Meridian Credit Union: Taking on the Big Banks

Meridian Credit Union (Meridian) was a financial co-operative (i.e. credit union) in Ontario, Canada. In its effort to shift from being a niche to a mainstream market player in the financial-services sector, Meridian attempted to challenge the oligopoly of Canada’s big banks. It tried to do this through a responsible, consumer-centric business strategy that aimed to address many of the problems with the financial sector in Canada and around the world. Owned by its customers, Meridian represented a marked counterpoint to the traditional shareholder-owned bank in Canada at a time of increased awareness about the conflict between consumer and shareholder objectives. In March 2018, Meridian’s executive team was reflecting on the credit union’s recent growth and the changes that had resulted. As they considered where Meridian should go next, they faced a series of questions: Should the credit union become more focused? Should it expand and diversify its service offerings? What were the risks of these strategies? What were the opportunities and threats of financial technology? Were there other growth options Meridian should consider in light of these trends?

This case can be used in courses on strategic management, corporate social responsibility, corporate sustainability, or organizational studies at the senior undergraduate or graduate level. The teaching note has been written specifically for courses on corporate social responsibility and corporate sustainability. The case asks how responsible businesses can take on entrenched and unsustainable practices that dominate an industry, and identifies critical institutional forces that make it difficult for companies to succeed using a responsible business strategy. Students will reflect on a company’s recent growth success, analyze the risks its growth strategy represents, and assess options for its future in an increasingly competitive financial-services sector. After working through the case, students will be able to do the following:<ul><li>Identify the sources of conflict between societal and business interests in the financial-services sector, and define responsible business in such a context.</li><li>Identify the corporate social responsibility strategy Meridian is undertaking, and explain how that strategy has evolved over time.</li><li>Explain the evolution of Meridian’s sustainability strategy by identifying critical institutional forces (regulatory, normative, and cognitive) that make it difficult or impossible for businesses like Meridian to succeed in penetrating mainstream markets.</li><li>Apply the concept of mission drift to Meridian’s current situation, and explain how institutional forces push companies like Meridian to abandon their principles and mimic traditional banks, thereby undermining their source of distinction.</li><li>Describe how a responsible business like Meridian can overcome institutional forces to become a leader in the financial-services sector.</li></ul>

• Cooperative Bank, Financial Institutions, Sustainability, Corporate Social Responsibility, Banks