Retaining Bandwidth Efficiency and Efficacy : Managing Systemically Relevant Institutions in Light of the New Role of Finance

In this paper we examine how the notion of systemic relevance challenges bandwidth efficiency and efficacy of middle managers of financial service organizations and what managers can do to coop with increasingly complex environments of the firm. As the envisaged merger of The New York Stock Exchange (NYSE Euronext) with Deutsche Börse Group is revitalizing debates concerning institutional configurations of stock markets, we first ask how managers of one of the world's leading stock exchange organizations define the value proposition of their firm. Second, we explore how middle managers balance multiple goals of value creation by focusing on firm-internal and external factors, accounting for industry-, firm-, and personal-level explanations. Our findings suggest, first, that middle managers of stock exchange organizations incorporate aspects beyond shareholder value creation into their definitions of their firm's value proposition. This finding contradicts views according to which processes of demutualization and electronization have transformed stock exchanges into generic IT firms that discard their roles as financial utility providers. Second, we uncover conflict patterns in the goal balancing of middle managers that seem typical for for-profit driven firms, which operate in highly politicized environments. We conclude with a discussion of our findings, and provide suggestions for future research.