Transcript Islamic Perspective Concerning Business Ethics

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Ethics
Business Ethics
Ethics In Islam
Islamic Business Ethics
◦ Keenness To Earn (Halal) Earnings
◦ Trustworthiness In Business Transactions
◦ Generosity And Leniency In Business
Transactions
◦ Honouring And Fulfilling Business Obligations
◦ Fair Treatment Of Workers
Prohibited Matters In Business Transactions
Summary and Conclusion
Q/A?
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May be defined as the set of moral principles that
distinguish what is right from what is wrong.
Has a twofold objective: it evaluates human practices
by calling upon moral standards;
Give prescriptive advice on how to act morally in a
given situation.
Ethics aims to study both moral and immoral
behaviour in order to make well-founded judgments
and to arrive at adequate recommendations.
Synonymous with morality. An action, which is morally
right, is also called an ethical one. Codes of morality
are called ethical codes.
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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 .
Makes specific judgments about what is right or
wrong; i.e. , business ethics is concerned with what is
good and bad, right and wrong, and just and unjust
in business.
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Islam places the highest emphasis on ethical values
in all aspects of human life.
Islam governs all aspects of life. Ethical norms and
moral codes from the verses of the Holy Qur’an and
the teachings of the Prophet (SAW).
Islamic teachings strongly stress the observance of
ethical and moral principle code throughout the
Holy Qur’an and numerous teachings of the
Prophet (SAW)
Ethics In Islam
َ ‫اس تَأ ْ ُم ُر‬
‫ع ِن‬
َ ‫وف َوت َ ْن َه ْو َن‬
ِ ‫ون ِبا ْل َم ْع ُر‬
ِ َّ‫ُك ْنت ُ ْم َخ ْي َر أ ُ َّم ٍة أ ُ ْخ ِر َجتْ ِللن‬
َ ‫ب لَ َك‬
َ ُ‫ا ْل ُم ْن َك ِر َوت ُ ْؤ ِمن‬
‫ان َخ ْي ًرا لَ ُه ْم ِم ْن ُه ُم‬
ِ َّ ‫ون ِب‬
ِ ‫اَّلل َولَ ْو آ َ َم َن أ َ ْه ُل ا ْل ِكتَا‬
َ ُ ‫سق‬
َ ُ‫ا ْل ُم ْؤ ِمن‬
‫ون‬
ِ ‫ون َوأ َ ْكث َ ُر ُه ُم ا ْلفَا‬
“You are the best of peoples, evolved for mankind, enjoining what
is right, forbidding what is wrong, and believing in Allah..........”
(Qur’an 3:110)
The Prophet (SAW) also says: “I have been sent
for the purpose of perfecting good morals”. (Ibn
Hambal , Vol 1 - No: 8595)
Islamic Business Ethics
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.
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Islam places great emphasis on the code of lawful and
unlawful in business transactions. Qur’anic verses
disapprove the wrongful taking of the property.
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‫اط ِل َوت ُ ْدلُوا ِب َها ِإلَى ا ْل ُحك َِّام ِلت َأ ْ ُكلُوا‬
ِ َ‫َو ََل تَأ ْ ُكلُوا أ َ ْم َوالَ ُك ْم بَ ْينَ ُك ْم ِبا ْلب‬
َ ‫اْلثْ ِم َوأ َ ْنت ُ ْم ت َ ْعلَ ُم‬
‫ون‬
ِ َّ‫فَ ِريقًا ِم ْن أ َ ْم َوا ِل الن‬
ِ ْ ‫اس ِب‬
Do not devour one another’s property wrongfully, nor throw it
before the judges in order to devour a portion of other’s property
sinfully and knowingly. (2:188)
َ ‫اط ِل ِإ ََّل أ َ ْن تَك‬
َ ‫يَا أَيُّ َها الَّ ِذ‬
‫ُون‬
ِ َ‫ين آ َ َمنُوا ََل تَأ ْ ُكلُوا أ َ ْم َوالَ ُك ْم بَ ْينَ ُك ْم ِبا ْلب‬
َ ‫اَّلل َك‬
‫ان ِب ُك ْم َر ِحي ًما‬
َ ُ‫اض ِم ْن ُك ْم َو ََل ت َ ْقتُلُوا أ َ ْنف‬
ٍ ‫ارةً ع َْن ت َ َر‬
َ ‫تِ َج‬
َ َّ ‫س ُك ْم ِإ َّن‬
Do not devour another’s property wrongfully – unless it be by
trade based on mutual consent. (4:29)
A Muslim businessman should be wary of the doubtful
things in order to keep himself clear in regard to his
faith and his honour
The Prophet (SAW) endorsed the importance of
legitimate ways of earning
- Asked ‘what form of gain is the best? [the
Prophet] said, ‘A man’s work with his hands, and
every legitimate sale’. (Ahmad, No: 1576)
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Leave what makes you doubt for things that do
not make you doubt. (Tirmidhi, No: 2442)
Foremost among the unacceptable business practices
strongly condemned in Islam is Riba. (interest),
Allah has permitted trading and forbidden Riba (usury).
