CSR practices in Bank AL Baraka – case study of Bahrain

Chapter 1

Introduction

1.1 Background research

In the business world, there are always conflicting opinions about the responsibilities of businesses. The meaning of business organization is that they are present for profit-making or profit maximization of shareholders’ wealth. It is essential to realize that morality is also necessary for carrying out business practices. The western economic think that concept takes inspiration by the neoclassical theory represented by Adam Smith. In which he stated that the idea of utility based on the maximization of self-interest and pleasure. In the case of the free economy, the significant role of conducting business is based on using its resources efficiently and engaging in activities that will generate value for the business (Visser, 2012).

“Stakeholder theory” was also presented to business, and it claims that along with the financial interest of an organization. It is highly essential to learn about the social impact of business operations as well. It is necessary along with monetary gain to give back to society. Businesses realize that if they don’t think about the social impact of their business operations, then their financial interest will also go into jeopardy. Due to globalization, now firms are under constant pressure to fulfill their responsibility concerning stakeholders. The society also demands that businesses must consider all types of stakeholder’s and significant responsibility of the company is attributed to two factors. Firstly, because of globalization, the power of the organization has increased locally and globally both. The primary point of concern for them is political, social, economic and cultural impacts over their business (Kang and Yoon, 2018).

Secondly, there is an increased power of communication which is present in today’s internet booming era. In case if corporations are not fulfilling their social responsibility of taking care of their stakeholders, this immediately impacts the overall image of the organization globally. Even the remote areas are not taking an active part in transmitting information and are also to influence the opinion of people globally. Both the phenomena discussed have a significant impact on the thinking, values, and advice of people regarding the operations of the business. Due to this, social responsibility, the responsibility of the company in respect of its stakeholders is of utmost for organizations globally (Oh and Cha, 2017).

Doctrine related to “Corporate social responsibility” has emerged over the years, and it provides a framework to understand the role of business in society. This doctrine has set standards that are used by companies to have a positive impact on society. CSR has developed different domains such as it created the concept of social enterprise. It also created business ethics, environmental practices, human rights approaches related to recruitment and selection of people globally. It is also essential that businesses must invest in the initiatives taken for the prosperity of the community (Zou and Wu, 2013).

In the UK, people are following the concept of making ethical investments and invest in socially responsible firms, and these concepts have increased after 1970.  Significant developments in the field of CSR have been done in the financial sector.  According to the research which was conducted by ethical investment research services (EIRIS) stated that in the UK, there are currently 50 ethical retail investment funds that are focused on fulfilling their corporate social responsibility first. These funds also ensure that along with social responsibility; they are meeting environmental responsibility and investments are also made by following ethical criteria.

The concept of ethical banking and finance is also becoming part of following ethical business practices. Banks and financial institutions in the West are now examining the moral standards supported by Islamic banks. Islamic banking also has a significant concern regarding fulfilling corporate social responsibility and following Islamic principles in their business practices. Islamic banks are entities that are established under Shariah law on the policy of promoting the Islamic economic worldview. This explains that following the CSR initiative is firmly embedded in the roots of Islamic banking practices. In respect of Islamic banks, there is a view that it should be compared with conventional banks on equal grounds and should not only focus on the initiatives taken by them in respect of CSR (Lee and Kim, 2017).

1.2 Research Focus

The focus of Research is over exploring the phenomena related to CSR and its importance and relevance with Islamic banks and banking practices. The research questions for conducting the study are as follows:

Q1 – what is the role of CSR in conventional banking systems?

Q2 – why companies need to engage in activities that will fulfill their corporate social responsibility?

Q3 – why is it essential for companies to broaden their boundaries in respect of fulfilling their CSR?

Q4 – what is the role of CSR in Islamic banking?

Q5 – is CSR relevant to Islamic banking practices?

Q6 – Why CSR matters to Islamic Banks and banking practice?

Q7 – what primary responsibilities Islamic banks owe in respect of fulfilling their corporate social responsibility?

Q8 – How stakeholders evaluate the CSR initiatives taken by Islamic banks?

1.3 Scope of the study

The thesis is based on answering the research questions identified above based on a comprehensive analysis of the role of CSR in Islamic banks. The literature in this regard is gathered from both Western and Islamic perspectives to develop understanding. Theoretical and conceptual discussions are made regarding the topic which helped in understanding the broader aspect of this phenomenon. This Research will also help in exploring implications for CSR, which are present for Islamic banking organizations and operations. To evaluate more about the importance of CSR for Islamic banks research has been conducted which will explain the empirical analysis of perceptions of stakeholders of Al Baraka bank Bahrain

1.4 Objectives of the Study

Aim

The aim is also to justify that how Islamic banks are CSR is relevant to each other.

objectives

• The primary objectives for the purpose of performing the study are based on evaluating the meaning of CSR from the perspective of Islamic Banks.
• Secondly, the study is conducted to explain how CSR is embedded in Islamic banking principles.
• The objective is to identify the perception of different stakeholders group in respect of Islamic banking practices is also taken into consideration. This will help in developing the overall view from the perspective of various stakeholders and their involvement in CSR.

1.5 significance of Study

This study will have a distinct contribution regarding the concept of CSR and its use in Islamic banking practices. There are numerous researches which have done in this regard in the West. But this research is based on investigating the distinctive features which are essential for Islamic banking. A serious attempt in this Research has been made to identify the relationship between CSR and Islamic banking practices taking place in Bank Al Baraka (Bahrain). The reason for conducting the study is to fill the gap by providing internal insights into preparations taking place in an Islamic banking environment. The difference which exists amongst the doctrine of CSR and CSR initiatives of Bank Al Baraka (Bahrain) is addressed.

The previous research conducted in the West was only involved in learning about the perspective of essential stakeholders like employees and managers, but this study is focusing on overall stakeholders. The research is focusing on identifying the perception of stakeholders like students of Bahrain, which will share their opinion about the CSR initiatives of Al Baraka Bank (Bahrain). The studies done previously has a limited dimension in regards to stakeholders. For instance, the Research was demonstrating about the preference of customer regarding the choice of their product based on the accomplishment of CSR objectives

This study is different from past conducted studies as the aim of the study is to fill the gap in respect of CSR and Islamic banking practices from the view of various stakeholders. The adoption of the stakeholder approach is more relevant in this study as the primary focus is over Islamic banks (Al Baraka bank Bahrain). The previous studies done in this regard are not having major focus over the ways through which the success is guaranteed in banks across Bahrain, by keeping the major focus over bank of Bahrain. In the previous stuy there was no focus over Bank al Baraka and this research will bemajorly focusing over the ways through which the success is guaranteed by apply CSR strategies.

1.6 Structure of a research

Chapter 2 – CSR: Perspective of WEST – this chapter examines the perspective of CSR and incorporates debate from different theorists and their impact on different business communities. The section also includes different type of definitions related to corporate social responsibility. There are various reasons for the development of the concept of CSR are also explained and examined. The discussion in this chapter also includes the idea because of which CSR has become an emerging concept over the years. The study in chapter will also relate to “stakeholder theory” and its role in the West for accomplishing CSR objectives.

