Muhamad Fazil Ahmad
INTRODUCTION
It has been talked for many years that the implementation of Corporate Social Responsibility (CSR) is the better way to generate values for companies. Alserhan, (2010) states that, due to increases in the lifestyle and environment, takaful products are facing major challenges that cannot be solved without effective branding and social responsibility systems (Alserhan, 2010). Over the centuries of human intellectual activities, takaful is the area of the selected scholars debate (Alserhan & Alserhan, 2012). Much of the theoretical debate has been normative in nature, that is it has tried to identify what the Muslim should do, or what is right and what is wrong. What are the best rules cause respectable management of takaful judgment? To develop and normative roots takaful – including revise the mudarabah concept in business - should be applied in practice (Aris, 2012). Only application, they can be developed, criticized and tested persistently. The researchers and scholars in takaful Industry should focus more to applied research on the effectiveness of takaful for all that pay besides their concentration in the normative takaful branding (Ismaeel, 2012; Rajagopal, Ramanan, Visvanathan, & Satapathy, 2011).
The phenomenon of establishing CSR with Islamic Philanthropy in Malaysian Takaful Industry and branding in Islam is a new and separate discipline has involved the consideration by practitioners and academics – from inside and outside the Muslim world (Hamid, Mutasim, & Ab, 2011). As a proof of that, the launching of the academic journal in the area of Islamic finance, business and management, and also Ogilvy Noor branding consultancy services in the Islamic perspective, which formed by Ogilvy and Mather. Its status as a new and separate discipline is not just because to identify the prerequisite and the request need of the client; but it is because the schools from existing brand thinking and framework seem to have a gap, which requires research and modification (F. A. Rahim, 2011).
CORPORATE SOCIAL RESPONSIBILITY
CSR has been receiving attention from both managers in enterprises and scholars in academic circle for many years (Eastbury, D., 2011). CSR means the commitment of business to contribute the sustainable economic development and meanwhile to improve the quality of life by connecting employees, organizations and local communities (Werther, W. B. & Chandler, D. (2010). CSR, a concept firstly proposed in western countries, it has a long history with rapidly developing (Lee, M.-D. P., 2008).
According to Carroll (1999), the concept of CSR can be traced to 1930s. Chester Barnard (1938), J. M.
Clark (1939) and Theodore Kreps (1940) are the authors who briefly build the fundamental concept of corporate responsibility in the beginning. In the 1960s, Davis (1960) argues that CSR is nebulous idea and it was concerned under the managerial framework. Johnson (1971) came up with more expression of CSR such as utility maximization and business related social program gaining profit in the1970s (Johnson, 1971). Scholars continued research on CSR issues and revise the concepts repeatedly. These studies gradually developed the framework of CSR (Werther, W. B. & Chandler, D. (2010). Plenty of academic scholars have researched and contributed to the knowledge of CSR. However, different scholars made definition of CSR in various ways. Generally summarized by O‟Riordan, L. & Fairbrass, J. (2008), there are two trends for the theory development of CSR.
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One is considering CSR issues from the stakeholders‟ perspective. For example, Freeman et al., (2006) proposed the new approach to CSR, company stakeholder responsibilities. The theory described that the ethical leadership was considered from stakeholder‟s view (Marrewijk, M. 2003, Freeman et al, 2006). Social expectation for a corporation to do ethical business require right behaviour, the behaviour is combined with stakeholder perception (Lee, H., et al., 2009). The other trend refers to Carroll‟s (1979) theory, it emphasizes that any given responsibility or action of business encompasses the economic, legal, ethical or discretionary motives. Of the four motives, Carroll (1990) replaced the discretionary to philanthropic and advice that philanthropic motive should embrace the concept of corporate citizenship.
Detail information of the four motives was summarized in a pyramid model (Figure 2).
Figure 2: The pyramid of Corporate Social Responsibility by Carroll (1991).
In this paper, the pyramid model will be adopted as the analysis model to carry out analysis of empirical findings. In terms of the model, it has four dimensions of responsibility that are economic, legal, ethical and philanthropic. In the economic dimension, it aims to produce products or service that customers wanted and meanwhile receives acceptable profit. In legal dimension, it reflects the view of legalized ethics. Legal responsibility asks the enterprises to establish frameworks to provide fair operations. Some basic definitions regarding to economic and legal dimensions are shown in Figure 3. It indicates the meaning of each responsibility (Carroll, 1991).
Figure 3: The economic and legal components of Corporate Social Responsibility
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By Carroll (1991)
Compared to economic and legal responsibilities, ethical responsibility embraces the activities that the society expected or favoured without codified law or regulation. The last dimension is about philanthropy. It includes all the operations for satisfying the society. Enterprises are encouraged to engage their business in actions or programs in the society to contribute human welfare and goodwill of the brand.
Definitions of ethical and philanthropic responsibilities are also summarized below in Figure 4 (Ibid).
Figure 4: The Ethical and philanthropic components of Corporate Social Responsibility By Carroll (1991)
THE CONCEPT OF TAKAFUL IN ISLAMIC PHILANTHROPY
Takaful is a concept that the Shari‟ah approval on all the activities (Annuar, 2004). The word „Takaful‟
derived from the Arabic verb Kafal, which literally means “to take care of their/one‟s needs”. Takaful is a scheme based on brotherhood, solidarity and mutual assistance which provides for mutual financial aid and assistance to the participants in case of need whereby the participants mutually agree to contribute for that purpose. Its fundamental aim of Takaful is to pay for a set defined by a loss of funds.
