PRINCIPLES OF MANAGEMENT IN ISLAM

Link : http://www.qurtuba.edu.pk/jms/default_files/JMS/7_2/JMS_July_December2013_207-212.pdf

The principles of Islamic management can be traced back to the time of 

Prophet Muhammad (PBUH) when he laid down the foundation of an 

Islamic Society. Those principles were administered by the Shura – a 

group of his companions for consultation. Al-Hirrawi (1986) was of the 

view that being a Prophet his companions were supposed to obey him 

without questioning, however, Prophet Muhammad (PBUH) created a 

conducive environment of consultation and participation. It is pertinent 

to mention that the Shura or council comprised of honest and pious 

members. As Islam spread to other regions of the world the 

administration turned to be complicated and other non members also 

became part of the administration Al-Hirrawi (1986). It is significant to

 note that the Holy Quran is a source of guidance for the principle of 

management, work ethics and sayings of Prophet (PBUH). The Holy 

Quran clearly states on the significance of justice, honesty and fairness in 

employee and employer’s relationship. Besides, it encourages and 

stresses on the learning of skills and struggle for good work to benefit the 

community as well. Islam firmly believes on consultation and 

cooperation in work Abuznaid (2006). The main principles of Islamic 

management are as follows: 

Taqwa (Fear of Al-Mighty Allah) 

When a person is filled with fear of Al-Mighty Allah he refrains from 

injustice and will do good deeds. It is a self accountable characteristic 

which shapes the behavior of an individual, either manager or 

subordinate, in a way so that he/she may honestly perform his duties and 

accomplish the tasks assigned to him/her. Such principle is a kind of 

check and balance and on employee and employer considers him/her self 

accountable to Al-Almighty Allah for his/her wrong actions. 

Ihsan (Forgiveness) 

The word Ihsan can be used in many contexts. Forgiveness, 

amelioration, completeness of faith etc are some of the meanings of 

Ihsan, however, it is a way of attaining Al-Mighty Allah’s Satisfaction to 

worship Allah as you see Him and He sees you (Branine, 2001). Ihsan is 

related to Iman which mean Faith in Al-Mighty Allah so in this context 

undertaking the economic activities wealth generation, ownership, 

equality and social justice and spending etc by keeping in mind Allah’s 

guidance. 

Managers can perform their tasks, related to subordinates, aptly 

with high level of Ihsan such as training and development, behavior with 

employee and their involvement in job. Besides, encourage employees to 

participate in decision making. 

Adl (Justice) 

Wilson (2006) stated that justice is a quality everyone should develop 

irrespective of his gender (he/she) and level of employment 

(manager/subordinate). The Holy Quran says about justice in these 

words, “O you who believe stand out firmly for God as witnesses to fair 

dealing and let not the hatred of others to you swerve to wrong and 

depart from justice…” (Chapter-5, verse-8)

Islam teaches the lesson of justice without personal interests and 

likeness. It should be free of prejudice. There is no restriction of beliefs 

in Islam and everyone should practice his/her belief freely. This can be

proved from the Holy Quran in these words, “there is no compulsion in 

religion” (Al-Quran, Chapter-2, Verse-256). Even the sayings of Prophet 

Muhammad (PBUH) provide a documented proof regarding the equality 

of all human beings, “An Arab has no preference over a non-Arab, nor a 

non-Arab over an Arab, nor is a white one to be preferred to a black one, 

nor a black one to a white one, except in piety (righteousness)”. Equality 

can be achieved through justice and for equality those at managerial 

positions should be mild. Managers should create and maintain an 

environment of justice by providing a chance of participation to 

employees. 

Amana (Trust) 

Trust is the core value of operating a social relationship and by this every 

one, he or she, is accountable for his actions and deeds. The Holy Quran 

says, “O you that believe! Betray not the Trust of God and the Apostle 

nor misappropriate knowingly things entrusted You”, (Chapter-8, Verse-

27). Tayeb (1996) opines that by trust consultation and delegation of 

authority can be accomplished. Trust can be an organization for its owner 

and its employees. 

