2. Story of change: The Banking Industry The before: Banks were safe, constant, and limited by the government Income from loan and credit interest “White collar factories”
3. The Problem: New companies offered new products the banks could not Large companies abandoned banks and, instead, offered stocks to raise money 1985: 95 banks closed Story of change: The Banking Industry
4. Change on the surface: Government lifted restrictions Case study: “Access” bank Story of change: The Banking Industry
5. A deeper change: Changing how employees viewed their jobs New role of bank employees as sales people New products Story of change: The Banking Industry
6. Changing the image New training: “Investing for Bank Costumers (IBC) Internalizing the new language Story of change: The Banking Industry
7. Bourdeau’shabitus Links us to society and enforces rules Giddens’sroutinization Everyday routines Comforting events The importance of habits and routines
8. Bourdeau’shabitus Links us to society and enforces rules Giddens’sroutinization Everyday routines Comforting events The importance of habits and routines
9. The role of language “Sticks and stones may break my bones, but words will never hurt me.” Importance of stories and specialized discourses Reluctance to change The importance of habits and routines
10. Language: Access case study Change in its internal culture Change to avoid change Second language The importance of habits and routines
11. The academic problem What about the subjects Applied academics to the real world The importance of habits and routines
Faber’s story this time is about the banking industry. From the 60s to the 80’s the banking industry was safe, constant, and very limited.Their profit was based on charging higher interests for loans and credit than they paid in savings and checking accounts. They were minimum risk and avoided change.They were called “white-collar” factories, and they functioned just like industrial factories: they were permanent employment with benefits increased with time in the company. Bankers were generally mediocre, and did not require critical thinking. It was a bureaucratic, regulation-bound environment, which did not need to attract the most talented workers.
New companies changed that. One of them was Sears Roebuck, which offered a wide range of products and services, such as personal financing, insurance, sales of mutual funds, etc.Large companies who used to take loans from banks now issued bonds (read: stocks) to raise money. This practice was riskier, but offered bigger payoffs.This was a huge blow to the banks. More and more money started leaving them. The decade of crisis of the 80’s led to the failure of more and more banks, culminating with the closure of 95 companies in just 1985. The banking industry was in dire conditions.
In the mid 80’s the government allowed banks to engage in activities that it had forbidden up till then, including operating branches in more than one state, and allowing companies to engage in securities trading. This leveled the field with companies like Sears Roebuck.Access bank merged with another bank, Esquire, but despite the advantages this merge offered, the bank still could not keep up with the competition.
According to the vice president of community banking for Access, the banks needed to “change the behavior of the community bank” by changing their employees’ views of their job.Besides introducing new technologies, the roles of the bank’s workers changed, going from simply managing accounts to becoming sales people, actively searching for new costumers and encouraging them to use their new products, such as credit cards and loans, which would bring the companies a bigger income.
Senior bank managers were the most affected. As in industrial factories, they had been aspiring to higher, and more comfortable, positions that were the typical reward for years of service.For this, a training course called “Investing for Bank Costumers (IBC), was designed. It would not only teach them about the new products but, more importantly, it would help them internalize the new language and make it part of their own.
Habits and routines are important. They help to structure our lives without having to think too much about it. They help define our identities as both indidividuals, and members of our societies.Bourdeau calls this “habitus,” that is, the “unconscious acts people employ that link them with their larger social infrastructures.” It’s habits that help make us part of our society, and at the same time, enforce that society’s laws and rules without them being actively reinforced by any one authority.
Giddens uses a different term: routinization. This is the “habitual, taken-for-granted character of the vast bulk of activities of day-to-day social life.”These are the familiar events that are comforting to people. We feel safe and stable in these routines. This way, daily routines evolve into habits, which evolve into certainties, which evolve into principles.When our routines are disrupted, we feel disoriented. Think of the time you will graduate, and what it will be like to make such a dramatic change.
Another factor that helps set up these habits is the use of language in specialized discourses and stories. This factor is so pervasive that people are unaware of its importance. We’ve heard that “Sticks and stones will break our bones, but words will never hurt me,” yet this is a huge fallacy because, as Faber puts it, “specialized discourses and the stories we hear and tell sustain our habits and routines and thereby build our social cultures”Because of this, people are very resistant to change. Change in culture bring into question our very identities, and the premises through which we make sense of life.
Back to the case of Access, the changes it faced threatened the bank’s internal culture. Thus, the new training involved a lot of re-socialization.To give the new discourse some authority, they backed it with the basis of their culture: they insisted that such changes actually brought them back to the bank’s original purpose of serving the public. It was a change to recover their identity, which would make employees more willing to accept it. Anyone who was against the change was against the culture. As Giddens puts it, “knowing how to use the routines, rituals, and structures embodied in language is to have agency in the face of change.Because language is important in change, IBC also changed the language the bankers were used to. Like learning a second language, the employees learned to use and internalize the new terms. Remember your experiences learning your second language. You had to think in your target language instead of translating in your mind. It’s not just a matter of knowing the meaning of the words, but how and when to use them.
Faber, in the end, questions how the study of the bank helped his research subjects. He also noted that in other studies, the researchers remained simple observers. Regardless of the data they gathered, it was all academic, and it was not applied to assist those people whose time they took for their papers. As academics, we need to ask ourselves “how can we influence our communities?” Otherwise, we risk remaining isolated from the general community. What good is our knowledge if no one benefits from it? Unless we start thinking in terms of participating in the community, we will remain antagonists to them, instead of forming one “us.”
