École des Hautes Études Commerciales

The Evolution of Organizational Identil: A Discursive Study

Par

Sarnia Cbreim

Service de la direction et gestion des organisations

Thèse présentée à l'École des Hautes Études Commerciales en vue de l'obtention du grade de Philosophiae Doctor (Ph.D) en Administration

Avril, 2000

@Sarnia Chreim, 1000 National Library Bibliothèque nationaie 1*1 of Canada du Canada Acquisitions and Acquisitions et Bibliographie Services services bibliographiques 395 Wellington Street 395, nie Wellington Ottawa ON K 1A ON4 Ottawa ON KtA ON4 Canada Canada Your fik Vorm nIbtmc8

Our lile Notre ret8rence

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The author retains ownership of the L'auteur conserve la propriété du copyright in this thesis. Neither the droit d'auteur qui protège cette thèse. thesis nor substantial extracts fiom it Ni la thèse ni des extraits substantiels may be printed or otherwise de celle-ci ne doivent être imprimes reproduced without the author's ou autrement reproduits sans son permission. autorisation. Identification du jury

Alain Chanlat École des HEC

Président du Comité de surveillance : Jean-,Marie Toulouse École des HEC

Membre du jury : Nicole Giroux Université de Montréal

Examinateur externe : Karen Golden-Biddle University of Alberta Résumé

La notion d'identité organinisationnelle a suscité beaucoup d'intérêt dans la littérature sur les organisations ces dernières années. Cet intérêt coïncide avec les changements qui se passent dans les organisations et autour de celles-ci. L'identité organisationnelle fournit une réponse a la question, « qui sommes nous ?» Plusieurs auteurs suggèrent que la réponse donnée à cette question indique ce qui est central, distinctif et persistant pour l'organisation (Albert et Whetten, 1985; Dunon et Dukench, 199 1 ; Scon et Lane, 2000). D'autres auteurs, par contre, ont indiqué que l'identité organisationnelle n'est pas forcément persistante; elle peut changer avec le temps (Gioia et Thomas, 1996; Fiol, Huff et Sarason, 1996). Ces derniers auteurs énumèrent les changements qui se passent dans les organisations. Lors des changements, les organisations tournent leur attention vers des questions ontologiques et les réponses données a ces questions ne démontrent pas toujours une compatibilité avec le passée, d'où la remise en question des notions de continuité et persistance dans l'identité. Cette étude vise a explorer le développement de l'identité dans un contexte de changement. Les questions àe recherche adoptées sont les suivantes : quels aspects de l'identité organisatio~ellesont remis en question dans un contexte de changement? Est-ce que l'identité évolue dans un contexte de changement ? et Comment? Quels sont les facteurs contextuels associés avec l'évolution? Le cadre théorique adopté dans cette étude met l'accent sur l'importance du discours des dirigeants dans l'élaboration de l'identité organisationnelle. En présentant l'identité aux auditoires, les dirigeants expriment et construisent l'identité de l'organisation (Scott et Lane, 2000). Comme macroacteurs (CalIon et Latour, 1985), ils possèdent plus de povoir que les autres groupes d'intérêt (stakeholders) dans Ia définition de cette identité, Ceci est surtout le cas dans un contexte de changement où Iës stakeholders accordent beaucoup d'attention au discours des dirigeants (Schweiger et DeNisi, 199 1). Cene recherche vise a étudier le développement de l'identité organisationnelle dans le discours des dirigeants. La littérature sur l'identité organisationnelle ne fournit pas de réponses claires à la question concernant la continuité ou le changement dans cette identité. C'est pourquoi nous avons choisi d'effectuer une étude exploratoire qui utilise l'approche de la théorie ancrée (grounded-theo- approach) proposée par Glaser et Strauss (1 967) et Strauss et Corbin (1 990). Dans cette approche, la théorie émerge des données. Le chercheur part d'une question large qui définit le sujet d'intérêt mais qui ne vise pas a établir le lien entre une variable dépendante et une variable indépendante (Sbauss et Corbin, 1990). Cette approche est pertinente pour l'étude des domees qualitatives qui sont bien les données étudiées dans cette recherche. L'étude du discoun doit tenir compte de la richesse du contexte (Hanks, 1989), et cette richesse se cerne mieux a partir des données qualitatives (Miles and Huberman, 1994). Pour effecnier l'étude du développement de l'identité dans le discours, deux entreprises qui ont vécu des changements des dernières années ont été choisies comme sujets de recherche : la Banque Royale et la Banque de Montréal. Le discours identitaire de ces deux entreprises dans les rapports annuels des années 1985 à 1997 (inclusivement) a été tracé. Plus précisément une étude des ((thèmes identitaires » a été effectuée. L'étude suit le développement des « thèmes » dans le discours de ces entreprises, ainsi que le contexte dans lequel ce discours est énoncé. Les facteurs contextuels associés avec le développement de ces thèmes identitaires sont alon tracés. L'analyse des données démontre qu'il y a des aspects de l'identité organisatio~ellede ces deux entreprises qui évoluent avec le temps, et d'autres qui persistent. L'étude met en évidence qu'en general, l'identité dans le discours évolue de façon incrémentale avec le temps. D'une année à I'autre, on remarque des petits changements dans les thèmes identitaires mais l'agrégation de ces petits changements résulte en un changement de taille. Les thèmes centraux et la constellation qu'ils forment avec les aspects différents de l'organisation changent avec le temps. Les aspects distinctifs qui sont mis en évidence dans le discours changent eux aussi. Ces changements sont associés avec trois facteurs : 1) les acteurs - les dirigeants - qui intluencent les traits par lesquels les entreprises sont définies, 2) les chagements stratégiques entrepris par les organisations, et 3) le contexte externe, notamment la façon dont l'organisation est perçue- par les publics externes. D'autre part, la continuité dans l'identité est maintenue dans le discours par l'utilisation de mots clefs identititaires qui eux persistent même si le sens qu'on vient donner a ces mots-là change avec le temps. Une contribution majeure de cette étude est le fait de mettre en évidence les aspects de l'identité organisatio~ellequi changent avec le temps et ceux qui demeurent. Jusqu'a maintenant les chercheurs étaient divisés en deux écoles de pensée : ceux qui affirment la persitance de l'identité et ce qui affirment qu'elle change. Cette étude démontre qu'au lieu de faire des généralisations sur la persitance ou le changement de l'identité, il vaut mieux essayer de cerner les aspects de l'identité qui changent et ceux qui persistent avec le temps. TABLE OF CONTENTS

Page

LIST OF TABLES LIST OF FIGURES LIST OF -4BBREW.ATIO'iS

2. LITERATCRE REVIEW 7.1 What is organizational identity? 2 2 Identity in organizational theory 2 2.1 4lacro Irvel organizational identity 2.22 ldentity. social interaction. and communication 2.2.3 The roie of top managers in the eiaboration of identity 1.3 Centrality 2.3.1 Ccntrality and management discourse 2.4 Distinctiveness 2.41 Distinctiveness and management discoune 2.5 Tcmporâl continuity 1.5.1 Continuity. change and management discourse 1.6 Organizational identity. stntrgy and culture 1.6.1 Idrntity and cuiture 2.6.2 Idrntity and strategy

3. RESEACH QUESTIONS, CONCEPTS AND APPROACH 3.1 Research questions 3.2 Definition of organizational identity 3.3 Top management discourse 3.3.1 Written discourse 3 -3.2 Content 3.3.3 Context 3.4 Approach used

3. METHODOLOGY 4.1 Research questions and approach 4.2 The organizations 4.3 Research design 4.4 Cnits of analysis 4-41 Operationalizations of organizational identiv in the lirerature 4-42 Proposed measures of organizational identity 4.5 Sources of data

4.5.1 Annual reports 4.52 Other orçanizational and industrial information 4.6 Data analysis. presentation and discussion 1.6.1 Data coding 4-62 Presentation. anal ysis and discussion 4.7 Reliability and validity 1.7.1 Rrliability 1.7.2 Validity

5. DATA PRESEIITATION AND .ANALYSIS 5.1 Royal Bank 5.1.1 Historicd oveniew 5.1 .I ldcntity thernes 5.1 .?.ci Quality senrice to custorners 5.1 2.b Fre-and-income generating ûbility 5.1.2.c Bank-tinancial institution 5.l.l.d Luge 5.1 .Le Leader 5.2 Bank of 'lfontreal 5.2.1 Historical overview 5.2.2 ldentity themes 5.2.2.a First 5.3.2.b Oldest bank 5 2.2.~Innovative 5.2.2.d North .\mericm 5.2.2.e Comrnitment to stakeholders

6. DISCUSSION 6.1 Royal Bank 6.1.1 Quality service to customers 6.1 2. Fee-and-incorne generating ability 6.1.3 Bank-financial institution 6.1.4 Large 6.1.5 Leader 6.2 Bank of Montreal 6.3.1 First 6.2.2 Sorth Arnerican 6.2.3 Cornmitment to stakeholders 6.3 General discussion 6.3.1 Shifis in distinctitreness 6.3.2 Projected. realized and unrealized identity 6.3.3 Shifts in centrality 6.3.4 Continuity and change %CONCLUSION 7.1 Contributions 1.2 Limitations and future research directions 7.3 Conclusion

8. REFERESCES LIST OF TABLES

Table 1. Quality srnrice to customers Table 2. Fre-and-income generating ability Table 3. Brink-FI Table 4. Large Table 5. Leader Table 6. First Table 7. BMO's age Table S. Quotations frorn the 199 1 MTS Table 9. innoutive Table 1 O. Yorth .irneican Tribit- 1 1. Commitment to stakeholders Table 12. Commitment to customers Triblè 13. Commitment to shareholders Table 14. Commitment to employees Table 15. Commitment to the community Table 16. The idctntity pciradox Table 17. Central themes and their constellations LIST OF FIGURES

Page

Figure 1. Quality senrice as a core theme 120 Figure 2. Quality service developmental trajectory 121 Figure 3. Quality senice: From normative & core to instrumental & peripheral 13 Figure 4. Fee-and-income generating ability developmental trajectory 1Z.C Figure 5. FI thrme del-elopmental trajectory 125 Figure 6. Inçreasing complexity in identity 129 Figure 7. Leadership ris an umbrclla theme 133 Figure S. The two meanings of the "first" theme 136 Figure 9. First as an umbrella theme 138 Figure 10. Nonh Arnencan theme developmental trajectory 143 Figure 1 1. Increasing complexity of geographic scope 144 Figure II. InstinitionalizationiErosioniAbonion of identity attributes 155 Fisure 13. Factors that intluence the evolution of organizational identity 157 LIST OF ABBWVIATIONS

BMO: Bank of blontreal

FI: Financial institution

MTS : Message to shareholders

RB: Royal Bank 1 uould like to thank Alain Chanlat. Christiane Demers. Nicole Girou. Am Langley and Jean-Marie Toulouse who. at different stages of my snidies. provided rnormous suppon and constructive feedback. To Gary. Grace and Christina who showed unfailing patience. suppon and encouragement throughout my snidies. 1. INTRODUCTION

Idçntity is a subject which wokes images of penistence and stability through time. Organizational identity is said to refer to the central. distinctive and rndunng attributes of

an oreanizationC (Albert and Whetten. 1985: Ashforth and Mael, 1996: Dutton and Dukcrich, 199 1 : Scott and Lane, 2000). The notion of orgmizationai identity as persistent cm leave an observer quite perplexeci. LVhen we look around us, we see govemment agcncies around the world rrsorting to privotizing senices that were initially considered to br part and parcel of the public senice identity. Telephone companies previously considered as utilities have corne to redefine thernselvès as integrriteci communication services companies. Banks. traditionally recognized for their branches where telles ofièred clients a relatively limited number of financial services. have been moving into oflering comprehensive financial sen-icrs through vimial banking opentions. .As these examples indicate, changes cm iead to an erosion of the amibutes by which organizations have traditionally deîïned themselves. Organizations in different industrial sectos are increasingly tuming their attention to ontological issues and addressing questions such as "Who are we?" and "What do we want to be?" As oganizations face major and rapid-paced changes deriving fiom globalization. derewlation.+ dotnsizing, mergers and acquisitions, technological breakthroughs and other events. they may atternpt a re-elaboration of their self-definition. It is thus not surprising that interest in organizational identity has been rekindled in recent years. This interest coincida wi th the occurrence of major changes in organizations and their environments. These obsmations prompt the following question: "How is the self-defuùtion rlaborated in a context of change?" If we find that the re-elaborarion places emphasis on past amibutes. the notion of organizational identity as persistent would still hoid. If. however. we find the self-definition to be built on elements which did not prevail in the past. we need to answer more questions: "How different is the 'new' identity tiom the past? How is the 'new' identity elaborated? Does it build slowly into a difference boom the past? Or are the relations with the past abruptly severed'?" To mswrr these questions. one needs to study how organizational identity develops (changes or remains stable) over a longitudinal penod of time. This is what this research atternpts to achieve. it traces how nvo organizations' self-definition evolved over a period of thineen >vars during which major changes occurred in the organizations' intemal and extemal environrnents. It explores how change and continuity in identity themes in the organiziitiuns' hmal discourse were elaborated and how shiHs in the centrality and ciistincth t'ncss of these themes occurred. Formal discoune provides rich information on the persona and attributes that an organizntion seeks to pomay (McMillan. 1987). and therefore provides excellent information Lin organizational identity. Of particular relevance and sipiticance is top management's discoune on identity. Top management is invested with authonty to speak on behalf of the organization: the elaboration of identity retlects the preferences of such pouwholders (Ashfonh and Mael. 1996). This study thus traces the development of identity themes ris revealed in top management discourse. It also reports on contextual factors that apprared to be assoçiated with the developmrnt. It is important to understand how identity is elaborated with time. The way an oganization defines what it is and what it would like to be impacts the legitimacy it can srcure tom its ditierent stakeholders (Scott and Lane. 2000). As the context changes. so does the orgmization's self-definition. which allows legitimacy to be maintained. In addition. the self-definition affects what the organization sees as an oppomuiity or threat (Dati and Wrick. 1984: Meyer. 1952) as well as what strategc alternatives are considered and how they are evaluated (Fox-Wolf'gramm, Boa1 and Hunt. 1998: Carpenter. 1994). Thus. environmental jolts may be perceived as dilemmas. oppominities or aberrations (Meyer. 1982) and the strategic fit of an organizational unit may be seen as positive or negative depending largely on how the organization defines itself (Carpenter, L 994). The evolution of the self4elinition also has major implications for implementation of snategy (Ashforth and Mael, 1996). Nun (1997) proposes that top managers can tàcilitatct the implementation of major change in an organization by providing a compelling L-isionof the orgmization - that is, by providing a compelling projected identity. This tùture-oricnted identity becomes the bais for actions taken at the organization. Cndrrstanding the evolution of the self-definition provides ches for understanding the drvelopment of interpretation and action at the organization. Yet we know linle about how business organizations' self-detinition evolves with timc. .A few studies (br example. Czarniawska-Jorges. 1994: Czamiawska and Wolf. 1998: Gioia and Chinipeddi. 199 1) have been conducted on organizational identity in a context of change. but these studies relate to non profit institutions and not business organizations. Funhermore. they did not trace the systematic evolution of identity themes over a longitudinal prriod of time. Systematic tracking of ditferent identity themes should dlow us to look at the components of identi. and to determine if ditferent components develop in ditferent aays. We can then make more accunte statements regarding the aspects of identity that change or persist with time.

The purpose of this thesis is to explore how identity develops in a context of change in an organization's formal discourse. The research involves a longitudinal study of identity rlaboration in top management discourse in nvo Canadian financial institutions for a period of 13 years. To explore this issue. the grounded theory approach is adopted. This thesis is organized as follows: in the next section, I will present a review of the relevant literature on organizational identity. in Section 3. 1 address the research questions and the central approach I use to answer these questions. Section 4 provides a discussion of the methodology used. Data and analysis are presented in Section 5. In Section 6 the findings are discussed and Section 7 concludes with the conaibutions and limitations of the study. Before reading on. please note that throughout the thesis I use a nurnber of expressions - such as "identity evolution". "identity construction strategies used by management over time" and "identity elaboration in management discourse" - to denote the same phenornenon or process. As wiil be discussed later. top management's presentation of the organization reflects and creates identity (Barr and HuK 1997: McMillan. 1987: Scott and Lane. 2000). Furthemore. it is of no consequence to the discussion whether or not intentional construction strategies were used by organizational authors. The fact is that some stntegies wrre used. whether intentionally or not. and the purpose of this thesis is to unsover these saategies and not to determine the degrec of intentionality diat lies behind them. In addition. it should also be remarked that although the discussion &en refers to how organizations "speok" about themsclvcr. organizations are social constnictions and cibsrract entitics which do not. in fact. speak. Rather organizational messages are cornposed by human acton bestowed with the power to speak on behalf of the organization. 2. LITERATURE REVIEW

In this section. I provide an overview of the concept of organizational identity. I drsçribc bietly the origin of the term "identity." after which I review its use in the organizational literature. Iargue that identity is expressed and elabonted through discourse and communication and that top management plays a major role in this communication. This is followed by a detailed discussion of the dimensions of centrality. distinctiveness and rernpo~dcuntinuity which. .\Ibert and Whetten ( 1985) indicate. detine the aspects of idcntity. .Alier I riddress the limitations of these dimensions, I elaborare un how each is rnanitèstcd in management discoune. 1 argue that although identity has been conceived to be persistent. it can also wolve and this evolution is elabonted in top management discourse. This section concludes with a discussion of the dittèrences benveen the concepts of identity. culture. and stratep.

2.1 WHAT IS ORGANIZATIONAL IDENTITY? Cheney (1991), following W. Mackenzie. indicates that the origin of the term "identity" can be traced to Aristotle who coined the word razrtotes - identitas in Latin - to speak about sarneness in different individuals. To Anstotle. brothers bom of the same parents are identical with each other, they are the same thuig, but in separate individuals. Mackenzie found the term to appear Iater in Roman and Medieval thought in comection with the Trinity. With the romantic poets. identin took on the meaning of essence - "an essential elsment in the continuity of penonality" (Macke~e,1975. quoted in Cheney and Tompkins. 1957:4). By the beginning of this century "the new meaning of 'identity' was established as primary. and the old metaphor in effect 'died"' (Cheney and Tompkins, 1957A). Since then, identity has become a central term in the study of social life and has received attention kom diffkrent thinkers. It was seen as being rooted in unconscious processes and rmotional anachrnents by S. Freud, as being socialized by G. Mead, and as being politicized by H. Lasswell (Cheney, 199 1 ). Identity today, is a concept which is typically associated with the individual person (Christensen and Chençy. 1994) and which provides an answer to the question "Who am i?" (Ashfonh and Mael. 1989). Like other terms that descnbe an individual person's activities or attributes. it has been appropriated by organizational scholars to denote particula. aspects of the or-anizrition. In the same sense that we have come to speak about orpnizcitions as acting. transacting. owning. planning and communicating, we have come to see or~mizationsas having identities. Levitt and Nass ( 1994) indicate that societies are anvious to assign- an identity or identities to the entities they deal with. whether these rntities be of an individuai or a collective nature. Assignrnent of an identity. these authors argue. allows placement of the entity within a social category which enables prediction of behavior and dcfinition of what constitutes legitimate conduct. Identity. however, is not only assigneci by the external world. It is also an integnl elcment of al1 human systems (Tannenbaum and Hanna 1985) - including organizations - which allows them to maintain a sense of self and an ontological distinction tom the environment ( Christensen and Cheney. 1994).

2.2 IDEYTITY IN 0RGANIZA4TIONALTHEORY Identity has been researched at the level of the individual From the perspectives of developmental psychology, psychodynarnics. social psychology and symbolic interactionism. as well as at the level of the group tfom diffèrent social perspectives that examine collective identity based on gender, race, ethnicity and nationality (Ashforth and Mael. 1996). increased interest in the organizational level of analysis has been manifesteci dunng the last few years. although some earlier organizational theorists also dealt with this concept (for example. Selmick, 1957). What the identity literature offers. as Aibert and Wletten (1985) indicate, is not a single concept or theory but a diverse set of ideas, modes of analysis, and propositions. h fact, a review of the literature indicates that organizational identity has been utilized to denote nvo different concepts, om at a micro level and the other at a macro level. At the micro level. reference has been made to the organizational identihpforthe bidiridiai. For example, Ashforth and Mael (1989) indicate that the organization can provide one answer to an individual's question regarding who he or she is. and Van Maanen speaks of an individual's organizational identity in relation to a change situation. "Ln some rases. a shiti into a new work situation may result in a dmatically altered organizational

identity for the person" ( 1 97820).

2.2.1 Mncro Level Organizational Identity .At the macro level. which is the level of interest in this research. a widely accepted concepruaiization of identi ty is provided by Albert and Whetten ( 1 985). These nvo authors indicrite that a statemenr of organizational identity provides an answer to the question "Who are ur'l" Idrntity becomes investigated when questions of information and expected utility di, not provide satistactory answers. thus leading to a discussion of roals and values. It refers to what is of centrdity. distinctiveness. and temporal continuity for an organization (Aben and CVktten. 1955). Building on .Albert and Whenen's conceptualization. some authors detine organizational identity as a set of constructs organizational manbers believe to be die central. enduring. and distinctive character of their organization (Ashforth and Mael, 1996: Dunon and Dukench. 199 1 ; Reger, Gustafson. Demarie and Mullane, 1994; Sanson. 1995). Sroecker ( 1995). also placing emphasis on the members' perspective, indicates that collective identity constitutes the universe of rnembers' fiames that are often linked together. To emphasize that identity refers to the amibutions made specifically by organizational members. Dunon and Dukerich distinguish it korn "image" which they define as the way organizational members "believe others see the organization" ( 199 1 520). The development of organizational identity is highly intluenced by communication.

2.1.2 Identity, Social Interaction, and Communication Communication is a principal element in the formation of identity. At the level of the individual. a young person's interactions and communications with other significant individuals and groups constitute a major factor in the shaping of identity (Laing, 1971). Through communication. an individual presents or affirms self-identity and confims or disconfirms the other's identity. By relying on communication, an individual, embedded in ti broadrr social system, is able to articulate his~hersimilarity to, and distinctiveness fiorn, this system (Christensnscn and Cheney. 1991). Communication play a major role in the social construction of organizational identity 3s wll. Communication precedes evey organization since it is the foundation of ;igcnts1 interactions and transactions (Hawes. 1971: Johnson. 1977: Putnam and Pacanowky. 1983: Taylor. Cooren. Giroux and Robichaud. 1996). Basically. it is though interxtions that organizational identity develops. Ln fact. identity is established with tirne. as a system (individual. group or organization) interacts with its environment (Tannenbaum and Hm3. 1985). interactions cm become pattemed. giving rise to interpretations that are bracketed (Weick. 1979) and sustained. The system develops meanings and interpretations thnt cmerge tiom its anempt to assert itself and to cope with the worid surrounding it. As Gray. Bougon and DomeIlon indicate. "Social interactions. and communication in pmicular. are the prirnary vehicles by which coincident interpretations of redity are created. msmitted and sustained. Through communication. concepts corne to embody similar meanings for nvo or more individuals. that is they become coincident" ( l985:U).

These coincident interpretations include a representation of the organization.

Selznirli ( 1957) argues that. as a result of their adaptive experiences. organizations take on a distinctive charactrr. The distinctive and centrai aspects of the organization become the subject of a cogitive representation which is broadly shared by the coiiectivity (Dunon and

Dukcrich. 199 1 ). This is the organizational identity. in other words. the notion of organizational identity implies a convergence ont0 a representation of the organization The maintenance or evolution of this representation of the organization is highly intluenced by the formai discourse on the organization. in formal discourse. the oganization is presented to intemal and extemal constituents. in fact, for organizations, as for individuals. communication about identi~becomes a major input into identity itself "The telling of one's own story, particuiarly at points when identity is challenged tiom the 'outside'. becomes an important contributor to identity itself' (Christensen and Cheney, 1994:129). Giddens talks about individuals "forging their self-identities" ( 199 1 2). To him, the self is a retlexive project consisting "in the sustaining of coherent, yet continuously revisrd. biogaphical narratives" (p.5). Sel f-identity involves a reflexive understanding by the person of his or her biography. A person's identity is to be found "in the capaci ty to keep a particular narrative going. The individual's bio_aaphy, if she is to maintain regular interaction with others in the day-to-day world, cannot be wholly fictive. It rnust continually integrate events which occur in the rxtemal world. and son them into the ongoing 'story' about the self' (Giddens. 199154).

.At the oganizationai level. identity is elaborated through nanatives told by oryanizntional authon (Czarniawska-loerges. 1994). As Levin and Nass point out. "...orgmizations cm, to a large extent. constmct their own identities. in a lia-gmnirnted and atomized societv, an entity has unique daims to knowledge of its previous behavior and the meanings of those behavion ... : society does not have a drtailed knowledge. rnemory or understanding of the behavion of each individual or organization ... Furthemore. an entity's presumed supaior knowledge of its own behaviors gives a priori authoritativeness to its o~nconsmictions of iü history. .Althouph the soçiety rnust eventually accept the claim to identity - identity is dways externally grantecl - the entity cm have a great deal of involvernent ..." (1 994242).

Through its formal discourse. the organization reflects and cotrstirures its persona or identity ( b1c;Cfillan. 1987). Yet claiming that an organization plays a major role in the construction of its identity through its discoune. impels us to look for the authotfs) of organizational identity presentation messages. As McMillan indicates. "there is a human being behind each organizational message" ( 1987:32). Sorne individuals or groups in the organization are invested with the authority to speak on behdf of the organization or to represent it. No group is more prominently invested with this authority than the top managers of the organization. As Ashforth and Mael (1996) point out, the elabontion of organizational identity is sûongly intluenced by the preferences of powerholders Iike top management. Top managers are the macro-acton who have "authority to speak or act on behalf OP' the other actors in the organization (Callon and Latour. 1985:2?9). By presenting the organization to stakeholders, these actors engage in the expression and construction of organizational identity (Scott and Lane. 2000). As I will point out below, these acton play a particularly signifiant role in the elaboration of identity in a context of change. 2.2.3 The Role of Top Managers in the Elaborrtion of Identity Numerous authon have emphasized the role of leaders in creating rneaning for orgmizations (Barnard. 1938: Srlznick. 1957: Lyles and Schwenk. 1992: Pemgrew. 1979; Pfeffer. 195 1 : Pondy. 1978: Smircich and Morgan. 1952). Top management cm intluence the co~mitivrrepresentations pmple have of the organization through its interpretation of environmental events and organizational capabilities (Dunon and Jackson. 1957: Lyles and Scha enk. 1 991) and through its translation of cues into rneaning (Daft and Wrick. 1954). The rok of top managers in the construction of identity is particularly significanr during tirnrs of change. Change constinites a context of hi@ ambiguity in organizations (Gioia and Chirtipeddi. 1991: Schweiger and DeNisi. 1991). People who expenence ambiguity otien look for clues in the environment that may help them interpret the situation (Weick. 1985). As Watzlawick points out "confusion aiggers off an immediate search for msaning or order to reduce the amiety inherent in any uncertain situationt' (197627). During organizational change. individuals and groups affected by the change attempt to reduce the experienced ambiguity and becorne highly attentive to communication tiom management (Schweiger and DeNisi. 199 1 ). Pfeffer (1951) indicates that tiequent communication by management. through informational social intluence. leads to the development of a cornmon set of understanding about the organization and the environrnrnt. "These understandings. these shared meanings. provide organizational participants with a sense of belonging and identity as well as demarcatine the organization From its environment and assisting in the control and cornmitment of those within the organization" ( 198 1 :13). Communications tiorn management are panicularly important in a context of change since stakeholders' previous knowledge and understanding of the organization and its environment may no longer apply. However. top management cannot control completely the meanings which stakeholders will amibute to its staternents of identity. Symbolic resources are subject to interpret arions (Chnstensen and Cheney, 1994). This, nevertheless. should not divert attention Iiom the tàcr that top management can carefully choose labels and expressions that are evocative of particular desired images of the organization. Pondy ( 1975) indicates that whrn a group's expenence cm be put into rvords. the meaning of the group's action becornes a social fact. He Merargues that an individual who cm make sense of things and put them into language meaningful to other people is in a position to gain enormous levenge. "Language is a major tool of social influence" and one of 'The least visible of (suçh) intlumces" (Pondy. 1975:9 1-92). Through the careh1 use of language. top management may be able to intluence how different stakeholders view the organization and thcir relxi~nshiptu it. liVctic.k armes- that people who cm find labels that bring order into ambiguous situations are able to direct organizational action. "Labels cany their own implications for action. and rhat is why they are so successtùl in the management of ambiguiw' (Weick. 1985: 128). People who cm resolve ambiguities in an organization sain power. *'The values of thrse powertùl people ofien affect what the organization becomes" (Weick. 1985: 125). .As menrioneci above, a situation of change in the organization is one of hi& ambiguity and is one a-here top management is looked at for explanations. in general. the sociaily accepted role of top management as a strategist and mano actor. as well as the arnbiguity of the situation. gant particular importance to management's representation of the organization's identity. As top management is best placed to propose labels to define the situation. it cmset the stase - and manage the context - for the discussion of identity. Thus, despitr constraints. top management remains. in gencral. the more influentid actor in the representation of organizational identity. Yet, despite the importance of top management discourse about the organizational identity. no study has attempted to systematically track how this identity is presented in top management discourse for a business organization. The purpose of this thesis is to explore the identity elabontion processes in a context of change through the study of top managrnent discourse. Orgmizational Iiterature has indicated that organizational identity is defined by a number of dimensions. some central. some expressing distinctiveness. some persistent (.Albert and Whenen. 19S5; Ashfonh and Mael. 1996: Dutton and Dukerich. 199 1 ; Gioia. Schultz and Corley, 1000; Sarason. 1595; Scott and Lane, 2000) and others changing over time (Gioia and Thomas, 1996: Fiol, Huff and Sarason. 1996). In what follows, 1 wili discuss these dimensions and how they are reilected in management discoune.

2.3 CENTRALITY Tmnenbaum and Hanna indicate that with time. a system develops a number of anributes whish may range hmthe boundary of the system to its center - what the authors ciil1 "the system's core of identity" (1985: 102). The peripheral amibutes are minor and solitnry in cornparison to the core elrments which are tùndmental and snongly interconncçted. In a similar vein. Lyles and SSchwenk ( 1992) indicate that in oqanizations there are both core and peripheral "shared beliefs". The core aspects are subject to widespread agreements and "facilitate undestanding about the tirm's general purpose. mission and cornpetitors" (p.160). These core aspects are supported by peripheral ones which may not be subject to widespread consensus and which relate to subgoals. Thus. we can think of organizational attributes as being located on a continuum ranging fkom the central to the peripheral. Ashforth and Mael indicate that the notion of cena-ality implies the positioning of an amibute in a hierarchy of attributes. These hvo authon also draw a parallel benveen individual identity and organizational identity: "Research on individual identity suggests that central self-conceptions tend to be well-elaborated and densely comected, providing strong cues for cognition, behavior and affect... Similarly, organizational identiry refm to the focal or core set of attributes that denote the essence of the organization... in sum. the centrai character retèrs to a self-contained cosmology, a more or less intemally consistent system of pivota1 beliefs. values. noms - rypically anchored to the organizational mission - that informs sense-making and action. This character ofien retlects the needs and prekrences of organizational powerholders" (Ashforth and Mael. 1996).

.As the above indicates, a centrai aspect of the organization is derived from its line of business. McMillan argues that the central detminant of identity in organizations is technology: "in shon. we are what we do" (1987:38). In a study of a work group in a Japanese factorv, Kildu ff. Funk and Mihra ( 1 997) observed how the process of producing a high tech machine was enmeshed with the construction of the groupls identity. This led the authors to conclude that the technologies - utilized here in the wide sense of the word - whiçh structure time and space hrlped shape the collective identity: "technologies sustain the crcitiing of selves" (p. 59 I ). In snuthcir vein. the notion of crnrrality as involving self-conceptions that are dcnsrly connectrd. implies a consistency benveen the çomponents of identity. in his snidy OF a social rnovement organizrition. Stoecker rrmarked that consistency in the hunes composing identity is important. Over time. constituent groups "may emphasize. alter. or replace various subsets of %mes. which may create contradictory hesubsets within the collecti\~eidentity and lead to identity disputes" (1993:1 13). For organizational members. la& of consistency cmcreate dissonance. 'ievertheless. an organization may persist despite its possession of inconsistent. and possibl y contmdictory cenaal attributes. Thus, Albert and Whetten ( 1 Wj), and Whetten and

Foreman ( 1994) talk about "hybrid organizations" or organizations with "multiple idrntitirs" in refemng to institutions that refirct a mixed hentage or "multiple organizing logics". Such is the case of agricultural cooperatives and universities that dernonstrate both. a normative çharacter and a utilitarian one. which in principle. are at odds. And although most organizations cannot be said to be hybrid or to reflect multiple identities according to the definition given above. they may nevertheless, present themselves differently depending on the context. Thus. organizations cm resort to selective categorizations, highlighting altemate amibutes depending on the issue requinng an affirmation of identity (Elsbach and kamer. 1 996).

23.1 Centrality and Management Discourse Albert and Whetten (1985) point out that managers reson to a classification of the central attributes when called upon to answer the identity question, and the classification scheme evoked depends on the purpose underlying the need for a statement of identity. In Albert and Whetten's view, there may be no one best statement of identity, but multiple and equally valid statements. "Wr treat the problem of imprecise. possibly redundant. or even inconsistent multiple classifications at different levels of analysis not as a methodological problem to be solved, nor as a deficiency of the concept of identity, but as a description of the facts of self-clûssification to be examined and explained" ( l9Sj:XS).

Expression of different identity amibutes corresponds to the enactment of diRerent roles in diverse social scenes (Dubar. 1995). Given the multiple interests that must be heedcd by the oganization. it is likely that top management's presentation of the orpnizarion will vary with the aim for which a self-definitional statment is required. For example. in justi@ng the undertaking of an unconvenhonal merçer and acquisition. an organization's top management may evoke the aspects of identity which speak of the organizrition's strateLic orientation. such as being an innovator or prospector. in addressing the reasons for implementing tlexiblr workplace policies. managers rnay make reference to thr aryanization being a progressive employer. Chrnry (1991) argues that organizations are able to operate in different - and somctimes contradictory - domains partly because of their ability to manage rhetorically their idrntity. He States that ditrerent identities in organizations are associated with diverse domains of discoune or tields of argument. More importantly however. Cheney notes that orgluiizations that produce seemingly contradictory statements of identity rnay reveal their core when questioned. in other words. affirming that an organization has an identity which is central to it. is not inconsistent with the notion that this organization produces diffkrent statements of identity. Here again Cheney's arguments are pertinent. in his study of the C.S. Catholic Bishops' drafting of The Challenge of Peace. a document that speaks against the expansion of nuclear weapons. he indicates that: "(The bishops) struggied to speak both as moral-theological leaders and as technical-pol i tical leaders without embracing the "identity" of technical-political spokespersons. As the bishops participateci in both domains of discoune - using tems of the Church as well as those of secular interest groups - they were pushed and pulled by goups who wanted thern either to stick to one set of tms(in the case of the political right) or work with both sets (in the case of the lefi). Ultirnately the bishops argued in both fields but clung to their moral-theological identity when they were chailrnged by critics" (199 1 :178). For most organizations, we are less likely to find contradictory themes in different statements of identity articulateci by top management. and more likely to find variations on particular themes. Holland (1 978:452), following Lichtenstein, points out that identity can be thought of as a "theme with variation". The central aspects are there. but these may be expressed or presented in various ways. In sommunicating with different publics. organizational authors iake advantage of the equivocaliry inherent in words and labels to project diRerent meanings. while at the samr time rnüintaining the appearance of being consistent. Because of this equivocality, a key terni or expression used to descnbe an organization - suçh as 'efficient' or 'socially rtisponsible' - cm bt: used with different connotations depending on the context. By relying on the tlenibility of symbolic resources. orgyiizations adapt the sel f-referenrial discourse to di ft2rent audiences. while at the same time appearinç consistent (Christensen and Chene. 1994). In fact. top managers rnay inteniionally refnin ttom providing very çlear and precise statements of identity. "Precise classification may be impossible and more importantly. undesirable" (Albert and Whetten. 1985268). This is consistent with Eisenberg's (1984) arkwment that engaging in strategic ambiguity in organizational communication may be a political necessity since it allows different stakeholders to apply different interpretations to the synbols used. In bricf. the literanire indicates that central attributes rnay be hierarchically ordered in alternative ways. However. the litenture does not indicate how attributes can increase or decrease in centnlity with time and what implications such shih have for the structure of identity. Neither does it tell us how possible shih in central aspects are presented to stakeholders.

