ass-ignment mgt162
DESCRIPTION
Management From Islamic PerspectiveTRANSCRIPT
INTRODUCTION
In the world that is full of complexities and obstacles nowadays requires a systematic
management. Management is the process of administering and coordinating resourses effectively
and efficiently in an effort to achieve the goals of the organization. It is vital to face the
challenges and ensure the activities of the organization run smoothly. In order to reach mission
and organizational goals, management plays four basic managerial functions which are consist
of: Planning – setting goals and defining the actions necessary to achieve those goals;
Organizing – the process of determining the task to be done, who will do them and how those
tasks will be managed and coordinated; Leading – motivating and directing the members of the
organization so that they contribute to the achievement of the goals of the organization;
Controlling – monitoring the performance of the organizations, identifying deviations between
planned and actual result and taking corrective action when necessary.
In addition, there are two types of management; Conventional and Islamic. Before we
define what an Islamic management is like, it is better to give a short description of
Conventional management. The Conventional definition of management is getting work done
through people. However, by contrast, Islamic management is defined as the ability to utilize
resourses both material and human (Khalifah) optimally in order to achieve either short term or
long term goals (hereafter). Moreover, it is generated based on holy Al-Quran and As-Sunnah
as a source for decision-making. Our focus in this paper is on management from Islamic
perspective and we have decided to choose Tabung Haji Pilgrims Fund Board of Malaysia
(Lembaga Tabung Haji) as an illustractive case.
Page | 1
ABOUT THE COMPANY
Turn Back Time..
For people back then, especially those from rural areas, used traditional methods of
saving money to enable them to perform Hajj. They accumulated money in pillows under
mattresses and in earthern jars which were buried for safety. They also purchased land or
livestock which later could be sold to get the money needed for their trip to the Holy Land.
These traditional methods were totally risky in terms of security and depreciation value.
The main reason for the recourse to these out-dated ways of saving among them was the
desire to be absolutely sure that the money to be spent on pilgrimage was untained by Riba.
However, these kinds of methods of saving are detrimental to the rural and urban economy in
Malaysia. Impact, pilgrims face many difficulties and financial hardships upon their return from
the Hajj. Those who had sold part of their property before performing the Hajj face problems in
supporting their families upon their return home. Those who had sold all of their property hoping
that they will die in the Holy Land, face even graver problems upon their return to Malaysia.
Looking at these phenomenons, Royal Professor Ungku Abdul Aziz who had saw the
needs for muslims to gradually accumulate savings before performing the Hajj, appeared to
propose the establishment of savings institution that carries out its activities according to
Shari’ah principles. In his paper “A Plan To Improve The Economic Position Of Future
Pilgrims”, submitted to the government in 1959, he recommended that future pilgrims should
save in a bank or financial institution which was untainted by Riba but which yielded profits.
This suggestion marked the beginning of the formation of the Pilgrims Saving Corporation.
Page | 2
Background..
In August, 1962, The Pilgrims Saving Corporation was incorporated and it was
subsequently launched on September 30th, 1963. In 1969, the corporation merged with the Office
of Pilgrims Affair operation in Penang and thus, was born the Managing Board and Tabung
Haji or simply Tabung Haji which was established under Act 8. The objectives of the company
are:
To enable muslims to save gradually to meet the expenses to perform pilgrimage or other
useful expenses.
Allows people’s savings to take part more effectively in the field of investment through
the way of lawful in Islam.
To provide protection, control and welfare of the pilgrims who perform pilgrimage to
various facilities and services.
Based on the goals that Tabung Haji had set; the goal of serving the good, perfect and
satisfaction for Malaysian pilgrims in the course of performing pilgrimage and give maximum
profit to the depositors of their savings.
This statement is clearly showed that the Pilgrims Fund was established not only to manage
the departure of pilgrims to the Holy Land, but its functions are also as an alternative entity to
the muslims of Malaysia to save money while investing accordance with Islamic principles.
As a corporate based, Tabung Haji is very particular to the developments and changes that
swept the world in the 90s era. To ensure the sustainability of competitiveness in the era of
Page | 3
globalization, a study was made in 1995 to expand its scope and role. Thus, on June 1st, 1995 a
new act of the Pilgrims Fund 535, the Pilgrims Fund Board in 1995 enacted the act to abolish
the old and the name is replaced with Tabung Haji Pilgrims Fund Board on August 28th, 1997.
