Abstract

This paper examines particularly on the cultural difference in adapting in a new form of

business, typically comparing the secular and capitalistic and the principal values of Islamic

business. Several questions are being investigated: What are the values of Islam that is

hostile to business? What is the relationship between Islam and business? What is the

experience gain from the region Kayseri where Islamic culture still practised? What are the

implications of Islamic values towards business to country like Turkey in the global

economy? The findings show that Values of Islam are never a hostile to business as the

edifice of the entire Islamic way of life depends on absolute ethical values. The role of

Muslim women in business especially in Islamic countries, make up only a very small part of

the workforce as the traditional Islamic value still hinders the involvement of this group.

Despite these concerns, this study also shows that how Turkey’s central region clearly

demonstrates that the country can indeed function successfully in the global economy.

1.0 Introduction

The Islamic World

Muslims never differentiate between the religious and the secular but regard Islam to be a

complete way of life. They interpret from the teachings of the Qur’an and from the sunnah.

The Islamic worldview is widely based on nature of concepts in human well being and good

life which stress socioeconomic justice and rationalism. Islam is often misunderstood, alas is

surprising to some that it contains a sophisticated of entire socioeconomic system with

specific guidelines for business. In Islam, business activity is regarded to be a beneficially

useful function as Prophet Muhammad too was involved in trading for much of his life. The

Islamic socio-economic system includes detailed coverage of specific economic variables

such as interest, taxation, circulation of wealth, fair trading, and consumption. Islamic law

(shari’ah), derived from the Qur’an and sunnah, governs business relationships between

buyers and sellers. Activities are broadly categorized into as lawful (halal) or prohibited

(haram), as decreed by the Providence above. Nothing is illegal except what is specifically

prohibited in the Qur’an or in a clearly authenticated, explicit sunnah (practice or saying) of

Prophet Muhammad.

Currently, Muslim consumers have enormous and growing purchasing power in countries

such as Turkey, Egypt, Iran, Malaysia, Saudi Arabia and South Africa. The trend in many

countries with predominantly Muslim populations is towards stronger religious conservatism

and commitment (Amin 2000, Lawrence 1998). The increasing impact of Islam on business

operations is evidenced by the recent rapid growth of Islamic banking and finance

worldwide. For example, in Malaysia, banks have Islamic banking division widely aimed at

investors who follow Islamic investment guidelines. There is an increasing number of

Muslims who want to participate in the global marketplace in ways consistent with Islamic

religious law. These developments suggest that religion may strategies also play an

important role in the effectiveness of some business. Proved, one of the traits that

differentiate Muslims from followers of some other faiths is that the influence of religion is

clear in every aspect of the Muslim’s life.

Geographical Settings

Kayseri  named inclassical antiquity as Mazaka or Mazaca, Eusebia, Caesarea

Cappadociae, and later as Kaisariyah,  a large and industrialized city in Central

Anatolia, Turkey seated of Kayseri Province. The city of Kayseri, as defined by the

boundaries of Kayseri Metropolitan Municipality, is structurally composed of five metropolitan

districts, the two core districts of Kocasinan and Melikgazi, and since 2004,

also Hacılar, Incesu and Talas. In conjunction with the addition of new districts and first

stage municipalities into the metropolitan area, the city's population, which was 690,000 in

2000, is currently 950,017. Kayseri received notable public investments in the 1920s and

1930s. Sumer Textile and Kayseri Tayyare Fabrikasi were set up here during the

early Republican Era with the help of German and particularly Russian experts. The latter

manufactured first aircraft "made in Turkey" in the 1940s. After the 1950s, the city suffered

from a decrease in amount of public investment. However, during the same years Kayseri

businessmen and merchants transformed to countrywide capitalists. Families such

as Sabancı, Has, Dedeman and Ozilhan who started out as small-scale merchants in the city

of Kayseri became prominent actors in the Turkish economy. However, these families set up

their headquarters in cities such as Istanbul and Adana, nevertheless often coming back to

Kayseri to invest. Introduction of economic liberalization policies in the 1980s, created a new

wave of merchants and industrialists from Kayseri joining their predecessors choosing

Kayseri as base of their operations.

