Faculty of Business and Accountancy

Islamic Management (PMS 1233)

Semester 2/20/34 ( Aug 2020)
Test 1

1. Explain why element of thinking in Islamic management function is important?

(4 marks)

Islam is a comprehensive religion which covers every single aspect of human activity. Islam is
not a religion that only focuses on the private life of individuals, but also covers and guides
humans’ interaction and activities in their daily lives. Despite the comprehensiveness of the
Islamic teachings, limited studies have been conducted to examine the practice of Islam in the
management of business processes in Muslim organizations. As a Muslim, the teachings and
practices of Prophet Muhammad (Peace Be Upon Him) and his companions should be closely
followed in the management of self, organization and even the state. Islamic management
practiced by former Muslim civilization was so successful that the Muslims were able to conquer
half of the world. Islamic Management is the right way of managing people and organization.
Other than that, the basis for Islamic Management is the Al- Quran and the As-Sunnah.
Practicing the principles of Islamic management enable leaders and managers to achieve unity
among the followers or members of the organization quickly.

2. Discuss FIVE (5) importance of consultation/syura in Islamic Management.

(10 marks)

1. Shura, as a principle, is rooted in the Quran itself. The Quran has presented shura as a
principle, and not as a system, of governance. The distinction is important to note,
because the Quran thereby has left it to successive generations of Muslims to
continue to strive toward a more perfect realization of the shura principle.
2. Shura consultation is predicated on equality among those consulting in order to arrive
at a collective decision. This clear Quranic depiction of the shura as essentially a
decision-making process among equals has to be distinguished from the notion that
depicts shura as merely an optional exercise in the seeking of non-binding counsel by
the ruler, acting from a superior position, from those of his subjects with whom he
may choose to consult.
3. The practice of shura allows the community to regulate its affairs peacefully
and arrive at a consensus acceptable to all individuals or groups involved in the
decision-making process. A matter of public interest is put up for discussion and
debate among a selected body of experts who are given the opportunity to share
their respective insights and suggestions. Such mutual consultation is not possible
without a general respect for different opinions and diverse viewpoints. Even though
the final decision is made by the appointed leader, it is an informed decision based on
the various opinions, suggestions and cautionary remarks made from all quarters
which reduces the risk of it being the wrong decision detrimental to the
interests of the community at large. The human mind or to be more precise
the intellectual capacity (‘aql) can be likened to the ‘light’. If the different lights of
different minds are joined, it increases in its intensity and illuminates the way.
4. Shura is a crucial part of the Islamic political system. It allows common people to
participate in the decision-making process. It helps create a society that engages
actively with leaders. Consultation is important in building a solid relationship
between the leader and the people ensuring that the leader does not go astray or
regress into an authoritarian government. The Almighty Allah encouraged the
Prophet Muhammad (SAW) to use shura : Those who hearken to their Lord, and
establish regular Prayer ; who (conduct) their affairs by mutual Consultation; who
spend out of what We bestow on them for Sustenance (Quran 42:38).
5. The practice of mutual consultation or shura as a valid form of reaching consensus
over matters pertaining to the affairs of the community is explicitly referred to in two
Qur’anic verses (Al-‘Imran: 159, As- Shura: 38). Allah consulted with the angels
when appointing man as His vicegerent on Earth (khalifah). Prominent
commentators like al-Zamakhshari, al-Razi, and al-Baidawi asserted in this respect
 that “here, Allah the Exalted wanted to teach man the importance of conducting
mushawarah and submitted the task to conduct shura to the experts and leaders”.

3. Compare and contras Islamic Management from conventional management?

(6 marks)

In Islamic management, all decisions and goals are based on Islamic values, while in
the conventional management, decisions and goals are based on the organizational-human
interests.
Islamic management

Organizational control has to operate in a way designed to make the human being subservient to the
will of Allah.(Comprehensiveness of Islam and the Shariah). The locus of control is internal. Each person
is responsible and accountable for his actions.(Shariah compliance)

Conventional management

Organizational control has to operate in a way designed to align human objectives with the
organizational objectives.(Cascading of Objectives) Implication (s). The locus of control is external and
lies in the realm of the organization. (Market Driven)

A comparison between goals

Conventional management Islamic Management

• Realizing the goals of the organization • Establishing justice in the organization

• Facilitate, accelerate and improve the • Respect the rights of the organization
flow of the organization
• Education for people and spiritual
• Increase efficiency education and ethical values

• Increased effectiveness • Creating an opportunity for growth, a

decent perfection in the organization
 A comparison between natures

Conventional management Islamic Management

• Division of labor • The principle of monotheism

• Authority and responsibility • The principle of justice

• Discipline • Principle of the centrality of the Quran,

• Unity of Command • tradition and moral values

A comparison between feature

Conventional management Islamic Management

• Expertise and management science • Courage and assertiveness

• Intelligence, talent, lust and art • Stability in the right position

• Motivated to manage • Sufficiency and Power

• People know your organization • Fidelity and Competency