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August 22, 2010 Leave a comment

IB1004 – ISLAMIC FINANCIAL MARKETS AND INSTITUTIONS
Main Reference
Saiful Azhar Rosly. (2008). Critical issues on Islamic banking and financial Markets. Kuala Lumpur: Dinamas Publishing.
Additional Reference
Ayub, Muhammad. (2008). Understanding Islamic finance. Hoboken, NJ: John Wiley & Sons.
Fabozzi, Frank J. and Modigliani, Franco. (2009). Capital markets: institutions and instruments. (4th ed.). Englewood Cliffs, N.J.: Prentice Hall.
Kettell, Brian. (2008). Introduction to Islamic banking theory and finance. London: Brian Kettell Islamic Banking Training.
Mishkin, Frederick S. and Eakins, Stanley G. (2009). Financial markets and institutions. (6th ed.). Boston: Pearson Prentice Hall.
Mishkin, Frederick S. (2006). The economics of money, banking, and financial markets. (8th ed.). Boston: Pearson/Addison Wesley.

IB1005 – DEPOSITS AND FINANCING PRACTICES OF ISLAMIC BANKS
Additional Reference
Ayub, Muhammad. (2008). Understanding Islamic finance. Hoboken, NJ: John Wiley & Sons.
Choudhury, Masudul Alam. (1997). Money in Islam: a study in Islamic political economy. New York: Routledge.
Durrani, Mansoor and Boocock, Grahame. (2006). Venture capital, Islamic finance and SMEs: valuation, structuring and monitoring practices in India. New York: Palgrave Macmillan.
El-Gamal, Mahmoud A. (2006). Islamic finance: law, economics, and practice. Cambridge: Cambridge University Press.
Harper, Malcolm. (Ed.). (1997). Partnership financing for small enterprise: some lessons from Islamic credit systems. London: IT Publications.
Karim, Adiwarman. (2006). Islamic banking: fiqh and financial analysis. Jakarta: PT Rajagrafindo Persada.
Munawar Iqbal and Ausaf Ahmad (Eds.). (2005). Islamic finance and economic development. New York: Palgrave Macmillan.
Saiful Azhar Rosly. (2008). Critical issues on Islamic banking and financial Markets. Kuala Lumpur: Dinamas Publishing.
Usmani, Muhammad Taqi. (2005). An introduction to Islamic finance. (Special ed.). Karachi, Pakistan: Maktaba Ma’ariful Qur’an.
Venardos, Angelo M. (2006). Islamic banking & finance in South-East Asia: its development & future. (2nd ed.). New Jersey: World Scientific.
A mini guide to Islamic banking & finance. (2006). Kuala Lumpur: CERT Publications.

IB1006 – ISLAMIC CAPITAL MARKETS
Main Reference
Saiful Azhar Rosly. (2008). Critical issues on Islamic banking and financial Markets. Kuala Lumpur: Dinamas Publishing.
Additional Reference
Adam, Nathif J. and Thomas, Abdulkader. (2004). Islamic bonds: your guide to issuing, structuring and investing in sukuk. London: Euromoney Books.
Archer, Simon and Abdel Karim, R. A. (Eds.). (2002). Islamic finance: innovation and growth. London: Euromoney Books and AAOIFI.
Archer, Simon and Abdel Karim, R. A. (Eds.). (2007). Islamic finance: regulatory challenge. Singapore: J. Wiley.
Damodaran, Aswath. (2001). Corporate finance: theory and practice. (2nd ed.). New York: Wiley.
Fabozzi, Frank J. and Modigliani, Franco. (2009). Capital markets: institutions and instruments. (4th ed.). Englewood Cliffs, N.J.: Prentice Hall.
Jaffer, Sohail (Ed.). (2004). Islamic asset management: forming the future for sharia compliant investment strategies. London: Euromoney Institutional Investor PLC.
Mayo, Herbert B. (2006). Basic investments. Mason, Ohio: Thomson/South-Western.
Capital market development in Malaysia: history & perspectives. (2004). Kuala Lumpur: Securities Commission
Islamic Finance News awards: deals of the year 2007 handbook. (2007). Kuala Lumpur: Islamic Finance News.
Shariah resolutions in Islamic finance. (2007). Kuala Lumpur: Bank Negara Malaysia.

IB2003 – MANAGING ISLAMIC FINANCIAL INSTITUTIONS
Additional Reference
Ali, Abdullah Yusuf. (2006). The meaning of the holy qur’an: text, translation and commentary. Kuala Lumpur: Islamic Book Trust.
Daft, Richard L. (2007). Organization theory and design. (9th ed.). Mason, OH: Thomson South-Western.
Foss, Bryan and Stone, Merlin. (2002). CRM in financial services: a practical guide to making customer relationship management work. London: Kogan Page.
Kotler, Philip and Keller, Kevin Lane. (2006). Marketing management. (12th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Rose, Peter S. and Hudgins, Sylvia Conway. (2008). Bank management and financial services. (7th ed.). Boston: McGraw-Hill/Irwin.
Payne, Adrian. (2006). Handbook of CRM: achieving excellence in customer management. Boston, MA: Elsevier.
Peelen, Ed. (2005). Customer relationship management. New York: FT Prentice Hall.
Peppers, Don and Rogers, Martha. (2004). Managing customer relationships: a strategic framework. Hoboken, New Jersey: John Wiley & Sons.
Islamic Banking Act 1983 (Act 276): as at 5th January 2008. (2008). Petaling Jaya, Selangor Darul Ehsan: International Law Book Services.
Islamic banking practice: from the practitioner’s perspective. (1994). Kuala Lumpur: Bank Islam Malaysia.

IE1001 – ISLAMIC ECONOMICS & FINANCE: THEORY & PRACTICE

Main Reference
Chapra, M. Umer. (1996). What is Islamic economics? Jeddah: Islamic Develoment Bank, Islamic Research and Training Institute.
Chapra, M. Umer. (2000). The future of economics: an Islamic perspective. Leicester: Islamic Foundation.
Chapra, M. Umer. (1996). Islamic and the economic challenge. Leicester: Islamic Foundation and the International Institute of Islamic Thought.
Fahim Khan, M. (1995). Essays in Islamic economics. Leicester: Islamic Foundation.
Khan, Muhammad Akram. (1994). An introduction to Islamic economics. Islamabad: International Institute of Islamic Thought and Institute of Islamic Studies.
Khurshid Ahmad. (1979). Economic development in an Islamic framework. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 35-58). Kuala Lumpur, Malaysia: International Islamic University Malaysia.
Siddiqi, Muhammad Nejatullah. (1981). Muslim economic thinking: a survey of contemporary literature. Leicester, U.K. : Islamic Foundation.
Monzer Kahf. (2006). The Islamic Economic System. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp17-34). Kuala Lumpur, Malaysia: International Islamic University Malaysia.

Additional Reference
Abulhasan M. Sadeq. (2006). Factor pricing and income distribution from an Islamic perspective. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 155-177). Kuala Lumpur, Malaysia: International Islamic University Malaysia.
Abulhasan M. Sadeq. (2006). The meaning of economic development in Islam. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 59-70). Kuala Lumpur, Malaysia: International Islamic University Malaysia.
McConnell, Campbell R and Brue, Stanley L. (2008). Economics: principles, problems, and policies. (17th ed.). Boston: McGraw-Hill Irwin.
Chapra, M. Umer. (2006). The Islamic welfare state and its role in the economy. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 355-388). Kuala Lumpur, Malaysia: International Islamic University Malaysia.
Chapra, M. Umer. (2007). Islam and economic development: a strategy for development with justice and stability. New Delhi, India: Adam Publishers & Distributors.
Choudhury, Masudul Alam. (1997). Money in Islam: a study in Islamic political economy. New York: Routledge.
Preparation of the ummah for the twenty-first century in the area of economic, trade and finance cooperation among the OIC member countries. (1998). Jeddah: Islamic Research and Training Institute.
Siddiqi, Muhammad Nejatullah. (1981). Muslim economic thinking: a survey of contemporary literature. Leicester, U.K.: Islamic Foundation.
Muhammad Ramzan Akhtar. (2006). Towards an Islamic approach for environmental balance. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 519-543). Kuala Lumpur, Malaysia: International Islamic University Malaysia.

Mufti Muhammad Shafi. (2006). Distribution of Wealth in Islam. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 195-230). Kuala Lumpur, Malaysia: International Islamic University Malaysia.

Aidit Ghazali and Syed Omar (Eds.). (1989). Readings in the concept and methodology of Islamic economics. Petaling Jaya, Selangor: Pelanduk Publications.

Sheikh Ghazali Sheikh Abod, Syed Omar Syed Agil and Aidit Ghazali. (Eds.). (2005). An introduction to Islamic economics and finance. Kuala Lumpur: CERT Publications Sdn. Bhd.

Ahmad, Ausaf and Awan, Kazim Raja (Eds.). (1992). Lectures on Islamic economics. Jeddah: Islamic Research and Training Institute.

Zubair Hasan. (2006). Economic development from the Islamic perspective: concept, objectives and some issues. In AbulHasan M. Sadeq (Ed.). Development issues in Islam (pp 71-104). Kuala Lumpur, Malaysia: International Islamic University Malaysia.

IE1002 – REPORTING OF ISLAMIC FINANCIAL TRANSACTIONS
Main Reference
Shahul Hameed Mohamed Ibrahim. (2009). Accounting and auditing for Islamic financial institutions. Kuala Lumpur: IIUM Press.
Additional Reference
Accounting and Auditing Organization for Islamic Financial Institutions. (2008). Accounting, auditing and governance standards for Islamic financial institutions: the full text of accounting, auditing and governance standards for Islamic financial institutions as at Safar 1429H-June 2008. Bahrain: Accounting and Auditing Organization for Islamic Financial Institutions.
Obaidullah, Mohammed. (2005). Islamic financial services. Jeddah, Saudi Arabia: Scientific Publishing Centre, King Abdulaziz University.

IE2001 – ETHICS AND GOVERNANCE
Additional Reference
Accounting and Auditing Organization for Islamic Financial Institutions. (2008). Accounting, auditing and governance standards for Islamic financial institutions: the full text of accounting, auditing and governance standards for Islamic financial institutions as at Safar 1429H-June 2008. Bahrain: Accounting and Auditing Organization for Islamic Financial Institutions.
Archer, Simon and Abdel Karim, R. A. (Eds.). (2007). Islamic finance: regulatory challenge. Singapore: J. Wiley.
Chapra, M. Umer and Ahmed, Habib. (2002). Corporate governance in Islamic financial institutions. Jeddah: Islamic Research and Training Institute (IRTI).
Kim, Kenneth A. and Nofsinger, John R. (2007). Corporate governance. (2nd ed.) Upper Saddle River, N.J.: Prentice Hall.
Mallin, Christine A. (2007). Corporate governance. (2nd ed.) New York, NY: Oxford University Press.
Umaruddin, M. (1962). The ethical philosophy of al-Ghazzali. Aligarh: [Muslim University].
Hassan, Vaseehar, Shanmugam, Bala and Perumal, Vignesen. (2005). Corporate governance: an Islamic paradigm. Serdang: Universiti Putra Malaysia Press.
Zeti Akhtar Aziz. (2006). Islamic banking and finance progress and prospects collected speeches: 2000-2006. Kuala Lumpur: Bank Negara Malaysia.

SH1002 – SHARIAH ASPECTS OF BUSINESS AND FINANCE
Mansuri, Muhammad Tahir. (2001). Islamic law of contracts and business transactions. Islamabad: Shari’ah Academy, International Islamic University.
Nyazee, Imran Ahsan Khan. (2003). Islamic jurisprudence: (Usul al-Fiqh). Petaling Jaya, Selangor: The Other Press.
Nyazee, Imran Ahsan Khan. (2002). Theories of Islamic law: the methodology of ijtihad. Kuala Lumpur: The Other Press.

SH2002 – SHARIAH ISSUES IN MODERN ISLAMIC FINANCE
El-Gamal, Mahmoud A. (2006). Islamic finance: law, economics, and practice. Cambridge: Cambridge University Press.
Vogel, Frank E. and Hayes, Samuel L. (1998). Islamic law and finance: religion, risk, and return. Leiden, Boston: Brill.
Usmani, Muhammad Taqi. (2005). An introduction to Islamic finance. (Special ed.). Karachi, Pakistan: Maktaba Ma’ariful Qur’an.

TK1003 – WEALTH PLANNING AND MANAGEMENT
Sadali Rasban, Ismail Mohd@Abu Hassan. (2006). Estate planning for Muslims. Singapore, HTHT Advisory Services Pte. Ltd.
Nik Mohamed Affandi bin Nik Yusoff. (2001). Islam and wealth: the balanced approach to wealth creation, accumulation and distribution. Subang Jaya: Pelanduk Publications.
Sadali Rasban. (2006). Personal wealth management for Muslims (PWMM). Singapore: HTHT Advisory Services Pte Ltd.
Imtiazi, I. A. [et al]. (Eds.) (2000). Management of zakah in modern Muslim society. (2nd ed.) Jeddah: Islamic Development Bank, Islamic Research and Training Institute.
Maude, David. (2006). Global private banking and wealth management: the new realities. Hoboken, N.J.: J. Wiley & Sons.
Arif Ali Khan, Tauqir Mohammad Khan (Eds.). (2006). Encyclopaedia of Islamic law. Batu Caves, Selangor : Crescent News.

TK2002 – TAKAFUL AND ACTUARIAL PRACTICES
Mohd. Ma’sum Billah. (2007). Applied takaful and modern insurance: law and practice. (3rd ed.). Petaling Jaya, Selangor: Sweet & Maxwell Asia.
Khorshid, Aly. (2004). Islamic insurance: a modern approach to Islamic banking. New York: RoutledgeCurzon.
Takaful guide 2007. (2007). [S.l.]: Islamic Finance news.
Mohd. Daud Bakar and Engku Rabiah Adawiah Engku Ali (Eds.). (2008). Essential readings in Islamic finance. Kuala Lumpur, Malaysia: Centre for Research and Training.
Engku Rabiah Adawiah Engku Ali, Odierno, Hassan Scott P. (2008). Essential guide to takaful (Islamic insurance). Kuala Lumpur: CERT Publications Sdn. Bhd.

Development of Islamic Finance in Malaysia: A Conceptual Paper

August 22, 2010 Leave a comment

Darwis Abd Razak
School of Management, Universiti Sains Malaysia
11800, Penang, Malaysia
Tel: 04 6533888
Fax: 04 6577448
Email: drwis2002@gmail.com

Mohd Azhar Abdul Karim, PhD
Faculty Business and Economics
Universiti Putra Malaysia
43400, Serdang, Selangor

Abstract
Islamic finance has made significant inroads in the international financial markets that have achieved growing global awareness. Islamic finance now has a presence in over 60 countries, especially in Muslim countries. In the context of financial infrastructure, the Malaysian Islamic financial system is both robust and fast growing. The market has highly diversified players, with Islamic banks, investment banks, takaful companies, development financial institutions, savings institutions, fund management companies, stock brokers and unit trusts. The aim of this paper is provide a conceptual understanding on the growth in Islamic Finance in Malaysia by exploring its current and future development. It is observed that the participation in the Islamic finance process would require the development of a comprehensive and well established Islamic financial system such as: – a wide range of products and services; a good legal system, adequate financial infrastructure with competitive tax structures, low cost of doing business, high standards of business ethics, and conducive living conditions and cultural offerings. It would also need to be supported by adequate human talents that would drive the business and spur innovation. In addition, a strong regulatory regime in the Islamic financial system would be another pull factor. The implication of this paper is to provide a platform for industry players and regulators to highlights the recent developments in Islamic finance in Malaysia.
Key words: Development, Islamic Finance, Malaysia

1.0 Introduction
The Islamic finance industry is now in its fourth decade and, during that period, has developed extremely rapidly. In the past few years, overall market growth has been estimated at between 15-20 percent annually although individual Islamic banks have reported even faster growth (Howard, 2008). According to Bank Negara Malaysia (the Malaysian central bank), the number of Islamic bank branches in Malaysia increased from 126 in 2004 to 766 in 2005. Elsewhere, new Islamic financial institutions (IFIs) are being established rapidly in the industry’s traditional markets in the Gulf Co-operation Council (GCC) countries. Islamic finance is also on the rise in new markets such as Syria, Lebanon, the U.K., Turkey and Canada. In the U.K., for instance, two new Islamic banking license applications are currently being considered by the Financial Services Authority (FSA), following the authorization in the past three years of the Islamic Bank of Britain and the European Islamic Investment Bank (Yong, 2007).

With the rapidly changing international Islamic financial landscape, Islamic finance in Malaysia is now becoming increasingly integrated to the international financial system (Zeti, 2008). The world has witnessed the emergence of Islamic finance, and this phenomenon, as observed has continued to grow strongly. Global asset size for Islamic finance is estimated to be between US$200 and US$400 billion, and growing at 15% per annum. Apart from financial institutions in the Middle East, global banks are also responding to tap the opportunities of this huge pool of capital. Today, the number of Islamic financial institutions worldwide now exceeds over three hundred in seventy-five countries and offering a wide range of Syariah compliant products (El-Qorchi, 2005). This development has taken place in all segments of the Islamic financial system in Malaysia including the Islamic banking and takaful industry, and in the Islamic money and capital markets. These include Sukuk, takaful insurance, murabaha financing, as well as deposits and property funds structured using Syariah principles. In conjunction with this, there are now a large number of diverse players and institutions in the Islamic financial system in Malaysia. There has also been a growing range of products and services being offered. The pace of product innovation has intensified with more sophisticated Islamic financial products including the structured and investment-linked products. These products have become competitive both in terms of product structure and pricing. There has also been enhanced depth of the Islamic financial markets. This has increased the attractiveness of the Islamic financial instruments as an asset class for investment.

As mentioned earlier, the growth rate of Islamic Finance in Malaysia is impressive by any standards. Malaysia, therefore, has the capacity to retain its leadership in global Islamic finance despite the emergence of competition from centers such as Hong Kong and Dubai (Yong, 2007). He said despite the stiff competition that Malaysia was facing, it was way ahead of other countries in terms of product offerings and its sophistication, having been developing the market for the last 40 years. This paper is therefore interested is provide a conceptual understanding on the growth in Islamic finance in Malaysia by exploring its current and future development. The following sections will discuss on the emergence of Islamic finance, operating environment for Islamic finance, barriers to growth and the concluding remarks.

1.2 The Emergence of Islamic Finance
In essence, the purpose of Islamic economics is to identify and establish an economic order that conforms to the precepts of the Islamic scripture and the narrated traditions of its prophet (Chapra, 1992 and Naqvi, 1994). In the contemporary era, the move towards formulating an Islamic economic framework that was in sync with prevailing economic needs took shape in the 1940s, and three decades later efforts to implement them were under way in dozens of countries (Rahnema & Nomani, 1990; Kuran, 1993, 1995; and Malik, 1996). Despite the fact that Islamic economics contains many distinguishing features, Islamic banking is now regarded as the defining characteristic of an Islamic economic system (Kuran, 1995). The term “Islamic financial system” is relatively new, appearing only in the mid-1980s. In fact, all earlier references to commercial or mercantile activities conforming to Islamic principles were designated as either “interest free” or “Islamic” banking. The first modern experiment with Islamic banking was undertaken in Egypt. This pioneering initiative based on the profit-sharing principle was helmed by Ahmad El Najjar. It involved the establishment of a savings bank in the Egyptian town of Mit Ghamr in l963. By 1967, the number of banks operating on the same principles had grown to nine (Siddiqi, l988). Thus, they functioned essentially as saving- investment institutions rather than as commercial banks.

Though similar initiatives were being made in Malaysia and Pakistan, the overall growth of Islamic banking was miniscule until the 1970s when the nascent reawakening was propelled forward by the oil boom of 1974. The ensuing prosperity enjoyed by the predominantly Muslim beneficiaries of this boom witnessed resurgence in the adoption of Islamic values in countries with substantial Muslim populations and a concomitant rejection of the political and economic structures of the West. This rejection was especially evident in the banking sector as many Muslims opted to deposit their money and conduct commercial transactions with Shariah compliant banks (Lewis & Algaoud, 2001). With the passage of time, the role of Islamic financial instruments in the economy, particularly in the banking sector, began to expand.

The increased popularity and visibility of the sector was especially evident in the 1990s when Islamic finance grew rapidly as Islamic and non-Islamic financial institutions devised new instruments and both Muslims and non-Muslim clients alike began to embrace and utilize Shariah compliant features such al-Muddarabah, al-Muassasah etcetera in their daily banking transactions (Zeti, 2007). Furthermore, Islamic banking expanded as western banks themselves (such as HSBC and Citibank) created a number of financial innovations consistent with Syariah in order to capitalize on the increased demand for Islamic capital investment products (Warde, 2000, 2001). The existence of such Islamic features in the Western banking sector served as a catalyst to draw financing from countries such as Saudi Arabia and Kuwait. Consequently, a number of predominantly Islamic countries such as Iran, Malaysia, Pakistan, Saudi Arabia, and Sudan Islamized their banking systems using highly innovative banking initiatives.

The phenomenal growth of the Islamic Financial sector is underlined by the fact that there are now about 300 Islamic financial institutions in 75 countries, holding assets estimated at more than US$300 billion, and another US$400 billion in financial investments. The average growth of the sector is estimated to be approximately 15 percent per annum and it is projected to grow considerably in the foreseeable future, given the amount of oil wealth in much of the Muslim world and a pent-up demand for investment products developed according to the tenets of the Syariah, the legal and ethical code of Islam and the existence of an estimated 1.6 billion Muslims world wide (Beccalli et al., 2006). Thus it is hardly surprising that many multinational financial institutions are increasingly becoming actively involved in the sector. According to Chapra and Ahmed (2002), the conventional banking industry has utilized the services of commercial Islamic banks, Islamic investment companies, Islamic investment banks, insurance companies, asset management companies, e-commerce, and brokers and dealers to cater for current and future needs. As for financial products, the predominant ones are financial instruments based on a diverse set of Islamic principles, insurance products, mutual funds and unit trusts, Islamic bonds, and Sharia compliant stocks (Hasan & Basser, 2003). The growth of the Islamic financial system via the expansion of its banking sector from the historical perspective is captured in Figure 1.

Figure 1:
History of the Industry Development

Development of Industry
Evolving richness in products
1950s • Development of theoretical framework
• Muslim-majority nation independence
60s • Egypt and Malaysia pioneering institutions
• Establishment of OIC (1969)
70s • Islamic Development Bank (1974) and DIB
• One country-one bank setup
80s • Advancement of Islamic products
• Full “Islamiczation” of Pakistan, Sudan and Iran
• Formation of BIMB, Malaysia.
90s • Entry of global institutions e.g. HSBC
00s • Tipping point reached in some markets
• Development of industry building institutions

Sources: Stages of Evolution in Islamic Finance: Islamic Financial Services Industry

The above explication clearly attest to the fact that Islamic finance has been acknowledged to be a viable and competitive form of financial intermediation not only in Muslim countries but also outside the Muslim world through its offering of a wide range of financial products and services (Zeti, 2006). The viability, sustainability and competitiveness of Islamic finance have been mainly due to a number of congealing factors that are both intrinsic and extrinsic in nature. The intrinsic advantages of the Islamic financial system lay in its eschewing of conventional financial tools such as interest which is anathema to the precepts of the Holy Quran. Instead, the system adopted a sharia-based profit-sharing concept in its investment ventures thus spreading risk profiles in a more equitable manner. Figure 2 encapsulates the types of banks and the Islamic financial products offered in the relevant regions.

Figure 2:
Islamic Financial Services: Stages of Evolution in Islamic Finance
Institutions
Products Area
Commercial Islamic Banks Commercial Islamic banking products Guff/Middle East
Takaful Takaful Asia Pacific
Islamic investment companies Mutual funds/unit trust Europe/Americas
Islamic investment banks Islamic Bonds Global/Offshore Market
Asset management companies Syariah – compliant stocks
e-commerce Islamic stock broking
Broker/bankers

Commercial Islamic Banks Commercial Islamic banking products Guff/Middle East
Takaful Takaful Asia Pacific
Islamic investment companies Mutual funds/unit trust
Broker/bankers Islamic Bonds
Syariah – compliant stocks
Islamic stock broking

Commercial Islamic Banks Commercial Islamic banking products Guff/Middle East
Takaful Takaful Asia Pacific
Islamic investment companies

Commercial Islamic Banks Commercial Islamic banking products Guff/Middle East
Source: Aseambankers, World Islamic Funds and Capital Markets Conference, May 2006, Bahrain

1.3 The operating environment for Islamic finance
There are now a large number of diverse players and institutions in the Islamic financial system. There has also been a growing range of products and services being offered. The pace of product innovation has intensified with more sophisticated Islamic financial products including the structured and investment-linked products (Guru et al, 2002). These products have become competitive both in terms of product structure and pricing. There has also been enhanced depth of the Islamic financial markets. This has increased the attractiveness of the Islamic financial instruments as an asset class for investment. The standards are developed by the Islamic Financial Services Board (IFSB) to govern the operations of Islamic financial institutions (Zeti, 2006). The IFSB has, not only, an important role in the harmonization of standards, but also contributes towards the consistent development of Islamic finance across different jurisdictions. Several parts of the world, including in Malaysia, have implemented the prudential standards issued by the IFSB. These standards which have been designed to take into account the unique features specific to Islamic finance will contribute towards ensuring its soundness and stability.

In the Malaysian approach, the Malaysian scholars have applied the concept of bai al-dayn or the sale of debts. The formal definition is: “…the sale of debt as a type of contract in which the creditor sells his payable right upon the debtor either to the debtor either to the debtor… or to a third party. This sale [sic] contract between two parties may be either on the spot or forward basis. It may also be either at a discount price or at the cost price” claimed by Moustapha (2003). The growing role of Islamic finance in mobilizing and channeling funds to productive investment activities across borders contributes to more efficient allocation of funds across borders and facilitates international trade and investment. According to Zeti (2007), greater diversification of risks also contributes towards promoting international financial stability. The more recent developments in Islamic finance is the growing significance of the sukuk market to become an increasingly important component of the Islamic financial system. She added that modern sukuk, sometimes referred to as Islamic bonds, are better described as Islamic investment certificates. This distinction is as crucial as it is important, and it is stressed throughout this pioneering work that sukuk should not simply be regarded as a substitute for conventional interest-based securities. The aim is not simply to engineer financial products that mimic fixed-rate bills and bonds and floating-rate notes as understood in the West, but rather to develop innovative types of assets that comply with Shari’a Islamic law. Conventional bonds that yield interest, or riba, are of course prohibited under Shari’a law. Furthermore, those who buy and sell conventional bonds are rarely interested in what is actually being financed through the bond issue, which could include activities and industries that are deemed haram such as the production or sale of alcohol. Companies that are highly leveraged with bank debt may seek refinancing through issuing bonds, but such companies are not regarded as suitable for Muslim investors.

1.3.1 Developments in the sukuk markets
The year 2007 has seen an exceptional growth of the global sukuk market which expanded by more than 70 percent during the year. New issues during the year reached a record high to about US$47 billion and the outstanding global sukuk market has now surpassed the US$100 billion mark. Despite the more challenging international financial environment arising from the financial crisis that has occurred in a number of the advanced economies in the recent twelve months, the sukuk market while also affected, it has been to a lesser extent. Up until June 2008, it has held its ground with a total global issuance now exceeding US$10 billion (refer Figure 3 and 4).

Figure 3:
Sukuk Market in Malaysia

Figure 4:
Sukuk Types in Malaysia

With greater recognition of the sukuk market as a competitive and attractive form of financing, the global sukuk market is expected to continue its growth going forward. The International Islamic financial hub evolving in Malaysia is supported by five pillars as discussed below.

Pillar 1: Sukuk Origination
Following the first ever sukuk in the world that was issued in Malaysia in 1990, Malaysia has now developed a deep, liquid and vibrant sukuk market. Recently, the largest sukuk ever was raised in the Malaysian sukuk market in 2007 (Bank Negara, 2008). The magnitude was approximately RM15 billion or about USD5 billion equivalent. Despite being issued during the height of the sub-prime crisis, it attracted huge demand and was oversubscribed by more than two times. Sukuk origination has thus been identified as one of the important pillars of the Malaysian Islamic financial system. As of the end of 2007, more than 60 percent of the outstanding global sukuks originated from Malaysia. It has been increasing by an annual rate of about 20 percent and it accounts for about 56 percent of the outstanding bond market in Malaysia.

