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ISLAMIC WORK ETHICS IN BUSINESS PERFORMANCE AND ORGANIZATIONAL COMMITMENT AS A MEANS OF DA’WAH: PRACTICES AND IMPACTS ON SMALL-MEDIUM ENTERPRISES (SME) IN SELANGOR SHAKIR HUSEIN BIN KALID UNIVERSITI SAINS ISLAM MALAYSIA

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Page 1: ISLAMIC WORK ETHICS IN BUSINESS PERFORMANCE AND ...ddms.usim.edu.my/jspui/bitstream/123456789/18951/1/4100065 25pages.pdfmy friends as a graduate student, for helping me get through

ISLAMIC WORK ETHICS IN BUSINESS

PERFORMANCE AND ORGANIZATIONAL

COMMITMENT AS A MEANS OF DA’WAH:

PRACTICES AND IMPACTS ON SMALL-MEDIUM

ENTERPRISES (SME) IN SELANGOR

SHAKIR HUSEIN BIN KALID

UNIVERSITI SAINS ISLAM MALAYSIA

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ISLAMIC WORK ETHICS AS A MEANS OF DA’WAH: PRACTICES AND

IMPACTS ON SMALL-MEDIUM ENTERPRISES (SME) IN SELANGOR

SHAKIR HUSEIN BIN KALID

(Matric number: 4100065)

Thesis submitted in fulfilment for the degree of

DOCTOR OF PHILOSOPHY

Faculty of Leadership and Management

UNIVERSITI SAINS ISLAM MALAYSIA

NILAI

OCTOBER 2019

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i

AUTHOR DECLARATION

I hereby declare that the work in this thesis is my own except for quotations and

summaries which have been duly acknowledged

Date : 11th October 2019 Signature :

Name : Shakir Husein Bin Kalid

Matric No : 4100065

Address : No 12A, Jalan Kenyalang, 11/15F

D’Villa Seksyen 11, Kota

Damansara 47810 Petaling Jaya Selangor

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BIODATA OF AUTHOR

Shakir Husein bin Khalid (4100065) was born on the 20th of February 1968.

His nationality is Malaysian. He is currentl y residing in No. 12A, Jalan Kenyalang,

11/15F, 47810 D’Villa Equestrian, Seksyen 11 Kota Damansara Selangor, Malaysia.

He has the Bachelor’s Degree from Al-Azhar University, Cairo Egypt in Islamic Study

and Arabic Literature. Then he had the Master’s Degree from University of Malaya

(UM) in Theology and Islamic Thought. He is at present a PhD student of USIM

majoring in Da’wah and Islamic Management. His employment history working as an

Managing Director at Shamawar Group of Companies, located in Seksyen 8 Kota

Damansara since 25 years back. The author can be contacted at the email address of

[email protected].

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ACKNOWLEGEMENT

By the name of Allah, the Most Gracious and the Most Merciful

First, I would like to express my appreciation to Allah, the Most Merciful and,

the Most Compassionate who has granted me the ability and willing to start and

complete this study. I do pray for His Greatness to inspire and enable me to continue

the work for the benefits of humanity.

This thesis is the end of my long journey in obtaining my PhD. I have not

travelled in a vacuum in this journey. There are some people who made this journey

easier with words of encouragement and more intellectually satisfying by offering

different places to look to expand my theories and ideas.

Foremost, I would like to express my sincere gratitude to my supervisor, Prof

Madya Mohd Rusdan Bin Mohd Jailani for giving me the confidence to explore my

research interests and the guidance to avoid getting lost in my exploration. For the

continuous support me during my PhD study, also for his patience, motivation,

enthusiasm and immense knowledge, His guidance helped me in all the time of research

and writing of this thesis that made this study for what it is. He was a fabulous advisor:

sharp, cheery, perceptive, wide, knowledge, logical way of thinking have been of great

value for me and mindful of the things that truly matter. I could not have imagined

having a better advisor and mentor for my PhD study.

I wish to thank my friends in high school, my friends as an undergraduate and

my friends as a graduate student, for helping me get through the difficult times, and for

all the emotional support, camaraderie, entertainment, and caring they provided.

My thanks and gratitude goes to all my dearest family members. Brothers and my sister

for being by my side since I started my PhD journey way back 2010/2011.

