This paper aims to identify the problem situations leading financial firms to kick off the elimination decision‐making process for financial products in their line, measure the importance of problem situations, and assess the effects of a set of contextual variables on the above importance.
The study took place in the UK; data were collected through 20 in‐depth interviews with managers of financial firms and a mail survey to a stratified random sample of financial firms, which yielded 112 returns.
Eight problem situations are identified and their importance is measured. The results indicate that the importance of problem situations is highly situation‐specific: it varies in relation to the degree of a financial firm's market orientation, the intensity of competition, the austerity of the regulatory environment, and the rhythm of technological change.
From a theoretical standpoint, future research on the investigation of the importance of decision variables pertaining to line pruning must always take into consideration the internal and the external context of the firm. From a practical standpoint, this study has important policy implications, since it provides managers with a first picture of the effects of selected contextual forces on the importance of the problem situations triggering line pruning in services settings. The limitations of the study provide useful avenues for future investigation.
This study represents the first attempt to measure the importance of different problem situations triggering line pruning in financial services and relate that importance to a set of contextual variables. As such, it makes a clear theoretical contribution.
