Salesforce product knowledge in Islamic financial institutions; development and validation of measurement scale

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shinaj Valangattil Shamsudheen ◽  
Mohammad Ashraful Ferdous Chowdhury
Keyword(s):  
Factor Analysis ◽  
Special Reference ◽  
United Arab Emirates ◽  
Financial Institutions ◽  
Three Dimensions ◽  
Measurement Scale ◽  
Islamic Finance ◽  
Product Knowledge ◽  
Content Type ◽  
Islamic Financial Institutions

Purpose The purpose of the study is to develop and validate scale to measure the “product knowledge of salesforce in Islamic financial institutions”. Design/methodology/approach A total of 371 responses were collected from the salesforce of Islamic financial institutions in the United Arab Emirates. Study adopted both exploratory and confirmatory approach with fundamental principles of Islamic finance. Content validity test and factor analysis are employed to refine measurement items and define as well as validate the scale, respectively. Findings Total three dimensions were extracted, i.e. “System”, “Features” and “Contracts” through “exploratory factor analysis” (EFA), and evidence of validation of measurement scale/construct was reported through “confirmatory factor analysis” (CFA). Research limitations/implications The span of the study is limited to a single country. Future studies are suggested to employ the newly developed scale/construct in the research frameworks and obtain the overall model fit. Practical implications The scope of developed and validated measurement scale is broad and can be applied in any kind of Islamic financial institutions in which the study requires capturing product knowledge of salesforce with special reference to peculiar characteristics of Islamic financial institutions. Originality/value While there is ample literature addressing the issues of competence and need for capacity building among Islamic banking practitioners in general, little has been explored with special reference to the salesforce, their degree of knowledge about the product they offer to the customers and a scale to measure their knowledge that envelopes the specific features of Islamic finance. These gaps serve as justification for undertaking this study.

Drawing ethical mentation in Islamic banks; addressing operational lines heterogeneity with special reference to Al-Ghazali’s ethical philosophy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shinaj Valangattil Shamsudheen ◽  
Saiful Azhar Rosly ◽  
Syed Abdul Hamid Aljunid
Keyword(s):  
Decision Making ◽  
Special Reference ◽  
United Arab Emirates ◽  
Partial Least Square ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Ethical Philosophy ◽  
Divine Knowledge

Purpose This study aims to examine the decision-making behaviour of Islamic banking practitioners of the United Arab Emirates with special reference to the operational line heterogeneity by employing factors that are religious in nature such as intellect, satanic force and divine knowledge as encapsulated in al-Ghazali’s ethical philosophy. Design/methodology/approach A total of 337 samples were collected from the Islamic banking practitioners in the United Arab Emirates using a purposive sampling technique, and the empirical analysis was conducted with the measures of model fit and bootstrapping technique using Partial least square Structural equation modelling and multi-group analysis. Findings The empirical findings reveal that the dedicated use of intellect in making decisions related to ethical issues where desires and emotions tend to overwhelm reason and human choices. While divine knowledge is found ineffective guidance of the intellect, the element of satanic force is found significantly impacting decision-making. As the lack of religious consciousness is evident among respondents, higher exposure to operational risk is expected. These findings were found identical across the Islamic banking practitioners in different lines of operations. Research limitations/implications The span of the study is limited to a single country. Future studies are recommended to replicate the study to more markets where the share of Islamic finance is significant. Practical implications Findings of the study highly suggest respective authorities of Islamic financial institutions to intensify the capacity-building programs on the foundation of faith which includes Islamic thought and worldview, to enhance the corporate ethical decision-making. Moreover, equal importance should be given to all the banking practitioners regardless of line of business operations. Originality/value With undue emphasis is given to the juristic (fiqh) aspects of Shariah compliance in the Islamic banking and finance industry, less has been attempted to explore its ethical dimension (akhlaq) in the compliance parameters that leave a relatively large gap to address prevailing unethical practices in Islamic finance institutions. Findings from this study can be useful as a warning to the Islamic banking firms to enhance the sense of God-fearing and improve existing measures in the organisation in mitigating operational risks that may arise from people or system and consequently ensure the smooth governance of the Islamic banks.

