the connecticut journal of international law, vol. 22 no. 1, spring 2007

The Connecticut Journal of International Law, Vol. 22 No. 1, Spring 2007

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Shari’ah, Islamic Law and Arab Business Ethics *

By Frederick V. Perry+

What is law, and what function does it have in our lives? Many people and many cultures answer those questions differently.1 Ethics, among other things, are concerned with judging things to be good or bad, especially behavior.2 Islam and its teachings, particularly Islamic Law, as this article will attempt to describe, inform and encompass all of the activities, mundane and spiritual of the devout Muslim, including how he or she views ethical responsibilities. The use of the term “law” as in “Islamic Law” does not necessarily imply national or state sanctioned, legislated statutes. A handful of countries rule themselves nearly completely by Islamic law, for example Saudi Arabia, Iran, Pakistan, Indonesia and Malaysia.3 Some countries use Islamic law for certain matters—for example domestic relations—and not others, but in fact, many Muslim countries do not rule themselves by Islamic law, and some have difficulty in attempting to implement the islamization of

* It must be disclosed to the reader at the outset that the author was not raised as a Muslim, and was not raised in a Muslim society or a Muslim or Arab country. Accordingly, what is contained in this article is based on the observations of an outsider looking in--to be sure an outsider who has lived for decades with and among Muslims, but an outsider nonetheless. It is for this reason that the author makes an apology in advance for any offense that the content of this article might cause for misreading, misinterpreting, or faulty reporting of Arabs, the Qur’an or the Shari’ah, or indeed of Christianity of Judaism. + Frederick V. Perry is currently Adjunct Professor of International Business Law in the Graduate School of the H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University, Fort Lauderdale, Florida, and Vice President and Associate General Counsel of Source Interlink Companies, Inc., a multi-billion Dollar publicly traded company. Dr. Perry was formerly Vice President and General Counsel of BAX Global, Inc. and former Vice President and Deputy General Counsel for Ryder System, Inc., where he worked from 1980 to 1999. He has traveled and conducted business in a number of countries in the Middle East. 1 See A. James Barnes, Terry Morehead Dworkin and Eric L. Richards, Law for Business, McGraw-Hill Irwin, New York, 2006, 9th ed. p. 3. 2 Robert B. Zeuschner, Classical Ethics: East and West, McGraw-Hill Irwin, Neew York 2001, p. 1. 3 John H. Willes and John A. Willes, International Business Law: Environments and Transactions. McGraw-Hill Irwin, New York, 2005, p. 56.


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the body of law.4 However in cases where western legal traditions are implemented, such as the Civil Law tradition in many Gulf Countries, often such laws are interpreted in harmony with Shari’ah,5 much like the original courts of equity in England were supposed to interpret issues in accordance with Christian principles. When considering the term “law” as a point of study, the average westerner has an idea of what law means, but Islamic law has a more basic meaning. Additionally, for the Arab, as with most peoples, many of the activities of daily life, including value judgments, stem from cultural and historical phenomena as well as religion, so that while religion is the major influence on the ethical principles for the Arab, cultural factors play a strong role. As used in this article, the term “doctrine” might also be used in place of law, when describing Islamic law. The purpose of this study is to explore the way that a very large group of people, the majority of Arab Muslims of the world, view the way in which they should conduct themselves vis a vis their fellow human beings, especially in the context of commerce or business. Accordingly, what follows is not always what an Arab Muslim does, but what an Arab Muslim generally believes to be the way forward if one is carefully to follow the rules. One might ask: Why concern oneself with Islamic ethics? What does such a discipline have to do with mainstream Western business, with American business? Should anyone in the West care? Current geo-political and geo-commercial circumstances suggest that they should care, since an understanding of the Islamic view, the Arab view of ethics is important in the globalizing world that surrounds us all. In view of world affairs in the early twenty-first century, such an understanding is very important to Western business people and politicians. It is also likely that that importance will grow in the future. It is certainly unlikely to diminish in the near future. During the time of the Roman Empire, some 2,000 years ago, the Middle East was the crossroads of the world—during a previous era of 4 See for example, Fauzi M. Najjar, “The Application of Sharia Laws in Egypt,” Middle East Policy, 1992, vol. 1, Iss. 3, p. 62. 5 Richard Schaffer, Beverly Earle and Filiberto Agusti, International Business Law and Its Environment, Thompson South-Western, Mason, Ohio, 2005, p. 59.


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globalization--with goods, people and ideas flowing through the region, linking Africa, Asia and Europe. During the second millennium AD, world trade flows changed and the Arab countries closed themselves to trade and to outside influences.6 Because of its natural and human resources and strategic geographical location, the Middle East has the potential of once again becoming an important player on the world’s economic stage.7 Nearly one fifth of the world’s population is Muslim, with some 1.3 billion Muslims8, and we are told that Islam is the world’s fastest growing religion.9 Of those 1.3 billion Muslims, some 200-300 million are Arabs—about one-fifth of all Muslims--living in North Africa and the Middle East.10 To be sure Muslims are in the majority in 48 countries around the world and are a significant minority in another 26 countries. Accordingly, it would seem that Muslims play a major role in one-third of the nations of the world,11 and of course the Muslim world is made up of more than just the Arab Middle East. While many of the concepts touched upon in this study will be true for most Muslims, and not just the Arab Muslims, this study concerns itself with looking at the ethics of the Arab Middle East, in short, ethics of the Arabs as informed by the religion and law of most Arabs.12 Of course in most Arab

6 Hendrik Van den Berg, International Economics, McGraw-Hill Irwin, New York, 2004, p. 263. 7 A. Ali, “Islamic Work Ethics in Arabia”, Journal of Psychology, 1992, 126(5), as cited in Christopher J. Robertson, Jamal A. Al-Khatib and Mohammed Al-Habib, “The Relationship Between Arab Values and Work Beliefs: An Exploratory Examination”, Thunderbird International Business Review, New York, Sep/Oct 2002, Vol. 44, Iss 5, p. 583. 8 Mir Zohair Husain, Global Studies: Islam and the Muslim World, Mcgraw-Hill, Newe York 2006. Some claim that there are 1.5 billion Muslims in the world. See www.islam.com/introislam.htm. 9 www.islam.com/introislam.htm 10 Encyclopedia of the Orient, www.lexicorient.com 11 James A. Beverley, Understanding Islam, Nashville, Thomas Nelson, 2001, pp. 37-38.

12 The following entities (18 states and 2 territories) all use Arabic as their official state language and most of their inhabitants maintain Arab identities (irrespective of their race or ethnic origin) and are therefore considered part of the Arab world:


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countries, the ethics of commercial behavior are informed by a combination of culture and religion, and these two phenomena, culture and religion, are inextricably intertwined. It appears clear that what most in the early twenty-first century call terrorism, the invasion and subsequent occupation of Iraq, atomic energy and Iran and the Arab-Israeli conflict are all issues, the conflicts of which, and the solutions if there be any, are based on politics. Further, and more to the point for purposes of this article, the Middle East in General, and the

• o Algeria o Bahrain o Egypt o Iraq o Jordan o Kuwait o Lebanon

• o Libya o Mauritania o Morocco o Oman o Palestine o Qatar o Saudi

Arabia

• o Sudan o Syria o Tunisia o United Arab

Emirates o Western Sahara o Yemen

Palestine and Western Sahara are not de facto sovereign countries, but they are widely recognized as legitimate states that should be independent by many countries and international organizations (for example Palestine is a full-fledged member of the Arab League and Western Sahara of the African Union). In addition to the countries listed, Djibouti, Somalia and the Comoros are all member states of the Arab League, although their inhabitants are not predominantly Arabic-speaking. On the other hand, the Maltese language is closely related to Tunisian Arabic, but Malta does not use standard Arabic and its inhabitants do not consider themselves Arabs. Chad, Eritrea, Israel, Mali and Senegal all recognize standard Arabic either as an official or a national language, but none of them are members of the Arab League (furthermore most Arab League member states do not maintain diplomatic relations with Israel). While the majority of the population of Israel is either Arabic-speaking or has parents or grand-parents that once were, only the Israeli Arab minority are considered Arabs, since most descendants of Arab Jews in Israel have shifted to using Hebrew in their daily lives.

