Strategizing in Practice in Islamic and Conventional Banks in Saudi Arabia

Abstract

This empirical research has explored strategizing in the banking sector in a non-Western context. Attention was drawn to strategy meaning, strategizing activities and strategy practitioners. A comparison of strategizing was made between Islamic banks governed by Shari’ah and non Islamic ones.
Strategy practices and strategy practitioners have received little research attention. Hence, this research is influenced by the strategy as practice perspective to describe the context for strategy actors and strategizing practices. The importance of this study is derived from its focus on the micro level of strategizing and strategists in a cross cultural context. Its focal point is strategy practitioners from different levels of the organisation.
A multiple case study approach was adopted. Data were obtained via 41 semi-structured interviews with purposively selected strategy actors, complemented by secondary data, from six of the 12 commercial banks in Saudi Arabia: two Islamic ones, two local conventional ones and two international banks.

Findings reveal that no single consensus definition was expressed by strategists, yet there were similarities in the various conceptualizations they offered. Thirteen practices employed by practitioners were identified and classified as recursive or adaptive. This research provides insights into who the strategists (internal and external) are by focusing on capabilities and engagement. Findings confirm that social norms could restrict certain actors’ participation, such as the cultural barrier to women’s participation. The engagement of strategy actors in different practices varied, which means different strategy practices could be practised by different strategy actors; moreover, they differed in their level of influence.

In terms of differences between conventional and Islamic banks, there was no distinction in the way strategy was perceived and practised. The only distinctive aspect was in terms of strategy actors, where in the Islamic banks, the Shari’ah Board and Shari’ah Group played key roles.
The research contributes to the emerging s-as-p perspective with micro level, cross-cultural data, identifying 13 practices and linking them to modes, timing and actors.