Succession Planning on Muslim Family Enterprises: Will the Successors Have the Attributes of Islamic Leadership?

Succession Planning on Muslim Family Enterprises: Will the Successors Have the Attributes of Islamic Leadership?

Muhammad Dharma Tuah Putra Nasution (Universitas Pembangunan Panca Budi, Indonesia), Cut Kesuma Pahlufi (Univesity of Surrey, UK) and Ku Halim Ku Ariffin (Universiti Malaysia Perlis, Malaysia)
DOI: 10.4018/978-1-7998-6892-7.ch008
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Abstract

In Islamic faith and ideology, tremendous emphasis is paid to leadership as an essential instrument for realizing an ideal society which is built on fairness and compassion. Muslims practice the Islamic faith, which Islamic law regulates the faithful's way of life, from moral issues to etiquette and business conduct. Established laws governing the Muslim's behaviour and activities are included in Sharia decisions, and many Islamic teachings deal with business activities. The business etiquettes and rules of succession are contained in Sharia laws. Sharia law offers guidelines on integrity, fairness, risk, fraud, bribery, and kindness in business activities. The family business culture is influenced by the business element of the enterprises, which offers principles, mutual goals, commitment towards a prosperous future, and complimentary relationships between enterprises. The family enterprises are considered in a socio-cultural and religious environment in which the business is operated to gain a greater awareness of leaders' succession and successor development.
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1. Introduction

Culture brings sense to what leaders do and promotes or impedes the influence mechanism that drives members to respond and behave in a specific manner. Culture frequently serves as a reference and character model to inform leaders what performs and what does not. In other words, culture establishes the principles for ethical behavior of leadership. Furthermore, every culture has its perspectives on idealism and pragmatism. Any of these values are increasingly evolving, while others remain and are more valued - the differentiation between families or societies cultures structured to define leadership principles.

The businesses' principles and priorities will relate to the family business's quality which reflects with their business ethics (Brice & Richardson, 2009; Franco & Lucas, 2016). The family business culture element offers principles, mutual goals, commitment towards a prosperous future, and complimentary relationships between enterprises (Vallejo 2009,2011). Accordingly, considering the socio-cultural and religious environment in which the family business is operated to gain a greater understanding of leaders' succession within the family business and successor development are necessary concerned.

The cultural factors identified by collective motivations, values, beliefs, personalities, and meanings will impact forming the succession roadmap. The principles and beliefs that characterize the family sector's business culture will affect the family business success. Hence, family businesses' cultural orientation is relevant to recognizing the features required for business survival across future generations (Fletcher, Melin, & Gimeno, 2012; Gupta & Levenburg, 2010; 2012).

Religion is a factor of the concept of societal culture, and it is part of a society's practices that offer significance to their life. Religion will affects the community's culture as cultural principles, and beliefs derive strongly from that of faith and social culture, which in turn it has been described as having a significant impact on business culture (Saroglou & Cohen 2011; Gupta, & Levenburg, 2012; Anggadwita et al. 2019). Furthermore, religion is a structured set of beliefs, narratives, and symbols that establish significance in life by a comfortable life for adherents (Vallejo, 2011). Therefore, religion constitutes an integral part of a community of adherents' social culture.

Miller and Ewest (2010) suggest that religion affects the business environment and drives shifts in the economy and organization. According to Vallejo (2009), this effect from a constructive viewpoint indicates that the family's solid is associated with a profound cultural outlook. The influential culture allows it to sustain in the context of family enterprise. A high degree of religious orientation is one aspect that generates solid cultural orientation, as many of the family's behaviors and viewpoints will impact the family business (Vallejo, 2009). However, some detrimental effects have been encountered in the literature. Business and religion are viewed as a conflict of civilizations, as profit maximization can be seen as materialistic, deceiving, and calculating (Wang & Yang, 2011).

The literature explores the religion, society, and business culture that are interrelated and affect the family business's activities as far as the management activities, such as succession planning, are concerned. Given the impact that culture has on family business and the effect that the Islamic has on Muslim family culture, it follows that research into the impact of Islamic leadership attribute as a factor in business succession planning will yield noteworthy outcomes.

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