Compliance to Culture: A Critical Synthesis of Organizational Integrity and Competitive Advantage in the African Banking Sector
DOI:
https://doi.org/10.47604/ejbsm.3814Keywords:
Organizational Integrity, Competitive Advantage, Ethical Leadership, African Banking, Institutional Theory, Resource-Based ViewAbstract
Purpose: This paper examines the distinction between regulatory compliance and organizational integrity in African banking, moving beyond rule-bound compliance toward embedding integrity as a cultural capability that sustains competitive advantage.
Methodology: The study undertakes a critical synthesis of recent empirical and theoretical scholarship. It is underpinned by Institutional Theory (IT) to explain how regulatory pressures and normative expectations shape banks’ compliance behaviors, and the Resource-Based View (RBV) to conceptualize integrity culture as a strategic, Valuable, Rare, Inimitable, and Non-substitutable (VRIN) capability.
Findings: Compliance is necessary but insufficient; misconduct persists when integrity is not culturally reinforced. Ethical leadership operates through organizational culture, which mediates employee ethical behavior. Integrity culture generates VRIN advantages, including building trust, reducing transaction costs, and strengthening legitimacy in ways competitors cannot imitate. The assumed ethics–performance trade-off is false; evidence links ethical leadership and integrity culture to innovation, governance quality, and financial performance across African contexts.
Unique Contribution to Theory, Practice and Policy: African banks should develop and empower ethical leaders. Intentionally shape organizational culture to support ethical internalization. Treat integrity culture as a strategic resource. Collaborate with regulators to move beyond compliance enforcement toward frameworks that enable ethical culture development.
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