A unified theory of the firm from the tawhidic paradigm of selected Islamic financial institutions and related firms in Malaysia : an alternative model

Abstract

This study develops a Unified Theory of the Firm based on Tawhidic paradigm as an inclusive theory to describe the nature of the firm, the scope and boundaries of assessment in organisational environments, and the assessment of internal organisations to improve organisational strategies. The conventional approach to the Theory of the Firm is inadequate to respond to the external, internal, and human dynamism. The market-based Theory of the Firm emphasizes the industrial organisational perspective item bodies that lack dynamism. Moreover, the evolutionary approach to resource-based and knowledge-based aspects of the firm is unable to provide a unified Theory of the Firm due to lack of spiritual foundations to sustain intellectual contributions from the knowledge workers. This study used the unified Tawhidic and social inferences methodology which aspired from Islamisation of knowledge agenda to develop an alternative model of unified Theory of the Firm. Rigorous investigation on classical and contemporary literatures on Tawhidic and Theory of the firm were led followed by personal in-depth interview conducted with twenty-two selected informants. There are from business sector, the representatives from trade chamber, policymakers, and experts from academia. The in-depth interview data collection aims at collecting rich and rigorous data from the field. Finally, both findings from the literature and grounded data analysis are able to contribute to the theoretical and practical understanding of the development of a Unified Theory of the Firm. As an alternative, this study proposes a Unified Theory of the Firm and the Tawhidic paradigm approach as a means to achieve al al-falah. Tawhidic paradigm offers three important themes, ‘people’, ‘process’ and ‘purpose’ as the critical success factors of the business firm. Accordingly, this study argues that a unified Theory of the Firm from Tawhidic paradigm is able to fill the current gaps through the process of transformation of philosophical foundation on the subscribed business paradigm and the integration process of the three sources of capital of the Firm (Physical/Intellectual, Emotional and Spiritual). Spiritual capital (‘Ubudiyyah) from Tawhidic paradigm played an important role as the unifier of these capitals to provide the balance fit between the internal and external sources of the firm to sustain and achieve al al-falah.