W14725 FORUS HEALTH CROSSING THE DISRUPTIVE PRODU.docx

W14725

FORUS HEALTH: CROSSING THE DISRUPTIVE PRODUCT
CHASM

Ramesh Narasimhan, M. V. Ravikumar and N. Barnabas wrote
this case solely to provide material for class discussion. The
authors
do not intend to illustrate either effective or ineffective
handling of a managerial situation. The authors may have
disguised certain
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Copyright © 2015, Richard Ivey School of Business Foundation
Version: 2015-03-24

In April 2013, K. Chandrashekhar, the co-founder and chief
executive officer (CEO) of Forus Health
(Forus), sat in his office in Bangalore, India reviewing the
company’s performance during the last
financial year.1 Despite initial challenges, Forus had managed
to sell more than 100 of its patented
“3nethra”2 ophthalmic devices since inception in January 2010.
A quarter of these sales came from
unanticipated export orders and the rest from hospitals and
clinics in the domestic market. The company
needed additional funds to grow and in April 2012 received
venture capital funding. During the last three
years, the number of employees at Forus had grown to 50 and
the main office had moved into a larger
independent building.

In January 2013, Chandrashekhar’s venture capital partner had
urged him to recognize and size up the
market’s potential for 3nethra. The venture capital partner felt it
was high time that Forus exploited its
first mover advantage in the market before imitators stepped in.
Based on an assessment of the market
potential and the past sales performance, a target of 300 units
was set for 2013/14. Chandrashekhar had
been busy setting up a new sales team over the past three
months, but it would need time to come up to
speed in the field. He knew that while his team had to seek new
customers for 3nethra, he could not
underestimate the efforts required to keep existing customers
happy with the product’s performance and
frequent upgrades. Chandrashekhar faced two opposing
challenges: 1) maximize the sales volume of
3nethra by targeting the entire market but risk not being able to

gain deeper acceptance within any
segment; and 2) maximize 3nethra adoption by focusing all
efforts on the ophthalmology segment but at
the cost of uncertainty in achieving the sales target. Later that
day, Chandrashekhar was scheduled to
meet with the senior sales team and formulate an approach that
would help them achieve the sales target.

FORUS HEALTH: THE COMPANY

In early 2005, Chandrashekhar and Dr. Shyam Vasudev, who
were colleagues at Philips India Limited,
happened to listen to a passionate presentation by Dr. Aravind,
the administrator of the world-famous
Aravind Eye Hospital3 in Madurai, on its missionary efforts to
“eliminate needless blindness.” A poignant
documentary, “Infinite Vision,” which followed the talk,
portrayed the plight of millions of blind poor in
the remote villages of the developing world. Vasudev and
Chandrashekhar were visibly moved by the

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powerful message of the documentary: if soft drinks could reach
the blind, why could not eye care? The
duo pondered how they could contribute to the cause of solving

health problems in countries such as
India. This thought led to the establishment of Forus.

Vasudev and Chandrashekhar had joined Philips on the same
day in 2004. Vasudev had a doctorate in
embedded systems from the Indian Institute of Science,
Bangalore and had a stint in academia as a faculty
member in a technical institute. He had also been an
entrepreneur for four years with an information
technology (IT) venture that out-licensed its anti-virus solutions
for DOS-based computer systems. In
fact, Vasudev used his royalty income to pursue his doctoral
program from 1991 to 1995. Vasudev
worked with CG Smith for two years, then with Ericsson as the
head of their India research and
development centre for three years and at the company
headquarters in Stockholm for four years. He
returned to India to work with Tata Consultancy Services for
one year before joining Philips in 2004 as
the technical director of its health care division.

Chandrashekhar had graduated from BITS, Pilani in 1988 and
worked with CDIL and Alliance
Semiconductors in product management and business
development. Prior to joining Philips in 2004,
Chandrashekhar had done his Master of Business
Administration at Annamalai University and a global
management program at the Indian Institute of Management,
Calcutta in 2003/04 with international
immersion in countries including Brazil, Russia, China and
South Africa.

Vasudev recalled:

Chandrashekhar and I form a curious team. That we had joined

Philips on the same day was a
mere coincidence. I am a hard-core technologist with a strong
research interest in embedded
systems. Chandrashekhar comes with an extensive experience of
marketing and business
development in semiconductors. But we share a common vision.

Chandrashekhar spoke of that vision:

Initially, we did not know what to do or how to contribute. But
the passion to work in preventing
blindness had become strong in Vasudev and me. Over the
following two years, we made several
visits to Madurai and attended the eye camps in remote villages.
We concluded that innovation in
the eye screening device and the way it is deployed could help
address the humungous problem of
preventable blindness4 in India.

Chandrashekhar resigned from his job in February 2009 when
an angel investor agreed to extend financial
support for the development of 3nethra. By December 2009,
Chandrashekhar and Vasudev were
reasonably sure that the product concept of a versatile
ophthalmological device, which would combine the
basic functions presently carried out by different devices, would
be technically viable. They decided to
name the device 3nethra due to its multi-functionality that
included imaging of the front and back of the
eye, generating a report on the patient through a connected
computer and sending the image and report to
a specialist ophthalmologist through telemedicine. The device
was conceived to be not only cost-effective

but also more rugged and portable than the imported brands
currently in use. They legally registered the
company as Forus Health Private Limited in January 2010, with
an investment of INR10 million and with
Chandrashekhar as the founder and CEO. The word “forus”
signified that the company would be “for us
— my community and me.” Vasudev joined Chandrashekhar in
April 2010 as the chief technology officer
(CTO) and president, along with a team of five engineers, some
of whom had worked on the prototype of
3nethra with him even before he joined the company officially.

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Vasudev closely interacted with the ophthalmologists at
Aravind Eye Hospital during the early stages of
product development. According to him, the optics technology
of the camera in 3nethra posed the biggest
challenge, especially considering the deficiency of
technological capability in India. By June 2010, the
prototype of 3nethra was completed, but the angel funding
stopped as the angel investor lost interest in
the business. This was the first time Chandrashekhar realized
that they had to be on their own and earn
their own living. He reminisced, “We started putting our real
skin into the game. But the passion was

there.” He had recognized that the success of 3nethra entirely
rested on its acceptance by
ophthalmologists. Because the quality of the image produced by
3nethra did not compare well with those
of imported brands, Vasudev and his team continuously worked
on its enhancement and provided free
upgrades to existing customers. A consultant was appointed to
explore the opportunity to tap the non-
governmental organization (NGO) channel, which played a key
role in conducting eye screening camps in
rural areas. Such an initiative, which started with one of the
NGOs in Bangalore in September 2011,
resulted in a purchase order for two 3nethra from Sankara Eye
Hospital, Bangalore in January 2012. By
March 2012, Forus had added two sales executives and had sold
18 3nethras, mainly to ophthalmology
hospitals and ophthalmologists in the cities.

In April 2012, Forus received venture capital funding of
INR300 million (US$5 million). The company
ramped up the head count to 50 employees and added senior
positions such as chief financial officer,
vice-president of engineering, vice-president of manufacturing
and head of sales and marketing. In the
financial year 2011/12, the company posted revenue of INR70
million (US$1.1 million) and profit of
INR2.7 million (US$0.05 million) (see Exhibits 1 and 2). By
March 2013, Forus had installed 127 units
of 3nethra, including 24 units that were exported to 10 different
countries.

EYE-CARE CHALLENGES IN INDIA

A recent World Health Organization study5 estimated that there
were about 550 million people in India —

about half the population — who needed some vision correction.
The country also had the largest number
of diabetic patients.6 Eighty per cent of India’s estimated 15
million blind people, accounting for more
than one-quarter of global blindness, could be cured if
diagnosed early. Diabetic retinopathy, cataract,
glaucoma, cornea problems and refractive errors constituted 90
per cent of the causes for blindness. In
2010, India had an estimated 18,000 ophthalmologists and the
same number of paramedic personnel that
included ophthalmic assistants and optometrists.7 A mere 800
ophthalmologists graduated every year,
keeping the ophthalmologist to patient ratio at approximately
1:60,000. The ophthalmologist to
population ratio in rural India was abysmally low at 1:250,000.8
With such a low number of qualified
ophthalmology practitioners, only 7 to 10 per cent of people at
various stages of blindness could be
screened and treated. Since the existing vision care system
required specific diagnostic devices (a single
device for every problem) and an ophthalmologist for screening,
it was very expensive. Thus, the rural
market remained underserved.9

OPHTHALMOLOGY MARKET ECOSYSTEM IN INDIA

Ophthalmology Practice

Of the 20,000 ophthalmologists in India, about 4,000 worked at
ophthalmology hospitals. These hospitals
had multiple specialty departments as well as an outpatient
department (OPD) and were equipped with
high-end diagnostic devices. Aggarwal’s Eye Hospital (Chennai,
Tamil Nadu), Nethralaya (Chennai,
Tamil Nadu), Sankara Eye Hospital (Coimbatore, Tamil Nadu),

Vasan Eye Hospital (Trichy, Tamil
Nadu) and LV Prasad Eye Hospitals (Hyderabad, Andhra
Pradesh) with their pan-India presence and

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Aravind Eye Hospital (Madurai, Tamil Nadu) with its pan-Tamil
Nadu presence, were a few of the
prominent ones in this segment.

