The consequences and limits of empowerment in financial services

Jørn Flohr Nielsen and Christian Preuthun Pedersen

Scandinavian Journal of Management, 2003, vol. 19, issue 1, 63-83

Abstract: Empowerment may be one of the answers to the growing competition and increasingly demanding customers in the financial retail sector, but the relation between empowerment and profit-oriented behaviour at the service encounter has been only sparsely documented. This article offers a comparative empirical analysis of the conditions and impact of empowerment and related activities in Danish financial institutions, with a focus on semi-standardised front-line jobs. The results indicate that granting decision-making authority and autonomy to the individual front-line employees has often been a powerful step in the efforts of the financial service companies to increase their competitiveness. In the change process, formal participation has only a moderate supportive impact on performance while changes initiated at the branch offices and the linking of rewards with performance, both have a notably positive impact on the competitiveness and profit-oriented behaviour of front-line employees.

Keywords: Empowerment; Financial; services; Implementation; Profit; orientation; Service; quality (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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