Market orientation in Islamic banks – a qualitative approach

2014 ◽  
Vol 32 (4) ◽  
pp. 495-527 ◽  
Author(s):  
Mostaque Ahmed Zebal ◽  
Hussein M. Saber
Keyword(s):  
Market Orientation ◽  
United Arab Emirates ◽  
Financial Institutions ◽  
Customer Orientation ◽  
Management Training ◽  
Data Matrix ◽  
Research Approach ◽  
Content Type ◽  
Islamic Financial Institutions ◽  
Antecedents And Consequences

Purpose – The purpose of this paper is to explore the nature of market orientation that exists in the Islamic financial institutions. The study further aims at identifying the antecedents and consequences of such market orientation. Design/methodology/approach – Considering the explorative nature, the study uses qualitative research approach, collecting data in words using in-depth interview technique, drawing sample from Islamic financial institutions of both Bangladesh and United Arab Emirates. Data were coded and categorized using inductive reasoning method and similar responses were identified from a prepared data matrix. The results were presented in a narrative way using simple frequency for the agreements and disagreements of respondents considering “street language” without being mediating the meaning of the responses. Findings – A different nature of market orientation called Islamic market orientation has been identified by the results of the study. The study identifies five elements (orientation on Islamic customer, orientation on information, orientation on integration, orientation on competition, and finally orientation on responsiveness) that embody the formation of Islamic market orientation. The study also identifies a different set of antecedents (attitude toward Islamic values, Islamic leadership, risk partaking, inter-relationships, government legislations, and management training) that are responsible for determining the extent of Islamic market orientation. The study further identifies a set of consequences (profitability, customer satisfaction and retention, gaining new customers, increase of employees’ team spirit and satisfaction, service quality improvement, increase of market share, and increase of work efficiency) when market-oriented behavior is being adopted by the Islamic financial institutions. Originality/value – To the best of the knowledge of the authors of this study, the results offer a different kind of market orientation along with its antecedents and consequences which can be considered as completely original and unique.

Development and validation of counterproductive work behaviour instrument

2019 ◽  
Vol 28 (3) ◽  
pp. 745-763
Author(s):  
Khahan Na-Nan ◽  
Peerapong Pukkeeree ◽  
Ekkasit Sanamthong ◽  
Natthaya Wongsuwan ◽  
Auemporn Dhienhirun
Keyword(s):  
Factor Analysis ◽  
Convergent Validity ◽  
Three Dimensions ◽  
Measurement Scale ◽  
Future Research ◽  
Content Type ◽  
Study Results ◽  
Confirmatory Factor ◽  
Counterproductive Work Behaviour ◽  
Development And Validation

Purpose Counterproductive work behaviour (CWB) is a type of behaviour of an individual that works against an organisation or employer, and he/she is usually discretionary (i.e. individuals make conscious choices as to whether they want to commit aberrant work behaviour). To deal with CWB in different contexts, organisations need to both understand and continually measure their employees in terms of behaviour and work. This study aims to develop an instrument to measure CWB for small and medium-sized enterprises in Thailand. Design/methodology/approach The study was conducted in three stages to develop a measurement scale for CWB. First, 27 questions were developed as a questionnaire based on concepts and theories of CWB and then verified using exploratory factor analysis with three CWB dimensions, namely “poor behaviour”, “misuse of organisational resources” and “inappropriate communication”. The questionnaire surveyed a total of 386 individuals working in SMEs. Finally, confirmatory factor analysis (CFA) and convergent validity were examined following the three CWB dimensions. Findings Three dimensions were developed to measure CWB, including aspects of poor behaviour, misuse of organisational resources and inappropriate communication. Practical implications The CWB questionnaire has practical use for assessing employee behaviour and can assist organisations and practitioners to better understand the CWB of employees. This know-how will help practitioners to assess employee behaviour and can be used to manage or develop this into good behaviour as valued members of the organisation. Originality/value The validity of the CWB questionnaire questions will facilitate the future research on the boundaries with CWB assessments spanning different SMEs contexts. Empirical study results validated that CWB measurement offered new perspectives to explore vital employee behavioural deviation that are necessary for the inspection employee behavioural deviation. This instrumental support will also help researchers to effectively understand CWB and explore its potential in future studies.

