The influence of Islamic core values on

organizations management.

1/ Introduction
In recent decades there has been widespread attention to business ethics due
to highly visible cases of corporate malfeasance, such as the WorldCom, Enron, and
Tyco scandals. To protect their reputations, companies have begun to form more
comprehensive corporate policies concerning ethics. These policies generally offer
guidance to employees and state the expectations of the company. Some companies
require that employees sign a contract stating that they will follow the procedures.
To be viewed by the public as having high moral standards, many companies
have created a position called the corporate ethics officer or the corporate
compliance officer. This person ensures their organization has statements of ethical
principles, clear guideline about acceptable and unacceptable practices, and means
of reporting ethical breaches. These executives also have the specific responsibility
of monitoring ethical behavior and addressing breaches.
Value can be seen as those underlying convictions that are held by individuals
or groups. It is a broad, encompassing concept containing a moral flavor of what is
right or desirable. Values usually relate to an ideal or standard which guides our
conduct and a reference point against which we judge ourselves and which we use
to judge others argues that there is widespread agreement in the literature regarding
five features of the conceptual definition of value: a value is a belief, pertaining
desirable end states or modes of conduct, that transcends specific situations, guides
selection or evaluation of behavior, people, and events and is ordered by importance
relative to other values to form a system of value priorities. Values help evaluate the
relative importance of alternatives and influence the reasons for choosing a
particular route. They make our life meaningful and instigate us to think about what
we appraise most. Values act as our conscience and generate a sense of right and
wrong in our minds.Values are derived from the basic assumptions and affect the
attitudes and individual behavior and organizational performance.

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 An important task for many managers is how to integrate the moral dimension
into business conducted across borders. Managers need an appreciation of the ethical
norms of different groups and cultures in order to gain complete understanding of
the cultural environment in which the firm must operate.
Muslims derive their ethical system from the teachings of the Quran and the
recorded sayings and behavior of Prophet Muhammad (PBUH). The goals of Islam
are not primarily materialist. They are based on Islamic concepts of human
wellbeing and good life which stress brotherhood/sisterhood and socioeconomic
justice and require a balanced satisfaction of both the material and spiritual needs of
all humans.
It should be emphasized that in Islam, business activity is considered to be a
socially useful function.

2/ Islamic core values in management

2.1. Islamic core values in strategic planning
Vision is conceptual and ideological representation of an organization. It is
cognitive construction and mental representation or model. It describes the
organizational journey and its destination with hope and faith. Vision acts as a
guiding force for an organization. The factors that influence the vision of an
organization are ideology, purpose, core values and leadership. Ideology defines the
character of an organization. It inspires, controls, and guides vision of an
organization. Ideology derived from Ethical Monotheism is sound and authentic and
any other source of knowledge for ideology is weak and non-authentic. God is the
true source of ultimate moral authority in the universe and His revealed words are
the single most important and powerful discipline in life because it points our lives
to our destiny. The strong belief about the right course of action is a necessary source
and component for creating the vision of an organization. The soundness and clarity
of the vision is based on the soundness of the ideology. Purpose and Core Values
increase the organizational commitment by engaging, aligning and creating common
and shared workplace culture. They improve the efficiency and performance of an
organization. Purpose provides the basis for creation of vision of an organization
whereas core values represent the day-to-day behavior and belief system of an
organization. Purpose and core values increase the likelihood that the employees of
an organization will be satisfied and committed and decrease the likelihood of
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burnout and employee turnover. The organizations with sound ideology and higher
purpose assign more importance to the normative aspects of life and are likely to be
more sustainable and profitable in the long run. Leadership is the most important
factor that influences the vision of an organization. Leadership takes its power and
moral authority from ideology, purpose and core values and influences the direction,
spirit and discipline of an organization. Organizations, whose leaderships vision is
driven from sound ideology, purpose and core values, are more likely to have
committed, satisfied and productive employees.

