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Abstract

The confidence level of zakat payers towards zakat institutions is at unsatisfactory level. The weakness in the zakat institution’s governance is identified as a factor that contribute to the issue of low public confidence. This study tests whether service quality fit into the constitution of zakat institution’s governance to address the existing issue. In this study, service quality in zakat institution’s governance is discussed from the perspective of the stakeholder theory. Survey method was employed for data collection. The data was analyzed using exploratory factor analysis and confirmatory factor analysis at first order level. The result from 431 zakat payers shown that service quality is significant and need to be included in the model of zakat institution’s governance. This study contributes to the literature by enriching discussions on service quality in the zakat institution’s governance. Thus, understanding on the issue can be improved since the finding is based on empirical evidence. Implications to the theory are in terms of the usage of the stakeholder theory in the zakat environment where previously this theory was only applicable in the corporate environment. Also, this study contributes to the zakat institution to focus on service quality when developing strategies so that zakat institution’s governance will be at the highest level.

Keywords: Service quality, zakat institution’s governance, zakat institutions, zakat, governance

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