HRER860 Penn State University Moral Absolutism and Moral Relativism Essay The commentary provided the following example of how differing moral values might

HRER860 Penn State University Moral Absolutism and Moral Relativism Essay The commentary provided the following example of how differing moral values might manifest themselves in the context of HR.An HR manager at the Calcutta (India) subsidiary of a multi-national corporation believes that she has an inherited duty (dharma) to protect and serve the interests of the less fortunate. Consequently, she is reluctant to terminate an employee who has stolen company property to feed his family.In an essay of between 750 and 1000 words based on the text and e-reserve readings in this lesson, compare and contrast how an HR manager might address the issue of “an employee who has stolen company property to feed his family” in China, Saudi Arabia and the United States.Based on your analysis, how did the readings change your personal perspective on how you would traditionally address similar issues in HR? J Bus Ethics (2013) 117:467–475
DOI 10.1007/s10551-012-1530-0
Islamic Perspectives on Profit Maximization
Abbas J. Ali • Abdulrahman Al-Aali
Abdullah Al-Owaihan

Received: 13 August 2011 / Accepted: 22 October 2012 / Published online: 2 November 2012
Springer Science+Business Media Dordrecht 2012
Abstract Ethical considerations, especially those religiously driven, play a significant role in shaping business
conduct and priorities. Profit levels and earnings constitute
an integral part of business considerations and are relevant
and closely linked to prevailing ethics. In this paper, Islamic prescriptions on profit maximization are introduced.
Islamic business ethics are outlined as well. It is suggested
that while Islamic teaching treats profits as reward for
engaging in vital activities necessary for serving societal
interests, profit maximization is not sanctioned and therefore should not be the goal of ethically guided business
Keywords Profit maximization Islamic ethics
Islamic perspectives Business ethics Islamic logic
Stakeholder theory
Since Weber’s seminal work on Protestant ethics, studies on
religion and business have thrived. Indeed, Weber’s (1905)
work set the stage for researchers to closely examine the
impact of religion on economic development, work
involvement, and organizational activities. Among those
who look at the link between economic development and
A. J. Ali (&)
Indiana University of Pennsylvania, Indiana, PA, USA
A. Al-Aali
King Saud University, Riyadh, Saudi Arabia
e-mail: alaali@KSU.EDU.SA
A. Al-Owaihan
Kuwait University, Safat, Kuwait
religious beliefs are Tawney (1948) and Huntington (2004).
Both authors have studied societal evolution and development and have attributed the growth of capitalism and economic achievement to Protestant beliefs. Earlier contributors
to work involvement studies, in the context of religion
influence, have also underscored work ethics and the role of
Protestantism in facilitating hard work and work commitment (e.g., Furnham 1984, 1991; Mirels and Garret 1971).
Organizations and management studies, on the other
hand, have examined organizational performance and how
religion shapes executive behavior (e.g., Graafland et al.
2006; Lee et al. 2003). These studies have in recent years
been strengthened due to the popularity of spirituality and
sustainability concepts and implications among practitioners and researchers. In their studies on the importance of
religious beliefs to ethical attitudes in the marketplace,
Emerson and Mckinney (2010) have credited the reoccurrence of financial crises and marketplace misconduct to a
rising interest in spirituality, morality, and religion. The
authors have asserted that the importance of religion in
one’s life is much more important than mere religious
affiliation in shaping ethical attitudes.
Like Ali (2005, 2008), Emerson and Mckinney (2010)
argue that in today’s marketplace, it is impossible to regulate executive behavior and that one’s morality and ethics
are instrumental in restraining the urge to engage in corrupt
or questionable acts. These authors along with Pava (1998)
suggest that religious-based and/or spiritually driven ethics
motivate individuals to incorporate the highest human and
spiritual ideals into their business conduct. The ideals can
be manifested in workplace environment, customer relations, pricing and profit margin, recruiting and promotion,
and competing in the marketplace.
One of the most vital issues related to marketplace
and business conduct is profit earnings. While almost all
researchers and practitioners agree that business organizations cannot survive without profit, they disagree on the
level of profit. Should profit be moderate or excessive,
minimum or maximum, fair or exploitative? In contrast to
those that propose that profit maximization is a wrong
concept (Drucker 1974; Li 1964), there are those who
argue that executives and their corporations must seek
profit maximization (Koplin 1963; Milton 1970). On the
other hand, there are those who are either driven by secular
(e.g., Sibley 2009; Dierker and Grodal 1996) or religious
(e.g., Karns 2008) motives who postulate that excessive
profit is not only undesirable, but also inconsistent with
optimally serving a society.
