Impact of Green Banking Practices on Customer Satisfaction: A Case Study of Barclays.

1. Background of the Study

Business operates its activities in the environment. So, profit is not the only purpose of making business in the civilized world. Corporate environmental responsibilities also have significant influencers on overall objectives of company (Blackburn, 2007). Barclays is a British multinational banking and financial services company headquartered in London which operates its business activities more than 65 countries (Barclays.co.uk, 2014). Barclays has a good image for its eco-friendly, environment sustainable investment and business practices and at the same time it is going to create paperless office throughout the world (Barclays.co.uk, 2014). In the period of globalization baking business world is highly competitive. None can survive without the satisfaction of customer and without responding the continuous changing needs of environment. Again, customers are very conscious and they have many options to change. However, Barclays is highly focusing on Green Banking Practices on Customer Services to keep the current customers and attracting new customers. Globalization is criticized for its negative impact on environment. So business world should properly respond to the general concern of the people to further survive (Gordon et al. 2011). 

1. Rationale of the Study

This report strives to explain the current practices and at the same time it will also suggest what should be the future tend of business in the highly competitive market. The major purpose of report is to identify impact and influence Green Banking Business Practices on Customer Services to keep the current customers and attracting new customers ((Jahanshaei et al, 2012)). Green Banking business practices of Barclays have both strategic and operational importance on its future business practices and profitability. The research may be effective for Barclays to take competitive strategy and future competitive advantages for creating a market with large market share and influence. This emerging type of business practice will lead of Barclays toward long term sustainability in the business cycle. Another, area of strategic importance is future growth is possible for coming of new customers. Every action related with Green Banking practices of Barclays Ltd increase its future profitability. Practices are also effective for cost saving using minimum amount of power and resources. Other flip side of the research to show the impact of green banking on customer services, customer satisfaction & customer loyalty for Barclays This research is to find out the risk issues associated with the new type of business practices and how Barclays can manage the risks and uncertainties in the future. Green Banking business practices are new and very emerging research issue in the 21st century of the world. This research paper has different implications in the fields of business, academic and policy making process for different authorities. The findings of this study may contribute to banking companies, Government, private sector, NGOs, academic world and civil environment.This is mainly to identify and explore long term and short term effect of environment friendly activities of Barclays.

• Research Questions of the Study

Every research aims with specific problems. The questions of the research paper are helpful to find out those specific problems of the environment. Case study of Barclays is designed with specific questions based on specific problem.The researches questions of this study are –

1. What is the impact of green banking on the customer satisfaction Barclays?
2. What is the impact of green banking on environmental sustainability of EU and other part of the world? 

1. Research Aim and Objectives

Every of research is concerned with specific aims and objectives. The output of the research highly depends on objectives of the concerned research. The specific objectives of this study are-

1. To identify the influence of green banking on customer satisfaction and customer loyalty of Barclays
2. To explain the applicability of Green BankingPractices for Barclays
3. To find out the relationship between Green BankingPractices for Barclays with customer satisfaction and customer loyalty.
4. To explore the impact of Green Bankingbusiness Practices on other companies in concerned industry.

1. Literature Review

Green Banking generally refers to earth friendly or not harmful to the environment (Holzer, D. 2013). It is also known as practices of investing for environment sustainable projects for making the world green or contributes to green living (Meena, 2013). The main purpose of business is profit maximization but business should be responsible to environment and environmental needs to survive. Currently business is very competitive and hard to exist (Muller, R. 2005). Only Green Banking or environment friendly business can survive in current competitive environment. Now earth friendly business is increasing as consumers are getting awareness and consciousness. Green Banking business was described by Miller, E. & Buys, L. (2008) as banking and function of making business supportive to environment or not harmful to environment of the world. Green trading is described by Lewis (2008) as a function which has minimum harmful ecological effect or which is more conducive to the environment. Green Banking or earth friendly is also defined by Barclay, J.L. & Grosvenor, and M. 2007 as both customer and environment friendly concerned trading activities which is convenient with the ecological system of the earth. Green Banking Business Practices are conscious about the use and preservation of natural resources .Green Banking Business Practices are much more effective for preventing the global contamination or earth pollution which are air pollution, water pollution, soil pollution and river pollution etc. Green Banking trading includes those products and services which do not have short term or long term bad effect on our surroundings (Bowen et al, 2007). Pollution and widespread use of natural resources lead our living world to catastrophic situation where living for animal being will be impossible. The association which is more Green Banking gets a good response from consumers and can keep their customer gratification only by refusing dangerous chemicals in their business activities (Chitra, K. 2007). Green Banking Business Practices are also effective for cost saving using minimum amount of power and resources. Most of the big companies are opening eco-department for considering the impacts of activities on environment and response of customer, govt., and other stakeholders of the organization (Rivera-Camino, 2007; Woodside et al, 2000; Papadopoulos, et al, 2010; Rashid, 2009). These types of activities lead to three R’s (reduce, reuse, and recycle) and which are conducive to both development of skills and management efficiency (Cobb, C. 2009). Many researchers are questioned about the advantages of green banking business, whether its aim is to maximize stockholder value. But rise of the environmental cautions among customers and consumers somewhat urges or sometimes forces for earth friendly business activities. Researchers criticize green trading activities for its complex implementation process and excess initial costs (Bized 2010; Bosch, Tait& winter 2006; Ghorpade 2004).  According to their research operational executive has to build advance process and frame within their trade to fulfill all concerns. Again, customer behaviour is motivated by different environmental, psychological and internal and external needs. Customers are concerned with not only the needs of food and clean water, but also  the  need  to  sustain  the  environmental  and  environmental  systems  (Martin  and  Schouten, 2012). 

