UNDERSTANDING ISLAMIC ENTREPRENEURSHIP THROUGH

QUALITY MANAGEMENT PROCESS Surakarta 7-8 September 2016

Fahrul RizaUniversitas Bunda Mulia

Jakarta

Unethical Entrepreneur Unethical Business Practice Environmental damage & Harmful product and service to consumer Halal or haram?

Sustainability to our next generation? Islamic entrepreneurship as a solution Muslim entrepreneurs ≠ Islamic

Entrepreneurship As the largest Muslim country, is a blessing for

Indonesia where the majority of the population and the government is embraced Islam.

Introduction

Indicator for measure Islamic entrepreneurship still vague

Develop a concept to measure the degree of Islamic Entrepreneurship from the quality management perspective and five pillars of Islam.

Proposed an alternative model of Islamic entrepreneurship from Hoque et al. (2014) as well suggest it’s measurement indicators.

Purpose

Desciptive study Secondary material (library research)

Methodology

Entrepreneurship development model is a series of activities starting from compiling inputs, transformation processing, generating outputs and reaching the goals, where such activities should be supported by Governments and Non Governments Organization (Chowdhury, 2008).

Islamic Entrepreneur: Muslims that doing business are required to run the business in accordance with the guidance in the Qur'an and Sunnah

Profit making is not the utmost goal of business (such as part of worship to Allah the Almighty, social welfare, creating jobs and support a national programme are the motivating forces of such entrepreneurship)

Concept and Definition

Entrepreneurship from Western Perpectives Entrepreneurship from Islamic Perpectives

Theoritical Framework

Drucker (1985: 28) define the entrepreneur as people who always search for change and respond to it and regard it as opportunity.

Brener (1987: 6) entrepreneur is person who has unique ideas and bet on those ideas by tries to implement them.

McClelland (1976: 65) defined entrepreneur as someone who have control over the production and he produces a products more than he need in order to get income from sell them to others

Entrepreneurship as the skills and innovativeness owned by people, which those things utilized for manufacture and market products or services for achieving their objectives (Chowdhury, 2008)

Western Perpective

Business objectives based on human desires

Business ethics is seen as rules that should be met

violation of business ethics will get social sanction

Process of starting a business to produce goods or services which are halal as a major concern and gaining a profit on the basis of an agreement between producers and consumers.

Ensure for halal status across the value chain Activities which fail to ensure consumer

rights, social responsibilities, ethical values and healthy business practices are prohibited to carries (Hoque et al 2014).

Islamic Entrepreneurship

Salient Traits of Islamic Entrepreneurship

KNOWLEDGE INITIATIVES RISK TAKING

CUSTOMER ORIENTATION

EMPLOYEE INVOLVEMENT STRATEGIC THINKING

EXCELLENCEINOVATIVENENSS HARD WORKING

OPTIMISMVISIONPATIENCE

SOCIAL WELLFAREHONESTY AND TRUTHFULNESSHALAL EARING

FEAR OF ALLAHECONOMICALLYMORALITY

Model for Developing Islamic Entrepreneursip

PREPATORY AND AWARENESS DEVELOPING

SUPPORTIVE AND MOTIVATION

ISLAMIC ENTREPRENEURS

HIP

FEED BACK

The concept suggested by Hoque et al. (2014) inclined at macro level.

Many activities have to be developed thoughtfully and delicately to prepare the Islamic entrepreneurs. (education in all levels (schools, colleges, universities and madrasas) so that every single student can acquire sufficient traits (knowledge, skills, honesty and values, etc.) to establish, operate and manage business enterprise efficiently and effectively from Islamic perspectives.

That process must be done through a continuous and rigorous process. This model adapted Plan-Do-Check-Act which is part of the Total Quality Management (Heizer and Render, 2009)

Total Quality Management (TQM) is one of an important management concept used in the value chain TQM is a set of activities aimed at achieving customer satisfaction, commitment among employees, revenue growth and cost reductions (Walaz, 2010, p. 148).

Comprehensive quality requires delegating responsibility to the lowest level of the organization, or involving all employees of the enterprise.

Measuring Islamic Entrepreneurship

TQM is to follow some set of rules that relate to, inter alia: enterprise orientation on results, customer orientation, leadership, process management, development and commitment of human resources, continuous learning, innovation and improvement to maximize the performance of an organization, development of partnership, system approach to management, decision-making based on facts,mutually beneficial relationships with suppliers, bearing social responsibility, etc. (Walaz, 2015).

TQM and Islamic Entrepreneurship

W. Edwards Deming used 14 points to indicate how TQM concept is applied. These points are then developed into seven effective TQM concept: six sigma, employee involvement, benchmarking, just-in time, taguchi and TQM tools (Heizer and Render, 2009).

Vision Establish consistent goal

Initiatives, inovativeness Lead to make change

Excellence, Economical Building superior product quality, reduce reliance on supervisory

Excellence Build long-term relationships on the basis of performance, instead of the price

Customer orientation Improve the quality of products and services on an ongoing basis

Knowledge Training

Morality Emphasized on Leadership

Risk Taking No Fear

The linkage between Salient Traits of Islamic Entrepreneurship and Deming’s point for quality improvement

Strategic thinking Breaking the boundaries between groups

Employe involvement, Patience Avoid criticizing workers excessively

Hard working Support, assist and improveStrategic thinking, employee involvemen

Emphasizes on team work

Knowledge, Strategic thinking Established strong and independently education program

Hard working, optimism Encourages everyone to be ready to work in the transformation process

Current practices of the quality management from western perspective have set social goals as part of the quality management. but the main pillar which is religio-spiritual and links people to God with the ultimate objective of pleasing Allah was never involved and discused in the western entrepreneurship perspective

The advantages of Islamic priciples do not regard any matters in the social goals. Further, Islam has taught how to create sustainability and safety for human beings in the natural world and the hereafter., Then, the five pillars of Islam (Rukun Islam) should be added as falsifies to create Islamic Entrepreneurship. Table below prensent measurement indicators for religio spiritual salient traits.

Islamic Entrepreneurship Dimension

Fear of Allah(Five Pilars of

Islam)

Economically, Morality, Halal

Earning, Honesty and Truthfulness

Deming’s Quality Improvement

RELIGIO SPIRITUAL

ETHICAL/ SOCIO CULTURAL

QUALITY MANAGEMENT

ISLAMIC ENTREPRENEURSHI

P

Islamic Entrepreneurship is condition in which the management obliging undergo pillars of Islam to all members of the company and make continous quality improvements in the company. Quality improvement is not just aimed at the existing processes in the company itself, but improvements were made also on the quality of taqwa (Godfearing) of everyone in the company in running the pillars of Islam.

CONCLUSION

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