Lastly, and most importantly, I wish to thank my parents. They bore me, raised

me, supported me, taught me, and loved me. To them I dedicate this thesis.

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ABSTRAK

Kajian ini mencadangkan untuk meneroka prinsip-prinsip Etika Kerja Islam

(EKI) yang telah dilaksanakan oleh Perusahaan Kecil dan Sederhana (PKS) di Selangor.

Adalah penting bagi PKS untuk mempunyai gaya pengurusan positif dan etika

perniagaan yang boleh dikaitkan dengan agama. Islam menekankan hubungan antara

perniagaan dan agama. Ia menggambarkan cara hidup yang sempurna dan diambil kira

sebagai ibadah. EKI memenuhi tuntutan ini. Oleh itu, kajian ini akan menganalisis

kesan Etika Kerja Islam terhadap prestasi perniagaan dan komitmen organisasi. Ia juga

akan menilai bagaimana EKI menyumbang kepada pembangunan dakwah di PKS.Di

Malaysia, EKI sangat dihargai dan diamalkan dalam banyak organisasi. Kerajaan

Malaysia memulakan pelaksanaan EKI yang terpilih dalam organisasi awam pada awal

1980-an yang kemudian diadaptasi oleh banyak syarikat swasta. Berdasarkan

perkembangan mereka yang semakin penting dalam pengurusan organisasi-organisasi

Malaysia semasa, terdapat sedikit kajian yang dijalankan dalam kalangan PKS secara

umumnya mengenai kesan EKI terutamanya di Selangor. PKS umumnya tidak

mengetahui mengenai kepentingan EKI, dan juga tidak mengiktiraf kelebihan

perlaksanaan EKI dalam organisasi mereka. Ini kerana pengaruh EKI dalam memacu

PKS telah dibayangi oleh haluan yang lain untuk mengurus prestasi pekerja dan

perniagaan PKS. Pendekatan kajian memberi tumpuan kepada EKI dengan

menggunakan tiga tunggak iaitu taqwa (Piety), akhlak (Moral) dan kualiti (Itqan)

sebagai asas EKI. Juga menekankan EKI sebagai perspektif dakwah dalam mewujudkan

usahawan PKS yang melaksanakan tugas sebagai wazir Allah dan membawa kesan

positif kepada pertumbuhan perniagaan mereka. Malah, kekurangan amalan baik dalam

aktiviti perniagaan PKS akan membahayakan pengguna, pekerja dan organisasi PKS

sendiri kerana banyak kes berlaku seperti penipuan, pertikaian kontrak, muflis, hutang

yang teruk, penipuan dokumen, rasuah dan lain-lain. Ini berlaku kerana pemisahan

antara EKI dan perniagaan yang memberi impak bukan sahaja kepada PKS tetapi juga

kepada kehidupan manusia. Reka bentuk kaedah campuran telah dipilih yang terdiri

daripada kualitatif, diikuti dengan kuantitatif. Penyelidikan kualitatif termasuk analisis

kandungan tafsiran dan temubual terhadap informan dari peringkat pengurusan PKS

dan ahli akademik. Penyelidikan kuantitatif pula termasuk analisis korelasi dari SPSS

versi 20 daripada 386 responden PKS di Selangor yang akan dibincangkan selanjutnya

pada bab seterusnya. Seperti mana yng dicatat dalam laporan tahunan SME Corporation

tahun 2015/2016, statistik jumlah PKS di Selangor adalah sebanyak 125,904 dan

kuantiti 386 responden ini diambil berdasarkan kesesuaian dengan kehendak kajian.

Secara umum, hasil penemuan tesis ini menunjukkan kesan positif yang signifikan

terhadap prestasi perniagaan PKS dan organisasi pekerjaan apabila EKI dilaksanakan

di organisasi mereka. Ketaqwaan (Piety), akhlak (Moral), dan kualiti (Itqan) adalah asas

yang tinggi dalam membangunkan kriteria EKI. Kebimbangan terhadap Allah di dalam

aktiviti harian PKS dan dalam proses penubuhan matlamat perniagaan PKS dapat

meningkatkan PKS prestasi yang lebih baik. Agama, perjalanan kerohanian adalah misi

mengapa dakwah diperlukan. Ia berkait rapat dengan prestasi perniagaan dan tidak

dapat diasingkan agar perniagaan PKS menjadi lebih relevan dan memacu kejayaan.