2.2 Islamic core values and stakeholders

2.2.1 Customers
An Islamic firm, as part of the ethical economy, is expected to undertake
its economic activity in line with normal conduct as enshrined in the Islamic tradition
which includes its relations with the customers. In this point also the difference
between current market mechanism and the Islamic oriented market mechanism
appears, that while market mechanism and its competitive nature is accepted, it is
expected to work with cooperation and its activities should be filtered through an
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ethical social filter. Due to such an ethical approach, it is the responsibility of the
firm to provide its customers exact information about its products: type, origin and
cost of production. Islam guides firm's behavior towards its customers. Exchange
should be beneficial to both the parties. However, unbeneficial exchange (the
exchange of one coin for an identical one), the exchange of bads (e.g. items of no
worth, dead animals or dust), unlawful commodities (e.g., pork, wine), or exchange
having those elements which are not allowed , such as gambling, interest , intolerable
degree of uncertainty or ignorance intimidation, time-restriction, uncertain
specification, harm , and corrupting conditions are excluded from legitimate
exchanges in the Islamic values.
2.2.2 Society
The objective of the Islamic firm is not only to maximize, but also
maximize social optimality as requested by the axioms of Islamic economic systems
foundational principles. The moral filter and the Islamically informed business
behavior of the firms is reasonable, fair level, moderate degree or satisfactory profit,
and therefore strict avoidance of excessive profit is the norm of the Islamic firm,
because the preference is for the moral and ethical values (Islamic injunctions or
Islamic rationale) instead of economic rationale.
2.2.3 Employees
In Islamic values the goals of the organization are not only to maximize
profit or sales as we mentioned elsewhere, but it is also to create an environment of
social justice and especially good relationships between entrepreneur and workers.
The organization and workers should behave in a different manner. Then it is a
matter of when, where, how and between whom transactions take place. In this
scenario, social categories play an important and remarkable role, utility depends on
social identity, and internal norms guide their behavior. Four components are very
important in the structure of any organization: identity, social category, norm and
ideal. If workers have their own identity then monetary incentives are complements
rather than substitutes. The position of the workers as insiders or outsiders has a
remarkable impact on the growth of the firm. In this advanced stage of the economy,
most of the firms are investing in by turning the outsider into an insider. Training
programs are organized covering themes such as how to avoid ridicule of peers, how
to increase the extrinsic and intrinsic motivation.

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2.3 Islamic values in production
Definition of Production: Production refers to the practices and means that
are used to convert tangible and intangible input into goods or services.
Production in Islam: Creation of utilities and adding value to utilities
The product or service will be lawful
The method of production will not cause an undue and excessive harm to
Allah-given resources
Any act of misuse of resources or mismanagement is seen as a violation of
trust.
Productive resources will not to be left idle
The production process will not cause harm to others
Natural resources must be used in the right way It is forbidden to damage the
natural resources
. Production that does not follow the principles set by Islam will affect the entire
business operation.
2.4 Islamic values in marketing
Achieve material and spiritual needs of consumers
Never compromise with unethical practices
Satisfy to customers based on the human values, marketing cultures, and
Islamic rules and regulations.
Focus on religious rules and ethics
enhancing the dignity and upholding the rights of human beings within the
society
Combine a value-maximization concept with the principle of justice for the
wider welfare of the society
Prices tend to be personal and human in nature. Prices may be positive,
negative or zero. There is no scope for a price system based on the market
mechanism, a market mechanism supplemented by conscious control,
supervision and cooperation. For the determination of prices, there is a need
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 for institutional reforms and structural change. Some economists suggest that
prices will be according to the average cost. Muslim economists have the
consensus that there should be guided cooperative prices; administered prices
of goods and services are limited to the basic human needs. There should be
direct supervision and control on the prices.
An Islamic firm may well advertise to inform potential buyers of their
existence. Since buyers and sellers change over time, since information is
forgotten, since new producers appear, the existence of sellers must be
advertised. However, advertising should be informative and educational,
excessive advertising is not allowed because this will be a cause of wastage
and misallocation of the resources.
In the conventional system the consumers are forced to pay the cost of
advertising without their consent, as it is not necessary that every piece of
information is provided to them. However, advertising also has a positive
impact on economic activities. It is believed in conventional economics, that
the good reputation of the firm has a negative impact on its cost of advertising.
The cost of advertising in the Islamic economy is less than in the conventional
system.
2.5 Islamic values in leadership

Leadership is the ability to show the way, to guide, to direct or to influence

the actions of others
Leadership is one management functions that very fundamental to achieve
organizational goals. With a very heavy atmosphere, leadership is forced
to confront several of issues such as structure and order, coalition, power,
and environmental conditions of organization.
Islamic leadership is viewed more as a service to the organization and its
members. Servant leadership is based on trust and sacrifice.
Consistency demonstrate leadership confidence and control, it means
to stay firm on track during rough times and to maintain a solid vision
forward.
To be disciplined is an important feature of Islamic value system to
develop quality leadership. Discipline provides tools necessary to reduce
practical and behavioral problems in organizations.