Correspondingly, the letters “TH” are introduced as stands for substituting the “Tabung Haji”.
Page | 4
ORGANIZATIONAL STRUCTURE OF TABUNG HAJI PILGRIMS
FUND BOARD, MALAYSIA
Page | 5
PRIME MINISTER’S
DEPARTMENT
HAJJ OPERATIONS
ADVISORY COUNCIL
FINANCIAL ADVISORY COUNCIL
BOARD OF DIRECTORS
DIRECTOR GENERAL
WELFARE COMMITTEE
FINANCE COMMITTEE
HAJJ DEPARTMENT
FINANCE DEPARTMENT
INVESTMENT DEPARTMENT
ADMINISTRATION AND QUALITY DEPARTMENT
A) Board Of Directors
Tabung Haji is governed by a Board of Directors which is comprised of the following
members:
i. Chairman – appointed by the Yang Di Pertuan Agung
ii. Deputy Chairman – appointed by the Yang Di Pertuan Agung
iii. Representative of the Prime Minister’s Department
iv. Representative of the Treasury
v. Director General of Tabung Haji
vi. A maximum of five other members appointed by the Minister
vii. Representative of the Ministry of Health (by invitation)
Members of the board other than ex-officious members are appointed or nominated from
amongst muslim citizens. The board administers the fund and all other matters pertaining to the
welfare of pilgrims, formulates policies in connection therewith and performs other duties as
provided under the Pilgrims Management and Fund Board Act. In carrying out its duties, the
board receives advice from the Financial Advisory Council and the Hajj Operation Advisory
Council. Both councils were formed under the provisions of the Act.
B) Financial Advisory Council
The Financial Advisory Council was formed under the Act in order to assist the board. The
council consists of the following members:Page | 6
i. Director General
ii. Director of Finance
iii. Four other members appointed by the Minister
The council is required to meet at least once every three months and to submit reports and
recommendations for the deliberation of the board.
C) Hajj Operations Advisory Council
The Hajj Operations Advisory Council was established under the Act for the purpose of:
i. Advicing the Minister on matters pertaining to the welfare of pilgrims
ii. Advicing the Minister on any matter referred to it by the Minister
The memberships of the council is as follows:
i. Chairman of the board, who also acts as the Chairman of the Council
ii. Representative of the Prime Minister’s Department
iii. Representative of the Treasury
iv. Representative of the Ministry of Foreign Affairs
v. Director General, who acts as the Secretary of the Council
vi. Representative from each of the Malaysia’s states
The council is required to meet at least once during every calendar year.
Page | 7
D) Finance Committee
The Finance Committee is vested with powers by the board and is responsible for the
administration and investment of funds.
The Finance Committee is comprised of the following members:
i. Director General – Chairman
ii. Director of Finance – Secretary
iii. Representative of the Prime Minister’s Department
iv. Representative of the Treasury
v. One member appointed by the board
E) Welfare Committee
The Welfare Committee is responsible for the welfare, protection, control and general well-
being of pilgrims in accordance with policies stipulated by the board and with powers delegated
by the board.
The Welfare Committee is made of the following members:
i. Director General – Chairman
ii. Director of Welfare – Secretary
iii. Representative of the Prime Minister’s Department
iv. One member appointed by the boardPage | 8
Close Up..
LOGO
The letters (ta ha) are an abbreviation for the
word ‘Tabung Haji’ in Arabic script. Form a
square logo represents Ka’abah which
direction and focus of muslim prayer in the
world.
Black
Ka’abah colour symbolizes the garment when
it engulfed Kiswah
Green
Represents the colour of Islam
MOTTO “Come to Success”
A call to prayer five times a day during echo in
the world. Day and night. Muslims are asked to
work towards the progress of the development
of global Islam. When developed nations, all of
which can be claimed in Islam such as Zakah,
development, learning and so on. Tabung Haji
is the right choice for muslims respond without
prejudice.
