The Ethical System in Islam – Implications for Business Practices

Abstract

The ethical system in Islam is presented in light of Shariah – the Islamic social/ legal system. According to Islam, whatever leads to welfare of the individual or society is morally good and whatever is injurious is morally bad. The ethical system prescribed in Islam is eternally divine and forms the foundation of an Islamic society. Islamic ethics prescribe its followers to zealously guard their behavior, words, thoughts, and intentions and observe certain norms and moral codes in their family affairs; in dealings with relatives, neighbors, and friends; in their business transactions; in their social affairs; and in private and public life. The unique feature of the Islamic ethical system is that it permeates all spheres and fields of human life. Islam also has its own distinctive value-based ethical system for business dealings. It prescribes certain specific guidelines governing business ethics, which are dictated primarily by the notion of halal (lawful or permitted) and haram (unlawful or prohibited) as per Islamic jurisprudence (fiqh). This chapter explores the ethical system in Islam, which is essentially a reflection of the divine commandments and guideline for the right and wrong and enumerates the general ethical rules of business conduct.