Strategic Islamic Business and Management

Three centuries post-industrial revolution, the global economy has witnessed an unparalleled expansion characterised by a fourfold rise in population and a forty-fold surge in industrial production throughout the twentieth century. Nevertheless, this expansion has resulted in considerable depletion of environmental resources throughout the production phase, hence presenting notable environmental issues in the era. The concept of Society 5.0 entails the development of a society that prioritises the needs and well-being of individuals, while leveraging advanced technologies to achieve environmental sustainability and effective governance. The rapid expansion of Green Sukuk, which involves the funding of ecologically friendly initiatives, is dependent upon the presence of favourable legal, regulatory, social, and technological contexts. The Internet of Everything (IoE), which encompasses the integration of individuals, objects, data, and operations, has the potential to augment the process of decision-making. This study conducts a literature analysis to evaluate the potential of IoE-empowered Green Sukuk in attaining Environmental, Social, and Governance (ESG) goals that are in line with the principles of Society 5.0. The results indicate that the use of private resources and technology has the potential to accelerate the achievement of environmental, social, and governance (ESG) objectives, thereby promoting a future that is both sustainable and equitable.

This chapter aims to elaborate and discuss on application of blockchain technology of zakat collection and distribution in Malaysia and Indonesia. The study adopts content analysis technique where various sources are referred including research database named Scopus, reports, official documents, and research articles. The chapter also explains on the development, the strength of zakat collection using blockchain, the research of zakat practices in Malaysia and Indonesia. The challenges and other issues on the adoption of blockchain technology in zakat are explained. It is expected that the blockchain technology in zakat will give more solutions, bring efficiency and transparency, which affect the national economy. The information revealed in this study could be used as a reference for future studies. Additionally, it is important to be discussed by practitioners, academicians, and other stakeholders, which assumed will be impacted to the economic development of the countries.

This chapter provides a comprehensive exploration of the intricate challenges involved in managing frozen estates in Malaysia. It meticulously dissects the complexities surrounding legal disputes, ambiguous legislation, and resource deficiencies, offering innovative solutions through the integration of blockchain technology. The chapter begins by delving into the intricacies of the Malaysian legal landscape, focusing on entities such as the High Court, Syariah Court, Amanah Raya Berhad, and the Land Office. It sheds light on the challenges posed by contested wills, adherence to Islamic inheritance laws, and the absence of specific legislation tailored for frozen estates. The resulting legal complexities, often leading to protracted legal battles lasting months or even years, underscore the urgent need for nuanced reforms in legal frameworks. Recognizing the inadequacies within the current estate management paradigm, the authors propose blockchain technology as a transformative remedy. The decentralized ledger system is explored, emphasizing its features, including immutability, transparency, and decentralized consensus. The chapter illustrates how blockchain can bring transparency to estate management processes in Malaysia, providing a singular, trusted data source that diminishes disputes and ensures meticulous record-keeping. Security emerges as a critical facet, with the authors delving into the decentralized nature of blockchain, cryptographic algorithms, and smart contracts. These elements fortify data against tampering and unauthorized access, ultimately reducing administrative overhead and expediting asset transfers by obviating the need for intermediaries. Furthermore, the chapter explores the potential of blockchain technology to revolutionize estate management by offering real-time tracking and monitoring of frozen estates. This ensures precise and current information for all relevant parties, mitigating disputes and fostering efficient asset transfers. Ongoing research and collaborative efforts between the legal and technology sectors are highlighted, indicating a positive trajectory toward the adoption of blockchain in estate management practices. In conclusion, this chapter offers a comprehensive examination of the challenges in frozen estate management in Malaysia and proposes a transformative solution through blockchain integration. The chapter serves as a valuable resource for legal professionals, administrators, beneficiaries, and stakeholders interested in navigating the complex landscape of frozen estates with efficiency, transparency, and trust.

