Abstract
This paper aims to examine the importance of Islamic organizational culture and Islamic corporate social responsibility in improving corporate performance. The population of this study is all sharia banks in Central Java – Indonesia. By using census sampling method, 327 sharia banks are determined as samples of the study. Partial least squares (PLS) approach is applied to analyze the data. The results reveal that Islamic organizational culture has a significant role in improving Islamic corporate social responsibility, which in turn, increasing corporate performance.
Highlights
Sharia banking has grown endlessly since its establishment in the mid-1970s
In Indonesia, the existences of sharia banks that operate in banking services increasingly enliven the financial industry (Ifada, 2017)
It can be concluded that the construct of Islamic organization culture, Islamic corporate social responsibility measured by (Islamic economic responsibility, Islamic legal responsibility, Islamic ethical responsibility and Islamic philanthropic responsibility) and corporate performance have a good reliability
Summary
Sharia banking has grown endlessly since its establishment in the mid-1970s. This industry is increasingly carving out most of the global financial markets (Farag, Mallin, & Ow-yong, 2014). In Indonesia, the existences of sharia banks that operate in banking services increasingly enliven the financial industry (Ifada, 2017). According to the numbers released by OJK (Financial Authority Service) in early 2017, the financial assets of sharia banks in exceeded 891 trillion rupiahs, with the market share rate of 5.18 percent from the total financial industry (Faisol, 2017). With the religious identity of sharia banks and other Islamic business organizations that incorporate the Islamic religion values in its operations, it is expected to have more social responsibility than conventional banking
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