Empathetic Language of Leadership in Religious-based Non-Profit Organizations: The Case of Waqf Institutions in Malaysia

This study aims to extend the empathetic language model derived from the motivating language theory. Empathetic language provides a model of how leaders can understand their subordinates via the emphasis on emotional support, specifically the selection of words, which is proposed to affect management effectiveness. This paper also proposes the moderating effect of LMX in the relationship between empathetic language and management effectiveness. The current finding indicates a non-significant relationship between empathetic language and management effectiveness due to the prevalence of a power distance culture in the context of Malaysia. However, the relationship was found to be significant when moderated by Leader-Member Exchange. These findings enrich the existing body of knowledge about empathetic language and management effectiveness among NPOs. Introduction There has been increasing pressure on NPOs to evaluate their operations and demonstrate their competence and credibility. Waqf institutions are also affected particularly due to the numerous and long unresolved problems that raised questions about their integrity and accountability (Sharfizie et al., 2019a). Thus, more effective and ethical leadership skills are required to enhance the survival and continuity of these institutions. Empathetic language is a pivotal 21st century leadership tool on top of good interpersonal relationship skills among leaders which has been proven to improve both employee and organisational performance. This study examines the effect of empathetic language usage by leaders on the management effectiveness of Waqf institutions, and investigates the moderating role of Leader-Member Exchange (LMX). Waqf institutions are religious-based non-profit organisations (NPOs) (Kahf, 2003; Thaker et al., 2016) categorised under the third sector organisation (TSO) (Mohd Arshad & Mohamed Haneef, 2016) of which objective is to uphold justice and human wellbeing. NPOs are basically identified as part of the non-profit sector, the third sector or voluntary sector (Kolb, 2018). NPOs are fundamentally focused on creating social values as opposed to generating profits (Othman et al., 2012). They aim to serve the community or undertake other non-profit initiatives (Pervez, 2006). The management of NPOs are often viewed as incompetent or International Journal of Academic Research in Business and Social Sciences Vol. 1 0 , No. 10, 2020, E-ISSN: 2222-6990 © 2020 HRMARS poorly trained as compared to commercially-driven organizations (Morris et al., 2011). Hasan & Siraj, (2017) asserted that Waqf institutions have lost a significant effect on the economy due to dwindling public trust which resulted in less donor involvement. All this indicates that these institutions need to raise their level of competitiveness which would in turn ensure their viability and the achievement of their social objectives. Towards that end, effective leadership leading to effective management is pertinent. Moreover Sharfizie et al., (2019b) argue that effective leaders are crucial in building camaraderie that leads to producing coordination which in turn enhancing the overall effectiveness of management. Effective leadership is a critical 21st century element in organizational management (Holt & Marques, 2012). Leaders need to have the immeasurable capabilities of identifying changes, motivating people and providing support, with a critical emphasis on situational leadership for facing various circumstances (Dumas & Beinecke, 2018). The 21st century also brings with a set of new challenges and demands thus drastically changing the way leaders perform. Today’s highly educated and skilful workforce requires flexible leadership (Holt & Marques, 2012). Traditional leadership techniques such as transformational and transactional leadership are fast becoming obsolete; in their place today is visionary leadership which is more effective at raising employees’ aspirations and tapping into their sentiments (Hayes, 2014). Leaders need to choose their words carefully to ensure clear information delivery, reinforce dyadic leader-member relationship (Luthra & Dahiya, 2015), and guarantee shared understanding of organisational objectives (Murphy & Clark, 2016). Effective leadership communication can lead to an effective organisation as it inspires and motivates employees (Naile & Selesho, 2014). It also enables the leader to understand the employees’ job situation and ensuing emotions, and thus provide the support needed. On top of that, effective communication facilitates the leader in establishing a cooperative relationship with a member built upon mutual trust. Ethical leadership values entail respect for the employees’ wellbeing and the disposition to protect, support, improve and encourage them (Mahsud et al., 2010). A leader with such values is better able at developing and sustaining a cooperative relationship with his