Recently, the debate on profit maximization has been
linked to the subject of business ethics (e.g., Emerson and
Mckinney 2010; O’Brien 2010). In fact, Primeaux and
Stieber (1994) made a powerful argument that not only is
ethics at the heart and center of business, but also that profit
and ethics are intrinsically related. This linkage helps to
focus attention on the role of corporations in society, the
objective of the firm, the nature of profit, and situates the
latter as a moral concern that is relevant to societal welfare
and prosperity. For this particular reason, some scholars
have attempted to address the subject of profit maximization in terms of religious teaching and/or philosophy.
Of particular interest are studies which have moved
beyond economic efficiency and focused on the behavioral
aspects of profit maximization (see Primeaux 1997;
Primeaux and Stieber 1994). These studies, while highlighting the importance of profit maximization, assert that
it symbolizes the contribution of business to communal and
personal well-being. Furthermore, these studies have contributed to understanding the role and objective of the firm
with an emphasis on moral responsibility and ethical conduct in the marketplace. This particular development has
situated the subject of profit maximization at the center of
the study of ethics and has subsequently framed decisions
regarding profit not only in terms of efficiency, but also in
the context of responsibility and contribution to society.
Due to the rising influence of the U.S. in the world
economy since late 1940s, American organizational concepts and terminologies have been widely promoted and
taught across the globe. While the validity of these concepts is not our concern in this paper, the fact of the matter
is that these concepts have found a receptive audience in
various cultures. The profit maximization is one of the
concepts which has been aggressively introduced to
developing countries and has been presented as an integral
part of capitalism and a necessary element for economic
growth (see Alaki 1979; Abusin and Hassan 2011; Bilsborrow 1997). Consequently, the concept has become part
of the usual lexicon among researchers and practitioners in
these nations.
A. J. Ali et al.
Almost all of the studies on profit maximization, secular
or religiously driven, have been conducted in the west,
especially in the US. Some of these studies have primarily
reflected on profit maximization in terms of Biblical
teaching (e.g., Emerson and Mckinney 2010; Karns 2008;
O’Brien 2010). The globalization of the marketplace, the
increasing role of the emerging economies in the world
economy, and growing contributions of ethnic and religious groups to economic and industrial development have
accentuated the need to examine the perspectives of other
religions and civilizations on profit maximization and
business conduct. In fact, as Yanow (2005) argues, management philosophy and outlook, rather than being
culturally monochromatic, should take into account the
differences in values informing practices in today’s societies beyond those of the Christian west.
In this study, we are guided by the following assumptions: Civilizations espouse various ethical principles
which are assumed to be prioritized differently depending
on cultural preferences and the importance attached to
each; the role of business in a society is influenced by many
factors including the stage of economic development,
religion, and openness; the interplay of these factors shapes
how people in certain civilizations/societies and time
periods deal with business issues and emerging or pressing
events; religion, however, remains a determining force in
ethics formation and application; and, indeed, each religion
has its own set of values and beliefs which in turn determines what is considered right and wrong and the standards
upon which a behavior/conduct is judged.
Islam, like other religions, has its own prescriptions and
business instructions. While some of these prescriptions are
general, others are specific and tackle issues that relate to
daily activities in the marketplace and to exchange functions. This is because economic activities and participation
in business have spiritual dimensions in Islam. The Quran
states (4:29), ‘‘Eat not up your property among yourselves
in vanities; but let there be amongst you trade by mutual
good-will’’ and (2:275) ‘‘God hath permitted trade and
forbidden usury.’’
Likewise, the Prophet Mohamed makes engaging in
business affairs an obligation, stating that ‘‘Seeking earnings is a duty for every Muslim’’ (Quoted in Ali 2011b) and
‘‘Some sins can be abolished only by working hard to get
earnings’’ (Quoted in al-Maki, died 996, p. 499). In fact,
the tenth-century jurist, al-Maki, suggested that the thriving
of religion is contingent upon good conduct in this world,
including integrity in trade and crafts. This elevation of
participation in business activities to ethical and economic
duties stems from the importance of such activities to
social stability, coherence, and development and growth,
while strengthening spirituality and the continuation of
civilization. Ibn Khaldun (1989), 1332–1406, a medieval
Islamic Perspectives on Profit Maximization
Muslim sociologist, highlighted this, stating that ‘‘civilization and its well-being, as well as business prosperity,
depends on productivity and people’s efforts in all aspects
for their own interest and profit. When people no longer do
business in order to make a living, and when they cease all
gainful activity, the business of civilization slumps and
everything decays.’’
