Share This Article:

Learning, Lending, and Laws: Banks as Learning Organizations in a Regulated Environment

Abstract Full-Text HTML XML Download Download as PDF (Size:315KB) PP. 141-154
DOI: 10.4236/ajibm.2014.43021    4,417 Downloads   6,504 Views   Citations

ABSTRACT

The concept of American banks as the most innovative in the world is difficult to reconcile with the reality that banking in the US is also a highly regulated industry with detailed and focused regulators and whose rules and regulations are constantly changing. While innovation inherently entails a need for freedom to experiment, laws and regulations inherently entail a certain degree of constraint. On the one hand, organizational learning may be defined as the ability of an organization to gain insight and understanding from experience through experimentation, observation, analysis, and a willingness to examine both successes and failures. On the other hand, a common goal of bank regulation is to prevent failures from ever occurring in the first place, and although in recent decades there has been significant deregulation in many industries, a sector that remains heavily regulated is banking. This paper examines the adequacy and applicability of Peter Senge’s theory of a learning organization’s five disciplines to the banking industry, the role of laws and regulations in promoting or discouraging US banks to become learning organizations, and recommendations for steps that US banks may take towards becoming learning organizations.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

Martineau, M. , Knox, K. and Combs, P. (2014) Learning, Lending, and Laws: Banks as Learning Organizations in a Regulated Environment. American Journal of Industrial and Business Management, 4, 141-154. doi: 10.4236/ajibm.2014.43021.

References

[1] Publilius Syrus.
http://www.quotationspage.com/subjects/money/31.html
[2] Jones, J.M. (2012) Economy Is Paramount Issue to US Voters. Gallup.
http://www.gallup.com/poll/153029/Economy-Paramount-Issue-Voters.aspx
[3] (2010) Economy Watch.
http://www.economywatch.com/world_economy/usa/banks-in-usa.html
[4] David Skyrme Associates (2012) The Learning Organization.
http://www.skyrme.com/insights/3lrnorg.htm
[5] Smith, M.K. (2001) The Learning Organization. The Encyclopedia of Informal Education.
http://www.infed.org/biblio/learning-organization.htm
[6] (2010) Economy Watch.
http://www.economywatch.com/world_economy/usa/banks-in-usa.html
[7] (2012) Wikipedia.
http://en.wikipedia.org/wiki/Bank
[8] Malhotra, Y. (1996) Organizational Learning and Learning Organizations: An Overview.
http://www.brint.com/papers/orglrng.htm
[9] Allen, F. and Carletti, E. (2007) What Is the Rationale for Regulating Banks? UniCredit Group: Banking and
Finance Monitor, 2.
http://finance.wharton.upenn.edu/~allenf/download/Vita/banking%20and
%20finance%20monitor%20article.pdf
[10] Senge, P.M., Kleiner, A., Roberts, C., Ross, R.B. and Smith, B.J. (1994) The Fifth Discipline Fieldbook.
Doubleday, New York, 5.
[11] (2012) Society for Human Resource Management Glossary of Business Terms.
http://www.shrm.org/TemplatesTools/Glossaries/BusinessTerms/Pages/l.aspx
[12] Pedler, M., Burgogyne, J. and Boydell, T. (1997) The Learning Company: A Strategy for Sustainable
Development. 2nd Edition, McGraw-Hill, London.
[13] Clark, D. (2012) The Learning Organization.
http://www.nwlink.com/~donclark/leader/learnor2.html
[14] http://en.wikipedia.org/wiki/Organizational_learning
[15] Senge, P.M. (2006) The Fifth Discipline: The Art and Practice of the Learning Organization. Doubleday
(A Division of Random House), New York, 7.
[16] http://en.wikipedia.org/wiki/Systems_thinking
[17] Sinha, A. (2012) Systems Thinking—A Beginner’s Quest.
http://systemsview.wordpress.com/2010/06/28/4/
[18] Babbit, T. (2009) Banking—5 Ways to Make Your Operations Profitable. Tripp Babbitt’s Blog.
http://blog.newsystemsthinking.com/banking-5-ways-to-make-your-operations-profitable/
[19] Blakely, D. and Day, I. (2009) Where Were All the Coaches When the Banks Went Down? 121 Partners
Ltd.
http://www.trainingzone.co.uk/topic/coaching
/where-were-all-coaches-when-banks-went-down-part-5-
systems-thinking/137496
[20] Professional Practice for Sustainable Development (2012) Financial Sector Programme—Systems Thinking
and the Five Capitals.
http://www.pp4sd.org.uk/downloads/pdf/2Systems%20Thinking%20and%20Five%20Capitals.pdf
[21] Wallance, D. (2011) Transformation at Bank of America: An Enterprise Systems Analysis. Massachusetts
Institute of Technology, 29-32.
http://sdm.mit.edu/docs/Wallance%20-%20Thesis%20presentation%20-%20copyright.pdf
[22] http://en.wikipedia.org/wiki/Mental_models
[23] Agarwal, A. (2012) Learning Organization. HR Folks International.
http://www.hrfolks.com/articles/learning%20organization/learning%20organization.pdf
[24] Jackson, K.T. (2010) The Scandal Beneath the Financial Crisis: Getting a View from a Moral-Cultural Mental
Model. Harvard Journal of Law and Public Policy, 2010, 736-777.
http://www.readperiodicals.com/201004/2045076881.html
[25] Willett, T.D. (2009) The Role of Defective Mental Models in Generating the Current Financial Crisis.
Prepared for the Cornell Workshop on the Global Implications of the Financial Crisis, 1.

