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Abstract

Details

Principles and Fundamentals of Islamic Management
Type: Book
ISBN: 978-1-78769-674-7

Article
Publication date: 13 March 2009

Khaliq Ahmad

The purpose of this paper is to compare and contrast conventional management thought, its main features of leadership, and work motivation with those from an Islamic

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Abstract

Purpose

The purpose of this paper is to compare and contrast conventional management thought, its main features of leadership, and work motivation with those from an Islamic perspective. The paper fills in the literature gap that exists, despite the growing importance of a need for knowledge on management from an Islamic perspective.

Design/methodology/approach

This paper is conceptual in nature. Therefore, the method adopted is descriptive and approached using revealed knowledge sources, as well as knowledge from conventional management literature from the cultural school of management thought.

Findings

Leadership and motivational concepts in Islamic management are more comprehensive than the conventional theories. Islamic motivation frameworks also provide fundamentals for developing a strong Islamic leadership. Implications of these Islamic management concepts are not only confined to this materialistic world but also have connotation for subscribers of the belief of attaining eternal success in the hereafter.

Originality/value

The paper gives a better understanding and guidelines for managers of multinational corporations, especially those working in Muslim countries, in order to achieve their corporate objectives successfully.

Details

International Journal of Commerce and Management, vol. 19 no. 1
Type: Research Article
ISSN: 1056-9219

Keywords

Article
Publication date: 21 September 2010

Mohamed Branine and David Pollard

The purpose of this paper is to explore the nature and contents of Islamic management practices and their consequent implications for human resource management (HRM) in…

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Abstract

Purpose

The purpose of this paper is to explore the nature and contents of Islamic management practices and their consequent implications for human resource management (HRM) in Arab countries. In addition, it aims to examine the implications for multinational companies (MNCs) operating in Islamic countries and the impact of globalisation before proceeding to an analysis of managerial problems in Arab countries and the need for understanding Islamic management principles by Arab (national) and international managers.

Design/methodology/approach

The paper takes the form of a qualitative approach based on an extensive review of relevant literature and the employment of examples from selected Arab countries.

Findings

The study reveals that a gap exists between the theory of Islamic management and the practice of management in Arab countries. Management in Arab countries is informed and heavily influenced by non‐Islamic traditional and national cultural values and norms of different countries and by Western management thinking rather than Islamic principles derived from the Holy Quran (words of God) and the Hadith (words of the Prophet Mohamed).

Research limitations/implications

The paper argues that one of the main reasons for the lack of progress in most Arab and Islamic countries is the mismatch between global integration and local responsiveness because of an excess forward diffusion of Western management and business practices with little understanding and, hence, the implementation of Islamic management principles by both local and international managers in Arab countries. It adopts the view that there is a gap between the knowledge possessed by national and international managers in order to manage locally and what is required from the local workforce to be managed effectively. The main limitation of this study is the lack of empirical research evidence to support the points deducted from this review of literature.

Practical implications

Understanding Islamic management principles could help to develop a more appropriate type of management best practice in Arab and Islamic countries while still benefiting from the transfer of relevant Western management techniques and Western technology. The paper also argues that a reverse diffusion of management knowledge and skills by managers of MNCs is very important for the effective management of human resources in host countries. National cultural contexts and different views of work values have made a major impact on the ability of firms to address HRM issues in different cultural settings.

Originality/value

The paper contributes to the comparatively sparse literature on Islamic management and its applications by identifying key issues for HRM implementation and in developing Western understanding of Islamic management systems.

Details

Personnel Review, vol. 39 no. 6
Type: Research Article
ISSN: 0048-3486

Keywords

Article
Publication date: 7 December 2021

Ufuk Can and Mehmet Emin Bocuoglu

There is not a comprehensive study which covers the evolution of the Turkish Islamic liquidity management landscape so far. The purpose of this study is to show how…

Abstract

Purpose

There is not a comprehensive study which covers the evolution of the Turkish Islamic liquidity management landscape so far. The purpose of this study is to show how Turkish PBs have been gradually furnished with the needed liquidity management instruments by the Turkish Treasury, Central Bank of the Republic of Turkey and other related regulatory bodies and to analyze the repercussions of the evolution of Islamic liquidity management on balance sheets of participation banks (PBs) over time. This study also aims to come up with some humble policy recommendations that can improve Islamic liquidity management set up going forward.

Design/methodology/approach

The study acknowledges that at least two important elements of liquidity management should be in place on the way of improving the Islamic liquidity management environment. The first one is asset side liquidity or having an adequate amount of high-quality liquid assets. The second one is liability side liquidity, meaning that having access to funding liquidity, especially to central bank liquidity. Historical development of liquidity-related asset-side and liability-side balance sheet items between 2010 and 2020 are analyzed and visualized to demonstrate the progress in the Islamic liquidity management landscape in Turkey.

