REVITALISING INDONESIAN ISLAMIC BANKING PERFORMANCE: A STAKEHOLDER ANALYSIS
This paper examines the views of Islamic bank stakeholders, which are used as basis for measuring and improving bank performance. Taking Indonesia as a case study, we compile information and data from both internal and external stakeholders through in-depth interviews and focus group discussions, code them using N-Vivo, and finally apply the stakeholder management framework for the data analysis. The results obtained suggest that internal stakeholders’ views of Indonesian Islamic banking performance are relatively positive. However, external stakeholders tend to have varied views of its performance. The research finds that the religious values promoted by Islamic banks can increase company value, but at the same time they can also reduce interest in Islamic banking. Based on these findings, it is necessary to investigate further how to strategise the religious values for the promotion of Islamic banking.
Ahmed, I. (2016). Aspirations of an Islamic bank: An exploration from stakeholders’ perspective. International Journal of Islamic and Middle Eastern Finance and Management, 9(1), 24–45.
Ascarya, Rahmawati, S., & Sukmana, R. (2017). Measuring the Islamicity of Islamic bank in Indonesia and other countries based on Shari’ah objectives. 11th Islamic Conference on Islamic Economics and Finance, Kuala Lumpur, Malaysia, October 11–13, 2016 (pp. 1-30).
Atti, G., Galantini, V., & Sartor, M. (2019). Stakeholder management. In Quality Management: Tools, Methods and Standards. https://doi.org/10.1108/978-1-78769-801-720191002 if chapter in a book, give editor/s, city of publication and publisher
Beck, T., Demirgüç-Kunt, A., & Merrouche, O. (2013). Islamic vs. conventional banking: Business model, efficiency and stability. Journal of Banking and Finance, 37(2), 433-447.
Bedoui, H. E., & Mansour, W. (2015). Performance and Maqasid al-Shari’ah’s pentagon-shaped ethical measurement. Science and Engineering Ethics, 21(3), 555–576.
Berman, S. L., Wicks, A. C., Kotha, S., & Jones, T. M. (1999). Does stakeholder orientation matter? The relationship between stakeholder management models and firm financial performance. The Academy of Management Journal, 42(5), 488–506.
Bhattacharya, C. B., Korschun, D., & Sen, S. (2009). Strengthening stakeholder-company relationships through mutually beneficial corporate social responsibility initiatives. Journal of Business Ethics, 85(2 Supplement), 257–272.
Brugha, R., & Varvasovszky, Z. (2000). Stakeholder analysis: A review. Health Policy and Planning, 15(3), 239–246.
Bunn, M. D., Savage, G. T., & Holloway, B. B. (2002). Stakeholder analysis for multi-sector innovations. Journal of Business and Industrial Marketing, 17(2–3), 181–203.
Butina, M. (2013). A narrative approach to strategy-as-practice. Business History, 55(7), 1143–1167.
Castillo-Montoya, M. (2016). Preparing for interview research: The interview protocol refinement framework. Qualitative Report, 21(5), 811-831.
Clarkson, M. B. E. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. Academy of Management, 20(1), 92–117.
Creswell, J. W. (2013). Qualitative inquiry and research design : Choosing among five approaches. Thousand Oaks, California: SAGE Publications, Inc.
de Colle, S. (2005). A stakeholder management model for ethical decision making. International Journal of Management and Decision Making, 6(3–4), 299–314.
Denzin, N. K. (2018). Strategies of multiple triangulation. In N. K. Denzin (Ed.), The research act; A theoretical introduction to sociological methods. New York: Routledge.
Dusuki, A. W., & Abdullah, N. I. (2007). Why do Malaysian customers patronise Islamic banks? International Journal of Bank Marketing, 25(3), 142–160.
Eesley, C., & Lenox, M. J. (2006). Firm responses to secondary stakeholder action. Strategic Management Journal, 27(8), 765–781.
Eljelly, A. M. A., & Abdelgadir Elobeed, A. (2013). Performance indicators of banks in a total Islamic banking system: The case of Sudan. International Journal of Islamic and Middle Eastern Finance and Management, 6(2), 142-155.
Faliza, N. (2016). CSR and Islamic banking performance in Aceh : The role of innovation as mediation. Journal of Management and Marketng Review, 1(June), 45–56.
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston, MA: Pitman Publishing.
Freeman, R. E. (2015). Strategic management: A stakeholder approach. New York: Cambridge University Press.
Friedman, A. L., & Miles, S. (2002). Developing stakeholder theory. Journal of Management Studies, 39(1), 1–21.
Frooman, J. (1999). Stakeholder influence strategies. Academy of Management Review, 24(2), 191–205.
