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Ethics is a major branch of philosophy that encompasses right conduct and good life (Jaffar, 2009). Ethics has been a central aspect of human life for many years by now. Ethics application and its conceptualisation into different systems has not ceased and can be dated as far back as 2500 years ago the time when a Greek philosopher Socrates encouraged both scholars and the common citizens to turn their attention from the outside world to the condition of man . Since then, it has been a general consensus among the human population to apply ethical standards to real-life situations. This is why ethics is sometimes loosely defined as a set of moral principles that define what is right from wrong (Beekun, 1997). Business ethics is a branch of applied ethics which examines ethical principles within a commercial context (Azmi, 2007). To begin with, business ethics was generally a

normative field. When carrying out activities and transactions relating to business, corporations follow through particular Dos and Donts. However, with the recent financial scandals that have came about several large business institutions, it was realised that the ethical boundaries laid down by many corporations often become blur and obscure when corporate individuals are faced with complicated situations and certain ethical dilemmas. The need to integrate more of the prescriptive aspect in ethical systems has then arisen. Nevertheless, many of the ethical systems often follow secular values that are often based on their human founders. The secular systems propose moral codes that are separated from religion, and are transient and myopic (Beekun, 1997). Islam places the greatest emphasis on ethical values in all aspects of human life. Therefore, complying with ethical standards when dealing with business is only one of the many moral affairs that should be expected of a steadfast Islamic believer. In other words, adherence to ethical behaviour is a function of the Islamic faith (Iman). The conditions for everlasting success or falah for a Muslim individual is the same regardless of whether he is conducting business affairs, or carrying out his day-to-day activities.
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

As Islam provides a way of life, it is important for Muslims to primarily comprehend the Islamic Worldview, rather known as Tasawwur Islamii. Tasawwur Islamii secures the general scope of Islam, so that we could understand and rightly interpret the Quran and the practices of the Prophet Muhammad (may peace be upon him). By internalising in the Holy Book and empathising on the Prophets message, we would then realise the meaning of our very own existence. Extractions from Islamic sources such as the Quran and the Sunnah generally tell thus: The Creators have made us, humans, His Viceroys on earth, with great instincts and abilities to discern Gods will; all the same, we are called to command the good and forbid the evil and maintain active submission to Allah (swt). Hence, Tasawwur Islamii is pertinent for us to discover our comprehensive way of life, inviting our appreciation of the dual roles that we play in our entire lives, as Servant of God (abdun) and Vicegerent on Earth (khalifah). In addition, Tasawwur Islamii provides clarity to many of our human doubts and helps us avoid confusion as we journey through life. A verse from the Holy Book tells that ...We have indeed created man in the best moulds, then We do abase him to be the lowest low (as you have abandoned the guidance) except such as believe and do righteous deeds, for they shall have (from Allah) a reward unfailing... (al- Tin (95): 4-6). What preceded is one of the many Islamic verses that command ibadah, or devotion to Allah (swt). Islam also tells of a period of Jahiliyyah a state of heedlessness where the human civilisation (ummah) is attaining material success while lacking ethics (akhlaq). Islamic sources have then revealed that the Prophet Muhammad (may peace be upon him) was sent by Allah to remind us, human beings, of our sense of moral responsibility, and hence restore balance to the ummah. Muslims are ordained to pursue activities that are based on the Divine Guidance, or Rabbani. The concepts Islam urges believers to follow are comprehensive and far-reaching. As the Creator of all things, the pillars that Allah has laid down for us to follow
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

can be administered to all aspects of human life to induce goodness. Also, unlike ethical prescriptions suggested by human beings, Divine Guidance are not confined to certain temporal and spatial boundaries that could fulfil only specific interests of some particular person, society, class or territory (Hasanuzzaman, 2003). Muslims should abide by the rules driven by Allah, and seek Gods pleasure. In particular, Muslims must be wary of their behaviour, thoughts, feelings and intentions (Azmi, 2007). Muslims must seek only whatever that is halal, and refrain from whatever that is haram. Muslims must observe limits and moral codes in their dealings with other persons, nay in all spheres of private and public life. In the business context, Islam prescribes certain ethical guidelines and also defines both desirable and undesirable forms and modes of economic transactions. By abiding by the rules laid down and pursuing activities as guided by the Almighty God, we make ourselves commendable in this world and in the Hereafter. Islamic ethics can be easily embedded in all aspects of human life with the foundations of Shariah and Fiqh. The following says thus: We have sent the scripture in truth (haqq), confirming the scripture that came before it and guarding it in safety. So judge between them by that Allah has revealed and follow not their vain desires diverging from truth that has come to you. To each among you have We prescribed the law and an open way (shirah and minhaj). Maidah (5); 48. The Shariah comprises the entire comprehensive teachings of Islam (Jaafar, 2009). It is absolute and permanent and provides the fundamentals of Islamic ethics in business. On the other hand, Fiqh (sometimes called Islamic Law) are the laws that are subject to alteration because of changing human lifestyles. As humans have progressed greatly through time and developments have led to the creation of more diverse activities, Fiqh provides the flexibility that is needed to clarify the sense of good (maruf) and bad (munkar). Both the Shariah and the Fiqh deal with matters of belief, conduct, ethics and morality and both are derived from
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

