ISLAMIC BUSINESS MODEL
[IBM]
Jamal A. Badawi
Saint Mary’s University
OUTLINE
n 1. Introduction & Methodology
n 2. Ethical Anchor
n 3. Ethics in production
n 4. Ethics in consumption
n 5. Ethics in marketing
n 6. Riba and IBM
n 7. Enforcement mechanism
1. Introduction & Methodology
a. What makes it Islamic?
n Islam = peace through submission to Allah
n Peace with Allah, self and creation of Allah
u Including business dealings
n Submission is trusting and complete
u Deen = way of living [not only religion]
1. Introduction & Methodology
b. Sources of “Islamicity”?
n Primary sources
u The Qur’an
u Hadeeth/Sunnah
n Secondary sources [involve Ijtihad]
u Effort to solve new problems guided by
primary texts & objectives of Islamic law
u Fallible, debatable & changeable
1. Introduction & Methodology
c. Ijtihaad & Islamic world view
n Centered in Tawheed
n Human dignity
[32:6-9,17:70]
u Business, science & technology: who serves
whom?
n Life = test in trusteeship [51:56, 2:30, 67:2]
u Resources = tools of fulfilling the trust [45:13]
u Accountability for choices
u Longer time scale in decision making
2. Ethical Anchor of IBM
n Ethics: @the core of being a “Muslim”
u “I was not sent except to perfect moral
characters” [Prophet Muhammad]
n Faith , moral behavior & righteous action
n Worship & piety: no ritualism/formalism
u Serve in part as “moral drill
n Worshipping Allah in business dealings
3. Ethics in Production
n OK to seek bounties of Allah
n Work may be an act of worship
n Entitlement to reward commensurate w/effort
u reward in the hereafter too
n Allah enjoins excellence [Ihsan] in everything
n Common contemporary problems
u Child labor, slave labor, sweat shops
3. Ethics in Production
Restrictions & Boundaries
n No unlawful products [e.g.. intoxicants]
n Reduction of idle resources
u Example: land use in Islamic Law
n Prevent harm or compensate for it
n Common contemporary problems
u environmental damage/pollution
u Disposal of dangerous waste
4. Ethics in Consumption
nNo unlawful consumption
uExample: Intoxicants
nNo restriction of lawful consumption
nModeration
uIn spending & consumption
uImplications for resource allocation
5.Ethics in Marketing
n No cheating & deception
n No hiding of product defects
n No unfair competition
u Unrestricted monopoly [esp. in foodstuff]
u Prevention of free flow of info. in the market
u Unethical luring of customers
u Bribery [BFP; business facilitation payment] !
6. Riba and IBM
n Both usury & interest are prohibited
n Joint ventures & profit sharing are OK
n Emerging Islamic substitutes
u Islamic banks
u Islamic “windows” in other banks
u Islamic co-operative housing
u Other arrangements
7. Enforcement Mechanisms
nIndividual moral conscious
uUltimate responsibility before Allah
nPositive social values & norms
nGovernment intervention
uBalancing freedom & public interest
Conclusions
n IBM = part of Islamic world view
n World view is based on basic convictions
u Allah: Oneness, mercy, sovereignty, love...
u The human: nature, role on earth & account’y
u The world: harnessing resources within the
terms of trusteeship [including sustainability]
n Common grounds with other communities
Wassalamu `Alaikum WW