Organizational Behavior in Islamic Firms

Organizational Behavior in Islamic FirmsAuthor(s): Peter WrightSource: Management International Review, Vol. 21, No. 2 (1981), pp. 86-94Published by: SpringerStable URL: http://www.jstor.org/stable/40227591 .

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P. Wright*

Organizational Behavior in Islamic Firms

Introduction

Increasingly, American and Western European multinational corporations are viewing Islamic countries (particularly those with significant oil revenues) as profitable markets for their products and services1 . As in other parts of the world, subsidiaries and joint ventures - employing, at least initially, cadres of managers and staff specialists from the home office - are important vehicles for developing these markets. Since few Westerners comprehend the "Moslem mentality", these expatriate personnel typically receive little forewarning of the organizational behavior problems they are likely to encounter. As a consequence, their dealings with their Moslem subordinates, co-workers, and superiors tend to be frustrating, at best, and frequently are highly unproductive. Below, several important areas in which individual attitides and behavior in Islamic organizations tend to differ from their Western counterparts are discussed. Obviously, in such discussions, generalities are stated that do not apply in all cases. Nevertheless, an understanding of these fundamental differences will be helpful to Westerners who hope to succeed in Islamic firms.

Perception and Decision Perspectives

Perhaps initially it would help to delineate the "mentality" of the typical Moslem vs. the Westerner through a discussion of their perception and decision perspectives. The enlight- ened Western businessperson tends to perceive organizations as being subsystems of the broader environment. Ordinarily, such a person also knows the enterprises are systems with their own subsystems of human and non-human resources. One of the challenges facing the knowledgeable corporate individual is to be aware of the relevant interrelationship that exist between the subsystems of the organization as well as the relationships between the organization and the society (Haire, et al., 1966). Analyses of "systems" by Western businesspeople primarily take into account worldly factors and their interrelationships on the bases of "facts", "issues", "problems", among

* P. Wright is Associate Professor of Business Administration at Southeastern Louisiana University, Hammond, Louisiana, U.S.A. He is grateful to Professor Edmund R. Gray of Louisiana State Uni- versity for his valuable inputs in this article. Manuscript received July 1980.

1 A recent study by R.A. Ajami suggests that Arab elites or opinion leaders generally hold favorable and receptive views of foreign multinationals. See "The Multinational Firm and Host Arab Society: Areas of Conflict and Convergence", Management International Review, Volume 20, 1980/1 pp 16-27.

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others. That is, the parameters of systems thinking for the Western businessperson is set

by observable and/or worldly events.

Systems thinking for the Islamic executive takes on broader perspectives. The Moslem

manager believes decisions should be made while perceiving interrelationship between

worldly incidents as well as metaphysical events. Hence, while a U.S. superior may be hesitant to terminate the services of an elder employee because it may be bad for organizational morale and that it would be "a shame" (to discharge a person with long years of excellent service), the Moslem manager would share the feelings of hesitancy but because it would be a "sin"! The Lord would not be pleased with ungentle treatment of a senior citizen. As a case in point, several years ago, an Egyptian employee told her American boss who had just fired her: "Look, what you have done to me will bring a curse on you. Don't you think you will be staying here for much longer!" Soon afterwards, the manager became

very sick with intestinal disorders. The company flew him back to the U.S. for treatment. When he became well, he was sent back to Egypt. However, the same disease struck again and the American manager finally had to be transerred out of Egypt. The Egyptian marketing manager's reaction to the events was, "Well, it is possible that the curse had its effect." Conversely, the American financial manager in the same firm

argued: "Baloney! What's all this about a curse? We all know Egypt has hygiene problems and so our general manager was a victim of the poor hygiene in this country." Here, it is evident that the Egyptian manager has perceived an interrelation between

worldly and deital phenomena while the U.S. executive has viewed the same situation from the perspective of worldly interrelationship. These perspectives are, of course, very divergent and may result in serious misunderstandings when individuals from the two different cultures have to work together. The basic reason for the Moslems' unique perception and decision perspectives lies in their monolithic view of the world through Islam. They approach their religion as an

all-embracing, total system containing its own political-legal, economic-technological, and socio-cultural subsystems. Virtually nothing is imagined outside of this Islamic super- system. The depth and breadth of this "system" is determined by the Koran (Moslem

holy book).