An estimated 8,000 ophthalmologists worked at smaller eye
hospitals, which had an OPD and a limited
in-patient facility. These hospitals usually had two or three
ophthalmologists, an optometrist and a few
nurses. Around 3,000 ophthalmologists practiced at their own
clinics. The rest were with ophthalmology
departments of general hospitals10 that typically had multiple
departments for treatment of several
ailments. The small eye hospitals and clinics attracted patients
mainly through walk-ins. On the other
hand, large hospitals, besides attracting walk-in patients, also
held pre-screening eye camps where
patients were examined for cataract and other common eye
ailments. If an ailment was detected, the
patients were referred to the main hospital for further diagnosis
and treatment. Pre-screening camps were
held for the general public in city suburbs, small towns and

villages. They were also held in cities for
people living in residential clusters and for employees working
in large corporations. Large hospitals had
the personnel, infrastructure and networks required for regularly
organizing pre-screening camps. In many
cases, these camps were sponsored by NGOs. Often non-
ophthalmology practitioners, such as
diabetologists and general practitioners (GPs), referred patients
to the hospitals and clinics and received a
referral commission.

Non-ophthalmology Practices

Non-ophthalmology practices, such as diabetic centres, optical
shops, pediatricians, diagnostic centres
and GPs, often attended to patients with eye-related disorders.
These practices had very high potential for
early screening and identification of ophthalmic problems, thus
aiding reference of such cases to an
ophthalmologist. But such referrals were currently small in
number. Dr. Praveen, an ophthalmologist in a
leading hospital, commented:

While non-ophthalmic doctors like diabetologists, general
practitioners and pediatricians came
across many ophthalmic cases, their priority & competency was
to treat the systemic illness often
missing to attend to the eye ailment. Efficient screening tools to
document and triage ocular
conditions and where needed refer & confer through
telemedicine to a remote ophthalmologist
will improve early diagnosis and referral and improve overall
care to the patient.

Ophthalmic Diagnosis Process and Devices

In a typical ophthalmic diagnosis scenario, after completion of
the registration formalities, a patient went
to a pre-consultation room where an optometrist measured the
prescription number of the eyes using an
automated refractor and a subjective refractor. Further, the
prescription number of the patient’s lens, if
any, was checked with a lensometer. The intraocular pressure
was then measured using a non-contact
tonometer. All these measurements were recorded for the
reference of the ophthalmologist. Before the
patient met the ophthalmologist, drops were administered to
dilate the patient’s eyes to facilitate further
examination. The ophthalmologist conducted a routine checkup
of the eye using an ophthalmoscope. The
anterior (cornea) and the posterior (retina) of the eye were
examined using a slit lamp along with a 20D
and 90D lens. The doctor then prescribed treatment for the
ailment diagnosed. If needed, the patient was
referred to ophthalmic specialties for further diagnosis and
treatment. The specialists used advanced
devices for diagnosis. For example, a glaucoma specialist used
an optical coherence tomography machine
to measure the cup-to-disc ratio, and a retina specialist used a
fundus camera to take images of the
posterior that helped assess damage to the optical nerve. A
depiction of the ophthalmology department
process flow is presented in Exhibit 3.

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The ophthalmic devices market in India remained quite
fragmented with multinational firms having
significant presence in some segments. The key players were
Advanced Ophthalmic Imaging System,
Consolidated Products Corp. Pvt. Ltd., Bausch & Lomb, Carl
Zeiss, J&J Vision Care, Appasamy
Associates, Mehra Eyetech Pvt. Ltd. and Toshbro Medicals (see
Exhibit 4).

CHALLENGES AT EYE CAMPS

Most parts of rural India lacked an eye care facility at primary
health care centres. People from rural areas
relied mostly on eye camps conducted in their area by NGOs
such as Rotary, Lions or some charitable
institution. NGOs created awareness about the camp and
informed the villagers in advance to ensure that
enough people visited. On any given camp day, about 200 to
300 villagers would visit. Since they would
have to wait for a few hours, they could not attend to their work
that day. A team of optometrists and
paramedical staff checked the patients initially and referred
only cases like cataract or corneal opacity to
the ophthalmologist present at the camp. Since such cases were
found in 10 to 20 per cent of the visitors,
the ophthalmologist ended up spending more than the required
hours at the camps, so many
ophthalmologists attached to hospitals did not want to be

associated with them. As typical eye screening
equipment was expensive and could not be carried to the field
for camps, eye inspection was conducted
with the help of a hand-held ophthalmoscope and torch light.
For further detailed checkup, the patient
would be advised to visit the ophthalmologist at the hospital.

3NETHRA: THE PRODUCT AND ITS POSITIONING

In 2011, Forus launched 3nethra as a single, portable,
intelligent, non-invasive, non-mydriatic11 eye pre-
screening device that could help detect five major eye-related
ailments such as diabetic retinopathy,
cataract, glaucoma, cornea problems and refractive errors. The
device was an imaging unit consisting of a
camera mounted on a stand for positioning the eyes of the
patient. The unit could be connected through a
USB interface to an operator console, i.e., an off-the-shelf
personal computer loaded with 3nethra
software that aided in imaging, analysis and communication. It
combined the functions performed by
multiple stand-alone devices (Exhibit 5). The 3nethra device
was capable of capturing pictures of the
posterior (retina) as well as the anterior (cornea) of the eye and
generated an automated “Normal” or
“Need to See a Doctor” report, which was useful especially
during the early onset of an eye disease when
patients did not experience symptoms. Through telemedicine,
the device could connect patients with
doctors at primary care centres or at eye camps to secondary or
tertiary care centres for remote diagnosis
of ailments. At about INR0.5 million (US$8,500), the device
was considered low cost, greatly reducing
the direct and indirect cost of pre-screening. Chandrashekhar
explained:

Suppose we pre-screened 100 patients in a village with 3nethra
and identified 20 of them as
having some eye-related problems. Among these, we referred 10
patients for further consultation.
But only four patients actually visited the doctor. Since we have
their whereabouts with some
follow-up, we could encourage the remaining six to also consult
the doctor. Thus, we could
increase the conversion rate from four to even seven patients.

Positioned as an “intelligent pre-screening device,” 3nethra
claimed to deliver the following benefits:
present at the location of pre-screening. The

operator could send reports of the screened cases to the doctor
through the telemedicine network and
the doctor could offer remote diagnosis and suggest treatment or
a meeting at the hospital, if required.
This allowed the doctor to spend time only on patients who
needed immediate attention.

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-screening in rural areas would help identify
patients at early stages, thereby increasing
the inflow of symptomatic patients to the hospitals. It also
enhanced the corporate social
responsibility image of the hospital.

-screening at low cost, integrated with remote
diagnosis, could help a patient get
screened for a problem right at his doorstep in a remote village.
This saved travel and associated time
and cost, as well as lost earnings.

ncer to the
blindness prevention efforts of the
government.

Referring to the eye camps, Dr. Meena Menon of Sankara Eye
Hospital commented:

Sending senior doctors was not optimal use of manpower at the
screening eye camps. A 3nethra
device fitted best here [eye camp] not only because it was
economical, but it could also be easily
operated by anyone with some training. 3nethra could also fall
back on a remotely placed expert
(doctor) especially in such remote camps. The portability of the
device made it even more
attractive for camps that otherwise had to have doctors
screening patients with the help of torch
light, ophthalmoscope and other multiple devices with no ability
to objectively record.

Over the past two years, 3nethra underwent product
improvements resulting in enhanced quality of
images. All existing customers received upgrades for the
software on their devices free of cost. Add-on
software applications, such as one for calculation of the cup-to-
disc ratio, was available at extra cost.
3nethra was priced at INR500,000. Another model, called the
3nethra Royal, was introduced. It included
an objective auto refractometer12 as an additional feature at an
extra charge of INR50,000.

