Sustainable Banking–A Quantitative Case in the Middle East Using MCDM and SEM Methods

Abstract

Purpose: This study aims to explore the influence of green management standards on decision-making in the Lebanese banking sector.It seeks to uncover the dynamics of decision-making among key stakeholders as businesses navigate the challenge of aligning with environmentally conscious frameworks. Theoretical reference: The theoretical framework underpinning this research is rooted in the imperative for businesses to undergo a transformative shift towards sustainability, colloquially referred to as the "green shift." This shift is anticipated to be an unavoidable phenomenon, exerting pressure on businesses, including those in the Lebanese banking sector, to align their operations with environmentally sustainable practices. Method: Mixed methods Multi-criteria decision-making (MCDM) via the Analytic Hierarchy Process (AHP) and Structural equation modelling (SEM) via AMOS software were employed. Results and Conclusion: The results suggest internal stakeholders play a significant role in decision-making regarding green management in the banking sector. In contrast, external stakeholders rank second in their significance to green management in the banking industry. We note green products are significant to most top bank stakeholders. Implications of research: Researching the banking sector limits the possibility of generalizing the results to other types of business sectors as well as other geographical areas. The results could be improved by including additional stakeholders. The results help the Managers, CEOs, and strategic thinkers in the banking sector to target green managerial practices to the right stakeholders to maximize their green competitive advantage. Originality/value: This research investigated one of the rare studies in the banking sector where we could calculate the significance of the managerial parameters that govern the decision-making of bank stakeholders.