Organization and Personnel

The Western and Islamic superior-subordinate relationships are significantly different from each other. Let us examine some of the main differences by focussing on personal evaluation and promotion of the Moslems vs. the Europeans and Americans.

Personnel Evaluation

Westerners look at their employees categorically. Typically, a Western manager may evaluate the personnel by assessing their strengths vs. their weaknesses. To the North American and the European manager, such evaluation would have a net result (Allport, 1958). It may be that the employee is a net asset or a net liability to the organization, in the opinion of the manager.

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The evaluation of the job performance of the Western employee by the boss would tend to affect the likelihood of success or failure of the subordinate in the corporate structure. It is also true that if an employee is very talented, but rates low with the immediate superior in personal aspects, that the Western superior may promote that subordinate anyway (Katona, 1951). The emphasis is primarily on job performance, not the personality of the subordinate. For the Islamic managers, the first consideration is the employee as a total person with related personal characteristics. And, the person is more the concern of an Islamic executive than the job which is to be done (Pezeshkpur, 1978). All considerations, of course, take place within a religious parameter. The following case may clarify the way the Westerners approach their personnel vs. their Moslem counterparts. A subsidiary of an European multinational corporation, located in a Middle Eastern coun-

try, witnessed the transfer of its American marketing manager to another nation. The

outstanding salesperson in that firm, who was an European, was passed over for the manager's job partly because of his arrogance and partly because of his shortcomings in administrative skills. An African national was given the manager's job. The previous American sales manager had found the European salesman to be offensive, but had kept him on because of his outstanding performance on the job. Soon after the African manager took over the management of the marketing department, he transferred the European salesman from his department to the personnel department. Not liking his transfer, the European salesman resigned from the firm. The verbal elabo- rations of these events by the new African manager of marketing is revealing:

4 'Sure, Patrick (the European) is a capable salesman. But he consistently got on my nerves as much as I tried to play ball with him. He was consistently impolite to me and uncivil to the others. He had no loyalties to me or to his peers. How could he have any loyalties to the firm if he did not have any toward its personnel? I would have fired him. But then he has a wife and three children. Firing him would not have pleased God. So I transferred him to another department. It was the good will of the Lord that Patrick resigned and saved us all a lot of trouble."

Promotion

The Western subordinate expects his/her promotion and future with the organization to depend substantially on initiative and performance on the job (Charles, 1971). The Western employee also knows that display of loyalty toward the boss and the firm may be helpful. The cultural environment of the West, of course, tends to encourage such expectations. The overall climate of the Islamic firm, as influenced by its environment, seems to indi- cate that performance on the job has little to do with who moves up to become a higher and higher superior. The reason is that the person as well as personal factors are consid- ered supreme and divine - not aspects of the individual such as specific areas of expertise or initiative on the job. In the West, the quest is to fit the right person into the right job. In Islamic regions, the emphasis is to fit the good person in any job opening that may come up. This is partly why Westerners are surprised to find that in Islamic private and public organizations official titles may have little relation to job functions. In Great Britain, Harry, the accountant, is in the financial department of his company. More than likely, his job involves accounting and financial matters. In Indonesia, Hatta is also in the financial section of a company. But, in actuality, his main function is to be the troubleshooter

