INTRODUCTION

In the world that is full of complexities and obstacles nowadays requires a systematic

management. Management is the process of administering and coordinating resourses effectively

and efficiently in an effort to achieve the goals of the organization. It is vital to face the

challenges and ensure the activities of the organization run smoothly. In order to reach mission

and organizational goals, management plays four basic managerial functions which are consist

of: Planning – setting goals and defining the actions necessary to achieve those goals;

Organizing – the process of determining the task to be done, who will do them and how those

tasks will be managed and coordinated; Leading – motivating and directing the members of the

organization so that they contribute to the achievement of the goals of the organization;

Controlling – monitoring the performance of the organizations, identifying deviations between

planned and actual result and taking corrective action when necessary.

In addition, there are two types of management; Conventional and Islamic. Before we

define what an Islamic management is like, it is better to give a short description of

Conventional management. The Conventional definition of management is getting work done

through people. However, by contrast, Islamic management is defined as the ability to utilize

resourses both material and human (Khalifah) optimally in order to achieve either short term or

long term goals (hereafter). Moreover, it is generated based on holy Al-Quran and As-Sunnah

as a source for decision-making. Our focus in this paper is on management from Islamic

perspective and we have decided to choose Tabung Haji Pilgrims Fund Board of Malaysia

(Lembaga Tabung Haji) as an illustractive case.

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 ABOUT THE COMPANY

Turn Back Time..

For people back then, especially those from rural areas, used traditional methods of

saving money to enable them to perform Hajj. They accumulated money in pillows under

mattresses and in earthern jars which were buried for safety. They also purchased land or

livestock which later could be sold to get the money needed for their trip to the Holy Land.

These traditional methods were totally risky in terms of security and depreciation value.

The main reason for the recourse to these out-dated ways of saving among them was the

desire to be absolutely sure that the money to be spent on pilgrimage was untained by Riba.

However, these kinds of methods of saving are detrimental to the rural and urban economy in

Malaysia. Impact, pilgrims face many difficulties and financial hardships upon their return from

the Hajj. Those who had sold part of their property before performing the Hajj face problems in

supporting their families upon their return home. Those who had sold all of their property hoping

that they will die in the Holy Land, face even graver problems upon their return to Malaysia.

Looking at these phenomenons, Royal Professor Ungku Abdul Aziz who had saw the

needs for muslims to gradually accumulate savings before performing the Hajj, appeared to

propose the establishment of savings institution that carries out its activities according to

Shari’ah principles. In his paper “A Plan To Improve The Economic Position Of Future

Pilgrims”, submitted to the government in 1959, he recommended that future pilgrims should

save in a bank or financial institution which was untainted by Riba but which yielded profits.

This suggestion marked the beginning of the formation of the Pilgrims Saving Corporation.

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Background..

In August, 1962, The Pilgrims Saving Corporation was incorporated and it was

subsequently launched on September 30th, 1963. In 1969, the corporation merged with the Office

of Pilgrims Affair operation in Penang and thus, was born the Managing Board and Tabung

Haji or simply Tabung Haji which was established under Act 8. The objectives of the company

are:

• To enable muslims to save gradually to meet the expenses to perform pilgrimage or other

useful expenses.

• Allows people’s savings to take part more effectively in the field of investment through

the way of lawful in Islam.

• To provide protection, control and welfare of the pilgrims who perform pilgrimage to

various facilities and services.

Based on the goals that Tabung Haji had set; the goal of serving the good, perfect and

satisfaction for Malaysian pilgrims in the course of performing pilgrimage and give maximum

profit to the depositors of their savings.

This statement is clearly showed that the Pilgrims Fund was established not only to manage

the departure of pilgrims to the Holy Land, but its functions are also as an alternative entity to

the muslims of Malaysia to save money while investing accordance with Islamic principles.

As a corporate based, Tabung Haji is very particular to the developments and changes that

swept the world in the 90s era. To ensure the sustainability of competitiveness in the era of

globalization, a study was made in 1995 to expand its scope and role. Thus, on June 1st, 1995 a
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new act of the Pilgrims Fund 535, the Pilgrims Fund Board in 1995 enacted the act to abolish

the old and the name is replaced with Tabung Haji Pilgrims Fund Board on August 28th, 1997.

