Organizational Culture and Organizational Change: The Transformation of Savings Banks in Denmark, 1965–1990

Abstract

In this article, I argue that organizations' historical narratives are a basic and important component of their culture and identity, and that these narratives can be resources as well as constraints. I combine a narrative approach with Joanne Martin's three perspective theory of organizational culture, and using the transformation of Danish savings banks as a case, I demonstrate how a narrative approach can provide a new and better understanding of organizational behaviour and change than mainstream economics and the abundant functionalist organizational culture literature. I demonstrate how, when change was called for by external pressures, the savings banks choice set was constrained by a shared narrative about their historical origins. This narrative, in turn, constituted the identity, image and organizational culture of savings banks and to a high degree restrained learning capabilities, created organizational inertia and delayed the adoption of a new strategy.