The Halal cosmetics sector is actively embracing the digital age by leveraging the vast potential of Industry 4.0 technologies and data analytics. This article delves into the intricate exploration of the incorporation of IR4.0 technologies including Augmented Reality (AR), Virtual Reality (VR), and Mixed Reality (MR) technologies, in conjunction with the profound utilisation of data analytics, within the domain of Halal cosmetics. Moreover, it delves into the intricate ways in which these ground-breaking advancements are moulding the perceptions and inclinations of consumers, thus ushering in a paradigm shift within the industry. Through a meticulous analysis of the interplay between these cutting-edge technologies and data-derived insights, this article effectively underscores their pivotal role in augmenting consumer experiences, amplifying the transparency of supply chains, and propelling the trajectory of strategic decision-making to enable sustainability of Halal cosmetics industry.

This research aims to analyze the modeling of the impact of digital transformation in accelerating the empowerment of the Muslimah economy to enhance the performance of micro, small, and medium enterprises (MSMEs) in Ponorogo. This study used a mixed-method approach, namely quantitative and qualitative. This study involves 269 MSMEs in Ponorogo that women manage as members of Islamic organizations and have food, beverages, medicine (including herbal medicine), and cosmetic products. The model used is based on the APKM theory (Access, Participation, Control, and Benefits) in the gender approach to determine the effect of digital transformation on women’s empowerment and the Resource-based View (RBV) theory to determine the improvement of MSME performance with a partial least square structural equation model as a data analysis tool and using a Phenomenological Approach to explore experiences by interviewing around 10% of respondents who represent all sample data. The study proved that digital transformation has a positive relationship with economic empowerment managed by Muslim women who are members of Islamic organizations. Overall, this signifies that the implementation of digital transformation positively affects women’s economic empowerment and can improve the performance of micro, small, and medium enterprises (MSMEs). The practical implication of this research is that by analyzing the modeling and influence of digital transformation on women’s economic empowerment and the performance of micro, small, and medium enterprises (MSMEs), managers may realize the significant role of digital transformation in influencing women’s economic empowerment and impacting operational and financial performance. It will attract more MSMEs to transform digitally to open up new and profitable business opportunities for MSMEs. It also empirically confirms that digital transformation can influence women’s economic empowerment and improve the performance of MSMEs. Based on this research, we suggest advocating for the Ponorogo regional government to continue to review and control the use of digitization in MSMEs, as the implementation of tracking and reevaluation has so far been limited. Reevaluation so far is still limited. In addition, strict supervision should be accompanied by transparency, accountability, and engagement of various stakeholders, including Islamic organizations, business associations, and civil society.

This chapter aims to shed some light on the operation of halal companies in the context of online marketing in the Kosovar economic environment. Since, in the era of digitalization, it is inevitable for companies to use online marketing tools, this chapter aims to examine halal companies in the Kosovar context regarding the use of online marketing and the application of the principles of Islamic online marketing by these entities. The chapter uses practical case studies from the respective companies to reach the conclusions. The findings emphasize that halal companies in the Kosovar context carefully apply the principles of Islamic online marketing in online communications with their target customers. The chapter will also have implications in the academic community to further advance studies in this field, as in the Kosovar context, as well as in other economic environments to see the similar and distinctive elements.

Implementation of product life cycle management for resource optimization within the framework of the circular economy in Islamic marketing remains unstudied. This chapter aims to emphasize the sustainability of product life cycle enhancement governed by Maqasid-al Shariah. The Maqasid-al-Shariah methodology and a qualitative approach have guided this chapter to showcase sustainable consumption and production of halal products. The extensive literature on the circular economy was aligned with Islamic principles to achieve resource optimization. Data were analyzed using ATLAS.ti, resulting in thematic and content analysis. The content analysis reveals that the circular economy prioritizes resource optimization while adhering to prohibitions (Haram) and purity (Khabis). However, Islamic marketing can contribute to enhancing the product life cycle for resource optimization with Halal (permissibility) and Tayyib (purity) norms, benefiting both individuals and society. This chapter provides valuable insights for academics interested in exploring the circular economy from the perspective of Maqasid-al-Shariah and Islamic marketing. Ultimately, halal marketers can reconfigure and market their products based on circular economy principles.