MARKETING 3NETHRA

Chandrashekhar recounted how the positioning of 3nethra had
changed over the past three years in
presentations he made during the annual conferences of the All
India Ophthalmology Society13 held in
Ahmedabad (2011), Cochin (2012) and Hyderabad (2013). He
said:

In 2011, our emphasis was on pre-screening as a concept for
outreach camps and 3nethra’s
uniqueness in that context. The following year, we addressed
the ophthalmologist as a user of
3nethra, highlighting the quality of the image (higher pixels)
and the elimination of dilatation
(non-mydriatic). We understood that it was essential to get the
acceptance of the ophthalmologist
before we could gain wider adoption of 3nethra or for that
matter any device. In the conference
this year (2013), we shared the case studies of actual usage by
various customers. In fact, we
asked potential customers the application where they wanted to
deploy 3nethra — be it eye

camps, mobile vans for telemedicine, pre-consultation and
doctor’s consultation; in an OPD,
diabetic or diagnostic centre, GPs, etc. — and then shared our
successful case studies in each of
these applications. For example, when we called on GPs, we
emphasized the return on their
investment in 3nethra through the increase in patient footfall,
additional income from the 3nethra
Pre-Screen Report [which was like an X-Ray report] and the
commission that could be earned
from referrals to specialist ophthalmologists.

K.M.K. Rajendran, the new sales head at Forus who had long
years of experience in selling medical
devices, felt that 3nethra had not been sufficiently exposed to
all possible users. He said:

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We demonstrate 3nethra to the doctor in an actual clinical
setting with a patient. Invariably, the
doctors have been excited and overwhelmed about the multi-
functionality, compactness and
affordability of this innovation. By the end of the year, we will

have 15 personnel promoting the
3nethra in different locations. This is basically like pharma
sales — meet the ophthalmologists,
opticians and GPs and promote the product, generate interest
and close the sale. The bigger the
funnel, the better the catch.

SELLING 3NETHRA

Anil Chaturvedi, the company’s regional manager-south,
believed that the sales approach had to vary with
the type of customer and that a one-size-fits-all approach would
not succeed. At Dr. Samina Zamindar’s
clinic (an independent ophthalmologist), 3nethra was proposed
as an affordable substitute for the
expensive imported fundus camera, facilitating better patient
compliance. At the Aggarwal Eye Hospital
branch in Bangalore, 3nethra was used as a pre-screening device
for eye camps. On the other hand, at
Shekar Nethralaya, a stand-alone medium eye hospital, 3nethra
was deployed in the OPD section,
restricting the use of the fundus camera exclusively for
conducting fundus fluorescein angiograms for
diabetic retinopathy cases.

Chaturvedi explained:

It is essential to build an excellent rapport with customers to
gain a deeper understanding of what
suits them. For an independent ophthalmologist, we may have to
suggest the possibilities of
revenue enhancement with 3nethra. Owning a 3nethra, an
equivalent of the expensive fundus

camera, in addition to the regular slit lamp, would enhance the
professional image of the doctor.
The 3nethra images could be used for educating and counseling
patients, thus ensuring better
compliance to doctor’s instructions and better treatment
outcomes. The additional service of
counseling, with the help of 3nethra images, could be made
chargeable — a win-win for both the
patient and the doctor.

Chaturvedi narrated how a dozen 3nethras, the single largest
order so far, were sold to the Aggarwal Eye
Hospital:

We had sold them two machines on trial. In 2012, they invited
me to a camp held in Mauritius,
where they have a hospital. There was a long queue of people
waiting for free eye checkups.
Luckily for me, the CEO of the hospital was sitting next to me
observing the progress of the
camp. I kept updating him on the number of patients screened
for further consultation and
treatment for glaucoma, retina or cataract. He was so impressed
that the next day he called up and
told me that he would place an order for 10 more devices.

Camps had been useful for getting increased footfalls to
hospitals. Chaturvedi added, “See this SMS from
the administrator at Aggarwal’s . . . this is a thank you message.
It says that he got 14 OPD walk-ins from
the camp held the previous day.”

A sales person, on average, demonstrated 3nethra to about 75

ophthalmologists in a month. Referring to
the developments of the recent month, Rajendran observed that
“In January 2013, four of my territory
sales managers had sold four 3nethras and there is more
business to come. Doctors are appreciating the
product. We have not heard about any objections related to the
product. The low rate of conversion14 is
either due to lack of funds to buy it immediately or the doctor
already had a high-end device.”

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The three applications of 3nethra — namely, pre-screening,
OPD and diagnosis — accounted for roughly
50 per cent, 40 per cent and 10 per cent, respectively. For a
detailed sales mix of Forus for the financial
year 2012/13, refer to Exhibit 6.

CHALLENGES FACED IN 3NETHRA ADOPTION

According to some doctors, though the large ophthalmic
specialty hospitals were reaching out to the
general public and employees of big IT companies through
camps, their number was small. On the other
hand, though the stand-alone medium and small eye hospitals

were large in number, they were not used to
conducting outreach camps. Hence, in the first place, these
customers (doctors) had to be convinced about
the benefits of conducting eye camps and would need to be
supported in organizing them. This would
demand effort in terms of identification of the right locality,
promotion of the camp among local residents
and managing logistics, etc. at the level of the device
manufacturer. It would only build momentum
gradually, with no assurance of quick results.

The same doctors further commented that, given the intense
competition among independent
ophthalmologists, they would not be inclined towards charging
anything more than normal consultation
fees. It was felt that at a corporate chain of eye hospitals, such
as Vasan’s Eye Hospital with a pan-India
presence, the doctors might not feel comfortable with anything
less than an imported Carl Zeiss or
Topcon brand of devices.15 While 3nethra produced pictures
clear enough to help make sound diagnosis,
some of these imported brands claimed better picture clarity.
Besides, 3nethra or any fundus camera, in
the view of many ophthalmologists, was only an also-have
rather than a must-have for diagnosis. “3nethra
provides only two-dimensional images and does not allow a
direct examination of the patient’s eyes
unlike the slit lamp or ophthalmoscope,” commented Menon.

ORGANIZING THE SALES EFFORTS

Chandrashekhar contemplated a sales approach for the current
year:

We have six members in our sales team now and soon we would
be 15 by the end of the year [see
Exhibit 7]. They would focus on the “standard segments” of
ophthalmology and diabetology and
push “boxes” like the medical reps do. I have an intern from the
United States who will work
only on the GP chain. We have already begun covering the
national GP chain. Once we are able
to hit 50 GPs, including the leading national GP chains in the
country, we will hand over the GP
chain to a three-member sales team and tell them to go after the
600,00016 identified GPs in the
entire country since the product had already worked with 50
GPs. We may have to give a monthly
installment facility or have a pay-per-use model for GPs. But I
expect as much as 80 per cent of
the sale to come from the ophthalmology segments next year,
including exports.

As Chandrashekhar browsed through the Excel file on his
computer screen, he thought he had greater
clarity on what to do for the current year. He recalled the
argument of the venture capital partner in the
morning meeting: “Consider only the ophthalmologists. There
were 20,000 of them attached to about
8,000 clinics or hospitals.” Thus, an annual sales target of 300
units looked meager, given the potential of
the addressable market. The question was how to pull all the
stops before imitators came into the market.
Chandrashekhar shared his concern: “While our technology is
protected by patents, the competition could
work around the same. Any of the international brands could
also pose challenges to Forus. Even
domestic players, like Appasamy, who offer a wide range of
equipment, could add a device similar to

3nethra.” What can he do to take the company forward?

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EXHIBIT 1: INCOME STATEMENT OF FORUS FOR THE
YEAR 2012 (AUDITED)

FORUS HEALTH PRIVATE LIMITED
STATEMENT OF PROFIT AND LOSS

Amt in INR

For the year ended March 31,
2012

For the year ended March
31, 2011

Revenue from operations 69,623,641

4,250,000
Total Revenue 69,623,641 4,250,000

Expenses:
Cost of Goods Sold; employee benefits;
expenses; finance costs; depreciation;
amortization expenses

2,487; 83,117; 997; 550,962;
68,628; 256,049

7,139; 2,717; 712; 408,221;
258,290; 470

Other expenses 17,230,482

44,904,867
66,934,598 60,268,273
Research and Development Expenses
capitalized

(55,000,000)

66,934,598 5,268,273
Profit/(Loss) before exceptional and
extraordinary items and tax

2,689,043 (1,018,273)

Profit/(Loss) before tax; Tax expenses 2,689,043 (1,018,273)
(1) Current tax 550,000

–

(2) Earlier year tax – –
(2) Deferred tax 101,524

314,647
Profit/(loss) for the year from continuing
operations

2,240,567 (703,626)

Profit/(loss) for the year 2,240,567

(703,626)

Earnings per share:
(1) Basic Earnings Per Share 83.2 – 26.1
(2) Diluted Earnings Per Share 83.2 – 26.1

Source: Forus management.

