The Role of Servant Leadership for Economic Development

Rachmadita Grandiz L, Fira Nurafini, Ririn Tri Ratnasari

Department of Economics, Airlangga University, Surabaya, Indonesia

Key words: Leadership, Servant Leader, Economic Development, Islamic Economics

Abstract: Economic development is the goal of every country. Economic development is not just about the increase in

production of goods and services from year to year, but more than that. Economic development measures all

changes that occur in terms of economy, education, technology, health, infrastructure, as well as prosperity

or the welfare of society. Economic development model of Ibn Khaldun explained that economic

development will not be achieved without the role of government as a leader. Servant Leadership is a

leadership model that prioritizes service to other parties, either to employees (members) of the company,

customers, or to the community. Using descriptive qualitative methods and data source from previous

theories and research, this study intends to discuss the role of servant leadership to the economic

development of a country. This study found that leadership with servant leadership model is very capable to

encourage the achievement of economic development. This is because the leader with servant leadership

model will be more concerned with the interests of subordinates or the community compared to their own

interests so the welfare of society and economic development will be achieved properly.

1 INTRODUCTION

Economic development is the goal of every country.

In Islam, the issue of economic development is also

very concerned, but still puts it on the issue of

greater development, namely the development of

mankind. Like the main function of Islam is to guide

people on the right path and the right direction. All

aspects related to economic development must

coalesce with the development of the human race as

a whole. It is also comprehensive and contains

spiritual, moral and material elements. Development

is a goal-oriented and value-oriented activity.

Material, moral, economic, spiritual and fiscal

aspects can not be separated. The happiness to be

achieved is not only material happiness and

prosperity in the world, but also in the afterlife

(Naf'an, 2014).

A 14th century Arab historian, Ibn Khaldun,

makes a model of economic development that can

improve the welfare of society. According to him, an

economic development will not be realized without

the role of government or leaders. According to

Fiedler as quoted in Setiawati (2000: 7) argued that

the leader is a person in charge of directing and

coordinating activities that exist in group tasks. A

leader is someone who because of his or her

personal prowess with or without official

appointment can influence the group he leads to

direct the cooperative effort towards the

achievement of a particular goal.

In Islam, this leadership style has long existed

even before western theory emerged. When viewed

in terms of characteristics, this style of leadership

can be seen in the history of the Prophet Muhammad

where it is written that the Prophet is a very humble,

earthy, and not crazy. When the food was only

enough for one guest, the Prophet even pretended to

accompany guests to have meal. The three shirts are

torn, then the Prophet even sews them himself.

When the Prophet traveled and went home too late

and did not want to disturb his sleeping wife, the

Prophet chose to sleep on the porch. In addition,

there is also Umar, a famous friend firmly very

careful as a leader. Lamps that use state oil alone are

turned off when going to discuss issues unrelated to

the state. Umar also wanted to go down to the

villages to listen to the complaints of the people, and

that carrying his own sack of wheat to his people

when it was needed. Ali recorded in history is also

very tawadlu'. As the people glorified as they

approached and said good-bye to a visit, Ali refused.

Looking at the characteristics of servant

leadership and also the importance of leaders for

128

Grandiz L, R., Nuraﬁni, F. and Tri Ratnasari, R.

The Role of Servant Leadership for Economic Development.

DOI: 10.5220/0007538701280132

In Proceedings of the 2nd International Conference Postgraduate School (ICPS 2018), pages 128-132

ISBN: 978-989-758-348-3

economic development of a country, therefore this

paper intends to discuss more about the role of

leadership with servant leadership style to economic

development.

2 CONCEPT REVIEW

2.1 Servant Leadership

Servant leadership is a type or model of leadership

developed to overcome leadership crises

experienced by an organization. Servant leaders

have a tendency to prioritize the needs and

aspirations of those who lead on him. Servant

Leadership has the responsibility to serve the

interests of followers in order for employees to be

more prosperous, whereas followers have full

commitment in working to achieve organizational

goals and success leaders.

Servant leadership can be applied to all

professions, organizations, institutions, corporations

(businesses) and governments because their services

are universal. Servant leadership assesses human

quality and looks at the individual development of

the organization's members. (Russel, 2002). Hale

and fields (2007, p.397) describes servant leadership

as "An understanding and application of leadership

that puts the merit better beyond the interests of the

leader himself, emphasizes the behavior of leaders

who focus on developing followers and reinforces

the goodness of leaders".

2.2 Characteristics of Servant

Leadership

There are 10 characteristics of a servant leadership

(Spears, 2004: 3). Characteristics of servant

leadership can occur in individuals naturally, and

may change with learning and practice. The

following ten characteristics have a significant

contribution to the application of servant leadership,

including: 1) listening ability, 2) empathy, 3)

healing/restore ability, 4) awareness, 5) convicing

others’s ability, 6) conceptual ability, 7) foresight

ability, 8) stewardship, 9) committed to the growth

of people, and 10) building community.

