Islam and Business Ethics
Different cultures and regions have a diverse range of business ethics. With increasing globalization, different business ethics continue to take on shared values and forms. Islam is a universal religion with its ethical business system based on values. It prescribes certain specific guidelines for business ethics, primarily determined by the concepts of halal (legal or permitted) and haram (illegal or prohibited) according to Islamic jurisprudence (fiqh).
What are Business Ethics
The term “business ethics” refers to the conduct that a business organization must adhere to in its relationships with the community, in its dealings with customers, and its internal affairs. The concept of business ethics is as old as the business itself.
Business Ethics in Islam
According to Islam, everything that leads to the good of a person or society is morally right, and everything harmful is ethically wrong. The ethical system prescribed in Islam is eternally divine and forms the basis of Islamic culture. Islamic ethics strongly urges its followers to protect their private and public life. A unique feature of the Islamic system of ethics is that it permeates all areas of human life.
Muslims have the great advantage that they can turn to their religious class for advice on how to do business. Faith in God is not only motivation but also the need to obey Sharia law, which is applied in all areas of life. For Muslims, moral conduct in daily life is part of their devotion. Explicit teaching provides a moral assurance and a set of standards that the entire community of believers must follow.
Islam forbids any company to trade in alcohol, drugs, gambling, or interests. Allah, in Surah Al-Baqarah verse No.275, stated that Those who devour usury would not stand except as stands one whom the Satan by his touch has driven to madness. It is because they say that trade is like usury, but Allah allowed trade and forbade usury. It gives the idea of investing in companies to distribute wealth, providing other people with equal opportunities to work and do business for profit by borrowing money, which not only limits wealth in one hand.
Holy Quran and life of Hazrat Muhammad (peace and blessings be upon him) prescribe the highest standards and ideals for other members of society with each other, as we now see these people as “stakeholders.” Today’s businesses are forced to follow an ethical path so that they can be best managed and organized according to modern rules and business ethics.
The entire history of Islam is based on absolute ethical values. These values are set out and emphasized in the Quran and are anchored in the statements of the Prophet Muhammad (PBUH). They were observed everywhere but were limited in time and place to serve the interests of a particular person, society, class, or territory. God has established that these values must be observed by all of humanity at all times to seek God’s pleasure and receive rewards in the next world