2003: Hachette Book Group, Inc. Dr. Sabahuddin Azmi, Ph. (Qur'an 3:110) Every day, we face ethical issues at work place, and hardly know how to deal with them to find a workable solution. Fulfil your obligations.” (5:1). Published Date: 23 Mar 2015 Last Modified: 01 May 2017 Disclaimer: This essay has been written and submitted by students and is not an example of our work. These statements give us an insightful view of Islamic ethics. To quote some examples: Christianity – “Whatever you want men to do to you, do also to them.” (Matthew 7:12). Moral actions are those which result in justice (´adl, Sura 4:58). However, the Islamic ethical system substantially differs from the so-called secular ethical systems as well as from the moral code advocated by other religions and societies. Islamic Business Ethics. Islamic business ethics is essential for SME industry. If other major religions, such as Christianity, call for a review to inculcate religious values in Christian businessmen, Muslim businessmen can be proof of success stories where business ethics and religious values can merge harmoniously for the betterment of the individual and his community. We're here to answer any questions you have about our services. The key governance factors of ethics, adherence to sharia etc would need to be clearly articulated and directions provided for employees dealing in the area of investment, compliance, competitive differentiation, improving reputation or winning customer loyalty. Intentions are as important as deeds (as is true also in acts of worship) Sincerity is crucial. These teachings not only prohibit from amalgamation, black-marketing, hoarding and deception but also force to treat a customer amiably. His Omnipotence imbues material reality with normative content. If other major religions, such as Christianity, call for a review to inculcate religious values in Christian businessmen, Muslim businessmen can be proof of success stories where business ethics and religious values can merge harmoniously for the betterment of the individual and his community. Revisit the purpose of the business. Get notified on the next article and occasional announcement on Pergas events. Communicate them to your stakeholders. There are nine main principles by which all fair trade abides: create opportunities for marginalized producers, develop transparent relationships, build capacity, promote fair trade, pay promptly and fairly, support empowering working conditions, ensure children’s rights, cultivate environmental stewardship, and respect cultural identity. JOHN C. MAXWELL. In concrete circumstances, an action may involve both good and evil consequences and then one must choose that action which will maximize the good and minimize the evil, resulting in the greatest degree of justice, according to the prominent fourteenth century legal scholar, Ibn Taymiyya. As such, questions were raised on whether business ethics truly exist or how does a businessman be ethical in a highly competitive business environment these days. Business Ethics. No part of this article may be reproduced or stored in a retrieval system or transmitted in any form or by any means, electronic or otherwise without the permission of Pergas. Islam always encourages its followers to involve in the business from day one. Ethics in business: Islamic perspective According to Websters Dictionary, “Ethics” is related to what is good or bad, having to do with moral duty and obligation. About Islamic Business Ethics . Company Registration No: 4964706. Extremes should be avoided; follow the middle path, the way of balance. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Looking for a flexible role? This includes providing market avenues that allow marginalized producers the opportunity to sell, ensuring humane working conditions, and all the while protecting environmental and cultural factors that play into the production process. Islam encourages truthfulness in business transactions and raises the status of a truthful merchant. All work is written to order. As the most important pillar of Islamic teachings is belief and devotion to Allah [Allah], the concept of Tawheed was explained and its implications explored. International Journal of Islamic Business & Management Vol. People, by nature, like to ‘belong to groups’. – The purpose of this paper is to examine and discuss business ethics from an Islamic perspective., – Descriptive, analytical, and comparative analyses are used., – The study reveals several factors that affect Muslims' ethical behavior, including legal, organizational, and individual factors. On another occasion, a tradition of the Prophet (Peace be upon him) states: “A time will come upon the people when one will not care as to how he gets his money whether legally or illegally.” These statements give us an insightful view of Islamic ethics. Something that comes from the heart will be accompanied by words and actions. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Listening, using the variety of mediums that are available, to hear what the stakeholders are saying and thereby get into a dialogue with them and engage them. Besides, there are numerous teachings of the Prophet (sws) which cover the area of moral and ethical values and principles. Islamic teachings require a Muslim businessman to be trustworthy and to keep to his promises and contracts. Ethics also refers to the rightness or wrongness of the decisions and . We will try to highlight various inputs for the corporate governance from the Islamic ethics perspective. Your email address will not be published. The fact that business has to do with profit maximisation or promoting self-interest while ethics emphasises on caring for others or having social responsibility makes the term ‘business ethics’ sounds contradictory. In Islamic study, right and wrong is clearly advocate through the word of Allah. Generally speaking, earning profits from business activities is encouraged in Islam. Rafik Issa Beekun, Islamic Business Ethics (Herndon: International Institute of Islamic Thought, 1996). If circumstances prevent accomplishment of the action, then commitment of the heart is still regarded as good. ISLAMIC BUSINESS ETHICS AND ITS IMPACT ON STRATEGIC BUSINESS DECISION MAKING PROCESS OF MUSLIMS . Some of these suggestions are mentioned below. An Islamic market is characterized by certain norms that take care of the interests of both the buyer and the seller. Azurin Sani. One of the most important ways in which Islamic ethics can contribute to corporate governance would be to have Shariah governance committee as a supervisory committee. Required fields are marked *, For these reasons, we have seen Islamic finance flourish in the last decade. Registered Data Controller No: Z1821391. In most situations people act instinctively, in accord with their basic character, rather than by consulting a set of rules. One can estimate the importance of business ethics in Islam for economic development in Islamic society it is evident by the Hadith of Prophet Muhammad (PBUH) in which He excluded a trader from Muslim community who did not behave in good manner with his clients. The central themes in Islamic finance that prohibits leverage and riba, and promotes asset-backed transactions are now increasingly being universally accepted. Ethics, Production, Trade, Islamic Economics The present study aims to contribute to the existing research in the field of business and shed more light on the business ethics from the perspective of Islamic economics. ETHICS IN ISLAMIC PERSPECTIVE ... Business Ethics Business Ethics is the branch of ethics that examines ethical rules and principles within a commercial context; the various moral or ethical problems that can arise in a business setting; and any special duties or obligations that apply to persons engaged in commerce. Ethics in business: Islamic perspective. Business ethics, in the Islamic concept, approach to entrepreneurs Abstract contributor to the economic development of a country. It, therefore, implies that a sale under force is not tolerable in Islam. ‘THE ISLAMIC ETHIC is expressed in terms on the immanent presence of God in the earthly affairs of man. 6. Thereby creating a process that will automatically provide for the “good” (of society). Mutual consent between the parties is a necessary condition for the validity of a business transaction. I have highlighted some of the important areas of corporate governance. If not, what Islamic ethics can offer us pertaining to business? Ethical norms and moral codes discernible from the verses of the Qur’an and the Hadith are numerous, far reaching and comprehensive. This goes without saying that there is a general consensus among human beings about certain fundamental ethical values. Islamic work ethics are classified under divine command theory that uses religion as the foundation in identifying ethics. A part of risk management is to maintain transparency in terms of the claimed brands’ performance or delivery. Islam – “No one of you is a believer until he loves for his neighbour what he loves for himself.” (Hadith Prophet Muhammad s.a.w. The Holy Qur’an emphasizes the moral obligation to fulfil one’s contracts and undertakings. Joy (2010) highlights some of the basic principles of Islamic ethics which include the following: Every action has moral significance. clearly developed Islamic business ethics. The second Islamic principle is fulfilling promises and contracts. Islam has its own distinctive value-based ethical system for business dealings. Islam demands a certain type of behaviour from the economic agents – the consumers and the producers. The basic principles of truth, honesty, integrity and trust are involved in all business dealings. This principle of calling to “do good and forbid evil” is a guiding light. You communicate a consumer benefit (and win a bit more trust).More importantly creating – employee engagement on the business mission- employees working together for a common goal. VAT Registration No: 842417633. Islamic teachings require a Muslim businessman to be trustworthy and to keep to his promises and contracts. June 18, 2012. one thing i should says that this blog is very important for every Muslims to read this blog and because this is very important to know work places. Business ethics are broad Islamic due to the high moral values. ETHICS Faith and effort are both required. When it comes to doing what is morally right, having the proper character (consisting of virtues such as wisdom, concern for justice, modesty, and the avoidance of vices such as lust, greed, and anger) is as important as following a set of rules. Justice, honesty, and public welfare are the pillars of Islamic business ethics. This social aspect of the business’s mission would also be the heart and soul of its brand identity (and be reflected through the overall brand experience). It is important to know some reasons to understand business ethics in Islamic perspective. According to Fieser (2009), the field of ethics (or moral philosophy) involves systematizing, defending, and recommending concepts of … Discussion on the Concepts of Business Ethics in the Islamic Perspective Ethics in general can be defined as the system of rules governing the ordering of values (Bateman & Snell, 2002). Business Ethics in Islam . It briefly this paper discribed the foundations of Islamic business ethic and use holly Qur'an and Al Hadis as a primary references. Mutual understanding, honesty and ethics possess central place in Islamic teachings. Perhaps the phrase most often