At present, most Arabs are Muslims. Sunni Islam dominates in most areas, overwhelmingly so in North Africa; Shia Islam is prevalent in Bahrain, southern Iraq and adjacent parts of Saudi Arabia, northern Yemen, and southern Lebanon, as well as parts of Syria. The tiny Druze community, belonging to a secretive offshoot of Islam, is usually considered Arab, but sometimes considered an ethnicity in its own right.

Source: “Arab World” from Wikipedia, www.wikipedia.org.


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Arab World in particular have an ever increasing impact on the world’s economies. Trade between the United States and Bahrain currently is measured at about $900 million per year, and the two countries recently concluded negotiations of a bi-lateral free trade agreement.13 Likewise, the United States has negotiated free trade agreements with Oman, Jordan and Morocco, and intends to commence negotiations for one with the United Arab Emirates.14 Four countries alone, Kuwait, Saudi Arabia, the United Arab Emirates and Iran will likely take in $276 billion in oil revenues in 2005.15 Three of those countries are Arab. The United States is worried about losing influence in this region because of both political reasons and an inability to conduct commerce with the peoples of the region in ways that ingratiate Americans.16 Of course the Arab world is not a homogenous place. Great disparities exist. The gross domestic product per capita of Yemen in 2003 was US $760 and in the United Arab Emirates it was US $20,530.17 The wealth of the UAE is obviously based on its oil wealth, but such oil wealth can tend to distort the world’s perception of the Arab world. The GDP of all Arab countries combined stood at US $531.2 billion in 1999, which was in fact less than that of a single medium sized European country, Spain, whose GDP in the same year was US $595.5 billion.18 In short, there are very poor Arab countries, and there are very wealthy ones. Even so, much of the world’s energy supply currently comes from the region and because of their natural endowments, the world will look to a number of these economies for a substantial portion of its energy supplies for the foreseeable future, since over one half of the world’s oil reserves are to be found in the Persian Gulf region alone, and 61.9% in the Middle East.19 Of

13 $6b investment projects go on show in US – Bahrain Bahrain Tribune, November 21, 2005. 14 “U.S., Oman Complete Talks on Bilateral Free-Trade Agreement”, www.usinfostate.gov. 15 “A Bourse is Born in Dubai”, Business Week, October 3, 2005. 16 Anthony Bubalo, “Asia’s Alliance With the Middle East Threatens US”, Financial Times, ft.com, Ocober 5, 2005. 17 Human Development Reports, HDR 2003, Human Development Index, United Nations Development Program, www.undp.org/hdr2003. 18 “The Arab World: Let the Numbers Speak for Themselves”, United Nations Development Program, , cfapp2.undp.org. 19 BP Statistical Review of World Energy 2006, ”Historical Data Series. At http://www.bp.com/productlanding.do?categoryId=6842&contentId=7021390.


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the world’s known natural gas reserves, nearly 40.1% are found in the Middle East.20 In 2004, the United States imported US $25.16 billion worth of goods from three Arab countries, Egypt, Kuwait and Saudi Arabia.21 In that same year, the United States exported a total of US $ 12.11 billion in goods and services to Egypt, Kuwait, Saudi Arabia and the United Arab Emirates.22 Arab money invested in the United States is important to the US balance of payments and the level of it deficit. Kuwait, according to the US Department of Commerce, is one of the ten largest investors in the US real estate market.23 Of the US $750 billion that Saudi Arabia has invested in foreign markets, approximately US $350 billion are invested in the US, some US $290 billion of that in real estate.24 A withdrawal of those investments and a curtailment of future investments would have an enormous effect on the US trade deficit, which in 2005 stood at about $US $717 billion.25 The United Arab Emirates were interested in managing a number of United States Ports, and invested heavily in the acquisition that would have accomplished that.26 There was a storm of protest over port security concerns.27

20 Ibid. p.174. 21 CIA World Fact Book, http://www.cia.gov/cia/publications/factbook. For Egypt, see section on Egypt at https://www.cia.gov/cia/publications/factbook/geos/eg.html; for Kuwait, see section on Kuwait at https://www.cia.gov/cia/publications/factbook/geos/ku.html; for Saudi Arabia, see section on Saudi Arabia at https://www.cia.gov/cia/publications/factbook/geos/sa.html. 22 Ibid. 23 See presentation by Henry J. DiGiacomo of Cape Code Island Association of Realtors, Inc., “Welcome to Spot International Trends Affecting Your Market”, dated April 3, 2006, at Realtor.org. Then type in ‘international trends’. 24 Nimrod Raphaeli, “GDP In Arab Countries Decline in 2001”, Middle East Economic News Report, No. 34, The Middle East Research Institute, September 19, 2002. 25 http://www.census.gov/foreign-trade/statistics/index.html, then go to Historical Series, Monthly Totals. 26 “Dubai Ports World is government Owned”, WorldNetDaily, February 20, 2006, www.worldnetdaily.com. 27 “Bush, Congress Clash Over Ports Sale”, cnn.com, February 22, 2006, www.cnn.com.


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Foreign investment in Arab countries appears to be on the rise after a decline following September 11, 2001.28 Arab financial institutions either own or control around US $60 billion.29 There is momentum building for the formation of a trading block of Muslim nations and there is a growing sentiment toward islamization, that is, toward a “return” to the broad application of Shari’ah in Muslim countries.30 All this trade and all this investment are rising in volume; globalization is upon us. The concept of globalization is on the minds of many people around the world these days, and a substantial number of Arabs view globalization as an imposition of American culture and values, an attempt to amalgamate religious principles, in short a cultural invasion, which threatens to dominate and even destroy their cultural heritage and national identity.31 It is important therefore for global corporations and international businesspersons in general to have an understanding of the worldview or motivations of Muslim and Arab consumers and business partners. Not understanding that worldview, and the rules by which such people govern their daily lives may tend to alienate companies and individuals attempting to conduct business in or with such countries, especially where strict adherence to Shari’ah, or Islamic law, is required, such as in Saudi Arabia.32 In other words for the West, business in Arab countries, and with Arabs is important and likely to become more so.

What is Islam? In the Islamic tradition, ethics stem from the law, and the law comes from the religion. Accordingly to understand the one, one must understand the

28 “ An Increase in the Flow of Foreign Investment to Arab States”, ArabicNews.com, at http://www.arabicnews.com/ansub/Daily/Day/040924/2004092412.html, www.arabamricanbusiness.com/oct_nov2004/intbus_arabstates911.htm 29 Mohammad Saeed, Zafar U. Ahmed, Syeda, Masooda Mukhtar, “International Marketing Ethics From and Islamic Perspective: A value Maximization Approach,” Journal of Business Ethics, July 2001, Vol. 32, Issue 2, p. 127. 30 Ibid. 31 Fauzi Najjar, “The Arabs, Islam and Globalization,” Middle East Policy, Washington, Fall 2005, Vol. 12, Iss. 3, p. 91. 32 Ibid. p. 128.