http://econ.duke.edu/uploads/assets/
Workshop%20Papers/Willett.pdf
[26] Wind, Y. (Jerry) and Crook, C. (2009) From Mental Models to Transformation: Overcoming Inhibitors to
Change. Harvard Business Review, 2009, 5.
http://hbr.org/product/from-mental-models-to-transformation-overcoming-in/an/ROT081-PDF-ENG
[27] Shaw, G.B. (2012) Quotes about Economy and Recession.
http://www.soundoflife.net/economy-quotes-recession/
[28] Jacobs, M. (2007) Building Shared Vision: The Third Discipline of Learning Organizations. Systems in Sync,
1.
http://www.systemsinsync.com/pdfs/Shared%20Vision.pdf
[29] Method Frameworks, a Division of Forte Solutions Group (2012) Corporate Strategy: Create a Shared
Vision.
http://www.methodframeworks.com/blog/2012/corporate-strategy-create-shared-vision/index.html
[30] Wang, J. (2012) Ten Largest Banks in the US. Bargaineering.
http://www.bargaineering.com/articles/ten-largest-banks-in-the-u-s.html
[31] Dunn, A. (2012) Bank of America Still Tops the US in Deposits. The Charlotte Observer: Bank Watch.
http://obsbankwatch.blogspot.com/2012/10/bank-of-america-still-tops-in-us.html
[32] Bank of America (2012) Our Vision.
http://about.bankofamerica.com/en-us/our-story/our-company.html#fbid=7BwpY8OLoIS
[33] Wells, F. (2012) Our Vision.
https://www.wellsfargo.com/invest_relations/vision_values/3
[34] (2012)http://www.motherjones.com/files/images/big-bank-theory-chart-large.jpg.
[35] Carbonara, G. and Caiazza, R. (2009) Mergers and Acquisitions: Causes and Effects. Journal of the
American Academy of Business, Cambridge, 14, 188-194.
http://www.scribd.com/doc/14358472/Cause-and-Effect-of-Mergers-Acquisitions
[36] (2012) New Tax Law a Windfall for Buyers of Struggling Banks. University of California at Davis, Graduate
School of Management.
http://gsm.ucdavis.edu/research/new-tax-law-windfall-buyers-struggling-banks
[37] McGaw, R. (2010) Financiers Eye Struggling Banks; Centennial First Buy. Denver Business Journal.
http://www.bizjournals.com/denver/stories/2010/05/17/story8.html?page=all
[38] Startup Nation (2012) Shared Vision, Not Group-Think: Will Chase.
http://www.devsun.startupnation.com/pages/keymoves/shared-vision-will-chase.asp
[39] The Emerich Group, Inc. (2012) Adams Community Bank: In a Merger State of Mind. 4.
http://www.emmerichfinancial.com/CaseStudies/Adams-Case-Study.pdf
[40] Jacobs, M. (2009) Personal Mastery—The First Discipline of Learning Organizations.
http://ezinearticles.com/?Personal-Mastery---The-First-Discipline-of-Learning-Organizations&id=2750492
[41] (2009) Management Decision Making.
http://ivythesis.typepad.com/term_paper_topics/2009/10/management-decision-making.html
[42] Wikipedia Learning Organization. http://en.wikipedia.org/wiki/Learning_organization#cite_ref-OK_1-14
[43] (2012) Sober 24.
http://www.sober24.com/Recovery_Tools/Moral_Compass/Finding_Your_Moral_Compass/265/vobId__
2729/
[44] (2009) Management Decision Making.
http://ivythesis.typepad.com/term_paper_topics/2009/10/management-decision-making.html
[45] (2012) Umpqua Holdings Financial Corporation. Case Study by Ritz Carlton.
http://corporate.ritzcarlton.com/en/LeadershipCenter/Studies/UmpquaHoldingsCorporation.htm
[46] (2012) Goldman Sachs Training and Orientation.
http://www.goldmansachs.com/careers/why-goldman-sachs/training-and-orientation/training-and-
orientation-main-page.html
[47] Gandel, S. (2001) Goldman Hirelings Educate Execs to Keep the Lead. Crain’s New York Business, 17,
35. Quoted in Zolfo, E. and Mann, D. (2012) Global Competition and Learning Organizations:
