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Toward Applied Islamic Business Ethics Paper
Toward Applied Islamic Business Ethics Paper
Toward Applied Islamic Business Ethics Paper
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Muatasim Ismaeel
University of Kuala Lumpur
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All content following this page was uploaded by Muatasim Ismaeel on 27 May 2016.
To cite this Article: Muatasim Ismaeel, Katharina Blaim, (2012),"Toward applied Islamic business ethics: responsible halal business",
Journal of Management Development, Vol. 31 Iss: 10 pp. 1090 - 1100
Permanent link to this document:
http://dx.doi.org/10.1108/02621711211281889
Abstract
Purpose – The purpose of this paper is to explore the opportunities of using halal regulation
and certification as a mechanism for applying Islamic business ethics in contemporary world.
Design/methodology/approach – The current practices of halal regulation and
certification and literature on Islamic ethics were reviewed, to identify a practical approach for
Islamic business ethics. Findings – Islam allows and accepts different levels of ethical
commitment. A multi-level Islamic ethics framework and a multi-level halal certification
approach are proposed to facilitate the
implementation of Islamic business ethics in a relative context. Two major developments can enrich
halal business practices: harmonization of global standards and governance structure, and integrating
responsibility and ethical issues in halal standards.
Practical implications – The proposed framework and developments can enrich halal
regulation and certification practice.
Originality/value – The paper emphasizes the importance of flexibility and adaptability in
Islamic business ethics implementation, and proposes a new framework and approach to
apply Islamic business ethics.
Keywords Islam, Business ethics, Social responsibility, Corporate governance, Islamic ethics, Halal,
Corporate responsibility
Paper type Research paper
Introduction
Despite (or maybe because of) the advancements in science and technology, humanity
is facing serious challenges that cannot be resolved without effective ethical systems.
During centuries of human intellectual activities, ethics and morality was a preferred
area of debate for philosophers. Most of the philosophic debate was normative in
nature, which means it was tried to identify, what humans should do, or in other words:
what is right and what is wrong? What are the best rules to guide ethical judgment?
In order to develop and take roots, normative ethics – especially business ethics – need
to be applied practically. Only by application they can be tested, criticized and emerged
continuously. Business ethics researchers need to pay more attention to applied ethics
in addition to their interest in normative ethics. “The business ethicists also have to
develop ways of applying their ideas in concrete practices. The current situation of
injustice – intra- as well as intergenerational – is simply so serious that we ought not to
understand business ethics merely as intellectual endeavor of moral reasoning”
(Beschorner, 2006).
Social institutions bear great importance in the application of business ethics.
International organizations, NGOs, business associations and regulating bodies are
examples of social institutions which play an essential role in applying business
ethics through mechanisms like regulation, certification, disclosure, media
coverage, advocacy, codes of ethics and other mechanisms. Social institutions
provide enforcement, socialization and incentives (Possumah et al., 2012) that influence
individuals and organizations to adhere to ethical standards in their business activities.
To contribute to the advancements of business ethics theory and practice, academic
research need to focus on the effectiveness of current social institutions and
mechanisms in applying business ethics and on how they can be improved.
This paper aims to contribute to research in business ethics application, by
analyzing one of the contemporary mechanisms of applying business ethics. The paper
will focus on Islamic business ethics and discuss its application using the example
of Halal regulation and certification.
31,10
International level AAOIFI, IIFM, IFSB
6
Figure 1.
Governance structure
Shari’a supervisory
of Halal regulation Consulting, auditing and Consulting, auditing and boards, consulting and
and certification Micro level rating companies certification companies auditing firms,Shari’a
advisors
Responsible Halal Overall company strategies and management processes meet and may
business exceed Halal responsibility standards
Responsible Halal The product meets Halal and responsibility standards
product Examples:
Organic and Halal product
Shari’a compliant investment in environmental – friendly technologies
Halal product The product meets basic Halal standards
Examples: Table
Meat slaughtered according to Shari’a rules II. Multi-level
Interest free financial products Halal
certification
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