Pillar 2: Islamic Fund and Wealth Management
The sukuk market has been an important source of financing for productive investment activities, while for investors it provides potential for diversification into new asset classes. The second pillar in the Malaysia Islamic financial hub is the Islamic fund and wealth management industry. Malaysia is centrally located in the ASEAN region that has a population of 570 million. It is also positioned centrally between the major Asian economies of India, China, Japan and Korea. Malaysia has always been a highly open economy in trade and investment activities and has been a major recipient of foreign direct investment for more than a hundred years. As a destination for financial investment, the Malaysian capital market offers a wide range of world class financial products. More than 85 percent of the listed companies in the equity market are Shariah compliant, representing about 60 percent of total market capitalization. Other investment opportunities include in Shariah-compliant real estate investment trusts (REIT), in unit trusts and in the Islamic exchange traded fund (ETF).

Pillar 3: International Islamic Banking
The Islamic financial system has also been extensively liberalized to allow for the entry of foreign Islamic financial institutions that offer both domestic and international banking business. In addition, the foreign equity ceiling in Islamic financial institutions has been raised to a maximum of 49 percent as part of the effort to promote strategic alliances. The Islamic banking business in foreign currencies can be conducted by the international currency business units (ICBUs) that may be set up within existing financial institutions and the international Islamic banks. Such international Islamic banks may be established as either a branch or a subsidiary. Currently, about 16 percent of total assets in the Malaysian banking system are Shariah compliant.

Pillar 4: International Takaful Business
The fourth pillar is takaful and retakaful business. There are now eight takaful operators, several of which are joint ventures with foreign shareholding that conduct both domestic and international takaful business. In addition, licenses have been granted to three reinsurance players to undertake retakaful business in Malaysia. Several existing takaful operators have set up international currency business units (ICBUs) and one new international takaful company has been licensed as an international takaful operator to conduct foreign currency takaful business.

Pillar 5: Human Capital and Thought Leadership
The fifth pillar is human capital and thought leadership. Several important human capital development projects have been implemented to foster Islamic finance thought leadership and to create a supply of talent for the Islamic finance industry. Having a sufficient pool of the talent and expertise has been key to the development of the Islamic financial hub in Malaysia. The International Centre for Education in Islamic Finance (INCEIF) which has an international faculty and students from more than 40 countries is focused on programmes for Islamic finance professionals and specialists to meet the human capital requirements of the global Islamic financial services industry.

1.4 Barriers to Islamic Financial
The prospects for the growth of Islamic finance look bright. Nonetheless, there are several obstacles currently preventing faster uptake of Islamic financial products. These include the issue of regulatory capital and relative risk weightings and the Islamic Financial Services Board (IFSB) guidance; a lack of human capital; piecemeal financial and legal architecture; weaknesses in financial reporting and transparency; and the overarching problem of a lack of Shariah convergence. These barriers are discussed below:-

1.4.1 Risk weighting
In 2006, the IFSB issued two standards – the Capital Adequacy Standard (CAS) and the Guiding Principles of Risk Management for Institutions offering Islamic Financial Services. CAS offers guidance on the requirements for minimum capital adequacy to cover for credit, market and operational risks of IFIs that is equivalent to the Basel II Capital framework for conventional banking institutions. According to the IFSB, the key difference between CAS and Basel II provisions is the computation of an institution’s risk-weighted capital ratio (RWCR). In Islamic banking, given that the risks on assets financed by profit-sharing investment account holders do not represent risk to the capital of the institution, the CAS allows risk-weighted assets that are funded by the account holders to be deducted from the institution’s total risk-weighted assets in the calculation of RWCR.

1.4.2 Human capital
Human capital development is crucial, as the current lack of qualified young Islamic bankers looks set to hamper the development of the sector should it not be addressed. In part, this low investment in the industry stems from the fact that the sector lacks a global industry body to oversee standardization of continuous education and training. The lack of human capital in the sector affects all regions, including nascent markets such as the U.K. Training of Islamic bankers has not kept pace with the rapid growth of the sector and, as a result, there are shortages throughout the industry. The two centers for training have been KFH and Bank Islam Malaysia, which between them have been responsible for training many Islamic bankers. In 2006, for example, Bank Negara set up an RM500m endowment fund to support The International Centre for Education in Islamic Finance (INCEIF), with the main objectives of making Malaysia the leading center for Islamic finance education and developing human capital for the global Islamic finance industry. Similarly in 2006, The Central Bank of Bahrain set up a US$4.6m Islamic Finance Education scheme in cooperation with eight IFIs based in Bahrain.

1.4.3 Regulation and legal frameworks
While rising demand for Islamic finance has helped lead to handsome returns for key players, some experts in the industry are concerned that the rapid proliferation of IFIs has not been matched by development in the Islamic finance regulatory and supervisory architecture and infrastructure, especially in the GCC states. “One thing that worries me,” explains Ali Al-Ghannam, Head of International Real Estate at Kuwait Finance House (KFH), “is that the IFIs should be controlled better to avoid any bubble in the industry. There are a huge number of new IFIs being established in the market. Many banks and traditional companies are converting to Islamic finance. Islamic banking windows at global majors are proliferating. Many of these institutions are not going after the concept itself, but are following the flow of money.

1.4.4 Financial reporting
The quality and transparency of financial reporting and disclosure in the Islamic finance industry differs significantly from one regulatory jurisdiction to another. There is a general concern in the market and among those interviewed that IFIs, with the notable exceptions of those operating in the U.K., Malaysia, Bahrain and perhaps Turkey, should have more rigor in their disclosure and financial reporting, especially to the general market.

1.5 Concluding Remarks
Islamic finance has made significant inroads in the international financial markets that have achieved growing global awareness. Islamic finance now has a presence in over 60 countries, especially in Muslim countries. In the context of financial infrastructure, the Malaysian Islamic financial system is both robust and fast growing. The market has highly diversified players, with Islamic banks, investment banks, takaful companies, development financial institutions, savings institutions, fund management companies, stock brokers and unit trusts. The aim of this paper is provide a conceptual understanding on the growth in Islamic Finance in Malaysia by exploring its current and future development. It is observed that the participation in the Islamic finance process would require the development of a comprehensive and well established Islamic financial system such as: – a wide range of products and services; a good legal system, adequate financial infrastructure with competitive tax structures, low cost of doing business, high standards of business ethics, and conducive living conditions and cultural offerings. It would also need to be supported by adequate human talents that would drive the business and spur innovation. In addition, a strong regulatory regime in the Islamic financial system would be another pull factor. The implication of this paper is to provide a platform for industry players and regulators to highlights the recent developments in Islamic finance in Malaysia.

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ANALISA KRITIS PRAKTEK AKUNTANSI KREATIF DALAM KONTEKS BUDAYA ORGANISASI PT. BUMI DAN PANDANGAN ISLAM DALAM MENYIKAPI PRAKTEK TERSEBUT

August 22, 2010 Leave a comment

Critical Analysis of the Creative Accuntancy in relation to Corporate Culture of PT Bumi and Islamic Concepts

Widarto
Mahasiswa Program Magister Sains Akuntansi, PPSUB

Zaki Baridwan dan Made Sudarma
Dosen Jurusan Akuntansi, FE UB

ABSTRAK

Tuntutan pasar pada perusahaan untuk membuat keuntungan sering menyebabkan praktek akuntansi kreatif, sehingga terjadi penurunan kualitas laporan keuangan yang dihasilkan. Kebijakan yang diambil oleh manajemen selalu menguntungkan pihak majority shareholder sebagai controlling. Budaya kerja telah mempengaruhi praktek akuntansi kreatif perusahaan, hal ini disebabkan adanya tuntutan dan campur tangannya direksi dalam akuntansi. Praktek ini bertujuan untuk mengiliminasi tindakan direksi agar transaksi yang mereka jalankan sesuai dengan kaidah akuntansi yang benar. Dengan demikian bagian akuntansi harus berusaha menyiapkan adanya data-data pendukung transaksi tersebut. Akuntansi kreatif yang dijalankan seputar manajemen laba dan SPE.
Praktek manajemen laba maupun SPE lebih mengarah pada praktek yang mementingkan pihak manajemen yang didalamnya ada direksi sebagai controlling. Perilaku ini tidak terlepas dari keberadaan para manajer yang diangkat dan direkrut oleh direksi, sehingga dalam pemahaman amanah, manajer merasa harus loyal pada direksi.
Namun jika dilihat dari hakekat amanah yang datangnya dari Allah, maka perilaku manajer maupun direksi diatas telah menunjukan perilaku yang tidak sesuai dengan hakekat amanah yang sesungguhnya. Pengkhianatan amanah merupakan tindakan yang dilarang agama, dan larangan ini hukumnya adalah haram jika dikerjakan.

Kata kunci : agency theory, praktek akuntansi kreatif, dan perilaku amanah.

ABSTRACT

Profit management and SPE have induced any practices which are oriented on the management interests, in which the direction as cotrolling agent. These behavior are due to the manager promoted by the direction, so their thinking about “amanah” tend to the direction interest.
In relation to the “amanah” phylosophy which is come from Allah swt., an above hehavior of manager and direction suggest any unsuitable behavior. Discrepancy actions from the amanah are haram.

Keywords: creative accuntancy, corporate culture

PENDAHULUAN

Tuntutan pasar pada perusahaan untuk membuat keuntungan sering menyebabkan penurunan kualitas laporan keuangan yang dihasilkan. Tekanan ini mempengaruhi manajemen untuk dapat menyajikan lapor-an keuangan dengan posisi laba. Tujuan pencapaian laba ini menurut (Triyuwono 1997) menjadi mapan ketika suatu organisasi disamakan dengan mesin, sehingga organisasi seolah-olah bagaikan mesin yang terdiri dari struktur formal, diskripsi kerja yang kaku, yang ditujukan untuk mencapai laba yang maksimal. Akibatnya realitas kehidupan manusia menjadi mekanistik dan tidak berbeda dengan mekanisme kerja mesin.
Organisasi bisnis merupakan sebuah pertemuan dari berbagai macam kontrak kepentingan, sehingga di dalam proses akuntansi, ada dimensi politis yang terlibat didalamnya. Sehingga dalam praktek akuntansinya telah memunculkan akun-tansi kreatif, dan akuntansi kreatif ini tidak di pahami oleh para akuntan saja melain-kan juga di manfaatkan oleh pihak-pihak yang mempunyai kepentingan dan kekuat-an untuk menggunakannya. Praktek akun-tansi kreatif di Indonesia menurut Hassim (2004) tidak terlepas dari keberadaan pendirian Perseroan Terbatas yang ber-cirikan : (1) dominasi anggota keluarga dalam mengelola perusahaan; (2) penipuan (vihicle) yang dilakukan perusahaan, sehingga muncul adagium umum bahwa “Perseroan Terbatas boleh kolaps tapi owner tetap mengkilap.”
Keunikan Perseroan Terbatas di Indonesia ini telah merpengaruhi perma-salahan keagenan perusahaan. Dengan pendekatan budaya dan melihat realitas kehidupan sehari-hari di perusahaan, maka penelitian ini akan melihat sejauh mana budaya perusahaan mempengaruhi praktek akuntansi kreatif di suatu perusahaan.
Rumusan masalah yang ingin dijawab dalam penelitian ini adalah: bagaimana proses terciptanya praktek akuntansi kreatif dalam konteks budaya organisasi PT. BUMI, dan bagaimana pandangan Islam terutama dari sisi amanah terhadap praktek akuntansi tersebut.
Seperti halnya penelitian terdahulu yang dilakukan Eddy R. Rasyid pada tahun 1998, bahwa budaya mempengaruhi prak-tek akuntansi pada suatu perusahaan, maka peneliti berusaha untuk menggunakan nilai-nilai partisipasi yang ada dalam perusahaan ini yang tujuannya untuk mengetahui hubungan antara budaya kerja dengan praktek akuntansinya, terutama dalam praktek akuntansi kreatif.
Penelitian ini diharapkan dapat mem-beri gambaran tentang hubungan budaya kerja dengan praktek akuntansi kreatif di perusahaan, sehingga dapat dianalisis relevansinya dengan pola agency theory Selain itu penelitian ini diharapkan dapat memberi kontribusi atas pengembangan pengetahuan akuntansi di Indonesia, dan dapat digunakan sebagai referensi bagi penelitian selanjutnya, serta dapat menam-bah wawasan terhadap dunia akuntansi yang selalu mengalami perkembangan.

KERANGKA KONSEP

Akuntansi dan Akuntansi Kreatif
Akuntansi selama ini telah dipahami sebagai seperangkat prosedur rasional yang dijalin untuk memenuhi kebutuhan infor-masi yang berguna bagi pengambil keputusan dan pengendalian yang rasional (Watts dan Zimmereman 1986; Horngren dan Foster 1991) dalam (Triyuwono (2000). Pemahaman seperti ini menye-babkan akuntansi diibaratkan seperti tehnologi yang keras, kongkret, kasat mata dan bebas dari nilai-nilai suatu masyarakat yang menyusun dan mempraktekannya.
Namun dalam perkembangannya akuntansi telah dipahami dalam konteks yang lebih luas yaitu dalam kontek organisasi dan sosial (Triyuwono, 2000). Dengan demikian akuntansi mulai dipandang sebagai suatu entitas yang terus berubah, tidak dipandang sebagai suatu entitas yang statis dan sudah selesai, melainkan sebagai suatu yang mengalami perubahan terus-menerus tergantung ling-kungannya (Hopwood, 1983, 1987,1990; Morgan 1988; Miller dan Napier 1993) dalam (Triyuwono 2000).
Akuntansi dalam praktek nyata dalam organisasi perusahaan telah membantu manajemen dari suatu organisasi untuk melihat secara jelas fenomena abstrak dan konseptual yang tidak pernah mereka pikirkan sebelumnya, misalnya pemaknaan laba dan biaya yang dalam praktek akuntansi dewasa ini merupakan simbol-simbol umum dan secara lazim memang diterima (Triyuwono, 2000).

Definisi Akuntansi Kreatif
Dalam beberapa pendapat tentang akuntansi kreatif, misalnya Breton, et al. (2000); Suwardjono (1990); Naser (1993) dan Amat et al. (2000) adalah sebagai proses pemanipulasian laporan akuntansi dilakukan dengan cara mencari celah-celah peraturan akuntansi demi keuntungan mereka, hal ini mempengaruhi cara pemi-lihan tolok ukur laporan dan pengungkapan laporan tersebut sehingga terjadi transfor-masi dari aturan sebenarnya, mereka mem-persiapkan pula bagian-bagian laporan yang lebih disukai, dan mengaturnya sedemikian rupa sehingga dihasilkan lapor-an akuntansi yang sesuai keinginan, ketimbang membuat laporan berdasarkan cara yang netral dan sesuai prosedur. Dari definisi ini, setidaknya dua hal pokok dalam menyikapi akuntansi kreatif yaitu, dalam kontek manajemen laba dan pere-kayasaan laba dengan cara SPE.
Manajemen laba ini merupakan re-fleksi sikap oportunis manajer untuk memperoleh keuntungan bagi dirinya sen-diri. Sedangkan persekayasaan laba dengan SPE mengarah pada unsur mani-pulasi data-data akuntansi. Praktek SPE ini banyak dilakukan oleh perusahaan-peru-sahaan kelompok besar, karena praktek ini akan melibatkan beberapa perusahaan afiliasi untuk mengatur transaksinya.
Istilah SPE itu sendiri mencuat di Indonesia ketika diketahui STT yang membeli saham PT Indosat menggunakan SPE yaitu Indonesian Communicate Limited (ICL) yang berkedudukan di Mauritus. Timbul kontroversi sekitar penggunaan SPE yang dibentuk hanya beberapa hari sebelum penutupan tran-saksi. SPE juga mengemuka pada saat perusahaan raksasa Amerika Enron meng-alami kebangkrutan tahun 2001.
Dalam perkembangan teori, Istilah SPE tidak memiliki definisi yang baku. Hartgraves et al. (2002) menyimpulkan bahwa SPE merupakan definisi teknis tentang instrumen keuangan yaitu: (1) SPE sebagai subsidiary; (2) SPE sebagai sekuritas; (3) SPE sebagai perusahaan sponsor; (4) SPE sebagai partnership atau joint ventures; (5) SPE sebagai instrumen khusus yang dibentuk untuk tujuan khusus dalam keuangan perusahaan.
Tidak mengherankan, bahwa dalam pelaksanaannya, SPE seringkali dinamakan sebagai off-balance sheet. Karena secara pencatatan, tidak tercatat dalam balance sheet parent company, baik sebagai aset maupun hutang (Hartgraves el.al 2002).

METODE PENELITIAN

Untuk mendukung penelitian ini, metodologi penelitian yang digunakan adalah metodologi etnografi kritis. Menu-rut Rudkin (2002) penerapan metodologi etnografi dalam kajian akuntansi telah menempatkan peneliti dalam konteks situsnya, serta mengasah kepekaan mereka terhadap pemahaman budaya yang khas disana.
Untuk merefleksi personal peneliti telah menemui tiga orang informan yaitu: manajer keuangan, manajer akuntansi dan manajer internal kontrol. Namun ketiga informan ini tidak bersedia untuk diungkap identitasnya secara detail, maka informasi yang mereka sampaikan dalam penelitian ini menjadi informasi bersama, walaupun dalam proses pengumpulan data dilakukan pada tempat dan waktu yang berbeda. Untuk itu peneliti tidak menyebut nama informan satu persatu dengan jelas.
Adapun teknik yang digunakan dalam pengambilan data, dilakukan dengan menggunakan Sensory experience dan communicative experience (Sawarjuwono, 2000). Sedangkan strategi yang dilakukan dalam pengumpulan data adalah dengan cara: interaksi langsung, melibatkan diri dalam pekerjaan subjek dan dengan wa-wancara.
Analisa data dilaksanakan sejak pe-ngumpulan data dilaksanakan sampai pe-nulisan penelitian ini berakhir. Informasi dan data yang berhasil dikumpulkan, dikelompokan berdasarkan subjek. Untuk mendukung informasi diatas, maka jika dimungkinkan informasi tersebut dico-cokan dengan data-data keuangan yang ada di laporan keuangan yang sudah diaudit oleh Akuntan Independen.
Waktu pengumpulan data tidak ditentukan dengan khusus dan formal. Kadang penulis berdiskusi sambil makan siang, diskusi pada istirahat siang, atau pada saat pulang kerja bersana-sama. Namun yang paling efektif yaitu interaksi langsung pada saat informan melakukan pekerjaaanya, sehingga penulis terlibatan langsung dalam proses akuntansi yang mereka jalankan.

Sejarah Singkat Perusahaan
Pada mulanya, PT. BUMI menga-dakan kerja sama dengan perusahaan terkemuka dari Jepang dalam jangka waktu 5 (lima) tahun dari tahun 1974 hingga tahun 1979, dan setelah masa kontrak berakhir pada (1979), perusahaan mela-kukan sendiri proses produksinya. Namun untuk pemasarannya, masih melakukan kerja sama dengan pihak asing.
PT. BUMI merupakan salah satu peru-sahaan publik di Indonesia dan perusahaan ini berada di bawah kelompok usaha JAGAT RAYA yang memiliki total anak perusahaan sekitar 20 perusahaan. Peru-sahaan anak ini menyebar di beberapa propinsi di Indonesia dan bahkan ada yang di Amerika, Eropa dan Singapura.

Pengorganisasian Perusahaan
Perusahaan memiliki struktur orga-nisasi sendiri dan struktur organisasi grup (bayangan). Pengelolaan perusahaan ba-nyak diperankan oleh organisasi bayangan yang di klaim bentukan dari para pendiri perusahaan yang terdiri dari lima ber-saudara, dan sebutan yang melekat pada orang per orang ini adalah “direksi”. Selain lima direksi diatas masih ada dua orang profesional yang menjabat sebagai direktur grup yaitu seorang “Direktur Akuntansi” dan “Direktur Personalia”. Namun kedua direktur ini tidak berhak menggunakan sebutan direksi. Organisasi bayangan ini tidak dibentuk secara notariil.
Wewenang direktur perusahaan hanya terbatas pada urusan pekerjaan, sedangkan urusan yang berhubungan dengan ke-uangan 100% urusan para direksi. Wewenang direksi ini sangat dominan, sehingga keberadaan direktur perusahaan hanya sebagai manajer.
Cash flow perusahaan dikelola lewat grup (kantor pusat) dengan harapan direksi dapat memantau secara langsung, dan kantor pusat ini mirip Bank-nya peru-sahaan grup ini. Untuk kebenaran transaksi dan saldo pihak perusahaan dan kantor pusat melakukan rekonsolidasi dengan cara telepon.

Budaya dalam Perusahaan
Karyawan di rekrut sesuai dengan kebutuhan perusahaan. Proses seleksinya ditangani langsung oleh direksi yang membutuhkan. Setelah semuanya selesai, maka karyawan tersebut disuruh meng-hadap direktur personalia. Baru pihak personalia menyiapkan kontrak-kontrak dan juga menjelaskan gaji dan fasilitas yang akan diberikan. Pada intinya besar gaji dan fasilitas yang ditetapkan oleh direksi dan direktur personalia ini berbeda, sehingga muncul istilah gaji kedua.
Budaya kerja di perusahaan ini me-munculkan kerajaan-kerajaan kecil, se-hingga untuk dapat masuk pada bagian-bagian tertentu harus mengatasnamakan perintah direksi. Perintah direksi dijadikan otoritas yang paling benar dan harus dilakukan.
Budaya kerja ini tidak terlepas dari sejarah panjang grup perusahaan JAGAT RAYA. Pada awalnya grup ini didirikan sebagai bisnis keluarga dengan menjual hasil laut Indonesia ke luar negeri, dan pada saat itu pengiriman dilakukan dengan lewat pesawat terbang. Pada saat ini walaupun organisasi bisnis sudah ber-bentuk PT, tetapi secara substansi adalah perusahaan perorangan/keluarga yang melibatkan banyak anggota keluarganya.

Praktek Akuntansi dan Akuntansi Kreatif di Perusahaan
Pengangkatan direktur akunting grup diatas menunjukan adanya Consern yang sangat tinggi terhadap akuntansi, sehingga tiap ada pemasalahan di perusahaan, semua direksi selalu melibatkan direktur akunting tersebut. Direktur akunting ini terkesan sebagai dewa penolong, kondisi ini ditunjang oleh performan orang yang menjabatnya yang mempunyai watak halus, sopan, tidak pernah marah dan selalu berkata bisa.
Permasalahan akuntansi perusahaan banyak disebabkan adanya campur tangan direksi dalam mengatur perusahaan, se-hingga untuk mengiliminasi transaksi tersebut bagian akuntansi melakukan akun-tansi kreatif. Akuntansi kreatif ini dijalan-kan agar transaksi tersebut seolah-olah benar dan legal.
Adapun praktek akuntansi kreatif yang mereka jalankan dalam manajemen laba adalah: (1) Menggabungkan beberapa perusahaan; (2) Kapitalisasi saldo laba; (3) Menghindari pajak final; (4) Menginflasi Modal Kerja dan (5) Penyusunan Proyeksi secara Optimis. Sedangkan praktek SPE yang dijalankan adalah : (1) Tidak meng-konsolidasi SPE; (2) Pengakuan sepihak atas pendapatan; (3) Meningkatkan pen-jualan ekspor; (4) Menstabilkan harga saham; dan (5) Melakukan window dressing.
Praktek akuntansi kreatif untuk manajemen laba ini banyak dilakukan pada saat perusahaan akan melakukan go publik dan right issue. Sedangkan praktek SPE dipraktekan pada saat perusahaan ingin mempertahankan harga saham di pasaran.

Penerapan Agency Theory Dalam Budaya Perusahaan
Dengan penjualan saham pada masya-rakat sebesar 20%, maka pihak direksi masih dapat mempertahankan kendali atas perusahaan-perusahaannya. Kepemilikan saham mayoritas oleh direksi ini menim-bulkan masalahan keagenan antara agent dengan owners, antara controlling sebagai mayority shareholders dengan publik sebagai minority shareholders, dan antara direksi sebagai mayority shareholder dengan kreditor dan pemerintah.
Direksi telah mempertahankan kendali perusahaan dengan jabatanya sebagai Presiden Komisaris dan Presiden Direktur, dengan demikian beberapa kebijakan yang diambil selalu menguntungkan pihak mayority shareholder. Kebijakan itu misal-nya: (1) Basic self-dealing, yaitu kondisi dimana seseorang melakukan transaksi atas nama perusahaan, tetapi untuk kepentingan pribadi atau perusahaan sendiri. (2) Executive compensation, yakni pemanfaat-an jabatan untuk menikmati fasilitas yang berlebihan. (3) The taking of corporate or shareholder property, yakni menggunakan aset perusahaan untuk kepentingan pribadi dan (4) Corporate action with mixed motive, suatu kondisi dimana pengambilan keputusan oleh manajemen tidak jelas untuk kepentingan siapa, apakah kepen-tingan perusahaan atau kepentingan pribadi.
Atas suatu jabatan, sebenarnya meng-emban tugas yaitu duty of loyalty, dute of care and diligence dan fiduciary duty. Ketiganya secara ringkas mengatakan bahwa direktur, komisaris pejabat publik ataupun manajer, tidak boleh mengambil keuntungan dari orang yang memberi kepercayaan (beneficiaries) melalui tindak-an yang menipu atau tidak adil. Untuk itu bagaimana pandangan Islam khususnya ajaran amanah terhadap praktek akuntansi kreatif diatas.

Tinjauan Amanah dalam Praktek Keagenan di Perusahaan

1. Praktek Self-dealing
Pihak direksi sering melakukan self-dealing berkaitan dengan perusahaan afi-liasi grup. Transaksi ini akan sangat merugikan pihak investor, karena seharus-nya dana tersebut dapat digunakan untuk meningkatkan deviden karena peningkatan laba perusahaan. Praktek ini mengakibat-kan munculnya ketidak adilan yang dilakukan oleh manajemen. Dengan demi-kian perilaku manajemen ini telah meng-khianati amanah, baik amanah dari pemilik minoritas saham atau amanah dalam menjalankan tugas yang dipercayakan pada manajemen tersebut.

2. Take Over Aktiva Tetap Secara Intern
Take over aktiva tetap perusahaan grup dilakukan dengan penetapan harga beli yang lebih tinggi dari harga pasar. Walaupun proses penetapan nilai pem-belian ini telah dilakukan oleh perusahaan penilai. Namun untuk meminta keterangan harga suatu aktiva di daerah setempat sangatlah mudah diatur, sehingga nilai aktiva tersebut masih sangat meng-untungkan direksi.
Prosedur melakukan take over juga telah dilakukan sesuai dengan peraturan yang ada misalnya: harus disetujui oleh mayoritas dari pemegang saham inde-penden (minority shareholders) dan pemegang saham mayoritas tidak boleh ikut dalam voting tersebut. Namun nam-paknya ketentuan ini dinilai tetap mem-punyai kelemahan, karena dalam RUPS (Rapat Umum Pemegang Saham) minority shareholder tidak ada yang datang. Minority shareholder mempercayakannya pada direksi, sehingga untuk memenuhi qorum rapat yang disyaratkan pihak direksi minta minority shareholder memberi kuasa pada orang yang di tunjuk oleh direksi, dan hasilnya sudah bisa dipastikan menyetujui hasil rapat.
Keterbukaan dan keadilan atas pe-nyampaian informasi oleh manajemen telah disampaikan dengan peraturan yang berlaku. Informasi yang disampaikan ini juga relevan, karena memuat langkah-langkah yang akan diambil perusahaan yang dapat diketahui dengan jelas oleh investor lewat publikasi di dua media. Prinsip-prinsip amanah dalam menjalankan tugasnya oleh manajemen telah dijalankan dengan baik dan benar, namun kenya-taannya dalam keputusan rapat masih selalu menguntungkan pihak mayoritas pemegang saham. Kondisi ini menggam-barkan bahwa sosialisasi peraturan pada publik harus lebih ditingkatkan lagi.

Tinjauan Amanah dalam Praktek Manajemen Laba

Praktek manajemen laba ini ber-hubungan dengan pengaturan laba, namun tidak mempengaruhi arus kas masuk perusahaan.

