1

Book Scan

Title Author Publisher Year of publication

: : : :

Islam And Business Ethics S. M. Hasanuzzaman Institute of Islamic Banking and Insurance, London 2003

Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

Book Review

Ethics may be defined as the set of moral principles that distinguish what is right from what is wrong. Ethics form a critical opinion of human practices by calling upon moral standards. Ethics provides prescriptive advice on how individuals should act under different circumstances. Along with the effects of modernisation and globalisation, human interaction becomes less personal and more indirect. This calls for the need to reaffirm ethical values. With many ethical scandals that arise involving big corporations and the public, greater precautions are taken to avoid ethical mishaps. Previously, business ethics in general, follows through certain normative discipline, whereby particular standards of DOs and DONTs are formulated then applied. It determines what ought to be done under specific circumstances. However, the flaw surfaces when individuals are faced with complex turns of events, which complicates and confuses ones ethical boundaries. This is why a great number of business organisations are now adapting the prescriptive aspect of ethics.

Today, business ethics is taken on more seriously by companies, small or large. Business ethics examines the moral duties and responsibilities that apply to anybody that is engaged in commerce. The growing interest in business ethics have encouraged the writings of many books that conceptualise in business ethics. Many scholars, sociologists and leaders have taken on different perspectives on the ethics system. Six ethics systems that dominate contemporary ethical thinking are: 1) relativism, whereby ethical decisions are made on the basis of self-interest and needs; 2) utilitarianism, in which an action is justified as ethical if it results in the greatest benefit for the largest number of people; 3) universalism, which states that similar decisions should be made by everyone under similar circumstances; 4) rights, in which ethical decisions stress a single value, liberty, and are based on individual rights
Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

ensuring freedom of choice; 5) distributive justice, which ensure an equitable distribution o0f wealth and benefits; and 6) eternal law, whereby ethical decisions are made on the basis of eternal law revealed in the scriptures. However, some systems are secular models that are short-lived because the moral codes are based on their human founders. The values and virtues are constrained by temporal and spatial limitations in order to fulfil specific interests of some particular person, society, class or territory. many of these propose a system of ethics disassociated from religion.

Islamic business ethics lays down an ethics system that complements contemporary ethical values, therefore providing a system of greater scope on the field of ethics. It does not leave gaps for any situational constraints or limitations because the Quran, as revealed by the Most Mighty God and conveyed by the Prophet Muhammad (peace be upon him) places the highest emphasis on ethical values in all aspects of human life. Islamic business ethics are far-reaching and comprehensive. In Islam, moral conduct in a Muslims daily life is part of their devotion. This explains the innumerable writings regarding business ethics built on the fundamentals of Islam. However, Islamic literature on business ethics has been all too meagre to date. Most of the literatures do provide ethical guidelines yet most are too general to be applied in the corporate governance of our world today. One of the very few present-day literature written about Islamic business ethics is the book by Dr. Syed Hasanuzzaman (2003), entitled Islam and Business Ethics.

Dr Syed Hasanuzzaman is an internationally renowned Islamic Economist and is a recipient of the Islamic Development Bank Awards. He takes the position as head of research in Islamic Economics in the State Bank of Pakistan. Dr Syed Hasanuzzaman has contributed to

Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

the contemporary Islamic literature and have published several papers in reputable academic journals.

In his book Islam and Business Ethics, Dr Hasanuzzaman (2003) stresses how Islamic ethical values are not a replacement for universal values and virtues, but rather combine to build a complete force by stressing justice and equity, honesty, integrity, veracity, leniency, compassion, tolerance, selflessness, benevolence, cooperation, mutual consideration, sacrifice, harmlessness and hospitality. One cannot be a true Muslim unless one adheres to and observe these values at all times, the field of business being no exception. Dr Hasanuzzaman(2003) commented that as times change with the rapid development in business and trade, even Muslims fail to recognise and live by the values laid down by the Quran and reinforced by the Prophet Muhammad (may peace be upon him). When we do not abide by the guiding principle of the Holy Quran and the Hadith, we fall short of being commendable in this world and in the Hereafter. The author also supposes that as humans, our efforts to seek self-interest have pushed us into the abyss of immorality, where we disregard the values as dictated by the divine guidance and also dismiss universal ethical decisions.

