Islamic Values in Business: The Role of Islamic Work Ethics in Strengthening the Impact of Ethical Production on Sme Growth in Surabaya

Abstract

This research aims to examine the influence of Islamic production ethics on the growth of micro, small, and medium enterprises (MSMEs) in the food and beverage sector in Surabaya. Specifically, this study analyzes the moderating role of Islamic Work Ethics (IWE) in strengthening the relationship between Islamic production ethics and MSME growth. A quantitative approach is employed using the Partial Least Squares Structural Equation Modeling (PLS-SEM) method. Data were obtained through a survey of 106 purposively selected MSME owners. The results indicate that Islamic production ethics has a positive and significant impact on MSME growth. Islamic work ethics also shows a direct positive influence on business growth. However, as a moderating variable, Islamic work ethics weakens the positive influence of Islamic production ethics on MSME growth. These findings suggest that among entrepreneurs with a high level of Islamic work ethic, the influence of external ethical systems becomes less dominant because these values have been internalized in their daily work behavior. This research contributes both theoretically and practically to the development of contextual Islamic business ethics.