The Impact of E-banking Entrepreneurship Orientation Drivers on Sustainable Performance: A Case Study of Banks Operating in Kingdom Saudi Arabia

Abderrazak Laghouag

doi:10.24176/bmaj.v5i1.7191

The Impact of E-banking Entrepreneurship Orientation Drivers on Sustainable Performance: A Case Study of Banks Operating in Kingdom Saudi Arabia

Abderrazak Laghouag

Abstract

Saudi Arabia’s vision for 2030 strives to increase the contribution of SMEs in the national economy from 20% to 35% and reduce the unemployment rate from 11.6% to 7%. To achieve this, the Kingdom relies on the vital role of banks to support entrepreneurial projects. This opportunity raised the competition among the different banks operating in Saudi Arabia to attract more customers and gain significant share market through being more pro-active and innovative and ready to risk-taking regarding e-services. This study aims to measure the impact of e-banking entrepreneurship orientation drivers on a bank’s sustainable performance. A questionnaire has been developed to test the different hypotheses, and 607 responses have been collected and analyzed. The results show high awareness regarding the drivers supporting e-banking entrepreneurial orientation, especially the human capital. On the other hand, the results show the significant positive impact of e-banking entrepreneurial orientation on the sustainable performance dimensions, namely, environmental, ethical, and social performance.

Keywords

entrepreneurial orientation drivers, e-banking entrepreneurial orientation, sustainable performance

Full Text:

PDF

References

Ahmad, B., Andriani, K., Umar, N., & Suharyono, S. (2021). The Effect of Spiritual Marketing and Entrepreneurship Orientation on Determining Sustainable Competitive Advantage. Koreascience.or.Kr, 8(2), 231–0241. https://doi.org/10.13106/jafeb.2021.vol8.no2.0231

Albort-Morant, G., & Rey-Martí, A. (2015). The Development of ICTs and The Introduction of Entrepreneurial Capital. Lecture Notes in Business Information Processing, 222, 84–92. https://doi.org/10.1007/978-3-319-22204-2_8

Al-Hariri, B., (2020). Structural Model to Measure The Impact of Entrepreneurship Orientation on Banking Sustianble Performance: An Applied Study in Egyptian Banking Sector. Journal of Alexandria University for Management Sciences, 57(3), 55–98.

Ali, G. A., Hilman, H., & Gorondutse, A. H. (2020). Effect of Entrepreneurial Orientation, Market Orientation and Total Quality Management on Performance: Evidence from Saudi SMEs. Benchmarking, 27(4), 1503–1531. https://doi.org/10.1108/BIJ-08-2019-0391/FULL/HTML

Ali, M., Cantner, U., & Roy, I. (2017). Knowledge Spillovers Through FDI and Trade: The Moderating Role of Quality-Adjusted Human Capital. Economic Complexity and Evolution, 357–391. https://doi.org/10.1007/978-3-319-62009-1_16

Al-Omoush, K. S. (2020). The Role of Top Management Support and Organizational Capabilities in Achieving E-Business Entrepreneurship. Kybernetes, Vol. 50 No. 5, pp. 1163-1179. https://doi.org/10.1108/K-12-2019-0851

Al-Omoush, K. S. (2021). Understanding the Impact of Intellectual Capital on E-Business Entrepreneurial Orientation and Competitive Agility: An Empirical Study. Information Systems Frontiers, 1–14. https://doi.org/10.1007/s10796-020-10092-7

Al-Omoush, K. S. (2019). The Drivers of E-Banking Entrepreneurship: An Empirical Study. International Journal of Bank Marketing, Vol. 38 No. 2, pp. 485-500. https://doi.org/10.1108/IJBM-03-2019-0113

AlSudani, A. M. S. H. H. (2017). The Role of the Orientation of Entrepreneurship in Improving the Performance of Gulf Commercial Bank. Applied Research. AL-Anbar University Journal of Economic and Administration Science, 9(20), 159–181.