Correspondingly, the letters “TH” are introduced as stands for substituting the “Tabung Haji”.

ORGANIZATIONAL STRUCTURE OF TABUNG HAJI PILGRIMS

FUND BOARD, MALAYSIA

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 PRIME
MINISTER’S
DEPARTMENT

HAJJ
FINANCIAL
OPERATIONS BOARD OF
ADVISORY
ADVISORY DIRECTORS
COUNCIL
COUNCIL

DIRECTOR
GENERAL

WELFARE FINANCE
COMMITTEE COMMITTEE

ADMINISTRATION
HAJJ FINANCE INVESTMENT
AND QUALITY
DEPARTMENT DEPARTMENT DEPARTMENT
DEPARTMENT

A) Board Of Directors

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 Tabung Haji is governed by a Board of Directors which is comprised of the following

members:

i. Chairman – appointed by the Yang Di Pertuan Agung

ii. Deputy Chairman – appointed by the Yang Di Pertuan Agung

iii. Representative of the Prime Minister’s Department

iv. Representative of the Treasury

v. Director General of Tabung Haji

vi. A maximum of five other members appointed by the Minister

vii. Representative of the Ministry of Health (by invitation)

Members of the board other than ex-officious members are appointed or nominated from

amongst muslim citizens. The board administers the fund and all other matters pertaining to the

welfare of pilgrims, formulates policies in connection therewith and performs other duties as

provided under the Pilgrims Management and Fund Board Act. In carrying out its duties, the

board receives advice from the Financial Advisory Council and the Hajj Operation Advisory

Council. Both councils were formed under the provisions of the Act.

B) Financial Advisory Council

The Financial Advisory Council was formed under the Act in order to assist the board. The

council consists of the following members:

i. Director General

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 ii. Director of Finance

iii. Four other members appointed by the Minister

The council is required to meet at least once every three months and to submit reports and

recommendations for the deliberation of the board.

C) Hajj Operations Advisory Council

The Hajj Operations Advisory Council was established under the Act for the purpose of:

i. Advicing the Minister on matters pertaining to the welfare of pilgrims

ii. Advicing the Minister on any matter referred to it by the Minister

The memberships of the council is as follows:

i. Chairman of the board, who also acts as the Chairman of the Council

ii. Representative of the Prime Minister’s Department

iii. Representative of the Treasury

iv. Representative of the Ministry of Foreign Affairs

v. Director General, who acts as the Secretary of the Council

vi. Representative from each of the Malaysia’s states

The council is required to meet at least once during every calendar year.

D) Finance Committee

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 The Finance Committee is vested with powers by the board and is responsible for the

administration and investment of funds.

The Finance Committee is comprised of the following members:

i. Director General – Chairman

ii. Director of Finance – Secretary

iii. Representative of the Prime Minister’s Department

iv. Representative of the Treasury

v. One member appointed by the board

E) Welfare Committee

The Welfare Committee is responsible for the welfare, protection, control and general well-

being of pilgrims in accordance with policies stipulated by the board and with powers delegated

by the board.

The Welfare Committee is made of the following members:

i. Director General – Chairman

ii. Director of Welfare – Secretary

iii. Representative of the Prime Minister’s Department

iv. One member appointed by the board

Close Up..

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 LOGO

Black

Ka’abah colour symbolizes the garment when

The letters (ta ha) are an abbreviation for the it engulfed Kiswah

word ‘Tabung Haji’ in Arabic script. Form a

square logo represents Ka’abah which

world.

MOTTO “Come to Success”

A call to prayer five times a day during echo in

the world. Day and night. Muslims are asked to

work towards the progress of the development

of global Islam. When developed nations, all of

which can be claimed in Islam such as Zakah,

development, learning and so on. Tabung Haji

is the right choice for muslims respond without

prejudice.