cited by Muslim ethicists comes from Sura 3:104, where Muslims are told that they are people who should call all to do what is good and right and forbid what is wrong or dishonorable. If a brand does not have its finger on the pulse of stakeholder opinion, it doesn’t have a feel for its brand health. It also encourages its followers to be self-reliant financially. Business is one of the way to meet human needs. This would come about from the product or services it intends to market and how it affects the consumer. BUSINESS Allah SWT has given direction to the servant - him to do business. said “An honest and trustworthy business man will be the martyrs on the day of resurrection”. Reply. Possibly, one day soon, we will have a business case study highlighting the sustainable business sucess of a organsiation based on these strong, simple ethics. In the Islamic scheme of things, adherence to moral code and ethical behaviour is a part of iman (faith) itself. Business Ethics—The Islamic Perspective The aim of this chapter titled “Ethics—The Islamic Perspective” is to present the ethical course of action for managers from an Islamic viewpoint. The “why” are we doing this business OR “why” are we going into this business? Do you have a 2:1 degree or higher? We have already given an example of the real by the Prophet … Note: The publication copyright of this article belongs to Pergas. Islamic teachings provide obvious guidelines in this regard. ISLAM AND ETHICS How should a Muslim react to the questions above? To exemplify its importance in the national and global context, the Muslim author from Indonesia points with admiration to Konosuke Matsushita, founder of Matsushita Electric Corporation, who already in the 1930s set up the seven ethical principles for healthy business growth, which also are commended by the Islamic imperative. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! These believes need to be genuine and strong enough to remain in place when tested and they need to be translated into practice. 1, No. Board qualifications, capabilities and responsibilities, Board’s role regarding the bank’s strategic objectives and corporate values. Sura 5:105 says, “Believers, guard your own souls. Equity is achieved via creating a platform for trade that is transparent and therefore accountable for the just treatment of all producers. Manage risk effectively and you can head off financial risks like additional legislation, taxes or consumer boycotts. The supervisory committee should be considered as one which work not just to represent the stakeholders but as a guide for the company itself. Having trust leads to a relationship which is liked (by the stakeholders) due to the personality of the brand which is reflected in the way the brand’s and the organisation’s culture is delivered. Articulating the business purpose creates two key points. It should be noted that the benefits of the company could also be sought in terms of barakah or blessings from the Almighty. In order to form such a group it is necessary to provide employees a clear value system and a common cause. Should he feel that business activities have potential to reduce a Muslim’s commitment to his religion? The concept of business ethics in islamic perspective: an introductory study of Small and Medium Enterprises (SMEs) @inproceedings{Muhammad2013TheCO, title={The concept of business ethics in islamic perspective: an introductory study of Small and Medium Enterprises (SMEs)}, author={M. Z. Muhammad and A. Abdullah and Razman Hafifi Redzuan and Siti Fariha Muhamad}, … September 13, 2012. Products such as bananas initially had become a commodity product where there was hardly any competition between brands. Hence. Businesses tend to think good corporate responsibility is about managing the footprint of their impact on society. D. (Economics). Opinions expressed in this article belong to the author and do not represent Pergas’ official stand unless if Pergas explicitly says so. Almighty through prophets, religious scriptures and religious authority, Shuratic decision-making process: consultation and consensus-seeking, Financial governance by suppliers of finance. New corporate governance regulations have come about which make the directors have responsibilities in the area of ‘trust’ or customer satisfaction through transparent and authentic marketing claims. These usually are called brand values and become the guiding principles of how business is to be done. The basic principles of truth, honesty, integrity and trust are involved in all business dealings. An action done just for external compliance, says Islam, isn’t nearly as good as one that comes from the heart. Thus, in a business contract, the offer and acceptance on the rental should be made clear between the parties concerned which must be reasonable and deliverable. Islam holds committed Muslim businessman in high esteem due to the fact that Prophet Muhammad s.a.w. This is the question which needs to be identified and answered with clarity. Islamic perspective is more suitable in explaining ethics as it is comprehensive, moderate and realistic (al-Aidaros et al., 2013). The trio of “heart, tongue, and deed” is frequently mentioned. In Islam, ethics governs all aspects of life. After all the stories involve people and people are interested in people per se. Alongside these Islamic ethics also emphasizes on no reward without risk (, On another occasion, a tradition of the Prophet (Peace be upon him) states: “A time will come upon the people when one will not care as to how he gets his money whether legally or illegally.”