered in future studies. it does serve as a springboard for generating propositions and hypotheses that can be tested in larger scale studies. The banks that were the focus of this study can be qualified as subscribing to a utilitarian logic as opposed to a normative one (Albert and Whetten. This study indicates that an interesting venue for studying organizational identity longitudinally involves tracing an organization’s self-presentational discourse. they have been ignored for the most part in the field of organizational studies.

the quest to understand the elusive subject of identity continues. . For me.174 study will stimulate further research into the subject of discourse on organizational identity.

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