CHAPTER 3 THE CONCEPT OF SOCIAL RESPONSIBILITY
3.5 A N I SLAMIC P ERSPECTIVE OF C ORPORATE S OCIAL R ESPONSIBILITY 94
The discussion of the concept of social responsibility and justice in Islam in this chapter in light of the holy Qur’an and Hadith suggests that there seems to be a congruence between the ideals of social responsibility and justice and business transactions in Islam that has a resonance with prevailing notions of corporate social responsibility. This perspective on social responsibility lays the foundation for the study of Islamic understandings and practice of corporate social responsibility. From this viewpoint, within Islam, as it is practiced amongst Muslims, the relationship between commercial activity and civil society is taken as natural and the rules of practice are embedded in the Islamic precepts.
In a corporate setting, Islam has always measured the corporation against two goals: financial goals and social goals. A for-profit institution that meets only the financial goal is regarded as a failing institution. In recent times, means of making profit often comes at the expense of the social good. Therefore the financial and social goals seem contradictory from time to time. However,
within the framework provided by Islam, there is a harmonious zone of sustainability, similar to the common notion of CSR, which is to be achieved.
The prevailing concept of corporate social responsibility refers to the expectations that society has of business not to harm, and also to contribute positively to the well being of others. Corporations have numerous responsibilities to all those who have a stake in it and these responsibilities derive from ethical principles and moral values. Similar values with features consistent with CSR also exist in Islamic values and moral philosophy as elaborated in this chapter through the concepts of social responsibility and justice in general, which are also applicable in a business context.
The concept of corporate social responsibility in Islam emerges from the social contract that necessarily relates to the congruency of the value system of the organization to the larger value system of an Islamic society. In Islam, organizations are similarly, if not more so, responsible to society as are individuals. As Lewis (2001) elaborates, the implications for business enterprises is that ‘both managers and providers of capital are accountable for their actions both inside and outside their firms; accountability in this context means accountability to the community to establish socio-economic justice within their own capacity’ (2001: 113).
Islam considers issues pertinent to CSR to be very significant moral aspects of the social order. The holy Prophet Mohammed (PBUH) emphasized these points with great conviction. The holy Qur’an and Sunnah of the holy Prophet Mohammed (PBUH) complement these philosophies by specifying the degree of lawfulness of key types of behaviours for Muslim businessmen as discussed in the preceding section of this chapter.
Islam’s strong emphasis on the responsibility of the businesses towards society is further seen in a letter from one of the four rightly guided Caliphs of Islam.
The fourth Caliph of Islam, Ali Ibn Abu Talib (may Allah be pleased with him) in a letter to Malik bin Al-Haris Al-Ashtar upon the latter’s appointment as the Governor of Egypt summarized the concept of social responsibility from an Islamic perspective concerning trade and industry. He wrote:
“You are advised to treat well businessmen and artisans and direct others to do likewise. Some of them live in towns and some of them from place to place with their ware and tools and earn their living by manual labour. They are the
real source of profit to the state and provider of consumer goods.
While the general public are not inclined to bear the strain, those engaged in these professions take the trouble to collect commodities from far and near,
from land and from across the sea, and from mountains and forests and naturally derive benefits.
It is this class of peace-loving people from whom no disturbance needs to be feared. They love peace and order. Indeed they are transacting business at your place or in other towns. But bear in mind that a good many of them are intensely greedy and are not immune to bad dealings. They hoard grain and try to sell it at a high price and this is most harmful to the public. It is a blot on the name of the ruler not to fight this evil. Prevent them from hoarding; for the prophet of God had prohibited it. See to it that trade is carried on with the utmost ease, that the scales are evenly held and that prices are so fixed that
neither the seller nor the buyer is put to a loss. And if, in spite of your warning, should anyone go against your commands and commit the crime of
hoarding, then inflict upon him a severe punishment”
(Alhabshi, n.d.).
The rightly guided fourth Caliph of Islam is very well known for his knowledge and wisdom. One can discern from this excerpt, in the present day context, that the business or the corporate sector provides numerous pertinent services to society. It brings goods and services of all types within society’s
reach. The corporate sector contributes substantially to the country’s income and wealth and parts some portion to the government in the form of taxes. It generates a major proportion of the nation’s employment and provides an important impetus to the growth and expansion of the economy apart from drawing in foreign investments and much needed foreign exchange. It plays a significant role in determining the quality of life through impacts on the physical and social environment. As the fourth Caliph has rightly pointed out, all these activities are actually motivated essentially by profits, which they deserve to make for all the hard work they do, and the risks they bear.