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ABSTRACT

The study proposed to explore the principles of Islamic Working Ethics (IWE)

that had been implemented by Small Medium Enterprises in Selangor. It is important

for SME industry to have positive management style and business ethics that can link

to the religion. Islam stresses the link between business and religion. It projects a perfect

way of life and consider as Ibadah. IWE meet this purpose. Therefore, this study analyse

the impact of Islamic Working Ethics towards the business performance and

organizational commitment. It will also evaluate how IWE contribute to the

development of da’wah in SME. In Malaysia, IWE are greatly valued and underlie

practised in many organisations. The Malaysia government initiated the implementation

of Islamic selected work ethics in public organisation in the early 1980s which were

later adapted by the many private sectors. In spirit of their growing importance in the

management of current Malaysia organisations, there has been bring little extensive

study being conducted among SME’s generally on IWE’s impact particularly in

Selangor. SME’s generally are not aware about the important of IWE, and also not

recognize the advantages of implementing IWE in their organizations. It is because the

influence of IWE in driving SME has been overshadowed by other near trends for

managing employees and SMEs business performance. The study approach is focusing

on IWEs by using three pillars which are Piety (Taqwa), Moral (Akhlak) and Quality

(Itqan) as a foundation of IWE. Also emphasized IWEs as a perspective of da’wah in

creating SMEs entrepreneur perform the duty as vicegerent of Allah and carry positive

impacts to their business growth. In fact, lacking of good practices in SME’s business

activities will do harm to the consumers, employees and SME’s organisation itself as

many cases occurred itself like cheating or scam, contract dispute, bankruptcy, bad

debts, fraud of documents, bribery and others. These happened due to separation

between IWE and business which has a negative impact on not only to SMEs industry

but also on human lives. A mixed method design was chosen consisting on a qualitative,

followed by quantitative. The qualitative research included interpretative content

analysis and interview of informant from SME’s management levels and academicians.

Quantitative research included correlation analysis from SPSS version 20 from 386

respondents of SME’s in Selangor. In general, the finding of this thesis indicates the

significant positive impact on SMEs business performance and job organisational when

IWEs being implemented in their organisation. Piety (Taqwa), Moral (Akhlak), and

Quality (Itqan) is the high fundamentals in developing IWE criteria. The fearing Allah’s

factor in daily SMEs activities and in the process of setting up SMEs business goal, are

able to elevate SMEs towards a better performance. Religion, spirituality journey are a

mission of why da’wah is needed. They are closely related to business performance and

cannot be isolated in order to gear SME businesses to be more pertinent and drive for

success.

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ملخص البحث

هتدف هذه الدراسة إىل حتديد ماهية أخالقيات العمل اإلسالمية وحبث أثر تطبيقها يف الشركات املتوسطة والصغرية يف سيالنغور. إن أخالقيات العمل اإلسالمية ضرورية لقطاع الشركات املتوسطة

للحياة والعبادة. ريقة مثالية والصغرية، ويؤكد اإلسالم على الرابطة بني العمل والدين، حيث أهنا تقدم ط يف ماليزاي، تعترب أخالقيات العمل اإلسالمية موضع تقدير كبري وتطبقه العديد من املنظمات، وقد شرعت احلكومة املاليزية بتنفيذ أخالقيات عمل إسالمية خمتارة يف املؤسسات العامة مع بداايت الثمانينات من

اخلاصة. على الرغم من أمهيتها املتزايدة يف إدارة من القطاعات العقد املاضي وطبقتها فيما بعد العديداملنظمات املاليزية احلالية، فإن الدراسات املستفيضة تعد قليلة حول الشركات املتوسطة والصغرية بشكل عام وحول أخالقيات العمل اإلسالمية بشكل خاص والسيما يف سيالنغور. يعود ذلك إىل أن اجتاهات

