Changes to administrative controls in banks after the financial crisis
Qualitative Research in Accounting & Management
ISSN: 1176-6093
Article publication date: 11 June 2018
Issue publication date: 15 June 2018
Abstract
Purpose
This paper aims to explore and explain how administrative controls have been changed as a response to a significant crisis, using the transition of the three largest Icelandic banks from bankrupt to operational entities after the 2008 financial crisis. The Icelandic banks are compared with three Danish banks to separate crisis-driven responses from simple market-driven reactions.
Design/methodology/approach
Empirical data were collected using semi-structured interviews. The participating Icelandic and Danish banks were considered as two units, which formed the basis for a comparative case study between the two countries.
Findings
Driven by an understanding of what is expected by the market rather than the need to inform and guide the employees the Icelandic banks implemented a number of revolutionary and formally documented changes. These changes included significant bigger risk management functions and policies and procedures documenting “everything”. However, in both countries, it seems that new values supported by the “tone at the top”, areas with limited formal documentation, are the most important management tools.
Research limitations/implications
The study relies on interviews with employees, and the actual changes of administrative controls have not been reviewed. The most important implication is that the situated logics in Iceland driven by external institutional pressure initiated a revolutionary implementation of values bypassing existing routines and formalised rules.
Originality/value
Although the use of management controls has been studied intensively, detailed studies of the banking sector have been lacking. Furthermore, there is limited knowledge of how administrative controls changed in response to the financial crisis.
Keywords
Acknowledgements
The authors would like to gratefully acknowledge support of CIMA General Charitable Trust.
Citation
Christensen, L., Rikhardsson, P., Rohde, C. and Batt, C.E. (2018), "Changes to administrative controls in banks after the financial crisis", Qualitative Research in Accounting & Management, Vol. 15 No. 2, pp. 161-180. https://doi.org/10.1108/QRAM-12-2016-0088
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited