Professional Documents
Culture Documents
Introduction
Islamic economy is one of the fastest growing segments worldwide that estimated to be
worth S3 trillion in 2021. Halal food is the largest pillar, where Muslim spent $1.17 trillion in
2015. The figures encourage many market players to enter to this market. However, Halal goods
market is some extent is different from other industries due to the Islamic culture and traditions.
Islam as a religion that has influence on different aspects of its followers requires Muslims to
follow the specific law, which is known as Shariah. According to the Shariah, Muslims should
follow the specific procedure to prepare their daily meals in order to make it acceptable to eat or
consume in Islamic terms to make it Halal. Halal market is expanding rapidly in recent decades,
concerned with the process of providing products and services to people who want to satisfy man
(Sharif, 1996). It is possible to meet all basic human needs completely. Basic human needs as
human beings are not increased. The exchange is the heart of conventional marketing.
Traditionally the exchange is regarded as the central concept of marketing (Bagozzi, 1975; Hunt,
1976). But in the process of this exchange, the customer is free to choose the type of goods and
services; even there are no restrictions for suppliers. In conventional marketing, alcohol, magic,
etc. also exchanged if it maximizes profits and utilities. No matter if the goods are harmful or
beneficial to the buyer. If something has economic utility can be exchanged in the market.
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Pursuing the production and exchange of products and services are not guided by ethics (code of
conduct) in the form of a real, though, the concept of social marketing, a little attention to social
This study aims to show and distinguish the role impact of Halal management on
business performance of Muslim owned establishments and its increasing market in the industry.
Islam Religion sees business activities as an important resource for someone to make a living
during this process in accordance with Islamic teachings related to the proper ways to do
prophetic life (Antonio, 2007). Because Islam is the way of life, a code of conduct marketing
should be guided by the Quran and Hadith, which are the two main sources of reference for
Muslims in order to succeed in life and hereafter. Islamic perspective guarantees the important
things in the field of global business for several reasons. First, Islam provides a framework that
forms the moral and ethical behavior of the growing number of Muslim consumers worldwide.
Second, an increasing number of Muslim population represent some of the most affluent
consumers in the world. Third, there has been an increase in the level of foreign investment in
Muslim countries in recent years. Fourth, there is a growing momentum towards the
establishment of Muslim trading zone (Saeed et al, 2001). Islam is a comprehensive way of life
that provides rules for everything including commercial activities (Arham, 2010). Halal
management plays a key role in an Islamic business’s sales, market and over-all performance.
Theoretical Framework
relationship, alsoknown as reverse marketing (Biemans & Brand, 1995; Leenders & Blenkhorn,
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1988) or backward integration (Kraljic, 1983). There is prospective to build up an overall ethical
(food) brand by harnessing Islamic values and attributes like animal welfare, health,
sustainability, less waste, fair working conditions (El Garah et al., 2012).
Delener (1994) states that religious factor is one of the most important aspects of
culture that influences the behaviour of consumers. This is because religiousity is an important
value in the individual user's cognitive structure, and therefore has an impact on one's behaviour.
Studies have shown that purchase of halal products is not solely based on the product's
functionality, taste or price of the product, but the denominator of religious values of a customer
is a consideration for the purchase. There are also previous studies from various researchers
focusing on religious-related studies which show that religiosity influences the purchase pattern
and can influence consumer attitudes and behaviours in general (Delener, 1994; Pettinger et al.,
2004), and food purchasing decisions and eating habits in particular (Mennell, Murcott & Van
Otterloo, 1992; Steptoe & Pollard, 1995; Swanson, 1996; Shatenstein & Ghadirian, 1997; Asp,
1999; Mullen, Williams & Hunt, 2000; Blackwell, Miniard & Engel, 2001). Other studies have
also shown that in most societies, religion plays one of the most influential roles of forming food
According to the Ahmad (2004) the halal (permissible) means that the food is free
from any part or substance extracted from animal that considered Haram, not containing
substance declared as filthy according to the Islamic Law, not processed using utensils or
machinery which is filthy and the process, preparation and storage of food should not exposed to
the non halal substance. The concept of halal not only applied to food production, but also in
other aspects. The processing of the foods should follow the good manufacturing practices
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which keep the food from being contaminated with non halal elements. Halal also not only
matter about the food and drink, but also the daily life of a Muslim. They also claimed that the
missing of Muslim entrepreneurs in the halal industry makes consumers to be less appreciation
for halalness concept which theoretically must be produced by Muslim society for Muslim
consumers.
Islamic Market is one of the fastest growing commodity on the global marketing
industry today. Many investors see the increasing value of Islamic goods on the stock market but
Shariah law plays vital role in this commerce since religion and culture is a big part of Islamic
Does the usage of Halal management creates marketability and income for the business?
What are the impacts on the business with the use this management?
Conceptual Framework
The purpose of this study is to determine the impacts of Halal management on business
pharmaceuticals, cosmetics, packaging and logistics as well as services from all over the world.
Figure 1 shows some approaches and improved aspects to recover negative impacts of halal
management on business performance such as Halal integrity, Halal policy and Halal mission.
To provide a Halal Management, the company/ business must have obtained Halal certification
and apply it to each service and product, ensure the conformance of Halal policy for the
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production and marketing of every product, and provide training and information to staff
Halal Islamic
Policy Marketing
Hypothesis
successfully enter and compete in an Islamic market. There is a significant relationship between
The result of this study would be important to the business owners of the halal
management in determining the management’s impact on the business performance that will
ensure enhance the business owner’s management for better performances. The findings of the
business owners that would help them improve the performance of their business.
The Academicians and scholars. The result will be important to academicians or scholars as it
provides useful material for reference and future research since Halal Management is a
The Future researchers. The findings of this study will provide a valuable and related study for
The approach to this study is to exhibit the role of Halal management on the impact on business
performance. The respondents of the study are limited to Individual using Halal Management in
their business at Mindanao State University Main Campus Marawi City. The central objectives
of our research is to determine the impacts of halal managements and to find out and examine the
area of consumerism in the halal products and halal awareness in the management. The
researchers will provide a questionnaire about the impacts of halal management on business
State University, Marawi City and the results will be gathered and analyzed by the researchers.
Definition of terms
Halal Management. The act or skill of controlling and making decisions about a halal business,
department, and others. Is managing of all the functions and activities necessary to determine and
capabilities and resources that together aim to ensure that products, processes or services will
satisfy stated or implied aims, i.e., production of halal products. (A. A. Norman 2008).
Halal Integrity. Is the quality of being honest and having strong moral principles, or moral
uprightness. It is a personal choice to hold one's self to consistent standards. In ethics, integrity is
regarded as the honesty and truthfulness or accuracy of one's actions. (Merriam Webster 2019)
This research although academic is meant to have a real value in improving the integrity of the
halal food supply chain, providing value to the food industry, to countries that are concerned
about this supply chain and to Muslim consumers. Halal integrity is crucial to the success of the
Halal mission. Food that's halal is allowed under the religious laws of Islam. It's especially
important for observant Muslims to eat only halal meat that's been prepared in a certain way. The
adjective halal can describe non-food items, and also allowable or proper behavior. (M.Z., Azila,
J).
Business performance. Entails reviewing the overall business performance and determining
how the business can better reach its goals. This requires the alignment of strategic and
operational objectives and the business' set of activities in order to manage performance. Because
BPM seeks to aggregate available information, managers are more informed about the company's
position and are able to make better decisions. Also called corporate performance management.
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Innovative performance. Is a key driver of business performance. Institutionalizing strategy-
driven Enterprise Innovation Management allows you to maximize the impact of your innovation
investment portfolio and aligns your investment decisions with performance goals. Intrinsically
linked to your organization’s business strategy are the best-practice metrics for measuring
Islamic Marketing. Can be defined as the wisdom of satisfying the need of customers through
conduct of delivering Halal- wholesome, pure and lawful products and services.
The Halal certificate. Is a document that guarantees that products and services aimed at the
Muslim population meet the requirements of Islamic law and therefore are suitable for
consumption in both Muslim-majority countries and in Western countries where there are
significant population group who practice Islam (France, Germany, United Kingdom, Spain).
Halal certification is a process which ensures the features and quality of the products according
to the rules established by the Islamic Council that allow the use of the mark Halal. (Zakiah
Samori).
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Chapter II
Related Literature
fundamental element in Islamic thoughts. Generally, from the Islamic perspective, any related
process and function should be done within ethical boundaries set by Sharia. In this case, product
can be considered as Halal (permissible or lawful, opposite of Haram) if it can provide core
benefits and values to consumers. Additionally, market players expected to operate in morally
acceptable manner. Thus, producers and marketers use Halal certificate to reassure customers to
convince consumer about integrity of production process. Halal certificate grants assurance to all
consumers since it fulfills the Shariah law. Preparing and consuming Halal products is a must for
Muslims that is forecasted to be 29% of the world population by 2030 (Grim and Karim, 2011).
Growing demands over Halal market on the one hand, have made the market more attractive for
most of producers, suppliers and traders and on the other provoked Halal certificate as one of the
fastest growing product certification. In other words, Halal market has targeted by many
Halal matters throughout the entire supply chain, from farm to fork. This is documented
by (Lodhi,2009) who explained the process of Halal food chain from the source to the
consumer .The slightest presence of non-Halal elements will void the Halal status.( Zulfakar et
al.,2013) suggested complete segregation, Halal certification, and the presence of Halal-trained
employees are critical to the success of a Halal supply chain. Demand for a skilled workforce
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and experts in Halal logistics can be met by developing formal degrees in Halal supply chain and
logistics at postgraduate, graduate and undergraduate level (La Londe and Ginter, 2003) as Halal
studies in universities is a way forward to manage Halal businesses (Ahmad et al., 2011). Several
studies managed to underline the need for well-knowledge and trained employees to be present
during Halal product preparation and Halal logistics activities such as pre-slaughter, slaughtering,
processing and preparation, procurement, packaging, storage, transportation, and tracking and
tracing. According to (Riaz and Chaudry,2004), the presence of Muslim employees acts as a
supervisory role and it is important as to ensure that no livestock is tortured (stunned) and only
proper tools and techniques, such as sharp knives, is practiced. Hence, the knowledge about
Halal and Halal logistics procedures, and presence of Muslim employees during Halal product
processes is very critical for a total Halal supply chain, and protecting consumers from
Halal industry represents a very large and rapidly expanding market segment. It is a new
force of market organization and identification. Halal food is becoming an increasing part of
consumers’ diet and has become a multi-billion dollar global industry involving multinational
companies that have aggressively expanded their halal-certified product lines. From a market
perspective, the traditional major target markets of halal food are the Asia-Pacific and the Middle
East. To date, the Muslim market is composed of approximately 25 percent or 2 billion of the
entire world population. Muslims represent a majority in more than 50 countries in Asia, Africa,
and Europe and their religion, Islam, is considered the fastest growing among all religions on
earth both through birth and conversion. Those 2 billion Muslims live in economically feasible
numbers in most countries in the world. In US Dollar, the global Muslim consumer market is
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forecasted to reach a staggering USD30 trillion by 2050 (Alserhan, 2010; Mordor Intelligence
Report, 2018).
Several factors have driven halal market forces as highlighted by Sungkar (2008). Firstly,
Muslim populations are now increasing and many Muslim nations are reaching a stage of
development whereby they can begin to influence world markets, both as producers and
consumers. Sungkar (2008) stressed that, as the world and Muslims get richer, the appetite for
trade increases. And when the consumer incomes of Muslims rise, they become fussier about the
products that they want to buy. As a general rule, the rise in income typically correlates to an
increase in the demand for more value-added and differentiated products. When Muslims have
higher purchasing power, they are able to be more selective about what halal foods they want to
buy. Secondly, products such as halal meat are increasingly popular among non-Muslims too and
this has significantly enhanced the halal industry sector. Halal certified products are attracting
non-Muslims consumers aware of the wholesome hygienic and contamination free principles
underlying halal food production. Lastly, requirements for food exporters to comply with halal
requirements and to provide halal certificate also lead to the growth of halal food industry (Al-
As the Halal market is a lucrative business, and with billions of customers, governments
are pouring-in supports to help and promote the Halal industry, such as setting up Halal
certification authority, providing incentives for Halal businesses, funding research on Halal
related studies through universities and research institutes as well as organizing Halal training for
industry practitioners. (Golan et al.,2004) stated that the government should protect consumers
from unsafe food by legislating guidelines or laws. In the context of Halal supply chain
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management, (Samsi et al.,011) describe the government roles are significant which involves
Development Malaysia (JAKIM) (Malaysia), Majlis Ugama Islam Singapura (MUIS) (Singapore)
and Brunei Halal (Brunei Darussalam) (Adams, 2011), are some examples that Halal is a good
business to venture. Malaysia government’s efforts in promoting Halal industry are admirable,
such as pumping millions into the national budget (Ramli, 2006), and that large sum of the
budget was allocated for halal product development, better halal certification standards and halal
In Islam, every aspect of human life must be in accordance with the will of God. In Islam,
the marketing is not limited to the sale or imaging to benefit from the goods and services in all
businesses. In Islam all activities and transactions considered as worship (QS2: 30). Islam is a
way of life that is governed by rules that limit, which is explained and practiced by Prophet
Muhammad SAW. Even nature and human behavior should not be against the Islamic faith,
sharia, and Akhlaq. In addition to this, Islam set some rules of food meant to improve human
welfare, also from Allah (QS5: 48). Halal management complies with Islamic ethics, these
Islamic ethics must be observed by the business and employees in order to deem or certify a
product is Halal and is favorable to be consumed by Muslims and does not violate the rules of
Shariah Law.
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1 Product o Compliance with Sharia
o Do not use God's name in
the brands and labels
o Halal (Holy and lawful)
o Accurate Labeling
o here are no weak packaging
o Do no harm to customer
o No thought is dull
o No products obsolete
o Value Resistance
o The environmental impact
2 Price o Fear of Allah (Allah is a
price setter)
o Fair and There should be no
cheating
o Approach public welfare
o Maximizing profits simply
not a priority.
o No price is justified
o There is no price
manipulation
o No predatory prices
o There are no feed prices
3 Place o Do not harm others streets
o No delay unnecessary
o There is no compulsion
o The distribution channel is
not encumbering customers
o Closure during Friday
prayers
o Avoid suspicious location
4 Promotion o Complying Sharia
o Women should not be used
to attract or lure customers
o No use suggestive language
and behavior
o There is no concealment of
facts and information
(Disclosure errors and defects)
oNo promotion of
manipulative behavior
o No sexual appeal
o There is no oath in the name
of God
o Attribute not excessive
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o No ad was misleading
o There is no fraud
o No obscene ads
5 People o Complying with Islamic law
(Shari'a)
Related Studies
A few studies in the literature on the halal certification and business performance
improved business performance (Al-Harran and Low, 2008; Chan, 2011; Marzuki, Hall, and
Ballantine, 2011; and Rajagopal, et al., 2011). For instance, Chan (2011) argued that halal
Currumbin Wildlife Sanctuary in Australia, Hilton Glasgow, and the Intercontinental Hotel in
Prague have reported significant improvement in their innovative business performance since
they started to offer new halal food products such as meat and beverages. According to him,
these places have become attractive destinations especially for Muslim travellers. Similarly,
Rajagopal et al. (2011) also revealed that food companies in the United Arab Emirates have
improved innovative performance after acquiring halal certification. Among these big companies
and retailers are Nestle, French supermarket chain Casino, Tesco, and Sainsbury. Rajagopal et al.
(2011) argued that products of these companies are quite unique in terms of quality because of
their halal certification logo where religious values and beliefs are upheld during the entire
product chain process. Marzuki et al. (2011) revealed that innovative companies with quality
halal products significantly improved their financial performance. This is in line with the Gulf
Marketing Review (2009) statement that Nestle has increased its profit since it moved its
halalrange into mainstream retail channels in Swiss supermarkets. Nestle has been offering halal
versions of many brands since 2004 in countries such as France, the UK and Germany. Halal
products are sold in 1,000 stores in five European countries. The product range includes Nido,
Smarties, Maggi soups, Kit Kat, Milo and Nescafe accounting for annual sales of around USD5.2
billion. Out of 456 factories, 85 are halal certified. These factories are mainly in Indonesia, South
Africa and the Middle East (Rajagopal, 2011). This indicates that halal certification improves
product quality, hygiene and safety which encourages more customers, thus increasing the firm’s
profitability.
