Journal of Islamic Business and Management

Bureaucratic System of Management in Islamic Financial Institutions: Implications & Alternatives for Social Inclusion

Omar Javaid & Abdul Wahab Suri
Published Online: December 2016
DOI: 10.1111/jibm

Islamic Financial Institutions (IFIs) have adopted an organizational design forged under the ideological and sociocultural forces in Europe which significantly differs with those of Islam. Modern discourse on Islamic banking and finance accepts such a design without sufficient analysis on its efficacy towards achieving the ideals of Islamic economics and finance. The paper develops a theoretical argument that the said design is not value neutral; rather influences all of its internal & external stakeholders by its metaphysical orientation. The available literature suggests that the bureaucratic system of management rewards psychopathic behaviour; distorts the morality of its subjects; colonizes non-market spheres; instrumentalizes religious-cultural values for capitalist objectives, and disintegrates traditional-socially inclusive-collectivities. It is argued that such characteristics of the bureaucratic system render it incapable to accomplish the ideals of Islamic economics to produce a just and inclusive socioeconomic order. It therefore can create significant hindrance for IFIs to accomplish their vision. The paper also highlights the original design of market institutions from Islamic historical experience, which was naturally oriented towards the goal of socioeconomic inclusion and justice. Some real life examples of contemporary alternatives are also discussed in the end.


Bureaucratic Management; Organizational Design; Social Inclusion; Islamic Financial Institutions.