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for his firm with the government sector. Financial matters are taken care of by others in that firm, not Hatta. If it is not expertise or job performance, then what does affect promotion in Islamic organizations? Most likely it is a system of interpersonal relationships extending form the lowest to the highest levels of the corporate structure which influences upward mobility (Bass, 1971). The Moslem employee seems to know that, in addition to being religious, it is necessary to cultivate the "right" people, particularly his immediate superior, to have a successful career. And the subordinate tends to be aware that the typical Islamic executive values personal loyalty and goodwill (over and above competence). The principal function of the loyal employee, within this context, is to serve as a buffer for the immediate superior. If anything goes wrong, the loyal subordinate will do anything to blame other variables for the problem at hand, not the boss, even if the problem is obviously caused by the boss (Pezeshkpur, 1978). So, whereas both the Islamic and the Western employee believe loyalty does help one's career, it is the concept of loyalty held by each individual which distinguishes the behav- iour of the Western subordinate from that of the Islamic subordinate. In Islamic societies loyalty can only be felt toward people and religious matters. In the West, the concept of

loyalty can also apply to non-human and non-spiritual entities like the organization. The Western employee, relative to the Moslem employee, would be more prone to uphold organizational interests when those interests cross the personal interests of the boss or the

very person of the employee. This would be a display of loyalty and goodwill toward the

organization. Contrarily, the Moslem subordinate is somehow convinced that what is

good for the boss and the self would also be good for the organization. The ambitious subordinate in the Moslem organization usually seeks to be chosen by a

higher and higher-level superior who, in exchange for personal services, will promote the interests of that subordinate. But the shrewd Moslem must always leave a gap between himself and the immediate superior. The relationship may backfire if one's immediate

superior goes out of power because the superior's boss becomes displeased with the sub-

ject superior's "performance".

Organization and the Basic Needs of the Employee

In order to eat, have shelter, and safety, the Westerner often looks to the organization as the means for obtaining physiological necessities. A German worker's statement seems to support this contention: "I would loke my job in this manufacturing plant to be

steady and make compensations for rises in living costs so that I can provide security for

myself and my family." In the Islamic markets, if the individuals are not able to guarantee for themselves and their offspring basic necessities, then it is not the organization to which they turn, but the Lord. There is a saying in some Moslem communities which is telling: "Whoever provides teeth, will also provide the bread," referring to ultimate securtiy provided by divine

power. This is why, for instance, many international managers are puzzled by the rela-

tively low concern of Moselm employess with the possibilities of losing their jobs.

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Organizational Work and Social Esteem

It is not uncommon to find the reply of a Westerner to the question, "What do you do?", to be "I'm associated with Hoechst", or "I'm with Harvard University". This type of reply associates the person with the organization. Because most Western organizations of wide repute command prestige in their societies, the individual employee is thereby claiming social esteem by identifying the self with the

prestigious organization (Scott, 1965). In such cases, necessarily the Western person would consider himself /herself subordinate to the organization. The Moslems, however, because of their emphasis on the person, consider the organization of secondary importance. In response to the question, "What do you do?", a Libyan professor recently answered, "Through the grace of God, I do an excellent job of teaching business courses. My department and university have witnessed a substantial improvement ever since I began my teaching career in this college." Here, the organization appears subordinate to the self.

Authority vs. Accountability in the Organization

The motivation of organizational personnel has received attention across Western and Eastern societies. The Western organization, relative to its Islamic counterpart, allows upper-middle-level and top managers much authority and in return expects accountability. This is perhaps why the Western organization has little concern with the motivation of its higher-level executive. Most motivational programs in the Occident are aimed at the middle managers, supervisors, and their personnel. But in the Islamic organization, accountability is demanded by superiors from subordinates, although authority is rarely delegated (Pezeshkpur, 1978). The ramification is that with the exception of the very top managers, all other executives are left with little authority. As a result, even insignificant matters are often pushed up the organization by the personnel for top-level decisions. Rarely would the Moslem employees initiate any activities. This remains the case until and unless jobs are specifically assigned to particular employees by the top management. The exception to this kind of predisposition is strictly routine work which the employee has done throughout the years. Contrarily, the Western employee is much more prone to display initiative and action in facing and solving problems. European and American employees and managers tend to be comparatively more action-oriented because they seem to better know the parameters of their levels of authority (Webber, 1969). They are also more likely to sense the degree of power associated with their position and their personal attributes.