The structure of the entire Islamic way of life is built upon absolute ethical values. Thus, ethics must be completely embedded with every occurrence in a Muslims life. With these, Dr Hasanuzzaman urges us to reaffirm our faith. Moreover, he illustrates how to address the moral issues that have emerged and apply Islamic principles to these dilemmas so at the same time, maintaining to seek Gods pleasure and earn rewards in the next world.

Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

The author have made Islam and Business Ethics an enlightening read as he incorporates Quranic verses into his explanations, and of course the Prophets precepts from the Hadith.

In the book Dr Hasanuzzaman (2003) starts off by reflecting on the natural instincts of human beings. With a manifestation of the mind and the will of God, he asserts that within us, human beings, is the instinct to work hard, organise our economic activities efficiently and profitably, and discover new methods of exploiting resources, multiplying wealth and organising expenditure in the most economical manner. This instinct provides our

motivation. Different from other religions such as Christianity, Islam does not castigate wealth. As the author puts it, Islam recognises the significance of wealth as an adornment of this worldly life and enjoyment of Gods blessings. If our instinctive motivations are properly managed, an ideal system in the economy can be achieved, hence providing a basis of a welfare society. Contrariwise, if we let lose our instinctive motivation, and give little or no attention to proper checks and balances, a society of injustice and exploitation would prevail. I find interest in Dr Hasanuzzaman (2003) discussion about the human quality of ungratefulness. The reflections from the Holy Book, one of which is Truly man is, to His Lord, ungrateful (100:6) truly laments human perfidy in relation to God. I see this most applicable to the period that we are experiencing today - a period of globalisation of the market, rapid developments in information and communication, and growth of multinational corporations. Amidst innumerable human accomplishments, many of us forget to be thankful but instead ignore the fact that in everything that we achieve, we remain indebted to God the Almighty. Another saying of the Prophet (may peace be upon him) is that One who is not grateful to the people is also not grateful to his Lord. Our self-centredness and disregard for others interests are indeed instinctive human traits. However, we do not see the evil of
Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

seeking our own interest at the expense of others, and we do not even feel sorry although we have put others at a disadvantage in a means of attaining our high ideals. Dr Hasanuzzaman (2003) states that unbridled human instincts coupled with the doctrine of free enterprise and an absolutely free market mechanism would sooner or later, only result to an economy slipping into a state of extreme confusion and disorder. Yet again, the concept of free market and enterprise are prevalent in many countries, especially in the West, because of certain economic grounds which are also fairly reasonable. This is why faith is needed to run counter to a likely state of ethical chaos. A firm faith in Islam, as Hasanuzzaman (2003) have explained, provides guidance to an individual which allow that individual management to harness his human instinct and turn it away from immorality and indecency in pursuit of its business objectives. In addition to a strong belief in The Omniscient God, Islam, which holds Muslims accountable in the hereafter and lays down a concept of rewards and punishment, empowers believers to remain within the limits prescribed by God and His Prophet. Thus, business laws and regulations need act only as secondary support to maintain ethical dealings. Coming back to the concept of wealth, Dr Hasanuzzaman (2003) made clear that while the Quran does not disapprove of acquiring wealth, it does require that affluence not be allowed to breed vice. Feelings of niggardness, unwillingness to give and spend, and conceitedness that develops from wealth is not allowed in Islam. On different occasions, The Prophet (may peace be upon him) is reported to have warned his people of abundance of wealth with the remark that wealth would turn away their attention from nobler objectives. In the book, Hasanuzzaman have quoted several Quranic verses that command restrictions on the ownership and use of resources and policies for consumption and investment, so as to prevent wealth from degenerating into evil.

Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

Dr Hasanuzzaman have also reaffirmed that in Islam, the laissez-faire concept, which is claimed in many of the worlds market today, is only acceptable with qualifications. The author has reminded man that the Creator is the real and absolute Owner of the universe and of mankind too. A verse from the Holy Book stresses that Unto God belongs whatsoever is in the heavens and whatsoever is in the earth. And We charged those who received the Scripture before you, and you that you keep your duty towards God. And if you disbelieve, lo! Unto God belongs whatsoever is in the heavens and whatsoever is in the Earth, and God is ever Absolute, Owner of Praise (4:131). Clearly, this implies that we should submit to Gods values and obey the prescriptions as forwarded by His messengers. For we are His viceroys on Earth, our actions are not based on absolute freedom and rather, restricted within limits revealed by the Creator. The author reasons out that the value-free system in the free market practice fail to direct attention to the core of business ethics which is values. Hence, Dr Hasanuzzaman (2003) reproduced Quranic verses pertaining to different economic activities and the Prophets sayings relevant to business transactions. The author classified the verses and sayings according to the ethical values that can be derived from them and subheaded them into values about production, consumption, distribution, exchange and ethical norms in general. Within the injunctions are mentions of what is defined as halal and what is defined as haram, and the economic pursuits separated into those that is positive and those that need be disapproved and condemned by a Muslim individual. Dr Hasanuzzaman(2003) have added more ethical guidelines that the Prophet (may peace be upon him) have laid down, especially for persons who are responsible for creating corporate ethics, and have put them into classes of moral discipline, on honesty and trust, on mutual consideration and miscellaneous sayings . These values that are conveyed in the Quran and in the Prophets sayings address individuals to train his inner self and hence, abandon selfishness in favour of self
Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

interests, though the actions they prescribe do affect the individuals relationship with others, too. Dr Hasanuzzaman(2003) have successfully identified the underlying substances hidden within the mention of land and sea trade, livestock-rearing, hunting and other activities that made up life during the time the Quran was revealed, and applied the above verses and sayings into the contemporary business setting. His discussion have shed light on ethical guidelines in production and trade, employer-employee relations, reinvestment policies, loans, whistle-blowing, etc. It is admirable how Dr Hasanuzzaman (2003) said that the insoluble dilemma is not about the difficulty to stick to ethical values, but instead, the dilemma arises when ethical requirements conflict with legal requirements. The most important values that he discussed were benevolence (ihsan) and justice (adl). The absence of benevolence (ihsan) will not disturb peacefulness. Even so, the attitude of benevolence (ihsan) enjoys a significant position in the Islamic framework because it decorates the society with generosity, kindness, mercy, forgiveness, self-sacrifice, mutual cooperation and affection. On the other hand, without justice (adl), balance and harmony would fail to exist. A cite from the book states that: It is the value of justice that maintains the entire creation (3:18), and the same value is required in legal (4:58, 135; 5.8, 106-110; 7:29, 16:90; 49:9), social ( 2:282; 4:3, 127, 129), moral (4:129; 5:8, 106; 6:153), and economic (4:158, 135; 6:153; 11:85; 16:90; 55:7-10; 57-25), dealings. The book stresses that the concept of justice (adl) and equity ( qist) must form the backbone in all economic policies and planning. Dr Hasanuzzaman (2003) articulates on a verse (4:145) the Quran and the Hadith expresses that, economic policies which protect and benefit the rich at the expense of the poor be
Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

disapproved, and, on the other hand, policies that take care only of the poor by dismissing the interest of the well-to-do be not allowed. Hence, the concept of justice (adl) states that a well-balanced policy must be devised so as to accommodate the interest of all the economic classes in the society. The author purported that maintenance of justice is crucial for the management of companies and corporations. Because multiple individuals are involved and employed in big businesses, decisions must be made based on merit and qualifications. As for small enterprises, benevolence generosity, courtesy and personal loyalty, have a weight. Nevertheless, it is still important that the management of corporation use its conscience to solve dilemmas in such a way that justice and fairness are not sacrificed. Next, Dr Hasanuzzaman talks about the market mechanism which Islam visualizes. The author asserts that Islam permits the free market operations only to the extent that an individual benefits without him taking advantage or damaging other peoples interests. Again, with messages from the Quran and prescriptions from the Hadith, accompanied by narrations regarding the Prophet (may peace be upon him) and the events that turned out during The Prophets time, Dr Hasanuzzaman illustrates the Islamic attitude that should be followed when regulating the supply, the demand and the manipulations in price. In Islam, buyers and sellers are indeed motivated to satisfy their personal preferences, which in the case of business is profit-maximisation. Islamic governance in commerce plays the role of ensuring that business transactions are carried out with the best of skills, ability and fairness. The book also deals with the issues that have attracted much attention from skeptics in the contemporary corporate world marketing. Marketing involves the commercial processes of goods and services, which include advertisement and publicity, salesmanship, pricing, corporate motives, and consumer satisfaction. Dr Hasanuzzaman (2003) provide illustrations
Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

