An exploratory study on corporate reputation practices and challenges in the UK banks : a comparative study between Islamic and conventional banks.

This study aims to investigate the concept of corporate reputation through the current practices of Islamic and conventional banks in the UK and to indentify to what extent Islamic banks adhere to the principles of Islamic banking and finance in light of the corporate reputation. In that attempt, the research investigates the concept of corporate reputation including the measurement scales as well as the theories related to the concept. In addition, the research moves beyond and further explores determinants of corporate reputation from the Islamic finance perspective which are derived from the overall objectives (maqasid al Shari'ah). Through the stakeholder theory, the research utilises pre-existing reputation measurement scales to investigate the social dimensions of sampled Islamic and conventional banks in the UK. In conducting the research, the study brings together the set of primary data from the internal and external stakeholder groups. Questionnaire survey was administered to the external stakeholders where 205 valid responses were obtained and further analysed. In addition, a number of semi-structured interviews were conducted with the senior managers and Shari'ah board member in order to verify the findings obtained through the questionnaire surveys. The findings indicate that the perceptions of the Muslim customers toward their banks, both Islamic and conventional, are somewhat similar. However, some of the dimensions such as trust and emotional appeal, were found to be higher with the customers of Islamic banks. The findings reveal that a very small proportion of the targeted sample population were sole customers of Islamic banks, however, they showed a lot more passion and positive regards toward their banks. Corporate social responsibility, as one of the dimensions of corporate reputation, is found to be lacking from Islamic banks and they were seen as not engaged in CSR activities as much as their conventional counterparts, mainly due to their limited capital. In addition, it was also found that the majority of respondents believed that the existence of Islamic banks is CSR activity itself. The results also indicate that the corporate culture seems to be stronger at Islamic banks and the bond between customers and employees is very strong where customers feel more valued and appreciated than those respondents from the conventional banks. In terms of further investigating the determining factors of corporate reputation, its monitoring and measurement, the study indicates that Islamic banks, in comparison to conventional banks, are enjoying higher level of trust. However, relatively small number of customers of Islamic banks is due to its technological limitations which are not as developed as in conventional banks. This has been found as one of the important aspects to which Islamic banks need to pay more attention in order to enhance their corporate reputation. This research is useful as it further explores the concept of corporate reputation within the boundaries of Islamic banking and finance and to investigate how corporate reputation may be better understood and examined. It also draws the attention to the executives of Islamic banks to how opinions, beliefs and expectations of their internal and external stakeholders are important in maintaining positive corporate reputation. The research adds value to the relevant body of knowledge as the literature on the concept of corporate reputation from the Islamic finance perspective is very limited