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5 Islamic Principles for Business

5 Islamic Principles for Business

Islam has given guidance for every part of life. Every guidance has some underlying benefit and moral value. Business is no exception. Islam gives us an entire framework to conduct business in a just, fair and ethical manner. These teachings are not solely for Muslims, everyone who believes in fair trading and moral values is encouraged to
adhere and promote these principles.

1. SELL LAWFUL ITEMS
A business should trade only that which is lawful. Items such as alcohol, tobacco, pork, pornographic material and services, interest based debts should not be traded. The data exhibiting the harms of each to oneself, the society, the economy and taxpayers’ is easily accessible. The harms of continuous alcohol consumption to the body is known to all. Smoking causes cancer, heart disease, stroke, lung diseases and many other severe illnesses. These are just two case studies, but whatever unlawful items in Islam are known to cause harm to individuals and the society physiologically, economically, psychologically, morally and spiritually.

2. HONESTY
Islam has strong guidance on being honest and upholding integrity in all walks of life. However, there is an extra
emphasis of upholding honesty and integrity in business as the stakes are higher. Due to the information asymmetry between the vendor and buyer, trust plays a big role.
The Prophet, peace and blessings be upon him, said, “The honest and trustworthy merchant will be with the prophets, the truthful, and the martyrs.” [Source: Sunan al-Tirmidhi]

3. GOOD TREATMENT OF STAFF
A fundamental rule of Islamic business is the good treatment and timely payments to employees. The Prophet (peace be upon him said) said: “Give the worker his wage before his sweat dries.” [Ibn Majah] In another statement, the Prophet said: “Whoever employs someone to work for him, he must specify for him his wage in advance.” [Musannaf ‘Abdur-Razzaq]

Almighty God states: “O you who have believed, fulfil your contractual obligations.” [Quran 5:1] This verse highlights the importance of both parties abiding by their side of the bargain.

On one occasion, the Prophet reports that God said: “I will be the opponent to three types of people on the Day of  Judgment:…and one who hires staff, takes full work from them and does not pay them their wages.” [Sahih alBukhari]

Beyond just timely payments, staff should be served well. Studies have shown that if employees are treated well, it results in:
• Increased productivity and employee loyalty, which ultimately leads to more production, growth and profits.
• Stronger customer relationships
• Less sick days and hence, less opportunity costs
• Higher employee retention and a low staff turnover rate
• A greater pool of talent to select for your workforce

4. NO DECEPTION OR FRAUD
Valuing the counterparty and upholding their integrity is a key principle of Islamic business. Deception and fraudulent behaviour are completely prohibited. This principle ensures that we not only be honourable in our transactions, but we value and respect the people we trade with too.

God says: “O you who have believed, do not consume one another’s wealth unjustly but only [in lawful] business
by mutual consent.” [Quran 4:29]

The Prophetic narration states:

“Whoever cheats us, is not one of us.” [Sahih Muslim]

According to another report, the Prophet (peace be upon him) passed by a pile of food in the market. He put his hand inside it and felt dampness, although the surface was dry. He said:

“O owner of the food, what is this?’

The man said, ‘It was damaged by rain, O Messenger of God.’

He said, ‘Why did you not put the rain-damaged food on top so that people could see it! Whoever cheats us is not
one of us.” [Sahih Muslim]

5. CHARITY
The Prophet advised traders and businesses to give charity. He said:

“O Businessmen, transactions carry lies and false oaths, so add charitable giving to your businesses [to mitigate
wrongdoing].” [al-Nasa’i]

Charity in this sense does not only mean monetary payments to the needy and poor, but charity is also committing to climate change, trying to minimise waste and adopting a zero-waste economic model. Charity also encompasses caring for the ocean and the blue economy, being concerned for the green economy and ultimately, operating a business model which works towards the Sustainable Development Goals (SDGs).

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EDITOR’S NOTE

 

The Moral System of Islam.

Moral sense is inborn in man and through the ages it has served as the common man’s standard of moral behavior, approving certain qualities and disapproving others. While this instinctive faculty may vary from person to person, human conscience has given a more or less uniform verdict in favor of certain moral qualities as being good and declared others as bad.

Read more: The Moral System of Islam