Search results

The purpose of this paper is to report on the development of an Arabic language scale for measuring cross‐cultural adjustment in the Arab world, predominately the Middle East. It also comments on aspects of psychometric tools and their appropriateness for use in cross‐cultural management research.

Black and Stephen's Cross‐Cultural Adjustment Scale was translated into Arabic using the method of back‐translation and a pilot item‐by‐item debriefing. It was then administered to 111 Arabic‐speaking employees of a single firm.

The Arabic language version yielded high alpha coefficients and a subsequent factor analysis revealed three primary factors of cross‐cultural adjustment, namely, Work Adjustment, Interaction Adjustment and General Adjustment, which corresponded closely to the original English version of the scale, with two minor exceptions.

The research is confined to the cultural‐linguistic context in which it was executed.

The findings suggest that an Arabic version of the three‐factor scale is useful for measuring adjustment in Arabic‐speaking samples and implies the wider generalizability of the cross‐cultural adjustment construct. The development of this scale in an important region for migrant labor is highly relevant to practice.

An Arabic version of the most widely used cross‐cultural adjustment scale is of value to researchers and practitioners. The Muslim sample drawn from the Middle East region also makes the paper highly original.

This study aims to examine the Shariah non-compliance (SNC) disclosure index for all 16 Malaysian Islamic banks from 2015 to 2020.

A qualitative research methodology was adopted that included content analysis. The data were gathered from banks’ annual reports from 2015 to 2020. To achieve this, firstly, the disclosure index was developed by examining the disclosure requirements of the regulator and previous studies. The index was then used to measure the level of disclosure index for all these banks.

The overall average SNC disclosure index for the Islamic banks from 2015 to 2020 remained low at 0.57. However, the values were comprised of mandatory and voluntary items. For the former, the SNC disclosure index was quite high at 0.82, but for the voluntary items, the value was 0.40. Progressive improvement can be observed in the disclosure practices of the majority of the Islamic banks between 2015 and 2020; nevertheless, certain banks displayed a deterioration in their disclosure practices.

This study has several limitations, including the index used, the research period and the fact that it was restricted to SNC events.

These findings add value for information users by assuring them of the accountability of Islamic banks in terms of transparency, as well as their effectiveness in managing and mitigating SNC events. Regular monitoring and strong enforcement by the regulator are essential to achieve full compliance with the stipulated requirements.

This study offers a disclosure index for analysing SNC events in depth by segregating the disclosure into mandatory and voluntary items for each Islamic bank and making recommendations for future research. In addition, it provides a broad overview of current trends in SNC and the associated issues, as well as insights for regulators and the public in terms of the transparency levels of Islamic banks in relation to SNC event disclosure.

The purpose of this paper is to suggest a model that yields a sustainability performance index for Islamic banks (IBs). This index is expected to account for stakeholders’ viewpoints while considering sustainability and Maqasid Al-Shariah as bases.

First, based on the relevant literature review refined through consultations with academic, banking and Shariah experts, the main stakeholders and their corresponding lists of relevant attributes and sub-attributes are identified. Then, adopting a multi-attribute utility approach and based on a second step of interviews with experts, an aggregated index is suggested. Finally, the developed index is applied to five famous Islamic banking groups over the period 2005–2019.

Empirical evidence shows that the banks used in the implementation do not achieve high scores of the suggested index. This can be interpreted through a lack of Islamic normative aspects and low adherence to sustainability practices. Specifically, they are not functioning on a justice basis and are deficient in providing sufficient varieties of Islamic products. They are also more interested in economic sustainability and are not involved in environmental and social ones.

The developed index not only considers the compliance of the banking activities with Shariah, but it also addresses their sustainability from the main stakeholders’ perspectives. The suggested model provides a transparent performance evaluation tool for IBs omitting all causes of conflict of interests and certifies the fairness of the resulting assessments.

As an essential component of Islamic governance for ensuring religious compliance, Shari’ah annual reports (SARs) play an important role in providing communication between Shari’ah board (SB) members and stakeholders. This paper aims to determine the ethical disclosure in SARs to identify how close the Shari’ah disclosure to the standards set by AAOIFI and also substantive morality of Islam. The research also aims to examine the factors determining disclosure performance.

Two disclosure indices are developed to generate data from the SARs: the AAOIFI standards for Shari’ah governance index for form related approach, an Islamic ethicality augmented index reflecting on substantive morality approach. The sample consists of 41 Islamic banks from 15 different countries for the period of 2007–2014. Sampled 305 SARs were examined through disclosure analysis in line with the two indices developed for this study. The econometric analysis was run to identify the factors determining disclosure performance.