scholarly journals Islamic Financial Services Act (IFSA) 2013 and the Sharīʿah-compliance requirement of the Islamic finance industry in Malaysia

2018 ◽  
Vol 10 (1) ◽  
pp. 94-101 ◽  
Author(s):  
Mohamad Akram Laldin ◽  
Hafas Furqani
Keyword(s):  
Content Analysis ◽  
Financial Institutions ◽  
Financial Services ◽  
Design Methodology ◽  
Islamic Finance ◽  
Content Type ◽  
Governance Framework ◽  
Finance Industry ◽  
Islamic Financial Institutions ◽  
Comprehensive Framework

Purpose This paper aims to observe the development of the Sharīʿah governance framework (SGF) and practice in Islamic financial institutions (IFIs) in Malaysia. Design/methodology/approach The study is a qualitative-based research. It uses various documents and content analysis approach to understand and analyze the structure, process and practice of SGF in IFIs in Malaysia. Findings It is found that the Central Bank of Malaysia, Bank Negara Malaysia, has attempted to develop a comprehensive framework of Sharīʿah governance for IFIs in Malaysia. The framework governs the practice of the industry, covers stakeholders’ scope of duties and responsibilities and provides details on processes and procedures in the operations of IFIs to achieve the objective of Sharīʿah compliance. To maintain the relevance of the SGF to the needs of the industry, the framework has also been updated recently in 2017. The amendments aim to strengthen the effectiveness of Sharīʿah governance implementation within the Islamic finance industry. Originality/value This study attempts to comprehensively examine the evolution of the SGF Sharīʿah governance framework for IFIs in Malaysia. The Malaysian model of the SGF is unique and could be emulated by other countries in developing the Islamic finance industry in their respective jurisdictions.

Musharakah Mutanaqisah home financing: issues in practice

2018 ◽  
Vol 9 (1) ◽  
pp. 91-103 ◽  
Author(s):  
Alam Asadov ◽  
Zulkarnain Bin Muhamad Sori ◽  
Shamsher Mohamad Ramadilli ◽  
Zaheer Anwer ◽  
Shinaj Valangattil Shamsudheen
Keyword(s):  
Financial Institutions ◽  
Current Mode ◽  
Fair Value ◽  
The Body ◽  
Islamic Finance ◽  
Islamic Banks ◽  
Periodic Review ◽  
Content Type ◽  
Finance Industry ◽  
Islamic Financial Institutions

Purpose This paper aims to examine the practical issues in the Musharakah Mutanaqisah (MM) financing and subsequently, recommends possible solutions to mitigate these issues and improve the current practice. Design/methodology/approach This paper analyses the theory and current practices of MM offered by Islamic banks. Findings It is suggested that Islamic financial institutions consider revaluation of property’s value to its fair value, especially during termination of MM contract and annual or agreed periodic review of the market value of the assets to determine the “rental” payments by the customer. It is also recommended that Islamic financial institutions should share all associated costs in performing the contract. Research limitations/implications Research findings reported in this paper contribute to the body of knowledge on MM in general and to the Islamic finance practices in Malaysia and abroad. Indeed, the Malaysia Central Bank (i.e. Bank Negara Malaysia) should form a special committee to look into the issues highlighted in this paper and recommend strict guidelines for Islamic financial institutions to improve their practices. Practical implications Islamic banks should extend the use of MM contract in automobile and trade financing where rent or profit could be easily identified and value of the asset is more certain. The regulators and Islamic financial standard setting authorities need to oversee the Shari’ah board decisions on MM contracts and keep the gates in the interest of ensuring a more viable and authentic Islamic finance industry. Originality/value This paper briefly views the current mode of MM contracts, specifically for home financing, and highlights the incompliance to Shari’ah requirements in exercising these contracts in practice.