2.4 DISTINCTIVEXESS Christensen and Cheney (1994. following Morin) state that identity is a center of knowledge about the self as separate eom the environment. They view identity as an essential drive of living systems to speci@ a world of their own by which the boundaries benveen the self and the environment are delineated. "Being on the one hand open and indissolubl y comected with the environment, the living system on the other hand articulates ontoloijral sepantions between the self and the nonself, between sense and nonsense"

( Ctuistensen nnd Cheney. I994:?18). By maintainhg a distinction behveen the self and others. the systcm is able to persist as a relatively autonomous entity whose relationship with the environment is confirrned through communication (Chnstensen, 1995). However. the imer drive to establish a distinctiveness fiom the surroundings is in constant interplay with forces external to the organization. Whde human systems may be actively involved in the management of their distinctive identities. their aaernpts are partly shaped by the extemal forces of socialization (Christensen and Cheney, 1994). In fact. iirganizations need to affirm their adherence to established social noms and values since this confers Icgitimacy upon them and helps hem secure necessary resources (Meyer and Rowan. 1977). Corrcive. mimetic and normative pressures in the institutional environment rict as rntxhiuiisms Ieading to the isomorphism of organizations (DiMaggio and Powell. 1993). Funhmore. industry recipes are likely ro ernerge in snategic goups which are followed by organizations within a group. making them quite sirnilar (HUE 1952). Cqenter (1991) indicates that organizations that belong to the same sector share industry characteristics that may contnbute to the content of the staternent of identity. Thus. there are institutional and industrial forces that lead organizations to converge on a set of attributes. Declarations of distinctiveness are ofien evident in organizational stories. But here again. an organization can ody draw on a limited number of categories which are available to otha organizations as well. As Martin. Feldman. Hatch and Sitkin (1983) argue, an organization's daim to uniqueness is paradoxically expressed through manifestations which are not unique. Ln thrir snidy of seven types of stories which make claims to uniqueness, they dernonstrate that such stories occur in identical fom in a variety of organizations. Still. the uniqueness is reinforced with the company-specific details provided. such as the names of individuals involved. what badges were wom. where the action took place and so on. What contributes to the distinctiveness of an organization is basically the unique combination of the different attributes that have been reinforced with time (Nizard, 1953).

To Selmick ( 1957). an organization's character is the result of the historicd patterning of its responsive interaction and reflects its specific experiences. A "distinct identity" evolves as an organization becomes infused with values and develops unique outlooks and habits. This identity "retlects the irreversible element in expenence and choice" (Selznick, 1 95 7 :-IO).

2.4.1 Distinctiveness and Management Discourse Orgmizational litentue tells us that management resorts to selective ciitegorizations of identity attributes and comparison groups in order to rnaintain the orannization's- distincti\reness when Wced with an identity threat (Elsbach and Krarner. I Wh). .Clanasers oHen çhoose to address those identity amibutes. and to compare the orgmiziition with those goups. that allow it to appear distinctive. The more positively distinct idrntity is made to appear with reference to a comparison goup, the more attractive it may seem to organizational stakeholders (Ashfonh and Mael. 1989: Dunon. Dukench and Hÿrquail. 1994: her.1993). However. more research is needed to investigate how the distinctive aspects of identity shifi with time and how management presents the erosion or building up of distinctiveness in its self-definitional discourse.

2.5 TEMPORAL CONTINUITY 1 had pointed out previously that organizational identity merges f?om interactions which are bracketed. leading to the convergence on a collective representation of the oganization. When an organization is attributed central and distinctive traits, these traits are drain on continuously in the Merinteractions and transactions of mernbers. Thus, Dunon and Dukerich (1991) found out. in their study of the Pon Authority. that organizational mernbers evoke the organizational identity in making decisions and in definin- the bais for their transactions wihn the organization and with extemal groups. By doing so. mernbers perpetuate the organizational identity. .A pod example of the identity perpetuation process is provided by the Memorial Hospital case in Meyer's (1952) study. Memorial was a hospital that cherished self-reliance, stability and commitment to employees. When this hospital had to face an environmentai jolt - narnely a doctors' sec - it "absorbeci the strike's impact and protected socially embedded organizational attributes by opting to deplete financial reserves rather than lay off ernployees" (p. 530). Mernorial's actions constituted a re-affirmation of the attributes of reliance. stability. and care for employees. "The administrators' benevolence was Mer emulated by physicians" (p. 533) who cooperated during the strike. merreinforcing the organizationd- amibutes. Organizational identity was evoked in making decisions regarding actions to be taken. These actions. in tum,helped reinforce the identity and perpetuate it. In other words. organizational identity. like other bracketed interpretations or memings. cm take on enduring or stntc~wipropenies and thus exen influence on iùrther intrraçtiuns t Giddrns. 1979: Ransiin. Hinings and Grernwood, 1980) sprciaily when these rncanings emerge ffom past organizational successes (Miller, 1990). Tannenbaum and Hmna indicate that "as constnicted or developed by a system through time. identity is dcfinsd by a number of sytern atmbutes. or fixities" ( 1985: 10 1). The term "tixities" captures well the çrystallization of identity attributes with the passage of time. Similady. Gagliardi (1956) indicates that organizations' pnmary strategy involves the maintenance of their cultural identity. implying that identity and change are incompatible. The antithetical reiationship between identity and change is clearly retlected in the expression "identity aisis". To Enkson (1 968). this expression is used to denote a situation of loss of persona1 sameness and historical continuity. At the organizational level. firrns can be said to expenence an identity crisis when they have to face the prospect of a "new" identity which is not consistent with their history (Levitt and Nass. 1994).

2.5.1 Continuity. Change and Management Discourse The above issues compel us to ask what happens to identity in a context of change. Cm identity change'? To start with. it should be noted that afirming that identity tends to endure does not mean that it remains static. Identity is never completely fined. It is constantly subject to revision as the context shifts. Nevertheiess, organizational identity cm. md does. maintain its core content as long as the context within which it is embedded calls for no major re-evduation. If we cast Levitt and March's ( 1988) argument in the terms used in the present discussion. we can Say that the organizational identity can be flexible enough to allow change in operational routines without altering the core of identity itself. This is consistent with Fox-Wofgramm et al's contention that "organizations cm change without necessariiy changing their identities" ( 1998: 12 1). These authors taik about "plasticity" in identity to refer to the fact that identity cm be expanded without breaiung or changing in essence. One cm still question. however. how far an identity cm be expanded before we can talk about a change in identity. .A number of authors who have studied organizations in a context of major change have challenged the notion of temporal continuity as one of the basic dimensions of organizütional identity. Gioia and Thomas ( 1996) - in their study of change in academic institutions - indicatr that a key question is whether idenuty cm be endunng if saategir changr is ro ocçur. .A sirnilar question is asked by Fi01 et al ( 1996). ln genrral. idcntity tends to endure drspite some changes in the organization. These are incrrrnental or first order changes (Watzlawick. Weakland and Fisch. 1974). More tùndarncntal changes in the system. or second-order changes. are likely to entail major modifications in identity itseK We would expect such changes in identity to occur in cases of reorientations which involve discontinuous shitts in most aspects of the organization (Tushman and Romanelli. 1985) or when the organization changes tiom one archetype to ano ther ( Greenwood and Hinings. 1993). If ive consider again the notion of "identity dsis". we will note that while it suggests the ditticulty of chmgmg, it also carries within itself allusions to a possible tuming point. h "loss of. .. sameness" also implies possibilities for change (Enkson. 1968:16). Today's orçanizations carry out their operations in increasingly cornplex environments and with increasingly sophisticated management options that offer them multiple opportunities for self-redehition.

Giddens ( 1979 and 1981) affirms that a hdamental element of hurnan agency is retlexivity. Agnts are capable of monitoring and adjusting their actions. ïhrough their creativity. hurnan actors cm produce changes in established structures (Poole. Seibold. and MçPhee. 1985). Reflexivity luid creativity are manifested when a major change is initiated by agents in an organization. Such a change could imply a msfonnation in identity. Planned major changes in organizations are undertaken by top managers (Tushman and Romanelli. 1985). As rnentioned previously, top managers are the macro-acton irn.ested Mth authority to speak and act on behalf of the organization (CaIIon and Latour, 198 1). They exert a high intluence on the new course for the organization, and the attributes by which it should corne to be defined. When they plan major changes for the organization. top managers introduce new themes into the organizational discourse. They provide a statement of Fision (Gioia and Chittipeddi. 199 1 ) or tùnire identity. This statement provides a projected identity for the orgmizotion. Ln other words. it provides a tùture image of the organization (Gioia and Thomas. 1996). or a hture representation to be fultilled through implementation of the proposed changes. This vision cm help propel organizational action in the direction of implrmentation of the needed changes to achieve the vision. Sinçe major change may threaten identity and induce resistance. most articulations of a "ne\\." identity by top management seldom sever çompletrly the ties with the past. Ln his longitudinal snidy of Imperia1 Chernicd Industries. Pettigrew ( 1985) found that rvrn whrn major changes are desired. they are ofren sought in a context of some continuity. Whiting indicata that "only when certain matten cm be depended upon to stay in place will resources become available to modiw others" ( 1 976: 197). A new statement of identity which diverges highly tiom the previling one has a low likelihood of penetrating the organization's cognitive tilters (Reger et al. 1994). Thus. management may hethe upcoming changes so they do not seem to be widely divergent hmthe orgtnizationûl identity. This will increase the probability that the change will be nccepted (Reger et al. 1994). Pondy and Huffs ( 1985) study of a school shows how proper choisi: of langage helped tiame a decision to utilize computers in the educational process as ordinary and routine. thus downplaying the discontinuity with pasi attributes and practice. The use of computers was portrayed by the president as an extension of the shared orgnizational atmbute of insrnicrion in the basic skilis rather than as a break with familiar ways. By presenting the change as consistent with the institution's identity. the resistance to the change that may have resulted othenvise was prevented. Thus. the organization's past was retiamed so it seemed consistent with the changes desired at the organization (Levitt and Nass. 1994). However, empirical studies also tell us that changes in organizations are not aiways framed as being compatible with the organization's previous self-defition. For example, in her study of the US. Post Otfice Department reorganization. Biggart ( 1977) found that top managers. who had the mandate to effect the change, resoned to a discreditation of the attributes of the organization prior to the change. Former policies. management style, structural arrangements. logos. were al1 denigrated. while new arrangements and amibutes ünd those uho complisd with them were pnised. in this case too, the organizational history was rrintrrpretrd so as to provide justification for the chanse. Ironically. however. it was re-interprrtsd md pomayed in a negative light. Orgmizational scholars have devoted considerable attention to studying changes of difirent types and magnitudes. However. very few studies have researched the discursive presenration of identity during these contexts. Yrt. as the above discussion indicaies. top management discourse about the change and its impact on identity may snongly intluence how the change is perceived by organizational stakeholders and the latter's acceptance of rhr change. More research should be devoted to undentanding the identity elabontion strategicts used by management in a context of change. Research should also address how prrsistrncc in identity is established in discourse. if at al].

The above constituted a review of what the literature says and does not say regarding centrality. distinctiveness and temporal continuity of identity and how these dimensions are expressed or created through top management discouee. I will rnove on to discuss the di fferences betsveen organizational identity, culture and strategy.

2.6 ORG.4NIZATION.iL IDENTITY, STRATEGY AND CtTLTURE LVhen the subject of organizational identiv is evoked. frequently asked questions which arise revolve around the difference between identity and other concepts that rnay seem similar to it. Authors who have written about organizational identity ofta atternpt to distin~ishit - with more or less success - tiom related concepts such as organizational culture and oganizational smtegy. in the following 1 discuss the distinctions betsveen idrntity and culture as well as identity and strategy. 2.6.1 Identity and Culture Srveral reviews of the literature point out that there are numerous perspectives to organizational culture and each defines the concept differently (Allaire and Firsirotu, 1984: Smirciçh. 1983). Establishing a distinction benveen identity and culture depends on the drtinition sdopted of rach of these nvo concepts. The diRerence benveen the nvo has not been the subjrst of a consensus among organizational theorists. For example. Nizard

( 1983) argues that culture is a subset of identity and a poweriùl expression of it. Similariy.

Ash forth and Mael ( 1W6), indicate that identity is a lvger concept than culture. but they do not dttîïne or discuss what they mean by culture. Albert and Whetten deciare that: "ibhat Ive will define as important about an organization will depend on how we chvacterize the organization as a whole. Consider the notion of organizational culture... 1s culture part of organizational identity'? The relation of culture or any othrr aspect of an organization to the concept of identity is both an unpincal qucstion (Does the organization include it arnong those things that are central. dis tinctii-eand endurin& and a theoretical one ( Does the theoretical characterization of the organization in question predict that culture will be central. distinctive. and an enduring aspect of the organization)" ( l985:265-266).

Howexr. by the same token. one cm ask "1s identity part of organizational culture?". and say that the answer depends on the theoretical perspective which is taken to the notion of culture. Unlike the authon mentioned above. 1 personally subscribe to a detinition of organizational culture which is broader than oqanizational identity. Like Fiol ( 199 1 ), 1 propose that identity provides the luik between two aspects of culture: one constituting a set of unobservable and unspoken rules or underlying beliefs and the other constituting of behavioral manifestations. Fi01 however. argues that a)culture as unobsewable and unspoken niles and b)culture as behavioral manifestation, constitute two opposing viws of organizational culture. Rather than seeing them as opposing notions. I set: them as cornplementary and as different aspects of organizational culture. In other

words. I ltrreeb with Hatch (1993) that culture involves a dynarnic interaction between ~alues. assumptions. symbols and artifacts. dl of which are components of the organizationai culture. Given this perspective, organizational identity constitutes a subset of culture: narnely the part which speaks particularly about the orjanizational amibutes. .-\ similar distinction between identity and culture is made by Reitter, Chevalier. Laroche. Mendoza and Pulicani ( 199 1). To these authors. identity and culture constitute two tùndamental Irvels of goup litè. Culture includes collective practices deriving fiom a local knowledge which al1 group members must possess to function properly within the rroup. It also includes the system of collective syrnbols (pp. 24 & 274). Some cultural C phenornena cmot be verbdized by acton: they may not be conscious and may be so intcmalized. that they strive without being expressed. Identity. on the other hand. is a coherent jet of chmcteristics developed by the group throughout its history, and recognizable by group members (p. 2 1 ). Identity cm be verbalized by group members.

2.62 Identity and Strrtegy Strateg has been detined in numerous ways in the iiterature (Mintzberg. 1990: blintzbcrg and Waters. 1985). Describing the nature of the relationship benveen strategy muid idrntity depends largely on how these nvo concepts are defind. This relationship has reçrived some interest in a number of studies. Dutton and Dukerich (1991) give an illustration of how identity cmaffect action and strategy in organizations. In their study of the New York Port Authonty. they show that managers' view of the organizational identity affected their interpretation of. and reactions to. die issue of dealing with homeless people on the premises managed by the organization. Miles and Carneron (1982) talk about a "corponte character" which is approxirnated by an organization's peculiar mix of relatively cnduring features including its strategic predisposition, dominant values and beliefs in the process of cntical decision-making. and a core distinctive competency. Thus, an orynization which descnbes itself as having an innovative strategic predisposition and which believes it has a distinctive competency in technology is likely to pursue the stratey of being the fint to introduce cornputer-based sales and services in its industry. Ashforth and 'viael ( 1996) dari% well the distinction between the two concepts: "Identity refers to an organization's centrai, distinctive, and enduring character, typically anchored to its mission. whereas strategy refers to an organization's goals and the activities intended to achieve them. ldentity can serve as a wellspring for strategy. dthough identity and strategy are reciprocally related such that identity is

enacted and expressed via strategy, and intèrred modified or affirnied fkom strategyi , The impact that identity and strategy have on each other is also explained by Sarason ( 1995). Arguing fiom a structurational perspective (Giddens, I981), she indicates that there is a reciprocal relationship between the two. Identiry impacts strategy through the vision of managers that drives strategic behavior: and strategic behavior impacts identity, espesirilly as participants gain a sense of the organization by observing what it does. In discussing the relationship benveen identity and stntegy. authors usually point out to the orgmization's identity as viewed by top managers. Carpenter (1994). for example. explains that the decision to divest an organizational unit is related to the top management team's shared gestalt of the distinctive, central and enduring attributes of their arganization. Both. strategy and identity are strongl y intluenced by top managers' worldvitlws.

In this section. I provided a review of the literature pertinent to my research subjecr. In the next section. I provide the research questions which guideci this research and discuss the central approach Iused to answer thrse questions. 3. RESEARCH QUESTIONS, CONCEPTS AND APPROACH

In this section. 1 present the research questions that guided the snidy and the central approxh I adopted. Thus. 1 presrnt the research questions which focus on unrrs«l\d issues in the past literanire on organizationai identity. 1 then provide the definition of organizational identity which I adopt in this snidy and which is based on clctments discussed in the literature review. As this snidy focusrs on the evolution of organizritional identi ty in top management discourse. 1 wiil explain where a researchrr can possibly look for such discourse. 1 thrn describe how I approash the snidy of identity c.w l iit ion in top management discourse: this involves the application of the grounded theory approach which allows for the emergence of theory from the data analyzed.

3.1 RESEARCH QUESTIONS Previously. 1 pointed out that authon have been in disagreement with respect to whether identity changes or tends to persist. and that this issue needs to be researched tùnher. 1 also indicated that top management discourse on identity has not been systematically researched in the literature and yet. it is a major element in the expression and eiaboration of organizational identity. specially in a context of change. The aim of this thrsis is to explore how identity in top management discourse develops over time in a contcxt of change. The research questions that guided the study are: What aspects of identity are addressed in a context of change in top management discoune'? Do these aspects evolve. and if so. how? What contextual factors are associateci with the evolution*? To answer these questions. 1 propose the following conceptualization of organizational identity. 3.2 DEFIYITION OF ORGANIZATIONAL IDENTITY The litrrature indicates that organizational identity is constnied through discourse u-hereby statements of self-definition retlect and heip create identity. It also indicates that top manasement has a pre-dominant role in detining the organization to stakehoidrrs. Furthemore. although some definitions of organizational identity have placed emphasis on the central. distinctive and enduring amibutes of the organization. these dimensions cm shi% unith timc deprnding on the context. Based on these affirmations. 1 define organizational identity as a representation of the organization which refers to the central and distinctive amibutes as well as to the enduring and shifting anributes of the organization. This represrnration manates in great part tiom a discursive claboration on the part of top management. Through its statements of identity. top management helps maintain or change an oryanizational representation. intluencin_r stakeholders' view of what the organization was. is, and \vil1 bé.

3.3 TOP >I.\N.GELIIENT DISCOURSE 3.3.1 Writtcn discourse A researcher looking for statements of identity in top management discourse, cm find his. hér object of interest in top management's day-to-day conversations and interactions with ditierent individuais and/or groups. The researcher could also tind the object of interest in witten organizational texts. Conversations are epherneral (Taylor and Van Every. 1993); spoken discourse "has the character of a tleeting event" (Ricoeur. 197 1 53l ) and is hard to retrieve post îàcto. Wriaen texts, on the other hand. tend to endure. These texts cmbe retrieved and re-analyzed (Ricoeur, 197 1; Hanks. i 989). Since the interest of this snidy lies in organizational identity in management discourse over an ex tended period of time. reliance on wrinen organizational texts was most appropriate.

3.3.2 Content There is a multitude of ways that a researcher cmapproach witten texts. Because this study focuses on top management's identity-revealing discoune. emphasis was placed on rhc: content of management's aatements of identity. More specifically. idenri- themes. and thrir evolution constituted the subject of the study. As will be expiained in detail in the methodology section, these themes are revealed in key words and expressions. Such words and expressions derive much of thcir meaning t?om the context within which they are pronounced.

3.3.3 Contest To bs able to understand wd explain the contrxt within which discoursr on identity de\doprd. 1 consulted numerous oqanizational and industriai dscuments. The importance o t' gathcring in tomnation on contextual factors to understand discourse on identity cannot bc overernphasizrd. .As Hanks indicates. "it is doubttùl whether my approach to discourse that posits text-works can limit itself to the textual anifact alone. without taking

the nrxt step of situating the artifrict in a broader .. . context" ( l989:98). Interna1 and extemal contrxt factors have an impact on top management discourse on identity and must br taken into consideration in explaining the evolution of this discourse. I thus adoptrd the approach of contextualizing top management statements on organizational identity. This. in tum, led to my reliance on qualitative data. A rich contextualization of phrnornena in research entails the use of qualitatively-based information (Xliles and Huberrnan. 1994).

3.4 APPROKH USED Since this is an exploratory snidy and since the area of organizational identity is in m early stage oidevelopment. 1 adopted the grounded theory approach (Glaser and Stnuss. 1 967: Strauss and Corbin. 1990). In tàct. this approach has been extensively utilized to anal>zequalitative data. Stnuss and Corbin indicate that a major assumption underlying this approach is that not ail the concepts pertaining to the phenomenon being studied have been identified: or if they have been identified they are "concepnially underdeveloped" ( 1WO:3 7). Identity evolution in management discourse has not been systematicaily reseuched in the literature. Concepts and idem regarding this nibject are f'ragmented and sometimes inconsistent. Furthemore. using the grounded theory approach irnplies that the researcher does not start out with a narrow research question. The initial question is broad and is progessiwly narrowed dom during the research process as relationships benveen concepts rire discovered. Narrowing down the question. h~wever."does not entail statements about reliitionships between a dependent and an independent variable. as is çornrnon in quantitative srudies because the purpose is not to test this kind of hypothesis. The research question in a grounded theory is a strtement that identifies the phenomenon to be studied" (Strauss and Corbin. 1990:35: bold in the orignal). The grounded theory approach was described by Glaser :rd Strauss (1967) as involving the "constant comparative mrthod of analysis whrreby data is gathered and analyzed. [radins to the emergence of conceptual categories. This. in mm. Ieads to more data gatheriny and analysis until categories and their propenies cm be integnted leadinç to an cmerging theory. -.A goundeci theory is one that is inductively dnived tiom the snidy of the phenomenon it represents. That is. it is discovered. developed. and provisionally verifird through systematic data collection and analysis of data pertaining to that phrnomrnon. Therefore. data collection. analysis. and theory stand in reciprocal rciationship with each other. One does not begin with a theo.. then prove it. Rather, one brgins with an area of snidy and what is relevant to that area is allowed tu emerge (S~MUSSand Corbin. 199023).

..\pplyinaC the gounded theory approach to the snidy of identity evolution in top management discourse entails looking for markers of identity in the content of texts. Once these rnarken have been identified. their development is traced for the perîod under snidy. Contexnial factors associated with identity development also have to be identified and traced. The patterns that surface fom the basis for a theory that emerges fiom the data.

tn this section. 1 provided an overview of the questions that guided the research. I also discussed the major conceptual building blocks for the study. hcluding the definition of organizational identity 1 adopt and the aspects of top management discourse which becorne relevant in a study like the current one. 1 concluded by indicating that the concepts in the area of organizational identity and identity evolution are not sufficiently developrd in the literature. Thus. using the grounded theory approach will allow claborations and nrw concepts to emerge tiom the data. In the next section. 1 tum to the mrthodo logy employed in this research. A METHODOLOGY

-4s 1 indiçatrd bcfore. this is an explontory snidy of organizational identity. The purpose of the resrarch is to trace the process of identity drvelopment in top mana=uemen t discoursr in a context of change. To explore this issue. I effected a longitudinal study of managerial discourse for two Canadian chartered banks for the years 1985 to 1997 inclusively. Dunng this period. these bdshad undergone substantial changes that affecteci their identiv. Since organizaiional identity as an area of study is still at an exly stage of deidopment. the concepts in this area are not well elaborated. Thmefore. I used the

+uoundsd theory approach the aim of which is to generate theory tiom the data. I also relied on relevant recommendations provided by different authors on research methods and techniques related to studying a limited number of cases. as well as those related to qualitative data anal ysis. in what follows. describe in detail the methodolo~gused. I again present the research questions, and then discuss the cases selected. the research design. the units of analysis. the sources of data. data presentation and andysis. as well as the issues of reliability and validity.

4.1 RESEARCH QUESTIONS AND APPROACH As mentioned in the previous section, the aim of this thesis is to explore the process of identity development in top management discourse in a context of change. The research questions that guided the study are: What aspects of identity are addressed in a context of change in top management discourse? Do these aspects evolve, and if so, how? What contextual factors are associated with the evolution? To answer these questions. 1 adopted the grounded theory approach the aim of which is to generate theory from the data. The data for this research was taken from hvo organizations that have undergone change. 4.2 THE ORGANIZATIONS Two Canadian chartered banks constitute the subject of this snidy: the Royal Bank (RB) and the Bank of Montreai (BMO).RB and BMO are comparable in terrns of size. They ranked arnong the top three b& in Canada during most of the study period. Howevrr. a reading of these two banks' tvritten documents indicates that the identity attributes thcy emphasizr differ in several respects. RB rankrd as the largest of al1 financial institut ions in Canada in terms of revenue at the end of the snidy period ( 1997). It considm itself the leader in many respects. BMO is Canada's Rrst bank (cjtablished in 18 17) and ranked third among financial institutions in Canada at the end of the study penod. BMO is the only bank which has retail banking operations in the United States and considers itself a Nonh .Amctriçan bank. The following statements of corporate profile taken fiom the banks' 1997 annual reports (the last year of the snidy period) illustrare concisely the aspects of identity that these banks emphasize:

Royal Bank Bank of Montreal Royal Bank is Canada's largest financial Bank of Montreal. Canada's first bank. is a institution as measured by market highly diversified financial services riipitalization. revenues and net income. institution offenng a full range of services We have leading positions in most in al1 three LIAFTA countries. These are Canadian tinanciai services markets and the companies that serve you: .. .. operations in 36 countries.. . In Canada ,... Intemationaliy.. .

Although the choice of these two financial institutions cmbe justified on a nurnber of theoreticai grounds. the factor that played a major role in my choice is the fact that, of the Big Five çhartered Canadian banks. RB and BiMO are the only ones which have their Archives department in Montreal. For a previous study I had undertaken. I had made numerous atternpts to obtain documents from the other members of the group of Big Five Canad i an chartered banks. However, as their Archives and Pub1 ic Relations departments are situated in Toronto, obtaining these documents was difficult indeed. From a theoretical standpoint. choice of these two chartered banks as snidy cases is justitied by the fact that they have ditrerent histones and. as the corporate profile indicates, drtine thrmseives by different amibutes. dthough they operate in the same indusuy. and are of comparable size. In addition, these institutions have dealt with a number of signifiant changes during the last decade. Changes deriving tiom de-replation. globaiization. i ncreasing compsti tion. technological advancements. international economic develo pments, and customrr rxpectations. have lefi the financial indusîry landscape substantially modified if WC compare it today with the mid-èighties. Both financial institutions in the study have undertriken numrrous resû-ucturings, made a nurnber of acquisitions in related but then non- banking areas. and substantially up-mded the senices they provide dunng the last thirteen yxrs. .-\II thrse changes- have had a major impact on the institutions in question and in the wny they are def ned by management. They therefore constitue interesting cases to study. The process of identity evolution for these two organizatiuns was studied for a penod of thirteen years. fiom Jmuq 1985 to December 1997. ui 1987. major reglatory change occurred relating to the banking seçtor in Canada and this had a major impact on the identity of the organizations under snidy. By considering 1985 as the begiming of the study period. 1 was able to see how the organizations defined themselvrs before these major changes occurred and the impact that these changes have hhad on the evolution of identity.

4.3 RESEARCH DESIGN Tne research involved the study of two organizations. Following Eisenhardt 's

( 1989) recomrnendations. 1 analyze and discuss identity development for each of the hvo organizations separately. The idea is to become intimately farniliar with each organization and its unique patterns before trying to generalize. This intraorganizational anaiysis is followed bby an interorganizational analysis whereby the findings for the two banks are sonrrasted. Similarities and differences are discussed and some general conclusions are made. 4.4 UNITS OF ANALYSIS Studying organizational identity empirically depends on how the concept is defined. To date. most articles on organizational identity have been of a concepnial nature. in the few rmpirical articles on this subject, different operationalizations have been adopted. In what î'ollows. 1 revierv different opentionalizations of organizational identity and propose an opentionalization which is discourse-based,

-#A.1 Operrtionalizations of Organizational Identity in the Literature Of the different studies that research some aspect of organizational identity. one rmployed a sun9ey. In a cross-sectional study, Gioia and Thomas (1996) tested the proposition that strateg and information processing structure are related to organizational identity. In their sumey of academic institutions. they measured two aspects of identity. identity type and strength of identity. Identity type referred to whether the top management tearn saw the institution as more utilitarian or more normative. It was measwed on a seven point Likert scale through questions such as "To what extent do top administrators feel your institution should not be competing for students as if they were clients or customers'?" (p. 0 1 . Identity strength referred to the extent to which members held the values and identity of thrir institution. It was also measured on a 7-point Likert scale through questions like "To what ctxtent do the top management team memben of your institution have a strong sense of the institution's history'?" (p.40 1). It should be noted that the authon' major aim was not to undertake an in-depth study of identity per se. but to test how different aspects of strateg and structure were related to it. Dutton and Dukerich (1991) used a different approach to study identity. in their study of the New York Pon authority. they measured it by asking infamants about their views regardins the characteristics that distinguished their organization. They found that there were six aitributes that summarized the infbnnants' views: "First. 100 percent of our informanu cailed the Port Authority a professional oreanization- with a uniquely technical expertise. ill-suited to social service activities. Second, informants (44%) referred to their organization as ethical, scandal-tiee. and altruistic. Third, 36 percent describeci it as a h-class, high quality organization and a provider of superior service. Fourth, ... Finally, a fourth of our informants expressed a view of their organization as distinctive in tenns of king a tixer. a 'an-dof organization" (p. 526-7).

Ont: ran argue that there are hvo caveats in the above opentionalization. Fint, as the list of chmcteristiss goes on. we cm see that there arc srnaller percentages of informants who tndorse the amibutes. Should an anribute mentioned by 75 percent of respondrnts bs considered an aspect of organizational identity? Walsh ( 1995) questions whrther an aggegation of individual knowledge structures cm be taken to represent the c»llectivr knowledge structure. These issues are not addressed by Dunon and Dukerich. Second. the above characteristics amibuted by organizational participants were relevant to a partiçular problernatic issue salient at the time - that of homeless people on the premises mmaged by the Port Authority. It is possible that a different set of amibures would have surfaçcd if organizational participants were questioned about their perceptions of the organization with regard to another issue. such as a major expansion project. for example.

Fiol et al ( 1996) propose that instead of placing emphasis on the central. distinctive

ctnd enduring aspects of organizational identity, researchers focus on "rhe more seneral question that helps form the glue that holds organizations toyether. This more genenl question is how stakeholders address the question. " Ckho are we'?" . "By timing identity as the address of the ongoing question "Who are we?". we are trying to capture the continuous retlection involved in identification. We want to cmphasize that identity is not something bat is just given - it is something routinely created and sustained through retlection and the testing of evolving ideas of identity."

In their paper, Fiol et al report on their study of the Baby Bells or regionai Bell operating companies (RBOCs) in the United States. They indicate that two questions proved efective in investigating the evolution of organizational identity: " 1)If you were to use adjectives to describe your company in comparison to the other RBOCs, what words ouuse? (and) 2) If ouwere to use adjectives to describe your company in comparison to comperition. what words puuse'?" These questions were presented to eighteen senior executives of one RBOC. Common themes that emerged Iiom the responses were analyzed and used to develop items for use in a questionnaire. The questionnaire items measured. on a 5 point Likert scale, the degrec of agressiveness. strategic focus, customer focus. tolerance for risk, bureaucracy, cost structure. speed of moving and constraint for each orgaiization in their snidy. It is clrar that the identity dimensions that were studied relate to the stntegic orientation of the organizations. In fact. the object of their research revolves around the interrelation behveen organizational strate= and identity. It should be mentioned. however, that the questions askrd and the questionnaire items mentioned above do not gauge the evolution of identity. Thcse questions are most likely to capture idrntity as a product and not as a process. In fact. thc iluthors relird on different sources of data to track the changes in identity and smtegy with timc.

.A process approach to identity is adopted by Stoeçkrr ( 1995) in his study of a social mowmrnt uganization. More specitically. he indicates that the identity of a social movrment organization is consmicted tiom tiames elabonted at direrent structural levels including the community. the movment. and the social movernent organization level. He andyzrs the tiarnes elaborated at these levels at different time periods. He concludes that difkrent liames cm converge or diverge. thus affecting the movement's identity and actions.

Czarniawska-loerges ( 1994) also adopts a process approach in her post-modernist study of the Swedish public sector organizations. She views identity as a narrative "or. more properly. identity construction as a continuous process of narration" (p.198); the appropriate analogy is one "between organizational narratives and autobiographies as narratives constituting identity" (p. 200). She thus shows how the public sector - and the consultants working for it - narrate identity using labels and concepts from the private sector. and re-cast the past so it rernains consistent with the present image which the pubiic sector attempts to legitimate. She looks for the different authors of the narrative. analyzes the labels used and their sources. and examines the rhetoric used by the pubiic sector in the presentation of identity. She takes a broad process view of identity which allows her to analye the multiple factors that impact identity, and to portray how identity is narrated with time. Viewing identity as a set of stable criteria anchored to the past is said to be particularly limiting. especially in midies of organizational change (Gioia and Thomas. 1996; Fi01 et al, 1996; Stoecker, 1995). To overcome this Iimitation, Gioia and Thomas

( 1 996) sugested that researchers focus on the vision of top managers, or what they cdl "the projected image of the organization" as a substitue to institutional identity in snidies of change. The identity of an oganization cm also be inferred from a variety of written organizational documents. Thus. Elsbach and kamer. in an attempt to grt a reliable definition of a number of universities' enduring identity dimensions. searched oqanizational records - narnely universi. catalogs for five yars - for statements regarding the unique and defining characteristics: "We focused on statements... that roughly fit the prototypes: "our school is an X Fpr of school". "our school is diferent tiom most schools on dimension X". "a central dimension of our school is X". or "we have always been a type X school" ( 1996:JS 1 ).