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other. In a fairly general sense, for many non-Muslim people, especially Westerners, or for those with the “modern” worldview, with little understanding of the Islamic worldview, it is difficult fully to understand the Qur’an and it teachings. It was written or revealed, after all, in Arabic, approximately 1400 years ago to a culture that is considerably different from any that exists today, certainly very much different from “modern” Western culture and its concept of reality. Indeed the Qur’an says that God sends a message in the language of the people to whom it is addressed. In other words, the Revelation conforms to the needs of its recipients, so that they may understand it.33 It is important to understand what is meant by the term “Islam”. Islam means “submission to the will of God”34 in Arabic, and it refers to the religion that was established by the Qur’an and by the Prophet Mohammed. Accordingly, a Muslim is one who is a follower of the religion of Islam, or one who submits to God’s will, as defined in the Qur’an.35 The Qur’an is for the Muslim the word of God. For the Muslim, it was revealed to the Prophet Mohammed from God through the angel Gabriel. Mohammed was ordered to recite, and the verses of the Qur’an were the result of that recitation.36 This has rather profound consequences. Of course the three great Western monotheistic religions are all revealed religions. However, it is fairly clear in Christian and Jewish traditions that, except for the Ten Commandments, their holy books were written down by men, some decades or centuries after the events described. Many of the events written about were handed down in the way of stories from generation to generation, but certainly not memorized word for word as a recitation. The Qur’an 33 Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p. xv. 34 In Arabic, “Allah” means “God”. Both words, “God” and Allah” will be used interchangeably throughout this study to denote the same concept. See Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p. 46. 35 Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p. xiv. 36 Karen Armstrong, A History of God, Ballantine Books, New York, 1993, pp. 139-140. See also Seyyed Hossein Nasr, Ideals and Realities of Islam, ABC International Group, Inc., Chicago, 2000, Chapter 2,


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actually is considered by Muslims to be the Word of God as God intended it to be heard, with no intermediation of a writer or time. The Prophet Mohammed repeated the recitation to his companions and he and they memorized the Recitation, as did their followers, word for word. Generations of Muslims have memorized the same recitation. Some even memorize the entire Qur’an. It is important to note that it is to be heard, not necessarily read. The Qur’an is thus not only a revelation,37 it is for the Muslim also the direct Word of God, and considered an enduring miracle, the miracle from God. For Muhammad, the message was the miracle.38 This gives the Qur’an a place in the hearts of Muslims that to many may be significantly more important than the holy books of many other religions, which though they may also be considered the word of God or about God, they are not necessarily considered miracles, though of course the Ten Commandments are believed to be the direct word of God by Christians and Jew.39 The word “qur’an” in Arabic simply means “recitation”, and the definite article “al” placed before it, as in, “al Qur’an” signifies the Holy Recitation.40 Because the Prophet Mohammed was who he was, not only a pious and charitable man, a man chosen by God to be the conduit of His revelation, and the one to introduce it to the Arabs, and through them, to the world, he was the one to whom the Arabs looked for guidance in interpreting both the Revelation and the new religion. But he was, as he often said himself, only a man. Indeed, the Qur’an orders him to: “Say thou: ‘I am but a man like you.’”41 He was not considered by his followers to be God or a manifestation of God, like the Christians consider Jesus,42 but what he said and did was what informed their understanding of how to practice the new religion, in short, how to be pious Muslims.43

Western Law

37 Qur’an 39:23. 38 Reza Aslan, No god But God, Random House, New York, 2006, p.157. 39 Exodus, Chapter 20. 40 Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p. 176. 41 Qur’an 41:6. 42 Seyyed Hossein Nasr, Ideals and Realities of Islam, ABC International Group, Inc., Chicago, 2000, p.3. 43 See footnote 55.


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Black’s Law Dictionary in defining the term “law”, states that: “Law, in its generic sense, is a body of rules of action or conduct prescribed by controlling authority, and having binding legal force. That which must be followed by citizens subject to sanctions or legal consequences is law.”44 The question for us here is who is “controlling authority”? That is, who or what is the source of the law. The source of law in the west is entirely different from the source of law in the Islamic tradition. Under the concept of “law” in the western nations, particularly the Common Law, and certainly in the United States:

“The law consists of rules of conduct established by the government of a society to maintain harmony, stability, and justice. It does this by defining the legal rights and duties of the people. The law also provides a way to protect the people by enforcing these rights and duties through the courts, the executive branch , and the legislature. The law is, therefore, a means of civil management. Certainly, the law usually cannot stop a person from doing wrong. However, the law can punish and individual who chooses to do that wrong, whatever it might be. The law, then, draws the line between conduct that is permissible and that which is not allowed, so people, at the very least, know that they can be punished if the choose to disobey the law.45

Under the United States Constitution--the starting point of all law in the United States--the people are to be the ultimate source of government and the law.46 The constitution was formed by “we the people”, so that a more “perfect union” could be formed, and the power to create laws emanating from the constitution is vested in the Congress, the members of which are chosen by the “peoples of the several States.”47 In addition to general and specific law making being vested ultimately in the “peoples of the various states”, a good illustration of the people at work, pushing the Congress and the President to commence activity they might not otherwise wish to surrounds the terrorist attacks on the World Trade Center 44 Black’s Law Dictionary, St. Paul, Minnesota, West, 1979 5th edition. 45 Gordon W. Brown and Paul A. Sukys, Business Law with UCC Applications, McGraw-Hill Irwin, New York, 2006, p3, 11th Ed. 46 See The Constitution of the United States of America, Preamble. 47 The Constitution of the United States, Article I, Section 1.


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and the Pentagon of September 11, 2001. After those attacks, many citizens and groups wanted an independent commission to be appointed to investigate the events that led up to the attacks. The idea was to determine if the attacks could have been prevented and how to prevent similar attacks in the future. President George W. Bush did not want such a commission to be appointed and refused. He insisted both that no public hearings would be conducted and that none of his staff would testify if such hearings were conducted. Then a group of people, mostly family members of those killed in the 9/11 attacks bypassed the President and went to the Congress in an attempt to get the Congress to force the President to appoint such a commission. At first the Congress resisted, but the families pushed hard, then the Senate agreed to support the idea of such an independent commission, in fact the Senate’s vote to approve the request was 90-8. Pressured by the Senate, the President relented and agreed to appoint such a commission. The foregoing provides an example of the President being pressured to act by the Congress, which in turn, was pressured by private citizens.48 Law in the west in general is considered a “social phenomenon,”49 that is emanating from or parts of social conventions, which stem from the legislature or from court decisions, These conventions provide for ways in which these laws can be created, changed or done away with.50 The government and its institutions are the law giver. In the Civil Law tradition, also a western phenomenon, law is “…a bundle of norms or rules…emanating from legitimate authority and to which its subjects are subjected to, even against their will. This means of course that coercion is inseparable from law, that is, coercion is an essential quality of law, without which law would not practically exist.”51 In other words, again

48 Gordon W. Brown and Paul A. Sukys, Business Law with UCC Applications, McGraw-Hill Irwin, New York, 2006, 24, 11th Ed. 49 “The Nature of Law, Stanford Encyclopedia of Philosophy, http://plato.stanford.edu/entries/lawphil-nature, p. 2. 50 “The Nature of Law, Stanford Encyclopedia of Philosophy, http://plato.stanford.edu/entries/lawphil-nature, p.2. 51 Rafael De Pina, Derecho Civil Mexicano, Editorial Porrua, S.A. Mexico City, 1981, Tomo I, p.44. See also, Galindo Garfias, Derecho Civil, Editorial Porrua, S.A. Mexico City, 1973, Chapter I.