Sidq (Truthfulness)

Sidq means saying sayings and actions what is right and at the best of 

someone’s knowledge. Lie to cheat someone is strictly forbidden in 

Islam. The Holy Quran on many occasions abhors lying. Managers, 

leaders, owners and subordinates should be truthful and not be guided by 

his/her personal will or feelings. They should perform their duties with 

honesty and trustworthiness. The center of effective management is 

honesty and trustworthiness. By trust resources cannot be misused, 

hence, everyone would perform his/ her job with responsibility. 

Ikhlas (Sincerity) 

Sincerity and keeping promise are the important principles of Islamic 

management. One should fulfill his or her moral obligations with 

sincerity and should keep the promises. The Holy Quran states, “O you 

who believe! fulfill (all) obligations”. 

Hence, sincerity tries to infuse a culture of trust, confidence 

truthfulness and cooperation among managers and subordinates. 

Shura (Consultation) 

An important principle of Islamic management is Shura. A Muslim 

leader should work by seeking the suggestions of its subordinates 

through consultations. He or she should not adopt autocratic style of 

management. The Holy Quran states, “Their matters are settled through 

shura among them.” (Chapter-42, Verse-38). All matters of life including 

socio-economic and political etc should be decided by consultation. The 

principle of Shura is an important concept of Islamic management which 

guides managers to behave with their subordinates with equality and 

justice. 

Observation :

Unlike modern western thinkers’ philosophies and concepts where 

technical and material objectives are important, Islamic management 

system comprise of principles derived from the Holy Qur'an and the 

Sunnah. Its principles and management approach is based on 

metaphysico-moral dimensions which are not stimulated by material 

objectives. Employer-employee relationship is purely based on religion. 

Both are accountable and answerable to Almighty Allah for their deeds 

and are Almighty Allah’s trustees on earth. Spiritual and moral facets are 

deemed important in Islamic Management system in decision process. 

By knowing and understanding such principles a combination of Islamic 

and western management system can be formulated which can be 

flawlessly implemented in other non-Islamic countries as well. A 

window of future research has been opened in their result of the 

discussion that what possible outcomes would be in case of combination 

of Islamic spiritual principles and western principles of management. 

ISLAMIC WORK ETHIC (IWE)

Link : www.andalus.sg/dpia/nota_pensyarah/Islamic%20work%20ethic%20a%20critical%20review.pdf

The Prophet Mohamed, both deliberately and extensively, addressed issues related
to work and business set out the above instructions. His directives were numerous and
innovatively challenged the existing practices. Ali (2005, pp. 53-5) categorized the work
related sayings of Prophet Mohamed.
These are grouped as follows:

(1) Pursuing legitimate business.
Prophet Mohamed explicitly instructed followers
that useful work is that which benefits others and society. Subsequently, those
who work hard are acknowledged and are rewarded. He stated ‘‘Worshiping
has seventy avenues; the best of them is the involvement in an honestly earned
living’’. That is, work is the best form of worshiping. He elevated people and
their work to the highest rank if their deeds benefited people: ‘‘The best work is
the one that results in benefit’’ and ‘‘The best of people are those who benefit
others’’.

(2) Wealth must be earned. 
In Islamic faith, it is acknowledged that people have
different capacities. It is these capacities and existing opportunities that enable
them to acquire wealth. Pursuing economic activities, however, must be based
on moral and legitimate foundations. The Quran states (4:29-32): ‘‘Oh ye
believers! Devour not each other’s property among yourselves unlawfully save
that by trading by mutual consent; and kill not your (own) selves; Verily, God is
Merciful unto you. And whoever shall do this in aggression and injustice, soon
shall We cast him into the (Hell) fire; for this is (very) easy for God. If ye avoid
the great sins which ye are forbidden, We will expiate from your (smaller)
misdeeds, and We will admit you (to Paradise) an honorable (place of ) entry (it
is indeed). And covet not that by which God hath raised some of you above
others; for men shall have of what they earn; and for women shall have of what
they earn; and ask God of His Grace; Verily, God is in the Know of all things’’.

