ISLAMIC BUSINESS IDEALS

1. ISLAMIC BUSINES IDEALS From “The Principles of Islamic Marketing” by Baker Ahmad Alserhan

2. Outline • Introduction • The Islamic Law, Shariah • Islamic Ethical System • Principles Governing Islamic Ethics • Some Shariah Rules Governing Commerce • Islamic Values in Business • The Biggest Unified Market in History and Implications for Business

3. Introduction The Islamic perspective on commerce is increasingly gaining momentum and importance in today’s global economy for many reasons: • The Muslim consumers represent more than a fifth of the world population • The financial crises of 2008/09 shattered the world markets which had followed conventional financial wisdom, while allowing those practicing Islamic finance to prosper and make significant gains • As s result of the oil boom, many Muslim countries are becoming the most affluent consumers in the world • The level of foreign investment in Muslim countries is increasing • There is a movement towards forming a Muslim trading bloc • There is a strong push towards the Islamization of countries where Muslims are a majority through laying down clear Islamic code of conduct in all walks of life, including commerce This Photo by Unknown Author is licensed under CC BY-NC-ND

4. The Islamic Law, Shariah • Shariah is a religious law which governs the life of Muslims and which Muslims consider to be the embodiment of the will of God • Eating, drinking, socializing, buying, selling, promoting, manufacturing, education, and so on, have to comply with God’s rules are stated in the shariah law • The shariah shows either general or detailed instructions about what is permissible (Halal) what is not (Haram)

5. The Islamic Law, Shariah (cont.) Categories Description Example Halal 1) Wajib — obligatory acts. Failure to perform these is a sin Being honest and transparent 2) Mandoob (likeable) — preferable but not obligatory. Not performing Mandoob is not a sin Being helpful and going the extra mile 3) Makrooh (despised) — not preferable, discouraged by religion and usually seen as a last resort. Engaging in Makrooh acts does not result in a sin unless it leads to one Divorce Mushtabeh It acts that a Muslim should refrain from because it might be Haram themselves or it might lead to Haram. Haram All acts condemned explicitly or implicitly by the Islamic religion. Engaging in them or in activities leading to them is a sin. Pork products

6. Islamic Ethical System • The Islamic ethical system has four sources: 1) The Quran 2) The sayings and behavior of the Prophet Mohammad 3) The example set by his companions 4) Muslim scholars’ interpretations of these sources • The four sources provide an entire socioeconomic system that guides the behavior of Muslims • Islamic law includes detailed coverage of specific economic variables such as interest, taxation, circulation of wealth, fair trading, and consumption • Islamic law also covers business relationships between buyers and sellers, employers and employees, and lenders and borrowers This Photo by Unknown Author is licensed under CC BY-SA-NC

7. Islamic Ethical System (cont.) • Islam has introduced rules to control human desire for wealth and the propensity for greed in business • Business success is judged not in material terms but rather by the degree to which the Muslim is able to comply with God’s rules • Muslims prove their worth to God by behaving ethically in the face of temptation and hardship

8. Principles Governing Islamic Ethics • Unity • Iman (faith) • Khilafah (trusteeship) • Balance • Adl (justice) • Free will

9. Some Shariah Rules Governing Commerce • Buyers and sellers a) Rationality b) Ownership • Means a) Shariah-compliant finance b) Freedom • The option to see • The defects option • Products a) Shariah-compliant produces b) Ownership and delivery This Photo by Unknown Author is licensed under CC BY-SA-NC

10. Islamic Values in Business • Prohibition of bribery • Prohibition of fraud and cheating • Prohibition of discrimination • Greater social responsibility • Prohibition of interest • Prohibition of certain earnings • Prohibition of hoarding • Prohibition of extravagance and waste • Payment of zakat (alms) • Payment of charity • Cleanliness • Strength (Qowa) • Honesty (Amanah) • Self-monitoring This Photo by Unknown Author is licensed under CC BY

11. • Impressive size of the Muslim population translates into real economic figures, with some Muslim countries today being among the richest in the world by far. 1.4 billion Muslims live in economically feasible numbers almost all over the world, with very few countries reporting small Muslim minorities that are hard to capitalize on commercially • Businesspeople should try to deal with practicing Muslims for the following reasons: 1. Practicing Muslims seek ‘blessing’ before ‘profit’ 2. You are less likely to be cheated 3. You are more likely to get a better deal 4. In case of dispute you are likely to get off with less harm 5. You are more likely to be treated better 6. If you receive a gift from a Muslim or if they invite you to a meal or social activity, nothing will be expected in return The Biggest Unified Market in History and Implications for Business This Photo by Unknown Author is licensed under CC BY-SA-NC

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