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Page 10 9B14A064

EXHIBIT 2: BALANCE SHEET OF FORUS F OR THE YEAR
2012 (AUDITED)

Amt in INR
As of March 31, 2012 As of March 31, 2011

I. EQUITY AND LIABILITIES
(1) Shareholders’ Funds:

(a) Share Capital 269,230 269,230
(b) Reserves and Surplus 1,536,941 1,806,171 (703,626)
(434,396)

(2) Share application money pending
allotment 3,450,000
(3) Non-current liabilities:

(a) Long-term borrowings 10,437,196 10,437,196 61,500,000
61,500,500
(4) Current liabilities:

(a) Trade payables 8,485,947 1,554,072
(b) Other current liabilities 14,892,980 1,401,034

(c) Short-term provisions 550,000 23,928,927 - 2,955,106
Total 39,622,295 67,470,710

II. ASSETS:

(1) Non-current assets

(a) Fixed Assets

(i) Tangible assets 28,682,944 58,794,558

(b) Deferred tax assets (Net) 416,171 314,647
(c) Long-term loans and advances 776,579 4,658,521
(d) Other non-current assets - 29,875,694 - 63,767,726
(2) Current assets

(a) Trade receivables 1,584,000 2,093,358
(b) Inventories 8,135,101 141,750
(c) Cash and cash equivalents 27,499 9,746,601 1,467,877
3,702,985

Total 39,622,295 67,470,711

Source: Forus management.

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Page 11 9B14A064

EXHIBIT 3: PATIENT FLOW AT A TY PICAL
OPHTHALMOLOGY CONSULTATION ALONG WITH
THE EQUIPMENT USED

*IOP: intraocular pressure.
**OCT: optical coherence tomography.
Source: Case authors prepared this process flow based on
observations made at Sanakara Eye Hospital, Bengaluru.

In the pre-consultation
room, optometrist
checks the power of
the eyes with
refractors

The patient
completes registration
formalities and goes
to pre-consultation
room

The doctor examines
the cornea and
retina with slit lamp

The doctor conducts
routine examination of
the inside of eyes with
ophthalmoscope

Optometrist checks
IOP* with the help of
a tonometer

Optometrist checks
power of existing
lens, if any, using
lensometer

Patient’s eyes are dilated
before meeting the doctor

Doctor advises treatment or
directs the patient to
ophthalmic specialties

Glaucoma
specialist measures
cup-to-disc ratio
with OCT**

Retina specialist takes
image of retina with
fundus camera

Optometrists record all
measurements for doctor’s
reference. Doctor also records
all measurements and
diagnosis in the same file

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Page 12 9B14A064

EXHIBIT 4: EQUIPMENT FOR EXAMINATION, DIAGNOSIS
AND MEASUREMENT OF EYE

PROBLEMS

EQUIPMENT&USE PRICE RANGE IN US$

AND BRANDS
Devices for Examination and Diagnosis
Direct Ophthalmoscope: A hand-held instrument for routine
examination of
the inside of the eye. It allows for a magnified image of the
retina and optic
disc.

$250 to $600
(Heine, Welch Allyn)

Binocular Indirect Ophthalmoscope (BIO): BIO provides a
thorough view
of the retina and vitreous of the eye through a dilated pupil in
order to
evaluate the health of the interior of the eye and to identify
structural
abnormalities.

$1,000 to $2,000; up to $10,000
for video models
(Heine, Keeler, Welch Allyn)

Slit Lamp: An instrument consisting of a high-intensity light
source that can
be focused to shine a thin sheet of light into the eye. It
specifically examines
the external and internal anterior structures of the eye.

$2,000 to $13,000
(Zeiss, Haag Streit, Marco,

Topcon)

Fundus Camera: Used for creation of a photograph of the
interior surface of
the eye, including the retina, optic disc, macula, and posterior
pole (i.e., the
fundus).

$15,000 to $60,000
(Canon, Topcon, Kowa, Zeiss)

Devices for Measurement and Diagnosis

Tonometer: Tonometer measures the internal pressure of the eye
or
Intraocular Pressure (IOP). An increased IOP may indicate
glaucoma.

$1,200 to $6,000
(Medtronic Xomed, Haag Streit,
Perkins)

Refractor: A machine used to provide an objective measurement
of a
person’s refractive error and prescription for glasses or contact
lenses.

$2,000 to $6,000
(Reichert, Topcon, Marco)

Keratometer: Also known as an ophthalmometer is a diagnostic
instrument
for measuring the curvature of the anterior surface of the
cornea.

$1,200 to $10,000

(B&L, Reichert)

Diagnostic Ultrasound: In A mode: measures the axial length of
the eye. In
B mode: provides a two-dimensional image of the interior
structures of the
eye, which permits detection of retinal detachments, foreign
bodies and
tumours.

$5,000 to $15,000 for A scan;
$10,000 to $35,000 for A/B scan
(Quantel Medical, Alcon,
Sonomed and OTI)

Source: “Guide to Ophthalmic Equipment for Non-ophthalmic
People,” Orbis, April 4, 2004, http://telemedicine.orbis.org/
data/1/rec_docs/211_Opthalmic_Equipment.pdf, accessed
September 5, 2013.

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Page 13 9B14A064

EXHIBIT 5: 3NETHRA, AN INTEGRATED
OPHTHALMOLOGY DEVICE

Source: Company brochure.

EXHIBIT 6: FORUS HEALTH SALES MIX FOR THE

FINANCIAL YEAR 2012/13 (%)

Segments Share
Ophthalmology Segment 60
Large eye hospitals, i.e., hospitals having multiple eye
specialty departments

16

Small eye hospitals 21
Stand-alone ophthalmology clinics 5
General hospitals with ophthalmology department 18
Non-ophthalmology Segment 40
Telemedicine 15
Diabetologists 5
Opticians 4
Corporate social responsibility, i.e., NGOs associated
with companies

4

General Practitioners 2

Source: Forus management.

Ophthalmology Departmental Process Flow &
3nethra–Integrated Pre‐Screening Device

Slit Lamp
(image of cornea)

Refractor(Myopia
Hyperopia)

Fundus camera
(Image of Re na)

Keratometer
(Curvature of
Cornea)

NC Tonometer
(Glaucoma by measuring
intraocular pressure)

3nethra PC Display with Camera
& intelligent image processing SW + PC
interface for tele‐ophthalmology

1

2

3 4

5
Paramedic
administers
eye drops
for pupil dila on

eliminated

6

1‐6 : Process Flow

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Page 14 9B14A064

EXHIBIT 7: FORUS ORGANIZATION STRUCTURE

Note: (refer to Forus Organization Chart on current page)
1. A. Chaturvedi and T. Amin had been with Forus since
inception.
2. K.M.K. Rajendran and the sales territory managers had been
with Forus for less than three months.
* Proposed recruitment.
Source: Forus management.

Head Sales
(K.M.K. Rajendran)

Regional
Manager-South &
East (A.
Chaturvedi)

Regional Manager –
West & North (T.
Amin)

Services Engineers
Bangalore - 2
Mumbai - 1*
Delhi – 1*

Sales
Territory
Manager
(Coimbatore)

Sales
Territory
Manager
(Hyderabad*)

Sales
Territory
Manager
(Nagpur)

Sales
Territory
Manager
(Delhi)

Sales
Territory
Manager
(Kolkata*)

Sales
Territory
Manager
(Chandigarh*)

CEO (K. Chandrashekhar)

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Page 15 9B14A064

ENDNOTES

1 Financial year as per common Indian practice ends in March.
2 In Hindu mythology “3nethra” refers to the third eye of Lord
Shiva, which symbolizes the forces of creative destruction in
the cosmos.
3 Aravind Eye Hospital received the Hilton Humanitarian Prize
in 2010 and the Gates Award for Global Health in 2008
among many other awards and accolades.
4 Preventable blindness refers to blindness that occurs over a
period of prolonged weakening of vital parts of the eye. Such
blindness occurring due to diseases such as glaucoma can be
prevented through timely intervention at the onset of the
illness.
5 H.K. Tewari et al., “Vision 2020: The Right to Sight,” NPCB
Publications, CME Series 9, www.aios.org/cme/
cmeseries9.pdf, accessed September 10, 2013.
6 Diabetes is one of the major reasons for damage to the retina.
7 Typically, ophthalmologists focus on diagnosis and surgeries
whereas optometrists check for primary eye care refractive
errors, such as presbyopia, and prescribe contact lenses, low-
vision aids and vision therapies.
8 G. Venkata, S. Murthy, S.K. Gupta, D. Bachani, R. Jose and

N. John, “Current Estimates of Blindness in India,” British
Journal of Ophthalmology, 2005, 89, pp. 257–260.
9 Forus website, http://forushealth.com/forus/products, accessed
September 24, 2014.
10 A general hospital is set up to deal with many kinds of
disease and injury and normally has an emergency department
to
deal with immediate and urgent threats to health.
11 Non-mydriatic means not requiring dilation of the pupil of
the eye for inspection by the doctor.
12 An auto refractometer checked the power of the eyes without
manual adjustments.
13 All India Ophthalmology Society is the largest association of
eye surgeons in India. It was started in 1930 and has
currently about 16,700 members. A number of scientific
programs, symposia, seminars and workshops are held as part of
the four-day annual conference.
14 The statement on “low conversion rate” was in comparison to
the high appreciation doctors had for 3nethra, which was not
resulting in sales.
15 Carl Zeiss and Topcon are widely recognized within the
profession as among the leading global brands and the
benchmark for quality ophthalmological equipment.
16 U. Anand Kumar, “India Has Just One Doctor for Every
1,700 People,” New India Express, September 22, 2013,
www.newindianexpress.com/magazine/India-has-just-one-
doctor-for-every-1700-people/2013/09/22/article1792010.ece
accessed January 23, 2014.