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 Once justice is ensured, every member of organization will feel comfort
and confidence, because he is aware that the leadership of the organization
will look after his interest without any bias. This will eventually bring
motivation across organization and every member will work with more
dedication and commitment towards set objectives.
Another important quality of leadership is the ability to articulate and
communicate ideas and views with clarity and eloquence, because
communication is one of the important dimensions of effective leadership.
The concept of trust is a core value governing social relationships, as
every person is held accountable for his/her doings in the community. The
leader is a trustee, who should respect the trust bestowed on him/her by their
superiors and subordinates.
2.6 Islamic values in human resources management
Personal values in Islam can be seen from the personal value per person
and personal value in community. Personal values include individual
characteristic of a person in attitudes and behavior, as well as its intellectual
capabilities. Because there is an element of personal values held, then individual
will display their respective mark.
Islamic HRM suggests that employees are not just a servant, they are
valuable assets, and they should be considered as a source of powerful and
dynamic workforce assets. Indeed, Islamic HRM practices emphases on the
development of employees individual skills, abilities, attitudes and job
knowledge to contribute for accomplishing organizational objectives. Islamic
HRM believes that individual to identify his or her strengths and make full use of
them. The concept of Islamic HRM aims at understanding the needs and hopes of
employees in a better way. Islamic HRM practices in the organization is one of
the vital factors that associated with job satisfaction, high performance, and low
turnover in workplace. In fact, trust in organization is most likely mutual
exchange behavior among the employees in work place. Moreover, when trust
levels are low, individuals tend to be less creative, less forthcoming with ideas
and exert less effort towards organizational goals. Furthermore, without trust in
organization, management may erroneously assume that employees need more
rigid supervision and tighter controls. It seems that the significant of Islamic
HRM might have an influence on the development of employee trust in
organization by practicing Islamic guiding. It is now very noticeable, the success

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of Islamic organizations make people to realized that the application of Islamic
core values, and ethics and moral values have long been sustainability, and
provide high productivity, good customer service, smooth management employee
relationships over the competitive and challenging business environment.
Moreover, to keep peace with this rapid growth it is require ensuring that Islamic
HRM must be well tuned, properly implemented, and continuously monitored to
accomplish desired organizational.
HR functions are vital for both Islamic and non-Islamic HRM practices.
Principally, it is obligatory for Muslims and Islamic institutions to accept and
obey Islamic rules, regulation and guidelines as a way of life rather than a separate
activity particularly, to run the organization under Islamic law. Additionally, for
non-Islamic institutions they can practices Islamic values to accomplish the
advantages of Islamic code.
In Islam every act should be accompanied by intentions. The implications
of this principle in human resource management is that employees should not, for
example, be punished for making unintentional mistakes and should be rewarded
or punished for their intended objectives, ideas, plans and strategies rather than
just for the outcomes of their actions which may be affected by external factors
beyond their control. This also accentuates in Islamic management the importance
of human resource planning and strategic decision-making.
2.7 Islamic values in quality management
There are several principles and standards, which Islam lays down, in
order to achieve quality management.
Trustworthiness and Honest
Strong Will and Self-Determination.
Efficiency.
Supervision.
Accountability.
Division of Labor.
Collective Efforts.
Planning.
Preference to the Organizational Interest.
Right person in the right place.

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 Conscientious of self-improvement value implies the continuous
struggle within oneself for self-betterment in order to do better work. Hence,
striving to do better all the time requires humans to work harder and improve the
quality of their products and services through the learning of new knowledge and
skills. This value is related to a state of passion for excellence and perfection.
Creativity therefore becomes an indispensable value in ones life because of the
desire to perfect and excel in doing what is good for oneself and good for the
community. In an organizational context, striving to do better all the time requires
managers and employees to work harder and improve the quality of their products
and services through the promotion of learning, training, innovation and
creativity.

3/ The influence of Islamic core values

1- Islamic core values in organization do more than just promote ethical business
practices. The system of core values that a business owns will shape the culture of
the enterprise, the decision-making criteria of your managers and the actions of your
employees. The more strongly defined the organizations core values, the more
likely that this value system will serve as a code of conduct that promotes and guides
strategically-aligned behaviors within managers and employees.
2- The process defines a shared set of beliefs and commitments to the way the
employees of a business want to behave and treat each other
3- The process guides decisions and emphasizes whats important to the business as
plans are developed to change and improve the organization
4- Measuring provides a way to quantify perceptions (ratings), understand context
and experiences (comments), and understand which core values appear to most
influence overall belief system satisfaction
5-The process enables organizations to track progress, both formally and informally
6- Core values help fill in the spaces where HR policies have gaps

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 Employees will be open, honest and respectful in both internal and
external communications
Employees actions will contribute to creating a positive work
environment
The employee agreed with the manager and stopped the negative behavior.

