Ethics Teaching in Business School
The emerging corporate governance reforms have had a positive
impact on academic programs.
The goal of corporate governance and business ethics education
is to teach students their responsibilities and accountability to
their profession and society. Almost all states require Certified
Public Accountant CPA candidates to pass an ethics exam
before licensing and report the ethics component in their
continuing education requirements. Almost all states require a
minimum amount of ethics education for their practicing CPAs.
Ethics in Institutions of Higher Education
Academic integrity and ethical conduct by students and faculty are important
to the sustainable well-being and reputation of institutions of higher
education. This academic integrity can be achieved when:
(1) there is an effective and fairly enforceable academic honor code,
(2) faculty are willing to take proper action against suspected cheaters,
(3) adequate research is conducted to identify factors that affect academic
integrity, including fundamental ethical values,
(4) ethics are integrated into the business curriculum, and
pedagogies are developed to teach and encourage adherence to
ethical values and conducts.
Ethics, like other Islamic sciences, takes its
origin form the Quran. The Quran lays down
the foundation of a religious system on purely
ethical principles, hence there is not much to
distinguish between Islam as such and Islamic
ethics.
The Muslims started the study of Ethics along
with the study of the Quran.
INCEIF
3
Ethics in Islam is nothing but the body of
injunction laid down in the Quran for the
practical conduct of life and fully exemplified
in the practice of the Holy Prophet throughout
his life.
Within an Islamic Context, the term most
closely related to ethics is khuluq in the Quran
which has been guided by principles from the
Quran and the Sunnah.
You are the best nation that has been raised up
for mankind; You enjoin right conduct, forbid
evil and believe in Allah. (3:110)
ُ ‫ُك ْن ُت ْم َخي َْر أ ُ َّم ٍة أ‬
ْ
َّ
ْ
‫ُوف َو َت ْن َه ْو َن َع ِن‬
‫ن‬
‫ل‬
‫ل‬
‫ت‬
‫ج‬
‫ر‬
‫خ‬
ِ ‫ُون ِب ْال َمعْ ر‬
ِ
َ ‫اس َتأْ ُمر‬
َ
ِ
ِ
َّ ‫ون ِب‬
ِ‫اّلل‬
َ ‫ْال ُم ْن َك ِر َو ُت ْؤ ِم ُن‬
INCEIF
5
The Quran addresses the Prophet. “Thou has been
created with an excellent character”
‫وانه لعلى خلق عظيم‬
The Prophet highlighted one of his main objective is
to perfecting good morals
“I have been sent for the purpose of perfecting good
morals”.
‫بعثت التمم مكارم االخالق‬
INCEIF
6
Islam consider the Prophet as an ideally
perfect man, par excellence, in all aspects
of life.
The Quran exhorts the believers to follow
the rightly guided particularly the Prophet.
It is the desire of every pious Muslim to
model his life in every possible particular
upon that of the Prophet.
The Prophet (pbuh) always prayed in all humility to
Allah to bestow on him the highest moral qualities and
a generous character.
He was of exceeding humility and the greatest, the
bravest, the justice and the most pious of men.
He mentioned that he was sent by Allah to set up the
best standards of moral conduct as he himself
demonstrated in by his own practice.
He exhorts his followers to be just and compassionate,
to fear Allah, to be truthful, to fulfill their covenants, to
avoid breach of trust, in return a trust duly, to be
merciful to orphans, to be afraid of the Day of
Judgment when everyone shall have to render full
To do good acts and avoid bad ones, to treat one’s
neighbors well, to lead the power, to be kindly
and generous in the daily intercourse of life and in
carrying the mission of peace to mankind, to
follow the just and the truthful.
He led an absolutely frugal and temperate life,
subsisting on the simplest fare, consisting mainly
of dates and barely.
He meted out equal treatment to all, free
or slave.
 He gracefully bore with anything that
annoyed him.
He had unbounded faith in Allah and
never compromised with anything which
he considered to be untrue, cunning or
mean.
He visited and confronted the sick and the
afflicted.
He was dignified in manner and in
speech, and always the first of offer
He readily forgave people and endeavored to
bring about peace between men.
He accepted invitation from the poor and the
rich alike and had always a smiling look.