Though in recent years there has been an interest in
Islamic perspectives on economic and business issues,
the greater part of these studies have focused on banking,
finance, and organization. Genuine studies pertaining to
profit maximization in the context of Islamic teachings
generally do not exist. This paper is designed to address
Islamic perspectives on the subject by relying on original
sources, the Quran, and the Hadith or the sayings of the
Prophet Mohamed, along with texts and sayings of earlier
scholarly Muslim authorities. The first source is regularly
read, and along with the latter, is often recited, studied, and
discussed and debated. In the first part of this paper, the
concept is discussed in the context of Islamic ethics. Then,
the paper goes on to reflect on profit maximization in the
context of Islamic teaching and practice. In particular, the
paper answers the following questions: What are the religiously sanctioned boundaries for business conduct? Does
religion sanction profit drive? How does religion view
profit? Are profits viewed as ends of business activity or
means to a broader end?
Islamic Ethics and Business Conduct
In the market place, ethics plays a significant role in setting
the boundaries for accepted conduct and in preventing
fraud, corruption, and questionable behavior. Recent
business crises underscore the fact that in the absence of
moral restraints, legal instructions and guidelines are susceptive to violation (Business Summit 2008; Morris 2008).
Articulated and widely agreed on ethical principles are
more likely to serve as instruments for motivating individuals to avoid fraud and deception. More importantly,
articulated ethics reinforces trust in market exchange
functions and strengthens relations among actors in the
marketplace. Each civilization has its own philosophical
assumptions upon which ethics are based. These assumptions are shaped by religion and tradition, making them a
significant factor in understanding management and organizations, their conduct and evolution (Ali 2009; Hofstede
In Islamic thinking, ethics determines business conduct
and behavior and economic considerations should be subordinate to ethical priorities (Nagvi 1981). That is, the
value of any business action stems from its contribution
to the general welfare of the society. For this particular
reason, ethics not only determines the boundaries of conduct, but also dictates whether certain economic activities
are legitimate or not. Ethics, therefore, takes on a broader
domain of influence in the marketplace, including a wide
range of issues from interest to monopoly and from pricing
to profit margin. This broad governing of business affairs
accentuates the social dimension of organizational activities making it fruitful for business executives to factor
social consequences in their decision-making process.
For Islamic ethics, no business action is independent of
its social milieu. This explains why in the early days of the
Islamic state, in the seventh century, knowledge of religious-based ethics was set as an essential prerequisite for
market actors. The second Caliph, Omer (590–644),
declared, ‘‘Only he who is a religiously learned person can
sell in our market’’ (Quoted in Asaf 1987, p. 224) and Al
Shaybani, an Islamic jurist (died 804 A.D., p. 42), argued
that ‘‘If a person wishes to engage in commerce, he should
learn what is necessary to safeguard against usury and
fraud’’ (Quoted in Ali 2011b). Possibly the reason for such
emphasis was that an ethically guided businessperson
would avoid blunders by aligning his/her act in the marketplace with societal benefit.
Islamic ethics refers to specified rules that govern individuals and organizational conduct and seek to insure generosity, openness, and accountability in behavior and actions,
while safeguarding societal interests. In the workplace, Islamic ethics is an orientation that shapes and influences the
involvement and participation of market actors to be transparent, responsible, and committed to serving their interests
without jeopardizing the welfare of other actors or the society
(Ali 2011a). The core focus is on creating an environment
conducive to responsible business conduct in accordance with
religiously sanctioned instructions, from prevention of
deception and fraudulent behavior to strengthening transparent operation and munificent behavior.
Ali (2011a) identifies four foundations of Islamic ethics:
ihsan, relationship with others, equity, and accountability.
Ihsan implies goodness and generosity in interaction and
conduct, be it at a personal or an organizational level. As a
projection of goodness and generosity, ihsan encompasses
mercy, justice, forgiveness, tolerance, and attentiveness.