Exercise of Power in the Organization

The Western executives may desire power in the organization as may the Islamic managers. But here again, the approaches to power take enormously different forms. The Amer-

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ican or European manager may want power, but would consider it socially unacceptable to hunger for it (French and Raven, 1960). Those executives who have power, deny having it. And the exercise of power by the Westerner is usually done discreetly. Seeking power and using it is done openly in the Moslem organization. Since the middle and lower-level Islamic personnel know that their chances of possessing and exercising organizational power is limited, they capitalize on what little power they may have when- ever possible. This is manifested by the authoritarian behavior of lower level personnel towards their underlings. And the higher-level Moslem managers, being aware of their positions, not only desire power openly but flaunt it. The Islamic managers generally believe that corporate entities need strong leaders who are willing to force their wills on their organizations. Consequently, contrary to Western or-

ganizations which tend to have comparatively stable goals, organizational goals in Moslem markets seem to shift with the changeover of organization heads. Even the Islamic bosses of very large and public organizations are quite willing to super- impose their desires on their establishments. A while back, for instance, an African nation's public administration's benefit program shifted its emphasis from helping farmers in the agricultural sector to building national infrastructures, reflecting the different wills of two successive program directors. As another example, when a larger Kuwaiti trading firm had a changeover of the top manager (from father to son), the bulk of business soon veered away from consumer

imports and toward trading of industrial products within several Middle Eastern countries. Noteworthy is that the Islamic top executives are, in fact, expected by their cultural environments to make their enterprises what they will regardless of successful past or ex-

isting corporate purposes. The Western managers, in contrast, are culturally expected to follow an evolutionary course. Generally winning past corporate purposes are to be built

upon, not revamped.

Groups in the Organization

People across societies join organizational groups in order to establish quid pro quos, materially and psychologically (Smith, 1973). That is, certain personal disutilities are borne by individuals in order to acquire certain utilities through the work group and

organization. At least theoretically, unless the net effect of this disutility /utility spectrum is at a break- even point, the individual would be predisposed to separate the self from the group. While

initially, most people would join a work organization for economic rewards, within such

organizations they tend to combine with other groups for professional and psychological reasons. One way to visualize the group in an organization is through the notion of synergy. This notion suggests that an amalgam of people in a group may display characteristics, behav-

ior, and productivity significantly different from the individual persons composing it. Positive synergy means that the summation of individual efforts within a group yields more than the addition of each individual's efforts in isolation from the group. Negative synergy holds the. opposite meaning.

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In the Occident, the work group is believed to be able to accomplish goals not attainable through individual efforts. In fact, much of Western advancement is attributed to effective group efforts. Positive synergy appears to hold validity for many European and American groups since their individuals believe in the cooperative spirit. Cooperation denotes modifying one's own behavior to allow for the viability of a group. But in Islamic markets, most groups can only exist for as long as the individuality of each member is not threatened. Moslem people are reluctant to alter their behaviors in order to belong to certain groups - including work groups. Furthermore, Moslems are hesitant to submerge their individual goals in order to meet group goals. That is why voluntary team work, in or out of the work place, has never taken root in the Islamic culture. Only authoritarian formal groups may be expected to function with any potency. But even authoritarian formal work groups are predisposed to negative synergism because of their inherent lack of cooperative spirit.

