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|Title:||De invloed van affectieve gevoelens op het kredietverstrekkingsproces The influence of affectionate feelings on the credit granting process|
|Publisher:||Open Universiteit Nederland|
|Abstract:||The influence of affective feelings on the credit granting process Angelique van Teeffelen, 838984213 Summary This research was done within the circle Behavioral Financial Management of the faculty Management, Science & Technology. A combination of the areas Financial Management and Phycology. Behavioral Financial Management (BFM) studies the behavior of management in decision making on financial management topics aiming to increase the descriptive power of economic science. This research was conducted within the banking sector that has increasing attention for reduction of (financial) risk. This is in the best interest of both bank and customer. Government have by means of Basel I till III implemented new rules and regulations and next to this also the duty to care was introduced and recently the banker’s oath was added. Especially that is why I’m interested if and how exactly, affectionate feelings still play a role in the process. Affect and affect heuristics in general has been researched numerous times. Heuristics can be regarded as rule of thumb. It’s defined as informal, intuitive and speculative way of problem solving strategy that people develop to solve problems. In behavioral finance heuristics often are used. Despite the fact theoretical approach would be the best way to come to investment decisions managers often use rule of thumb instead. Within heuristics we also recognize the affect heuristic. Scientists in Phycology still not agree on the definition of affect, but a number of scientists use the following description: the conscious or subconscious feeling of “happiness” or “discomfort” which could also be described as “good” or “bad” as qualification of the stimulus (Finucane, M. 2000, p.2 and 2006, p. 141 and Slovic, 2004, p. 311). As described before the affect heuristic has been generally investigated before, however not in particular in combination with granting credits / loans or in the specific context of the banking sector. With this research I want to contribute to science to look into the practical impact of the relationship of affect heuristics and granting credit within a banking cooperation. This will lead to scientific knowledge and practical awareness of how, where and by what kind of people involved in the process affect exactly plays a role. Based on this background the main topic is: How does the affect heuristic influence granting of credits and loans at a banking cooperation and what functions/people involved play a role in this process? With this research I want to contribute to science to look into the practical impact of the relationship of the affect heuristic and granting credit within a banking cooperation. This will lead to scientific knowledge and practical awareness of how, where and by what kind of people involved in the process affect exactly plays a role and then add to the missing part in existing literature. From existing literature I took a conceptual model that can be pictured as follows: In short the conceptual model should be read as follows: interpersonal relationships and image forming can trigger affectionate feelings. Affectionate feelings can in case of risk perception and time pressure influence the final decision-making. The image forming could even directly influence the risk perception. Given current literature and the existing conceptual model it’s important what will be the research strategy. I have chosen to do a multiple case study. It’s a both qualitative and testing research. Testing because of the quality of the topics investigated, their compositions, the context in which they occur and the perspective one can look at them etcetera. I have investigated by means of theoretical replication. This means expected that most probably 2 cases will not follow the conceptual model and 2 of them will. This was done to gather more information from empirical data. The research has been conducted by means of face to face in depth interviews with respondents. The roles of respondents are: credit assessment manager, manager KRM and the account manager for corporations. According to literature they are most involved in the process of granting credits and loans. The interviews have been done in a semi-structured way, which means that a list of questions was drafted with predefined questions that have been structured according operational variables and their features. Interviews have been analyzed and based on this analysis conclusions were drafted. Following relationships are regarded as proven: The relationship between interpersonal relations, affectionate feelings, risk perception and decision making The relationship between image forming, affectionate feelings, risk perception and decision making The relationship between affectionate feelings, time pressure and decision making Following relationships are regarded as not proven: The relationship between image forming and risk perception The relationship between affectionate feelings, time pressure, risk perception and decision making The question arises why the relationship between image forming and risk perception have not been proven. I consider this a topic for further investigation as in existing literature this has been considered as being valid. Furthermore I did not zoom into the variable of time pressure, but based on the results have added this to the conceptual model. Also this variable could be topic for further investigation. A lot of proof exists for the fact that affectionate feelings (via risk perception) influence decision-making. The overall impact however is not significant as strict rules and regulations for these kinds of processes need to be adhered to. Certain financial measures need to be within boundaries and risks having to be assessed as acceptable. It could however impact the details to give just final go or in the conditional agreements. It could also occur in items that cannot be judged based on figures only. This research also has some constraints: The context. This research was executed within the banking sector and within this sector also a very specific form of organization, the so called co-op. This means that the validity will remain to be within this subset Group decision-making. Group dynamics within for instance credit commissions, that can potentially be completely different, have not been investigated Limited number of cases investigated. This will limited the way this research can be applied in more general context and external validity The interview technique (semi-structured). This has proven to be a difficult way of working due to the open character of the technique. This impacts the reliability and makes it difficult to align the answers directly to the questions asked and with that the audit trail. Based on above-mentioned constraints I recommend below adjustments in case of further investigation: Extend investigation outside of banking sector into other sectors. This will increase the external validity of the model This specifically counts for the non-proven relationship between on one hand time pressure and imager forming and risk perception on the other hand Investigation of group dynamic would be a valuable addition to this research Increase the number of case studies to increase both more general and external validity|
|Appears in Collections:||MSc Management Science|
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