1. Menggabungkan Beberapa Perusahaan Anak
Menggabungkan beberapa perusahaan anak untuk tujuan go publik dilakukan agar perusahaan dapat membukukan asset lebih besar, operasional lebih bagus dan juga laba lebih besar. Kenaikan laba ini diharapkan dapat meningkatkan laba per saham yang mempengaruhi harga saham.
Praktek ini telah disajikan dengan transparan baik dalam laporan keuangan ataupun dalam prospektus yang diterbitkan oleh perusahaan, sehingga informasi ini tidak bertentangan dengan peraturan yang ada, dan tidak adanya asimetri informasi. Perilaku manajemen ini merupakan per-wujudan sifat amanah manajemen pada pemegang saham dan calon pemegang saham.

2. Kapitalisasi Saldo Laba menjadi Modal Saham
Kapitalisasi saldo laba menjadi modal saham ini dianggap sebagai langkah yang mengoptimalkan kekayaan direksi atas perusahaannya. Praktek kapitalisasi ini juga merupakan hak dari para pemegang saham untuk menjalankannya. Namun di-reksi menggunakan tehnik kapitalisasi ini untuk menghindari pajak final yaitu dengan mengalihkan saham direksi pada perusahaan holding yang disiapkan terlebih dahulu oleh direksi.
Langkah manajemen ini juga meru-pakan salah satu perwujudan dari sifat amanah yang diperuntukan pada pemegang saham. Namun pengalihan modal saham pada perusahaan holding jika ditujukan semata-mata untuk penghindaran pajak final merupakan tindakan yang tidak amanah, terutama amanah pada maka hal demikian merupakan wujud dari pengkhianatan sehubungan dengan wewenang dan jabatan yang dipercayakan oleh manajemen pada pemerintah dan pada masyarakat.

3. Menginflasi modal kerja untuk direksi
Menginflasi modal kerja untuk direksi ini diharapkan dapat memberi gambaran atas keberhasilan manajemen dalam me-ngelola perusahaan, sehingga direksi akan memberikan nilai tambah atas prestasi kerjanya. Mengingat peningkatan modal kerja perusahaan diartikan direksi sebagai tingkat keuntungan perusahaan, maka manajemen berupaya untuk meningkatkan modal kerja ini sebagai prestasi kerjanya.
Langkah manajemen ini merupakan salah satu dari upaya manajemen untuk mementingkan dirinya sendiri, agar presta-si yang bagus ini mendapat kompensasi bonus yang lebih tinggi. Perilaku mana-jemen ini merupakan wujud dari peng-khianatan amanah yang di berikan direksi untuk kepentingan dirinya sendiri.

4. Penyusunan proyeksi secara optimis
Proyeksi keuangan merupakan salah satu syarat pertimbangan persetujuan kon-trak dengan pihak perbankan yang disiap-kan oleh perusahaan. Dengan menyusun proyeksi secara optimis, maka diharapkan permohonan kredit dapat disetujui. Penyu-sunan proyeksi secara optimis ini juga sah-sah saja untuk dilakukan, karena pihak bank juga melakukan analisa atas proyeksi tersebut. Namun pihak perusahaan (direksi maupun manajer) dapat memberikan logika yang masuk akal dengan data-data yang dapat meyakinkan pihak bank. Peri-laku manajemen ini telah berhasil diman-faatkan untuk mendapatkan dana yang diinginkan perusahaan.
Namun selama tidak terjadi perma-salahan penungga’an angsuran dan pemba-yaran biaya bunga, maka tidak ada pihak yang dirugikan. Namun penyampaian informasi yang tidak semestinya ini dan ditunjang lagi dengan situasi krisis yang terjadi tahun 1977 yang menyebabkan diketahuinya jaminan yang tidak memadai, maka akan menimbulkan masalah perusahaan dengan para kreditor.
Penyampaian berita menyesatkan oleh perusahaan pada pihak kreditor khususnya perbankan telah mengidentifikasikan seba-gai sifat tidak amanah dalam menjalankan tugas. Hal yang demikian merupakan bentuk pengkianatan amanah yang diberi-kan padanya.

Tinjauan Amanah atas Praktek SPE

Praktek akuntansi kreatif dengan cara SPE meliputi: tidak mengkonsolidasi SPE, meningkatkan penjualan ekspor lewat SPE, menstabilkan harga saham lewat SPE dan melakukan window dressing dengan SPE. Praktek SPE ini dalam tinjauan amanah dapat di jelaskan sebagai berikut.

1. Tidak Mengkonsolidasi SPE
Dalam Prinsip Akuntansi Berterima Umum konsolidasi diatur atas perusahaan dan anak perusahaan dengan kepemilikan lebih dari 50%, baik langsung maupun tidak langsung. Namun jika tujuan SPE dibentuk untuk tujuan penggelembungan aktiva, menyembunyikan kewajiban dan juga meningkatkan laba, maka hal demi kian akan menyesatkan pemakai laporan keuangan. Transaksi ini sering dilakukan dengan tujuan untuk menyajikan informasi keuangan agar kelihatan besar, sehat dan juga bagus, dengan jalan memasukan informasi tidak benar. Ketidak benaran informasi ini bisa disebabkan adanya pene rimaan hutang dicatat sebagai pendapatan lain-lain.
Pada dasarnya para investor melaku kan investasi pada perusahaan ini juga secara tidak langsung melihat keberadaan grup perusahaan tersebut. Dengan demi kian pembelian saham perusahaan secara substansi juga membeli grup perusahaan tersebut. Dengan demikian transaksi intern perusahaan untuk menguntungkan salah satu perusahaan dan merugikan perusahaan grup lainnya tidak memberi nilai tambah atas kepemilikan saham tersebut bagi investor.
Praktek transaksi intern ini merupakan pembohongan yang dilakukan perusahaan pada para investornya. Secara konsolidasi praktek ini bisa jadi menurunkan asset perusahaan, karena peningkatan laba pada salah satu perusahaan afiliasi dengan merugikan perusahaan afiliasi dalam grup perusahaan akan menambah pajak dibayar perusahaan secara grup. Dalam sisi lain mengorbankan pengakuan pendapatan atau penerimaan laba perusahaan malah mengalami penurunan. Penurunan ini di-sebabkan adanya inflasi laba atas transaksi intern yang menimbulkan adanya pajak penghasilan, sedangkan pihak afiliasi beban atas transaksi tersebut tidak dapat mengurangi pajak yang dibayar, sehingga secara total terjadi kelebihan bayar pajak jika transaksi itu benar-benar dilakukan oleh masing-masing perusahaan.
Transaksi SPE ini jelas-jelas suatu pelanggaran, baik pelanggaran dalam pe-nyampaian informasi maupun pelanggaran dalam hal transaksi keuangannya. Pihak yang dirugikan adalah para investor dan juga pemerintah dan salah satu penyebab kebangkrutan perusahaan adalah praktek SPE. Dalam tinjauan amanah penyampaian berita bohong yang disampaikan oleh para manajer yang dipercaya, dan mereka telah menyalah gunakan amanah ini dengan cara memanipulasi informasi.

2. Pengakuan Sepihak atas Penda-patan Bunga Afiliasi
Dikatakan secara sepihak, karena pe-rusahaan mengakui adanya pengeluaran sejumlah dana pada pihak afiliasi, namun dana tersebut sebenarnya digunakan oleh direksi untuk investasi dan setoran modal pada perusahaan barunya. Praktek ini bagi perusahaan afiliasi tidak mencatat piutang tersebut.
Manajemen melakukan pelanggaran sehubungan dengan pembebanan sepihak atas pendapatan bunga tersebut. Direksi melakukan pelanggaran karena menggu-nakan dana publik atau dana perusahaan untuk kepentingan pribadinya, yaitu investasi pribadi. Praktek demikian jelas-jelas merupakan pelanggaran amanah.

3. Menginflasi Penjualan Ekspor ke SPE
Transaksi ini tidak mempunyai efek material berupa arus kas masuk yang dapat meningkatkan pembelanjaan perusahaan. Namun transaksi ini dapat digunakan manajemen sebagai dasar penerbitan surat hutang perusahaan. Dengan demikian proses menginflasi penjualan ini merupa kan suatu sifat yang tidak amanah ber kaitan dengan pemberian informasi bohong pada saat manajemen di percaya untuk mengelola perusahaan.

4. Menstabilkan Harga Saham Lewat SPE
Direksi telah melakukan intervensi perdagangan saham perusahaan dengan melakukan transaksi sendiri lewat peru-sahaan sekuritasnya. Praktek ini diharap-kan dapat untuk mengatur harga saham dan perdagangkan saham. Praktek demikian akan memberikan informasi yang menye-satkan bagi para investor. Transaksi ini dapat dikatakan sebagai praktek tidak adil atau tidak fair yang bisa mempengaruhi perilaku investor. Perilaku ini merupakan tindakan yang tidak amanah, karena direksi berperilaku tidak adil yang sangat meru-gikan investor.

5. Melakukan Window Dressing lewat SPE
Praktek window dressing pada intinya digunakan untuk menjadikan kondisi laporan keuangan menjadi bagus dan sehat. Praktek ini diharapkan menjadikan saham perusahaan banyak diminati oleh investor, sehingga harga saham perusahaan mening-kat terus dan performen perusahaan dimata investor dan kreditor nampak baik. Kondisi ini mempermudah perusahaan untuk men-dapatkan dana untuk operasional maupun untuk pengembangan. Laporan aktiva yang sering digunakan untuk praktek ini adalah transaksi kas, wesel tagih, piutang usaha dan persediaan.
Praktek window dressing ini jelas-jelas sebagai praktek yang merugikan penggunan informasi secara keseluruhan. Secara hukumpun praktek ini dianggap sebagai pelanggaran, dengan demikian manajemen yang diperankan oleh manajer dan direksi jelas-jelas menunjukan sifat yang tidak amanah.

KESIMPULAN DAN SARAN

Kesimpulan

Budaya kerja perusahaan telah mem-pengaruhi praktek akuntansi dan praktek akuntansi kreatif perusahaan. Praktek akuntansi kreatif ini banyak disebabkan adanya tuntutan dan adanya campur tangan direksi dengan tujuan untuk mengiliminasi permasalahan akuntansinya.
Sedangkan dalam tinjauan amanah praktek akuntansi kreatif baik dalam kon-tek manajemen laba maupun dalam kontek SPE termasuk dalam kelompok praktek yang bertujuan untuk mementingkan diri sendiri, baik oleh manajer maupun direksi. Perilaku manajemen dalam praktek akun-tansi kreatif ini lebih cenderung meng-untungkan direksi sebagai controlling, hal ini karena direksi adalah sebagian dari manajemen, dan para manajer telah di-angkat dan direkrut oleh direksi. Perilaku ini mengakibatkan para manajer mema-hami amanah sebagai sifat yang harus loyal pada direksi.
Namun demikian jika dilihat dari hakekat amanah itu datangnya dari Allah, baik manajer maupun direksi telah mela-kukan tindakan yang tidak sesuai ajaran amanah. Melanggar amanah merupakan tindakan yang menuju kearah berkhianat, dan hal yang demikian ini merupakan perbuatan yang dilarang dan larangan dalam agama adalah “dosa”.

Saran – saran

a. Pemerintah telah mengeluarkan aturan untuk melindungi minority share holder terutama dalam transaksi self-dealing yang menimbulkan benturan kepentingan. Meskipun demikian nampaknya ketentuan ini dinilai tetap mempunyai kelemahan, walupun pihak perusahaan sudah melakukan prosedur tersebut. Untuk itu hendak nya penelitian yang akan datang dapat meneliti sejauh mana respon dan pemahaman peraturan tersebut ter-hadap investor dan calon investor.
b. Alat ukur yang digunakan dalam penelitian ini adalah nilai-nilai amanah dalam Islam. Untuk itu peneliti yang akan datang hendaknya bisa menggu nakan nilai-nilai lain dalam Islam, sehingga ajaran Islam dapat lebih diaktualkan lagi dalam akuntansi.

Keterbatasan Penelitian
Seperti halnya dalam penelitian kua-litatif dan penelitian dengan pendekatan budaya maka, penelitian ini memiliki subjektifitas yang tinggi sehingga tidak dapat digenerallisasi. Kasus di perusahaan yang diteliti dan penunjukan informan merupakan keterbatasan penelitian ini, sehingga dengan penunjukan informan yang berbeda akan menghasilkan pendapat yang berbeda pula.
Rujukan Islam yang digunakan dalam penelitian ini adalah menunakan amanah, jadi simpulan yang ada dalam penelitian ini hanya terbatas pada faktor ini saja. Keterbatasan penelitian ini juga terletak pada pemahaman penulis tentang meng-artikan amanah secara detail dari sumber sama, sehingga jika ditemukan sumber lain tentunya akan menghasilkan pendapat yang berbeda.

DAFTAR PUSTAKA

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THE IMPACT OF GLOBALIZATION ON WORLD BUSINESS IN THE NEW MILLENNIUM: COMPETITION, COOPERATION, ENVIRONMENT, AND DEVELOPMENT

August 22, 2010 1 comment

International Management
Development Association
Pennsylvania, USA

Akdeniz University
Antalya, Turkey

Eleventh Annual World Business Congress

THE IMPACT OF GLOBALIZATION ON WORLD BUSINESS IN THE NEW MILLENNIUM: COMPETITION, COOPERATION, ENVIRONMENT, AND DEVELOPMENT

July 10 – 14, 2002
Resort Dedeman Antalya Hotel, Antalya, Turkey

TABLE OF CONTENTS

Page

MESSAGE FROM JAN NAPOLEON SAYKIEWICZ, CONGRESS CO-CHAIR………… 3
MESSAGE FROM YAVUZ TEKELIOGLU, CONGRESS CO –CHAIR………………….. 4
MESSAGE FROM ERDENER KAYNAK AND FULYA D. SARVAN, CONGRESS PROGRAM CO-CHAIRS………………………………………………………………… 5
MESSAGE FROM ERTUGRUL DOKUZOGLU, GOVERNOROF ANTALYA 6
MESSAGE FROM BEKIR KUMBUL, MAYOR OF THE CITY OF ANTALYA…………. 7
MESSAGE FROM YASAR UCAR, RECTOR OF AKDENIZ UNIVERSITY……………… 8
CONGRESS PROGRAM COMMITTEE………………………………………………………9
LOCAL STEERING COMMITTEE IN TURKEY…………………………………………….10
LOCAL ARRANGEMENTS COMMITTEE IN TURKEY………………………………… 10
LOCAL ARRANGEMENTS COMMITTEE IN NORTH AMERICA……………………… 10
CONGRESS TRACK CO- CHAIRPERSONS……………………………………………… 11
LIST OF TRACKS, PANELS AND SPECIAL SESSIONS………………………………… 12 CONGRESS PROGRAM SCHEDULE………………………………………………………..14
CONCURRENT SESSIONS………………………………………………………………..14-15 Wednesday, July 10, 2002…………………………………………………………………… 14
Thursday, July 11, 2002………………………………………………………………… 14
Friday, July 12, 2002………………………………………………………………….. 15
Saturday, July 13, 2002……………………………………………………………….. 15
Sunday, July 14, 2002……………………………………………………………… 15
MASTER SCHEDULE……………………………………………………………………… 16
TWELFTH WORLD BUSINESS CONGRESS
Vancouver, British Columbia, Canada, July 2-6, 2003…………………………… ………….. 54
INVITATION TO ATTEND 12TH WORLD BUSINESS CONGRESS…………………… 59
INDEX OF AUTHORS, CHAIRS, PARTICIPANTS……………………………………… 60
LIST OF COUNTRIES REPRESENTED……………………………………………………..64
IMDA NEWSLETTER INFORMATION……………………………………………………..65
PRELIMINARY STATEMENT OF INTENT……………………………………………… 67
ABOUT INTERNATIONAL MANAGEMENT DEVELOPMENT ASSOCIATION……….68
HOTEL MAP…………………………………………………………………………………..70

WELCOME MESSAGE TO THE IMDA 11TH ANNUAL WORLD BUSINESS CONGRESS PARTICIPANTS

Jan Napoleon Saykiewicz, Congress Co-chair, Vice-President for Programs and President Elect of the International Management Development Association (IMDA)

Dear Colleagues:

Welcome to the Eleventh World Business Congress of the International Management Development Association as we celebrate the 15th anniversary of its foundation. Welcome to Turkey, to Antalya, and to Akdeniz University, our academic host that so successfully influences development in business education and management in its region.

IMDA, created in 1987 to provide an interdisciplinary, multifunctional, and global platform to address problems and issues linking academe, business and politics, proudly stands by its mission to emphasize management development as a way to promote understanding and cooperation in the world business. There are a lot of issues in today’s expanding business world. Global policy makers are scrambling to catch up with the expanding role of foreign direct investment which has outpaced world trade and GNP growth. A complex relationship develops between policy changes, market conditions, and global trends. Globalization tends to result in a closer integration to worldwide labor markets.

We convened here, coming from different parts of the world, to discuss the impact of globalization on world business in the new millennium. Millennium of great hopes and also great fears. We are going to debate on competition, cooperation, environment and development not only from economic or technology point of view but addressing mainly the problems and issues of management development.

The importance of management development can not be underestimated. Despite great development in technology, not so much technological management development contributed to the economic success of various countries. Still good management is a hot commodity and sells well by presenting solutions to existing problems, and values that contribute to the success of business entities.

Management development is stimulating closer links, cooperation and understandings between academe, business, and politicians and may also help to find responses to challenges posed by the constantly arising problems in our environment. By fighting ignorance and backwardness, it may promote economic and social development in many areas of the world that badly needs different approaches to social and economic issues. This is an important objective of IMDA to stimulate close cooperation between academe, business and politics in purpose to contribute to economic growth and global business success through management development.

All of us here worked very hard to support this objective. Our Turkish hosts, Akdeniz University colleagues, paper authors, reviewers, track chairs prepared an intellectually stimulating program both professionally and socially valuable and enjoyable. Professor Dr. Khosrow Fatemi, President of IMDA, successfully lead our organization the last three years. Professor Dr. Yavuz Tekelioglu, Dean, made great effort to perfect all local arrangements. Professor Dr. Fulya D. Sarvan worked hard as Congress Program Co-chair and Proceedings Co-editor. Professor Dr. Erdener Kaynak, IMDA Executive Vice President and Director, and also our Congress Proceedings Co-editor should be recognized for his hard work in organizing this Eleventh World Business Congress.

Colleagues, welcome to this great, historic land, to Antalya, to Akdeniz University, to IMDA. I wish you good sessions, stimulating debates, interesting networking and great memories of IMDA Congress and Turkey as a host country.

WELCOME MESSAGE FROM THE DEAN OF THE FACULTY OF ECONOMIC AND ADMINISTRATIVE SCIENCES

Yavuz Tekelioğlu – Dean, Faculty of Economic and Administrative Sciences, Akdeniz University and Congress Co-chair

On behalf of my Faculty and Staff members I would like to welcome the delegates of the Eleventh World Business Congress to Antalya. It has been a great pleasure and excitement for me and my colleagues at the Local Arrangements Committee to carefully plan the congress program to make it an unforgettable experience of a combination of traditional Turkish hospitality, the Mediterranean climate and the rich Anatolian history and culture, for all the delegates and their spouses
.
Our Local Steering Committee is composed of the leading public and business people of Antalya, including the Governor and Major of Antalya, the Rector of Akdeniz University, the presidents of business organizations and the Chamber of Commerce. We are proud to have received their full support to the 11th World Business Congress of IMDA, to make this event an exciting experience of Turkish hospitality, to be remembered pleasantly years after.

Since its foundation in 1993, our Faculty of Economic and Administrative Sciences has hosted 30 international and numerous national scientific meetings in Antalya. Being a quite young Faculty, we have been enjoying the advantage of the willingness of our young, dynamic and enthusiastic faculty and staff in undertaking challenging events and assignments. The 11th World Business Congress of IMDA is certainly the biggest event that we have undertaken so far and has undoubtedly required the best of our capabilities and resources. It is our sincere hope that you will enjoy both the academic and social programs of the congress. We have done our best to invite the best possible speakers in their own areas of specialization to make the program of keynote speakers, panels of industry representatives and public policy makers an interesting opportunity of getting first hand information about Turkey and her economic and business relationships with other countries.

We also hope that you will enjoy being in Antalya, renowned as the “Turkish Riviera”, combining all the natural beauties of the Mediterranean coast, with a very rich collection of ancient historical sites around its vicinities. Owing to these qualities, Antalya has also become a well known international congress town, hosting many international and national congresses, every year. Please take this chance to see as much as you can around the vicinities
which offer more than that could be hoped for tourism and cultural opportunities. Being a town of Roman – Ottoman core, the city enjoys a historic district around the Roman harbor, which is now a yacht marina, and at the outskirts, not very far from the city, the ancient cities – Perge, Aspendos, Side, Termessos, Phaselis, and Olimpos offer more to see in the way of historical sites. The Antalya Museum carries a rich collection of arts from all around the ancient cities. Antalya Cultural Center provides the cultural flavor, with concerts, operas and theaters all around the year. From mid-June to mid-July visitors can enjoy the marvelous ballet and opera performances at the ancient amphitheater Aspendos during the Aspendos Festival of Opera and Ballet.

The academic and administrative staff of our Faculty of Economic and Administrative Sciences welcome the delegates of the congress and wish everybody an enjoyable time in Antalya .

WELCOME MESSAGE FROM CONGRESS PROGRAM CO-CHAIRS

Erdener Kaynak, Executive V.P. and Director of IMDA and Proceedings Co-editor
Fulya D. Sarvan, Associate Dean, Akdeniz University and Proceedings Co-editor

On behalf of the Program Committee, Track and Session Co-chairs, we take this opportunity to welcome all of the delegates and the accompanying persons and guests to the beautiful city of Antalya for the Eleventh World Business Congress of IMDA held from July 10 through 14, 2002. Since last July, Congress Organizing Committee members both in North America and in Turkey have been working very diligently to organize a diverse congress program which will be challenging and stimulating academically and culturally enriching for all of the participants.

We are extremely pleased that a number of plenary sessions and panels with representatives from local industry, representatives of trade organizations and government have been organized. We have also developed “Meet-the-Editors” Panel, a city tour, and Turkish entertainment. There will be a one-day visit to ancient sites of Antalya region for those who have already made bookings for it on Wednesday all day. The plenary sessions will be held on all day Thursday. All day Friday and Saturday, and Sunday morning, there will be academic sessions and special panels devoted to various contemporary management development issues. This year, as in the past IMDA congresses, we are offering full-papers, research-in-progress papers, and special panels. We are very pleased to note that a broad spectrum of papers, ideas, and research findings are being presented by scholars and practitioners coming from five continents and 35 countries. As part of our IMDA tradition, we will again publish the Congress Best Papers in a future issue of the Association’s Journal of Transnational Management Development (JTMD).

This is our second World Business Congress organized in Turkey. The first one was held in Istanbul in 1995 and it was a tremendous success. We would like to continue this tradition and organize more IMDA congresses in the Middle East and North Africa region in the future. We are very pleased with the sponsorship of Akdeniz University, Faculty of Economic and Administrative Sciences and their hard work and dedication. In particular, Congress Co-chair Dean Yavuz Tekelioglu and Local Arrangements Co-chairs, Drs. Safak Aksoy and I. Serdar Tetik were of special help to us. They both did a yeoman’s job at every stage of the Congress organization. Congress Web Page and Proceedings papers were prepared by our enthusiastic and dedicated colleague, Dr. Talha Harcar of Pennsylvania State University at Beaver. Because of the excellent Congress web site Talha has developed, the site facilitated the work of everyone who was involved with the Congress organization as well as the paper presenters. May we also take this opportunity to extend our warm thanks and appreciation to Congress Co-chairs, Local Arrangements Committee members and support staff in various locations for their extraordinary efforts in organizing what seems to be an excellent Congress. Special thanks and appreciation also go to 51 Track Co-chairs, manuscript reviewers, and colleagues who are chairing panels and
special sessions at the Congress.

We wish much success in the deliberations at the Eleventh World Business Congress. We are certain that we will all benefit from it immensely. We encourage all of you to attend the Twelfth World Business Congress to be held in Vancouver, British Columbia, Canada from July 2 through 6, 2003. See you all there and enjoy this year’s congress in Antalya, Turkey.

WELCOME MESSAGE FROM THE GOVERNOR OF ANTALYA
Ertuğrul Dokuzoğlu, Governor of Antalya, Turkey

On behalf of my government, I am welcoming the participants of the 11th Annual World Business Congress to our renown city of Antalya. It has been a great pleasure for me to sit on the Local Steering Committee of the Congress and collaborate with the staff of the Faculty of Economic and Administrative Sciences of Akdeniz University on a multitude of details making up a successful congress organization. I hope everything goes as well as we wished for.

I believe that the universities are the real sources of knowledge and development and their impact on community is indispensable. The presence and development of Akdeniz University in Antalya has added such a great value to the potentialities of the city that, now its contributions can be appreciated more than ever by everybody. The 11th Annual World Business Congress to be hosted by Akdeniz University between 10th to 14th July 2002 will be an event that will attract the attention and hospitality of people and organizations of Antalya.

For the last ten years our city has increasingly become renowned as a tourism and congress destination and every year quite a number of congress events are organized in a host of venues around Antalya. The natural beauties, the climate, the quality hotels and young tourism professionals render Antalya a perfect destination for congresses besides purposes of tourism. I would like to congratulate the Executive Board of IMDA for choosing Antalya as the host town of the 11th World Business Congress. I have no doubt that it is going to be successful in every respect.

I would like to take this opportunity to inform all the participants that Antalya is one of the safest cities in the World. Please feel comfortable while you are enjoying the pleasant moments during your stay.

I wish all the participants an enjoyable and fruitful congress.

Thanks for choosing to participate at the 11th Congress and coming to visit Antalya on this occasion.

WELCOME MESSAGE FROM THE MAYOR OF ANTALYA
Bekir Kumbul, Mayor of Antalya, Turkey

On behalf of the Municipal Government I take great pleasure in welcoming all the participants of the 11th Annual World Business Congress to Antalya, the tourism capital of Turkey. Being invited to sit on the Local Steering Committee has been a great honor for me and I will feel delighted if the congress fulfills all the expectations.

Our city hosts many congresses every year, but I believe that the 11th Annual World Business Congress to be held between 10th to 14th July 2002 will be among the most important ones in respect to the topics to be discussed, since understanding and appreciating global economic issues is becoming essential more than ever.

Antalya is a city of about 2 million inhabitants and hosts close to 2 million tourists every year. The population increase is about 7 percent a year. There are close to 80 hotels with bed capacity of about 10.000 in the city. The cultural heritage dating back to the second century B.C., the natural beauties and the sunny climate are attracting people from all over the world to visit and enjoy this beautiful geography. These facts place a great responsibility on the shoulders of the municipal government of Antalya, to keep the city tidy and clean, to provide best service to the inhabitants and tourism establishments, to build infrastructure for the newly developing quarters and create new recreational possibilities. The people of the municipal government of Antalya are working really hard to keep the premises clean, neat and safe for all the inhabitants and guests.

In carrying out these responsibilities the Municipal Government of Antalya frequently refers to the specialization provided by Akdeniz University, requests consultancy and education and collaborates with the various departments in specific projects. There is a strong bond of trust and cooperation between these two important institutions of the city.

The Municipal Government of Antalya will be happy to provide any support or service that would be needed during 11th World Business Congress. The hosting Faculty of Economic and Administrative Sciences, Akdeniz University has worked really hard to make this congress a memorable experience for all the participants and the municipality is ready to play its own part.

I sincerely hope that you enjoy being in this beautiful town and I wish much success to your congress.

I welcome you again to Antalya on behalf of my city.

WELCOME MESSAGE FROM THE RECTOR OF AKDENIZ UNIVERSITY
Yaşar Uçar, Rector of Akdeniz University, Antalya, Turkey

On behalf of Akdeniz University, I welcome the participants of the 11th Annual World Business Congress to the beautiful city of Antalya. It is a great honor for all of us, and especially for my colleagues at the Faculty of Economic and Administrative Sciences, to be the host of such a prestigious event for international business scholars and practitioners.

The 11th Annual World Business Congress to be held between 10th to 14th July 2002 will be among the most important scholarly meetings that our university has hosted since its foundation some 20 years ago. When I look back, I can see that it has shown quite a rapid progress, since now it has close to twelve thousand students, fifteen hundred academic staff, 1300 administrative personnel, 11 faculties, 10 schools of higher education, three institutes of graduate education, one conservatory and 18 centers of research and application.

