The Mediating Role of Organizational Culture in the Relationship Between Corporate Sustainability and Financial Performance in the Iraqi Banking Sector
Keywords:
Corporate Sustainability, Financial Performance, Organizational Culture, Iraqi Banking Sector
Abstract
The study aimed to examine how organizational culture mediates the effects of corporate sustainability on financial performance. The study population was managerial employees of Iraqi commercial banks. Data was gathered between March and May of 2025, a period of two months. 2,713 managers and department heads made up the entire population. A random sampling technique was used to guarantee representativeness. The minimum sample size needed for this population was 337 respondents. 337 surveys were sent out in order to accomplish this. Following a thorough review, 328 questionnaires were deemed valid and added to the analysis; the response rate was 97.33%. The study revealed that organizational culture serves as a partial mediator in the relationship between corporate sustainability and financial performance within Iraqi banks. This finding aligns with the broader literature emphasizing the role of internal organizational dynamics in shaping the effectiveness of sustainability initiatives. The study recommended expanding beyond the banking sector to include other industries. Since this research focused solely on Iraqi commercial banks, it would be valuable to investigate whether the observed relationships between corporate sustainability, organizational culture, and financial performance also apply to sectors such as manufacturing, telecommunications, or healthcare.
Downloads
Download data is not yet available.
PlumX Statistics
References
1. Ahmed, L., & Rashid, N. (2022). Corporate social responsibility and brand perception in the banking industry. International Journal of Corporate Governance, 29(4), 55-78.
2. Akhter, P., & Chaity, N. S. (2024). Exploration of the Relationship between Organizational Culture and Its Performance in the Bangladeshi Microfinance Sector with Organizational Innovation as a Mediating Factor. European Scientific Journal, ESJ, 20(10), 88. https://doi.org/10.19044/esj.2024.v20n10p88
3. Al-Haidary, K. H., & Al-Rikabi, S. Y. (2021). Corporate sustainability practices in Iraqi banks: Challenges and opportunities. International Journal of Economics and Financial Issues, 11(4), 75–83.
4. Amarneh, A., & Chamas, M. (2017). Corporate social responsibility and its impact on employee engagement in the Middle East context. Business Ethics and Leadership, 1(4), 30-38. https://doi.org/10.21272/bel.1(4).30-38.2017
5. Amoh, G. G., Serge, M. E., & Mukah, S. T. (2025). Sustainability Accounting and Financial Performance of Commercial Banks in Cameroon. European Scientific Journal, ESJ, 21(31), 112. https://doi.org/10.19044/esj.2025.v21n31p112
6. Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56. https://doi.org/10.1016/j.jclepro.2013.11.039
7. Busch, T., Schleper, M. C., & Gold, S. (2016). Sustainable supply chain management: Exploring performance and culture. Journal of Business Ethics, 145(2), 285–307. https://doi.org/10.1007/s10551-015-2856-3
8. Denison, D. R. (1990). Corporate culture and organizational effectiveness. John Wiley & Sons.
9. Denison, D. R., & Mishra, A. K. (1995). Toward a theory of organizational culture and effectiveness. Organization Science, 6(2), 204–223. https://doi.org/10.1287/orsc.6.2.204
10. Dyllick, T., & Muff, K. (2016). Clarifying the meaning of sustainable business: Introducing a typology from business-as-usual to true business sustainability. Organization & Environment, 29(2), 156–174. https://doi.org/10.1177/1086026615575176
11. Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of a corporate culture of sustainability on corporate behavior and performance. Harvard Business School Working Paper.
12. Elkington, J. (2018). 25 Years ago I coined the phrase “Triple Bottom Line.” Here’s why it’s time to rethink it. Harvard Business Review. https://hbr.org/2018/06/25-years-ago-i-coined-the-phrase-triple-bottom-line-heres-why-im-giving-up-on-it
13. Flayyih, A. A., & Khiari, M. (2023). "Corporate Governance, Earnings Management, and CSR: Evidence from Iraq's Banking Sector". Industrial Engineering & Management Systems, 22(3), 273-286.