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Islamic approach to the business is regulated by two sources, namely the Qur'an and the
Hadith of the Prophet shaped guide how Islam entire life. The practice of Islam is based on the
divinity and faith, and does not recognize the separation between the earthly dimension and
maximization. According to the Islamic perspective, activities are based on the goal of satisfying
the material alone will inhibit rational thinking people and will make them into slaves of a
marketing company. Islam respects freedom and offers free mankind from all shackles of slavery,
Halal is an Arabic word which means permitted or lawful under the Islamic law (Jump, 2002)
(including the al-Quran, al-Hadith, Ijma’ (consensus) and Qiyas (deduction of analogy according
to the Syafie or any one of the Hanafi, Maliki or Hambali School of Thought or Fatwa approved
by the relevant Islamic Authority) (Bonne and Verbeke, 2008). The term
explains goods or actions that are permissible and wholesome according Shariah laws and
Islamic principles (Omar et al., 2013).Generally, marketing from Islamic perspective can be
defined as the promotion of products that would be in line with Islamic values. According to
Quran verse “One who believe! Eat not up your property among yourselves unjustly expect it to
be a trade amongst you, by mutual consent. And do not kill yourselves (nor kill one another).
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Chapter III
Methodology
Research Design
Quantitative research method is used in this research. The result and analyzing of the data
will be in numerical form. Non-experimental survey research is most applicable to this study. It
will produce the necessary results needed for the study. This offer relatively quick ways of
Research Locale
The study will be conducted at the Commercial Center of Mindanao States University,
Marawi City because most of the stores and shops are located in this area of the university.
Research Subject
The sample frame is 50, quota sampling followed by purposive sampling will be used in
this research. The sample list of the study is comprised of individual business owners who are
managing their business with the use of Halal Management in the university. The participants of
the study must have their own stores or shops within Mindanao States University.
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Research instrument
The study is conducted via survey in which the participants are going to complete or
answer a controlled set of questions in a survey questionnaire. These are given to them for the
purpose of visual and clear understanding of the questions. The researchers must obtain
permission from the participants of the study by explaining to them the nature and the scope of
the study and ensuring them their participation in the study is strictly confidential. They are
given the freedom to keep their identity anonymous by leaving the name in the questionnaire
blank.
In order to acquire the desired result through data gathering, the researchers used the survey
questionnaire. Questionnaire method has been used for primary data collection to identify the
impacts of Halal Management on the business performance. Respondents were individuals who
used halal management on their business. Primary data was first-hand information collected
through various methods such as observation, interview and survey. This data was directly
collected by the researcher from their original sources and analyzed following the research’s
objectives. Secondary data are sources containing data which have been collected and compiled
for another purpose. Secondary data doesn’t need to be collected by the researcher from the
respondents because it already exists. They’re already been collected by someone else and which
have already passed through the statistical process. Data was checked for accuracy and
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Various articles which are published in journals, magazines, and research papers
Web sites were also picked up as a major source to provide valuable and important data
The analysis started with the computation of frequencies and percentages to analyze
respondent’s profile in terms of name, gender and religion. The overall data was analyzed using
This provides a summary of data in the form of mean, median, mode and standard deviation.
Statistical Method
The data from the questionnaire will be analyzed using the statistical tools such as
Frequency and Percentage Distribution, Mean. Pearson’s Correlation Coefficient, and Single
Regression. The result of this analysis will indicate the impacts of Halal Management on the
business performance of the respondents and it will clarify if Halal marketing could help in
business marketability.
The Frequency and Percentage Distribution was used to determine the answers of the
respondents according to their profile information. To get the percentage of the collected answers
from the respondents, get the quotient of the frequency of response and the total number of
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Formula:
𝒇
P = 𝒏 × 100
Arithmetic Average (Mean) is the number of response divided by the total number of
respondents. Mean was used to determine the impacts of halal Management on the business
performance.
∑𝒙
X= 𝒏
The goal here is to compute the correlations between the halal management and its impacts on
the business performance. A correlation coefficient depicts the strength of the link between two
quantitative variables, whether positive or negative. Our data consist of continuous variables so
we will use Pearson Correlation Coefficient. The Pearson correlation coefficient, r, can take a
range of values from +1 to -1. A value of 0 indicates that there is no association between the two
variables. A value greater than 0 indicates a positive association; that is, as the value if one
variable increases, so does the value of the other variable. A value less than 0 indicates a
negative association; that is, as the value of one variable increases, the value of the other variable
decreases. The t-test is used to establish if the correlation coefficient is significantly different
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from zero, and, hence that there is evidence of an association between the two variables. There is
then the underlying assumption that the data is from a normal distribution sampled purposively.
Simple Regression tests how change in the predictor variable predicts the level of change in the
outcome variable. The factor that is being predicted is called the dependent variable which is
business performance. The factors that are used to predict the value of the dependent variable is
the independent variable which is the Halal Management. It allows us to summarize and study
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