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FACTORS SUSTAINING SOCIAL ENTERPRISES FROM THE TAWHIDIC

PARADIGM IN MALAYSIA
Zaliza Azan
International Islamic University Malaysia

Zarinah Hamid (Corresponding author)

International Islamic University Malaysia
Email: [email protected]

Suhaimi Mhd Sarif

International Islamic University Malaysia

Yusof Ismail
International Islamic University Malaysia

Date submitted: 14 November 2019; Date accepted: 15 December 2019; Date published: 31
December 2019

ABSTRACT

This paper attempts to analyze the factors that sustain social entrepreneurship theory from Tawhidic paradigm
perspective. It describes the nature of the social entrepreneurship, the scope and boundaries of assessment on
social entrepreneurship environments, and the assessment of internal aspects social entrepreneurship entities
in order to formulate, implement, and evaluate strategies for survival and growth. This paper also develops an
alternative model as a means to achieve sustainability in terms of innovation and competitive advantage for
social entrepreneurship. It uses in-depth interviews with 10 participants including policymaker, subject
matter experts, and founders of social enterprises in Malaysia. The finding indicates that the Tawhidic
approach contributes to the theoretical and practical understanding of the factors sustaining social enterprises
in Malaysia. Future research should incorporate more participants to further debate the dynamics of key
components in the subject matter of the study.

Keywords: sustainability; social enterprises; Tawhidic paradigm

INTRODUCTION

In general, although the enterprises' motive was to make profit, they still made a huge contribution to the economy through
tax and charitable activities. The dynamism of the economic activities has shifted the economic attention to include entities
within the society to take part in social entrepreneurship. However, a theoretical problem remains on how entrepreneurs
could unify the economic, social, and ethical concerns into business entities. Mathematical equations in many economic
theories could not solve this issue. Likewise, many qualitative studies have shown that there are theoretical misalignments
in integrating the two concepts harmoniously in social entrepreneurship.

Social entrepreneurship in the contemporary economy requires more dynamism to sustain its function as a vital engine of
economic growth. Sustainability has been debated from the contemporary view as ideally incorporating a holistic and
balanced approach for business and societal activities. The implication of social entrepreneurship for the region continues

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to receive positive feedback from the society. With the mission and vision of the social enterprise accepted worldwide,
the social business can gain competitive advantage through the innovation that they created and sustain over time.

Ideally, sustainability has been debated as a contemporary view for a holistic and balanced approach for business as well
as social activities. The main argument for the sustainability view is to address the damages, pollution, and problems in
human society from bigger, comprehensive, and holistic stakeholders' perspectives. Nevertheless, scholars are still unable
to offer the sustainability theory with holistic, balanced, comprehensive and bigger perspectives for social
entrepreneurship. The market is waiting for government-driven initiatives on sustainability instead of proactive roles from
the industry. The issue of sustainability has been debated without having solid, concrete, substantial and comprehensive
view.

Factors sustaining social enterprises from the Tawhidic paradigm offer an alternative model that is based on Islamic
teaching and spirituality. This alternative model offers new insight and philosophy to sustain social enterprises from the
spiritual dimension. The primary contribution of the Tawhidic paradigm as an alternative insight to sustain social
entrepreneurship is due to the dual objectives i.e. for business profitability and social well-being. There have been
theoretical debates on how could social entrepreneurship achieve dual objectives when both objectives are mutually
exclusive. Indeed, the Tawhidic paradigm offers a comprehensive, holistic, and balanced view on the roles, duties, and
functions of human to achieve dual objectives as servants and vicegerents of Allah guided by the Holy Qur'an and the
Traditions of Prophet Muhammad PBUH.

The objective of this paper is two-fold. Firstly, it is to examine the elements in the Tawhidic paradigm that can sustain
social enterprises. Secondly, it is to explore the insights that contribute to the factors in sustaining social enterprises from
the Tawhidic paradigm.

The paper is structured as follows. Section 2 reviews the literature related to social entrepreneurship, triple bottom line
concept and Tawhidic paradigm. This is followed by methodology adopted in this study under section 3. Section 4
discusses the findings of the study followed by some discussions in Section 5. Lastly, Section 6 concludes.

