This study has two objectives; first is to investigate how the nature of the macro-environment (political and economic) vary in different geographical contexts, and second is to explore if different strategic thinking dimensions impact the bank’s performance. The current research adopts a qualitative methodology using a comparative case study method. Purposive sampling and semi-structured in-depth interviews have been used to obtain data from 50 bank executives; 33 of whom are Malaysians and 17 Palestinians. Data analysis was conducted using Atlas Software. The finding of this study shows that executives’ strategic thinking dimensions are influenced by the macro and micro-environment, which in turn impacts the bank’s performance. The executives’ strategic action in an uncertain environment varies based on the type of bank. In Commercial banks (local and foreign), executives understand and evaluate the external environment, while local Islamic bank executives focus on following up and monitoring all the changes. In addition, in a stable environment, the executives’ strategic actions for foreign banks (commercial and Islamic) understand and evaluate the environment. This indicates that environmental conditions influence the banks’ performance. The (STEM) directs the executives’ strategic action, which impacts the bank’s internal process, employees’ perspectives, and product development and growth, directly affecting the bank’s performance, while the (STDM) guides local Islamic bank’s executives’ strategic action and focuses on customer satisfaction.