Changes of strategic schemas in the financial service industry following the financial crisis

Top management cognitive change and strategic schemas have become a trendy topic in strategic management. Strategic schemas have been studied to provide firms with learning process and organizational renewal. This research addresses how the financial crisis has influenced the strategic schemas in financial institutions and how performance outcomes could trigger the changes in strategic schemas based on the top management cognitive studies through annual reports. This thesis contributes to strategic theories by testing the relationships between top management cognitive changes and company performance. The research has utilized qualitative methods to investigate the changes of strategic schemas in financial service industry following the financial crisis. Based on the findings, the research provided some insights to the studies of top management cognitions. First of all, the financial crisis has decreased the complexity of strategic schemas in financial service industry. Secondly, the crisis has changed the banking philosophy and brought new attentions on strategic issues dealing with government and regulations in financial service industry. Moreover, the financial crisis has increased the connectedness of the strategic schemas in financial service industry. Lastly, after a disastrous hit from the financial crisis, strategic decision making in financial service industry became more dependent on economic environment, government and regulations. What's more, the research results also demonstrate that low performance financial institutions were more significantly to change the strategic schemas in how the corporate strategies would be communicated and how economic environment was perceived than high performance financial institutions during the financial crisis. Results are based on the data sources from annual reports and analyzed in using cognitive maps with cause-effect linkages. These results have implications for our understanding of top management cognitive changes following the financial crisis as well as the relationships between company performance and strategic schemas