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Islamic Banking has been in the limelight since the recession of 2008. Although around for a long time, it is enjoying a renaissance of sorts. This case provides an introduction.

EMBA and/or MBA introduction to banking, senior semester undergraduate, specialization in Islamic Banking.

This case is written in the form of an interview with Meezan Bank, one of the leading financial institutions in the Islamic banking sector. It is based on primary as well as secondary data obtained via interviews and documentary analysis.

This is an analytical case and not a decision-making one. The main theme of the case revolves around analysing what Islamic banking is, the challenges that Meezan has faced, the pros and cons of doing business this way and the future issues it can face.

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CSS 7: Management Science.

Islamic Accounting, Auditing, Strategic Management and Accounting Theory.

The case is suitable for graduate and postgraduate business students, particularly those on courses such as Islamic Accounting, Auditing, Strategic Management and Accounting Theory. The case is based on secondary data collection and all the facts are real.

In the early 2000s, the Tabung Haji (TH) faced financial difficulty, particularly regarding its returns from investments and, with the intention of helping to improve this situation, the General Manager (GM) of Finance and the GM of Investment decided to accept an investment proposal presented by an investment company. The proposal involved initial and subsequent investment portfolios of RM50 million and RM150 million, respectively. The proposal was presented in a board meeting and was approved by the board. Indeed, the two GMs were delighted to receive a return of RM12.5 million from their RM50 million initial investment – i.e. 25 per cent return. In the process of approving the subsequent investment of RM150 million, the two GMs were informed that their investments were partly for the FOREX market (Foreign Exchange Market/Currency Market). At that time, there was no conclusive decision on the status of investment in the FOREX market regarding whether it complied with Sharia principles. The two GMs contemplated whether they should accept this second investment proposal. The issue was whether they should reveal in the board meeting that this investment was partly in FOREX. What if the board failed to accept the idea of investing in FOREX and rejected the proposal? Indeed, they were dropping an opportunity for lucrative returns. Should the GMs seek technical advice on the status of FOREX investment in Islam and present it to the board?

The case should help students to: understand the concept of Sharia and Sharia financial principles; understand the process involved in TH investment decisions; analyze the issues involved in decision-making and apply the relevant theories to describe the actions; and recommend various alternative course of actions in a given situation.

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Undergraduate courses: Auditing, Leadership, Management accounting. Postgraduate courses: Leadership, Management accounting.

Auditing, Leadership, Management accounting

This case documents the journey of a professional accountancy organisation, namely, the Malaysian Institute of Accountants (MIA) and document the MIA’s journey on the establishment of digital blueprint for the accounting profession in Malaysia including some major milestone in innovating audit evidence-gathering technique by introducing e-confirm for auditing bank confirmation in Malaysia. This case highlights the significant role played by a lady chief executive officer (CEO) in embarking into the digitalisation of the accountancy profession and practice in Malaysia. While the ultimate objective of digital blueprint is to transform the accounting and auditing practices in Malaysia, the CEO has led by example by embedding digitalisation within MIA’s practices itself.

The learning outcome of this paper are as follows: to develop students’ understanding on the right attitudes, skills and characters that a successful leader should possess in contemporary business environment by focusing on dilemma and stereo-typing faced by women leaders; to develop the students’ understanding on the changes in business environment particularly the rise of digital technology that affecting the ways in which accounting functions in organisations; to encourage students to be aware that technical accounting knowledge is just one of the key success factors in the career of a professional accountant. The case offer insight into accountants’ role in digital environment and the development needed for accounting profession; to demonstrate how auditing process can benefit from the advancement in technology; and to encourage critical discussion on the development of accounting profession in Malaysia. The case aims to develop students’ critical discussion on the roles of MIA as a regulator of accounting profession and to appreciate historical development of accounting profession in Malaysia. The case also aims to encourage students to realise the existence of other professional accounting bodies, accounting practitioners and academic accountants, and together with MIA, they play significant role in shaping the accounting profession in Malaysia.

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The case has a strong implication on the role of effective leaders in ensuring that significant efforts involved in digitalisation journal, a vital need for the accountancy professional to continue to be a relevant profession, is a success.

CSS 1: Accounting and Finance.

Women leadership, Digitalisation, Professional accountancy organisation, Electronic bank confirmation, Malaysia

Integrated Case Study, Advanced Management Accounting, Environmental Management Accounting (EMA), Human Resource Management.

This case is designed for undergraduate students in accounting, business or human resource management programmes.