فيما خيص إدارة املوظفني وأداء العمل لتلك الشركات. إن أسلوب هذه قد طغت عليهاحديثة أخرى الدراسة هو الرتكيز على أخالقيات العمل اإلسالمية من ثالثة أركان هي التقوى واألخالق واإلتقان واعتبارها أساسا هلا، كما مت التشديد على الدور الدعوي يف جعل رواد أعمال املؤسسات املتوسطة

ومون أبعماهلم ابعتبارهم خلفاء هللا يف األرض وأتثري ذلك اإلجيايب على منو أعماهلم. يف والصغرية يقاحلقيقة، إن إمهال تلك األخالقيات يف نشاطات الشركات املتوسطة والصغرية يضر ابملستهلك واملوظفني

ال يها غش واحتيوكذلك يف هيكلية تلك الشركات نفسها، وقد حصلت الكثري من احلاالت كان فوخالف على العقود وإفالس وديون معدومة واحتيال الواثئق والرشوة وغريها، وقد حصل كل ذلك بسبب الفصل بني أخالقيات العمل اإلسالمية واألعمال، ويف ذلك أثر سليب ليس على الشركات املتوسطة

لى دراسة الذي يعتمد عوالصغرية فحسب، بل على حياة الناس. مت اختيار تصميم البحث املختلط و كيفية يتبعها دراسة كمية، حيث يتضمن البحث الكيفي حتليل السياق التفسريي ومقابالت مع موظفني يف شركات متوسطة وصغرية على مستوى املدراء وكذلك مع أكادمييني. أما البحث الكمي فيتضمن حتليل

رية يف سيالنغور. أو صغ متوسطةشركة 386لعينة من 20النسخة SPSSارتباط ابستخدام برانمج بشكل عام، تشري نتائج هذه الدراسة إىل وجود دور إجيايب وجوهري بني أداء الشركات املتوسطة والصغرية وتنظيم العمل يف الشركات اليت تطبق أخالقيات العمل اإلسالمية، كما تشري إىل أن التقوى واألخالق

أخالقيات العمل اإلسالمية. إن عامل اخلوف ودها لتطبيق واإلتقان هي املبادئ األمسى اليت يشرتط وجمن هللا سبحانه يف نشاطات العمل اليومية للمؤسسات املتوسطة والصغرية وكذلك عند إجياد أهداف عملها يؤداين إىل حتسني أداء تلك الشركات، كما أن الدين والروحانيات واألخالق هلا عالقة وثيقة

ثيقة الصلة أبعمال هذه الشركات من أجل حتقيق النجاح. ب أن تكون و ابألداء وال ميكن عزهلا وجي