14. Guenster, N., Kotsantonis, S., & Scholtens, B. (2020). The relationship between organizational culture and sustainability performance. Journal of Business Ethics, 167(4), 623-640.
15. Hart, S. L., & Milstein, M. B. (2003). Creating sustainable value. Academy of Management Executive, 17(2), 56–67. https://doi.org/10.5465/ame.2003.10025194
16. Hassan, M. K., & Bashir, M. A. (2020). Sustainable banking in emerging economies: Challenges and opportunities. Sustainable Finance, 9(1), 1-19. https://doi.org/10.2139/ssrn.3524511
17. Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. Sage Publications.
18. Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the mind (3rd ed.). McGraw-Hill.
19. Khan, M., Serafeim, G., & Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697–1724. https://doi.org/10.2308/accr-51383
20. Kiron, D., Kruschwitz, N., & Haanaes, K. (2015). The innovation bottom line. MIT Sloan Management Review, 56(1), 69-77. https://sloanreview.mit.edu/article/the-innovation-bottom-line/
21. Kotrba, L., Fiedler, M., & Voelpel, S. C. (2012). Corporate culture and financial performance: The role of corporate culture consistency. Journal of Business Research, 65(10), 1427-1433.
22. Lin, W., Huang, C., & Lee, Y. (2021). CSR strategies as moderators of social dimension impacts on financial outcomes in the banking industry. Journal of Business Ethics, 175(2), 365-382. https://doi.org/10.1007/s10551-020-04665-0
23. Lozano, R. (2015). A holistic perspective on corporate sustainability drivers. Corporate Social Responsibility and Environmental Management, 22(1), 32–44. https://doi.org/10.1002/csr.1325
24. Martínez-Conesa, I., Palacios-Manzano, M., & García-Sánchez, A. (2017). Sustainable practices and financial performance: The impact of corporate social responsibility in Spanish SMEs. Sustainability, 9(12), 2295. https://doi.org/10.3390/su9122295
25. Naveed, R. T., Alhaidan, H., Al Halbusi, H., & Al-Swidi, A. K. (2022). Do organizations really evolve? The critical link between organizational culture and organizational innovation toward organizational effectiveness: Pivotal role of organizational resistance. Journal of Innovation & Knowledge, 7(2), 100178.
26. Núñez-Serrano, J. A., García-Álvarez, M. T., & González-Benito, J. (2020). The influence of corporate social responsibility on corporate financial performance. Journal of Business Research, 112, 437-447. https://doi.org/10.1016/j.jbusres.2020.02.008
27. Pizzi, S., Caputo, A., & Corvino, A. (2021). Shaping sustainable strategies in the banking industry: A framework for integrating sustainability risks into business models. Corporate Social Responsibility and Environmental Management, 28(2), 709–719. https://doi.org/10.1002/csr.2061
28. Porter, M. E., & Kramer, M. R. (2011). Creating shared value: How to reinvent capitalism—and unleash a wave of innovation and growth. Harvard Business Review, 89(1-2), 62-77. https://hbr.org/2011/01/the-big-idea-creating-shared-value
29. Schein, E. H. (2010). Organizational culture and leadership (4th ed.). Jossey-Bass.
30. Scholtens, B. (2017). Why finance should care about ecology. Trends in Ecology & Evolution, 32(7), 500–505. https://doi.org/10.1016/j.tree.2017.03.004
31. Shatnawi, M., Masadeh, A., Alsawalhah, J., & Al-Zaqeba, M. (2024). Corporate environmental responsibility and corporate performance in Jordan. Uncertain Supply Chain Management, 12(1), 307-314.
32. Shi, Y., & Veenstra, A. L. (2015). The role of cultural values in moderating the relationship between corporate social performance and corporate financial performance. Journal of Business Ethics, 128(1), 79-94.
33. Sustainable Banking Network. (2020). Greening the financial sector: Progress report on sustainable banking initiatives. International Finance Corporation. Retrieved from https://www.ifc.org/example-link
34. Yesil, S., & Kaya, A. (2013). Organizational culture and firm financial performance: The role of corporate sustainability. International Journal of Sustainable Development & World Ecology, 20(6), 505-518.
