Islamic Management vs Conventional Management

By: Amiera Zulkifli

Msc Islamic Finance and Management,

Durham University, UK.

The under developed nations are currently in quest for formulas that could help their
economic development and social progress. This has given much limelight to the
area of practice and management of institutions which have been the key contributor
to a state. Efficient management, sound economic institution coupled with great
strategies is essential to erode the root of backwardness (Ali, 1988). The
conventional view management as a process towards organisational goal by
engaging in four major transactions of planning, organising, leading and controlling
(Bartol & Martion, 1994). Another sub category of management that has gained
popularity over the years is the Islamic management which refers to an approach to
deal with production, consumption and distribution according to Islamic worldview.
Generally, employee do not carry task in an organisational vacuum but rather they
will bring along their culture, work-related values and religious belief into workplace
(Branine & Pollard, 2010). Hence, the aim of this essay is to explore different
management view, practice and its impact on organisational performance.

The Sources

The bases for Islamic management are found in the ontological and epistemology
source which are the Quran and Hadith (Branine & Pollard, 2010). This is further
supported by the axioms that articulate Islamic management principles. They are
tawhid (God’s unity and sovereignty), ‘al adl wa’l-ihsan (justice, equilibrium, and
beneficence), ikhtiyar (free-will), fard (responsibility), rububiyyah (towards
perfection), tazkiyah (purification and growth), ukhuwwah (fraternity, solidarity and
unity), amanah (trust), takaful (cooperation), khilafah and human accountability
before God, islah (struggle for excellence), taqwa (righteousness) and the maqasid
al-shariah (Malik & Asutay, 2011). Apart from the above, Malik & Asutay, (2011)
have developed a dynamic Islamic management model to facilitate the ihsani social
capital processes that eventually distinguish the Islamic from the conventional
model.

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Figure 1 explains that stemming from the Quran and Hadith, articulation of axioms
will lead to a dynamic self-articulation or khalifah typology. The outcome of such
articulation will be a benevolent society namely efficient institutions and societies
which then enable individual to strive for falah and building ihsani social capital. This
resembles the process of becoming or islah in achieving the ideal management. In
contrast, the source of principles, rules and regulations in the conventional
management are derived from the rationale of person vested with authority. The
rules and regulations on operational management set by the company are based
from the rationale reasoning by the management itself. Hence, the rules may only
represent interest of certain group of people. Further, conventional management
focuses on organisational goal and objectives as the thrust for all activities. Here,
since Islamic management based its source on the ontological and epistemology, the
system has become a value loaded and more humane than the conventional ones.

Individual Development (Micro)

In order to achieve the ideal management, one must be concern with the
development of individuals which later help develop the organisation and society.
Tawhid, being the main principle in Islamic management help to shaped current
practice by reflecting the idea of true submission and devotion to Allah in His
commandments (Sulaiman, et. al., 2014). One must regard that every work is an
ibadah to Allah by implying that the concept of worship is broad and applicable even
in management (Ismaeel & Blaim, 2012). Aim, objectives and procedure must reflect
submission and devotion towards pleasing Allah which simultaneously promote
goodness and prevent evil (Sulaiman, et. al., 2014). The concept of khilafah
(vicegerent) are further practice in Islamic management for developing individuals as
human are considered as khalifah (trustee) to develop this world (Beekun & Badwi,
2005). Individuals have to work at his best to develop the skills and ability to achieve
good performance in the company using the articulation of Islamic principles.

In contract, practices in conventional management which based their values from

rationale have result in clear separation between private matter and public domain
(Sulaiman, et. al., 2014). Religious activities, spiritual values and needs are regarded
as separate and should not be mixed together, hindering human growth. Work is
never associated with religious values and one must not bring norms and behaviour

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of private lives into workplace. The conventional management also relies on the idea
of motivation and work values by the Western (Branine & Pollard, 2010) and works
are designed to serve and contribute to organizations growth and not individuals.
The managerial practices are based on worldly matter and are not integrated with
the hereafter. In short, there is clear distinction between the Islamic and conventional
in the aspect of human development. The first promote human growth through the
articulation of Islamic foundations while the later only concern on the worldly matters.

Organisational Development (Macro)

Further comparison between Islamic management and the conventional ones are its
organisation or society development. Islamic management promotes the idea of ‘al
adl wa’l-ihsan (justice, equilibrium and beneficence). It means doing things in a
proportionate manner, avoiding extremes, at a more metaphysical level, equilibrium,
or embracing harmony in the universe (Beekun & Badwi, 2005). In Islamic
management worldview, there is no prohibition by Allah on the accumulation of
wealth and in fact He promises to reward person whom work hard in changing his
faith. However, wealth must be accumulated in a noble manner in accordance with
the tawhid and khilafah concept to generate more capital and later help the society.
Every wealth accumulated by permissible way (halal) will be rewarded more
(barakah) as it is based on taqwa and tawakkal (trust in Allah). Further, one shall
note that homoislamicus idea on maximization of utility in Islam is always subject to
islah (struggle for excellent). This means that even Islam aims at falah, it does not
disregard the worldly matter as it requires its followers to work hard and struggle for
excellence. Efforts made can be one of the way and mechanism for individuals to
attain falah. Hence, Islamic worldview aims at achieving balance between wealth
accumulations and the hereafter.