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CONTENTS

Page

AUTHOR DECLARATION i

BIODATA OF AUTHOR ii

ACKNOWLEDGEMENT iii

ABSTRAK iv

ABSTRACT v

MULAKHKHAS AL-BAHTH vi

CONTENTS vii

LIST OF TABLES xii

LIST OF FIGURES xiii

LIST OF APPENDICES xv

ABBREVIATION xvi

CHAPTER 1 INTRODUCTION 1

1.1 Research Background 1

1.2 Working Ethics as a Da’wah in Business Management 6

1.3 Problem Statement 15

1.4 Research Objectives 19

1.5 Research Questions 19

1.6 Hypotheses 20

1.7 Definition of Terminologies

1.7.1 Concept and Operational of Da’wah

1.7.2 Islamic Working Ethics

1.7.5 Small-Medium Enterprises

20

20

20

22

1.8 Conclusion 22

CHAPTER 2 LITERATURE REVIEW 24

2.0 Introduction

2.1 Overview of Small Medium Enterprise in Malaysia

25

24

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2.2 Conceptual Framework

2.2.1 Axiological Dimension: Islamic Working Ethics as The

Guidelines for SMEs To Create Awareness on The

Excellent Working Culture

2.3 Islamic Da’wah

2.4 Islamic Working Ethics and Working Culture

2.4.1 Working in Islam

2.4.2 Working Culture

2.4.3 Working Values

2.4.4 Working Ethics in Islam

30

31

33

39

39

40

43

48

2.5 Small-Medium Enterprise in Malaysia

2.5.1 Definition of Small-Medium-Sized Enterprises

2.5.2 Challenges of Small-Medium Enterprises in Malaysia

2.6.2a Financial

2.6.2b Management Issues

51

51

54

54

54

2.6 Organizational Commitment

2.6.1 Definition of Organizational Commitment

2.6.2 Perspective in Organizational Commitment

60

60

64

2.7 Performance Management

2.7.1 Definition of Performance Management

2.7.2 Significance of Performance Measurement

2.7.3 Financial and Non-Financial Organizational

Commitment

2.7.4 Business Performance in Small-Medium Enterprises

66

66

67

70

74

2.8 When the Islamic Working Values is Start to be Known 77

2.8.1 Awareness and Factors on How Islamic Working

Values being Established

78

2.8.1a Islamic Movement

2.8.1b Media Influence

2.8.1c Education

2.8.1d The Role of Prime Minister

2.8.1e Halalan Toyyiban

2.8.1f Islamic Banking

78

81

82

83

86

87

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2.8.1g Malay Culture 90

2.9 Research Gap 92

2.10 Conclusion 93

CHAPTER 3 DA’WAH AND HUMAN RESOURCES 94

3.1 Definition of Da’wah

3.1.1 Method of Da’wah

3.1.2 Dimension of Da’wah

3.1.3 Da’wah in Quran and Hadith

3.1.4 Importance of Da’wah

3.1.5 Framework of Da’wah and Islamic Working Ethics

94

98

101

103

107

108

3.2 Scope of Study

3.2.1 Epistemology

3.2.2 Sample and Population

3.2.3 Research Methodology

3.3 Discussion on Human Resources

3.3.1 Human Resources Concept

3.3.2 Organizational Commitment in Human Resources

3.3.3 Business Performance in Human Resources

3.3.4 Framework of Human Resources

113

113

113

113

114

117

118

120

122

3.4 New Framework Integration between Da’wah and Human

Resources

3.4.1 Working Values vs Working Ethics

3.4.2 Importance of Islamic Working Ethics

3.4.3 Interpretive Content Analysis

125

134

137

150

3.5 Conclusion 161

CHAPTER 4 RESEARCH METHODOLOGY 162

4.1 Research Design 162

4.2 Operational Framework 164

4.3 Research Sampling

4.3.1 Unit of Analysis

4.3.2 Sampling Size

4.3.3 Sampling Technique

4.3.4 Measurement

167

167

167

171

172

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4.4 Data Collection

4.4.1 Document Analysis

4.4.2 Questionnaire

4.4.3 Interview

180

181

182

183

4.5 Data Analysis

4.5.1 Interpretive Content Analysis

4.5.2 Statistical Package for the Social Sciences

4.5.3 Thematic Analysis

4.5.4 Triangulation

184

185

193

195

197

4.6 Conclusion 198

CHAPTER 5 FINDINGS AND DATA ANALYSIS 199

5.0 Introduction

5.1 Quantitative Data Analysis

5.1.1 Respondent Profile based on Position

5.1.2 Reliability Analysis

5.1.3 Normality Test

5.1.4 Hypothesis Testing

5.1.5a Correlation Analysis

199

199

205

211

212

214

215

5.2 Qualitative Findings

5.2.1 Interpretive Content Analysis: Categorization of

Principles in Islamic Working Ethics

5.2.2 Themes on Islamic Working Ethic in the Development

of Islamic Da’wah in Business Setting

5.2.2a Theoretical Dimension

217

217

240

242

5.3 Conclusion 262

CHAPTER 6 DISCUSSION OF THE FINDINGS 264

6.1 The Principles of Islamic Working Ethics 264

6.2 Islamic Working Ethics in Evaluating Business Performance 270

6.3 Islamic Working Ethics in Enhancing Organizational

Commitment

272

6.4 Islamic Working Ethics as a Means of Da’wah

6.4.1 Worldview of Islam on Islamic Working Ethics as a

272

273

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Means of Da’wah