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IIUM JoUrnal of EdUcatIonal StUdIES, 2:2 (2014) 40-58
Copyright © IIUM Press
ISSN: 2289-8085

Quality Assurance in Contemporary Islamic
Universities: Issues and Challenges

Bakare Kazeem Kayode, Che Noraini Hashim*

Abstract: The inability of contemporary Islamic higher
institutions of
learning to produce human capital of the “right mind and sound
thought” has
cast doubt on the goals and objectives of Islamic Universities of
the present
milieu. Change is imperative. The purpose of this article is to
critically
analyze some issues and challenges of quality assurance
confronting Islamic
universities and propose a quality assurance model that stems
from leadership
concepts rooted in Quranic tenets. Admittedly, some of the
written goals of
contemporary Islamic universities with respect to quality
assurance had been
partially fulfilled. However, compared with other contemporary
universities,
quality assurance in Islamic universities has not lived up to
expectations,
especially in terms of creative innovations and inventions, that
are beneficial
for all humanity. These weaknesses could be attributed to lack
of leadership
quality to spearhead innovative projects, and subsequent brain

drain due to the
exodus of bright Muslim minds migrating to ‘greener pastures’.
The paper
offers strategies for improving quality assurance in Islamic
universities, with
special emphasis on good governance and leadership.

Keywords: Quality assurance, quality standards, Islamic
universities,
strategic planning, good governance and leadership, innovation
and
sustainability of ummatic education.

* Corresponding author: Bakare Kazeem Kayode
([email protected]
com), Kulliyah of Education, International Islamic University
Malaysia

Introduction

In every operation and decision-making activity of a university,
quality assurance plays a vital role as it provides information on
the
effectiveness of the university’s core business to the world.
Therefore,
finding the adequate features of quality assurance is a
requirement
for the evaluation and benchmarking processes. In spite of
copious
research on quality assurance and total quality management
(TQM)
dimensions, very little research effort has been focused on these
aspects

in contemporary Islamic universities especially in the Muslim
countries.
As such, investigating factors or components which can
contribute to
the enhancement of the quality of Islamic higher education,
taking into
account the persistent challenges facing the Muslim world at the
present
time, is highly desirable. Evaluation of the obstacles and
challenges to
quality assurance in the relevant extant literature was conducted
in order
to formulate a new framework for the dimensions of quality
assurance
for the comtemporary Islamic universities.

Today, quality assurance, total quality management and quality
governance of higher institutions of learning have been adopted
and
practiced by many universities and colleges in many parts of the
world (Malek and Gopal 2000). In many countries, national
systems,
institutions and procedures have been set up to fine-tune and
take
the lead on quality assurance in higher education (Jones,
Hobson,
Plasschaert, Gundersen, Dummer, Roger-Lero, Sidlauskas and
Hamlin
2006). The European Ministers of Education held a meeting in
2001
with the aim of collaboration in establishing a common
benchmark for
Quality Assurance, towards the establishment of the European
quality
assurance framework by 2010 (Jones et al. 2006). This further
indicates

that quality assurance is not only being adopted by the
university
authorities but also within the entire university educational
system.

Quality Assurance: Definition, Theory and Framework

Quality assurance, according to Shewhart (2000), is the process
of
verifying or determining whether products or services meet or
exceed
customer expectations. It is a process-driven approach with
specific
steps to help define and attain goals. This process considers
design,
development, production, and service. It is the operational
means
through which a company provides quality control to fulfill the
quality

42 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

requirements in order to gain confidence, both within the
organization
and externally to customers and authorities (Jones et..,al 2006).
Theoretically, quality assurance connotes an art of promoting
processes
that lead to doing quality jobs. But in reality, there is a
persistent battle
of meaning between quality process and quality product.

Different theories have been propounded on quality assurance.
One of these is Deming’s theory of Total Quality Management
(TQM),

1993. This theory rests upon the assumption of profound
knowledge—
that quality is a function of the ratio of work efforts over total
costs.
That is, if the total cost incurred by an organization is low, it is
an
indicator that the quality of the organization product is high
and vice-
versa . Those who adopt Deming’s theory of quality,
concentrate more
on cost reduction strategies or profit maximization methods.
However,
cost will increase when quality of product or services is not
maintained,
which Deming has cautioned against in his thirteen principles.
However,
Deming’s theory is more relevant in manufacturing, where most
of the
workers are low-skilled workers. The theory also faced
challenges in
university settings, where the end product cannot be easily
determined.
Also, with respect to contemporary Islamic universities, the
theory does
not cover some aspects of quality in relation to Islam teaching.

Crosby’s Theory of quality management also supports the
assumption postulated by Deming. Crosby opined that an
organization
that established a quality program will see savings returns
which more
than pay off the cost of the quality program: “quality is free”.
That is,
establishing a training programme on a regular basis for staff
will ensure
more returns on investment and lower the cost. Although these

theories
are so enduring, they are not exhaustive because the human
aspect,
specifically the role of leaders in ensuring quality in the
university,
particularly in the Muslim world, is not emphasized.

Based on the theories mentioned, different frameworks have
been developed to capture the scope of quality assurance in
higher
learning institutions, for instance, Vroeijenstijn (1995, cited by
Jones et
al. 2006), introduced a framework for quality assurance that
includes
both internal and external elements. The external process is
built on, and
is preceded by, the internal process. The internal evaluation
comprises
monitoring, student evaluation and a method of school and self-
evaluation. Some system of external peer review is included.

Bakare & Che Noraini: Quality Assurance

In the framework, the following objectives can be identified:

a) Accreditation – usually an external quality evaluation by
which an
outside body formulates the criteria and standards (a
benchmark) against
which the institution and the program will be assessed.
Improvements
are usually aimed at fulfilling criteria for accreditation.

b) Accountability – this usually considers the appropriate use of

resource
and would include an assessment of the value for money.
Benchmarking
by some method is usually fundamental to this process, which
may be
based on an external evaluation. Any resultant improvement
would
usually be in the form of increased efficiency.

c) Self-regulation (and autonomous systems) - where quality
management comprises internal and external evaluations with
linked
internal procedures for improvement. This is aimed at
maintaining high
educational standards in an independent, academic institution.

It is apparent that all these objectives are of paramount
importance in planning a quality educational management
system for
the contemporary Islamic university. However, these
frameworks still
need to be improved to capture quality assurance elements
based on
the teachings of Islam. Perhaps self-regulation is the most
fundamental
component. In Islam, education is a way towards achieving the
ultimate
purpose of creation which is in line with the teachings of Allah
(SWT):
“I have only created jinns and humans so that they may serve
Me” (Al-
Dariyat: 56). As such, the major role of Islamic-based tertiary
education
is to build creative and productive capacities in human
resources of a
nation. This is particularly true because human resources

constitute the
key to building quality servants (‘abd) who believe in their
Creator,
and who are fully aware of the reason behind their existence,
and be
ready to sacrifice their own desires (nafs). Effective Islamic
education
and its quality process therefore should be based on firm
foundations,
goal-oriented and clear plans, in conformity with the Islamic
values of
faith, knowledge, work ethics, cooperation, tolerance, spreading
peace
and proper conduct, among other noble values as enshrined in
the Al-
Qur’an and As-Sunnah (teachings of Prophet Muhammad).
There is a
growing need to integrate these Islamic values in the strategic
quality
planning of Islamic higher education institutions whose vision,
mission
and goal must conform to the saying of Allah: “ To each of you
have We
prescribed a Law and an Open Way” (Al- Maida:48). One of the
most

44 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

pressing issues in the Islamic-based universities is how to
assure and
continuously improve the many facets of quality Islamic
education and
at the same time to integrate the revealed Islamic values.