Chapter 3 – CSR: the perspective of Islamic bank – The discussion mainly focuses on CSR and its role in Islamic banking practices. The section highlights the Shariah View in this respect and also sheds light on the position of Islamic values in fulfilling CSR initiatives. The article highlights the Islamic view of performing social responsibility, and it’s the difference with the practices followed by conventional banks. The philosophies regarding CSR and Islamic teachings are established and discussed in this chapter. The chapter also included different dimensions related to CSR and its importance for Islamic banks operating in Bahrain

Chapter 4 – Implication of CSR for Islamic banks – This chapter explains the role of CSR over the operation of Bank Al Baraka Bahrain. The stakeholders relevant to Islamic banks are also described in this chapter

Chapter 5 – Research framework and methodology – this chapter includes an analytical framework that is used for conducting Research. This also explains different variables that are used for conducting research. The chapter consists of research methodology and data collection processes to conduct Research. This chapter will also indicate the validity and reliability f data which is gathered for Research. This chapter also gives an introduction regarding the Bank Al Baraka Bahrain

Chapter 6 – Profile analysis – this chapter explains the profile analysis of participants involved in the research process. The section helps in understanding the characteristics of different stakeholders. The section provides an understanding of the backgrounds of participants involved in Research.

Chapter 7 – Findings and analysis – this chapter represents the analysis and findings which are gathered in respect of answering the research questions. The chapter provides an in-depth study of knowledge which relates to fulfilment of objectives. This chapter links the findings with the CSR initiatives taken by Islamic banks and evaluates the perspective of different stakeholders. The hypothesis related to each research objective is tested individually. Various statistical methods are used for drawing findings ranging from frequency distribution to factor analysis

Chapter 8 – Conclusion – This chapter will include the summary which relates to different results. Along with this, the section consists of recommendations, limitations and future research for the topic. The road map to thesis is given in the figure below

Chapter 2

CSR – Western Perspective

2.1 Introduction

This chapter helps us to understand the basic responsibilities to assume corporate social responsibilities (CSR), Mostly strategic theory, social contract theory, legitimacy theory which assist as an initial theoretical analysis of the concept. The theories and concepts related to CSR will help in making it more easy for businesses or banks to understand how these concepts can help them in achieving competitive advantage. The research will be based on finding answers for following question:

1. What is the meaning of CSR
2. What is the role of CSR in the Islamic banking sector
3. How nonfulfillment of CSR objectives is impacting the business models
4. Why is it important for Islamic banks to have appropriate CSR strategies in place

2.2 CSR as an evolving concept

Maigan and Ferell (2003), has stated that CSR is an emerging concept and it is based on the ethical and social responsibility of businesses. The use of CSR in business is helping in the sustainable development of business organizations.

(Chen et al., 2012).

2.2.1 Socioeconomic Discontent

CSR is incorporating different types of approaches and the approach used by business is totally dependent on the circumstances or needs of individuals. Over the period’s businesses are showing great interest in the CSR initiative taken by businesses and they believe that accomplishment of CSR objectives is going to help the businesses in achieving success. The businesses should not focus on their self-interest rather it is important that they must give importance to needs and wants of society. Any unethical misconduct done by the large corporation will come immediately in spotlight and will get affected by the consumer’s boycott of product of service. CSR is part of Public debate since the time of its initiation and it is witnessed that that major CSR activities performed by Businesses are helping them in sustaining growth. According to Boatright (1993), it is argued that for businesses it is becoming highly important to address social, political and geographical issues of society. Because of economic globalization the issues related to CSR are coming in spotlight making it difficult for business to escape from social responsibility.

In the recent scenario, financial inclusion is the major cause of increasing poverty in the country. In western countries the major reason for financial inclusion is based on market dynamics and uneven distribution of money caused by commercial banks. Including HSBC, since 1987 the amount of bank workplaces of the four essential High Street banks has declined by 33%. It is represented that more than 3,600 bank workplaces have been closed since 1990, and another 3,000 are depended upon to shut down in the accompanying five years. A study in 1997 found that paces of branch terminations were higher than typical in progressively shocking domains. Most by far of the 171 Barclays’ branch terminations in April 2000 occurred in minimal natural systems and only eight percent in its south-east area. A huge bit of the branch terminations by the colossal retail banks in Britain were energized by the need to verify their advantages from the new contenders, running from telephone banks and security providers to supermarkets, administration associations, and other assist associations with preferring British Airways which obviously showed energy for giving cash related organizations to their clients

The banks are considered as cash related center individuals that give money related organizations to the people turns upon two essential parts; directly off the bat, the applicant’s reputation for being a person of regard. Furthermore, the availability of enough capital or protection from which cases can be advanced with regards to default. As the typical mortgage pros, danger contradicted banks may be anxious to advance if these two segments that fill in as a reason for trust in their corresponding relationship with their clients exist. In any case these two segments present critical impediments to needy individuals, especially in the natural areas, in getting to the credit feature. The poor are for the most part observed by the ‘advantage orientated’ standard banks as high-risk borrowers in light of the inalienable difficulties in assessing their unwavering quality and, at the same time, their feebleness to offer assurance to guarantee against any potential peril. These standard legitimate credit experts are looked with borrowers who they don’t before long have the foggiest thought, who don’t keep made records or ‘attractive methodologies’ and who need to acquire nearly nothing and uneconomic aggregates along these lines exhibiting them to astoundingly high threats in light of the natural screening issues looked by the moneylenders at the same time make the endeavor assessment exorbitantly expensive. Moreover, no backup plan is anxious to ensure against the likelihood of non-repayment as a result of ordinary and commonest dangers which weight little producers in making countries; for example, dry season, trained creatures disease and breakdown of equipment. The peril acquaintance in giving credit poor clients is moreover exacerbated in light of the characteristic issue for the business cash related foundations to separate their portfolio. For example, most of the national clients who get their pay rates from agriculture need to get in the pre gather season, making it difficult for banks to separate their portfolio. Rapidly extending social and reasonable issues looked by globalization gave rise to new requests similarly as measure about organizations and social obligations among big business and state colossal beneficial associations owning gigantic advantage, the government is envisioning name social and judicious issues (Gelbmann, 2010).

Worldwide associations are on high for progression in getting occupations, a portion of costs, move if development through unselfish advancing hands-on social protection and preparing (Lunt 2001). In view of these improvement associations are especially mindful of their work in people in general eye and they’re sickly in CSR. In reality, CSR has delighted in making countries, unequivocally in the US and European association of all business divisions. CSR helps us to expect various factors in creating designs toward CSR basics as weight on making markets bit by bit as laborers or capital markets attempt in tendencies in its strategies .social and good issues are looking by expanding open contemplations (Gutsche, 2016).

Stakeholder theory

The analysis of needs and wants of customers is not only important but it is also going to help in determining the ways through which the success is guaranteed in respect of gaining success for the purpose of satisfying their customers. The stakeholder theory helps in identifying the value for customers, suppliers and employees. The interest of customers are essential to identify and understand as  this also helps in giving direction to banks. Stakeholder theory is absed on organizational management process and it is also based on maintaining business ethics within the organization. The resource based view and market based view is essential as ths helps in determining and selecting the stakeholder strategy. The stakeholders theory is when applied to Bnak Al Baraka than this helps in determining that what are the major stakeholders which are essential for business. The stakeholder nalaysis is also going to help in determining that how Al Baraka bank is going to help in achieving the CSR initiatives. The stakeholder theory related to Al Baraka is going to help in establishing the ways through which business is capable of achieving success and becoming competitive.

