Differences in Conventional and Islamic Process Business

Abstract

Business process is an important aspect in the success of a business. Good business processes will also increase the value added in the business itself. There are two types of business processes that are used in conducting business, namely islamic and conventional business process. What is the fundamental difference of both the business process? and what the benefits to run the right business processes. This paper discusses the fundamental differences of the two business process

Introduction

The current global financial crisis has not only shed doubts on the proper functioning of conventional “Western” business process, but has also increased the attention on Islamic "Sharia" business process. In every activity of business management process, there are aspects that Shariah is concerned about. These activities which includes: Financial, Marketing, Human Resources, and Operations Management, should follow the Shariah rules, called Fiqh Muamalah. Fiqh Muamalah is the Islamic laws that regulate the relations among humans being and all their acts and interconnections. (Anything is permitted up to there are some provisions that forbid it). The scope of fiqh muamalah includes, among others, the law related to all aspects of human life as well as the law related to financial acrtivities.

Conventional vs Islamic Business Process
Islam advocates productive work and efficiency, and regards them as virtues. It encourages the physically capable to work and earn their living by being productive members of the society. In order to motivate the people to work hard and enjoy the fruits of their labor, Islam recognizes the profit motive, private ownership and the market. But the pursuit of wealth is subject to moral and ethical standards as it is guided by the criteria of Halal (permissible) and Haram (prohibited). What is beneficial and just, is permissible and what is harmful and unjust is prohibited. These criteria are drawn from Islamic Law (Shariah), which includes the Qur'an, Sunnah (the practice of Prophet Muhammad), and further opinions and deductions and logically applied principles from Islamic experts and adherents to the faith. Thus Shariah is at the root of Islamic business ethics.

Islamic business ethics recognizes profit as a motive for production, but production and profit making are not the end, but rather a means to achieve the objectives of Islamic law. The Shariah aims at achieving society's well being as defined by Maslahah (public interest). Public interest in Islam is regarded as seeking or promoting something which is useful, or removing something which is harmful. The objective of Islamic law is to protect and promote public interest by ensuring the preservation of the following five things: religion, life, reason, descendants, and property. If the nature of a business activity, product or service is such that it harms any of the above five, then it is considered to be harmful and unjust and is therefore prohibited, while a product, service or activity which protects and preserves the above five is permissible. Thus Islamic business ethics evaluates all the business decisions and activities on the criteria of public interest.

Therefore, the best business process is a business process-based sharia (Islamic) because the business is not only profitable but some parties only have a purpose and prosperity of the people of the welfare society.

References:

• Febianto, Irawan, 2011, Shariah Compliant Model of Business Entities, University of Padjadjaran
  
  

• Thorsten Beck, Islamic vs. Conventional Banking Business Model, Efficiency and Stability