When two established Austrian banks merged to form BA-CA in 1997, its Vienna HQ continued early forays into Central and Eastern Europe, with the pace quickening as the iron curtain dissolved, the European Union materialized and opportunities blossomed. When bank internationalisation began in earnest, BA-CA was merged with the German bank HVB, and the two then taken over by the Italian UniCredito, successive waves of corporate restructuring promised to consign the Vienna operation to the history books. But, in fact, the Vienna Office - refused to roll over in the face of divisionalisation, and negotiated itself a regional role which led to it managing the largest CEE banking network in asset terms.

Taking the Vienna Office perspective, the authors explain how it reacted to its declining formal authority by developing valuable regional capabilities. First it set up knowledge transfer routines – and trustful relationships - to organise management, IT and reporting back structures from a region where regulatory environments and market maturity levels were widely divergent, and then reversed the knowledge flow, harvesting experience from individual subsidiaries so as to pass learning on to others.

Operating as a broker and then owner of specialised knowledge allowed the Vienna Office to defy theory and continue to leverage its capabilities, even as they became increasingly misaligned with its formal organisational status. Reviewing its history, the authors enjoin internationalising companies not to opt headlong for divisionalisation, but to audit their organisational capabilities thoroughly, and even give units with specific expertise distinctive status, rather than waste developed learnings that could give them competitive advantage.

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