2.0 Values of Islam never a Hostile to Business

Values of Islam are never a hostile to business. Many question emerged on why global

economy looks unjust, with large income and wealth disparities and exploitation all too

apparent. Islamic ethical values are not a replacement for universal values and virtues, but

solely build on these by stressing compassion, tolerance, leniency, benevolence and

hospitality. In fact, there is nothing to discover with regard to business ethics in Islam. The

edifice of the entire Islamic way of life depends on absolute ethical values. Justice and

equity, honesty, integrity, veracity, leniency, compassion, tolerance, selflessness,

benevolence, cooperation, mutual consideration, sacrifice and harmlessness, are the guiding

values in all walks of life, business being not excepted. Muslims are deemed to truly observe

these values in whatever position they are: either employer or employee, landlord or

peasant, trader or customer, ruler or ruled, officer or subordinate, transporter or passenger,

depositor or fiduciary, relatives or strangers, neighbours or fellow-workers, nobody is allowed

to ditch these. In enable to recognise these values as binding is a concomitant of true faith;

to neglect them in practical life means a serious lapse these values are laid down and

emphasised in the Qur'an and reinforced in the Hadith.

Mutual consent between the parties is a necessary precursor for the validity of a business

transaction. Therefore, a sale under coercion is unacceptable in Islamic context. A sale

transaction is to be regarded as legal only if it is made through the mutual consent of the

parties concerned. Taking advantage of someone’s plight and charging high price is also a

form of pecuniary exploitation and as such forbidden in Islam. In the case of Kayseri, it

depends on how people look at the term of exploitation. It was a mutual agreement that was

made since that both parties agree into it. Trustworthiness is one of the most vital principles

of ethical discipline in commercial transactions. Trust is a moral virtue and duty incumbent on

a Muslim in the performance of his affairs. It demands sincerity in work and purity of intention

from every believer. A true Muslim trader will not, therefore, barter his ‘Akhirah’ (hereafter)

for worldly gains and attention. He will void fraud, deception, and other dubious means in

selling his merchandises or products. The sense of mutual trust demands that the

advantages and disadvantages of commodity be known to the buyer so that he purchases

the commodity in full satisfaction. Islam attaches great importance to the fulfilment of

contract and promises. Islamic teachings teach a Muslim trader to keep up his trusts,

promises and contracts. The basic principles of truth, honesty, integrity and trust are involved

in all business dealings. The Holy Qur’an emphasizes the moral obligation to fulfil one’s

contracts and undertakings. In order to safeguard the interest of both the buyer and the seller

it is desirable, according to the Islamic teachings, to clearly define all the necessary details

concerning the business deal.

It is a pivotal act that each business contract should clearly specify the quality, the quantity

and the price of the commodity in question. Thus, in a business contract the offer and

acceptance should be made between the parties concerned on a commodity which is with

the buyer and, which he is able to deliver. Any commodity which is non-existent or not

deliverable is disallowed to be transacted. A contract must be explicit with regard to the

rights and obligations of the parties concerned so that it does not lead to disputes and

disagreements among them. To encourage economic activity while seeking to keep it from

being exploitive as well as becoming an end in itself, Islam has exhorted its adherents to

refrain from riba, which translates literally as unlawful or exploitive gains.  It must be equated

with economic exploitation and the prohibition against it must not be construed as applying

only to transactions involving usury or even interest.  The prohibition against riba is intended

to promote ethical economic activities that do not exploit other human beings in order to

create wealth for an individual. Repeatedly, the Qur'an urges Muslims to pay others what is

owed to them since exploitation occurs when one does not pay one's obligation. 

Therefore, these principles can provide a useful foundation and platform for any interested

individuals or groups to launch programmes and policies towards conservation and

betterment of the surrounding environment and the resources therein. To practise Islamic

values in business is a good start. It is, however, a pity that the conceptual and operational

bases of Islamic perspective of sustainable development had only been marginally explored

which loom large over the developing countries.

3.0 Relationship between Islam and Business

Much has been made over the past decade about the role of women in Muslim culture,

generally ascribing the religion as anywhere between oppressive and misogynistic. Well,

only up to a point. Recent Western debate about the role of women in Islam may have

centred on the veil, but from its early years, Islam was receptive to women in business

and finance. And today, Malaysia is an example of how making money has little to do with

gender in Islam. Not only does Malaysia boast a female central bank governor devoted to

helping Islamic finance grow, but Malaysia's Islamic institutions also boast women

executives in top positions.  Modern women nowadays are now capable of achieving any

task, having a significant role in business. It’s hard to imagine, how the world of business

would be without direct intervention of women. Women these days have been forced to be

more active in the business world and that can be proven daily by seeing women working

day by day either to maintain a family or just to seek a better life. So, what is the meaningful

role of women in business? Women provide required resources to economic growing by

giving manpower; this is because they tend to be more dedicated and perfectionists.

