CSR in the Lebanese banking sector: a neo-institutional approach to stakeholders’ legitimacy

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 natural 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 in specific institutional environments.

Design/methodology/approach

Using a qualitative approach, this research highlights the input of neo-institutional theory in the CSR context in top Lebanese banks in Lebanon.

Findings

This paper aims to analyze the impact of neo-institutionalism and the role of stakeholders in legitimizing CSR practices in the Lebanese banking sector.

Practical implications

Top Lebanese banks cannot simply comply with institutional pressures to gain their legitimacy, they need to develop their CSR activities targeted toward legitimacy-building at the local level; as for managers they cannot simply adopt managerial perspectives instrumentally to gain societal support, they need to adapt such perspectives and practices to the local needs as expressed by their internal and external stakeholders.

Originality/value

Managers of top Lebanese banks need to proactively engage in managing institutional pressures by adopting and adapting legitimacy-seeking strategies. This study highlights that top Lebanese banks differ in their CSR orientation because of their ownership structure, number of employees and profitability.

Citation

Chedrawi, C., Osta, A. and Osta, S. (2020), "CSR in the Lebanese banking sector: a neo-institutional approach to stakeholders’ legitimacy", Journal of Asia Business Studies, Vol. 14 No. 2, pp. 143-157. https://doi.org/10.1108/JABS-03-2018-0093