M. Ishaq Bhatti, M. Zafarullah, Hayat M. Awan and Khuram S. Bukhari
Internal organizational orientation of service quality and its impact on service delivery performance of the employees have received considerable attention from financial…
Abstract
Purpose
Internal organizational orientation of service quality and its impact on service delivery performance of the employees have received considerable attention from financial management literature. The purpose of this paper is to address this issue by conducting empirical research focusing on the Pakistani Islamic banking industry. It conceptualizes and measures key determinants of internal organizational orientation of service quality from the employees' perspective.
Design/methodology/approach
The data were collected from a sample of 150 employees of pure Islamic banks and conventional banks with IBBs (Islamic Banking Branches or windows) across the entire country. The paper uses principal component factor analysis and regression methods.
Findings
Statistical results demonstrate that the employee perceptions of organizational service quality orientation mainly depends upon four main predictors: employees' perception about training and development; development and positioning of Islamic banking products/service concept; customer service orientation; and employees' service quality performance. Principal component factor analysis results indicate four predictive internal organizational service quality orientation factors (ISQF) where 16 per cent of the variation is being explained by employee perception of organizational orientation towards employees' training and development (ISQF1), 13 per cent variation explained employee perception of organizational orientation towards development and positioning of Islamic banking products/service concept (ISQF2), 11 per cent variation explained by employee perception of organizational service quality orientation towards customer service orientation (ISQF3), and 10 per cent variation explained employee perception of organizational service quality orientation towards employees' service quality performance (ISQF4).
Originality/value
Management of Islamic Banks in Pakistan need to be mindful about the fact that ISQFs identified by this study have the potential to indirectly influence customer perceptions through effective employees' recruitment and selection criteria, complemented by training to improve service oriented skills and knowledge development about Sh´ria principles related with the products/services offered by Islamic banks in Pakistan.
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Hayat M. Awan and Khuram Shahzad Bukhari
Islamic banking is an emerging financial system in the contemporary world. Currently, it is found mostly in Islamic countries or in countries where OPEC oil revenues have been…
Abstract
Purpose
Islamic banking is an emerging financial system in the contemporary world. Currently, it is found mostly in Islamic countries or in countries where OPEC oil revenues have been invested. Most of the research has therefore been oriented towards macro‐environment issues, ignoring the market‐oriented problems. The purpose of this paper is to determine the conditions under which Islamic banks can successfully compete with conventional banks by understanding customer attitudes towards Islamic banking products.
Design/methodology/approach
A sample of 250 respondents was taken from four cities of Pakistan to examine customer awareness of key products/services being offered by Islamic banks, usage of those services and customer satisfaction with the service delivery mechanism being used by pure Islamic banks and conventional banks with Islamic bank branches (IBBs). Data for this study were collected by using a structured questionnaire containing two sections, where section I contains ten statements using Likert scale, for assessing customer's preferred selection criteria for Islamic banks. These statements are developed based on past literature. Section II deals with the questions related to the social and demographic profiles of respondents.
Findings
Analysis of data indicated that most of the customers value product features and quality of service as major factors for making selection of Islamic banks, and give lesser importance to religious belief as influential factor in selecting an Islamic bank. Findings suggest that there is a lack of awareness about basic conventions of Islamic financing options among respondents and customers of both the pure Islamic banks and conventional banks with IBBs do believe that the bank's staff lacks ability to provide credible information about religious compliance of Islamic banking financial services.
Originality/value
The paper has practical significance for Islamic banking policy makers, for understanding the key behavioral and demographical dimensions of their customers and using these dimensions for effectively positioning Islamic banking financial instruments, developing policies; and articulating procedures to maximize customer satisfaction and to ensure better exchange of value.
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Hayat Muhammad Awan, Khuram Shahzad Bukhari and Anam Iqbal
The purpose of this paper is to investigate the service quality and its relationship to customer satisfaction among the customers of conventional banks and Islamic banks. A…
Abstract
Purpose
The purpose of this paper is to investigate the service quality and its relationship to customer satisfaction among the customers of conventional banks and Islamic banks. A modified SERVQUAL scale is utilized to ascertain the functional dimensions of service quality specific to the industry and service context under study. In addition, the study examines the differences in service quality satisfaction and its impact on the behavioral intentions of customers.
Design/methodology/approach
A field survey carried out with the help of a questionnaire constructed by using a modified SERVQUAL scale. Data were collected from 200 walk‐in customers conveniently drawn from three major conventional banks and three Islamic banks located in urban areas of Pakistan. Data were analyzed using the analytical hierarchy process to identify service quality and customer satisfaction‐related factors for Islamic and conventional banks.
Findings
By using factor analysis, 52 measurement items with a factor loading greater than (0.5) were identified to form five service quality dimensions namely empathy, service architecture, convenience service encounter, employee service criteria, customer focus and five customer satisfaction dimensions: responsiveness, competency, safe transaction, competitive services, knowledge for the overall banking industry explained 56 percent of the variance. Results from regression analysis of the relationship between multidimensional service quality dimensions and unidimensional customer satisfaction factors also validated the importance of service quality aspects for behavioral intentions (satisfaction, feelings) for customers from conventional banks and Islamic banks.
Originality/value
This study has practical significance for conventional and Islamic banking policy makers for understanding the behavioral intentions of their customers and using them for effectively positioning the service quality of their banks.