During the past 20 years, Akdeniz University has become an indispensable research and education center for the Western Mediterranean Region, taking its place among the most promising universities of Turkey. Our faculties and schools create knowledge and service for people and organizations, in many areas including medicine, agriculture, engineering, economics, social sciences and fine arts. Every year we have new departments, schools or faculties getting started. The academic staff of our university become increasingly integrated to the international academic networks and world class academic achievements are becoming a rule rather than an exception. I feel really proud of the achievements, the growth pace and dynamism of my young university and I see this congress as another indicator of its high performance.

I believe that the 11th Annual World Business Congress will provide plenty of opportunities for the participants to get acquainted with the warm hospitality of Turkish people, taste the natural beauties and rich cuisine of the Mediterranean coast and also establish pleasant relations and new academic networks with Turkish colleagues. It is my sincere hope that the image of Akdeniz University will become still brighter after the positive impressions of the participants when the congress is over.

My colleagues at the Faculty of Economic and Administrative Sciences have been working really hard, in collaboration with the IMDA Executive Board, to make this congress a memorable experience for all the participants, both academically and socially. I have taken great pleasure to be on the Local Steering Committee and to be able to contribute to the social programs of your congress.

I sincerely hope that you enjoy every moment of your presence in our country and I wish much success in all the activities of your congress.

I welcome you again to Antalya on behalf of my university.

CONGRESS PROGRAM COMMITTEE

CONGRESS CO–CHAIRS

Yavuz Tekelioglu
Dean
Graduate School of Economic and Business
Akdeniz University
Antalya 07058
Turkey Jan Napolean Saykiewicz
School of Business Administration
Duquesne University
Pittsburgh, PA 15282
USA

CONGRESS PROGRAM CO–CHAIRS

Erdener Kaynak
Chair, Marketing Program
School of Business Administration Pennsylvania State University at Harrisburg
777 West Harrisburg Pike
Middletown, PA 17057
USA
Fulya D. Sarvan
Associate Dean
Faculty of Economic and Administrative Sciences
Akdeniz University
Antalya 07058
Turkey

PROCEEDINGS CO–EDITORS

Erdener Kaynak
Chair, Marketing Program
School of Business Administration
Pennsylvania State University at Harrisburg
777 West Harrisburg Pike
Middletown, PA 17057USA
Fulya D. Sarvan
Faculty of Economic and Administrative
Sciences
Akdeniz University
Antalya 07058
Turkey

LOCAL ARRANGEMENTS CO-CHAIRS
CONGRESS ADMINISTRATIVE DIRECTOR
Safak Aksoy
Associate Dean
Faculty of Economic and Administrative Sciences,
Akdeniz University
Antalya 07058 Turkey
I. Serdar Tetik,
Vocational School of Tourism Administration and Hotel Management
Akdeniz University
Antalya 07058, Turkey Talha Harcar
Department of Business Administration
Pennsylvania State University
Beaver Campus
Monaca, PA 15061
USA

LOCAL STEERING COMMITTEE IN TURKEY

1. Prof. Dr. Yaşar Uçar, Rector, Akdeniz University
2. Ertuğrul Dokuzoğlu, Governor, Antalya
3. Bekir Kumbul, Mayor, Antalya Metropolitan Municipality
4. Süleyman Evcimen, Mayor, Muratpaşa Municipality
5. Muhittin Böcek, Mayor, Konyaaltı Municipality
6. Mehmet Atay, Mayor, Kepez Municipality
7. Mesut Akca, Provincial Director of Tourism, Antalya
8. Osman Siviloğlu, Provincial Director of Culture, Antalya
9. Bekir Bülend Özsoy, Chairman of the Board of Directors, Antalya Industrialists’ and Businessmen’s Association (ANSİAD)
10. Menderes Türel, President, Antalya Chamber of Commerce and Industry
11. Ercan Boztepe, Chairman of the Board, General Secretariat of Antalya Exporters’ Union
12. Ahmet Barut, Chairman, The Union of Mediterranean Tourist Hotels (AKTOB)
13. Kerim Çavuşoğlu, Director of Regional Executive Board, Association of Turkish Travel Agencies

LOCAL ARRANGEMENTS COMMITTEE IN TURKEY

1. Şafak Aksoy, Associate Dean, Akdeniz University, Faculty of Economics and Administrative Sciences
2. I. Serdar Tetik, Assistant Director, Akdeniz University Vocational School of Tourism Administration and Hotel Management
3. Orhan Kuruüzüm, Director, Akdeniz University, Institute of Social Sciences
4. Ayse Kuruüzüm, Akdeniz University, Faculty of Economic and Administrative Sciences
5. Esra Çayhan, Akdeniz University, Faculty of Economic and Administrative Sciences
6. Can Deniz Köksal, Akdeniz University, Faculty of Economic and Administrative Sciences
7. Eda Atilgan, University, Faculty of Economic and Administrative Sciences
8. Serkan Akıncı, Akdeniz University, Faculty of Economic and Administrative Sciences
9. Filiz Angay, Akdeniz University, Faculty of Economic and Administrative Sciences
10. Sibel M. Aykın, Akdeniz University, Faculty of Economic and Administrative Sciences
11. Emre Çetin, Akdeniz University, Faculty of Economic and Administrative Sciences
12. Koray Çetin, Akdeniz University, Faculty of Economic and Administrative Sciences
13. Nejla Arıca, Akdeniz University, Faculty of Economic and Administrative Sciences
14. Eren Güzeloğlu, Akdeniz University, Institute of Social Sciences

LOCAL ARRANGEMENTS COMMITTEE IN NORTH AMERICA

1. Kip Becker, Boston University, USA
2. Khosrow Fatemi, San Diego State University, Imperial Valley Campus, USA
3. Talha Harcar, Pennsylvania State University at Beaver, USA
4. Elif S. Kaynak, Pennsylvania State University at University Park, USA
5. Erdener Kaynak, Pennsylvania State University at Harrisburg, USA
6. Ovgu I. Kaynak, Philheaven Clinic, USA
7. Orsay Küçükemiroglu, Pennsylvania State University at York, USA
8. Mathew Loose, Philheaven Clinic, USA
9. Jan Napoleon Saykiewicz, Duquesne University, USA

CONGRESS TRACK CO-CHAIRPERSONS

1. Aahad M. Osman-Gani, Nanyang Technological University, Singapore, Global Human Resource Management
2. Juhary Haji Ali, University Utara, Malaysia, Global Human Resource Management
3. Kip Becker, Boston University, USA, Global Information Technology Management
4. Ata Nahouraii, Indiana University of Pennsylvania, USA, Global Information Technology Management
5. Mark Speece, Asian Institute of Technology, Thailand, Management and Global Business Education
6. Abbas Ali, Indiana University of Pennsylvania, USA, Global Entrepreneurship and Small Business Development
7. John A. Pearce, Villanova University, USA, Global Entrepreneurship and Small Business Development
8. John R. Schermerhorn, Jr., Ohio University, USA, Global Management and Corporate Strategy
9. Marca Marie Bear, The University of Tampa, USA, Global Management and Corporate Strategy
10. Muzaffer Uysal, Virginia Polytechnic Institute and State University, USA, Global Tourism Development
11. Frederic Dimanche, Tourism Management Program, CERAM, France, Global Tourism Development
12. A. Coskun Samli, University of North Florida, USA, Cross-Cultural Marketing and Marketing Research
13. Isabelle Szmigin, The Birmingham Business School, United Kingdom Cross-Cultural Marketing and Marketing Research
14. C. P. Rao, Kuwait University, Kuwait, Global Business in Africa and the Middle East
15. Syed Aziz Anwar, University of Sharjah, United Arab Emirates, Global Business in Africa and the Middle East
16. T.S. Chan, Lingnan University, Hong Kong, Global Business in Asia
17. Muammer Ozer, City University of Hong Kong, Hong Kong, Global Business in Asia
18. Violeta A. Llanes, University of Otago, New Zealand, Global Business in Australia and New Zealand
19. Colin Jevons, Monash University, Australia, Global Business in Australia and New Zealand
20. Josef Poeschl, The Vienna Institute for International Economic Studies, Austria, Business in Transition Economies
21. Marin A. Marinov, Gloucestershire Business School, United Kingdom, Business in Transition Economies
22. Nevenka Cavlek, University of Zagreb, Croatia, Global Business in Europe
23. John Hill, University of Alabama, USA, Global Supply Chain Management
24. S. Altan Erdem, University of Houston-Clear Lake, USA, Global Supply Chain Management
25. Talha Harcar, Pennsylvania State University at Beaver, USA, Global E–Commerce
26. Gopal Iyer, Florida Atlantic University, Global E–Commerce
27. Gerhard Gniewosz, University of Wollongong, Australia, Social Responsibility and Cultural Values in Global Business
28. Riad Ajami, University of North Carolina at Greensboro, USA, Social Responsibility and Cultural Values in Global Business
29. Jan Nowak, The University of the South Pacific, Fiji Islands, Global Production, Operations, and Services Management
30. Sudhi Seshadri, Indian Institute of Management Bangalore, India, Global Production, Operations, and Services Management
31. Noel Murray, Chapman University, USA, Global Marketing Management and Strategy
32. Havva J. Meric, East Carolina University, USA, Global Marketing Management and Strategy
33. Soumitra Sharma, University of Zagreb, Croatia, International Economics and Economic Development
34. Asim Erdilek, Case Western Reserve University, USA, International Economics and Economic Development
35. Tamer Kocel, Dean, Kultur University, Turkey, International Economics and Economic Development
36. Shaukat Ali, University of Wolverhampton, United Kingdom, International Economics and Economic Development
37. Manucher Farhang, Luleå University of Technology, Sweden, Global Relationship Marketing
38. Jean Harris, Pennsylvania State University at Harrisburg, USA, International Accounting, Taxation, and Finance
39. Mehmet C. Kocakülah, University of Southern Indiana, USA, International l Accounting, Taxation, and Finance
40. Myron Kyj, Widener University, USA, Global Business in Eastern /Central Europe and C.I.S. Countries
41. Anatoly Zhuplev, Loyola Marymount University, USA, Global Business in Eastern /Central Europe and C.I.S.
42. Paul S. Marshall, Widener University, USA, Global Business Case Studies
43. Mohamed A.S. Latib, DeSales University, USA, Global Business Case Studies
44. Ekrem Tatoglu, Beykent University, Turkey, Turkish Business
45. Sitki Gozlu, Istanbul Technical University, Turkey, Turkish Business
46. Frederic Jallat, Paris Graduate School of Business-ESCP-EAP, France, Geo strategic Issues and International Business
47. Erdener Kaynak, Pennsylvania State University at Harrisburg, USA, Global Business (Misc.)

LIST OF TRACKS, PANELS AND SPECIAL SESSIONS

1. Business Education, Training, and Development in Turkey
2. Company Internationalization: Experiences of Turkish Companies
3. Company Performance in a Changing Global Business Arena
4. Consumer Behavior: Cross Cultural/National Perspectives
5. Country Specific Cases of Globalization
6. Cross–National/Cultural Marketing
7. Current Issues in Transition Economies
8. E-Commerce Management
9. Economic Development of Turkey and EU Entry: Public Policy Concerns
10. Entrepreneurship and Small Business Development
11. Entrepreneurship in a Changing World
12. Entrepreneurship in Emerging Markets
13. Entrepreneurship in Global Contexts
14. Global Business in Africa and the Middle East
15. Global Business in Asia
16. Global Business in Europe
17. Global Destination Tourism
18. Global E–Business
19. Global Economic Development and Higher Education
20. Global Entrepreneurship and Small Business Development
21. Global Information Technology and Innovation
22. Global Internet Usage
23. Global Management
24. Global Marketing
25. Global Marketing Management and Strategy
26. Global Publishing Opportunities in Business Administration: Publish and Perish
27. Global Sales and Marketing
28. Global Tourism: Development and Sustainability
29. Global Trade and Development
30. Global Training and Development
31. Globalization and Development
32. Human Resource Development Practices
33. Impact of Global Technology
34. International Business Competitiveness
35. International Business Development
36. International Business in Africa
37. International Business Teaching
38. International Finance and Banking
39. Issues in Emerging Economies
40. Managing the Global Marketplace
41. Marketing and Development
42. Networking, International Education and Consulting Opportunities
43. Operational Risk Management and Financial Analysis
44. Organizational Development and Business Enterprises
45. Publishing Opportunities in Business Administration
46. Social Responsibility and Cultural Values in Global Business
47. Technology Transfer and Foreign Direct Investment
48. Tourism and Hospitality Management
49. Transition Economies
50. Turmoil in Turbulent International Business Environment: Responses to Violence and Terrorism

GOODWILL AMBASSADORS

1. Ali Sevki Akay, Department of Food Economics, Akdeniz University
2. Andac Gorgulu, Department of Management, Akdeniz University
3. Basak Berberoglu, Department of Management, Akdeniz University
4. Eren Guzeloglu, Department of Management, Akdeniz University
5. Husamettin Serkan Akilli, Depoartment of Public Administration, Akdeniz University
6. M. Burak Onemli, Department of Economics, Akdeniz University
7. Nejla Arica, International Relations Department, Akdeniz University
8. Ogeday Calli, Department of Public Administration, Akdeniz University
9. Ozge Burunsuz, Department of Economics, Akdeniz University
10. Ozge Tutuncu, Department of Management, Akdeniz University
11. Pinar Baytaroglu, Department of Management, Akdeniz University
12. Z. Tugce Ciftcibasi, Department of Public Administration, Akdeniz University

CONGRESS PROGRAM SCHEDULE

WEDNESDAY, July 10, 2002

8:30 – 17:00

10:00 – 12:00
16:00 – 18:00
18:00 – 19:30

20:00 – 21:30

EVENING IS FREE TOUR TO PERGE, ASPENDOS, SIDE (Optional Paid Tour)
Please Meet at the Hotel Lobby (Pre–Booking is Needed)
IMDA, EXECUTIVE BOARD MEETING (Toros 1)
CONGRESS REGISTRATION AT FUAYE
ANTALYA CITY TOUR ( For Registered Delegates, Spouses and Invited Guests) Main Attractions of Antalya
EARLY BIRD RECEPTION (Sponsored by Resort Dedeman Antalya Hotel ) (For Registered Delegates, Spouses and Invited Guests Only) Dedeman Hotel, Golfer’s Corner, Lobby Floor

THURSDAY, July 11, 2002

8:00 – 17:00
9:00 – 10:00
10:00 – 10:30

10:30 – 11:00
11:00 – 12:30

12:30 – 14:00
14:00 – 15:30

15:30 – 16:00
16:00 – 17:30

17:30 – 18:30
18:30
19:00 – 23:00

CONGRESS REGISTRATION
OPENING CEREMONIES
STATE MINISTER’S WELCOMING ADDRESS (Hotel Dedeman Resort Antalya, Aladağ Room)
COFFEE BREAK (Sponsored by IMDA)
SPECIAL PANEL I (at Hotel Dedeman Resort Antalya, Aladağ
Room
LUNCH BREAK (on your own)
SPECIAL PANEL II (at Hotel Dedeman Resort Antalya, Aladağ Room)
COFFEE BREAK (Sponsored by IMDA)
SPECIAL PANEL III (at Hotel Dedeman Resort Antalya, Aladağ Room)
IMDA, EXECUTIVE BOARD MEETING (Toros 1)
LEAVE FOR AKDENIZ UNIVERSITY CAMPUS
RECEPTION AND DINNER, SHOWS, ENTERTAINMENT AND CULTURAL PERFORMANCES AT OLBIA AMPHITHEATRE

FRIDAY, July 12, 2002

9:00 – 17:00
9:00 – 10:30
10:30 – 11:00
11:00 – 12:30
12:30 – 14:00
14:00 – 15:30
15:30 – 16:00
16:00 – 17:30
19:30 – 23:30

23:30 CONGRESS REGISTRATION
CONCURRENT SESSIONS
COFFEE BREAK (Sponsored by IMDA)
CONCURRENT SESSIONS
LUNCH BREAK (on your own)
CONCURRENT SESSIONS
COFFEE BREAK (Sponsored by IMDA)
CONCURRENT SESSIONS
CONGRESS BANQUET / AWARD CEREMONIES/ENTERTAINMENT
ADJOURN

SATURDAY, July 13, 2002

9:00 – 17:00
9:00 – 10:30
10:30 – 11:00
11:00 – 12:30
12:30 – 14:00
14:00 – 15:30
15:30 – 16:00
16:00 – 17:30
18:00 – 21:00

21:00 – 23:00 CONGRESS REGISTRATION
CONCURRENT SESSIONS
COFFEE BREAK (Sponsored by IMDA)
CONCURRENT SESSIONS
LUNCH BREAK (On your own)
CONCURRENT SESSIONS
COFFEE BREAK (Sponsored by IMDA)
CONCURRENT SESSIONS
BOAT TOUR WITH COCTAIL AND REFRESHMENT
(The Boat Tour Finishes In The Old City Harbor)
DINNER AT OLD CITY (on your own)

SUNDAY, July 14, 2002

9:00 – 11:00
9:00 – 10:30
10:30 – 11:00
11:00 – 12:00
12:00 – 12:30
12:30 – 19:00
CONGRESS REGISTRATION
CONCURRENT SESSIONS
COFFEE BREAK (Sponsored by IMDA)
IMDA MEMBERSHIP MEETING (Toros 1)
CLOSING CEREMONIES (Toros 1)
CULTURAL VISIT TO PHASELIS ANCIENT CITY (Lunch at Ulupinar Historic City) For Registered Delegates and Registered Spouses and Accompanying Persons.

Date Day Concurrent
Sessions TIME VENUE
Tour program (Registered IMDA Congress participants)
Antalya City Tour (Meet at the Lobby)
18:00 – 19:30
Early Bird’s Reception (20:00-21:30) (For Registered Delegates, Spouses, and Invited Guests Only)
Aladag Pinarbasi 1 Pinarbasi 2 Pulpinar Toros 1 Club Room
July 10, 2002 Wednesday 16:00-18:00 C
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N Congress Registration at Fuaye Level on Wednesday, July 10,2002, 16:00- 18:00
Congress Registration at Fuaye Level on Thursday through Sunday July 11-14, 2002, 9:00-17:00 and Sunday 9:00-11:00
July 11, 2002 Thursday 1 9:00-10:30 Opening Ceremony and Keynote Addresses
2 11:00-12:30 I.1
Special Panel I
3 14:00-15:30 I.2
Special Panel II
4 16:00-17:30 I.3
Special Panel III
July 12, 2002 Friday 5 9:00-10:30 II.1 II.2 II.3 II.4 II.5
6 11:00-12:30 II.6 II.7 II.8 II.9 II.10
7 14:00-15:30 II.11 II.12 II.13 II.14 II.15
8 16:00-17:30 II.16 II.17 II.18 II.19 II.20
19:30-23:30 Congress Banquet / Award Ceremonies / Entertainment Resort Dedeman Hotel Pool Side
Registered Delegates, Registered Spouses, and Registered Accompanying Persons
July 13, 2002 Saturday 9 9:00-10:30 III.21 III.22 III.23 III.24 III.25
10 11:00-12:30 III.26 III.27 III.28 III.29 III.30
11 14:00-15:30 III.31 III.32 III.33 III.34 III.35
12 16:00-17:30 III.36 III.37 III.38 III.39 III.40
18:00-21:00 Boat Tour (The boat tour finishes in the old City Harbor)
July 14, 2002 Sunday 9:00-10:30 IV.41 IV.42 IV.43 IV.44 IV.45
11:00-12:00 IMDA Member-ship meeting
12:00-12:30 Closing Ceremo-nies
12:30-19:00 Cultural Visit to Phaselis Antique City (Lunch at Ulupinar Historic City)

I.M.D.A. AND THE CONGRESS ORGANIZING COMMITTEE GRATEFULLY ACKNOWLEDGE THE CONTRIBUTIONS OF THE FOLLOWING ORGANIZATIONS

FACULTY OF ECONOMIC AND ADMINISTRATIVE SCIENCES OF AKDENIZ UNIVERSITY, ANTALYA, TURKEY

INTERNATIONAL MANAGEMENT DEVELOPMENT ASSOCIATION (IMDA), PENNSYLVANIA, USA

TURK TELEKOM INC.

AFYON KOCATEPE UNIVERSITY, AFYON, TURKEY

TARIS (AGRICULTURAL SALES COOPERATIVES’ UNION), IZMIR, TURKEY

FISKO BIRLIK (HAZELNUT SALES COOPERATIVES’ UNION), GIRESUN, TURKEY

KAYISI BIRLIK (APRICOT SALES COOPERATIVES’ UNION), MALATYA, TURKEY

GULBIRLIK (ROSE AND ROSE BY- PRODUCTS SALES COOPERATIVES’ UNION), ISPARTA, TURKEY

AYTAC INC. (MEAT AND DAIRY PRODUCTS), ANTALYA, TURKEY

PAMUKKALE WINERY, DENIZLI, TURKEY

YENIGUN INC. (JAM, MARMALADE, AND CONFECTIONERY), ANTALYA, TURKEY

ANTALYA EXPORTERS’ UNION, ANTALYA, TURKEY

INTERNATIONAL BUSINESS PRESS (IBP) AND THE HAWORTH PRESS INC. OF NEW YORK, USA

ORIENT BASAR (ORIENTAL CARPETS, RUGS, AND ANTIQUE ORNAMENTS), ANTALYA, TURKEY

Wednesday, July 10, 2002

TOUR

8:30 – 17:00

VISIT TO PERGE, ASPENDOS, SIDE (Optional Paid Tour )

(Pre–paid delegates only. Please congregate at the lobby of the hotel by 8:30 a.m.)

IMDA EXECUTIVE BOARD MEETING
10:00 – 12:00
Location: Hotel Dedeman Resort Antalya, Toros 1

CONGRESS REGISTRATION
Location: Hotel Dedeman Resort Antalya
16:00 – 18:00

TOUR PROGRAM (Registered IMDA Congress Participants)
Antalya City Tour (Meet at the Hotel Lobby)
18:00 – 19:30

EARLY BIRD RECEPTION
Location: Hotel Dedeman Resort Antalya
Golfer’s Corner- Lobby Floor
20:00 – 21:30
(Sponsored by Resort Dedeman Antalya Hotel)

EVENING IS FREE
Thursday July 11, 2002

CONGRESS REGISTRATION
Location: Hotel Dedeman Resort Antalya
8:00 – 17:00

OPENING CEREMONY
9:00 – 10:00
Location:
Hotel Dedeman Resort Antalya
Aladağ Room

KEYNOTE ADDRESS
10:00 – 10:30
His Excellency TUNCA TOSKAY, State Minister Responsible for Foreign Trade, Republic of Turkey

COFFEE BREAK
10:30 – 11:00
(Sponsored by IMDA)

SPECIAL PANEL I
Location: Aladağ Room
11:00 – 12:30

LUNCH BREAK
12:30 – 14:00
(On your Own)

SPECIAL PANEL II
Location: Aladağ Room
14:00 – 15:30

COFFEE BREAK
15:30 – 16:00

SPECIAL PANEL III
Location: Aladağ Room
16:00 – 17:30

LEAVING FOR AKDENIZ UNIVERSITY CAMPUS FOR DINNER RECEPTION, CULTURAL PERFORMANCES AND SHOWS AT OLBIA AMPHITHEATRE
Departure is at 18:30 Sharp
(Please congregate at the Hotel Lobby)

RECEPTION AND ENTERTAINMENT
Location: Akdeniz University Campus
19:00 – 23:00

OPENING CEREMONY AND KEYNOTE ADDRESS
Location: Aladağ Room
Thursday, July 11, 2002

OPENING CEREMONIES

9:00 – 9:45 Welcome Messages and Introductions

Dr. Erdener Kaynak, Pennsylvania State University at Harrisburg, Congress
Program Co-chair, Executive Vice President and Director of IMDA
Dr. Khosrow Fatemi, Dean, Imperial Valley College, San Diego State University, President, International Management Development Association (IMDA)
Dr. Yavuz Tekelioglu, Dean, Faculty of Economic and Administrative Sciences,
Akdeniz University, Congress Co–Chair
Dr. Jan Napolean Saykewicz, Duquesne University, Congress Co-Chair, V.P. for Programs and President Elect of IMDA
Dr. Fulya D. Sarvan, Associate Dean, Faculty of Economic and Administrative
Sciences, Akdeniz University, Congress Program Co–Chair
Dr. Kip Becker, Boston University, Chairman of the Board of Country Directors of
IMDA

Welcoming Addresses
Ertugrul Dokuzoglu
Governor of Antalya

Bekir Kumbul
Mayor of Antalya

Welcoming Address
Prof. Dr. Yasar Ucar, Rector of Akdeniz University
9:45 – 10:00

Keynote Address
His Excellency Tunca Toskay, Minister of State Responsible for Foreign Trade,
Republic of Turkey
10:00 – 10:30

10:30 – 11:00 Coffee Break at the Fuaye

1.1: SPECIAL POLICY MAKERS PANEL

Hotel Dedeman Resort Antalya
Thursday, July 11, 2002
11:00 – 12:30
Location: Aladağ Room

Economic Development of Turkey and EU Entry

CHAIR: San Oz-Alp, Rector of Afyon Kocatepe University, Turkey

SPEAKERS:

1. Rifat Hisarciklioglu,, Chairman of the Board of Directors, Turkish Union of Chambers (TOBB)

2. Oğuz Satıcı, Chairman of the Turkish Exporters’ Assembly

3. Baki Alkacar, Republic of Turkey, Prime Ministry, Deputy Undersecretary of Foreign Trade

4. Vural Kural, Deputy Director, Prime Ministry, Undersecretary for Treasury, Economic Research Directorate

12:30–14:00 Lunch Break (On your own)
1.2: SPECIAL BUSINESS LEADERS PANEL

Hotel Dedeman Resort Antalya
Thursday, July 11, 2002
14:00 – 15:30
Location: Aladağ Room

Company Internationalization: Experiences of Local Turkish Companies

CHAIR: Fulya D. Sarvan, Akdeniz University, Turkey

SPEAKERS:
1. Bekir Bulend Ozsoy, Chairman of the Board of Directors, Antalya Industrialists’ and Businessmen’s Association (ANSIAD)

2. Paul Schwaiger, General Manager, Sun Express Airlines

3. Yusuf Ornek, General Manager, VASCO Tourism Inc.

4. Hilmi Unsal, General Manager, Wagner Kablo Inc.

___________________________________________________________________________

Coffee Break: 15:30 – 16:00
At the Lobby

1.3: SPECIAL PANEL III
Hotel Dedeman Resort Antalya
Thursday, July 11, 2002
16:00 – 17:30
Location: Aladag Room

Global Publishing Opportunities in Business Administration: Publish or Perish?