The case is about Irfan, a former Production Manager in Omicron, a small and medium-sized enterprise in Selangor, Malaysia, manufacturing automotive metal parts. Irfan is truly enthusiastic for environmental and cost-reduction tools and wishes to pursue it further to his best possible. The case presents Irfan facing the dilemma of how to align his passion for these tools to his future career choice. He is faced with three options – to remain in Omicron, to accept a job offer in another company or to establish his own consultancy firm. The case highlights the heavy involvement of Irfan in the implementation of a new environmental tool, Material Flow Cost Accounting (MFCA) in Omicron, and all the tasks, activities, benefits and challenges encountered. Being at the ground with the implementation and outputs achieved, Irfan is excited about MFCA and wants to continue with it, due to the rich and valuable experience gained from its implementation and its potential for future savings. However, he does not seem to observe a similar excitement among the higher management. The case details an example of the implementation of MFCA for one of Omicron’s products and other relevant information that could serve as a guidance to any future implementation either in Omicron, the new company or even his own company. The case also provides details about Omicron and how Irfan regard Omicron as his second family to hint a strong pulling factor for Irfan to remain in Omicron, hence providing the extra weight on the dilemma he faces.

In the process of assessing a career choice dilemma for a middle-level manager, students are expected to analyse the three career options available to this middle manager, whose dilemma also relates to his passion of pursuing environment-related and cost-reduction tools. Where the environment is concerned, some parties need extra persuasion to pursue it and this also triggers the middle-manager’s dilemma. This case is intended to provide a tool to enable students to review and discuss matters, such as overcoming obstacles of pursuing environmental-related initiatives and progressing a mid-life career that provides self-fulfilment financially, emotionally and mentally. Among the theories and concepts referred include diffusion of innovations theory, EMA concepts and Hofstede’s cultural dimensions.

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.

At the end of this case study, students should be able to identify issues relating to the external and internal environment of a business; explain how traditional marketing differ to social media marketing strategy and how digital marketing could be applied for frozen food company, identify alternatives to address the production capacity issue and challenges of contract manufacturing; identify and discuss measures that a company could adopt to effectively manage the working capital; apply various business management tools, concepts and theories in different decision-making settings – tools or concepts such as Porter’s five forces, SWOT analysis, PESTEL; and use analytical and logical skills through problem solving.

This case presents Khir, CEO of Mamart Food, facing several challenges in the post Covid-19 pandemic. Mamart Food is a SME manufacturing company located in Peninsular Malaysia. It competes in a frozen food industry. The case highlights the turbulence which Khir had to face due to the production capacity issue. He had the dilemma of balancing between the opportunity to boost sales and the capacity to meet demand. The dilemma emerged during the Movement Control Order in place and was expected to continue in the post MCO period. Quite a number of frustrated stockists over the unmet demand have started to aggressively voice out their dissatisfaction. Seeing the growing number of complaints, Khir had to act fast. Being the CEO, Khir must resolve the tension between Suliana, the production manager and Hisham, the sales and marketing manager. Failing which, it could be detrimental to the survival of Mamart Food. The most effective strategy for Mamart Food therefore needs to be formulated immediately.

This case is designed mainly for final year students in Accounting or Business undergraduate programmes.

Teaching notes are available for educators only.

CSS 11: Strategy.

The case is suitable for use in the topics related to the functions and roles of hedging and the Islamic derivatives/hedging instruments.

The case is designed for undergraduate students, taking courses in Islamic Banking, Islamic Finance and Risk Management for Islamic Banking Institutions.

This case describes the theory and application of Islamic Cross Currency Swap (ICCS) in the market. Having this understanding enables case analysts to understand the functions and roles of hedging and the Islamic derivatives or hedging instruments of ICCS comprehensively. The case begins with Yusof, the new finance officer of Al-Yemeni Sdn. Bhd to analyse the permissibility of hedging and derivatives to hedge against currency fluctuations from Islamic perspective. Yusof had to complete the report before the Board of Director's quarterly meeting, which was within a week. Having in mind that the company's mission was to be a Shariah-compliant stock by 2012, Yusof was responsible for ensuring that the company was administrated in an Islamic way. Besides, he also had to ensure that the company generated income and profit as planned. In doing so, he had to strategise all possible risk exposures that could be mitigated or hedged. This case ends by giving the case analyst information on ICCS offered by Al-Rizky Bank Berhad (ARBB). In this case, Yusof had to find out whether hedging is allowed in Islam. What are the Islamic derivatives? What are the different views of Shariah scholars on various types of derivatives? What is the modus operandi of ICCS? Is the ICCS offered by ARBB Shariah compliant? What are the possible risk exposures being hedged in ICCS?

To provide exposure on the concepts of hedging from Islamic perspectives; to provide exposure on the concepts of Islamic derivatives/Islamic hedging instruments; to stimulate understanding on the modus operandi of ICCS in ARBB; and to help case analysts understand what makes the Islamic hedging instruments become Shariah compliant.

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The case is suitable for use in the topics related to the functions and roles of Islamic pawn-broking and the Islamic risk management framework.

