[Extract from Preface of Islam and Business Ethics by Dr S M Hasanuzzaman,
published by the Institute of Islamic Banking and Insurance, London, UK 2003]

Business immorality has becomes a universal menace. Its nature and extent varies according to the mode, scale and impact of the business organisation concerned. In the West, however, a meaningful change is taking place. Many world organisations have diverted their attention to the role of multinational organisations (MNCs) in the host countries and laid down some broad operational guidelines for them. A look at the guidelines laid down by these organisations leads to the impression that they are focussed on serving highly developed and well-managed countries. A major part of the world falls outside the range of these well-sounding compacts, which reflect the capitalist philosophy and hedonistic individualism of the market, money and exchange. They seem to believe in a kind of free-trade under which consumers are no more than a means of profiteering.

The unfortunate situation is that most of the developing countries desperately need foreign capital and technology to overcome their backwardness. They are thus vulnerable to blackmail by MNCs and their home governments if they dare to take a stand. The guidelines fail to protect them from this situation. Apart from the role of these international organisations, private efforts are also under way to touch upon this situation. Persons involved in the modern theory or practice of economics or business have also picked up the gauntlet and seem to be determined to bring about a change in the existing situation.

Over and above the activities on the academic plane, concerted efforts are also being made at national and international level to enlist the support of the largest number of academics, traders and communities. In London, in 1986, an Interfaith Institute of Business was launched which was represented by Jews, Christians and Muslims. The Institute, with the consensus of the three communities, adopted a declaration that emphasised the key moral values of justice, mutual respect, trusteeship and honesty. An international group of thirty business executives from Japan, Europe and the United States, who meet each year in Caux, Switzerland, have agreed on operational principles and procedures which could be made a standard of accountability for corporations the world over. The Caux principles accommodate the Japanese concept of kyosei (working together for the common good) and the Western concept of human dignity.

A look at the Interfaith Declaration and the Caux Principles reveals an almost identical approach to the issues involving MNCs. It will not be out of place to point out here that the US Department of Commerce has also released Model Business Principles, thereby encouraging corporations to develop their own codes of conduct. Adoption of codes of conduct reflecting these principles is made voluntary. These principles incorporate the provision of a safe and healthy workplace, fair employment practices, employees' right to organise and bargain collectively, and responsible practices to protect the environment. The International Society of Business Economics and Ethics (ISBEE) organised the first World Congress in 1996 near Tokyo. The papers at the Conference were edited and published in 1999.
The Compacts, the Declaration and the Principles all have many good points and need to be supported. But all these deliberations place all forms of legal trade in the same category. What we feel is that a distinction should be made between essential and non-essential goods. If we are advancing towards forming a world community, governments and businessmen should demonstrate feelings of mutual consideration and sympathy for the members of a human community who are the children of Adam and Eve, the family of God.

These efforts to make business more ethical may be objected to on many grounds. Firstly, the seminars and conferences remain academic exercises. Why do not governments enforce rigid laws to curb business malpractices and punish offenders? This objection fails to realise that the existing state of affairs is longstanding. Ethics have been alien to business for centuries. Governments have been upholding a laissez-faire policy towards trade. Absolutely free trade, an unregulated market mechanism and cut-throat competition have been the motivating forces of traders.

These business values, which have become firmly imbedded in businessmen's minds, cannot be replaced by mere legislation. It will require a change in the inner selves of the traders, shareholders and executives. This change can be brought about by intellectuals, academics and theorists, all of whom have always been the precursors of change by preparing an active team of their followers, convincing the business community and mobilising public opinion. This paves the way for initiating reforms, after which alone legislation can become effective.

In addition to this objection, discussion of business ethics in the context of MNCs is susceptible to suspicion, especially in South East and Far East Asia, where people equate MNCs with the role played by The East India Company. The flurry of resentment against this company and its followers has not yet died down. The abundance of MNCs is seen to be a stratagem to pave the way for economic imperialism by industrialised nations. According to them, the movement to ethicise MNCs seems to convey a sense of contrition for whatever was done in the past by the East India companies and an attempt to persuade them to now welcome them. The suspicion described above is not totally unfounded, but it is also the result of xenophobia. No foreign foothold is possible anywhere without active local support. Moreover, the critics should distinguish between two things: the objectionable role of the East India companies, on the one hand, and the MNCs and the need to reform them on the other. It is in the interests of all to appreciate and support these attempts at reform rather than adopting a negative attitude.

Another argument against the movement that has much weight and logic behind it is the movement's incongruity with the philosophy of life that Western thinking has hitherto upheld. Unless we bring about a basic change in our attitude to, and concept of, life, we cannot expect a meaningful and effective change with respect to the different compartments of life. A change emerging from the Inner Self is more reliable and lasting than piecemeal changes. I he significance of the movement lies in the realisation of the evils caused by a value-free system.



Source : islamic-banking.com