Enhancing Organizational Resilience: The Case of Palestinian Islamic Banking Sector

Discussion Committee: 
Dr. Ayham Jaaron / Supervisor
Dr. Hisham Shkokani / External Examiner
Dr. Ahmad Ramahi / Internal Examiner
Dr. Ayham Jaaron / Supervisor
Mohamed Mahmoud Fareed Abo Alrob
Organizations maintain our economy; they provide jobs, goods, services and a sense of community. The increasingly globalized nature of the modern world has led to organizations facing threats that often are not recognized until the threat becomes a crisis. It is impossible for organizations, regardless of size, location or financial strength, to identify all possible hazards and their consequences. Therefore, the concept of increasing organizational resilience is gaining momentum. However, the term resilience has been used with abandon across a wide range of academic disciplines and in a great many situations. There is little consensus regarding what resilience is, what it means for organizations and, more importantly, how they may achieve greater resilience in the face of increasing threats. As in the case of all banks in emerging countries that are not fully capable of implementing the Basel II and Basel III accords which aims to enhance their resilience abilities, the Islamic banks in Palestine must be aware of the significance of configuring an internal environment in accordance with the best practices and international standards to enhance their resilience abilities, due to the fact that there is a lack of knowledge in on how Palestinian organizations can enhance their resilience abilities. This study investigates two Islamic banks within the Palestine context to discover what are the common issues that foster or create barriers to increased resilience. Organizational resilience is defined in this study as a function of the overall situation awareness, keystone vulnerabilities and adaptive capacity of an organization in a complex, dynamic and interrelated environment. A case-study method has been used, and resilience benchmark tool for assessing the organizational resilience in each bank. Data was collected in the form of participant observations, semi-structured interviews and benchmark tool. The study has revealed that operational risk, severe weather and political instability are the major risk facing the Islamic banks in Palestine. A proposed framework was developed so that Palestinian Islamic banks can adopt in order to enhance their organizational resilience abilities. The framework consists of two dimensions along with a set of thirteen resilience indicators. The first dimension is adaptive capacity which includes eight indicators minimization of silos, internal resources, staff engagement and involvement, information and knowledge, leadership, innovation and creativity, decision-making, and situation monitoring and reporting. Planning is the second dimension it includes five indicators which are planning strategies, stress testing plans, proactive posture, external resources and recovery priorities. Future work is likely to include further quantification of the methodology and the resilience dimensions and indicators and work on understanding how the implementation of Basel II and Basel III accords: A global regulatory framework for more resilient banks and banking systems impact the resilience of Palestinian banks.
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