Ethics may be defined as the set of moral principles that distinguish what is right from what is wrong. Ethics has a twofold objective; it evaluates human practices by calling upon moral standards; also, it may give prescriptive advice on how to act morally in a given situation. Therefore, ethics aims to study both moral and immoral behaviour in order to make well-founded judgments and to arrive at adequate recommendations. Sometimes ethics is used synonymously with morality. Codes of morality are called ethical codes. Business ethics can also be defined as business morality.
Business Ethics is the branch of ethics that examines ethical rules and principles within a commercial context; the various moral or ethical problems that can arise in a business setting; and any special duties or obligations that apply to persons engaged in commerce. Generally speaking, business ethics is a normative discipline, whereby particular ethical standards are formulated and then applied. It makes specific judgments about what is right or wrong, it makes claims about what ought to be done or what not. Generally speaking, business ethics is concerned with the study of what is good and bad, right and wrong, and just and unjust in business. In the current business scenario, people decide what is right and what is wrong, but as per Islam, the teaching of the Qur’ān and the life of Prophet Muhammad (peace and blessings of Allah be to him) act as a basis to call something ethical or unethical.
Islam places the highest emphasis on ethical values in all aspects of human life. In Islam, ethics governs all aspects of life. Ethical norms and moral codes reflect from the verses of the Qur’ān and the teachings of Prophet Muhammad; they are numerous, far reaching and comprehensive. Islamic teachings strongly stress the observance of ethical and moral code in human behaviour. Moral principles and codes of ethics are repeatedly stressed throughout the Qur’ān. Besides, there are numerous teachings of the Prophet which cover the area of moral and ethical values and principles.
The Prophet (peace and blessings of Allah be to him) was chosen by Allah to be His last prophet at the age of forty. Before attaining Prophethood, he was very much involved in business. He had a good reputation as a hard worker and truthful businessman. It was due to this reputation that Khadija hired his services. It was also a result of his honest and noble character that he became known as ‘Al-Ameen’ (the Trustworthy) among the people. Prophet Muhammad displayed honourable behaviour in all aspects of life, including trade. The following are the principles which Islam has laid down with respect to Business Ethics.
i. Lawfulness and Honesty: The most important aspect of business is that, when it is done, one should ensure that the income which he earns from it is lawful. As the Prophet Muhammad (peace and blessings of Allah be to him) said, “A time will come when people will no longer care about whether their wealth has been lawfully or unlawfully acquired” (Bukhari). On the other hand, Islam gives high importance to honesty, as Prophet Muhammad was asked, “Which was the best kind of earning”, he replied, “that for which a man works with his hands and honest trading” (Ibn Hanbal). On the other hand, Islam also prohibits a person from telling a lie, as the Prophet Muhammad forbade a seller from telling a buyer that he had been offered a price for goods that the latter had not been offering (in order to raise the price or encourage the sale)” (Bukhari).
The Prophet emphasised that honesty and kind dealings with customers are the secrets of success in business. He said, “The truthful and honest merchant is associated with the Prophets, the upright and the martyrs” (Tirmidhi). He also said, “Allah shows mercy to a person who is kind when he sells, when he buys and when he makes a claim” (Bukhari).
ii. Firm Commitment: For any business to survive, fulfilling its contracts, commitments and promises is extremely important. For employees, it is utterly important to respect the deadlines and deliver work when promised. Allah says in the Qur’ān, “…And fulfil (every) commitment. Indeed, the commitment is ever (that about which one will be) questioned” (Qur’ān 17:34). Allah says in the Qur’ān, “O you who have believed, why do you say what you do not do? Great is hatred in the sight of Allah that you say what you do not do” (Qur’ān 61:2-3).
iii. Be Compassionate: Prophet Muhammad said, “Allah will show compassion to those who show kindness while buying, selling and recovering debts” (Bukhari). In this saying he guides the buyers and sellers to exhibit kindness during the activities of trade. It is this act of kindness which builds a long and strong relationship between the buyer and seller, which is pretty fruitful in the long run.
iv. Transparency: It is moral and ethical to tell the customer of the defects in the product, as Prophet Muhammad said, “The seller and the buyer have the right to keep or return goods as long as they have not parted and if both the parties spoke the truth and described the defects and qualities (of the goods), then they would be blessed in their transaction, and if they told lies or hid something, then the blessings of their transaction would be lost” (Bukhari). Prophet Muhammad has also said, “It is required for a vendor to tell the buyer of any defects of which he is aware” (Ibn Hanbal).
v. Avoid Taking Oath: In a business transaction, one should also avoid swearing as the Prophet Muhammad has said, “Swearing produces a ready sale for a commodity, but blots out the blessing” (Bukhari and Muslim). What is meant here is that if a person takes an oath while offering merchandise, he may succeed in selling a large quantity of it, but this is not a fair means of business because it increases the sale but robs the business of its blessings. Therefore, even if a person is perfectly right in his statement in respect of his merchandise, he should avoid taking oath to influence his customer.
vi. No Cheating: Be strict in regard to weights and measures. Allah says in the Qur’ān, “…So fulfil the measure and weight and do not deprive people of their due and cause not corruption upon the earth after its reformation. That is better for you, if you should be believers” (Qur’ān 7:85). The Prophet is reported to have said, “When people cheat in weight and measures, their provision is cut off from them” (Al-Muwatta). He also told the owners of measures and weights, “You have been entrusted with affairs over which some nations before you were destroyed” (Tirmidhi).
Islam does not endorse any kind of fraud, as Prophet Muhammad said, “When a sale is held, say, there’s no cheating” (Bukhari). Islam also instructs the seller to avoid making too many oaths when selling merchandise, as Prophet Muhammad has said, “Be careful of excessive oaths in a sale. Though it finds markets, it reduces abundance” (Muslim). Islam always encourages mutual consent, as Prophet Muhammad said, “The sale is complete when the two parties involved depart with mutual consent” (Bukhari).
vii. Leave What is Doubtful: The Prophet’s general advice to all people was, “What is lawful is clear and what is unlawful is clear, but between them are certain doubtful things which many people do not recognise. He who guards against the doubtful things keeps his religion and his honour blameless, but he who falls into doubtful things falls into what is unlawful, just as a shepherd who pastures his flocks round a sanctuary will soon pasture them in it. Every king has a sanctuary, and Allah’s sanctuary is the things He had declared unlawful” (Bukhari).
viii. No Holding of Stock: Islam strongly discourages monopoly, as Prophet Muhammad said, “Whoever monopolises is a sinner” (Abu Dawood). Islam also forbids people from hoarding merchandise in order to increase the prices, as Prophet Muhammad said, “A merchant who hoards goods in order to raise their price is a sinner” (Muslim). Islam forbids one to indulge in the trade of intoxicant products, as Prophet Muhammad said, “The trade of alcohol has become illegal” (Bukhari).
ix. No Dumping: Islam also discourages the concept of dumping in business. While selling product, one should ensure that the product is of a good quality, i.e., can also be used by him, as Prophet Muhammad said, “None of you are true believers until you love for your brother what you love for yourself.” We sell all good things in our own country and export the waste, unused, unsold products and worst quality products to the third world countries.
x. Dues & Timely Payment of Wages: Today people are considered one of the strongest resources of the organisation, thus they are referred to as ‘Human Resource’. Every human being should be respected by giving them their right due, rather than exploiting them to the maximum, which is done by many companies today. Islam emphasises giving the right and timely wages to the employees and discourages any sort of exploitation.
Prophet Muhammad (peace and blessings of Allah be to him) has strongly discouraged people to break trust and exploits the labourers, as he said, “There will be three persons whose opponent I shall become on the Day of Resurrection. A man who gave in my name and then broke trust, a man who sold a free man and enjoyed his price and a man who engaged a labourer and enjoyed full labour from him but did not pay him his wages” (Bukhari).
xi. Adopting Right Means: It is not only the end which is important but also the means adopted to achieve the end is also equally important. Today a majority of advertisements are filled with vulgarity and immodesty, which use women to the maximum extent. Sometimes it makes us think whether they are conveying or corrupting? Islam emphasises that any kind of display should be modest and should not stimulate unreasonable expectations of product or performance directly or indirectly by advertising. They must communicate accurately and truthfully knowing that children may learn practices from advertising that can affect their health or well-being. Moreover, they should bank on the positive aspects of life such as friendship, honesty, kindness, respect, etc. True ethics is not only being ethical while selling but true ethics is also being socially and morally responsible while advertising.
xii. No Bribe: Islam strongly condemns the giving and taking of bribe. Generally, bribes are given to people to get huge orders and contracts in modern day business. Allah says in the Qur’ān, “… or send it (in bribery) to the rulers in order that (they might aid) you (to) consume a portion of the wealth of the people in sin, while you know (it is unlawful)” (Qur’ān 3:188). Prophet Muhammad “invoked the curse of Allah on the one who bribes and the one who takes bribe” (Abu Dawood). To demand or accept a bribe in absolutely any form or under any excuse or circumstances is absolutely forbidden in Islam. It is also categorically forbidden in Islam for one to pay a bribe to take something which does not rightfully belong to him or to get something which is the right of someone else.
Like all aspects of life, if trade is done honestly and fairly, it can become a form of devotion to Allah. If it is done unethically and unjustly, it can be a source of distancing oneself from Allah. Prophet Muhammad taught a great deal on ethical trading. It is his example of honesty that the Muslims should follow in their day to day transactions to be successful in both the worlds. It is worthy stressing here that when Muslims stick to ethics in their daily lives, they will become good examples to emulate. Perhaps this will help rectify some aspects of the distorted image about Islam and thus they will to some extent become worthy ambassadors of Islam.