CHAIR: Erdener Kaynak, Editor–in–Chief, International Business Press (IBP), New York, London, Norwood (Australia) and Executive Editor, The Haworth Book Series in International Business

PANELISTS:

Kip Becker, Editor, Journal of Transnational Management Development
Muzaffer Uysal, Editor–in–Chief, Tourism Analysis
Khosrow Fatemi, Editor, Global Economy Quarterly
Manton Gibbs, Editor, Competitiveness Review
Boris Vukonic, Editor–in–Chief, Acta Turistica
Abbas J. Ali, Editor, International Journal of Commerce and Management
Soumitra Sharma, Editor–in–Chief, Zagreb International Review of Economics and Business
Erdener Kaynak, Editor–in–Chief, IBP International Marketing/Business Journals
______________________________________________________________________________

RECEPTION
Akdeniz University Campus
19:00 – 23:00
(Sponsored by Faculty of Economic and Administrative Sciences, Akdeniz University)

______________________________________________________________________________

Friday, July 12, 2002

CONGRESS REGISTRATION
Location: Hotel Dedeman Resort Antalya
9:00 – 17:00

CONCURRENT SESSIONS
9:00 – 10:30
11:00 – 12:30
14:00 – 15:30
16:00 – 17:30
Sessions are Held at Pinarbasi I, Pinarbasi II, Pulpinar, Toros I, Club Room

COFFEE BREAKS
10:30 – 11:00
15:30 – 16:00
(Sponsored by IMDA )

LUNCH BREAK
12:30 – 14:00
(On your Own)

CONGRESS BANQUET/AWARD CEREMONIES
Location: Hotel Dedeman Resort Antalya,
Poolside
19:30 – 23:30

MASTER OF CEREMONIES
Kip Becker

AWARD CEREMONIES
BEST PAPER AWARDS
IMDA INTERNATIONAL DEAN OF THE YEAR AWARD
IMDA INTERNATIONAL BUSINESSPERSON OF THE YEAR AWARD
DOOR PRICES AND BOOK DONATION DRAWS
ENTERTAINMENT: TURKISH MUSIC AND BELLY DANCE

STATE OF THE ASSOCIATION ADDRESS
Presented by Khosrow Fatemi, President of the IMDA

PRESENTATION OF VANCOUVER, BRITISH COLUMBIA, CANADA AS THE SITE OF THE TWELFTH WORLD BUSINESS CONGRESS OF IMDA
Presented by Ernest Neumann, Kingston College

CONCURRENT SESSIONS
Location: Hotel Dedeman Resort Antalya
Friday, July 12, 2002
9:00 – 10:30

II.1: Global Tourism: Development and Sustainability
Location: Pinarbasi I

CHAIR: Brian Mihalik, Virginia Polytechnic Institute and State University, USA

SPEAKERS:

1. Tourism Risk Assessment: A Cross Regional Comparison
F. T. Mavonda, Monash University, Australia
Sebastian Vengesayi, Monash University, Australia

2. Tourism Management in Protected Natural Areas in Romania
Michaela Dinu, Romanian American University, Romania

3. Identification and Measurement of Tourism Fesources: The Case of Virginia
Sandro Formica, Institut de Management Hotelier International (IMHI), France

4. Sweepstakes: Are they a Viable Marketing Option to Promote Turkish Tourism?
John L. Beisel, Pittsburg State University, USA
Musa Pinar, Pittsburg State University, USA

SPECIAL PANEL
II.2: Turmoil in Turbulent International Business Environment: Responses to Violence and Terrorism
Location: Pinarbasi II

CHAIR: Erdener Kaynak, Pennsylvania State University at Harrisburg, USA

SPEAKERS:

Education and Global Progress
Phillip W. Balsmeier, Nicholls State University, USA

2. Global Economic Integration or Militarization of the Globe
Abbas J. Ali, Indiana University of Pensylvania, USA

3. Civility, Trade, and Terror: Moving Beyond Simplicity
Riad Ajami, University of North Carolina at Greensboro, USA

4. American Public Attitudes Towards Flying: Pre and Post September 11 Comparisons
Erdener Kaynak, Pennsylvania State University at Harrisburg, USA
Orsay Kucukemiroglu, Pennsylvania State University at York, USA

II.3: Human Resource Development Practices
Location: Pulpinar

CHAIR: Gerhard Gniewosz, University of Wollongong, Australia

SPEAKERS:

1. Human Resource Management Practices in Small, Medium and Large Firms: A
Multivariate Analysis
Muhammad Aminu Bawa, University Utara Malaysia, Malaysia
Muhamad Jantan, University Utara Malaysia, Malaysia
Juhary Ali, University Utara Malaysia, Malaysia

2. Integrated Human Resources Development Practices of the Large British
Corporations: Technology-Based Learning Dimension
Serkan Bayraktaroglu, Sakarya University, Turkey

3. Potential Effects of Job Satisfaction on Employees and Organizations: An
International Review
Ismail Bakan, Kahramanmaras Sutcu Imam University, Turkey

4. Cultural Values, Work Values, Motivation and Rewards: A Conceptual Analysis
Gerhard Gniewosz, University of Wollongong, Australia
______________________________________________________________________________

II.4: Cross-National Management Issues
Location: Toros 1

CHAIR: Frederic Jallat, Paris Graduate School of Business (ESCP), France

SPEAKERS:

1. Relationship Quality and Customer Loyalty in China
Y. H. Wong, The Hong Kong Polytechnic University, China
Peter Oswald, Pfleiderer Wind Energy GmbH, China
Lorett B.Y. Lau, The Hong Kong Polytechnic University, China

2. IT Outsourcing in Public Sector – A Framework for Analysis and Decision Making
Syed Zahoor Hassan, Lahore University of Management Sciences, Pakistan

3. Regionalism and its Impact on Global Business Regionalism and its Impact on Global Business – The Case of BSEC and Turkey
Zeynep Bilgin, Marmara University, Turkey
Ven Sriram, Morgan State University, USA

4. Fortress France? Myths and Reality of a “Cultural Exception”
Frederic Jallat, Paris Graduate School of Business (ESCP), France

II.5 Operational Risk Management and Financial Analysis
Location: Club Room

CHAIR: David Weir, CERAM, France

SPEAKERS:

1. Portfolio Investment: ESP Trading Strategy in Hong Kong and in Singapore
Simon K.M. Mak, City University of Hong Kong, China
Stephen Y.L. Cheung, City University of Hong Kong, China
Chris K.C. Ng, City University of Hong Kong, China

Translation of Financial Statements Under GAP, IAS, and TAS
Dilek Leblebici, Istanbul Technical University, Turkey

The Evolution of Self-Regulation of the Audit Oversight Function in Australia
Antoinette Richardson, Swinburne University of Technology, Australia
Irene Tempone, Swinburne University of Technology, Australia

The Effect of Agency Problem on the Performance of the Istanbul Stock ExchangeCompanies
Ahmet Kose, Istanbul Commerce University, Turkey
Kemal Guven Gulen, Istanbul Commerce University, Turkey

Coffee Break: 10:30 – 11:00 At Fuaye

CONCURRENT SESSIONS
Friday, July 12, 2002
11:00 – 12:30

II.6: Tourism and Hospitality Management
Location: Pinarbasi 1

CHAIR: Muzaffer Uysal, Virginia Polytechnic Institute and State University, USA

SPEAKERS:

1. Tourism and Hospitality Education in the Kingdom of Saudi Arabia: Prince Sultan College for Tourism and Hotel Sciences – A case Study
Ali Essa Al-Shabbi, Prince Sultan College for Tourism & Hotel Sciences, Saudi Arabia

2. Global Integration of the Turkish Tourism Sector: Organizational Learning Perspectives
Serkan Bayraktaroglu, Sakarya University, Turkey
Rena Ozen Kutanis, Sakarya University, Turkey

3. The Influence of Globalization on Tour Operating Business
Nevenka Cavlek, University of Zagreb, Croatia

4. A Path Analytic Investigation of Relationship Between Destination Performance, Overall
Satisfaction, and Behavioral Intention for Distinct Segments
Seyhmus Baloglu, University of Nevada Las Vegas, USA
Ibrahim Ilhan, Nevsehir Turizm Isletmecilik ve Otelcilik Yuksek Okulu, Turkey
Shiang-Lih Chen, University of Nevade Las Vegas, USA
___________________________________________________________________________

II.7: Company Performance in a Changing Global Business Arena
Location: Pinarbasi 2

CHAIR: Tuncdan Baltacioglu, Izmir Ekonomi University, Turkey

SPEAKERS:

Market Orientation and Business Performance in Small and Medium Sized Enterprises: Exploring the Moderating Effects of Market Dynamism and Planning Flexibility
Cengiz Yilmaz, Gebze Institute of Technology, Turkey

The Perception of the Importance of Entrepreneurial Qualities Across Different Cultures: A First Report
Italo Trevisan, University of Trento, Italy
Johan W. de Jager, Technikon Pretoria, South Africa
Jan Grundling, Technikon Pretoria, South Africa

3. Corporate Motivations and Pressures for Environmental Citizenship Behavior: The Case of
Turkish Medicine Industry
Fatma Kusku, Istanbul Technical University, Turkey

4. Motivation Factors and Reasons of Total Quality Management Implementation in the
Turkish Companies
Sitki Gozlu, Istanbul Technical University, Turkey
Dilek Erertem, Istanbul Technical University, Turkey

II.8: Business Education, Training, and Development in Turkey
Location: Pulpinar

CHAIR: A. Coskun Samli, University of North Florida, USA

SPEAKERS:

1. Alternative Methods to Measure Service Quality in Education Sector: The Analytical
Hierarchy Process
Ayse Kuruuzum, Akdeniz University, Turkey
Nuray Atsan, Akdeniz University, Turkey

2. Research into Determining the Personality Traits of Students Who Prefer to Pursue a
Career in Finance: The Case of the Faculty of Business Administration, Istanbul
University
Mahmut Paksoy, Istanbul University, Turkey
Gonen Dundar, Istanbul University, Turkey
Ahmet Kose, Istanbul University, Turkey

3. Management Ethics and Social Responsibility: Practices in Turkish Industry
Asli Suder, Istanbul Technical University, Turkey

4. Research on the Effect of the Identity of University Lecturers and the Quality of
Lectures on Success of Employees in Organizations
Erol Eren, Dogus University, Turkey
Hakan Tat, Dogus University, Turkey

II.9: Cross-National/Cultural Marketing
Location: Toros 1

CHAIR: John S. Hill, University of Alabama, USA

SPEAKERS:

1. Correlates of Cultural Values and Message Strategies in Service Advertising
H. C. Susan Tai, Hong Kong Polytechnic University, China

2. Estimating Consumer Demand for Food Safety: A Case Study of Mad Cow (BSE) Scare in Turkey
Sedef Akgungor, Isik University, Turkey

3. Prevention of HIV/AIDS in South Africa: A Social Marketing Approach
Johan W. de Jager, Technikon Pretoria, South Africa
L. de W. Fourie, Technikon Pretoria, South Africa
Jan Grunding, Technikon Pretoria, South Africa

4. A Dynamic Approach to Scenario Analysis
Sule Onsel Sahin, Istanbul Technical University, Turkey
Fusun Ulengin, Istanbul Technical University, Turkey
Burc Ulengin, Istanbul Technical University, Turkey

II.10: Issues in Emerging Economies
Location: Club Room

CHAIR: Anatoly Zhuplev, Loyola Marymount University, USA

SPEAKERS:

1 New Product Development Practices of Urban Regeneration Units
Roger Bennett, London Guildhall University, United Kingdom
Sharmila Savani, London Guildhall University, United Kingdom

2. Globalization and the Changing Profile of Polish Commerce
Jan Napoleon Saykiewicz, Duquesne University, USA

3. Foreign Market Expansion in Newly Emerging Markets – Finnish Companies in
Visegrad Countries
Zsuzsanna Vincze, Turku School of Economics and Business Administration, Finland

4. Turkish Foreign Direct Investment in Central Eastern Europe and Commonwealth of Independent States
Refik Culpan, Pennsylvania State University at Harrisburg, USA
Emin Akcaoglu, Ankara University, Turkey
______________________________________________________________________________

Lunch Break – On Your Own 12:30 – 14:00

CONCURRENT SESSIONS
Friday, July 12, 2002
14:00 – 15:30

II.11: Technology Transfer and Foreign Direct Investment
Location: Pinarbasi 1

CHAIR: Jan Nowak, University of the South Pacific, Fiji Islands

SPEAKERS:

1. Technology Transfer, R&D and Trade Policies
Berk Ataman, Istanbul Technical University
Zeki Orbay, Istanbul Technical University

2. The Impact of Information Technology in Developing Countries and Sustainable
Development
Kip Becker, Boston University, USA
Stewart W. Ting Chong, Boston University, USA
Ustun Alan, Boston University, USA

3. Socialization of Technology in Relationship Marketing
Aslihan Nasir, Bogazici University, Turkey

4. Strategic Alliances in the Aviation Industry: An Analysis of Turkish Airlines
Experience
Fatih Semercioz, Istanbul University, Turkey
Burak Kocer, Istanbul Bilgi University, Turkey
___________________________________________________________________________

II.12 International Finance and Banking
Location: Pinarbasi 2

CHAIR: Mehmet C. Kocakulah, University of Southern Indiana, USA

SPEAKERS:

1. Dating a Financial Crisis with Evidence from the Asian Crisis of 1997
Kessara Thanyalakpark, Chulalongkorn University, Thailand
Jonathan A. Batten, Deakin University, Australia

2. The Purpose of Using Financial Derivatives: A Case of Turkish Banking Sector
Oktay Tas, Istanbul Technical University, Turkey

3. Audit Committees: Provision for its Effectiveness in Malaysia
Kalaithasan Kuppusamy, Monash University, Australia
Mohamed Nazim Abdul Rahman, Monash University, Australia

4. Competition, Quality Focus and the Emphasis Given to Non-Financial Indicators in
Manufacturing Organizations
Mohd. Yussoff Ibrahim, University of Sains Malaysia, Malaysia
Daing Nasir Ibrahim, University of Sains Malaysia, Malaysia
Subramaniam Pillay, University of Sains Malaysia, Malaysia

II.13: Globalization and Development
Location: Pulpinar

CHAIR: Ahmad Fawzi Mohd Basri, University Utara Malaysia, Malaysia

SPEAKERS:

1. Peasants and Globalization
John Hurd, Norwich University, USA

2. Market-Age Index: A New Tool for Accurate Forecasting
Mehdi Hojjat, Neumann College, USA

3. Convergence and Restructuring: A Comparison of Japan and the United States
Toru Yoshikawa, Nihon University, Japan
Deepak K. Datta, University of Kansas, USA
Abdul A. Rasheed, University of Texas at Arlington, USA
Joseph Rosenstein, University of Texas at Arlington, USA

4. The Role of Distribution Systems in Economic Development: An Exploration
A. Coskun Samli, University of North Carolina, USA
Jean-Phillippe Dominguez, University of North Carolina, USA

II.14: Current Issues in Transition Economies
Location: Toros 1

CHAIR: Marin A. Marinova, Gloucestershire Business School, United Kingdom

SPEAKERS:

1. Globalization of a Transitional Economy – the Experience of Poland
Rodoslaw Gorynia, University of Warsaw, Poland
Jan Nowak, University of the South Pacific, Fiji Islands
Radoslaw Wolniak, Poznan University of Economics, Poland

2. Internationalization of Japanese Corporations in Central and Eastern Europe
Marin A. Marinova, Gloucestershire Business School, United Kingdom
Svetla T. Marinova, University of Birmingham, United Kingdom
Ken Morita, Hiroshima University, Japan

3. Russia and Eastern Europe Enterprise Reform and Corporate Governance
Jennifer Foo, Stetson University, USA

3. Privatization in the Bulgarian Sector: The Impact on Bank Performance and Credit
Availability
Didar Erdinc, American University in Bulgaria, Bulgaria
______________________________________________________________________________

II.15: Organizational Development and Business Enterprises
Location: Club Room

CHAIR: Kamariah Othman, University Tenaga Nasional, Malaysia

SPEAKERS:

Islamic Perspectives on Organizational Development
Abbas J. Ali, Indiana University of Pennsylvania, USA

Islamic Principles Governing Business and Entrepreneurial Behavior
Mohammad Saeed, Minot State University, USA
Syeda-Masooda Mukhtar, Price Waterhouse Coopers, United Kingdom
Zafar U. Ahmed, Fort Hays State University, USA

Leadership in Third Rome Globalization
Manton Gibbs, Indiana University of Pennsylvania, USA
Ling Yuan, Indiana University of Pennsylvania, USA

Survivors’ Attitudes in the Aftermath of Downsizing: Assessing Effects of Organizational
Justice and ‘Best Management Practices’
Syed Akhtar, City University of Hong Kong, China
Anson K.K. Kong, City University of Hong Kong, China
Richard C.M. Yam, City University of Hong Kong, China
______________________________________________________________________________

Coffee Break: 15:30 – 16:00 At Fuaye
___________________________________________________________________________

CONCURRENT SESSIONS
Friday, July 12, 2002
16:00 – 17:30

II.16: Entrepreneurship and Small Business Development
Location: Pinarbasi 1

CHAIR: Gunes Gencyilmaz, Istanbul Kultur University, Turkey

SPEAKERS:

1. Customer Expectation and Perception of Services Quality (Hospital Performance) and Their
Influence on Overall Service Quality: A Special Case at a Non-Profit Hospital in Turkey
Ahmet Kara, Fatih University, Turkey
Mehves Tarim, Marmara University, Turkey
Selim Zaim, Fatih University, Turkey

2. The ISO 9000: 2000 Vision in Quality Assurance Systems and its Impact on Global Small
Business Development
Orhan Kuruuzum, Akdeniz University, Turkey
Fulya D. Sarvan, Akdeniz University, Turkey

3. Does CEO Good-bye Mean Investor Good-bye?
Antony McCloy, Swinburne University of Technology, Australia

4. Cross Border Entrepreneurs- A Study of the Strategies and Competencies of Hong Kong,
Theresa Lau, Hong Kong Polytechnic University, China
__________________________________________________________________________

II.17: International Business Competitiveness
Location: Pinarbasi 2

CHAIR: Mohamed Latib, DeSales University, USA

SPEAKERS:

1. Evaluation of Performance of Joint Ventures in Electronic, Chemical, and Earth Sectors
in Turkey
Erol Eren, Dogus University, Turkey
Aysegul Samsunlu, Dogus University, Turkey

2. Financing IT Startups: Case Study Evidence from Bulgaria
Didar Erdinc, American University in Bulgaria, Bulgaria

3. Entrepreneurial and Administrative Management Approach to New Business
Development – A Comparative Analysis
Robert Zacca, Akademia Ekonomiczna w Krakowie, Poland

4. Equity Ownership as a Strategic Tool in Global Automobile Manufacturing
Refik Culpan, Pennsylvania State University at Harrisburg, USA

II.18: Entrepreneurship in Emerging Markets
Location: Pulpinar

CHAIR: Phillip W. Balsmeier, Nicholls State University, USA

SPEAKERS:

1. Entrepreneurship and Small Business Development: The Necessary Ingredient for
Economic Progress
A. Coskun Samli, University of North Florida, USA

2. Fostering Entrepreneurship Through Technology Business Incubators: A Study on
Manager-Tenant Relationship
Kamariah Othman, University Tenaga Nasional, Malaysia
Yaacob Anas, University Technologi MARA, Malaysia
Shazam Juliana Abu Bakar, University Tenaga Nasional, Malaysia

3. Cross Border Entrepreneurs – A Study of the Strategies and Competencies of Hong
Kong Entrepreneurs in Emerging China Context
Theresa Lau, Hong Kong Polytechnics University, China
K. F. Chan, Hong Kong Polytechnics University, China
Ricky Ho, Hong Kong Polytechnics University, China

4. Problems, Prospects and Turkey’s EU Membership
Mensur Akgun, Istanbul Kultur University, Turkey
________________________________________________________________________

II.19: Global Information Technology and Innovation
Location: Toros 1

CHAIR: Kip Becker, Boston University, USA

SPEAKERS:

1. Consumer Attitudes and Adoption of Internet Banking: An Empirical Research
Serkan Akinci, Akdeniz University, Turkey
Eda Atilgan, Akdeniz University, Turkey
Safak Aksoy, Akdeniz University, Turkey

2. Cultural Recognition in One-to-One Internet Advertising
D. Selcen Ozturkcan, Florida Atlantic University, USA

3. The Development of Global Business By E-Commerce – A Case of Saudi Banks
Mohammed Duliem Al-Qahtany, King Faisal University, Saudi Arabia

4. E-Learning as a New Approach to Corporate Training and Development: A Case Study from Turkey
Esra Nemli, Istanbul University, Turkey
Serhat Yanik, Istanbul University, Turkey
Selim Yazici, Istanbul University, Turkey
___________________________________________________________________________

II.20: International Business Development
Location: Club Room

CHAIR: Abbas J. Ali, Indiana University of Pennsylvania, USA

SPEAKERS:

1. International Joint Ventures in a Diversifying Economy: A Case Study of Dubai Internet City
Ali Hammoutene, University of Sharjah, United Arab Emirates

2. Success Factors in New Product Development: Are the Factors Universal?
Wan Jamaliah Wan Jusoh, International Islamic University, Malaysia
Nordin Zain, International Islamic University, Malaysia

3. Determinants of FDI in United Arab Emirates
Syed Aziz Anwar, University of Sharjah, United Arab Emirates

4. The Economic Effects of an ERP System Implementation for a Utility Corporation
Mehmet C. Kocakulah, University of Southern Indiana, USA
Andrew Freson, Vectren Corporation, USA
______________________________________________________________________________

Saturday, July 13, 2002

CONGRESS REGISTRATION
Location: Hotel Dedeman Resort Antalya
9:00 – 17:00

CONCURRENT SESSIONS
9:00 – 10:30
11:00 – 12:30
14:00 – 15:30
16:00 – 17:30
Sessions ar Held at Pinarbasi I, Pinarbasi II, Pulpinar, Toros I, Club Room

COFFEE BREAKS
10:30 – 11:00
15:30 – 16:00
(Sponsored by IMDA )

LUNCH BREAK
12:30 – 13:30
(On your Own)

EVENING PROGRAM
BOAT TOUR (The Boat Tour Finishes In The Old City Harbor)
18:00 – 21:00

FREE TIME AT OLD CITY
21:00 – 23:00

CONCURRENT SESSIONS
Location: Hotel Dedeman Resort Antalya
Saturday, July 13, 2002
9:00 – 10:30

III.21: International Business in Africa
Location: Pinarbasi 1

CHAIR: Refik Culpan, Pennsylvania State University at Harrisburg, USA

SPEAKERS:

1. Managerial Challenges of Ethical Business Practices in Africa
Gbolahan Gbadamosi, University of Botswana, Botswana

2. The Impact of Legislative Changes in the Tobacco Industry on South African Clearing the
Air
Johan de Jager, Technikon Pretoria, South Africa

3. Importance of South African Company Specific Labor Related Risk Factors for Financial
Investment Decision-Making by Global Investors
F.J. Mostert, University of Stellenbosch, South Africa

4. On the Future of International Business Research on Africa: Some Critical Thoughts
Foster Ofosu, Turku Polytechnic, Finland
Jacque Muhati, Marcus Evans, United Kingdom

III.22: Tourism and Hospitality Management
Location: Pinarbasi 2

CHAIR: Musa Pinar, Pittsburg State University, USA

SPEAKERS:

1. Developing Healthy Tourist Friendly Destinations: The Public and Private Sectors
Zaher Hallab, The University of Southern Mississippi, USA
Muzaffer Uysal, Virginia Polytechnic Institute and State University, USA

2. Factors Affecting the Advancement of the Lebanese Tourism Industry
Said M. Ladki, Lebanese American University, Lebanon
Mira W. Sadik, Lebanese American University, Lebanon

3. Online Survey Process: Where Does it Fit?
Sungsoo Pyo, Kyonggi University, Republic of Korea
Brian J. Mihalik, Virginia Polytechnic Institute & State University

4. The Implications of the Economic and Monetary Union (EMU) on the Turkish
Travel and Tourism Industry
Ibrahim Birkan, Baskent University, Turkey
Gamze Tanil, Middle East Technical University, Turkey
_______________________________________________________________________

III.23: Marketing and Development
Location: Pulpinar

CHAIR: Erdener Kaynak, Pennsylvania State University at Harrisburg, USA

SPEAKERS:

1. Life-Style Orientation of US and Canadian Consumers: Are Regio-Centric Standardized Marketing Strategies Feasible?
Talha D. Harcar, Pennsylvania State University at Beaver, USA
Erdener Kaynak, Pennsylvania State University at Harrisburg, USA
Orsay Kucukemiroglu, Pennsylvania State University at York, USA

2. On Exporting to the Arab Market: An Empirical Investigation of the Key Variables
Affecting the Japanese Multinational’s Export Performance
Trimeche Marouane, Kyoto University, Japan

3. Consumers’ Adoption of Internet Usage in Turkey: A Comparison Between Online
Shoppers and Non-shoppers
Serap Ekin, Istanbul Bilgi University, Turkey
Sebnem Burnaz, Istanbul Bilgi University, Turkey

4. The Evolution of Self-Regulation of the Audit Oversight Function in Australia
Antoinette Richardson, Swinburne University of Technology, Australia
Irene Tempone, Swinburne University of Technology, Australia

III.24: Global Growth and Competition Through Strategic Alliances
Location: Toros I

CHAIR: Myron Kyj, Widener University, USA

SPEAKERS:

1. Networked (Interactive) Competitive Advantage
Gabriel Baffour Awuah, University of Skovde, Sweden
Desalagen Abraha Gebrekidan, University of Skovde, Sweden

2. Developing Effective Growth Strategies by Linking Business Climate and the Formation of
Strategic Alliances
K. Mark Weaver, Rowan University, USA
Berrin Dosoglu-Guner, Rowan University, USA

3. Global Linking and Local Leveraging of Firm’s Resaources
Starboard T.H. Yeung, University of Technology, Sydney, Australia

4. Building Strategic Scenarios by Using Managers Mental Models
Umit Ozen, Sabanci Holding, Turkey
Fusun Ulengin, Istanbul Technical University, Turkey
______________________________________________________________________________

III.25: Global Business Case Studies
Location: Club Room

CHAIR: Paul Marshall, Widener University, USA

1. Case Study: Teivovo Magazine
Carol Frodey, University of the South Pacific, Fiji Islands
Elenoa Korovulavula, University of the South Pacific, Fiji Islands

2. Sportivna Bazaar
Paul Marshall, Widener University, USA
Ekaterina Evtouchhovich, Belarussian State University, Belarus

3. Natural Waters of Viti Limited: P:ionering a New Industry in the Fiji Islands
Jan Nowak, University of the South Pacific, Fiji Islands
Jim McMaster, University of the South Pacific, Fiji Islands

4. Brand Without Boundaries – Croata Case
Durdana Ozretic-Dosen, University of Zagreb, Croatia

______________________________________________________________________________

Coffee Break: 10:30 – 11:00 At Fuaye

CONCURRENT SESSIONS
Saturday, July 13, 2002
11:00 – 12:30

III.26: Global Business Trends in the Far East
Location: Pinarbasi 1

CHAIR: T. S. Chan, Lingnan University, China

SPEAKERS:

1. Foreign Companies in China: Guanxi Strategy
David McHardy Reid, Rochester Institute of Technology, USA

2. Chinese Joint Ventures: Sino/Sino, Sino/UK Perspectives
Shaukat Ali, University of Wolverhampton, United Kingdom
Paul Buszard, University of Wolverhampton, United Kingdom
T. S. Leung, University of Wolverhampton, United Kingdom
Neil Morris, University of Wolverhampton, United Kingdom

3. Is Giuanxi a Bridge for Knowledge Transfer Among Firms in the PRC?
T.S. Chan, Lingnan University, China
Matthew Yeung, University of Nottingham, United Kingdom

4. When Strengths Become Weaknesses: Shanghai the New Hong Kong?
David McHardy Reid, Rochester Institute of Technology, USA
______________________________________________________________________________

III.27: Entrepreneurship in a Changing World
Location: Pinarbasi 2

CHAIR: Kamariah Othman, University Tenaga Nasional, Malaysia

SPEAKERS:

1. Market Orientation and Business Performance in Small-and-medium-Sized Enterprises: Exploring the Moderating Effects of Market Dynamism and Planning Flexibility
Cengiz Yilmaz, Gebze Institute of Technology, Turkey
Nihat Kaya, Gebze Institute of Technology, Turkey
Lutfihak Alpkan, Gebze Institute of Technology, Turkey

2. Using Biometric Technology for Airport Identification and Customer Satisfaction
Phillip W. Balsmeier, Nicholls State University, USA
Blaise J. Bergiel, Nicholls State University, USA

3. The Role of Gender on Risk Taking Propensity and Tolerance for Ambiguity as
Entrepreneurial Attributes
Ferda Erdem, Akdeniz University, Turkey
Nuray Atsan, , Akdeniz University, Turkey
Beykan Cizel, Akdeniz University, Turkey
Kadriye Karakas, Akdeniz University, Turkey

4. The Gender Gap in Leadership Positions in Business Organizations
Maali H. Ashamalla, Indiana University of Pennsylvania, USA
John N. Orife, Indiana University of Pennsylvania, USA
A. Amin Mohamed, Indiana University of Pennsylvania, USA

III.28: Emerging Trends in Business Higher Education
Location: Pulpinar

CHAIR: Mahmut Paksoy, Istanbul University, Turkey

SPEAKERS:

1. Analysis of Progenistic and Prodigical Knowledge Management Development
Kamal Dean Parhizgar, Texas A & M University, USA
Pena-Sanchez Rolando, Texas A & M University, USA
Fuzhan F. Parhizgar, Texas A & M University, USA

