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American Journal of  Environmental
Economics (AJEE) 

The Role of  Reengineering Operations in Achieving Banking Sustainability: A Case 
Study on A Sample of  Employees in Iraqi Private Commercial Banks

Mustafa Khudhair Hussein1*, Omar Tawfiq Mahdi1, Mustafa Mohammed Kleban Zuhairi1, Ruaa Basil Noori Al-Tekreeti1

Volume 2 Issue 1, Year 2023
ISSN: 2833-7905 (Online)

DOI: https://doi.org/10.54536/ajee.v2i1.2259
https://journals.e-palli.com/home/index.php/ajee

Article Information ABSTRACT

Received: November 12, 2023

Accepted: December 15, 2023

Published: December 18, 2023

The study aims to know the role of  reengineering processes (process design, service quality, 
technology) in achieving banking development in its three dimensions (economic, social, and 
environmental) in Iraqi private commercial banks. The descriptive analytical approach was 
adopted by distributing a questionnaire to a sample of  workers in those Banks (338 ) from various 
administrative levels. The most prominent results were the existence of  a positive relationship 
between reengineering processes and banking sustainability and that Reengineering has an 
impact on achieving sustainability in banks through redesigning operations and enhancing the 
quality of  service and technology used. The most prominent recommendations were that the 
management of  private banks in Iraq develop appropriate strategies to develop sustainability 
activities and improve its operations in line with the needs and desires of  customers.

Keywords

Reengineering Processes, Banking 
Sustainability

1 Imam A’adhum University College, Iraq
* Corresponding author’s e-mail: mustafakhudair87@gmail.com

INTRODUCTION
Reengineering banking operations is an essential strategy 
that helps achieve banking sustainability and improve 
performance. Banking process optimization involves 
restructuring and enhancing existing banking procedures 
to maximize efficiency and improve overall performance. 
The reengineering operations are used to analyze and 
restructure the operations of  private commercial banks 
in Iraq to achieve financial and economic sustainability. 
Iraqi private commercial banks encounter various 
obstacles that impact their capacity to maintain long-term 
viability in the banking sector. These problems include 
legislative constraints, technical advancements, changes in 
consumer preferences, and financial strains. Implementing 
operational Reengineering in the banking sector improves 
the capacity to adapt to challenges and accomplish 
objectives (Nasser & Abdul-Redha, 2023), particularly 
in the Iraqi context, marked by ongoing changes and a 
dynamic environment. Requires bank management to 
identify practical approaches and strategies to enhance 
their position and effectively address these persistent and 
evolving challenges. Reengineering operations aims to 
enhance efficiency and quality, minimize expenses, and 
augment customer happiness (Falih et al., 2020). This 
encompasses the examination and assessment of  existing 
operations, the identification of  issues and deficiencies, 
the formulation of  novel solutions, and the creation of  
innovative and streamlined procedures.  
To accomplish these goals, many strategies are 
implemented, including organizational redesign, 
process reengineering, supply chain management, and 
sophisticated technology (Maharmah & Al Jbour, 2023). 
Studying the impact of  reengineering operations on the 
viability of  Iraqi private commercial banks is a crucial 
and noteworthy topic. Iraq has a grand total of  81 banks 

comprising seven government and 74 private banks. 
Among the private banks are 24 commercial banks and 
29 Islamic banks. Additionally, there are 21 branches of  
international banks operating in the country. Compared 
to other countries in the area, Turkey has the highest 
number of  banks with 43, followed by Egypt with 41, 
Saudi Arabia with 31, Iran with 30, Jordan with 26, and 
Algeria with 20. Despite the abundance of  banks in Iraq, 
they still need to fulfill their necessary financial function 
and offer contemporary banking services and products 
(Jabr & Shamkhi, 2023). This research seeks to investigate 
how banking sustainability can be attained in Iraqi private 
commercial banks through the implementation of  
reengineering operations. It aims to identify the factors 
that impact the success of  these operations and elucidate 
the potential advantages and obstacles they may encounter. 
Therefore, the research problem can be articulated by the 
subsequent primary inquiry: Has the management of  Iraqi 
banks successfully implemented reengineering operations 
in their banking processes to improve the sustainability 
of  their activities and operations? The primary inquiry 
gives rise to the subsequent subordinate inquiries:

1- What is the level of  reengineering operations practices 
in the researched Iraqi private commercial banks?

2- What is the level of  banking sustainability in the 
researched Iraqi private commercial banks?

