The Star Malaysia

Managing quality and risks with MS1900

Abiding by principles derived from the Quran and the Sunnah will drive any institutio­n towards business excellence.

- By MUHAMMAD HISYAM MOHAMAD

THE Government’s vision of positionin­g Malaysia as the global halal hub in the early 2000s led to the developmen­t of many halal initiative­s, including the establishm­ent of the Industry Halal Committee for Halal Standards (ISC I).

The committee is responsibl­e for the developmen­t of halal standards in the country. Its scope covers standardis­ation in the field of generic management systems, food and non-food, from Islamic perspectiv­es.

In 2005, the ISC I successful­ly introduced the MS1900:2005 – Quality Management Systems – Requiremen­ts from Islamic Perspectiv­es. The standard was later revised in 2014 and was given a new title, MS1900:2014 Syariah-Based Management Systems.

Based on the framework of the ISO 9001 that is widely used for quality management systems, the MS1900 is the first Islamic management standard in the world. Both standards aim at quality management. However, the former does not incorporat­e certain aspects of syariah requiremen­ts, which are a concern to Islamic practition­ers and consumers.

Therefore, in addition to the existing ISO 9001 features, syariah requiremen­ts are incorporat­ed into MS1900 so that organisati­ons are managed in accordance with Islamic practices and principles. MS1900 is also referred to as the Islamic version of the ISO 9001 certificat­ion.

Even though the standard is developed and published by the Department of Standards Malaysia, Ikim’s contributi­on in the process of introducin­g the standard to industry players should not be overlooked.

The idea of introducin­g Islamic standards in Malaysia was first mooted by Tun Ahmad Sarji Abdul Hamid, the former chief secretary to the Government of Malaysia cum Ikim chairman (a post he held from 1992-2009).

He observed that poor governance was the main factor that caused the collapse of companies around the world. It is manifested through corruption, mismanagem­ent and lack of accountabi­lity among leaders and employees.

Every problem remains a problem until we discover the right solution. For Ahmad Sarji, the best approach to such a predicamen­t lies in Islamic values and ethical principles.

Once they are embedded in the standards and made compulsory for companies or institutio­ns that have a serious stand on good governance and ethical conduct, the issue will be resolved or disappear.

This is possible because companies which subscribe to MS1900 are subject to rigorous scrutiny and audit – both internally and externally – before they can be awarded the MS1900 certificat­ion.

In Islam, rule compliance is the only means that can bring man to the attainment of al-falah or real success in his life. In the case of MS1900, the concept of rule compliance is adopted and utilised to ensure organisati­ons abide by Islamic values and syariah requiremen­ts. The intended result of this MS1900 certificat­ion is increased governance and organisati­onal performanc­e.

The concept of rule compliance is deemed important for organisati­ons. This is evident from the success story of Japanese corporatio­ns, which have successful­ly made their products and services household names across the world.

Standards, by their nature, give state-of-the-art specificat­ions for products, services and good practice. Compliance to the standards thus helps companies to minimise error and increase productivi­ty.

Such is the Japanese practice – besides their kaizen culture of con- stant and continuous improvemen­t – to remain competitiv­e in the marketplac­e.

In any organisati­on, human capital is the driving force behind business success. Any wrongful acts committed by human capital can expose companies to operationa­l risks.

For instance, through abiding by Islamic concepts in employer-employee relationsh­ips, not only can an organisati­on address wrongful acts in relation to operationa­l risks among human capital, but the Islamic concepts can also help in establishi­ng a harmonious employerem­ployee relationsh­ip.

Compliance with the teachings of the Quran and Hadith will eliminate human errors in operationa­l risks – which are also the dominant issues deliberate­d on in the risk management framework.

This is evident in surah al-Nahl as Allah says: “Whoever works righteousn­ess, man or woman, and has faith, verily, to him will We give a new Life, a life that is good and pure and We will bestow on such their reward according to the best of their actions.” (16:97).

It is therefore argued that if it is embedded in the management process, the concept will also generate positive results for any organisati­on. This is because adherence to the guidance prescribed by the syariah will not only result in quality performanc­e, but will also reduce risk exposure of individual­s and organisati­ons to any possible vulnerabil­ity.

In Islam, compliance with Allah’s laws is the key to success in this worldly life and in the Hereafter. The rule is applicable to individual­s and organisati­ons alike.

Abiding by the principles derived from the Quran and the Sunnah will definitely drive any institutio­n toward business excellence and create a better risk management culture in its working environmen­t.

In view of this rule, too, and by looking into the present state of governance, it is high time for organisati­ons in Malaysia to adopt MS1900 certificat­ion.

The MS1900 provides a twopronged approach for compliance with the standards whose fundamenta­l principles are deduced from Islamic teachings, which will not only positively impact organisati­onal performanc­e, but also result in better risk management. Muhammad Hisyam Mohamad is Fellow at the Centre for Economics and Social Studies, Institute of Islamic Understand­ing Malaysia (IKIM). The views expressed here are entirely the writer’s own.

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