2. University Students’ Approach to Corporate Identity and Corporate Image: A Comparative
Study
F. Muge Arslan, Marmara University, Turkey
A. Ercan Gegez, Marmara University, Turkey
Sahavet Gurdal, Marmara University, Turkey
Okan Tuna, Dokuz Eylul University, Turkey
A. Gulden Cerit, Dokuz Eylul University, Turkey

3. The New Role of the Professor When Teaching and Learning Leave the Classroom
Tahereh Alavi Hojjat, DeSales University, USA
Mohamed Latib, DeSales University, USA

4. Student Satisfaction, Intentions, and Retention in the U.S. Higher Education Institutions: Working Toward a Structural Equation Model
Ali Kara, Pennsylvania State University at York, USA
Oscar W. De Shields, California State University at Northridge, USA
______________________________________________________________________________

III.29: Globalization Strategies: Issues and Strategies
Location: Toros I

CHAIR: Mile Jovic, Institute of Economic Sciences, Yugoslavia

SPEAKERS:

1. Implementation of the EFQM Business Excellence Model in the Turkish Firms: Benefits and
Difficulties
Sitki Gozlu, Istanbul Technical University, Turkey

2. A Phenomenological Study of Sub-Contracting Small-and Medium-Sized Enterprises and
Their Globalization Strategies and Responses: A Scottish Perspective
John Saee, IĖSEG School of Management, Catholic University of Lille, France
Olga Mouzychenko, Charles Sturt University, Australia

3. The Globalization Process: Historical Perspectives on Catalysts and Impediments
John S. Hill, University of Alabama, USA

4. Transforming an Indonesian State-Owned Enterprise (SOE) in the Context of Transition
into an Open Market: A Pilot Project Experience
Hasnil Rasyid, University of Hertfordshire, United Kingdom
______________________________________________________________________________

III.30: Joint Ventures and Network Alliances in Turkey
Location: Club Room

CHAIR: Ekrem Tatoglu, Beykent University, Turkey

SPEAKERS:

1. Management Practices in Different Cultures: International Influences on Culture
Ismail Bakan, Kahramanmaras Sutcuimam University, Turkey

2. The Strategic Planning Processes of Turkish Firms
Ekrem Tatoglu, Beykent University, Turkey
Omer Dincer, Beykent University, Turkey

3. Trust, Inter-Partner Conflicts, Cultural Distance, Commitment and Joint Venture
Performance: An Empirical Analysis of International Joint Ventures in Turkey
Mehmet Demirbag, PRIAE, United Kingdom
David T. H. Weir, CERAM, France
Hafiz Mirza, University of Bradford, United Kingdom

4. A Dynamic Model and Empirical Examination of Performance and Customer Satisfaction in a Non-Profit Health Care Sector in Turkey
Ahmet Kara, Fatih University, Turkey
Mehves Tarim, Marmara University, Turkey
Selim Zaim, Fatih University, Turkey

___________________________________________________________________________

Lunch Break – On Your Own 12:30 – 14:00

CONCURRENT SESSIONS
Saturday, July 13, 2002
14:00 – 15:30

SPECIAL PANEL
III.31: Business Education in a Changing World
Location: Pinarbasi I

CHAIR: Khosrow Fatemi, San Diego State University, Imperial Valley Campus, USA

SPEAKERS:

1. Impact of Technology on Global Business Education
Mohamed Latib, De Sales University, USA

2. Business Education in Ukraine
Pavlo Sheremeta, The Kiev-Mohyla School of Business, Ukraine

3. Business Education in Russian Federation
Anatoly Zhuplev, Loyola Marymount University, USA
Paul Marshall, Widener University, USA

4. Business Education in Bulgaria
Didar Erdinc, American University in Bulgaria, Bulgaria

III.32: Business Management in a Changing World
Location: Pinarbasi 2

CHAIR: Nimet Uray, Istanbul Technical University, Turkey

SPEAKERS:

1. The Performance of IPOs in Istanbul Stock Exchange in the Year 2000
Suat Teker, Istanbul Technical University, Turkey
Omer Ekit, Istanbul Technical University, Turkey

2. Determinants of Foreign Direct Investment in United Arab Emirates
Syed Aziz Anwar, University of Sharjah, United Arab Emirates

3. Integration versus Disintegration in Logistics Activities: Perspectives of Turkish Firms
Nimet Uray, Istanbul Technical University, Turkey
Fusun Ulengin, Istanbul Technical University, Turkey

4. Hugo Boss Lifestyle on Andriyivs’kyy Uzviz: What will the Transformation of the “Yunist”
Garment Factory in Kyiv Result in?
Alexandra Baklanova,

III.33: E-Business and Company Performance
Location: Pulpinar

CHAIR: Fahri Unsal, Ithaca College, USA

SPEAKERS:

1. An E-Business Case Study from Turkey: TEBA
Mustafa Murat Inceoglu, Ege University, Turkey
Fatih Gullukaya, Ege University, Turkey
Saban Eren, Ege University, Turkey

2. Developing Tactical Strengths Through Technology and E-Commerce Strategies Designed to Confront Shifting Global Challenges
Kip Becker, Boston University, USA

3. Internet Banking: Will it Receive Global Acceptance?
Fahri Unsal, Ithaca College, USA
Hormoz Movassaghi, Ithaca College, USA
Abraham Mulugetta, Ithaca College, USA

4.. The Digital Divide: The Challenges Ahead
Gurmak Singh, University of Wolverhampton, United Kingdom

III.34: Global Resource Management Issues
Location: Toros 1

CHAIR: Elliot Wood, Curtin University of Technology, Australia

SPEAKERS:

1. Recruitment and Selection of Managers for Effective Performance in a Knowledge-Based Economy: A Sudy of HR Professionals in Singapore
Aahad M. Osman-Gani, Nanyang Technological University, Singapore

2. Performance Metrics: Key to Success in Global Supply Chain Management
Abbas Foroughi, University of Southern Indiana, USA
William C. Perkins, Indiana University, USA
Mehmet Kocakulah, University of Southern Indiana, USA

3. Learning in Turbulence
Ali E. Akgun, Gebze Institute of Technology, Turkey
Halit Keskin, Gebze Institute of Technology, Turkey
Cemal Zehir, Gebze Institute of Technology, Turkey

4. The Head of the Chicken or the Tail of the Cow? Chinese and Australian Chinese
Perceptions of Leadership
Elliot Wood, Curtin University of Technology, Australia
Alma Whiteley, Curtin University of Technology, Australia
Shiquan Zhang, Curtin University of Technology, Australia
______________________________________________________________________________
III.35: Organizational and Human Resource Issues
Location: Club Room

CHAIR: Sedef Akgungor, Istanbul Isik University, Turkey

SPEAKERS:

1. Family Ownership: Typology and Implications
Sibel Yamak, Galatasaray University, Turkey
Bengi Ertuna, Galatasaray University, Turkey

2. A Dynamic Approach to Scenario Analysis
Sule Onsel Sahin, Istanbul Technical University, Turkey
Fusun Ulengin, Istanbul Technical University, Turke
Burc Ulengin, Istanbul Technical University, Turkey

3. The Relationship Between Job Related Characteristics and Organizational Commitment
Oya Erdil, Gebze Institute of Technology, Turkey
Halit Keskin, Gebze Institute of Technology, Turkey
Cemal Zehir, Gebze Institute of Technology, Turkey

4. Human Resources Policies of Downsizing Firms in Times of Crisis
Cemal Zehir, Gebze Institute of Technology, Turkey
Halit Keskin, Gebze Institute of Technology, Turkey
Lutfihak Alpkan, Gebze Institute of Technology, Turkey

CONCURRENT SESSIONS
Saturday, July 13, 2002
16:00 – 17:30

III.36: Global Management Development

Location: Pinarbasi 1

CHAIR: Safak Aksoy, Akdeniz University, Turkey

SPEAKERS:

1. Triple Bottom Line Reporting – A Comparative Analysis of the Social and Environmental Disclosures of Two Companies
Meropy Barut, Swinburne University of Technology, Australia

2. Implementing International Countertrade: A Framework
Violi A. Llanes, University of Otago, New Zealand
Andre M. Everett, University of Otago, New Zealand
John Paynter, University of Otago, New Zealand

3. Influence of National Culture on Leadership Behavior and Management Effectiveness: A
Cross-Cultural Study of Principles
Shahid Mahmood, Institute of Leadership and Management, Pakistan

4. Utilization of Rubberwood in Malaysia: A Sustainable Issue
Barudin Muhamad, University Utara Malaysia, Malaysia

III.37: Global Marketing Management and Strategy
Location: Pinarbasi 2

CHAIR: Fred Robins, University of Adelaide, Australia

SPEAKERS:

1. Moderating Influence of Conflict within Manufacturer-Channel Member Relationships
Bulent Sezen, Gebze Institute of Technology, Turkey
Cengiz Yilmaz, Gebze Institute of Technology, Turkey

2. Tourism and Tourist Behaviors in Developing Countries: An Empirical Study in Morocco
Ugur Yucelt, Pennsylvania State University at Harrisburg, USA

3. A Survey of the Factors Affecting the Receptivity of Turkish SME’s to Electronic Commerce Adoption
Ekrem Tatoglu, Beykent University, Turkey
Veysel Kula, Afyon Kocatepe University, Turkey

4. The Rewards of Reach: Cases of SME Gains Online
Fred Robins, University of Adelaide, Australia

III.38: Current Issues in Transition Economies
Location: Pulpinar

CHAIR: Andrei Kuznetsova, Manchester Metropolitan University, United Kingdom

SPEAKERS:

1. Corporate Governance in Russia: The Emerging Framework
Anatoly Zhuplev, Loyola Marymount University, USA
Vladimir Shein, Academy of National Economy, Russian Federation

2. Crisis of Governance: Why Market Solutions to Economic Problems are not Popular in Russia
Olga Kuznetsova, Manchester Metropolitan University, United Kingdom
Andrei Kuznetsova, Manchester Metropolitan University, United Kingdom

3. The Importance of Information Sought from Environmental Scanning: The Influence of Environmental Dynamism
Nikolai Wasilewski, Pepperdine University, USA
Kurt Motamedi, Pepperdine University, USA

4. A Comparison of Web Page Design in Ukraine, the USA and the UK
Myroslaw J. Kyj, Widener University, USA
Larissa S. Kyj, Rowan University, USA

III.39: Global Business
Location: Toros 1

CHAIR: G. Nazan Gunay, Ege University, Turkey

SPEAKERS:

1. Market Orientation and Globalization Among the Turkish Clothing Exporters
G. Nazan Gunay, Ege University, Turkey

2. Technology of Transfer: Strategic Alliances Approach in Malaysia Environment
Huda Ibrahim, Universiti Utara Malaysia, Malaysia
Hasmiah Kasimin, Universiti Kebangsaan Malaysia, Malaysia
Mohammed Yusoff, Universiti Kebangsaan Malaysia, Malaysia

3.. The Effects of Organizational Motivation, Managerial Encouragement, Work Group and Task Motivations on Organizational Creativity
Erol Eren, Dogus University, Turkey
Hulya Gunduz, Kocaeli University, Turkey
___________________________________________________________________________

III.40: Pot-pourri
Location: Club Room

CHAIR: Ernest Neumann, Kingston College, Canada

SPEAKERS:

1. Performance Changes in Public, Private and Foreign Banks
Ihsan Isik, Rowan University, USA
Osman Kilic, Quinnipiac University, USA

2. Corporate Motivations and Pressures for Environmental Citizenship Behavior: The Case of Turkish Medicine Industry
Fatma Kusku, Istanbul Technical University, Turkey
Ilke Aydin, Istanbul Technical University, Turkey

3. Whose Game is it Anyway? A Comparison of Governance Issues in Two Football Codes – The Australian Football League and the English Premier League
Julie Foreman, Swinburne University of Technology, Australia

4. Redefining the Process of Development within the Context of a Knowledge-Based Global
Economy
Syeda-Masooda Mukhtar, Pricewaterhouse Coopers, United Kingdom
__________________________________________________________________________

Sunday, July 14, 2002

CONGRESS REGISTRATION
Location: Hotel Dedeman Resort Antalya
9:00 – 12:00

CONCURRENT SESSIONS
9:00 – 10:30
11:00 – 12:30

COFFEE BREAKS
10:30 – 11:00
(Sponsored by IMDA )

CLOSING CEREMONIES (Toros 1)
11:00 – 12:30

CULTURAL VISIT TO PHASELIS ANCIENT HISTORIC CITY (Lunch at Ulupinar Historic City)
13:00 – 21:00

______________________________________________________________________________

CONCURRENT SESSIONS
Location: Hotel Dedeman Resort Antalya
Sunday, July 14, 2002
9:00 – 10:30

IV.41: Miscellaneous I
Location: Pinarbasi 1

CHAIR: Abdullah Homeadan, The Institute of Public Administration, Saudi Arabia

SPEAKERS:

1. Assessing Resources and Capabilities Critical to International Students’ Satisfaction
Mark Gabbott, Monash University, Australia
Yelena Tsarenko, Monash University, Australia

2. Perceived Instructor’s Quality in Marketing Education: A Comparative Study Between New and Well Established Turkish Universities
Talha Harcar, Pennsylvania State University at Beaver, USA
Omer Torlak, Osmangazi University, Turkey

3. Business Ethics: Considerations of Purchasing Professionals
Sebnem Burnaz, Istanbul Technical University, Turkey
Y. Ilker Topcu, Istanbul Technical University, Turkey

4. Doing Global Education Business in Australia: Controlling the Effects of Layoff Survivor Sickness Could Help ‘Give the Edge’
Barbara Lasky, Swinburne University of Technology, Australia
Irene Tempone, Swinburne University of Technology, Australia
______________________________________________________________________________

IV.42: Managing Diversity
Location: Pinarbasi 2

CHAIR: Narendra Reddy, The University of the South Pacific, Fiji Islands

SPEAKERS:

1. Managing Australia’s Cultural Diversity
My-Van Tran, University of South Australia, Australia

2. Restructuring Prospects for the Fiji Sugar Industry
Narendra Reddy, The University of the South Pacific, Fiji Islands

3. The Challenge of Being Number One: A Case Study of Ukranian Mobile Communications Company
Pavlo Sheremeta, Kyiv-Mohyla University, Ukraine.
Natalka Moroz, Kyiv-Mohyla University, Ukraine
______________________________________________________________________________

IV.43: Global Information Technology and Innovation
Location: Pulpinar

CHAIR: Albert Caruana, University of Malta, Malta

SPEAKERS:

1. The Effect of Anemia on Ethnocentrism Among Small Firm Owners and Managers in a Globalization and Liberalization Context
Albert Caruana, University of Malta, Malta
Saviour Chircop, University of Malta, Malta

2. Marketing Ethics in Nigerian Organizations
Linus Osuagwu, Federal University of Technology, Nigeria

3 Business Expansion of Two Polish Companies Abroad- A Case Study on KGHM and
Elektrim
Kari Liuhto, Lappenrata University of Technology, Finland

4. Internet Technology in Nigerian Business Organizations
Linus Osuagwu, Federal University of Technology, Nigeria
_____________________________________________________________________________

IV.44: Global Business Training and Development in the New Century
Location: Toros 1

CHAIR: Jan Napoleon Saykiewicz, Duquesne University, USA

SPEAKERS:

1. International Business Education in North America
A. Coskun Samli, University of North Florida, USA

2. International Business Education in Europe
Frederic Jallat, Paris Graduate School of Business, France

3. International Business Education in Latin America
Khosrow Fatemi, San Diego State University, Iperial Valley Campus, USA

4. International Business Education in Turkey
Fulya D. Sarvan, Akdeniz University, Turkey

5. International Business Education in China and Central Asia
Erdener Kaynak, Pennsylvania State University at Harrisburg, USA
______________________________________________________________________________

IV.45: Miscellaneous II
Location: Club Room

CHAIR: Sebnem Burnaz, Istanbul Technical University, Turkey

SPEAKERS:

1. .The Configural (Factorial) Invariance of the Brand Identity Scale
Kemal Buyukkurt, Concordia University, Canada

2. Contingent Employment in Asia: A Study of Compensation and Benefits of Contract Employees in Singapore
Aahad M. Osman-Gani, Nanyang Technological University, Singapore
Hesan A. Quazi, Nanyang Technological University, Singapore

3. ERP Challenges in the Internet Era: A Romanian Approach
Luminita Finaru, “Al. I. Cuza” University, Romania
Doina Fotache, “Al. I. Cuza” University, Romania
_____________________________________________________________________________

Coffee Break: 10:30 – 11:00 At Fuaye
___________________________________________________________________________

The Twelfth Annual World Business Congress

Vancouver, British Columbia, Canada
Sponsored by Kingston College, Vancouver, Canada

July 2 – 6, 2003

Preparations for the Twelfth Annual World Business Congress in Antalya, Turkey have already started. The Congress is to be held in Vancouver, British Columbia, Canada from July 2 through 6, 2003.

As in other Congresses, we have developed a number of interesting conference tracks and look forward to your contributions with papers, research–in–progress proposals and presentations, and special panels. If you are interested in becoming part of the 2003 Program as a Track Co-chair, please contact IMDA Secretariat at execdirector@imda.cc

For more attraction information, please check the official Vancouver Tourism Office web site at http://www.tourismvancouver.com

IMDA RECOGNIZES DEAN YAVUZ TEKELIOGLU AS RECIPIENT OF THE INTERNATIONAL BUSINESS DEAN OF THE YEAR AWARD

Professor Tekelioğlu is a 1968 economics graduate of the renowned Faculty of Political Sciences of Ankara University and obtaining the state scholarship for doctoral studies abroad, from 1969 to 1974, he completed his masters and doctoral degrees at Universite de Montpellier in France. Returning to his native country, he worked for the Undersecretary for Land and Agriculture Reform of the Prime Ministry until 1977 and from then on he continued his academic career at Hacettepe University, teaching economics at different departments of the Faculty of Economics and Administrative Sciences. In 1993 he was assigned as the Founding Dean of the Faculty of Economic and Administrative Sciences of Akdeniz University.

Professor Tekelioglu has given prominence to building international relations since the beginning of his career and has woven excellent personal ties with various universities and research centers in Europe. During the last nine years that he served as the Dean of his Faculty, he has invested his personal ties at such an admirable level to building up the institutional relations of his school that, it has been possible to establish international networks, organize joint conferences and mutual collaboration programs with the academic circles of various countries, at a high intensity level that is beyond the performance expectable from a young Faculty and an international identity only achievable by institutionalized universities could be created.

Beginning from the foundation of the Faculty in 1993, Professor Tekelioğlu has enabled many Turkish and foreign scholars work on and discuss a large range of topics from agriculture to industry, from health to politics, from law to international relations, from business administration to economics, from public administration to public finance, in numerous national and around thirty international academic events such as congresses, colloquiums, panels, seminars, conferences, summer schools, workshops and round table meetings, he and his staff organized in Antalya. Upon recognition of his academic achievements in the international arena, French Government has awarded him with the “Chevalier dans l’Ordre des Palmes Academiques” in 1998.

Professor Tekelioğlu achieved very close relations with the universities and research centers, especially in France, international institutions of the European Union and many domestic and foreign, public and non governmental institutions working towards international relations in Turkey, enabling hundreds of academicians, speacialists and business people to come together in an academic discussion environment, to get acquainted with each other, form bonds, share viewpoints, collaborate in joint research projects and develop friendship between nations, while actualizing the above mentioned academic events. Invitation of Professor Papayannakis, a Greek academician and also a member of the European Parliament, to give a conference at Akdeniz University and the influential messages he has given for the Turkish-Greek friendship has been one of the concrete examples of his achievements in this respect.

The international academic events Professor Tekelioğlu has organized since 1993 reflect only one aspect of his contribution to the development of international relations. His extensive collaboration with French universities, research institutes and agencies like CIHEAM, IAMM and CNRS for many years has resulted in agreements on faculty and student exchange and made it possible to organize mutual visits, joint research projects, resource and information exchange and cooperation programs for the future. Within this framework a number of academicians from his Faculty have been able to conduct research in such centers, many foreign researchers have visited Antalya to give seminars and a number of joint projects have been started. The students visiting Turkey and the students visiting other countries within the summer training program agreements signed by the Universities of Picardie and Auvergne, France, had the chance to improve themselves and also contribute to the friendship of nations. Professor Tekelioğlu’s personal contribution to these projects has been significant and indispensable.

The impact of all the above mentioned efforts on the involvement of his Faculty in international research networks also deserves to be mentioned. The Economic Reseach Center on Meditteranean Countries founded and still directed by Professor Tekelioğlu in 1997 has become a member of EuroMesCo in 2000 and FEMISE in 2001, both creating ample opportunities for the staff to carry their academic studies within international networks. Dean Tekelioglu has made significant contributions in the development of international academic networks and friendship ties between nations.

As the Congress Co-Chair of the Eleventh World Business Congress hosted by his Faculty, Professor Tekelioğlu will be widening the scope of international relations of his academic staff, providing new opportunities to get involved in international academic networks and making his Faculty still renowned among the IMDA colleagues.

For all his accomplishments in making his Faculty a modern education and research center open to the global arena with its students and staff, taking part in international academic cooperation networks, having gained an international identity with a multitude of academic events, and for his outstanding efforts as the leading role model with his dynamic, entreprising and pacifist personality, Dr. Tekelioğlu was awarded the International Business Dean Award of the International Management Development Association.

IMDA HONORS
HÜSEYİN ÇALIK
FOUNDING MEMBER OF THE BOARD OF DIRECTORS OF ATAÇ CONSTRUCTION AND INDUSTRY INC.
AS IMDA INTERNATIONAL BUSINESSMAN OF THE YEAR

Hüseyin Çalık was born in Konya in 1935. After completing his primary and secondary education in Konya, he continued his education in İstanbul and graduated from the Istanbul School of Economics and Commercial Sciences in 1957. During his lycee and university education he worked for the accounting and finance departments of several big companies, gaining plenty of practical experience.
.
His first major entrepreneurial attempt was the foundation of his first company as a partnership with Hikmet Ataman in Antalya. This company, known today as ATAÇ Construction and Industry Inc., has specialized in irrigation projects, dams and purification installments and successfully completed many such projects. Besides this core business area, Hüseyin Çalık made diversified investments in other sectors, such as textile, tourism, agriculture, education and communication. Some of the investments he started as a founding partner are KEPEZ Flour Factory (1974), ANTEKS Spinning Mill (1986), ANTEKS Weaving Plant (1991), Textile Finishing Company (1993), ANTEKS Garment Manufacturing Plant (1996), Antalya Fair Center (1995) and Antalya Joined Forces Holding Company (1999).The ANTEKS Spinning Mill has grown to a capacity of 60.000 spindles in 2001, producing 22 tons of carded, combed, compact, elastan core-spun cotton and slub-yarns daily. The ANTEKS Weaving Plant has steadily grown in capacity to reach 1.000.000 metres of finished fabric in one month. In the Finishing Mill all the grey cloth is dyed and finished using the latest technology. The ANTEKS Garment Factory, situated in the Antalya Free Trade Zone is now producing 1500 shirts daily. The textile group of companies has become an important exporter of textile and ready made clothing products.The biggest markets for export goods are USA, Germany, Italy and France. The major customers for the company’s textile products are GAP Inc., Express USA, Marks nad Spencer, the Benetton Group, Hugo Boss, Calvin Clein, Stefanel and Lacoste.

Çalık’s investments in the tourism area are, Best Western K.Han Hotel downtown Antalya which started in 1989 and Kemer Resort Hotel which is still under construction since the year of 2000. Çalık started his communications investments in 1998 with the foundation of ATAÇ Computer Services company which merged with DORUK Communications and Automation Industry Inc., the first company to provided internet services in Turkey, in 2000. Doruknet has now set itself the challenge of placing itself as the computer infrastructure supplier to companies working within its field.

Hüseyin Çalık is also the founding partner of Antalya College, one of the best providers of private education in the Western Meditteranean Region. He completed the construction of the facilities of the school and started education in 1980. Today this modern College Campus is comprising five schools, the Primary School, the High School, the Science High School, the Anadolu High School of Tourism and Hotel Management and the Anadolu High School of Fine Arts with an enrollment of approximately 2000 students. The College is very well equipped with

computers, laboratories, sports facilities and extra curricular activities for students and also has preparatory programs in English as a Foreign Language. German is also taught as a second foreign language.

Hüseyin Çalık has also been an active initiator of NGO’s for community services. In 1980’s he served as the Director of the Antalya Sports Soccer Club for 8 years and he was also the founding member of the Board of Directors of the Antalya Tennis Club. He was also one of the founders of the Antalya Industrialists’ and Businessmen Association (ANSİAD) and now he is chairing the Higher Consultancy Board of the same association. He is also the founding member of the Denizli and Antalya branches of TABA, The Turkish-American Businessmen Association. He is a senior and active member of many other NGO’s working for a better community, but as a member of the Board of Trustees of the Foundation for Private University of Antalya, his biggest ideal is to achieve the foundation of the private University of Antalya.

For all his proven entrepreneurial performance in a multitude of business areas, his outstanding exports enhancement and his dedicated contributions to community services, he was awarded the Businessman of the Year 2000, by the Antalya Industrialists’ and Businessmen Association.

INVITATION TO VANCOUVER, BRITISH COLUMBIA, CANADA

July 3, 2002

Dr. Khosrow Fatemi
President
International Management Development Association
Dean
Imperial Valley Campus
San Diego State University
7209 Heber Avenue
Calexico, CA 92231

On behalf of the Greater Vancouver Convention & Visitors Bureau, our hotels, our businesses and hospitality community, we’re delighted that you’re considering our city as the site for the 12th Annual World Business Congress to be held here next June or July 2003.

To set the stage for an outstanding meeting, Vancouver has the scenery that your delegates will rave about, activities to suit every whim, hotels for every taste, and first class convention centre that is set amongst it all. A dynamic, International City blessed with exceptional first-class hotels and state of the art facilities. Add to all this Canada’s exceptional exchange rate and you begin to see why Vancouver is one of the world’s best meeting destinations.

While our charm may entice you, we know it is our commitment to quality service that will keep you. Through our Vancouver’s Service Edge program, Tourism Vancouver will work with you every step of the way to ensure your meeting is a success. (And the records show that meetings in Vancouver have an average 14% higher delegate draw.)

Tourism Vancouver – the Greater Vancouver Convention and Visitors Bureau – and its 1,050 members look forward to welcoming your business to our region and to working with you in the near future.