Pride and vanity did not touch him.
He was meek and tolerant while he was at the
zenith of his power and treated his enemies
The Psychological Nature of Man
Knowledge and Morality
The Freedom of the Will
According to al-Ghazzali all psychological
phenomena of Man originated in the Self, such as:
- What is the nature of the Self?
- What is the ultimate purpose of it?
- Wherein lie its misery and Happiness?
The self is the essence of man, al-Ghazzali
divided the self into four:
- Qalb (heart)
- Ruh (Soul)
- Nafs (desire-nature)
- ‘Aql (intellect, reason)
According to al-Ghazzali there are six powers included in
the Self of man:
Appetite,
Anger,
Impulse,
Apprehension,
Intellect and
Will
Appetite, anger and apprehension are common to man and
animals. The self of man possesses two additional
qualities which distinguish him from animals, and
enable him to attain spiritual perfection which are the
An -Nafs al -Mutma’inna (tranquil soul) when the ‘Aql has
checked the evil tendency and subdued and harmonized the
animal forces, its struggle in it ceases and harmony prevails.
An-Nafs an-Ammara (the instigating soul) when the evil
tendency becomes stronger and stronger, continually
inciting them to gratify themselves even at the expense of
the good of the self. In this case it is the evil tendency at its
strongest, instigating the animal forces to revolt.
An-Nafs al-Lawwama (the admonishing soul) when the
divine element is continually struggling with the human evil
According to al-Ghazzali morality and good conduct are
not possible without knowledge.
Knowledge results from the functioning of intellect of
reason (‘aql) which is the innate rational faculty of man,
the faculty which distinguishes him from animals.
Man occupies a position midway between animals and
angles; and his distinguishing quality is knowledge. He
can either rise to the level of the angels with the help of
knowledge, or fall to the level of animals by letting his
anger and lust dominate him.
It is, therefore knowledge which helps the growth of the
Al-Ghazzali holds the fact that human
character can be changed and improved
certainty implies that man possesses
some degree of free will.
Some people deny that human character
is capable of improvement.
(is it true?)
 The progress that man changes from the state
of an-Nafs al-Ammarah to the state of an-Nafs
al-Mutma’inna through ordeals and pains
clearly indicate that he is free in his will.
 This freedom is not absolute, yet it is of
paramount importance, for it is sufficient to
effect the necessary change in human
character.
There are some individuals whose character is yet
unformed, who are lacking in the ability to distinguish
between good and evil, between right and wrong. They
are ignorant, lacking in reflection and selfconsciousness, possessing no moral character, no will,
and no belief. They have yet not wholly become slaves
to the pleasures of the senses.
The character of such men can be improved easily. They
need only a guide, a determination and a motive to help
them follow the right path.
Some individuals in spite of being addicted to the
indulgence of the lower appetites are, nevertheless,
alive to their evil effects. They can discriminate
between good and evil. Their consciousness if fully
developed and they realize that the rational self is the
only true self. Yet, they submit to the demands of
their lower selves because they are not practiced in
subjecting their actions to the power of their will.
They have knowledge. They can be reformed, firstly
by abandoning their habits, and secondly, by
cultivating virtuous habits.
 Such men are amenable to good influence, if they
have the will to improve their character.
Some individuals are not only addicted to evil ways
but also believe that those ways are good and to
follow them is necessary. With regard to such people
it can be said that the real nature of things has
become obscured in their minds; consequently, the
gratification of the lower self appears to them as the
sole end of human life. They have been brought up
in ignorance. Their animal self has grown at the
expense of their rational self. It has completely
suppressed it and rendered it ineffective.
To reform them is almost impossible.
There are some who, in having been brought up in the
way mentioned above, are proud of doing evil and of
leading others astray. They take pride in doing so.
The improvement of such men is the hardest of all. Only
a conversion through Diving power can bring about a
radical change in their case.