6.4.2 Leadership Role in Practicing Islamic Working as a

Da’wah in Organization

6.5 Better approach Da’wah Methodology

In SME Business Activities in Selangor

6.7 Conclusion

274

275

277

CHAPTER 7 CONCLUSION AND RECOMMENDATION 281

7.0 Introduction

7.1 Conclusion

281

281

7.2 Recommendation 286

REFERENCES

APPENDIX

290

337

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LIST OF TABLES

Table nu. Page

3.1 Organizational Values based on Management System 114

4.1 Table for Size Determination, S 173

4.2 Development of Questionnaire’s Each Items with

Reference

176

4.3 The Preliminary Questions before Interview Session 188

4.4 Interpretive Content Analysis according to each Themes 190

4.5 Summarizes of the SPSS Analysis for Quantitative Data 198

4.6 Correlation Value and The Strength 199

4.7 Reliability Test Result

4.8 200

5.1 Overall Demographic Profile of Respondents 205

5.2 Respondents’ Position Distribution based on Gender 211

5.3 Respondents’ Position Distribution based on Level of

Education

5.4 Respondents’ Position Distribution based on Service

Length in the Present Company

5.5 Respondents’ Position Distribution based on Monthly

Income in the Present Company

212

214

215

5.6 Reliability Test for Variables 217

5.7 Normality Test 218

5.8 The Strength of the Relationship based on Correlation

Coefficient

219

5.9 Spearman’s rho Correlation for Business Performance 221

5.10 Spearman’s rho Correlation for Organizational

Commitment

222

5.11 Interpretive Content Analysis (ICA) 223

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LIST OF FIGURES

Figure nu. Page

1.1 Percentage of SME Establishments by Sector 2016 19

1.2 Contribution of SME’s GDP and Malaysian’s GDP in 21

2016

3.1 Framework of Da’wah 129

3.2 Islamic Awareness 130

3.3 Conceptual Framework 130

3.4 Relationship between Islamic Work Values, Islamic

Work Ethic and Islamic Work Culture

4.1 Mixed-method Design Matrix with Mixed-Method

Research Design in Four Cells

132

167

4.2 Operational Framework 170

4.3 Data Analysis for Qualitative Process 201

4.4 Triangulation of Data 203

5.1 Graphical Representation of Respondents’ Gender

Distribution

5.2 Graphical Representation of Respondents’ Age

Distribution

5.3 Graphical Representation of Respondents’ Level of

Education Distribution

5.4 Graphical Representation of Respondents’ Present

Position Distribution

5.5 Graphical Representation of Respondents’ Length of

Service Distribution

5.6 Graphical Representation of Respondents’ Position

based on Gender

5.7 Graphical Representation of Respondents’ Position

based on Level of Education

5.8 Graphical Representation of Respondents’ Position

based on Service Length in the Present Company

206

207

208

209

210

211

213

214

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xiv

5.9 Graphical Representation of Respondents’ Position

based on Monthly Income in the Present Company

216

5.10 Cronbach’s Alpha Values 217

5.11 Themes on Islamic Working Ethics in Islamic Da’wah

Development in Business Organization

248

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LIST OF APPENDICES

Appendix Page

A Cover Letter 337 B Questionnaire 339 C SPSS Output 350 D Interview Transcription 376

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ABBREVIATION

ABIM Muslim Youth Movement of Malaysia

AOC Affective Commitment

BSC Balanced Scorecard

CEO Chef Executive Officer

CPI Corruption Perception Index

EKI Etika Kerja Islam

EMS Emergency Medical Services

ETP Economic Transformation Program

ETP Economic Transformation Program

FIPM Financial Performance Measures

GCB Global Corruption Barometer

GDP Gross Domestic Product

ICA Interpretive Content Analysis

ICT Information and Communication Technology

ICT Information and Communication Technologies

ISO International Standards Organization

IWE Islamic Working Ethics

KPIs Key Performance Indicators

KPMG Klynveld Peat Marwick Goerdeler

LTH National Pilgrimage Board

MITI Ministry of International Trade and Industry

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MNCs Multi-National Companies

NFPM Non-Financial Performance Measures

NKEA National Key Economic Area

PAS Parti Islam Se-Malaysia

PKS Perusahaan Kecil dan Sederhana

PM Performance Management

PWE Protestant Work Ethic

ROA Return on Assets

ROE Return on Equity

ROI Return on Investment

SME Small Medium Enterprise

SMIDEC

Small and Medium Industries Development

Corporation

SPSS Statistics Package For the Social Science

TQM Total Quality Management

USIM University Sains Islam Malaysia

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