Sumamrizing the literature review can help in understanding that the businesses around the world are following CSR strategies. This also explains that the CSR initiavties are taken in order to identify the needs and wants of people living in a society. The presence of different mind sets in society regarding CCSR is having large impact over the development and profitability of business. The presence of different CSR initiatives is helping banks like Al Baraka Bahrain is fulfilling their objectives easily

Chapter 3

CSR: Implications for Islamic Banks

3.1 Introduction

This chapter is based on evaluating the CSR policies in Islamic Banks. The major phenomena to which CSR relates to in Islamic bank is based on ethics. The social responsibility of Banks is defined as following Shariah. It is interesting to analyze the Social responsibility which is followed by Islamic Banks and the ethical frameworks which are used by banks in respect of their morality. The Islamic banking sector is developing on regular basis since its incorporation in 1970. The major growing concern of Islamic banking sector was to establish competitive Islamic banking practices. The major focus of Islamic Banks in following CSR initiatives is based on making Islamic Banking system the best alternative to conventional banking systems. Currently there are 256 financial institutions globally that are involved in providing Islamic banking services. The start of chapter is based on providing introduction about the Islamic banking systems and their operations globally. The chapter also discusses the brief structure and philosophy of people working in Islamic Banks. The chapter is also going to discuss the philosophies used in Islamic banks and the finance principles which they follow. The final section of the chapter discusses the previous studies which are done over the topic of CSR and it also contains discussion about the stakeholder’s perceptions related to Islamic banking policies and procedures (Hwang and Kim, 2018).

3.2 Islamic banking: Its philosophy and modalities

To understand Islamic banking policies and philosophy it is highly important to understand the reason and objectives related to their operations. According to Harron (1996), there are two different reasons which are related to establishment of right philosophies within Islamic banks. The policies are established and are used by the management or policymakers of Islamic banks for the purpose of establishing corporate objectives based on guidelines of CSR. It is also important to consider whether or not the philosophies are based on identifying the reasons because of which Islamic banks are focusing on holding true Islamic principles (Kang and Yoon, 2018)

The understanding of Islamic economic systems will help in understanding the context and philosophy of the Islamic banking system. It is highly important to maintain policies and operate under Shariah principles.  These principles are going to help in defining the specific patterns which relate to economic behavior of individuals. Because of following these principles the Islamic banks refrain themselves from charging high-interest rates and they are only offering Islamic financial products. This system is based on aiming the contribution made by the social-economic policies followed by the management of Islamic banks. While conducting operations the major focus of Islamic banks is overachieving a balance between earning and spending and this is done for achieving business objectives (Kang and Yoon, 2018).

Islamic scholars mainly Ahmed (2000) and Mirakhor (2000) stated that it is highly important that Islamic banks must perform some effective functions as of conventional banks and the way they are operating differently than conventional banks. It is interesting to know about the salient features of Islamic banks and the major principle on which Islamic banks are based is to bring fairness and create balance amongst society. The practice related to charging of interest rates in the conventional banking system is considered as unjust as the borrowers feel pressurized while returning interest rates. The interest factor is not only impacting the business and also lives of people living in Bahrain. The interest contracts in conventional banks are also a problem for lenders and the banks are only concerned about the return on deposits (Khan, 2009).

Secondly, Islamic banking is based on the principle of brotherhood and there must be cooperation which is based on system of equity sharing, risk sharing, and stake taking. This promotes the feeling of sharing and cooperation amongst the provider of funds and users of funds. The major reason for changing towards Islamic banking is based on the ethical and moral framework focusing on shariah law. The law is based on fulfilling ethical norms and social commitment. The moral principles followed by Sharia law are based on fulfilling the definition of halal and haram which is offered in banks at different operations. Islamic banks are providing finance and project with ethical and moral values by keeping in mind the Islamic moral value system. This means that providing finance to brewery factory, casino or night club is not considered as an ethical activity as it is completely prohibited by Islam. This is not acceptable by society as well (Ko and Cho, 2019).

The principles related to Islamic banking are totally community-related and the major focus is based on Ethical values. The banks will be financing the entrepreneurs who are having eco-friendly and socio friendly investments. The distribution of credit is also an important phenomenon and in Islamic banking system it is ensured that the credit is given to individuals for the purpose of bringing stability in their lives. Islamic banking systems are majorly focusing on ensuring over bringing stability in the amount of money and also stabilizing the market. Models related to financial banking are related to the modes which are directly related to the flows of goods and services (Michaels and Grüning, 2016).

3.2.1. The idealized model of Islamic banking

There is a revolution in Islamic banking systems as compared to conventional banking procedures. Islamic banking systems are followed for the purpose of moving a mission from debt-based financial intermediary to a system that is equity-based and firmly believe over risk-sharing arrangement. The ideal structure related to Islamic banks is based on models that reflect throughout the balance sheet structures and are totally based on profit-loss sharing phenomenon. According to Siddiqi (1985), in case of Islamic banks when an individual is making deposits and sharing the risk with the bank than in this scenario an individual is naturally going to absorb adverse outcomes that are present in the balance sheet of bank. The value which is present over the depositor’s fund is based on funds that represent the actual amounts related to the asset value of banks (Oh and Cha, 2017).

Ahmed (2000) and Ziauddin Ahmed (1984) state that profit-loss sharing amongst an individual and bank is the major concept on which the Islamic banking system is made. It is important to understand and identify that what are the major factors which are related to Islamic finance such as Riba, Musharakah and Murabahah are the major products offered by Bank Al Baraka in Bahrain. The true spirit of Islamic banking system is totally different from the approach used by conventional banks which is the interest-based approach. Conventional banks are not totally negating the shariah based debt contracts instead they are offering them against equity-based contracts. The fulfillment of socio-economic objectives is completely linked with the Islamic banking system as their principles are based on justice, economic growth and maintain efficiency and stability in the markets. According to Henry and Wilson (2004), it is described that the group related to Islamic Economists is based on “purists” and their major focus is over the equity-based contracts rather than debt-based instruments. These Islamic groups are emphasizing over ethical and social Islamic Banking activities which are based on risk-sharing and value additions activities. They are also depending moreover value-added activities. They are also not willing to depend themselves over fixed income instruments like Murabaha and ijarah which is related to the conventional loan systems. In these systems the banks secure the margin and capital invested by seller without considering the level of market risks which can impact the instrument. The investors of Islamic banks are of the opinion if the risk is eliminated from the transaction than it is going to remove the morality from banking business (Visser, 2012)

3.2.2 Anomalies in the practices of Islamic banks

It is witnessed that the practices followed by conventional banks and Islamic banks have a great level of diversion and the practices followed by them are following doctrines which relate to the intellectual doctrine related to the economy. The management of Islamic banks has pointed out different anomalies which are having different salient features:

It is important to realize that there are certain techniques that are not completely fulfilled by the management of Islamic banks. The case of “buy back on markup” is true in this regard. They are also of the opinion that this case is not following the rules and principles laid by Murabahah. The principles are related to the banks which are involved in making fictitious dealings and they are engaged in buying and selling securities in which it is evident that they are not based on following shariah. Zaman (1994) in his article states that banks are involved in making dealings that are based on playing tricks and signing of documents that relates to sale, purchase, and transfer of bank securities in such a way that they are based on shariah. Islamic banks are more involved in making these type of transactions as they are more reluctant as compared to conventional banks in exposing their capital to risks which are involved in direct business practices (Woo, 2018).

