Examining How Takaful Operators Can Achieve Business Sustainability through Micro-Takaful from A Malaysian Perspective.
[Dissertation (University of Nottingham only)]
Nowadays, businesses are concern not only about gaining market share and achieving financial growth but also about new issues and problems affecting the country and nations as well as the world at large such as human rights, climate change and global warming. This study intends to link the idea of doing business with the poor, focusing on micro-takaful, to the creation of value for the organisation and achieving sustainable development. Micro-takaful scheme is very similar to conventional micro-finance or micro-credit. This study attempts to investigate the key role which takaful industry, as a private sector, can play in helping the Malaysian government to achieve the goal under the Millennium Development Goals (MDGs) related to eradication of poverty. This study examines how by playing its role in the society, the takaful industry can find solutions for the poverty problem and simultaneously increase the shareholder value, which leads to business sustainability and sustainable development. The main objective of this study is to examine the challenges faced by takaful operators in implementing micro-takaful in Malaysia and in achieving business sustainability. The main aim of this study is to examine what can takaful operators do to be able to convince their shareholders that investment in Corporate Social Reponsibility (CSR) or social initiatives, namely micro-takaful, can help in the eradication of poverty, and can simultaneously drive shareholder value which leads to the creation of sustainable value for the takaful operators. This study is structured as follows. Section 2 provides a review of literature and discussions about the theoretical concepts, particularly relating to the Bottom of the Pyramid (BOP) approach advocated by Prahalad and Hart (2002), CSR and the theories on motivations for CSR initiatives, sustainable development and the relationship between CSR and business sustainability. Section 3 provides the objective of this study, the methodology applies for this study, the key frameworks for this study, explanation on the selection of data collection methods, design of research instruments and data analysis method. Section 4 provides interpretations and meaningful analysis of the data as well as the findings from this study. Section 5 offers some recommendations and implications. Section 6 summarises the findings and provides some concluding remarks. Based on the main findings from this study, financial performance and maximisation of shareholders’ wealth remain the biggest challenges for the takaful operators. This study concludes that takaful operators can be ‘sustainable’ only if they adopt the ‘triple bottom line’ of business and take into consideration the economical, social and environmental aspects. Case studies show us that economic growth alone cannot guarantee the success of businesses and the sustainability of their businesses. Therefore, in order to achieve sustainable development, it is crucial for takaful operators to undertake comprehensive stakeholder analysis to help them identify all relevant stakeholders so as to have a better understanding of the different demands, needs and expectations of different stakeholders, which are critically important for takaful operators to achieve their mission and strategic objectives.
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