Departmentalization and Specialization vs. Personalization

Given the purposes of a corporate entity, the attempt in the Western organization is to identify and structure unit tasks, to group these tasks into individual jobs, to group the jobs into administrative units, and to amalgamate these units into larger departments in order to achieve the corporate purposes. Because the Western organization has evolved in response to modern science and technology, the trend toward departmentalization has received a strong impetus from the tremendous advancements in scientific and technological breakthroughs. The Western organization is also characterized by having specialists. It is the specialists and their abilities to interact with various corporate "hardwares" and "softwares" which provide the Western enterprise with its competitive edge. With growth, more specialists have been recruited and with more specialists, again refinements in departmentalization have occurred. The American and European firm has incorporated departmentalization and specialization in order to improve productivity (and hence profitability) within an ever-accelerating scientific and technological corporate environment. But the Islamic corporate entity has essentially remained a charismatic organization. Although with national development plans select Moslem organizations have, to a limited degree, responded to science and technology, these organizations are not likely to be administered efficiently. The reason for this is that, unlike the emphasis of the Western enterprises on productivity, the Islamic firms stress various factors, one of which may be productivity. The corporate entity in Islamic markets is prized mainly as a vehicle for promotion of the interests of the individual as well as the interests of the family members and friends. Needless to say, such an approach to organizations would not significantly contribute to productivity. Even Moslem entrepreneurs and small businesspeople hardly ever display an overriding concern with productivity per se. The approach to the management of large Islamic organizations is also through personalization - not departmentalization or specialization. That is, often the organization is molded and remolded around the individual personalities of the top executives.

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When specialists are required and the members of the family and friends simply do not have capabilities of accomplishing specialized tasks, one of two alternatives is generally chosen. Either outside consultants are hired (often from abroad) or specialists are brought into the organization. In the latter case, rarely would the specialists acquire organizational authority and power beyond the sphere of their expertise.

Organizational Perspective and Corporate Planning

One of the most glaring differences between Western and Islamic executives is their time orientation. The very concept of organization in America and Europe is futuristic - the

organization has eternal life. Western managers generally dwell on the route from the

present to the future. For generations, the Western society has been programmed to anticipate evolutionary changes. Even upshots in science and technology have produced complementary changes to the past and existing Western ways of life. Therefore, it makes sense to be future oriented in the Western organization. The Islamic mentality primarily dwells on the past, with some emphasis on the present and practically no concern with the future (Moore, 1976). Nearly all Moslems believe in

predestination. That is, they believe that the affairs of the world, nations, organizations, individuals and all else have been worked out by the Heavens. Nothing can be done to alter fate.

Backgrounds of most Moslems seem to give credence to believing in elements of predestination. The people of Islam as well as the developing world mainly can look back to hectic, random, revolutionary changes in their nations as well as in their organizations (Pye, 1962). Thus, the Moslems almost find it futile to be concerned with the future. For what is the use of thinking ahead when predicting the future and one's control of it

appears all but impossible? Given this scenario, corporate planning, which in Europe and North America has been resorted to by increasing numbers of well-managed firms, has

rarely been applied in Moslem markets.

Top Managers

The chief executive officer and other top executives in the Western firm tend to conduct tasks which are different from middle-level managers and lower-level supervisors. Given the opportunities and constraints in the environment, the American and European top managers are architects of their organizational purposes. The general managers preside over enterprises which contain many technical specialties. It is not uncommon to find that in the Occident, managers delegate decision-making authority of specialized areas to their various management teams. The role of the top managers often is to define corporate objectives, to plan, to organize, to motivate, to control, to mediate, and to coordinate. In Moslem regions, the top managers, in fact, play the role of assistants to the heads of their corporate departments as well as the middle- and lower-level executives. As was

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mentioned earlier, because authority is seldom delegated down the corporate structure, even trivial matters are pushed up the organization for top-level decision-makings.. A

typical day for the Islamic manager entails having to attend to multitudes of organizational problems - some of them surprisingly insignificant. As an example, a Moslem Malaysian top executive recently had to settle a dispute between two production workers on who should work the morning shift and who the afternoon shift.

Conclusion

The successful conduct of business in Moslem regions of the world requires attitudes and skills significantly different from those needed to operate in Europe and North America. Western expatriate managers should realize that compromise and an open mind would be

prerequisites for triumphant corporate management in the Islamic countries. Awareness of the "Islamic way" does not automatically assure U.S. business of great results in the Islamic markets. But such awareness may allow for the development of more imaginative and effective approaches to management in the Islamic world.

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Organizational Behavior in Islamic Firms

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