Strategic Renewal of European Financial Incumbents; Coevolution of Environmental Selection, Institutional Effects, and Managerial Intentionality

How do incumbent firms and environments coevolve and how are firm-level adaptation and selection at industry level interrelated? Can and do large established organizations renew themselves to adapt to their environment? We develop propositions based on three single-lens theories that relate to environmental selection, institutional theory, managerial intentionality, and to the coevolutionary perspective to investigate strategic renewal of incumbent firms. We distinguish between three dimensions of strategic renewal to develop metrics to investigate our propositions in a multi-level, multi-country, longitudinal study of the European financial services industry.The results provide the following insights. From an environmental selection perspective, we find incumbents have a preference for exploitation renewal actions. Country institutional environments appear to explain to what extent incumbents prefer internal and/or external renewal actions. Managerial intentionality seems to explain outlier behaviour and firm-specific frequency and timing of renewal actions. From a coevolutionary perspective, interaction effects contribute to explain deviations from predictions derived from the single-lens theories applied in this thesis.

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