Al-Swidi, A., & Al-Hosam, A. (2012). The Effect of Entrepreneurial Orientation on the Organizational Performance: A Study on the Islamic Banks in Yemen Using the Partial Least Squares Approach. Oman Chapter of Arabian Journal, 2(1). pp. 73-85 https://platform.almanhal.com/Files/Articles/41906

Ameer, F. and N. R. Khan. (2020). Manager’s Age, Sustainable Entrepreneurial Orientation and Sustainable Performance: A Conceptual Outlook. Sustainability, 12(8), 3196. https://doi.org/10.3390/su12083196

Ang, J., Madsen, J., & Islam, M. (2011). The Effects of Human Capital Composition on Technological Convergence. Journal of Macroeconomics, 33(3), 465–476. https://www.sciencedirect.com/science/article/pii/S0164070411000164

Audretsch, D., & M Keilbach. (2004). Entrepreneurship and Regional Growth: An Evolutionary Interpretation. Journal of Evolutionary Economics, 14(5), 605–616. https://doi.org/10.1007/s00191-004-0228-6

Bahrami, P., Nosratabadi, S., & Calitatea, C. I.-. (2016). Role of Intellectual Capital in Corporate Entrepreneurship. Calitatea, 17(155), 111–115.

Batjargal, B. (2007). Internet Entrepreneurship: Social Capital, Human Capital, and Performance of Internet Ventures in China . Research Policy, 36(5), 605–618.

Brockhaus, R. H. (1980). Risk Taking Propensity of Entrepreneurs. Academy of Management Journal, 23(3), 509–520. https://doi.org/10.5465/255515

Carè, R. (2018). Exploring the Role of Banks in Sustainable Development. Sustainable Banking, 39–64. https://doi.org/10.1007/978-3-319-73389-0_3

Charband, Y., & Jafari Navimipour, N. (2016). Online Knowledge Sharing Mechanisms: A Systematic Review of the State Of the Art Literature and Recommendations for Future Research. Information Systems Frontiers, 18(6), 1131–1151. https://doi.org/10.1007/S10796-016-9628-Z

Chow, I. H. S. (2006). The Relationship Between Entrepreneurial Orientation and Firm Performance in China. SAM Advanced Management Journal, 71(3), 11-20

Danquah, M., & Amankwah-Amoah, J. (2017). Assessing the Relationships Between Human Capital, Innovation and Technology Adoption: Evidence from Sub-Saharan Africa. Elsevier. https://doi.org/10.1016/j.techfore.2017.04.021

Dogarawa, A. B. (2006). An Examination of Ethical Dilemmas in the Nigerian Banking Sector. Available at SSRN https://ssrn.com/abstract=1621054 or http://dx.doi.org/10.2139/ssrn.1621054

Fatoki, O. (2019). Green Entrepreneurial Orientation and Firm Performance in South Africa. Entrepreneurship and Sustainability, 7(1), 247.

Ferreira, F., Jalali, M., & JJM Ferreira. (2016). Experience-Focused Thinking and Cognitive Mapping in Ethical Banking Practices: From Practical Intuition to Theory. Journal of Business Research. Vol. 69 No.11 pp. 4953-4958 https://doi.org/10.1016/j.jbusres.2016.04.058

Ghozali, I., Kusumawardhani, A., Mahelan Prabantarikso, R., & Basbeth, F. (2020). Entrepreneurial Orientation in Government-Owned Bank: Do They Improve Competitive Advantage? International Journal of Financial Research, 11(2). https://doi.org/10.5430/ijfr.v11n2p262

Gowthorpe, C. (2009). Wider Still and Wider? A Critical Discussion of Intellectual Capital Recognition, Measurement, and Control in A Boundary Theoretical Context. Critical Perspectives on Accounting, 20(7), 823–834.

Halberstadt, J., Niemand, T., & Kraus, S. (2021). Social Entrepreneurship Orientation: Drivers of Success for Start-Ups and Established Industrial Firms. Industrial Marketing Management , 94, 137–149.

Hanafizadeh, P., & Zare Ravasan, A. (2018). An Empirical Analysis on Outsourcing Decision: The Case of E-Banking Services. Journal of Enterprise Information Management, 31(1), 146–172. https://doi.org/10.1108/JEIM-11-2016-0182

Hayton, J. C. (2005). Competing in the New Economy: The Effect of Intellectual Capital on Corporate Entrepreneurship in High-Technology New Ventures. R and D Management, 35(2), 137–155. https://doi.org/10.1111/J.1467-9310.2005.00379.X

Henderson, J. C. , & V. N. (1989). Strategic Alignment: A Framework for Strategic Information Technology Management. Business Quarterly.

Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A New Criterion for Assessing Discriminant Validity in Variance-Based Structural Equation Modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/S11747-014-0403-8

Hernández-Perlines, F., & N Rung-Hoch. (2017). Sustainable Entrepreneurial Orientation in Family Firms. Sustainability. https://doi.org/10.3390/su9071212

Hu, G. G. (2021). Is Knowledge Spillover From Human Capital Investment A Catalyst For Technological Innovation? The Curious Case of Fourth Industrial Revolution in BRICS Economies. Technological Forecasting and Social Change, 162(120327). https://www.sciencedirect.com/science/article/pii/S0040162520311537

Hughes, M., & Morgan, R. E. (2007). Deconstructing the Relationship Between Entrepreneurial Orientation and Business Performance at the Embryonic Stage of Firm Growth. Industrial Marketing Management, 36(5), 651–661. https://doi.org/10.1016/J.INDMARMAN.2006.04.003

Hussain, N., Rigoni, U., & Orij, R. P. (2018). Corporate Governance and Sustainability Performance: Analysis of Triple Bottom Line Performance. Journal of Business Ethics, 149(2), 411–432. https://doi.org/10.1007/S10551-016-3099-5

Imam Wafaqi. (2008). Scientific Research - Preparing the Research Project and Writing the Final Report: Vol. (First Edition). Al-Asriyya Library for Publishing and Distribution.

Jiang, W., Chai, H., & Shao, J. (2018). Green Entrepreneurial Orientation for Enhancing Firm Performance: A Dynamic Capability Perspective. Journal of Cleaner Production, 198, 1311–1323. https://www.sciencedirect.com/science/article/pii/S0959652618320778

Khan, Z., Ali, S., Umar, M., Kirikkaleli, D., Total, Z. J.-S. of the, & 2020, undefined. (2020). Consumption-Based Carbon Emissions and International Trade in G7 Countries: The Role of Environmental Innovation and Renewable Energy. Elsevier, 730, 138945. https://doi.org/10.1016/j.scitotenv.2020.138945

Kim, M., Song, J., & Triche, J. (2015). Toward an Integrated Framework for Innovation in Service: A Resource-Based View and Dynamic Capabilities Approach. Information Systems Frontiers, 17(3), 533–546. https://doi.org/10.1007/S10796-014-9505-6

Knight GA. (1997). Cross-Cultural Reliability and Validity of a Scale to Measure Firm Entrepreneurial Orientation. Journal of Business Venturing, 12, 213–225. https://www.sciencedirect.com/science/article/pii/S0883902696000651

Kraus, S., Burtscher, J., Vallaster, C., & Angerer, M. (2018). Sustainable Entrepreneurship Orientation: A Reflection on Status-Quo Research on Factors Facilitating Responsible Managerial Practices. Sustainability, 10(2), 444. MDPI AG. Retrieved from http://dx.doi.org/10.3390/su10020444

Kreiser, P. M., Marino, L. D., & Weaver, K. M. (2002). Assessing the Psychometric Properties of the Entrepreneurial Orientation Scale: A Multi-Country Analysis. Entrepreneurship Theory and Practice, 26(4), 71–93. https://doi.org/10.1177/104225870202600405

Kumar, K., & Prakash, A. (2019a). Developing a Framework for Assessing Sustainable Banking Performance of the Indian Banking Sector. Social Responsibility Journal, 15(5), 689–709. https://doi.org/10.1108/SRJ-07-2018-0162/FULL/HTML

Kumar, K., & Prakash, A. (2019b). Examination of Sustainability Reporting Practices in Indian Banking Sector. Asian Journal of Sustainability and Social Responsibility, 4(1). https://doi.org/10.1186/S41180-018-0022-2

Kumar, K., & Prakash, A. (2020). Managing Sustainability in Banking: Extent of Sustainable Banking Adaptations of Banking Sector in India. Environment, Development and Sustainability, 22(6), 5199–5217. https://doi.org/10.1007/S10668-019-00421-5

Laghouag, A., (2016). The impact of aligning Information Systems with Supply Chain Management on Business Performance.

