ETHICS IN DAILY LIFE SOSS2231 SECTION 2 GROUP ASSIGNMENT BUSINESS ETHIC IN HALAL & HARAM

PREPARED BY: MUHAMAD HAN BIN MOHD HALIM (DIT101034) AISHAH BINTI EMASDUKI (DCE102073) MUHAMMAD AIDEL AKMAL BIN ANUAR (102016) NOR FARHANNA BINTI BURHAN (DCE102038) NURUL ATIQAH BINTI KHALID (DCE102035)

PREPARED FOR: SIR MOHAMMAD RAFIQI BIN RASHIDI SEM III, 2011/2012

Introduction Islam encourages mankind to enjoy the bounties offered by Allah (s.w.t), provided that these bounties are not used in forbidden activities and in an excessive manner. Since wealth is a favour from Allah, it is to be treated properly; it should not be abused, misused, destroyed, wasted, or laid idle. You are the best of peoples evolved for mankind, enjoining what is right, forbidding what is wrong, & believing in ALLAH. (Quran 3:110) ALLAH describes people who attain success are; inviting to all that is good (Khyr), enjoining what is right (maruf) & forbidding what is wrong (munkar) (Quran 3:104) Business Ethics Definition The set of moral principles that distinguishes what is right from what is wrong. Business ethics referred to as management ethics or organizational ethics, simply limits its framework to organization Islamic Business Ethics, identifies the practical elements of managing ethics within an organization that business leaders can use, offering the framework of an overall Islamic ethics model for an organization to adopt. Islamic ethical system emphasized on; Khuluq --- Good nature Khayr --- Goodness Birr --- Righteousness Qist --- Equity Adl --- Equilibrium & justice

Axioms Of Islamic Ethical Philosophy. AXIOM Unity DEFINITION Related to the concept of Tawhid. Since everything belongs to ALLAH, there is nothing on which a man can discriminate or feel superior over others. Concept of al-tawazun. A sense of balance among various aspects of man's life through conscious purpose, in order to produce the best social order. Man's ability to act without external coercion within the parameters of ALLAH's creation & as ALLAH's trustee on earth. Man's need to be accountable for his action. Ihsan or an action that benefits persons other than those from whom the action proceeds without any obligation.

Equilibrium

Free will Responsibility Benevolence

Unity Makes a persons vision wider, & any thought of racism or caste system becomes inconsistent with his thinking Muslim becomes fearless, modest & humble.

Equilibrium The law & order in universe reflects a delicate balance. This provides a path to success Balance and moderation are key to heaven. ALLAH has described those as who will be rewarded with highest place in heaven ALLAH advises to be moderate and those who, when they spend, are neither extravagant nor miserly, and it (i.e. their spending) is moderate in between (the two extremes,) (25:67)

Application of Equilibrium Axiom to Business Ethics He raised the sky high, and has placed the scale, so that you should not be wrongful in weighing (::55-8) And give full measure when you measure, and weigh with a straight balance. That is fair, and better at the end (17:35) Avoid what is forbidden & engage in what is good.

Application of Unity Axiom to Business Ethics No discrimination. O mankind, We have created you from a male and a female, and made you into races and tribes, so that you may identify one another. Quran 49:13 No involvement in unethical practices. Do not seek to accumulate wealth. Wealth and children are the embellishment of the worldly life, and the everlasting virtues are better with your Lord, both in rewards and in creating good hopes Quran 18:46 Free will (I swear) by the Time, man is in a state of loss indeed, except those who believed and did righteous deeds, and exhorted each other to follow truth, and exhorted each other to observe patience. (103:3) O you who believe, fulfill the contracts (5:1) Here contract means; A. Divine obligations B. Social obligations C. Political obligations D. Business obligations

An Islamic perspective of the Social Responsibility of Organizations This is not (a matter of) your fancies or the fancies of the People of the Book. Whoever does evil shall be requited for it, and he shall find neither a friend for himself, besides Allah, nor a helper. Whoever, male or female, does good deeds and is a believer, then such people shall enter Paradise, and they shall not be wronged in the least (4:123-124)

Islam lays down the principle of mutual responsibility in all its various shapes & forms. In it we find the responsibilities which exist between a man & his soul, between a man & his immediate family, between the individual & society, between community & other communities