The findings suggest that AAOIFI guidelines have an influence on the level of disclosure, even if Islamic banks have not adopted them. However, the level of disclosure for the ethically augmented index is found to be very limited with reliance on general statements in most of the cases. As part of determining factors, the popularity of Shari’ah scholars is significant for both indices, while the existence of an internal Shari’ah auditing department holds some explanatory power. The adoption of AAOIFI standards at the country level, the regulatory quality and the duration of Sharīʿah-compliance are particularly deterministic factors in terms of complying with AAOIFI standards for SARs.

Although SB is the most crucial division of corporate governance in Islamic banks in terms of securing the “Islamic” identity of these institutions, their most important communication instrument, namely, SAR, has not been explored sufficiently, alongside an insufficient attempt to constitute Islamic corporate governance. Initially, this study attempted to constitute an Islamic corporate governance framework as a theoretical construct, which provides context for the empirical part of the research and this should be considered a novel approach. Second, the empirical part of the research aims to fill the gap observed in the literature such as small sample size and index construction-related matters. This research is conducted with a larger sample size as compared to the available studies in the literature and it has developed two indices for disclosure analysis along with developing an Islamic morality-based index beside an index based on AAOIFI standards.

Islamic financial institutions (IFIs) can gather provisioned funds from various sources, but they are prohibited from incorporating these funds into their profits or using them for personal gain as they are considered illegitimate income. Instead, IFIs are required to allocate these funds to charitable purposes. This study aims to examine the potential establishment of a Waqf (an Islamic alternative for endowment) using the provisioned funds of IFIs in the United Arab Emirates (UAE) by analyzing its Shariah perspective, utility and viability.

This research uses an information-gathering approach, gathering data from books, articles, journals and websites to illuminate the Shariah perspective of endowing provisioned funds. Additionally, it draws upon interviews with experts in Waqf and Islamic banking and finance to grasp the potential and viability of establishing a Waqf from provisioned funds in the UAE.

Establishing a Waqf using provisioned funds is permissible. Although Waqf is always advantageous, in the current situation, endowing Islamic financial institutions' provisioned funds will not adequately address societal needs in the UAE. This is because the majority of annual returns on UAE Waqf investments are low compared to the amount invested, and there is an urgency to disburse these funds to those in need. If these needs are identified and met using Zakat and other charitable funds, a Waqf can be created from provisioned funds and prove beneficial. However, the authors have suggested some proposals to establish a relevant Waqf from provisioned funds that satisfy the required conditions and address the societal needs of the UAE. They concluded that creating a Waqf school would be the best suggestion.

The scope of this study is limited to examining the use of IFIs' provisioned funds to establish a Waqf in the UAE. Furthermore, the findings and conclusions of this study may be applicable only to the UAE and may not be universally applicable to other countries.

Proposed initiatives to create a “Cash Waqf” fund and a “Waqf School” using provisioned funds are anticipated to bring about immediate positive changes for the underprivileged and the wider UAE community. Furthermore, the sustainable establishment of any Waqf could greatly benefit society by addressing all societal needs through Zakat and charitable contributions.

To the best of the authors’ knowledge, this is the first study to explore the potential and practicality of creating a Waqf using provisioned funds from IFIs in the UAE.

The purpose of this paper is to investigate Malaysian practitioners’ general perspective on corporate social responsibility (CSR) of Islamic banks and their views on having a special CSR framework.

This study used semi-structured face-to-face interviews, which contained both qualitative and quantitative data. The study also used observation and document review to support the data drawn from the research participants whenever necessary.

In total, 34 practitioners from all 16 Islamic banks in Malaysia responded to the interview questions designed for this purpose. The results show that the majority of the research participants viewed positively that Islamic banks should have a special CSR framework.

The Islamic concepts of CSR will be of interest not only to academicians but also, especially, to Islamic financial institutions. This paper will also send a strong signal to regulators that they should develop and introduce an Islamic CSR framework to Islamic financial institutions, especially Islamic banks.

This paper contributes to the growing debate on CSR among Islamic financial institutions, especially in the Islamic banking industry, by investigating practitioners’ views on having a CSR framework. In addition, to the knowledge of the authors, this is the first research that has involved Chief Executive Officers, Heads of Shari’ah, and Heads of Corporate Communications as research participants to talk about the CSR of Islamic banks.

