Ethics Teaching in Business School

1. Ethics Teaching in Business School The emerging corporate governance reforms have had a positive impact on academic programs. The goal of corporate governance and business ethics education is to teach students their responsibilities and accountability to their profession and society. Almost all states require Certified Public Accountant CPA candidates to pass an ethics exam before licensing and report the ethics component in their continuing education requirements. Almost all states require a minimum amount of ethics education for their practicing CPAs.

2. Ethics in Institutions of Higher Education Academic integrity and ethical conduct by students and faculty are important to the sustainable well-being and reputation of institutions of higher education. This academic integrity can be achieved when: (1) there is an effective and fairly enforceable academic honor code, (2) faculty are willing to take proper action against suspected cheaters, (3) adequate research is conducted to identify factors that affect academic integrity, including fundamental ethical values, (4) ethics are integrated into the business curriculum, and pedagogies are developed to teach and encourage adherence to ethical values and conducts.

3. Ethics from Islamic Perspective • Ethics, like other Islamic sciences, takes its origin form the Quran. The Quran lays down the foundation of a religious system on purely ethical principles, hence there is not much to distinguish between Islam as such and Islamic ethics. • The Muslims started the study of Ethics along with the study of the Quran. INCEIF 3

4. Cont. Ethics from Islamic Perspective • Ethics in Islam is nothing but the body of injunction laid down in the Quran for the practical conduct of life and fully exemplified in the practice of the Holy Prophet throughout his life. • Within an Islamic Context, the term most closely related to ethics is khuluqin the Quran which has been guided by principles from the Quran and the Sunnah.

5. The Quran reminded man of a number of basic moral and ethical values You are the best nation that has been raised up for mankind; You enjoin right conduct, forbid evil and believe in Allah. (3:110) كُنْتُمْ خَيْرَ أُمَّةٍ أُخْرِجَتْ لِلنَّاسِ تَأْمُرُونَ بِالْمَعْرُوفِ وَتَنْهَوْنَ عَنِ الْمُنْكَرِ وَتُؤْمِنُونَ بِاللَّهِ INCEIF 5

6. Cont. Ethics from Islamic Perspective The Quran addresses the Prophet. “Thou has been created with an excellent character” وانه لعلى خلق عظيم The Prophet highlighted one of his main objective is to perfecting good morals “I have been sent for the purpose of perfecting good morals”. بعثت لاتمم مكارم الاخلاق INCEIF 6

7. Code of Ethics of the Prophet (pbuh) • Islam consider the Prophet as an ideally perfect man, par excellence, in all aspects of life. • The Quran exhorts the believers to follow the rightly guided particularly the Prophet. • It is the desire of every pious Muslim to model his life in every possible particular upon that of the Prophet.

8. Cont. Code of Ethics of the Prophet (pbuh) • The Prophet (pbuh) always prayed in all humility to Allah to bestow on him the highest moral qualities and a generous character. • He was of exceeding humility and the greatest, the bravest, the justice and the most pious of men. • He mentioned that he was sent by Allah to set up the best standards of moral conduct as he himself demonstrated in by his own practice. • He exhorts his followers to be just and compassionate, to fear Allah, to be truthful, to fulfill their covenants, to avoid breach of trust, in return a trust duly, to be merciful to orphans, to be afraid of the Day of Judgment when everyone shall have to render full account of his actions.

9. Cont. Code of Ethics of the Prophet (pbuh) • To do good acts and avoid bad ones, to treat one’s neighbors well, to lead the power, to be kindly and generous in the daily intercourse of life and in carrying the mission of peace to mankind, to follow the just and the truthful. • He led an absolutely frugal and temperate life, subsisting on the simplest fare, consisting mainly of dates and barely. • He patched his won sandals and repaired his own clothes.

10. Cont. Code of Ethics of the Prophet (pbuh) • He meted out equal treatment to all, free or slave. • He gracefully bore with anything that annoyed him. • He had unbounded faith in Allah and never compromised with anything which he considered to be untrue, cunning or mean. • He visited and confronted the sick and the afflicted. • He was dignified in manner and in speech, and always the first of offer greeting.

11. Cont. Code of Ethics of the Prophet (pbuh) • He readily forgave people and endeavored to bring about peace between men. • He accepted invitation from the poor and the rich alike and had always a smiling look. • Pride and vanity did not touch him. • He was meek and tolerant while he was at the zenith of his power and treated his enemies and persecutors with compassion when they were laid low at his feet.