Frow, P., & Payne, A. (2011). A stakeholder perspective of the value proposition concept. European Journal of Marketing, 45(1), 223–240.
Gardner, J. R. (1997). Liberty, community and the constitutional structure of political influence: A reconsideration of the right to vote. University of Pennsylvania Law Review, 145, 893-985.
Gardner, J. R., Rachlin, R., & Sweeny, A. (1986). Handbook of strategic planning. Hoboken, NJ: J Wiley.
Greenley, G. E., Hooley, G. J., & Rudd, J. M. (2005). Market orientation in a multiple stakeholder orientation context: Implications for marketing capabilities and assets. Journal of Business Research, 58(11 Spec. Iss.), 1483–1494.
Gustani. (2013). Analisis Tingkat pengungkapan kinerja sosial bank syariah berdasarkan Islamic social reporting index (Indeks ISR) [Analysis of disclosure level of the social performance of Islamic banks based on the Islamic social reporting index (ISR Index)]. Jurnal Akuntansi dan Auditing Indonesia, February 2013. https://doi.org/10.13140/RG.2.1.1516.3128
Hanif, M., Tariq, M., Tahir, A., & Wajeeh-ul-Momeneen. (2012). Comparative performance study of conventional and Islamic banking in Pakistan. International Research Journal of Finance and Economics, 83, 62-72. https://ssrn.com/abstract=1959950
Harfiah, L. M., Purwati, A. S., & Ulfah, P. (2016). The impact of ROA, BOPO, and FDR to Indonesian Islamic bank’s mudharabah deposit profit sharing. Etikonomi, 15(1), 19–30.
Hassan, M. K., & Aliyu, S. (2018). A contemporary survey of Islamic banking literature. Journal of Financial Stability, 34(2018), 12–43.
He, X., Zhang, X., Li, X., & Piesse, J. (2011). Stakeholder orientation and organisational performance in an emerging market. Journal of General Management, 36(3), 67-91.
Huda, N., Sabrina, I., & Zain, E. (2013). Pengukuran kinerja perbankan syariah dengan pendekatan balance scorecard [The measurement of Islamic banking performance with a balanced scorecard approach]. Jurnal Etikonomi, 12(1), 21-32.
Hult, G. T. M., Mena, J. A., Ferrell, O. C., & Ferrell, L. (2011). Stakeholder marketing: a definition and conceptual framework. AMS Review, 1(1), 44–65.
Johnes, J., Izzeldin, M., & Pappas, V. (2014). A comparison of performance of Islamic and conventional banks 2004-2009. Journal of Economic Behavior and Organization, 103(Supplement July), S93-S107.
Khan, M. M., & Ramzan, M. (2015). Perceptions of stakeholders on Islamic banking in Pakistan. Journal of Islamic Business and Management, 5(2), 99–116.
Lipka, M., & Hackett, C. (2017). Why Muslims are the world’s fastest-growing religious group. In Pew Research Centre, Washington, DC (April 6, 2017). https://www.pewresearch.org/fact-tank/2017/04/06/why-muslims-are-the-worlds-fastest-growing-religious-group/
Littau, P., Jujagiri, N. J., & Adlbrecht, G. (2010). 25 Years of stakeholder theory in project management literature (1984-2009). Project Management Journal, 41(4), 17-29.
Luk, C. L., Yau, O. H. M., Tse, A. C. B., Sin, L. Y. M., & Chow, R. P. M. (2005). Stakeholder orientation and business performance: The case of service companies in China. Journal of International Marketing, 13(1), 89-110.
Magaldi, D. B. M. (2020). Semi-structured interviews. In V.Zeigler-Hill & T.K. Shackelford (Eds.), Encyclopedia of personality and individual differences. Cham, Switzerland: Springer.
Matos, S., & Silvestre, B. S. (2013). Managing stakeholder relations when developing sustainable business models: The case of the Brazilian energy sector. Journal of Cleaner Production, 45(April), 61–73.
Merriam, S. B., & Tisdell, E. J. (2016). Qualitative research: A guide to design and implementation, 4th Edition. San Francisco: John Wiley & Sons, Inc.
Minoja, M. (2012). Stakeholder management theory, firm strategy, and ambidexterity. Journal of Business Ethics, 109(1), 67–82.
Mitchell, R.K, Agle, B.R. & Wood, D. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(04), 853–886.
Mohammed, M. O., Tarique, K. M., & Islam, R. (2015). Measuring the performance of Islamic banks using maqāṣid-based model. Intellectual Discourse, 23(Special Issue 2015), 401–424.