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Vision

o Pillars of the economic success of the ummah

o Systematically pilgrimage management

Mission

o Strengthening the economy of ummah

o Always actively seeking global and regional strategic investments for sustainable growth

o Mobilizing and enriching the depositors’ capital

o To provide continuing excellent services

o To facilitate and improve the pilgrimage to the hajj mabrur

o To provide returns that are competitive, clean and toyyiban

PRINCIPAL ACTIVITIES

Tabung Haji operates based on three main activities:

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Savings – providing funds for the muslims

Investments – investment funds are collected and monitoring the investment function

Hajj – hajj services in Malaysia and in the Holy Land

SAVINGS

i. Savings

The memberships of Tabung Haji are only open to Malaysian muslims. Tabung Haji used

Wadiah Al-Wakalah principle which requires new depositors to fill in the form which includes

the statement of aqad izin. That means, the depositors are agree to save in Tabung Haji and give

consent for it to manage their savings for investment purposes.

ii. Withdrawal

Depositors are allowed to withdraw their savings for any beneficial purpose once every six

months. Based on Islamic law, depositors who are above 18 years old are allowed to appoint

nominee/s who will act as trustee/s later.

Faraid Law

 Tabung Haji will pay the balance in the account of the deceased depositor to the

nominee/s, then requested to distribute the money to other beneficiaries.

 If the deceased depositor has not appointed nominee/s, Tabung Haji will advice the

beneficiaries to get a “Letter of Administration” from the Shari’ah Court, High

Court, Public Trustee or District Office.

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 Other than that letter, the beneficiaries can also get “Faraid Certificate” issued by the

Shari’ah Court. It is easier and faster as it applys the Faraid law.

iii. Zakah

Before the distribution of dividends to its members, Tabung Haji pays business Zakah at

2.5% rate on the aggregate of the profits earned during the Zakah year and the amount of

working capital at the end of Hijri year.

iv. Profit and Bonus

In the line with the Adil principle (justice), the profit derived from the depositors’ funds are

distributed in the form of a bonus. The bonuses paid are based on the principle of “Profit

Sharing” which it differs with the bonus from the concept of Riba. Bonuses are only paid if

Tabung Haji makes profits. In other words, the rate of the bonus is not fixed, it depends on the

profits derived in particular year.

The yearly bonus is paid to the depositors on the December 31st each year. Furthermore, the

bonus paid has been fully exempted from income tax due to the payment of Zakah by Tabung

Haji on behalf of depositors.

INVESTMENTS

Leading as an Islamic institution, Tabung Haji are carried out its investments according

to Islamic rules and practises. In order to operate the investments without any element which is
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contrary to Islamic principles, Tabung Haji uses the services of the Religious Supervisory

Council of Bank Islam Malaysia and the National Fatwa Committee of Malaysia to get

advises from time to time.

Plus, Tabung Haji will not invest in the companies that are involved with activities which

are prohibited by Islam. For instances, it does not invest in sectors such as hotels, insurance

(except Takaful of Malaysia) and banking (except Bank Islam Malaysia).

The sectors of investments made by Tabung Haji:

o Real estate development sectors

o Agriculture sectors

o Construction sectors

o The services, hajj, umrah and tourism sectors

o Productions and distributions of halal foods and beverages sectors

Tabung Haji managed the investments under these several Shari’ah principles:

Al Musyarakah

 The shareholders finance a project and the profits are divided accordingly as agreed by

the parties

 E.g: Corporate Notes; with these instruments, financing requirements can be made

secure through the issue of Syahadah Al Bayn (promissory notes or debt certificates)

Al Bai’ Bithaman Ajil

 E.g: Housing loans. Firstly, Tabung Haji determines the requirement of the clients

regarding to the period and manner of repayments and purchases of the assets concerned.

Then, sells them to the clients at an agreed price which comprises the actual cost and

margin profits.

