Factors Determining Libyan Banking Employees’ Readiness to Support the Transformation to a Full-Fledged Islamic Banking System
The purpose of this research is to examine the determinants of banking employees’ readiness to support the transformation to the full-fledged Islamic banking system in Libya. Using the Theory of Planned Behaviour (TPB) and employing survey questionnaires of 323 employees of 10 conventional Libyan banks analysed using Structural Equation Modelling (SEM). This research revealed that the readiness of Libyan banks’ employees is influenced significantly and positively by attitudinal, religious and subjective norms. Moreover, attitude toward transformation is the most critical factor that determines readiness among bank employees. This indicates that bank employees are willing to support the transformation process toward Islamic banking. Due to the unstable security situation in Libya, this research is confined to two states (Tripoli and Benghazi). Further researches may extend applying the proposed model to other states in the country, which may enhance the generalisability of this research’s findings. Overall, this research provides support for the transformation process to Islamic banking as a way to evaluate the readiness of Libyan banking employees for such change. Also, this research emphasizes the importance of undertaking a pre-implementation evaluation of readiness for change in Libyan commercial banks.
Ababneh, O. (2016). Switching towards islamic banking system between integral conversion or windows. International Journal of Economic and Business Review, 4(9), 56-66.
Abusloum, M., Mohamad, K. A. bin, & Bello, N. (2020). Islamic banking in Libya: Emergence, growth, and prospects. In A. Rafay (Ed.), Growth and emerging prospects of international Islamic banking (pp. 17-37). IGI Global. https://doi.org/10.4018/978-1-7998-1611-9.ch002
Addis, A. R. (2017). Determinants of customers' intention to use interest free banking products and factors affecting employees' product knowledge: The case of Commercial Bank of Ethiopia (Unpublished master's thesis). Addis Ababa University College.
Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211. https://doi.org/10.1016/0749-5978(91)90020-T
Ajzen, I. (2011). The theory of planned behaviour: Reactions and reflections. Psychology and Health, 26(9), 1113-1127. https://doi.org/10.1080/08870446.2011.613995
Alhajam, A. S. (2013). Exploring and analysing the demand and supply conditions for the institutionalisation of Islamic banking and finance in Libya (Unpublished doctoral dissertation). Durham University.
Alhajam, A. S. (2017). Demand and supply conditions for Islamic banking and finance in Libya. International Journal of Islamic Economics and Finance Studies, 3(2), 7-32.
Ali, M., Raza, S. A., & Puah, C. H. (2015). Factors affecting intention to use Islamic personal financing in Pakistan: Evidence from the modified TRA model (Munich Personal RePEc Archive Paper No. 66023). https://mpra.ub.uni-muenchen.de/66023/
Alzayed, M., & Murshid, M. A. (2017). Factors influencing employees ' intention to leave current employment in the Ministry of Information in Kuwait. European Journal of Business and Management, 9(12), 17-31.
Amin, H., Muhammad, M. Z., Lada, S., Amran, A., & Hamid, M. R. A. (2006). Islamic banking development in Bimbeaga countries: Issues and potentional cooperation. THe Journal of Mualamant and Islamic Finance Research, 3(1), 89-118.
Amin, H., Rahman, A. R. A., Sondoh Jr, S. L., & Hwa, A. M. C. (2011). Determinants of customers' intention to use Islamic personal financing: The case of Malaysian Islamic banks. Journal of Islamic Accounting and Business Research, 2(1), 22-42. https://doi.org/10.1108/17590811111129490
Baej, Y. M. A. H. (2013). A comparison of key dimensions in conventional and Islamic Banking: An international perspective with implications for the bank transformation process in Libya (Unpublished doctoral dissertation). Griffith University Submitted.