The other feature is based on the fact that even Islamic banks are involved in the financial contracts which are present for mitigating financial business risks and used in a similar manner by conventional banks. As per an article was written by Greuning and Bratanovic (1999), Islamic banks and conventional banks are both exposed in a similar manner to risks but the characteristics and extent of risk are different from each other. The use of Islamic instruments increasing risks and hazards which can impact Islamic banks. Due to this reason Islamic banks are always under the constant pressure and are exposed to the risk at large extent and they believe that they have to make more policies to mitigate those risks as compared to conventional banks (Chen et al., 2013)

In general, Islamic banks are facing criticism for not prioritizing overspending in long term development projects. It is said that the management of Islamic banks is always interested in making short investments and generating profits and they did think about spending in long term development projects. The economists are of the opinion that this policy followed by Islamic banks is similar to that used by conventional banks than how it is different amongst both banking systems. It is also criticized that the short term investments made by Islamic banks are under the domain of debt base contracts and it is also having predominance with the conventional banking system. The use of debt-based contracts by Islamic banks make them more like conventional banks in respect of adhering to the financial criteria. Kuran (2004) states that while looking at debt based structure followed by Islamic banks it can be claimed that they are not acting much different from the conventional banking system (Gelbmann, 2010).

Rosly and Bakar (2003), in their research, stated that although Islamic banks are following Equity-based instruments for mitigating their risk it is still more ethical as compared to interest-based instruments used by conventional banks. It is argued that equity bases instruments are better on the grounds of efficiency, stability, and social growth. The research also states that the use of equity-based systems are not going to lower the impact which interest-based system has caused over society. The theorists suggest that although the financial instruments used by Islamic banks are approved by Shariah law still they are impacting society. It is becoming highly important that the use of equity-based instruments must be used more in Islamic banking systems are they relate more with the Islamic teachings and principles (Chen et al., 2012)

3.3 social responsibility of Islamic banking

The philosophy and objectives related to the features of the Islamic banking system are the same as conventional banks. The concept of CSR is similar in Islamic banking system and conventional banking system but researchers believe that Islamic banks are following the guidelines of CSR more as compared to conventional banks. Al-Omar and Adel-Haq (1996) have indicated that the duty of Islamic banking systems are based on giving bank to society and in their research they referred to a statement given by the International Association of Islamic Banks (IAIB). The statement describes that Islamic banking systems are concerned about the impact of their operations on society. They are also having special responsibility towards society (Gutsche, 2016)

3.3.1 Model used by Islamic banks in respect of fulfilling their corporate social responsibility

There are two different opinions that are present in the world based on the objectives followed by Islamic banks. Lewis and Algaud (2001), conducted research where they stated that Islamic banks are following a model for fulfilling socio-economic purposes. Sadr (1982) stated that the research conducted by him concluded that the purpose of Islamic banks is not based on generating profits. The aim of Islamic banking systems is based on promoting Islamic norms and values amongst society. The models used by Islamic banks are more focused over social welfare of society. They are based on achieving the Islamic economic objectives based on morality and social justice. The model given by Chapra (2000) was believed to be congruent with the Islamic teachings and was believed to be based on Shariah Law. In the research done by him he stated that it is highly important for banks that they engage themselves in social welfare activities as a way of contributing towards society and fulfill needs of people.

A well-known scholar Wahbah Al-Zuhayli in his famous book “Al-Fiqh Al-Islami wa-Adillatuh” stated that the major goal for the establishment of financial institutions is not for profit-making purpose. He stated that Islamic institutions are developed for the welfare of society and resolving their issues. In his book he links the objectives of financial intuitions with the objectives related to social harmony and principles. The other framework was given by Ismail n which he stated that Islamic banks should work as normal conventional banks and the only difference is that Islamic banks follow shariah law.  The framework given by him indicates that the major responsibility of bank is towards safeguarding the rights of depositors and shareholders. According to him the duty related to social welfare is the major responsibility of government. Islamic banks are although bound to pay zakat as part of following shariah law, on the other hand, they are also under the responsibility of safeguarding the assets of shareholders and depositors like conventional banks (Hwang and Kim, 2018).

3.3.2 CSR dimensions related to Islamic banking systems

It is understood that the CSR dimensions for Islamic banks, conventional banks, and ethical institutions are same. The values and aspirations are also same for everyone but the only difference is that all institutions are working in a different business environment and have different goals and objectives to achieve. Some of the CSR initiatives taken by Islamic banks are recognized by the institutions operating in west. Many western theorists and institutions have also verified the CSR approach used by Islamic banks and they also believe that they focus more on social welfare as compared to any other institution. The table given below represents the Islamic guidelines related to fulfillment of CSR and how they elated with the western perspective (Kang and Yoon, 2018)

Islamic perspective on CSR practices

(Kang and Yoon, 2018)

The table given above can be further elaborated to understand the salient features related to Islamic banking systems which are important for following shariah law:

3.3.2.1 Promotion of financial and social inclusivity

The major purpose for the establishment of Islamic banks is due to the prohibition of interest rates by the Islamic principles. The Islamic principles believe that once interest is prohibited it is going to improve social justice amongst society. The prohibition is also going to improve the living standards of people living in society. Khan (1994) has conducted research in which he stated that the major purpose of establishing Islamic banks is based on promoting the profit-loss sharing mechanism. This mechanism is going to promote investment in riskier sectors of economy as well (Khan, 2009).

3.2.2.2 Promotion of Small and medium entrepreneurship

Islamic banks are involved in promoting small and medium entrepreneurs. The lending procedures in Islamic banking systems are more flexible and they are not suppressing the lenders. They are offering collateral-free partnership finance and the use of PLS mechanism is encouraging the small and medium entrepreneurs to make more investments (Hwang and Kim, 2018)

3.2.2.3 Responsibility related to Zakat and Sadaqah

Giving of Zakat and sadaqah are the two major instruments related to Islamic principles. The Islamic banks have to give zakat and sadaqah for fulfilling principles of Shariah law and this helps in lowering the poverty level of society. CSR is having spiritual implications over Islamic banks as well which is essential for them to fulfill. The use of Zakat and Sadaqah is used as it will help in fair distribution of wealth amongst society. This is also going to create a feeling of harmony amongst society and this is the most effective way of distributing. The major objective of the use of this instrument is based on bridging the gap which exists amongst the society or known as social variances. The Zakat and sadaqah will help the people living in society to spend their life in a dignified manner. Sadaqah is known as philanthropic donations and Islamic banks are making these donations as way of promoting Islamic values in society. This is going to improve the quality of life of society as well.