They list the identity dimensions that surfaced hmtheir investigation for each of the schools (p.453). X reading of these dimensions indicates that they inçlude the following: type of culture (e.g. "participatory culture": "small~kirndlyculture"). values (e.g. "accidcmic wlurs": "work ethic"), type or quality of snidents (e.g. "diverse students": "dite students"). type of progam (cg. "global program": "quantitative prokgam"). type of institution (e.g. "public institution"). approach (e.p. "entrepreneunal"; "technical"). and a w-iety of other amibutes including "renowned university" and "strong almi". As cm be noted. the above attributes address a variety of organizational domains and is consistent with a relatively broad view of identity. .As the above indicates. there is no single approach to operationaiizing organizational identity. The operationdizations are as varied as die objectives of the studies and the methodologicai perspectives taken.

4.4.2 Proposed Measures of Organizationai Identity The approach used by Elsbach and Krarner (1996) which involves analyzing written documents for statements of identity seems pairicularly pertinent for my study. As 1 mentioned previously in my discussion. 1 will be relying on formal written texts to study what identity themes ernerge and how these themes are elaborated with time. Huff indicatrs that "the use of the same word and its syionyms.. . is called a theme" (1983: 169). 1 propose that an identity theme is revealed by a word or an expression - a label - which is self-referential and which is talked about as being central, distinctive and/or enduring. Relaving the requirement that a therne be considered identitanan ("identitaire") only if it is enduring alloupsthe researcher to study how identity changes. It also allows the tracing of those themes that increase in centrality andior distinctiveness with time. Distinctiwness was gauged by such qualifiers as "best" and "highest": references to the bank's superior ranking on some attribute within a cornparison group. Temporal continuity (or la& of it) was gauged by references to timr. such as the pst, present and future. Evidcncr of continuity is also provided the continuai appearance of the theme over the yem. Crnuality wûs gauged by such terms as "at the hem of our mission". "basic reason tir rveqthing we do". .eiother measure of centrality is the nurnber of references that are made to a particular theme. The tiequency with which an item is mentioned is a measure of importance (DtAveni and MacMillan. 1990). Evidence of centrality was also provided by the number of issues revolving around the dieme. The following paragraph from the Royal Bank 1985 message to shareholders (MTSs) is an example: "Sening eusromers rrdl remains at the heart of the Royal Bank's mission. It is the basic reason for eveqdung else we do. Traditionally. attention to customer needs. the 'personal touch'. has been a strong point at the Royal. It remains a constant. Al1 our etforts to preserve the Bank's financial soundness, manage costs, improve productivity. devise and introduce new products, new service-delivery methods and new technologies - as well as to make continuing investments in staff training - al1 are ultimately aimed at one primary goal: serving customers' needs well" (italics in the original).

Sening customers' needs well is an attribute that appean in this and other annual repons. From the above para_gaph it cm be seen that this is an attribute which is çonsidered central ("basic reason for everythmg else we do")?distinctive ("a strong point") md endunne ("traditionally" and "it rernains a constant"). Particular attention was paid to variations on a given therne. For example, at the RB. such terms as "custorner service". "quality senice". ''meeting customer needs" seem to be used interchangeably to denote particular aspects of the bank-custorner relationship. Instèad of using the labels that were used by the banks - which changed iÏom year to year and sometimrs within the sarne year - and to avoid making the discussion confusing, I used the samr theme titlr in al1 discussions and elabonted on how the labels changed. For esample. al1 references to how the bank served customers were discussed under the title "quality service to customers" which was considered an identity theme. hother exarnple cm be provided tiom BMO's identitarian discouse. BMO calls itself initially a Canadian bu&. thrn a Sonh ..\mericm bank and later still a NMTA bank in refemng to its

*ctwgraphiç sçope that evolved with time. 1 used throughout my discussion the expression "Sonh .4rnerican" to refer to the geographic scope theme since this is the label that dominates throughout the study years. It should also be noted that although 1 used a single label or expression to speak about what 1 cal1 "a thme". neither the labels. nor their meanings remain tixed over the yem. Furthemore. because rny interest is in the elaboration of identity over timr. projeçted identity attributes also constitue themes of interest. As Pettigrew (1990) indicütes. studying procm requires looking at the past. present. and funire. Projected idcntity amibutes are reveaied as major objectives or pans of a vision. Indicaton of projccted attributes used were such expressions as "Our major objective is.. .". and "Our ~isionis to becorne.. ." It should also be rnentioned that written documents by organizations may contain varied and numerous self-references. To avoid death by data asphyxiation (Penigrew. 1990). 1 emphûsized. for example. five of the RB tbernes that were most tiequently recumng andor that did not occur tiequently at the beginning of the period. but becarne tiquent and central later on (or vice versa). For exarnple, the 'Pe-and-income genenting abiliw' theme for RB and the "innovative" therne for BMO do not occur tiequently in the MTS wi thin the tint fèw yars of the study. They do become more centrai towards the end of the snidy period. These themes were tracked and analyzed. Furthermore, some themes like "retail banking opentions" for RB appear as distinctive in size and this issue recurs in the h1TS. However. since "size" is a therne that was traced for RB and it subsumes in part the "retail banking operations". the latter theme was not discussed separately. This limitation of the study. however. is a minor one since the purpose of the study is not to provide a hl1 account of al1 attributes that constinite the banks' identity. Rather the study aims at disceming identity construction strategies used by the organizations over tirne. The rhemes that were tncked for the nvo organizations provide ample evidence of such strategies. -4s Mcklillan indicates: "Rralizing the impossibility of overtuming every rock and stone within the organizotion. we hope instead for a .. . picture which rnight resemble an old jigsaw puzzle that we dng out of the anic on a niny day. Severd pieces are missing, but at lcast we know at the end of our labos whether we have a ship or a puppy"

( 19873).

4.5 SOURCES OF DATA blintzberg and LMcHu& ( 1985) state that the bat method for tracking stntegies is to reconsuuct them aHer the fact. Reconstruction after the fact applies to identity elaboration str~tciBes- in top management discourse as well. As mentioned in the preceding chapter. writtrn tws tend to endure and therefore provide excellent information for tracing the development of identity. One such winen tent is the annual report.

4.5.1 Annual Reports r\ variety of written texts appewing in the annual report are used as the major source of data in this study. Statements of corporate profile. vision. values, and/or history as well as lrtters to shareholders - al1 of which can be found in annual reports - provide a wealth of information on top management's representation of the organization. Because these texts are produced annually, they allow the researcher to trace the process of identity de~.eIopment.Numerous researchen who have done longitudinal studies have relied on annual reports as the single or the major source of data (for e.g. Barr and HuK 1997; Bettrnan and Weitz. 1953: D'Aveni and MacMillan. 1990: Saland and Meindl, 1984; Staw. Mckechnie and Puffer. 1983). h oganization's centrai attributes. its significant undertakings and changes during the year. its major future objectives, and the extemal factors that are heeded by management are most otien addressed in the message to shareholders. "Letters to shareholden are particularly good indicators of the major topics that organizational managers attend to"

( D' Aveni and Macmillan, 199O:64O). Since the messages to shareholden are produced mually. they constitute a reliable source of information on the evolution of the organization's identity in top management discourse. In fact, because they are signed by the top manager(s) of the organization. they provide an excellent information base ti-om whch

to inf'rr management's identity construction stntegies. Although the fint draft of the lener to shüreholdrrs is prepared by public relations writen. it has to be read and approved by differcnt top offiçials (Staw et al. 1983); what is \Minen in the lener to shareholders is thus taken to be rop management's account (Salancik and Meindl. 1954). in addition to the message to shareholders. some annual reports ijve a brief overview of the orgmization's corporate profile. vision. values. andjor history. 1 consider these to be major sources of data as well. Thesr written documents were analped for a period of thirteen years. tiom January 1985 to December 1997.

1.5.2 Other Organizational and Industrial Information To understand and explain the context within which identity-construction discourse developed. 1 consuited other organizational and industrial documents. Organizational documents included the review of operations and other segments of the annual report, as wrll as the house organ for the period under study. The house organs provided a wealth of information. House organs constitute part of the organizational public statements which disseminate the organization's history and values and which cal1 forth a "significant past" and provide "the symbolic impetus to propel the organization into the future" (McMillan, 198757). In addition. five interviews per bank were conducred with middle or senior managers. The information gathered kom these interviews was also used as a source of contextual information. Indusaial infornation was taken mainly fiom the business press.

4.6 DATA .ANALYSIS, PRESENTATION AND DISCUSSION Different approaches to the analysis of qualitative data are available. The overriding approach I used is the grounded theory approach which I described previously. It involves a process of travelling back and forth between the data and the emerging theory (Elsbach, 1991). 1 also relied on recommendations provided by diffèrent researchers who have subscribed to qualitative methods.

4.6.1 Data Coding The major units of analysis that were coded are the retèrences to identity themes (and relatcd issues) in the primary sources of data. The ~peratingreview in the annual repon. uther organizational documents. the inteniews with organizational intonnants and industry information were carefùlly read and searched for information that could confirrn or disconfirm the rmergng patterns in the analysis. These documents and interviews were also used as a source of information on contextuai variables. In my initial coding of the primary sources. I anempted to stay very close to the data and to use codes derived tiom the ternis utilized in these sources. For example. in coding the BXlO data. ( initially had the following codes: 'Canada". "U.S.". "North Arnerica". Wrixico". "NAFTX". Thesr are fint-order codes that remain very close to the terms utilized by die source of data (Gioia. Thomas. Clark and Chittipeddi, 1994). Later these codes wrrc aggregated into a single code. "geognphic scope". which is a more conceptual çategoq or second-order code (Gioia et al. 1994). in fact. the constant comparative method prescnbed by the grounded theory approach involves not oniy "comparing incidents applicabie to each category", but also "integrating categories and their propdes" (Glaser and Strauss. 1967: 105). 1 had started by coding the data for RB. Later when I attempted to code the data for BMO using the coding scheme developed for RB, I found that the codes had to be re- elaborated. For example. in contrast to RB, BMO consistently presents paradoxical aspects of identity which are thereafter dernystified. Additional codes (such as bbparadox")were addrd to the coding scherne to take account of these issues. The final coding scheme that ernerged was used to recode al1 the documents. Recoding documents using the final coding SC hernr strengthens the reliability of the study (Huff, 1990). The process of coding was facilitated by the use of the ATWS ti Software for Visual and Qualitative Data Analysis (Version 4.1). It allows the researcher to code quotations of different sizes. change code names. group codes, renieve quotations under a -tlvrn code. and search for words or expressions with relative ease.

4.6.1 Presentntion, Annlysis and Discussion For nome of the thernes studied. a large number of quotations were generated. Insteüd of presenting all those quotations -whiçh wvould have increased substantially the volume of the rhesis and again would lead to death by data asphyxiation - 1 repon those quotritions that are representative of a signiticant state in the theme's trajectory. For rxmple. for RB. there are 3 1 quotations coded with "leader" in the MTSs alone. Only a portion of thrse quotations are presented in the thesis. Following the recornrnendations of Miles and Huberman ( 1994). 1 present the data for each theme in tables ananged açcording to chronological order. This is followed by a narrative description (Langley, 1996) of the theme's rvolution. Thus the developmentai trajcctory ( Kimberly and Bouchikhi. 1995) for each theme was presented. The evolution of some of the thrmrs lent itself to presentation dong tracks (Van de Ven. 1992). Tracks wrc usrd to brietly show the progression of the thcme dong wvith the contextual factors associatcd with the evolution.

Following Eisenhardts's ( 1989) recornmendations. a discussion is provided for each bank which is followed by a general discussion addressing the similarities and differences behveen the nvo banks. A number of general conclusions are provided. The conceptual insi@ts that emrrged fi-om the snidy are discussed. Some of the concepts that emerged are consistent with the literature. Others seem to diverge tiom extant literanire and provide avenues for extending existing concepts

4.7 RELIABILITY AND VALIDITY The evaluation of any research project is based. in part, on the assessrnent of the reliability and the vaiidity of the research. 4.7.2 Reliabiiity Reliabi 1 ity is a measure of consistency across time and across researchers (Miles and Hubsman. 1990). "A reliable procedure should yield the same results from the same set of phcnomena regardless of the circumstances of application" (Knppendorff, 1980: 129). To strenghen the reliability of the study, I applird a number of measures. 1 used the final çuding scheme to recode al1 documents. This implies that the same codes and categories wre ripplird to the data %om the nvo organizations. In addition. since the documents analyd arc public and are referenced in the diesis. they are available for consultation to other resiiiirchers. Furthemore. substantial chunks of raw data in the tom of quotes are pnxided throu@out the analysis. By making rxplicit what research methods and analytical techniques were used. as NIAI as what documents and data were analyzed. I allow other researchers to track the proçrss by which 1 arrived cit rny results. These steps help strengthen the reliability of the study.

1.7.2 Validity Two main types of validity are piven attention to by qualitative researchers: internal validity and extemal validity. internal validity relates to "tnith value": to whether the findings of the snidy make sense: to whether they are credible to the people snidied and readm: and to whether they are "an authentic portrait of what we were looking att' (Miles and Huberman. 1990:775). Strauss and Corbin tell researchers that referencing literanire in appropriate places gîves validation of the accuracy of the findings. "Or you might want to point out how purs dit3ex-s fiom the litenture and why" (Strauss and Corbin. 199052). This is a strategy 1 used throughout. Extemal validity. on the other hand. retèrs to the generalizability of the study to its "transfenbility" to other contexts (Miles and Hubennan. 1994). Generalizabilit. is a major limitation of research which relies on a bmall number of organizations (Eisenhardt, 1989). Nevertheless. since I have provided extensive information about the sample, the process and the context. cornparison with other samples, processes and contexts may be undertaken by other researchers (Miles and Hubman, 1 993). In ihis section. I discussed the methods used in the study. I now tum to the data presentatkn and analysis. 5. DATA PRESENTATION AND ANALYSIS

This section has two sub-sections. one for RB and the other for BMO. Each of thtx nvo sub-sections opens with ri brief ovewiew of the bank's history. This is followed by dota presentation and analysis. The data for each themr is presented in a table orgmized by chronological order. Quorations in the tables are taken tiom the annual rcpon and cire presrnted vrrbatim. Eaçh quotation is preceded by a "-" sign. Data presentotion for rach thrme is followed by a narrative description and analysis of the theme whsreby its evolution ovrr the years is drscribed and contextual factors that are associated with the theme are presented. It must be noted that the order in which the ihemes ore presented for both banks is of no particular signiticance. 5.1 ROYAL BANK

5.1 .I HISTORICAL OVERVIEW

( Source: l nterest 4lagazine.SeptembeaOct 1 993. and ww.royalbank.comihistory) Royal Bank staned off in 186-1 as the Merchants' Bank, founded by a close-knit -aoup of msrchants as a privatr enterprise in Halihx. In 1869, the bank obtained a federal charter and the name was changed to the Merchants' Bank of Halifax. Dunng its early existence the bank pursued a snategy of national development as it opened branches across differrnt areas of the country. In 1901. its name

5.1.2 IDE5TITY THEMES In the 4lrthodology section. I drscribed how identity themes were chosen for cinaiysis. Here arc: the thernes presented and analyzrd for RB: 1)quality senice to ciistomttrs: 2)fee-and-income generating ability: 3) bank-financial institution: 4) large: and 5)1t.acir.r.

5.l.l.a Quniity Service to Customers The quality of the semice otrered to the customer appears as a self-defining rittribute for RB at the outset of the study period. Quality service is referred to in a number of ways which I considered to be variations on a therne. Thus. "customer service". "quality service". "meeting customer needs" are dl interrelated labels refemng to how the bank defines an important aspect of its relationship to the customer. These labels were grouped under the code "quality service to customers". The following table proiides the quotes related to this theme.

Table 1. Qualitv- Service to Customers 1985 -Senhg custorners well rernains at the heart of RB'S mission. It is the basic reason for everything else we do. Traditionaily. attention to customer needs. the "personal touch". has been a strong point at the Royal. It remains a constant. Al our eflorts to preserve the bank's fi nancial soundness. manage costs. irnprove productivity. devise ana introduce new products. new service delivery methods and new technology -as weil as to make continuing investments in staff training - dl are ultimately aimed at one primary goal: seMng customers' needs well.

-The Royal's strength spnngs ultimately from a consistent track record of service to customers. -(Consumer deposits) corne to us, and stay with us. because of the quaiity and çonvrnience of the service provided through our network of branches and Personal Touçh Banking machines.

-Delivering value (to customers) requires supporting... statf with enormous resources.. . It also requires unremitting attention to many of the strategic pnorities disçussed in past Annual reports. Among these is productivity improvement . which allow us to drliver more value for the price of a service. .. hother is product innovation.. . (and) investment in technolog. .. The Bank's çontinuing invesmient in (statl) ... is aimed in the end at assuring that good service is delivcred knowledgrabl y and with sensitivity to the customer.

-...protitability is a signal that value is being provided. in the eyes of the people who purchasr our service. -The senml goal of the management team is to build on our track record for top- tlight customer service. By sening customers well. we aim over time to substantially improve profitability.

-Expanding into ... new senice areas is vital to one ofour centrai corporate goals: to bt. rrcognized by our customers as a consistent leader in the value of our products and customer service. Cornitment to quality service is a distinctive RB triidemark. and to build on thar saen_& we must continue to expand our range of services to meet growing customer needs. - -Central among our goals. as 1 said in this space iast year. is to sewe customers wI1. and by doing so. to substantially improve profitabili ty...

-WC me çommined to serving customers well and in doing so. to provide career opportunities for Our employees and cornpetitive renims for our shareholders. -WC intend over time to lead die Canadian financial senices industry not only in tems of size and scope of business, but in ternis of profitability as well. The key to this. of course, is a business fundamental - that such leadership can oniy be achirved and sustained by the provision of nothing Iess than the best service available to customers in the marketplace. Business success cm only be built on sening customers well.

-We are convinced that qudity of senice -as perceived by the customer - is the primary factor deterrnining iong-term perîbrrnance. A recent market survey, for example, indicates a positive correlation between the invesmient rems of various companies and the perceived quality of their product brands. Common sense tells outhe same thing. At large corporations like the Royal -with millions of clients and a large existing market share - satistied customers provide a springboard for effective sales and marketing. Dissatisfied customers, on the other hand cut into business mmvth ~otential. -Our drive to improve service quality is designed to generate solid retums tiom heaky investment in branches, staff training, technology and invesûnent banking subsidiaries"...... - -Our continued success will be influenceci by three important factors: customer senice. technology and govemment regulation.

-.A strong commitment to customer service is tùndmental to Our business strategy. Our resolve to sen7ecustomers well has not diminished...

-WC3re intent upon improving a11 aspects of our business as we enter a new decade so that we are better able to serve our customers and therefore, better able to increase benetits to shareholders and employees. -The bank's operating pertbnnance showed progress in 1990 on most tionü. We tùnher refîned our customer focus ... For RB an absolutely top priority continues to be improwment in the quality of our service.

-There is no doubt that the quality of service will be the major competitive arena in the 1990s. more so than product innovation and pricing. The fi& for customer loyalty md market share will become increasingly intense as more players enter the tinancial services sector on various fronts and customer expectations continue to mow. C

-in the past nvo years. we have made genuine progress in our quality of sewice initiatives. Our formal customer surveys which are carrieci out regularly tell us our customers are more satisfied now than in the past. But we are not resting on Our laurels. A senior bank otKcer has been made responsible for our service quality goup. which brings definition and focus to service initiatives at every level. -We made good progress in 199 1 towards our objective of differentiating ourselves tiom our cornpetitors by being the clear leader in service quality. in 199 1, more was done than ever before to lem what our customers need, want, and expect kom us. A great deal of effort was also devoted to developing the effective measuring and monitoring techniques that we believe are essential to winning the battle for customa loyalty. -Solid progress was made towards our goal of being the leading provider of financial services measured in ternis of service quality. customer satisfaction, and profitability.

-Extensive surveys and other measures of customer satisfaction tell us that we are doing as well as the bat of our cornpetitors. perhaps even a little better. These sweys also help us measure and monitor performance against specific quality targets. Feedback tiom the Iarge nurnber of customers surveyed during the past year suggest that our senice quality initiatives are paying off in terms of irnproved custorner satisfaction. 1993 -The reduction (of branches following the merger with Royal Trust) will take place wduall y. . . to ensure the redeployrnent of staff is handled effectively and service to C our customers is not im~aired. -Providine- customers with value means providing a level of service that çonsistently meets or exceeds their expectations at a reasonable and competitive çost. Providing value is where the battle for competitive advantage is being fought in the tinancial services sector.

-1ncreased revenue generation fiom traditional and emerging businesses is Our top priority. We will achieve this by continuing to improve senice quality, diversifqinç and rxpanding our global businesses and developing our fee-generating business. -.As customer acceptance of alternative delivery channels.. . grows. we will continue to reduce the number of branches and reconîïgure the nenvork to be more responsive to our customers.

-Hi&er levels of employee satisfaction and rewards tied to corponte goals should lead to rnhanced custorner satisfaction. irnproved cost management and hi&r profitability. Il-Wr became Canada's leading fi nancial institution. one customer at a time. through Our cornmitment to delivenng innovative and high qudity products and services. We have earned our customen' business by anticipating and meeting their needs. providing them with what they want at a competitive pnce. 1997 -For our customen. we are nising the targets for customer satisfaction and providing mployees with the training. technoIo= and timr to devote care and attention to their clients.

-In 1997. we added customer satisfaction and pertbrrnance relative to the cornpetition as tLnher criteria for (employee compensation) payouts.

Description and analysis For RB. quality service to customers is a major self-defining attribute throughout 1985 and 56. This is clear tiom the presentation of customer service as a mission. a primary eoal. a tradition. a constant, a strength. and a reason for everythng else the buik does C ( 1985). It is a theme in the organization's discourse that stands above other themes. in 1985. for example. more than half of the message to shareholders revolves amund the quality semice issue. .A continuity in the supremacy of customer semice is noted in the 1986 messase to shareholden where customer service is said to be a matter of track record, consistent leadership and distinctiveness at the bank as well as a central goal of manasement. It should be noted that a Canada-wide survey conducteci on customers in 1985 indicatrd that the RB was perceived as the best run bank by seven in 10 of the RB'S main customers. whereas only "five or six customers in I O at the other major banks Say their bank is best run" (Interesr, NowDec 19Sj:ZI). Interest magazine reports that "while our customers are satisfied with our pertbrmance (in terms of service provided by well trained and exprrienced employees) other major banks fall short of their customers' e.upectations"(Nov~Dec:198522). In 1957. a similar study indicated that RB tied NB and Canada Trust in corporate rcpurnrion attributes and finished second to them in service delivey and pncing attributes... Howver. the RB consistently ranked ahead of CIBC, TD. BNS. and BMO.. . Interestingly. in the 1957 message to shareholders. serving customers well is still mentioned as a central wal but no distinctive fertture the bank. In fact the ratinçs do not show the b more as a of is RB to be ÿhead of the cornpetition in terms of this attribute. In 1988 and 89. it is clear that the bank still holds the belief that service quality leads w higha profits and remains cornrnitted to the principle of providing quality service. in fact. the notion that better service leads to bener profit is a constant in the bank's communication and remains so throughout the years under study. in 1985. for exarnple. profit is said to be "a signal that value is being provided in the eyes" of the customers. What rnakes thcrir statements in 1985 and 89 different tkom those in 1985 is the tàct that service quality merges more as a means to an end ("size, scope and profit" 1988) than as an end in itself. The service-profit relationship becomes more explicitly and rigorously deiïned in 1988. Furthemore. there is emphasis on "improWigf' service quality. in fact, the ratings do not show RB to bc ahead of the cornpetition in terms of this amibute. Senice quality is now pottrayed as an aspect of the bank to be improved and a means to higher profits and suççess rather than a distinct trademark, a constant and the basic reason for everything else the bank does. In 1990. "quality service" - which appeared in 1983.86 and 88. but which becarne a more comrnon expression than "customer service" in 1990 - remains a top priority for improvernent. Creation of a new senior position to deal with quality, in fact, does underscore the importance that the bank places on improving quality. It can be seen as an aaempt to reinforce and consolidate a desired identity attribute. In fact, the belief in the bank that quality is a source of competitive advantage and therefore. of utrnost strategic importance. is reflected in the arena metaphor. Quality service becomes the weapon that will allow the wiming of the banle for customer loyalty which has to be fought for on many tionts in the competitive arena. This is a quite different statment fiom 1985's "(consumers) corne to us and stay with us". .An article reponed in Interest Magazine in the Jan/ Feb 1993 issue. states that for tuu ycms in a row. ( 199 1 and 93). the RB led the otha banks in quality of senice (except in .ABkls for 1992). This article. entitled "Royal Bank leads Big Six in customer service" reports RB'S senior executive VP - Retail Banking as saying that "For the second year in a row. we lead the other banks. Some tremendous initiatives by staff are taking place across the country - and they are clearly having an impact... N'hile our challenge is to truly differentiare ourselves. the competition is making noticeable progress. and just staying the leader will be in itself a formidable task" (interest, Jan/Feb 1993: 10). This is retlected in the message to shareholders for 1991 and 92. The emphasis on the objective of achieving a "clear" differentiation from the competition demonstrates the importance. for the RB. of being recopized as distinctive tom the competition in this particular anribute. Other bmks had been making a headway in different measures of the quality senice attribute: that is. other banks could have been leaders on one or more of t hesr measures. Furthemore. the re ferences to "learning w hat customea need. want and rxpect" and to "developing effective measurîng and monitoring techniques" imply that the bank's knowledge retained from the past had to be updated to serve as a guideline for ensunng a leadership position in quality senice. The progress made in 199 1 is qualified as "eood".- in 1992 as "solid", possibly implying that the bank is moving towards narrowing the identity gap that had been created by its slipping position in quality semice relative to competitors. Despite this tact, the bank has not been able to present itself as the "clear" leader in quality. it is "perhaps" better than the best of its competitors. The Nov! Dec L 993 interest Magazine issue reports on two major 1993 customer satisfaction surveys which indicate that while RB held its own. major bank competitors were catching up. The VP. Quality & Service Planning is quoted as saying: "We're doing many good things. but our competitors are pushing hard and the bar is rising quickly". The article tùnher points out that RB is still as good or better than other banks, although its overall quality senice position has weakened "as some competiton have improved at a -~matcr rate. In this same article. the Senior Executive VP. Retail Banking mentions that "Retail Banking's number one strategic priority is to ditferentiate ourselves eom the cornpetition by çetting the standard for quality senice. Currently among banks, there's no siyitirant ditference. Our goal is to have RE3 lead the indusûyv(p.1 1.) Interestingly. the IW3 messiiye to shareholdrrs pro~ldrsonly minimal references to quality service. Ln fact. hm 1 9% to 1 997. referrncrs to "quality senice" decrease substantially. In 1994. providing customes wvith value (service at a competitive price) is ponrayed as a competitive advantage to be obtained by ivinnins the battle against the competition. The banle metaphor - which tint appeared in 1990 ivhen RB did not seem to be making supenor advances in quality service relative to its competitors - is re-iterated. In 1994. the battle involves providing value; the price element ("a competitive price") - dermcd Iess important than service quality in 1990 - is factored in. in addition. improving sen-icr quality is clearly pomayed in the second quotation for 1994 as a means to some other priority. and is placed at the same level as other procedures like diversification and expansion. The Sep~Oct1994 intcrest Magazine features an article entitlcd "Cusromer sütisfaction rises but competition heats tiom other banks". This article again repons on nvo national surveys that show that RB has improved in ternis of customer satisfaction. "but so have competitors. .. RB is in the middle of the pack (afier the credit unions and Canada Trust). nt virtually the same level as TD, Scotiabank and BMO. While RB'S score rose slightl y since 1st year. the three other banks have al1 improved since 1992" (p. 16). in 1995. the message to shareholders makes no reference to quality service. Responsiveness io customers lies in the reconfiguration of the delivery network (which inciudes decreasing the number of branches). in this year as well, customer satisfaction is said to be part of the corporate objectives, (a notion which is reiterated in 1997.) In the 1996 message to shareholders the quality senice is brought in again, and appears to be a major factor through which the bank achieved irs leadership position. The bank's distinctiveness, however. lies in its leadership position as a hancial institution and not in its providing the 'highest' quality senice. in 1997. customers are one of the four groups of stakeholders mrntioned in the message and about whom the bank speaks in tasof objectives. The targcts for customer satisfaction have been raised. Customer satisfaction is now the responsibility of employees as individuals ('~eircustomers"). Customer satisfaction has bren rstablished as one of the employees' pertbrmance objectives. tn summary. it cm be noticed that "quality service to custorner;" evolves %om a constmtiy held distinctive identity attribute in 1985-86 to an objective. or a desired and projected identity amibute as the bank's customer service ratings become less disrinpishablr tiorn the cornpetition's. As the bank loses some of its grounds to the somprtition. talk about custorner senice gets cast in metaphoncal terms refening to banles thüt have to be won against the other banks. Gnduaily. customer senice loses its supremacy as a reason for cwything rlse the bank does and becomes one of the things the bank does to achieve higher revenues and profits. The change in the bank's nting with respect to the cornpetition. which is an extemal çontext factor. appears to have an influence on the cvolution of this identity theme.

5.1.2.b Fee-and-income Generating Ability Another srlfdrtininç attribute which appears in the MTS is RB'S fee-and-income generating ability. Cnlike quality service. fee-and income genenting ability is not presented as part of the bank's tradition. However, as the years go by, the tee-and income generating ability theme takes on a more central place in the bank's communications and operations. It should be noted that at the begiming of the study period. when the issue of 'Tee-generating senices" (1956) is addressed, ive see no explicit association between this issue and the issue of hi& income generation ability. The association is made explicit towards the end of the study penod ( 1996) when fee-based business is said to provide "'highROE.. . and above average prospects for profitable growth". I have treated them both as aspects of the same theme. The following table provides quotations on this therne. Table 2. Fee-and-income generating ability -r\nothrr strength, evident in the year's results, is Our ability to genente fee incomr. which now accounts for almost a quarter of total net revenue and helps to counterbalance the effects of relatively slow commercial asset growth. Fee income tiorn retail banking senices and foreign exchange trading operations were key earnings contn butors. As well, fee-genenting services will increasingly play a vital role in helping to build stronç, lasting and profitable relationships with customers. -Our stronger retail orientation has significantly lowered Royal Bank's risk profile. Further improvements will result tmom the êmphasis we have placed on tée-bzised and trade sewices. -Increased revenue generation - tiom our traditional banking and newer emerging businesses and tiom rross-selling oppominities within the bank - is our top priority. We will achieve this by continuing to improve service quality. diversi@ing and expanding our global businesses and devcloping our fee- zcnerating businesses. -Revenue growth and diversification will be achieved by strengthening the traditional consumer businesses. by expanding fee-based businesses. and by sclective international growth.

-Fee-based consumer businesses with the greatest oppominities for expansion inciudr insurance. wealth management. mutuai îùnds and retail brokerage. In addition. business banking and financial institutions and trade hold prospects for hnher growth and increased profitability.

-Our focus is on secunng consistent, superior retums for Our shareholders and al1 our initiatives are undertaken with that goal in mind. -As Canada's premier, and one of its most profitable, global financial institutions dealing with one in three Canadians, we will continue building on our strengths. They include a leading market position in Canada in most of Our businesses. an ~.xceptionally strong position in high-growth fee-based businesses.. .

-We will look for profitable growth that builds and strengthens our market competitiveness and shareholder value, paying particular attention to businesses with reiatively high retums on equity. high price/earnings multiples and above- nverase prospects for profitable growth... We intend to grow rapidly in high- potential businesses. which are the wealth management businesses.. ., as well as insurance and ûade finance. These businesses are largely fee based. need relatively linle capital, and in most cases generate high retums on equity. Our three main acquisitions this year (in insurance, retail brokerage and securities custody) a11 fa11 in this hi&-potential segment and attest to our comrnitment to +grogringthis important side of our operations. -Wc recorded solid growth in personal and small business lending, and excellent performances From fee-based businesses such as mutual funds, global private banking, securities custody, investment management, retail brokerage, and investment banking and trading. This allowed other income to rise to 46% of total revenues tiom -!Ioh in 1996.

-WC want to continue to provide top quartile retums to our shareholders by çontinuing to lead the industry in ROE. eamings growth and valuation.

-We intend to grow high-ROE fee-based businesses. as we have done in the past. Our recent acquisitions. in securities çustody and retail brokerage.. .. have been in such businesses.

-The pursuit of Our objectives of revenue growth in high-renirn businesses and (other objectives) should allow us to generate solid retums for our shareholders.

Description and analpsis In 1 956. fee-generating ability is portrayed as a strength at the bank as it contributes revenues and gro~vth. Like most other spheres of activity at the time. it is linked to customers and the bank's relationship with hem. "fee-generating services will increasingly play a viral role in helping to build strong. lasting and protitable relationships with ustomers". The bank projects that fee-based services will be increasingly vital in the iiiture. In 199 1. thrse services are seen to decrease nsk. in 1994. revenue generation is said to be the bnnk's '+top pnority". an expression previously reserved to quality service. Revenue generation is said to be achieved by impmving service quality. global diversitication and expansion, and the development of fee-generating businesses. This association benveen revenue generation and tèe-based business expresseci in 1986 becomes more elaborate in 1994 and 1996. It should be noted that 1994 marks the year in which Royal Trust. acquired by the bank in 1993, becarne more integrated with the bank operations. Royal Trust business is largely tee-based. in 1995. the emphasis on revenue growth as an objective continues, and so does the association of revenue growth to fee-based businesses. These businesses are said to hold "prospects for.. . increased profitability". the latter being the focus of the bank and the çenter of "al1 ... initiatives" at the bank. Here, the ernphasis is clearly placed on the shareholden. indicating a shiA in stakeholder focus: while in 1986, revenue generation was said to benetit the customer, in 1995 it is said to serve the shareholder. in fact, 1995 marks the year the bank's shares became iisted on the New York Stock Exchange. This same year, the bank raised its target for ROE to a range of 16-18s retlecting its "'desire to be in the tirst quartile of the 10 largest North hmerican banks". in both 1994 and 95. RB'S ROE exceeded l6O0. 'rhe best performance of al1 major Canadian chartered banks" (Annual Report. 1995). In 1996. the bank is said to have a position in high-growth fee-based businesses which is "exceptionally strong". a mark of distinctiveness. The bank wiil continue its pursuit of kt.-basrd businesses which require linle capital and therefore generate a high

ROE. In tàçt. irs implernentation efforts involve acquisitions which al1 faIl in this category of businesses. In 1997. we çan observe ri continuity with the recent past in the emphasis on Iec-based businesses and "continuing to lead the indus. in ROE", again indicating distinctivenrss in achieving high eamings. By 1997. other income constinited 46% of total revenues - a substmtial increase tiom almost 25% in 1986. In summq. although fee-generation is mentioned as early as 1986. it is not before 1994 that it assumes a central role in discourse and not before 1996 that it is presented as a mark of distinctiveness. During the later years. an explicit association is made between fèe- based services and the bank's distinctively high ROE. This evolution in the theme is accompanied by the bank's acquisitions of Royal Trust and other cornpanies that are highiy reliant on fee-based business, as well as by the bank's listing on the NYSE. The later years also show an increased emphasis on the shareholders who stand to benefit the most fkom the bank's hi& retums.