Islamic institutions of higher education should strongly
and practically reflect the Islamic community’s aspiration
towards
progress, building a better future and reclaiming the Muslim
traditions.
Contemporary Islamic University is used in this article to
connote
universities that specialized in integrating Islamic Revealed
Knowledge
(Wahy) and Human Acquired Knowledge (`aqliyah) citing
examples of
quality processes from The International Islamic University
Malaysia
(IIUM) and The Islamic American University (IAU). Quality is
not
a new concept in Islam; in fact Islam encourages Muslims to
perform
their duties and work in a perfect manner and to continue their
efforts
on improving their work, for Allah has promised to reward
those people
who do good deeds. There are many verses in the holy Quraan
and
the Hadith (sayings of Prophet Mohammad, peace be upon him),
that
encourage quality work and perfection; for instance:

“The artistry of God, who disposes of all things in perfect
order” (Al Quran; Surah Al-Naml: 88)

The Prophet Muhammad (S.A.W) was also reported to have
said:

“Allah loves someone who when he works, he performs it in
(Itqan) a perfect manner” (Al-Hadith)

The purpose of quality assurance in the university, therefore,
is to ensure accountability, as well as enhancing the quality of
higher
education. The standards and guidelines for quality assurance in
the
European higher education system, for example, provide
directions for
higher education institutions to improve their internal quality
assurance
policies and procedures. In the case of the Islamic university,
everyone
involved should aim to perform one’s duty to the best of one’s
ability
and to continuously improve quality performance. The meaning
of
Itqan is to arrange or dispose of things with finesse, so as to
obtain the
most perfect result. Some of the Islamic principles and values
related
to quality is ‘love for work’ and perform it in good order of
“Al-Shura”
(Open discussions and Team work). In a nutshell, quality
assurance
in Islam is an arrangement or disposition of job, task and duties
with
appropriate training, adequate knowledge and detailed
technicalities
applied to achieve good results or outcomes.

Bakare & Che Noraini: Quality Assurance

Needless to say, the internal scuffles spreading in many
Muslim
countries have affected and weakened their higher educational

systems
(Noraini and Hassan 2007). It is a fact that no quality oriented
policy
can be successfully thought or properly implemented in a
turbulent
environment. This study therefore discusses quality assurance in
contemporary Islamic universities against the backdrop of some
issues
and challenges. In this paper, the following issues and future
challenges
(Commercialization, Leadership, Creative thinking and financial
difficulties, Brain-drain, globalization, competition and Job
market)
have been identified and discussed.

Commercialization of Education

The proliferation of foreign universities off-shore campuses in
many
developing third world and Muslim countries is not a panacea
for poor
quality education as argued by the advocates of foreign
campuses.
Noraini and Hasan (2007), espoused that the rationale behind
the
educational goals of secular democratic societies introduced by
the
western world are strongly influenced by the economic
objective of
profit maximization. They further argued that education for the
purpose
of economic prosperity and luxurious life alone contradicts the
Islamic
belief. Though the intention to increase qualified and
professional
manpower in most Muslim countries is ideal, but had the

Muslim
world been able to achieve this? To what extent has the profit of
soft
technology (knowledge) benefited Muslim countries in the long-
run?

Commercialization of education in many Muslim countries
is a major obstacle to quality assurance in education. By
endorsing
educational franchises and licenses to business entities, many
Muslim
countries have done more harm than good to the Islamic
educational
system. Kazmi (2000), referring to commodification of
education
asserted that quantity considerations present no problem or less
of a
problem in determining the exchange value of a commodity than
do
quality concerns particularly in the field of knowledge, where
quality
is not easily definable. He also argued that proliferations of
western
Universities and their campuses in developing countries and the
eagerness with which they are granted licenses by the host
government
is an extreme example of commodification of higher education
which
has led to a parasitic relationship. The foreign western
Universities only
came to get capital to fund their research at home. As such
education has

46 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

turned to an option to make money than providing quality
education to
students. In actual fact, commercialization of education under
the guise
of reciprocity has permeated the curriculum of schools.
Nowadays,
companies are driving curriculum in many ways, and most of
them are
done in the name of “partnerships” or through free curricula
(Schrum,
2002). This so called successful partnerships is premised on the
principle of reciprocity as the underlying common factor. That
is, the
school and the business forms an equitable relationship, with
substantial
commitment and benefits identified for both (Parravano, 2001).

The consequence of this fragile relationship, as presented by
Boyles (1998), and Schrum (2002), is the increase in demands
from
the school, and especially the university, that students should be
taught
subjects that can improve their technical skills, rather than
subjects
on innovative pedagogy based upon praxis and reflection. In
addition
to this, universities and other higher learning institutions,
especially
in Muslim countries, were faced with challenges of
proliferation
of commercial graduate and postgraduate educational
opportunities,
as a result of foreign college networks and regional for-profit
universities (Schrum, 2002). Therefore, as teachers exerted
their effort

and time in practical experience in schools, they observe the
increased
commercialization of the curriculum, whereby they will be
naïve of
the influences and impending challenges they will face in their
own
classrooms. Thus, quality assurance in universities is highly
daunting
with the presence of the commercialization of education.

Kazmi in his writing emphasized that in the context of
commodification of knowledge, it would be a meaningless effort
to
mark the differences in the quality of educational systems,
learning
and gathering of information. He also suggested that, in order to
move
out of this ramshackle position, Muslims’ present educational
goal
and objective might as well require the presence of good and
dynamic
leaders in the Muslims nations. According to Chandwani and
Bhome
(2013), the essence of education is to impart knowledge into
human
minds, and as such allows learners to contribute positively to
society.
But the assumption that knowledge can be given an exchange
value is a
Darwinian nightmare. The commercialization of education thus
forces
universities to intensify their effort in response to the
increasingly
competitive higher education environment, rather than
producing
a holistic human personality. Since education institutions are

now

Bakare & Che Noraini: Quality Assurance

partnering with business in terms of resources, the
responsibility of
universities is now to produce graduates who are workforce-
ready.
Chandwani and Bhome (2013) emphasizes this phenomenon in
India
where the impact of the commercialization of education has
serious
negative consequences in the community. The number of
students
enrolling in university programmes is increasing in India, and
this
serves as an avenue for many franchise colleges to make a
fortune at
the expense of the students rather than imparting knowledge and
values
to them. Chandwani and Bhome (2013) argued for strong
change in
the basic foundation of the education system, in order to revive
the real
philosophical underpinning of schooling.

Leadership

In Islam, leadership is about sharing power and knowledge. A
leader
should also practice good deeds and forbid bad deeds.
Leadership is
certainly not an avenue to amass wealth, oppression and
enslavement of

the intellectual properties and spiritual freedom of the citizen.
Being a
leader is antithetical to possessing absolute power. As such, a
leader does
not possess perceptual power, and both leadership position and
power
are not immune to change. A leader that allows his mercy to
override
his anger is called “a benevolent leader”. A leader must have a
positive
outlook on his followers, and have confidence that development
and
tranquility of the state is a function of quality citizens and
wisdom of
the leader himself. A leader must be a source of hope, joy and
happiness
for his subordinates and subjects. This could be achieved when
wisdom
enables the leader to meticulously explore and tap those
qualities that
are latent in the citizens. Altalib (1991), emphasized the need
for a
leader who would be able to provide an atmosphere congenial
for free
and rational thinking, healthy exchange of ideas, criticism, and
mutual
advice so that the follower feels very comfortable in discussing
matters
of interest with the leader.

However, a leader that creates a “knowledge vacuum” by
subjecting the populace to an intellectual and spiritual darkness
with
provision of an “excess luxury” will eventually lead the
supposed
efficient/working populace to the ephemeral world of money

and
food. The objective of this kind of leadership is to keep the
citizens
“at bay” from power and reasoning, and it is a new mechanism
used
by the oppressors (leaders) against the oppressed (the citizens).
This

48 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

corroborates the rhetorical question of Greenleaf (1970) in his
servant-
leader description when asked: Do those served grow as
persons?
Mumtaz (2008) citing ibn Khaldun in Al-Muqaddimah and
Sayyid
Mawdudi in the Islamic Movement said:

The dynamic of values, power and change have contended
that the rise and fall of nations and civilizations mainly
depends on the role of leaders and scholars. (Mumtaz Ali.
Pg 20)

One of the reasons for the dwindling quality of university
output
in the Muslim world today is the shortage of visionary leaders
in major
sectors, particularly in education. Those people entrusted with
the
mantle of leadership responsibility rise to the upper echelon of
power
via political appointment. Most of them lack appropriate
leadership
prowess, intuitive ability and professional proficiency to direct

and
govern properly. Mumtaz (2008) confirmed this by quoting
Caliph
Umar who asked Zaiyad Ibn Hudayr if he knew what will
destroy Islam.
Zaiyad answered in affirmation, and Umar said “Islam will be
destroyed
by the mistakes of scholars, the argument of the hypocrites
using the
book and government by leaders who are in error. Mumtaz
stressed this
by citing the hadiths of the holy prophet who was reported to
have said
that “there are two classes in my Ummah who if they are right,
the
ummah will go right; and if they go wrong the Ummah will go
wrong:
they are the rulers and the scholars.” He concluded by saying
that:

Unfortunately, the attention of the Ummah has been diverted
from this reality of the responsibility of leadership, instead
of bringing development in the Muslim world the leadership,
both political and intellectual, caused decline. They were
unable to understand the affairs of the world with ijtihadic
qualities. Leadership who can take decisions courageously
on the Islamic worldview? We badly lack that leadership.
(Mumtaz Ali. 2008 pg20)

The presence of ijtihad qualities in management and leadership
of universities in the Muslim world should encourage and
promote
quality output and increase quality assurance in universities.
This
can easily be achieved with the adoption and implementation of
three

leadership requirements proposed by Rahman (1997). In
addition to
other leadership characteristic, Rahman proposed that a Muslim
leader

Bakare & Che Noraini: Quality Assurance

in every sector is responsible for guiding himself and its
members
towards the Islamic ethics of Iman, Taqwa and Ibadah.

