Exploring Strategic Responses and Managerial Attention to Discontinuous Environmental Changes within the Austrian Banking Industry: Evidence from the Erste Group Bank AG

Abstract

This study investigates how Erste Group Bank AG, a leading financial institution in Austria and Central Eastern Europe, strategically responds to discontinuous environmental changes. The research focused on specific aspects such as the formulation and execution of strategic responses and the allocation of managerial attention within the banking ecosystem. The study was anchoredon the attention-based theory and utilized both primary and secondary data sources. Data collection involved literature research and interviews with bank managers, as detailed in the sampling section. Secondary data was gathered from financial statements and annual reports.Changing demographics and an aging population were identified as having the highest impact and uncertainty. In response, the bank has been compelled to adapt its strategies, products, and servicesto meet shifting customer needs while addressing operational challenges.Global warming and carbon reduction projects were reported to have high impact and high uncertainty as drivers of discontinuous change. In response, the bank has integrated environmental,social, and governance (ESG) criteria into its financial products and services. It supports sustainable projects and offers green bonds and loans to promote environmentally friendly investments.Managerial attention to these discontinuous changes has primarily focused on exploring fintech solutions and digital innovations that support sustainable finance practices. Additionally, bank managers have made efforts to foster a culture of environmental responsibility and sustainability among employees through training, awareness programs, and the integration of ESG principles into corporate values.The primary limitation of the study was restricted access to internal data. Detailed internal data on strategic decisions, risk management practices, and financial performance was not accessible dueto confidentiality and competitive concerns. Additionally, strategies and responses may differ based on the specific characteristics of the banking industry in Central and Eastern Europe compared to other regions, affecting the generalizability of findings.