Managing Quality And Risks With MS1900
The government’s vision to position Malaysia as the global Halal hub in early the 2000’s has led to the development of many halal initiatives which include the establishment of the Industry Halal Committee for Halal Standards (ISC I). The committee is responsible for the development of halal standards in the country. Its scope covers standardisation in the field of generic management systems, food and non-food from Islamic perspectives. In 2005, the ISC I successfully introduced the MS1900:2005 – Quality Management Systems-Requirements from Islamic Perspectives. The standards was later revised in 2014 and was given a new title i.e MS1900: 2014 Shariah-Based Management Systems.
Based on the framework of the ISO 9001 that is widely used for quality management systems, the MS1900 is the first Islamic management standards in the world. Both standards aim at quality management. However, the former does not incorporate certain aspects of Shariah requirements which are a concern to Islamic practitioners and consumers. Therefore, in addition to the existing ISO 9001 features, Shariah requirements are being incorporated into MS1900 so that organisations are managed in accordance with the Islamic practices and principles. For that, MS1900 is also referred to as the Islamic version of the ISO 9001 certification.
Even though the standard is developed and published by the Department of Standards Malaysia, the contribution of IKIM in the process of introducing the standard to the industry players should not be overlooked.
The idea to introduce Islamic standards in Malaysia was first mooted by Tun Ahmad Sarji Bin Abdul Hamid who is the former Chief Secretary to the Government of Malaysia cum chairman of IKIM—the post he helmed from 1992–2009. In his observation, poor governance is the main factor that caused the collapse of companies around the world. It is manifested through corruption, mismanagement and lack of accountability among leaders and employees.
Every problem remains a problem until we discover the right solution. For Tun Ahmad Sarji, the best approach to address such a predicament lies in Islamic values and ethical principles. Once they are embedded in the standards and made compulsory for compliance by companies or institutions that have a serious stand on good governance and ethical conduct, the issue will resolve or disappear. This is possible because companies which subscribe to MS1900 are subject to rigorous scrutiny and audit—both internally and externally before they can be awarded the MS1900 certification.
In Islam, rule compliance is the only means that can bring man to the attainment of al-falah or real success in his life. In the case of MS1900, the concept of rule compliance is adopted and utilised to ensure organisations abide by Islamic values and Shariah requirements. The intended result of this MS1900 certification is increased governance and organisational performance.
As a matter of fact, the concept of rule compliance is deemed important for organisations. This is evident from the success story of Japanese corporations which have successfully made their products and services as household names across the world. Standards by their nature, give state of the art specifications for products, services and good practice. Compliance to the standards thus helps companies to minimise error and increase productivity. Such is the Japanese practise—besides their kaizen culture of constant and continuous improvement—to remain competitive in the marketplace.
In any organisation, human capital is the driving force behind business success. Any wrongful acts committed by human capital can expose companies to operational risks. For instance, by abiding by the Islamic concepts, employer-employee relationship, not only an organisation can address wrongful acts in relation to operational risks among human capital, but it can also help in establishing a harmonious employer-employee relationship (Seidu, 2008). In other words, compliance to the teachings of the Quran and Hadith will eliminate human errors in operational risks—-which are also the dominant issues deliberated on in risk management framework.
This is evident in surah al-Nahl as Allah s.w.t says to the effect: “Whoever works righteousness, man or woman, and has faith, verily, to him will We give a new Life, a life that is good and pure and We will bestow on such their reward according to the best of their actions.” (16:97). It is therefore argued that if it is embedded in management process, the concept will also generate positive result to any organisation. This is because adherence to the guidance prescribed by the Shariah will not only result in quality performance, but will also reduce risk exposures of individuals and organisations to any possible vulnerability
In Islam, compliance to Allah’s laws is the key to success in this worldly life and in the Hereafter. The rule is applicable to individuals and organisations alike. As such, abiding by the principles derived from the Quran and the Sunnah will definitely drive any institution toward business excellence and create a better-risk management culture in its working environment.
In view of this rule too and by looking into the present state of governance, it is high time for organisations in Malaysia to adopt MS1900 certification. The MS1900 could serve as a double edged sword for compliance to the standards whose fundamental principles are deduced from Islamic teachings in which it will not only produce positive impact on organisational performance, but also result in better risk management.