3- What is the role of  reengineering operations 
in enhancing banking sustainability in Iraqi private 
commercial banks?

The Eesearch Objectives
1. To determine the level of  reengineering operations 

practices in Iraqi private commercial banks.
2. To determine the level of  banking sustainability in 

Iraqi private commercial banks.



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3. To identify the role of  reengineering operations 
in achieving banking sustainability in Iraqi private 
commercial banks.

4. To provide some conclusions and recommendations 
that can enhance the performance and development of  
Iraqi private commercial banks by strengthening their 
strengths and addressing areas of  weakness.

Importance of  the Research
The scientific significance of  the current research lies 
in its exploration of  the variables under study, namely 
reengineering operations and banking sustainability. 
These concepts are essential in managerial and accounting 
thinking due to the valuable methods and practices they 
offer. Reengineering operations in banking serves as an 
effective tool for achieving banking sustainability. These 
operations aim to redesign and improve banking processes 
and procedures to enhance efficiency, reduce costs and 
risks, and strengthen the banks’ ability to compete in the 
commercial banking market. By improving operational 
efficiency and enhancing customer experience, banks can 
provide better and more competitive banking services, 
attracting more customers and increasing their market 
share. This, in turn, elevates the performance levels of  
Iraqi banks. The banking sector is one of  the critical 
sectors in the Iraqi economy and the largest in the region 
in terms of  the number of  banks. These reasons have 
motivated the researchers to adopt this topic as it holds 
great importance, mainly when applied in the Iraqi 
context.

LITERATURE REVIEW
Reengineering-Operations
Reengineering operations is the comprehensive analysis and 
redesign of  current banking processes and procedures to 
improve efficiency, effectiveness, and quality significantly. 
It aims to reshape and transform traditional and inefficient 
banking operations into innovative and greatly improved 
processes using technology and modern ideas (Hasnan et 
al., 2017: 3). This concept focuses on redesigning banking 
operations to align with changes and innovations. Bhaskar 
(2018: 65) emphasized redesigning business operations 
and organizational thinking regarding processes, 
interconnected systems, and organizational structure 
to achieve significant performance improvements. It 
emphasizes both redesign and organizational thinking. 
On the other hand, Aruta (2018: 2) states that Business 
Process Reengineering (BPR) aims to achieve significant 
performance improvements rather than incremental and 
gradual improvements resulting from traditional process 
improvement methods. It focuses on making substantial 
improvements in operations.
Similarly, Chin et al. (2019: 1) clarified that it involves 
rethinking and analyzing business processes to improve 
performance by integrating information technology 
with process design, highlighting the technological 
improvements in accomplishing banking operations 
and activities. AbdEllatif  et al. (2018) focused on radical 

improvements in the operational strategy through rapid 
and radical changes in the organization’s work using 
modern management methods, such as reengineering 
strategic processes, policies, organizational structures, 
and values in unconventional ways. Based on the above, 
the researchers see reengineering operations as practices 
aimed at making changes and improvements in their 
processes, activities, strategies, and services, as well as 
the technology used to enhance activities and achieve 
desired goals with lower costs, time, and higher quality. 
Economic, legal, and environmental pressures impose 
strict requirements on organizations or banks to effectively 
redesign their processes, develop new strategies, and 
improve organizational structures and operations to 
adapt to these challenges and achieve sustainable success. 
Implementation initiatives of  reengineering processes 
have achieved significant and influential results for 
organizations adopting this approach. They have achieved 
significant cost reductions, increased profits, improved 
production quality, and rapid response to customer 
requirements (Getele & Jean, 2018).
On the other hand, Reengineering is a means to solve 
complex problems. It works on improving business 
processes and is not limited to improving the current 
situation but has a lasting impact. It also includes 
significantly improving all low-performing activities 
(Cemehocha et al., 2020: 2). Reengineering operates widely 
within an organization and has many benefits, such as cost 
reduction, increases, and improved production, which 
increases customer satisfaction (Abdel-Latif  et al., 2018: 
2). It is also a systematic tool that works on changing 
performance and future improvement and includes 
the radical redesign of  its processes, characterized by 
specifications during implementation (Chountalas & 
Lagodimos, 2018: 14). In the same context, Gunasekaran 
and Kobu (2002) stated that it is an interconnected 
and sequential process that works integrally to make 
incremental or radical improvements in behaviors, 
structures, technologies, processes, and customer service, 
as shown in Figure (1) below:

Figure 1: Re-engineering Operations



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Banking Sustainability
The concept refers to the ability of  banking institutions to 
balance economic, social, and environmental dimensions 
in their operations and decision-making to meet the 
needs of  the current generation without compromising 
the ability of  future generations (Brundtland, G.H. 1987). 
Companies and institutions recognize that sustainability 
is crucial for long-term success (Ali et al., 2021). 
Integrating sustainability into strategic management 
provides a framework for achieving business goals. It 
can lead to new opportunities, cost reduction, improved 
brand reputation, and a positive impact on society and 
the environment (Banerjee, 2018). Sustainable practices 
such as reducing energy consumption and greenhouse 
gas emissions can help companies improve their 
environmental performance and reduce costs (Poudel et 
al., 2021).
Additionally, integrating circular economy principles, 
such as waste reduction and material reuse, can enhance 
environmental sustainability and business competitiveness 
(Teng et al., 2020). Social sustainability has emerged as 
a significant topic in recent research, with companies 
prioritizing employee health and safety and supporting 
local communities, which proves to be more resilient 
during times of  crisis (Leung et al., 2020). Similarly, 
promoting diversity and inclusion can improve employee 
engagement and retention (Córdoba-Pachón et al., 2021). 
Economic sustainability is also essential, with sustainable 
practices such as investing in renewable energy and waste 
reduction leading to long-term financial performance and 
value creation (Fan et al., 2021).
The triple bottom line framework is commonly used 
to measure sustainability as it takes a comprehensive 
approach (Savitz & Weber, 2014; Alkhodary, D., 2021). The 
framework includes three dimensions of  sustainability: 
environmental, social, and economic. The environmental 
dimension relates to the impact of  operations on the 
natural environment, the social dimension considers their 
impact on stakeholders, and the economic dimension 
focuses on financial performance.
The United Nations’ Sustainable Development 
Goals (SDGs) provide a global framework to address 
sustainability challenges, with 17 goals covering various 

environmental, social, and economic aspects (The United 
Nations, 2015).

Research Hypotheses
Primary Hypothesis H1
There is a statistically significant relationship between 
reengineering processes dimensions (process design, 
service quality, technology) and banking sustainability 
dimensions (economic dimension, social dimension, 
environmental dimension) in Iraqi private commercial 
banks in Iraq.

Primary Hypothesis H2
There is a statistically significant impact of  reengineering 
processes variables dimensions (process design, service 
quality, technology) on enhancing banking sustainability 
dimensions (economic dimension, social dimension, 
environmental dimension) in Iraqi private commercial 
banks, and the following sub-hypotheses branch from it:

Sub-Hypothesis H2-1
There is an impact of  process design dimension 
on enhancing banking sustainability in Iraqi private 
commercial banks.

Sub-Hypothesis H2-2
There is an impact of  service quality dimension on 
enhancing banking sustainability in Iraqi private 
commercial banks.

Sub-Hypothesis H2-3
There is an impact of  the technology dimension 
on enhancing banking sustainability in Iraqi private 
commercial banks.

Research Model
The research model is based on the relationship between 
reengineering processes and banking sustainability in Iraqi 
private commercial banks. The Model consists of  three 
main dimensions: the three dimensions of  reengineering 
processes (process design, service quality, technology) and 
the three dimensions of  banking sustainability (economic 
dimension, social dimension, environmental dimension).

Figure 2: 

Research Methodology   
The researchers adopted a descriptive-analytical 
methodology in this study. This Methodology involves 
describing the phenomenon and the related concepts and 

analyzing and interpreting the phenomenon based on 
the results and data obtained. A questionnaire consisted 
of  30 items, with 15 items representing the independent 
variable of  reengineering processes and another 15 



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items representing the dependent variable of  banking 
sustainability. This design aligns with the objectives of  
the current research.

Research Community and Sample
The research community comprises employees in Iraqi 
private commercial banks, totaling 2,843 employees 
from various senior, middle, and executive positions 
(bank managers, branch and department managers, 
section and unit managers, accountants, auditors, and 
administrators). The research includes eight Iraqi private 
commercial banks out of  Iraq’s 24 commercial private 
banks. The selected banks are Baghdad Bank, Iraqi 

Commercial Bank, Iraqi Middle East Investment Bank, 
Iraqi Investment Bank, United Bank for Investment, Iraqi 
Al-Ahli Bank, Iraqi Credit Bank, and Economy Bank for 
Investment and Finance. These banks were chosen due to 
their prominence and being the largest in activity among 
Iraqi private commercial banks and the oldest in this 
sector, as shown in the following Table (1).
“A random sample of  338 individuals was drawn from 
various managerial levels of  the researched population, 
which consists of  a total of  2,843 individuals. This was 
done based on the )Steven K. Thompson ,2012). The 
details of  the sample are shown in Table (2) below.”