Sincerely,

Rick Antonson
President and CEO

PARTICIPANT INDEX

Abdul-Rahman, M. Nazim 32
Ahmed, Zafar U. 33
Ajami, Riad 25
Akcaoglu, Emin 30
Akgun, Ali E. 46
Akgun, Mensur 35
Akgungor, Sedef 29, 46
Akhtar, Syed 33
Akinci, Serkan 35
Aksoy, Safak 35, 47
Alan, Ustun 31
Ali, Abbas J. 23, 25, 33, 36
Ali, Juhary 26
Ali, Shaukat 41
Alkacar, Baki 22
Alpkan, Lutfihak 41, 47
Al-Qahtany, M. Duliem 35
Al-Shabbi, Ali Essa 27
Anas, Yaacob 35
Anwar, Syed Aziz 36, 45
Arslan, F. Muge 42
Ashamalla, Maali H. 42
Ataman, Berk 31
Atilgan, Eda 35
Atsan, Nuray 29, 42
Awuah, Gabriel Baffour 39
Aydin, Ilke 49
Bakan, Ismail 26, 43
Bakar, Shazam Juliana 35
Baklanova, Alexandra 45
Baloglu, Seyhmus 28
Balsmeier, Phillip W. 25, 35, 41
Baltacioglu, Tuncdan 28
Barut, Meropy 47
Basri, Ahmad Fawzi Mohd 32
Batten, Jonathan A. 31
Bawa, Muhammad Aminu 26
Bayraktaroglu, Serkan 26, 28
Becker, Kip 21, 23, 31, 35
Beisel, John L. 25
Bennett, Roger 30
Bergiel, Blaise J. 41
Bilgin, Zeynep 26
Birkan, Ibrahim 38

Burnaz, Sebnem 39, 51, 53
Buszard, Paul 41
Buyukkurt, Kemal 53
Caruana, Albert 52
Cavlek, Nevenka
Cerit, A. Gulden 42
Chan, K. F. 35
Chan, T. S. 41
Chen, Shiang-Lih 28
Cheung, Stephen Y.L. 27
Chircop, Saviour 52
Chong, Stewart W. Ting 31
Cizel, Beykan 42
Culpan, Refik 30, 34, 38
Datt, Deepak K. 32
Demirbag, Mehmet 43
De Shields, Oscar W. 42
Dincer, Omer 43
Dinu, Michaela 25
Dokuzoglu, Ertugrul 21
Dominguez, Jean-Phillippe 32
Dosoglu-Guner, Berrin 39
Dundar, Gonen 29
Ekin, M. G. Serap
Ekin, Serap 39, 52
Ekit, Omer 45
Erdem, Ferda 42
Erdil, Oya
Erdinc, Didar 33, 34
Eren, Erol 29, 34, 49
Eren, Saban 45
Erertem, Dilek 28
Ertuna, Bengi 46
Everett, Andre M. 47
Evtouchhovich, Ekaterina 40
Fatemi, Khosrow, 21, 23, 44, 52
Finaru, Luminita 53
Foo, Jennifer 33
Foreman, Julie 49
Formica, Sandro 25
Foroughi, Abbas 46
Fotache, Doina 53
Fourie, L. de W. 29
Freson, Andrew 36
Frodey, Carol 40
Gabbott, Mark 51
Gbadamosi, Gbolahan 38
Gebrekidan, Desalagen Abraha 39
Gegez, A. Ercan 42
Gencyilmaz, Gunes 34
Gibbs, Manton 23, 33
Gniewosz , Gerhard 26
Gorynia, Rodoslaw 32
Gozlu, Sitki 28, 43
Grunding, Jan 28, 30
Gulen, Kemal Guven 27
Gullukaya, Fatih 45
Gunay, G. Nazan 49
Gunduz, Hulya 49, 52
Gurdal, Sahavet 42
Hallab, Zaher 38
Hammouten, Ali 36
Harcar, Talha D. 39, 51
Hassan, Syed Zahoor 26
Hill, John S. 29, 43
Hisarlikcioglu, Rifat 22
Ho, Ricky 35
Hojjat, Mehdi 32
Hojjat, Tahereh Alavi 42
Homeadan, Abdullah 51
Hurd, John 32
Ibrahim, Daing Nasir 32
Ibrahim, Huda 49
İbrahim, Mohd. Yussoff 32, 49
İlhan, İbrahim 28
Inceoglu, Mustafa Murat 45
Isik, Ihsan 49
Jager, Johan de 28, 29, 38
Jallat, Frederic 26, 27, 52
Jantan, Muhamad 26
Jovic, Mile 43
Jusoh, Wan Jamaliah 36
Kara, Ahmet 34, 44
Kara, Ali 42
Karakas, Kadriye 42
Kasimin, Hasmiah
Kaya, Nihat 41
Kaynak, Erdener 21, 23, 25, 39, 53
Keskin, Halit 46, 47
Kilic, Osman 49
Kocakulah, Mehmet 31, 36, 46
Kocer, Burak 31
Kong, Anson K.K. 33
Korovulavula, Elenoa 40
Kose, Ahmet 27, 29
Kucukemiroglu, Orsay 25, 39
Kula, Veysel 48
Kumbul, Bekir 21
Kuppusamy, Kalaithasan 32
Kural, Vural 22
Kuruuzum, Ayse 29
Kuruuzum, Orhan 34
Kusku, Fatma 28, 49
Kutanis, Rena Ozen 28
Kuznetsova, Andrei 48
Kuznetsova, Olga 48
Kyj, Larissa S. 49
Kyj, Myroslaw J. 39, 49
Ladki, Said M. 38
Lasky, Barbara 51
Latib, Mohamed 34, 42, 44
Lau, Lorett B.Y. 26, 34
Lau, Theresa 35
Leblebici, Dilek 27
Leung, T. S. 41
Liuhto, Kari 52
Llanes, Violi A. 47
Mahmood, Shahid 47
Mak, Simon K.M. 27
Marinova, Marin A. 33
Marinova, Svetla T. 33
Marouane, Trimeche 39
Marshall, Paul 40, 44
Mavonda, F. T. 25
McCloy, Antony 34
McMaster, Jim 40
Mihalik, Brian J. 25, 38
Mirza, Hafiz 43
Mohamed, A. Amin 42
Morita, Ken 33
Moroz, Natalka 52
Morris, Neil 41
Mostert, F.J. 38
Motamedi, Kurt 48
Mouzychenko, Olga 43
Movassaghi, Hormoz 45
Muhamad, Barudin 47
Muhati, Jacque 38
Mukhtar, Syeda-Masooda 33, 50
Mulugetta, Abraham 45
Nasir, Aslihan 31
Nemli, Esra 36
Neumann, Ernest 49
Ng, Chris K.C. 27
Nowak, Jan 31, 32, 40
Ofosu, Foster 38
Orbay, Zeki 31
Orife, John N. 42
Ornek, Yusuf 22
Osman-Gani, Aahad M. 46, 53
Osuagwu, Linus 52
Oswald, Peter 26
Othman, Kamariah 33, 41
Oz-Alp, San 22
Ozen, Umit 40
Ozretic-Dosen, Durdana
Ozsoy, Bekir Bulent 22
Ozturkcan, D. Selcen 35
Paksoy, Mahmut 29, 42
Parhizgar, Fuzhan F. 42
Parhizgar, Kamal Dean 42
Paynter, John 47
Perkins, William C. 46
Pillay, Subramaniam 32
Pinar, Musa 25, 38
Pyo, Sungsoo 38
Quazi, Hesan A. 53
Rasheed, Abdul A. 32
Rasyid, Hasnil 43
Reddy, Narendra 51
Reid, David McHardy 41
Richardson, Antoinette 39
Robins, Fred 48
Rolando, Pena-Sanchez 42
Rosenstein, Joseph 32
Sadik, Mira W. 38
Saee, John 43
Saeed, Mohammad 33
Sahin, Sule Onsel 30, 46
Samli, A. Coskun 29, 32, 35, 52
Samsunlu, Aysegul 34
Sarvan, Fulya D. 21, 22, 34, 52
Satıcı, Oğuz 22
Savani, Sharmila 30
Saykewicz, Jan Napoleon 21, 30, 52
Schwaiger, Paul 22
Semercioz, Fatih 31
Sezen, Bulent 48
Sharma, Soumitra 23
Shein, Vladimir 48
Sheremeta, Pavlo 44, 52
Singh, Gurmak 46
Sriram, Ven 26
Suder, Asli 29
Tai, H. C. Susan 29
Tanil, Gamze 38
Tarim, Mehves 34, 44
Tas, Oktay 31
Tat, Hakan 29
Tatoglu, Ekrem 43, 48
Tekelioğlu, Yavuz 21
Teker, Suat 45
Tempone, Irene 27, 39, 51
Thanyalakpark, Kessara 31
Topcu, Y. Ilker 51
Torlak, Omer 51
Toskay, Tunca 21
Tran, My-Van 51
Trevisan, Italo 28
Tsarenko, Yelena 51
Tuna, Okan 42
Ucar, Yasar 21
Ulengin, Burc 30, 46
Ulengin, Fusun 30, 40, 45, 46
Unsal, Fahri 45
Unsal, Hilmi 22
Uray, Nimet 45
Uysal, Muzaffer 23, 27, 38
Vengesayi, Sebastian 25
Vincze, Zsuzsanna 30
Vukonic, Boris 23
Wasilewski, Nikolai 48
Weaver, K. Mark 39
Weir, David T. H. 27, 43
Whiteley, Alma 46
Wolniak, Radoslaw 32
Wong, Y. H. 26
Wood, Elliot 46
Yam, Richard C.M. 33
Yamak, Sibel 46
Yanik, Serhat 36
Yazici, Selim 36
Yeung, Matthew 41
Yeung, Starboard T.H. 40
Yilmaz, Cengiz 28, 41, 48
Yoshikawa, Toru 32
Yuan, Ling 33
Yucelt, Ugur 48
Zacca, Robert 34
Zaim, Selim 34, 44
Zain, Nordin 36
Zehir, Cemal 46, 47
Zhang, Shiquan 46
Zhuplev, Anatoly 30, 44, 48

LIST OF COUNTRIES REPRESENTED
IN THE IMDA ELEVENTH WORLD BUSINESS CONGRESS

1. Australia
2. Belarus
3. Botswana
4. Bulgaria
5. Canada
6. China
7. Croatia
8. Fiji Islands
9. Finland
10. France
11. Italy
12. Japan
13. Korea, Republic of
14. Kuwait
15. Lebanon
16. Malaysia
17. Malta
18. New Zealand
19. Nigeria
20. Pakistan
21. Poland
22. Romania
23. Russian Federation
24. Saudi Arabia
25. Singapore
26. South Africa
27. Sweden
28. Thailand
29. Turkey
30. Ukraine
31. United Arab Emirates
32. United Kingdom
33. United States of America
34. Yugoslavia

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Integrating conservation practice into religious teachings in Indonesia

August 22, 2010 Leave a comment

Final Report

Integrating conservation practice into religious teachings in Indonesia

June 2007 – August 2008

1.1. Project Partner Meeting

For the community outreach pilot project, the first partner meeting was held on 21 August 2007 in Padang, West Sumatra. The meeting was attended by various stakeholders that included: a local NGO (QBar, our main project partner), Department of Forestry (provincial agency for West Sumatra), University of Andalas (Faculty of Law and Faculty of Agriculture), State Islamic Institute of Imam Bonjol Padang and provincial journalists. The meeting aimed to introduce the project partners and set up a social network and also garner supports from the various stakeholders in order to then implement the project. All invited stakeholders supported the project and look forward to collaborating with it in the future. From this initial meeting, a small advisory group was established to subsequently run the project.

2.1. Document Islamic Teachings on Nature Conservation
The activities included:
(1) A meeting with Conservation International held in August, 2007. In this meeting, reading materials regarding to islam and biodiversity conservation accessed. CI also shared its experiences in developing Fiqh Al Bi’ah with pesantrens in Indonesia. Collaboration to support the implementation of project was agreed.
Some important points from the series of discussion:
• The concept of Islamic principles in nature conservation is the use of Ihya Al-Mawat system which is reviving the neglected field by using reclamation way and or functioning the area to be productive. There is also Harim system, which is the protected area especially for water sources, and Hima system, which is the area that is protected for public interest and natural habitat conservation.

(2) Series of focus group discussion held in 3 nagari (sub districts ) during Septermber 2007. The meeting involved local ulama (religious leaders) and community members to gather local values and perceptions with regards to islam and conservation. The series of FGDs was also held to obtain inputs and support from local communities on the outreach activities that integates islamic values in promoting biodiversity conservation.
Some important points from the series of FGDs:
• In Minangkabau society (West Sumatra), the concept of customary law and system is higly based on islamic values under the term ’Adat Basandi Sara, Sara Basandi Kitabullah’ means that customary system is based on syari’ah law and syariah law is based on the Qoran. Therefore, custamary system and islamic values is an interconnected concept. In additon, it is also advised by indigenous leaders that Minangkabau communities should learn from their natural environment.
• There are three important elements in the Minangkabau customary institutions that responsible for natural resources management called as ’tigo tungku sajarangan’ include: ulama to promote sustainable natural resources management; ninik mamak (customary council) to monitor and manage the utilization of natural resources; and cadiak pandai (knowledgable people) to teach local communities about good natural resources management. These three elements should work hand in hand to ensure sustainable natural resources management.
• Concept of protected areas or Hima (in arabic term) is also found in the Minangkabau society, that is called as hutan larangan (sacred forest). Some communities also have devised and maintained customary rules regarding to natural resources use and management. If the community members want to utilize the natural resources in the area, they have to obtain a permit from ninik mamak (indigenous leaders appointed by community members)

3.1. Develop Curriculum and Reference Material
This activity was started in June to September 2007. Curriculum for training of indigenous and conservation leaders was developed. Reference materials also gathered that include several topics, for instance:
– Islamic perspective on biodiversity conservation
– Islamic law and natural resources management
– Ecological aspect in Syariah
– The importance of planting trees in Islamic perspective
– The Qoran: creation and biodiversity conservation
– Fiqh Al Biah (Environmental Fiqh)
– Raising awareness on islam and conservation.
The reference material used for the training for conservation and religious leaders

3.2. Establish Small Working Group & Evaluate Curriculum
This working group was established after the initial partner meeting. Members of this working group include: Syafrial (State Islamic Institute of Imam Bonjol, Padang), Kurnia Warman and Bachtiar Afna (Faculty of Law of Unand), Fachruddin (CI), Abidah (Greenlaw Indonesia), Jomi Suhendri. S dan Naldi Gantika) (Qbar). The working grou[p has worked together to develop a curriculum of training for religious and conservation leaders. With regard to the curriculum evaluation, a workshop will be organized to evaluate the curriculum to be held sometimes in April 2008.

3.3. Training Religious and Conservation Leaders
Two trainings for Religious and Conservation Leaders was organized in Padang, West Sumatra inviting local ulama, teachers of Islamic junior high school (Madrasah Tsanawiyah) and community members from two Nagari (Ampiang Parak and Kambang) in the Pesisir Selatan District, West Sumatra. The trainings aimed to:
– Integrate conservation values in Islamic teachings;
– Enhance capacity of participants to facilitate community meetings and to promote the integration of conservation values in Islamic teachings in the local level
Topic of the training includes:
– Identify and explore verses in Al Qur’an related to conservation and environmental management;
– The concept of Hima and Harim;
– Fiqh Al Bi’ah (environmental Fiqh);
– Discuss Indonesian biodiversity resources and the urgent need to promote and take action regarding to biodiversity conservation
– Explore environmental problems at the local levels and develop action plans to solve these problems using knowledge gathered during the training;
– Participatory mapping to identify potential local site of Hima/Harim
The training deployed participatory approach using several methods: group discussions, participatory mapping, lecturing that was followed by intensive discussions, and so forth. In the end of the training, participants were able to develop action plans to follow up the training. Some example of their action plan activities include:
• to hold khutbah (speech during friday prayer) on islam and environmental conservation) in several local mosques;
• To disseminate these ideas in some adat (customary councils) meetings;
• To support the development of a local library based in Nagari as well as provide materials to schools and pesantren library, particularly on environmental related materials.

First training:
The first training was held on October 23-25 attended by 8 participants form Nagari Ampyang Parak that included ulama, ninik mamak (member of adat council), teachers of a modern pesantren and a junior high school as well as Qbar member. Participants from Nagari Ampyang Parak were really enthusiastic with the training and hoped that this initiative could be continued. Participants of Nagari Ampyang Parak were really interested to apply concept of Hima in their areas but in a small scale basis. They informed that Kampung Tanjung Pinang could be a potential area to apply this concept. Local people have started to plant various trees along the watershed area (customary forest area) since they experienced drought last year.
The participants:
1. Salman MT from alim ulama element, Nagari Ampiang Parak, Pesisir Selatan District
2. Muas, S.Ag from teachers element, Nagari Ampiang Parak, Pesisir Selatan District
3. A.R. DT. Batuah from ninik mamak element, Nagari Ampiang Parak, Pessel District
4. Narus Bidin from ninik mamak element, Nagari Ampiang Parak, Pesisir Selatan District
5. Amir Syarifuddin from ninik mamak element , Nagari Ampiang Parak, Pesisir Selatan District
6. Bachtiar Afna, Academician from Andalas University in Padang
7. Syafrial, Academician from IAIN Imam Bonjol

Second training:
The second training was held on 27 – 29 November 2007 attended by 8 community members from Nagari Kambang that included: local ulama, ninik mamak (member of adat council), youth, a teacher of junior high school. Action plans were also developed by each participants based on their knowledge, experience and expertise.
The participants:
1. Idris Sutan Ibrahim from alim ulama element, Nagari Kambang, Pessel District
2. Haris Musrinda from teachers, Nagari Kambang, Pessel District
3. Muslim DT. Pando Basi from ninik mamak element, Nagari Kambang, Pessel District
4. R.A.Rj. Bagindo Sati from ninik mamak element, Nagari Kambang, Pessel District
5. Asrul from young generation, Nagari Kambang, Pessel District
6. H. Amiruddin from alim ulama element, Nagari Kambang, Pessel District
7. Martias NR Batuah from ninik mamak element, Nagari Kambang, Pessel District
8. Kamaruddin Kadra from alim ulama element, Nagari Kambang, Pessel District
9. Qbar (Lili, Naldi, Inas, Tri Astuti and Nurul)

Picture 1. An ulama present communities’ action plan

Picture 2. A participant drawing map of his village to design the implementation of Hima

Picture 3. Group photo of first training

3.4. Monitoring and Evaluation
Monitoring activities have been held on 12 – 14 February, 2008 in Nagari Kambang and Nagari Ampyang Parak, Pesisir Selatan District. The methods used were semi structure interviews and participant observant.
Some result of the monitoring activities:
– Some previous participants have promoted the integration of conservation values in Islamic teaching during several informal discussions with community members
– Some previous training participants also delivered ‘islam and conservation’ during Friday prayer speech (khotbah)
– It was noted that most community members have minimal understanding on Islamic teaching with regard to good environmental management and biodiversity conservation, therefore, further efforts to promote this values were recommended.
– It was also suggested that the distribution of reading materials on the related subject to Islamic schools (elementary school, junior and senior high school) and outdoor activities (so called ‘tadabur alam’) was also consider important to raise awareness among students on islam and conservation.
– Previous training participants also noted the importance to involve Islamic institutions such as MUI (Indonesian Ulama Council) and Muhammadiyah to be leverage the impact of integrating conservation values in religious teachings in Indonesia.

3.5. Workshop on “Evaluating and Monitoring”
The activities have been held on 25 – 26 August 2008 in Asrama Haji (Pilgrimage Hostel) in Padang. The participants invited in the workshop were the community from Nagari Kambang, Ampiang Parak and Lakitan. The workshop aimed to sharpen the result of monitoring and evaluating that has been done in field after the training and to formulate the follow-up plan in the implementation of Islam and Conservation next. In this workshop, the activity plan that will be implemented in nagari after the implementation of Islam and natural resources conservation that has been done for six months in three nagari in West Sumatra will be formulated.

3.6. The Seminar of Islam and Natural Resources Conservation Activities Result
The activities have been held in 27 August 2008 in Asrama Haji in Padang. These activities aimed to inform the stakeholders about Islam and Nature Conservation and to receive inputs from stakeholders about the implementation of Islam and nature conservation activities. The activities was participated by the community of Nagari Ampiang Parak, Lakitan and Kambang, students, NGO and community organization in West Sumatra. The first speaker of this seminar was Jomi Suhendri. S (Qbar) who conveyed his paper about “The Implementation of Islam and Natural Resources Conservation Program in Three Nagari (Nagari Kambang, Ampiang Parak and Lakitan) in Pesisir Selatan District”. The second speaker was Bachtiar Afna, SH (LKAAM of West Sumatra) who conveyed his paper about “The Implementation of Traditional Values in Nature Conservation in West Sumatra”. The third speaker was Drs. Syafrial (lecturer of IAIN Imam Bonjol in Padang) who conveyed his paper about “Islamic Teaching in Nature Conservation in West Sumatra”. The inputs of these activities were to keep on the activities of Islam and natural resources conservation in West Sumatra by expanding the area.

Categories: Uncategorized

WORKSHOP ON ISLAMIC RISK MANAGEMENT

August 22, 2010 Leave a comment

JOINTLY ORGANISED BY

Hawkamah, the Institute for Corporate Governance
Level 14, the Gate, P.O. Box: 7477 Dubai, UAE
Tel: +9713622551 Fax: +97143622552 Website: http://www.hawkamah.org
AND

Amanie Islamic Finance Learning Centre
No, 44, Level 41, Emirates Towers,
Sheikh Zayed Road,
Dubai, United Arab Emirates

Phone: +971 4 319 7688
Mobile: + 971 5 092 27652
Fax: +971 4 330 3365

DATE:
26TH MARCH 2009
VENUE:
Lecture Room 2 Level 1, the Gate, P.O. Box: 7477 Dubai, UAE
THEME:
“Towards Better Understanding of Islamic Risk Management”

Course Objective

The objective of this workshop is to provide participants with a comprehensive understanding of the Islamic risk management. The workshop will allow participants to examine the unique risks involved in Islamic finance particularly in the aspect of Shariah compliant risk management tools, scope of risk and overviews of Islamic prudential standards of International Financial Services Board, rating of risk for Islamic financial institutions (IFIS) and Islamic financial products from rating agency perspective. The workshop content will be drawn heavily from the key issues of the day, in particular those which raise supervisory and management effectiveness questions.

Benefits for Attending

The workshop offers comprehensive module on Islamic risk management which has been designed by experienced and renowned experts peculiarly in providing Shari’ah advisory services and structuring of Islamic financial products both local and international market. The workshop will enable participants to understand the unique risk facing Islamic banks and the risk management techniques involved in Islamic finance industry.

Who Should Attend?

Risk Managers
Central Bankers
Banking Regulators
Bankers
Legal Advisors
Shariah Scholars
Internal Shariah Reviewers or officers
Asset and Fund Managers
Accountants & Auditors
Tentative Program
0830hrs Opening Remarks by Mr. Nickolai Nadal, Director of Hawkamah

0900hrs Scope of Risk for Islamic Financial Institution (IFIS) and Overviews of Islamic Prudential Standards of IFSB: Dr. Syed Musa Al Habshi

- Risk Management Framework, Capital Adequacy & Shariah Governance, Types of Risk exposures of IIFS
– Impact of Profit Sharing Investment Accounts (PSIA) on capital adequacy requirement
– Role of Shari’ah Review on governance of Shari’ah compliant activities

1030hrs Tea Break

1100hrs Application of Risk Management Tools and Standards for IFIS: Dr. Syed Musa Al Habshi
– Application & Impact of Risk Management Tools
– Importance and need for Risk management tools for Islamic financial transactions
– Issues on Shari’ah acceptance of risk management tools Potential Impact of risk management tools on IIFS

1230hrs Lunch

1400hrs Shariah Compliant Risk Management Tools – The Role of Islamic forwards, option and swaps: Dr Mohd Daud Bakar
1515hrs Tea Break

1545hrs Risk Management and Corporate Governance in Islamic Financial Institutions: Mr. Zulkifli Hasan

1615hrs Panel Discussion on Islamic Risk Management:
Amanie: Dr. Mohd. Daud Bakar
DIFC: Mr. Nik Norishky Thani
Hawkamah: Mr. Nickolai Nadal

1700hrs End of Workshop
Fees
Normal fees are USD1, 000 and 20% discount will be given to group registration of 3 or more and Hawkamah members.
About the Speakers
Dr. Mohd Daud Bakar
Dr. Mohd Daud Bakar is currently the Managing Director of Amanie Islamic Finance Learning Centre (DIFC Incorporated) Dubai. He received his first degree in Shari’ah from University of Kuwait (1988), PhD from University of St. Andrews, United Kingdom (1993) and external Bachelor of Jurisprudence at University of Malaya (2002). He has published more than 30 articles in various academic journals and presented more than 200 papers in various conferences both local and abroad. He is now Chairman of the Shari’ah Advisory Council at the Central Bank of Malaysia, member of the Shari’ah Advisory Council at the Securities Commission of Malaysia, (Malaysia), Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) (Bahrain), Dow Jones Islamic Market Index (New York), Unicorn Investment Bank (Bahrain), Financial Guidance (USA), BNP Paribas (Bahrain), Bank of London and Middle East (London), Islamic Bank of Asia (Singapore), Noor Islamic Bank (Dubai), Morgan Stanley (Dubai), Dubai Bank (Dubai) and in other financial institutions both local and abroad. He has been involved in advising Islamic funds and Islamic Sukuk both local and globally. In 2005 he has been awarded the Islamic Banker Award of 2005 by the Association of Islamic Banking Institutions Malaysia

Dr. Syed Musa Alhabshi
As principal consultant of Amanie Business Solution, Dr Syed has been involved in Islamic financial product design and development, Professional module design and development of Islamic finance courses and programs as well as spearheading research for the Islamic Financial Services Industry. He actively conducted training in the area of Accounting, Risk and Governance for Islamic Financial Institutions, Islamic Finance and Banking in public seminars and in house training programs for various financial institutions, international audit firms, supervisory agencies and rating institutions in London, United Arab Emirates, Mauritius, Brunei, Malaysia, Singapore and Indonesia.
In setting the direction for the industry he had been appointed as a technical consultant with Centennial Group International where he was involved in developing Islamic Financial Services Board (IFSB) Prudential Standards. He had also served as a member of Accounting, Auditing and Governance Standards Board of Accounting Auditing Organization for Islamic Financial Institutions (AAOIFI). In Malaysia he is currently a member of Malaysian Accounting Standards Board (MASB) Working Committee of Islamic Financial Reporting Standards.
As an academic Dr. Syed Musa Alhabshi was an Associate Professor and Dean of Faculty of Business Administration, Tun Abdul Razak University (UNITAR) till February 2007. In postgraduate education he designed and developed doctoral and masters degree curriculum as well as graduate programs in both UNITAR and International Islamic University, Malaysia (IIUM). His teaching experience spans from undergraduate, professional to postgraduate programs in the areas of accounting and finance with special focus in Islamic finance and accounting. He supervised doctoral students in Islamic Finance and has presented papers in both local and International Conferences as well as published papers in academic journals and related academic literature which includes areas on Performance and Efficiency of Islamic Financial Institutions and Foreign Investments, Accounting, Auditing, Governance, Risk Management, Performance Measurement and Zakat particularly for Islamic Financial Institutions. In addition his previous employment as audit assistant in Coopers & Lybrand as well as a police inspector in Singapore provides early exposures to the demands of commercial and social environment.
His early education was from Singapore where he obtained a Diploma in Business Studies from Ngee Ann Polytechnic and later pursued and obtained first class honors degree in Bachelor of Business Administration (1989) from International Islamic University (IIUM), as well as conferred Bank Islam Malaysia Overall Best Student Award. He then proceeded to obtain Doctor of Business Administration (1994) (Accounting and Finance) from Strathclyde University, UK.

Nick Nadal

Nick Nadal is the Director at Hawkamah Institute of Corporate Governance, in charge of developing programmes for family owned enterprises, non listed companies, banks and financial institutions, capital markets, media and academia on corporate governance. Prior to joining Hawkamah, he was the Program Officer for Middle East and North Africa programmes at the Centre for International Private Enterprise, a non-profit affiliate of the U.S. Chamber of Commerce, building linkages with and supporting regional business associations, developing and conducting training programmes on association governance and developing programmes to advance entrepreneurship, economic journalism and corporate governance in the region.

Nik Norishky Thani
Nik Norishky Thani is Executive Director of Islamic Finance, at the Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. He has over a decade’s experience in advising and structuring Islamic financial instruments, in particular Islamic Sukuk. Prior to DIFC, he was the Head of Islamic Capital Markets for MIMB Investment Bank Malaysia and Bank Islam Malaysia Berhad. He was previously attached with Aseambankers Malaysia Berhad and Commerce International Merchant Bankers (CIMB), Malaysia.
Nik Norishky Thani was a Fulbright scholar at Georgetown University, Washington DC where he focused on Islamic law and finance for his Master of Law (LLM) and graduated top of his class with Distinction and Dean’s List. Subsequently, he was a fellow at the Center for International Environmental Law, a Geneva-based international body that promotes sustainable economic development. He also underwent the Program of Instruction for Lawyers at Harvard Law School in Boston, Massachusetts. Nik Norishky Thani is a past winner of the Petronas scholarship, and holds a law degree (LLB) from the University of Cardiff, United Kingdom.
Zulkifli Hasan
He has worked extensively in Islamic finance industry as an advocate and solicitor, in-house counsel for Bank Muamalat Malaysia Berhad and member of Rules and Regulations Working Committee for Association of Islamic Banking Institutions Malaysia. As an academician, he has developed excellent research skills as senior lecturer at Faculty of Shari’ah and Law and hold various academic positions such as legislation editor for the Malaysian Journal of Shari’ah and Law, Shari’ah panel for the Institute of Fatwa Management and Research for Islamic Science University of Malaysia, ad-hoc reviewer for the International Journal of Business and Finance Research, the Institute of Business and Finance Research, USA as well as a member of the Advisory Editorial Board of the Shari’ah Law Reports. He has published numerous articles in various academic journals and presented many papers in various conferences both local and abroad. He obtained his first degree in Bachelor of Laws from International Islamic University (2001) and received his second degree in Bachelor of Shari’ah (2002) as well as Master of Comparative Laws (2004) from the same university. Currently, he is doing his Ph.D at University of Durham, United Kingdom.

