TRANSLATION

Sunday, November 21, 2010

SHAYA'A OTHMAN ISLAMIC MANAGEMENT MODEL

FUNCTIONS OF MANAGEMENT FROM ISLAMIC PERSPECTIVE
By
SHAYA’A OTHMAN

I would like to redefine management from the Islamic perspective as Integrated activities of thinking, planning, organizing, leading, and controlling, interconnected with decisions, involving the use of resources – human, financial, information and physical, with objectives of attaining goals of maqasid al-Sharia, by means of effective and efficient methods. Profit is just like oxygen in our body, but it is not the point of life, but without oxygen there is no life
  1. Management in the 20th Century
In the 20th century, non-Muslim management thinkers or scholars looking at management in different perspectives, namely, [1] Psychological Perspective, [2] Sociological Perspectives, and [3] Scientific Perspective, and the management gurus, according to these different perspectives, were as follow:
1.  
Psychological Perspective:
· Ordway Tead (1891) Human nature and management; the applications of psychology to executive leadership,
· Walter Scott and J. Mooney
2.  
Sociological Perspective:
· Elton Mayo (1949), The Human Problems of an Industrial Civilization
· Mary P. Follett (1868-1933)
· Max Weber (1868-1920)
· Chester Barnard (1886-1961)
· Rensis Likert (1903-1981)
· Chester Argyris (1923)
3.  
Scientific Perspective:
· Henry R. Towne (1890), Science of Management
· Henry L. Gantt (1910), Gantt’s Charts
· Frederick Winslow Taylor (1911), Principles of Scientific Management
· Frank and Lillian Gilbreth (1917), Applied Motion Study
· H. Dodge, Ronald Fisher (1890–1962), Introduced Statistical Techniques into Management.
· Patrick Blackett (1940), Combined Statistical Theories with Microeconomic Theory and gave birth to the Science of Operations Research in Management.

It is observed that these different management gurus as mentioned above defined management differently according to their own background experiences in the industries as well as their background training. For example Ronald Fisher was a statistician, and both Frank and Lillian Gilbreth were industrial engineers. The search for better understanding of management is still going on, yet with more acceptable understanding of management, there is still a missing link and incomplete.
  1. Definition of Islamic Management
Today, it is generally accepted and practiced, that management is meant to involve activities which include planning, organizing, leading, and controlling. Griffin (1996) defined management as set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organization’s resources (human, financial, physical, and information, with the aim of achieving organizational goals in an efficient and effective manner. This definition is more complex than what Taylor (1903) was trying to define management as knowing exactly what you want people to do, and then seeing that they do it in the best and cheapest way.
From my practical experiences for many years in many different companies, both at national and international levels, the definition of management [Planning, organizing, leading and controlling], which is acceptable by many today, including many contemporary management scholars, is rather incomplete. There is a missing link. On many occasions proposals were thrown with a common remark “not enough thinking’ was put into the proposals. The worst experienced I had in my life, was the remark made by an Executive Chairman, in a big Malaysian multinational company, when he threw a proposal made by a Group Managing Director to the board’s meeting. His remark was “My dog can think better than you”, and this unpleasant remark is still implanted in my mind.
Western scholars including management gurus, segregate knowledge and religion. The solution which is simple and being ignored, as always being reminded by God in several verses in our Holy Quran as follow:

Quran 6:50 “Why you do not think”

Quran 23: 80 ‘Why you do not use your intelligent”

I have advocated “thinking” as part of management process when I was teaching to MBA and business students at Selangor International Islamic University in 2008, as well as my many lectures at various universities in Malaysia and Europe, including Europe International Islamic University,[ Istanbul campus], as well as business communities. I have explained this additional function in my book entitle “Berfikir Seperti Genius’ [Think Like Genius] [2009].



Since Islam gives special emphasis on “thinking” in whatever we do in life - in our private life, as well as, in managing a society or an organization, I would like to put thinking as an important function or process in management. Thus from Islamic perspective, I would like to redefine management as follows:

Integrated activities of thinking, planning, organizing, leading, and controlling, interconnected with decisions, involving the use of resources – human, financial, information and physical, with objectives of attaining goals by means of effective and efficient methods.

I would like to explain further what I mean “the objectives of attaining goals” in my definition of management above. In Islam the goals in our daily life are beyond financial returns. Even in business, Islam looks beyond profit. Though profitability is one of the objectives of business enterprise, but it is not the ultimate goals. Think of the following statement:

Profit is just like oxygen in our body, but it is not the point of life, but without oxygen there is no life

I would like to advocate Maqasid al-Sharia as the integrated goals of management. Therefore my earlier definition of management from Islamic perspective shall be more precise, and thus how I would like to define Islamic Management as follows:
Integrated activities of thinking, planning, organizing, leading, and controlling, interconnected with decisions, involving the use of resources – human, financial, information and physical, with objectives of attaining goals of maqasid al-Sharia, by means of effective and efficient methods.

