Halal Business Management

A Guide to Achieving Halal Excellence

Marco Tieman

• Publisher: Routledge
• Year: 2020
• ISBN:
  9781000282474
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Desarrollo empresarial

The halal industry is a fast-growing industry due to demographics and industry expansion. Halal certification of products, outlets, and services is essential for doing business in Muslim-majority countries. This book shares the building blocks of professional halal business management, covering halal certification, halal supply chain management, branding and marketing, and halal risk and reputation management.

Drawing on years of academic research and advisory experience, the book provides practical advice and guidance on how best to organise and upscale your halal business operations. Successful companies in the halal industry are those that embrace halal excellence by design. Halal excellence is a process – a pursuit of excellence. Halal business management is beyond halal certification, and needs to address supply chain management, branding and marketing, and risk and reputation management. Halal excellence needs measurement through adopting the right key performance indicators, to protecting your halal reputation and licence to operate in Muslim markets.

This book gives proven, practical strategies to guide you in the halal industry. The book is for all organisations involved in serving Muslim markets, and also serves as a coursebook for graduate and postgraduate education in halal business management.

PART I

HALAL CERTIFICATION

1

The World of Halal

Introduction to halal

A significant paradigm shift in modern marketing is taking place, from a consumer-centric to a value-driven approach (Kotler et al. 2010), requiring the integration of Islamic values into business operations when operating in and/or exporting to predominantly Muslim countries.

Halal, which means ‘lawful’ (Al-Qaradawi 2007) has its origin from the holy Quran which tells humanity:

‘O you people! Eat of what is on earth, lawful and good; and do not follow the footsteps of the Evil One, for he is to you an avowed enemy’

Quran (2:168)

In the holy Quran lawful (halal) and good (tayyib) always comes together as two sides of the same coin. Therefore, when we talk about halal excellence it connotes an equal emphasis on quality excellence. The Arabic term for excellence, perfection, or beautification is ‘ihsan’ (or ehsan). Ihsan is also the Muslim responsibility to obtain excellence in worship, and it also constitutes the highest form of worship. Ihsan is excellence in work and in social interactions, in both deed and action. Simply put, Ihsan is the pursuit of excellence.

My dear friend Abdalhamid Evans defined halal during one of his inspiring speeches at the World Halal Forum in Malaysia as follows:

‘It is a portion of God’s gift to mankind; lawful, wholesome, safe, healthy, pleasing. Halal is not just about the end product; it is the entire process. It is a trust, an honour, and a responsibility’

Abdalhamid Evans (1951–2018)

From his definition, we can identify four important lessons. First, halal goes beyond the technical meaning of ‘lawful’. Halal requires an equal focus on wholesomeness, safety, health, and aesthetics. Second, halal should not be limited to only a product approach. Halal requires a process approach: end-to-end. Third, halal is related to trust which should be protected through standards and regulations. Fourth, halal is an honour and responsibility not only to consume, but also to provide (read: produce) so that humanity has access to products and services that are lawful and good.

Halal, rooted in shariah (Islamic law), is an important concept for Muslims to protect man from evil and to benefit mankind in all aspects of life (Al-Qaradawi, 2007). The opposite of halal is haram, meaning forbidden. The haram foods are mainly pork, alcohol, blood, dead animals, and animals slaughtered while reciting a name other than that of God. This includes also halal items that have been contaminated or mixed with haram items (Riaz and Chaudry, 2004). These things are prohibited due to their impurity and harmfulness.

The halal food laws in Islam provide important dietary guidelines for the daily life of Muslims. Some better insights into halal diets are shared below in Halal Insight 1.1.

However, halal is not limited to dietary regulations alone. Halal touches on all aspects of Muslim life. As a result, halal standards and certification have moved beyond food and have matured into non-food sectors such as services.