Islamic Banking A Performance Analysis

August 22, 2010 Leave a comment

M. Raquibuz Zaman,* Ithaca College
Hormoz Movassaghi, Ithaca College

Source: The Journal of Global Business,
Volume 12, No. 22, Spring 2001, pp. 31-38.

Acknowledgment: This paper is being made available through the kind permission of the author. He has written extensively on Islamic economics and finance. To learn more about his works, you can visit http://www.ithaca.edu/faculty/zaman/publications.htm#journals.

This study reviews the growth of Islamic banking since its inception nearly four decades ago. It examines the major products/services offered by various Islamic banking institutions (IB) as well as analyzing such institutions’ financial performance based on the latest data available. The study concludes that some of the practices and the financial instruments used by the Islamic banks do not seem to conform to the traditional Islamic principles, and it offers suggestions for improvements.

Introduction

From its humble start in Egypt in 1963 and its sporadic progress in 1970S, the Islamic banking has grown notably in size and number in the 1980s and 1990s. According to the latest published figures by International Association of Islamic Banks, there were 166 Islamic banks and financial institutions worldwide at the end of 1996 with total assets of $137 billion, deposits exceeding $100 billion, paid-up capital of $7.3 billion, and net profit of $1683 million [Timwell 1998]. These figures exclude the funds managed in accordance to Islamic law (sharia) held by conventional banks in Muslim and non-Muslim/Western countries. Indeed, an increasing number of Western banks have established subsidiaries and/ or specialist divisions to offer corporate finance and investment banking services for tapping the deposits of high net worth individuals. The list of these Western financial institutions includes such well known names as Citigroup, ANZ, Grindlays, JP Morgan, Deutsche Bank, ABN AMRO, Goldman Sachs, Chase Manhattan, NatWest, Societe General, and HSBC among others [Siddiqi 1999].

Islamic banks operate in over sixty countries, though mostly concentrated in the Middle East and Asia. In most of these countries, the banking system is dominated by conventional banking institutions with Islamic banks operating alongside. In three countries, however -Iran, Pakistan, and Sudan -the entire banking system has been converted to Islamic banking. Islamic banking is noted as “the fastest growing segment of the credit market in Muslim countries that have Islamic banks: their market share has risen from 2 percent in the late 1970s to about 15 percent today, as measured by assets in the banking system” [Aggarwal and Yousef 2000]. And by some estimates, funds under Islamic management are increasing at the rate of 15-20 percent a year [The Banker 2000], with some banking sources suggesting the total value of Islamic funds may well be approaching $200 billion [Frenchman 1998].

The main objectives of this paper are to review the growth of the Islamic banking on a global basis, assess its performance based on the latest financial data available, discuss its salient products/services, evaluate them for likely departures from traditional Islamic principles, and offer suggestions for improvement based on the experience of the authors and evidence provided by other recent studies in this area.

Islamic Banking: Origin, Scope, and Growth

The first modern experiment with Islamic banking was undertaken in Egypt under cover, for fear of being labeled as a manifestation of Islamic fundamentalism, which was anathema to the government in power. It took the form of a saving bank based on profit-sharing in the town of Mit Ghamr, lasted until 1967, by which time there were nine such banks in the country. These banks neither charged nor paid interest, invested mostly in trade and industry, directly or in partnership with others, and shared profits with depositors [Ariff 1988]. The 1970s heralded the arrival of a new age in Islamic finance witnessing the establishment of the Nasr Social Bank in 1971 (Egypt), Philippine Amanah Bank in 1973, the Dubai Islamic Bank in 1975, the Kuwait Finance House, the Faisal Islamic Bank of Sudan, and the Faisal Islamic Bank of Egypt, all in 1977, the Bahrain Islamic Bank in 1979, and the Qatar Islamic Bank in 1981, to mention a few [Ariff 1988, Wilson 1995, Edward 1999]. By the end of 1996 the number of Islamic banks, IBs, rose to 166 with a total paid-up tier-one capital of $7.3 billion, and total assets of $137 billion [Timewell 1998]. Moreover, if one excludes the Iranian and Pakistani IBs, the countries that operate under the Islamic system of banking (along with Sudan), only 40 percent of the paid-up capital and 30 percent of total assets are commanded by those from other countries. These percentages do not tell the whole picture. The 19 Gulf Cooperative Council, GCC, states command 18 percent of the total paid-up capital, and 13 percent of total assets of all IBs. In other words, 10 Iranian, 46 Pakistani, and 19 GCC IBs totaling 75 out of 166, command 78 percent of total paid-up capital and 83 percent of total assets for the IBs. These numbers appear impressive if one ignores the size of a single large commercial bank in many developed economies of the West [Business Week July 13, 1998]. Thus, it is quite obvious that IBs are relatively very small and a few of them are not even profitable [Timewell Op. Cit.].

Table 1 shows the number of IBs by region, their capital, total assets, and capital-to-asset ratios for the year-end 1996. Of the 50 financial institutions in South Asia, 5 are in Bangladesh (total capital of $20.6 million, total assets of $594 million), 1 is in India (total capital of $1.2 million, total assets of $3.5 million), and the remaining 46 are in Pakistan. Of the 35 institutions in Africa, Algeria, Djibouti, Gambia, Guinea, Mauritania, Niger, South Africa, Senegal, and Tunisia have 1 bank each, and the remaining 26 are in Sudan. Total capital of those 9 countries’ institutions is $102 million with assets of $376 million representing roughly 48 and 19 percent respectively of those of all Africa. Of the 30 IBs in Southeast Asia, 3 are in Brunei, 4 are in Malaysia, 1 is in the Philippines, and the remaining 22 are in Indonesia. Two Malaysian Banks-Bank Islam Malaysia Berhad and Lembaga Tabung Haji-together account for $3.3 billion of the total assets of $3.8 billion for the entire region.

Middle East is defined here as Egypt, Iran, Iraq, Jordan, Lebanon, Turkey and Yemen. Egypt has 4 IBs (total capital of$337 million with assets totaling $4. billion), Iran has 10 (total capital of $32.4 billion with assets totaling $50.2 billion), Iraq has 1 (capital $402 million with assets of $9.9 billion), Jordan has 2 (capital of $23.5 million

TABLE 1
ISLAMIC BANKS AND FINANCIAL INSTITUTIONS AT YEAR-END 1996 (in $ million)

Region # of Banks Capital Total Assets Total Deposits Net Profit Capital to Asset in % Net Profit as % of Total Assets
South Asia 50 962 45,201 27,042 350 2.1 0.8
Africa 35 213 1,951 603 39 10.9 2.0
Southeast Asia 30 136 3,801 1,572 184 3.6 4.8
Middle East1 24 4,060 67,142 54,288 373 6 0.6
GCC2 19 1,340 18,084 16,494 686 7.4 3.8
Europe & America 8 559 952 1,164 54 58.7 5.7
Total 166 7,270 137,131 101,163 1,686 5.3 1.2
1 -Middle East includes Egypt, Iran, Iraq, Jordan, Lebanon, Turkey, and Yemen.
2- GCC stands for Gulf Cooperation Council, consisting of Bahrain, Kuwait, Qatar, Saudi Arabia, and United Arab Emirate (UAE).
SOURCE: International Association of Islamic Banks, Jeddah, Saudi Arabia, quoted by Timewell (1998).

with assets of $871 million), Lebanon has 1 (capital of $7.7 million with assets of $21.6 million), Turkey has 4 (capital of $33.8 million with assets of $1.2 billion), and Yemen has 2 IBs with a total capital of $12 million. It should be pointed out that about 49 percent of all assets of IBs in the world are commanded by this region and this is principally because of Iran, whose entire financial system is based non-interest bearing transactions and instruments.

The various states constituting the Gulf Cooperation Council, GCC, have 19 IBs of which 10 are located Bahrain, the de facto center of financial activities for the GCC. Of the 10 IBs, data are incomplete for 2. Except for Faysal Islamic Bank of Bahrain E.C., the rest of them have capital less than $100 million each. Bahrain Islamic bank with assets of $376 million is the largest, with the Faysal Islamic Bank a close second with $356 million in assets. Kuwait has three IBs (total capital of $276 million with assets of $4.9 billion), Qatar also has three (capital of $78 million with assets of $1.3 billion), Saudi Arabia has two (capital of $453 million with assets of $10.5 billion), and the United Arab Emirates has one Islamic banking institution with capital of $136 million and total assets $1.9 billion.
The IBs in Europe and America are 8 in numbers shown in Table 1. Of these, one is in the Bahamas ( capital of $15 million with assets of $26 million), one is in the Cayman Islands (capital of $300 million with assets of $388 million), one is in Switzerland (capital of $14 million and assets of $73 million), one is in United Kingdom (capital of $182 million and assets of $385 million), and four are in the U.S., of which data are available only for two (capital for the two totals $49 million with assets of $60 million). These eight IBs are essentially investment banking, credit and fund management outfits as can be seen from their combined capital-to-asset ratio of 58.7 percent.
In general, the IBs of the various regions except Africa seem to have inadequate capital by the basic standard of capital adequacy. The worst situation is in South Asia where Pakistan dominates the number and assets of the IBs. Like Iran, Pakistan declared that its banking is to be based on the Islamic system, and it does not seem to be running them efficiently. The next precarious region is Southeast Asia where Indonesia dominates the IBs. Most of the IBs in Indonesia are very small-only three of them have capital between $100 and $162 million with combined assets of $2.3 billion. In general, return to assets (net profit as percentage of total assets) of the IBs seem to be very low in South Asia and the Middle East where most of them are located. Table 2 sheds more light on this.

Table 2
FINANCIAL POSITION OF THE TOP 20 ISLAMIC BANKING INSTITUTIONS AT YEAR-END 1996 (in $ millions)
Region Rank by Assets Capital Total Assets Total Deposits Net Profit Capital to Asset in % Net Profit as % of Total Assets
Bank Melli Iran 1 656 19,297 18,617 53 3.4 0.2
Iraqi Islamic Bank for Develop. & Invest 2 402 9,900 10,900 NA 4.0 NA
Halib bank of Pakistan 3 72 9,827 5,684 21 0.7 0.2
National Bank of Pakistan 4 73 9,348 6,081 90 0.8 1.0
Al-rajhi Bkg & Ivest. Corp.-Saudi Arabia 5 400 8,608 6,051 322 4.6 3.7
Bank Tejarat, Iran 6 326 8,544 6,978 23 3.8 0.3
Bank Sedarat, Iran 7 542 7,055 466 0.5 7.7 –
Bank Mellat, Iran 8 346 6,535 4,967 NA 5.3 NA
United Bank, Pakistan 9 49 5,088 3,704 9 1.0 0.2
Kuwait Finance House 10 169 4,732 3,767 271 3.6 5.7
Muslim Comm. Bank Pakistan 11 45 4,071 2,816 3 1.1 –
Agricult. Bank of Iran 12 233 3,024 1,001 11 7.7 0.4
Allied Bank of Pakistan 13 20 2,558 1,493 4 0.8 0.2
Islamic Int’l Bank for Invest. & Develop, Egypt 14 134 2,358 1,494 34 5.7 1.4
Agricult. Develop. Bank of Pakistan 15 104 1,982 81 6 5.2 0.3
Dubai Islamic Bank, UAE 16 136 1,935 1,754 16 7.0 0.8
Faisal Islamic Bank of Egypt 17 100 1,900 1,508 85 5.3 4.5
Lambaga Tabung Haji, Malaysia 18 NA 1,877 1,817 145 NA 7.7
Bank of Industry & Mine, Iran 19 729 1,778 147 88 41.0 4.9
Bank Islam Malaysia Berhad 20 53 1,442 1,278 15 3.7 1.0

NA = not available
— = insignificant percentage.
SOURCE: International Association of Islamic Banks, Jeddah, Saudi Arabia, quoted by Timewell (1998)

Table 2 presents data on financial positions of the Top 20 IBs for the year-end 1996. It appears from the data that the IBs in Pakistan and Iran, the two countries officially under Islamic system, fared rather poorly compared to the other IBs operating under dual banking systems. Only an Iranian bank, Bank of Industry and Mine, which performed relatively well, is a very specialized bank with a capital-to-assets ratio of 41 percent. The banks in GCC, with the exception of Dubai Islamic Bank, showed relatively higher return to assets ratios among the Top 20 IBs. One Malaysian bank, Lembaga Tabung Haji, had the highest return to assets for the year-end 1996 among this group. Probably, this picture is completely changed in the aftermath of the crash of the financial markets in the South East Asian region in 1997.

To gauge the relative performance of the IBs in terms of returns to assets, we examined around 200 banks worldwide with total assets ranging between $1.5 billion and $20 billion–the same range as the top 20 IBs in Table 2. For the year-end 1996, we found that the mean return was 1.53 percent, with a median of 1.22, and these ranged between — 12.43 and 16.451. Twelve of our top twenty banks performed well below the averages, for two we have no information, and only six IBs were above these averages. The June 1998 ranking of world’s banks by Moody’s Investor Services show that the banks in IBI countries are in either vulnerable or very weak financial condition with rankings of Ds and Es, respectively [The Wall Street Journal 1998].

The better performance of the IBs in the dual banking system countries (i.e., IBs working side by side with predominantly modern banking and financial institutions) calls for an explanation. It seems as though the need to compete with the regular banks in attracting depositors’ money, pressures the IBs to essentially follow the practices of those banks under Islamic garb and try to manage their portfolios more carefully so that their customers and investors do not get disillusioned [see for example the study of IBs and conventional commercial banks in Turkey [Kuran 1995]. As we discuss the actual practices of IBs in the next section, this point will be made clearer.

Products/services of Islamic Banking Institutions

It would be helpful, at the outset, to review some of cardinal elements of economic transactions according to Islam, which laid the foundation of the Islamic banking system.

The most salient characteristic of such system is the prohibition of riba (often translated as usury or interest), a pre-determined -fixed or variable -charge levied for the use of a loaned commodity be it real or financial asset.

That riba is unequivocally banned in Islam is borne by four specific references in Islam’s holy book, Quran, and several ahadith -narrations attributed to prophet Mohammad. For example, Quran states, ” Believers! Do not consume riba, doubling and redoubling. ..” 2 (Ch. 3, verse 130), and “…God has made buying and selling lawful, and riba unlawful…” (Ch. 2, verse 274). Prophet Mohammad condemned not only those who take interest but also those who give it, record it, or witness it, saying that they are all alike in guilt. Indeed, not only Islam, but also Judaism and Christianity ask their followers to shun usury to avoid hell fire [Homer 1977]. The common thread running through all such condemnations of riba is its exploitative nature and not the concept of profit, which is lawful in Islam if justly and fairly earned.

As such, while there is considerable debate among Muslim scholars as to the exact nature of this prohibition and exactly what constitutes a usurious transaction3, there is a common perception that ban on riba is tantamount to ban on interest, be it paid or received. Hence, the various financial instruments developed by Islamic banks have been based on two principles: the profit-and-loss sharing (PLS) principle and the mark-up principle [Errico and Farahbaksh, 1998, Aggarwal and Yousef 2000]. The financial contracts offered by the IBs can be classified into five basic categories: (1) non-interest bearing demand deposits (checking accounts); (2) mudaraba, (3) murabaha, (4) musharaka, and (5) ijara.

Conventional checking accounts in modern commercial banks are non-interest bearing deposits, and since IBIs shun interest rate based dealings, most of them offer such demand deposit accounts. Ideally, IBs should not be charging any fees on checking accounts as they are free to employ the depositors’ money, subject to the reserve requirements, if there are any, into earning assets [Siddiqui 1978]. In practice, however, this is not always the case. Depending on the size of the deposit, service charges and fees get collected to meet operating “costs”.

IBs offer savings and time deposits in the form of investment accounts under the system of mudaraba. The depositors of such accounts share profits and/or losses of the institutions under an agreed-upon formula [Siddiqui 1986]. The depositors in mudaraba accounts are the suppliers of capital, rabb al-mal, who entrust their funds to the bank, mudarib, in the tradition of Western style investment banking, subject to dealings with only non-interest bearing instruments [De Belder and Khan 1993]. The mudarib, acting as money manager or agent, invests the money and then distributes the profits and/or losses on the basis of the agreed-upon contract. The following conditions must be met:

1) Profits to be shared must be proportional to the funds contributed to the mudaraba account and these cannot be in lump sums or in guaranteed amounts.
2) The loss to the depositor (contributor of funds) cannot be more than the amount of deposit.
3) The mudarib does not share in the losses, except for the time and efforts put into the management of the mudaraba funds or in cases of mudarib’s negligence.

The third principle leaves it wide open for an unscrupulous or careless money manager to engage in questionable transactions leading to losses to depositors, or worse–even failure of the financial enterprise. This is especially problematic in the Muslim countries where there is a general lack of transparency in economic transactions, and where periodic public disclosure of financial performance of firms to their stakeholders, are essentially non-existent.

Siddiqui ( 1986) cites the use of four other forms of mudaraba ventures by the existing IBs. In one case, two-tier mudaraba, the depositors and the bank combine their funds to invest in ventures such as mutual funds and then share profits and/or losses. Another variation of the mudaraba account is that an outside entrepreneur comes to the bank and borrows depositors’ (and the bank’s) money to invest in a venture. The bank and the entrepreneur become partners and share in profits and/or losses. The examples Siddiqui provides to illustrate the cases of mudaraba accounts deal with a 20 percent profit or loss on the invested amount and the way they are distributed among the parties. In this particular type of mudaraba, the entrepreneur has to return the principal amount borrowed and share equally in the profits and losses. It is not clear, however, what would happen if the entrepreneur lost the funds borrowed completely. There are two other variations of these types of accounts. The jurists are not all in agreement as to the conditions that satisfy a particular transaction in a mudaraba [Naqvi 1993].

The mudaraba accounts are popular with the IBs partly because they assume very limited liability and risk while earning rather hefty margins. As currently practiced, they simply collect “profits” (estimated ahead of time) from the borrowers. Suppose an individual wants to borrow $100,000 for building a single-family home. The IBI agrees to lend the money at an agreed upon “profit” rate of 12 percent per year. However, the borrower receives a check for only $88,000 and is asked to pay back the full amount of $100,000 at the year-end. This mudaraba account yields the equivalent of 13.64 percent to the bank. If the “profit” rate were named “interest” rate, the borrower would still pay the 13.64 percent effective rate. If the borrower could not pay back the loan because the project failed for whatever reason, it is not clear how the IBs will treat the loan and the defaulting borrower.

Similar problems are faced by depositors and/or subscribers of capital to the IBs. If the institutions fail to invest their depositors’ and shareholders’ money judiciously, there is no recourse to recover some of the funds lost. The failure of the Ar-Ryaan investment banking outfit in Egypt devastated the poor Egyptian subscribers, some of whom lost their life’s savings.

The third instrument, murabaha (or more specifically, bai-mujal murabah -cost plus financing), used by the IBs consist of transactions where the institution buys a product (e.g., a car or a machinery) on a client’s behalf and then resells this with a mark-up to a client, the borrower [DeGelder and Khan, Op Cit., Chapra 1985]. Thus, an automobile selling at a price of $20,000 may be bought by the IBI and resold to a client at $25,000, to be paid back in monthly installments (or a lump sum at the end of the loan term) over a 2-year period. The implied rate of interest is 11.21 percent for this transaction. If the buyer of the car went to a conventional bank and borrowed $20,000 at a rate of 11.21 percent interest for buying the car directly from the dealer, s/he would pay a total of $22,418.59 (monthly installment of $934.11 multiplied by 24 months), instead of the $25,000 charged by the IBI. The additional sum of $2,581.41 for the same car for the privilege of calling interest rate a profit rate cannot be justified on any ground.

Other variants of murabaha transaction are al-bay’ bithaman ajil where a bank allows deferred payment within an agreed period, and bay’ salaam where a buyer pays an agreed price in advance for commodities that will be delivered at a future date [Chapra, Op. Cit., Siddiqi 1999]. In order to justify murabaha transactions, IBs have come up with elaborate contract requirements between the bank and the seller of the merchandise, and between the bank and the buyer of the product [De Belder and Khan, Op Cit., Edwards, 1999]. These contracts detail the rights and responsibilities of each party including financial terms of the contract. The title to the property is retained until the debt is paid off just like in conventional banking. Borrowers with deep religious feelings may accept murabaha transactions, but average consumers or business clients would notice the higher implied costs and the striking similarity with conventional discount loans! [see Abdul Gafoor 1995, ch. 4, section titled “Uneasy questions of morality” for further discussion of such dubious practices].

The fourth instrument used by IBs is musharaka, which is a form of equity financing through joint ventures. Unlike the case of mudaraba, here the bank not only participates in the supply of capital to the venture, but also in its management. Thus, the IBI assumes the role of an entrepreneur as well as that of a financier [Chapra, Op Cit., 1999]. Like mudaraba and murabaha transactions, musharaka also requires elaborate written contracts defining the conditions under which the parties are to operate. For an IBI to become an efficient partner in projects under musharaka agreement while performing the role of a depository institution and that of a financial intermediary seems to be unrealistic. Even the well-trained bankers in the modern financial institutions of the West seldom perform such varied tasks for their clients! If the return on assets and the size of net profits are any indication of the performance of financial institutions, then surely the IBs are not up to par with the modern financial institutions.

The fifth instrument used by the IBs is ijara or leasing. Two types of leases are used. In one, the lessee pays the lessor installment payments that go towards ultimate purchase of the equipment by the lessee [Wohabe 1997]. This type of lease/purchase agreement is known as ijara Wa-iqtina [Martin 1997]. The second type of lease maintains the ownership of the lessor as per the lease contract. DeBelder and Khan (1993) cite the provisions of a model contract between the lessor (the IB) and the lessee in Pakistan. These provisions seem to have been drawn from the practices of modern finance companies, only these are more favorable to the IBs. For example, the provision that “The lease can be terminated at any time by the Lessor after twelve months…”, or “…current Pakistani business practice results in monthly lease rentals generally working out to be equal to installments of principal plus about an amount equivalent to interest of 22 percent per annum” (p. 6 of the electronic version). The demand for lease financing seems to have prompted the IBs to come up with contract instruments that satisfy their religious councils and yet earn them returns equivalent or better than those earned by conventional finance and banking institutions.

Conclusion

The foundation of the Islamic banking system is based on the prohibition of interest from transactions. The IBs, under the guidance of their religious councils (usually such councils differ among themselves on the Islamicity of various transactions) have developed various financial instruments discussed above. Despite their intention to avoid interests, most of the transactions indeed involve use of fixed percentages of profits (and presumably, losses) that are nothing but interest under a different name.

The financial instruments are based on contracts made by the various parties. It is argued that as long as all conditions are written down and known to the participants in the contract, it does not matter whether the financial institution collects “profits,” fees and commissions ahead of time or later. From the various references cited in the paper, it appears that the IBs set their “profit” rates for each contract that reflect the going interest rates plus, usually, some premium. The Annual Reports of Bank Islam Malaysia Berhad for 1994 through 1996 show that the rate of profit for investment accounts (similar to time deposit) to the depositors goes up consistently as the time length of deposits increases. For interest-based banks, this should not be surprising because the depositors would expect to be compensated for maturity risks. However, for an Islamic bank based on “profit” sharing, how is it possible that all long-term investments are more profitable than the ones with shorter durations? These “profit” rates seem to be prefixed just like interest rates of conventional banks, or “quite comparable with the rates of return offered by conventional banks”! [Ariff, 1988]. In the same vein, Aggarwal and Yousef (2000), based on their own case studies of banks in Jordan, Malaysia, Egypt, and Iran, as well as other studies that they review, find that Islamic banks rely much more heavily on markup (debt-like) financing than on PLS (equity-like) financing. Only in Iran, they note, is there a significant PLS component to new flows of financing; that most financing does not appear to be long term in nature4; and the evidence on whether or not Islamic banks provide financing to capital intensive sectors of the economy, such as, industry , to be mixed at best. Large banks, they note, use murabaha financing more frequently than do smaller banks and offer more financing to agriculture/industry.

The prohibition of usury (riba) in Islam is to ensure economic justice and fair play by providing the stronger partner in transactions from taking advantage of the weak one. This can be achieved if the lender receives a return that covers the costs of funds and provides a return to shareholders commensurate with earnings that a silent partner can muster from the joint ventures in business. That is, the return must be in proportion to actual earnings from the borrowed funds, minus the compensation to the borrower as the entrepreneur and manager of the undertaking. Of necessity, this return will vary over time. As a result, the stipulated profits to be distributed will also vary from one period to the next (whether monthly, quarterly, semi-annually or annually). Whether this is called interest rate or profit does not make any difference to the nature of payments by the borrower and receipts to the lender. The ideal Islamic transactions (i.e., transactions that establish economic justice) will be the one where rates of payments and receipts closely resemble the ever-changing costs and returns. Flexible interest rates that adjust quarterly, or as soon as costs and profits can be estimated, would go a long way toward the abolition of usury than the current methods of ascertaining “profits” by the IBs. Until this is done, it is not feasible to establish standard banking practices across the Muslim countries. Such absence of the institutional framework needed to create the type of security and standardization required by the international banking system is noted as one of the major limitations constraining the growth of Islamic banking [Proctor 1997, The Banker 2000]. At present, religious scholars of different countries differ on the suitability of one instrument or another.

The conventional banking institutions are not the answer for the Muslims. What are needed are institutions that charge or pay interests which are not only flexible, but also reflect actual costs of and returns from operations. Thus, a true IBI could not offer long-term CDs on fixed rates, nor could it provide fixed-rate mortgages or installment loans. The ideal rates will vary with the changing business and economic conditions so that neither the depositors nor the borrowers and investors face undue economic hardships from financial transactions. To make this possible, there is an urgent need for qualified and trained people, a free press and unobstructed flows of information. All these are wanting in today’s Muslim states.

Note

1 The data were collected from the World Scope of the Disclosure Data Base, June 1998, and the estimates were made by using the Minitab statistical package.

2 According to Tabari (Jami, no date, V .4:49), riba in the pre-Islamic period consisted of doubling and re-doubling of the principal amount of commodities lent over a period of time. When a borrower, at the appointed date could return the original amount borrowed in full, no additional amounts were charged to him. However, if he failed to pay in full, the lender would allow the borrower to pay back next year in double the quantity borrowed originally. If again, the borrower could not pay back the next time, the loan would be extended for another year for double the amount that was due at the end of the second year. Similarly, al-Zamakhshari (al-Kashshaf, no date, :234) points out that even a small debt could consume the wealth of a debtor because of repeated doubling of the original amount of goods borrowed arising out of the inability of the debtor to pay back. Afzal (1996) details the various interpretations of riba by classical as well as modern Islamic scholars/jurisprudents and goes on to show how the controversies arose since the early time of Islam.

3 Despite the interpretation of riba as doubling and redoubling of the principal lent, the Fuqaha extended the scope of riba to cover all transactions that call for any increase over the amount lent, and at any time any faqih (a religious scholar) gives contrary opinion is declared a heretic. Among those who do not believe all transactions involving interest are usurous are Sanhuri (1954-1959), al-Saud (1985), Tantawi (1989), Salus (1991), Suhail (1936), Ali (1994, commentary on Quran Chapter 2, Verse 275, commentary no.324), Shah (1967), and Rahman (1980:41), to name a few.

4 Such focus on short term project is also noted by Abdul Gafoor [1995] as well as Edward [1999] and, at times, has been attributed to the shortage of trained personnel with expertise in assessing long-term projects [Iqbal and Miakhor, 1987] or absence of backup institutional structures such as secondary capital markets for Islamic financial instruments [Ariff 1988].

References

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*M. Raquibuz Zaman is Charles A. Dana Professor of Finance & International Business and Chairman, Department of Business at Ithaca College. His publications are in the fields of foreign direct investment, financial markets, trade and development, and Islamic economics.

Hormoz Movassaghi is associate professor of Finance & International Business in the School of Business, Ithaca College. His research interests are in the areas of foreign direct investment, international trade, export behavior of small and medium sized companies, banking, and e-commerce.

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