A Service Science Perspective on Strategic Choice, IT, and Performance in U.S. Banking.

Author List: Tallon, Paul P.;

Journal of Management Information Systems, 2010, Volume 26, Issue 4, Page 219-252.

With the move to an information-based economy, financial services has become a key contributor to the U.S. gross domestic product. Even as consolidation reduces the number of banks, small banks with under $100 million in assets continue to report higher profit margins than large banks with over $100 million in assets. Lacking scale, small banks employ a service-oriented business strategy (customer intimacy), whereas large banks focus on productivity and throughput (operational excellence). Information technology (IT) plays a key role in applying each strategy, but as banks move toward customer intimacy in general, the challenge is to grow without undermining service quality. Using a balanced panel data set from 43 U.S. banks, this paper finds that banking strategies are becoming more customer focused. Yet for large banks in particular, IT remains resolutely operations focused. This misalignment could restrict future banking performance. In this way, this paper contributes to the service science literature by using size to dissect banking strategies and performance.

Keywords: banking; business value; customer intimacy; financial services; relationship banking; service science; services; strategic alignment; strategic choice; value disciplines

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List of Topics

#229	0.237	alignment strategic business strategy performance technology value organizational orientation relationship information misalignment matched goals perspective fit firms executives argue need
#211	0.220	service services delivery quality providers technology information customer business provider asp e-service role variability science propose logic companies especially customers
#200	0.194	banking bank multilevel banks level individual implementation analysis resistance financial suggests modeling group large bank's services levels national data early
#182	0.061	percent sales average economic growth increasing total using number million percentage evidence analyze approximately does business flow annual book daily
#102	0.058	choice type functions nature paper literature particular implications function examine specific choices extent theoretical design discussion value widely finally adopted
#10	0.053	strategies strategy based effort paper different findings approach suggest useful choice specific attributes explain effective affect employ particular online control