LITERATURE REVIEW

Social Entrepreneurship

Social entrepreneurship involves seizing the benefits for the innovation of a social purpose in the economy (Corner & Ho,
2010; Leadbeater, 1997). To succeed in business, some people do things differently from others even though the main
reason to venture into business is to make profits. This is supported by research which investigated at the beginning of
social entrepreneurs showed that the result or outcome of the organization stands out (Dees, 2001; Fiet et al., 2006).

Opportunity identification in social entrepreneurship describes social entrepreneurs as actively seeking new ideas to serve
the society. According to Weerawardena & Mort (2006), the process of opportunity identification and evaluation is
influenced by social mission, organizational sustainability, and environmental dynamics. Thus, the social
entrepreneurship term has been used to describe the avocation and mission of a society. It may also refer to the notion of
“total wealth” as presented by Zahra et al. (2009). Social entrepreneurship embodies the relationship between social
activities and economic wealth generation conducted to sustain business activities (Boschee & McClurg, 2003; Emerson
& Twersky, 1996; Thompson, 2002). There are perceptions that the Islamic-based social entrepreneurship could be
assimilated with socialism and communism, which are practiced in Eastern Europe, the former Soviet Union, and

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communist countries.

To create social entrepreneurs, it is essential to plan the idea from the early stage so that entrepreneurship will sustain in
the long term. One of the major reasons why entrepreneurs or owners of social entrepreneurship should begin with
planning is to increase the probability of success and sustainability (Kickul & Lyons, 2012). As a way to achieve its
objective, a social entrepreneurship needs to have a plan and operate accordingly (Miller, Cardinal, & Miller, 1994;
Rogers, Miller, & Judge, 1999).

Triple Bottom Line Concept

Sustainability is always the primary concern in economic planning. The well-being of the nation is always being indicated
with numbers instead of the quality of living, welfare, and wellness of people. Instead of this, economic planning and
development have always subscribed to the holistic, balanced and entrepreneurial approach to assure sustainable growth
and benefit to all stakeholders. Thus, the introduction of the Triple Bottom Line (TBL) concept introduced by John
Elkington in 1994 has been used by many organizations to gain sustainability development. According to Elkington
(1994), he argued that the profit of the business activities is not the ultimate goal but to give impact to the social and also
save the environment in a way to gain sustainability for now and future needs. TBL or also commonly called the 3Ps i.e,
people, profit and planet, is an accounting framework to measure sustainability.

Under people concept, it is said that an organization needs to focus on human touch relationship. It involves activities
which give social impact or economic development. It is designed for people-centric individuals in order to gauge the
extent of the organizations benefits the society. Meanwhile, the profit emphasis is on the flow of income and business
diversity factors. Finally, the planet or environmental concept looks at how the organization's strategy highlighting the
importance of protecting the environment for sustainability.

Figure 1: Triple Bottom Line Concept

Tawhidic paradigm

Tawhidic paradigm is a belief in the operationalization of Islam as a way of life. Tawhid refers to the absolute oneness of
power and guidance without any association. Paradigm refers to mental imagery, thinking, and mental visualization. The
Tawhidic paradigm can thus be defined as the absolute oneness of power influencing and dominating mental imagination,
thinking, and visualization of life. The subscription to the Tawhidic paradigm requires knowledge, conviction, love,
sincerity, adherence, and acceptance before operationalizing it into life.

The key to operationalizing Tawhid in life is through worship (‘ibadah) as servant (‘abd) and vicegerent (‘khalifah) of

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Allah. Any action and decision is regarded as worship if in line with Islamic teachings. In terms of classification, there
are general worship (‘ibadah am) and specific worship (‘ibadah khusus). General worship includes every action, deed,
and activity in everyday life. Specific worship, on the other hand, is limited to time, space, and event. Figure 2 summarizes
the elements of the Tawhidic paradigm.