(3) Quality of work.
The pre-Islam Arabs lacked discipline and their commitment
mostly revolved around a primary group. Mohamed understood this fact as a
statesman and reformer and he attempted to transform the Arab communities
into a functional society. His emphasis on discipline and commitment intended
not only to highlight the essence of work, but also to draw a link between faith
and work and to eventually steer the Muslim community towards becoming an
economically and politically viable entity. In this context, he reiterated, ‘‘God
blesses a person who perfects his craft (does the job right)’’ and ‘‘God loves a
person who learns precisely how to perform his work and does it right’’.

(4) Wages.
 Prophet Mohamed instructed Muslims to be fair and just and prompt in
compensating workers. He declared, ‘‘One must give a worker his wage before
his sweat dries (should be given on time)’’ and ‘‘your wage should be based on
your effort and spending’’. That is, payment for wages should be timely, fair
and adequate. In fact, the Prophet considered denying a worker his/her full
wage to be an immoral act. He was quoted saying that he would personally
plead against, ‘‘He who received work from a laborer and did not pay him
in full’’.

(5) Reliance on self. 
One of the most important functions of work is that it sustains
confidence and self-reliance. Mohamed stated, ‘‘No one eats better food than that which he eats out of the work of his hand’’ and ‘‘No earnings are better than
that of one’s own effort’’.

(6) Monopoly.
In Islam, monopoly is considered a great fault that produces
suffering, unlawful profit and ensures inequality. Prophet Mohamed, therefore,
forbade it stating, ‘‘The supplier is blessed and the monopolist is cursed’’ and
‘‘whoever withholds commodities, is a sinner’’.

(7) Bribery. 
Like monopoly and cheating, bribery is strongly condemned in Islam.
Mohamed declared, ‘‘God cursed the one who gives and the one who receives
bribery’’.

(8) Deeds and intentions. 
These constitute significant pillars in the IWE. They
clearly differentiate the IWE from the work ethics of other faiths. One of the
fundamental assumptions in Islam is that intention rather than result is the
criterion upon which work is evaluated in terms of benefit to community. Any
activity that is perceived to do harm, even though it results in significant
wealth to those who undertake it, is considered unlawful. Prophet Mohamed
stated, ‘‘God does not look at your matters [shapes or forms] and wealth, rather
God examines your intentions and actions’’.

(9) Transparency.
Business and work in general have to rest on ethical and moral
foundations. The precondition for propagating and realizing this goal is
transparency. It was reported that Prophet Mohamed once inspected a bin for
dates and found that those that were not good were hidden underneath the
fresh dates. The prophet ordered the merchant to differentiate between the
quality of the dates saying, ‘‘He who cheated us is not one of us’’ and if buyers
and sellers ‘‘conceal and tell lies, the blessing of their transaction shall be
obliterated’’. His saying ‘‘Those who declare things frankly, will not lead to each
other destruction’’ underlies the significant of transparency in any business
transaction, and the necessity for enhancing trust and reducing problems in the
marketplace.

(10) Greed.
In Islam, greed is considered a threat to social and economic justice. The
Prophet Mohamed in his struggle against the elite of Mecca consistently and
tirelessly criticized their greediness. He stated, ‘‘Be aware of greediness; it is the
living poverty’’ and ‘‘Two qualities are not found in a believer: greediness and
immorality’’.

(11) Generosity.
 Generosity is a virtue in Islam. The Prophet Mohamed stated that
‘‘There is nothing worse than avariciousness’’. He declared, ‘‘The generous
person is closest to God, heaven, people and far from hell’’ and ‘‘He who removes
a distress, God blesses in this world and the hereafter’’.