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the law emanates from the government, from men, and it can be created, changed or annulled. As for the concept of law in general international law, an advisory opinion on the meaning of “laws” by the Inter-American Court of Human Rights, interpreted the term “laws” as used in the American Convention on Human Rights—where the Convention refers to laws of the various state signatory parties—as being: “…a general legal norm tied to the general welfare, passed by democratically elected legislative bodies established by the Constitution, and formulated according to the procedures set forth by the constitutions of the state parties for that purpose”.52 This is similar to the notion in the United States Constitution, and the refrain throughout the western traditions is law by the state, and often emanating ultimately from the people.

Islamic Law

For Shari’ah, or the Muslim concept of law, God is the lawgiver, and the word Shari’ah in Arabic means the way or path, literally “the way to a watering place”.53 In the Islamic legal tradition, and in countries that have adopted the Islamic legal tradition, no power on earth has the authority to make law or change law.54 The Qur’an was revealed to the Arabs in the desert, hence the metaphor of the water hole, a place of ultimate importance to the Bedouin. Everyone in the desert seeks water. In a dry spell or a dry place, water is one’s salvation. Not finding water can mean sure death. The Shari’ah therefore is not only the way to God, to Allah, but also the way or path shown by Allah for a Muslim to conduct his or her life.55 To be sure, the Qur’an says: “We made for you a law, so follow it, and not the fancies of those who have no knowledge.56 The metaphor of water, of its life-giving and cleansing effects, and the path to it is ever present: “…and He caused rain to descend on you from heaven, to clean you therewith, to remove from

52 Human rights Law Journal, volume 7, p. 231 (1989), as cited in Ray August, Public International Law, Prentice Hall, Upper Saddle River, New Jersey, 1995, p. 11. 53 Abdur Rahman I. Doi, Shari’ah: The Islamic Law, Ta Ha Publishers, London 1997, p.2 54 David M. Neipert, Law of Global Commerce: A Tour, Prentice Hall, Upper Saddle River, New Jersey, 2002, p.27. 55 Ibid. 56 Qur’an, 65:18.


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you the stain of Satan.”57 Accordingly, following Shari’ah is what God intends for man and woman to do, and doing so is therefore the path of purity, as symbolized by the cleansing water, the way of salvation for the Muslim.58 Accordingly if one is to follow the rules carefully, a certain type of behavior is expected from Muslims in their dealings with their fellow human beings in social and business contexts. The ethics of Arab Muslims are based on their understanding of the law; their ethics come out of and are defined by the law, which for them is Shari’ah. For purposes of this study then, it is therefore also essential to understand what law or Shari’ah means to a Muslim, and from where that law is derived. Two other concepts to be defined are Sunnah and Hadith, both very important to the concept of law in Islam. There are two primary and three secondary sources of Shari’ah. The two primary sources are the Qur’an and the Sunnah and the secondary sources are based on the writings and opinions of the Islamic legal scholars.59 The three secondary sources are consensus of the legal scholars, deduction from analogy, and the use of individual reasoning by those scholars.60 The Islamic scholars, or Ulama, are the ones who provide these foregoing secondary sources, based on their interpretation of the Qur’an and the Sunna, which they apply to the specific question at issue, in the context of the circumstance. The second primary source of the Shari’ah, the Sunnah, is generally the way in which the Prophet Mohammed led his life and practiced his faith, which is to say the same thing, since leading one’s life in accordance with God’s will is considered practicing the faith. The Qur’anic verse, which says: “Nor 57 Qur’an 8:11. Water was important to the desert Arabs for many reasons. Water was scarce for both drinking and ritual and real cleansing; water helped the thirsty traveler sssuage his fatigue. The “stain of Satan” refers to dirt being a symbol of evil, and ritual cleansing, or ablutions were important before praying. See The Holy Qur’an: English translations of the Meanings and Commentary, King Fahd Holy Qur’an Printing Complex, Al-Madinah, Saudi Arabia, 1411 H. Notes 1187 and 1188, p. 472. 58 See Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, pp. 22-23. 59 See Abdur Rahman I. Doi, Shari’ah: The Islamic Law, Ta Ha Publishers, London 1997 chapters 2, 3 and 4. 60 Ibid. chapter 4. See also Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, Introduction.


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does he say(aught) of his (own) desire. It is no less than inspiration sent down to him. He was taught by one mighty in power, endowed with wisdom”,61 tells the followers of the Prophet that he, that is, the Prophet, knows what he is doing and his example is the one to follow. Accordingly the first community of Muslims followed his example and remembered his verbal teachings and how he responded to various questions about this or that. Eventually, after his death, people wrote down what he said and did, calling it Sunnah, which is often translated as practices or traditions.62 They wrote such things down in reports called Hadiths.63 After the Qur’an, the Sunnah is the most important source of Islamic law.64 The term Shari’ah can therefore be translated as Islamic Law or revealed law.65 So that the “path leading to water”, the rules to live by, as taught by the Qur’an and by the Prophet Mohammed became know as the Shari’ah. It was considered the law, but an all-encompassing law. If followed, Shari’ah informs nearly every aspect of the Arab’s daily life.

In every religion the Divine Will manifests itself in one way or another and the moral and spiritual of each religion are of Divine origin. But in Islam the embodiment of the Divine Will is not only a set of general teachings but of concrete ones. Not only is man told to be charitable, humble or just, but how also to be so in particular instances of life. The Shari’ah contains the injunctions of Divine Will as applied to every situation in life. It is the law according to which God wants a Muslim to live. It is therefore the guide of human action and encompasses every facet of human life. By living according to the Shari’ah, man places his whole existence in God’s “hand”. The Shari’ah, by considering ever aspect of human action, thus sanctifies the whole of life and gives a religious significance to what may appear as the most mundane of activities.66

61 Quran 53:3-6. 62 Oliver Leaman, A Brief Introduction to Islamic Philosophy, Polity Press, Cambridge, UK, 1999, p. 1 & 17. 63 Ibid. 64 Joseph Schacht, An Introduction to Islamic Law, Oxford University Press, Oxford, 1982, p. 8. 65 Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p. 22. 66 Seyyed Hossein Nasr, Ideals and Realities of Islam, Chicago, ABC International Group, Inc. 2000, p.86.


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And for Muslims:

Islam is a religion and a way of life based on the commandments of Allah contained in the Holy Qur’an and the Sunnah of the Prophet of Islam, Muhammad. Every Muslim is under an obligation to fashion his entire life in accordance with the dictates of Qur’an and Sunnah. So he has to observe at every step the distinction and what is wrong. This highlights the need and importance of his acquaintance with the corpus juris of Islam (Shari’ah).67

As already alluded to, in the Arab world, religion and culture are intertwined. There are two very important areas in which the Arab view of ethical behavior differ from that of the average American, or indeed, Westerner in general; the idea of collectivism versus individualism, and the concept of rendering unto Caesar or not “that, which is Caesar’s”.

The Christian tradition, which informs much of the social and commercial world of the West gives rise to a fairly broad misunderstanding within the West in general of the significance of Shari’a and its thoroughgoing or all encompassing nature.68 It is difficult for Christians and secularists with a Christian background to understand fully the concept of divine law.69

The difference between the conception of Divine Law in Islam and in Christianity can be seen in the way canon (qanun) is used in the two traditions. This word was borrowed in both cases from the Greek. In Islam it has come to denote a man-made law in contrast to the Shari’ah or divinely inspired Law. In the West the opposing meaning is given to this word in the sense that canonical law refers to laws governing the ecclesiastical organization of the Catholic and Episcopal churches, and has definitely a religious color. The Christian view, which governs man socially and politically, is indicated in the well-known saying of Christ, “Render therefore unto Caesar things which are Caesar’s.” This phrase has actually two

67 Abdur Rahman I. Doi, Shari’ah: the Islamic Law, Ta Ha Publishers, London, 1997, p. i. 68 Seyyed Hossein Nasr, Ideals and Realities of Islam, Chicago, ABC International Group, 2000, p. 86. 69 Ibid.