Page | 9
Vision
o Pillars of the economic success of the ummah
o Systematically pilgrimage management
Mission
o Strengthening the economy of ummah
o Always actively seeking global and regional strategic investments for sustainable growth
o Mobilizing and enriching the depositors’ capital
o To provide continuing excellent services
o To facilitate and improve the pilgrimage to the hajj mabrur
o To provide returns that are competitive, clean and toyyiban
Page | 10
PRINCIPAL ACTIVITIES
Tabung Haji operates based on three main activities:
Savings – providing funds for the muslims
Investments – investment funds are collected and monitoring the investment function
Hajj – hajj services in Malaysia and in the Holy Land
SAVINGS
i. Savings
The memberships of Tabung Haji are only open to Malaysian muslims. Tabung Haji used
Wadiah Al-Wakalah principle which requires new depositors to fill in the form which includes
the statement of aqad izin. That means, the depositors are agree to save in Tabung Haji and give
consent for it to manage their savings for investment purposes.
ii. Withdrawal
Depositors are allowed to withdraw their savings for any beneficial purpose once every six
months. Based on Islamic law, depositors who are above 18 years old are allowed to appoint
nominee/s who will act as trustee/s later.
Faraid Law
Page | 11
Tabung Haji will pay the balance in the account of the deceased depositor to the
nominee/s, then requested to distribute the money to other beneficiaries.
If the deceased depositor has not appointed nominee/s, Tabung Haji will advice the
beneficiaries to get a “Letter of Administration” from the Shari’ah Court, High
Court, Public Trustee or District Office.
Other than that letter, the beneficiaries can also get “Faraid Certificate” issued by the
Shari’ah Court. It is easier and faster as it applys the Faraid law.
iii. Zakah
Before the distribution of dividends to its members, Tabung Haji pays business Zakah at
2.5% rate on the aggregate of the profits earned during the Zakah year and the amount of
working capital at the end of Hijri year.
iv. Profit and Bonus
In the line with the Adil principle (justice), the profit derived from the depositors’ funds are
distributed in the form of a bonus. The bonuses paid are based on the principle of “Profit
Sharing” which it differs with the bonus from the concept of Riba. Bonuses are only paid if
Tabung Haji makes profits. In other words, the rate of the bonus is not fixed, it depends on the
profits derived in particular year.
The yearly bonus is paid to the depositors on the December 31st each year. Furthermore, the
bonus paid has been fully exempted from income tax due to the payment of Zakah by Tabung
Haji on behalf of depositors.
Page | 12
INVESTMENTS
Leading as an Islamic institution, Tabung Haji are carried out its investments according
to Islamic rules and practises. In order to operate the investments without any element which is
contrary to Islamic principles, Tabung Haji uses the services of the Religious Supervisory
Council of Bank Islam Malaysia and the National Fatwa Committee of Malaysia to get
advises from time to time.
Plus, Tabung Haji will not invest in the companies that are involved with activities which
are prohibited by Islam. For instances, it does not invest in sectors such as hotels, insurance
(except Takaful of Malaysia) and banking (except Bank Islam Malaysia).
The sectors of investments made by Tabung Haji:
o Real estate development sectors
o Agriculture sectors
o Construction sectors
o The services, hajj, umrah and tourism sectors
o Productions and distributions of halal foods and beverages sectors
Tabung Haji managed the investments under these several Shari’ah principles:
Page | 13
Al Musyarakah
The shareholders finance a project and the profits are divided accordingly as agreed by
the parties
E.g: Corporate Notes; with these instruments, financing requirements can be made
secure through the issue of Syahadah Al Bayn (promissory notes or debt certificates)
Al Bai’ Bithaman Ajil
Financing with deferred sale over a specific period of time
E.g: Housing loans. Firstly, Tabung Haji determines the requirement of the clients
regarding to the period and manner of repayments and purchases of the assets concerned.
Then, sells them to the clients at an agreed price which comprises the actual cost and
margin profits.