This concept has been in the time of Prophet Muhammad (peace be upon him) practiced. Then the members of the community have to help in a fund, known as Al-Kanz contributed, a member of the community had to pay blood money (diyah) for a particular crime. Based on the analogy (qiyas), the practice of paying diyah turned into Takaful, as it is currently practiced (Annuar, 2004). Takaful differs from conventional insurance that the premium (contribution) paid by each participant for the purpose a gift, donation or contribution (tabarru‟) rather than have to make an exchange of goods are made, because if tabarru‟ involved, keeps the Shari‟ah that the transaction is authorized.
Takaful, which aims to promote Islamic brotherhood, emphasized the importance of solidarity between the participants who agreed to take the other specified losses, such as death or disaster, Member, including donating a portion of the contributions. Motivated the interest of personal material gain has no place in the Islamic insurance system. In Malaysia is the modus operandi of the Takaful system is based on the agency model (wakalah) is shown in Figure 1.
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Meanwhile, the term wakalah also derived from Arabic word which means agency. Therefore, in the structure there is an agency relationship between two counterparts in order to make ties to the company. On that basis the model describes an agency agreement between the operators in a wide variety of products by the operator „Wakil‟. The Takaful offered participants to successfully participate as an agent or as principal. Considering the performance of the Agency, the operator is entitled to charge fees under the contract. The fees are paid by the Takaful contribution of the participants. In this sense the model is discussed, the expenses can put the initial costs charged to the takaful fund (Hussain, 2011). In this model, the operator wins the turnover of the agency fee described in the foregoing as well as the return on investment for shareholders. However, there are also operators who are charged the above model practice, the cost and fee of the performance of their duties and services of managing the investment of the takaful fund. Unexpectedly, if participants make a cancellation or surrender, participants paid the balance of its contribution, if any, after deduction of all initial costs such as management fees and other charges wakalah takaful fund (Ayinde & Echchabi, 2012).
Figure 1: General Takaful Wakalah Model Chart
The resulting contract has a two-tier relationship that is external in nature to the Takaful Company. The first tier, the one among the participants, is based on tabarru‟ (Hussain, 2011; Shukri et al., 2012). The second tier is the one among the participants as one entity (i.e., the fund) and the Takaful Company. A certain proportion of the participants‟ contributions are reallocated in order to pay his/her fellow participants who experience a loss. This portion is placed in the Special Participant Account, while the balance of the contributions is placed in the Participant Account for savings (Shukri et al., 2012)
INTEGRATING PHILANTHROPIC CONCEPT WITH HALAL BRAND PERSONALITY FOR ENHANCING MUDARABAH FAMILY TAKAFUL MODEL
The preliminary finding of the study found support for the idea that the personality strategy type has indeed been the success of the brand personality in the real world. In this context, the dimensions of the usefulness of the personality are clearly perceived as different from each other, selected according to
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the specific strategy of the personality mark. It also shows that the benefits and positioning effective than alternative strategies for the positioning functions. On this basis, marketers should conduct a thorough investigation before making product features as a strategy to position its offer. Direct personality is more effective than indirect positioning. Based on the literature this study has found five antecedents attribute of Halal brand personality which are as follow: Safety, Quality, Purity Benefit and Religious Compliance (MatSAWali et al., 2012). However, interest continued to challenge the academic and practitioner, to be discussed in this paper from the perspective of communication branding, are:
Safety
By projecting the secure attribute of products and services and the condition of the Halal brand personality status in the eyes of a client, it would be a positive perception of the product and service is a product of better quality than ordinary Takaful products and distributors can use this approach as an effective marketing strategy. It must be sincere in fulfilling the needs of the clients and ensure the client safety and a sense of brotherhood in dealing with business partners and clients (Duasa, Rahim, & Rahman, 2006). For this reason, Annuar (2004), suggests that Takaful operators develop effective marketing strategies emphasizing products and services to develop satisfy the values of potential clients (Annuar, 2004).
Quality
On this basis, we can see that the quality characteristics play an important role in influencing client satisfaction and loyalty. Properties of certain products, such as price, design, features and functions, advertising and influence client perception of quality brand (Afzal & Address, 2010). This variable also affects the process of client assessment and draw conclusions about the dimensions of quality leads to customer satisfaction (Annuar, 2004).
Purity
The concept of purity in providing takaful products can be an important advantage in the promotion of Halal brand personality products and services to clients and reflects the true image of Islam, and is in accordance with the Syari‟ah law. The attributes of purity, which is a must in the production and provision of Takaful products, they are also moving in the traditional markets, partly due to the increase in Muslim clients (Hanzaee, 2011). Based on the foregoing, it is clear that purity is an important part of Islam and in Halal brand personality of Takaful products, image and symbol of purity are the main attributes that can influence to gain brand personality strategy of marketing both Muslim and non-Muslim Clients.
Benefit
In a Takaful context, it is imperative that both clients and takaful agencies work together for a better understanding and acceptance of products and services offered in the Takaful products and services industry. In this study, the takaful agencies are regarded as being responsible for providing oversight for clients with respect to all the components of the service providing from sourcing the delivering material, handling, processing equipment, dealing out, keeping, preparing, and presenting to the patrons. Thus, assuring that the whole process in the products and services is Halal compliant where appropriate.
However, no previous study has examined the attitudes of Takaful operates in Malaysia with respect to Halal certification and its importance and how they provide clients with confidence in their products and services.