The principles that inspire someone set up a business have an impact on its management and its results. If entrepreneurs prioritize profit over the services they offer, their business adventures may have disastrous consequences.
This is the case of many banks created in recent years whose raison d’être has been to maximize profit at whatever cost, with the result that they have become distant from their clients and have caused serious local and global economic problems.
In his article "Arriving at the Starting Line: The Impact of Community and Financial Logics on New Banking Ventures," published in Nº6 of the Academy of Management Journal, IESE Prof. John Almandoz researches the motivation of the community and green banks in the United States.
In theory, these institutions have a mission to meet the needs of local communities and encourage environmental projects. But Almandoz’s research reveals that this orientation is dependent on the management team that founded the bank.
According to his article, awarded the prize of best article of the year by the IESE Alumni Association, the more executives with a background in banking and finance involved in the foundation of these institutions, the greater the distance from the commitment to maximize social objectives.
At a time when many institutions are trying to reconcile their mission with the needs of their clients and communities, the findings of this article are particularly relevant.
Research excellence awards
The prize awarded to Prof. Almandoz is one of the three Research Excellence Awards presented by the IESE Alumni Association.
The awards, established in 2001, recognize the best book, best course, and best academic article of the year with a prize of €10,000 for each category.