Findings

From 2010 to 2020, Turkish financial authorities made a great effort to get PBs to have more proper liquidity management tools. Turkish authorities have leveled the playing field for PBs via enriching liquidity management tools. Government sukuk issuances has filled the liquid asset gap, improved the liquidity profile of PBs and lessened overall liquidity risk while introduced central bank liquidity facilitates have reduced funding liquidity risk. Islamic liquidity management setup is much more advanced and participation banking system is more resilient than the past, but there are still some missing steps that can further ameliorate the Islamic liquidity management ecosystem in Turkey.

Research limitations/implications

This study is a visualized ratio analysis of PB’s improving liquidity profile in the past 10 years and fills an important gap in terms of displaying the overall Islamic liquidity management landscape in Turkey. Further studies and analysis can be built on this paper on Islamic liquidity management, banking and finance in the future. This paper can be a useful basement for researchers who intend to study on potential impacts of improving the liquidity of PBs on monetary transmission, banking profitability and overall banking system systemic risks.

Practical implications

Three different and interconnected areas should be further improved. These are enriching the diversity of government securities, providing central bank liquidity facilities under various available Islamic contracts and establishing an organized Islamic money market which will facilitate fund flows among various Islamic Financial Institutions (IFIs) and conventional financial institutions. Policymakers should act together, handle arising issues in a holistic manner, design and operationalize these incomplete parts of the puzzle to further optimize the playing field for the IFIs. Thus, there will be a more inclusive and competitive finance industry in which all risks are better managed and resources are more efficiently allocated.

Originality/value

Although various other studies are available on the Turkish Islamic banking industry, there is not such a specific study on Islamic liquidity management of Turkish PBs which makes this study a preliminary and different one. Apart from shedding light on the Turkish journey that has built a sound Islamic liquidity management infrastructure in the past 10 year, this study also shows an exemplary country experience in developing a more inclusive and robust financial ecosystem. This paper also contributes to financial development and inclusion literature as a policy paper.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 15 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Book part
Publication date: 29 December 2016

Mahfod Aldoseri and Andrew C. Worthington

The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and…

Abstract

The purpose of this chapter is to review the risks Islamic financial institutions face in an emerging market context, including risk sharing in Islamic financing and Shari’ah (Islamic law) compliance risk. We explore current risk management practices and establish the link between risk management and the financial performance of banks and the efficiency and effectiveness of financial sectors in emerging markets. Because of their distinctive risk profile, Islamic finance institutions face challenges in risk management. We show that Islamic banking is riskier in emerging markets because of the presence of immature money markets, limitations in the availability of lender of last resort facilities, and deficiencies in market infrastructure. There is also no evidence that Islamic banks have developed effective solutions for managing the risks conventional banks face as well as their own unique risks. We suggest that the countries that do this best are those that prioritize the structure of risk management knowledge and capabilities in a single financial regulator.

Book part
Publication date: 26 August 2019

Surianom Miskam, Abdul Monir Yaacob and Romzie Rosman

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and…

Abstract

The global Islamic financial landscape is changing with rapid advances in technology. The increasingly tech-savvy demography is presenting both opportunities and challenges to the industry. With the advances in e-finance and mobile technologies, financial technology (Fintech) innovations emerged by combining the e-finance, Internet, social networking services, social media, artificial intelligence (AI) and big data analytics. Fintech promises to reshape the Islamic financial landscape by improving processes’ efficiencies, cost-effectiveness, increased distribution, Sharīʿah compliance and financial inclusion. As far as the Islamic fund management industry is concerned, AI seems to be the keyword. Islamic fund managers have recently started to incorporate AI and big data analytics into their strategy in the process of making accurate decisions based on facts and figures, which eliminates any biases and personal intuition. This disruption in status quo is raising new issues, new concerns and new exciting opportunities. While disruption may carry negative connotations, the industry players have been embracing the innovation and potential revolution the technology could offer. Thus, the objective of this chapter is to discuss legal aspects of Fintech and its impact on the Islamic fund management industry in Malaysia. This chapter introduces a historical overview of Fintech and its evolution in the Islamic fund management industry. This chapter further provides an overview of the legal and regulatory aspects of Fintech with regards to the industry. Finally, legal issues and challenges are identified and discussed. Being a legal research, this chapter adopts a qualitative method by analysing the relevant literatures on the subject. This chapter is expected to provide an insight into the application of Fintech and its impact on the Islamic fund management industry in Malaysia.

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

Keywords

Article
Publication date: 7 December 2021

Virasty Fitri and Dodik Siswantoro

This study aims to provide empirical evidence on the role of corporate governance mechanisms in reducing earnings-management practices in Islamic banks in Asia.

Abstract

Purpose

This study aims to provide empirical evidence on the role of corporate governance mechanisms in reducing earnings-management practices in Islamic banks in Asia.

Design/methodology/approach

This study used 28 Islamic banks in Asia, which were listed on the stock exchange from 2013–2017. The research method used quantitative regression with data on the characteristics of Islamic banks taken from the websites of each bank. This study used discretionary loan loss provision as a proxy for measuring earnings management.

Findings

The results show that only the audit committee size has a significantly negative effect on earnings management. An independent audit committee has a negative, but not significant, effect. The difference expectation signs cannot be interpreted further.