Organizational culture is one of the factors that influence the effectiveness of Quality Management System practices in any organization. A weak organizational culture deteriorates the implemented quality management system. Organizational culture describes how an organization operates, makes decisions, manages customers, and manages performance. Therefore, this article aims to analyze organizational culture practices in sustaining Shariah-based Quality Management System MS 1900 at a Zakat collection center in Malaysia. This study employed a qualitative method involving the Pahang Zakat Collection Center (PZCC) located on East Coast of Malaysia as a case study organization. Semi-structured interviews were used as a data collection method and were supported by observation and document review. A total of fifteen informants consisting of top management and officers of the Zakat center were interviewed to obtain data and information related to the topic studied. The thematic analysis method was used with the help of Atlas.ti version 7 to analyze the data collected. The research findings revealed that there are five organizational cultures practices in sustaining the Shariah-based Quality Management System MS 1900 at Pahang Zakat Collection Center (PZCC), namely management commitment, customer focus, performance measurement, partnership with suppliers, and emphasis on excellence. The positive culture found helps to the effective and sustainable implementation of MS 1900. The results of this study prove that work culture facilitates sustainable quality management system implementation and further accelerates organizational competitiveness in a challenging management and economic environment.

Malaysia has the leadership in developing Islamic socially responsible investing (SRI) and green finance. This study aims to highlight the importance of issuing SRI sukuk to achieve sustainable development and point out the incentives which attract investors to participate in the SRI sukuk within its legal and regulatory framework. This study has adopted a qualitative approach by analysing previous literature, as well as examining Malaysian SRI regulatory framework provisions. This study found that Malaysia is the key actor in provision of an environment requisite for issuing Sukuk aligned with SDGs such as SRI sukuk and SDG Sukuk. Promoting financing for SRI projects through issuing SRI sukuk will meet the United Nations’ Sustainable Development Goals (SDGs). In order to attract more investors to subscribe to SRI sukuk, SC Malaysia is determined that SRI sukuk should be highly mandated to invest in green, social, sustainable, and waqf dimensions. Moreover, the Government of Malaysia (GoM) provides Tax incentives for SRI sukuk issuers, investors as well as brokers. For instance, the SRI sukuk issuer enjoys tax concessions on SRI sukuk issuance. Finally, SDG Sukuk Framework explains the Malaysian Government’s intention to utilize the SDG Sukuk to fund projects that will generate environmental and social benefits and also conform to sustainable development goals.

The Islamic business in Malaysia can be divided into several types, such as large, medium, small, and micro businesses. The majority of Islamic businesses are micro, small, and medium companies. The challenges Muslim entrepreneurs face are categorized into internal and external. The challenges are identified as financial, corruption, interpersonal relationship conflict, emotional challenges, lack of current knowledge, incompetence, risk-taking, changes, competition, less competitive and survivable, crisis, lack of demand, family challenges, customer loyalty, business sustainability, business expansion, entrepreneur attitudes, business blessings, product diversity, partners, requirements vs customer needs, target market, market segment, market placement, and human resource challenges and pricing. To be successful, among necessities are entrepreneurs need to have backup plans such as falling back onto angel capital or venture capital, good planning, basic knowledge in financial management, good interpersonal and time management skills, resilient, persistent, and committed, safeguard the reputation and integrity of the company and update knowledge through training.

Uncovering the facts of factors that influence financial statement fraud is the purpose of this study. The role of religiosity and detection of red flags from external auditors is a concern to uncover financial statement fraud. This study used a quantitative approach. Purposive sampling method was used and produced 85 research samples. Research shows evidence that red flags and religiosity affect the tendency of financial statement fraud. This research makes an important contribution that companies must provide a good atmosphere for the implementation of employee worship. Providing sufficient time opportunities and good places of worship is the solution to increase religiosity. Indications of red flags in employee’s behavior can be used as early detection to prevent fraud.

