Islamic banking performance measurement: What do stakeholder think?

Abstract

Purpose: The objective of this study was to determine the understanding of Islamic banking X stakeholders about performance measurement   Theoretical framework: Performance measurement is important in a company or business entity, which is useful for providing manager accountability to all stakeholders. Stakeholders are people or groups who have an impact on company decisions. But in terms of management, conventional companies differ from Islamic financial institutions, especially in managing the interests of their stakeholders   Methods: The research paradigm used is an interpretive paradigm with a phenomenological approach. Phenomenology is used as an analytical tool to determine the understanding of informants   Results: The results of the study found that some stakeholders understand that Islamic banking performance is measured based on financial aspects alone, without looking at other aspects. Therefore, a balance of all aspects is needed in measuring Islamic banking performance that can accommodate the interests of all parties   Research, Practical & Social implications: Stakeholder understanding can be used as a basis for management to develop an alternative performance measurement system that not only focuses on financial aspects but other aspects, including religious aspects   Originality/value: An importan finding explains the existence of aspects other than financial aspects needed for measuring Islamic banking performance such as religious aspects