Birds of a Feather Are Punished Together, or Not? Examining Heterogeneity in Career Advancements of Minority Groups

In this study we examine the heterogeneous effects of being affiliated with different minority groups on employees’ career advancements in organizations. We draw on the categories literature and its concept of category distance to hypothesize why some minority groups may be more (dis)advantaged than others in their career advancements. To do so, we define category distance in terms of shared identity markers between groups, where identity markers are salient attributes that audiences commonly associate a group with. We test our hypotheses among religious minority groups using employment data from a large Indonesian government organization. Our results indicate that minority groups closer in distance to the organizational majority group are more penalized in their career advancements than minority groups further in distance. These results hold both at the group and at the individual level. Through our study we make contributions to the literatures on careers, categories, and the burgeoning study of religion in organizations. We conclude with implications for practice

HOW FEASIBLE IS A CONVERTIBLE IJARAH CONTRACT FOR SME FINANCING?: A SIMULATION APPROACH

Islamic financial institutions have relied for decades on margin-based contracts to provide financing for the business sector, despite the basic idea that Islamic finance is expected to provide an equity-based or a profit and loss sharing (PLS) contract. This fact raises the need to encourage the use of a margin-based instrument with an innovative scheme that allows for conversion of the contract into a PLS-based contract. Moreover, we propose a convertible ijarah contract to fill this need. A convertible ijarah contract is an ijarah (rent) contract that is convertible to a PLS contract according to the Islamic financier’s decision. In this study, we simulate three scenarios of project financing with (a) murabaha as a margin-based contract, (b) musharaka as a PLS contract and (c) a convertible ijarah contract. The aim is to evaluate whether the convertible ijarah contract will provide a higher return for the financier compared to the other contracts. The main input of the simulation is nine sectors of Indonesian SMEs’ financial performance. We found that when the financial performance of Indonesian SMEs was measured by short-term financial performance, the convertible ijarah contract outperformed the murabaha contract for all sectors but did not outperform the musharaka contract, except for low-margin sectors. However, when the financial performance of Indonesians SMEs was measured by long-term economic performance, we found that the convertible ijarah contract outperformed the murabaha contract and musharaka contract for almost all sectors

Holier than thou? Identity buffers and adoption of controversial practices in the Islamic banking category

Existing scholarship on categories frequently highlights how some category members may violate codes that others diligently abide by. In this paper, we take into account the differences in identity across category members, and ask how these relative differences determine their response to a code-violating change. Taking a case where category members are clearly identified as ‘insiders’ and ‘outsiders’, we argue that insiders’ reaction to a code violation depends upon the extent to which they believe their identity to be distinct from the code violator’s, who might be an insider or an outsider. Specifically, we suggest that it is the presence or absence of an ‘identity buffer’ – i.e., a relative identity advantage – which determines insiders’ reaction. We hypothesize that when a code violation is introduced by a fellow category insider, the focal insider will be more likely to refrain from the practice. When it is an outsider who introduces the code violation, insiders will be more likely to adopt the code violation as long as they can retain an identity buffer. We further posit that when outsiders adopt code-preserving behavior, thus narrowing the identity buffer between insiders and outsiders, it will mitigate insiders’ likelihood of code violation adoption. We test and find support for our hypotheses using data on Islamic banking industry in 12 countries (2003-2014)

Beyond the Insider-Outsider Divide: Heterogenous Effects of Organizational Identity and Category Taken-for-grantedness on Conformity

Categories that become taken-for-granted tend to acquire rule-like standing. That is, people begin to strongly expect certain behaviors from entities that have claimed affiliation with them, and these expectations tend to induce conformity. However, conformity does not always ensue, and we lack an explanation of why the effects of category taken-for-grantedness might diverge. In this paper, we propose that the effects of increasing category taken-for-grantedness hinge upon an organization’s identity. We first argue that the relationship between organizational identity and the likelihood of conformity is U-shaped, with insiders and outsiders being more likely to conform relative to those with middling identities. We then propose that greater category taken-for-grantedness should reduce scrutiny for those whose identities mark them as more of insiders, subsequently making them less likely to conform. In contrast, outsiders become more likely to conform as taken-for-grantedness increases. We test our arguments in the empirical context of Islamic banking, using data on 118 Islamic banks worldwide between 2001 and 2014. We examine the likelihood that banks in the sector make what are known as zakat payments as a function of category takenfor-grantedness and the extent to which a bank’s identity is Islamic. We discuss implications for the literatures on categories, identity, and religion

Committee on board: Does it matter? A study of Indonesian Sharia-listed firms

© 2017 The Author(s). The committee on board includes audit committee and nomination committee that currently has been questioned as to whether the firm value is also affected by the committees’ performance that has been the subject of attention. Apparently, this study is the first to attempt providing an evidence of committees’ role on to the extent of its contribution to firm value in the context of Indonesian Sharia-listed firms as the establishment of Islamic-compliance firms is currently experiencing an upward trend in many countries. Hence it is enticing to examine the impact of committee on board as part of corporate governance mechanisms on firm value in the Indonesian Sharia-listed firms. Using an Indonesian Sharia-listed firms which counts for 30 firms in the quarterly period of 2009 to 2015, this study employs a 720 balanced panel, using Generalized Least Square. The results reveal that the audit committee and the nomination committee have a significant impact on firm value (Tobin’s Q). The non-significant result for ROA suggesting that the mixed measured of book and market is viewed more reliable for investors as it indicates the overall performance measure. Meanwhile the result of the number of audit committee meeting yielded no significant impact on firm value; this may be due to no restrictions on the number of positions of audit committee serves in firms, therefore, the auditor may be manifold in some companies which can be overlapping. Further, the number of audit committee only meets the regulations and yet the transparency is still far beyond