Banking on Trust : Historical Perspectives on Changes and Continuities in the Strategies of Rebuilding Corporate Legitimacy in British Joint-Stock Banks, c. 1830s-60s

Chan, Alvin and Downs, Carolyn and Taylor, James (2024) Banking on Trust : Historical Perspectives on Changes and Continuities in the Strategies of Rebuilding Corporate Legitimacy in British Joint-Stock Banks, c. 1830s-60s. PhD thesis, Lancaster University.

Text (2024ChanPhD)
2024ChanPhD.pdf - Published Version
Available under License Creative Commons Attribution-NonCommercial.
Download (2MB)

Abstract

This thesis uses the organisational trust repair model developed by Gillespie and Dietz to examine how effectively selected joint-stock banks from Northwest England rebuilt corporate legitimacy amidst periodic commercial crises in the nineteenth century. Given organisational complexity and exposure to shifting market sentiments, this thesis focuses on how bank directors simultaneously managed trust and distrust in a hostile environment, in which different parties were prone to distrust just as much as they were to trust. By exploring various approaches to repairing organisational trust across different banking institutions, this thesis argues that successful trust repair requires one to understand how trust was damaged in the first place, because different violations require distinct reparative responses as conditioned by varying circumstances. Following the belief that organisational legitimacy is a generalised perception among stakeholders that corporate actions are aligned with social norms and values, the research applies a cultural narrative approach to demonstrate how the interplay of socio-cultural factors drove the dynamics of trust repair. For this purpose, it uses different cultural sources, official papers, and archival materials to reconstruct the nineteenth-century contexts in which banking companies sought to repair trust. This thesis also argues that the dynamics of trust repair were essentially compounded by four key features of banking, namely: (1) information and power asymmetry between management and stakeholders; (2) competing expectations from different stakeholder groups; (3) the delicate balance between returns and risks from financial investment, and (4) the interconnectedness of banking institutions and the real economy. Through the combination of a contemporary theoretical framework with the historical contexts, the thesis aims to present the case for (1) understanding the past through the perspectives of management scholars in the twenty-first century, and (2) assessing the applicability of modern trust repair strategies in relation to historical patterns and practices.