CSR in the Lebanese banking sector: a neo-institutional approach to stakeholders’ legitimacy
| Pages | 143-157 |
| Published date | 02 January 2020 |
| DOI | https://doi.org/10.1108/JABS-03-2018-0093 |
| Date | 02 January 2020 |
| Author | Charbel Chedrawi,Alain Osta,Souheir Osta |
| Subject Matter | Strategy,International business |
CSR in the Lebanese banking sector: a
neo-institutional approach to
stakeholders’legitimacy
Charbel Chedrawi, Alain Osta and Souheir Osta
Abstract
Purpose –Corporate social responsibility (CSR) has become an issue in the international banking
industry, where each bank must assert its stakeholders, the social fabric and the n atural
environment. In the same time, legitimacy which has become one of the most critical issues for
corporations, can be increased in the eyes of other stakeholders or institutions by structurally or
procedurally adjusting to institutional influences. By conforming to three external institutional
pressures (normative, mimetic and coercive), identified by DiMaggio and Powell (1983),
organizations can build, support and gain legitimacy for their activities i n specific institutional
environments.
Design/methodology/approach –Using a qualitative approach, this research highlights the input of
neo-institutionaltheory in the CSR context in top Lebanesebanks in Lebanon.
Findings –This paper aims to analyze the impactof neo-institutionalism and the role of stakeholdersin
legitimizingCSR practices in the Lebanese bankingsector.
Practical implications –Top Lebanese bankscannot simply comply with institutional pressuresto gain
their legitimacy,they need to develop their CSR activities targeted towardlegitimacy-building at the local
level; as for managers theycannot simply adopt managerial perspectives instrumentally to gain societal
support, they need to adapt such perspectivesand practices to the local needs as expressed by their
internaland external stakeholders.
Originality/value –Managers of top Lebanese banks need to proactively engage in managing
institutionalpressures by adopting and adapting legitimacy-seekingstrategies. This study highlightsthat
top Lebanese banks differ in their CSR orientation because of their ownership structure, number of
employeesand profitability.
Keywords Corporate social responsibility, Legitimacy theory, Stakeholder theory,
Neo-institutional theory, Stakeholders, Lebanese banking sector
Paper type Research paper
1. Introduction
Corporate social responsibility’s (CSR) contribution within the banking sector’s activity is
growing continuously (Masudand Kabir, 2016). In fact, banks are increasingly involved with
financing economic activity that aims at sustainable development and offer microcredit to
the poor and deprived (Hermes et al.,2005). Furthermore, these financial institutions are
among the most proactive ones investing in CSR (Truscott et al.,2009) while many
companies in other sectors only reactto the pressure of public opinion (Decker, 2004).
As a crucial sector in today’s economy, there is always room for more studies regarding
CSR, which according to Scholtens (2009), has become an issue in the international
banking industry, where each bank must assert its stakeholders, the social fabric and the
natural environment.
Charbel Chedrawi is based
at the Faculty of Business
and Management,
Universite Saint-Joseph,
Beirut, Lebanon.
Alain Osta is based at the
Universite Antonine,
Hadath Baabda, Lebanon.
Souheir Osta is based at
the Universite
Saint-Joseph, Beirut,
Lebanon.
Received 14 March 2018
Revised 10 April 2018
Accepted 26 October 2018
DOI 10.1108/JABS-03-2018-0093 VOL. 14 NO. 2 2020, pp. 143-157, ©Emerald Publishing Limited, ISSN 1558-7894 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 143
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