Lehner, O. M. (2016). Routledge Handbook of Social and Sustainable Finance. Routledge Handbook of Social and Sustainable Finance, 1–732. https://doi.org/10.4324/9781315772578/routledge-handbook-social-sustainable-finance-othmar-lehner

Leone, M., & Belingheri, P. (2017). The Relevance of Innovation for Ethics, Responsibility and Sustainability. Industry and Innovation, 24(5), 437–445. https://doi.org/10.1080/13662716.2017.1310036

Lucas Jr, R. E. (2009). Ideas and Growth. Economica, 76(301), 1–19.

Lumpkin, G., & GG Dess -. (2001). Linking Two Dimensions of Entrepreneurial Orientation to Firm Performance: The Moderating Role of Environment and Industry Life Cycle. Journal of Business Venturing, 16, 429–451.

Maditinos, D., Chatzoudes, D., & Sarigiannidis, L. (2014). Factors Affecting E-Business Successful Implementation. International Journal of Commerce and Management, 24(4), 300–320. https://doi.org/10.1108/IJCOMA-07-2012-0043

Martinez-Conesa, I. , S.-A. P. , & P.-M. M. (2017). Corporate Social Responsibility and Its Effect on Innovation and Firm Performance: Empirical Research in SMEs. Journal of Cleaner Production, 14(2), 2374–2383.

Martín-Rojas, R., García-Morales, V. J., & García-Sánchez, E. (2011). The Influence on Corporate Entrepreneurship of Technological Variables. Industrial Management & Data Systems, 111(7), 984–1005. https://doi.org/10.1108/02635571111161253

Matejun. (2016). Role of Technology Entrepreneurship in the Development of Innovativeness of Small and Medium-Sized Enterprises. Management, 20(1), 167–183.

Miller, D. (1983). The Correlates of Entrepreneurship in Three Types of Firms. Management Science, 29(7), 770–791. https://doi.org/10.1287/MNSC.29.7.770

Miller, D., & Friesen, P. H. (1982). Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1–25. https://doi.org/10.1002/SMJ.4250030102

Miller, D., & Friesen, P. H. (1983). Strategy‐Making and Environment: The Third Link. Strategic Management Journal, 4(3), 221–235. https://doi.org/10.1002/SMJ.4250040304

Mintzberg, H. (1973). Strategy-Making in Three Modes. California Management Review, 16(2), 44–53.

Mullens, D. (2018). Entrepreneurial Orientation and Sustainability Initiatives in Family Firms. Journal of Global Responsibility, 9(2), 160–178. https://doi.org/10.1108/JGR-03-2017-0020/FULL/HTML

Nasution, M. D. T. P., Rafiki, A., Lubis, A., & Rossanty, Y. (2021). Entrepreneurial Orientation, Knowledge Management, Dynamic Capabilities Towards E-Commerce Adoption of SMEs In Indonesia. Journal of Science and Technology Policy Management, 12(2), 256–282. https://doi.org/10.1108/JSTPM-03-2020-0060

Niemand, T., Rigtering, C., Kallmünzer, A., & Kraus, S. (2017). Entrepreneurial Orientation and Digitalization in the Financial Service Industry: A Contingency Approach. https://aisel.aisnet.org/ecis2017_rp/70/

Nissen, V., & von Rennenkampff, A. (2017). Measuring the Agility of the IT Application Systems Landscape. https://aisel.aisnet.org/wi2017/track05/paper/1/

Nizam, E., Ng, A., Dewandaru, G., & … R. N. (2019). The Impact of Social and Environmental Sustainability on Financial Performance: A Global Analysis of the Banking Sector. Journal of Multinational Financial Management, 49, 35–53. https://www.sciencedirect.com/science/article/pii/S1042444X18300215

Oliveira, T. , & M. M. F. (2011). Literature Review of Information Technology Adoption Models at Firm Level. Electronic Journal of Information Systems Evaluation, 14(1), 110–121.

Orji IJ. (2018). Examining Barriers to Organizational Change for Sustainability and Drivers of Sustainable Performance in the Metal Manufacturing Industry. Resources, Conservation and Recycling , 140, 102–114. https://doi.org/10.1016/j.resconrec.2018.08.005

Petti, C., & Zhang, S. (2011). Factors Influencing Technological Entrepreneurship Capabilities. Journal of Technology Management in China, 6(1), 7–25. https://doi.org/10.1108/17468771111105631

Porter, M. E. (1997). Competitive Strategy. Measuring Business Excellence, 1(2), 12–17. https://doi.org/10.1108/EB025476

Purnomo, M., Permana, ; Erwin, Qosasi, ; Achsanul, Achmad, ;, Febrian, F., & Miftahuddin, A. (2019). Entrepreneurial Orientation in Micro and Small Enterprises of Traditional Food Centers in Bandung, West Java. Journal.Binus.Ac.Id, 10(3), 167–174. https://doi.org/10.21512/bbr.v10i3.5611

Rajhi Annual Report. (2019). Bank of the Future. Alrajhibank.Com.Sa.

