Article Preview
Top1. Introduction
Generally speaking, turbulent events that can affect organizational performance take many forms, such as the 2004 Indian Ocean Tsunami, the 2010 Haiti and Chile Earthquakes and the recent global financial crisis. Natural disasters, pandemic disease, economic recession, system failures and human errors can all pose both a potentially unpredictable and severe threat to the continuity of an organization’s operation. Therefore, the concept of resilience has been reaching increasing prominence both within academia and industry over recent years (Bhamra et al., 2011). The Concept of resilience is grounded in the roots of ecology and social psychology and has expanded to address various areas including organizations, industrial safety, supply chain management, infrastructure development, crisis, and disaster management. Although the context and meaning of resilience may vary across disciplines, the fundamental principle of resilience remains the same (De Florio, 2015). Resilience relates to the capacity of a system to absorb discontinuities and disturbances, such as natural disasters and other potential crises, and retain essential system structures, processes and feedbacks (Adger et al., 2005). As highlighted by several authors (Seville et al., 2006; Crichton et al., 2009; Gibson and Tarrant, 2010; Lengnick-Hall et al., 2011), through the cultivation of resilience within a system, it may be possible to not only overcome potential disruptions but transcend these events and develop towards a more robust system.
Banking organizations, similar to other organizations, are subject to a diverse and ever-changing environment. The threats that turbulent environment possess can vary in both severity and frequency and may originate internally or externally to banks. An event in one area of the environment can often have disastrous effects on these organizations (Juttner, 2005). The recent global financial crisis has been described as the worst in history. It has adversely affected the global banking organizations performance and profitability. Researchers argued that the major cause of this crisis is financial imbalances. Nevertheless, there is no full agreement about the origin of these financial imbalances. As a result, several banks collapsed and many others were bailed out by their governments. Other large banks, such as Royal Bank of Scotland and Citibank, have survived this crisis but suffered tremendous losses (Acharya and Schnabl, 2010). Conversely, during the financial crisis, researchers and financial reporters witnessed an unprecedented better cumulative profitability and performance of Islamic banking organizations than conventional banks.