It is about the third and the fourth types of men that the
Holy Quran says (2:7) “God has set a seal upon their
hearts and upon their hearing, and over their eyes is a
covering, and there is a great chastisement for them”
‫َخ َت َم ه‬
َ ‫صاره ْم غ‬
‫ش َاوةٌ َو َل ُه ْم‬
َ ‫س ْمعه ْم َو َع َلى أَ ْب‬
َ ‫َّللاُ َع َلى قُلُوبه ْم َو َع َلى‬
1. Unity – related to the concept of tawhid or
oneness of God, men are united under this
concept
2. Equilibrium – related to the concept of ‘adl
or justice.
3. Responsibility – accountability for one’s
actions,
4. Free will – to a certain degree, man has
been granted the free will to steer his won
life as Allah’s Vicegerent/Khalifah on earth.
5. Benevolence/kindness/generosity.
In explaining the moral code of Islam, it is
important to categorize the action according
to the degree of lawfulness and
unlawfulness as classified in fiqh to five
categories; fard, mustahabb, mubah,
makruh and haram.
It represents the class of actions that is
mandatory on every Muslim, such as praying
the five times a day, fasting the month of
Ramadan, paying zakah and performing hajj.
Describes the class of actions that are not
obligatory but highly recommended to do. e.g.
fasting beyond the month of Remadan, put
perfume during Friday prayer, or praying
nawafil etc.
Actions are permissible in the sense they are
specified neither as mandatory nor as
forbidden. e.g. trading during hajj.
Actions are not absolutely forbidden, but
are detested.
Actions are unlawful and prohibited.
Committing them is a major sin. e.g. murder,
commit adultery, dealing with riba, drinking
alcohol etc.
Islam asks its believers to observe certain norms
and moral codes in;
dealings with relatives
with neighbours and friends;
in their business transactions;
in the market;
in their social affairs,
in all spheres of private and public life.
An Islamic market is characterized by
certain norms that take care of the
interests of both the buyer and the seller.
In the market place, Islam demands a
certain type of behaviour from the
economic agents, the consumers and the
producers. For examples:-
Code of Islamic Business Transaction
Keenness to Earn Legitimate (Halal)
Earnings
Trade through Mutual Consent
Truthfulness in Business Transactions
Trustworthiness in Business Transactions
Generosity and Leniency in Business
Transactions
Honouring and fulfilling Business
Obligations
Fair Treatment of Workers
Dealing in Prohibited (Haram) Items
Sale of Al-Gharar (Uncertainty, Risks,
Speculation).
Arbitrarily Fixing the Prices.
Hoarding of Foodstuff.
Exploitation of one’s Ignorance of
Market Conditions.
Cheating and Fraud in Business
Transactions.
Swearing, Giving Short Measures and
Dealing in Stolen Goods are not
• 'Urwa related from 'A'isha that Quraysh were
concerned with the case of a Makhzumi woman who
had stolen something and they said, "Who will
speak to the Messenger of Allah, may Allah bless
him and grant him peace, about her?" They said,
"Who is bold enough to do it except Usama ibn
Zayd, the beloved of the Messenger of Allah, may
Allah bless him and grant him peace?" Usama
spoke to him and the Messenger of Allah, may Allah
bless him and grant him peace, said, "How can you
intercede when it is a case of one of the legal
punishments of Allah Almighty?" Then he stood up
and spoke and said, "Those before you were
destroyed because when a noble among them stole,
they let him be, but when the weak among them
stole, they carried out the legal punishment on
One of the servants of the Prophet (pbuh) who
was killed in one of the battles, the
companions said about him: Congratulations
to him the certificate, O Messenger of Allah!
The Messenger of Allah peace be upon him,
said: (if you can see what I see you have seen
his grave has been fueled by the fire, they said:
Why, O Messenger?! Said: because he took
Shamlah from the booty without the
permission of the commander or distributor,
Caliph Omar bin al-Khattab came out one
day to the market in an inspection tour.
He saw fat camels which were
distinguished from the rest of the camels,
he asked: whose camels are these? They
said: Ebel Abdullah bin Omar. He said:
Abdullah ibn Umar .. .‫ بخ بخ‬Squirt. O son
of the faithful ..!! And sent for him, and
when he stood between his hands he said
to his son: What is this camels, O slave of
God ..? He replied: It is my Ebel I bought
them and sent them to the pasture to
eat: then Caliph Omar reply(the people
when they see it .. They said let Ebel the