ISLAMIC PERSPECTIVE STRATEGY & CONTROL
On April 8, 2020, Dahlan Iskan said that “it’s time for us to move on”, especially in the hospitality sector which has been significantly affected since the pandemic. Global policies, either lockdown or restrictions implemented in Indonesia, have an impact on the business sector. That way, the shifting system is applied at several levels of employees, even the implementation of fully working from home.
It cannot be denied that most of the business sectors have experienced a setback (corporate losers) such as industries engaged in transportation, gas and oil, event organizers, and tourism (especially hotels). But on the other hand, several companies have become corporate winners during this pandemic, including companies making PPE, food delivery, online marketplaces, and provider teleconference apps.
Data from PHRI for the February-March 2020 period shows the hotel occupancy rate only reaches 20–30%, even in Bali it only reaches 7–9%. The next domino effect is on other businesses that become hotel vendors, where on average, one hotel cooperates with approximately 30 vendors.
In the short term, along with the decline in sales, some hotels try to minimize the pain by laying off employees, but some are still trying to survive with the shifting method. Furthermore, cut down expenses are an alternative. Where it needs to be known from the total operations of a hotel company, around 60–70% of total revenue is allocated as expenses. Thus, the resulting profit ranges from 30–70%.
To stay afloat during the pandemic, several hotels are giving massive discounts. For example, hotels in Bali offer ‘5 million rupiahs for 1 month stay,’ then in Jogjakarta ‘600 thousand rupiahs for a week.’ Even worse, several hotels divert services like restaurants, namely by opening food orders. So that people can buy food from the hotel.
Some business consultants provide advice, in these difficult times the hotel business needs to do a lot of introspection, and safe the energy, for example with a marketing audit, maximizing all digital assets, or starting dipping the customer segment, starting to conduct consumer interviews and conduct webinars.
Then, how do the Al-Quran and Sunnah provide guidelines in difficult times like this?
- Make sure tawhid is the grip.
“No disaster occurs except by God’s leave. Whoever believes in God. He guides his heart. God is Aware of everything”. (QS At Taghabun: 11)
“Every soul will taste death. We burden you with adversity and prosperity — a test. And to Us you will be returned.” (QS Al-Anbiya: 35)
“God does not shy away from making an example of a gnat, or something above it. As for those who believe, they know that it is the Truth from their Lord. But as for those who disbelieve, they say, “What did God intend by this example?” He leads astray many thereby, and He guides many thereby, but He misleads thereby only the evildoers.” (QS Al-Baqarah: 26)
- Patience: Self-control
“And seek help through patience and prayer. But it is difficult, except for the devout.” (QS Al-Baqarah: 45)
Holding your heart and mouth from complaining holding your limbs from emotional behaviour such as slapping cheeks and tearing clothes (‘Uddatush Shobirin wa Zakhirotusy Syakirin, Ibnu Qayyim al Jauziyyah, p. 10). Continually try to change your circumstances optimistically, do not give up until the problem can be resolved.
- Optimistic and endeavour
“With hardship comes ease”. (QS Al-Insyirah: 6)
“He has a succession; before him and behind him, protecting him by God’s command. God does not change the condition of a people until they change what is within themselves. And if God wills any hardship for a people, there is no turning it back; and apart from Him they have no protector”. (QS Ar-Radu: 11)
In the endeavour, a servant needs to protect the rights of Allah, as in Hadist Tirmidhi 2516, Ibn ‘Abbas narrated: I was behind the Prophet(s.a.w) one day when he said: ‘O boy! I will teach you a statement: Be mindful of Allah, and He will protect you. Be mindful of Allah, and you will find Him before you. When you ask, ask Allah, and when you seek aid, seek Allah’s aid. Know that if the entire creation were to gather together to do something to benefit you- you would never get any benefit except that Allah had written for you. And if they were to gather to do something to harm you- you would never be harmed except that Allah had written for you. The pens are lifted, and the pages are dried.’. Hence, make sure every activity carried out has a benefit.
As an accountant, in carrying out their role during difficult times, they must be able to develop a strategy and ensure that the strategy runs according to the corridors of the Al-Quran and Sunnah. The strategy will affect organizational goals, because its relation to decision making in the future and is long term. In carrying out the strategy, it is necessary to ensure that the internal resources owned (both human and technological) are able to be made as a distinction that can be used to survive, and it is better if it can be utilized as a tool for gaining competitive advantage. Then make sure that when the strategy is implemented, the control is also running. This is a mechanism used to ensure the strategy works effectively.
Control in terms of the behaviour of employees is defined as all the efforts made to influence employee behaviour. In this way, during difficult times, employees are directed to have a sense of effectiveness at work. The control can be done with various approaches, both through behaviour or output.
Specifically, this business strategy can be divided into 3 aspects, namely:
- Typology: determining whether the company is included in the defender category (not too many product types, not too focused on market development, and more focused on finance and developing resources), prospectors (looking for new opportunities and create innovation, efficiency is not too important because the main goal is leading product innovation) or analyzer (the strongest combination of characteristics of a defender and prospector).
- Positioning: whether cost leadership (controlling the market because of low prices) or differentiation (controlling the market because of the superiority/uniqueness of the product).
- Mission: determine the mission achieved by the company, whether Build (increase market share and competitive position even though this will reduce short-term earning cash flow), Hold (increase market share and competitive position to monitor market share while generating returns and investment that is reasonable), or Harvest (trying hard to generate short-term cash flow and profit).
Then the strategies that can be done include:
Short term:
- Efficiency (the main key during decreased sales).
- Switch to online marketing.
- Explore market trends, conduct analysis, prepare resources to undertake new strategies to enter the new world of business.
Long term:
- Innovate products.
- Making adjustments, business processes (costs, shipping, marketing, etc.) to return to the market when the pandemic ends.
The control can be done through 2 alternatives:
1. Financial control through budgeting
Islamic approaches to budgeting revision and adjustment include:
- Prioritizing goodness and benefits for mutual success (not wrongful and not wronged). Don’t be in a hurry, for example, in determining layoffs.
- Putting first the qath’i (absolute, certain, clear), prioritizing the primary (primary) then the secondary, and giving priority to the large then the small.
- Putting the public’s needs ahead of personal interests.
- Choose the effect of something in the long term rather than the short term.
- If there is a dilemma, then choose the one with the least harm.
In the budgeting process, the categorization of costs is divided into two, namely costs that cannot be changed/modified by management policies (non-discretionary costs), for example, taxes, insurance, leases, licensing fees, and debt. The case is currently, many companies are changing convertible bonds into shares. Then next, costs that can be changed/modified by management policies (discretionary costs), for example, utilities, wages and salary, technology, management fees, asset maintenance, and marketing. Modifications can be made by considering whether these costs must be minimized or maximized.
2. Control human resources through performance measurement by referring to compensation and incentive plans.
Ensuring the measurement of employee performance is accountable, fair and accountable (QS Al An’am: 132, QS An Najm: 39).
Trying to bring out a belief in individual responsibility. (QS Al Mudatsir, QS Al Insan: 14)
Ensuring that the performance measurement is leading to improvement based on comprehensive information.
Making adjustments in the process of appraising/measuring employee performance, especially in difficult circumstances as we faced today.
(Summarized from Laela, 2020)
Author : Asfa Asfia
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