3.2.2.4 Providing Qard al Hasan

The Islamic banks are fulfilling their CSR by means of providing Qard al Hasan or otherwise known as Benevolence loans. These loans are provided to people for bringing positive change in their lives. The loans are provided as no profit and no interest schemes. The people taking loans only have to pay the amount of loan back to the bank without any additional interest or share of profit from business. In this regard research was conducted by Lewis and Algaud (2001) and Al- Harran (1993), in these researches it was stated that there are multiple circumstances in which providing Qard al Hasan is considered as a way of helping the society. They further explained that providing loans when a customer is facing cash flow issues or in the situation when a customer has blocked saving account and is in need of urgent short term finance is considered as qard al Hasan. It is considered as a form of providing social service and a way of helping society or poor people in the hour of need. Islamic banks are providing these types of loans for the purpose of fulfilling their needs (Chen et al., 2012).

While summarizing the chapter it is witnessed that even Islamic banks are involved in fulfilling their CSR initiatives and as a result Al Baraka Bank is also ensuirng that they are providing loan at no profit and no loss rate so that the small and medium enterprises are established and this is the way through which the betterment of society is ensured

Chapter 4

Research framework and methodology

4.1 Introduction

The chapter is based on the research methodology used for carrying out research. The literature related to corporate social responsibility in respect of Al Baraka Islamic bank is viewed. The chapter relates to the significance of conducting the research and the issues which are related to the topic. The hypothesis was also part of this section regarding the business practices followed by Al Baraka Islamic bank.

4.2 Variables identification and Hypothesis development

The study is based on analyzing different stakeholder groups in which different stakeholders’ perceptions are analyzed. This is based on identifying the trends which are present in the market in respect of Islamic banking practices. The variables of the study are also identified, which are based on investigating different variables and understanding the perception of different stakeholders. The perception towards the stakeholders of an Islamic bank is identified and is also taken into consideration. It was also important to understand the perception of different stakeholders regarding the CSR practices followed by Al Baraka bank. This is also providing a good and effective way of getting information about the ways through which the stakeholders can be identified, and their issues can be resolved. The importance for banks in respect of making ethical decisions is based on understanding the needs and wants of the consumers. The subsections are also discussed, which are including different variables in which the study is based on having information about the expectation of different stakeholders of Al Baraka bank.

4.3 Hypothesis

There are different ways through which Al Baraka bank is fulfilling its CSR objectives. It is important to understand and make a hypothesis for the purpose of conducting research. The reason for making the hypothesis is due to the fact that it is used for bringing change in society. The hypotheses related to research are as follows:

H1: Stakeholders of Al Baraka bank are making the banking selection as per the CSR factors which they are fulfilling.

H2: There are different instances in which the stakeholders have an opinion about banks in which they are making opinions about the ways through the banks are fulfilling their CSR objectives

H3: The difference amongst age groups of different people makes the process of achieving CSR effectively, and it is also impacting the sales made by Islamic banks

H4: There is no major difference regarding fulfilling the CSR initiatives, and the stakeholders are irrelevant about the bank’s initiatives

There is no mention of age in your age and objectives… I have not seen this as a section in your literature review.. your hypotheses should reflect your aims and objectives, the structure of your literature review and the resulting research questions

4.4 Dimensions of CSR of Albaraka bank

There are different areas of CSR, which are discussed as the CSR areas are mentioned in the literature. There are different variables that are chosen for the purpose of conducting this research, and the study also defines different frameworks that are used by the business for the purpose of identifying the policies which are used by Al Baraka bank in respect of fulfilling its CSR initiatives. There are different CSR objectives that are used by Banks, such as the initiatives used by banks for bringing change within their business environment. The CSR initiatives of Al Baraka can be based on making positive changes in society, and by society, the change for employees is also incorporated. Providing financial services is also an important factor for bringing change in society, and this is also based on keeping the employees motivated by fulfilling their needs. The research in this regard is not only important to address but also by learning the perspective of employees, which are essential stakeholders of Al Baraka, business is capable of bringing positive change in society. There are various other CSR initiatives such as Paying zakat or giving sadaqah, which is an important factor that impacts the CSR strategies of the business. The CSR initiatives taken by Islamic banks must follow the Islamic teachings, and the research methodology is based on identifying the ways through which Al Baraka bank is taking care of its stakeholders. In this regard, it is also essential to understand that the research must also cover the domain in respect of Islamic teaching in various products offered by Al Baraka bank, and this is done to identify the ways through which the bank is achieving success. Some other hypotheses which are tested in respect of CSR policies used in Al Baraka bank according to Islamic principles are as follows:

H6: Stakeholders using services of Al Baraka bank are having the same level of importance as other banks, and the bank is following CSR initiatives to support the customers of the Islamic banking sector. And this is done by taking information from the stakeholders of other bank

H7: The stakeholders of Al Baraka bank are capable of understanding the ethical dimensions used for bringing change in society

H8: Stakeholders of Islamic and Conventional banks are having same dimensions related to CSR strategies

4.5 Stakeholder’s expectations of Islamic banks

Performing analysis of stakeholder’s expectations is essential, but it is also essential to learn about the perspective of stakeholders of Islamic banks about the ways their banks are fulfilling their CSR responsibility. In this regard, the research should be conducted, and it is witnessed that profit and accomplishment of CSR initiatives usually conflict with each other. There is an instance in which it was witnessed that the businesses are not capable of fulfilling their CSR responsibility, but on the other hand, they are capable of maintaining the ways through which they are capable of fulfilling their roles as a leading bank.

The CSR is not only related to a single community, but it is important for Islamic banks, that they should provide relief and give Islamic financial solutions to different stakeholders whether they are Muslim or not. It is assumed that for banks like Al Baraka, having appropriate CSR strategies can help the business in achieving better competitive standing in the financial banking sector. On the contrary, the cost which banks incur in respect of fulfilling the CSR initiatives is also important to understand and identify. The expectations of Stakeholders is different for Al Baraka bank, but it is important to realize that how it is bringing change in society

4.6 Research methodology and design

The study is based on the descriptive approach, and the cross-sectional study is also done in respect to gathering data about the CSR strategies used b businesses, especially banks. The research is primarily based on the nature of data, which is gathered during the research, and the major focus of data is over keeping the employees motivated to bring positivity in society. For the purpose of conducting research, both the primary and secondary data are used. The secondary data is gathered for the purpose of gathering information regarding Islamic banks, and the focus is on the policies used in Al Baraka bank. The secondary data is also gathered from secondary sources like the annual report of banks, and also the annual report from the central bank can also be used or analyzing the CSR strategies which should be used by Al Baraka bank. For obtaining secondary data, the information is also gathered from various journal articles and websites of banks, which helped in developing a better understanding of the ways through which banks are operating. The CSR dimensions are also finalized by looking at the ways through which the management of Al Baraka Bank is making its CSR initiatives or frameworks.

