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Islamic Business Ethics

Islamic Business Ethics

Ahsan Hameed (Date: 02.06.2014)

The role of business ethics is important in developing the culture of an organization.  The Beekun (1996) defines the ethics as, “set of moral principles that distinguish what is right from what is wrong”. The Islamic ethical system of business ethics is different from the secular system, as it represents the “Civilization of Islam” (Abbasi, Mir and Hussain, 2011). The increasing dynamism and complexity of current business environment puts the Islamic business men and enterprises into the dilemma of right and wrong business practices according to Islamic work ethics. The Islamic business ethics provide the framework for business for guiding them in operating ethically and also developing culture in the accordance of Islamic imperatives (Abeng, 1997). There are three kinds of factors, such as legal interpretations, organizational factors and individual factors, affecting ethical framework of business in accordance with Islamic implications (Beekun, 1996). There are many Islamic work ethics, presented by scholars and experts to be used in Muslim countries.

The Abeng (1997) presents seven important principles of Islamic ethics for achieving business growth. The business can achieve growth in accordance with Islamic ways through considering the importance of; (a) Activities of productive work and distribution of wealth, (b) Vocation of trade, (c) Mutual Consultation, (d) Motive of serving, (e) Leniency, (f) Principles of freedom and justice and (g) consciousness of Allah Almighty.  In considering the Islamic work ethics, Abeng (1997) presents the concept of Islamic leadership that is very important for developing the Islamic culture in an organization. An Islamic leadership is based upon three important elements such as, (a) Vision of achievable and highly productive standards, (b) Effective value system based upon fairness, freedom and justice and (c) Motivational Standards of trust in Allah, efficiency of working and courage to face tough decisions. The model of Islamic leadership is effective tool for running business productively and achieving growth according to Islamic ways.

The supports of Islamic work ethics states that the use of Islamic work ethics is having tremendous impact on business functions and performance. The Abbasi, Mir and Hussain (2011) elaborates the importance of Islamic work ethics through proven its impact towards organizational performance. According the research, the use of Islamic work ethics is having a great and positive impact on organizational learning, innovatioveness and performance of the organization. The Marri et al. (2012) states that the impact of Islamic work ethics is positive towards employee job satisfaction and organizational commitment that contributes to the overall performance of the organization.

The Ali and Al-Kazemi (2007) justifies the role of Islamic work ethics through presenting its research on organizations in Kuwait. The use of Islamic work ethics is having a positive impact on managerial orientation such as loyalty of managers. Further, the research is showing that the male managers are seeking great impact of Islamic work ethics on their job performance as compared to female managers. Other research by Ali and Al-Owaihan (2008) is showing the positive impact of Islamic work ethics of organizational commitment, organizational continuity, employee’s personal growth and employee social relations.  The findings of both research are showing that the use of Islamic work ethics is having fruitful benefits for managers, as they need to play vital role in enhancing employee’s organizational commitment, organizational continuity, personal growth and social relations.

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