Today, the halal industry is a multi-trillion USD industry consisting of food, cosmetics, home care, pharmaceuticals, medical devices, chemicals, fashion, hospitality, finance and insurance, logistics, and many more. The halal industry is expanding rapidly as the industry grows in both width and depth (figure 1.1). The halal industry is expanding in width as new industries are seeking halal compliance and are getting halal certified. On the other hand, the halal industry is expanding in-depth, meaning more companies within one industry are getting halal certified. The demographics and economic development in Asia and the Middle East make the halal industry one you cannot afford to ignore. Halal is moving away from a niche market and into the mainstream, available in both predominantly Muslim and non-Muslim countries (Evans and Syed 2015).

Halal Insight 1.1 Halal diets

God encourages humans to conduct research on their food and says: ‘Then let men look at his food, (and how We provide it)’ (Quran 80:24). The Prophet (PBUH) frequently emphasised the medicinal properties of plants and the importance of various foods. According to the holy Quran, an important staple of our diet is water, corn, olives, date-palms, grapes, and every kind of fruit (Quran 6:99; 16:10–11; 23:19; 80:24–32). Olives, date-palms, and grapes have proven extensive medical properties. Most important fruit plants from the holy Quran are identified based on the number of times it was mentioned in the Holy Quran and also the order from other fruit plants: date palm, grape, olive, pomegranate, jujube, banana, and fig.

10 fruit plant species are explicitly mentioned in the Holy Quran and Hadith, namely: watermelon, cucumber, quince, figs, olive, date-palm, pomegranate, mustard tree, grapes, and jujube. The holy Quran also mentions the use of vegetable oil for food (Quran 23:20). The Prophet (PBUH) has said: ‘Use the olive oil in your meals and also use it for massages. For this oil is obtained from a tree full of blessings’. Current research shows that the use of (extra virgin) olive oil in our daily diet, which is also associated with the Mediterranean diet, has plenty of health benefits.

It is the law of God that the lower order of species be sacrificed for the benefit of those that are above. Therefore, green plants are fed to an animal (and not other animals), and slaughtered for consumption to be food for man. Although it is still being debated to this day, various scientists believe that the mad cow disease was caused by animal feed, where cattle feed has been commonly supplemented with meat and bone meal made from animal carcasses.

A human’s body is like a container, it can only fit in certain things and it is limited! So, fill your stomach with correct serving proportions as taught by the Prophet (PBUH) so we can be healthy: 1/3 food, 1/3 water, and 1/3 air for breathing. In other words, moderation is important for a healthy diet!

The Ramadan is a 29–30 day fast in which food, fluids, medications, drugs, and smoking are prohibited during the daylight hours which can be between 13- and 18-hours per day depending on the geographical location and season. Today scientific evidence shows the benefits of fasting for healthy aging (Greger 2019, Verburgh 2018).

The current food supply chain is characterised by high levels of waste in postharvest handling storage, processing and packaging, distribution, and consumption. The holy Quran is clear ‘Eat and drink: but waste not by excess, for God loves not the wasters’ (Quran 7:31).

Source: Tieman 2016

Figure 1.1 Halal industry is growing in width and depth.

As halal is moving mainstream, halal as a concept cannot be fully expressed within the construct of a product or service. It can be argued that halal reaches much further into the discipline of management, cultural anthropology, and sociology. If you describe halal from a cultural perspective, using the Hofstede (1991) onion diagram, ‘halal’ and its Arabic character becomes for Muslims an important ‘symbol’. In Islam the Prophet Muhammad (PBUH) is the best role model (‘hero’) to emulate and follow; which actions, sayings, and tacit approval have been documented in the Sunnah (Laldin 2006). Islam has various ‘rituals’, such as the method of ritual slaughter, and for certain Islamic schools of thought, there is also ritual cleansing. The core ‘values’ of Islam are based on the Holy Quran. Figure 1.2 presents the adoption of the Hofstede onion diagram to describe halal.

Figure 1.2 Halal according to the Hofstede onion diagram.

Halal is not static, but goes through an evolution (figure 1.3) from a Muslim company (purely based on a system of mutual trust between people), halal product (product is halal certified by an independent halal certification body), halal supply chain (a supply chain approach towards halal), to a halal value chain (halal is addres...