in the name of allah, the most merciful, the most

8/14/2019 In the Name of Allah, The Most Merciful, The Most

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In the name of Allah, the

Most Merciful, the MostKind


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lights of Holy Quran and

HadithEthics is the set of moral principlesthat distinguish what is right fromwhat is wrong.

Business Ethics is the branch of

ethics that examines ethical rulesand principles within a commercialcontext; the various moral or ethical

problems that can arise in abusiness setting; and any special

duties or obligations that apply topersons engaged in commerce. Itmakes specific judgments aboutwhat is right or wrong, in other

words business ethics is concerned

with the study of what is good and


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For Islam, the basis of these laws is the HolyQuran,and they are amplified in the Hadith. Muslim wealthethics include avoidance of the exploitation ofpeople in need through lending them money atinterest (riba) and prohibitions against false

advertising; under Islamic law, if a vendor sells anitem by making false claims about it, the customerhas the right to have the transaction cancelled.

Islam gives complete freedom to economicenterprise. Each individual in an Islamic societyenjoys complete freedom in the earning of his

livelihood. He can start, manage and organize anykind of business enterprise within the limits set bythe Islamic Shariah. However, freedom does not andmust not operate without a sense of responsibility.

The dictates of the Holy Quran and the teachings ofthe Prophet (s.w.s) serve to set a scale in

everybodys mind to distinguish between the lawfuland the unlawful means of earning, and to prohibitor disapprove of all things that are either morallywrong or socially unacceptable. Islam puts certainrestraints in order to Eliminate the incidence ofinjustice and check malpractices and unlawful

operations.


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During the early centuries of Islam, this function wasmainly performed by the institution ofMuhasbah(headed by a Muhtasib or market inspector). Theinstitution ofMuhasbah was an important institutionwhose functions were broad-based and multifarious,

chief among them being keeping a watch on theharmful practices prevalent in the market and thesociety and checking the incidence of injustice andmalpractices in the market


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Business Ethics in IslamIslam places the highest emphasis on ethical values inall aspects of human life. In Islam, ethics governs allaspects of life. Ethical norms and moral codesdiscernable from the verses of the Holy Quran and the

teachings of the Prophet (s.w.s) are numerous, farreaching and comprehensive, Islamic teachings stronglystress the observance of ethical and moral code inhuman behaviour.

Moral principles and codes of ethics are repeatedlystressed throughout the Holy Quran. Besides, there are

numerous teachings of the Prophet (s.w.s) which coverthe area of moral and ethical values and principles.

Says the Holy Quran:

You are the best nation that has been raised upfor mankind; You enjoin right conduct, forbid eviland believe in Allah. (3:110)

The Prophet (s.w.s) also says:I have been sent for the purpose of perfectinggood morals. (Ibn Hambal)


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According to the Islamic teachings, Muslims have tojealously guard their behaviour, deeds, words,thoughts, feelings and intentions. Islam asks its

believers to observe certain norms and moral codes intheir family affairs; in dealings with relatives, withneighbors and friends; in their business transactions; intheir social affairs, nay in all spheres of private andpublic life.

There are a number of rules of ethical discipline in

Islamic commercial transactions without which businesscontract would be regarded as lacking perfection in thelight of the code of good manners, decency and ethicalexcellence. Some of these tenets are as follows:

Keenness to Earn Legitimate ( Halal ) EarningsIslam places great emphasis on the code of lawful andunlawful in business transactions. Many Quranic versesdisapprove the wrongful taking of the property.


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Says the Holy Quran:

Do not devour one anothers property wrongfully, nor throwit before the judges in order to devour a portion of othersproperty sinfully and knowingly. (2:188)

Do not devour anothers property wrongfully unless it beby trade based on mutual consent. (4:29)


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The Prophet (s.w.s) endorsed the importance of legitimateways of earning in the following words:

Asked what form of gain is the best? [the Prophet]said, A mans work with his hands, and every

legitimate sale. (Ahmad, No: 1576)Leave what makes you doubt for things that do notmake you doubt. (Tirmidhi, No: 2442)

A true Muslim businessman should be wary of the doubtfulthings in order to keep himself clear in regard to his faith

and his honour because one who falls into doubtful mattersis sure to fall into that which is unlawful.

Trade through Mutual Consent

Mutual consent between the parties is a necessarycondition for the validity of a business transaction. A sale

under coercion is not acceptable in Islam. A sale transactionis to be regarded as legal only if it is made through themutual consent of the parties concerned.

Th H l Q


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The Holy Quran says:O you who believe! eat not up your

property among yourselves in vanities: butlet there be amongst you traffic and tradeby mutual goodwill: nor kill [or destroy]yourselves: for verilyAllah has been to you Most Merciful (4:29)The Prophet (s.w.s) is reported to have said:

A sale is a sale only if it is made through

mutual consent (Ibn Majah, No: 2176) Truthfulness in Business TransactionsIslam encourages truthfulness in businesstransactions and raises the status of a truthfulmerchant so much so that he will be at par with

the holy warriors and martyrs, in the Hereafter.The Prophet (s.w.s) is reported to have said:The truthful merchant [is rewarded bybeing ranked] on the Day of Resurrectionwith prophets, veracious souls, martyrs and

pious people (Tirmidhi, No: 1130)


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The Prophet (s.w.s) has also exhorted thebelievers to strictly adhere to truthfulness inbusiness transactions. He says:

The seller and the buyer have the right tokeep or return the goods as long as theyhave not parted or till they part; and if boththe parties spoke the truth and describedthe defects and qualities [of the goods],

then they would be blessed in theirtransaction, and if they told lies or hidsomething, then the blessings of theirtransaction would be lost. (Bukhari, No:

1937) The tradition implies that Allah blesses

business dealings if both the buyer and theseller are true to each other. Telling liesand hiding facts will result in the loss ofdivine blessing. A tradition reads.