35. Yusliza, M. Y., et al. (2020). Top management commitment, corporate social responsibility and green human resource management: A signaling theory perspective. International Journal of Human Resource Management, 33(3), 567–599. https://doi.org/10.1080/09585192.2020.1735207
36. Zohar, D., & Luria, D. (2005). Organizational culture and climate in high risk industries: A safety perspective. Industrial Relations Research Journal, 38(1), 1-16.
2. Akhter, P., & Chaity, N. S. (2024). Exploration of the Relationship between Organizational Culture and Its Performance in the Bangladeshi Microfinance Sector with Organizational Innovation as a Mediating Factor. European Scientific Journal, ESJ, 20(10), 88. https://doi.org/10.19044/esj.2024.v20n10p88
3. Al-Haidary, K. H., & Al-Rikabi, S. Y. (2021). Corporate sustainability practices in Iraqi banks: Challenges and opportunities. International Journal of Economics and Financial Issues, 11(4), 75–83.
4. Amarneh, A., & Chamas, M. (2017). Corporate social responsibility and its impact on employee engagement in the Middle East context. Business Ethics and Leadership, 1(4), 30-38. https://doi.org/10.21272/bel.1(4).30-38.2017
5. Amoh, G. G., Serge, M. E., & Mukah, S. T. (2025). Sustainability Accounting and Financial Performance of Commercial Banks in Cameroon. European Scientific Journal, ESJ, 21(31), 112. https://doi.org/10.19044/esj.2025.v21n31p112
6. Bocken, N. M. P., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-56. https://doi.org/10.1016/j.jclepro.2013.11.039
7. Busch, T., Schleper, M. C., & Gold, S. (2016). Sustainable supply chain management: Exploring performance and culture. Journal of Business Ethics, 145(2), 285–307. https://doi.org/10.1007/s10551-015-2856-3
8. Denison, D. R. (1990). Corporate culture and organizational effectiveness. John Wiley & Sons.
9. Denison, D. R., & Mishra, A. K. (1995). Toward a theory of organizational culture and effectiveness. Organization Science, 6(2), 204–223. https://doi.org/10.1287/orsc.6.2.204
10. Dyllick, T., & Muff, K. (2016). Clarifying the meaning of sustainable business: Introducing a typology from business-as-usual to true business sustainability. Organization & Environment, 29(2), 156–174. https://doi.org/10.1177/1086026615575176
11. Eccles, R. G., Ioannou, I., & Serafeim, G. (2014). The impact of a corporate culture of sustainability on corporate behavior and performance. Harvard Business School Working Paper.
12. Elkington, J. (2018). 25 Years ago I coined the phrase “Triple Bottom Line.” Here’s why it’s time to rethink it. Harvard Business Review. https://hbr.org/2018/06/25-years-ago-i-coined-the-phrase-triple-bottom-line-heres-why-im-giving-up-on-it
13. Flayyih, A. A., & Khiari, M. (2023). "Corporate Governance, Earnings Management, and CSR: Evidence from Iraq's Banking Sector". Industrial Engineering & Management Systems, 22(3), 273-286.
14. Guenster, N., Kotsantonis, S., & Scholtens, B. (2020). The relationship between organizational culture and sustainability performance. Journal of Business Ethics, 167(4), 623-640.
15. Hart, S. L., & Milstein, M. B. (2003). Creating sustainable value. Academy of Management Executive, 17(2), 56–67. https://doi.org/10.5465/ame.2003.10025194
16. Hassan, M. K., & Bashir, M. A. (2020). Sustainable banking in emerging economies: Challenges and opportunities. Sustainable Finance, 9(1), 1-19. https://doi.org/10.2139/ssrn.3524511
17. Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations. Sage Publications.
18. Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and organizations: Software of the mind (3rd ed.). McGraw-Hill.
19. Khan, M., Serafeim, G., & Yoon, A. (2016). Corporate sustainability: First evidence on materiality. The Accounting Review, 91(6), 1697–1724. https://doi.org/10.2308/accr-51383
20. Kiron, D., Kruschwitz, N., & Haanaes, K. (2015). The innovation bottom line. MIT Sloan Management Review, 56(1), 69-77. https://sloanreview.mit.edu/article/the-innovation-bottom-line/
21. Kotrba, L., Fiedler, M., & Voelpel, S. C. (2012). Corporate culture and financial performance: The role of corporate culture consistency. Journal of Business Research, 65(10), 1427-1433.
