ETHICS and ISLAMCHAPTER 1

What is ethic? (Is it right or wrong? WHY?)

Definition of ethics and business ethicsPhilosophy, concepts and principles of ethics in

IslamEthics and Social responsibilityImportance of Ethics and responsibility in Islam

CONTENT

Describe the philosophy, concepts and principles of Islamic ethics in business management

Evaluate any action whether it is ethical or not from the Islamic point of views

LEARNING OBJECTIVES

Definition of Ethicswhat is right and wrong (Velasquez, 2006)How to know the right from the wrong, good

from the bad?Raymond Baumhart asked more than 100 business people, “what does ethical mean to you? and their answers were: (1)50% what my feeling tell me is right, (2)25% what my religious beliefs tell me is right, (3)25% others …(laws, …etc).achieving competitive advantage through

business ethicsneed to set up ethical values and principles

that should be applied in every branch in the world

Ethics MoralityMorality and ethics have same roots, mores

which means manner and customs from the Latin and etos which means custom and habits from the Greek.

Robert Louden, Morality and Moral Theory

Ethics Moralityrules and standards individuals must have

a study that examines these rules and standards

(Newton, Hodges, & Keith, 2004; Rachels & Rachels, 1993; Velasquez, 2006)

used these two concepts

interchangeably

good rules and principles people must observe and

follow

SAME CONCEPT

(Ho, 2007; Jones, 1991; Thorne, 2000; Trevino, 1992)

Ethics and Business Ethics

Ethics

Islamic Business Ethicswhat is good or bad in the business world as long as

it’s consistent with Islamic principles

what is good or

bad, right or wrong

Islamic Ethics Business ethics

what is good or bad in the

Business world

what is good or bad based

on Islamic resources

Philosophy, Concepts & Principles of ethics in Islam

Business ethics is referring closely related to khuluq that mentioned in Quran.

“ Dan sesungguhnya engkau mempunyai akhlak yang amat mulia.”

Al-Qalam ; ayat 4describes the concept of goodness in every aspect

including businessProphet Muhammad (PBUH) was also known to

have engaged in entrepreneurial activities“9/10 of sources of rezeki (incomes) can be derived

from business activities”

Concept Of Goodness In Business

PHILOSOPHY

Islamic resources No prohibited element related to Iman (faith)

fundamental principle of "Ta'auanu ala birri wa't-taqwa” fairness in business

Prohibited business in Islamic wayMonopoly businessSpeculative business based on selfish

interest. Interest transactions.Transactions similar (in nature) to

gamblingMunabadhaالمنابذة and Mulamasaالمالمسة .

FIVE

AXIOMS

Unity: Concept of “tawhid”توحيد which means the totality of integrated existence in and outside of the Universe are the creation of AllahEquilibrium: Concept of “adl”عدل which means a sense of balance among the various kinds of human beings.Free will االختيار The ability of human : حريةbeings to act without external force.

Responsibilityالمسؤولية : The accountability of human beings for all their actionsBenevolence: Concept of “Ihsan”إحسان meaning an action carried out by a human being without the expectation of return or reward benefiting

Characteristics of Islamic ethics

ETHICS and SOCIAL RESPONSIBILITY Balance between what’s right and what’s profitable.

Management’s considerations are profit, consumer satisfaction, and societal well-being of equal value in evaluating the firm’s performance

Contributions should be to the overall economy, job opportunities, and charitable contributions and service

Three main social responsibilities: (1)People, (2)Developing the economic, (3)Environment

Examples of SOCIAL RESPONSIBILITY

Public Health Issues

Protecting the Environment.

Recycling

Developing the Quality of the WorkforceCorporate Philanthropy. GENERAL

PUBLICS

CUSTOMERThe Right to Be Safe

The Right to Be Informed

The Right to ChooseThe Right to Be Heard.

EMPLOYEESWorkplace Safety

Quality-of-Life Issues

Ensuring Equal Opportunity on the Job.

Age Discrimination

Sexual Harassment and Sexism

INVESTORmake profits

To be protectedEthical

IMPORTANCE OF ETHICS AND RESPONSIBILITY IN ISLAM

Practicing of people should seek ‘blessing’ before ‘profit’

To get a better deal and to get off with less harm

To help the community fighting the corruption in businessThe Prophet Muhammad explained the purpose

of his mission

Islamic main worships (Prayerصالة , Fastingصوم , Zakatزكاة, and hajjحج ) are designed to improve

and protect ethics

ReferencesAl-QuranRafik Essa Beekun, Islamic Business Ethics,

Herndon, Virginia, USA: The International Institute of Islamic Thought, 1997  

Al-Hasan Al-Aidaros, Faridahwati Mohd. Shamsudin, & Kamil Md. Idris (2013). Ethics and Ethical Theories from an Islamic perspective. International Journal of Islamic Thought, 4(1), 1-15.

Ethical Theories

Character CultureReligionActionCategory basis

Meaning

“Morally right” if “specific

society” accepts it

Utilitarian Theory- greatest good for greatest number

Egoism Theory-focus only on

your self

Deontology Theory (Kant’s

theory)

Virtue Ethics (Aristotle's

theory)

Divine Command

Theory

Relativism Theory

Consequences theories -the

right action is the one that produces the most benefit

Duty is the basic moral category,

and that is independent of consequences

Follow religious beliefs and principles

What kind of person should

we be?

What kind of actions should we perform?