5.1 .Z.c Bank-Financial institution (FI) In its self-presentation. it can be noted that RB refers to itself at the beginning of the study psriod as a "bank" and that this reference gets replaced eventuaily by "financiai institution" or variations thereof. The following table traces the evoluhon of the Bank-Fi theme. It should be noted that the quotations provided here are derived from hvo sections of the annual report: the MTS and the Corporate Profile. The latter usually appears Mthin the first two pages of the annual report, before the MTS. in later years, RB uses the title "Who We .Are" instead of "Corporate Profile" to give a synopsis of itself. Quotations tiom the Corporate Protile section are preceded by an indication that this is the case. Al1 othrr unrrferencrd quotations were taken from the MTS.

Table 3. Bank-FI -From Cotporate Profile: The Royal Bank of Canada. chartered in 1869. is Canada's largest chartered bank... Two fundûmental goals have always been püramount: excellence in banking senice across Canada and vigorous participation in international financial markets. -Longer term market trends demand that the Royal Bank set for itself ambitious -zoals. Given the right regdatory clirnate. we plan to move frorn being Canada's largest chartered bank to become this country's leading provider of tinancial senaices. while remainin~a prominent force in selected international markets. -0pportunity was seized equally decisively - one example is that with

dercruliition+ in Canadian financial markets. we reached an agreement in ptinciple. on December 1. io acquire 7500 of Canada's premier securities tirm. Dominion Secunties. This is a sigiticant milestone in the Royal's 118-year history. It will substrintially rxpand the rance of services for clients. and clearly reinforces our position as Canada's leading financial institution. -Frorn C'orporciîe Projile: The Royal Bank of Canada, chartered in 1569, is Canada's largest bank ... Two hndamental goals are paramount: excellence in a full range of financial services across Canada and vigorous participation in selected international financial markets. ...A ky subsidiary. RBC Dominion Securities Limited, is Canada's leading investment dealer. Portfolio management and mutual %nd services are ot-fered in Canada by another subsidiary. Royal Bank Investrnent ,Managernent Inc.

-We completed strategic acquisitions which, by putting the Royal Bank group in the investment banking and investment management markets in Canada, represent solid progress in our transition from a bank to a more broadly-based financiai services enterprise. -Our overall objective in Canada is to be the leader, not just in banking. but in providing a broad range of bank-based financial services to al1 sectors of the market. Our developing businesses will play a key role in achieving this goal. -In 1990. Royal Bank recorded solid results tiom its core businesses, further strengthened its capital base and built on its position as Canada's leading provider of bank-based tinancial services. -From Corporate Profile: The Royal Bank group is arnong North America's largest providen of integrated financial services with more than eight million personal and business clients. We rank tint arnong dl financial institutions in Canada in .... Investment banking activities are canied on by RBC Dominion Secunties, Inc.. Canada's leading investrnent dealer. The acquisition of Royal Trust in 1993 greatly expanded the strengths of the Royal Bank goup in the areas of penonal and institutional trust services. mutual funds, investment management and secunties custody services - for which Royal Tmst has a world-class reputation. Other subsidiaries include discount brokerage services, marketed under the name Action Direct, and a substantial credit. travel and health-related insurancc business.. .

-In 1993. Royal Bank moved closer to becoming a hlly integrated financial senices group.

-Our goal in 1994 is tu complete this integation and to take hl1 advantage of the opportunitirs to broaden client relationships across the Royal Bank group. Royal Tmst has brought with it strengh and leadership in such businesses as penonal and institutional tmst. securities custody and investment management. It has also allowed us to increase market share in core banking products like residential mongages. consumer loans and deposits wherc: we rank tirst among Canadian banks. as well as in such high-gowth areas as mutual funds where we now rank second among al1 financial institutions. -1ncreased revenue generation from traditional and emerging businesses is our top priority. -Most of Our efforts in the past decade have centered on broadening our financial srnices tianchise with individual and corporaie clients. Our acquisitions of Dominion Securities. Voyageur Insurance Company. and. more recently, Royal Trust gave us the foundation we wanted as the largest broad-based provider of financial services in Canada. with a strong presence in selected markets abroad. -From Coqm-ate Profile: Royal Bank Financial Group has leading positions in Canada in most tinancial service markets. -Revenue growth and diversification: We intend to grow high-ROE fee-based businesses. as we have done in the past. Our recent acquisitions. in secunties custody and retail brokerage. have been in such businesses. In the more traditional business lines. we see hrther oppominities in card services. persona1 lendins and banking for smail businesses. Outside Canada, we will focus largely un the wealth management businesses.

Description and analysis .As the study period opens. we can see that RB defines itself as "Canada's largest ba~zk".a fundamental goal of which is "excellence in banking service across Canada"

( 1985) with an ambitious goals of "mov(ing) fiom being Canada's largest chartered bank to become this country's Ieading provider of financial services" (1986). Achieving this goal is impending on the regulatory clirnate. In 1987. with deregulation, the bank reached C an agreement to acquire Dominion Secunties, a move described by the bank as "a signi ficant milestone in the Royal's 1 18-year history". one of the few references the bank makes in its MTS to its history. The move is descnbed as reinforcing the bank's position as "Canada's leadingjimzmial insritir~iori". Clearly the acquisition moves the bank a step doser to the goal stated in 1956. In 1988. the Corporate Profile still detines RB as a "bank" with a major goal of proiiding "a /id! rajige of financial services". The MTS for this year indicates that "strateyic acquisitions" represent solid progress in the bank's '*iramirionfrom a bank to a more broadly-based financial senices enterprise". In 1989, the bank's objective to prmide "a broad range of bank-based financial services" shows continuity with its stated objrcrives in lW3. In 1991. the bank is said to provide "a hll-range of banking services" and in i W3. it is said to be a "provider of iniegraied financial services". In 19%. the bank is apin said to have "rnoved closer to becomins a blly integn.atcd tinancial semices group". which in 1956 \vas stated as a goal. As with the Dominion Stxuritics acquisition. the bank is said to be moving closer or effecting its transition. In l%S. the transition was said to be towards a "broadly-based financial sen-içes enterprise" whrreas in 1993. the move is toward becominç "a hlly integmted financial services group". Each acquisition brings the bank towards more comprehensive senices in the financial industry. In this same year (1 993). the Royal Tmst acquisition is said to have increased the bank's market share "in core banking products" as well as "in high growth areas such as mutual funds", which apparently were not considered then core banking products. In 1994, the bank's priorities lie in increasing both, the "traditional and rmerging businesses". What would have been the core business in the past is now referred to as traditional. "Traditional business" is a term that appears in subsequent years

( 1996 and 1997). Wrs see a transition tiom a self-definition as a "bank (1985) to a "financial institution.. . provid(ing) banking and related financial services" ( 1989) to "(one of the larges) providen of integrated financial services"(l993) to having a "leading position in.. . most hancial semices markets" (1996). This is accompanied by an evolution in labels tiom "core businesses" ( 1990 and 93) to "traditionai business" (1 994) which rekr to "card senices. personal lending and banking for small business" (1997). The "emersing businesses" ( l99J), on the other hand. include "high growth areas as mutuai tùnds" ( 1994). By 1997. what used to be the "core services" up to 1993 are still referred to as "traditional" whereas the term "emerging" is no more used, possibly indicating that "high ROE fer-based businesses.. . as secunties custody and retail brokerage" ( 1997) are now considrred regular and not just emerging businesses for the bank. As RB makes acquisitions in different areas of the financial services industry. and as it achieves a higher proportion of its revenues tiom such businesses. it narrows the identity gap and considers itself more as an integated-service tinancial institution than as a bank. Note that this is iiccompanicd by a change in the bank's name tiom Royal Bank to Royal Bank Financial Group.

5.1.2.d Large Without exception. for every year of the study period. RB'S Corporate Profile makes reference to some measure of the bank's size and its rank with respect to a cornparison goup. The MTS also includrs several references to these measures. The table below provides quotations on size and the variations thereof. Different labels are used to refer to the bank's size: "large". "leading market share". "most extensive", "first rank" (in rems of size). To simpli. the discussion. 1 will refer to this theme as "large".

Table 4. Large -From Co~porateProfile: The Royal Bank of Canada, chartered in 1869. is Canada's largest chartered bank. with assets at the end of fiscal 1985 of S96 billion ....The Royal Bank's extensive network of branches. subsidiaries and attiliates comprises more than 1680 operating units in 14 countrirs. One of the world's larsest retail banks, the Royal is also North America's tifth largest bank overall.

-The Royal is not only Canada's largest financial institution. it is one of the countrv's largest and most res~ectedservice businesses. -Given the nght regdatory climate, we plan to move ftom being Canada's largest chartered bank to become this country's leading provider of financial services. while remaining a ~rominentforce in selected international markets. b.!

-The partnership of Canada's iargest financial institution and its largest securities dealer will create a uniquely Canadian force in the market. -Wr intend. over time. to lead the Canadian financial services industry not only in trms of size and scope of business. but in terms of profitability as well. -From Co~porateProfile: The Royai bank of Canada, with assets of S 1 11.7 billion. is Canada's largest financial institution and the fifth largest bank in North .Ammica. It provides banking and related tinancial services to eight million retail and business custorners through its 1.560 Canadian branches and specialized business centres and 2,324 banking machines - one of the largest networks in the world.

-(Wc have) the largest proprietary network of banking machines in Nonh Amenca.. . -.At the end of the year. total assets stood at S 125.9 billion. making Royal Bank the third largest bank in Nonh Amenca.

-Royal Bank has some distinctive suengths that set us apart fiom our çompetiton. We have an extensive and well-developed network of branches and other custonirr service units which. likr our systrrn of automated banking machines. is the largest in North Amenca. We have a sizeable customer base and a substantial share of market in most sectors. -From Corporate Profile: Royal Bank is Canada's Ilvgest financial services enterprise and one of North America's largest banks. We rank tirst among al1 financial institutions in Canada in terms of assets. capital and stock market value. Wtt also command the largest market share of consumer loans. mortgages and deposits in the country.. .. Investment banking activities are consolidated within WC Dominion Securities inc., which dominates the Canadian market in size and ~ertbrmanc e. -Royal Trust has brought with it strength and leadership in such businesses persona1 and institutional trust. securities custody and investment management. II has also allowed us to increase market share in core banking products like residential mortgages. consumer loans and deposits where we rank first among Canadian banks, as well as in such high-growth areas as mutual hnds where we now rank second among al1 financial institutions.

-Looking ahead. 1994 will mark our 125th year as a Canadian chartered bank. We wçre founded on the Halifax watertiont by eight enterprishg merchants. From thrse modest begi~ings,we have grown with Canada. Because Canada is a trading nation. we also expanded internationally to become one of the largesi banks in the world. But. size for its own sake is not the objective. Our focus in the months and yean ahead will be on building a profitable business that succeeds b~ providing value to our customers and better returns to Our shareholders. -From Corporate Profile: Royal Bank Group is among North Arnerica's largest providers of integrated financial services with more than 9.5 million penonal and business clients. We rank first among al1 financial institutions in Canada in stock market capitalization and total assets, and first or second in almost every type of financial service provided in the Canadian Market. except insurance. Our services are provided through one of the largest banking nenvorks in the world - almost 1.600 Canadian branches and special business units. over 3900 banking machines. 4422 self-serve account updaters and over 30.000 point-of-sale merchant tsrminals.

-Tu rrdure çosts. we continued to streamline the branch network in 1994. çlosing or merging 4 1 of the Id 1 branches of Royal Trust. In addition. we reduced the number of Royal Bank domestic branches by 90. The bank has one of the most extensive and et'ticient retail branch networks in Yonh herica and one of the largest proprietary electronic banking networks in the world. -Royal Bank's strength derives lqely from Our leading share of the domestic retail financial services market. Approximately 7j0,6 of our earnings today corne tiorn providing banking and related services to individuals and small and medium-sized business customers.

-We derive a much higher proponion of Our deposits tiom individuals than do other Canadian banks, a significant advantage as these deposits are more stable than wholesale funds. Similarly. residential mortgages and other consumer loans. which are attractive because of their relaiively stable and low loss ratios. represent a much higher percentage of our overall lending than for the other Canadian bnnks. We have the largest market share of residential mortgages. consumer drposits and consumer loans. and the greatest number of small and medium-sized clients of anv financial institution in Canada. -Frorn Cotporare Profile: Royal Bank is Canada's largest financial institution as rneasured by market capitalization. revenues and net income. We have leading positions in most Canadian financial services markets ... We serve nearly 10 million individual and business customers aroünd the world. In Canada we have lrading market shares in residential mortgages. penonal loans and deposits and business loans. We are the largest money manager and the third largest provider of mutual funds (first among bank-owned funds).... Our domestic delivery nenvork includes more than 1,100 branches. 4.200 automated banking machines. 570 self-service account updaten. and 54,000 point of sale merchant terminais. With 1.3 million customers, Royal Direct is among the world's largest alternative delivery charnel provideo.. .

Description and analysis As the above quotations indicate, size seems to be an integral component of the bank's self-detinition. The centrality of this theme drrives from its association with strength in the industry (for example. 1993). Its distinctiveness denves from the bank's rank relative to other organizations with which it compares itself. Difkrent measures of the bank's size are touted: its assets, delivery network, market share tor a vnriety of products and services. market capitalization. revenues. net income ... The bank detines not only itself in ternis of size. but also its partners or açquisirions. Thus DS is said to be "Canada's largest secunties dealer" (1987) and RT is said to have brousht with it "strength and leadership" making RB first or second mong Canadian banks in terms of a nurnber of financial products ( 1993). Even in 1994, after the bank announces that it has strearnlined its retail branch ncnvork. it indicates that it has "one of the most extensive and efficient retail branch networks in North America and one of the larzest proprietary electronic banking networks in the world". Size is one of RB'S attributes which confer upon it distinctiveness since it rûnks higher than other organizations in the industry dong a number of measures of size. In fact. the bank addresses mainly those measures of size that allow it to daim distinctiveness within a piiniculx rcference group. Evoking its distinctive size is a constant in the bank's discourse over the years. The issues that evolve with time are the particular measures of size the bank evokes and the particular mrmbership goups which are used as a reference for the cornparison. Two issues are noteworthy here. First, size is associated with financial and competitive strengths as the quotations in 1988, 93 and 95 indicate. in 1985. the bank's goals of leading the industry in size is associated with that of leading in profitability. This appears more clearly in 1993 when we are told that size for its own sake is not the objective. Rather the objective is to buiid a profitable business. These statements lead us to infer that size lrads to profitability. In 1995 when the bank's leading share of the domrstic retail market as compared to competitors is mentioned. This is associated with financial stability which is portrayed as a strength. Second. RB has been. for a good part of its history. the largest bank in Canada. A self-description of the bank provided in a 1993 issue of Interest magazine(Sept/Oct 1993) at the occasion of the RT acquisition, points out that: "In 1970, the Royal Bank edged out Bank of Montreal to become Canada's largest bank in tenns of assets, and for the next 21 years was in a see-saw battle for top spot with Bank of Montreal. Since 194 1, Royal Bank has remained on top."

tt should be noted that the above quotation represents one of six landmark events the bank chose in ordrr to ponray its 115-year history in the above-mentioned publication. [nterestingly. a battle is said to have been waged for taking up the "top spot" or top rmk in six. In othrr words. being the largest bank in Canada. seems to be an issue of hisronciil rclevmce. centrality and distinctiveness.

5. t 2.e Leader .An attribute of RB which appears consistently in the bank's discourse is its position as a leader. Table 3 provides the quotations for the "leader" theme.

Table 5. Leader -Frorn Cmporase Proji/e: The Royal Bank is a !eader in the application of new technologies for efficient operational management and in making possible a variety of sophisticated new senfices. -.. .one of our central corponte goals: to be recognized bby our customers as a consistent leader in the value of our products and customer senice.

-Given the right regdatory climate. we plan to move %om being Canada's largest chartercd bank to become this country's leading provider of financial services. -Dominion Secunties Limited has a track record of excellence in service and profitability, based on top-caliber leadership and highly respected professional talent. -We intend. over time. to lead the Canadian financial services industry not only in tems of size and scope of business. but in terms of profitability as well. The key to this, of course. is a business fundamental - that such leadership can only be achieved and sustained by the provision of nothing less than the best service available to customers in the market~lace. -Our overall objective in Canada is to be the leader. not just in banking, but in providing a broad range of bank-based financial seMces to al1 secton of the market ...Outside Canada, our broad objective is to be the leading Canadian financial senices enterprise elobally. Our strong international presence and our position as Canada's Icading bank C abroad over many decades have been significant contributing factors in achieving dominance at home. -Our leadership in systems and technology, particularly at the client servicing level, is a cornpetitive advantage that we intend to exploit. -We have a sizeable customer base and a substantial share of market in most sectoc-- .And we are the leader in developing and implementing bank-related technology.

-Wr are immensely proud of the leadership Royal Bankers demonstrate - not only in the market~lacebut ako in the communitv. -WC made good progress in 199 1 towards our objective of differentiating ourselves~from Our cornpetition by being the clear leader in service quality. -.As we rnove foward. Royal Bank's business strategy will continue to be driven by four corporate objectives.. .:- be the leading Canadian financial institution best positioned globally, -be a leading employer comrnitted to excellence. -Royal Tmst has brought with it strength and leadership in such businesses as persona1 and institutional mst. securities custody and investment management. -Royal Bank's strength derives largely. from Our leading share of the domestic retail tinancid semices market. -.As Canada's premier. and one of its most profitable, global financial institutions dealing with one in three Canadians. we will continue building on Our strengths. They include a leading market position in Canada in most of our businesses. -From Cotpomte Prqfile: Royal Bank is Canada's largest financial institution as measured by market capitalization. revenues and net income. We have leading positions in most Canadian tinanciaI senices markets.. .

-WCwant to continue to provide top quartile returns to Our shareholders by continuing to lead the industry in ROE. rarnings gowth and valuation.

-(We have) leading-edge work/family!life. gender gap and diversity policies and momarns.. .

Description and analysis in its statements of Corporate Profile, as well as in its MTS. the bank tiequently refers to its leadership position. The bank's partners or acquisitions are dso said to be leaders in their field: "Dominion Securities Limited (acquired by the bank in 1987) is said to have "a track record of excellence in service and profitability. based on top-caliber leadenhip". and Royal Trust acquired by the bank in 1993 is said to have "brought with it strength and leadership". Even "Royal banken demonstrate (leadership) ...in the marketplace (and) the community" ( 1990). The leadership label, however. applies to a variety of objectives (projected identity artributes) as well as achievements including the bank's size, scope and profitability (L988), providing a broad range of bank-based seMces ( 1989). system and technology (1 985.89.90). U.S. foreign exchange market (1 989), market share position ( 1992. 95.961, and ROE and UR practices (1997). to name a kw. The "leaderT' label persists throughout the years and is used to refer to a variety of aspects of the bank. The bank does not explicitly address why it seeks leadership, or why this seems to be a central issue for it. We do know. however. that a leadership position implitts the bank's ability to pertorm bettrr than its cornpetitors and theretire is a mark of distinctiveness. In 199 1. for example. RB indicates that "being the clear leader in senice quülity" cillows the bank to differentiate itself tiom the cornpetition. As important. however. is the hçt that buik's synbol includes a lion. the "Leo". as it is refmed to by bank rmployrs and bank publications. The following are excerpts tiom m article entitled The ot1r utid oti(v Leo in interest magazine: "ln the minds of staff. customers and the general public. the familiar Lion and Globe sybol - better known by his nicknarne of "Lm" - has corne to represent the Royal Bank and al1 it stands for. Leo adoms just about everything connected with the bank.. . and together with the name "The Royal Bank of Canada". ..has smed as the bank's trademark since the early 1 960s. . ... The cornmittee of banken and designers formed (in the 1960s) to select the new trademark.. . agreed the symbol must retlect the Royal's image as Canada's leading bank and should indicate the scope of the Royal's business not only in Canada but throughout the world.. .. Lro was created to tùlfill this far-reaching role. The lion continued the idea of "royal" which stood for quality, while the globe indicated the bank's worldwide scope. ;\ crown complete with tleur-de-lis tops off the logo to reinforce the idea of supenority. The adoption of the Lion and Globe symbol and the unique lettenng for the Royal Bank name. '\vas a radical transformation of our public identity, one that may have been one of the most important policy changes made in the early sixties" according io Chairman and CE0 Rowland C. Frazee and CO0 AIlan R. Taylor" (Interest. Feb,'Mar l9SS:XI).

Ln this article. the Lm is said to represent the bank's 'public identity" and eve~lthingthe bank stands for leadership, quality, scope, and supenority. We thus see that the leadership therne is part and parcel of the bank's persona - what it stands for to 'the staff. customers and the general public". Furthemore, this attribute seems to be of historical relevance. having persisted since at least the 1960s. In this section I traced the developmental trajectory for RB themes. In the next section. I turn to BMO. 5.2 BANK OF ILIONTREAL

5.2.1 HISTORICAL OVERVIEW (Source: -4 S/mt-t Histo-• of Bank of Mortireai: .-l Tradition of' Leadership. Bank of blontrcal. 1992 and uww.bmo.com~history.) The Bank of Montreal was founded in 15 17 under the name of Montreal Bank by nine rnerchants. Shortly after its establishment. the bank expanded into di fferent areas of Cpper and Loiver Canada. .At the time. Ci'pper and Lower Canada were British colonies. and neither had a currency of its own. The Montreal Bank provided its own bank notes which were "an acceptable and reliable circulating medium"( .4 Shorr Hisrory p.3). "Here the Bank's ealy history was a story of "firsts" Funding, for example, the building of Canada's tirst canal (Lachine l82Ll8X). and its first railway (Champlain and St.Lawrençe. 1532-36)". In 1527 it was granted a charter under the namr of Bank of Montreal. In iY59. the bank established a permanent agency in New York which was

followed in 196 1 by another agency in Chicago. following the patterns of made. "Bank of Montreal strongly supportcd the movement for union of the British North American provinces. When Contederation was finally achieved in 1876, the Bank was çalled upon by Finance Minister Alexander Galt to becorne the new federal -eovernment's banker7'( il Short Hisro-. p.7). The bank grew by opening new branches and through mergers and acquisitions. The Bank ceded its role of central bank in 1934 and the Bank of Canada took on the exciusive nght to issue currency. With this. Bank of Montreal banknotes which had been issued since 18 17 were phased out over a period of fi feen y ears. In 1981. the bank acquired Harris Bankcorp, Inc.. a retail bank in the Chicago area. In 1987. it acquired the securities dealer Nesbitt Thomson, Inc. With the falling of the four pillars. the bank has increased the range of senices it offers. In 1992, the bank was represented directly in 1 I countries and had a network of correspondents around the world. In 1996. it made a major investment in Mexico's Bancomer and became "the first

NAFT.\ bank" ( 1996. Annuai Report). In 1998. Bank of Montreal had total assets of S222.590 million. The period under study saw the succession of three executives to the top positions of chaiman of the board. CEO. president and/or COO. Thus, the MTS. the main source of data for this study was signed by the following executives:

1985- 1989: William Mulhoiland (Chairman and CE0 - CE0 only until 1988) IWO: blatthew Barren (Chaiman and CEO) and Tony Comper (President and COO) 1 99 1- 1997: Matthew Barrett (Chairman and CEO)

The BMO data analyzed reveals a large difference between the style of

'clulholland and that of Barrett. LVhile Mulhoiland spoke at lenad on rconornic. political. and social issues directing attention more to the extemal environment than to BMO itself. Barrctt emphasized the bank. with a tèw occasionai remarks on national and economic issues. These differences are reflected in my analysis. At several occasions. 1 will point out how Barren's discounr showed a continuity or a break with Mulholland's.

5.2.2 IDENTITY THEMES .A number of identity themes surface in BMO's discourse. Notable among these are the bank's self-definition as Canada's "first" bank, which takes on two difrèrent meanings in the bank's discoune: "oldest" and "innovative". BMO also defines itself as a North ,4merican bank. and a bank cornmitted to its four stakeholders, These are the themes analyzed in this section. 5.2.2.a First "First" is a label that did not appear with Mulholland, but which becarne prominent with Barrett. In fact, it is used in two different senses: 1) sometimes it rekto Bk10 being the oldest bank in Canada. and 2) at other times it is used to indicate that the bank uas the first among other institutions in Canada to undertake sorne strategy or procedure and. therefore. refers to the bank's innovative stance. The following quotations provide examples of the two meanings attributed to "tïrst". The fint two quotations are rakrn from the MTS. The third quotation is taken fiom BMO's statement of history

( W~IV b~nocorn).

Table 6. First -In 1992 Bank of Montreal will celebrate its 175th anniversary. LVe first opened our doors on November 3. 18 17, at 32 St. Paul Street, montrea al. We were the tirst bank in Canada, and we have been in business ever since -Beinp tint is a Bank of Montreal tradition. In 15 17 we becarne Canada's tint bank. In 1 Y 32 we financed the first Canadian railway. launching the connections essential to this country's gowth.. ..And in 1993 we çontinued to set the pace for the Canadian industry with our nrwest first. continent-wide banking -. ..our Nmh Amencan strategy is both an exhilarating new deparne, with immense promise for al1 Our stakeholders, and a natural development îkom our proud Canadian past. It's an oid tradition - and a real fint. And that's as it should be, for Canada's first bank. Cmuda 's first bank: Bank of Montreal is Canada's.. . oldest bank.

.As can be seen, "first" is used to refer to the bank's being the oldest FI in Canada in 199 1 and 1999. In 1993, 'tiint" assumes both meanings in the fint quotation. as weil as in the second whereby "an old tradition" and "a real fint" for "Canada's tint bank" are juxtaposed. Because both rneanings of the "fint"label seem to be self-defining for the bank. 1 tnced them separately. 5.2.t.b Oldest Bank It must be noted that the tem "first" appears for the first time in 1991 with Barrett's second ;LITS. In this statement it alludes to BMO's being Canada's "oldest" bank. Hoivever, the reference to BMO's being one of Canada's oldest banks does appear before 199 1. but not accornpanied by the "first" label. Consider the following quotations which ref'r to the bank's age:

Table 7. BMO's age 1 1085 1 -...the Canadian banking system ... has a history of extraordinary stability and 1 1 1 service. This Bank. for instance. has an unbroken record of service for 168 years. 1 longer than the life of most countries. IWI -11 is cleariy in our interest to uphold these values (of integrity and prudence). but it is rilso a rrsponsibility which cornes with more than 170 years of honorable service. 1990 -Planning is vital to success. But a clear sense of purpose and identity are also essential. While we are Canada's oldest bank. we are also a multi-fàceted. contemporary corporate family . . . 199 1 -We were the first bank in Canada and we have been in business ever since.

- For most Canadians the canoe and the snowshoe are now sports equipment. in part because we tinanced the tint canal and the fint nilway. i 993 -In 18 17 we becarne Canada's first bank.

Description and analysis The first two quotations in the table above, occurred during MulholIand's time. Age here is ponrayed as a sign of the bank's capacity to offer stability and senice. as well as an attnbute that confers responsibility on the bank in terms of upholding values that will safeyard the interests of ditrerent stakeholders. The old age theme's centraiity is hrther demonstnted in 1990 with Barrett's reference to the importance of a sense of identity. Their sense of identity involves a recognition of the bank's age. Not only is the bünk's age a central issue. it is also a source of distinctiveness. Being Canada's oldest bank is a mark of distinctiveness that can never be surpassed by any other bank. In hct, Barren takes the old bank theme one step further than Mulholiand. While Mulholland refers to Bk10 in 1985 as one example of a number of old banking institutions. Barren presents it as the most distinctive banking institution with regard to age. In later years. 'oldest" bank is replaced by "first" buik in the ,MTS. In 199 1, ''we were the tirst bank in Canada, and we have been in business ever since" indicates a continuity wi th Mulholland's statements regarding an 'bnbroken record of service" throughout many years. Not ody is BMO the first and oldest bank in Canada. it is also associated with the first and oldest canal and railway. aspects of major economic and social impact for Canada and Canadians. With this the bank's agis intemvined with the bank's historic achievements and possibly innovations. Xctually the use of "tirst" here is ambiguous: it is hard for the reader to tell whether the label is intended to rekr to oldest or most innovative. One thing is clear in the 199 1 MTS: the history of the bank is closely associated with the history of Canada: it is a sign of the bank's notoriety as well as its social responsibility. as the quotations in the table below indicate. The 199 1 annual report is a çelcbration of the bank's 175th anniversary. The bank's achievements. performance and objectives for the year do not receive a single mention in this year's MTS. Instead. the bank's pstachievements. its existence before Canada and its role in building Canada are drtailed. .And so is the bank's responsibility to rernind Canadians that they have an euxptionül country. Here are most of the quotes tiom the 1 99 1 MTS:

Table 8. Quotadons from the 1991 MTS [n 1991 Bank of Montreûl will celebrate its 175th amiversary. We tirst opened our doors on November 3. 15 17, at 32 St. Paul Street, Montreal. We were the tirst bmk in Canada. and ure have been in business ever since. In this 1991 Annual Report we therefore look both fonvard and back. 1817 was an unimaginably ditierent world. ,Montreal had 16.000 people and lived by the fur trade. Canadians traveled by canoe and snowshoe... Canada was a colony, govemed kom London.

Change has been enonnous and is still accelerating. Through it al1. Bank of Montreal has survived. and grown mightily.. .We have grown with Canada - and we have helped Canada to gow. For most Canadians the canoe and the snowshoe are now sports equipment. in part because we financed the fint canal and the first railway. Our loans helped lay Canadian Pacific's 3,000 miles of track and, 80 years later, we financed Churchill Falls. Today we are still worhg with Canadians, both in millions of individual lives and in Our undertakings as a nation.

Ii is timrly to remember these things. for two reasons. 1992 will also be the 125th amiversary of Canada's Confederation. That calls for a celebration, and few people have more to celebrate than Canadians. .. It is. for me, a humbling thought that only a tiny minority of al1 the human beings who ever lived have been ris formate as Canadians - not only in material things. but in the intangibles of peace and tieedom.

Yrt this anniversary is also a time to pause and take stock. In recent years. Canadians have seemed more and more unsure of the way ahead. We are deeply divided on our constitutional hture. In a time of bewildering change, we are unsure of our ability to eam our living in the world's markets and give our children a better life than ours and. at the sarne rime. to preserve Our natunl heritage and do our duty to the less forninate. And the stress is showing.. .Underlying al1 these unhappy symptoms is simple, old- tashionrd ignorance - ignorance of Our country and of al1 we have achieved and. even more. ignorance of each other. ht Bank of Montreal. ive believe we cm best celebrate Canada's anniversq and our oun by rrminding Canadians how rich we al1 are through the astonishing variety of the rcyions and peoplrs that make up the Canadian totality. For this special Annual Report we risksd right Canadian writers of standing to bring us a vision of Canada.. .Together. they paint ".A Portrait ofcanada'' which we hope will bnng the Canadian reality home to aur shareholders and our iiiends in Canada and abroad. We are not doing this to give the public one more study that aspires to be detached, objective and impanial. Far from it. .At Bank of Montreal. we are unequivocally committed to the Canadian ideal of a democratic. pluralist society. where one roof covers many hearths and a just balance has been stmck benveen individual and collective rights.

Wr are committed. because over 175 years we have seen that even the less-than-ideal Canada of the past has worked ...But in the broadest view. Canada has been good to man. people. It has cenainly been good to Bank of .Montreal. We cm best thank Canada by helping Canadians to know their country, for knowing it is the tirst step to rebuildins it with ample room for ail its people. This special Annuai Repon is our way of doing that. and 1 hope you will al1 read it with profit and pleasure.

A number of issues emerge from this MTS. Several references are made to the façt that BMO not only preceded Canada as a sovereign state, but also helped build this country. The bank's history and legacy seem to be a source of notoriety and therefore distinctivenrss. as well as a source of social responsibility. BMO considen it a part of its responsibility to bring the "Canadian reality home" to the readers. This resernbles in some ways Mu1ho1 land's 1 989 statement indicating that upholding values is a **responsibility which cornes with more han 170 years of honorable service". Mile the bank's age and its implications are given attention in the MTSs until 1 993. references to its age are dropped in subsequent reports. In those reports, "fint" is used mainly to refer to the bank's innovative stance. Let us look at the bank's self- description as an innovative creative bank, the second meaning associated with the "first" label. The table below provides quotes on this theme.

5.2.2.c Innovative BMO uses different labels to talk about its being the fint institution to undertake a number of initiatives. These include "innovative", "creative", and "a bank that leads change". Thc following table provides quotations on this theme.

Table 9. Innovative -This past decade has witnessed drarnatic growth and significant structural changes in international tinancial markets. Among the rnost important were the virtual disappearance of boundaries to capital tlows in the western world, the massive flow of capital to North Amenca, rapid technological change with its concomitant explosion of financial innovation and a chronic oversupply of tinanci al services. -Supporting small business and agriculture means paying attention to what our customers want and. whenever possible. giving it to them. We have kept our prime rate below our cornpetitors' for over 359 days since August 1. 1990. We are the only bar& to offer a Small Business Lending Rate tracking 1% below prime.. . There is more ...We have a pilot project to help viable businesses through temporq setbacks. Bank of Montreal works actively with emerging sebmcnts of the business community such as women entrepreneurs and Aboriginal business people. And although we know this will be a long haul, we intend CO become the informed bank. the bank of choice, for the knowledge- based. suruise industries that will help make Canada prosperous tomorrow. Each of these actions is a srna11 step forward in itself. Together they are a radical change in the way we do business. And the results are showing. In a contracting market for small business credit, our market share has risen by 7.3% in iust two vears. -Be@ first is a Bank of Montreal tradition. In 18 17 we became Canada's first bank. In 1532 we financed the first Canadian railway, launching the connections essential to this country's growdi. Almost 150 yean later. we were the fint bank to establish a national electronic comection, linking al1 our branches to a central cornputer. And in 1993 we continued to set the Pace for the Canadian industry with our newest fist, continent-wide banking.

-In June we announced Our North American strategy for the 1990s, Vision 1001. By the early years of the new century it will make us the first full-senice financial organization to span North Amenca. Canada, of course, will aiways be Our home and our number one market. We shall invest, innovate, and compete more vigorously than ever in this country... Thus Vision 2003 is also our creative response to the ever-increasing integration of the world's economies. -In tive years. we have established a reputation as a bank that leads change.. . . uses technical innovation intelligently. and is sensitive to the evolving needs of our customers and employees. 1994 brought nvo excellent exampies. Our It is Possible marketing campaign made the tools of basic financial planning available to al1 Canadians for the first time.

-.And WC became the tirst Canadian bank ever to be listed on the 'lew York Stock Exchange.. .

-We have corne a long way in Eve years and. as you cm see. 1994 especially has been a year to remember in the long history of our Bank. It will probably be remembrred longest. however. for the opening in May of Our [nstinite for Leüminj in Scarborough. Ontario. The fint purpose-built corporate hcility of its kind in Canada. the Instinite will receive over 15.000 students a year. coming from al1 the companies in the Bank's farnily. But despite its scope. the IFL is onlg the latest stage of the cornmitment we made five years ago to give our employees the finest oppominities for learning in the financial services indus..

-In this tlux we have two fixed points. The fint is the vision and values we adopted in the Bank's 1990 Strategic Plan. Although we review and renew Our Plan. keeping it amined to new times. I cannot imagine circumstances which would lead us to abandon or senously modi& our cornmitment to our four stakeholden - our shareholden. customen, employees and the communities in which we do business ... We must of course continually find fresh ways to put our values into practice, but the values themselves are inherent in the very nature of what we do.