Executives’ observance of zakat among Islamic financial institutions: evidence from Bahrain and Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jessie P.H. Poon ◽  
Yew Wah Chow ◽  
Michael Ewers ◽  
Trina Hamilton
Keyword(s):  
Financial Institutions ◽  
Design Methodology ◽  
Change Agents ◽  
Islamic Finance ◽  
Board Members ◽  
Content Type ◽  
Financial Firms ◽  
Management Positions ◽  
The Board Of Directors ◽  
Islamic Financial Institutions

Purpose The purpose of this paper is to examine the influence of Shariah board members and managerial networking on zakat observance among executives of Islamic financial firms (IFFs) in Bahrain and Malaysia. Design/methodology/approach The methodology is based on surveys administered to 106 respondents and personal interviews conducted with individuals holding management positions in IFFs. Findings The paper finds that: networking among IFF executives in Bahrain positively influences their observance and perception of zakat in their firms; and higher representation of Shariah on the board of directors increases executives’ favorable perception and observance of zakat in Malaysia. Differences in findings may be explained by Bahrain’s global Shariah institutions where networking offers opportunities for socialization of zakat ethics. In Malaysia, on the other hand, Shariah directorship sets the pace and direction of zakat ethics. Originality/value The seminal work of DiMaggio and Powell (1991) on neo-institutional theory has drawn attention to executives’ agency in creating cognitive frameworks that help promote the development of firm standards and norms. However, application of the theory to Islamic finance is largely absent. This paper contributes to an empirical understanding of the theory by highlighting sources of IFFs’ social agency in the development of zakat norm and its observance, namely, managerial networking and Shariah directors as change agents.

A critical analysis of the use of fair value by Islamic Financial Institutions

2016 ◽  
Vol 7 (2) ◽  
pp. 170-183 ◽  
Author(s):  
Leila Gharbi
Keyword(s):  
Growth Rate ◽  
Interest Rate ◽  
Financial Institutions ◽  
Financial Reporting ◽  
Fair Value ◽  
Islamic Finance ◽  
Content Type ◽  
Narrative Methods ◽  
Financial Reporting Standards ◽  
Islamic Financial Institutions

Purpose This paper aims to address a specific question over the compatibility of International Financial Reporting Standards with Islamic finance regarding the use of interest rate as discounting rate in impairment testing and valuation techniques. Design/methodology/approach Inductive methodology and qualitative-narrative methods are used to explore the available texts and literature. Findings There are two main findings: first, the use of reference rate obtained in non-Islamic financial system is inappropriate from the Islamic perspective. Interest-based valuation techniques have not been adopted by the Accounting and Auditing Organization for Islamic Financial Institutions in its adaptation of conventional accounting practices, and the majority of Islamic scholars argue against Interest rate benchmarking. Second, the authors suggest nominal gross domestic product (NGDP) growth rate as an alternative benchmark because Islamic finance, in its ideal sense, is based on and closely linked to the real sector. Moreover, recent studies show that there are no statistical differences between NGDP growth rate and nominal interest rate for most of the countries studied. Originality/value This paper highlights the accounting implications of the prohibition of interest for valuation techniques and raises the need of acceptable alternative pricing benchmark.

Realising financial inclusion in Islamic finance

2019 ◽  
Vol 11 (1) ◽  
pp. 143-160 ◽  
Author(s):  
Akilu Aliyu Shinkafi ◽  
Sani Yahaya ◽  
Tijjani Alhaji Sani
Keyword(s):  
Financial Institutions ◽  
Low Income ◽  
Financial Services ◽  
Public Awareness ◽  
Financial Inclusion ◽  
Islamic Finance ◽  
Content Type ◽  
Financial Infrastructure ◽  
Islamic Financial Institutions ◽  
Regulatory Commitment

Purpose The purpose of this paper is to evolve a theoretical account that highlights the determinations for achieving financial inclusion in Islamic finance. Design/methodology/approach The methodology used is a library approach where the existing and relevant document remains the sources of concern. Findings The outcome of the study designates that robust technology; microcredit and microfinance services; legal and regulatory commitment of the regulators and policymakers of the Islamic financial institutions; extensive public awareness of Islamic financial services and products; financial proficiency and literacy; and financial infrastructure are some of the imperative drives for realising financial inclusion particularly for women, low income earners and rural poor. Research limitations/implications The paper limited itself to realising financial inclusion in Islamic finance. Thus, anything beyond the stated limitation is outside the scope of our objective. The paper has an inference for the concerned professional bodies, regulators, policymakers, stakeholders and practitioners of Islamic financial institutions. Originality/value The paper is original in its nature, it is also a pearl and a reference to those who may conceive and cherish the relevance of its capacity.