subordinates, which in turn can drive the formation of an exchange relationship. Only a small number of existing studies have examined the relationship between empathetic leadership language and organizational effectiveness specifically in religious-based institutions such as Waqf institutions as well as other NPOs. Adnan et al., (2013) described Waqf institutions as NPOs managing endowment funds and properties in Muslim-majority countries. Studies on Waqf institutions typically emphasize the following aspects: Table 1: Issues pertaining to Waqf property management Themes Effects Scholar Lack of professionalism and role ambiguity Interruptions in the implementation and completion of istibdal. Failure to register property ownerships under the SIRCs. Under-utilization of Waqf properties. (Abas & Raji, 2018; Abdul Majid & Said, 2014; Audit, 2014d; Azmi et al., 2014; N. Hassan et al., 2018; Ihsan & Adnan, 2009; Ismail et al., 2015; Mohd Puad et al., 2014) International Journal of Academic Research in Business and Social Sciences Vol. 1 0 , No. 10, 2020, E-ISSN: 2222-6990 © 2020 HRMARS The above shows that most NPOs fail to provide the needed information or public goods in justifying their purpose (Wallis & Dollery, 2006). In Malaysia, for instance, there is a Failure to gazette Waqf lands. Encroachment. Encroachment of Waqf lands Obstructions in developing Waqf lands. Failure to generate rental revenues. Owners not trusting Waqf institutions. (Abdul Majid & Said, 2014; Abdul Rashid et al., 2015; Audit, 2014a, 2014b, 2014c; Isamail et al., 2015; Ismail et al., 2015; Megat Abd Rahman et al., 2006) Lack of awareness among Muslims Inefficient rental system Data storage problems No standard procedures Non-awareness about the encroachment of Waqf lands. Non-awareness about istibdal. Rising rental arrears. Unobtainability and nonrenewal of lease agreements. Non-payment of commissions on leaseholds. Very low rental rates, nonrevision of charges. Ineffective or non-collection of rental charges. Poor Waqf property record. Untitled Waqf lands. Encroachment. Incomplete/non-updated Waqf properties list. Encroachment. Non-identification of land ownership documents. (Ibrahim & Ibrahim, 2013; Isamail et al., 2015; Mohd Puad et al., 2014) (Abdul Majid & Said, 2014; Audit, 2014a, 2014b, 2014c, 2014d;Mahmood & Markom, 2013;) (Audit, 2014a, 2014c, 2014d; Ismail et al., 2015; Rabitah Harun et al., 2012) (Audit, 2014c, 2014a; Ihsan & Adnan, 2009; Isamail et al., 2015; Ismail et al., 2015; Rabitah Harun et al., 2012) International Journal of Academic Research in Business and Social Sciences Vol. 1 0 , No. 10, 2020, E-ISSN: 2222-6990 © 2020 HRMARS information asymmetry between NPOs and the donors (Zainon et al., 2012). On top of that, Malaysia does not possess a uniformed framework for NPOs unlike other countries such as the USA (Zainon et al., 2014) whilst the degree of its NPOs’ transparency, accountability and good governance is not enforced by law (Ruhaya et al., 2012). According to Zainon et al. (2014), information disclosure for NPOs remains optional in Malaysia which indirectly affects the institutions’ productivity and effectiveness as the lack of legal and legislative requirements leads to information asymmetry (Zainon et al., 2014). All this indicates the need for proper leadership practices and ethics to ensure the effective management of Waqf Institutions in Malaysia. Furthermore, Sharfizie et al., (2019a) also argue that in order to ensure the Waqf institution continues to be successful, the recognition of core competencies is strongly encouraged. Herman and Renz (1999) asserted that effective NPO management reflect proper management practices, leading to overall organizational effectiveness. In the case of religious-based NPOs such as Waqf institutions, the leadership reflects the practice of Islamic principles in the organization. Hence, leaders play an important part in driving ethical thinking and practice among the organizational members via effective interactions and clear communications of expectations in achieving shared objectives (Sharfizie et al., 2019a). Ethical leaders are empathetic and respectful towards others and their opinions, exhibiting personal warmth and sympathetic tendencies (Heres & Lasthuizen, 2010) with the ability to understand and interpret behaviours. An empathetic leader hence can better understand and respond to the needs of his followers in such a way that improves their performances (Kock et al., 2019). A leader that can anticipate the needs of his followers also has the ability to determine the best management technique to improve their performance (Gavin et al., 1995). However, empathetic leaders need to have an affectionate disposition moderated via a leader-member exchange relationship, which makes it easier to achieve improved behavioural outcomes such as work effort. This study intends to underline the relationship between empathetic leadership language and management effectiveness in the context of Waqf institutions as there are very few exi