10

and explains the Islamic position for each of the points. For instance, advertisement and publicity is regarded as helpful in introducing people to new products and services. However, advertising practices should be condoned when they infatuate and mislead people because by then, advertising is confining to falsity and deceit. The Prophet (may peace be upon him) have warned Muslims thus: Beware of frequent oaths. This may result in a quick turnover, but take away blessing and grace. Furthermore, Dr Hasanuzzaman (2003) articulates on the environmental issues associated with the industrial era. He evaluated the factors that gave rise to the problems in the environment within all the industrial societies, and listed the major environmental hazards industrial and agricultural chemicals, gaseous emissions from industries and power houses, highly reactive materials that react with air and water, causing explosion and emission of toxic wastes, corrosive materials, infectious hospital wastes, radioactive materials, etc. The author stated that these factors are not the only environmental hazards and that a lot more chemicals that contribute to environmental pollution. Even peoples awareness to the matter had only been a recent development, and many still continue in carrying out immoral ways of toxic waste disposal. The author realizes the need for greater consciousness among all nations on environmental issues. It is wise of the author to notice that because the environment did not have problems in the primitive society as we are having now, the Quran does not provide direct reference to the issue of pollution. So, analyzing the problems of the environment, Dr Hasanuzzaman have put forward six legal maxims that have been expanded by jurists from a decree made by The Prophet (may peace be upon him) Harm and counter-harm are not allowed. Overall, the maxims laid down rules that states thus: A harmful act is prohibited. If such an act has already been committed in the past, it would not be allowed to continue. If the harmful act has also benefits which outweigh the harm, the element of harm will be eliminated in such a
Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

11

way that this elimination does not cause a bigger harm or an equivalent harm. An attempt should be made to confine or reduce the repercussions of harm. This implies that acts which are harmful and does not provide any social benefits should be discouraged. Dr Hasanuzzaman (2003) also examines the issue of controlling environmental pollution in a way which is compatible with the Islamic logic. He urges business units to cooperate with government authorities to ensure a clean environment by organising recycling facilities. In his discussion includes a verse that reports what The Prophet (may peace be upon him) have said: Removal of a harmful object from the path is a virtuous act (sadaqa). The author asserts that according to the Quran, the duty of a Muslim is to tell the others of the maintenance of good conduct and forbid them to indulge in misconduct. Dr Hasanuzzaman (2003) argues that the sustenance of ethical values that the Quran and the Prophet (may peace be upon him) have established depends on the strength of our belief in God, and in the concepts of Resurrection and in Reward and Punishment. Nevertheless, every aspect of an ethical conduct must not only come from within an individual character, rather external admonishing is needed, too. The author clarifies that the sense of good (maruf) and bad (munkar) are very much touched upon by the Quran and the Prophet (may peace be upon him), yet of course, many activities and procedures have developed through time. Because peoples perceptions evolve through time, in order for the new events to be defined as good (maruf) or bad (munkar), a monitor must be appointed to encourage and help people to observe Islamic doctrines and facilitate a healthy environment. That monitor must be in good character and have a sound judgement himself, so that others would feel a sense of accountability towards him and the social system would have a check on its quality, honesty and reliability, professional competence, sanitation, decency and good manners, and many more.

Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

12

Lastly, Dr Hasanuzzaman (2003) puts forward arguments on the reform in business practices in the Western countries. He proposes a metamorphosis of business attitudes from the selfreliant individualism towards one that is binding with theological and moral principles. Dr Hasanuzzaman (2003) tells that business is part of economics which is in turn a part of life. Hence, if we could not bring about values in our attitude, and concept of life, what more could we change in the values of economics? The ethical values that we desire be embedded in the whole of the corporate world must start from the small moral deeds that we make. The author suggests that the reforms made in the Western policies, proposed by academicians are, to the least, vested for the good of the society. However, despite much deliberation from economic experts, many procedures fall short of one thing Divine Guidance. Guidance, with emphasis to the Quran and the Hadith, or the Sunnah, is an essential part of ones life, which in turn influences the morals and integrity of the society as a whole. A change emerging from the Inner Self is more reliable and lasting than piecemeal changes. The message conveyed by Dr. Hasanuzzaman (2003) resonates with me. The book Islam and Business Ethics should appeal not only to Muslim readers alone, but also to anyone who is concerned with both corporate governance and ethical practices. Those who desire to rediscover the powerful human character that God has showered us with, and realize the great things that we could achieve if we harness our blessings in the right way, should find the read enlightening.

Madison Sheena Nazareno Vejerano MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam