Strategic Management from an Islamic Perspective: Text and Cases

Chapter 7

The Role of Islamic Law

Introduction

So far, we have looked at conventional strategic management and we have observed four fundamental problems with the way it is currently being practiced. We have argued that the key principles in Islam are embedded in three chapters of the Qur’an—surah al fatihah, surah al takathur, and surah al asr—and that these principles would allow us to overcome the fundamental problems identified. But how do we go from these general ideas to a more specific practice of strategic management from an Islamic perspective? How do Muslim managers and subordinates apply Islamic principles on a daily basis? In this chapter, we will argue that pretty much every strategic decision can be and must be related to Islamic legal maxims. We propose to briefly explain the principles of Islamic legal maxims and illustrate how they might be used in the context of strategic management.1

Why Do We Need Islamic Law?

Every society needs to enact laws in order for people to know their rights and their duties. Laws can either be created by man or be based on a revealed text. Muslims take the view that a revealed text will be the only just and comprehensive law as man-made laws are often enacted to suit those who have political control of the country (Ahmad and Fontaine, 2011). Without dwelling on philosophical issues too much, let us consider two simple examples: alcohol and gambling.

Every year thousands of people die due to alcohol-related diseases, fights, or accidents. ...