Brain Drain

The undermining of Islamic ethics such as Iman, Taqwa and
Ibadah
today by management and leaders of most universities in the
Muslim
nations had jeopardized the attainability of quality assurance in
most
Muslims universities as they had been greatly affected by
‘intellectual
attrition’ commonly known as brain-drain. According to
Mugimu
(2010), brain drain is defined as the movement of the highly
proficient
and educated individuals from their countries of origin to other
countries
where they anticipate better opportunities to maximize the use
of their
talents and betterment of their life. It is a massive exodus of
highly
professional human capital from countries where they make
the greatest
contribution to national output to countries already well

supplied with
high-levels of manpower (Ramin 1995).The incessant problem
of Brain-
drain especially among the efficient personnel in higher
institutions of
learning in Muslim countries had reached an alarming stage.
The major
reason for this problem is due to under-estimation of Islamic
ethics
by leadership and management of these institutions. The
presence of
dynamic, moral, intellectual and focused leaders will encourage
and
foster creative ability among the citizens (Mumtaz 2008). Africa
and
the Arabic countries are more vulnerable in losing their highly-
skilled
human capital as a result of the region’s political instability,
social
conflicts, civil wars, and poor overall economic situation (Katz
and
Rapoport 2001).

Brain drain has become a constant observable fact, because
developed nations especially in western Europe are often more
politically and economically stable and offer better working
conditions
that attract highly-skilled workers from the third world
countries
(Mugimu 2010). Certainly a direct relationship exists between
the level
of education and migration decision (Katz and Rapoport 2001).
So, a
highly educated individual will migrate more often than low
educated
individuals. And since most of the highly skilled and educated

people
are in higher education, the quality of these institutions will be
greatly
affected. Incessant brain-drain have led to an increase in
mediocre
professionals in many developing and third world countries
(Miyagiwa
1991; Gould 1994; Odek Stark, Helmenstein, and Prskawetz
1998).

50 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

Having bunches of mediocres in our universities will lead to
poor
management of the university and production of less
competitive
graduates. Tapsoba (2000) asserted that:

We are spending less and less on our higher education
systems, and our research laboratories are in a state of
decay. Equipment and documentation materials are not
regularly renewed. How can we keep the best of our minds
if we continue to pay less to our top researchers and skilled
[workers] than the youngest unskilled military personnel
and our security guards? When wars are not making living
conditions impossible for [our diverse] populations………
Even today, it is not surprising to see policy maker[ s] select
foreign experts over well qualified Africans.. . . Brain drain is
expensive for Africa and we cannot afford it. (Tapsoba 2000)

Although, Tapsoba is describing the brain-drain scenario in
Africa, the situation described by Tapsoba is exactly what is
happeneing
in the Muslim world. Alas, the whole of North Africa and the

majority
of West and substantial part of East and Central Africa are
Muslim
dominated countries. So, if the problem of brain-drain persist
unabated
among human capital in contemporary Islamic universities,
quality
assurance will be ransomed. Although, Mugimu (2010) and
Reichling
(2001) have argued that when the highly skilled people migrate
to look
for greener pastures in developed countries, their remittance
actually
improve the economies and GDP growth of the country of
origin.
But in actual fact, this migration in the long-run jeopardize
efforts of
contemporary Islamic universities in matching with the local
needs of
many Muslims nations.

The problem of brain-drain is not limited to university
personnel alone, the hydra-headed monster is also swooping
away
the “egg-headed” students in most Muslim university.
According to
Straubhaar (2000), the foreign students studying in the United
States
contribute annually over US$7 billion to the US economy and
most
of these students are from Arab and African countries. The
whole
scenario is like a phenomenon in a food-chain or a food-web
wherein
each event is mutually inclusive of the other. Today, most of the
highly

profiled Muslim lecturers and intelligent students are in the
west or
many are on the awaiting list of departures. The university
environment
is a microcosm of the intellectual environment and both
lecturers

Bakare & Che Noraini: Quality Assurance

and students are expected to be satisfied and independent under
the
ambience of the institution with minimal restrictions. However,
pigeon-
holing both material and intelligent quotient of academic staff
and
students in universities will unleash nothing but a gateway to
imperil
creativity and innovation among lecturers and students.
Therefore, for
the contemporary Islamic university to contribute in a positive
way to
human development in the Muslim world, curricula in higher
education
institutions must focus on increasing individual’s choices, by
creating
the environment for students to develop their full potential and
lead
productive, creative lives.

Rational and Creative Thinking

Creativity and rational thinking are both endowed to man by
Allah, the
Creator. Thus, the ability to think constructively and rationally

are both
latent in man. Better still, to develop these dual gifts for a
concrete and
meaningful outcome requires quality and timely education.
Creativity
and rational thinking have lent credence to the notion that the
qualities
of students graduating from Universities from developing
countries
nowadays are not internationally competitive. Critical and
creative
emotion and spirit have been fundamental to Islam from its
beginnings.
The Holy Qur’an is replete with allusions to inquiry, reflection,
reason,
critical thinking and creativity. The holy book deplores those
who do
not use their critical reasons in the clearest and strongest terms
that: “the
worse creatures in God’s eyes are those who are [willfully] deaf
and
dumb, who do not reason” (8:22).

Critical and creative thinking of text, philosophy and scientific
findings and process were hallmarks of the classical Muslim
civilization
(Roger, 1998). According to Roger, the Islamic philosophical
theology
was heightened with critical and creative works, of erudite
schorlars
such as Ibn Hazm (994-–1064) , ibn Sina (990-–1037) and ibn
Rushd
(1126-1198). He also provides a narrative of the critical mind,
creative
reasoning and human beneficial knowledge and skills which the
human

race have deciphered in the works of Muslim scientists of the
golden
age such as the optics of al-Haytham (965-–1040), the natural
and
social science of al-Biruni (973-–1048), and the innovative
astronomy
of al-Battani (858-–929). In addition, Roger also commended
the
intellectual forum and discussion between al-Ghazzali (1058-–
1111)
and ibn Rushd. These examples of creative minds, inquisitive to
know

52 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

and the culture of learning were the norm in classical Islamic
education
of yore. Nevertheless, with the exception of a relatively small
number
of well-informed scholars and thinkers, this critical and creative
spirit is
lacking in the modern Muslim world.

The reasons advanced for the fading of this critical thought
are many and diverse (Sardar, 2010). To some Muslims the onus
lies
on al-Ghazali, as he “strongly attacked philosophy in his book
“The
Incoherence of the Philosophers”, and that both the intended
and
unintended consequences have led to significant reduction of
philosophy
in the Muslim world (Saeed, 2006). Perhaps, as suggested by
other

Muslims, critical thinking receded among Muslims as a result of
“the
well-known decree of al-Qadir in 1017-18 and 1029”, that
banned the
rationalist thought of the Mutazalites, the school of speculative
theology
that thrived during the Al-Mahmun (Abbasyd) reign in Baghdad
and
Andalusia between 18th and 12th centuries (Arkoun, 2002).

Another reason for the abrogation of critical thinking as
mentioned by Sardar (2010) and Kadri n.d is the closure of “the
gates
of Ijtihad”, the “sustained reasoning”, a critical cross-
examination of
Islamic law which an Islamic Jurist, Mufti or Shiek has to
undertake
to reach an independent decision and conclusion, that
constraint or
may permanently seal off the door to critiques. However,
Ijthihad is
what Fazlur Rahman tagged as “essentially an ever-expanding
process.
Huff (1993) argued that critical thinking or criticism faded-out
in the
Muslim world due to lack of state support for education or
protection for
dissent or as a result of colonization of the Muslim world.
Nevertheless,
all these explanations of the dwindling of Muslim civilisation
and the
evaporation of the critical spirit have to a large extent created a
serious
conundrum in the form of misconceptions, misrepresentations
and
misinterpretations among Muslims. And these have had a great

impact
on the education system in the Muslim world.

Sardar (2010) opined that the disappearance of the critical and
creative spirit in Islam is the result of the absence of
philosophers, thinkers
and writers over many centuries. Philosophy and logic
departments and
faculties no longer exist in many of the past and contemporary
Islamic
universities. This ushered in the dawn and supremacy of a
singular and
ultra-consevative interpretation of Islam. This, according to
Sardar, has
snowballed into an atmosphere of intolerance and highly
emotional

Bakare & Che Noraini: Quality Assurance

reaction which has become an intrinsic feature, especially
among the
Muslim youth.