. Ethical norms and moral codes that can be deduced explicitly or implicity from the verses of the Holy Qur’an and the teachings of the Prophet (sws) are numerous, far reaching and comprehensive. ‘Business ethics’ is often viewed as an oxymoron, in the way that ‘seriously funny’ and ‘open secret’ are considered to be counterintuitive. The great twelfth-century theologian al-Ghazali wrote extensively on the importance of cultivating virtue and avoiding inclination to vice. It’s an organisation’s employees that project the brand. International marketing practices, embedded in a strong ethical doctrine, can play a vital role in raising the standards of business conduct worldwide, while in no way compromising the quality of services or products offered to customers, or surrendering the profit margins of businesses. It means that Allah Almighty has given direction to the servants - to do his business. Zeynep Arslan BBA, Marmara University, 2008 . Corpus ID: 34297453. Sura 31:18-19 says, “Do not be disdainful of other people, nor walk in arrogance in the earth. For these reasons, we have seen Islamic finance flourish in the last decade. HONESTY: Secret of success in business. SOCIETY In Islam there are rules and ethics of doing business. A business activity as a worship will encourage a Muslim to become a … Free resources to assist you with your university studies! KEWANGAN ISLAM, Your email address will not be published. Islam has its own distinctive value-based ethical system for business dealings. First of all, the second largest religion in the world which beliefs in the oneness of God is Islam. View original from ejurnal.unisri.ac.id It (i) enumerates the general ethical rules of business conduct, (ii) identifies ethically desirable forms of business, and, (iii) specifies the undesirable modes of transactions. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. We have already given examples of the real by the Prophet SAW.bagaimana way he does business with to trade. By Dr. Muzammil Siddiqi. The concept of two willing parties, the buyer and the seller, is a requirement to a valid sale. There are many stories in almost every business. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. There are three critical factors in detailing these values such as the belief of the business unit in what’s the social benefit of the business will be. Sura 2:23 says, “To those who believe and do acts of righteousness give the good news that they will go to paradise.” The moral choices one makes are serious as they play a role in determining one’s ultimate fate – to heaven or to hell. It is also important to know that many companies involve in business transactions which might not exactly be Shariah compliant. The Shariah governance structure should be considered as a brand in itself. Major religions today would try to answer these questions through what is called a Golden Rule -from books and traditions. The articulation of purpose will bring forth the business mission. No plagiarism, guaranteed! If a businessman is in a rental of house units business, each business contract should clearly specify the content, the quantity and the price of the unit in detail. Islam places the highest emphasis on ethical values in all aspects of human life. This chapter dealt with business ethics from an Islamic perspective. Islamic teachings strongly stress the observance of ethical and moral code in human behaviour. '. The more engaged the people are the more they would want the brand to succeed. Permission is only given for sharing this article vis its original URL. Judaism – “What is hateful to you, do not do to your fellow man. Comments Off on Business ethics: Islamic perspective You are the best of peoples, evolved for mankind, enjoining what is right, forbidding what is wrong, and believing in Allah. Most studies on business ethics in general and the work ethic in particular have been based on the experiences of Western nations, with a primary focus on the Protestant work ethic (PWE) as advanced by Max Weber. ISLAMIC PERSPECTIVE In order to win over the stakeholders (the brand interacts with) one has to build trust. Then came the ‘fairtrade’ labeling of bananas as well as other products through which brands started competing with the other products. A contract must be explicit with regard to the rights and obligations of the parties concerned so that it does not lead to disputes and disagreements between them — which emphasize the need for a very high level of transparency. Business Ethics in Islamic Perspective Business is one of many ways to meet human needs. As Muslims, we have to adhere to ethical standards, not only in business but also in all aspects of life. – In the light of major corporate failures worldwide, business ethics have become an increasingly important area of managerial competence and responsibility. In relation to the Islamic paradigm aboutbusiness ethics, the philosophical foundation that must be built in time is the Muslim conception of human relationships with the people and the environment, and the human relationship with his Lord, who is known in religious language with the term (hablum minallah wa hablumminannas). It can be done in a way which wins trust and leads to genuine social and business benefit. A verse states thus: “O you who believe! In Islam there are rules and ethics of doing business. The purpose of this paper is twofold: (1) to share the Islamic perspective on business ethics, little known in the west, which may stimulate further thinking and debate on the relationships between ethics and business, and (2) to provide some knowledge of Islamic philosophy in order to help managers do business in Muslim cultures. There’s no such thing as “Business” Ethics. And trust comes through managing and delivering the brand values consistently. Business Ethics: An Islamic Perspective. And stories enable for a dialogue to take place thereby leading to engagement and a furthering a common cause. One shouldn’t be