Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)

First Advisor

James J. Chrisman


This dissertation examined the antecedents and consequences of strategic change in the commercial banking industry between 1980 and 1987. Based on a review of the literature, a conceptual model was developed that predicted change would be influenced by two factors, adaptive forces and inertial forces. Adaptive forces include two factors that have been hypothesized to encourage change, prior performance and slack resources. Inertial forces include two factors sometimes thought to inhibit change, organizational size and age. Change outcomes were predicted to be influenced by degree of change and moderated by adaptive and inertial forces. Guided by previous theoretical and empirical research, cluster analysis was used to measure strategic change and degree of change. The conceptual model proved to be useful in understanding the relationship between certain firm level factors and the propensity of organizations to change strategies. Some evidence was found to support the notion that prior performance, slack resources, and age are all important antecedents to change. Specifically, declining performance and slack resources in the form of excess capital were found to encourage change as predicted. Contrary to predictions, age was found to be a positive force for change. Change was found to have positive consequences for the banks in this study; i.e. it was positively related to performance and survival. The relationship between change and performance became more clear when degree of change was considered. Those banks that underwent moderate levels of change outperformed those that did not change as well as those that underwent more drastic changes, suggesting a curvilinear relationship. Age and slack resources were found to moderate the change performance relationship as well. Specifically, for firms that changed strategies, age and slack resources in the form of liquidity were found to be negatively related to performance. The findings concerning slack were surprising, however, high levels of liquidity may suggest risk aversion on the part of banks. Overall, the findings provide some evidence to support the conceptual model and they lend credence to the major assumptions underlying the strategic management perspective.