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The Holy Prophet said: Traders are wicked people. TheCompanions asked: O Messenger, has Allah not permittedbusiness? The Messenger replied: Of course He hasdeclared trading lawful. But they (i.e. the traders) will

swear by Allah and do evil, they will not speak but tell lies.(Ahmad, No: 14982)

Trustworthiness in Business Transactions:

Trustworthiness is one of the most importantprinciples of ethical discipline in commercial

transactions. Trust is a moral virtue and dutyincumbent on a Muslim in the performance of hisaffairs. It demands sincerity in work and purity ofintention from every believer. A true Muslimtrader will not, therefore, barter his Akhirah

(hereafter) for worldly gains. He will avoid fraud,deception, and other dubious means in selling hismerchandise.

S th H lS th H l Q Q


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Says the HolySays the Holy QuranQuran::

O you believers! Do not betray Allah and theO you believers! Do not betray Allah and theMessenger, nor knowingly, betray your trusts.Messenger, nor knowingly, betray your trusts.

Generosity and Leniency in BusinessGenerosity and Leniency in Business

TransactionsTransactionsOne should be lenient and generous in bargaining.One should be lenient and generous in bargaining.Therefore, whoever demands his debt back from theTherefore, whoever demands his debt back from thedebtor should do so in a decent manner.debtor should do so in a decent manner.

The Prophet (s.w.s) invokes Allahs mercy thus:The Prophet (s.w.s) invokes Allahs mercy thus:

May Allahs mercy be on him who is lenient in hisMay Allahs mercy be on him who is lenient in hisbuying, selling, and in demanding back his moneybuying, selling, and in demanding back his money[or debts] (Bukhari, No: 1934)[or debts] (Bukhari, No: 1934)

Honouring and fulfilling Business ObligationsHonouring and fulfilling Business Obligations

Islam attaches great importance to the fulfillment ofIslam attaches great importance to the fulfillment ofcontract and promises. Islamic teachings require acontract and promises. Islamic teachings require aMuslim trader to keep up his trusts, promises andMuslim trader to keep up his trusts, promises andcontracts. The basic principles of truth, honesty, integritycontracts. The basic principles of truth, honesty, integrityand trust are involved in all business dealings.and trust are involved in all business dealings.

The HolyThe Holy QuranQuran emphasizes the moral obligation to fulfilemphasizes the moral obligation to fulfil

ones contracts and undertakings.ones contracts and undertakings.


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Dealing in Prohibited (Dealing in Prohibited ( HaramHaram ) Items) Items

Dealing in unlawful items such as carrion (dead meat),Dealing in unlawful items such as carrion (dead meat),pigs and idols is strongly prohibited in Islam. Deadpigs and idols is strongly prohibited in Islam. Deadmeat would mean the flesh of any bird or animal deadmeat would mean the flesh of any bird or animal dead

from natural causes, without being properlyfrom natural causes, without being properlyslaughtered in an Islamic way. It is, therefore, notslaughtered in an Islamic way. It is, therefore, notpermissible for a Muslim to trade in dead meat.permissible for a Muslim to trade in dead meat.Likewise, trading in pork or intoxicants and sale ofLikewise, trading in pork or intoxicants and sale ofidols and statues is not permitted in Islam.idols and statues is not permitted in Islam.

A verse of the HolyA verse of the Holy QuranQuran says:says:

Forbidden to you [for food] are: dead meat, theForbidden to you [for food] are: dead meat, theblood, the flesh of swine and that on whichblood, the flesh of swine and that on whichname of other than Allah has been mentioned.name of other than Allah has been mentioned.(5:1)(5:1)

The Prophet (s.w.s) is also reported to have said;The Prophet (s.w.s) is also reported to have said;

Allah and His Messenger made illegal the tradeAllah and His Messenger made illegal the tradeof alcoholic liquors, dead animals, pigs andof alcoholic liquors, dead animals, pigs andidols. (Bukhari, No: 2082)idols. (Bukhari, No: 2082)

The Prophet (s.w.s) also said;The Prophet (s.w.s) also said;

If Allah makes something unlawful, he makesIf Allah makes something unlawful, he makes

its price also unlawful. (Ahmad, No: 2546)its price also unlawful. (Ahmad, No: 2546)


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Conclusion: In modern times business ethics has become a major

topic of discussion among business communities and

other related organizations. Each and every society hasevolved ethical and moral codes of conduct for business

transactions.

The Islamic ethical codes are humane. They are good for

all times and absolute. Ethical and moral codes in Islamare part of the overall Islamic faith and observing them

will not only lead to a happy state of affairs in this world

but also holds the promise of manifold returns in the

thereafter. Islamic ethical and moral codes thus create asense of responsibility and accountability in the minds of

the believers, be they buyers or sellers.


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THE ENDTHE END

in the name of allah, the most merciful, the most

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