It does, however, control, regulate and discipline them, so as to stop injustice and exploitation of any sort due to man's love of wealth and his desire to maximise his earnings and get rich overnight. This is understood to apply to money as well as to all other goods and services. Islamic perspective is more suitable in explaining ethics as it is comprehensive, moderate and realistic (al-Aidaros et al., 2013). 2981339) Islamic banking and finance can be described as a system through which finance is provided in the form of money in return for either equity or rights to share in future business profits, or in the form of goods and services delivered in return for a commitment to repay their value at a future date. The success of a trader depends on salesmanship, in order to achieve a quick turnover of whatever he has in stock. Islamic ethical values represent universal ethical values. 76 ... Islamic economic system) with a concept that exists in reality in different forms (the social market economy). As servants of God we are directed to perfect our spiritual existence. Although there has been a growing interest in business ethics with courses offered as an integral part of most MBA degrees, the ethics taught are essentially socially derived, relative and secularist rather than being based on religious moral authority. View Conceptandtheory-3.pdf from BANKING BWRR3063 at Universiti Utara Malaysia. It is often difficult enough to ensure that national laws are enforced in business, but business ethics, which promotes codes of good conduct over and above the legal minimum, lacks any enforcement mechanism, and instead relies on individual moral conscience. Justice, honesty, and public welfare are the pillars of Islamic business ethics. God has ordained that these values should be observed by the entire human race for all time, with the object of seeking God's pleasure and to earn a reward in the next world. All these facts lead to the conclusion that Islam does not allow unbridled freedom to traders to manipulate the supply, demand or price of the available goods. 20 [Special Issue – October 2012] 116 The Concept of Islamic Work Ethic: An Analysis of Some Salient Points in the Prophetic Tradition Assoc. Clearly ethics, as Syed Hasanuzzaman notes, should not be merely at the margins of business, imposing constraints, but rather at the heart of management decision-making, providing the motivation. Tawheed is different from monotheism. Thus both the source of the values and the objective in observing them prevent them being confined to any specific place or time. Education occupies … This objection fails to realise that the existing state of affairs is longstanding. These have not been examined by our scholars. EDUCATIONAL PHILOSOPHY ISLAMIC CONCEPT OF EDUCATION Islam has presented the concept of accountability of deeds in hereafter and the universal philosophy of life. 3 The Islamic banking transactions … 7. They have been universally observed, but constrained by temporal and spatial limitations in order to achieve the interest of some particular person, society, class or territory. In the eighth century, extensive contact with the Byzantine Empire led to a drive to translate … It imposes limits on ownership, possession and consumption. Islam does not castigate wealth or application to economic pursuits. The capitalist countries in the West, where ethics have been alien to business activity for some time, are not in search of a moral code for business. Over and above the activities on the academic plane, concerted efforts are also being made at national and international level to enlist the support of the largest number of academics, traders and communities. Firstly, the seminars and conferences remain academic exercises. However, this does … These business values, which have become firmly imbedded in businessmen's minds, cannot be replaced by mere legislation. Islamic philosophy lays … It is the religion of nature. To recognise these values as binding is a concomitant of true faith; to neglect them in practical life means a serious lapse these values are laid down and emphasised in the Qur'an and reinforced in the sayings of the Prophet Muhammad (may peace be upon him). Its function was to encourage and help people to observe Islamic tenets and rituals, and, in particular, to ensure and facilitate a healthy environment in public places, mainly shopping centres. A person who observes the basic values and abides by the guiding principles of trade, as laid down in the Qur'an and the Hadith, is deemed to be commendable in this world and in the Hereafter. The concept of Islamic Economics stems from the Holy Quran and Sunnah. The reaction against business malpractices was so strong that some thinkers tried to divest business of its primary object — earning a livelihood. With the requirement for strict observance of the elaborate system of values that Islam prescribes and with its negation of full freedom, the question is whether there is still any possibility of a market economy in an Islamic system. This website is for people of various faiths who seek to understand Islam and Muslims. The Compacts, the Declaration and the Principles all have many good points and need to be supported. A trader has to add all the incurred and accrued expenses to the wholesale price, in addition to a profit for himself/herself. Trust matters in business, and where there are shared religious values, this creates great opportunities for industry and commerce as analysts of Muslim history have observed from the time of Ibn Khaldun. The official organisation that was entrusted with the task of enjoining good and forbidding evil was the hisba (lit, accountability) headed by a muhtasib (monitor