Often businesses are considered to be secular, money-making entities that have nothing to with religion or morality.
Attributes such as cheating, tax avoidance, aggressive marketing, deception, and exploitation at the cost of preventable harm and wellbeing are by which businesses and corporate world in general are sometimes identified with.
This is not the case as far as the Islamic concept goes.
Prophet Muhammed (pbuh) was a businessman when he became a Prophet at the age of 40. At the time he was married to Khadijah RA, a prominent businesswoman In Makkah. Makkah was in the middle of some famous trade routes. One route was to Shaam (Syria) in the north during the hot summer months and the other to Yemen in the south during the winter months.
The nobles in Makkah were mainly traders. This is why some of the early noble companions of the Prophet Muhammed (pbuh) were traders and businessmen. They continued their trades and businesses after accepting Islam whenever they had the opportunity to do so. Some prominent companions known for their successful businesses and wealth are Abdur-Rahman ibn ‘Awf (RA) and Uthman ibn Affan (RA), both were among the ten promised paradise and glad tidings.
Islam promotes business and trade – this activity becomes a force for good for humanity. Islam therefore provides a comprehensive framework for businesses to operate within. Unfortunately at times this is overlooked and ignored by Muslims over technical debates concerning permissibility of individual business transactions.
Some aspects of this framework are as follows:
Islam focuses on consumption, and this dictates production and supply
In Islam what is not permissible (Harram) to consume is also not permissible to produce. This sets an important principle. A moral guide for businesses. Businesses become champions of promoting what is permissible (Halal). Mosques and Scholars can educate and give advice, but the actual Halal activity is facilitated by businesses, and this is what then influences consumer behavior – In Islam, business is not just about profits, they promote the good (Halal) as well.
The approach of Islam to Halal and Harram is set by the Holy Quran. It allows everything and prohibits exceptions (Quran 02:173). Being religious does not restrict business thus Islam provides ample opportunity for businesses to supply and produce.
Honesty and accountability should be at the heart of business ethics
Prophet Muhammed (pbuh) was known for his honesty and accountability in his business dealings. This is what stood him out and led to his marriage to his first wife Khadijah (RA). Even his enemies vouched for his honesty and accountability in his business dealings. His companions followed his example.
Quran refers to the story of the Prophet Shoaib (RA) and how God punished the people of Madyan (Midian) for not giving full measure and weight in their business dealings and for creating mischief (Quran 07:85).
In Islam honesty and accountability is at the heart of business dealings and reporting. As part of the Islamic faith, one may be able to dodge earthly regulators, the belief dictates the ultimate accountability to be in the grave and on the Day of Judgement. This is what focuses the mind and ensures honest and transparency in business dealings and reporting.
Social responsibility is a mandatory worship (Zakat) for businesses in Islam
It is obligatory on every able Muslim adult, and this includes business owners to give Zakat (religious donation) each year. This is traditionally 2.5% of one’s savings more than a year less short-term liability. Islam prescribes those that should benefit from Zakat funds, these individuals being the most vulnerable in society.
This way the most vulnerable in society became stakeholders in businesses and businesses contribute to the uplifting of the society they operate within.
Another aspect of Zakat contribution is the way it is calculated. Its not based on in year profits as traditionally business taxes are instead the focus is on the top half of the balance sheet, being the net savings more than a year. Through this mechanism God ensures wealth is not accumulated in fewer hands in savings assets and that instead assets are put into use for generating further economic activity and charity.
In Islam business performance generates and decreases wealth
Usuary is prohibited in Islam and it is replaced with trade and business. Money is not treated as a product that can be hired out instead it is invested in business. The investor becomes a stakeholder in the business with success and failure resting with all. This ensures wealth is generated and decreased based on business performance and effort and not on social class and privilege.
The consequence being that an Islamic business mind then becomes focused on business activity and performance and not on maximising wealth without effort or risk.
The concept of business success and failure rests with the Almighty
Business performances often very much rely on nature and factors outside the control of humans, business owners, employees, and suppliers. The recent pandemic has taught us this lesson in a very hard and real way.
Quran (18:32-44) refers to a story of two businessmen. One boasted of his wealth and business strength and while the other reminded him of his limitations before the Almighty. The one that boasted eventually saw his crops destroyed by nature overnight with nothing left.
This way the most vulnerable in society became stakeholders in businesses and businesses contribute to the uplifting of the society they operate within.
Another aspect of Zakat contribution is the way it is calculated. Its not based on in year profits as traditionally business taxes are instead the focus is on the top half of the balance sheet, being the net savings more than a year. Through this mechanism God ensures wealth is not accumulated in fewer hands in savings assets and that instead assets are put into use for generating further economic activity and charity.
In Islam business performance generates and decreases wealth
Usuary is prohibited in Islam and it is replaced with trade and business. Money is not treated as a product that can be hired out instead it is invested in business. The investor becomes a stakeholder in the business with success and failure resting with all. This ensures wealth is generated and decreased based on business performance and effort and not on social class and privilege.
The consequence being that an Islamic business mind then becomes focused on business activity and performance and not on maximising wealth without effort or risk.
The concept of business success and failure rests with the Almighty
Business performances often very much rely on nature and factors outside the control of humans, business owners, employees, and suppliers. The recent pandemic has taught us this lesson in a very hard and real way.
Quran (18:32-44) refers to a story of two businessmen. One boasted of his wealth and business strength and while the other reminded him of his limitations before the Almighty. The one that boasted eventually saw his crops destroyed by nature overnight with nothing left.