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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.
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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
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 globalization, a study was made in 1995 to expand its scope and role. Thus, on June 1st, 1995 a Page | 3
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”.
ORGANIZATIONAL STRUCTURE OF TABUNG HAJI PILGRIMS FUND BOARD, MALAYSIA
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PRIME MINISTER’S DEPARTMENT
HAJJ OPERATIONS ADVISORY COUNCIL
BOARD OF DIRECTORS
FINANCIAL ADVISORY COUNCIL
ADMINISTRATION AND QUALITY DEPARTMENT
A) Board Of Directors
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Tabung Haji is governed by a Board of Directors which is comprised of the following members: i. ii. iii. iv. v. vi. vii. Chairman – appointed by the Yang Di Pertuan Agung Deputy Chairman – appointed by the Yang Di Pertuan Agung Representative of the Prime Minister’s Department Representative of the Treasury Director General of Tabung Haji A maximum of five other members appointed by the Minister 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: i. Director General Page | 6
Director of Finance 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. ii. Advicing the Minister on matters pertaining to the welfare of pilgrims Advicing the Minister on any matter referred to it by the Minister
The memberships of the council is as follows: i. ii. iii. iv. v. vi. Chairman of the board, who also acts as the Chairman of the Council Representative of the Prime Minister’s Department Representative of the Treasury Representative of the Ministry of Foreign Affairs Director General, who acts as the Secretary of the Council Representative from each of the Malaysia’s states The council is required to meet at least once during every calendar year.
D) Finance Committee
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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. ii. iii. iv. v. Director General – Chairman Director of Finance – Secretary Representative of the Prime Minister’s Department Representative of the Treasury One member appointed by the board
E) Welfare Committee
The Welfare Committee is responsible for the welfare, protection, control and general wellbeing 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. ii. iii. iv. Director General – Chairman Director of Welfare – Secretary Representative of the Prime Minister’s Department One member appointed by the board
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Ka’abah colour symbolizes the garment when 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. it engulfed Kiswah
Represents the colour of Islam
“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.
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o Pillars of the economic success of the ummah o Systematically pilgrimage management
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
Tabung Haji operates based on three main activities:
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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.
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 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. Page | 11
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.
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.
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 Page | 12
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: 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 Page | 13
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 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 Page | 14
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
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
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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.
iv. Hajj guidance courses
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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
Between 100 – 110 chartered flights using DC 10s (363 passengers capacity) or Boeing 747s (475 passengers capacity) are arranged by Tabung Haji each season
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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 o Administering dispensaries in Jeddah, Mina, Madinah and Arafah o Providing mobile clinic services o Providing ambulance services for sick pilgrims; etc
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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.
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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/aHR0cDovL2lzbGFtZmlubGFuZC5maWxlcy53b3JkcHJlc3MuY29tLzIwM DkvMDgvaWRiLXRhYnVuZy1oYWppLWFzLWFuLWlzbGFtaWMtZmluYW5jaWFsLWluc3 RpdHV0aW9uLnBkZg
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