Table 1: Comprises employees in Iraqi private commercial banks
No. Bank Name Year of  

Establishment
Capital Number of  

Branches
Number of  
Employees

1 Baghdad Bank 1992 250 billion 23 470
2 Iraqi Commercial Bank 1992 250 billion 8 185
3 Iraqi Middle East Investment Bank 1993 250 billion 18 385
4 Iraqi Investment Bank 1993 250 billion 16 298
5 United Bank for Investment 1994 300 billion 26 510
6 Iraqi Al-Ahli Bank 1995 250 billion 18 360
7 Iraqi Credit Bank 1998 250 billion 4 175
8 Economy Bank for Investment and Finance 1999 252 billion 23 460

Total 2843

RESULTS AND DISCUSSION
Characteristics of  the Research Sample
The characteristics of  the research sample include 
gender, age, educational level, and work experience. It 
can be observed that the highest percentage in terms of  
gender is for males at 71% compared to 29% for females. 
Regarding age, 16% of  the sample falls between 20 and 
30, while 43% falls between 31 and 40. Then, 28% of  the 
sample falls between 41 and 49, while 13% are 50 or older. 
Regarding educational level, 72% of  the sample hold a 
Bachelor’s degree, while 15% have a higher diploma, 8% 
have a Master’s degree, and 5% have a Doctorate.

Table 2: Represents the research sample according to the researched managerial levels
No. Categories Sample Size
1 Bank Managers 8
2 Branch and Department Managers 136
3 Section Managers 60
4 Accountants, Auditors, and Administrators 134
Total 338

Regarding work experience, 16% of  the sample have 
work experience of  5 years or less, while 21% have work 
experience between 6 and 10 years. Additionally, 24% have 
work experience between 11 and 15 years, while 23% have 
work experience between 16 and 20 years. Furthermore, 
16% have work experience of  21 years or more, and It 
can be observed that the sample is characterized by a high 
presence of  males, individuals with Bachelor’s and higher 
degrees, and a range of  work experience across different 
categories, with a higher proportion of  individuals having 
extensive work experience. This reflects the suitability and 
alignment of  the selected sample members in achieving 

Table 3: Descriptive Statistics
Variables N Mean Std. Deviation
Economic dimension 338 3.136 .6489
Environmental dimension 338 3.230 .6074
Social dimension 338 3.111 .8091



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the objectives of  the current study, as their high level of  
experience, academic qualifications, and age can be relied 
upon in their responses, drawing from their accumulated 
experience and academic knowledge in their respective 
fields of  expertise. To answer the reengineering operations 
and banking sustainability level, the researchers will use 
Descriptive Statistics.
The statistical results for a set of  researched variables 
(process reengineering and banking sustainability) 
using different measures, such as average and standard 
deviation, can be inferred from the above Table and are 
as follows:

Economic Dimension
The average in this dimension is approximately 3.136, 
with a standard deviation of  0.65. This indicates relatively 
less variation in the obtained responses in this dimension, 
which is at an average level.

Environmental Dimension
The average in this dimension is approximately 3.230, 
with a standard deviation of  0.60. This suggests that the 
responses related to the environmental dimension range 
from higher to lower values than the average.

Social Dimension
The average in this dimension is around 3.111, with a 
standard deviation of  0.80. This also indicates variation 
in the responses related to the social dimension, which is 

below average.

Banking Sustainability
The average in this dimension is about 3.15, with a 
standard deviation of  0.618. It is below average, indicating 
that sustainability practices in commercial banks in Iraq 
are not at the desired level.

Process Design
The average in this dimension is approximately 3.360, 
with a standard deviation of  0.561. It is at an average 
level.

Service Quality
The average in this dimension is about 3.369, with a 
standard deviation of  0.6913. It is at an average level.

Technology
The average in this dimension is approximately 3.080, 
with a standard deviation of  0.6352. It is below average, 
indicating a weakness in the technology-related aspects, 
particularly in process reengineering.

Process Reengineering
The average in this dimension is about 3.27, with a 
standard deviation of  0.566. Process reengineering is at 
an average level in the researched commercial banks.