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meanings of which only one is usually considered. It is commonly interpreted as leaving all things that are worldly and have to do with the political and social regulations to secular authorities of whom Caesar is the outstanding example. But more than that it also means that Christianity, being a spiritual way, had no divine legislation of its own, it had to absorb Roman Law in order to become the religion of a civilization. The law of Caesar, or Roman law, became providentially absorbed into the Christian perspective once this religion became dominant in the West, and it is to this fact that the saying of Christ alludes indirectly. The dichotomy, however, always remained. In Christian civilization law governing human society did not enjoy the same Divine sanctions as the teachings of Christ. In fact this lack of a divine Law in Christianity had no small role to play in the secularization that took place in the West during the Renaissance. It is also the most important cause for the lack of understanding of the meaning and the role of Shari’ah on the part of Westerners and many modernized Muslims.70

So it is that Christians are instructed to follow the secular law of the place in which they live, and religious faith is separate from government.71 Islam did not give to Caesar that which was Caesars, because virtually nothing was Caesar’s to begin with. What was considered in the Christian view to be the domain of Caesar was to be integrated into to the complete Islamic view of the world, encompassing political, social and economic life. Religion included all of it. Law in Islam is a part of revelation, and religion—which comes from revelation--informs daily life with rules for nearly everything. In other words, whereas Christianity separated the spiritual from the mundane, Islam did not.72 This has significant consequences in the differing worldviews of what law is and how life is to be ordered. First, it is acceptable—though perhaps not

70 Ibid, pp. 86-87. 71 David M. Neipert, Law of Global Commerce: A Tour, Prentice Hall, Upper Saddle River, New Jersey, 2002, p.27. 72 See Fauzi M. Najjar, “The Debate on Islam and Secularism in Egypt,” Arab Studies Quarterly, Spring 1996, Vol. 18, Iss. 2, quoting Muhammad Imara, who believed that Christian dualism gave rise to secularism—that is separation of religion and state—in Europe.


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mandatory--to have a Caliph73, or a divinely inspired leader who enforces the law.74 Perhaps more importantly, because in the West, the law has no Divine roots, man can change it. The law as understood in Islam, that is Shari’ah, because of its Divine provenance, cannot be changed by man. It is therefore unlike the laws of legislatures, as most non-Muslims understand the concept of law. A Christian might violate an unjust law and not expect to be punished in the afterlife, whereas a violation of Islamic law might well bring punishment in the afterlife.75 Law in the West, in fact law in many societies around the world generally proscribes or requires certain types of specific behavior. Thus there are criminal laws, civil laws, tax laws, traffic laws and so on. Most of those laws carry with them certain prescribed penalties for their transgression, such as fines, jail time etc. Because the Shari’ah is an all-encompassing concept, it too has certain things, which are proscribed and certain things, which are prescribed. But Islamic law has five categories of actions: (1) those things that must be done, that is, required action, such as fasting during Ramadan or the daily prayers; (2) those things, which are recommended, that is, things that ought to be done; (3) those things, which are indifferent, that, is, the law does not care one way or another whether such things are done or not; (4) the reprehensible, that is, things that one should not do, but they are not prohibited; and (5) the forbidden actions. Not all forbidden actions have a punishment prescribed for them.76 This whole body of Islamic law, of Islamic doctrine, lays the foundation for and informs the Arab concept of ethical behavior. From Law to Ethics

73 The idea of the separation of religion and state is often a much disputed issue among many Muslims. See, for example, Fauzi M. Najjar, “The Debate on Islam and Secularism in Egypt,” Arab Studies Quarterly, Spring 1996, Vol. 18, Iss. 2. 74 See generally Reza Aslan, No god But God, Random House, New York, 2006, at pp.136, 156-157 and elsewhere therein. 75 David M. Neipert, Law of Global Commerce: A Tour, Prentice Hall, Upper Saddle River, New Jersey, 2002, p.27. 76 Sachiko Murata and William C. Chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p.23, and see Joseph Schacht, An Introduction to Islamic Law, Clarendon Press, Oxford, 1982, chapter 26.


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The word “ethics” is derived from the Greek word ethos, which means the character and sentiment of the community.77 In other words, the concept of what is acceptable behavior as a norm within a community or within a group is the essence of ethical behavior for that community or group. Ethical standards help to inform one’s decisions. It is for this reason that we study or attempt to understand the ethics of various groups, since what is the right path, the moral or ethical way for one person, might not be the right way for another, if they both come from divergent backgrounds or cultural groups. Difference between law and ethics or morals in western thought. Of course not all who claim to be Muslims can be expected to follow completely the ethical principles that the tenets of their law prescribe, just as not all Westerners or Asians or all who profess to follow Christian, Jewish or Buddhist principles actually always follow those principles fully. At the same time, an attempt to understand the principles underlying the ethical rules of a group can be a good starting point toward understanding what to expect from a member of that group in a social or commercial context. Through such understanding, one can at least have a good idea as to what the member of that group views as what is right. Whether the group member actually does what he or she believes to be the right thing, is another matter altogether. The study of ethics has been a fairly popular discipline at least since the time of Aristotle; his Nichomachean Ethics is still widely read throughout the world. The concept of business ethics, though of more recent vintage, is now widely studied in business schools. In fact some major international business schools, like INSEAD, attempt to weed out those students that they believe do not measure up in terms of their ethical values.78 At the same time, we see that the study of culture or cross-cultural relations is also broadly studied, and there is broad interest in how cultural differences affect international business. 79 77 Stephen J. Carrol and Martin J. Gannon, Ethical Dimensions of International Management, Sage Publications, thousand Oaks, California, 1997, p.4. 78 William J. Holstein, “Screening for Ethical Values: How One School Does It,” the New York times, Sunday November 20, 2005, p.9. 79 Stephen J.Çarroll and Martin J. Gannon, Ethical Dimensions of International Management, Sage Publications, Thousand Oaks, California, 1997, p. ix.


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Ethics is on the minds of many these days. Educators are pushing for more courses to be taught in the area of ethics for business, in fact the Association of Advanced Collegiate Schools of Business (AACSB), the foremost accrediting agency of graduate business schools in the United States, recently endorsed not only beefing up ethics educations in the schools that it monitors and mentors, but also that such schools implement codes of ethics for its students.80 Graduate business schools in the United States have heeded this call81 and many graduate schools of business now offer ethics courses.82 Business schools and business appreciate the importance of ethical or moral behavior in the conduct of modern business.83 Nearly two-thirds of executive believe that high ethical standards strengthen the competitive position of the company84; eighty-two percent of U.S companies and fifty-nine percent of non-U.S. companies have a code of ethics.85 The American Medical Association is concerned about their publications and are beefing up ethical controls.86 One might ask why attempt to relate cultural differences to ethical differences? Or even more fundamentally, why analyze ethical behavior? One reason is that among any group of people, the behavior of individuals within that group has a significant influence on both social as well as economic outcomes. “Ethics and moral judgments involve the application of 80 “Accrediting Board endorses Stronger Focus on Ethics in Business School Curriculum” The Chronicle of Higher Education, http://chronicle.com/daily/2003/01/2003010805n.htm. See also McDonald, Gael M. (2004) A Case Example: Integrating Ethics into the Academic Business Curriculum. Journal of Business Ethics 54(4) 81 Accounting Scandals Have Prompted Business Schools to Implement Ethics Courses”, Daily Bruin, Monday June 13, 2005. 82 See, Paul Singer , “Business Schools Add Ethics in Wake of Corporate Scandals,” Associated Press State & Local Wire, August 16, 2002,. 83 Gerald F. Cavanagh, American Business Values With Ethical Perspectives, Prentice Hall, Upper Saddle River, New Jersey, 4th ed. P.64. 84 Ethics in American Business: An Opinion Survey of Key Business Leaders on Ethical Standards and Behavior, New York: Touche Ross, 1998, p.1. As cited at Gerald F. Cavanagh, American Business Values With Ethical Perspectives, Prentice Hall, Upper Saddle River, New Jersey, 4th ed. 85 Ronald E. Berenbeim, “Corporate Ethics Practices: Coporate Ethics Codes,” New York, conference Board Report, 1992. As cited in Gerald F. Cavanagh, American Business Values With Ethical Perspectives, Prentice Hall, Upper Saddle River, New Jersey, 1997, 4th ed. 86 www.huffingtonpost.com/merrill-goozner/pulling-punches-at-jam, August 24, 2006.