Observation :

In this paper, an attempt was made to provide an in-depth review of IWE. The concept
of work ethic, its presence and evolution have been covered. Political, social and
economic conditions that gave rise to IWE were addressed. It was demonstrated that
certain factors, especially faith, have cultivated and eased the emergence of work ethic.
During the first few centuries of Islam, trade and other economic activities were
encouraged and promoted. At that time, rulers displayed an enthusiasm and
commitment to trade. They played a significant role in providing protection to
merchants and trade. As such, merchants and commerce were held in high regard.
Consequently, Muslim merchants reached foreign lands and operated in different
countries. As inflexible attitudes, rigid beliefs and foreign domination swept across the
Muslim lands, trade, creative thinking and scientific discoveries experienced serious
stagnations and setbacks. Since that time, economic and organizational activities have
not progressed adequately.
The paper proposed that, in general and in terms of business and management,
Islamic principles and the original thinking of the early Muslim generations are
conducive for building business institutions and for a market economy that is founded
on justice and responsible competition. Moral principles, hard work and commitment
to the community which helped the Muslim society to thrive economically in the past
have the promise to strengthen commerce and economic progress in today’s world.
These principles are vital for independent thinking, genuine creativity and dynamic commerce.

CONCEPT OF MANAGEMENT IN ISLAM

Link : http://www.muslimsocieties.org/Vol6_2/Concept_of_Management_in_Islam.pdf

Henry Fayol was a managing director of a large coal mining farm. He is famous for his
writing of 14 Principles of Management. He largely emphasized that the concept of management
is a vital one and which is an important activity to all human beings involved in business,
government and even at the household activities. His endeavour led him to develop 14 Principles.
Is now been noted that many of his views have a very close linkages with the teachings of Islam.
If we examine and compare his principles with the Quranic verses we will find that most
of the principles of management are also noted in the Islamic Text viz Holy Quran. It indicates
that Islam has conveyed the contemporary Principles of Management before 1400 years ago to
the entire mankind even when there was no existence of the subject called MANAGEMENT.
Therefore, in the context of thoughts and theories in management studies, the Islamic views need
to be studied and examined to strengthen the subject of Contemporary Management Studies.
The present paper is an attempt to examine the relationship between Islamic notions of
work and management and there relevance in the context of management studies. A special
emphasis shall be given in this paper to present an alternative discourse in management studies
in the post-modern era which advocates for diversities in thoughts, behaviours and practices
against the hegemonic and dominant discourse of western thoughts and ideologies in
management studies.
The paper is based on facts gathered through review of textual sources. Some verses of
Holy Quran (English Version) have been taken into consideration to prepare this paper. The
author is concluded with the fact that more researches are needed to evolve the alternative
paradigm in management studies and to which Islamic Verses have also a very crucial role to play.

Henry Fayol was a managing director of a large coal mining farm. He became famous for
his writing 14 Principles of Management. He emphasized on the concept that management was an
activity common to all human beings in business, government and even at the home which led
him to develop 14 Principles of Management.
But do the well versed readers know that some of these principles are the actual result and
outcome from the teachings of the Islam. If we all compare these principles with Ayats and
Hadith we will find most of the principles there. Therefore it means that Islam has already
conveyed these modern day Principles of Management 1400 years ago to the entire mankind even
when there was no existence of a subject named MANAGEMENT.
Now let me discuss some of such Principles in relevance to the Koran and Hadith:

1. Division of Work
The above principle signifies the concept that specialization increases the output and productivity
which in turn helps in making the employees more efficient and fruitful.
The Koran says:
“No person is charged with more than his capacity. No mother should be harmed through
her child, and no father through his child. And upon the [father's] heir is [a duty] like that [of the
father]. And if they both desire weaning through mutual consent from both of them and
consultation, there is no blame upon either of them.” Surah Al Baqarah 2:233
This beautiful quote from the Holy Scripture can be explained as the fact that physical,
emotional and intellectual capacity of an individual is limited and every person has its own
talents and potentials. Therefore, it is important not to burden someone with extra task that is
beyond his/her ability.

