| The challenge faced by traditional retail banks is that markets continue to shift; large financial institutions no longer gain an advantage based on economies of scale, because size and vertical organizational structures result in operational costs five times greater than the costs of nontraditional banks ("The Pros and Cons," 2005). The purpose of the qualitative grounded theory study was to generate an explanatory and descriptive grounded theory depicting the potential application of the virtual network organization (VNO) business management model as an approach to increasing profitability ratios and competitiveness in traditional retail banking in the mid-Atlantic and southern United States. Participants included 20 chief executive officers, chief information officers, vice presidents, senior and midlevel managers, operations managers, technology and business solution architects, and business process management consultants from 10 states within the mid-Atlantic and southern United States. Results indicated three primary implications for the challenges faced by traditional retail banks. First, traditional retail banks in the mid-Atlantic and southern United States could reduce operating costs, increase managerial efficiencies, and achieve greater advantages in economies of scale and asset allocation by adopting a VNO business management model. Second, use of the VNO business management model may provide better opportunities for survivability and resiliency of the retail banking infrastructure in the event of a natural or manmade disaster. Third, use of the VNO business management model could provide opportunities to increase basis points on financial service products and facilitate access to a broader talent pool of knowledge capital, while allowing increased focus on the core competencies of financial services. |