Therefore, they are the perfect element for manufacture labours. Women as an entrepreneur

could maintain the perfect relation in a business giving dynamism and fresh ideas, unique

from nature of women. Unfortunately, women have grown and barely been recognized as a

symbol of businesses just a few decades ago, possibly hindered by traditional culture value

before that they were treated in a demeaning way. Today there are some groups and

persons that still keep the same idea:” Only men are a symbol of success” but, even if it’s

hard for these people to accept, women have grown and will keep growing, either way

biologically speaking the most notorious difference between women and men is that women

are more equipped of brain neurons than man. In today’s business world it is familiar with

seeing women in senior and managerial roles, but being a woman in business brings whole

new elements into play in the terms of values and attitudes in the business world, especially

in the Islamic country where the traditional way still sticks .

If you were to ask men if they regard women in business as equal most of them would

probably concur that they do. If you ask women in business if they feel equal to the men, I

think you will find they do not. In the present world the shifting role of Muslim women in their

homes and in the working world provides a new market for financial institutions typically. In

order to tap into this growing segment of the financial industry, banks need to understand the

unique banking needs of this vital customer segment and implement a sound training

program to best sell and service them. The recent rise in this market may be attributed to the

increasing role of Muslim women in the workplace. With new opportunities for education on

the rise and more and more women entering the workforce, women could have become

crucial target customers to the financial industry. 

Today, many Muslim women have significant liquid assets, partly because of Islamic

inheritance law. Islamic law dictates that a married woman’s wealth is her own; spending on

the household is her husband’s responsibility. Muslim women are legally entitled to inherit

and bequeath property, holding their wealth in their own names even after marriage, without

obligation to contribute that wealth to their husband or their family. Because Muslim women

do not have to rely on their husbands as their only source of funds for domestic and

household purchases, they have traditionally managed most aspects of household finance.

Today, women throughout the Muslim world play an even more active role in the financial

transactions of their families, giving them more of a say in terms of purchasing power and

decision-making authority. With these responsibilities, women require banking services that

both understand their needs and can help them to manage the challenges they face in

making the best financial decisions for their families.

4.0 Implication of Islamic Values in Turkey

Islam's position regarding justice is unequivocal and universal. It sets the highest standard in

this regard.  As part of this quest for justice, Islam against all forms of exploitation of humans

by other humans, whether individuals, groups or institutions. Therefore, anything, including

Islamic economics, finance, or banking that takes exploitation as a serious and fundamental

concern, can't be belittled or ignored. It should be known that the principle of justice is not

relevant merely to financial contracts or transactions, but to all commercial transactions as

well. Turkey faces problems in financial industry, directed to loaning companies when Koran

condemns interest as exploitative and unjust. The reality is that, while the pervasiveness of

exploitation that has existed and continues to exist in the world is due more to the pursuit of

greed and profit in general, pertinent Islamic literature is preoccupied with interest as the

source of exploitation and focused primarily on the financial sector. For example, just

consider the case of the British East India Company. It was a joint stock company that

received its royal charter from the British crown in 1600. In one and a half century, the

"Company transformed from a commercial trading venture to one which virtually ruled India

as it acquired auxiliary governmental and military functions, until the Company's dissolution

in 1858. The world knows the rest of the story, as that Company's role ultimately led to

complete subjugation and colonization of South Asia. This entire British venture, driven by

the quest for power and profit, serves as one glaring example of exploitation. What role did

"interest" play in this as well as other ventures to colonize? While the colonial period is gone,

during the post-colonial period, especially in the era of globalization led and controlled by the

corporate multinationals, exploitation in different forms is as rampant as before. However,

what role is interest playing in causing or facilitating such exploitation around the world,

especially in Turkey?

Through almost an exclusive focus on the presumed interest-exploitation connection, the

proponents of Islamic economics and finance have entrapped themselves into a seriously

myopic reductionism. Indeed, global financial and corporate power houses of the world that

also play a vital role in worldwide exploitation are becoming the patrons of Islamic banking

industry, and these Islamic financial institutions have no concerns about exploitation in this

context, because their focus is actually on rendering the world interest-free, not exploitation

free. Sustainability initiatives have become the most important issues that take a significant

place in the national agendas of developed countries and receive strong support and

commitment from the citizens and international institutions. Having delved into the concept

with the ‘Sustainability’, sustainability initiatives which are implemented by the government

and non-government organizations helped me to reflect on such secular business practices

that appeared to be in line with two out of three of the Islamic ethical values identified.