2. Decentralization
It may be defined as the process through which subordinates are equally involved in the
decision making along with the top level management regarding any issue. This concept of
decentralization has also been already depicted in the Koran 1400 years ago.
It is mentioned in Surah Aal-e-Imran in ayat 159:

“So by mercy from Allah, [O Muhammad], you were lenient with them. And if you had been
rude [in speech] and harsh in heart, they would have disbanded from about you. So pardon them
and ask forgiveness for them and consult them in the matter. And when you have decided, then
rely upon Allah. Indeed, Allah loves those who rely [upon Him]”
This quote from the Koran can be explained as Allah says to Prophet to be kind to your
followers and also consult with them in your affairs. This depicts the importance of consultation
in different matters and affairs. The Prophet is ordered by Allah to consult and in the same
manner the Prophet himself emphasized and motivated his followers to consult with their
subordinates in different affairs because that can lead to a right direction through multiple
alternatives.

3. Espirit De Corps
This principle highlights the concept of promoting team spirit in order to build and promote
harmony and unity within the organization. This process also encourages the subordinates and
treats them in such a way that they develop team spirit, belongingness and unity within an
organization.
As per the Koran this principle is written in the following words:
“(Telling the Prophet) if you had been stern and fierce of heart they (the companions and
followers of Prophet) would have disappeared from around you. So pardon them and ask
forgiveness for them and consult them in the conduct of affairs.” Surah Aal Imran 3:159
In simple English language the following Ayat means – Allah is saying to Prophet to treat his
companions and followers with courtesy. Therefore, if any well versed manager wants to keep his
employees motivated then he must treat them with courtesy so he can promote the Team Spirit
and Unity within an organization.

4. Unity of Direction
It emphasizes that any running organization must have a proper plan of action to guide
managers and workers for achieving their targeted goals
This principle can be found in the Koran in these words:
“If there were in the heavens and the earth, other gods beside Allah, there would have been
collision in the both” Surah Anbia, Ayat 22

Though this Ayat highlights the fact of the existence of one God but this also shows the
importance and necessity of Unity of Command and Unity of Direction. The entire functioning of
the Universe is managed and controlled by one God only and He doesn’t have any companion
equivalent to his position.

5. Equity
Allah does not take pity on one who does not have it for others” Muslim Tirimzi
This Hadith shows the importance of kindness not only with subordinates but also with
superiors. The Prophet emphasized a lot on the Kindness. If a person deals employees with
courtesy and kindness he can get maximum output from them.

Criteria for Promotion as per Islamic style of Management
The criteria for promotions were based strictly on merit, ability and talent, rather than
that of one based solely on age. Khalid Bin Walid was selected on many occasions to lead the
Muslim army based on his strategic abilities, military prowess and skills on the battle field. He
was a force to reckon with. He participated in so many battles with a dream of embracing
martyrdom, but that was not to happen by the will of God Almighty. Much of his body was
covered with scars from the battle field but death on the field was not to be his. The Prophet on
one occasion preferred a very young Muslim called Usama for leading the entire Muslim army.
Usama led the army in which there were many valiant and well known companions of the
Prophet who were older to him, but the role to lead the army was given to the young Usama.
Much later in the early Muslim era in 711 AD, a seventeen year old man Muhammad Bin
Qasim was selected by the Muslim Caliph to run the campaign against the pirates of Debal and
free the Muslim captives held there. Muhammad Bin Qasim ended up spreading message of
Islam in what is known as the present day Pakistan and people freely embraced the religion,
who were oppressed by a tyrannical caste system that had been a plague to the Hindu society of
that time

Observation :

Many sound management practices in the contemporary world owe their beginnings to 
the early Muslim managers who used the most humane and cutting edge techniques of 
management in those times and brought the light of knowledge to the human world. Even today 
the management concepts as per the Islamic way can be found in the Koran. It is about time to 
relive those times and do away with the archaic bureaucratic practices of management that the 
British have endowed to the lands they have ruled. 
“Islam is perfect but Muslims are not”- So never underestimate and evaluate a religion just 
by visualizing the behavior of its followers. To know Islam study the Quran not the Mullahs or 
Muslims
Therefore, it can also be concluded by commenting that Koran is not only for the 
followers of Islam but for the entire mankind because it shows the right path of life as well as 
managerial skills for new entrepreneurs and managers. Koran has already shown us the path 
1400 years ago but we humans are so intelligent and knowledgeable that we got to know its real 
meaning in this 21st Century