The case is designed for undergraduate and postgraduate students taking courses in Islamic Banking, Islamic Finance and Risk Management for Islamic Banking Institutions.

This case is meant to explain the mechanics of pawn-broking (Ar-Rahnu) in Islam as well as to understand the risk management of Ar-Rahnu in the bank. Ar-Rahnu is discussed, in general, from the perspective of muamalat and then is related to the financing service offered through Ar-Rahnu scheme at Al-Qamari Bank Berhad (a disguised bank). Ar-Rahnu means making an asset as a security or collateral for a debt. The collateral will be used to settle the debt when the debtor is in default. It may also be known as borrowing with either collateral or pawn-broking. In Al-Qamari Bank Berhad, gold and jewellery are the subject of collateral for Ar-Rahnu. In return, customers will get the cash based on the margin of loan with regards to the current market value of gold/jewellery as determined by the bank. The operation of Ar-Rahnu is discussed in Exhibit 1, while the risk management of Ar-Rahnu is discussed in Exhibit 2.

The learning outcomes include: to identify a problem and issue related to Ar-Rahnu; to evaluate the modus operandi of Ar-Rahnu; to analyze the risk management practices of Ar-Rahnu; and to develop decision criteria on whether Ar-Rahnu in Al-Qamari bank is Shariah-compliant or not.

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The case discusses Islamic Banking Principles and Products (Banking), Business Strategy for Niche Markets (Strategic Management) and Segmentation and Marketing Strategy (Marketing Management).

Undergraduate Graduate Training – Executives at junior level.

This case is about the dilemma faced by Azhar Mehmud, a newly recruited Marketing Manager, Islamic Products (MMIP) in Bank Islam on six-month probation. Prior to Bank Islam, Azhar had an MBA degree from the UK and about 15 years of experience of business development in a multi-national bank in Indonesia. Looking at his experience, he was awarded to promote Islamic banking (IB) products in Malaysia where the competition was very intense. After his interactions with customers for about six to seven months, he prepared a report for his boss, General Manager, Consumer Banking (GMCB). In this report, he had summarized the challenges of marketing IB products in a market meant for conventional banking. When he presented the report to GMCB, he met with unfavorable reactions. GMCB was not convinced that IB products had any competition from conventional banking. He gave Azhar one additional month to either revise his thinking or quit the organization.

The expected learning outcomes are as follows: to enhance the awareness of IB products, principles and differences from the conventional banking products; to introduce the concept of business strategies for niche markets; to make students realize the importance of segmentation in view of niche market like IB.

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Through the discussion of this case, students will have a better understanding of the managerial dilemma associated with the implementation of management control in an early-stage firm. Students will provide proposals to improving current management control. Finally, this case encourages students to think about the costs and benefits of implementing formal management control systems.

As the company grows, it becomes difficult to keep control of the organization. The organizational structure of Majid Al Futtaim (MAF) Carrefour Jordan is too centralized, and the top management is confronted with information overload, which inhibits their ability to pursue strategic goals. The department managers are also confronted with communication problems, and they are evaluated based on the indicators that were out of their control. Processes and rules do not permit managers sufficient autonomy, and neither do these motivate employees towards organizational strategic goals. It is obvious that many control issues needed to be addressed in MAF Carrefour Jordan. However, given the limited budgets, MAF Carrefour Jordan managers need to decide which control systems to implement first.

This case can be used in an introductory cost accounting and management control course at the undergraduate or postgraduate level. The case should be introduced after students attained a baseline understanding of management control system fundamental concepts. However, this case is equally effective in introducing concepts to students who are new to management control systems.

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CSS 1: Accounting and Finance

The learning outcomes are as follows: to teach the concept of mutual fund as whole, how mutual fund works and who are the investors; discuss how any asset management company can work and what is their investment process; discuss how mutual funds are affected by changes in economic outlook/macro-economic variables; discuss the alternative risk-adjusted measures of performance evaluation, such as the Sharpe ratio, Treynor, Jensen’s alpha and measure of risk-adjusted performance; and discuss which index to use as a benchmark and how to improve funds’ performance.

In April 2019, Khaldoon Bin latif, Chief Executive Officer (CEO) of Faysal Asset Management, reflected on the changes that had occurred during his two and a half years at Faysal. He was quite pleased with the recent performance of Faysal Funds and the company’s relationship-oriented approach to money management for individuals with high net worth. Yet, he wanted to ensure that both the investment-process and performance-evaluation measures that he had implemented at Faysal would continue to provide superior returns. Latif also wanted Faysal to outperform the relevant indices, not only on an absolute basis, but also on a risk-adjusted basis. He pondered which indices and models Faysal should use in the future based on their performance.

Undergraduate/graduate

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.