(2:275)
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Trustworthiness is one of the most important
principles of ethical discipline in commercial
transactions. Trust is a moral virtue and duty
incumbent on a Muslim in the performance of his
affairs.
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َ ‫يَا أَيُّ َها الَّ ِذ‬
‫سو َل َوت َ ُخونُوا‬
ُ ‫الر‬
ََّ ‫ين آ َ َمنُوا ََل ت َ ُخونُوا‬
َّ ‫اَّلل َو‬
َ ‫أ َ َمانَاتِ ُك ْم َوأ َ ْنت ُ ْم ت َ ْعلَ ُم‬
‫ون‬
O you believers! Do not betray Allah and the Messenger, nor
knowingly, betray your trusts. (8:27)
One should be lenient and generous in bargaining.
Therefore, whoever demands his debt back from the
debtor should do so in a decent manner.
The Prophet (SWS) invokes Allah’s mercy thus: - May
Allah’s mercy be on him who is lenient in his buying,
selling, and in demanding back his money [or debts].
(Bukhari, No: 1934)
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Islam attaches great importance to the fulfilment of
contract and promises and requires a Muslim trader
to keep up his trusts, truth, honesty, integrity,
promises
َ ‫يَا أَيُّ َها الَّ ِذ‬
‫ين آ َ َمنُوا أ َ ْوفُوا ِبا ْلعُقُو ِد أ ُ ِحلَّ ْت لَ ُك ْم بَ ِهي َمةُ ْاْل َ ْنعَ ِام‬
َ ‫علَ ْي ُك ْم‬
‫اَّلل‬
َ ‫ِإ ََّل َما يُتْلَى‬
َّ ‫غ ْي َر ُم ِح ِلي ال‬
َ َّ ‫ص ْي ِد َوأ َ ْنت ُ ْم ُح ُر ٌم ِإ َّن‬
ُ‫يَ ْح ُك ُم َما يُ ِريد‬
O you who believe! Fulfil [your] obligations... (5:1)
(On the Other hand, Obligations could be Divine , Social,
Political, Business)
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Islam puts certain conditions and restrictions to
obviate the chances of bitterness between the
employer and employees.
It is the religious and moral responsibility of the
employer to take care of the overall welfare and
betterment of his employees in terms of.
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Fair wages,
good working conditions,
suitable work and
excellent brotherly treatment
The last Prophet of Allah (SAW) has explained this principle in
the following words:
Those are your brothers [workers under you] who are around 
you, Allah has placed them under you. So, if anyone of you has
someone under him, he should feed him out of what he himself
eats, clothe him like what he himself puts on, and let him not
put so much burden on him that he is not able to bear
10.
Trading in Alcohol
Drug dealing & trading
Sculptors & artists
Production & sale of Haram goods
Al-Gharar
Riba based transactions.
Arbitrarily Fixing Commodity / Service Prices
Hoarding of Foodstuff (Ihtikar)
Exploitation of one’s Ignorance of Market Conditions
Al-Najsh (Trickery)
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Cheating / Fraud in Business Transactions (Al-Ghashsh).
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Swearing
Giving Short Measures
Dealing in Stolen Goods
Another aspect of business ethics is the various forms
of unethical business practices a Muslim businessman
must avoid in his business dealings.
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Dealing in Prohibited (Haram) Items
Unlawful items such as carrion (dead meat), pigs and
idols is strongly prohibited in Islam.
‫اَّلل ِب ِه‬
َ ْ‫ُح ِر َمت‬
ِ َّ ‫علَ ْي ُك ُم ا ْل َم ْيتَةُ َوالدَّ ُم َولَ ْح ُم ا ْل ِخ ْن ِز ِير َو َما أ ُ ِه َّل ِلغَ ْي ِر‬
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Forbidden to you [for food] are: dead meat, the blood, the flesh
of swine and that on which name of other than Allah has been
mentioned. (5:3)
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Intoxicant And Gambling / Betting
َ ‫يَا أَيُّ َها الَّ ِذ‬
‫ع َم ِل‬
َ ‫س ِم ْن‬
َ ‫س ُر َو ْاْل َ ْن‬
ِ ‫ين آ َ َمنُوا ِإنَّ َما ا ْل َخ ْم ُر َوا ْل َم ْي‬
ُ ‫ص‬
ٌ ‫اب َو ْاْل َ ْز ََل ُم ِر ْج‬
َ ‫اجتَنِبُوهُ لَعَلَّ ُك ْم ت ُ ْف ِل ُح‬
‫ون‬
َّ ‫ال‬
ْ َ‫ان ف‬
ِ ‫ش ْي َط‬
O you who believe! intoxicants and gambling [dedication of]
stones and [divination by] arrows are an abomination of Satan’s
handiwork: so avoid it in order that you may prosper. (5:90)
The Prophet (SAW) is also reported to have said;
Allah and His Messenger made illegal the trade of
alcoholic liquors, dead animals, pigs and idols.