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societal values.”87 People who behave according to accepted societal norms within such a group are said to be engaging in ethically accepted behavior for that group. In general people as well as societies as a whole must have some degree of trust between and among themselves in order to cooperate with one another in any type of long standing relationship. In other words, people must be able to predict behavior and outcomes. This predictability is necessary for there to be social and economic interaction, investment, contracts, and risk taking. We associate predictability with the behavior of those with whom we associate so long as they adhere to ethical norms, that is, so long as they adhere to the ethical norms that we understand. If they do not adhere to such ethical norms or if we cannot trust them to adhere to them, we can ill afford to risk dealing with such people, since we cannot predict what they will do. We do not continue doing business with people who lie to us, who cheat us, who steal from us, or who fail to live up to their contractual obligations. It is too risky to invest our time or our money with such people.88 If we can understand what type of behavior is considered ethically acceptable for a group, we can better predict the behavior of a person who belongs to that group, provided of course that the person acts “ethically” in the context of the group norms. Business transactions, whether they be local, national or international in scope have to rely on agreed upon or shared perceptions of acceptable behavior, that is, ethical behavior, and the great increase in transnational business—the effects of globalization—have made essential at least a basic consensus on what is acceptable behavior.89 When viewing the Arab culture, it is important to understand the difference between group behavior and individual behavior, or what has been termed collectivism versus individualism. This concept can be perhaps more easily understood by contrasting two familiar cultures, that is, for example, by looking at the difference between Japanese and American cultural norms, since the Japanese culture may, for historical reasons, be a culture more familiar to the average Westerner than the Arab culture.

87 Mohamed M. Ahmed, Kung Young Chung and John W. Eichenseher, “Business Students’ Perception of Ethics and Moral Judgment: A cross-Cultural Study,” Journal of Business Ethics, 2003, vol. 43, Iss. 1/2 , p. 90. 87 See generally Stephen J. Carroll and Martin J. Gannon, Ethical Dimensions of International Management, Thousand Oaks, California, Sage Publications, 1997, Preface. 89 Mohamed M. Ahmed, Kung Young Chung and John W. Eichenseher, “Business Students’ Perception of Ethics and Moral Judgement: A cross-Cultural Study,” Journal of Business Ethics, 2003, vol. 43, Iss. 1/2 , p. 90.


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Japan…is a small island nation that has few natural resources. It imported rice farming from China, at about the 7th century A.D., because this type of agriculture provided at least a subsistence level of living for all Japanese. However, for each village to survive, it was necessary that all contribute and work hard at rice farming. Thus, harmony in working toward the common good became the chief value underlying the Japanese perspective; it was the first article in the country’s first constitution, written by Prince Shotoku in the 7th century. Behaviors that tend to destroy this sense of harmony are frequently classified as unacceptable or unethical. This perspective is in sharp contrast to that in the United States, where life, liberty and the pursuit of individual happiness predominate. In the United States the abundance of natural resources and land helped to strengthen this ideological perspective. Americans in the 17th and 18th centuries had almost unlimited resources and they tended to develop practices that were wasteful and careless of resources. Even today, this wastefulness is a problem in the United States…90

This concept gives rise to the metaphor told to the writer some years ago, when an attempt was made to point out the contrasts between the two cultures, Japanese and American. The metaphor went as follows: the Japanese is a rice farmer and the American is a hunter. The implications of those two stereotypes are that the rice farmer must work in tandem with the community in order to plant, nurture and harvest the rice. They then share the fruits of their labors among the community members. The hunter, on the other hand, goes out into the forest by himself, with his weapon, in a macho attitude of individual risk taking, overcoming the natural abilities of the prey to escape detection and capture or killing. The hunter, then, as a hero, brings back the killed animal to provide sustenance for himself only, or for himself and his family. If he is really magnanimous, he may share some with his hungry neighbors, but maybe not. Individualism, in turn, gives rise to the idea of rights--particularly individual rights being more important than, in fact transcendent over, obligations. Few Americans talk of their obligations; all speak of their rights, and spend

90 Stephen J. Carroll and Martin J. Gannon, Ethical Dimensions of International Management, Sage Publications, Thousand Oaks, California,, 1997, p. 9.


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a lifetime defending them and clamoring about them. For the Arab, “the individual is responsible for the common welfare and for the prosperity of his society. This responsibility is not only to the society but also to God. This gives the individual a feeling of inescapable responsibility.91 The harsh environment of the desert in which the Bedouin lives often requires cooperation for survival. One never turns away a visitor, since to do so could mean a death sentence for leaving someone to fend for himself in the desert. Accordingly, a sense of communal cooperation, unity and collectivism grew up among the desert Arabs of the Arabian Peninsula. It also became important to the merchant class, who traveled long distances with their goods in caravans across hostile terrain. Traveling in such caravans required cooperation for protection against the elements and from bandits. The Prophet himself was a merchant with caravans. Cooperation became a way of life and a community and cultural value for the Arabs. The Qur’an reinforced this. This sense of community values is everywhere present in the Qur’an and the Shar’ia. Prayers, which are required of all Muslims,92 can be said in a solitary fashion, but the Prophet Mohammed admonished Muslims to pray in communal groups, saying that although prayer is rewarded by God, but that prayer said in congregation is rewarded seventy times as much as the prayer said in private.93 In other words, the community is important, and individualism is not rewarded. The Islamic approach to value maximization places the emphasis on striving for the greater good of society, the community, rather than simply the pursuit of profit for the self.94 This is based on the Qur’anic concept of justice. This understanding of justice admonishes one not to be greedy, and one should not have an excessive love for money for the sake of money or for the sake of oneself alone, since such an excess would tend to prevent one from being kind and just.95 Further, the

91 “The concept of 'Community' in Islam”, www.ummah.net (or ummah.net). Then go to ‘Social Life’, then ‘the concept of community in Islam’ 92 Qur’an, 2:236. 93 Sachiko Murata and William C. chittick, The Vision of Islam, Paragon House, St. Paul, Minnesota, 1994, p. 14. 94 Mohammad Saeed, Zafar U. Ahmed, Syeda_Masooda Mukhtar, “International Marketing Ethics from and Islamic Perspective: A value Maximization Approach,” Journal of Business Ethics, July 2001, Vol. 32, Issue 2, p. 131. 95 Ahmad Ibn Muhammad Ibn Miskawayh, The Refinement of Character, The American University of Beirut, Beirut, 1968 as cited at Ibid.