7- Organizational leaders need their employees to act as their proxy, serving as

delegates of the business that promote a shared set of common objectives and
possess the same organizational DNA as top-level managers. Management must be
able to know that decisions made and actions taken by employees will protect the
organization and portray it well.
Values-aligned managers and employees benefit the entire organization
by demonstrating predictable and favorable decision-making capabilities and
behaviors that are reflective of the executive management mindset. When
management provides the core values compass to help influence and guide
behavior, those closest to the action in the organization can respond with appropriate
decisions and actions.
8- The concept of Truthfulness implies doing and saying what is right to the best of
ones knowledge. It is forbidden in Islam to lie or to cheat in all circumstances.
Managers as well as subordinates are reminded not to be guided by their personal
feelings that might divert them from the right path of justice, care and
trustworthiness. They are asked to be patient, to fulfill their contractual duties, to be
honest and to work hard, while seeking Gods love and mercy. Honesty and
trustworthiness are central to effective management. They safeguard humans from
temptation to misuse the resources entrusted to them. The love of truth reflects the
notion of personal responsibility for every uttered word and reinforces
organizational attempts to evaluate and assess practice or investigate roots of the
problem.
9- Organizations with strong cultures rooted in shared core values tend to have much
happier employees. Happier employees help businesses be more productive.
10- Kindness and care while feeling the presence of God has several It is alms giving,
perfection and amelioration, forgiveness, completeness of faith and, most important
of all, doing good deeds. It is also a continuous struggle to work towards attaining

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Gods satisfaction and to worship God as if you see Him and He sees you. This
feeling makes the person behave at his/her best without the need for any human
supervision.
In this context, such economic and social activities assume a moral and
spiritual dimension as a means for doing well to oneself by self-preservation and to
society by following Gods guidance on wealth generation, ownership, spending,
equality and social justice. Production and consumption are therefore guided by
consideration of what is produced, how it is produced and the human and social costs
of both production and consumption.
Every activity should be a pursuance of good deeds and remembrance of
Gods presence. Managers with a high level of kindness and care while feeling the
presence of God promote the training and development of their employees and
encourage employment involvement and participation in decision-making.

4/ Implementation of Islamic core values

For Muslims, Islamic core values subject is faith, but for non- Muslims who
live with the Islamic society is culture. Both Muslims and non-Muslims should
participate Implementation of Islamic core values.
There are at least four elements that create an atmosphere conducive to ethical
behavior within an organization:
1. A written code of ethics and standards
2. Ethics training for executives, managers, and employees
3. Availability for advice on ethical situations (i.e., advice offices)
4. Systems for confidential reporting
It is the duty of all managers to see that their organization maintains ethical practices
and behaviors. Good leaders strive to create a better and more ethical organization.
Promoting an ethical climate in an organization is critical, since it is a key component
in addressing many other issues facing the organization.
The key to success is to establish the expected behaviors, and then design a
system to reinforce and support those behaviors. Expected behaviors will emerge
from the foundation of a companys valuesthings such as transparency, integrity,
and collaboration and filtered by Islamic values. But studies indicate that not all
employees will have a common understanding of the values. Therefore, explaining
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these values and behaviors through practical and tangible examples helps employees
understand how to integrate them into the daily performance of their roles. Managers
are in the best position to reinforce and support the expected behaviors.

1. Develop lists of values:

Personal: Each member of the leadership team should develop his personal priority
values list.
Corporate: Each member of the leadership team should develop his own corporate
priority values list.
2. Reconcile / evaluate:
Each individual should reconcile the differences between the personal and
corporate values.
Refine the individual lists if needed, then as a group consolidate the corporate
values into one list.
Measure the list with the actual Islamic values.
3. Define behaviors that exemplify the final core values.
Compile a list of expected behaviors for each core value
Consider different roles within the organization and what behaviors might look
like within those contextual settings
4. Determine measurements for the core value behaviors.
Examine methods that can be used to measure the behaviors.
Consider indexes for employee satisfaction, productivity and performance and
other metrics that can be captured through normal processes or newly developed
surveys.
5. Communicate about the core values.
As a group, discuss what stories can be shared that exemplify the core values and
associated behaviors.
Identify stories for each of the core values.

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 Communicate the values and stories with employees to inform and educate:
Identify and establish a core group of trusted employees that exemplify those
newly established core values. Define the communications strategy and plan to begin
rolling those values out to the organization.
Determine what needs to be done, by whom and when.
Identify the leadership team member accountable for making sure that the core
values are rolled out to the organization as well as what responsibilities the other
readership take to ensuring the success.
Decide how the newly established team will begin working and interacting with
the employees to reinforce the core values for all.

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