Research limitations/implications

Only a few components of corporate governance were tested in this study. Therefore, it is expected that future studies will include more components.

Practical implications

In general, the components of corporate governance that include the characteristics of the board of directors and the audit committee have a varied effect on reducing the earnings-management practices in Islamic banks, except audit committee size. In practice, audit committee size should have an important role in earning management reduces.

Originality/value

This may be the first paper that studies the effect of corporate governance on earnings management in Islamic banks in Asia.

Details

Journal of Islamic Accounting and Business Research, vol. 13 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 14 September 2015

Romzie Rosman and Abdul Rahim Abdul Rahman

The purpose of this study is to examine the nature of the risk management practices of Islamic banks as recommended by the Islamic Financial Services Board (IFSB) in…

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Abstract

Purpose

The purpose of this study is to examine the nature of the risk management practices of Islamic banks as recommended by the Islamic Financial Services Board (IFSB) in managing their unique risks. This study also explores the differences in risk management practices based on the country, size, type and age of the bank.

Design/methodology/approach

A questionnaire was developed to investigate the risk management practices. The main reference for the questionnaire was the IFSB Guiding Principles of Risk Management and the respondents were either the chief risk officers or holders of other senior positions involved in risk management in the Islamic banks. A non-parametric test was then conducted to explain the difference in mean scores for the unique risk management practices by the Islamic banks.

Findings

A lack of effective risk management practices was found in relation to liquidity risk, displaced commercial risk and equity investment risk by Islamic banks. However, Islamic banks were comparatively good in managing operational risk/Shari’ah non-compliance risk. The study found that there was a significant difference in the practice of equity investment risk management based on the size, type and age of the Islamic bank. In addition, a significant difference was found between the Islamic banks in the Middle Eastern and North African (MENA) and Asian countries concerning the practice of both displaced commercial risk and operational risk/Shari’ah non-compliance risk management.

Research limitations/implications

In spite of the limitations in non-parametric analysis, this analysis was preferred inasmuch as the data were measured on an ordinal scale with a small sample size.

Originality/value

This study is among the few studies that examine and explore the risk management practices of Islamic banks internationally by explaining the unique risks encountered in Islamic finance.

Details

Journal of Islamic Accounting and Business Research, vol. 6 no. 2
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 26 June 2018

Sugiyarti Fatma Laela, Hilda Rossieta, Setyo Hari Wijanto and Rifki Ismal

This paper aims to examine the effect of management accounting–strategy coalignment on the maqasid Shariah-based performance of Islamic banks in Indonesia. The study also…

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Abstract

Purpose

This paper aims to examine the effect of management accounting–strategy coalignment on the maqasid Shariah-based performance of Islamic banks in Indonesia. The study also examines the role of the corporate life cycle of Islamic banks in influencing the relationship between management accounting–strategy coalignment and performance.

Design/methodology/approach

Management accounting practices, management control systems, strategy and maqasid Shariah-based performance are measured using questionnaires which were distributed to 97 directors and heads of Islamic banks. The model of this study is analyzed using structural equation model.

Findings

This study finds that the coalignment between low cost-oriented strategy, strategic management accounting practices and mechanistic management control system has positive impact on improving maqasid Shariah-based performance. However, this study is unable to verify that corporate life cycle strengthens the positive relationship between management accounting–strategy coalignment and performance.

Research limitations/implications

Limited indicators of management accounting practices in this study illustrate less comprehensive management accounting practices. Further studies may add other relevant management accounting as described by the International Federation of Accounting Committee to provide a more comprehensive management accounting practices.

Practical implications

This study provides recommendations to the management of Islamic banks to design management accounting practices and management control systems that fit to their strategic orientation.

Originality/value

This paper fulfils limited empirical studies on management accounting practices and strategy in Islamic banking industry.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 11 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Article
Publication date: 23 February 2010

Rifki Ismal

The purpose of this paper is to analyze and evaluate the present liquidity management in the Indonesian Islamic banking industry. It also proposes an integrated and…

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Abstract

Purpose

The purpose of this paper is to analyze and evaluate the present liquidity management in the Indonesian Islamic banking industry. It also proposes an integrated and comprehensive program of liquidity risk management which captures and assimilates the whole aspects of the issue and brings the industry into a better way of managing liquidity risk based on sharia principles.

Design/methodology/approach

The paper first examines the organizational structure of Islamic banks and Islamic windows in managing liquidity. Second, it investigates the characteristics of the depositors, their investment behaviors and expectations followed by the banks efforts and policies to manage the liquidity. Then, it identifies the potential liquidity problems and Islamic liquid instruments. Finally, it proposes an integrated and comprehensive program for managing liquidity.

Findings

The paper suggests institutional deepening; restructuring the liquidity management on the liability and asset sides; and revitalizing the usage of the Islamic liquid instruments, in the integrated program.

Originality/value

This is believed to be the first paper to propose a liquidity management improvement program in the Indonesian Islamic banking industry.

Details

Humanomics, vol. 26 no. 1
Type: Research Article
ISSN: 0828-8666

Keywords

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