The fourth Caliph of Islam also reminded followers that a good many of those in business are intensely greedy. It is this greed that encourages businesses to resort to unethical and immoral behaviours in pursuit of their objectives (Drucker, 1984). Consistent with this philosophy, Islam prohibits hoarding of wealth avariciously. The concept of ‘amanah’ or trust is of critical importance because any worldly merit is transient, and must be used wisely. Accordingly a Muslim must not be solely guided by profits and seek to accumulate wealth at any cost. The holy Qur’an states in this regard that:
“Wealth and sons are allurements of the life of this world; but things that endure – good deeds – are best in the sight of your Lord, as rewards, and best
as (the foundation for) hopes”
(Qur’an, Al Kahf-18: 46).
Interpreting the above verse (Commentary in the Qur’an, pg.833), every other thing is fleeting, but good deeds have a lasting value in the sight of Allah (TME). They become the foundation of hopes for the highest reward in the hereafter. On the Day of Judgment, none of the landmarks achieved by individuals will remain, including wealth and offspring. Everyone will stand as they were created, with none of the possessions that were collected during
one’s lifetime, which would all have vanished. Consequently, a Muslim’s actions must be motivated to please Allah (TME) alone.
Overall, Islam does not aim to create a society of martyr-like merchants, doing business for purely philanthropic reasons. Instead, Islam wants to curb man’s propensity for covetousness and his love for possessions. As a result, miserliness and a spendthrift mode of conduct have both been condemned in the Qur’an and in the Hadith.
Islam goes beyond the more common issues associated with CSR and adds another significant moral virtue in social responsibility, i.e. benevolence. In general, Islam encourages benevolence. For example, if any debtor is in financial trouble, Allah (TME) encourages kindness, as stated in the Qur’an:
“If the debtor is in a difficulty, grant him time till it is easy for him to repay.
But if you remit it by way of charity, that is best for you if you only knew”
(Qur’an, Sura Al Baqarah-2: 280).
In fact, a Hadith of the holy Prophet Mohammed (PBUH) reaffirms the importance of magnanimity on the part of the lender. The holy Prophet (PBUH) said:
“Before your time the angels received the soul of a man and asked him, ‘did you do any good deeds (in your life)?’ He replied, ‘I used to order my employees to grant time to the rich person to pay his debts at his convenience
and excuse (the one in hard circumstances).’ So Allah said to the angels,
‘Excuse him’”
(Hadith - Sahih Bukhari, No. 3.291).
As part of their social responsibility, Muslim businesspersons also need to watch over the welfare of weak and destitute members of society. The Qur’an clearly states in this regard:
“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, […]”
(Qur’an, Sura An Nisaa-4: 75).
The reward for taking care of the destitute and the weak is further stressed in this Hadith, as the holy Prophet Mohammed (PBUH) said:
“The one who looks after and works for a widow and for a poor person, is like a warrior fighting for Allah’s cause or like a person who fasts during the day
and prays all night”
(Hadith - Sahih Bukhari, No. 8.35).
3.6 Conclusion
These examples from the Hadith exemplifying the holy Prophet Mohammed’s (PBUH) preaching and practice of social responsibility and justice and the Qur’anic commandments provide enough evidence that a concept similar to that of the prevailing notion of CSR has been an integral part of Islamic society for nearly 14 centuries, since its advent in the Seventh century. The guidelines in the Shariah specifically address issues concerning the general well being of both businesses and society and are further detailed in Islamic jurisprudence concerning every day activities (fiqh ul muamalaat). The holy Prophet Mohammed (PBUH) and his four rightly guided Caliphs promulgated and practiced social responsibility and justice in their society scrupulously.
While extensive, these elements remain scattered, incoherent, and unsystematic. This feature is replicated in the literature from an Islamic perspective, which is fragmented and tends to focus on particular aspects of commercial practice or remains too theologically oriented. Beyond identifying such elements, the task therefore remains to elaborate a higher-order framework to organize and systematize these elements, thereby constructing a more coherent statement of social responsibility that may be considered more properly as a counterpart to the prevailing notion of CSR that is informed by the Western value system.
The next chapter takes up this task of elaborating a higher-order framework of corporate social responsibility from an Islamic perspective, where a set of axioms will be introduced to summarize and systematize much of the previous discussion on the issue of social responsibility and justice in Islam.
Chapter 4 Towards a Framework of Corporate Social Responsibility