Mollah, S., & Zaman, M. (2015). Shari’ah supervision, corporate governance and performance: Conventional vs. Islamic banks. Journal of Banking and Finance, 58(September 2015), 418–435.
Nvivo. (2018). Nvivo 12 for Windows. In NVivo qualitative data analysis Software; QSR International Pty Ltd. https://doi.org/10.1887/0750306920/b833c1
OJK. (2019). Statistik Perbankan Syariah. Www.Ojk.Go.Id.
Payne, A., Ballantyne, D., & Christopher, M. (2005). A stakeholder approach to relationship marketing strategy. The development and use of the “six markets” model. European Journal of Marketing, 39(7/8), 855-871.
Pedrini, M., & Ferri, L. M. (2019). Stakeholder management: A systematic literature review. Corporate Governance (Bingley), 19(1), 44–59.
Perrini, F., & Tencati, A. (2006). Sustainability and stakeholder management: The need for new corporate performance evaluation and reporting systems. Business Strategy and the Environment, 15(5), 296-308. https://doi.org/10.1002/bse.538
Preston, L. E., & Sapienza, H. J. (1990). Stakeholder management and corporate performance. The Journal of Behavioral Economics, 19(4), 361–375.
Puspaningtyas, L. (2019). Tingkat Inklusi Keuangan Syariah Indonesia Turun | Republika Online. Republika.
Rafiq, M. R. I. (2016). Determining bank performance using CAMEL rating: A comparative study on selected Islamic and conventional banks in Bangladesh. Asian Business Review, 6(3), 151–160.
Ranängen, H., & Zobel, T. (2014). Revisiting the “how” of corporate social responsibility in extractive industries and forestry. Journal of Cleaner Production, 84(1), 299–312.
Rodoni, A., Salim, M. A., Amalia, E., & Rakhmadi, R. S. (2017). Comparing efficiency and productivity in Islamic banking : Case study Indonesia, Malaysia and Pakistan. Al-Iqtishad: Journal of Islamic Economics, 9(2), 227–242.
Rosly, S. A., & Abu Bakar, M. A. (2003). Performance of Islamic and mainstream banks in Malaysia. International Journal of Social Economics, 30(11–12), 1249–1265.
Rusydiana, A. S., & Hasib, F. F. (2019). Islamic banking selection criteria: Case in Indonesia using analytic network process. Economica: Jurnal Ekonomi Islam, 10(1), 165-188.
Savin-Baden, M., & Van Niekerk, L. (2007). Narrative inquiry: Theory and practice. Journal of Geography in Higher Education, 31(3), 459–472.
Siraj, K. K., & Sudarsanan Pillai, P. (2012). Comparative study on performance of Islamic banks and conventional banks in GCC region. Journal of Applied Finance & Banking, 2(3), 123–161.
Soto, C. F., Quintana, L. A. M., & Rodríguez, P. V. (2018). Effect of stakeholders-oriented behavior on the performance of sustainable business. Sustainability (Switzerland), 10(12), 1–27.
Syafii Antonio, M., Sanrego, Y. D., & Taufiq, M. (2012). An analysis of Islamic banking performance: Maqashid index implementation in Indonesia and Jordania. Journal of Islamic Finance, 1(1), 12–29.
Tantalo, C., & Priem, R. L. (2016). Value creation through stakeholder synergy. Strategic Management Journal, 37(2), 314-329.
Tariq, M., Ahmed, A., Rafi, S. K., & Ahmed, S. (2014). Investigating the impact of balanced scorecard on performance of business: A study based on the banking sector of Pakistan. IBT Journal of Business Studies (Formerly Journal of Management & Social Sciences), 9(1), 125-136.
Varvasovszky, Z., & Brugha, R. (2000). How to do (or not to do)...: A stakeholder analysis. Health Policy and Planning, 15(3), 338–345.
Waddock, S., & Smith, N. (2000). Relationships : The real challenge of coorporate global citizenship. Business and Society Review, 105(1), 47–62.
Wojewnik-Filipkowska, A., Dziadkiewicz, A., Dryl, W., Dryl, T., & Bęben, R. (2019). Obstacles and challenges in applying stakeholder analysis to infrastructure projects: Is there a gap between stakeholder theory and practice? Journal of Property Investment and Finance, 39(3), 199-222.
Yin, R. . (2016). Qualitative research from start to finish. Second Edition. New York: The Guilford Press.
Zafar, M. B., & Sulaiman, A. A. (2020). Measuring corporate social responsibility in Islamic banking: What matters? International Journal of Islamic and Middle Eastern Finance and Management, 13(3), 357–388.
Journal of Islamic Monetary Economics and Finance is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.