Strategic Responses of the Lebanese Banking Sector to the Pressure of the United States Regulations

Abstract

Researchers have linked the institutional lens with strategic responses in order to better understand the behavior of organizations when confronted with institutional pressures and wider social forces. In our study, we empirically test Oliver’s (1991) conceptual framework of strategic responses in the Lebanese banking sector that is facing institutional exogenous pressure stemming from the US regulations for the purpose of understanding how the sector responds to the US pressure. Thus, this paper attempts to bridge the neo institutional theory with Oliver’s (1991) strategic responses by addressing the following question: What are the strategic responses adopted by the Lebanese banking sector to maintain its legitimacy in view of the pressures of the US regulations? Towards achieving this objective, this paper utilizes a qualitative approach, retrospective longitudinal design, and relies on collection and content analysis of extensive archival data from 1997 to 2018, in addition to analysis of data collected from 28 participants through semi-structured interviews. Our findings defy most of the strategic responses and tactics of Oliver (1991). Rather, they revealed the salience of new strategic responses adopted by the Lebanese banking sector in the face of the US challenges.