Al Mudharabah
An agreement is made where capital is provided by one party and management expertise
is handled by the other party
Any losses incurred in the venture are borne by the provider of the capital
E.g: General investment, this instrument basically a time deposit in which the bank
invests deposited funds collectively over a specified period and divided the returns
accordingly
Al Murabahah
Page | 14
A repayment agreed upon by both parties that includes the profits mark up
Al Qardhul Hasan
A benevolent loan in which the debtors are only need to repay their debts on the loan
amounts without any additional charges
The provider of the capital is guaranteed at least of the principal portion
Al Ijarah
A repayment to get the rights in order to use the services of a given asset
Usually, Tabung Haji uses this facility provided by Bank Islam of Malaysia for the
purchases of equipments
Page | 15
HAJJ
In order to fulfil one of the five Islamic tenets, every single muslim must do the
pilgrimage to the Holy Land. Tabung Haji appears to make a systematic hajj arrangements for all
Malaysian pilgrims. However, another private organizations which are qualified and experienced
with the approval of the Minister of Hajj Affairs are also given the autonomy to handle them.
HAJJ MANAGEMENTS IN MALAYSIA
i. Medical examination
Medical examinations (including chest X-ray if necessary) and meningitis are given at local
hospitals and health centers. The Certificate of Fitness to perform the hajj is issued after the
treatment (if necessary).
ii. Registration for the hajj
The registration can be done by the pilgrims at any of Tabung Haji’s branch offices.
iii. Issue of hajj passport and hajj visa
Hajj passports are only issued to Malaysian citizens and permanent residents. While, hajj visas
are arranged by the board on behalf of pilgrims and issued by the Royal Saudi Embassy in
Kuala Lumpur.
Page | 16
iv. Hajj guidance courses
In helping the pilgrims to experience the hajj mabrur, Tabung Haji is responsibles to equip the
future pilgrims with knowledge of Hajj rituals and administration. The aspects of the hajj
guidance courses include:
Performance of hajj including hajj principles (rukun), hajj obligations (kewajipan) and
problems solving related to them
Regulations and administrations of hajj in Malaysia and Saudi Arabia
Securities measure and health care while performing hajj in the Holy Land
v. Transportation arrangements:
a) By sea
Sea transportations are arranged if there is a demand fo it by more than three thousands pilgrims
(adequate for at least two trips)
b) By air
Chartered flights
Page | 17
Between 100 – 110 chartered flights using DC 10s (363 passengers capacity) or Boeing 747s
(475 passengers capacity) are arranged by Tabung Haji each season
Scheduled flights
Pilgrims can also choose to go by regularly scheduled Malaysian Airlines flights if chartered
flights are unavailable
HAJJ MANAGEMENTS IN THE HOLY LAND
Tabung Haji sends two official teams to accompany the pilgrims in order to take care of their
welfare, safety and health during the stay.
The Welfare Team:
o Providing accommodations services
o Administering the payment of dam
o Searching for lost pilgrims
o Providing counselling services; etc
The Medical Team:
o Administering the Malaysian Hospital at Aziziah
Page | 18
o Administering dispensaries in Jeddah, Mina, Madinah and Arafah
o Providing mobile clinic services
o Providing ambulance services for sick pilgrims; etc
CONCLUSION
According with the concept of Islam as “Ad-Deen”, it shows that the Islam is not only
limited to certain, specific worships such as solah and fasting during Ramadan. Instead, taking it
as our lifestyles are truly the real scope of the Islamic religion.
Management from the Islamic perspective seems to be one of the best choice, method and
option that we can apply within an organization in order to form a magnificence of the ummah.
In this case, Tabung Haji could be one of the examples which plays a big role in Islamic
management. We really hope that the Islamic management will be followed by another
companies especially among the OIC countries. What is more, we are also hope that every single
thing that we had done will be given a good returns either here or hereafter from Allah The
Almighty.
Page | 19
REFERENCES
Tabung Haji Pilgrims Fund Board. Retrieved from
http://www.tabunghaji.gov.my/th/TH/THIndex.htm
Tabung Haji as an Islamic financial islamic institution: The mobilization of investment resources
in an Islamic way and the management of hajj, 9-42. Retrieved from
http://jukabooks.com/download/ebook/TABUNG%20HAJI%20AS%20AN%20ISLAMIC
%20FINANCIAL%20INSTITUTION/
aHR0cDovL2lzbGFtZmlubGFuZC5maWxlcy53b3JkcHJlc3MuY29tLzIwMDkvMDgvaWRiLX
RhYnVuZy1oYWppLWFzLWFuLWlzbGFtaWMtZmluYW5jaWFsLWluc3RpdHV0aW9uLnBk
Zg
Page | 20