How Large Commercial Banks Manage Product Innovation

Abstract

Those banks which are active and experienced product innovators use organisational systems significantly different and better suited to the task of developing new products than those of less active product innovator banks. The findings, based on interviews conducted in nine large commercial banks competing in the market for corporate banking services, show a key difference between the organisation arrangements of the two banking groups; active product innovators ensure that specialised personnel make regular, effective contact with the market while less active product innovators see development tasks as a special activity. Active product innovator banks have also progressed considerably in opening up traditionally tight operating structures in order to initiate product innovation.