For the purpose of conducting the empirical study, the information is also gathered by means of using primary data sources such as a survey is conducted in which the initiatives of different stakeholders of Al Baraka bank are taken into consideration. Conducting a survey is also providing a more realistic approach as it can help in developing a better understanding of the ways through which CSR initiatives are fulfilled by the business. The use of a survey also makes performing quantitative analysis an easy approach, and the testing of different responses of the survey helped in developing a better understanding of the topic and can also help in reaching findings and conclusions. There are various techniques that are used by businesses for the purpose of bringing change in their CSR initiatives, and by using different other approaches of gathering primary data, the evaluation will become easy. There are different advantages and disadvantages of conducting a survey in which the focus should be over identifying the ways through which the most reliable data can be gathered

4.7 Sampling process

Whenever data is collected for the purpose of conducting research than the major focus is always over identifying the sampling method, which can be used by businesses. The sampling method is used when the data is collected for the purpose of conducting research, and consideration is also given to maintaining the reliability and validity of data gathered.  The sampling process used for gathering data about the CSR initiatives followed by Al Baraka bank is based on the following six steps such as:

Step 1 – in this step, the target population used for sampling data is identified

Step 2 – the sampling frame is identified

Step 3 – a selection of appropriate sampling procedure

Step 4 – determination of sample size

Step 5 – a selection of sample elements

Step 6 – a collection of data by means of different designated sources

4.8 Research population

For the purpose of collecting data, the research population used is based on different stakeholders of Al Baraka bank. The major stakeholders on whom the focus of this research is based are customers, depositors, managers, employees, or shariah advisors who are involved in identifying that whether or not Al Baraka bank is fulfilling their CSR initiatives. The respondents identified for conducting research are mainly the stakeholders who are connected with Al Baraka banks and are also impacted directly by their decisions.

4.9 Sample frame

The sampling frame is an important element in order to minimize the level of error in transactions. The appropriate sampling technique is not only essential but is also relevant for bringing change in the business processes. The sampling frame, which is used or conducting this research, is based on identifying the list of all customers, employees of depositors who are getting impacted by the operations of different stakeholders. It is important to understand here that developing an appropriate sampling frame is not possible due to the subjectivity of the topic. It is also important to understand that the presence of the sampling technique makes it difficult to evaluate the most appropriate results. Due to the level of the subjectivity of the topic, the random sampling method is used for evaluating the results and draw conclusions regarding the CSR initiatives followed by the management of Al Baraka bank. Due to tie constraint development of effective sampling process is not possible but it helped in making the sampling methods effective

4.10 Sampling procedure and rationale

There are several constraints that are part of conducting this research, such as the size and scope of this research. The major constraint is the cost factor and the timeline related to complete the research. The sampling method also acts as a hurdle for conducting research as the research is subjective, and using random sampling cannot make positive implications over the results gathered for conducting research. While selecting the size of the sample, it is important that the consideration should be given to the fact that the sample is capable of representing the overall population of data. The population is based on different stakeholders such as competitors, managers, depositors for which the data is gathered and evaluated by using random sampling. The rational used for sampling is based on ensuring that each item of data is capable of getting selected in the random sampling method.

4.11 Research instruments

For the purpose of collecting data, the major research instruments in respect of collecting primary data are based on questionnaires. The questionnaire contains different types of questions that are asked with the stakeholders of Al Baraka Bank regarding the policies and procedures which are followed by the bank.

4.12 Data quality and reliability

It is important for conducting research that no compromise should be made over the quality and reliability of data. It is important that the business should adopt all measure which is required for gathering and interpreting data in a reasonable manner. It is ensured that the collected data is based on high quality, and no compromise is made over the accuracy and reliability.

Chapter 5

Findings and analysis

5.1 Introduction

This chapter is based on making findings and also analyzing the hypothesis which were established at the start of research. The chapter is based on analyzing the research framework which is used by business in order to achieve success and remaining compatible by the ways through which the people believe that Bank Al Baraka has been fulfilling its CSR objectives. This chapter is also discussing the primary objectives which are based on analyzing the study in this regard which depicts that how CSR objectives are achieved by the management of Bank Al Baraka and by what are the major steps which they are taking to work towards the business objectives in this respect. The behavioral implications are also highly essential to consider as this is going to help the business in defining that how they are going to achieve success and become successful. This chapter is also analyzing the interviews which are taken by the stakeholders of Bank Al Baraka and this is going to help in understanding that how this factor is helping the society to grow and develop. The findings and analysis in respect of the research questions and hypothesis are answered in this chapter and this is going to help in making sure that the CSR initiatives taken by Islamic banks like Bank Al Baraka seems effective in fulfilling their CSR initiatives.

 5.2 Islamic banking philosophy and objectives

This section is helping in making different descriptive statistical analysis such as means and standard deviations which are helping the businesses operating in the Islamic banking sector are becoming competitive and also effective in fulfilling their CSR responsibilities. It has been considered that the businesses in the banking sector are trying their best to fulfill their CSR responsibility related to their Stakeholder and in this respect the analysis has been performed to evaluate the response of stakeholders regarding the ways through which Islamic banking operation has been performed.

5.2.1 Descriptive analysis: Perceived Islamic banking characteristics

To understand the general reviews about the ways through which the stakeholders are helping the businesses in the banking sector to grow than it is becoming increasingly important to analyze the Islamic banking practices in this respect. The different measures which are based on analyzing the Islamic banking characteristics which are taken into consideration after taken interviews and also by distributing some of the questionnaires to the employees and customers related to Bank Al Baraka are incorporated in the research. While talking about the questionnaire, it has been witnessed that there were some major issues related to CSR and Islamic banks which are measured on the five-point likert scale. And in the scale the options start from 1, means strongly disagree to point 5 which means strongly agree. The table given below is going to describe the perceptions which are related to the stakeholders of Bank Al Baraka in respect of the operations which are taking place in Islamic banks of Bahrain

Table: Stakeholder’s perception regarding Islamic banking practices in Bahrain

The table mentioned above indicated that the major of the respondents are agree with the statement 1 made which is stated as “Islamic banking is introduced in Bahrain because the Muslims living in the country are not willing to associate with the bank which is having the element of Interest”. The level of mean is high in the statement and the standard deviation is kept low which is giving an indication that most of the respondents are having strong consequences regarding the issues. The increase in the number of respondents agreeing with the statement has been indicating that the people living in Bahrain are willing to follow the Islamic teaching and the people living in the country is of the opinion that they are not doing anything which is against the teachings of Islamic. Just because of presence of Islamic factor the people or stakeholders livening in Bahrain are supporting Islamic banks more due to their no interest policy. Islamic banks like Bank Al Baraka in Bahrain are having strict policies against Riba as the bank is under the constant pressure that they should realize that Riba is highly prohibited in Islam and exercising this practice is going to cause he damage to the business such as they might lose customers and government might also impose high level of fines.

