Social Responsibility Attitudes Actualities and Possible Areas of Advancement in Saudi Arabian Banking Research Proposal

  • Length: 9 pages
  • Sources: 12
  • Subject: Economics
  • Type: Research Proposal
  • Paper: #369488

Excerpt from Research Proposal :

CSR in Saudi Arabian Banking

Social Responsibility: Attitudes, Actualities, and Possible Areas of Advancement in Saudi Arabian Banking

The global financial system has become increasingly smaller and more complex, with individual countries and their financial and banking infrastructures more intertwined and mutually dependent on each other. Because of this, understanding the role that banking systems and entities play in the social and political spheres is essential for policy makers and for individuals working in the banking sector. Of special importance are the social responsibilities that are borne by banks and the banking industry, which can vary greatly from country to country, based on a multitude of factors. The research described and proposed herein will yield a greater understanding of how these responsibilities are viewed by bankers in Saudi Arabia.

Scholarship on Saudi Arabia's banking industry has focused almost entirely on the financial implications for the country and the globe of various banking activities, touching on issues of ethicality only tangentially though providing ample preliminary information upon which to base more direct investigations (Ford 2007; Gorvett 2009). It is the aim of this research to provide one small part of these direct investigations, opening a new area of research.

Research Question

Several key research questions will serve as guides to help focus and narrow the proposed research. The attitudes of responsibility of individuals involved in the banking system in Saudi Arabia independently towards issues of poverty, the environment, infrastructure development, and overall social and cultural progress and status will be investigated, as will past and current actions by banking institutions/individuals in regards to these social issues. Research will be driven by the desire to understand exactly what degree of social responsibility is perceived to exist amongst the banking institutions and individuals of Saudi Arabia, and to what extent these senses of responsibility are acted upon.


Throughout the development of the banking sector that largely attributes its growth and historical background to the first foreign banks to open shop in the Saudi Arabian banking sector, it has being developing in the same pace as its corporate social responsibility. The Saudi Arabia monetary Agency established in 1952 has helped in the integration of CSR culture into the banks operating in the country through its policies and regulations that enhance and facilitate CSR, most notable period in which this happened in between 1970s and 1980s where the SAMA focused on expanding the country's banking sector as well as make it responsible and beneficial to the Saudi community.

Wilson (2002, 44-77)has noted in his studies that banks operating in Saudi Arabia have increasingly over the past become conscious with what they do with profit they generate and how they make it and as such philanthropy has been integrated to banks corporate structure so also include the issue of competitiveness and risk management.

The Saudi Arabian community has also been keen to observe how this bank not only benefit from them but also offer a helping hand, such awareness among the locals has made the banks to respond with philanthropic programs that are aimed at making meaningful contribution to the Saudi community and its' national development objective (IIias, 2004, 309).


The reason why this research and others have focused their study on Saudi Arabia as a country is because of the country's recent economic growth enabled by the oil industry and the strong banking sector, more in particular the research has focused on the banking sector because it offers a good point of study as its still in the developing stages and due to the recent trend that have reported on CSR in the country's banking sector such as; CSR becoming a competitive issue; a growing focus on transparency and accountability; the integration of CSR into university and banking schools curriculum (Butters,2009,44-77).

Aims and Objectives

This research aims to provide insights into the workings of social responsibility in Saudi Arabia's banking industry, with the overarching objective of improving the level of social involvement and the sense of responsibility in the banking industry as a whole. This research will not be able to directly achieve this objective, but aims to make viable and more approachable a new area of research focusing specifically on the ethical aspects of banking in specific countries given the modern geopolitical climate. The larger objective of actually influencing change in these ethics and in the social responsibility of the global banking system as well as its individual domestic constituent parts will be accomplished by a growing body of research in this and related areas (Campbell 2007). By fulfilling its objective of clearly identifying attitudes towards social responsibility in Saudi Arabia, this research will serve as both an initial part of this body of research and as an indicator for future areas of research.

Statement of Purpose

This research will provide insight into the banking sector understands of its social responsibility in the Kingdom of Saudi Arabia. This will lead to a greater understanding of the perspective of bankers on this issue worldwide, and will suggest avenues for further research. Eventually, it is hoped that ongoing research will effect practical change in banking ethics.

Problem Statement

Taking steps to ensure that the global financial crisis and recession of the recent past (and arguably of the current period) are not repeated due to similar failures in the international finance system, a clear definition of the banking sector's social responsibilities must be developed, and these responsibilities must be agreed upon and adhered to by banking institutions and/or governments in all countries that are major international trading partners. International understandings of these social responsibilities are widely divergent, however, and research is needed to determine the perceived role of social responsibility in Saudi Arabian banking.

The Kingdom of Saudi Arabia also faces several pressing social issues, including an ongoing gender inequality that faces heavy criticism from the international community, ongoing poverty, environmental, and infrastructure issues, and the more fundamental issue of continued development in a nation that has only been able to independently join the modern world over the past half-century or so (Krieger 2008; Butters 2009). The highly religious control of finance in the country and in the region generally, however, has somewhat limited and largely directed the level of perceived and acted-upon social responsibility of the banking industry in Saudi Arabia (Wilson 2002). Research is necessary to determine the level to which various social issues are seen as at least the partial responsibility of the banking system in Saudi Arabia according to different stakeholders.

Literature review

Saudi Arabia has raised a lot of interest from scholars, authors and business analysts due to the robust economic growth that has been witnessed in the country in the past few decades, which many analysts will be quick to attribute to the rich oil resources that the country posses. Of particular importance to this research is the country's banking sector, which according to Butters, (2009, 44-77) attracts interest due to its consolidation, stability and competition that has increasingly heightened so far in the periods of four decades since the inception of Islamic banking in the country. Ford, (2007, 48-50) attributes the stability, resilience and strength of the Saudi Arabian banking sector to the Islamic banking practices, which notably was unaffected by the recent global economic crisis and the effective government supervision coupled with consistent policies in the banking sector.

Players in the Saudi Arabian banking industry have taken up their social responsibility that has led to community improvement, workforce recruitment and retention, consumer trust which Ford (2007, 48-50) noted in his book; that an estimated 35% of people in the country entrust confidence to a bank that participate in corporate social responsibilities. Banks engaging in CSR activities in the country have donated grants with an aim of improving the living standards of the poor in the community, as well taking part in initiatives aimed at promoting entrepreneurship and reduction of unemployment levels within the country.

Campbell, J. (2007, 946-947) is quoted in his book saying that: "banks in Saudi Arabia engage in CSR activities with the motive of helping the poor in the community as well as practicing religion beliefs," due to the fact that most banks are Shari' a compliant, it means that most of them are driven by Islamic religious beliefs that call onto the fortunate in the society to help those who are unfortunate n the society, thus banks participating in CSR use it a channel through which they can fulfill their religious beliefs (Jaywant, et al. (2003, 597).

According to studies conducted by Wilson (2002, 143-163) on corporate social responsibility; banks that participate in CSR activities create a positive brand image in the community they serve, they appear to be financially stable, they are able to attract talented employees who have pride in working for such banks and lastly such banks are regarded with good business ethics, all this translates to better financial performance for this banks.

Business analysts and authors such as Gorvett, (2009, 42-51) have noted that generally banks engaging in CSR…

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"Social Responsibility Attitudes Actualities And Possible Areas Of Advancement In Saudi Arabian Banking" (2010, December 08) Retrieved January 23, 2017, from

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