Participatory decision-making: an empirical investigation of Kuwait Islamic banks

Abstract

One of the world’s fastest growing banking methods today is Shariah compliant banking, with the number of Islamic banking and finance institutions growing from one in 1975 to more than three hundred today in more than seventy-five countries around the world, holding assets valued around US$1 trillion. However, research and understanding regarding the management in decision-making in the Islamic banking industry is underdeveloped. This study, unlike previous research, applies Islamic Work Ethics (IWE’s) and Participatory Decision-Making (PDM) to inspect both their influence and outcomes. However, despite PDM’s maturity and validity in different contexts, very little published literature strives to extend its capability in the Islamic banking context. Both PDM and IWE’s have found to lead to greater job satisfaction and commitment; however, interrelationships have not yet been studied. As a result, it is unclear if the PDM approach to determining whether or not employees should be involved in the decision-making process is applicable with IWE’s or within Islamic banking and developing country contexts. As a result, a need arises for the addition of factors, which may potentially develop the understanding of employee involvement in decision-making, as misuse and lack of understanding of PDM may lead to low job satisfaction and commitment. The current study is sorted into multiple stages as to carry out the entire research. To start with, the introduction section of this study provides the setting of the research including the background of the study, aims, objectives and research questions. Moving on, a critical literature review is provided as to identify key points in previous studies. As a result, research hypotheses are extracted, which provides the relationships being tested, of which the theoretical framework is based. Next, the methodology, which is applied in the study, is identified and justifications for data collection methods, analysis tools and multiple tests are provided. Afterwards, questionnaires were distributed to front desk employees working within the Kuwaiti Islamic banking industry as the sample for primary data. Following, vi data analysis is carried out, from which the findings and accepting and rejecting of analysis is reliant upon. Outcome identified that employee desires to be involved in decision-making was greatly influenced by IWE’s. Also, employees desire to be involved in decision-making differentiated significantly based on whether or not decisions were based on actual work or regarding fellow co-workers. Finally, theoretical and managerial implications are provided, as well as suggestions for future research.