Social Responsibility of Organizations Social responsibility refers to the obligations that an organization has to protect and contribute to the society in which it functions. An organization exercises social responsibility in three domains: its stakeholders, the natural environment and the general social welfare. Organizational stakeholders refer to the organizations relationships namely: Relationship of the firm to its employees hiring, promotion related employee decisions, fair wages, respect for employees beliefs, accountability, rights to privacy and finally benevolence. Relationship of employees to the firm cheating, embezzlement, fraud and not returning a fair days work for a fair days pay. Relationship of the firm to other stakeholders firms suppliers, vendors, buyers/consumers, debtors, the general public, shareholders, owners partners, needy and competitors. Another key domain is the natural environment and the firms attitude toward its environment and the environment of others. As Muslims we are taught that we are vicegerent of this earth and that we are instructed to be aware of our surroundings the rain, clouds, mountains and animals. This can be characterized as follows: Treatment of animals Muslims must be careful how we treat them, butcher them and care for them. Environmental pollution and ownership rights Although Islam honors ownership rights, it does not consider these rights to be absolute especially if they may lead to environmental pollution and threaten public safety. (Al Hisbah and the Islamic Economy) Environmental pollution and free resources (air, water, etc.) The general principal with respect to resources that are free, e.g., air, ocean water, etc is that any person may make use of any thing that is free provided that in doing so no injury is inflicted upon any person (Al Majallah, serial no.2486, paragraph 1254). The guilty party is responsible to clean up any damage and make restitution. Besides the above, Muslims are expected to care about the general welfare of the society they live in. As part of the community, Muslim businessmen need to watch over the welfare of its weak and destitute members. And why should you not fight in the cause of Allah and of those who, being weak, are ill treated (and oppressed)? men, women and children, (Quran 4:75) The reward for taking care of the destitute and the weak is stressed in many hadith. If a person spends the night hungry, the blame is shared by the community because it did not attempt to take care of him. It is therefore the responsibility of any Muslim organization to contribute to charities, and support philanthropic causes.
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In Closing To close this series let me state that it is the responsibility of every Muslim to be ethical in their daily business practices and to act responsibly toward the community in which it serves. To review its business practices and remove from its organization any haram activities and devote themselves to productive and halal activities that benefit mankind and the Islamic Community. It is everyones responsibility to take a long and serious look at their organization and implement policies and procedures that are conducive to ethical behavior and remove from its organization anything that may be a disincentive to function so. As a general guide to Muslims in business we should all adopt the following overriding principals: Be honest and truthful Keep your word Love Allah more than your trade or business Deal with Muslims before dealing with non-Muslims Be humble in how you conduct your life Use mutual consultation in your affairs Do not deal in fraud Do not bribe Deal justly

We trust that you have enjoyed this series and, as always, should you have any questions or concerns please do not hesitate to contact us. Be honest and truthful Keep your word Love Allah more than your trade or business Deal with Muslims before dealing with non-Muslims Be humble in how you conduct your life Use mutual consultation in your affairs Do not deal in fraud Do not bribe Deal justly Benevolence The inmates of Paradise are of three types: one who wields authority & is just and fair; one who is truthful & has been endowed to power to do good deeds; & the person who is merciful and kind hearted towards his relatives & to every pious Muslim, & who does not stretch out his hand in spite of having a large family to support. (Sahih al-Bukhari)

Halal Earnings Islam, through the example of the Holy Prophet and the rightly guided caliphs, demonstrates the importance of trade or business. Abu Bakr ran a cloth business, Umar had a corn trading business, and Uthman also ran a cloth business. The Ansar among the Companions of the Prophet engaged in farming. In fact, except for the trades that have been prohibited (see table 1 below), Islam actively encourages Muslims to get involved in business and commerce. Allahs Messenger was asked what type of earning was best and replied, A mans work with his hand and every business transaction which is approved. (Rafi ibn Khadij, Mishkat al Masabih, Hadith no. 2783)

Islamic Principals Pertaining Halal and Haram The basic principal is the permissibility of things; To make lawful and to prohibit is the right of Allah alone; Prohibiting the halal and permitting the haram is similar to committing shirk; The prohibition of things is due to their impurity and harmfulness; What is halal is sufficient, while what is haram is superfluous; Whatever is conducive to the haram is itself haram; Falsely representing the haram as halal is prohibited; Good intentions do not make the haram acceptable; Doubtful things are to be avoided; The haram is prohibited to everyone alike; and Necessity dictates exceptions. Source: Al Qaradawi, p.11.

Earning money through halal trade

therefore, is vastly preferred over begging. This principal is emphasized in the following hadith:

A man of the Ansar came to the Prophet and begged from him. The Prophet asked, Have you nothing in your house? He replied, Yes, a piece of cloth, a part of which we wear and a part of which we spread (on the ground), and a wooden bowl from which we drink water. He said, Bring them to me. He then brought these articles to him and the Prophet took them in his hands and asked, Who will buy these? A man said, I shall buy them for one dirham.
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He said twice or thrice, Who will offer more than one dirham? A man said, I shall buy them for two dirhams. He gave these to him and took the two dirhams and, giving them to the Ansari, he said, Buy food with one of them and hand it to your family, and buy an ax and bring it to me. He then brought it to him. The Apostle of Allah fixed a handle on it with his own hands and said, Go gather firewood and sell it, and do not let me see you for a fortnight. The man went away and gathered firewood and sold it. When he had earned ten dirhams, he came to him and bought a garment with some of them and food with the others. The Apostle of Allah then said, This is better for you than that begging should come as a spot on your face on the Day of Judgement. Begging is right only for three people: one who is in grinding poverty, one who is seriously in debt, or one who is responsible for compensation and finds it difficult to pay. (Anas ibn Malik, Abu Dawud, hadith no. 1637) Halal Forms of Work Allah describes in the Quran (55:10-13) the process underlying agriculture and farming. How He sends rain down and how it flows throughout the earth making it fertile and ready for cultivation and how the winds play a role in scattering seeds, and how crops grow. This Quranic verse and many others (71:19-20; 80:24-28; 15:19-22) provide motivation for agricultural work. Besides agriculture, Muslims are encouraged to develop proficiency in industries, crafts and professions that are instrumental to the survival and betterment of the community. In fact, development of these skills represent a fard kifayah. Imam al Ghazzali stresses this point, Sciences whose knowledge is deemed fard kifayah comprise every area which is indispensable for the welfare of this world. (Anas ibn Malik, Sahih al Bukhari, 3.513) Many professions that are ordinarily looked down upon have been given dignity by Islam. For example, Moses worked as a hired hand for eight years to gain the hand of his future wife. The Prophet also worked as a Shepard for several years. In general, then, Islam looks on work which fills a halal need in society as good provided that the person performs it in an Islamic Manner.

Haram Earnings A partial list of businesses that Muslims should stay away from are as follows: 1. Trading in Alcohol Alcohol consumption and trade is strictly prohibited. 2. Drug dealing and trading Umar ibn al Khattab defined the criteria for defining khamr as, Khamr is what befogs the mind. 3. Sculptors and artists If they are engaged in producing pictures, statues, etc, as objects of worship or as objects to be likened to Allahs creations are clearly forbidden in Islam. 4. Production and sale of haram goods trading in goods for committing sins is haram such as pornography, hashish and the like, and idol manufacturing. 5. Prostitution Islam prohibits this practice and the senseless exploitation of women. 6. Al Gharar futures speculation in crops or animals not yet harvested or in your possession. 7. Some prohibited forms of sharecropping where the sharecropping is considered mukhabarah, that is where the sharecropper stands the chance of not receiving his share of the crop if the crop fails to produce a specified weight. The prohibition of the inequitable form of sharecropping mentioned above illustrates Islams preoccupation with the axioms of balance and benevolence. Both the land owner and the cultivator must behave equitably. Both parties must share in the gain or loss of crops. This is clearly fairer than leasing where the landlord collects rent no matter what, and the tenant may or may not harvest any produce. For businesses not mentioned above, it is imperative that the reader consults with Muslims that are qualified jurists. Developing an Ethical Organizational Climate Ethical or unethical behavior does not take place in a void. They usually take place within an organizational context that facilitates their occurrence. The actions of other organizational participants as well as the norms and values embodied within the firms culture may add to the ethical climate within the organization or facilitate its moral and ethical decline. The English proverb birds of a feather flock together is applicable here. The Milken, Levine and Boesky scandals are all incidents where organizational participants flouted ethics because supervision was either too lax or they believed that the law would never catch them. In Indonesia, the Bank Bali scandal is yet another example of individuals in an organization thinking themselves above the law and allowing their greed to overcome their sense of right and fairness. For his misdeeds, Michael Milken had to pay a fine of $500 million and spend time in jail, we can only pray that the individuals responsible for the Bank Bali scandal will suffer the same prescription. In examining the ethical climate in an organization, one needs to start with the individuals own ethical stance. Some are committed to ethical behavior, and will not engage in doubtful practices. Others are influenced by the unethical standards of their peers or boss or by
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external environmental pressures. For example, employees in hyper-competitive industries may feel compelled to excel by whatever mean possible and may resort to unethical behavior, such as Boeskys insider trading activities, in order to obtain competitive advantage. Should a manger become cognizant of unethical behavior and do nothing about it, he or she is in fact signaling that such practices are tolerated. At other times, organizations may unintentionally encourage unethical behavior by their reward system. For example, Eastern Airlines gave a bonus to their mechanics to encourage them to get airplanes back into circulation as fast as possible. Thus, airplanes that did not receive adequate maintenance were flying when they should have been kept on the ground. The rash of recent scandals on Wall Street, in the savings and loan industry in the United States and in other countries business sectors has incited many firms to re-examine their ethical standards. This renewed concern with ethics can be more clearly understood by discussing organizations social responsibility with respect to their multiple stakeholders. Reference http://www.scribd.com http://www.meemeducation.com/?p=502 http://bangladesh2000.com/blog//blog6.php/halal-aamp-haram-explained-clearly http://www.kantakji.com/fiqh/Files/Fatawa/A302.pdf http://www.halalhelpline.org/halal.htm http://www.slideshare.net