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Qur’an admonishes Muslims to adhere to the contracts that they have made,96 to “fulfill your obligations”97 and to “work righteousness.98” Throughout the Qur’an is the concept of justice in social and commercial dealings,99 reasonable distribution of income, sanctity of contract, private ownership and earning money the hard way. Simple human memory is fallible, and so the Qur’an admonishes Muslims to write down their contracts, in the presence of witnesses.100 Most Western systems of law, especially Common Law systems, have what is know as a law of contract. However most commentators do not believe that there is an Islamic law of contract, rather perhaps a law of contracts, and the Arabic term for contract, ‘aqd, covers obligations of every nature, much like the concept of obligations in Mexican law101 or in the Civil Law tradition in general102. This covers two-party transactions that are covered by an offer and an acceptance, but also obligations of every nature.103 So when the Qur’an says: “You who believe, fulfill contracts”104 and “You who believe, be faithful to your contracts”,105 the injunction is a highly general one to simply do that which you say you will do.106 Under this view, all commercial activity is governed by two principles: submission to the moral order of God, and refraining from doing harm to other people.107 Not only to refrain from doing harm, but actively to do good within the community.108 96 Qur’an 2:177. 97 Qur’an 5:1. 98 Qur’an 23:51. 99 “….surely Allah loves those who act equitably.” Qur’an 49:9. 100 Qur’an 2:82. 101 See Rafael De Pina, Derecho Civil Mexicano, Tomo III, Editorial Porrúa, S.A. Mexico D.F., 1973. 102 See Manuel Bejarano Sánchez, Obligaciones Civiles, Oxford University Press, Mexico D.F., quinta edición, 1999. 103 Hussain Hassan, “Contracts in Islamic Law: the Principles of Commutative Justice and Liberality”, Journal of Islamic Studies 13:3, 2002, pp. 257 & 258. 104 Qur’an 5:1. 105 Qur’an 4:33. 106 Hussain Hassan, “Contracts in Islamic Law: the Principles of Commutative Justice and Liberality”, Journal of Islamic Studies 13:3, 2002, p. 258. 107 Mohammad Saeed, Zafar U. Ahmed, Syeda_Masooda Mukhtar, “International Marketing Ethics from and Islamic Perspective: A value Maximization Approach,” Journal of Business Ethics, July 2001, Vol. 32, Issue 2, p. 131. 108 “And (as for) those who believe and do good, We will make them enter into gardens beneath which rivers flow, to abide therein for ever; (it is) a promise of Allah, true (indeed), and who is truer of word than Allah?” Qur’an 4:122.


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The human dimension is of great importance in the Arab world. Human beings are important. “Arabs believe in people, not in institutions.” 109 People, therefore are generally more important than mere rules. In view of this, Arabs have a long tradition of personal appeal to authority in order to ask for exceptions to rules in their own personal case.110 “Arabs look at life in a personalized way. They are concerned about people and feelings and place emphasis on “human factors” when they make decisions or analyze events. They feel that Westerners are too prone to look at events in an abstract or theoretical way, and that most Westerners lack sensitivity toward people.”111 There is an ever growing tendency in the Western world in general, and in the United States in particular to rely on telephone conversations, especially conference calls and internet based e-mail transmissions to communicate regarding, and indeed to close, business deals of all levels of complexity. This tendency is likely to clash with feelings in the Arab world. Arabs love to negotiate. Persuasion and negotiation are considered a fine art, and Arabs enjoy long and spirited discussions, applying personal charm and engaging in personal appeals for consideration for their point of view. A display of emotions is often important, something which on many occasions dismays the average Westerner.112 As should be clear from the foregoing, in general economics and the way of conducting business are regulated by Shari’ah, and as one commentator has put it “…the priority of the moral quality renders the economic activity dependent on values, which are beyond it and which orientate it”.113 So in the Arab world, for mankind duties take priority over rights.114 Thus, while the Qur’an clearly permits ownership, economic activity and profit,115 those 109 T. E. Lawrence, Seven Pillars of Wisdom,, p. 24, as cited in Margaret K. Nydell, “Beliefs and Values in the Arab World,” Richard Holeton, Encountering Cultures, Prentice Hall, Englewood Cliffs, New Jersey, 2005, 2d ed. P. 451. 110 Richard Holeton, op.cit. 111 Ibid. 112 Margaret K. Nydell, “Beliefs and Values in the Arab World,” Richard Holeton, Encountering Cultures, Prentice Hall, Englewood Cliffs, New Jersey, 2005, 2d ed. P. 452. 113 Tariq Ramadan, Islam, the West and the Challenges of Modernity, The Islamic Foundation, Leicester, England 2001, p. 145. 114 Ibid. p. 146. 115 “To men is allotted what they earn, and to women what they earn”. The Holy Quran, King Fahd Holy Qur’an Printing Complex, Al-Madinah, Saudi Arabia , Revised and edited by The Presidency of Islamic Researches, IFTA. 4:32.


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who profit from economic activity and those who are in possession of property or wealth, must take into account the interests of society as a whole.116 And Muslims are exhorted to be honest in their commercial dealings. It is reported that the Prophet Mohammed said: “A trustworthy and an honest and truthful businessman will rise up with martyrs on the day of Resurrection.”117 This is an enormously important concept, inasmuch as the honest merchant is likened to the martyr who has struggled or fought in jihad and given up his or her life in such struggle. One sees in this concept that if a person conducts his or her trade honestly during a lifetime, that person will have taken part in an “economic jihad” so to speak.118 Further implications of this are that it is the basis for a strong Muslim and Arab work ethic. Business motives are held in high regard. A Muslim is supposed to work and use his or her resources in order to multiply them.119 A study of managers in Saudi Arabia found Arab managers to be highly committed to the work ethic. Muslims feel that work is a virtue; laziness is a vice; work benefits others as well as oneself life has no meaning without work and creative work is a source of happiness and accomplishment.120 The honest businessman then is accorded a lofty place in the mind of the Muslim. Muslims are prohibited from false advertisement of the goods or services that they sell; they must disclose defects of which they are aware, and must not use sexual appeal, fear appeal, emotional appeal or false testimonies in the promotion of their goods or services.121 The Qur’an admonishes the Muslim to “give

116 Tariq Ramadan, Islam, the West and the Challenges of Modernity, The Islamic Foundation, Leicester, England 2001, p. 147. 117 Abdur Rahman I. Doi, Shari’ah: The Islamic Law, Ta Ha Publishers, London 1997, p.350. 118 Ibid. 119 “The holders back from among the believers, not having any injury, and those who strive hard in Allah's way with their property and their persons are not equal; Allah has made the strivers with their property and their persons to excel the holders back a (high) degree, and to each (class) Allah has promised good; and Allah shall grant to the strivers above the holders back a mighty reward.” Qur’an 4:95. 120 Helen Deresky, International Management: Managing Across Borders and Cultures, Prentice Hall, Upper Saddle river, New Jersey, 2006, 5th Ed. P. 410. 121 Mohammad Saeed, Zafar U. Ahmed, Syeda_Masooda Mukhtar, “International Marketing Ethics from and Islamic Perspective: A value Maximization Approach,” Journal of Business Ethics, July 2001, Vol. 32, Issue 2, p. 131. And see Qur’an 43:80.


