Abstract: Strategic Responses to Economic Integration: The Case of Barclays Bank, 1973-2003

Mitchell Larson and John Wilson

Abstract

From 1973 to 2003 British banking underwent a series of dramatic changes, providing fascinating insights into the interactions among strategy, structure, ownership and performance (SSOP). Although few SSOP studies have been conducted in banking, a corporate micro-perspective shows how Barclays Bank responded to the global financial integration process from the early 1970s to the middle 2000s. Our study can provide valuable insights into banks' responses to the integration process and the growing impact of international competition on strategic decision making. The point of departure for this paper will be the impact that economic integration had on the formation of new markets; given that this process should be regarded as a (somewhat underestimated) cornerstone of our understanding of the dynamics of capitalism, it will also become apparent that a range of other factors influenced especially strategy and structure, including global tendencies in the financial sector, the liberalization of financial markets, and a series of traumatic crises that severely affected attitudes within and about banks. After tracking the fundamental change from a highly cartelized UK banking sector before the 1980s toward a more fully integrated financial sector in the post-1990 period, we assesses the relative importance of the key drivers of change.