(Bukhari, No: 2082)
Sale of Al-Gharar (Uncertainty, Risks, Speculation)
The sale of a commodity or good which is not present
at hand; or the sale of an article or good, the
consequences or outcome of which is not yet known.
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Arbitrarily Fixing the Prices
Islam grants absolute freedom to traders provided they
adhere to the code of lawfulness. It does not,
encourage the practice of price–fixing and leaves the
traders to earn the profits from each other within the
lawful limits.
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Hoarding of Foodstuff (Ihtikar)
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Storing foodstuffs or withholding them in expectation
of rise in their prices. A handful of traders operating
in the market buy the entire quantity of an item, rice
for example, and store it up with the object of selling
it later at the time of scarcity to draw maximum profit
out of it and to dictate the prices.
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The Prophet (SAW) says - No one hoards but the
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Exploitation of one’s Ignorance of Market Conditions
traitors (i.e. the sinners). (Abu Da’ud, No. 2990)
An unethical practices in modern business is to exploit
one’s ignorance of market conditions.
Al-Najsh (Trickery)
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This is an action in which a person offers a high price
for something, without intending to buy it, but just to
cheat or defraud another person who really means to
buy it.
Cheating / Fraud in Business Transactions (Al-Ghashsh).
 The traders and businessmen generally have a
tendency to motivate the customers by adopting
fraudulent business practices.
The Prophet (SWS) is reported to have said:
The seller and the buyer have the right to keep the
goods or return them as long as they have not parted.
... If they have told lies or concealed something, then
blessings of their transaction would be lost. ( Bukhari,
No: 1937)
Swearing
The traders often take recourse to swearing to
emphasize that their items are of good quality / Qty
which don’t exist. They try to persuade the buyers to
purchase their commodity by invoking Allah’s name.
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The Prophet (SAW) is reported to have said:
Swearing [by the seller] may persuade the customer to
purchase the goods but the deal will be deprived of
Allah’s blessing. (Bukhari, No: 1945)
Giving Short Measures
A form of deceit to manipulate weights and measures. It
refers to the act of taking full measures from others and
giving them short measures in turn.
َ ‫س‬
‫ست َ ِق ِيم ذَ ِل َك َخ ْي ٌر‬
ْ ‫اس ا ْل ُم‬
ْ ‫َوأ َ ْوفُوا ا ْل َك ْي َل ِإذَا ِك ْلت ُ ْم َو ِزنُوا ِبا ْل ِق‬
ِ ‫ط‬
ً ‫س ُن تَأ ْ ِو‬
‫يل‬
َ ‫َوأ َ ْح‬
And give full measure when you measure, and weigh
with a just balance. That is good and better in the end.
(17:35)
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Dealing in Stolen Goods
Almighty Allah has declared thievery unlawful and
warned of severe punishment such as cutting the
hand of the thief from the wrist joint if the necessary
legal conditions for the award of punishment are met.
1. The ethical code of Business In Islam is
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multidimensional, far reaching and comprehensive.
2. Islamic ethical framework encompasses all spheres
of life including business, financial dealings, and
obligations.
3. The fundamental codes of moral behaviour provide
the general background of Islamic business ethics.
4. Muslims-In-Business Must Imbibe such acts as
truthfulness, trustworthiness, generosity and
leniency, adherence to business commitments and
contracts, fair treatment of workers, avoidance of
evil practices (such as fraud, cheating, deceit,
hoarding of foodstuff, exploitations, giving short
measures etc.)
1. Islamic ethical and moral codes create a sense of
. minds of
responsibility and accountability in the
the believers,
2. The Islamic ethical codes, are humane and are
good for all times and absolute.
3. Ethical and moral codes in Islam are part of the
overall Islamic faith and observing them will lead
to a happy state of affairs in this world and also
holds the promise of manifold returns in the
Hereafter.
Wrap-Up Phrase!!!
َ ‫اس ت َأ ْ ُم ُر‬
‫وف‬
ِ ‫ون ِبا ْل َم ْع ُر‬
ِ َّ‫ُك ْنت ُ ْم َخ ْي َر أ ُ َّم ٍة أ ُ ْخ ِر َج ْت ِللن‬
َ ُ‫َوت َ ْن َه ْو َن ع َِن ا ْل ُم ْن َك ِر َوت ُ ْؤ ِمن‬
‫ب‬
ِ َّ ‫ون ِب‬
ِ ‫اَّلل َولَ ْو آ َ َم َن أ َ ْه ُل ا ْل ِكت َا‬
َ ُ‫سق‬
َ ُ‫ان َخ ْي ًرا لَ ُه ْم ِم ْن ُه ُم ا ْل ُم ْؤ ِمن‬
َ ‫لَ َك‬
‫ون‬
ِ ‫ون َوأ َ ْكث َ ُر ُه ُم ا ْلفَا‬
“You are the best of peoples, evolved for mankind,
enjoining what is right, forbidding what is wrong,
and believing in Allah..........”
(Qur’an 3:110)
Thank You!!!