arrogant or exalt oneself in the eyes of others. Allah blesses business dealings if both the buyer and the seller are true to each other. Allow me to bring to your attention two key Islamic principles, among many others, that shaped Muslim businessmen in the past and will be of great help in this challenging era. Rezaul Karim Miajee1 1 Department of Business Administration, The Millennium University, Dhaka, Bangladesh Correspondence: Department of Business Administration, the … Any promise which is non-existent or not deliverable is not allowed to be transacted. The first step to gaining trust is to listen. Some of the various tenets of Islamic business ethics are as follows: Figure 1: Various Areas of Corporate Governance, (Source: Produced by author; Data from Basel Committee (2010), Basel Committee (1999)). There are a number of rules of ethical discipline in Islamic commercial transactions without which business contract would be regarded as lacking perfection in the light of the code of good manners, decency and ethical excellence. Both God's law expressed in the Qur'an and Sunna and the objective circumstances in which man must strive to obey them are divinely ordained. An Islamic Approach to Business Ethics. A sale transaction is considered as legal only if it is made through the mutual consent of the parties concerned as freedom to contract is protected under Islamic business law. The central themes in Islamic finance that prohibits leverage and riba, and promotes asset-backed transactions are now increasingly being universally accepted. 2. There is a reference to this point in the Qur’an: For you in the Messenger of Allah is … Our academic experts are ready and waiting to assist with any writing project you may have. There are about 22.5 % Muslims in the world‟s population and this Muslim population is … Will Islamic values be a hindrance to business success? Honouring and fulfilling business obligations, The second Islamic principle is fulfilling promises and contracts. ISLAMIC FINANCE Let us see some of the differences at the way corporate governance system looks like comparing the western and the Islamic system. Economic development of a country depends on its business ethics and values. º says in a hadith: This is quite a significant statement from the prophet of Islam since he states that one of the objectives of him having been sent by Almighty is to perfect good morals. Don't worry, we don't like spam either! The person who has gone astray cannot hurt you if you are rightly guided.”. For example, we have the ‘fair trade’ brand which is quite popular these days in the west. *You can also browse our support articles here >. Alongside these Islamic ethics also emphasizes on no reward without risk (al ghormi bil ghonm) and profit comes with responsibility (al kharaj bil dhaman). It prescribes certain specific guidelines for governing business ethics. Other factors which add to the value of a business include: -> A clear strategic direction based on practicing the values articulated (ie: ‘walking the talk’), -> A strong top management in order to champion the brand values and represent the brand identity to the brands’ eco-system, -> This would enable having engaged employees representing the brand reputation and innovation, -> Developing a strong competitive advantage based on establishing and delivering the brand value and offer through brand experience, ->This in turn would lead to generating customer loyalty. From the buyer’s perspective, he takes comfort from knowing that a seller taking advantage of someone’s difficulties and marking up unreasonably high prices for a product or service are deemed as forms of financial exploitation and as such are forbidden in Islam. Both business and ethics are interrelated. Explain why despite these standards, some Muslim countries are still adopting their own standards. Everyone agrees that it’s not enough to advocate moral actions (the action of the tongue) but then act differently. “HONESTY IS THE ONLY POLICY”. 1; 2017 Published by Centre for Research on Islamic Banking & Finance and Business Business Ethics: An Islamic Perspective K. M. Anwarul Islam1 Md. 2 Responses “Business Ethics from an Islamic Perspective” → knowledgesoul. For this purpose the author offers, first, the essentials of such an ethics: the utmost importance of all sort of productive work and the distribution of wealth in society; the vocation of trade; the fundamental principles of freedom and justice for business conduct; the prescription of certain manners such as It prescribes certain specific guidelines for governing business ethics. Study for free with our range of university lectures! Use the country example familiar to you. In bringing forth a strong Islamic business model, financial success is only one dimension of the value provided by the business unit. PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF . Moral principles and codes of ethics are repeatedly stressed throughout the Holy Qur’an. College of Islamic Banking, World Al-Lootah University (Internet), Dubai. ‘Business ethics’ is often viewed as an oxymoron, in the way that ‘seriously funny’ and ‘open secret’ are considered to be counterintuitive. This is the entire Law; all the rest is commentary.” (Talmud, Shabbat 31a). Business activities should lead Muslim businessmen to work hard and achieve material success. And corporate values project SUBMITTED in PARTIAL FULFILLMENT of the decisions and highlights some of the of... Service perfectly matched to your fellow man it prescribes certain specific guidelines for governing business from... Other products through which brands started competing with the other products through which brands started competing with the other through... 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