Al Mudharabah

 An agreement is made where capital is provided by one party and management expertise

is handled by the other party

 Any losses incurred in the venture are borne by the provider of the capital

 E.g: General investment, this instrument basically a time deposit in which the bank

invests deposited funds collectively over a specified period and divided the returns

accordingly

Al Murabahah

 A repayment agreed upon by both parties that includes the profits mark up

Al Qardhul Hasan

 A benevolent loan in which the debtors are only need to repay their debts on the loan

amounts without any additional charges

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  The provider of the capital is guaranteed at least of the principal portion

Al Ijarah

 A repayment to get the rights in order to use the services of a given asset

 Usually, Tabung Haji uses this facility provided by Bank Islam of Malaysia for the

purchases of equipments

HAJJ

In order to fulfil one of the five Islamic tenets, every single muslim must do the

pilgrimage to the Holy Land. Tabung Haji appears to make a systematic hajj arrangements for all

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Malaysian pilgrims. However, another private organizations which are qualified and experienced

with the approval of the Minister of Hajj Affairs are also given the autonomy to handle them.

HAJJ MANAGEMENTS IN MALAYSIA

i. Medical examination

Medical examinations (including chest X-ray if necessary) and meningitis are given at local

hospitals and health centers. The Certificate of Fitness to perform the hajj is issued after the

treatment (if necessary).

ii. Registration for the hajj

The registration can be done by the pilgrims at any of Tabung Haji’s branch offices.

iii. Issue of hajj passport and hajj visa

Hajj passports are only issued to Malaysian citizens and permanent residents. While, hajj visas

are arranged by the board on behalf of pilgrims and issued by the Royal Saudi Embassy in

Kuala Lumpur.

iv. Hajj guidance courses

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In helping the pilgrims to experience the hajj mabrur, Tabung Haji is responsibles to equip the

future pilgrims with knowledge of Hajj rituals and administration. The aspects of the hajj

guidance courses include:

 Performance of hajj including hajj principles (rukun), hajj obligations (kewajipan) and

problems solving related to them

 Regulations and administrations of hajj in Malaysia and Saudi Arabia

 Securities measure and health care while performing hajj in the Holy Land

v. Transportation arrangements:

a) By sea

Sea transportations are arranged if there is a demand fo it by more than three thousands pilgrims

(adequate for at least two trips)

b) By air

• Chartered flights

Between 100 – 110 chartered flights using DC 10s (363 passengers capacity) or Boeing 747s

(475 passengers capacity) are arranged by Tabung Haji each season

• Scheduled flights

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Pilgrims can also choose to go by regularly scheduled Malaysian Airlines flights if chartered

flights are unavailable

HAJJ MANAGEMENTS IN THE HOLY LAND

Tabung Haji sends two official teams to accompany the pilgrims in order to take care of their

welfare, safety and health during the stay.

The Welfare Team:

o Providing accommodations services

o Administering the payment of dam

o Searching for lost pilgrims

o Providing counselling services; etc

The Medical Team:

o Administering the Malaysian Hospital at Aziziah

o Administering dispensaries in Jeddah, Mina, Madinah and Arafah

o Providing mobile clinic services

o Providing ambulance services for sick pilgrims; etc

CONCLUSION

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 According with the concept of Islam as “Ad-Deen”, it shows that the Islam is not only

limited to certain, specific worships such as solah and fasting during Ramadan. Instead, taking it

as our lifestyles are truly the real scope of the Islamic religion.

Management from the Islamic perspective seems to be one of the best choice, method and

option that we can apply within an organization in order to form a magnificence of the ummah.

In this case, Tabung Haji could be one of the examples which plays a big role in Islamic

management. We really hope that the Islamic management will be followed by another

companies especially among the OIC countries. What is more, we are also hope that every single

thing that we had done will be given a good returns either here or hereafter from Allah The

Almighty.

REFERENCES

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Tabung Haji Pilgrims Fund Board. Retrieved from

http://www.tabunghaji.gov.my/th/TH/THIndex.htm

Tabung Haji as an Islamic financial islamic institution: The mobilization of investment resources

in an Islamic way and the management of hajj, 9-42. Retrieved from

http://jukabooks.com/download/ebook/TABUNG%20HAJI%20AS%20AN%20ISLAMIC

%20FINANCIAL

%20INSTITUTION/aHR0cDovL2lzbGFtZmlubGFuZC5maWxlcy53b3JkcHJlc3MuY29tLzIwM

DkvMDgvaWRiLXRhYnVuZy1oYWppLWFzLWFuLWlzbGFtaWMtZmluYW5jaWFsLWluc3

RpdHV0aW9uLnBkZg

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