The purpose of this study is to investigate whether Tawarruq Islamic home financing (IHF) products remain untouched and maintain their position as the top IHF product in Malaysia.

The study adopted a qualitative research methodology that included both literature review and content analysis. Firstly, the existing studies and literature were reviewed to compare different types of IHF. The composition of IHF products offered by these Islamic banks was then investigated further to analyse each bank’s progress in IHF from 2015 to 2019. The data were gathered from bank websites, brochures, product disclosure sheets and annual reports.

The findings reveal that around 62.5% of Islamic banks offered Tawarruq for IHF in the year 2020. For the banks that offered Tawarruq, the amount of the financing continued to grow each year. The plausible reason for the preference for Tawarruq was its less risky nature, despite facing numerous operating, legal and Shariah issues.

This study has several limitations, including the fact that it was limited to home financing products only, the methodology used and the research period.

This study aimed to provide beneficial insights into the use of Tawarruq, which has been a source of concern for regulators as well as steps made to reduce its usage in the industry. Islamic banks should be more proactive in developing non-Tawarruq products to enhance product innovation in the market and minimise the heavy reliance on debt-based products.

This study provides useful insights by analysing IHF in depth for each Islamic bank and making recommendations for future research. Specifically, the method facilitated critical discussions and comparisons to previous research findings as to why Tawarruq has remained popular.

This study aims to investigate the potential application of Istisna’ financing in Malaysia.

Using primary data from semi-structured interviews with 17 participants, including Islamic financial institutions (IFIs), regulatory body and property development companies, the findings of the study suggest that Istisna’ is perceived as a good contract that has unique features and the potential to be implemented in Malaysia; although, it has only been implemented a little by current businesses, mainly due to its perceived high risks.

The authors find there is a gap between the theory and the actual operation of IFIs in Malaysia – some salient features of an Islamic contract are actually difficult to execute in reality as there are many factors to be considered, such as default risk in Istisna’, legal issues and accounting treatment of Istisna’ contract. This study recommends the further development of Istisna’ in Malaysia due to its huge potential in the Islamic financial market there.

Istisna’ is a unique type of sale contract that is used in the manufacturing sectors where the sale of a commodity is transacted before the commodity exists. In practice, data from the Central Bank of Malaysia show that Istisna’ financing is scarce.

The study differs from previous research studies on Istisna’ – to the best of the authors’ knowledge, this is the first study to provide evidence the real thoughts of IFIs with regard on Istisna’ specifically and IFIs’ operations in general. Previous studies related to Istisna’ have limited scopes, as they have mainly explored the theoretical nature of the contract, issues of permissibility from the Shariah perspective and its comparability with other IFIs product such as Salam. In this study, from respondents’ views, the authors notice actually there is a gap between theory and the real practice of Islamic finance. An Islamic finance instrument may be an ideal choice to customers but not very popular from IFIs’ sides. In this respect, the authors add to the growing literature of Istisna’ by asking the direct questions to IFIs and the authors get honest responses pertaining to default risk, legal issues and accounting treatment.

This study aims to analyze the level of customer awareness of Islamic Banks’ activities toward corporate social responsibility (CSR) in the Kingdoms of Bahrain and Saudi Arabia and test whether both groups have similarities or not. The outcome of this study determines the extent to which customer awareness regarding Islamic banking activities furthering the betterment of society and achieving socioeconomic goals beyond their financial objectives.

Quantitative methods are used in this study covering Islamic Banks in both the Kingdoms of Bahrain and Saudi Arabia; using a survey questionnaire distributed to a total of 150 customers in the Kingdom of Bahrain and 100 customers in the Kingdom of Saudi Arabia. The weighted means are calculated, and statistical tests are used, such as, Kruskal–Wallis H and independent sample tests, in analyzing the data.

The results of the survey reveal that the level of customer awareness is generally low in terms of the pursuit of corporate social responsibilities by the Islamic Banks. The significant statistical difference in the data gathered from the sample is highlighted when they are grouped according to their respective banks. It proves that the level of customer awareness varies considerably among the Islamic banks in the survey. It was also found that there is no significant difference between the two groups of Islamic banks’ customers in the two countries in terms of their awareness toward the CSR practices of the Islamic banks.

The findings of this study could be used to aid policymakers in the field of CSR of Islamic banks to formulate a more efficient set of CSR activities that are better aligned with the ultimate goal of achieving society’s betterment. This study may also facilitate Islamic banks in the region to set up strategies that highlight their CSR efforts and raise the awareness levels of their customers.