The statement 2 is based on analyzing the perception of participants regarding the profit and loss sharing which happens amongst participants. It has been considered that there are instances which depicted that the people living in Bahrain are of the opinion that the principle related to profit and loss sharing is the true Islamic principle and For Islamic banks across the region it is becoming increasingly important for the management of Bank Al Baraka that they are promoting this fact. The mean and standard deviation results regarding the questions are giving an indication that the people living in Bahrain are agreeing with the statement. It is evident that more that 77% o the respondents are agreeing with the statement. This is given an indication about the fact that the people living in Bahrain are of the same opinion and they are supporting the fact that true Islamic teachings are in making sure that the banks are following PLS system without any hesitation

The statement 3 was stating the most of the entrepreneurs are opting for the Islamic banking approach and it is witnessed that most of the workers and people working in the bank do agree with the statement. This statement was made just to analyze that how new entrepreneurs who are also the stakeholders of Bank Al Baraka are viewing the policies which are taking place within the country. Most of the people living in Bahrain are accepting the fact that this is going to help the new entrepreneurs to grow and develop their position in the market. The high level of mean and low standard deviation is indicating that the respondents have reached to the consensus and the result generated in this regard is highlighting the fact that most of the businesses in Bahrain prefer to form deal with Islamic banks. The writers such as Rosly and Bakar (2003) are of the opinion that the new entrepreneurs are taking steps to get associated with Islamic banks as this approach is going to help the business in establishing a risk averse nature due to profit and loss sharing aspect related to policies made by banks like Bank Al Baraka

Statement 4 is based on analyzing that how the participants who are also the stakeholders of Bank Al Baraka are viewing the practices related to Islamic teaching followed by Bank. The statement was asked that do they believe that the product offered by Islamic banks are of similar nature or are they totally distinct from the products offered by conventional banks. The participants were majorly disagreeing with the statement as they are not o the opinion that the products are different from each other and also the Islamic banking practices which they are following are also not must different from that of conventional banks. The authenticity of Islamic principles were the major concern which was evaluated after conducting the research as the participants were not sure that whether the Islamic teachings following by Bank Al Baraka are up to the mark or not as they are also o the opinion that if the banks is not following Islamic teachings than he is also not going to have an impact over making effective CSR strategies. This opinion of respondents were strong because they believe that in the Islamic banking practice CSR is also embedded in their principles as the teachings of Islam is going to have a major impact over the ways through which they are helping the society

The statement 5 stated that “The principles in Islamic banking system is not based on competing or negotiating on price approach” and this statement shows that the Islamic banks are not negotiating much over the price factor as they believe that they should follow more ethical and moral approach which is going to help them in determining that how they are helping the businesses in making sure that they are not causing great negotiations or are even bothered about price. Islamic banks are of the opinion that they should follow the teaching in the ethical and Islamic perspective and even in that if the bank is bound to incur cost that they must not feel hesitant. Incurring cost is also not the major factor which Islamic banks are worried about as they believe that costs incurred in respect of fulfilling ethical duties and fulfilling CSR initiatives is going to help in the growth of banks.

Statement 6 was based on the discussing related to the profit maximization factor and it was indicated that the management of Bank Al Baraka do believe that they have to earn profits if they are willing to fulfill their CSR initiatives. The majority of the stakeholders of Bank Al Baraka were of the opinion that the bank must adopt the profit maximization techniques as this factor is going to have an impact over their capability to fulfill their CSR initiatives. The approach was also verified by looking at high mean and low level of standard deviation as this factor was o great importance for the businesses operating in the sector and they were also of the opinion that they should focus over keeping their profits high as this is the only way through which they are going to achieve success and can also determine the ways through which they are capable of bringing positivity in the society

The statement 7 was of great importance for the people and stakeholders of Bank Al Baraka. The respondents were asked that do they think that fulfilling CSR initiatives is entire responsibility of government of Bahrain. The means and standard deviation both were high in this statement and majority of the respondents were of the opinion that no, fulfilling CSR initiatives is not only the entire responsibility of government. The findings related to this statement verifies that all businesses are under the obligation of fulfilling their CSR initiatives and incase if they are not fulfilling their responsibility than they have to bare serious consequences as a result

Statement 8 was based on the purpose of identifying that how respondents believe that how polices of Bank Al Baraka are going to have an impact over the ways through which the success is guaranteed by business. The statement was made in which the respondents were asked that do they believe that the management of Bank Al Baraka should not only focus over the ways through which the success is guaranteed in an organization. The majority of respondents are agreeing with the statement that it is the major responsibility of management of Islamic banks like Bank Al Baraka that they should focus over keeping their policies flexible and also effective as they are also having the responsibility of improving the standard of living of people living in the society. The people are also of the opinion that the banks must realize that they are not only thinking over maximization the wealth of stakeholders. It is also becoming highly important for banks that they should keep in mind that there major focus must be over helping the society to grow and develop.

7.3 Interview

An interview was also conducted as this was part of making sure that what is the major opinion of stakeholders regarding the ways through which success is achieved by Bank Al Baraka regarding fulfilling their CSR initiatives. In this respect small interviews are taken by the stakeholders of Bank al Baraka such as their customers and employees just to analyze that what is their opinion about the ways through which the bank is fulfilling their CSR initiatives and along with this the major and an important factor is to make sure that the ethical considerations are maintained and are also given equal importance to the people making research and along with this is also becoming increasingly important here to identify that the identify of participant of interview is not going to be revealed. For analyzing the impact of CSR initiatives over the people working in Bank Al Baraka it has been witnessed that the business is having clear guidelines and the interview was take from one of their values customer in order to understand their opinion regarding the success of business.

Interview 1

Q1 – What is your opinion about the CSR initiatives and do you believe that this is aspect if going t change the world?

As an individual I do believe that fulfilling the CSR initiatives is highly important for business and also it is their utmost responsibility that they should take steps which is going to help them in achieving their targets becoming highly competitive. I believe that when businesses follow CSR than this is their way is giving back to the society.  Am strongly of the opinion that the businesses are present and are successful because society is supporting their operations and buying their products or services. The businesses are also making profits because people are helping them in the success of their activities. So I believe that as a result it is also highly important that with the profits earned the businesses should also take reasonable steps to make sure that their initiatives are not only supporting business but also guiding them to remain competitive and achieve success. If the society and businesses both will realize their responsibility towards the success of CSR initiatives than this is the only way through which the world is going to become a better place to live. This also is giving an indication to the society that the wealth is going to be distributed equally and the standard of living across the globe will become better

Q2 – Do you believe that the Islamic banks are under the direct responsibility of fulfilling their CSR initiatives?

Well I believe that the role played by Islamic banks are highly important for business to grow and this aspect is going to have a major impact over the ways through which the success is guaranteed in respect of society. I strongly believe that fulfilling CSR is already embedded in the model of Islamic banks and this approach is going to have a positive impact over the society. The use of modern Islamic teachings is going to have an impact over the ways through which the society is going to get benefit by the fulfillment of CSR strategies. It has been witnessed that the Islamic banks are also under the Islamic responsibility of doing good for the society and this approach is going to help the business in taking advantage of the ways through which the society can be made a better place to live

Q3 – Do you think that Bank Al Baraka is taking initiatives in respect of fulfilling the CSR initiatives?

As a customer of Bank Al Baraka it is becoming increasingly important to consider that the management is realizing that are taking all reasonable steps to fulfill their CSR responsibility. In this respect it is also important to consider that the management of Bank Al Baraka the management is ensuring that they are helping the businesses to grow. The bank is taking initiatives which as a customer I do appreciate that the business is going to achieve success only if they are fulfilling the CSR responsibilities

Q4 – Do you believe that the CSR initiatives taken by bank are encouraging customers to remain loyal?