12. Al-Ghazzali’s Theory of Ethics(Worldview and Ethics) • The Psychological Nature of Man • Knowledge and Morality • The Freedom of the Will

13. The Psychological Nature of Man According to al-Ghazzali all psychological phenomena of Man originated in the Self, such as: - What is the nature of the Self? - What is the ultimate purpose of it? - Wherein lie its misery and Happiness?

14. Cont. The Psychological Nature of Man The self is the essence of man, al-Ghazzali divided the self into four: - Qalb (heart) - Ruh (Soul) - Nafs (desire-nature) - ‘Aql (intellect, reason)

15. Cont. The Psychological Nature of Man According to al-Ghazzali there are six powers included in the Self of man: • Appetite, • Anger, • Impulse, • Apprehension, • Intellect and • Will Appetite, anger and apprehension are common to man and animals. The self of man possesses two additional qualities which distinguish him from animals, and enable him to attain spiritual perfection which are the ‘Aql (intellect) and Irada (will).

16. Nature of Man has three Nafs (souls) • An -Nafs al -Mutma’inna (tranquil soul) when the ‘Aql has checked the evil tendency and subdued and harmonized the animal forces, its struggle in it ceases and harmony prevails. • An-Nafs an-Ammara (the instigating soul) when the evil tendency becomes stronger and stronger, continually inciting them to gratify themselves even at the expense of the good of the self. In this case it is the evil tendency at its strongest, instigating the animal forces to revolt. • An-Nafs al-Lawwama (the admonishing soul) when the divine element is continually struggling with the human evil tendency.

17. Knowledge and Morality • According to al-Ghazzali morality and good conduct are not possible without knowledge. • Knowledge results from the functioning of intellect of reason (‘aql) which is the innate rational faculty of man, the faculty which distinguishes him from animals. • Man occupies a position midway between animals and angles; and his distinguishing quality is knowledge. He can either rise to the level of the angels with the help of knowledge, or fall to the level of animals by letting his anger and lust dominate him. • It is, therefore knowledge which helps the growth of the divine element in him and makes possible the realization of the ideal.

18. The Freedom of the Will • Al-Ghazzali holds the fact that human character can be changed and improved certainty implies that man possesses some degree of free will. • Some people deny that human character is capable of improvement. (is it true?)

19. Cont. The Freedom of the Will • The progress that man changes from the state of an-Nafs al-Ammarah to the state of an-Nafs al-Mutma’inna through ordeals and pains clearly indicate that he is free in his will. • This freedom is not absolute, yet it is of paramount importance, for it is sufficient to effect the necessary change in human character.

20. According to Al-Ghazzali he divided mankind into four classes(1st Class) • There are some individuals whose character is yet unformed, who are lacking in the ability to distinguish between good and evil, between right and wrong. They are ignorant, lacking in reflection and self-consciousness, possessing no moral character, no will, and no belief. They have yet not wholly become slaves to the pleasures of the senses. • The character of such men can be improved easily. They need only a guide, a determination and a motive to help them follow the right path.

21. (2nd Class) • Some individuals in spite of being addicted to the indulgence of the lower appetites are, nevertheless, alive to their evil effects. They can discriminate between good and evil. Their consciousness if fully developed and they realize that the rational self is the only true self. Yet, they submit to the demands of their lower selves because they are not practiced in subjecting their actions to the power of their will. They have knowledge. They can be reformed, firstly by abandoning their habits, and secondly, by cultivating virtuous habits. • Such men are amenable to good influence, if they have the will to improve their character.

22. (3rd Class) • Some individuals are not only addicted to evil ways but also believe that those ways are good and to follow them is necessary. With regard to such people it can be said that the real nature of things has become obscured in their minds; consequently, the gratification of the lower self appears to them as the sole end of human life. They have been brought up in ignorance. Their animal self has grown at the expense of their rational self. It has completely suppressed it and rendered it ineffective. • To reform them is almost impossible.

23. (4th Class) • There are some who, in having been brought up in the way mentioned above, are proud of doing evil and of leading others astray. They take pride in doing so. • The improvement of such men is the hardest of all. Only a conversion through Diving power can bring about a radical change in their case. • It is about the third and the fourth types of men that the Holy Quran says (2:7) “God has set a seal upon their hearts and upon their hearing, and over their eyes is a covering, and there is a great chastisement for them” خَتَمَ اللَّهُ عَلَى قُلُوبِهِمْ وَعَلَى سَمْعِهِمْ وَعَلَى أَبْصَارِهِمْ غِشَاوَةٌ وَلَهُمْ عَذَابٌ عَظِيمٌ

24. Axioms Govern Islamic Ethics • Unity – related to the concept of tawhid or oneness of God, men are united under this concept • Equilibrium – related to the concept of ‘adl or justice. • Responsibility – accountability for one’s actions, • Free will – to a certain degree, man has been granted the free will to steer his won life as Allah’s Vicegerent/Khalifah on earth. • Benevolence/kindness/generosity.