Figure 1: Conceptual Framework of customer loyalty. Source- Writers’ own

Loyal customer is an important resource like other resources to Barclays. Barclays is working for the development of Green Banking or earth friendly strategy to attract customer’s psychology to their change habitat and to make them loyal customers. It takes strategies to reduce its carbon footprints and other culprits of environment to protect the environment from being polluted. Barclays is also planning to focus its ecology friendly business to new customers. Green Banking business practices are new emerging tool of business survival and future growth and progress. Research and study is going on for the continual development of business. A lot of researchers are making huge study on this emerging issue for finding some important research output which will concern with the future progress of business practices. For this research different theories are used to prove the influence of Green Banking business practices on customer’s satisfaction and customer’s loyalty. Again, different statistical and analytical tools were used for getting the output of the study. Ultimately all the taken theories and tools of mathematics and statistics are taken in the given research for finding defined result.  

1. Research Design and Methodology

A proper methodology is important to solve a research problem easily. It is the overall framework and systematic model for a making a research and finding a result from the undertaking result. The following structured methodology has been followed to prepare the report:

Figure 2: Structure of methodology. Source- Writers’ own

1. Research Philosophy

Research Philosophy is the systematic search for knowledge, values and reasons. Philosophy develops the creativity and find out the process which was unknown to man before research. Hughes, (2004) argued that the Philosophical reason is necessary to be perceived due to various causes. Different philosophical models are used in research such as positivism, antipositivism (Interprevitism), inductive and deductive. But two conspicuously used research philosophies are- a. positivism, b. Interprevitism (antipositivism). This research of Barclays is mainly concerned with positivism and Interprevitism. Positivism focuses on real field not on the theoretical aspects. Where antipositivism argue against the real and practical aspects. Positive theory is used for this research from different philosophical models. Positive theory is used in this research as it empirical, practical and realistic. Again, it is highly convenient with the mission and vision of Barclays

1. Research Paradigm

There are many research philosophies e.g. positivism, interpretivism, realism etc. Positive theory is used for this research. Positive theory is used in this research as it empirical, practical and realistic. Again, it is highly convenient with the mission and vision of Barclays. Although there are Quantitative and qualitative method of research is available, a mixed method was used for getting a highly acceptable and useful result. Under this research, a single case was of UK based Banking Company has been taken to test the impact of Green Banking practices on customer services, customer satisfaction and customer loyalty.  

1. Critical analysis of Ethical theories

There a lot of ethical theories to define a particular situation and activity. Here I am discussing with just two theories. These two theories are (Belkaoui, A. R. 2004).

1. Positive theory of Ethics
2. Normative Theory of Ethics
3. Inductive and Deductive Theory

Positive theory of Ethics: Positive theory of ethics is realistic based.  Positive theory of ethics believes in practical field which says what is happening in the real field. Under Positive theory of ethics a business mainly works for the maximization of profit of the business. In positive theory, it is assumed that no business can run without the purposes of making profit.

Normative Theory of Ethics: Normative Theory of Ethics defines what should by a business or a particular person. It focuses on ethical sides of business. This theory concerned with a fact that business has the capability of serving the environment. 

Inductive and Deductive Theory: In the inductive process of research, theory is the outcome of research (Bryman, A. & Bell, E., 2007). Inductive method starts observation and finished with decision.

1. Figure 3: Inductive model, source: writers own

1. Research techniques and methods

Two widely used are Quantitative and qualitative research. A mixed method is used under the given research. The quantitative method has been used to find the relationship between Green Banking practices with customer services and loyalty of Barclays. 

1. Quantitative Research

The analysis of primary data collection is quantitative research. Quantitative Research includes Surveys, interviews, observations, and reviews of records, documents for collecting numeric information (Hughes, C. 2013).  Quantitative research shows the statistical information (Freshwater et al, 2006). For finding the impact of Green Banking practices on customer services, customer satisfaction and customer loyalty of Barclays, a mixed method was used.  

1. Qualitative Research

The information analysis quality is maintained by Qualitative research. Qualitative research includes focus groups, in-depth interviews, and reviews of documents for types of themes not numeric data (Hughes, C. 2013).