2.3 Servant Leadership in Islamic View

Servant leadership is a leadership style of a leader

who focuses on subordinates. Islam has taught about

the behavior of doing good to others. In this case

could include also good behavior of a leader against

his subordinates. In the Qur'an many verses advocate

to do good to others as in the words of Allah SWT in

Surah An-Nisa (4): 36. This verse describes the

command to do good to the parents, kinsman

relatives, children orphans, poor people, near and

distant neighbors, peers, ibn sabil and even slave

girls because God does not like those who are

arrogant. When associated with the concept of

leadership, then a leader should apply it well to his

subordinates.

Some of the key servant leaders of Prophet

Muhammad according to Humphreys (2005) and

Durbin (2012) can be explained as follows:

1. Service before self

Servant leader is not interested in acquiring

power, status or wealth.

2. Creating Trust

The Prophet Muhammad is known as alamin

which means is trustworthy. He is a person

who never cheats or steals from others and

always speaks right every time.

3. Focus on what is worth achieving

The Prophet Muhammad also indicated that he

should convey the message to all Arabia as

soon as possible, first he silently performs the

spell until it is possible to go public.

4. Helping

Prophet Muhammad's goodness and wisdom

are endless. He always helps the poor and the

needy.

2.4 Economic Development Model by

Ibn Khaldun

Development in the works of Ibn Khaldun is known

as umran al-'alam which means prospering the

world. Before the term umran al-'alam is discussed,

as explained by Yahaya (2011) that Ibn Khaldun

first discusses history, community cooperation (al

ijtima al insani) and then world prosperity (umran

al-'alam) is formed. These three terms are related to

each other in a society that is driven by the spirit of

brotherhood (asabiyya) to give birth to the state

(daulah) and prosperity (umran).

Furthermore, Ibn Khaldun's development theory

(in muqaddimah) which is an interpretation of the

hikamiyyah sentence, is manifested in a multi-

discipline model that has a dynamic character. It is

said to be multidisciplinary because Ibn Khaldun's

analysis connects all important socio-economic and

political variables: government or political authority

(G), beliefs and rules of conduct or sharia (S),

society (N), wealth or resource reserves (W) g) and

The Role of Servant Leadership for Economic Development

129

justice (j) (Chapra, 2008). This whole variable

cannot stand alone even in Ibn Khaldun's theory is

not known the term cateris paribus because basically

between one variable with other variables affect

each other. As for the model form of Ibn Khaldun's

thinking which will be explained in detail in the next

discussion can be seen through picture below:

Figure 1: The theory model of Ibn Khaldun's development

(Chapra, 2008).

1) Society (N)

According to Rosenthal (1967: 19), man is

central to Ibn Khaldun's analysis because the

rise and fall of civilization depend heavily on

the welfare or suffering of society. Human

dependence on the rise and fall of civilization

not only within the scope of economic variables

but also the human role in morals, psychology,

institutions, politics, social and demography

(Chapra, 2008). Chapra also emphasized that

this is the reason why all the messengers of

Allah's Messenger (including Abraham, Moses,

Isa and Muhammad saw) are present in this

world that is to reform human beings and the

institutions that influence their behavior.

2) Development (g) and Justice (j)

If human beings are central to Ibn Khaldun's

analysis, then development and justice become

very important relations in the chain of

causation and the collapse of a state.

Mohammad (2010) explains that national

economic growth can be achieved when the

people get the prize in the form of additional

wealth (through productivity). So that

development becomes very important because

without any real progress in the welfare of

society, then people will not be motivated to

exert their best ability. Furthermore, according

to Ibn Khaldun in Chapra (2008) if development

does not exist then it will cause scholars /

scientists, artists, labor and capital that should

flow into the country to encourage development

to experience obstacles or even stalled. So it is

probable that this could lead to the decline or

collapse of a country. It is important to note that

development in Ibn Khaldun's theory is not only

in the realm of the economy but all aspects of

human development (as in his models, G, S, N,

W, j and g) in which each variable is enriched

by each other to contribute to the real well-

being or the happiness of the community.

This development will never be possible

without the existence of justice (j). Justice, as

development, by Ibn Khaldun is not understood

in a narrow context, but rather in a more

comprehensive context which includes justice

for all mankind (Chapra, 2008).

Justice in this comprehensive context can

not be realized without creating a caring

society through brotherhood, and social

equality, security of life, property security,

respect for others, honesty in the fulfillment of

social, economic obligations and politics,

rewards or punishments consistent with deeds,

and the prevention of cruelty, from injustice to

every human being in all its forms. As Dasuki

(2006) explains that Islam emphasizes justice

is not only rooted in the social system but also

must resonate through all levels of social life,

in all relationships and affairs of the family to

the state. Therefore, both development (g) and

justice (j) are equally important factors and

they are so closely interrelated that they are

parallel and simultaneous in Ibn Khaldun's

previous model.