Bagozzi, R. P., Yi, Y., & Phillips, L. W. (1991). Assessing construct validity in organizational research. Administrative Science Quarterly, 36, 421-458. https://doi.org/10.2307/2393203
Bakari, H., Hunjra, A. I., & Niazi, G. S. K. (2017). How does authentic leadership influence planned organizational change? The role of employees' perceptions: Integration of Theory of Planned Behavior and Lewin's Three Step Model. Journal of Change Management, 17(2), 155-187. https://doi.org/10.1080/14697017.2017.1299370
Bananuka, J., Kaawaase, T. K., Kasera, M., & Nalukenge, I. (2019). Determinants of the intention to adopt Islamic banking in a non-Islamic developing country: The case of Uganda. ISRA International Journal of Islamic Finance, 11(2), 166-186. https://doi.org/10.1108/IJIF-04-2018-0040
Belal, Z. (2018). Legal and regulatory framework of Islamic banking in Libya. Al Mashalih - Journal Of Islamic Law, 1(2), 46-58.
Byrne, B. N. (2001). Structural equation modeling with AMOS EQS, and LISREL: Comparative approaches to testing for the factorial validity of a measuring instrument. International Journal Of Testing, 1(1), 55-86. https://doi.org/10.1207/S15327574IJT0101_4
Central Bank of Libya. (2014). 2014 3rd quarter economic bulletin [Economic Bulletin No. 54]. https://cbl.gov.ly/uploads/2016/03/%D8%A7%D9%84%D8%B1%D8%A8%D8%B9-% D8%A7%D9%84%D8%AB%D8%A7%D9%84%D8%AB2014.pdf
Chatzoglou, P. D., & Vraimaki, E. (2009). Knowledge-sharing behaviour of bank employees in Greece. Business Process Management Journal, 15(2), 245-266. https://doi.org/10.1108/14637150910949470
Chou, C. P., & Bentler, P. M. (1995). Estimates and tests in structural equation modeling. Concepts, issues, and applications. Sage Publications.
Cummings, T. G., & Worley, C. G. (2009). Organization Development & Change (9th ed.). South-Western Cengage Learning.
Dawkins, C. E., & Frass, J. W. (2005). Decision of union workers to participate in employee involvement: An application of the Theory of Planned Behaviour. Employee Relations, 27(5), 511-531. https://doi.org/10.1108/01425450510612031
Dzulkarnain, A. A., & Hatta, M. F. M. (2017). Factors influencing consumer intention towards investment account: Post Ifsa 2013. ASEAN Comparative Education Research Journal on Islam and Civilization, 1(2), 17-32.
Echchabi, A., Azouzi, D., & Aziz, H. A. (2016). The future prospects of Islamic banking in Tunisia: An empirical survey. EuroMed Journal of Business, 11(1), 119-131. https://doi.org/10.1108/EMJB-03-2015-0018
El-brassi, M. A. M. A., Alhabshi, S. M., & Othman, A. H. A. (2020). Exploring the knowledge of Islamic banking among Libyan bankers. International Journal of Islamic Economics and Finance, 3(January), 1-20. https://doi.org/10.18196/ijief.2119
El-brassi, M. A. M. A., Bello, N., & Alhabshi, S. M. (2017). Libya's transformation to an Islamic financial system: Issues and challenges. International Review of Management and Business Research, 6(3), 976-994.
El-brassi, M. A. M. A., Bello, N., & Alhabshi, S. M. (2018). Conversation of conventional banks to Islamic banks in Libya: Issues and challenges. International Journal of Accounting, Finance and Business, 3(15), 25-39.
El-brassi, M. A. M. A. (2020). Behavioural intention of Libyan bank employees towards transformation to the Islamic banking system. (Unpublished doctoral dissertation). International Islamic University Malaysia.
El Mallouli, A., & Sassi, H. (2021). Determinants of Islamic banking products and services adoption in Morocco: A conceptual framework. Journal of Islamic Marketing, 13(7), 1589-1605. https://doi.org/10.1108/JIMA-06-2020-0194
Farah, M. F. (2017). Application of the theory of planned behavior to customer switching intentions in the context of bank consolidations. International Journal of Bank Marketing, 35(1), 147-172. https://doi.org/10.1108/IJBM-01-2016-0003
Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of Marketing Research, 18(3), 382-388. https://doi.org/10.1177/002224378101800313
Garas, S. N., & Pierce, C. (2010). Shari'a supervision of Islamic financial institutions. Journal of Financial Regulation and Compliance, 18(4), 386-407. https://doi.org/10.1108/13581981011093695
Hair, J. F. Black, B., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis (7th ed.). Pearson.