-The second fixed point is our determination to take nothing for granted. We are endlessly curious about our environment - in business. technology and the community - about Our own performance in relation to it. and about our preparedness with the right blend of competencies and capabilities. We are also acutely aware that somewhere someone. perhaps the proverbial inventor in a garage. has an idea that could transform the way we do business. We cannot know what that idea is. but we cm shorten our response times and look continually and cntically at the structures and received ideas we have inherited kom the past. We seek continually to redefine Our business systems and ou. workpiaces. Xnd we are also rethinking and re-irnagining the relationships between the Bank and its customers, the Bank and its employees. and the Bank and the cornmunities in which we work and live. -Banking is an inherently consenrative business. Our depositors and our shareholdrrs rightly pnze stability. and we have put it at the core of our values. But the central paradox we face is that as the twentieth century ends, stability and sustaincd retums cm only corne from an open and inquiring mind. The tension benveen the maintenance of order critical t the care of other people's money - and creative innovation must be skillfuily managed if success is to be sustaincd in ;i tinrincial senices instinition. -For the Bank of Mmtreal Group of Compaiiirs. 1996 has been a ycar of much 5 4d achitxcrncnt and many creatiw new dcpanures. but in our long histoq. it il ,li be rcmembered br one initiative obovs 311 othrrs. 1996 is the yex \. e launched mbanx. an rntirely new vinuiil banking enterpnse desi-med t ) meet ihc nrds of' tinnncially active consimers across Nonh Amrriça at the highest stnndar(!j of speed. convenience and senice quaiity. Its concept is unique and its potentinl un!imitcd. With the founding of rnbanx on Oçtober 16. we haw plantrd an xor îYom uhich a rruly mightv oak ivill ,TO tv .

-This message CS ün ~CCC)U~Icd how change is bringing hishrr c.xpectarions of our pt.rformancr in evcry ticld. wliile [lie tccompanyin~ stories give euniples of the groundbreaking initiatives th~tfornt Our rcsponse.

- \\'c understand that in the rnidst of a tcchnologicai revolution it is critically important 10 chtwic the teçhnology. thar best xnrs our custorners' needs. 3s the) detine thctn. That is \vhy ...we seek the crentivcr blrndinp of people and teshnolagy - kit' \\-hich mbans is the prime example. Tqether. technologiçal powr and excellence in execution CUI -ive US bünking tiee tiom the boundaries trliditioncill) imposd bp spactt and time.

-Together with our capabiiities in Canada and the Cnitrd States. the strategic alliance with Bancomer makes us the first NAFT.\ bank.

- Change is dl-penasive. but it is perhaps in the workplace that its effects are tirst brought home ter most people ... Our response as a bank is to prepare a new contract with our employees. one that defines us as a learning organization. The paternalism of the past is being replaced by a prokssional relationship between the Bank and employees who are essentially independent entrepreneurs. with their skills as their capital. For those who welcome rontinuously expanding career horizons. and are prepared to take responsibility for their futures by investing in riemseives, we are providing unprecedented oppominities for learning in every line of business.

-The gound-breaking disclosure standards set by this Report have won major awards on several occasions. Description and analysis As the above indicate, Mulholland's oniy reference to innovation in the MTSs studied appears in 1989. While reviewing some of the occurrences in the past decade. he mentions among other things the "explosion of financiai innovation". He speaks. however. in a -eeneral sense and does not refèr specifically to BMO. It is mainly with Barren that BMO is presented as an imovative bank. and this not before he had been in the chairman's position for three years. However. the above table indicates that with the !cars. more rcfercnces are made to the bank's being innovative and creative. In 1992. innovation and creativity are fint rnentioned. These labels appear in the opcniny paragaph and are associated with small business. a customer segment which had becorne the target of BMO. In the second quotation in 1992. a number of initiatives are mentioned. somc of which retèr to the bank's progressive undertakings in cornparison to the competition. Innovative pricing, irnplernenting a pilot project. working with "emerging" segments of the business cornmunity. becoming the "bar& of choice br know ledge-based. sunrise industries" (genenlly known to be imovative) are al1 examples of the bank's innovative stance. Furthemore, *e importance of these steps or undertakings lies not only in the fact that each constitutes an innovation in itself, but that "together thry are a radical change in the way we do business". in other words. the innovation stands not only with respect to the competition. but also with respect to the bank's recent history. This is a reference to the changes at the bank since Banen took o\ rr the chairmanship, changes which are of a significant magnitude when put together. In 1993. the term "first" appears in its "innovative" sense. Afier listing a number of first rnoves histoncally undertaken by the bank. Barrett mentions the latest, "continent- wide banking". The latest innovation involves their North Amencan strategy for the 90s, labelcd Vision 1003 which is portrayed in the second quotation as "our creative response" to the integration of econornies. In fact. the second quotation in 1993 rnakes three different references to the bank's i~ovativestance: Vision 2002 is said to make BMO "the tïrst full-service organization to span North Arnerica", the bank is said to continue to "innovate" in Canada, and their strategy is said to be "our creative response". It must be noted that references to changes and innovations are interspersed with references to continuity. Afier mentioning that Vision ZOO2 will rnake the Bank a North American financial orçanization. Barrett indicates that Canada "will always be" the bank's home and priority market. Similady. atier mentioning that Vision ZOO? is the bank's creative response to the increasing integration of the world's economies. he adds that "We shall continue to be an international bank". In fact. the opening paragraph itself indicates that "brins first is a bank of Montreal tradition" impiying a continuity in leading change. In 1 8410 is said to have "a reputation as a bank that leads change" and rinother series of firsts are mentioned: the listing on NYSE. bringing tools of financial planning to Canadians for the first time. and opening the Institute for Lraming. the fint such corporate facility in Canada. Of the events that occurred during the year. one is singled out as a reason for which 1994 will be remembered in the bank's long history: The Institutc for Leaming which is said to be the "first" facility of its kind in the country. Yrt. the IFL. which is said to be an undertaking of some scope. is also pomayed as "the latest stage of the commitment we made îïve years ago". In other words. although it may iippear as a major move. it does. in fact. show some continuity with the past: it is a continuation of the cornmitment the bank made to the empioyees brfore. Here apain. as in 1992 and 93. we see that references to innovations and changes are ofien followed by refcrencçs to continuity. so that the innovation is not portrayed as a major break with the past. but as a retlection of some pattern that has persisted. It is also noteworthy that in 199-1 Barrea moves away from the notion of "tint" as old and adheres to the notion of "tirst" as imovative. In 1995. after mentioning several major changes that have occurred in the bank's environment (including the ideological divisions of the world, the capabilities of technology. Our concepts of comrnunity etc.). Bmett indicates that the bank has two fixed points in the flux. The fint is the vision and values adopted in the stntegic plan in 1990 which. as will be explained later. outlined the bank's commitment to each of the four stakeholders. The values themselves (the commitment to the four stakeholders) are said to be a fixed point in the tlun. however. "tiesh ways" must be "continually" found to put thsse values into pnctice. implying a renewal in practicing the cornmimient to stakeholders. This rmphasis on continuous renewal which may be seen as a mark of the bank's innovativeness. is reiterated in the second quotation in 1995. There the bank's pursuit of change and innovation are mentioned whereby the bank's "determination to take nothing for granted" is said to be a fixed point in the tlux. In kt, we see the bank ençaged in a proactive search for change and innovation as evident in the expressions: --we are rndlessly curious about our environment"; "we are also acutely aware that somewhere someone. perhaps the proverbial inventor in a garage. has an idea that could

transfonn the way we do business": 'We cm ...look continually and critically at the strucrurrs and received ideas we have inherited tiom the past"; "+WC seek continually to rttdrtïnt: our business systems and our workplaces": '\ve are also rethinking and re- imüging the relationships.. ." The references to the bank's pursuit of innovation are many. yrt this pursuit of innovation is an attnbute which itself is persistent. The third quotation in 1995 addresses rxplicitly the stabilitychange and the maintenance-o f ordencreativr-innovation paradox. Interest ingl y though. Barren presents the need to be inquisitive as [lie condition through which stability can be maintained. "Stability and sustained retums can on!r corne tiom an open and inquiring mind. That there is a tension benveen the maintenance of order and creative innovation is explicitly nirntioned. but the tension is one that cm be skillFully managed. It is noteworthy that Barrett speaks about the need to manage the tension in "a financial senice institution" and not at BMO in particular. indicating that the need to seek innovation is not specific to BMO. but a general condition for success in the industry. Clearly the 1995 MTS shows a continuity with the1994 MT'S in the sense that BMO is portrayed as an innovative and creativr bank that seeks change. These traits are portrayed as necessary for achievement of financial stability and success. This portrait of the bank as an innovative and creative oqanization continues with rigor in 1996 as is rvident in the expression "many creative new depamires" whereby each of the last three words in itself is an indication of innovation. mbam, the latest creation. is said to have a "'unique" concept again irnplying the bank's innovation. The second quotation in 96 -and the last one as well - talk about "groundbreaking" initiatives and undenakings at the bank. again a sign of innovation. These innovations are the bank's response to higher expectahons brought about by change. The cmu of the bank's innovative undertakings in 96. is mbanx which exemplifies the "creative blending of people and technology". This blending allows the bank to surpass the traditional boundaries imposed by space and time (third quotation). Another area of innovation in 1996 is the undertaking of the NAFTA strategy. hlthough this strategy shows some continuity with the past and is consistent with Vision 1001 previously announced in 1992. extending the bank's position into Mexico brings additional change and makes BMO "the first" bank CO cover al1 three countries. A third area of innovation and change in 1996 involves the bank's relation with employees. In response to the many changes occumng in the environment. the bank is preparing a new contract with employees. This contract is one that defines the bank as a "leaming" organization and the employees as "entrepreneurs". both ternis oîten used in conjuction with the ability to creete and innovate. Finally. a fourth area of innovation is its disclosure standards. an innovation that has won major awards on several occasions. In brief difkrent areas of innovation are mentioned in 1996: mbanv whose concept is unique and which represents the crearive blending of people and technologv, the pursuit of the YAFT.4 strategy. redrîïning the relationship with employees. the disclosure standards adopted by the bank. ln summary, we can note that the 'innovation' theme which is mentioned by Mulholland in reference to tinancial products in general. does not re-appear in the MTS again until 1992 when it persists and becomes more frequent. As of 1992 the MTSs are rich in references to: "invention". "innovative", "creative", "first", "ground-breaking", "new". "departure". "leaming", and the pre-fix, "remapplied to "defining", b'thinking'' and "imaging". As the years go by. the areas in which the bank demonstrates innovation and creativity become more numerous. In fact, some references to innovation relate to the bank in general. whereas others relate to specific undenakings of the bank.

5.2.2.d Sorth American Another thcme which appears in BMO's self-definitional discourse relates to its North Xmerican scope. The bank refers fiequently to its North Amencan posture which, in somr ways. is distinctive with respect to other Canadian banks. The table below provides the quotation on the '-North Amencan" theme.

Table 10. North American -The Harris acquisition has proceeded smoothly and is living up to our expectations.. . Since it is not intended to integrate management. the emphasis will br upon defining the respective organizational roles and markets. establishing goals. and building the spirit and habit of teamwork upon which an effective and well-coordinated overall perfbmance depends. In this way, we rxpriçt to maximize the potential inherent in this strategic association. - We welcome the added assurance which ratification of the trade agreement brings and rxpect to continue to expand and rationalize our US. business. .At lrast as important. however, is the benefit to Our Canadian business which stems from our unique position in the United States. Canadian customers desirous of rxploiting opportunities in the United States will find that we are able tu place at their service a unique capability. embncing a hl1 range of quality banking srin.ices in both countnes. accessible to them through a single Canadian-based brinking relationship. - .As the only bank with full service capability in Canada and the U.S.. we have a distinct çompetitive advantage in Nonh America. We intend to build sensibly but agressively on that platform. -in June we announced Our Nonh Amencan strategy for the 1990s. Vision 2002. By the early yem of the new cenniry it will make us the fint Ml-service financial organization to span North henca. Canada, of course. will always be our home and our number one market. We shall invest. innovate. and compete more vigorously than ever in this country. At the same time, when we look south of the border we see that the vast American market is a natural extension of our home market.. . The United States is a market with a potential for steady growth that canTtbe profitably matched anwhere else. When we look in the other direction, Vision 2002 becomes a strategic initiative to meet the certainty, sooner or later. of increased competition %om Arnerican banks in the Canadian market. Lnless Canadim financial service institutions are able to offer full-service bankinp in both countries, they may tind themselves at a senous cornpetitive disadvnntage - and miss an exceptional opportunity for growth.

-...our North Amencan strategy is both an exhilarating new depamire, with immense promise for al1 Our stakeholders. and a natural development from our proud Canadian past. It's an old tradition - and a real fint. And that's as it should be, for Canada's first bank. - In the same five years. we have consolidated our position as the only %ancial woup to offer a full range of seMces across Canada and in our chosen markets C in the United States. ln 1994 we strengthened that position by acquiring Suburban Bancorp Inc. of Chicago and merging it with Harris, our United States bank, under the Harris name, bringing us much closer to ougoal of a 120- branch network in Greater Chicago. And we became the fint Canadian bank rver to be listed on the New York Stock Exchange - a clear signal of our lasting commitrnent to the Nonh American market.

-Our Nonh Amencan base and our responsiveness to the cornmunities in which uredo business have stood us in good stead as Our international reach has grown in the nineties ... And by acquiring Bums Fry Limited and merging it with Nesbitt Thomson in September 1994 as Nesbitt Bums Inc., we not only forged the pre-eminent Canadian investment firm but also created a powerful base for our plannrd expansion into selected markets in the United States and oveneas. -In the six years we have earned these renims. virtually al1 the goalposts and finish lines have been moved ... The niles of international trade and investment. The regulation of the financiai services industry. in North Amenca and worldwide - and the look of the Nonh Amencan industry as it underçoes an unprecedented wave of consolidation.. . - 1996 is the year we Launched mbanx, an entirely new virtual banking enterprise designed to meet the needs of financiall y active consumers across North Amenca at the highest standards of speed, convenience and service quality.

-.A world with fewer boundaries also means that more and more of Our clients rxpect us to serve them wherever they require financial services. This is especially. trur in North Amerka. where Canada does almost 80% of its trade and where NAFTA is making political boundaries across markets less and less relevant. Our response has been decisive. In March 1996 we reallocated our exposure to Mexico without increasing it. exchanging our sovereign nsk involvement for a 1696 equity stake (7006 voting interest) in Gnipo Financier0 Bancomrr. Mexico's finest financial services organization. Together with our capabilities in Canada and the United States, the strategic alliance with Bancomer rnakes us the first NAFTA bank. The Bank of Montreal Group of Companies is now uniquely, positioned to take part in the rapid grorvth of trade and investment among al1 three NAFTA partners. And as mbanx realizes its full potential in the United States and Mexico, continent-wide cross-border banking will be a realitv readilv available to al1 our customers. -Geographic diversification has centered mostly in the United States, followed by Mexico and, to a much lesser extent, selective markets in East Asia.

Description and analysis In 1934, BMO had acquired the Hams Bank in the United States. It was a major acquisition which gave BMO access to retail branch operations in the United States. This acquisition is referred to by Mulholland as a "strategic association" in 1985. Later, in 1988. he talks about BMO's ''unique position in the United States". This unique capability includes "a full range of quality banking services" in both countries. Canada and the U.S. Both. the uniqueness of the North Amencan posture and the bank's ability to provide hl1 services across both countries will reappear in later years in association with each and as self-defining elements. In fact. the bankTsuniqueness stems not simply from openting in the U.S nor fiom its offering a full range of services. BMO's uniqueness stems from the combination of the two: a hll-range of services in the United States. Bk10 \vas the only hank to own a retail bmch banking subsidiary in the US.. confemng on it 3 mark of distinctiveness arnong other banks.

In 1990. Barrett's discourse on the bank shows ;i continuity with Mulholland's: Bk10 is presented as "the only bank with hi1 service capability" in both countnes. This is considered ri mark of distinctiveness and a source of competitive advantage. The 1993 MTS is devoted aimost cxclusively to the bank's Nonh Amencan posture and strategy. which indicates the centrality of the 'iorth Arnerican theme to BMO. In this MTS different labels are used to talk about the North Arnerican theme: "North .Amencan strategy". "Vision 2007". In the tirst quotation, their North Amencan strategy is labeled Vision 2007. Note the hmnstic tones in this label. "By the early years of the new cenniry. it ai11 make us the first full-sewice financial organization to span North America" is a statement that joins again hvo major identity themes: "first" and "full- service financial institution in North America". As usual. however, in announcing some change or innovation at the organization. Barren immediately addresses some element of continuity: "Canada. of course. will olrcys be our home and our nurnber one market". Barrett then presents the American market as "a nanird extension of Our home market", thus rninimizing the scope of the change undenaken. A number of arguments are made in this quotation to justie the need to pursue the North American strategy, arnong which is a reference to the ability of Canadian financial services institutions, in general. "to offer hl1 senrice banking in both counrries". a condition for attaining competitive advantage and mowth. In other words. expanding into the U.S. market is a strategy that ought to be C pursued by ail Canadian financial institutions if success is to be attained. In a sense we see a discursive strategy similar to Mulholland's regarding the Canadian financial services indusp. And to conclude. Barrett cornes back to a variation of the theme of change and continuity at the Bank, for while "exhilarating new departure" and "real fint" are si~msof innovation and change, "a natural development from Our proud Canadian past" and "an old tradition" indicate a continuity with the past. In 1994. wr are told that the bank consolidated its position "as the only financial

3l~oup to offer a full range of services across Canada and the United States by making an acquisition in the CS. During this yeu as well. BMO became 'rhe first Canadian bank ewr" to get listed on the NYSE. îùnher strengthening the NA stance. In this last sraremenr. we see again that the BMO is said to be "fint" in undertaking such a move. This is another occurrence of the association of two major identity themes "innovative" and 90nh American". In i994 the bank's base and capabilities are now said to be North .Amencan and not Canadian. In tàct. as of 1994. most references to Canada are followed by references to the US. The bank's geographic scope is often mentioned to be of a North Amencan scale. Interestingly, even the acquisition of Burns Fry which is said to crcate the pre-minent Canadian firm is portrayed as providing the bank with the opportunity for expansion in the U.S. Sonh America as the reference group continues into 1995 whereby in addressing the changes that have occuned in the financial services industry. the industry in Yonh .-\meriça (and not in Canada) is mentioned. In 1995. there is an almost complete shift to North .Ametka tiom Canada. This is also apparent in 1996 where consumen whose needs are being met by mbanx are those across North America. "Consumers across North Arnenca" are seen as a single mass or group. ln the second 1996 quotation, the bank's customers in the three major countries of operations (Canada, the U.S. and Mexico) are referenced separately, but the quotation concludes with reference to mbanx providing the opportunity for "continent-wide. cross border banking". In this quotation. we see an alternation of references between North Amencan and NAFTA. in fact, BMO is said to be "the first NAFTA bank" and not just a North Amencan bank with operations in Canada and the US. The bank has made a major investment in Mexico and is now pursuing a NAFTA strategy. We thus see that the bank's geographic posture evolves f?om Canada to North America to NMTA. 1997 bnngs a re-affirmation that the bank's diversification and expansion priorities include first the U.S. and then Mexico, indicating tùrther intention to consolidate the NAFTA position. In sumrnary. we see that the bank's full-service capabilities on a North Amencan scale are pomayed as a mark of uniqueness and distinctiveness and that self-reference shifts from bbCanadian" to "North American" to "NAFTA". Vision 3002 was an expression of the bank's stratepic intent to pursue a No& Amencan strategy and its acquisition of Suburban Bancorp lent substance to this intent. The launching of mbam and the additional investment in Bancomer in Mexico. hrther propelled the bank's _eeogriphic scope to include Mexico. allowing BMO to cal1 itself a NAFTA bank.

5.I.Z.c Cornrnitment to Stakeholders One way Bk10 defines itself is as an institution committed to its stakeholden. This commitment is mentioned at times in relation to al1 four stakeholders and at others in relation to a particular stakeholder proup. In 1986, a full page in the annual report entitled .d Conlmitment to People: The Bank of Monmeal Tradition outlines the bundations of the bank's genenl cornmitment to people and then spells out the bank's commitment to each of its four interest groups - customers. shareholders. employees and the cornrnunity - in a separate section. In 1990. the year Matthew Barrrtt became the chairman of the board of directors, two pages in the annual repon precede the MTS. The first is entitled "Vision" and the second is entitled "Values". In these two pages the bank's philosophy as well as values, which are articulated in reference to the four stakeholder groups. are outlined. Later, the 1994 MTS is dedicated to reviewing how the allcgcd commitment had been hlfilled and this commitment is further re-affirmed. The "commitment to stakeholders" (al1 four of them) theme is discussed below. Quotations are provided in the table below. Cornmitment to the individual stakeholder

2~oups will then each be discussed in separate sections. The quotations related to the "cornmiûnent" identity themes have been taken from three sections of the annual report: the MTS. the 1986 A Commifrnenr to People. and the 1990 statements of Vision and l'alites. Quotations talcen f?om the latter two are identified as such. Al1 unrekrenced quotations have been taken from the MTS. Table 1 1. Cornmitment to stakeholders -Our business rests, more than most other businesses, on public confidence, not just in our financial stability but also in our integrity and faimess and in our ability and willingness to pertbrm the roles which society expects of us. The preservation of a bank as a healthy, growing institution and its capacity to serve the interests of its shareholders, customers and employees depends greatly upon rhr preservation of this supportive consensus.

-From .d Conirnitmenr to Peopie: The Bank of'iClonrrea1 Tradition: .A commitrnent to people - customers, employees, shareholders and neighbours - h3s been a cornerstone of our reputation since Bank of Montreal first opened its doors as Canada's tirst permanent financial institution in 18 17. While the Bank has changed dramatically in the intervening years, its commitment to its own people and those it serves has remained constant. Our founden' commitment to ethical business practice, high professional standards and responsible conduct has also endured. Together these principles have guided us through more than a century-and-a-half of g~owthand expansion.. . Today, as in the past, (we are commined to our customers. employees, sharsholders and the communities where we live and work). .. We are proud of Our traditions and Our place in history. From our predecessors we inherit an institution of stability, strength and character. On this foundation ive cm build contidentlv for the fùture. -As a result of... ethical lapses and of an over-emphasis upon short-term gain. the social contract. and the basic trust between business and society. is under increasing pressure. We must ensure. therefore. that ethical piinciples and concem for the well-being of Our customers. employees and shareholders. as cvell as for the public, are integral components of every business relationship. -From Lïsion: Ozir Philosophy: We are dedicated to excellence in everything we do. to meeting or exceeding the performance expectahons of our principal constiniencies- customers, employees, the cornrnunity and shareholden.

-From kaizies: Our values are what each of our stakeholders can expect of us.

-At Bank of Montreal, our goal is to provide a distinctive level of senice to our customers, without whom we could not succeed. But our success also depends on how we meet the needs of our employees, the communities we serve, and our shareholders. Together, these groups constitute the Bank's "stakeholders" - those who have a stake in our business.

-Our stakeholders are interdependent. By serving each, we serve dl. -...our Korth American strategy is both an exhilarating new depamire, with immense promise for al1 our stakeholders, and a natural development from our ~roudCanadian oast. -We detine our values in relation to our four stakeholder groups.. .

-In this tlux we have two fixed points. The first is the vision and values we adopted in the Bank's 1990 Strategic Plan. Although we review and renew Our Plan, keeping it attuned to new times, 1 cannot imagine circumstiinces which would lead us to abandon or seriously modie our commitment to our four stakeholders - our shareholders, customers. employees and the communities in which we do business. The needs of these constiniencies are the driving force shaping and infomiing Our approach to the business of banking. We must of course continually find fresh ways to put our values into practice, but the values themselves are inherent in the very nature of what we do. -And as you read. 1 hope you will see how banking without boundaries means a brighter fùture for al1 our stakeholders - Our customers. comrnunities. employees. and especially, our shareholders, who stand to benefit the most as we welcome the challenge of expanding horizons.

-kt as always amidst al1 the changes there will be a powertùl element of continuity. The values of inteyity, accountability and respect for human beings that pemeate all our strategies will not change. They will be the foundations of a bank where a11 the factors of production work in harmony to shape an rnterprise that continuously builds on its own success for the benefit of al1 stakeholders. Steady. sustainable growth. for exarnple. will help us amact and retain the best employees, who as they corne to know their long-term customers will lem how to add more value. reduce costs and irnprove senice quality. Higher productivity will release resources to invest in extraordinary levels of training and development, reinforcing employee productivity, compensation, mowth and loyalty. These in tum will produce a cost advantage difficult to Y match. while yielding the steady profits that appeal to long-term, value investors and lowering the cost of capital for Merinvestment in the creation of wealth. Such a bank is an immensely valuable partner for the communities in which it does business. To work in it is always challenging, but also rewarding and enjoyable. It is a bank in which the interests of al1 stakeholders are in hannony, and which contributes to the creation of wealth for shareholders and for society at larce.

Description and analysis In 1956. Mulholland indicates that serving the interests of the shareholders, customers and employees of a bank depends greatiy on public confidence, confidence in the tinancial stability. integrity. faimess and willingness of the bank to perform the roles society expects. As is typical of Mulholland's discourse, BMO is not addressed specifically, rather reference is made to "a bank". Another section of the 1986 annual report. however. places emphasis on BMO in particular. This section indicates that tùlfilling the financial. ethical and social responsibilities are components of BMO's çommitment to four groups. This "commitment to people" appears as a major seif- defining element of the bank since it is said to be a "BMO tradition". "a comerstone of our reputation since the bank fint opened its doors" and a "constant" despire the dramatic changes at the bank. The "ethical business practice. high professional standards and responsible conduct" which were upheld by the bank's founders have also "endured". An association is made here between a commitment to the bank's four stakeholders and a commitment to ethical and professional business conduct. In a later section of this same trxt. the bank's cornmitment to each of the four stakeholders is spelled out and such cornmitment is couched mainly in terms indicating "fairness". "duty", and 'Pocial responsibility". Ethical principles are not oniy enduring at the bank. and should be at other financial institutions. they are also central as the 1988 quotation indicates. "Ethical prinçiples and concem for the well-being" of the four stakeholders should be "integral components of every business relationship". In shon. the bank's commitment to people is an enduring anribute. This çommitmrnt is exercised by edhering to ethical business conduct which is a central requirement for BMO (and should be for other financial institutions). In other words. this cornmitment is a self-defining amibute which has normative implications for the bank. Barrett makes the "commitment to stakeholders" theme a central one in his first mnual report to shareholders in 1990. The bank's philosophy (which constitutes a part of the Vision statement) as well as its values are articulated in terms of what the bank is wiliing to provide the stakeholden and what the latter cm expect of the bank. In fact, both the philosophy and values statements go into the details of the bank's relation with each stakeholder group as will be shown later. Furthemore, the 1990 MTS starts by attxibuting success to customers, employees, communities and shareholders, although primacy is given to customers. Barren calls these four groups "'the Bank's s~akeholders- those who have a stake in our business" - a label which was not used in the MTSs signed by Mulholland. Barrett thus introduces into the bank's discourse a term which will be ofien referred to in subsequent years. The expectations of each of the four stakeholders tiom the bmk are articulated and their interests are said to be interdependent. "By se~ng each. we serve all". is an implicit indication that the interests of these four stakeholders are no t divergent, but rather compatible. The 1990 MTS. the first signed by Barrett as Chairman, re-establishes the bank's commi tment to the four stakeholders, individuall y and collectively, as a sel f-de fining attribute of the bank. showing a continuity with Mulholland. although the commitment to tmh of the four stakeholders spelled out dunng Barrett's tenure differs in some ways tiom thot spcllrd out during the Mulholland years. This commitment to stakeholders is rciterritsd in later years. For rxample. 1993 re-affirms that the bank's North Amencan stratrgy - which is partly presented as a new depamire - will be beneficial for al1 stlikeholdsrs. In façt. in this as in later years (for example. 1996), references to new developments at the bank are said to be advantageous to al1 stakeholders. Reassunng al1 stakeholder groups that they stand to gain t?om changes at the bank provides justification for undertaking such changes. The 1994 MTS is devoted to a review of the bank's undertakings during the previous five years which correspond to Barrett's chairmanship of the bank. The bank's values are said to be defined in terms of the relation to the four stakeholders, a reiteration of what was mentioned in the annuai report issued during Barrett's fint year as Chairman. 1994 thus shows a continuity in the articulation of the bank's commitment. In 1995. after having enumerated a number of major changes that had occurred in the bank's environment during the past years. Banett indicates that the fixed points in the flux are the vision and values adopted in 1990. and the bank's determination io take nothing for granted. Recall that the vision and values centered around the bank's relation to the four stakeholders. The needs of these stakeholders are central, they are "thedriving force shaping and informing Our approach to the business of banking". The bank's commitment to the stakeholders is also enduring: it is said to be fixed. However. how this cornmimient is practiced may change as indicated in ''we mut continually find &esh ways to put our values into practice". In fact, it is clear that some fiesh ways are fond in 1996. in 1996. banking without boundanes is said to mean "a brighter future for ail our stakeholders... and especially our shareholders". Interestingly, the shareholders are sin-led out as the group standing to gain the most as the bank expands its horizons. This stands in contrast to the ovemding emphasis the bank placed on customen back in 1990 when the vision and values were articulated. As is common of other MTSs signed by Barrett. mentions of change and new srrategic initiatives are followed by references to some èlement of continuity. In the third quotation. the '%values of integrity. accountability and respect for human beings that prrmsate a11 our strategies" are said to be constant. In fact. this brings back a theme (integity) that wiis articulated by Mulholland, appeared in Barrett's first MTS in 1990. rind \vas dropped thereafer from discourse. These values are said to be the toundations of the bank "that continuously builds on its own success for the benefit of al1 stakeholders". and a virtuous circle linking the needs of different stakeholders is elliborated. The quotation ends. however. with an rmphasis on the benefits to be derived by shareholders in particular, and society at large in gencral. This again indicates an overernphasis on the shareholder goup. In brieE we see with Mulholland "a commitment to people" implying integrity and social responsibility as a self-defining attribute of the bank which has endured since the founding days. This cornrnitment to people becomes articulated as a cornrnitment to "stakeholders" with Barren in 1990. It is referred to in 1993 when major undertakings occur at the bank and is re-affirmed in 1994 when the accomplishments of the fint five yexs of Barrett's tenure are reviewed. In 1995, this cornrnitment is said to be a fixed point in the flux. although die relationship with the stakeholder grooupps is ahedto be çontinually re-thought. ln fact. the bank's commitment to customers which seemed to have taken pnmacy in 1990 eventually gives way to a predominant cornmimient to the shareholden in 1996. As the forthcoming sections will indicate. the relationship with the different stakeholder gooups do get re-thought throughout the years. In the next pages. the bank's commitment to each of the four stakeholder groups \vil1 be discussed in turn. Let us start with the customers. Commitment to customers The fo'ollowing table provides the quotations related to the "cornmitment to

Table 12. Commitment to customers -One myth hoids that we are big and theretiore bad. A more realistic view would br that the secunty and stability which size can bring are based on our traditional and continuing service to the smallest as well as the largest customers.

-Automation is necessvy not only to maintain an efficient operation, capable of providing service of acceptable quality at a reasonable cost, but it is also essential to maintain adeauate control. -From d Commirnrerri to People: We are committed to Our customers: Every individual with whom we deal is respected, fairly treated and served to the best of our ability. In upholding the public trust vested in us. we will protect our customers' deposits and honour their privacy. -One of the Bank's objectives is to provide convenient, accessible options for Canadians of modest means to invest a portion of their savings in the economy without being exposed to undue nsk. hother is to provide tuiancially active Canadians with access. through a single contact point. to transactional. savings. credi t. securities market, safekeeping and record keeping services.

-The opportunities aRorded by deregulation also present formidable challenges for hancial institutions. Customen will have a greater level of persona1 choice in the selection of financial products and in the financial institutions that provide hem. Thus. one legacy of deregulation is the need to be better infonned about what Our customers want and be prepared to respond with appropnate products of a high quality delivered to the highest service standards.

-There should be no fundamental difference between the values of the marketplace and those we apply to other aspects of our daily lives. These include honesty, fairness, a decent respect for the standards of society, and acceptance of the obligation to give value and useful service in rem for the rights and privileges which we enjoy and for the trust placed in us by our fellow çitizens. - -- -This pst decade has *esseddrarnatic growth-&d significant structural changes in international financial markets .. . .(leadhg to the) explosion of tinancial innovation and a chronic oversupply of financiai services. These changes have forced banks to .. .seek new ways to add value to their customer relationships. -Frorn I kiorz - Oitr Phiiosophy: We will provide customers with value, quality, a distinctive level of service and high ethical standards in a11 our dealings with them.

-From Ialiies: Our customers corne fint: They will be served at al1 times by fiendly, caring responsive and well-trained employees. Our service will be characterized by fairness and respect. professionalism, integrity and ethical conduct. Employee satisfaction leads to customer satisfaction.. ..

-.At Bank of Montreal. our goal is to procide a distinctive level of service to our customers. without whom we could not succeed. But our success also depends on how we meet the needs of our employees. the cornmunities we serve. and our s hareholders.

-Rigorom cost control measures held non-interest expense growth to 5%. This usas achieved despite a substantial increase in technological. training and other investments to improve service quality. -1Ve deal with more than 320,000 small businesses across Canada. and we know beyond doubt how important they are to us ... When we adopted Our Corporate Strategic Plan three years ago. we put small business firmly front and center arnong our priorities for the Bank.

-Today. we are making that commitrnent a reality. in the teeth of the Iongest- drawn-out recession most of us cmremember. ...The recession has not changed our credit practices. Our goal remains a supportive credit environment.. .

- Supporting small business and agriculture means payng attention to what our custorners want and, whenever possible. giving it to them ... We are the only bank to offer a Srnall Business Lending Rate tracking 1% below prime ... And we are working hard with govemments to create a more effective legal and regulatory environment for small business ...Each of these actions is a small step forward in itself. Together they are a radical change in the way we do business. And the results are showing. In a contracting market for small business credit, our market share has risen by 2.3% in just two years. Better yet, we have done this without lowering Our high standards of creditwonhiness and asset quality. These are achievements of which we are righdy proud. even as we recognize that it is our srnall business customers who have made hem possible. This annual report is our thanks to them. -We owe our customers the highest standard of service. professionaIism and added value.

-Let me review brietly some key achievements of this strategy in the last five years and in 1994 in particular. We have customized Personai and Commercial Financial Services to meet the unique needs of 234 cornrnunities across Canada .... Our customers have rewarded us with substantial growth in market share. especially in the independent business sector, where we are now the highest-rated bank in Canada. In 1994, we moved to build on that achievement by creating the Institute for Small Business, which will allow Our independent business customers to Iearn fi~mus while we lem from them.

-In five years. we have established a reputation as a bank that .. .is sensitive to the evolving needs of our customers and employees. 1991 brought. .. excellent examples. Our It is Possible marketing carnpaign made the tools of basic financial planning available to al1 Canadians for the tirst time. -.Although we review and renew Our Plan. keeping it amined to new times. 1 çünnot imagine circurnstances which would lead us to abandon or seriously modify our cornmitment to Our four stakeholden.. .

-Our depositors and our shareholders rightly prize stabiiity, and we have put it at the core of our values. 1996 is the year we launched mbanx. an entirely new virtual banking enterprise designed to meet the needs of tinancially active consumen across North America at the highest standards of speed, convenience and service quaiity.