3) Sharia (S) and Government (G)

Sharia (S) refers to values and institutions or

rules to make society (N) fulfill its obligations

and prevent social harm to ensure the

upholding of justice (j), development (g) and

the achievement of a well-being for all. They

may be formal or informal, written or

unwritten. Every society must have a set of

rules based on their own value system. The

main basis of development-related regulations

in Muslim societies is Sharia (S). But Shariah

is unlikely to play a meaningful role except

with a fair and impartial implementation. So it

becomes the obligation of the government (G)

and also the society (N) to ensure the

implementation of these fair and impartial

rules.

4) Wealth (W)

The wealth (W) intended here is the provision

of necessary resources to ensure fairness (j)

and development (g), effectiveness of the

government's role performance (G) and the

achievement of a well-being for society (N).

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3 FINDINGS AND DISCUSSION

The model of economic development according to

Ibn Khaldun explains that the economic

development of a country is influenced by several

factors namely government (leader), sharia, human

(society), development and justice, and wealth.

These six factors influence each other in realizing

economic development. According to Ibn Khaldun,

this economic development will not be realized

without the creation of justice, where the

government (leader) is responsible for creating

community justice with a good implementation of

sharia.

In terms of leadership, Ibn Khaldun in Roshental

(1967: 383) also explained that good leadership is

the meek. So if the leader is cruel and abusive in

punishing then the public will be scared, depressed

and seek refuge by lying and cheating. This can turn

into an inherent characteristic of society so that their

perceptions and characters are damaged which

impact on the possible conspiracy of leader

assassination. This shows the importance of the right

leadership style to achieve the economic

development of a country.

Servant Leadership is a leadership style that

focuses on service to subordinates. In addition,

leaders with leadership style is more concerned with

the interests of subordinates / members / community

compared with their own interests. They will focus

more on the development, growth and prosperity of

their members.

Some empirical studies discuss the impact of

servant leadership on the attitudes and performance

of subordinates (Ehrhart, 2004; Liden et al, 2008;

Neubert et al, 2008). The belief in the leader shows

the effect of how subordinates react to the

encouragement given by the leader (Ng and Chua,

2006). Servant leadership itself is a view of how to

serve others that impact on the trust and attitude of

subordinates to the leader.

With an interest in subordinates, a servant leader

directs his subordinates to reach their potential

abilities and goals (Greenleaf, 1997, Lord et al,

1990). In addition, Servant leaders also emphasize

high quality relationships with their subordinates

and as a result can satisfy the needs and increase

their trust (Page and Wong, 2000). He creates

opportunities for his subordinates to share problems,

which can build strong trust in their leaders

(Whitener et al, 1998). When a subordinate feel that

they want to show and develop success, a servant

leader will entertain and encourage them. This

encouragement will increase the satisfaction of

subordinates.

Servant leadership focuses on developing

subordinates. In return, subordinates retaliate by

believing in their leader. For example, in the field of

work, a servant leader will encourage his

subordinates to plan for their future opportunities,

generously sharing and building trust with

subordinates. When their subordinates feel that they

receive the benefits of servant leaders, they are

motivated to believe in their leader (Whitener et al,

1998). Similarly, in the government, leaders with

leadership style will be very concerned with the

interests of society, development, growth and

welfare of the community so that ultimately can

create public confidence in the leader. Furthermore,

as described in Ibn Khaldun's development model, a

good relationship between the leader (government)

and the (human) community will be able to create

just economic development. In addition, as a leader

who is also a role model for members or

subordinates or in this case is the community, then

the high caring values can be emulated by the

community so as to create a good social life and care

for each other.

4 CONCLUSIONS

Economic development is the goal of every country.

Economic development is not just about the increase

in production of goods and services but more than

that. Economic development measures all changes

that occur in terms of economy, education,

technology, health, infrastructure, as well as

prosperity or the welfare of society. The model of

economic development according to Ibn Khaldun

explained that the economic development of a

country is influenced by several factors namely the

government (leader), sharia, human (society),

development and justice, and wealth. These six

factors influence each other in realizing economic

development. According to Ibn Khaldun, this

economic development will not be realized without

the creation of justice, where the government as a

leader is responsible for creating community justice

with a good implementation of sharia. Simply, if the

leader is good, the community justice can be easily

achieved and then the economic development can be

realized. Leadership style with servant leadership

model is very capable to encourage the achievement

of economic development. This is because the leader

with servant leadership model will be more

concerned with the interests of subordinates or the

The Role of Servant Leadership for Economic Development

131

community compared with their own interests so

that the welfare of society and economic

development will be realized properly. In addition,

for leaders with this leadership servant model,

leaders are not an opportunity to act in self-interest,

but rather to fulfill the interests of the people

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