It is wise to take note that "Scholars in Islamic finance and banking have invoked necessity

to permit exceptional relaxations of rules issuing fatwas letting Islamic banks to deposit

funds in interest-bearing accounts, particularly in foreign countries, because these banks

have no alternative investments at the necessary maturities. Typically, however, they place

conditions on such fatwas, such as requiring that the unlawful gains be used for religiously

meritorious purposes such as charity, training, or research. Many Islamic banks have been

explicitly and openly earning interest on their excess funds, often invested in safer, debt or

debt-like instruments overseas. Even Islamic Development Bank (IDB), a multilateral

development financing institution, established to foster social and economic

development. Some Islamic institutions have steadfastly refused to receive interest, whereas

others, including the Islamic Development Bank and the Faisal Islamic Bank of Egypt (FIBE),

have always placed their excess funds in interest-bearing accounts.

Yet, Turkey’s central region clearly demonstrates that the country can indeed function

successfully in the global economy. The preceding discussion makes it clear that Islamic

policy and values are not a negligible or merely temporary phenomenon. Islamic banks and

even business are here to stay and there are signs that they will continue to grow and

expand. Even if one does not subscribe to the Islamic injunction against the institution of

interest, one may find in Islamic way of dealing stuff some innovative ideas which could add

more variety to the existing financial network. Moreover, one of the main selling points of

Islamic banking, at least in theory, is that, unlike conventional banking, it is concerned about

the viability of the project and the profitability of the system but not the size of the collateral.

Good projects which might be turned down by conventional banks for lack of collateral would

be financed by Islamic banks on a profit-sharing basis. It is especially in this sense that

Islamic banks can play a catalytic role in stimulating economic development. In many

developing countries, of course, development banks are supposed to perform this function.

Islamic banks are expected to be more enterprising than their conventional counterparts. In

practice, however, Islamic banks have been concentrating on short-term trade finance which

is the least risky.

5.0 References

Abdel-Magib, M.F., 1981. 'Theory of Islamic banks: accounting implications', International Journal of Accounting, Fall: 78-102.

Aftab, M., 1986. 'Pakistan moves to Islamic banking', The Banker, June: 57-60.

Izzi Dien M.Y. (1992) “Islamic Ethics and the environment”, F. Khalid and O’Brien eds. Islam and Ecology, Cassell, London, pp.25-35.

Khan, M. S.,1986.'Islamic interest-free banking', I M F Staff Papers, March, 33(1):1-27.

Masri B.A. (1996) “Islam and Ecology”, in F. Khalid and O’Brien eds. Islam and Ecology, Cassell, London, pp.1-23.

Naughton, S.A.J. and Tahir, M.A., 1988. 'Islamic banking and financial development', Journal of Islamic Banking and Finance, 5 (2).

Nienhaus, V., l983. 'Profitability of Islamic PLS banks competing with interest banks: problems and prospects', Journal of Research in Islamic Economics, l(l):37-47.

http://en.wikipedia.org/wiki/Kayseri

5.0 References

Abdel-Magib, M.F., 1981. 'Theory of Islamic banks: accounting implications', International Journal of Accounting, Fall: 78-102.

Aftab, M., 1986. 'Pakistan moves to Islamic banking', The Banker, June: 57-60.

Izzi Dien M.Y. (1992) “Islamic Ethics and the environment”, F. Khalid and O’Brien eds. Islam and Ecology, Cassell, London, pp.25-35.

Khan, M. S.,1986.'Islamic interest-free banking', I M F Staff Papers, March, 33(1):1-27.

Masri B.A. (1996) “Islam and Ecology”, in F. Khalid and O’Brien eds. Islam and Ecology, Cassell, London, pp.1-23.

Naughton, S.A.J. and Tahir, M.A., 1988. 'Islamic banking and financial development', Journal of Islamic Banking and Finance, 5 (2).

Nienhaus, V., l983. 'Profitability of Islamic PLS banks competing with interest banks: problems and prospects', Journal of Research in Islamic Economics, l(l):37-47.

http://en.wikipedia.org/wiki/Kayseri

6.0 Appendix

Caption 6.0 Dominant religion in the world, Adapted from:@@@