Islamic Corporate social responsibility - Hussein Elasrag - ebook
Opis

Islam provides a foundation and guidelines for living one's life. In this context, there is a very detailed concept of ethical and social behavior that allows us to deduce that the concept of social responsibility automatically plays a role in Islam. The concept of social responsibility and justice in Islam considering the holy Qur’an and Hadith suggests that there seems to be 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 (CSR). The purpose of this book is to illustrate the concept of Islamic Social Responsibility (ICSR), the definition, structure and the Islamic principles of CSR with a specific reference to its values and objectives.

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Islamic Corporate social responsibility

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Hussein Elasrag

Copyright © 2016 Hussein Elasrag

All rights reserved.

this book

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Islam provides a basis and guideline for living one’s life. Within this, there is a very detailed concept of ethical and social behavior which allows us to deduce that the concept of social responsibility automatically has a role in Islam. This is a critical point that must be firstly understood as the role of moral ethics has been underpinned in Islam for over 1440 years whilst the concept of CSR remains relatively new for businesses today.

The concept of social responsibility in Islam is discussed considering Islamic religious values and beliefs according to Shari’ah, the sacred law of Islam derived from the holy Qur’an (book of divine revelation), Hadith (sayings and deeds of the holy Prophet Mohammed [PBUH]), Ijma (consensus), Qiyas (reasoning by analogy), and Maslaha (public interest). The purpose of the Islamic system (maqasid al Shari’ah) is material as well as spiritual. The goal of an Islamic social system is based on falah (human well-being) and hayat tayyibah (good life), both of which stress brotherhood and socio-economic justice, as well as a balance between the material and spiritual requirements of all human being that is necessary to preserve and enrich faith, life intellect, posterity and wealth.

The concept of social responsibility and justice in Islam considering the holy Qur’an and Hadith suggests that there seems to be 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 (CSR). This perspective on social justice and 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. The value of social responsibility, either individually or collectively, has been recognized throughout history, and more structured programs for endowments and zakat were introduced by Islam in the 7th century. Major organizations throughout the world now realize that corporate social responsibility (CSR) is an important part of a company's operations, because of its positive impact on society, which in turn impacts positively on staff members and the public.

The scope of this book is to briefly outline some of the major aspects of Islam which give consideration for businesses and their push towards Corporate Social Responsibility. It considers the belief system of Islam and how this belief has a significant underpinning of social behavior.

CONTENTS

1 INTRODUCTION

2 THE CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility: Definitions and History

ISLAMIC CORPORATE SOCIAL RESPONSIBILITY

The Concepts of Business Ethics and Corporate Social Responsibility

Benefits of Corporate Social Responsibility

3 THE BASIS FOR ISLAMIC SOCIAL RESPONSIBILITY

Appendices

References

1 INTRODUCTION

Islam provides a basis and guideline for living one’s life. Within this, there is a very detailed concept of ethical and social behavior which allows us to deduce that the concept of social responsibility automatically has a role in Islam. This is a critical point that must be firstly understood as the role of moral ethics has been underpinned in Islam for over 1400 years whilst the concept of CSR remains relatively new for businesses today.

Corporate Social Responsibility (CSR) has been associated with related terms like business ethics, corporate performance, corporate accountability, corporate responsibility and stake holder involvement. In recent years CSR has grown into a well-known collective expression. The growth of CSR has been a result of organizations realizing their responsibility toward their stake holders in the context of business scandals (e.g. Enron) and a growing concern for environmental changes (e.g. global warming). [1]

The European Union defines CSR as "a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis" (European Commission, 2002). According to Vernon and Mackenzie (2007), the question of whether companies should seek to do good by exercising CSR, rather than concentrate solely on wealth creation, is no longer interesting and in fact the focus today is on how well companies do good. Increasingly stake holders expect companies to take on public responsibility. Companies engage in CSR through diverse activities such as donating to charitable organizations (e.g. Ben and Jerry's), 'green' activities (e.g. moves by major retailers to eliminate plastic bags and promote 'green' bags) and by implementing environment friendly purchase and supply policies. A survey conducted by Research International, however, found that while CSR practices are commendable, they need to be viewed with caution as these activities are not sufficient in and of themselves (Social Funds, 2000).

Before going to understanding the concept Corporate Social Responsibility on Islamic perspective, we need to know the Islamic Worldview. Islam is a complete code of life. The fundamental of Islam such as aqidah,( belief and faith) ibadah (worship) and akhlaq (morality and ethics) are not subject to change, their manifestation in secondary areas like economics,

business and other worldly activities would require flexibility and development according to time and space. This is embodied in Islamic Shari’ah which is central to the worldview of Islam. Normally, the Shari’ah as Islamic Law, but the boundaries of Shari’ah extend beyond the limited horizons of law. The concept of CSR in Islam encompasses a broader meaning embracing the taqwa (God consciousness) dimension by which corporation as group of individual, assuming the roles and responsibility as servants and vicegerents in all situations(Hossain & Siwar, 2009).

The difference between Islam and most other religions is that it did not content itself with merely establishing acts of worship and abandon the needs of society to a Caesar or any form of temporal governing body. Rather, Islam established ways of conduct, relationships, and rights and obligations for the individual vis-à-vis members of his family and the nation and for the nation vis-à-vis other nations. The reform of society was the main target of Islam. Even acts of worship contribute to the achieving of this reform. Within the framework of human society, the Islamic nation is a compact union having recourse to itself, possessing an inner sense of responsibility for its own members, and resisting decay, both individually and collectively.

This social solidarity (takaful) is apparent in all aspects of Prophet Muhammad's Message. The history of mankind shows that few societies have developed as strong a sense of solidarity or have cooperated as closely or acted as mercifully as have Islamic societies.Developing this two-way responsibility is Islam's principal way of achieving reform and social solidarity.The individual's responsibility for the community in Islamic societies and conversely the community's responsibility for the individual are of primary magnitude, constituting a trust of life and the highest of its responsibilities. It is for that reason that Islam introduced community worship. Islam also enjoins the group not to neglect the individual, obligating it to safeguard his various interests, to respect his rights and freedom, and to harmonize different interests. In Islam, praying in groups is preferred many times over to praying individually.The individual is thus an integral element of the Islamic society; he perfects it and is perfected by it, he gives to it and receives from it and he protects it, and is protected by it. Developing this two-way responsibility is Islam's principal way of achieving reform and social solidarity. Islam has impressed the meaning of these two types of responsibility on the individual and collective conscience in order to guarantee for Muslims the life of a unified, sound, happy, and productive body in a classless community.[2]

The value of social responsibility, either individually or collectively, has been recognized throughout history, and more structured programs for endowments and zakat were introduced by Islam in the 7th century. Major organizations throughout the world now realize that corporate social responsibility (CSR) is an important part of a company's operations, because of its positive impact on society, which in turn impacts positively on staff members and the general public.[3]