the pillar of Rabbani. In fact, sources of guidance for all aspects of human life are obtainable from the established sources of the Shariah. With this, if one successfully complies with the Shariah law and devotes himself to Allah, amidst the day-to-day temptations of evil, he is said to experience the concept of tazkiyyah, namely growth and purification. Beekun (1997) have explained that it is through active participation in the day-to-day affairs of this world and through the struggle in this life against evil that a Muslim proves himself. Thus, achieving human governance must follow through. Beekun (1997) also asserted that a Muslim is expected active participation on the grounds that any material enhancement and growth must lead to social justice and spiritual upliftment of both the ummah and himself. Hence, this implies that the personal affairs that we have, concerning our inner self and our devotion to Allah (thus being tazkiyyah), inevitably have a direct influence in our social affairs, which deals with our relationship with fellow human beings. By living by the ethical standards emphasized by the Holy Quran and of course, by observing the five pillars laid down by Islam, a Muslim may commend success in both the world and the Hereafter. Some of the ethical tenets of Islam prescribed for the economic units comprise of keenness to earn legitimate (Halal) earnings, trade through mutual consent, truthfulness, trustworthiness, generosity and leniency in business transactions, honouring and fulfilling business obligations and fair treatment of workers. These tenets are devised so as to develop a sense of accountability and responsibility amongst the believers, regardless of whether they are sellers or buyers. By the observation of these tenets, a balance would exist amongst the ummah, hence resulting to business success and the shower of divine blessing (barakah). As Allah (swt) describes it, people who attain success are those who are inviting to all that is good (khayr), enjoining what is right (maruf) and forbidding what is wrong (munkar). Furthermore, observing the tenets provided by Islam, not only that which concerns
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

the commercial aspect of life, would lead to a happy state of affairs in the world and also holds the manifold returns of the Hereafter (the consequent fulfilment of the objective of AlFalah). The Islamic perspective on business ethics is no different from its perspective on the moral values of the other aspects in life. Ethics (akhlaq) is an integral component in the Muslims way of life and his practices are driven by his knowledge and his faith to Allah the Almighty. A steadfast Muslims character is embedded in a value system based on the Shariah perimeters, whereby he holds himself accountable to Allah (swt) and believes in Rewards and Punishments in life in the Hereafter. He, nevertheless, is mindful of the world he lives in aware that his deeds and actions have a direct influence on fellow human beings in his surroundings. With his character and consciousness, the steadfast believer learns to discipline his mind and actions (adab) and naturally ameliorates the powerful traits of truthfulness, trustworthiness, clearness, generosity, fairness and many more postivities. The Islamic perspective on business ethics, as discussed above, provides the core of the Tawhidic Paradigm (as developed by Muhammad Affandi Hassan). The concept of tawhid states that the political, economic, social and religious aspects of a mans life forms a homogeneous whole, which is consistent from within, as well as in integrated with the vast universe without (Beekun, 1997). In simpler words, the ethical code in Islam covers ethics in all.

Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

References: 1) Hasanuzzaman, S.M. (2003). Islam and business ethics. London: Institute of Islamic Banking and Insurance. 2) Dr. Sabahuddin Azmi (2007) , Ethics in Islam, World Al-Lootah University (Internet), Dubai 3) Dr Haji Zainuddin Jaffar (2007), Islamic Management Ethics, Universiti Brunei Darussalam 4) Beekun, R.I. (1997). Islamic business ethics. Virginia: The International Institute of Islamic Thought. 5) http://www.renaissance.com.pk/main.html 6) Noah Feldman (March 16, 2008). "Why Shariah?". New York Times. Retrieved on 25 April 2009. 7) http://www.nytimes.com/2008/03/16/magazine/16Shariaht.html?ei=5070&em=&en=5c1b8de536ce606f&ex=1205812800&pagewanted=all 8) http://www.learndeen.com/jm/deen-islam/aqueeda-a-tawheed/36/105-relationshipbetween-pillars-of-islam-a-development-of-excellent-moral-a-character.html

Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

There is a great variety of issues that surface in the business and commercial world. Not excluded from scepticism and criticism are the practices in the marketing world, which forms a large part in the corporations. The mainstream economy seems to popularise

marketing as adversarial because of three main reasons. Firstly, marketing poses the ethical dangers of infringement to consumers. The marketing processes that occur today have used the concept of selective marketing which involves the set up of target audience the group of consumers on which producers desire to sell their products or render services to. Forthrightly, this results to the stereotyping of consumers as they are segregated into different groups. The stereotype placed on the consumers is a conventional perception that may disregard individual consumers rights and privacy. The ethical dangers it points out to is that some groups may be put at a disadvantage with other groups. As an example, the aged group which comprise of the elderly and pensioners have become the target audience of companies that offer health plans, living trusts, and even holiday packages. Because of the perception that aged target audience possesses a great proportion of money and wealth with which they are willing to spend on the mentioned goods, specific markets have financially exploited the consumer group by setting prices at a higher price. In worse cases, the perception of wealth amongst the elderly, have allowed for many fraudulent troupes to swindle huge amounts of money by scheming fake market offers. Likewise, marketing tactics can put one consumer group at a disadvantage by excluding the group from the market and discouraging demand, e.g. recently, overweight and obese individuals are vulnerable audiences, excluding them from the fashion scene with the pressures of media portraying thin and beautiful models. Pricing have also led to

infatuation and misdirection amongst consumers due to the different unethical tactics of price fixing, price discrimination, bid rigging, predatory pricing, etc. Therefore, marketing can damage personal autonomy (Kandy, 2004).
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

Secondly, excessively fierce competition often leads to unethical marketing tactics that could result to saturated markets or monopolized markets. Thirdly, marketing have an effect on its environment and society. Marketing has the capacity to manipulate societal views and social norms. Marketing promotes consumerism and consumption. As the society consumes more, environmental degradation is aggravated by the need to extract greater amounts of the earths resources, as a need to meet the rising demands of consumers. As society realises the hazards that is associated with marketing, the need to incorporate practical ethics in marketing substantiate. Marketing ethics is the area of applied ethics which deals with the moral principles behind the operation and regulation of marketing. Since marketing is the commercial processes involved in promoting and selling and distributing a product or service, it deals with the relationship between the sellers and the buyers. Scholars have proposed different frameworks of analysis for marketing ethics. One such example is the power based analysis which is an ethical framework that articulates on the market state and how the supply and demand can shift the marketing power between producers and consumers. The analysis relates ethics to the balance of power between the two economic components. Other analysis, other than the power-based concept tries to analyze ethics with regards to other economic components. However, none of the frameworks allow a convenient and complete categorization of the great variety of issues in marketing ethics (Kandy, 2004). Another issue that calls for attention is the ethics in advertising. Ethical misconducts that undermine truthfulness and honesty in advertising have led to different problems such as false advertising, negative campaigning, controversy, etc. It is relieving to discover that Islam have embedded in itself guidance to avoid ethical pitfalls. Muslims are urged to incorporate ethics is all aspects of life including commercial
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

activities. Because it is central in Islam to live a life of morality and integrity, in fulfilment of the goals set by Allah (swt), Islamic business ethics consists of a stable and a flexible set of rules that are all-inclusive, complete and comprehensive. Business ethics in the Islamic context have thus covered the moral issues in marketing and advertising. The laissez faire concept that is presently prevalent in the mainstream economy is by far acceptable in Islam only to the extent that an individual benefits without him taking advantage or damaging other peoples interests (Hasanuzzaman, 2003). This view of protection of individual interests has been fused into the marketing ethics of the free market economy. Nevertheless, Islam requires the strict observance of values that ensure we, humans, are reminded of our inferiority to the Almighty God and hence, realise that absolute freedom is not within human beings. A verse from the Holy Quran stresses thus: 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) Islamic business ethics calls for unhindered interplay of the forces (Hasanuzzaman, 2003) of demand and supply. Hence, the price of products in the economy will be set naturally. The Islamic system ensures that supply would not be withheld. Price hoarding is an unethical practice, in which the expansion and contraction of prices are controlled in human hands suppliers. The Prophet (may peace be upon him) has exclaimed: Expansion and contraction is controlled by God. I wish to face Him as one against whom nobody has a claim in respect of his wealth or blood. Furthermore, fierce competition that results to the imbalance of traders is regarded as unethical and does not bring about divine grace (baraka), and hence Islam forbids the ousting of a new entrant in the market.

Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

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Likewise, Islam sees to it that demand will not be artificially created. So, the practices of monopoly and price dictation in the mainstream economy are deeply discouraged. Consumers must not advocate an arbitrary price for the products sold and services rendered in the market. Excess advertising or publicity of a product is also an artificial creation of demand. Businesses can jeopardise the concept of free market, when sellers manipulate consumer choice allowing them to purchase goods that they would not have wanted given there was no excessive publicity. Advertising could be unjustifiable in this way. Islam prohibits traders to sell their goods with the tactic of false oath (Hasanuzzaman, 2003). With the discussions above, The Prophet (may peace be upon him) have worked on regulating the supply and demand, so that both buyers and sellers are motivated to maximise their utility through optimum utilisation of resources, careful planning, accurate anticipation and managerial efficiency, without involving themselves in means that Islam regard as sinful ( Hazanuzzaman, 2003). Guidance in the framework o f business ethics in Islam, like other frameworks, reflects on the human ability to maintain integrity and morality. Nevertheless, because Islamic business ethics is based on the Divine Guidance, believers follow a set of moral conduct that enables oneself to achieve high ideals while building good character. In sum, Muslims who abide by the Islamic guidelines attain a commendable sense of purpose both in the world, and the Hereafter. Since the recent years have seen many scandals regarding large corporations fall off the ethical path, the degree of concern people have about ethical issues, sometimes called the ethical intensity (Williams, 2007), have risen to high levels. More and more organisations have realised this and have devised codes of ethics, which are guidelines that are meant to achieve an ethical culture in the workplace. The code of ethics, most of the time, cover
Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

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offenses defined by federal laws, such as invasion of privacy, price fixing, fraud, customs violations, antitrust laws, money laundering, etc (Williams, 2007). The implication of the companys code of ethics is to take proactive steps that will discourage ethical pitfalls before it even happens. Many businesses are dedicated to encourage ethical decision making and behaviour among its employee; hence, businesses communicate the codes of ethics to individuals both from inside and outside the company and apply that code of ethics in practical situations. By promoting the code of conduct, and involving corporate figureheads to also commit to the guidelines (just as lower employees are required to), businesses can achieve an ethical culture in the workplace. By clarifying and familiarising employees with the company code of ethics, employees recognise the ethical dilemmas that they face in their day-to-day transactions, analyze them, and consequently avoid rationalising unethical behaviour. The confusion and ambiguity in the corporate activities that businesses engage in can also be clarified in the employees mindset. With this clarity, employees feel a sense of accountability towards others and also become aware of the magnitude of consequences associated with their individual decisions and actions. The discussions above provide an argument as to why a companys code of ethics is important as a mean to achieve ethical culture. The strength of the foundations of the code of ethics built in a business can be said to deeply influence the ethical culture with which that business is in. With an ethical culture that is firm, a business would succeed in inviting all that is good (khayr), enjoining what is right (maruf) and forbidding what is wrong (munkar) (3:110). With an ethical culture that is firm, a business would be able to bring about divine blessing (barakah).

Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam

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References: 1) A.J.Kandy, Is marketing evil?, King Marketing, 2004; 2) Hasanuzzaman, S.M. (2003). Islam and business ethics. London: Institute of Islamic Banking and Insurance. 3) Williams, C. (2007). Effective Management, Thomson Southwestern. 4) Beekun, R.I. (1997). Islamic business ethics. Virginia: The International Institute of Islamic Thought. 5) http://www.ftc.gov/bcp/conline/pubs/services/apact/apact01.htm 6) http://www.associatedcontent.com/article/1292229/the_importance_of_ethics_in_any _business.html 7) http://www.helium.com/items/1388589-the-importance-of-having-a-company-codeof-ethics-policy

Madison Sheena Nazareno Vejerano (08B1904) MS 1111 Principles of Islamic Business Ethics Universiti Brunei Darussalam