-The evolving needs of our customers are the principal force for change in financial services today. In personal banking, demographic trends are bnnging us mature customers who are expenenced and knowledgeable, with wider perspectives and more complex needs ... We are committing more and more electronic and human resources to building relationships tailored to our individual customers - relationships whose core is tirst-class prokssional financial advice. mbw. with its easy. low-cost access to al1 Our electronic distribution çhannels and its individual portfolio managers for every client. embodies both these strategies.

-Sensitivity to our customers' needs is paralleled by our response to the rising standards that communities are setting for corporations everywhere. -As customers' demand for financial services grows in intensity and sophistication, your Bank is constantiy seeking ways to meet or exceed their expectations.

Description and analysis In 1985. Mulholland indicates that providing service to customen, regardless of whether they are small or large, is a matter of tradition and continuity at the bank. Furthemore the service provided by the bank is said to be "'of acceptable quaiity"; the bank's service to customers does not appear as distinctive. In 1986, the bank's çommitment to customers is manifested in the bank's respect, fair treatment, service '70 the best of Our ability". deposit protection, and privacy honouring. In fact, some of this commitment emanates from the "public tnist" vested in the bank. In other words. part of the bank's commitment to customers is a social responsibility. That the bank's relationship with custorners is a matter of social responsibility is again re-iterated in 1988 where there is talk about '~eobligation to give value and useful service in return for the rights and pn~ilegrswhich we enjoy and for the tnist placed in us by our fellow citizens" (third quotation). The bank's relationship with the customer thus has normative ovenones. It goes beyond an instrumental. business relationship and involves a moral responsibility and obligation towards the "fellow citizens". However. the relationship is dso an issue of strategic imponance. Deregulation has brought a challenge for tinancial institutions as customers will have greater choice in the selection of services and the institutions that provide them. There is thus. a "need" to be better informed about sustomrrs' wants and to respond with products "of a high quality delivered to the highest service standards". The instrumental aspect of being informed about customer wants and meeting these wants appears in this statement. It is also noticeable that the qualifiers used here are stronger than those used in 1985. Thus. products should be "of a high quality". and should br "delivered to the highest service standards." In 1958 as in 1985. Mulholland addresses iwo classes of customers. namely Canadians, who are catered to by the bank: those "of modest means" and those who are "financially active". 1989 shows a continuity with 1988 in that a number of major changes are said to have "forced" banks to rethink their stratepies including the search for 'hew ways to add value to their customer relationships". Again here. catering to custorners appears as a matter of necessity. Funhermore. in a typical marner. Mulholland. talks about banks and financial institutions in genrral and not about BMO in particular. In 1990. the annual report was prepared under Barrett's chairmanship of the board. The commitment to customers addressed in the Vision statement reiterates some of the sub-themes articulated by Mulholland inchding 'value", b'quality" and "high ethical standards". Some new issues not addressed by Mulholland surface as part of the bank's commitment to custorners such as a "distinctive" level of se~ce.In addition, employees, another stakeholder group, appear subordinated to customen. The opening statement of the MTS indicates that it is the bank's goal '20 provide a distinctive level of service" to the custorners who are said to be a major reason for success. Here again. the customers appear as having priority over the other stakeholder

3t~oups which are addressed jointly in the second statement. Later. we are told that the bank had made major investrnents intended '30 improve service quality". implying that the quality of senicr was not at its best. In other words. 1990. re-itentes mmy of the cusrumer sub-themcs put fonh by Mulholland. Barrett. however. introduces the notion of distinctiveness in customer service as a goal for the bank. He also attributes success mainly to customers. as is evident in a number of quotations. In other words. with Barren. the rustomer theme takes more centralig. and distincriwness in customer service becornes a pal at the bank. The emphasis on customers' underlying the bank's success continues in 1992. In fact. the 1992 MTS is dedicated almost exclusively to the small business customer se+gnent who were piaced "fidy fiont and center" among the bank's prionties in the Corporate Strategic Plan. The bank's commitrnent ro small business has remained constant despite adverse factors in the environment (second quotation). Continuity in the bûnk's cornmitment to and practices towards the small business custorner segment is rmphasized. The bank's attentiveness to customer wants and needs is reiterated in the third quotation. A variety of steps taken by the bank to meet these wants and needs, some of which are said to be distinctive to the Bank, are outlined. Noteworthy among these distinctive procedures is the bank's Small Business Lending rate which for over a year was one of the lowest in the country. Each of the procedures used by the bank in meeting the needs of small business customers is "a small step fonvard". but 'Together they are a radical change in the way we do business". This last statement allows us to conclude that the change is radical with respect to the bank's past ways of doing business. In fact, it is a near past (since Barrett's ascendance to the chairmanship and the bank's adoption of the Corporate Strategic Plan). The rise in the bank's market share refers to the previous two years. The MTS ends with the attribution of success to the small business customers which is a variation on the 'customer leads to success' issue previously mentioned in 1990. In brief. 1992 shows a continuity in the 'cornmitment to custorner' theme with emphasis on 3 particular customer segment - small business - which gained in stratepic importance since Barrett's mandate as chairman. The 1994 MTS is dedicated to a review of the bank's achievements during the previous tive years and to a re-iteration of the bank's commitment to the four stakeholders. The commitment includes owing customen "the highest" standards of "senice. professionalism and added value" which reiterates aspects of the commitment mentionrd in 1990. Interestingly. though, this commitment does not refer to faimess and integrity which were mentioned in 1990 by Barrert and before that by Mulholland. In this respect. Barrctt appears to be diverging from some of the major sub-themes articulated earlier. Some of the achievements dunng the ftrst five years of Barrett's tenure are also outlinrd. Pan of the bank's success is açain attributed to customers who are said to have "rewarded" the bank with gotowth in market share in the small business sector in particular. Here the bank's distinctiveness in the sector of independent business is rmphasized as the bank is said to be 'zhe highest-rated bank in Canadai'. In an effort to fiirther consolidate this distinctiveness. the bank builds the Institute for SmalI Business thus allowing both. the bank and the customers to leam tiom each other. The last quotation in 1994 indicates that the bank has established a reputation for. among odier things, being sensitive to its customers' needs. An example of this sensitivity is that the bank has provided "Canadians" with basic financial planning tools for the first time. Here the "fiat" theme is joined to the "customer service" theme. In 1995. the NITS addresses a nurnber of major changes that have occurred in the bank's environment and this is followed by a reference to the fixed points at the bank in the tlux. Le. continuity in a tirne of change. This continuity retèrs to its cornmitment to the tour stakeholders among whom we End the customers (who in this case are not singled out). The relationship with these stakeholders may be redefined and re-irnaged, but the bank's cornmitment to them will rernain. In the second quotation, the bank's values are said to drrive from what is prized by depositors (customers) and shareholders, narnely stability. Here we see that depositon (a customer se-ment) are placed at par with the shareholders in influencing bank values. In 1996. the bank launches mbanx which is defined in terms of meeting customer nçrds. More specifically, it caters to the needs of "financially active" custornen across N..A. a t "the highest standards of speed, convenience and service quali ty." The expression "tinancially active" designating a group of customers was used by Mulholland in 1988 in speaking about one of the bank's objectives. Then. Mulholland distinguished between Canadians of modest means and tinancially active Canadians. It is also noteworthy that emphasis is plased on "the highest standards" of speed, convenience and quality echoing the feu superlative qualifiers of customer service used at BMO. The second quotation in 1996 indicates that '~heevolving needs of customers are the principal force for change in financial services". Customer needs are attributed a causal force for change. This is a more forcetùl role which is attributed to customer needs than was common with Mulholland. The latter indicated in 1985 that deregulation lrd to a higher level of customer choice and in 1989 that technological change had an impact on customer expectations. For Mulholland. deregulation and technology were pushing the changes in customer needs which. in tum. created the necessity for banks to readjust their stratesies. With Barrert. customen themselves are said to push the changes. and technology provides a means to satisfi these needs. Customers. who in 1996 are said to bt: "mature". "experirnced, knowledgeable" and to have "more complex needs". seem to take a more central role in discourse since Barrett took over. Advanced research and segmentation techniques are used to understand customen and the tight blend of technology and people is sought in other to meet customer expectations. In fact, the whole concept of mbanx is centered around meeting individual customer needs. The bank's "sensitivity to ...customers' needs" is reiterated. In 1994. the bank was said to have establis hed a reputation for such sensitivity. The quotation in 1997 addresses shareholders directly and informs hem that their bank 9s constantly seeking ways to meet or exceed (customer) expectations." This underscores the centrality and the stmtegic importance that the bank grants to meeting customer needs and expectations. In brief. we see that the cornmitment to customers (and fellow citizens) which was portrayed as part of the bank's social responsibility and moral obligation with M ul ho1 land. and w hich involved providing "service of acceptable quality" ( 1985) and protecting customer desposits and privacy ( 1986), becomes part of the bank's vision and values with Barrett in 1990, but with sorne different ternis. Then, the bank's goal is said to be to provide a "bdistinctive"level of service and customers seem to have primacy over other stakehoider groups. In 1992. a custorner segment, namely small business. is singled out as the subject of the annual report and the bank's distinctive service to this customer uoup is outlinrd. In 1994. BMO is said to be "the highest rated bank in Canada" in the C small business sector. During 1994 as well. when the bank's cornmimient to customers is re-affirmed. this cornmitment rnakes no reference to the protection of customer deposits. By then. BMO is said to have rstablished a reputation as a bank that is sensitive to the needs of its customen. The 1996 staternent places particular emphasis on meeting the nreds of financially active consurners. whom mbanx - a major bank development -was tarsetins. This is portrayed as an instance of the bank's sensitivity to customer needs.

Commitment to shareholders

Table 13. Commitment to shareholders -From .-lCommitment to People: We are committed to Our shareholden: We have a duty to Our shareholders to optimize the return on their invesment. and through prudent management, to maintain the continued prosperity of the Bank. -Faithfbl attention to (the fundamentals of prudent management) will provide added assurance that the Bank and its shareholders will not only be protected against the impacts of the inevitable adverse developments but will also be well- positioned to take advantage of the opporninities which the future will bring. -From fision - Our Philosophy: We will provide shareholders with an attractive and continuing remon their investment.

-Frorn Pahes: We manage the Bank on behalf of our shareholders: Our fint responsibility to them is to provide sound , responsible management and to keep them fully informed. We will be responsive to emerging threats and opportunities. and will invest - or divest - accordingly. We will maintain a prudent risk profile and a strong credit rating to protect shareholder investment. Shareholden cmexpect to see their investment steadily increase in value and achieve an annual remthat is cornpetitive with other banks. -1t is to thern - our customers and shareholders - that in no small measure we continue to owe ow success. -We reported Our fifth consecutive year of record earnings, while sustaining our solid and consistent retum on equity. Overall, Our financial track record for the nineiies places us firmly among the top-perfonning major banks in Canada and the United States.

-Our shareholders are entitled to a competitive rate of retum and the prudent management of their investment. -In 1995 Bank of Montreal reported net income of $986 million for our sixth consecutive year of record emings. Natwally. we are encouraged by this achievemrnt. But we are particularly gratified that 1995 is also the sixth consecutive year in which we earned a return on equity of over 14%; in fact, our ünnual ROE was the Bank's highest in six years. We are one of only hvo North .Amencan banks in Our peer group to achieve these results ...For me, however, the real meaning of our 1995 results is that we are hltilling our commitment to give Our shareholders a solid and. above all. a consistent return on their investment. We made that cornmitment when we adopted our Corporate Strategic Plan in 1990. just as the business cycle began to turn down. We kept it through the worst days of the recession, and we are keeping it in today's more prospcrous times. We will do everything we can to maintain our record. because earning a consistent renim is fundamental to our whole business strategy.

-.Mthough we review and renew our Plan, keeping it amined to new times. 1 cannot imagine circumstances which would Iead us to abandon or seriously rnodi. our commitment to our four stakeholders.. .

-Our depositors and Our sharehoiden rightly prize stability, and we have put it at the core of our values. -11 is the Bank of Montreal Group of Companies' decisive response to those possibilitiss that makes Our shares an investment to buy and io keep. Elsewhere in this Report, you can read about the seven consecutive years of record profits which show how effectively our Bank has been managing the dnvers of change in the 1990s.. ..And as you read, 1 hope you will see how banking without boundaries means a brighter füture for al1 our stakeholders - our customers, cornmunities, employees, and espccially, our shareholders. who stand to benefit the most as we welcome the challenge of expanding horizons.

-The ground-breakhg disclosure standards set by this Report have won major awards on several occasions. Increased disclosure also goes naturally with effective corporate govemance... It is an important guarrrntee that our shareholders can not only profit from their Company, but be proud to own a part of it. Yet we remernber that we are first and foremost a commercial enterprise, with an ovemding responsibility to create wealth for our shareholders. We have a stakeholder strategy, because we believe it is the most effective shareholder stratew. -For the management of the Bank, year-end brings with it the obligation to give the hl lest possible accounting of the initiatives and events that produced growth in shareholder value, as well as opportunity to report on plans for sustaining the creation of shareholder wealth in the future. The pages that follow in this Annual Report and the extensive disclosure contained in the Management analysis of operations section combine to assure that shareholders are well in t'onned.

-Fiscal 1997 saw the bank of Montreal Group of companies report record eamings for the eighth consecutive year. 1 1.7% above the level in 1996. Rem on equity (ROE) was 17.1%. Your Bank is the only major bank in Canada and the United States to have produced ROE exceeding 14% for the 1st righht years. As a result the market value of your Bank at year-end rose to 95.9 billiori - a gain of S5.4 billion for the year.

-Durin$ the severe recession of the carly 1990s. your Bank achieved record eaminps. while some of our cornpetitors stumbled. This was due in part to the risk management disciplines already in place. which we have continued to refine. Se~rralexperts in these fields have recently judçed your bank to be on the Icading edgr of çontemporary nsk management capabilities.

Description and analysis In the MTSs signed by bIulholland there are very few references to shareholders as a separatr interest group. In 1986 and 85. shareholders are one of the three or four groups whose interests should be looked afier by the bank (see the "comrnitment to stakeholder" theme analyzed before). In A Cornmitrnenr &O People, the bank's duty towards shareholders centers on optimizing their ROI, and "through prudent management (maintaining) the prosperity of the Bank". Prudent management as a requirement for the protection of shareholders is again re-iterated in 1989. During MulholIand's tenure, the bank's commitment to shareholder could be summanzed in the duty to provide a prudent management style as well as to provide optimal renims. With Barren. the bank's comrnitment to shareholden includes providing not only, "an attractiveo'but also a "continuing" retum on invesmient which they can expect to see "steadily increase in value" and which is "cornpetitive with other banks". The bank is also committed to maintaine a "prudent" risk profile. This latter staternent shows a continuity with Mulholland's articulations regarding "protecting" shareholders in 1989 (and al1 interest groups in 1985. 56 and 88) through prudent management Another of the bank's commitments to shareholden articulated during Barren's first year as chairman and not prevalent before includes keeping shareholders hlly informed. Although the bank's commitmrnt to shareholders under Barrett seems to go beyond that under Mulholland, the sharcholdrr goup. unlike the customer group in 1990. does not emerge as the principal stakeholdrr pup. In 199 1. thrre is a single mention of shareholders, who along with customers. are given crcdit t'or the success of the bank. 'lo rekrences to shareholders are made in 1992 b or 93. In 1994. Barren reviews the bank's pertomance for the preceding the yean çomesponding to his trnure as chairman and re-at'firms the bank's cornmitment to its four stakeholdrrs. We see that the bank has been reponing record eamings since Barrett took uver as chairman. This is an indication that the bank has bern tùlfilling the commitment to sbareholders it pledged in 1990 when it pointed out that it would be providing them with an attractive. consistent and steadily increasing renirn. The shareholden' entitlement to "a cornpetitive rate of retum and the prudent management of their investment" is again reiterated in 1994. echoing statements made during blulholland's times ( 1986) as well as

Barren's ( 1990). It is notewonhy that 1991 marks the year the bank's stock became listed on the NYSE. It also marks the year that references to difkrent measures of the bank's protitability stan appearing in the MTS. In 1995 the bank's hlfillment of its commitment to shareholders is explicitly addressed: "For me. however. the real meming of our 1995 results is that we are fulfilling Our commitment to give our shareholden a solid and, above dl, a consistent retum on their investment. We made that commitment when we adopted our Corporate Stratepic Plan in 1990.. ." This commitment was fulfilled despite adverse circumstances in the extemal environment and will remain a central issue, "fundamental to our whole business strate&'. The bank's continued commitment to shareholders along with the other three stakeholder groups is re-affirrned. The last quotation for 1995 indicates that the values of two stakeholder groups, depositors and shareholders, are also the core of the bank's values. Here we see that these ovo stakeholder groups take more prorninence than the others. The predominance of the shareholder group becomes very clear in 1996 whereby this group is singled out fiom the other stakeholder groups in hvo quotations: -"... you will see how banking without boundaries means a brighter future for a11 our stakeholdrrs.. . and rspecially. our shareholders. who stand to benefit the most as we wrlcorne the challenge of expmding horizons" and -". . . we are first and foremost a commercial enterprise, with an ovemding responsibility io create wealth for Our shareholders. We have a stakeholder strategy, because we beiieve it is the most effective shareholder strategy." Not only is the shareholder group singled out t?om the other groups as being catered to most by the bank. the shareholders are also told that the bank's shares constitute "an investment to buy and to keep" and that the b&'s "shareholders can not only protit from their company. but be proud to own a part of it." The last two sentences appear to induçe shareholder identification with the bank: they stand above other stakeholder groups and their owning BiMO shares is both an investment to keep for the long-term. and a source of pride. This identification-inducement continues in 1997 as the following statements (and several others) indicate: -"Your Bank is the only major bank in Canada and the United States to have produced ROE exceeding 1496 for the last eight years." -"During the severe recession of the early 1990s, your Bank achieved record eamings, while some of our cornpetitors stumbled ... Severai experts in these fields have recently judged your bank to be on the leading edge of contemporary risk management capabilities." In these statements the bank addresses shareholders directly as is evident in the expression "your Bank" which appears at least seven times in the 1997 MTS. Most of thrse statements talk about measures the buik has taken or is taking to mcceed. Funherrnore. it is noteworthy that seved references to ').ou. Bank" are accompanied by somr mark of distinciiveness of the bank, giving the readers (shareholders) additional reasons to identifi with the bank. These include the tact that BMO is the only major bank in Canada and the US. to achieve ROE exceeding 14% for eight years while cornpetitos smmbled and that the bank was judged by experts to be on the leading edge of nsk management. There is an ovemding tendency throughout the whole MTS to speak directly to shareholders about matters that are of concem to them. This emphasis on the shareholder shows continuity with 1996 when the shareholder group was singled out as the most sigiticant among the stakeholder proups. Funhermore, references to the bank's high protitability and extensive disclosure indicate. as in the past ( 1990. 94 and 95) that the bank is hl tilling the commitment it proclaimed in 1990. In brièt: we see that with Muiholland, the bank's comrnitment to sharehoiders is aniculated in terms of providing an optimal retum and prudent management of their invrstmrnt. This rmphasis on retum and prudent management is re-attfirmed by Barren at the begnning of his chairmanhip. Barrett, however. made additional issues part of the bank's cornmitment to shareholders. notably the bank's responsibility to keep them informed and the cornmitment to provide hem with rems that are not ody attractive. but also consistent. Between 199 1 and 1993 only one reference is made to shareholders in the MTS. In 1994. the bank's commitment to shareholders is re-affirrned and emphasis is again plaçrd on the bank's responsibility to provide competitive retums and prudent management. In 1995. references to the bd's profitability and the bank's fulfiliment of its commitment to provide attractive and consistent retums to shareholders is emphasized. In 1996. identification-inducement strategies appear in the MTS and the shareholders are placed above the other stakeholders on the bank's prionty list. This continues in 1997. where the MTS seems to be addressing primarily the shareholder concems and talking explicitly to them by refemng to BMO as 'leu Bank". specially while addressing some distinctive achievements by the bank. The bank's extensive disclosure, consistent and high retums. and prudent management practices are again re-iterated in 1997. The bank's commitment to shareholders offers an interesting conûast to its comrnitment to customers who, in 1990, were placed above other stakeholder groups. The srrategic importance of the customers continues until 1997, but not the bank's pre- dominant commitment to them. In 1996, it is clearly the shareholder who takes center stage in the bank's discourse and retains it in 1997. Commitment to employees

Table 14. Commitment to Employees -From .A Commitment ro People: We are comrnitted to Our employees: Tney are special. Their loyalty is prized as are their skills and exPeience. ~e are dedicated to their personal and professional developrnent and well-being. We support equal opportunity and advancement in accordance with ability for al1 staff.

-Those engaged in takeovers and acquisitions argue. sometirnes correctly, that they serve a legitimate economic and social purpose. They identify areas of opportunity and by their actions force a more efficient use of capital. Even when tme. this is a tough argument to sell. But, try selling it to the employees of a business that is dismembered or a plant that is shut doua to help tinance the ricquisitor's purchase or to mm a quick profit. Multiply this rnany times over and it is not difficult to see how easy it is to nsk destruction of the very bais of the poli tical consensus on which a market economy ultirnately rests. - -[t will continue to be necessq to.. . enhance the professional skills of our management and staff.. , - -From CWisio>i- Oirr Phifosophy: We will offer ernployees the opportunity for a hl1 and rewarding career. and will nurture a culture based on mutual loyalty, tenmnork. respect and a strong work ethic.

-From Lulues: Employee satisfaction leads to customer satisfaction. The Bank is commined to attracting, developing and retaining the best people. Employees cm expect us to demonstrate respect for the individual, to be a fair and equitable employer. and to provide the opportunity for a full and challenging career. We will offer cornpetitive compensation and benefits, and will recognize and reward personal achievement as well as teamwork. And we will provide oppomuiities for continuing professional development through training and mobility within the Bank ... The Bank in nirn seeks from every ernployee: cornmitment to the Bank's principles and goals, a strong customer orientation. a sensitivity to public concems and actions which are at al1 times socidly responsible.

-Today's Bank of Montrealers draw upon a prized tradition, place it at the senice of our stakeholders, and hold it in trust for the future. -Finally. we cm count on the great and growing excellence of our people. We are absolutely determined to have the best people in the financial seMces industry. anyvhere in North Amenca. We have already made notable progress along that road, and when the Institute for Learning, our state-of-the-art eduration and training centre, opens early in 1994 it will give us an advantage the competition will fuid hard to match. - -And to Our employees we offer equitable conditions of work, with excellent opportunities for personai and professional growth.

-In five years, we have established a reputation as a bank that .. .is sensitive to the evolving needs of our customen and employees. (Examples are then given relating to sensitivity to customer needs. Nothing else is mentioned regarding sensitivity to employee needs.)

-But despite its scope. the IFL is only the latest stage of the cornmitment we made tivr years ago to give our employees the finest opportunities for learning in the tinancial services indus.. They have rewarded us with five years of grotvth, leadership. innovation and record financial results. Nothing would have been possible without them, and this message is above al1 one of thanks to them for everything they have achieved. Their results today are our oppomuiities for tomorrow . -...we are comrnitting more and more electronic and hum& resources to building relationships tailored to Our individual customers - relationships whose core is fint-class professional financial advice.

-Change is all-pervasive. but it is perhaps in the workplace that its effects are first brought home for most people. Rising customer expectations, together with swreping technological, demographic and attitudinal changes, have made the ability to manage value-adding relationships the essential qualification for more and more rmployees.

-The consequences for the traditional banking mode1 of security and hierarchy are protound. Many employees in financiai services are learning for the first time that their jobs will not be there. The steady decline in full-time transaction- processing positions will continue, even as the demmd for new skills increases in occupations, such as the portfolio managers of mbanx, which did not exist a few years ago. Over time, only those who consistently contribute to the well- being of our customers and, as a result, the profitability of the enterprise will prosper in the new century. They will have understood what is happening, and responded by preparing themselves for a new kind of banking.

-Our response as a bank is to prepare a new contract with our employees, one that defines us as a leaming organization. The patemalism of the past is being replaced by a professional relationship between the Bank and employees who are essentially independent entrepreneurs, with their skills as their capital. For those who welcome continuously expanding career horizons, and are prepared to take responsibility for their futures by ùivesting in themselves, we are providing unprecedented opportunities for leaming in every line of business. Over tirne, our reward will be to have the highest quality of human capital, which today is the only lastins cornpetitive advantage in banking. -To work in (such a bank) is always challenging, but also rewarding and .- rnjoyable.

Description and analysis In 1986. .f Cornmirment !o People spells out how the bank's cornmitment is rxercised towards employees. This commitrnent has some paternalistic overtones as is rvidenced by the emphasis on employees' being "special". on the prize the bank places on ernployees' "loyalty" as well as the bank's "dedication" to their "well-being". The importance of caring for employees is again evident in the second 1986 quotation where hlulholland indicates that the "more efficient use of capital" is a tough argument to sel1 to cmployees ofa business that has been dismembered or a plant that has been shut down in order to tum a quick profit. In this quotation. Mulholland is speaking about general business practicrs and exposes the hgility of the consensus on which a market economy rrsts. Irnplicit in Mulholland's statements is the indication that businesses have a social responsibility. part of which applies to how they treat employees. in 1989. Mulholland spells out sorne of the steps the bank should take in the future and they include enhancing the professional skills of employees. With Barrett (1990), the employees do not appear as special, rather we are told that "employee satisfaction leads to customer satisfaction". This seems to place employees in an instrumental position to achieve customer satisfaction. However. like 1986's '4 Cornmitment to People, the 1990 statement of vision includes nurturing a culture of "mutual loyaity", thus some continuity is maintained with 1986 statements. Unlike the 1986 statements, however. the 1990 vision and values statements include offenng employees "the opportunity for a full and rewarding career" and for a "full and challenging career". This emphasis on "rewarding" careers will be taken up in later years, but the emphasis on "loyalty" will be dropped. In the closing paragraph of the MTS. "Bank of Montrealen" are said to draw upon a prized tradition and to place it at the service of the bank's stakeholders. Note the identification-inducernent overtones in the expression "Bank of Montreaiers" as well as in placing the laner in a position of responsibility to draw on "a pnzed tradition" and to "hold it in trust for the friture". Bank of Montrealers are thus the perpetuators of the Bank's prized tradition which they place at the semice of stakeholders. in 1993. references to employees are accompanied by references to the Institute for Lraming (IFL). a "state-of-the-art education and training center" slated to open in a short while. This quotation. in addition to boasting about the IFL, also indicates that the bank is çounting on employees' "geat and growing excellence". In tàct. thanking employees for al1 they have achieved appears in 1994 when we rire told that "nothing wuld have ben possible without them". 1994 is also the year the IFL staned operations and this is said to bc 'the latest stage of the commitment" made to employees in 1990 when Barrett became chainan. As mentioned previously. the 1994 MTS reviews the bank'a açhirvements since Barren took over. It places emphasis on how the bank tùlfilled its commitment to the different stakeholders dunng the previous tïve years. This MTS re- iterates the bank's commitment to offenng ernployees "equitable conditions of work. with excellent opportunities for persona1 and professional grotvth" which echoes statements in 1986's .-1 Cornrnirmenr to People. The bank is also said to have "established a reputation as a bank that . . . is sensitive to the evolving needs of customers and emplo yees." To dernonstrate this sensitivity. the MTS goes on to give examples of its cornmitment to customers. but not to employees. In 1996. "electronic and human resources" -which are placed at the same level - are said to be committed to building relationships with custorners. More importantly. however. is the fact that of the different years studied. 1996 shows the most discontinuity with the past in its address of the bank-employee relationship as the expression "change is all-pervasive" indicates. Changes in customer expectations as well as sweeping technological and attitudinal changes have dictated the need for new employee qualifications. the most essential of which is managing value-adding relationships. [t is important to note that employees are again - as in 1990 - subordinated to customers in this statement: "only those (employees) who consistentiy contribute to the well-being of our customers . ..dl prosper in the new century". Thus the consequences are said to be "profound for the traditional mode1 of banking where security and hierarchy prevailed. Full-time transaction processing jobs will continue declining while demand for new skills which did not exist before will continue to increase. The onus is on the employees to understand what is happening and to prepare themselves for "a new kind of banking". This kind of banking involves a "new contract" with the employees and replaces the "paternalism of the past". No quotation speaks about radical change as forcefully as do the ones appearing in 1996. The contrasts between the past on one hand. and the present and the tùture on the other. are remarkable. The bank is fbrther said to be providing employees who have an entrepreneurid spirit *unprecedented oppominities" to invest in themselves. The bank's reward is to have. over timr. "human capital" of the highest quality. Working in such a bank is said to be "chailrnging". "enjoyable" and "rewarding". Remark that in 1990. the statement of vision and 1 dues pledges that the bank will offer employees the oppominity for a hl1 and rcwnrding carrer. However, unlike 1990. the 1996 MTS says nothine about "mutual loyalty" between the bank and employees. In 1996. the bank's cornmitment to employees is maintained as long as the latter are ultimately able to contribure to the bank's bottorn line. The bank's commitment to employees does not appear as a matter of social responsibility: neither does it revert to the normative realm. Rather it is based on a calculated exchange relationship. Its cornmitment to employees is contingent on the employee-customer relationship. Only when the employee takes responsibility in ensuring that hisjher relationship with customers "consistently contributes .. . to the profitability of the enterprise". will the bank hlfill its commitment to the ernployees. It must be noted that in 1996. BMO introduced mbanx which is portrayed in al1 BMO's publications as a totally new concept in banking and as a revolutionary step in the bank's history. In brief, in 1986. the bank's commitment to employees indicates that the latter are "special". that the bank prizes their loyalty and skills and is committed to their personal and professional development and well-being. In 1990. the statement of vision and values makes no indication of the employees' special statu, but maintains the ernphasis on mutual loyalty between the bank and employees and the bank's commitment to their professional development. It merindicates that it offers employees the oppominity for "a full and rewarding careei'. As the EL gets completed and operationai, it is presented as a step in the bank's commitment to employees, which in 1994 is again reiterated in terms of providing the latter with "excellent opportunities for personal and professional growrh". 1996 bnngs some major discontinuities with the past. as well as some çontinuities. The bank's commitment to provide employees with rewarding careers is re- iterated. but that is done under the terms of a new contnct between the hvo parties whereby the employees take responsibility for investing in their skills and for acting as entrepreneurs with their skills as their capital. Only those employees who are able to sontribute w customers' well-being and. therefore. the bank's profitability. will tind cinployment undrr this new contract. Working under such conditions is said to be "rewarding" which implies a tùlfillment of the bank's 1990 commitment to provide employees with challenging and rewarding careers. Patemalism (as the 1986 quotations implicitly declare) is considered in 1996 to be a thing of the past.

Cornmitment to the communil

Table 15. Commitment to the communitv -From .-! Commitment ro People: We are committed to the cornmunities where we live and work: We have traditionally observed the responsibilities of corporate citizenship, supporting charities. cul~niprograms, civic projects, research and education. Our staff voluntanly contribute time and talent to community activities.

With added powen. greater responsibility will Ml on tinancial institutions to impose disciplines on themselves and to dernonstrate consistently that the powers granted to them are being used pmdently, responsibly and in the best interests of the community. -One troubling development during the course of the Iast decade has been the lapse in ethical standards and behaviour expenenced in the tinancial world. Failures of ethical conduct in the investrnent industry have been especially conspicuous for the magnitude of the sums involved. ...They were al1 simply breaches of basic trust - betnyals of vaiues that have always been as essential to success in business as they are to our personal lives. These actions have been ri~htfully held up to public censure, and their unforninate consequences underscore the need to earn and to preserve the trust of the community. Uitirnately, al1 businesses operate ody with the support of society, and that support should never be abused nor taken for ganted. -From Fision- ûzrr Philosophy: We will be involved in the cornmunities we serve. and will always demonstrate high standards of social and corporate res~onsibilitv. -Frorn I,Blcres We do business with the permission of the communities we serve: Communities expect us to consistently demonstrate social responsibility as an employer and as a corporate citizen. This we will achieve by serving the public interest. and the interests of consumers and local businesses in communities nationwide. We will encourage Our employees to participate in cornrnunity açtivities, and provide financial and other assistance to educational. cultural. health care and sports programs.

-Communities look to us for quaiity services unique to their needs. and for a commitment to the public interest- making the cornmunity a better place to work and live. -We have decentralized so that virtually al1 our small business loans are approved within the cornmunities where they operate. -We rire an active and responsible member of every cornmunity where we do business.

-Let me review briefly some key achievements of this strategy in the last fi ve years and in 1994 in particular. Wr have customized Personal and Commercial Financial Services to meet the unique needs of 234 communities across Canada. We did that to bring the full strength and reach of a major bank into communities where recil decision-taking authority lies with people who live and work in the çommunity they serve. Our customers have rewarded us with substantial growth in market share. -Sensitivity to our custornen' needs is paralleled by our response to the rising standards that cornmuni ties are setting for corporations everywhere. We acknowledge and welcome the responsibilities that come with a franchise to do business. The first and most fundamental of them is simply to mn a profitable enterprise. By providing hi@-quality, cost-efficient financial seMces for our clients we help them to prosper in their endeavors, while earning a steady competitive retum for our shareholders, creating a major market for our suppliers and investing in the skills and experience of our employees. We also pay taxes and levies to al1 levels of governrnent which in 1996 once again exceeded the total earnings available to our shareholders. And by doing al1 these things we ridd signiticantly to the wealth. productive capacity and policy options of society as a whole.

-Vie also hlfill our responsibilities by contributing time, money and ideas to the cornmon cause. This is one of the oldest traditions of the Bank, but it has never been more relevant than today. Needs are growing steadily as governrnents strive to put their financial houses in order. While it is not realistic to expect that any one company - or even the whole corporate sector - cm completely fil1 the cap. the Bank C last year of Montreal Group of Companies gave nearly S 17 million in donations and sponsorships, and the tune and effort freely offered by ou. ernployees were at least equally significant. In the final analysis, we believe that corporate responsibility and corporate profitability are not alternatives, but interdependent and mutually reinforcing factors in business success. Each is ultimately made possible by the other.

-Such a bank is an immensely valuable partner for the communities in which it does business.

Description and Analysis In .-1 Comniitnient to People. BMO's commitment to the "communities where we liw and work" is txpanded upon. It involves a ""traditional" adherence to corporate citizenship and the support of a variety of charities and social progams. The bank contributes in two ways: as an institution, and as staff vouluntarily participate in cornmunity activities. This is one of the few references made during Muiholland's time to BMO's role in particular towards the community. In addition. this quotation shows a narrower view of the community ('the communities where we live and work") than some of the other quotaiions that refer to the comunity in a broader sense. In fact. in the MTSs, Muiholland's discourse places more emphasis on the social responsibility that financial institutions and businesses in general have towards the comrnunity. The second quotation in 1 956 and the one in 1989 attest to this fact. ?lot only businesses ought to behave in socially responsible ways. they can only operate with the support and trust ganted to them by the community. Cornmunity, here. refers to society in general or possibly to the public. With Barrett, the emphasis shifts to BMO in particular. No mention is made of the responsibilities of business firms in general towards the comrnunity. In 1990, we can see thai continuity is maintained with 1986 in the emphasis on '~ecornmunities we serve" and on the bank's pledge of social responsibility. However, there is an additional reference with Barrett on the bank's commitment to provide cornmunities with "seMces unique to their needs". This latter aspect of the bank's commitment to the cornmunity will continue into later years with Barrett as the quotations in 1992 and 94 indicate. 1994, as mentioned before, was the year in which the bank's achievements since Barrett became chairman were reviewed, and the bank's commitment to its four stakeholders was re- at'tinned. One of the bank's achievements mentioned is the custornization of services "to meet the unique needs of 234 communities across Canada". in this case, "communities" and "customers" srem to be used interchangeably as the 1st sentence in the quotation indicates: "Our customers have rewarded us with substantial growth in market share".

In 1996. we see the bank as responsive '?O the nsing standards that communities are setting for corporations everywhere", and the bank's most tùndamental responsibility in this regard is *to nin a profitable enterprise". In other words, making a profit is ponrayed as meeting comrnunity-set standards of corporate behavior. This gives a normative overtonr to the need ro make profits. How making profits contributes to different sesments of the cornmunity (including clients. shareholders, employees and soçiety as a uhole) is then exposed. In the second quotation. the bank is said to be tùlfilling ri responsibility constituting 'one of the oldest traditions of the Bank": "contributing time. money and ideas to the çommon cause". As was mentioned in 1956. the bank contributes as an institution and through its employees. However. 1996 is the îïrst time when a direct and explicit relationship is established between "corporate responsibility" and "corporate profitability". which "in the final analysis". the bank believes are not "alternatives. but mutually reinforcing factors in business success". After outlining a series of bank achievernents and undertakings. BMO is said to be "an immensely valuable parnier for the cornmunities in which it does business". This appears as an identification-inducement tactic, but on a community scale. In bief, we see that with Mulholland, ernphasis is placed on social responsibility of businesses in general towards the cornrnunity at large. References to BMO's exercise of social responsibility are scarce and the quotation from A Cornmitment tu People is one of thrm whereby BMO's commitment to the communities "where we live and work" is articulated. but then again. in terrns of corporate citizenship. This ernphasis on business fimis' general responsibility is dropped with Barren, but we find continuity in articulating B MO'S commitment to the cornmunities where the bank does business. Furthemore, with Barren in 1990. an additional dimension appears as part of the bank's commitment to communities, narnely the bank's serving the unique needs of communities, an issue which appears in discourse quite ofien sthng in 1990. By the end of the period under study, corporate responsibility and corporate profitability are said to be mutuaily reinforcing factors in business success. The normative and instrumental requirements becorne hereby confounded.

5.2.l.f The ldentity Paradox Bcfore movine to a discussion of the identity themes. 1 would like to present an intcresting aspect of BMO's self-reference which ernerged Iiom the data and which was nlludrd to sevrral iimes in the annlysis. It relates to the bank's discoune on idenrity in -reneral. and not a particular identity theme. This is the tendency for apparently contndictory identity themes to be addressed simultaneously or sequentially in the bank's discourse. .\ddressing a principle occasions the evoking of a divergent principle which is ofien made to appear as complementary and not contradictory. Remark the quotations in Table 16:

Table 16. Paradonical identity attributes - -- -1t will continue to be necessq to maintain an up-to-date technological capability. to maintain a tlexible and adaptable snucnue. to enhance the professional skills of Our management and staff. to improve productivity, and to continue to search for ways to add value ro the service we provide to our customers. These are al1 part of the ongoing challenge of doing business. Amidst dl of this change. however. there are a few fundamentals which do not change and of which we need to remind ourselves hmtime to time. First and foremost amongst these Fundamental values is the integrity of the institution and its people. It is clearly in our interest to uphold these values, but it is also a responsibility which cornes with more than 170 years of honorable service. -Although we have kept Pace with the times. our values have remained constant and untamished. -. ..Our Nonh Amencan strategy is both an exhilarating new departure, with immense promise for ail our stakehoiders, and a natural development tiom our proud Canadian pst. It's an old tradition - and a real fint. -In this flux we have two fixed points. The first is the vision and values we adopted in the Bank's 1990 Strategic Plan ....The second fixed point is our determination to take nothing for granted.

-Banking is an inherently consewative business. Our depositors and our shareholders rightly prize stability, and we have put it at the core of our values. But the central ~aradoxwe face is that as the twentieth centurv ends. stabilitv and sustained retums cm only come from an open and inquinng mind. The tension behveen the maintenance of order critical to the care of other people's money - and creative innovation must be skillfully managed if success is to be sustained in a financial services institution. 1996 -Ali these responses to change are significant in themselves. Together they equal the reinvention of the Bank, of which Our new mbam brand is the symbol. Yet as always amidst al1 the changes there will be a powerful element of continuity. The values of integrity, accountability and respect for human beings that

* pemeate al1 our strategies will not change. 1997 -We are living in a time of geat change. and success in this era requires the ability to accept and embrace change, and to seize the opportunities it creates. By identifying those opporninities and incorporating thm into a prudent. balanced strategy, the management of your Bank believes it has set the course for the sustained building of shareholder value for manv vears to come.

Description and Analysis The above table dernonstrates how seemingly contradictory issues are addressed topether. For examplr. in 1989, atier Mulholland addresses "all of this change". he aftirms that thrre are "a few hndamentals that do not change" at the bank. Similar statements are made by Barrett in 1990 and 96. For example. in 1996. "arnidst al1 the changes" is followed by a reference to "a powerful rlemenr of continuity". Almost al1 references to change at the bank are accompanied by references to continuity or to prudence and stability. Although in a few of the above references, the two seemingly opposed principles (change on one hand and continuity and stability on the other) are simply juxtaposed, in most occasions, we see an anempt to reconcile the two principles. For example in 1993, the North Arnerican strategy which is said to be an exhilarating new departure is also presented as a natural development from the bank's past; in other words, the depamire does not constitute a break with the bank's past general practices. The move to reconcile stability and continuity with change is also apparent in 1995 and 97. In 1995, Barrett addresses the tension that exists bebveen "maintenance of order" and "creative innovation. and declares that this tension can be skillfully managed. If we break down the argument in 1995 to its components, we see the following declarations: we need to provide stable and sustained retums stable and sustained retums will only come tiom i~ovation3 creative innovation can be skillfully managed to provide such stability. Similarly, in 1997. the argument seems to flow as follows: change creates oppominities + oppominities have ro be prudently incorporated in strategy + this stratrgy helps build sustained shareholder value. Implicit in these statements is the assertion that these seerningly divergent issues are not contradictory, but complementary. There is a move to reconcile the need to change with the need to maintain stability.

In this section. prominent identity themes were presented and analyzed for each of the banks. The next section provides a discussion. 6. DISCUSSION

In this section, a discussion is provided for each therne separately as each theme has sorne particularities which may not be relevant to other themes. A general discussion of the bank's identity then follows. The discussion parts relate the tindings of this study to extant lirerature where applicable. These steps are followed for RB in the first section, and for Bk10 in the second. Tne third section provides a general discussion of both banks whereby similarities and differences benveen the two banks are elabonted on, and a number of genrral conclusions regarding organizational identity and its evolution are presrntrd. 6.1 ROYAL BANK

In this section. 1 will discuss each of the five RB themes presented before. The rvolution of the iheme with time and the aspects of identity it reveals ditfèr hmtheme to thrme. The following discussion emphasizes the particularities of each of the five thrmes that have emerged hm the data and relates the findings to extant litennire where pertinent.

6.1.1 QCALITY SERVICE TO CUSTOMERS The fading of identity with the fading of image The study penod opens with RB placing the most emphasis on its quality of senicc attributc. descnbing it as distinctive. constant. and a reason for everything else the bank does. Consumer deposits are said to corne to the bank and stay with it. and profits are considered an indication that value is being provided in the yes of the bank's customers. .-\ big part of the MTS in 1985 is devoted to the quality service theme. As RB stans to lose its supreme position among banks in terms of distinctive quality service. the latter is tiamed as a goal to be achieved. In other words. it moves tiom the realm of an xtual self-detining identity attnbute to a projected identity attribute to be achieved throush a nurnber of measures taken at the bank. The bank's image with the public (Dutton and Dukerich. 1991) or the bank's reputation (Whetten, Lewis and Mischel, 1992) act as a mirror providing the organization with a reflection that it uses to adjust the way it sees and defines itselE In other words. RB would not be able to continue defining itself as distinctive in tmsof quality service and set confirmation for this definition fiom the different audiences to which its statements of identity are destined. Ultirnately identity presentation by an organization has to be confixmed by the extemal world (Levitt and Nass. 1994).

From a core identity amibute to a projected attribute to a peripheral attribute Yet. RB does not simply give up its self-definition in terms of distinctive quality service. men its distinctiveness in terms of this attribute fades, the bank devotes enormous effort to recapnire its lost position as leader in quality service. A senior executive is appointed with responsibiiity for quality endeavors at the bank, more effort is placed into learning about customer needs and wants. the bank strives to not only meet customer exprctations. but also exceed them. in fact. it is not sufficient that the bank rank highly, it desires to be the "clear" leader in quality service ( 199 1 ). How cm the bank's preoccupation with quality service be explained? Quality senpice. it is indicated. was a constant, a tradition. and a distinctive trademark of the bank

( 1985 and 56). Losing a long-held supreme position over competitors is hard to accept. in addition. quality service is a core identity theme (as opposed to a peripheral one) and it is di tficult for an orgmization to let go of its core amibutes. A core theme is one that is cenaal and is drnsely intertwined with other aspects of the organization (Tmenbaum and Hanna. 1985). Fibue i indicates the issues that are said to revolve around quality service in t 985 anci 1956. in addition. quality senrice is said to be a source of competitive advantage and both. implirit and explicit causal links are made benveen quality service and profits at different occasions (for example in 1985. 58 and 94). It appears in the bank discourse as a sine qua non of both: its tinancial success and its distinctiveness. So important is this attribute that even the smallest gain in quality semice ratings is celebrated (1992). However. as the bank's continued efforts to gain their lost position and rank do not lead to the hoped for results, discourse about this factor wanes. Attention graduaily shifts ftom the goal of being in a leadership position in quality service to a certain measure of custorner satisfaction. The organization had set for itself an objective - a projected identity attribute - and had engaged in activities aimed at attaining the projected attribute. When its continued efforts failed, it reformulated its objective in more achievable tems - here in some quantifiable tm- and dropped its rmphasis on quality service being a desired identity attribute.

From a normative theme to an instrumentai theme As the bank loses its supreme ranking among other banks in tms of quaiity service, and continued efforts to re-establish that rank do not seem to lead to a ciear Figure 1: Quality service as a core theme

Quality service to custorners

inno\ mon Figure 1: Quality service developrnental trajectory

Interpretation of Failure to achieve clear lo~verntings supremacy despite nwnerous efforts

Figure 3: Quality senice: from normative and core to instrumental and peripherrl theme

\

Instrumental Theme \ \ \ distinctive positioning, quality se~cestarts to fade in the bank discourse. The loss of distinctiveness precedes the fading of the theme's centnlity. in the later years, when distinctiveness in customer senrice cannot be claimed anymore. the theme seems to be more at the periphery than at the core of the bank's self-definition. Rather than being pursued for its own value. quality senice becomes an intrmediar) goal. pursued to achieve some othrr purpose which has higher primacy (in this case. achieting hisher revenues and incorne). In façt. quality senice evolves tiom beinz a normative theme ro being an instrumental one. At the end of the penod. quality semice corresponds to what Gustafson and Reger ( 1995) cal1 "tangible. substantive amibutes". Figures 2 and 3 illustrate the evolution of the quality service theme.

6.1.2 FEE-.AND-INCOltlE GENERATING MILITY From a peripheral attribute to a central identity attribute The evolution of the fee-generating ability theme provides an interesting contrast to that of the quaiity service theme. Although fee-senmting ability appears to have some signiticance in 19%. it is not a theme that appears Frequently in the MTS. nor does it seem to be of centrality betore 1994. h tact. like other spheres of acrivity at the bank in 1956. fee-generating services are said to play a vital role in building strong relationships with customers. As the bank moves into new areas of business such as investment management and trust Company operations with its acquisitions of Dominion Securities and Royal Trust, the ernphasis on fee-based businesses becomes more pronounced. Furthemore, these businesses make increasing contributions to the bank's total revenues as the years go by. Meanwhile. fee-generating ability emerges as a more central theme in the sense that other procedures and undenakings start to revolve around it. such as the bank acquisitions. Touards the end of the period, fee-and-income generaùng ability appears as a mark of distinctiveness at the bank (1996 and 97). in other words, fee-generating ability becomes more entrenched in the bank's discourse on identity. As the bank projects that tee-

3aenerating services will increase in importance in the future, makes acquisitions in businesses that are Iargely fee-based, generates an increasing proportion of revenues tmom fee-based businesses. and achieves an exceptionally strong position in doing so, this identity theme becomes institutionalized. Fee-and-incorne genenting ability thus progresses &om a projected amibute. to a realized and central attribute to a distinctive amibute of the bank. Fi~wre4 illustrates this rvolution. The process of institutionalization is an incremental one. as different undenakings and achievements bnng it closer to its stated projected identity attributr. thus nvrowing the gap benveen desired and actual identity.

.L\ shift in the constellation Fee-and-incorne generating ability increases in centrality with time. increasing centrality implirs that the theme moves from the periphery to the core of identity. It also implies that the themr becomes more intertwined and interrelated with other themes aniçulated at the bank (Twenbaurn and Hama. 1985). The tee-and income generating ability thtme follows an opposite trajectory to that of quality service to customers. At the same time that fee-generating ability was emerging as a more central theme. quality service \vas losing its centrality in the bank's discourse. The following table provides quotations indiçating the points in time at whiçh each of the two themes appeared as prorninently central thems. Evidence of crnmlity is provided by quotations on different issues revolving around the given (central) theme. Figure 4: Fee and income generating - ability developmental trajectory

- hkrgt'rs and acquisitions - Exceptional strength - Highi'r proportion of revenues achieved gcnentsd fiom fer semices Table 17. Central themes and th( Central theme \Issues Quaiity service Feeand-incorne generating revolvin abiiity around the therne "\ - Qualiîy 1956 - As well. fee-generating f 994 - increased revenue servicet3fee services will increasingly play a generation tiom tradi tional and generating vital rote in helping to build emerging businesses is Our top abiiil strong, lasting and pro fi table pnority. We will achieve this by relationship relationships with customers. continuing to improve service auaIitv.. .. 1985 - Confidence, in the end, 1992 - If there is one lesson we will cannot be assumed, or take away î?om this recession. it is 1 Prudentirl rnanuhctured, It must be earned the inescapable relationship management by a track record of prudential between sustainable earninps and management - the most basic credit risk, element ofcustomer service ter a 1993 - Sound credit risk and loan financial intemediary. portfolio management are hndamental to the profitability of the bank, 1985 - customen well 1995 - Our focus is on securing Bank remains at the heart of RB'S consistent supenor retums for our procedures and mission. It is the basic reason for shareholders and al1 Our initiatives undertakings êverything else we do. are undertaken with that goal in mind. 1986 - Expanding into ...new 1996 - Our three main acquisitions service areas is vital to one of our this year. .. al1 fa11 in this high cenaal corporate goals: to be potential segment (of high ROE. Expansion recognized by our customers as a fee-based businesses). efforts consistent leader in the dueof our products and customer senice. Cornmitment to quality service is a distinctive RB trademark, and to build on that strength we mut continue to expand our range of services to meet growing customer needs. Bank's stated 1990 - For RB an absolutely top 1994 - increased revenue priorities priority continues to be generation tiom traditional and improvement in the quality of our emerging businesses is ou.top service. ~i0rilY. in 1986. fee generating services were presented as one of the elements leading to building strong relationships with customers. Like other aspects of the bank's activities at the time. fce-generation revolved around the customer senice theme. In contrast. in 1994. increased revenue çeneration is said to be achieved bbbycontinuing to improve service quality". In other words, quality service is now portrayed as revolving around the central thcme of revenue and fee-generation. Similady. other issues such as prudential or risk manapcment. bank procedures and undertakings. expansion efforts. as well as the bank's stated priorities. which initially revolved around quality service to customer. are decouplrd tiom this theme in later yem and associated with the fee-and-income generating ability. We cm tell rhat a theme increases in centrality as different spheres of activity revolve around the thems in question. It is also interesting to note that with a shifi in sentraiity tiom quality service to fee- and-income generation. there is a shiti in stakeholder focus hm the customer to the shareholder. Rernark the tfequency with which these hvo stakeholders are mentioned in the tirst and last nvo years of the study in the message to shareholders:

Word kequency count 1 Year 1 Client(s)+ CustomerW 1 Shareholder(s) 1

In fact. the customer is a theme that is more coherent with quality senice, as the shareholder is more coherent with income generating ability. Coherence thus can be found among a gven core identity anribute. the stakeholders who have the most interest in the particular identity amibute, and the peripheral activities undertaken to reinforce the actual andior desired core identity attribute. A central therne draws other themes to it that revolve around it and which are coherent with it. Let us refer to an identity amibute dong with the different spheres of activities that revolve around it and are coherent with it as a "constellation". As an identity attribute changes in centraiity, we see a shift in the diffèrent constellations. To a certain degee. quality senice and fee-and-income generating ability follow opposi te trajectones, with quality srMce moving frorn the center to the periphery and fee

2wnerating ability moving tiom the periphery towards the center of identity. While the fint iheme hdes. the second gets institutionalized with time and appears more tiequently in discoursr. However. fee-and-income generating abiliîy does not seem to anain the nonnative starus that was once an aspect of the quality service theme. It is not portnyed as a tradition or as a value. Only time can tell whether it will be expressed as a normative thme in thc tùturc.

6.1.3 B.43K-Fi The institutionalization of the FI attribute

When the study period opcns. WC witness RB defining itself as Canada's largest bank. In 1956. it indicates that it would like to become this country's leading provider of financial services and later that a thdamental goal is achieving excellence in a "hl1 range" of financial services (1985). What was a projected identity attribute (ability to provide a hl1 range of financial services) eventually becomes an institutionalized identity attnbute as the bank makes a number of acquisitions in diffèrent areas of the financial srnices srctor (following goverment deregdation), States its objectives as including inçreasing revenues tiom emergmg business. and derives a bigger proportion of its revenues from such businesses. With time, the self reference as a financial institution - as opposed to a bank - becomes institutionalized: it appears fiequently in the bank's discourse. Institutionalization. as Selmick ( i 957) indicates. is a process that occurs wiih timr. retlecting the organization's undenakings and the way it has adapted to its environment. Thrre is a self-definitionai change fiom "a bank" ( 1985) to a "more broadly based finansial sen-ices enterprise"(l985) to being one of the largest "providers of integrated financial services"( 1993) and to havhg a "leading position in.. . most financial services markets" ( 1996). Furthemore. this change is accompanied by another shift: that in the reference made to the services the bank provides. As mentioned previously, "core" businesses are later referred to as "traditional" and the "emerging" label which Figure 5: FI theme developmentai hajectory

- Deregdation allowing banks to expand range of services

Financial institution

- Acquisition of DS - Acquisition of RT - Increasing revenues tiom "emerging" business

Core businesses [-> Tradi tional - Traditional and and emerging ( regular) businesses - businrssrs

Royal Bank t- Royal Bank Financiai Group Figure 6. lncrersing complexity in identity accompanied new businesses in 1991 is dropped in later years likely indicating that these businesses werr çonsidered to be regular at the bank by then. The "Royal Bank" name also gets changed to "Royal Bank Financial Group". Here again, a shift in an identity attributc is accompünied by a shiti in the constellation of which it is a part. This is illustrated in Figure 5. Funhrrmore. the process of instinitionalization of the FI attribute is incremental. .As mrntioned brfore. RB moves %om considering itself as a bank ( 1985) to a broadly- based financial senices enterprise ( 1998) to a provider of integrated financial services

( 1993). .As the transition occurs. RB does not cease to be a bank in order to become something different. Rather. as a financial institution. RB still includes banking operations. There is an increase in identity complexity. rather than a configurational shifi in identity. Figure 6 shows the "bank" identity as subset of the "FI" identity.

6.1.4 LARGE .A shift in the ettribute and the membership group and a continuity in distinctivencss Evoking its distinctive size is a constant in RB'S discourse over the years. The bank consistently evokes some measure of size along which it can daim a distinctive rank within a certain goup. However. some change can be noticed over time with respect to two aspects of the bank's rank in ternis of size: a) the particular measure of size the bank evokes and b) the particular membership group which is used as a reference for the comparison. With respect to the measure of size, it can be nohced that RB addresses those measures that allow it to claim distinctiveness within the membenhip group. So for example. while in 199 1 and 94, RB addresses the critenon of "total assets". this criterion is dropped in 1997 when it was in a tie with CIBC for first rank in terms of asset size. Instead. other mcasures of size, not evoked during the earlier years such as revenues and net income. are addressed in 1997. With respect to the membership group evoked. we notice a shift with tirne as well. In the carlier yean of the study period. RB extols its rank on a North American scale: "fifih largest bank overall in North Amença" in 1985. and 'rhird largest bank in North .wenca" in 1990. However. rekrences to its rank on a North Amencan scale are dropped in later years. In fact, the last few yean have seen a wave of consolidation in the Nonh Arnerican financial industry and have been marked by huge mergers and acquisitions. When measured by assets. the Canadian banks have been on a downfall (Financial Post. July 29. 1995). In the final yem of the shidy penod, only rnembership in the Canadian financial institution goup is evoked. Within this group. RB cm still claim its distinctii.cness in terms of size. This is consistent with Elsbach and Kramer's (1996) tindings which indicate that organizations resort to selective categorizations highliçhting altemate identity attributes or altemate cornparison groups that allow them to pottray thcmselves in the most favorable light.

6.1.5 LEADER Change and continuity in leadership: Leadership as an umbreiia theme That leadership is a central theme in the RB'S self-presentation is indicated by the fact that this theme appears constantly in the bank's discourse. is associated with other areas of crntrrility at the bank (such as quality service in 1986. and ability to generate high eamings in 1997), and is atrributed to the bank's Pamiers and employees. It appears essential for the bank to cast itself. its member companies. and employees in terms of leadership in some aspect. Leadership is not only centnl. but also a distinctive amibute. A leader stands out tiom the other rnernbers of a group. In tact. the leadership theme, as was indicated previously. is intertwined with a number of symbols and ernblems at the bank. The name "Royal" Bank has connotations of leadership: royalty is normally charged with leadership fictions. The bank's symbol - and what Intrrest magazine calls their 'public identity" - indudes a lion and a crown, both symbols associated with leadership. The corporate pin. wom by many RB employees also consists of the "Lm". "Leader" and its visual couterparts are floating symbols that get anached to a variety of aspects of the organization. Nevertheless, we might question what being a "leadei' means. For example, in 1986. 89, 90 and 92, its vision and objectives of being a leading Canadian hancial institution at home and abroad are expressed. A "leading institution" remains a vague term sincr it dors not apply to a particular aspect of the bank in which leadership should be achieved. Men the bank is more specific with respect to the areas in which leadership as an objecriiv is desired. ditTerent aspects emerge. They include: size. scope and profitability

( I 98s). broad range of bank-based services ( 1989), investment management ( 1990), se~ce

quality ( 199 1 ). senice quality, custorner satisfaction and profitability ( 1992). and the

consumer business ( 1196). A similar argument applies to areas where leadership is said to have been already acki~wedat the bank. References to specific areas of achieved leadership includr: system and technology ( 1985. 89 and 90), US. foreign exchange market ( 1989). market share position ( 1992.95 and 96), and ROE and HR practices ( 1997). In other words. "leadership" tùnctions as an umbrella theme (Figure 7) which can aoup a variety of aspects of the bank brcause it is ambiguous. By talking about itself as a C leader. the bank cm always appear as distinctive. dthough the aspects that confer distinctivenrss on it may change with time depending on the context. initially leadership in quality service is said to be achieved (1956) and lata it is said to be desired. in contrast. leadership in protitability is said to be desired initially (1988) and to be achieved in later yexs ( 1997). Leadership in quality senice is generally absent in later years. As rnentioned above. the leadership label is a general one which the bank applies to different central thtmes. While the aspect of the bank to which the leadership label is applied changes with tirne, the label itsel f rernains constant providing some continuity in the organization's self- rekrential discome (Gioia et al, 2000). Figure 7. Ledership as an umbrelia theme

Leader

Fer - and - income generating ribility

New trchnology What general inferences might we draw about RB'S identity themes from the previous discussion*?The discussion indicates that both continuity and change in identity themes occur. The change or penistence in identity themes takes place at different levels. The first is the degree of distinctiveness and centnlity of the theme. Thus. quality service to çustomrrs loses its distinctiveness as the bank's image with the public declines relative to its past image and relative to other institutions' image. With the decline in its distinctiveness. this theme appears less as a normative and core theme. and more as an instrumental and periphenl one. Conversely. the fee-and incorne generating ability theme increases in crntrality and distinctiveness as the bank projects this ability to play a more important role in the bank's operations and as the intemal and extemal rnvironments allovi the bank to narrow the gap between the projected and the attained aaribute. There is. however. a persistence in the bank's claimed distinctiveness in terms of its six. The distinctive size attribute endures since the bank resorts to selective categorizntions allowing it to daim a supenor rank with respect to measures of size and cornparison groups that shift with time. Continuity and change can also occur at the level of the meanings that are attached to the labels by which the bank detines itself. We see that by relying on the ambiguity of symbolic resources such as the "leader" label. RB is able to portny its present and projected identity as consistent with past attributes. While the label itself provides çontinuity. the aspects in which the bank is a leader change with time. The bank's leadership position is maintained. but this position ditrers in meaning in 1997 riom that in 1986. In addition, the labels themselves can shift with time. Thus we see a transition in the self-definition from a bank to a financial institution. This change in the label is also accompanied by a change in the meaning attached to it: in this case, not a radicaily different meaning, but one implying increased complexity. In surnmary, the change in the themes is ofien evolutionary as opposed to rel.olutionary (Tushrnan and Romanelli, 1985). It is minor and incrernental when measured tiom Far to year. Nowhere in the case do we see a major break in a theme from one year to the other. None of RB'S identity articulations show an abrupt severance with the past. Some themes (like distinctive quality service) are lefi to fade as manasement addresses them less often or less forcefully in discourse. Other themes (such as tèe-and-income generating ability and Fi) buiid slowly into a central position. Yet. nlthough the changes follow an evolutionary pattern whrreby rninor changes can be obsened hmyear to year, the magnitude of the change for these rhree themes is quite large when the difference between the theme ar the end of the study penod ( 1997) and the same theme at the beginning of the period (1983) is measured. The Pace of change is slow. bur mer the years. the aggregate magnitude of the shih is significant. 6.2 BANK OF MONTREAL In this section, 1 provide a discussion of each of the BMO's identity themes malyzed in the previous chapter and I conclude with a general discussion of BMO.

6.2.1 FIRST Continuity and change in the "first" theme: First as an umbreîia theme .As was show in the previous section. the "first" theme is one that is used to retèr to two aspects of the bank's identity (Figure 8). its being the oldest bank in Canada and its being an innovative bank. one that undertakes important moves ahead of its cornpoti tors.

Figure 8. The two meanings of the "first" theme

First

Mile the bank's age and history receive mention in 1991 and 1993, such references are basically absent fiom the WSsthereafier. Starting in 1993. "tint"is used rnainly to denote bank innovation. even some of its oldest ones. In later years. al1 references to "first" are used to portray one innovation or another at the bank such as making tools of financial planning available to Canadians for the fint tirne (1994). IFL as a first facility of its kind in Canada (1994), first NAFTA bd( 1996). References ro tirst as oldest get aborted while references to first as innovative increase in frequency. This is not surprising given Banen's views of the past traditions, traditions that seemed to be entrenched at the bank. At different occasions, in addressing employees through articles in the FirstBank News, Barrett derides a number of the bank's past attributes and pnctices. For example, in an article entitled Moving inro the lead, he declares the bank to be adopting a "new system" where "leaders inspire people" as opposed to the bank's past "system where bosses gave orden and workers carried them out" (FintBank News,

JulyAugust 1992). At several occasions, he talks about the need for the people at the bank to contribute to the transformation of BMO into û creative and "lea.n_e organization" (FirstBank News, 1995-963. However, regardless of the meaning that "tirsr" subsumes in rhe MTSs. it is extensively used in association with different aspects of the bank. "First" is a tloatins theme which gets associated with bank publications. products and scn*iccsas well as with other self-defining themes. For cxample the employee house ogan is called "FirstBank Sews" and a number of the bank's mutual funds have aprllations including the "tirst" label. This label is also associated with other attributes which are themselves self-detining for the bank. In 1993. the bank's newest first (North Amrrican scope) is announced. In 1994. making tools of tinancial planning available to Canadians hrthe first time is extolled t which is an indication of BMOTs"reputation as a bank that ...is sensitive to the evolving needs" of cusromers - i.e. cornmitment to customers). In the same year. the launch of the IFL. the rirst corporate built facility of its kind. is announced (which is an instance of the bank's fult'illment of its cornmitment to rmployers). In 1996. BMO is said to be the first NAFTA bank. These aspects described as first or innovative are self-defining attributes. "First" is intertwined with a persona for the bank. It is also an umbrella theme that cmgroup a number of other attributes of the bank (Figure 9). By using this label the bank maintains a sense of continuity over tirne. The label persists although the meanings attributed to it (Gioia et al, 2000) and the aspects of the bank with which it is associated change with time. By relying on the ambiguity provided by symbolic resources (Christensen and Cheney, 1994). a sense of continuity. despite change, can be maintained. Remark that regardless of the meaning which is attributed to "first", it remains a sign of distinctiveness. As the oldest bank in Canada, BMO cannot be surpasseci by any other bank. As an innovative institution, BMO introduces new products. senices and practices ahead of cornpetitors. Figure 9: "First" as an umbrella theme

Firs t

Innoduçtion of products and scn-ices (Cornmiment to ustomers

d Innovation as a fixed and persistent theme that facilitates change The bank's innovative side is referred to with several terrns in addition to "first". The latter's synonps of "imovative". "creative". "bank that leads change" appem quite tiequently in the MTS starting in i 991. In 1992. the bank extols a number of innovations it had undertaken with respect to its dealings with small business customers. In 1995. it is indicated that krsh ways to practice the bank's values towards its stakeholders are sontinually searched for. and in 1996. the bank is said to be preparing a new contract with employers. one that defines the bank as a learning organization. Of the different characteristics that an institution can attibute to itself. none provides the possibility of as much continuity and as much change simultaneously as the characteristic of innovation. By defining itself as an imovative. crearive and learning orpanizntion. Bk10 undenakes changes in different areas and of differenr magnitudes without there being a change in its self-definition. Bcing innovative. creative and a leaming organization establishes the ability-to-change as a constant self-delining attribute. Continuity cm thus be maintained in the self-definition while the organization pursues a multitude of changes in different aspects of the bank. The best example of this is provided in 1995 when Barrett declares: "The second fixed point (in the flux) is our detemination to take nothing for granted.. . We seek continually to redefine our business systrms and Our workplaces." While the determination to take nothing for granted is a fixed and persistent attribute, it allows the organization to continually redefine its systerns and workplace. By defining itself as innovative. BMO asurnes an expansive identity (Fox- Wo-am et al. 199S), one which allows it to undenake several changes without breaking. Gustafson and Reger (1995) posit that an organization operating in a highly changing environment needs an enduring and intangible attribute that allows it to achieve distinctive advantages through a variety of achvities rather than through a single one. Based on the evidence %om BMO. I propose that nich an enduring attribute is the ability to innovate. Personal impact on organizational idedity In some occasions when major successtùl changes and innovations undertaken at the bank are mentioned. the chaimen make implicit references to these successes having ken ciçhieved dunng their mandate - an indirect reference to the impact they have had on the bank's identity. For example. Mulholland praises the ability to Iend substance to the rerogition that the CS. market would play an increasingly important role for Canadian tirms. (In 1988. he declares the following in the MTS: "LVhiie it required no special predictive powers to appreciate the curent importance and future potential of the Cnited States market. both to Canada and to the Bank, it is another matter to lend substance to such strategic views. Wc were fortunate. in the acquisition in 1984 of Harris Bankcorp of Chicago. to be able to give substantive expression to what we saw as the future direction for our two countries, working and trading together. Along with other complementary movcs. it has positioned us well to benefit fiom an active and growing economic relationship with the United States.") We know that he lent substance to such recognition in 1951 by spearheading the acquisition of Harris Bank in the C.S. In the 1989 annual report there is a page entitled IKD. Stdlrolinna' Retires (p. 3 1). which tells us that Mulholland's "boldest strategic initiative was the 1984 purchase of Hanis Bancorp. Inc. of Chicago. The move. anticipating the Canada-US. Frec Trade Agreement four years iater, gave BMO the strongest foothold of any Canadian bank in the U.S. market, undersconng Mr. Mulholland's belicf that our Future prosperity would depend upon a strong presence throughout Norih Arnerica." We also know that other Canadian banks could not boast of owning retail operations in the US.as BMO was able to. An article in the Financial Post (July 29. 1995. Big Sir face onslaright 6y US. banks) quotes an analyst with Nesbitt Burns as saying that "(The Canadian banks) could have marched into the U.S. seven or right years ago when share prices were down and bought up U.S. banks - and they should have ... The Bank of Montreal has been the only Canadian bank to acquire a US. retail bank". Similarly. Barrett indicates that the memes taken at the bank to serve mal1 business customers are together equal to the re-invention of the bank in 1992. This customer segment became a major target of the bank when the bank announced its stntegic plan in 1990, the year Barrett took over as chairman. In 1993, Barrett indicates that in five years. BMO established a reputation as a bank that leads change. These tive years correspond to his mandate as chaiman. An article entitled B of MS :bfathm

Burrerr: -4 charismaric decision maker rthloves ro win (FeTJuly 1, 1995), indicates that Barren's "willingness to lead the pack became apparent in 199 1 and 1992 when B of 'vl regularly lowered interest rates week after week in advance of cornpetitors. This simple strategy boosted the bank's image as the consumen' fiend. and reinforced the view of Barren as goundbreaker". The article goes on to say that "(Barrett) says that when the bank looks at cxecutive prospects it focuses less on simple job performance than in the past. and now considers other "soi?" attributes such as curiosity. lateral thinking, and passion for lraming -traits which. not coinçidentally. are parts of Barren's own makeup". Thesr daims made by Mulhollnnd and Barren. as well as by the business press. point out to the role that the two chairmen had personally played in shaping some major innovative aspect of the bank - an aspect which became self-defuiing.

6.2.2 'IORTH AMERICAN Institutionalizaîion of the North American theme Although BMO had retail branch operations in the U.S. as of 1983, references to its being a North Amencan bank do not become pronounced before 1993 when Vision 2002 is articulated. The vision itself is said to make the bank the first hll-service financial institution to span North America. This vision acts as a projected identity for the bank and is attnbuted the force to make BMO a North Amencan institution. References that appear thereafier to the bank's geographic posture revolve around "North America" or both. "Canada and the US". In 1994. the acquisition of Suburban Bancorp of Chicago. narrows hrther the gap benveen actual and projected identity. Other bank undertaking. such as the acquisition of Nesbitt Thomson. a Canadian firm, in 1994 and the launch of mbmx in 1996, are also portrayed as part of the achievernent of the North American scope. They help menkgthen the bank's self-reference as a North Amencan bank. The equity stake taken in Mexico's Bancomer in 1996 Merextends the bank's geographic scope allowing BMO to cal1 itself a NAFTA bank. As these strategic moves are engaged in and as the bank generates more of i ts revenues From the U.S. and Mexico, we see that the Nonh Amencan (or NAFTA) self-reference becomes more prominent in the bank's discourse. As the years pass. more reference is made to the bank's North .Amencan base as opposed to its Canadian one. The vision. the acquisition in the U.S.. the equity stake in Mexico. the launch of mbanx on a continental scope and the ceneration of hiyher revenues from Nonh American operations are associated with the L gradua1 instinitionalization of the Nonh Amencan theme. Figure 10 shows the progression in the bank's reference to its geographic scope. The progression (Canadian+ Nonh Amencan 3 NAFTA) is an incremental one with each level including. but going beyond. the previous one. In tàct. in its discourse. BXIO pornays each level as a step further which builds on and prolongs the saengths of the past. With time. the bank's geographic scope increases in complexity. but the end product encompasses the beginning one (Figure 1 I ).