Assessment of  Measurement Model

Banking sustainability 338 3.15877712033 .618878368909
Process design 338 3.360 .5617
Service quality 338 3.369 .6913
Technology 338 3.080 .6352

Figure 3: Assessment of  Measurement Model

Validity& Reliability
Both validity and reliability are crucial in ensuring the 
credibility and trustworthiness of  research outcomes. 
Validity ensures that the research accurately captures the 
intended concepts and variables, while reliability ensures 
that the research findings are consistent and dependable. 

Convergent Validity
In summary, proximal validity evaluates the consistency 
and agreement among questions or measures intended to 
assess the same construct or concept. It is assessed by 
examining the level of  agreement or correlation between 
these questions or measures. It is measured through the 

following steps:

Indicator Reliability
Indicator reliability is determined by calculating the values 
of  the outer loading for each indicator. Hair et al. (2012) 
suggested removing items with values below 0.4 and 
retaining indicators with values of  0.7 or higher. Items 
that fall between 0.4 and 0.7 are excluded if  their removal 
increases composite reliability. If  there is no change, they 
are retained. Table (4 ) illustrates the reliability of  the 
Model’s indicators.
We note from the previous Table that all indicators are 
reliable, which is greater than 0.7



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Construct Reliability and Validity
The indicators “banking sustainability” and “reengineering 
processes” exhibit good internal consistency reliability, as 
indicated by Cronbach’s Alpha values of  0.880 and 0.881, 
respectively. The reliability is further supported by the 
rho_A (rho_alpha) values of  0.882 and 0.883, indicating 
consistent measurement within each construct. Both 
indicators demonstrate excellent composite reliability, 
with values of  0.926, indicating the measurement model’s 

high internal consistency and reliability.
The Average Variance Extracted (AVE) values for 
“banking sustainability” and “reengineering processes” 
are 0.807 and 0.808, respectively. These values suggest 
that approximately 81% of  the variance in the indicators 
can be explained by their respective constructs. In 
conclusion, the analyzed indicators exhibit good reliability, 
high internal consistency, and a significant proportion of  
variance explained by the constructs.

Table 4: Indicator reliability
Variables Latent Variables Outer loading 
Banking sustainability Economic dimension 0.878

Environmental dimension 0.890
Social dimension 0.926

Reengineering processes Process design  0.915
Service quality 0.892
Technology 0.888

Table 5: Construct Reliability and Validity
Cronbach's Alpha rho_A Composite Reliability (AVE)

Banking sustainability 0.880 0.882 0.926 0.807
Reengineering processes 0.881 0.883 0.926 0.808

Discriminant Validity
Fornell-Larcker Criterion
The Fornell-Larcker criterion is used to assess the 
discriminant validity of  constructs in a measurement 
model. It examines the correlation between constructs 
and compares it to the square root of  each construct’s 
average variance extracted (AVE). The provided 
Table shows that the correlation between “banking 
sustainability” and itself  is 0.898, higher than its AVE’s 
square root (0.897). Similarly, the correlation between 

“reengineering processes” and itself  is 0.899, higher than 
its AVE’s square root (0.897). These results indicate that 
each construct correlates highly with itself, demonstrating 
internal consistency. However, the correlation between 
“banking sustainability” and “reengineering processes” 
is 0.804, which is lower than the square root of  their 
respective AVEs (0.897). This suggests that there is 
discriminant validity between these two constructs, as 
they are not highly correlated.

Table 6: Fornell-Larcker Criterion
Variables’ Bbanking sustainability Reengineering processes
Banking sustainability 0.898  
Reengineering processes 0.804 0.899

Table 7: Cross Loadings
Latent Variables Banking sustainability Reengineering processes
Economic dimension 0.878 0.716
Environmental dimension 0.890 0.697
Social dimension 0.926 0.752
Process design 0.755 0.915
Service quality 0.696 0.892
Technology 0.716 0.888

Cross Loadings
The provided Table (7) presents the cross-loadings 
for the latent variables of  “banking sustainability” 
and “reengineering processes” with their respective 
dimensions. For the “banking sustainability” latent 

variable, we observe high cross-loadings with the 
economic dimension (0.878), the environmental 
dimension (0.890), and the social dimension (0.926). 
These results suggest that the “banking sustainability” 
construct is strongly related to each dimension, indicating 



