Multiple Goals and Ownership Structure: Effects on the Performance of Spanish Savings Banks Articles uri icon



publication date

  • June 2008

start page

  • 582

end page

  • 599


  • 2


  • 187

International Standard Serial Number (ISSN)

  • 0377-2217

Electronic International Standard Serial Number (EISSN)

  • 1872-6860


  • Spanish savings banks (SBs) are financial institutions with a wide mission that includes different stakeholders' goals. Profit maximization is only one among several goals, and the widespread use of cost or profit efficiency as the only comparative performance measure may prove to be insufficient in this context. To overcome this problem, we build an aggregate performance index for organizations with multiple goals. Furthermore, we show how the ownership structure of SBs influences their economic behavior in two basic ways: (1) the performance level and (2) their goal priorities. In particular, we distinguish two types of ownership structures in our application, namely, organizations controlled by Public Administrations and those controlled by insiders (i.e. managers and workers). Our results indicate that each type has different priorities and differ in their performance indexes. More specifically, the empirical analysis shows that insider-controlled SBs favor goals related to profit maximization and the universal access to financial services and, furthermore, they perform better. In contrast, contributing to regional development becomes the most favored goal when Public Administrations have a majority in the bank.