Hair, J. F. J., Black, W. C., Babin, B. J., Andersen, R. E., & Tatham, R. L. (2006). Mutilvariate data analysis (6th ed.). Pearson.
Harun, T. W. R., Rashid, R. A., & Hamed, A. B. (2015). Factors influencing products' knowledge of Islamic banking employees. Journal of Islamic Studies and Culture, 3(1), 23-33. https://doi.org/10.15640/jisc.v3n1a4
Ho, R. (2006). Hand book of univariate and multivariate data analysis and iterpretation with SPSS. CRC Press. https://doi.org/10.1201/9781420011111
Holmes-Smith, P. (2001). Introduction to structural equation modeling using LISREL. ACSPRI-Winter Training Program.
Islamic Financial Services Board. (2020). Islamic Finance Services Industry Stability Report 2020. https://www.ifsb.org/download.php?id=5724&lang=English&pg=/sec03.php
Jaffar, M. A., & Musa, R. (2014). Determinants of attitude towards Islamic financing among halal-certified micro and SMEs: A preliminary investigation. Procedia - Social and Behavioral Sciences, 130(16), 135-144. https://doi.org/10.1016/j.sbspro.2014.04.017
Janssen, M. J. (2015). An understanding of employee behavior in an organizational change setting through the theory of planned behavior and the moderating effect of training (Unpublished master's thesis). University of Tilburg.
Jimmieson, N. L., Peach, M., & White, K. M. (2008). Utilizing the Theory of Planned Behavior to inform change management: An investigation of employee intentions to support organizational change. The Journal of Applied Behavioral Science, 44(2), 237-262. https://doi.org/10.1177/0021886307312773
Jimmieson, N. L., White, K., & Megan., P. (2004). Employee readiness for change: Utilizing the Theory of Planned Behavior to inform change management. Academy of Management Proceedings, 2004(1), C1-C6. https://doi.org/10.5465/ambpp.2004.13857578
Jimmieson, N. L., White, K. M., & Zajdlewicz, L. (2009). Psychosocial predictors of intentions to engage in change supportive behaviors in an organizational context. Journal of Change Management, 9(3), 233-250. https://doi.org/10.1080/14697010903125472
Johan, Z. J., Dali, N. R. S. M., Suki, A. A., & Hafit, N. I. A. (2017). Customers' intention towards Shariah compliant credit cards: A pilot study. International Journal of Academic Research in Business and Social Sciences, 7(4), 772-799. https://doi.org/10.6007/IJARBSS/v7-i4/2887
Jones, R. A., Jimmieson, N. L., & Griffiths, A. (2005). The impact of organizational culture and reshaping capabilities on change implementation success: The mediating role of readiness for change. Journal of Management Studies, 42(2), 361-386. https://doi.org/10.1111/j.1467-6486.2005.00500.x
Kim, T. G., Hornung, S., & Rousseau, D. M. (2011). Change-supportive employee behavior: Antecedents and the moderating role of time. Southern Management Association, 1-30. https://doi.org/10.1177/0149206310364243
Kline, R. B. (2011). Principles and practice of structural equation modeling (3rd ed.). The Guilford Press.
Krejcie, R. V., & Morgan, D. W. (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30(3), 607-610. https://doi.org/10.1177/001316447003000308
Kwahk, K. Y., & Lee, J. N. (2008). The role of readiness for change in ERP implementation: Theoretical bases and empirical validation. Information and Management, 45(7), 474-481. https://doi.org/10.1016/j.im.2008.07.002
Noor, S. M., & Nasirun, N. (2015). Training as a moderator in the relationship between employees collaboration, top management support and IT support with knowledge management in Malaysian public organization. International Academic Research Journal of Business and Technology, 1(2), 108-116.
Obeid, H., & Kaabachi, S. (2016). Empirical investigation into customer adoption of Islamic banking services in Tunisia. The Journal of Applied Business Research, 32(4), 1243-1256. https://doi.org/10.19030/jabr.v32i4.9734
Organisation for Economic Co-operation and Development. (2016). The development dimension SMEs in Libya's reconstruction preparing for a post-conflict economy. OECD Publisher.
