Economic development of a country depends on its business ethics and values. In Islam there are rules and ethics of doing business. We will try to highlight various inputs for the corporate governance from the Islamic ethics perspective. By Dr. Muzammil Siddiqi. 1, No. by . It’s an organisation’s employees that project the brand. Manage risk effectively and you can head off financial risks like additional legislation, taxes or consumer boycotts. Company Registration No: 4964706. His Omnipotence imbues material reality with normative content. First of all, the second largest religion in the world which beliefs in the oneness of God is Islam. The second Islamic principle is fulfilling promises and contracts. How should a Muslim react to the questions above? Islam holds committed Muslim businessman in high esteem due to the fact that Prophet Muhammad s.a.w. 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. It means that Allah Almighty has given direction to the servants - to do his business. ISLAMIC FINANCE In the Islamic scheme of things, adherence to moral code and ethical behaviour is a part of iman (faith) itself. It prescribes certain specific guidelines for governing business ethics. In bringing forth a strong Islamic business model, financial success is only one dimension of the value provided by the business unit. Islamic business ethics is essential for SME industry. 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! From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Free resources to assist you with your university studies! 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. 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). 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. No plagiarism, guaranteed! JOHN C. MAXWELL. These teachings not only prohibit from amalgamation, black-marketing, hoarding and deception but also force to treat a customer amiably. HONESTY: Secret of success in business. Any promise which is non-existent or not deliverable is not allowed to be transacted. 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. Explain why despite these standards, some Muslim countries are still adopting their own standards. The business mission should then be evaluated for the impact it would have on society. 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. It explores the normative and practical of business ethics in the context of Islamic religious perspective to organization and personal business man. 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. Use the country example familiar to you. 2. 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. 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. Business is one of the way to meet human needs. 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. 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. Both business and ethics are interrelated. The central themes in Islamic finance that prohibits leverage and riba, and promotes asset-backed transactions are now increasingly being universally accepted. KEWANGAN ISLAM, Your email address will not be published. International Journal of Islamic Business & Management Vol. Communicate them to your stakeholders. Discuss the recent guidelines on governance of financial institutions formulated by International Islamic Financial and Accounting Standard organizations. I have highlighted some of the important areas of corporate governance. The person who has gone astray cannot hurt you if you are rightly guided.”. An Islamic Approach to Business Ethics. 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. The basic principles of truth, honesty, integrity and trust are involved in all business dealings. 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.”. For these reasons, we have seen Islamic finance flourish in the last decade. Ethical norms and moral codes discernible from the verses of the Qur’an and the Hadith are numerous, far reaching and comprehensive. ETHICS It should be noted that the benefits of the company could also be sought in terms of barakah or blessings from the Almighty. About Islamic Business Ethics . September 13, 2012. In Islam, ethics governs all aspects of life. Buddhism – “Hurt not others with that which pains yourself.” (Udana-Varga 5,1). These usually are called brand values and become the guiding principles of how business is to be done. An action done just for external compliance, says Islam, isn’t nearly as good as one that comes from the heart. It prescribes certain specific guidelines for governing business ethics. Business ethics are broad Islamic due to the high moral values. Ethics also refers to the rightness or wrongness of the decisions and . We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. If a brand does not have its finger on the pulse of stakeholder opinion, it doesn’t have a feel for its brand health. We're here to answer any questions you have about our services. The Shariah governance structure should be considered as a brand in itself. – 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. Joy (2010) highlights some of the basic principles of Islamic ethics which include the following: Every action has moral significance. Faith and effort are both required. These statements give us an insightful view of Islamic ethics. Major religions today would try to answer these questions through what is called a Golden Rule -from books and traditions. Business Ethics. Board qualifications, capabilities and responsibilities, Board’s role regarding the bank’s strategic objectives and corporate values. Moral actions are those which result in justice (´adl, Sura 4:58). 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. It is important to know some reasons to understand business ethics in Islamic perspective. 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). If not, what Islamic ethics can offer us pertaining to business? Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Business Ethics: An Islamic Perspective. Extremes should be avoided; follow the middle path, the way of balance. It’s strange that “risk management’ is still in the purview of the finance departments. 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. BUSINESS 1; 2017 Published by Centre for Research on Islamic Banking & Finance and Business Business Ethics: An Islamic Perspective K. M. Anwarul Islam1 Md. Everyone agrees that it’s not enough to advocate moral actions (the action of the tongue) but then act differently. Business ethics, in the Islamic concept, approach to entrepreneurs Abstract contributor to the economic development of a country. Something that comes from the heart will be accompanied by words and actions. 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. View original from ejurnal.unisri.ac.id A business activity as a worship will encourage a Muslim to become a … Revisit the purpose of the business. Islamic Business Ethics. 2003: Hachette Book Group, Inc. Dr. Sabahuddin Azmi, Ph. The supervisory committee should be considered as one which work not just to represent the stakeholders but as a guide for the company itself. clearly developed Islamic business ethics. Islamic teachings require a Muslim businessman to be trustworthy and to keep to his promises and contracts. Our academic experts are ready and waiting to assist with any writing project you may have. 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. PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF . It can be done in a way which wins trust and leads to genuine social and business benefit. Rezaul Karim Miajee1 1 Department of Business Administration, The Millennium University, Dhaka, Bangladesh Correspondence: Department of Business Administration, the … ‘Fair trade’ is considered a financial relationship between producers, sellers, and consumers based on the principle of equity within the exchange of goods. And stories enable for a dialogue to take place thereby leading to engagement and a furthering a common cause. Businesses tend to think good corporate responsibility is about managing the footprint of their impact on society. This is the question which needs to be identified and answered with clarity. Registered Data Controller No: Z1821391. It is also important to know that many companies involve in business transactions which might not exactly be Shariah compliant. *You can also browse our support articles here >. 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. Islam places the highest emphasis on ethical values in all aspects of human life. Equity is achieved via creating a platform for trade that is transparent and therefore accountable for the just treatment of all producers. 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. VAT Registration No: 842417633. There are many stories in almost every business. – In the light of major corporate failures worldwide, business ethics have become an increasingly important area of managerial competence and responsibility. Required fields are marked *, For these reasons, we have seen Islamic finance flourish in the last decade. It briefly this paper discribed the foundations of Islamic business ethic and use holly Qur'an and Al Hadis as a primary references. This is the entire Law; all the rest is commentary.” (Talmud, Shabbat 31a). After all the stories involve people and people are interested in people per se. said “An honest and trustworthy business man will be the martyrs on the day of resurrection”. Then came the ‘fairtrade’ labeling of bananas as well as other products through which brands started competing with the other products. For example, we have the ‘fair trade’ brand which is quite popular these days in the west. To quote some examples: Christianity – “Whatever you want men to do to you, do also to them.” (Matthew 7:12). 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. Hence. Bring these stories out. Intentions are as important as deeds (as is true also in acts of worship) Sincerity is crucial. 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)). Let us see some of the differences at the way corporate governance system looks like comparing the western and the Islamic system. ‘Business ethics’ is often viewed as an oxymoron, in the way that ‘seriously funny’ and ‘open secret’ are considered to be counterintuitive. There’s no such thing as “Business” Ethics. The first step to gaining trust is to listen. It also encourages its followers to be self-reliant financially. 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