My definition of Islamic Management may be capsulized or summarized in the form of the following matrix:









The Islamic Management Model that I am advocating to include "Thinking" as well as "Maqasid Al Shariah can be further illustrated in the following diagram:




Friday, November 19, 2010

The Need for Maqasid al- Syariah in the Management Strategy of Current Islamic Banks

The Need for Maqasid al- Syariah in the Management Strategy of Current Islamic Banks

By

SHAYA’A OTHMAN

Academic Fellow & Executive Director, INSANIAH Global Centre of Excellence

INSANIAH University College, Kedah Malaysia



ABSTRACT



The management of Islamic financial institutions such as Islamic banks and Islamic insurance companies should look beyond profit. Although profit is very important for the institution to be able to exist, it is not the main objective of the institution. Profit is just like oxygen in our bodies which is essential for us to stay alive, but which is not the main objective.

This paper attempts to examine the management strategy of current Islamic institutions, particularly Islamic banks, in the light of their moving towards maqasid al-Syariah or, in other words, ‘the spirit of the Islamic Syariat’.

Muslim scholars are of the opinion that the ultimate objectives [maqasid al-Syariah] which are a necessity [al-daruriyyah] for mankind to be able to live peacefully in this world, according to al-Quran and al-Sunnah, include five main areas – [1] protection of life, [2] protection of al-Din [Islam], [3] protection of human generation, [4] protection of intellect, and, lastly, [5] protection of wealth or resources. From a review of the related literature, little is mentioned or discussed about Islamic banks working towards achieving these ultimate objectives or maqasid al-Syariah.

This paper also attempts to answer the question of whether the current Islamic banks owned by non-Muslims will be able to incorporate maqasid a-Syariah into their management strategies.

What are the objectives of the many conventional banks which are rushing to convert themselves into “Islamic Banks” or open windows of “Islamic Banks”? Are they attracted to the ultimate objectives [maqasid al-Syariah] as advocated by Islam? Or are they attracted to make profits from the abundant wealth of Muslims?

Attempts are also made in this paper to examine the possibility of Islamic banks owned by non-Muslims being sustainable if, and only if; they incorporate maqasid al-Syariah into their strategy of existence. Also, is there is any rationale whatsoever for countries predominantly populated by non–Muslims and governed by non-Muslims becoming Islamic Financial Centres? London, Singapore and Hong Kong are all planning to establish such centres, and the question arises as to whether maqasid al-Syariah is being incorporated into their blueprints for creating these centres?

This paper tries to put across the view that the current practice of Islamic banks needs to incorporate maqasid al-Syariah into their management strategy. Otherwise, the use of the word ‘Islamic’ should be dropped. Furthermore, it proposed that the term ‘Islamic Bank’ should be reviewed, and should only be used to refer to an ‘Islamic Bank’ owned and managed by Muslims. This is because Muslims are the only community [ummah] recognised by Allah which can or should uphold maqasid al-Syariah. Islamic banks owned by non-Muslims may be called ‘Interest Free Banks’.



An Overview of Maqasid al-Syariah



MAPPiCXS Presentation of MAQASID AL-SYARIAH

Maqasid al Shariah



1 Imam al Syatibi's Opinions

1.1 ALLAH'S REQUIREMENTS

1.1.1 Category 1

1. Al-daruriyyah = Necessary Factors

  • 1. Protection of Human Life
  • 2. Protection of Religion [Islam]
  • 3. Protection of Protection of Human Generation
  • 4. Protection of Human Intellect
  • 5. Protection of Wealth and Resources

2. Al- hajiyyah= Requiring Factors to eliminate difficulty in life

  • 1. Ibadat
  • 2. Adat [Common Practices]
  • 3. Muamalat [Business]
  • 4. Jenayat [Criminal Laws]

3. Al- tahsinniiyyah = Complementing Factors

  • 1. Mahasin al-adat [Good Culture]
  • 2. Al-ahwal al- mudannisat [Disgraceful Elements]

1.1.2 Category 2

  • 1. Compulsory to understand Arabic

1.1.3 Category 3

  • 1. Responsibility beyond Human Capability
  • 2. Responsibility within Human capability

1.1.4 Category 4

  • 1. Implementation for everyone without exception

1.2 MUKALLAF'S [HUMANS] REQUIREMENTS

1.2.1 1. Feeling that the practices are in line with Allah's requirements

1.2.2 2. Determining objectives which are probably in line with the rules of Allah

1.2.3 3. Implementing any directives for the obedient to the rules of Allah



2 Imam Ibn 'Asyur's Opinions

2.1 General Objectives

  • 2.1.1 Getting Benefit
  • 2.1.2 Rejecting Harmful & Destruction

2.2 Special Objectives

  • 2.2.1 munakahat [nikah]



Note:

1. I will presenting this paper at the LIFE [Langkawi Islamic Finance & Economics] International Conference to be held on 13 - 15 December at Langkawi:

http://conferences.insaniah.edu.my/main/

2. If you wish to put your ideas please give your kind comments or e-mail to me :

shayaaothman@yahoo.com

3. If you wish to have a copy of full paper please e-Mail to me:

shayaaothman@yahoo.com