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that it encompasses various aspects of  sustainability. 
Similarly, for the “reengineering processes” latent variable, 
we observe high cross-loadings with the process design 
dimension (0.915), the service quality dimension (0.892), 
and the technology dimension (0.888). These findings 
indicate that the “reengineering processes” construct is 
strongly associated with these dimensions. Overall, the 
cross-loadings in the Table indicate a good fit between 
the latent variables and their respective dimensions. This 
suggests that the measurement items used to assess the 
latent variables align well with the dimensions they are 
intended to measure, supporting the convergent validity 

Table 8: Variance Inflation Factor (VIF)
Latent Variables VIF
Economic dimension 2.183
Environmental dimension 2.500
Social dimension 3.065
Process design 2.714
Service quality 2.432
Technology 2.299

Table 9: Fit Summary
 Saturated Model Estimated Model
SRMR 0.056 0.056
d_ULS 0.067 0.067
d_G 0.082 0.082
Chi-Square 167.229 167.229
NFI 0.887 0.887

Table 10: R-squared value
Variable R Square R Square Adjusted
Banking sustainability 0.646 0.645

Table 11: Correlations pearson
 Variables x1 x2 x3 x y1 y2 y3 y
Process design 1 .737** .719** .904** .698** .683** .652** .752**

of  the measurement model.

Collinearity Statistics (VIF)
The provided Table (8)  shows the Variance Inflation 
Factor (VIF) values for the latent variables included in the 
Model. VIF is a measure used to assess multicollinearity, 
the degree of  correlation between predictor variables. 
A VIF value of  )1-5)  indicates no multicollinearity, and 
typically, values above 5 or 10 are considered problematic 
and indicative of  severe multicollinearity. In this Table, the 
VIF values are below these critical thresholds, suggesting 
that multicollinearity is insignificant in this Model.

Model Fit
Based on the Fit Summary table (9), the estimated 
Model demonstrates a reasonably good fit to the data, as 

evidenced by the similar fit indices to the saturated Model 
across SRMR, d_ULS, d_G, Chi-Square, and NFI.

The Coefficient of  Determination
The R-squared value of  0.646 indicates that approximately 
64.6% of  the variance in banking sustainability can be 
explained by the independent variables(reengineering 
processes). The remaining percentage is due to other 
variables not included in the current study model. The 
adjusted R-squared value of  0.645 is nearly identical, 

suggesting that the Model’s performance is not significantly 
affected by the number of  predictors. Overall, the Model 
shows a moderately strong relationship between the 
reengineering processes and banking sustainability.
After completing the model quality test and basic 
suitability tests, the research hypotheses will be tested:

Testing the First Hypothesis
The results in Table No. (11 ) above indicate a statistically 
significant correlation between the independent variable 
(process reengineering) with its three latent dimensions 

and the dependent variable banking sustainability with 
its three latent dimensions. Therefore, we accept the first 
research hypothesis   H1.



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Testing the Second Central Hypothesis H2
The path coefficient for the relationship between 
“reengineering processes” and “banking sustainability” 
is 0.804. This indicates a strong and positive relationship 

between these variables, suggesting that improvements 
in reengineering processes significantly impact banking 
sustainability. Therefore, we accept the second central 
hypothesis, H2.

Service quality .737** 1 .678** .880** .578** .682** .611** .697**
Technology .719** .678** 1 .909** .649** .664** .614** .714**
Reengineering processes .904** .880** .909** 1 .716** .751** .696** .802**
Economic dimension .698** .578** .649** .716** 1 .722** .643** .865**
Environmental dimension .683** .682** .664** .751** .722** 1 .763** .931**
Social dimension .652** .611** .614** .696** .643** .763** 1 .897**
Banking sustainability .752** .697** .714** .802** .865** .931** .897** 1

Figure 4: Testing the second central hypothesis H2

Table 12: Path Coefficients
 PATH Original Sample (O) Sample Mean (M)  (STDEV) T Statistics P Values
Reengineering processes -> 
banking sustainability 

0.804 0.805 0.020 40.057 0.000

Figure 5: The second study model aims to test the effect of  the sub-dimensions of  reengineering processes (process 
design, service quality, technology) on the dependent variable of  banking sustainability in Iraqi commercial banks

Indicator Reliability
The results of  the Model’s goodness-of-fit standards 
indicate that all dimensions and paragraphs of  the 
Model fall within the goodness-of-fit standards, except 
for paragraphs q9, q8, and q7 of  the service quality 
dimension and paragraphs Q1, Q2 of  the process design 

dimension, which are less than the specified goodness-of-
fit standard of  0.70, unless (Hair et al.) indicated (2917) If  
the saturation of  the items falls between (0.40-0.70). The 
researcher must verify the effect of  deleting this item on 
the other criteria of  the measurement model. Therefore, 
when item Q9 is deleted from the study model, the value 