Goals and Motivations of Corporate
Leaders and Employees
Who Participate in Corporate/University Partnerships. Dowling College, Forum
on Public Policy.
http://www.forumonpublicpolicy.com/archive07
/zolfomann.pdf
[48] Trichur, R. (2009) Goldman’s Huge Profit Stirs Public Outrage. Toronto Star.
http://www.thestar.com/business/article/666314--goldman-s-huge-profit-stirs-public-outrage.
[49] Reisinger, S. (2012) Senators Express Disgust, Anger as Corporate Execs Squirm. Corporate Counsel.
http://www.law.com/jsp/article.jsp?id=1202453292949&Senators_Express_Disgust_Anger_as_Goldman
_Execs_Squirm&slreturn=1.
[50] Taibbi, M. (2009) The Great American Bubble Machine. Rolling Stone.
http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405.
[51] Macalister, T. (2010) Revealed: Goldman Sachs Made Fortune Betting against Clients. The Observer.
http://www.guardian.co.uk/world/2010/apr/25/goldman-sachs-senator-carl-levin
[52] (2006) Investment Bankers Flock to Spiritual Guru. Dealbook.
http://www.areyoureadytosucceed.com/dealbook.htm
[53] (2012) 100 Best Companies to Work for.
http://money.cnn.com/magazines/fortune/bestcompanies/2011/index.html
[54] (2012) The 10 Most Hated Companies in America.
http://247wallst.com/2012/01/13/the-10-most-hated-companies-in-america/
[55] Wikipedia Team Learning.
http://en.wikipedia.org/wiki/Team_learning
[56] (2012) Peter Senge and the Learning Organization. In: Infed: The Encyclopaedia of Informal Education.
http://www.infed.org/thinkers/senge.htm
[57] Hollis, E. (2004) Deutsche Bank: Building Global Learning. Chief Learning Officer Magazine, Mediatec
Publishing, Inc.
http://clomedia.com/articles/view/deutsche_bank_building_global_learning/1
[58] Kim, J.Y. (2012) Quoted in Global Development at a Pivotal Time: A Conversation with World Bank
President Dr. Jim Yong Kim. Brookings Institution.
http://www.worldbank.org/en/news/2012/07/18/world-bank-group-president-jim-yong-kim-brookings-institution
[59] (2012) Goldman Sachs Training and Orientation.
http://www.goldmansachs.com/careers/why-goldman-sachs/training-and-orientation/training-and-
orientation-main-page.html
[60] Kouzes, J.M. and Posner, B.Z. (2007) The Leadership Challenge. 4th Edition, John Wiley & Sons, Inc.
, San Francisco, 326.
[61] Federal Reserve Bank of Boston. (2012) Depository Institutions Deregulation and Monetary Control Act of
1980.
http://www.bos.frb.org/about/pubs/deposito.pdf
[62] Investopedia. (2012) Definition of Regulation Q.
http://www.investopedia.com/terms/r/regulationq.asp#ixzz2DXtNbTH3
[63] Federal Deposit Insurance Corporation. (2012) Garn-St Germain Depository Institutions Act of 1982.
http://www.fdic.gov/regulations/laws/rules/8000-4100.html
[64] Reagan, R. (1982) Remarks on Signing the Garn-St Germain Depository Institutions Act of 1982. In: The
American Presidency Project.
http://www.presidency.ucsb.edu/ws/index.php?pid=41872
[65] Federal Deposit Insurance Corporation (2012) Competitive Equality Banking Act of 1987.
http://www.fdic.gov/regulations/laws/rules/6500-3240.html
[66] Federal Deposit Insurance Corporation (2012) Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
http://www.fdic.gov/regulations/laws/rules/8000-3100.html
[67] Federal Deposit Insurance Corporation (2012) Federal Deposit Insurance Corporation Improvement
Act of 1991.
http://www.fdic.gov/regulations/laws/rules/8000-2400.html
[68] Henderson, D.R. (2012) The Roots of the 2008 Economic Collapse. Review of What Caused the
Financial Crisis? In: Friedman, J., Ed., What Caused the Financial Crisis? University of Pennsylvania Press.
