CSR in the banking sector: A legitimacy approach to the shareholders’ and stakeholders’ debate

Abstract

Globalization increased calls for corporations to use firms' resources to alleviate a wide variety of social problems taking into consideration that existing governments are unable or unwilling to deal with such problems. In this context, corporate social responsibility (CSR) in the banking sector became a strategic tool of legitimacy in parallel to the recognition of stakeholders' interests keeping the primacy of shareholders' interests. This article studies CSR in the Lebanese banking sector through Suchman's (1995) legitimacy approach to the shareholders' and stakeholders' debate. Using a qualitative approach, this paper discloses how the banking strategy in terms of CSR could respond to the process of legitimacy within the debate: "creating value for stakeholders creates value for shareholders"; and reveals how normative considerations are likely to modify substantially banks' behavior and practices.

A sequential process from external stakeholder pressures to performance in services

“…'s (2022) observations of several service and manufacturing cases that pursing environmental performance for competitive advantages through responding to the concerns of external stakeholders is a process of organizational learning and innovation. Due to the intangible nature of services, existing service research generally adopts the legitimacy theory to advocate that legitimacy is the vital source of sustainable competitive advantage and managing the stakeholders' concerns can lead to the legitimacy (Chedrawi and Osta, 2017; Miotto et al. , 2020; Payne et al.…”

Corporate social responsibility authenticity as a determinant of repurchase intentions

“…The motivation behind engaging in CSR initiatives is based on the idea of shared values (Chedrawi and Osta, 2017). CSR practices through community engagements often successfully create shared values for the focal firms and the larger society in which these firms operate; this invariably helps build a more positive image of the firms and their business activities.…”