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Table 13: Outer Loadings
Variables Indicators Cronbach's Alpha C.R  (AVE)
Banking sustainability Y1 0.879 0.880 0.926 0.807

Y2 0.890
Y3 0.925

Process design q1 0.698 0.802  0.864  0.560
q2 0.685
q3 0.737
q4 0.801
q5 0.812

Service quality q6 0.779  0.721 0.817 0.475
q7 0.638
q8 0.695
q9 0.569
q10 0.745

Technology q11 0.733 0.849  0.892 0.625
q12 0.836
q13 0.817
q14 0.749
q15 0.811

Table 14: Outer Loadings After modification
Variables Indicators Cronbach's Alpha C.R  (AVE)
Banking sustainability Y1 0.879 0.880 0.926 0.807

Y2 0.890
Y3 0.925

Process design q1 0.698 0.802  0.864  0.560
q2 0.685
q3 0.737
q4 0.801
q5 0.812

Service quality q6 0.782  0.707 0.820 0.533
q7 0.651
q8 0.727
q10 0.755

Technology q11 0.733 0.849  0.892 0.625
q12 0.836
q13 0.817
q14 0.749
q15 0.811

Table 15: Cross loading
 Indicators Banking sustainability Process design Service quality Technology
Economic dimension 0.879 0.697 0.596 0.665

of  the other criteria (AVE) changes, and in this way, 
we decide to Delete the cursor. After completing the 
reliability standards (internal consistency consistency 
(Cronbach alpha), indicator stability (outer loading), and 
convergent validity (average variance extracted (AVE).

The researcher conducted and tested the discriminant 
validity criterion (cross-loading), which aims to ensure 
that the items belong to the dimension they represent in a 
way that is larger than the other dimensions and does not 
overlap with them. The Table (15 ) below shows this test:



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Environmental dimension 0.890 0.653 0.619 0.627
Social dimension 0.925 0.686 0.677 0.672
q1 0.512 0.698 0.512 0.487
q2 0.558 0.685 0.559 0.428
q3 0.568 0.737 0.498 0.541
q4 0.580 0.801 0.545 0.605
q5 0.604 0.812 0.657 0.634
q6 0.481 0.613 0.782 0.559
q7 0.506 0.466 0.651 0.533
q8 0.458 0.590 0.727 0.415
q10 0.586 0.511 0.755 0.462
q11 0.597 0.595 0.466 0.733
q12 0.552 0.569 0.582 0.836
q13 0.660 0.611 0.554 0.817
q14 0.554 0.515 0.532 0.749
q15 0.486 0.554 0.531 0.811

Collinearity Statistics (VIF)
A VIF value of  )1-5)  indicates no multicollinearity, and 
typically, values above 5 or 10 are considered problematic 

The Coefficient of  Determination
The results of  the above Table indicate that the 
coefficient of  determination R-Square is 0.660 and 
R-Square Adjusted 0.657. That is, the dimensions of  

Table 16: Collinearity Statistics
 Indicators VIF
Economic dimension 2.183
Environmental dimension 2.500
Social dimension 3.065
q1 1.430
q10 1.342
q11 1.533
q12 4.412
q13 1.869
q14 1.599
q15 4.100
q2 1.422
q3 1.610
q4 2.162
q5 2.005
q6 1.570
q7 1.220
q8 1.454

and indicative of  severe multicollinearity. In this Table, 
the VIF values are below these critical thresholds

Table 16: R-squared value
Variable R Square R Square Adjusted
Banking sustainability 0.660 0.657

the reengineering processes explain a percentage (66%) 
of  the change occurring in the banking sustainability 
variable. In contrast, the remaining percentage is due to 
other variables not included in the current study model.



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Testing the Sub-Hypotheses (H2-1 , H2-2,H2-3 ) of  
the Second Main Hypothesis
Sub-Hypothesis H2-1
There is an impact of  process design dimension on enhancing 
banking sustainability in Iraqi private commercial banks.

Sub-Hypothesis H2-2
There is an impact of  service quality dimension on 

enhancing banking sustainability in Iraqi private 
commercial banks.

Sub-Hypothesis H2-3
There is an impact of  the technology dimension 
on enhancing banking sustainability in Iraqi private 
commercial banks.