In contrast, the conventional management has made competitive advantage as the

most important concept in strategic management of a business (Fontaine & Ahmad,
2013). Competitive advantage can be defined as the ability to generate higher profit
margin than the industry’s average (Fontaine & Ahmad, 2013). Since the
conventional management aimed at profit maximization, it concentrates more on
individualism, performance-related and economic measure-based approached, as
portrayed by the Western thought (Branine & Pollard, 2010). These have contributed

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to the idea of capitalism management where profit is the main objective and
development can be at the expense of anything. Bribery and corruptions are
permissible as long as business deal can be closed (Fontaine & Ahmad, 2013).
Developments for organisations are at the expense of moral values. The yard sticks
for success in conventional management are determined by the ability to generate
highest income. Thus, the Islamic management differs from the conventional
management in organizational development as it features the concept of moderation
and includes social concerns in accumulating wealth. The later however, aim at
wealth accumulation at the expense of organisational development.

Distinct Outcome

It is also believe that the consequence of good management would have significant
impact on business ethics and performance. Among example of good behaviours
and moral values stemming from Islamic management are steadfastness,
trustworthy, truthful, sincere, cooperation, transparency and others (Branine &
Pollard, 2010). There is also sense of humanity through personal discretions among
those who are in the Islamic managerial positions (Branine & Pollard, 2010).
Subordinates are treated fairly regardless of their ranks and positions in the
company. Consultation or shura, being the key leadership values in Islam had been
the basis in all decision making. The suggestions and ideas of others shall be taken
into considerations prior to decision making. In contrast, the conventional
management may have less degree of humanity in the organisations. Strong
adherence to the rules and regulations are the key to good management. Discretions
are rarely practiced on its workers which showed lack of humanity in the
management practice. Works are primarily important and personal excuses are not
accepted. Thus, such practice has led to divorce standing between ethics and
economy in the neo-classical realm which resulted to insensitivity to moral issues
(Naqvi, 2003). Unethical work practice like bribery, corruption, breach of trust,
misappropriation of funds, immoral trading, fraudulent transactions, bribery, interest,
coercion, and greed can emerged in conventional management (Maududi, 2011).
Overall performance can be affected if mal practices of the above continued in
organisations. Hence, it is important that the current management practices are
based on moral and ethical foundations as laid by the Islamic ontology and

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epistemology. With good managerial practice and motivated worker, an organisation
can achieve success in this world and the hereafter (falah).

In conclusion, it is noted that in this modern context, the social constructivist and
cross-cultural management suggest that different management practice can be
made possible with the influence of cultural and norms (Malik & Asutay, 2011).
Islamic management is among the possible managerial practice that can be
administered in an organisation as it has proved to stimulate individual growth and
develop high performance in organisations.

Islamic ontology &

epistemology

Articulation of
axioms

Process

Dynamic Self Articulation Content

Outcome Benevolent
Enable and Building &
functioning enhancing Ideal
society; efficient
individual ihsani social management
institution &
aiming at capital
society
Khalifah typology falah

Feedback into system / becoming process (islah)

Figure 1: Islamic Management Model

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 Bibiliography/References:

Ali, A. (1988) Scaling an Islamic Work Ethic. The Journal of Social Psychology. 128
(5), pp. 575-583.

Bartol, K. M. & Martin, D. C. (1994) Management. 2nd Edition. New York: McGraw
Hill.

Beekun, R. & Badwi, J. A., (2005) Balancing Ethical Responsibility Among Multiple
Organizational Stakeholders: The Islamic Perspective. Journal of Business Ethics.
60 (2), pp. 131-145.

Branine, M. & Pollard, D. (2010) Human Resource Management with Islamic

Management Principles: Dialectic for a Reverse Diffusion in Management. Personnel
Review. 39(6), pp. 712-727.

Fontaine, R. & Ahmad, K., (2013). Strategic Management from an Islamic

Perspective: Text and Cases. Wiley. Available from
<http://www.myilibrary.com?ID=508844> [Accessed date: 1 st January 2015].

Ismaeel, M. & Blaim, K. (2012) Towards Applied Islamic Business Ethics:

Responsible Halal Business. Journal of Management Development. 31 (10), pp.
1090-1100.

Malik, M & Asutay, M. (2011). Conceptualising Islamic Governance. Discussion

Paper, SGIA, Durham Business School.

Maududi, S.A.A., (2011) First Principles of Islamic Economics. Leicestershire: The

Islamic Foundation.

Naqvi, S. N. H., (2003) Perspective on Morality and Human Well-Being: A

Contribution to Islamic Economics. Leicester: The Islamic Foundation.

Sulaiman, M., Abdul Sabian, N. A. & Othman, A. K., (2014) The Understanding of
Islamic Management Practices among Muslim Managers in Malaysia. Asian Social
Science. 10 (1), pp. 189-199.

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