Corporate social responsibility in Islam

Abstract

Notions of corporate social responsibility (CSR) have been suggested to be consistent with an Islamic view of society. Indeed, values and principles that have been central to Islam since the time of the holy Prophet Mohammed (Peace and Blessings be upon him) may serve as a foundation for notions of corporate social responsibility (CSR) similar to those in the West. Much contemporary discussion of CSR, however, has not recognized this. These discussions have largely been based on a Western orientation informed by Western religious values. Moreover, CSR has evolved literally in response to particular issues or problems that are specific to businesses in a Western context. This led to a lack of a comprehensive global context within which a wider perspective of CSR should be positioned. On the other hand, the notion of social responsibility and justice has been an integral part of Islamic society for nearly 14 centuries. However, the Islamic literature remains scattered, fragmented and lacks a coherent framework that would allow such a concept in Islam to be systematized. While Islamic philosophy is rich in precepts pertinent to CSR, these precepts have not yet been formally synthesized to present a systematic model with an explicit notion of CSR in Islam. Thus, there exists a gap in both the Western and Islamic literature. This was fruitfully exploited in this study to advance the understanding of the concept of CSR in a wider cultural and religious setting. This study explored this new territory and presented a conceptual framework of CSR in Islam based on Shariah (the Islamic legal and social system) derived from the holy Qur'an and Hadith. It provided both, a counterpart and a comparable base in the study of various issues relevant to CSR and international business from a much wider global perspective. It also provided significant insights into Islamic jurisprudence (Fiqh) regarding business practice. The consistency of the conceptual framework of CSR in Islam with contemporary business practices was explored using a survey of Islamic banks located in different parts of the world. The survey revealed that many current practices of Islamic banks mirror the expected behaviours or practices generated in the Islamic framework. In fact, it was possible to discern that the organizations surveyed implement the Islamic code of conduct rather extensively. Against this background, a consistency with the framework of CSR in Islam presented in this study was identified. Such consistency, however, was driven by legal requirements in adherence to Shariah rather than an explicit understanding or pursuit of CSR. The lack of a systematic framework with explicit notions of CSR from an Islamic perspective caused hindrance in implementing CSR practices in Islamic organizations. It follows that this study was a modest step towards filling this lacuna by presenting a systematic and coherent framework of CSR in Islam.

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