or ombudsman). The value system set forth in Islam does not accept any constraints, because of its source and the objective behind observing it. The Quranic Concept of War 1 JOSEPH C. MYERS “The universalism of Islam, in its all-embracing creed, is imposed on the believers as a continuous process of warfare, psychological and political, if not strictly military. In Islam confidential information is a trust and must be honoured, whether it be contractual or implied and understood. Copyright © 2021. He emphasises that Islamic ethics is not simply about justice in the legal sense, but ihsan, benevolence that transcends justice. Absolute justice is a legal requirement and, therefore, essential, but the Prophet, in line with the Qur'anic requirement, has persuaded his followers to behave magnanimously in claiming their rights and be generous in discharging their duty. . This has resulted in a proactive approach in the West to ensure more widespread awareness of ethical issues in business. No foreign foothold is possible anywhere without active local support. This is the basic concept of the Islamic legal philosophy. The abundance of MNCs is seen to be a stratagem to pave the way for economic imperialism by industrialised nations. Islamic finance to continue to evolve. A business activity as a worship will encourage a Muslim to become a successful entrepreneur in this world and the hereafter. Markets are seen as a legitimate institution for economic transactions, but regulation is needed to prevent fraud, hence the institution of the hisba, which provides ethical guidelines for monitoring and managing business transactions. Muslim philosophers both profess Islam and engage in a style of philosophy situated within the structure of the Arabic language and Islam, though not necessarily concerned with religious issues. Concept of Islam & Economics Islam encompasses the essence of economic well-being and development of Muslims at individual, familial, societal, state and Ummah levels. During the month of Ramadan we are required to reflect upon our condition in a society. . Marketing issues are considered in considerable depth, as it is in this area that some of the greatest abuses occur with misleading and inappropriate advertising and publicity material and pressurised selling that neglects the interests of the client. Paradoxically despite the decline in the influence of religion in the West, there has been a reaction by many to corporate excesses and the malpractices associated with capitalism. Islamic philosophy is a generic term that can be defined and used in different ways. As companies and corporates grow in size, their business needs will become more complex. They seem to believe in a kind of free-trade under which consumers are no more than a means of profiteering. published by the Institute of Islamic Banking and Insurance, London, UK 2003]. United Kingdom, Registered charity no. The Prophet has given to the seller the option to annul the sale if he finds that he was paid less than the market price in the off-market purchase made by brokers. “An Islamic bank is a financial institution whose status, rules and procedures expressly state commitment to the principle of Islamic Shariah and to the banning of the receipt and payment of interest on any of its operations.” Dr Shawki Ismail Shehta viewing the concept from perspective of an Islamic economy and the prospective role to be played by an Islamic bank therein opines … If we are advancing towards forming a world community, governments and businessmen should demonstrate feelings of mutual consideration and sympathy for the members of a human community who are the children of Adam and Eve, the family of God. In Islam, moral and social betterment transcends affluence in importance. Many question why the global economy appears so unjust, with huge income and wealth disparities and exploitation all too apparent. The emphasis that inheres in this value system is aimed at training the inner self of man, so as to motivate him to abandon selfishness in favour of social interests. BPMS1013 Theory & Practice of Islamic Business 1. We are also considered to be both the viceregent of God on earth and His servants. Concept of Ownership. The ideal economic standard for man that the Qur'an envisages is a contented life. Islam - Islam - Islamic philosophy: The origin and inspiration of philosophy in Islam are quite different from those of Islamic theology. By regulating the activities of intermediaries and brokers, he discouraged the manipulation of prices. Institute of Islamic Banking and Insurance Moral business is successful business, as although immorality can result in short term gains by taking advantage of others, in the longer term such business is unsustainable. Islamic teachings in the fields of mu[amalat, or transactions, prohibit selling a certain quantity of any present goods or service for a different (presumably larger) quantity of the same good or/and service delivered in the future. The papers at the Conference were edited and published in 1999. The first is the option on account of false description, where the seller has sold goods as possessed of some good quality. Belief in God provides not merely the motivation, but the imperative for adhering to shariah law, which is to be applied in all spheres of life. In addition to this objection, discussion of business ethics in the context of MNCs is susceptible to suspicion, especially in South East and Far East Asia, where people equate MNCs with the role played by The East India Company. It allows the free operation of market forces only for as long as one benefits without damaging others' interests. Downloadable! 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