Islamic ethics provides alternatives to “shareholder primacy”—the view that managers should maximise shareholder returns subject to the law. Concern for societal welfare has remained under discussion throughout the history of mankind. Theories, philosophies, policies, legislations, and what not formulates time and again to make this world a happier place to live. Still, there is a search for even better models to organise market forces to deliver in terms of welfare of society. In the corporate world, a good deal of scholarship has been devoted to articulating and justifying the responsibilities and the role of business enterprises and their managers in relation to society. This chapter aims to discuss a framework for the welfare of society being extended by key stakeholders at contemporary workplaces ensuring happiness and prosperity for all.
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The third Caliph Hazrat Usman (RA), a renowned businessman of early times of Islam, purchased a well of water and donated to entire people of that time just for the welfare of society. During the conquest of Jerusalem arrival of the second Caliph Hazrat Umar (RA) in the battlefield as a pedestrian while his slave was riding according to his turn, denotes optimum equilibrium among rights of employees and the management (according to contemporary understanding of organisational structures). This chapter aims to provide insights into Islamic ethics a fine balance between shareholders’ interest and value for other stakeholders of the society.
Welfare is one of the important themes in Islamic ethics which has its roots in the concept of Infaq which has been used in al-Qur’ān at several places. Infaq is pious spending in the way of Allah (SWT) (Aziz et al, 2008); al-Qur’ān says:
These people ask you, how much, we will be spending in the way of Allah? Said everything beyond your requirements (2:219)
Islamic teachings limit mankind's material wants (unlike Western economic thought) if it adversely affects the society's wellbeing: no one should be denied their basic needs or sustenance and live in poverty and deprivation. Injustice is believed to ultimately impede the realisation of human welfare, exacerbate social unrest and malaise and retard development. Justice demands that all, regardless of race, colour, sex, nationality and even religion share the benefits of development equitably; and distributive justice is recognised as central to the Islamic vision of an economic system (Askari and Arfaa, 2007).
... Be ever steadfast in upholding equity, bearing witness to the truth for the sake of God, .... Whether the person concerned be rich or poor, God's claim takes precedence over [the claims of] either of them. Do not, then, follow your own desires, lest you swerve for justice.. (al-Qur’ān 4:135)
. .. Bearing witness to the truth in all equity; and never let hatred of anyone lead you into sin of deviating from justice. Be just: This is closest to being God-conscious .. (al-Qur’ān 5:8)
Behold, God enjoins justice, and the doing of good, and generosity towards [one's] fellow-men; and He forbids all that is shameful and all that runs counter to reason, as well as envy (al-Qur’ān 16:90)
Qur’ān states that poverty and denial of assistance to the needy is forbidden. The Qur’ān goes on to explain that material inequalities are not a manifestation of spiritual inequalities. Rather such inequalities should be overcome through human effort and are thus meant to foster brotherhood, again stressing the importance of zakah (Askari and Arfaa, 2007).
... We who distribute their means of livelihood among them in the life of this world, and raise some of them by degrees above other, to the end that they might avail themselves of one another's help .. (al-Qur’ān 43:32)
The role of the state includes the administration of a social security system in which the religiously decreed zakah assumes a central position. As one of the five pillars of Islam, the system levies a zakah or compulsory tax on all Muslims who meet a minimum level of wealth to help finance eight categories of welfare that are mentioned in the Quran, including poverty alleviation, the emancipation of slaves, pilgrimage, and assistance to those serving Islam (Askari and Arfaa, 2007).
Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveller - an obligation [imposed] by Allah. And Allah is Knowing and Wise (al-Qur’ān, 9:60)
Perhaps the most prominent alternative is stakeholder theory, according to which business enterprises are to be managed in the interests of all who are and who can be affected by managerial decisions. Other alternatives include corporate citisenship and the creation of shared value. There are also alternatives that draw explicitly on traditions in moral and political philosophy, such as Kantian theory, virtue ethics, social contract theory, Confucianism, deliberative democracy and theories of corporate social responsibility (Hsieh, 2017). In Islamic ethics roles and responsibilities of following key stakeholders of the organisation must keep collective societal welfare as one of their top priorities at the contemporary workplace. Figure. 3.1 outlines the Welfare Model of Islamic Ethics.