Employee engagement in small and medium-sized enterprises in Thailand: the construction and validation of a scale to measure employees

2020 ◽  
Vol 37 (9/10) ◽  
pp. 1325-1343 ◽  
Author(s):  
Khahan Na-Nan ◽  
Peerapong Pukkeeree ◽  
Kanokporn Chaiprasit
Keyword(s):  
Factor Analysis ◽  
Employee Engagement ◽  
High Growth ◽  
Three Dimensions ◽  
Measurement Scale ◽  
Primary Data ◽  
Content Type ◽  
Future Studies ◽  
Cognition And Emotion ◽  
Management Behaviour

PurposeEmployee engagement (EE) is an expression of a person's own preferred task behaviours that promote their relationship with work and personal physical, cognition and emotion and make them more active in terms of vigour, dedication and level of absorption with their work. To deal with EE in different environments and organisations, it is necessary to both understand and continually assess their employees. This paper presents an instrument which was developed to measure EE for small and medium-sized enterprises (SMEs) in Thailand.Design/methodology/approachThe study was conducted in three stages to develop an EE measurement scale. To begin with, 18 questions were developed for a questionnaire based on the concepts of EE and validated using exploratory factor analysis (EFA) which is split into the dimensions of vigour, dedication and absorption. A survey was then conducted with 270 employees in SMEs. Finally, confirmatory factor analysis (CFA), convergence and validity were tested along the three engagement dimensions.FindingsThis research extended and broadened the EE concept to provide theoretical support for engaging with intelligence research. Three dimensions were developed to measure EE, including aspects of vigour, dedication and absorption with their work.Research limitations/implicationsThe questionnaire used was produced primary data collection which was self-assessed, and data was collected only from the sample of employees working for SMEs in high-growth sectors of the Thai economy. The EE findings exhibited a good fit, but the results require further future refinement and validation using a larger sample size and sampling area.Practical implicationsThe EE questionnaire has practical uses for monitoring management behaviour and can assist practitioners to assess the level of EE. This knowledge will help to encourage and support practitioners to improve EE. This research also provides other measurements for assessing EE in organisations.Originality/valueThe EE questionnaire validity will facilitate future studies on the boundaries of EE measurements in the context of SMEs. The empirical research results verified that EE assessment offered new perspectives to explore vital individual EE which is necessary for SMEs. This instrument can also support and help researchers to effectively understand EE and explore its potential in future studies.

Limited purpose banking (LPB) and Islamic finance

Humanomics ◽  
2014 ◽  
Vol 30 (2) ◽  
pp. 122-135 ◽  
Author(s):  
Edib Smolo ◽  
Abbas Mirakhor
Keyword(s):  
Financial Institutions ◽  
Design Methodology ◽  
Financial System ◽  
Islamic Finance ◽  
Extensive Literature ◽  
Content Type ◽  
Finance Industry ◽  
Islamic Financial Institutions ◽  
Alternative Solutions ◽  
Practical Implications

Purpose – This paper primarily aims to review and analyze a new model for Islamic finance based on Laurence J. Kotlikoff's idea of limited purpose banking (LPB). In addition, this paper aims to highlight, explain and discuss various aspects of LPB and how it suits the original aspirations of pioneer writers in Islamic finance. Design/methodology/approach – Based on an extensive literature review, this paper aims to highlight, explain and discuss the reform of the Islamic finance industry based on Kotlikoff's model of LPB. Findings – Based on a modified LPB model, Islamic financial institutions could be established to provide specific services with clear aims and objectives. These LPB Islamic financial institutions would operate in a similar way to LPB. Research limitations/implications – As there is no perfect plan, the proposal of this paper is far from being perfect and is open to discussions and improvements. The paper will, hopefully, spark off quite a discussion on the topic; may result in a better understanding of the model; and provide some alternative solutions to the current structurally ill financial system. Practical implications – The paper provides some practical ideas for a better implementation of Shari'ah principles in financial intermediation of the Islamic financial system. Originality/value – Kotlikoff's LPB proposal for reforming the financial system is new and has been directed to the conventional financial system. This paper represents the first attempt to apply his proposal to the Islamic finance industry.

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