The influence of halal orientation strategy on financial performance of halal food firms

Abstract

Purpose Although the halal orientation strategy (HOS) plays a key role in protecting the halal status of any product, research on the impacts of HOS on the financial performance of halal firms is lacking in the literature. As the main objective of all companies is to maximize their profit, this study aims to examine the influence of HOS on the financial performance of halal food firms with respect to halal culture as a moderator. Design/methodology/approach Data were obtained from a survey of 154 halal food firms in Malaysia and were analyzed using the partial least squares technique. Findings The results indicate that halal materials and halal storage and transportation positively affect financial performance, whereas the halal production process negatively affects financial performance. It is also interesting to observe that halal culture moderates the relationship between the production process and the financial performance of the firm. Practical implications The findings can help managers of halal food firms to enhance the financial performance of their respective firms by investing in HOS and giving attention to halal culture. It also helps decision makers to understand the importance of revising requirements for halal certification. Originality/value This study also contributes to the advancement of knowledge on the relationship between HOS and the financial performance of halal food firms.