These aspects are related to the second element which is
succinctly articulated by the Prophet Mohamed’s saying:
‘‘Al-Din Al-maamala’’ (Religion is found in the way of
dealing with other people). That is, judging whether any
action or conduct is right or wrong must stem primarily
from its benefit to people and society. Equity constitutes a
necessary element in the marketplace to insure that social
welfare is strengthened and fairness is not overlooked due
to any prejudice against market players. Irrespective of
their identity or background, players must have equal
access to market opportunities. The fourth foundation,
responsibility, strengthens market trust and reinforces
commitment to business promises and contracts. Along
with the other foundation elements, it insures transparency
and minimizes fraud. Indeed, the ethos of ‘‘let the buyer
beware’’ is antithetical to Islamic ethics because this
amounts to deception and any deception is prohibited
(al-Maki 1995). Morally, responsibility goes beyond the
relationships among the immediate market actors to include
a commitment to community well-being and to ones’ faith,
thereby manifesting a natural linkage between economic and
spiritual factors.
This linkage provides a clue for understanding the nature and essence of Islamic ethics. In fact, as we show later,
it sheds light on why the issue of profit is situated at the
heart of Islamic ethics. In Islamic teaching, not just is the
universe created for the sake of mankind, but the worth of
any human being is determined by his/her relation and
service to others. The Holy Quran (1989, 49:13) states,
‘‘The noblest of you in the sight of God is the best of you in
conduct.’’ Likewise, the Prophet declares, ‘‘The best of
people are those who benefit others’’ (Quoted in Al-Barai
and Abdeen 1987, p. 144). Furthermore, the aim of business exchange and involvement is to create value to society
and serving one’s interests, while serving the community
(al-Ghazali (2006), died 1111; al-Maki 1995).
In the context of ethics, there are two primary factors
that influence business responsibility and conduct. These
are fardh (duty) and multiplication factors. These are
briefly discussed in the following section.
The Fardh Factor
Muslim jurists identify two types of fardh: kifia and ayen.
The first refers to a general obligatory duty for the whole
community. However, the duty for the community is
absolved once an individual or sufficient numbers of the
community perform it. This concerns religious or worldly
affairs without which there would be no order. In the
context of business, this includes having a profession,
craft, engaging in buying and selling, etc. (Hamedan 2011).
That is, not every member of the community, for example,
should be a merchant; a few should be sufficient. On the
other hand, fardh ayen is an obligatory duty for each person
irrespective of others. That is, a person cannot turn his/her
back on meeting ethical expectations and duties. This can
be something like charity, quality work, using valid measures, avoiding cheating, hoarding, thievery, etc. Ethical
conduct is part of fardh ayen which has to be observed and
violation amounts to a defiance of religious prescriptions.
Irrespective of being fardh kifia or ayen, the ultimate
criterion for judging any act is whether or not the act has
resulted in benefit to the public.
A. J. Ali et al.
The logic of fardh is community well-being. Whether
the fardh is kifia or ayen, performing them is essential for
insuring normalcy and stability in the society. By upholding the tenets of fardh, individuals know not only their
duties, but also the boundaries of their responsibilities.
These duties, when performed in line with the Ihsan
outlook, are more likely to improve the welfare of the
community. Indeed, fardh, guided by Ihsan, suggests that
avoidance of any harm to a community is a priority. It is
within this understanding that economic objectives and
activities, including the issue of profit maximization,
become an integral part of ethical concern. Market actors,
therefore, are obliged by ethical guidelines and projections
to align their activities with sanctioned practice to be
legitimate and rewarded.
The Multiplication Factor
Philosophically, the logic of Ihsan constitutes the principal
factor that shapes and reinforces one’s disposition to
engage in what is good and beneficial to society. However,
there is a reward for engaging in Ihsan. The Quran (6:160)
instructs, ‘‘He that doeth good shall have ten times as much
to his credit. He that doeth evil shall only be recompensed
according to his vice.’’ This reward induces believers to go
beyond what is required legally or what constitutes a just
act. The reasoning behind this is articulated by the tenthcentury jurist al-Maki who argued that Ihsan is much
broader than justice. The latter implies that you acquire
your right share and give what is their right share to others.
In contrast, Ihsan always implies that a person may forsake
some of his/her rights for the …
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