Figure 2: Elements of Tawhidic Paradigm (Source: Ismail & Sarif, 2011)

Tawhidic Paradigm

Servant of Roles and Vicegerent of Allah

Allah Duties

Core Values Nahyu

‘Amr Ma’aruf
Munkar

Khayr Birr Halal Sharr Sins Haram

For this purpose, the introduction of the Tawhidic paradigm that combines the spirit of Tawhid (Unity of God) with the
roles and duties as servant and vicegerent of Allah is believed as the right guideline to gain sustainability in business.
With this spiritual awareness, the evolving and continuous operation of the Tawhidic paradigm approach in social
entrepreneurship will result in businesses achieving their mission and objectives by implementing mutually reinforcing
values referred to as promotion of goodness (‘amr bil ma’aruf) and prevention of evil (nahi ‘anil munkar).

The use of the Tawhidic paradigm in this research is aligned with the understanding of the Tawhidic paradigm as the
revelation that guides the thinking of human beings. The implementation of the Tawhidic paradigm begins with the
specified duties of mankind as vicegerents and servants of Allah towards the surrounding (Al-Faruqi, 1982). The
sustainable thinking in the Tawhidic paradigm, which can be used all the time has been specified from the beginning in
Al-Quran and Sunnah. In contrast, universal values consist of human values that are based on thinking. The conventional
ideas evolve using reasoning, which cannot sustain a competitive advantage since situational values need to adapt to
current developments of business duties and responsibilities.

METHODOLOGY

In this study, the use of in-depth interviews was adopted for data collection. Since the issue of social entrepreneurship is
not an easy concept to be tested through existing theories which are mainly interdisciplinary, this study tries to pave the
way for future studies by identifying factors which could sustain social enterprises from Tawhidic paradigm.

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For this study, a total number of 10 participants who consists of one policymaker, three subject experts and six social
enterprises were interviewed. Along the data collection process, We managed to get the quickest response via email from
the participants within 30 minutes while some of the interviews took around one month to book a slot for the interview
date due to the unavailability of suitable time.

Under the data analysis section, the transcription of the interview and field notes were used in this study. The coding was
divided into themes and categories in order to differentiate which data are going to be gathered and which data are
important for this study. Each theme and categories had been analyzed and translated accordingly to meet the objectives
of the study. Once sufficient data have been collected and transcribed, we progress to the next stage in building and
indexing a system for the dataset.

To analyze the data, the study uses QDA Software, ATLAS.ti that normally assists many researchers in getting accurate
theme and analyzing data for their research. With the help of ATLAS.ti software, the study can arrange and analyze the
data gathered from the interview in detail according to the right coding and theme.

The details of the participants involved in this research are described in Table 1 in terms of assign code, designation, job
description or principal activities.

Table 1: Summary of the participants

Code Designation Job Description / Principal activities

PM1 Director Planning and Development Section, Ministry of International Trade

(MITI)
EX2 Director Malaysian Academy of SME and Entrepreneurship Development
(MASMADE), Universiti Teknologi Mara (UiTM)
EX3 Director Entrepreneurship Development Centre, Universiti Sains Islam
Malaysia (USIM)
EX4 Manager Strategic Initiative Asian Centre of Entrepreneurship, Malaysian
Global Innovation & Creativity Centre (MaGIC)
SE5 Founder Sells do-it-yourself (DIY) product and bags made from preloved jeans

SE6 Founder Employs disabled people, single mother, and underprivileged youth
SE7 Founder Offers free workshop for employability among universities students
SE8 Founder Provides crowdfunding platform for helping underprivileged
university students to pay tuition fees
SE9 Founder Provides consultation and micro-financing to underprivileged women
towards entrepreneurship

SE10 Founder Sells sanitary pads made from bamboo to corporate company and
supplying it to underprivileged secondary students in Sabah

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FINDINGS

This section presents the feedbacks obtained from the personal interview with 10 participants consists of policymakers,
subject experts and social enterprises. The factors that sustain social enterprises include social, economic, environmental
and spiritual. The summary related to factors sustaining social enterprises from the Tawhidic paradigm is described in
Table 2.