http://www.hoover.org/publications/policy-review/article/80211
[69] White, A. (2008) Blaming the CRA. Consumer Law & Policy Blog. Public Citizen’s Consumer Justice Project.
http://banking.about.com/gi/o.htm?zi=1/XJ&zTi=1&sdn=banking&cdn=money&tm=1644&gps=226_355_1020_537&f=00&su=p284.13.342.ip
_&tt=2&bt=1&bts=1&zu=http%3A//pubcit.typepad.com/clpblog/2008/09/blaming-the-cra.html
[70] Wikipedia (2012) The Dodd-Frank Wall Street Reform and Consumer Protection Act.
http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection
_Act
[71] Investopedia (2012) Definition of Regulation Q.
http://www.investopedia.com/terms/r/regulationq.asp#ixzz2DXtNbTH3
[72] Financial Crimes Enforcement Network (FINCEN). (2012) USA Patriot Act.
http://www.fincen.gov/statutes_regs/patriot/
[73] Mehran, H., Morrison, A. and Shapiro, J. (2011) Corporate Governance and Banks: What Have We
Learned from the Financial Crisis? Federal Reserve Bank of New York Staff Reports, No. 502, 1.
[74] Mainelli, M. and Giffords, B. (2009) The Road to Long Finance: A Systems View of the Credit Scrunch.
Centre for the Study of Financial Innovation, No. 87, London, 6.
[75] Kolhatkar, S. and Weise, K. (2012) Dodd-Frank: The 848-Page Financial Firewall. Bloomberg Business
Week.
http://www.businessweek.com/articles/2012-10-11/
dodd-frank-the-848-page-financial-firewall
[76] Goldman Sachs. (2012) Goldman Sachs Hires Stephen Kerr as Chief Learning Officer.
http://www.goldmansachs.com/media-relations/press-releases/archived/2001/2001-05-10.html
[77] Karkoulian, S., Halawi, L.A. and McCarthy, R.V. (2008) Knowledge Management, Formal and Informal
Mentoring: An Empirical Investigation in Lebanese Banks. The Learning Organization, Emerald
Group Publishing, 15, 409-420.
[78] Zolfo, E. and Mann, D. (2007) Global Competition and Learning Organizations: Goals and Motivations
of Corporate Leaders and Employees Who Participate in Corporate/University Partnerships. Forum
on Public Policy: A Journal of the Oxford Round Table.
http://www.thefreelibrary.com/Global+competition+and+learning+organizations%3a+goals+and+
motivations...-a0180164015
[79] (2009) 250 Bankers Attend Banker Legislative Day. Texas Banking Magazine.
http://www.texasbankers.com/tba_info_news_releases.php?news_id=690&archived=&type=Bank
[80] Codjia, M. (2012) Mandatory Annual Compliance Training for Banks.
http://www.ehow.com/about_6647167_mandatory-annual-compliance-training-banks.html
[81] Caldwell, R. (2011) Leadership and Learning: A Critical Reexamination of Senge’s Learning Organization.
Systemic Practice and Action Research, 25, 39-55.
http://dx.doi.org/10.1007/s11213-011-9201-0
[82] Argyris, C. (2004) Reasons and Rationalizations: The Limits of Organizational Knowledge. Oxford
University Press, Oxford.
http://dx.doi.org/10.1093/acprof:oso/9780199268078.001.0001
[83] Ahearn, W.E. (2005) Walter Wriston, Ex-Citigroup Chief Executive, Dies. Bloomberg.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=as3a1z7NeiSY&refer=us
[84] Deal, T.E. and Kennedy, A.A. (1982) Corporate Cultures: The Rites and Rituals of Corporate Life.
Addison Wesley Publishing Company, Reading, 126.
[85] Weber, A.A. (2009) The Future of Banking Regulation. Dinner Speech at the Conference on “The Future
of Banking Regulation” Organized by Imperial College London and the Deutsche Bundesbank,
Frankfurt am Main.
http://www.bis.org/review/r090929a.pdf

  
comments powered by Disqus

Copyright © 2019 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.