Chapter 2: The evolution of cooperative banks
When economic historians study the development of a particular type of business organisation, they can draw on two distinct ideas: evolution and design. First, consider evolution. Businesses are founded, and then they grow larger, sometimes changing or expanding their purposes, and then they may enter into a period of decline, eventually being wound up. The analysis can be taken to a higher level, and we can see how a group of businesses in a particular sector evolve together through collaboration and competition, growing and declining under the impact of new technologies, changes in consumer demand and competition from other ownership types. At the top level we can distinguish a ‘community ecology’ of organisations that make up a whole industry, such as food retailing, cotton production or banking (Hannan and Freeman, 1989). In the next four chapters we want to understand the evolution of different types of customer-owned bank and so have to analyse developments at all three levels: individual banks that have managed to survive and replicate themselves; groups of banks that have established a distinct customer-owned sector within the wider banking industry; and the banking industry as a whole. However, the emphasis will be mostly be on the middle level – a customer-owned sector within the larger banking industry.
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