| This dissertation addresses the impact of the founding group's embeddedness in community and financial institutional logics for various outcomes involving local banks: the strategic orientations of the organizations founded, their propensity to engage in certain risky behaviors, and the success rates of those founding teams in getting their organizations started. While local banks integrate patterns of beliefs, practices, values, assumptions, and rules that are both financial and community-oriented, there are variations in the influence of the two institutional logics in those organizations. Some banks are clearly committed to the long-term service to their communities while others are simply "built to be sold" to other financial institutions. In most cases, both motivations and logics are simultaneously present.;This dissertation argues that founding groups with proportionally more financial members are more likely to emphasize the bank's profit and growth goals when describing the bank and that those with proportionately more community members are more likely to emphasize their commitment to a particular location and community. The community logic makes founders more resolutely committed to the venture and more capable of attracting local support, resulting in more favorable bank establishment outcomes. It also leads to banks that are less likely to take risks with certain deposit instruments that could compromise the banks' liquidity during a crisis. By contrast, the financial logic results in greater chances of the team dissolving during the process of formation because of lower levels of founder commitment and community support. It also leads to banks that are more likely to take liquidity risks.;This study bridges the literature on institutional logics with that on entrepreneurship by showing how cognitive structures and values resulting from embeddedness within financial and community logics have motivational implications that make a difference in establishment success rates. It also bridges the literature on institutional logics with that on board governance by showing how the experience of directors with different institutional logics conveys different assumptions and values resulting in variations in risk-reward tradeoffs and in the perceived appropriateness of certain risky practices. |