Table 2: Analysis of factors sustaining social enterprises from the Tawhidic paradigm

Code Themes Details

PM1 Economic a) Long term planning

Social b) Proper business model
c) Trustworthiness
EX2 Spiritual a) Gain a reward from Allah
b) Believe in sustenance
EX3 Social a) Knowledge
b) Clear vision and mission
EX4 Social a) Intention to help society
Economic b)Innovation towards technology advancement
SE5 Environmental a) Protect the environment
Social b) Give impact to the society
SE6 Spiritual a) Reward from Allah
Economic b) Seek for business opportunities either collaboration
with government agencies or other social enterprises
SE7 Spiritual a) To please Allah
Economic b) Innovation towards 4th industrial revolution
SE8 Social a) Passionate
Spiritual b) Integrity
SE9 Economic a) Measure the impact to the society using Social Return of
Investment (SROI)
SE10 Environmental a) Intention to help society
Social b) Never give up

PM1, EX3, EX4, SE8, and SE10 argued that social factors essential for the sustainability of social enterprises which
involved trustworthiness, knowledge, clear vision and mission, impact to society, passionate and never give up. For
instance, PM1 mentioned:

[…] Islamic element jadi seorang yang reliable dan trustworthy. Bila sebab Nabi Muhammad SAW pun sebab
dia jadi usahawan yang berjaya sebab dia trustworthiness dia, orang percaya kat dia. Jadi bukan senang entity,
enterprise atau social enterprise, value dia yang consistence, istiqamah. value dia memang strong, ada dan
orang percaya. reliable trustworthy … business yang hanky-panky tak perlu. Sebab dia telah membuatkan diri
dia telah berada di tahap yang sangat tinggi.

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(Islamic element will make a person reliable and trustworthy. Prophet Muhammad PBUH is also a successful
entrepreneur because of his trustworthiness. People trust him. It is not easy for enterprise and social enterprises
to have consistency in value, steadfastness with very strong value and people trust the reliable trustworthy … no
hanky panky business because he has made himself to be at the top level)

PM1, EX4, SE6, SE7 and SE9 contended under economic factors for sustaining social enterprises are, among others: long
term planning, proper business model, innovation towards technology advancement and 4th industrial revolution, seek for
business opportunities either collaboration with government agencies or other social enterprises, and measure the impact
to the society using Social Return of Investment (SROI). As remarks made by SE7 under proper business model:

[...] Basically my point of view that social entrepreneurship can have any type of business model. For example,
you have Grameen Bank because the reason for it is that during 1980s, the Grameen Bank is the pioneer. Every
social entrepreneur would know who Prof Yunus is. Because he developed the model which is sustainable,
profitable and impactful. And this all based on trust. But it won't, Like I said, it was micro-financing. I mean you
go anywhere else in the world; it's entrepreneurship need business model. You have to have business model any
kind and you have the social impact.

SE5 and SE10 pointed out their mission to protect the environment and intention to help the society which fall under
environmental factors as an important factor for business sustainability. SE10 mentioned:

Kita dah support 1500 girls. Meaning kita dah sponsor sanitary pad kat dia orang which help reduce 376,000 pads
to the land field. Maksudnya tu dia punya dari segi environment. 5 pads tu can last until 5 years so dia dah save.
1 save economical and then environment, kita tak buang.

(We already supported 1500 girls. Meaning we already sponsored sanitary pads to them which helped reduce
376,000 pads to the land field. It means in terms of environment, 5 pads can last until 5 years so we save. 1
economical and then environment, we don't throw it away.)

For the spiritual factor, EX2, SE6, SE7 and SE8 emphasized on gaining reward from Allah, believing in sustenance, and
pleasing Allah as factors for social enterprises and sustainability in the business. This fact mentioned by EX2:

Ermm personally, Saya rasa sangat penting, it is very important sebab kalau kita tengok kepercayaan. You punya
believe kan. Kalau kita sebut paradigm la tu. It is a set of believe. A set of believe yang membentuk your paradigm
so dengan kepercayaan pada rezeki Allah akan bagi. And then kalau you tak buat kerja, mana you nak dapat
rezeki. You kena usahakan. Itu semua dah ada guideline dalam Islam. In fact, kalau kita tengok dalam agama lain
pun ada, bukan Islam je. Benda tu memang penting … Kita datang bekerja atau you buat business, kalau you tak
yakin tentang konsep rezeki ni, you kerja kuat hari tu tiba-tiba you tak dapat seperti sekuat mana you kerja kan.
Perasaan kita rasa lemahlah. Simple je konsep tu. Konsep yang sangat simple tapi susah nak dibuat lah. You
believe that macam mana hebat you pun, kalau Allah tak bagi, tak bagi lah. Tapi biasa nya usaha ni berkadaran.
Apa yang dapat, apa yang you buat, Allah akan bagi nanti.