1.  Research Strategy and Case selection

For research strategy case study and proper methodology was used. Case studies can be divided into four types which are single case, multiple cases, holistic case and embedded case (Yin, 2003). In making deep research and analysis on different environmental phenomenon, single case is used (Yin, 2003). The purpose of this study is deeper study and research about impact of Green Banking business practices on customer services, customer satisfaction and customer loyalty. So a single case of a big Green Banking company named Barclays of UK was chosen to make a deeper exploration of theories.

1. Data Collection Method Analysis

   1. Data Collection Method

Information is mainly collected from two sources. Primary data has been collected from direct interview with management of Barclays Primary data is original data which is highly reliable for the research question (Ghauri and Grønhaug, 2005). The other source of primary data which are data collected from customers of Barclays by sending a semi structured questionnaire to a sample of 50 customers. The secondary sources of information were collected from journals’  articles,  books,  online  data  sources  such  as  official  websites  of  firms.

Sources of information are as follows-

Figure 4: Source of information, source: writers own.

Some empirical information was collected from Barclays’s official website and annual report. For this reason secondary source of information is also considered with the primary information. But the primary information is the main concern of the research. The primary information has been collected sending questionnaires to the customers of Barclays.

1. Sample Size

A sample of 50 customers of Barclays has been used in this research. Collecting a sample of 50 customers is a complex and tough task as it is a banking company, not daily accessories company (Freshwater et al, 2006). Sampling follows the procedures of non-appearance of secondary data. Again, wider sample is useful for faithful accurate output from the research. Using sample in this research has been taken from Barclays.

1. Data Analysis methods

The aim of this research is to find out the impact of Green Banking activities of Barclays on the customer service. For analysis of information, different statistical and quantitative measures with demonstration of charts & graphs have been used. Besides using descriptive statistics the data have been analysed by using an important statistical tool named ANOVA test was used for analysing the descriptive statistics. Another important statistical tool which has been used in this study is Regression Analysis. Regression Analysis has been conducted for identifying the impact of Green banking on customer satisfaction and customer loyalty of Barclays Following regression model has been used in this study.

Where, 

Y= Dependent variable (customer Satisfaction or loyalty)

α = Constant

β1= Coefficients of independent variables other than green banking

X1=Independent variables vector other than green banking

β2= Coefficients of Green banking

X2= Independent variable green banking

e= Error term

1. Data Analysis Process

According to Homburgh and Rudolph, (2001) customer satisfaction in banking industry is a very complex process. He also mentioned there are many factors that influence customer satisfaction of a banking company. So, in this research paper, six major factors of customer satisfaction have been used for measuring service quality and customer satisfaction and customer loyalty of Barclays a brief discussion of overall data analysis is given below using different statistical tools and techniques.

1. Reliability Test with Cronbach’s Alpha

Cronbach’s Alpha test was used to test the reliability and validity of dimensions that are added in the theoretical model. Alpha value of more than 0.70 is acceptable and Alpha value of more than 0.60 is also acceptable under condition. The higher the Alpha value, the higher reliability and validity is found. The highest Alpha value which is more than 0.70 measures the green banking factors. This indicates the green banking related to customer services aspects of Barclays is highly valid and acceptable as well. But Alpha value 0.60 or more indicates internal service providing qualities. Different factors used are activities related to green banking, service and work quality, security and safety, Price and environmental responsibility of Barclays Relationship between Green banking and Customer Satisfaction. Barriers and Limitations of the proposed research

1. Ethical Issues

 Ethical issue is very important consideration for the study. One of the important ethical issues is the confidentiality of the participants’ personal information. Another important ethical issue is the secrecy of the researcher. Faithful representation without biasness and manipulation is another significant ethical issue for the study.

1. Suggestions further research activity

Using this research there is scope of further study. As there is not enough research banking companies available, this will act as a benchmark for future studies with other banking companies. Moreover, this study has not incorporated enough viewpoints of management of the company that is a vast limitation for the study. Further study can be led by incorporating both management point of view and customer opinion. Besides this, a broader sample of many banking companies can be used rather than using a single company for finding the result

1. Limitations

One of the important barriers is validity and acceptability of the study. This major and goal congruent barrier can removed with quality in study. For this, large sample may be used and some other statistical tools may be applied to get further accuracy on current study using information of Barclays only. Time limit and number of applied personnel was another important barrier to research (Freshwater et al, 2006). This study use information only from Barclays about their Green Banking activities. As there are some other Green Banking companies in UK, acceptability and validity can be ensured using information from other Green Banking companies.

Conclusion

In the age 21st century Green Banking business practices are vitally important for all business for their continual survival and existence. Green Banking business practices can influence the customer’s buying behaviour by increasing loyalty and continuous purchase of goods. This study has tried to find out the impact of green banking on the customer satisfaction and customer’s loyalty of Barclays. 

Timetable and Research Planning

Timetable and research planning is stated for completing the overall research activities with proper time management. This is presented by a Gantt chart –

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