Islamic Business Ethics 2b373g

ISLAMIC BUSINESS ETHICS By Rafia Ayub

You are the best of peoples evolved for mankind, ening what is right, forbidding what is wrong, & believing in ALLAH. (Qur’an 3:110)

ALLAH describes people who attain success are;

“inviting to all that is good (Khyr), Khyr ening what is right (mar’uf) mar’uf & forbidding what is wrong (munkar) munkar (Qur’an 3:104)

Ethics defined as The set of moral principles that distinguishes what is right from what is wrong. Business ethics referred to as management ethics or organizational ethics, simply limits its framework to organization

• Islamic Business Ethics, identifies the practical elements of managing ethics within an organization that business leaders can use, offering the framework of an overall Islamic ethics model for an organization to adopt.

Islamic ethical system emphasized on; • Khuluq --- Good nature • Khayr --- Goodness • Birr --- Righteousness • Qist --- Equity • Adl --- Equilibrium & justice

AXIOMS OF ISLAMIC ETHICAL PHILOSOPHY AXIOM

DEFINITION

Unity

Related to the concept of Tawhid. Since everything belongs to ALLAH, there is nothing on which a man can discriminate or feel superior over others.

Equilibrium

Concept of ‘al-tawazun’. A sense of balance among various aspects of man's life through conscious purpose, in order to produce the best social order.

Free will

Man's ability to act without external coercion within the parameters of ALLAH's creation & as ALLAH's trustee on earth.

Responsibility

Man's need to be able for his action.

Benevolence

Ihsan or an action that benefits persons other than those from whom the action proceeds without any obligation.

Unity • Makes a person’s vision wider, & any thought of racism or caste system becomes inconsistent with his thinking • Muslim becomes fearless, modest & humble. • Avoid what is forbidden & engage in what is good.

Application of Unity Axiom to Business Ethics • No discrimination. “O mankind, We have created you from a male and a female, and made you into races and tribes, so that you may identify one another.” Qur’an 49:13 • No involvement in unethical practices. • Do not seek to accumulate wealth. “Wealth and children are the embellishment of the worldly life, and the everlasting virtues are better with your Lord, both in rewards and in creating good hopes “ Qur’an 18:46

Equilibrium • The law & order in universe reflects a delicate balance. • This provides a path to success • Balance and moderation are key to heaven. ALLAH has described those as “who will be rewarded with highest place in heaven” • ALLAH advises to be moderate and those who, when they spend, are neither extravagant nor miserly, and it (i.e. their spending) is moderate in between (the two extremes,) (25:67)

Application of Equilibrium Axiom to Business Ethics “He raised the sky high, and has placed the scale, so that you should not be wrongful in weighing” (55:7-8) “And give full measure when you measure, and weigh with a straight balance. That is fair, and better at the end” (17:35)

Free will (I swear) by the Time, man is in a state of loss indeed, except those who believed and did righteous deeds, and exhorted each other to follow truth, and exhorted each other to observe patience. (103:3)

“O you who believe, fulfill the contracts” (5:1) •

Here contract means;

E. F. G. H.

Divine obligations Social obligations Political obligations Business obligations

Responsibility “This is not (a matter of) your fancies or the fancies of the People of the Book. Whoever does evil shall be requited for it, and he shall find neither a friend for himself, besides Allah, nor a helper. Whoever, male or female, does good deeds and is a believer, then such people shall enter Paradise, and they shall not be wronged in the least” (4:123-124)

Islam lays down the principle of mutual responsibility in all its various shapes & forms. In it we find the responsibilities which exist between a man & his soul, between a man & his immediate family, between the individual & society, between community & other communities.

Benevolence The inmates of Paradise are of three types: one who wields authority & is just and fair; one who is truthful & has been endowed to power to do good deeds; & the person who is merciful and kind hearted towards his relatives & to every pious Muslim, & who does not stretch out his hand in spite of having a large family to .

Halal & Haram Business Areas

Halal Earnings ALLAH’s Messenger (peace be upon him) was asked, “what type of earning is best?”, & replied “ a man’s work with his hand & every business transaction which is approved”

Halal Business Areas Work in • Agriculture • Industry & professional areas

Haram Business Areas • • • • • •

Trading in Alcohol Drug dealing & trading Sculptors & artists Production & sale of Haram goods Al-gharar Riba based transactions