(Ermm personally, I think it is very important (sustenance) because if we understand the concept of belief. Your
own belief. We talk about paradigm which is a set of beliefs. A set of beliefs that shapes your paradigm so with
the sustenance that Allah gives. And then if you don't do the work, how you will get the reward. You need to work
hard. That is all the guidelines in Islam. In fact, if we see from other religions, not in Islam only. That is the essential

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thing … If we go to work or you run a business, if you don't believe in the concept of sustenance, you work hard
every day and suddenly you did not get the reward as you wish. We will feel demotivated. Simple concept but hard
to do it. You believe that how good you are, if Allah does not want to give, so He will not give. But it is based on
our effort. What we work for, Allah will give.)

DISCUSSIONS

The above findings explain some of the factors related to sustaining social enterprises in Malaysia. In addition, this study
also explores new themes that need to be considered as competitive advantage tools. It includes the theme of Maqasid
Shariah approach with the implementation of the Pengurusan Tauhidik idea. Besides that, this study proposes using the
concept of Rahmatan Lil ‘Alamin for sustainability strategy not only for social enterprises but also for other business
activities.

The summary of findings and discussions are displayed in Table 3.

Table 3: Summary of findings and discussions

Paper Objective Findings & Discussions

To examine the elements in the Tawhidic a) Business Paradigm:

paradigm that can sustain social  Conventional – Capitalism
enterprises.  Islamic – Tawhid
 Duties as vicegerent and servant of Allah
b) Influence of the Tawhidic paradigm and Maqasid
Shariah approach in the social enterprise business
activities.
To explore the insights that contributes to a) Four Core Elements of Critical Success Factors:
the factors in sustaining social enterprises  Social
from the Tawhidic paradigm.  Economic
 Environmental
 Spiritual in Islam

b) Sustainability Concept (Triple bottom line)

Based on the qualitative findings of this study, a social enterprise’s sustainability model is presented in Figure 3.

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Figure 3: Influential factors sustaining social enterprises

Social Economic Environmental

Tawhidic paradigm Sustainability

Spiritual in Islam

CONCLUSION

Currently, social entrepreneurs strive to achieve sustainability and gain competitive advantage through the reactiveness,
and risk management behavior. Their behavior in a way is similar to the profit-oriented entrepreneurs, which requires
them to adopt competitive ideas to achieve their social mission and to sustain in the industry. In doing so, they are
responsive to and constrained by environmental dynamics. They continuously interact with a dynamic environment that
forces them to pursue sustainability, often within the context of the relative resource of the organization (Davis, 1973).

The use of the Tawhidic paradigm in this paper aligns with the understanding of the Tawhidic paradigm as the
revelation that guides the thinking of human beings. The implementation of the Tawhidic paradigm begins with the
specified duties of mankind as vicegerents and servants of Allah SWT towards the surrounding (Al-Faruqi, 1992). The
sustainability thinking in the Tawhidic paradigm that can be used throughout all times has been specified from the
beginning of the Holy Quran and Sunnah. In contrast, universal values consist of human values that are based on thinking.
The conventional ideas evolve through reasoning, which cannot sustain the competitive advantage since situational values
need to adapt to current developments of business duties and responsibilities.

The finding of this paper indicates that the Tawhidic approach contributes to the theoretical and practical
understanding of the factors sustaining social enterprises in Malaysia. For this study, a total number of 10 participants
who consists of one policymaker, three subject experts and six social enterprises were interviewed. Future research should
incorporate more participants to further debate the dynamics of key components in the subject matter of the study.

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