Ogbodoakum, N., & Abiddin, N. Z. (2017). Theory of Planned Behaviour and readiness for changes: Implication for organisations. Jurnal Indonesia Untuk Kajian Pendidikan, 2(1), 1-18. https://doi.org/10.17509/mimbardik.v2i1.6019
Omar, K. M. (2015). The Moderating effects of government support and religious obligations on the relationship between service quality, knowledge and awareness of Islamic banking system and the intention to subscribe the system in Libya (Unpublished doctoral dissertation). Unversity of Utara Malaysia.
Peach, M., Jimmieson, N. L., & White, K. M. (2005). Beliefs underlying employee readiness to support a building relocation: A Theory of Planned Behavior perspective. Organization Development Journal, 23, 9-22.
Rafferty, A. E., Jimmieson, N. L., & Armenakis, A. A. (2013). Change readiness: A multilevel review. Journal of Management, 39(1), 110-135. https://doi.org/10.1177/0149206312457417
Rise, J., Sheeran, P., & Hukkelberg, S. (2010). The role of self-identity in the Theory of Planned Behavior: A meta-analysis. Journal of Applied Social Psychology, 40(5), 1085-1105. https://doi.org/10.1111/j.1559-1816.2010.00611.x
Saaid, A., & Shafii, Z. (2013). The obstacles facing conversion process from conventional banks to Islamic banking: A review of literature. Proceedings of the 5th Islamic Economic Conference, 540-558.
Saaid, A. A. K. (2016). The internal obstacles of Libyan conventional banks' conversion to Islamic banks (Unpublished doctoral dissertation). Universiti Sains Islam Malaysia.
Sahi, G. K., & Mahajan, R. (2014). Employees' organisational commitment and its impact on their actual turnover behaviour through behavioural intentions. Asia Pacific Journal of Marketing and Logistics, 26(4), 621-646. https://doi.org/10.1108/APJML-01-2014-0015
Saleem, Q., Shahid, M., & Naseem, A. (2011). Degree of influnce of training and development on employees behaviour. International Journal of Computing and Business Research, 2(3), 1-11.
Schumacker, R. E., & Lomax, R. G. (2004). A beginner's guide to structural equation modeling (2nd ed.). Lawrence Erlbaum Associates Publishers. https://doi.org/10.4324/9781410610904
Sekaran, U., & Bougie, R. (2016). Research methods for business (7th ed.). John Wiley and Sons Ltd.
Strebel, P. (1994). Choosing the right change path. California Management Review, 36(2), 29-51. https://doi.org/10.2307/41165743
Thomson Reuters. (2018). Islamic finance development report 2018: Building momentum. https://ceif.iba.edu.pk/pdf/Reuters-Islamic-finance-development-report2018.pdf
Waddell, D., & Sohal, A. S. (1998). Resistance: A constructive tool for change management. Management Decision, 36(8), 543-548. https://doi.org/10.1108/00251749810232628
Werts, C. E., Linn, R. L., & Jöreskog, K. G. (1974). Intraclass reliability estimates: Testing structural assumptions. Educational And Psychlogical Measurment, 33(1), 25-33. https://doi.org/10.1177/001316447403400104
Wilopo, Iqbal, M., & Sanjaya, A. (2016). TPB and employees ' intention to support organizational change through the adoption of e-ticketing: A survey of employees of private bus lines in Malang. International Journal of Management and Administrative Sciences, 3(10), 107-121.
Yang, Y., Choi, J. innim, & Lee, K. (2018). Theory of Planned Behavior and different forms of organizational change behavior. Social Behavior and Personality: An International Journal, 46(10), 1657-1671. https://doi.org/10.2224/sbp.6832
Zafar, R., Altaf, M., Bagram, M. M. M., & Hussain, H. (2012). Religiosity, as determinant of turnover intention: An exploratory study. Journal of Commerce, 4(4), 1-8.
Copyright (c) 2022 UNIMAS Publisher
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.