While analyzing the CSR initiatives of business it is becoming highly important that the business is going to have an impact over the ways that they are taking all reasonable steps to fulfill their objectives. The CSR objectives of Bank are going to help the business in retaining the customer as I have noticed that the people living in the country are supporting businesses which are fulfilling their CSR initiatives

Q5 – In your opinion, do you think that banking sector is helping the people living in Bahrain to make their standard of living better?

Yes I do believe that the CSR initiatives of Islamic banking sector are developing with sustainability. CSR means that it is the way through which the businesses give back to the society and this is going to help in making the standard of living better of people living in the country

7.4 Summary and conclusion

This chapter is based on the comprehensive analysis and there are results of interviews and questionnaires which are conducted by the ways through which Islamic banks especially Bank Al Baraka are taking CSR initiatives. The summary of the findings and analysis based on the result of interview and questionnaire is based on following:

• Majority of the stakeholders are of the opinion that they are supporting the businesses which are fulfilling their CSR initiatives
• The findings state that the businesses operating in the region are helping the banking sector of Bahrain to grow
• The stakeholders are of the opinion that Islamic banks must have to embed CSR strategies in their structure
• The results of interview stated that the management of Banks must realize that they should fulfill their CSR initiatives

Chapter 6

Conclusion and research implication

6.1 Summary of research

It has been found out that there are many businesses which are operating globally but amongst all of them the major aspect in this regard is to ensure that the businesses are taking all reasonable steps to make sure that their responsibility in respect of CSR has been fulfilled. With everything taken into account, the Islamic perspective on CSR stays as an obvious contrast to various Western philosophical creates and theoretical help of CSR, since it takes social obligation in a comprehensive point of view that finally grounds Muslims’ great and good judgment to Shari’ah. Section 3 totally examined the Islamic circumstance on CSR in the light of the God-mindfulness (taqwa) perspective, the goals of Shari’ah (Magäsid as-Shari’ah) and the principles of open interest (maslahah). The implications of these guidelines are essential to the degree that the CSR issue is seen by Islam in a joined and dynamic way, pondering reality and normally advancing conditions.

Islam, by methods for the possibility of vicegerency (khalrfah) envisions business firms as stewards or then again gatekeepers, of financial specialists’ money related resources, yet moreover of society’s financial resources, holding their property in trust to help society as a whole and finally accomplishing the blessing from God. This recommends an ineluctable necessity for firms to imbue incredible CSR practices in their business conducts getting a handle on issues, for instance, biological practices, word related security, philanthropic duties, and socially profitable and harmless activities and exercises. Put in a surprising manner, God-awareness perspective moves a firm to reliably work in an OK also, socially trustworthy route regardless the cash related outcomes. Powerlessness to do so similar to unfaithfulness to God’s will, with all the going to results in this world and in the extraordinary past. Besides, the appreciation of goals of Shari’ah in addition, the models Maslahah reinforces the criticalness of CSR. It uncovers understanding into how to effectively administer routinely conflicting interests among accomplices after some time and space,especially with respect to various issues including the utilization of CSR.

Islam, by methods for the possibility of vicegerency (khalrfah) pictures business firms as stewards or then again supervisors, of financial specialists’ cash related resources, yet also of society’s money related resources, holding their property in trust to help society as a whole and finally achieving the blessing from God. This construes an ineluctable necessity for firms to imbue extraordinary CSR practices in their business conducts getting a handle on issues, for instance, characteristic practices, word related prosperity, unselfish responsibilities, and socially helpful and harmless activities and exercises. Put in a sudden manner, God-mindfulness perspective rouses a firm to reliably work in a not too bad likewise, socially fit route regardless the cash related results. Powerlessness to do so comparable to bad form to God’s will, with all the going to brings about this world and in the incredible past. Also, the understanding of goals of Shari’ah moreover, the models Maslahah sustain the essentialness of CSR. It uncovers understanding into how to effectively direct routinely conflicting interests among accomplices after some existence, especially with respect to certain issues incorporating the use of CSR.

6.2 Implications for knowledge

The study related to topic was not only essential but it also helped in fulfilling the gaps which are present in the Islamic banking sector. The major contribution made by the study is based on ensuing that the Islamic banks are under the obligation of giving back to the society and this is embedded in the Islamic teachings. It has been found out that the social responsibility is embedded in the structure of banks and the works performed by Islamic banks across Bahrain is highly essential and important to consider. There were also previous studies which are conducted over the topic but the major focus of thi research was over the Islamic banking sector of Bahrain Al Baraka. The Study is also focusing over the CSR practices which are performed by the management of Bank Al Baraka. There was a gap which was existed before as they were majorly focusing over the developed economy and the use of modern CSR strategies used by banks in Bahrain are going to have a positive impact over society

6.3 Implications related to Islamic banks

The previous research has been done regarding the topic but it is becoming increasingly important to think about the ways through which the Islamic the Islamic banks are making strategies which are important to possess as part of the Islamic teachings. The conclusion has been made in this regard in which it was stated that the businesses operating in the banking sector of Bahrain are pressurized to have Islamic teaching embedded into their structures. It is also becoming an increasingly important factor to consider that the Islamic teachings used by banks are helping the society to get a chance to improve their living standards

6.4 Limitations and future research

The concept related to CSR was clear as this was going to help the businesses operating in the sector to learn about the ways through which the success has been guaranteed by businesses and banks across Bahrain. The major limitation in relation to the topic was the subjectivity level of topic as CSR is a diverse approach and by limiting the scope of research it is not becoming possible to understand that how businesses are taking place effectively in the banking sector. The major limitation faced during the research as limiting the scope as only banking sector of Bahrain is chosen and from it the major focus was over the CSR practices carried out in Bank Al Baraka. It is becoming an increasingly important factor to consider that the use of techniques and technology in respect of fulfilling CSR approach is having a positive impact over the society but this is also the limitation as it was not possible to identify that up to what extent it is having an impact over the ways through which the businesses are capable of achieving their targets by making sure that they are fulfilling their CSR responsibility

The future research can also be conducted in this regard and it is recommended that for the purpose of conducting research it is important that the CSR strategy comparison must be made amongst different Islamic banks operating in Bahrain as this aspect is going to have an impact over the way through which they are using their CSR strategy. The comparison is going to help the business in making sure that the CSR approach comparison can help the people living in the country that how they are helping the business to grow

Appendices

Appendix 1

Questionnaire

Kindly share your opinion about the following statements

Appendix 2

Interview

Q1 – What is your opinion about the CSR initiatives and do you believe that this is aspect if going t change the world?

Q2 – Do you believe that the Islamic banks are under the direct responsibility of fulfilling their CSR initiatives?

Q3 – Do you think that Bank Al Baraka is taking initiatives in respect of fulfilling the CSR initiatives?

Q4 – Do you believe that the CSR initiatives taken by bank are encouraging customers to remain loyal?

Q5 – In your opinion, do you think that banking sector is helping the people living in Bahrain to make their standard of living better?

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