25. Degrees of lawful and unlawful behavior in Islam In explaining the moral code of Islam, it is important to categorize the action according to the degree of lawfulness and unlawfulness as classified in fiqh to five categories; fard, mustahabb, mubah, makruh and haram.

26. 1. Fard It represents the class of actions that is mandatory on every Muslim, such as praying the five times a day, fasting the month of Ramadan, paying zakah and performing hajj.

27. 2. Mustahabb Describes the class of actions that are not obligatory but highly recommended to do. e.g. fasting beyond the month of Remadan, put perfume during Friday prayer, or praying nawafil etc.

28. 3. Mubah Actions are permissible in the sense they are specified neither as mandatory nor as forbidden. e.g. trading during hajj.

29. 4. Makruh Actions are not absolutely forbidden, but are detested.

30. 5. Haram Actions are unlawful and prohibited. Committing them is a major sin. e.g. murder, commit adultery, dealing with riba, drinking alcohol etc.

31. Norms and Moral Codes in Islam Islam asks its believers to observe certain norms and moral codes in; • dealings with relatives • with neighbours and friends; • in their business transactions; • in the market; • in their social affairs, • in all spheres of private and public life.

32. Code of Islamic Business Transaction • An Islamic market is characterized by certain norms that take care of the interests of both the buyer and the seller.   • In the market place, Islam demands a certain type of behaviour from the economic agents, the consumers and the producers. For examples:-

33. Code of Islamic Business Transaction • Keenness to Earn Legitimate (Halal) Earnings • Trade through Mutual Consent • Truthfulness in Business Transactions • Trustworthiness in Business Transactions • Generosity and Leniency in Business Transactions • Honouring and fulfilling Business Obligations • Fair Treatment of Workers • Dealing in Prohibited (Haram) Items

34. Cont. • Sale of Al-Gharar (Uncertainty, Risks, Speculation). • Arbitrarily Fixing the Prices. • Hoarding of Foodstuff. • Exploitation of one’s Ignorance of Market Conditions. • Cheating and Fraud in Business Transactions. • Swearing, Giving Short Measures and Dealing in Stolen Goods are not allowed in business.

35. Some examples from the Sunnah 'Urwa related from 'A'isha that Quraysh were concerned with the case of a Makhzumi woman who had stolen something and they said, "Who will speak to the Messenger of Allah, may Allah bless him and grant him peace, about her?" They said, "Who is bold enough to do it except Usama ibn Zayd, the beloved of the Messenger of Allah, may Allah bless him and grant him peace?" Usama spoke to him and the Messenger of Allah, may Allah bless him and grant him peace, said, "How can you intercede when it is a case of one of the legal punishments of Allah Almighty?" Then he stood up and spoke and said, "Those before you were destroyed because when a noble among them stole, they let him be, but when the weak among them stole, they carried out the legal punishment on them. By Allah, if Fatima the daughter of Muhammad were to steal, Muhammad would cut off her hand."

36. Cont. Examples from the Sunnah One of the servants of the Prophet (pbuh) who was killed in one of the battles, the companions said about him: Congratulations to him the certificate, O Messenger of Allah! The Messenger of Allah peace be upon him, said: (if you can see what I see you have seen his grave has been fueled by the fire, they said: Why, O Messenger?! Said: because he took Shamlah from the booty without the permission of the commander or distributor,

37. Cont. Examples from the Sunnah Caliph Omar bin al-Khattab came out one day to the market in an inspection tour. He saw fat camels which were distinguished from the rest of the camels, he asked: whose camels are these? They said: Ebel Abdullah bin Omar.He said: Abdullah ibn Umar ..بخ بخ.Squirt. O son of the faithful ..!! And sent for him, and when he stood between his hands he said to his son: What is this camels, O slave of God ..?He replied: It is my Ebel I bought them and sent them to the pasture to eat: then Caliph Omar reply(the people when they see it .. They said let Ebel the son of the Caliph to eat first and so become fat. So sell it and get its capital only.