Customer-Centric Corporate Social Responsibility: A Framework for Islamic Banks on Ethical Efficiency

Management Research Review, Vol. 36 No. 4, 2013

20 Pages Posted: 13 Oct 2018

See all articles by M. Kabir Hassan

M. Kabir Hassan

University of New Orleans - College of Business Administration - Department of Economics and Finance

Mamunur Rashid

University of Brunei Darussalam - UBD School of Business and Economics; Nottingham University Business School Malaysia Campus

Islam Abdeljawad

An-Najah National University

Siti Manisah Ngalim

National University of Malaysia (UKM)

Date Written: 2013

Abstract

Purpose – The purpose of this paper is to investigate customer-centric corporate social responsibility (CSR) in Islamic banks of Bangladesh, Malaysia and the Arabian Gulf Region. The new framework is found from the incomplete link between managerial motivation and their actual involvement with CSR activities.

Design/methodology/approach – The study uses annual reports of 16 Islamic banks from three regions. Using content analysis method, the study produces an ethical identity index on eight dimensions. The average index scores are ranked to get a view of the importance given by Islamic banks to the path of social responsibility.

Findings – In this study, the customer-centric CSR framework assumes that there are two layers of CSR involvement in Islamic banks. The upper layer assures the commitment towards Allah (SWT) by operating under Islamic Shari’ah. The bottom layer ensures the commitment towards customers, employees and society. The reports of Islamic banks show that the selected banks are too customer centric and efficiency driven. However, that efficiency is targeted at the cost of sacrificing Shari’ah norms. Their commitments to basic Islamic rules fall far behind the average.

Research limitations/implications – The study uses content analysis of the annual report to identify CSR involvement of the Islamic banks. There are various issues related to CSR and corporate management that are not reported in annual reports. Moreover, disclosure norms and regulation also have an influence on reporting standards. Thus, this study is limited to what is found in the reports only.

Originality/value – The study contributes to the existing literature on customer-centric CSR and customer-centric marketing. There is evidence that the findings from this study are consistent with other studies. Islamic banks are becoming customer centric because of the competition from conventional banks. However, they must not forget the very essence of the establishment of these banks which is the spiritual freedom based upon sole submission to Allah (SWT).

Paper type - Research paper

Keywords: Islam, Banks, Corporate social responsibility, Ethics, Bangladesh, Malaysia, United Arab Emirates, Bahrain, Kuwait, Saudi Arabia, Customer-centric CSR, Efficient ethics, Islamic banks, Ethical Identity

JEL Classification: M14, N25, N35

Suggested Citation

Hassan, M. Kabir and Rashid, Mamunur and Abdeljawad, Islam and Ngalim, Siti Manisah, Customer-Centric Corporate Social Responsibility: A Framework for Islamic Banks on Ethical Efficiency (2013). Management Research Review, Vol. 36 No. 4, 2013, Available at SSRN: https://ssrn.com/abstract=3263079

M. Kabir Hassan (Contact Author)

University of New Orleans - College of Business Administration - Department of Economics and Finance ( email )

2000 Lakeshore Drive
New Orleans, LA 70148
United States

Mamunur Rashid

University of Brunei Darussalam - UBD School of Business and Economics ( email )

Jalan Tungku Link
Gadong
Bandar Seri Begawan, BE1410
Brunei

Nottingham University Business School Malaysia Campus ( email )

Jalan Broga
Semenyih, Selangor 43500
Malaysia

HOME PAGE: http://www.nottingham.edu.my/Business/People/Mamunur.Rashid

Islam Abdeljawad

An-Najah National University ( email )

00972
Palestine
+970597801131 (Phone)

HOME PAGE: http://www.najah.edu

Siti Manisah Ngalim

National University of Malaysia (UKM)

43600 Bandar Baru Bangi
Bangi, Selangor 06010
Malaysia

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