Application of Knowledge Management in Islamic Banks
1.0 Title
The proposed title for the study is “Application of Knowledge Management in Islamic Banks.” This proposal will present the background information regarding the issue of Islamic banking and Knowledge Management. This paper will also present the objectives of the study as well as the methodology, tools, approaches and instruments used in the study.
2.0 Background of the Study
The Islamic financial system has a set of rules and laws as its basic framework, governing economic, social, political, and cultural aspects of Islamic communities. Such principles could be summarized as prohibition of interest, risk sharing, money as potential capital, prohibition of speculative behaviour, sanctity of contracts and Sharia-approved activities. Initially, the central tenet of the system is riba which literally means ‘an excess’ and interpreted as ‘any unjustifiable increase of capital whether in loans or sales.’ Iqbal (1997) noted that “any positive, fixed, predetermined rate tied to the maturity and the amount of principal is considered riba and is prohibited. The general consensus among Islamic scholars is that riba covers not only usury but also the charging of “interest” as widely practiced.” Iqbal (1997) also outlines the Islamic financial instruments: murabaha, ijara, mudaraba, mushakara and bay’ mu’ajjal and bay’salam. The first one is trade with mark-up or cost-plus sale, the most widely used instrument for short-term financing. Leasing, or ijara, designed for financing vehicles, machinery, equipment, and aircraft. Profit sharing agreement or mudaraba is identical to an investment fund in which managers handle a pool of funds with maturity structure ranging from short to medium term and is more suitable for trade activities. Musharaka is classical joint venture where both entrepreneur and investor contribute to the capital of the operation in varying degrees and agree to share the returns. Deferred payment sale and deferred delivery sale are contracts used for conducting credit sales.
3.0 Objectives
The main aim of the study is to investigate and study the knowledge management strategy for Islamic banks. In line with this, the following are the specific objectives of the study:
· To present the different problems that are related with the challenges in having innovative products and services in order to compete with the conventional banks;
· To investigate if knowledge management can help to improve and empower the people to offer excellent services’
· To identify the knowledge strategy model in order to improve and develop the services being offered by Islamic banks; and
· To present the knowledge management model to be applied in the knowledge strategy model in the industry.
4.0 Methodology
The research study to be used in the proposed study will be descriptive method. According to Creswell (1994) it intends to present facts about the nature and status of a situation as it exists at the time of the study. In addition, it also concerns with the relationships and practices that exist, beliefs and processes that are ongoing, effects that are being felt or trends that are developing (Best 1970). Therefore, it can be helpful in order to describe the current conditions and situations based on the impressions and perceptions of the respondents of the study (Creswell 1994).
4.1 Data Collection
Surveys will be implemented in the study. Surveys are the most common form of research method for collection of primary data (Commonwealth of Learning, 2000). One of its purpose is to describe, e.g., to count the frequency of some event or to assess the distribution of some variables such as proportion of the population of different age groups, sex, religion, castes and languages, knowledge, attitude and adaption of practices about particular issues, and other information of similar nature about the population (Commonwealth of Learning, 2000). Survey questionnaires and interviews will be implemented in the study. Questionnaire will include information that are related with the different information related with the connection of KM with Islamic bank system and its connection with the strategies being implemented in the company and its effectiveness.
4.2 Sample Frame
The primary data will be gathered from managers and employees of banks implementing the Islamic bank system. The target population is 50 managers and employees.
4.3 Data Analysis
The data results of the study will be analyzed by determining their corresponding frequency, percentage and weighted mean. The following statistical formulas will be used:
1. Percentage – to determine the magnitude of the responses to the questionnaire.
n
% = ——– x 100 ; n – number of responses
N N – total number of respondents
2. Weighted Mean
f1x1 + f2x2 + f3x3 + f4x4 + f5x5
x= ———————————————;
xt
where: f – weight given to each response
x – number of responses
xt – total number of responses
5.0 References
Best, J. W. (1970). Research in Education, 2nd Ed. Englewood Cliffs, N.J.: Prentice Hall, Inc.
Commonwealth of Learning. (2000). Manual for Educational Media Researchers: Knowing your Audience. Vancouver, Canada: Commonwealth Educational Media Centre for Asia (CEMCA).
Creswell, J.W. 1994. Research design. Qualitative and quantitative approaches. Thousand Oaks, California: Sage.
Credit:ivythesis.typepad.com
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