Model of Institutional Strengthening Based on Management Function and Sharia Compliance: Exploration of Islamic Cooperative Institutions in Jember Regency, Indonesia

Abstract

Purpose: Sharia cooperative practices in Jember Regency, Indonesia generally do not perform well. This study explores the Islamic Cooperative Institution (ICI) practices based on management functions, the role of stakeholders, and sharia compliance at ICI in the Jember Regency. Method: This research uses a qualitative method with a case study approach. Data mining using in-depth interviews with seven informants managing the ICI who are still active and an informant from the Cooperatives and MSMEs Office in Jember Regency Findings: The results show that the ICI in Jember Regency is still not operational using the sharia concept because there are weaknesses and limitations in the application of sharia rules, especially knowledge and understanding of the concept of Islamic finance. Therefore, the proposed study model focuses on strengthening institutions so that ICI can maintain its sustainability. The proposed model also links the involvement of the government and universities. Originality: This study proposes a model for strengthening sharia cooperative institutions that relevant parties can adopt in developing suitable sharia practices in various regions in Indonesia and even the world. Implication: Increasing the role of the government in providing training to ICI administrators or managers to improve the implementation of management functions so that ICIs have a good performance.