This study investigates the challenges hindering underprivileged Nigerians from accessing Islamic microfinance loans. Employing qualitative methods multiple case study approach, the research analyzes the experiences of three individuals who faced such challenges. The objective is to identify and analyze primary barriers encountered by Nigerians seeking financial services from Islamic Microfinance Institutions (IMFIs). The identified challenges include Convenient Access for the Unbanked Community, Limited Awareness, Stringent Eligibility Criteria, and High Cost of Financing. The narrative of the case study findings sequentially presents each business owner’s account, incorporating excerpts from their interviews. The study concludes by emphasizing the pivotal role that Islamic microfinance institutions can play in sustainable poverty alleviation efforts.

Islamic banking should transcend conventional commercial banking, extending its reach to all segments of society through diverse product and service offerings, distribution channels, and sustainable initiatives. While Islamic banks are assessed based on financial performance metrics, they face challenges in quantifying their social impact. This is partly due to the absence of a clear conceptual framework defining Islamic social banking and its overarching themes. This paper seeks to systematically review and consolidate the sustainability aspects of Islamic social banking. A systematic review was identified literatures by electronic open-access database searches (Scopus, ScienceDirect, and Emerald Insights). The study applied specific inclusion criteria, including publication dates from 2018 to 2022, country, methodology, model/theory, and dimension. It performed a narrative synthesis and systematic analysis in accordance with the Preferred Reporting Items for Systematic Review and Meta-Analyses (PRISMA) search methodology. Initially, 599 studies were identified from various sources, but after applying the selection criteria, 15 relevant studies were retained. Recommendations include conducting more qualitative studies, adopting a standardized systematic review method for research synthesis in Islamic social banking, and employing complementary searching techniques such as citation tracking, reference searching, and expert consultation. Overall, there is a scarcity of research in Islamic social banking, and this study contributes to addressing this gap.

This chapter aims to elaborate and discuss on professionalism and competency of amil in Malaysia and Indonesia. The study adopts a content analysis technique where various sources are referred including research database named Scopus, reports, official documents, and research articles. The chapter also explains on the research (active countries and affiliations in publishing research documents) of zakat management, professionalism, and competency of amil zakat in Malaysia and Indonesia. There are challenges related to the amil zakat where expectations are high and the impact of zakat on the economy is expected. Various keywords associated with zakat management which are importantly to be discussed by practitioners, academicians, and other stakeholders, in getting positive solutions to the countries.

The objective of this paper is to examine the potential role of Cash Waqf Linked Deposit (CWLD) that could contribute to Indonesia’s education system and efforts to reduce poverty. The study, which employed a qualitative approach and data from papers and scholarly works on the subject of Cash Waqf, included Cash Waqf Linked Sukuk (CWLS) and compared it with Cash Waqf Linked Deposit. CWLD shall consist of three instruments, namely temporary cash waqf, Islamic fixed deposit, and Islamic financing in the Islamic bank. The existing product offered by Islamic banks is whereby the customer places a deposit in an Islamic bank, while the return will be transferred to nazhir as a permanent waqf from the depositor. While in CWLD, the capital will become a temporary waqf, and the return will be a permanent waqf. The paper proposes the use of cash waqf from deposits for the program that may provide more benefits in the future for the citizen including education programs and poverty alleviation. This research shows that the return from CWLD is that it may be used for providing education programs such as building schools and traditional markets. The analysis of Cash Waqf Linked Deposit (CWLD) a new Islamic product that OJK launched in 2023 is valuable in drawing the attention of Islamic banking entities to develop and implement CWLD without jeopardizing their sustainability, competitiveness, or institutional survival. This is evident from the previous model of CLWS and the proposed model of CWLD to incorporate their social financing product initiatives.