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Khuram Shahzad Bukhari, Hayat M. Awan and Faareha Ahmed
The purpose of this paper is to explore the perceived importance of management about various corporate governance dimensions being practiced in the Pakistani Islamic banking…
Abstract
Purpose
The purpose of this paper is to explore the perceived importance of management about various corporate governance dimensions being practiced in the Pakistani Islamic banking context.
Design/methodology/approach
AHP is applied to analyze the corporate governance indexes and its dimension of five Islamic banks and 12 conventional banks which are providing Islamic banking facilities (Islamic bank window) throughout Pakistan. These dimensions included board of directors (BOD), Shari'ah supervisory board (SSB), audit, investment account holders (IAH), and information disclosure & transparency.
Findings
The study reveals that the most significant dimensions which affect the corporate governance in Islamic banks are BOD and SSB, while the significant factors for Islamic banking windows are almost all dimensions of corporate governance. The correlation, regression, and ANOVA tests are applied to check the contributions of various factors of corporate governance mechanisms. These results indicate that there is a significant difference between Islamic banks and Islamic banking windows regarding the BOD and SSB. On the other hand, no significant difference is seen for the rest of the factors. The dissatisfaction level of customers reduces with the increase in the audit and BOD governance and all other factors have no impact in the case of Islamic banking windows; whereas in Islamic banks, in addition to audit and the SSB, information disclosure also significantly reduces the dissatisfaction level of customers. The concern of customers decreases significantly with the increasing level of IAH in the case of Islamic banking windows whereas in the case of Islamic banks a significant impact is seen for BOD, information disclosure, audit and IAH, but improvement in the governance of these rather increases the concern of customers toward compliance of Shari'ah and SSB has no contribution towards the concern of customers.
Originality/value
This study has practical significance for conventional and Islamic banking policy makers for understanding the requirements of their stakeholders and aligning them with the fundamentals of Shari'ah compliance according to the guidelines provided by the code of corporate governance so as to get better insight into the relationship between customers' motives behind using Islamic banking products.
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Suzanna ElMassah and Heba Abou-El-Sood
As the popularity of Islamic banking and financial instruments continues to rise globally, a recurring empirical question is what specifically makes consumers choose Islamic…
Abstract
Purpose
As the popularity of Islamic banking and financial instruments continues to rise globally, a recurring empirical question is what specifically makes consumers choose Islamic banking. This paper aims to investigate the determinants of bank type selection, especially in culturally diverse settings where the Islamic banking sector is well-established. It further examines whether consumers’ gender/religion influences their choices. One intuitive prediction is that Muslim consumers opt for Islamic banking products as “ethical” because of conviction-related reasons. However, the reality is not necessarily straightforward.
Design/methodology/approach
This paper uses structural equation modeling to examine data collected from a survey questionnaire of 790 respondents in an emerging market setting. Further analysis is made based on gender and religion to remove related bias.
Findings
Results suggest that overall consumer awareness significantly affects the selection of Islamic banking products. The positive effect of awareness is more significant for Muslim consumers relative to non-Muslims. Interestingly, social stimuli and bank attributes have an insignificant effect on the banking choices of both Muslims and non-Muslims.
Practical implications
Results suggest that Islamic banks’ marketing managers should adopt differentiated strategies for men and women, focusing on the core benefits of the service or personal interactions with consumers, respectively, along with a focus on different aspects of personal service for each gender. Awareness should be enhanced by adopting informative and effective marketing strategies to attract and retain consumers in the competitive bank environment. Islamic banks (IB) should pay attention to the religious effect without considering it as the sole variable motivating potential customers. They should design segmented and customized marketing strategies based on gender-religion market segmentation to suit different groups’ needs.
Originality/value
The findings fill a gap in the literature and provide Islamic bankers with insights to help design and articulate their business strategies to appeal to consumers in a multicultural context. Examining an integral part of gender and religion mitigates biased estimates due to the omission of variables. The study contributes to the existing literature on customer preferences for IB with a relatively large, new data set.
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Mubasher Iqbal, Shajara Ul-Durar, Noman Arshed, Khuram Shahzad and Umer Ayub
Increased trapped heat in the atmosphere leads to global warming and economic activity is the primary culprit. This study proposes the nonlinear impact of economic activity on…
Abstract
Purpose
Increased trapped heat in the atmosphere leads to global warming and economic activity is the primary culprit. This study proposes the nonlinear impact of economic activity on cooling degree days to develop a climate Kuznets curve (CKC). Further, this study explores the moderating role of higher education and renewable energy in diminishing the climate-altering effects of economic activity.
Design/methodology/approach
All the selected BRICS economies range from 1992 to 2020. The CKC analysis uses a distribution and outlier robust panel quantile autoregressive distributed lagged model.
Findings
Results confirmed a U-shaped CKC, controlling for population density, renewable energy, tertiary education enrollment and innovation. The moderating role of renewable energy and education can be exploited to tackle the progressively expanding climate challenges. Hence, education and renewable energy intervention can help in reducing CKC-based global warming.
Research limitations/implications
This study highlighted the incorporation of climate change mitigating curriculum in education, so that the upcoming economic agents are well equipped to reduce global warming which must be addressed globally.
Originality/value
This study is instrumental in developing the climate change-based economic activity Kuznets curve and assessing the potential of higher education and renewable energy policy intervention.