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just weight and full measure,”122 to give time to the debtor who is having difficulty paying,123 and to take oaths seriously.124 Any businessperson wishing to conduct business in an Arab country would do well to research the culture of the country in question before embarking on their project. Understanding how to conduct business in the Arab Middle East, understanding what to expect, requires a modicum of an understanding of the Arab culture. Arab countries differ in physical size, in population, in levels of natural resources and in a variety of other ways. Of course the nationals of the various Arab countries are different from one another in a variety of ways also, and in general, a national of each country will be proud of his or her nationality and often consider it superior to that of other Arabs, just as Westerners, Asians and Latin Americans do, but to a large extent, shared religion, a shared language and similar culture give rise to similarities in behavior throughout the region. It is common, especially in places like Saudi Arabia, for the employees of a firm to spend up to two hours in prayer each day. Many Arabs base their history on tribalism, which bring with it customs of reciprocity and favors. Families are normally more closely knit than in many Western countries. For Arabs, personal relationships, honor and saving face for all concerned are of high importance, and they often take precedent over the business at hand.125 There are many differences between the ways that Arabs and Westerners behave in a business context, some subtle, some stark.

Westerners tend to believe, for instance, that the individual is the focal point of social existence; that laws apply equally to everyone, that people have a right to certain kinds of privacy, and that the environment can be controlled by humans through technological means. These beliefs have a strong influence on what Westerners think about the world around them and how they behave toward each other.

122 Qur’an 6:152. 123 Qur’an 2:280. 124 Qur’an 5:89. 125 Ibid.


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Arabs characteristically believe that fate rather than humans, that everyone loves children, that wisdom increases with age, and that the inherent personalities of men and women are vastly different. As with Westerners, these beliefs play a powerful role in determining the nature of Arab culture.126

Islamic tradition and philosophy, in line with the concept of collectivism, generally consider knowledge to be the common heritage of people in general, so that the idea of the protection of intellectual property rights, which is commonly accepted as fundamental to western commercial law, is not encouraged.127 Of course this has changed in many countries recently because of a need to conform certain internal laws to that which is widely accepted as necessary to protect foreign investment and the export of goods protected by patents, trademarks and copyrights.128 Since Islamic Law prohibits gambling,129 insurance policies are frowned upon, and prohibited in some jurisdictions.130 Arab cultures tend to be conservative and traditional. Perhaps for this reason, Arabs are not as mobile as Westerners. Society demands conformity. All Arabs, no matter their social level or country of origin, share similar basic beliefs. While most Westerners likely feel that Arabs are difficult to understand or predict, their behavior is generally predictable, since it conforms to norms that change little.131 In Saudi Arabia, Islam permeates all aspects of life, including business, and God, or Allah, is frequently referred to in conversation.132 The anthropologist Edward T. Hall has categorized cultural groups into what he calls high and low context societies, who view time as monochronic or polychronic. In a high context society, information need not be explicitly stated in order for it to be understood. There is strong agreement as to what 126 Margaret Nydel K. Nydell, “Beliefs and Values in the Arab World,” Encountering Cultures, Prentice Hall, Englewood Cliffs, New Jersey, 1995, p. 445. 127 David M. Neipert, Law of Global Commerce: A Tour, Prentice Hall, Upper Saddle River, New Jersey, 2002, p. 31. 128 Ibid. 129 Qur’an 2:219; 5:90: 5:91. 130 David M. Neipert, Law of Global Commerce: A Tour, Prentice Hall, Upper Saddle River, New Jersey, 2002, p. 30. 131 Ibid. p. 446. 132 Helen Deresky, International Management: Managing Across Borders and Cultures, Prentice Hall, Upper Saddle River, New Jersey, 2003, 4th Ed., p. 114.


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is to be expected in the culture or group.133 Again using the example of the Japanese culture, which is a high context society, explains it well in a well-know aphorism: “He who knows does not speak; he who speaks does not know.”134 In monochronic cultures, one event is scheduled and tended to at a time. In a polychronic culture, people do not typically distinguish between or among activities and they are attended to simultaneously. High context societies tend to be polychronic in their attitude toward time and its use. The Arab culture is both a high context society and a polychronic one.135 The writer often attended business meetings in Jordan and Kuwait, where interruptions both by phone and in person were constant. This is normal in an Arab country, and there is nothing impolite about it, and offence is neither intended nor taken by such actions. In high context societies, people tend to have much less physical space between them when communicating; they stand close to each other. Whereas Westerners, such as Americans or Germans, who are both monochronic in their view of time, and low context societies, where things are explicitly stated in conversations and in negotiations, tend to stand farther apart when speaking to one another. For Germans and Americans, rules and expectations are clearly stated. Because they are monochronic in their understanding of time, interruptions to business meetings are unusual and often offensive. Adapting to this view of time and its implications can give rise to many problems of adaptation for Westerners, especially Americans or Germans. Time is generally important in the United States, and much attention is paid to it. On the other hand the concept of sequential time represents to many cultures, the Arab in particular, at best, an abstract view of reality, One American businessman with some twenty years experience in the Arab Middle East describes the concept by saying that “at worst, there is no concept of time in the Middle East. At Best, there is sort of an open-ended concept.” In his description of the use of the wristwatch, the head of the Industrial Design Center of Egypt states that, “one of the first things a foreigner should learn in Egypt is to ignore the second hand. The minute

133 See E. Hall and M. Hall, Understanding Cultural Differences, Intercultural Press, Yarmouth, Maine, 1990, as cited in Martin J. Gannon, Understanding Global Cultures, Sage Publications, Thousand Oaks, California, 2004.pp. 8-9. 134 Martin J. Gannon, Understanding Global Cultures, Sage Publications, Thousand Oaks, California, 2004.pp. 9. 135 Ibid.


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hand can also be an obstacle if he expects Egyptians to be as conscious as he of time ticking away.”136 Knowledge is generally exalted and its importance is clear throughout the verses of the Qur’an.137Arabs view business as an intellectual exercise, and in Saudi Arabia, for example, business subjects are normally brought up only after one gets to know one’s host. To do otherwise is considered rude. Discussing politics, religion or Israel is considered bad taste. Pointing fingers at someone or showing the soles of the feet when seated are also discourteous gestures for the Arabs.138 At the same time studies have shown that the Islamic work ethic in the Arab Middle East can enhance organizational commitment, since work is viewed as an obligation in life.139 Advertising products in an Arab country for those business people used to Western norms can be a challenge, since the use of women in certain ways or for certain products in promotional advertisements can be censored.140 We find that the ethical rules of commerce for the Islamic Arab and that of the average western businessman are similar, though they come from different sources and are viewed in a different way by their adherents. It is important to know as much as possible about the various peoples of the world with whom we interact. It is doubly so in our globalizing world. In the world of today and tomorrow we will be called upon to interact with a variety of people and cultures. Because of geopolitical forces and the horrors of war, because of expanded commercial links, because of oil, and because of links among humanity that globalization provides, it is important that Westerners understand how to work with the people of the Arab world. In order effectively to do that, it is essential to understand the things that motivate and inform the actions of the Arabs. It is important to understand Shari’ah and Islam and the ethical code that stems from them.

136 Don Ball and Wendell McCulloch, International Business: The Challenge of Global Competition, McGraw-Hill Irwin, New York, 7th Ed. 1999, p. 263. 137 As an example see Qur’an 29:43 and 30:22. See also Tariq Ramadan, Islam, the West and the Challenges of Modernity, The Islamic Foundation, Leicester, U.K. 2001. 138 Helen Deresky, International Management: Managing Across Borders and Across Cultures, Prentice Hall, Upper Saddle River, New Jersey, 2003, 4th Ed. Pp. 114-115. 139 Anne Marie Francesco and Barry Allen Gold, International Organizational Behavior, Prentice Hall, Upper Saddle River, New Jersey, 2d Ed. 2005, p. 176. 140 Don Ball and Wendell McCulloch, International Business: The Challenge of Global Competition, McGraw-Hill Irwin, New York, 7th Ed. 1999, p. 463.

the connecticut journal of international law, vol. 22 no. 1, spring 2007

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