Figure 6: 

Path Coefficients
The Table provides path coefficients, descriptive statistics, 
t-statistics, and p-values for the relationships between 

three independent variables (“process design,” “service 
quality,” and “technology”) and the dependent variable 
“banking sustainability.”

Table 17: Path Coefficients
 PATH Original Sample (O) Sample Mean (M)  (STDEV) T Statistics P Values
Process design -> banking 
sustainability 

0.363 0.366 0.046 7.907 0.000

Service quality -> banking 
sustainability 

0.216 0.212 0.049 4.427 0.000

Technology -> banking 
sustainability 

0.321 0.322 0.047 6.867 0.000

Path Coefficients
The path coefficients represent the strength and direction 
of  the relationships. The coefficients for “process 
design,” “service quality,” and “technology” are 0.363, 
0.216, and 0.321, respectively. These coefficients indicate 
positive relationships between each independent variable 
and banking sustainability. A higher value suggests a more 
substantial impact on banking sustainability.

Sample Mean and Standard Deviation
The sample mean represents the average values for the 
variables. The sample means for “process design,” “service 
quality,” and “technology” are 0.366, 0.212, and 0.322, 
respectively. The standard deviations (STDEV) indicate the 
variability of  the scores around the mean for each variable.

T-Statistics and P-Values
The t-statistics measure the significance of  the 
coefficients. Higher absolute t-values indicate greater 
significance. The corresponding p-values assess the 
probability of  obtaining such results by chance alone. All 
the t-statistics are relatively high in this case, indicating 
significant relationships. The p-values of  0.000 suggest 
that the relationships between the independent variables 
and banking sustainability are statistically significant. All 
sub-hypotheses are accepted (H2-1, H2-2, H2-3 ).

CONCLOGIN
Economic Dimension
The responses in this dimension show relatively less 
variation, indicating a moderate level of  economic 



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performance among the researched commercial banks.

Environmental Dimension
The responses related to the environmental dimension 
vary, with some values higher and some lower than the 
average. This suggests that there is room for improvement 
in environmental practices within the banks.

Social Dimension
The responses in the social dimension exhibit variation, 
and the average is below average. This implies that 
there are areas where the banks can enhance their social 
initiatives and engagement.

Banking Sustainability
The average score for banking sustainability is below 
average, indicating that the sustainability practices in 
the researched commercial banks in Iraq must meet the 
desired level. There is a need for improvement in this 
area.

Process Design
The average score for process design is average, suggesting 
that the researched commercial banks have implemented 
generally satisfactory processes.

Service Quality
The average score for service quality is at an average 
level, indicating that the researched commercial banks 
provide services that meet the average expectations of  
their customers.

Technology
The average score for the technology dimension must 
be higher, highlighting a weakness in technology-related 
aspects, especially in process reengineering. The banks 
should focus on improving their technological capabilities.

Process Reengineering
The average score for process reengineering is at an 
average level, suggesting that the researched commercial 
banks have implemented reengineering practices that are 
generally satisfactory.
The results indicate the need to improve banking 
sustainability, environmental practices, social initiatives, 
and technology-related aspects within the researched 
commercial banks. However, the banks have achieved 
average performance in economic dimensions, process 
design, service quality, and process reengineering. 
A positive relationship exists between the studied 
study variables, reengineering processes, and banking 
sustainability.

RECOMMENDATION
It is recommended to continue to enhance economic 
performance and achieve further improvements by 
adopting more sustainable strategies and developing 
environmental initiatives to contribute to environmental 

protection. Furthermore, banks should enhance their 
social responsibility and implement initiatives promoting 
communication and community engagement. The 
improvement in this area should be achieved by adopting 
sustainable initiatives and integrating environmental and 
social standards in banking operations. Continuing to 
improve process design is essential to enhance efficiency 
and effectiveness. It is crucial to improve service quality 
and enhance the customer experience continuously. Banks 
should focus on improving their technological capabilities 
and the necessity of  improving process reengineering 
practices to enhance efficiency and achieve continuous 
improvements. In summary, the results indicate the need 
for improvement in banking sustainability, environmental 
practices, social initiatives, and technology-related aspects 
within commercial banks in the Iraqi environment.

LIMITATION
The study defines its scope for private commercial banks 
in Iraq, which refers to banks that operate in the private 
sector and provide commercial banking services. It was 
applied to a sample of  employees in private commercial 
banks in Iraq, who number (338). It was applied to a 
sample of  employees in the Iraqi environment, so it is 
preferable to include other variables. Such as inclusion, 
money, competitive advantage, and expanding the scope 
of  application in a different environment

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