Ratten, V. (2012). Entrepreneurship, E-Finance and Mobile Banking. International Journal of Electronic Finance, 6(1), 1–12. https://doi.org/10.1504/IJEF.2012.046590

Reuber, A., & Fischer, E. (2011). International Entrepreneurship in Internet-Enabled Markets. Journal of Business Venturing, 26(6), 660–679. https://doi.org/10.1016/j.jbusvent.2011.05.002

Roxas, B. (2021). Environmental Sustainability Engagement of Firms: The Roles of Social Capital, Resources, and Managerial Entrepreneurial Orientation of Small and Medium Enterprises in Vietnam. Business Strategy and the Environment, 30(4), 2194–2208. https://doi.org/10.1002/BSE.2743

S Wilson, J. O., F Hoepner ab, A. G., Barth, J., Casu, B., Lehnert, A., & Scholtens, B. (2010). 24 Social, Environmental, Ethical and Trust (SEET) Issues in Banking: An Overview. Books.Google.Com. https://doi.org/10.4337/9781849802932.00037

Scheepers, M., & Hough, J. (2017). Entrepreneurial Intensity: A Comparative Analysis of Established Companies in South Africa. South African Journal of Economic and Management Sciences, 10(2), 238–255. https://journals.co.za/doi/abs/10.10520/EJC21809

Schumpeter, J. A. (1934). The Theory Of Economic Development. Cambridge, Harvard University Press.

Sikdar, P., Kumar, A., & Makkad, M. (2015). Online Banking Adoption: A Factor Validation and Satisfaction Causation Study in the Context of Indian Banking Customers. International Journal of Bank Marketing, 33(6), 760–785. https://doi.org/10.1108/IJBM-11-2014-0161

Stevenson, H. H., & Jarillo, J. C. (2007). A Paradigm of Entrepreneurship: Entrepreneurial Management. Entrepreneurship: Concepts, Theory and Perspective, 155–170. https://doi.org/10.1007/978-3-540-48543-8_7

Tseng, C., Chang, K., & Chen HW. (2019). Strategic Orientation, Environmental Innovation Capability, and Environmental Sustainability Performance: The Case of Taiwanese Suppliers. Sustainability , 11(4), 1127. https://doi.org/10.3390/su11041127

Wang, E., & Chiu, C. (2015). Impact of IT Intellectual Capital on IT explorative-exploitative Innovation Strategy and Performance. 48th Hawaii International Conference on System Sciences, 4266–4275. https://ieeexplore.ieee.org/abstract/document/7070331/

Wang, X., & M Dass. (2017). Building Innovation Capability: The Role of Top Management Innovativeness and Relative-Exploration Orientation. Journal of Business Research. https://doi.org/10.1016/j.jbusres.2017.03.019

Yu, W. , J. M. A. , C. R. , & Y. J. (2019). Dynamism, Disruption Orientation, and Resilience in The Supply Chain and the Impacts on Financial Performance: A Dynamic Capabilities Perspective. International Journal of Production Economics, 218, 352–362.

Zhao, W. , & W. Q. (2006). Human Capital and Technology Spillover: An Empirical Research Based on The Import-Oriented Mechanism. China Soft Science Magazine, 4(1), 66–74.

Zhu, K., Dong, S., Xu, S., & KL Kraemer. (2006). Innovation Diffusion in Global Contexts: Determinants of Post-Adoption Digital Transformation of European Companies. European Journal of Information Systems, 15(6), 601–616. https://doi.org/10.1057/palgrave.ejis.3000650

Zupic I. (2014). The Knowledge Base of Technology Entrepreneurship. Handbook of Research on Techno–Entrepreneurship, 1–16.

DOI: https://doi.org/10.24176/bmaj.v5i1.7191