Distinctiveness only if two attributes are joined BMO defines itself as a unique North Amencan bank. The uniqueness of its Ml- senice capabilities in North Amenca are extolled by both Mulholland and Barren. in fact. BMO is not the only bank to have full-service capabilities. neither is it the only bank to have operations in the U.S. It is however. the only bank to own a retail branch operation in the U.S which allows it to offer full services to customen. While other banks have hl1 seMce capabilities, these do not appiy to the U.S., and while they operate in the C.S.. they do not do so with the capacity of retail bank operations. The uniqueness or di stinctiveness 1ies in the combination of two attributes: North hencan geographic

scope + the hl1 service capability. BMO resorts to selectively addressing those identity amibutes that allow it to claim distinctiveness withîn a cornparison group (Elsbach and Kramer. 1996.) In fact. al1 Canadian banks have expanded different operations into the U.S. market for it is seen as a market with high potential for growth. An article in the Financial Post (July 79,1993) indicates that "Observers believe that Royal has been looking to Figure 10: North American theme developmental trajectory

- Invesunent in Bancomer - Increased revenues from non- Canadian opentions Figure 1 1 : lncreasing complerity of geographic scope acquire a C.S. retail bank but has been unabie to identiQ a suitable candidate. One of the stumbling blocks for any Canadian bank is the fact that U.S. banks are very expensive.. .Bank of Montreal has been the only Canadian Bank to acquire a U.S. retail bank". [t is not surprising therefore. that BMO's U.S. retail branch operation is seen as a self-dcfining clement: it is a sign of the bank's success as well as a sign of distinctiveness. It is thus not surprising that references to the bank's uniqueness with respect to its U.S. operations are almost always accompanied by referencr to the full- senice çapübility.

6.2.3 COMMITME.IT TO ST.AKEHOLDERS (COLLECTIVELY .%ND INDIYIDC.4L GROUPS) Centrality and distinctiveness Could we say that BMO has a distinctive commitmenr to its four srakeholders which sets it aport tiom othcr financial institutions'? This would be a hard question to answer with my degree of precision. What we know is that the bank's cornmitment to its four stakeholder groups receives center stage in its discourse in 1986. 90. 94 and 95 and that partial aspects of its commitment to specific stakeholder groups are emphatically prescnted as distinctive throughout the years. In fact. the needs of the four stakeholder croups would have to be heeded by ail Canadian banks. rather by al1 business fims that C would like to succeed. However, what is specific about BMO is that it makes the commitment to people or stakeholders a self-defrning theme. In 1986, this commitment is said to be "a Bank of Montreal tradition", "a comerstone of Our reputation since Bank of Montreal first opened its doors.. . in 18 17". a "constant" despite the many changes in the bank. "principles (that) have guided (the bank) through more than a century-and-a-half of erowth and expansion". .. In 1990. the year the bank's strategic plan was revealed. we are C told that the needs and expectations of the four stakeholders are placed at the center of the plan. During that same year. the bank's vision and values are articulated in terms of its commitment to its four stakeholder groups. In 1994, the bank's opentions for the preceding tive yean are reviewed and the review focuses mainly on BMO's fulfillment of its comminent. In this same yeu, the bank's continuing comminnent is Merre- aftïrmed. Both the 1990 and the 1994 MTSs are dedicated to spell out the bank's commitment and its tùlfillrnent of this commitment. Later in 1995, Barren indicates that he cannot imagine circumstances that could force the bank to change its commitment to the stakrholders whose needs "are the driving force shaping and inforrning (BMO's) ripproach to the business of banking." In other words. this appears as a central theme in the bank's discourse. With respect to whether the bank's cornmitment is distinctive. what emerges tiom the data is thüt some aspects of its commitment are. in fact. distinctive. and these aspects are cmphasizrd in discourse. For example. in 1992. a number of unique measures taken by BMO to serve small business customers are pomayed which include. but are not limirrd ro. providing a lower lending rate than competitors for an extended penod of time. By 1994. the bank indicates. it had become "the highest-rated bank in Canada" in the small business sector. Furthemore. it is indicated that the bank has established "a repuration" as a bank that is sensitive to the needs of its customers (1994 and 96) and its cmployees ( 1994). The bank's distinctive fulfillment of its commitment to employees. for example. is pomayed in its building and opening of the IFL descnbed as a unique facility in Canada and as the reason why 1994 will be remembered longest in the history of the bank. .As another example. distinctive liilfillment of the bank's cornmitment to sharrholders is portrayed in each of the yem starting with and following 1994 when the bank's ROE is mentioned. By 1997, shareholders are told that *your Bank is the oniy major bank in Canada and the United States to have produced ROE exceeding 1406 for the last eight years". The above indicates that BMO does not daim to have hlfilled a distinctive general commitment to its stakeholder groups. However. it does claim to have achieved distinctiveness in fulfilling specific parts of this cornmitment. For example, it does not boast to have a distinctive level of service towards customers in general, but with respect to the small business customen. Neither does it portray itself as having a distinct relation with employees. but as having a unique institute for learning, an aspect of the bank- employee relationship which is distinctive. In other words, the bank narrows the area of activity to that in which it can claim to be distinctive. This again confims Elsbach and kamer's ( 1996) daims that the criteria for which uniqueness is claimed are selectively chosen by oqanizations.

Continuity and change in the 4bcornrnitmentto stakeholder" theme Both change and continiiity in the commitment to stakeholders theme cm be obsenved. Let us stan with the labels. The "cornmitment" label persists. but "people" in 1986 is replaçed with "stakeholden" in 1990. Although here we see a partial change in labels. the interest groups to whom "people" and "stakeholden" refer are the same (sustomers. employees. shareholders and the community). With Barrett. not only is there a change in the label. but also in some aspect of the ciimmitmrnt. For enample. in 1990. in articulating the bank's commitment to each of the four stakeholders. some aspects of the commitment aniculatrd in 1986 are maintained. others are dropprd and still othrrs are added. Here are a kw of the issues added: with respect to the bank's cornmitment to customers. a "distinctive" level of service is pledged to be given: with respect to shareholden a "continuing" and "steadily increasing" retum on invrstment. in addition to an enhancrd level of disclosure are promised: employees are said to be given "the oppominity for a full and rewarding career": and cornmunities are said to be entitled to services "unique to their needs". None of these aspects of the bank's commitment was mentioned in 1986. The commitment to stakeholders is enlarged and Sets infused with new meanings when Barren takes over as chairman. In the yean following 1990, the bank portrays itself as having remained consistent to its piedges and as having tùlfilled them. Thus, small business customers are portrayed as having received distinctive service tiom the bank (1992). the shareholden consistent and increasing retums ( 1 994 to 1997), the employees rewarding and challenging careers ( 1994 and 1996). and the communities services unique to their needs (1994). In fact. throughout Barrett's mandate. the "cornmitment to stakeholden" pnnciple remains constant and persists. So does the bank's presentation of its having fiilfilled its commitment. Nevertheless. how the cornmitment is practiced. does change with the for some of the stakeholder groups. For example, in 1996. the bank declares that a 'hew contract" is being forged with employees. However. this is portrayed as part of the bank's rommitment to employees, namely its commiûnent to provide employees with challenging and rewarding careers. Here again, we see a persistence in the "commitment" label and principle but a change with time in how this commitment is practiced. In other words. the bank uses an ambiguous terrn which it interprets in varying ways dependinç on ihc occasion ( Eisenberg, 1954). while maintainine the appearance of bring consistent wer time. Most of the changes in the meaning of the bank's commitment to interest groups arc incremsntal. The shifts are gradual and pircrmeal tvhrn followed trom year to year. For example. in 1990. in articulating the bank's commitment to stakeholden. many of the ternis of this commitment portrayed in 1986 were retained. An exception to the gradual chanse in die commitment theme appears with respect to the bank's cornmitment to employees articulated in 1996. This is an instance where a major break with past attributes and themes appean to be intended. Consider the contrasts between the banking model and skills of the past and those of the present and future as presented in the 1996

The past The present and future "traditional banking rnodel of security and "new kind of bankinz". "a new contract" hierarchy"

"steridy drcline in full-time transaction- "new skills increases in occupations such as processing positions" the portfolio managers of rnbanx. which did not exist a few years ago"

"many employees . . . are learning that their "prosper(ing) in the new centuy" jobs ri11 not be there"

"patemalism of the past" "professional relationship (whereby). . . emplo yees are essentially entrepreneurs w ith their skills as their capital"

The past attributes are derided and presented in negative overtones (such as "traditional". "hierarchy", "patemalism") whereas the present and future ones are presented with positive overtones (with terms as bbskills'*,"professional"). This is akin to the destruction of identity attributes descnbed by Biggart ( 1977) in the case of a radical restrucniring of an organization. Past identity attributes are destroyed and new ones are reconstnictrd. This presentation of past and future identity accompanies the bank's introduction of mbanx which, in the bank publications (FirstBank News. Annuai repoxt, 1996). was portrayed as a revolutionary undertaking in the bank's history. This is evident in the following quotation fiom the 1996 MTS: "Al1 these responses to change are sianificant- in themselves. Together they equal the reinvention of the Bank. of which our new mbrtnv brand is the syrnbol." Interestinçly. however. afier the bank portrays the major breaks with the past. and addresses the reinvention of the bank. an element of continuity is mentioned: "Yet as always amidst a11 the changes there will be a powertùl element of continuity. The values of integity. acçountability and respect for human beings that pemeate al1 Our strategies will not change. They will be the foundations of a bank where al1 the factors of production work in harmony to shape an enterprise that continuously builds on its own suçcèss for the benefit of al1 stakeholders." Like other references made to change. this one is follocved by a reference to some element of continuity in the bank despite the change. .At no point in time. do we find a cornplete destruction and reconstruction. The destruction. despite its magnitude. always seems partial. Furthemore, although Barrett mentions that a new contract is being forged with employees. he is persistent in affirming that working at the bank is challenging and rewarding. As mentioned aboue. this shows a consistency in the commitment the bank had made to employees in 1990. In other words. the new contract is portrayed as a change in the practice of a persistent pnnciple. Thus, ewn when a major break is explicitly declared to be occurring, some of the statements of the bank indicate that a continuity with the past is maintained. In brieî'. ive see a partial change in the label refemng to the commitment to interest goups. a partial change in the meaning of this cornmitment, and a reference to a major change in this cornmitment portrayed as a change in the practice of a persistent principle. This confirms a number of authors' allegations that when change is desired, it is ofien sought within a conten of some conhnuity (Pettigrew. 1985: Whiting, 1976). To conclude. 1 would like to comment on a few general issues related to the bnnk's idrntity in discourse that have ernerged tiom the data. The discussion of the different BMO identity themes indicates that change in identity occun at different levels. The labels used in the self-referential discourse may shifi with time such as cornmitment to people+ commitment to stakeholders. and Canadian+ North Amencan NAFTA. Shifis in these labels are usually accompanied by shilis in the meanings associated with the labels. In fact. even when the labels persist for some time such as "cornmitment to stakeholders" (from 1990 to 1997) and "first" (as of 1991). they ohen corne to signi% different issues as time passes. The labels persisr. providing a scnse of continuity. but the aspects of the bank that they define change with rime. Most changes in the identity themes are incremental. The shifts in the reference to the geographic scope and the shifis in what the bank's commitment to interest groups represents are senerally piecemeal. In exceptional cases. the bank declares it is effecting a major chansr and creating a new order. This new order. however. is presenred as conformine to a previously held identity theme: the new contract with employees makes wxk at the bank challenging and rewarding coniinning a continuity in the bank's comrnitmrnt to employees. Furthemore. rekrences to a change in an identity theme are otien accompanied by references to continuity in a complementat-y theme. At no point in the bank's discourse do we see a complete destruction of identity. 6.3 GENERAL DISCUSSION

What similarities and differences can be found betsveen the hvo banks'? What do the findings ailow us to say about identity evoluhon in top management discourse in -~eneral'? The following table sumrnarizes the çeneral conclusions reached ter RB and BhIO and points out the similarities and differences between the nvo banks. General conclusions incorporating a cornparison of the two banks follows afienvards.

Royal Bank Bank of Montreal

-.A shift in the attribute andior the -A shifi in the atnibute andw the membrrship goup rvoked. and a continuity membership group evoked. and a continuity in the distinctiveness and'or the genenl in the distinctiveness and/or the senerai principle depicted by the identity theme. pnnciple depicted by the identity theme. ( Example: Large) (Example: Cornmitment to stakeholders)

-Erosion of the identity theme with Abonion of the projected identity theme continued absence of extemal contirmation. with absence of externa1 confirmation. ( Example: Quality senice) ( Exarnple: Distinctive (overall) senice to customers)

-Erosion of centrality with erosion of -Persistent and indisputable distinctiveness distinctiveness in the theme. (Example: of the theme. (Example: First as oldest) Quality sewice)

-1nstinitionalization of themes that initially -Institutionalization of themes that initially appeared as aspects of vision or strategic appeared as aspects of vision or strategic objectives (projected identity attributes). objectives (projected identity amibutes). These themes get institutionalized as the These themes get institutionalized as the or_eanizationtakes strategic action and as its organization takes strategic action and as its strategic achievements lead to a realization strategic achievernents lead to a realization of these attributes. ( Examples: Fee-and- of these attributes. (Exarnple: North incorne generatine abilitv; FI) Arnerican)

-Actors' impact on central identity attributes is explicitly addressed and is noticeable: (MuhoIland and Barrett) -The process of identity change is -The pmcess of identity change is, in evolutionary and incremental. (Examples: general, evolutionary and incrernental. a11 themes) ( Exam ples: al1 themes)

-Persistent use of the umbrella theme. This - Persistent use of the umbrella theme. This theme is rtssociated with other themes that therne is associated with other themes that Vary deprnding on the context. (Example: Vary depending on the context. (Example: Leader) First)

-Ccintinuity is malntained through: -Continuity is maintained through: 3 the persistent utilization of a label. +the persistent utilization of a label or ( Example: Leader) expression. (Examples: Fust: Cornmitment 3prrsistence of a eiven principle. to stakeholders) (Example: Large) i the prrsistence of a given pnnciple. ( Example: Cornmitment to shareholders) +portraying innovation as an identity attribute of the bank +addressing some persistent or enduring aspect of the bank aAer addressing change

6.3.1 Shifts in distinctiveness The two banks show a tendency to rmphasize those attributes that allow them to daim distinctiveness within a comparison group. Different marks of distinctiveness appeared in discourse. RB places extensive emphasis on its size. In addition. when the public perception confirmed its higher rating in rems of service quality to custorner, this attribute was extolled in the MTS. As conditions change. an organization's standing vis- a-vis a compariscn group may also change. Thus, RB'S relative size changed with time. .As the bank's rank in terms of size changes, the bank resorts to changing the criterion for measuring relative size. It also changes the comparison group used to detemine its rank. This was evident as well in BMO's discourse. BMO did not claim to provide customers in general with a distinctive level of service, but rather to be the highest rated bank in tems of its service to small business, a subset of customen in general. Similarly, in clairning its distinctive North Amencan scope. BMO had to consistently evoke both criteria: its hl1 service capacity and its U.S. operations. This study confims Elsbach and barners's ( 1996) allegations that organizations resort to selective categorizations in order to maintain ;t daim to distinctiveness. This 1s rnainly due to the fact that organizations' identity claims need to be confinned by society (Levia and Nass, 1994). Duaon and Dukench ( 199 1 ) indicate that an organization uses the image the public has of it (or what is cailed "the construed extemal image" by Gioia and Thomas. 1996) to adjust the way it views itself. This was evident in RB'S portraya1 of its quality service attribute. Initially. when contirmation for i ts distinctive senice could be obtained through customer surveys. it proclaimed this mark of distinçti\.eness. '4s its distinctiveness eroded. so did its claims. Continuing to daim distinctiveness in this aaribute in the face of erodinr statu would have created a dissonant situation for the different stakeholders. Sirnilarly. BMO drclared in 1990 that their goal was ro provide a distinctive level of semice to their customers. However. surveys of customer service ratings of the big banks did not show BMO to be supenor to the other institutions. (The discussion of quality service for RB provides information on customer surveys on the Big Six banks including BMO and these do not show BMO as leading in customer service.) Nowhere does B MO daim to have actually realized the objective of providing distinctive overall customer service. Instead, BMO extols its supenor service to small business, a subset of the overall customer poup. For this claim. confirmation in the fonn of public opinion and survey results could be obtained. On the other hand. some organizational attributes are indisputably unique and the organization does not need to continually provide proof of their distinctiveness. This is the case with BMO's being the first and oldest bank in Canada. In fact. al1 organizations can make claims to distinctiveness on the bais of their history. As Selznick (1957) indicates. organizations develop a character as a result of their adaptive experiences, and no organization's expenences can be duplicated. Martin et al (1983) indicate that different organizations' claims to uniqueness take sirnilar forms, but that an organization is able to illustrate distinctiveness by referring to specific people, events and places that are unique to its experiences. This is more evident in BMO's discourse than in RB'S. At BbIO. the bank's history and its beins the first bank ever in Canada is a source of notoristy. ii sign of distinçtiveness by excellence - one that cmot be disputed or ciiscontirrncd. Distinctiwness. whether or not based on historical elements, is what ailows an orynization to stand out from the environment as opposed to being an extension of it (Christensen and Cheney. 1994). It is a sign of some superior achievement. It further rillows the strrngthening of stakeholders' identification with the organization (Dutton et al. 1994.) Stakctholders can achieve a positive personal identity by being associared with a distinctive organization. We can thus understand why claims to distinctiveness in a widr am- of aspects appear in this study as a major aspect of the banks' self-presentation. We undso understand why so much top management attention is focused on rnanaging and prrsenting marks of distinçtiveness.

6.3.2 Projected, rcalized and unrealized identity Projectrd identity may or may not berome realized and institutionalized. Figure 12 slio\w the major aspects of the process of institutionalization. crosion or abortion of idcntity attributes. Early in the study period. RB had projected becoming a full service financial insiitution. It acquires a securities firm. and later a trust fim. it makes acquisitions in insurance and with the years provides more extensive financial products and semices. in other words. the bank took a proactive stance vis-a-vis the FI attribute. frst making it a desired projected amibute and then tdung different actions to realize it. Achieving a hl1 service FI stanis tlowed partly frorn stntegic actions at RB. A similar argument applies to BblO's Vision 1003 which projected Bk10 as a full service North American hanciai institution. Strategic action was undertaken which ailowed the realization of this attribute. Consmicting identity. however. does not aiways tlow tiom the organization's strateejc undertakings. For example. RB was partly curtailed in its efforts ro become a full senice FI by government replations which. î?om the bank's perspective. were slow in ailowing it to movc into nçw lines of business. Ln the case of quality service. RB'S projected identity of being the leader in quality service in the early nineties was not realized despite the many efforts made at the bank. Similarly, %MO hdicates in 1990 that its goal is to provide a Figitrc I 2. Insti tiitionalization/Erosion/.4bortion [nsti tut ional iza tion of identity rtt ributes (Rrtalized identity rittribute)

Erosio~Abortion (Fading of'unreaiized identity attribute) distinctive Irvel of service to customers. Sevenl years later only its service to small business appeared particularly distinctive. In othrr words. while an organization may activrly engage in et'fons to build or manage its identity. there are factors which impact identity over which the organization rnay have no control. .As the above discussion indicates. notable among these factors are gowmmcnt reylation and the perceptions of the organization held by extemal publics.

6.3.3 Shifts in centrality The data indicates that the central aspects of the organizations shift with time. The discussion so far has indicated that these shifis are otien piecemeal when measured hm yrto year. The discussion has nlso pointed to a number of factors that intluence the txolution of identity. ailowing attributes to become more or less central with time. The tictors that tmerged in this study are: the major actors or top managers at the organization. a change in the bank's strategy or suategic açhievernents. and a change in the rxtrrnül context. These forces are depicted in Figure 13. Xot clearly evident in the case of RB. the intluence of the chairman and CE0 is highly noticeable in the case of BMO. Mulholland was the only Canadian bank executive to rpearhead the acquisition of a retail bank in the United States and to Iay the fondation for a Nonh Amencan bank. Barren took that a step hrther by announcing Vision 2002. In addition. Bamtt appeared to have infused the bank with a spirit of innovation. Creativity. learning, innovating and transforming became important themes in the bank's discourse after he became CE0 and chairman of the bank. .As mentioned previously. Barrett himself was seen to possess the ability to leam and innovate. The discussion of BMO indicated that both .Mulholland and Barrett as welZ as interna1 and externa1 obsen~ersagree that the two CEOs had a major influence on the bank's identity. The second factor intluencing the evolution of the centrai aspects of identity is a change in the bank's strateg or stntegic achievement. In its self-presentation, RB initiolly refers to itself as a bank with the goal of becoming an integrated financial institution. Major smtegic efforts are exerted to achieve the status of an integrated Figure 13. Factors t hat influence the evolution of organizationnl identity financial institution. RB reports extensively. for example. on the strategic acquisitions it makes in the w-ious areas of the financial services sector. allowing it to narrow the gap benvern being a bank and being an integrated financial institution. Ashforth and Marl

( 1996) indicate that an organization's identity is typically anchored to its mission and btacblillan ( 1957) points out that we are what we do. Ai the end of the snidy period. RB refers to itsel f os a financial institution rnther than a bank. The products and services the bank ims offering at the end of die study period were substantially more varied and cornplex than those it ot'fered at the begi~ingof the period. It; structure had gown more cornplex. its markets more varied and its name was changed to Royal Bank Financial Group. The bank's strategic achirvements and change in mission were related to a major aspect of its self-definition. A similar argument can be made about BMO. For example. the strategy it adopted with respect to the srnall business segment dlowrd it to achieve the stütus of the highest rated bank in this sector in Canada. Its major investmrnt in b1c.uico. rillowcd BMO to become a XAFTA bank. .Another factor which appears to have an intluence on shifts in identity attnbutes is the extemiil contrxt. .A major aspect of this context is the institutions' relative position with respect 10 a comparison group. olien made up of the major cornpetiton. As the or=anirarion's position or rank changes with respect to the reference group. its statements of idsntity shiti correspondingly. Thus. RB ceases to define itself as the bank which provides distinctive service and evennially presents itself as the institution with an exceptionally strong position in tee-based business. BMO cornes to portray itself as the tiighest rated bank in the mal1 business sector. Shifis in the banks' extemal image are associated with shifts in identity.

6.3.4 Continuity and change What can we say about continuity and change in identity*?Does identity persist or does it change with time'? Should we uphold the definition of organizational identity as constituting of those attributes that penist'? Persistence is part of the definition provided by Alben and Whetten (1985) and built upon by other authors (such as Ashforth and Mael. 1996: Dutton and Dukench. 1991: Scott and Lane. 2000). Gagliardi (1986) pro posed that organizations ' primary strategy is the maintenance of their identity. Srivastva and Fry (1993) claim that organizations change to maintain a sense of identity and continuity. Could we say that the findings of this study confirm these allegations? The data tiorn the nvo banks indicates that some aspects of identity persist whereas others change with tirne. The tindings of this study indicate that rather than making grneral statements reçarding whether organizational identity persists or changes, rrscarchtrs are well advised ro look at the components of identity and attempt to diî'fercntiatr betueen those aspects of identity that change and those that tend to endure. Let us surnmarize those aspects of identity that did change. The discussion of the difkrent identity themes indicated that over the yean. there were shitis in different aspects of identity:

1 ) The tiegree qf.cerlrra/ihand diszincriveness of some themes çhanged over the years: RB: Quality senice to customers: Fee-and-incorne generating ability BM0: First-as-innovative; Commitment to shareholders Changes in the degee of centrality of a theme are often acrompanied by changes in the curisteilarion that is associated with the theme.

7)Some iabels by which organizations refened to their distinctive and central attributes evolved with time. RB: Bank+FI BMO: Canadian 3 >orth Amencan 3 NAFT.& Cornmitment to people Cornmitment to stakeholden

3) Some of the meartings anached to the labels changed with tirne, whether or not the labels themselves remained constant: RB: Leader BMO: First; Commitment to stakeholders

Most of the changes that did occur were incremental when looked at %om year to year. In discussing the process of institutionalization of identity themes (fee-and-income eenerating ability and FI for RB: North Amencan for BMO), 1 indicated that maidy b piecemeal changes could be observed from year to year. Even the fading of some identity themes appears to take place gradually and undramatically (such as quality service for RB: first-as-oldest for BMO) as the banks address them less often. Furthemore. some changes entai1 gradua1 increases in complexity rather than shifts fiom one state to another. This is the case of the FI theme for RB which included but surpassed the bank theme, and the Sonh Amencan theme for BMO which included but surpassed the Canadian theme. In the case of the cornmitment to stakeholders theme at BMO, most shit'ts are also incremental. However. these shifts which appear to be small tiorn year to year amount. in aggeeglitc. to a change of significant magnitude. Whrn the study penod opened. RB definrd itsrlf as a Canadian bank distinctive for its quality service. When the penod ends. it presents itself as a Canadian financial institution providing integrated services. distinctive in its ability to generate high revenues and income. When the study period oprned. BMO detïned itself as the oldest Canadian bank. When the penod ends. it dcfined itself as a highly innovative North Amencan (or NAFT.4) tinancial institution. Although most aspects of discourse point to small shiHs in identity on a year-to- year buis. a few aspects apprar to point out to major changes occumng at the banks. RB rnakes less refrrence to such changes than does BMO. RB'S indication that the acquisition of Dominion Securitirs constinited a milestone in the Royal's 118-year histov is anc of the few references made to change of some magnitude at the bank. BMO. in contrast. presents the changes occumng in the bank's attributes as more dramatic. panicularly with Barrett as chairman. He refers to small changes that together are rquivalent to the "re-invention" of the bank. the "groundbreaking" initiatives of BMO. and a "new" contract to be forged with employees. It should be noted that BMO also explicitly addresses the issue of continuity in identity attributes more frequentiy than does RB. Could this lead us to conclude that a sense of occuning major changes is ctccompanied by a sense of continuity in some aspects of identity? Continuity was also observed to occur in identity themes in this study. Continuity is the sense of "ongoingness that links the past to the present and the present to future hoprs and ideals" (Srivastva and Fry. 19922). It refew to "a degree of sarneness. pnmarily to sameness sustained through tirne" (Bateson. 1992127). We can think of continuity as streams From the past that flow into the present and funire. The study indicates that continuity is established in discourse in a number of ways: Ibl

1 ) Through the use of Zabeis whiclr are icsed persistendv rhrolcghorrt die Jvears.even if the meanings they stand for may change with time: RB: Leader BMO: First: Commitment to stakeholders

2) Through meoni!zgs or prirlcipfes that persisr or tlzar change rnitiimnf!i~throughout the vc'ars RB: Liirge (relating to the retail nenvork. for example) B410: Commitment to shareholders (consistent returns. for example)

3) By ~ddress~rlgsome enduring aspecr Of'rlie bank ajkr and-essing a change: 8410: Commitment to employees (a new çontract is forged. but the values of respect for 311 humnn beings rernain).

4) By porrraying Dtnovation as an ihirihartribiite of the bank: BMO: Innovative (the attnbute persists and enables the bank to undertake changes of di fferent magnitude and in di fferent spheres of operatîons).

There are very kw situations (if any) where we cmot discem continuity in change (Bateson. 1992:27). This confirms what several authors have repeatedly indicated. 'vlobilizing die energy to engage in change requîres that some aspects of a system's cxperience rernain persistent (Pettigrew. 1985: Whiting, 1976). Schmiedeck ( 1979) talks about "contluence": strearns fiom the past and present that rnay combine and tlow together in a cross section At no point in time in the banks' discourse do we see ü complete destruction of the past. When major change is declared. some aspect of continuity is referred to. When incremental shifts occur the severance with the past is only partial. In both cases contluence occurs. ktthis discussion implying that some continuity in identity can be observed should not mask the fact that rnost aspects of identity for these bvo organizations do not remain tixed for long periods of time. Gioia et al (2000) indicate that an organization's ability to change its identity should be seen as a sign of adaptive instability: it changes to adapt to its environment. In this study, we see a major tendency for organizational identity to undergo a conhnuous process of incremental change whereby the anchorage in the present is stronger than the anchorage in the past. Present anchorage helps fil1 the gap left by thosr aspects of the past that are discontinued (Schmiedeck, 1979). The discourse of both banks indicates that in their self-presentations. in answenng the question "Who are we'?". their ovrrriding emphasis is on "We are.. .. today." 7. CONCLUSION

Czmiawska-Joerges ( 1991) indicates that organizations have been engaged in a "st.xçh" for ideniity. This. she believes may be a problem nther than a solution in the dstinition of an orgmization's identity. FolIouring Alasdair 4Ichtyre. she proposes diat a "qucst" for identity is the better way to drscribe the process of autobiogaphical narration. "The quest sugests that what is sought .ifter will br drfined in laqe part thmu& the process of formulation itseif: it is not prepackaged" (Chnstensen and Cheney. 1994:23). This thesis \vas a stage in a quest to explore what happens to oganizational identity in a sontrxt of change by using the grounded theo. approach. The evolution of organizational identity in the top management discourse of nvo Canadian banks was tracrd for a longitudinal period of time dunnp which these two organizations and their environment undenvent rnany changes. Although this quest allowed me to answer some of the queries. it gave rise to many others. In this section 1 would likc ro review the contriburions of the study. its limitations and the directions for finire research that it opens up.

7. t CONTRIBUTIONS This study has both, theoretical and practical implications. At the theoretical level. it was pointed out at the outset that organizational idmtity has generally been conceived in the organizational literature as being of an enduring nature. This study of two Canadian banks indicates that organizational identity is more prone to evolve and change than it is to persist. It further indicates that general statements about change and continuity in identity cm mask the fact that there are specific components of identity which are likely to endure and other components which are prone to change. The drvelopmental trajectories naced for different identity themes show that identity çan rvolve at the level of the labels which organizations use to define themselves. lit the lrvrl of the meanings anributed to identity-defining labels. and at the level of the degrce of centrality and distinctiveness of a given identity theme. h change in the centrality of a thcme was shown to imply a change in the constellation of attributes associatcd with the theme. Changes in labels were shown to be incremental and to be accornpanied. for the most part. by an increasing complexity in the panicular themes to whiçh the labels apply. Although a few studies reponed in the literature suggest that organizational identity can change (Gioia and Thomas. 1996; Gustafson and Reger. 1995). no study has provided empincal evidence of the aspects of identity that change and those that persist. The study also pointed to a number of factors which are associatcd with the cvolurion of idrntity thernes. some interna1 and others extemal. some appearing to propel the ttvolution of identity in the direction desired by the organization. others seemingly çurtailing its deuelopment. This finding should be taken as suggestive of a few factors that may have an impact on identity. The tindings of this study also point out how continuity is established in a context of change. Xlthough researchers have repeatedly indicated that some continuity is needed for change to oçcur. few have provided empirical evidence of how continuity is maintained in organizations. It was found in this snidy that one way to maintain continuity is by defining the organization as innovative which would allow the organization to undertake different changes while maintaining a persistent self-definition. Other continuity rnaintaining strategies involve using the sarne self-defining labels over the yean. labels that persist although they corne to signiiify different meanings with time. .-\ third continuity maintaining saategy entails addressing aspects of the organization which are persistent after change in the organization has been addressed. These continuity-maintaining strategies demonstrate the extent to which discourse iüelf provides the links benveen the past and the present. Far fiom simply portraying continuity and change in identity. top management discourse helps create a state of continuity or a state of change. The findings indicate that the two organizations studied are mainly anchored in the present. with confluent streams from the past provided mainly through persistent use of labels and reference to continuity in discourse. This study also has practical implications. It sheds light on identity maintenance and change strategies used in organizations. The use of the term "strategy" here does not necessarily imply that these identity construction processes were intentional acts. althouyh the- may have been. Van 'Maanen (1975) indicates that the extent to which a paniçular strategy (such as a discursive strategy) is used by an organization is not a naturd occurrence in itself. "However. the form that it t&es is a matter of organizational choiçe. .And whethcr this choice of snategy is made by design or by accident. it is at lem theoreticltlly subject to rapid and complete change at the direction of management" (Van

'vlaanen. 1 97S:Z 1 ). Similarly, Cheney ( 1983) indicatrs that formal messages from management may contain intended as well as unintended aspects. Wr do not know to what extent the strategies apparent in the annual reports were chosen intentionally. What we boais that pmicular strategies were evident. Making explicit the strategies used by management in its discourse cm raise awareness of these techniques, specially if they corne to be by accident. This study offen practitioners an array of strategies that cmbe used to maintain continuity or to create change in organizations.

7.1 LI3IITATIONS AND FUTURE RESEARCH DIRECTIONS This study has a number of limitations. One such limitation denves tiom the tàct that most of the data analyzed here has been taken iiom the annual repons. One could arme- that these reports retlect only one of different versions of the organization's identity. The fact is that annual reports reflect the views of top managers, the group with pre-rminent responsibility for interpreting events to intemal and extemal audiences, and therefore. the goup most likely to exert an influence on this identity. Barr and Huff

( 1 997349) indicate that annual reports "reflect and help create needed comrnonalities" in the interpretation of issues. I propose that organizational identity is one such issue. Fume research may attempt to study organizational identity elaboration processes in other public documents such as house organs, press releases or public statements by different Company representatives and try to establish whether statements made to diftèrent audiences emphasize different aspects of identity. This study. like al1 research based on a srna11 number of organizations, has the limitation ofnot allowing us to make generalizations at large. However. it does serve as a springboard for generating propositions and hypotheses that can be tested in larçer scale studirs. For example. hture research may attempt to veri- whether the developmental trajecrories that emerged for identity themrs in this study would occur in other organizations. Doss identity tend to rvolve incrementaily with subsequent increases in compiexity or are there other patterns that cmbe observed? Do the identity maintenance strategies that emerged in this study also occur in other change contexts'? -4s interesting is the question of identity rvolution for different ipes of organizations. The banks that were the focus of this study cmbe quaiified as subscribing to a utilitarian logic as opposai to a normative one (Albert and Whetten. 1985). It would bc interestins to find out how the identity of an organization that subscnbes to a nomative loyic cvolves. as conditions in its environment force it to review its normative requirements. To what cxtent will anchonye in the present. as opposed to the pst. occur*? This snidy raises a number of cxciting questions that cm be answered in future studies.

7.3 CONCLCSION .As change becomes more prevalent inside and around organizations, the subject of organizational identity will continue to arouse the interest of researchers. This study indicates that an interesting venue for snidying organizational identity longitudinally involves tracing an organizahon's self-presentational discourse. Although studies adopting such an approach have appeared in the communication literanire. they have been ignored for the most part in the field of organizational studies. It is my hope that this study will stimulate further research into the subject of discourse on organizational identity. For me. the quest to understand the elusive subject of identity continues. 8. REFERENCES

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