The absence of an environment that encourages the critical
spirit in many contemporary Islamic universities have sacked
quality assurance and quality output . University students
nowadays
concentrate and depend so much on the adoption and usage of
creative
innovations and inventions of the west. Their own initiative
remains
idle and dormant. They are pragmatic when it comes to the
adoption
and usage of western technology, ideas and innovations, but

insensitive
to their own traditions, thus subjecting themselves to the
dictates of
western hegemonic knowledge. Today, few students do
assignments
from their own thinking; most of them rely solely on the
internet.
They notwithstanding, use rather than contribute to what is on
the
net; group discussions, academic debates have been shelved to
some
extent; libraries most of the time are deserted except for those
students
who chat and read newspapers. Many of the graduates are not
critical,
creative, or original in their thinking. They lack Islamic
intellectualism,
what the West considers the goal of a liberal education (Rosnani
1996).

Consequently, few Muslim graduates and undergraduates
reflect on what they read from the Quran; some students regard
the
Quran only as a spiritual book to consult when they are in
despair or
in extreme agony. Hardly can one see students producing thesis
by
making use of the Al Quran as a major and important reference.
Jamal
& Mustapha (2007) commented that lack of creativity has
subjected
Muslim countries to being perpetual consumers of “Know-how”
that
come from the western world. They further reiterated that the
only way
to change the status-quo is by fostering creativity in the mind of

coming
generations. Mumtaz (2008) in his comment observed:

It was as if creative thinking had been shelved. There was
no urge for change from worst to better. The Muslims were
generally complacent with the status quo. The Ummah was
submerged in fatalism, superstitions and rigidity. When there
was no creativity, the need was not felt for either development
or introduction of new institutions. (Mumtaz 2008, Pg21)

54 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

Lack of Financial Resources

Most Universities in Muslim countries are underfunded and this
has
contributed to the low level of creative and rational thinking.
There is
not much fund to accomplish creative ideas. Lack of adequate
funds
also inhibits the curiosity to explore new areas of research and
findings;
what is left in some universities in developing countries and the
third-
world is modification of the existing research, changing of the
research
site, reproduce what had been investigated with little or no
impact
on the broad goal of the Ummah. The demand for higher
education
opportunities in many third world and developing countries
often
exceeds the ability of governments to provide sufficient fund to
meet

this need (Levy, 2003). As such the university rate of funding
is rising
more rapidly from private investment than from public funding
which
result in diversification, privatization, and commercialization of
higher
education and research and their funding sources (Levy, 2003).
Some
of the most common are funding from social foundations,
sponsorship
from the private corporate sector, income from the
commercialization
from fee-based education for domestic delivery.

Consequently, university services are becoming increasingly
competitive, and the presence of business partnerships has had
a
significant impact on public higher education institutions
especially in
third world countries (Larsen, Morris & Martin, 2002). If there
is no
motivation and curiosity for students, teachers and lecturers to
conduct
research, creativity and critical thinking will be retarded and
quality
of knowledge, skill and attitudinal change will drop drastically.
On
the contrary, with the availability of funds, Western researchers
were
motivated to come-up with new research ideas that are different
from
what had been studied in the past. In addition, inadequate funds
impede
the use of the latest technology to support learning in most
Islamic
universities especially in areas which needed to be in tune with

the latest
innovations for teaching and learning to be effective and
competitive.

Globalization

Islamic universities also need to prepare for some challenges
ahead.
One of the challenges facing Islamic universities of the present
time
is globalization, that had affected educational restructuring of
many
nations. Associated activities such as decentralization,
privatization
and proliferation of instruments to measure education quality
had been

Bakare & Che Noraini: Quality Assurance

actively promoted. Globalization according to Martin (1999)
connotes
nation’s investment; production and innovation are not limited
by
national borders. The two bases of globalization are information
and
innovation which are knowledge intensive. As a result, the pay-
off to
higher level education had shifted the economic production to
knowledge-
intensive products. Governments of developing-countries are
therefore
under pressure to increase spending on education to produce a
more
educated labor force. The more well-organized education system

and
the more educated labor force could attract bigger globalized
financial
capital, which plays an important ‘currency’ in the global
economy. The
governments of many developing countries are now on their
toes to
share in the huge amount of financial capital roaming around
the world,
in order to accelerate growth and development. They were
forced to
re-channel and expand national resources in a more effective
way to
improve education in the new global economy.

If knowledge is the only criterion and highly fundamental to
globalization, it should also have a profound impact on the
channel
via which the knowledge is being transmitted (Martin 1999).
Thus,
educational institutions especially the institutions of higher
learning
appeared to have a bigger and challenging role to play. Now the
focus
of the entire globe is on education that produces quality
knowledge.
Concerted efforts had witnessed in virtually every “nooks and
crannies”
of the world on the expansion of post-secondary school
education and
tertiary education. This phenomenon according to Martin
(1999) had
led to a rise in relative incomes for a higher-educated labour
force
and subsequently increases the demand for university education.
This

pressure had further pushed many governments to embark on
numerous
developmental changes in higher institutions of learning.

Conclusion

In general, the suggestion posit from this paper is centrally on
the need
to have capable and highly committed leaders in every sectors
of human
endeavor. These leaders should possess quality of ‘Imam’ that
will enable
the followers to obey the leaders willingly. The writers also
suggest that
the leaders in educational as well as the political masters must
ensure
that the nature of education must be the niche of the university
and across
discipline with reality, fact and figures. The aim of the
institution has to
be clearly outlined. Furthermore, the delivery of subject matters
with

56 IIUM JoUrnal of EdUcatIonal StUdIES, Vol 2, No 2, 2014

attractive methodology is vital for the eager acceptance of
knowledge
by the students as the immediate clients. The empowerment of
rules,
regulations, and certification should be tolerated in order to
achieve the
desired quality. The management and staff at all levels must
shoulder
the responsibilities with robust resilience. It is the leader’s

choice based
on the situation to determine the styles of leadership to adopt
such as
autocratic, democratic, laizer faire, charismatic, or
transformational.

Moreover, a concerted effort must be made at all levels, and
this
should start from school, colleges and universities. Effort
should also be
made at the family, society and governmental levels. The
quality at the
university level should be benchmarked against tested quality
measures
acceptable to the Muslim Ummah. In addition, better facilities
and
good working conditions would increase and improve research
skills
among lecturers, which will enable them to be creative and
innovative
before they could produce tangible quality products.
Scholarships and
good welfare packages for students would increase students’
morale to
support quality research supervised by their lecturers along the
line of
Islamic thinking and reasoning.

References

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Dummer P.,

Roger-Leroi V., Sidlauskas A., and Hamlin J. (2006). Quality
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You are to write a one-page, typed homework assignment. The
font should be no smaller than 12-point. Please take the
perspective of a senior marketing manager making marketing
recommendations to upper management (CEO, CFO, CMO,
etc.). The memo should not be a rehash of the facts of the case,
but rather a summary of your recommendations for how the
company should move forward, and the supporting rationale.
These memos should be well written and professionally
presented. Please use the following format:

Key Issue/Issues (concise statement)
1-
2-
Recommendations (to address the issue/s)
1.
2.
3. (or however many you think are appropriate)

Rationale (to support your recommendations)
1.

2.
3. (support for each recommendation)

Example:
Key Issue/Issues:
1. How can Evoe Springs overcome/ work around the lack of
social acceptance for Spas in India?
2. Who should Evoe Springs target?

Recommendations:
· 1- Make it clear through advertisements that Evoe Springs Spa
is more than a massage parlor
· ● Divide the facility in sections: Men, Women, Family
· ○ Women can feel more comfortable
· ○ Children friendly environment
· ● Show more men in advertisements
· ● Promote de-stressing benefits of spas
2-
· Larger, less informed segment---> SNAILS
· ○ Emphasize reactive approach
· Partner with medical industry
· Provide research
· Ads in magazines at hospitals and doctors’ offices
· ○ Proactive approach
· Repackage offerings- emphasizing affordability and wellness
· Coupons and discounts
· ● More specifically...
○ Male professionals
· Happy hour from 4-7pm
· Open up new locations
● Urban city ● Mumbai

Rationale (to support your recommendations)

1-
· Website allows for easier navigation, longer visits, and
returning visitors
· Educates consumers on CFI history, ownership model,
employment culture
· Introduces online market with established, popular products
· Game/giveaways bring younger visitors

2-
· Experimenting on a small scale prevents a failed product
launch
· Capitalizing and promoting “family-owned” feel through
consumer engagement and personalized service
· Follow up survey brings more visitors to company website

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7-10. STP + Branding and Product & Services Strategies.pptx