22. Lin, W., Huang, C., & Lee, Y. (2021). CSR strategies as moderators of social dimension impacts on financial outcomes in the banking industry. Journal of Business Ethics, 175(2), 365-382. https://doi.org/10.1007/s10551-020-04665-0
23. Lozano, R. (2015). A holistic perspective on corporate sustainability drivers. Corporate Social Responsibility and Environmental Management, 22(1), 32–44. https://doi.org/10.1002/csr.1325
24. Martínez-Conesa, I., Palacios-Manzano, M., & García-Sánchez, A. (2017). Sustainable practices and financial performance: The impact of corporate social responsibility in Spanish SMEs. Sustainability, 9(12), 2295. https://doi.org/10.3390/su9122295
25. Naveed, R. T., Alhaidan, H., Al Halbusi, H., & Al-Swidi, A. K. (2022). Do organizations really evolve? The critical link between organizational culture and organizational innovation toward organizational effectiveness: Pivotal role of organizational resistance. Journal of Innovation & Knowledge, 7(2), 100178.
26. Núñez-Serrano, J. A., García-Álvarez, M. T., & González-Benito, J. (2020). The influence of corporate social responsibility on corporate financial performance. Journal of Business Research, 112, 437-447. https://doi.org/10.1016/j.jbusres.2020.02.008
27. Pizzi, S., Caputo, A., & Corvino, A. (2021). Shaping sustainable strategies in the banking industry: A framework for integrating sustainability risks into business models. Corporate Social Responsibility and Environmental Management, 28(2), 709–719. https://doi.org/10.1002/csr.2061
28. Porter, M. E., & Kramer, M. R. (2011). Creating shared value: How to reinvent capitalism—and unleash a wave of innovation and growth. Harvard Business Review, 89(1-2), 62-77. https://hbr.org/2011/01/the-big-idea-creating-shared-value
29. Schein, E. H. (2010). Organizational culture and leadership (4th ed.). Jossey-Bass.
30. Scholtens, B. (2017). Why finance should care about ecology. Trends in Ecology & Evolution, 32(7), 500–505. https://doi.org/10.1016/j.tree.2017.03.004
31. Shatnawi, M., Masadeh, A., Alsawalhah, J., & Al-Zaqeba, M. (2024). Corporate environmental responsibility and corporate performance in Jordan. Uncertain Supply Chain Management, 12(1), 307-314.
32. Shi, Y., & Veenstra, A. L. (2015). The role of cultural values in moderating the relationship between corporate social performance and corporate financial performance. Journal of Business Ethics, 128(1), 79-94.
33. Sustainable Banking Network. (2020). Greening the financial sector: Progress report on sustainable banking initiatives. International Finance Corporation. Retrieved from https://www.ifc.org/example-link
34. Yesil, S., & Kaya, A. (2013). Organizational culture and firm financial performance: The role of corporate sustainability. International Journal of Sustainable Development & World Ecology, 20(6), 505-518.
35. Yusliza, M. Y., et al. (2020). Top management commitment, corporate social responsibility and green human resource management: A signaling theory perspective. International Journal of Human Resource Management, 33(3), 567–599. https://doi.org/10.1080/09585192.2020.1735207
36. Zohar, D., & Luria, D. (2005). Organizational culture and climate in high risk industries: A safety perspective. Industrial Relations Research Journal, 38(1), 1-16.
Published
2026-01-31
How to Cite
Abd Ali, A. R., & Yozgat, U. (2026). The Mediating Role of Organizational Culture in the Relationship Between Corporate Sustainability and Financial Performance in the Iraqi Banking Sector. European Scientific Journal, ESJ, 22(1), 63. https://doi.org/10.19044/esj.2026.v22n1p63
Section
ESJ Social Sciences
Copyright (c) 2026 Aysar Razak Abd Ali, Ugur Yozgat
This work is licensed under a Creative Commons Attribution 4.0 International License.
