TOWARD THEOCENTRIC ENTREPRENEURSHIP: THE TAWADHU FRAMEWORK FOR VALUE-BASED GOVERNANCE IN A PESANTREN ECOSYSTEM

Abstract

Previous research on Islamic entrepreneurship has primarily focused on halal business practices, ethical conduct and social enterprise, but it lacks an adequate description of the way Islamic values are operationalised and internalised to sustain compliance with fatwa principles at the institutional level. This study addresses this gap by developing a conceptual and empirical framework of value-embedded entrepreneurship based on Islamic principles and investigates how these values contribute to fatwa-oriented governance. The study employed a qualitative phenomenological approach using in-depth interviews, participant observation and document analysis in the Pesantren Riyadlul Jannah, Indonesia. Data were analysed using interpretative phenomenological techniques and normatively validated based on maqasid al-shariah. The results reveal that pesantren-based entrepreneurship is a spiritually embedded socio-economic system that is structured through the TAWADHU framework—Tarbiyah, Wathaniyah, Dakwah, Hamasatul Jihad, and Uswah—that work collectively as mechanisms of value formation, social orientation, moral communication, spiritual resilience, and ethical standardisation. These dimensions constitute the basis of Value-Based Fatwa Compliance (VBFC). This is the application of Sharia principles in a way that is sustained by internalised moral consciousness rather than external enforcement alone. This study contributes to the literature on Islamic entrepreneurship by conceptualising the internalisation of values as a governance mechanism at the micro-level that links entrepreneurial behaviour to institutional fatwa compliance, and by showing how maqasid al-shariah can be operationalised through organisational culture and daily entrepreneurial practices. Thus, the TAWADHU framework positions pesantren as a strategic micro-ecosystem for enhancing sustainable sharia compliance and aligning entrepreneurship with fatwa, maqasid al-shariah, and ethical governance.