Name: Khoirunnida Yasmin

Student ID: 21311338/ Management IP

Subject: Islamic Business Ethics resume chapter 10
Individual Ethics in Organizations

َ ْ‫ي اَل تُ ْش ِر ْك بِاهّٰلل ِ ۗاِ َّن ال ِّشر‬

‫ك لَظُ ْل ٌم َع ِظ ْي ٌم‬ َ َ‫َواِ ْذ ق‬
َّ َ‫ال لُ ْقمٰ ُن اِل ْبنِ ٖه َوهُ َو يَ ِعظُهٗ ٰيبُن‬
“And (remember) when Luqman said to his son, when he taught him, "O my son! Do
not associate partners with Allah, in fact associating (Allah) is truly a great injustice." (QS.
Luqman:13)
So dzolim is when and individual do something out of place, between more or less.
There are many forms of injustice to fellow human beings, such as criticizing, slandering,
torturing, taking property without rights, being cruel, and being unfair. The example is when
an employee should be paid, but it turns out to be reduced by the manager for no reason.

The idea is that a rationally structured organization is one that a company is a tool for
achieving a definable goal or set of goals. A rational organization uses a formal structure to
define the role of each member of the organization. In a company with clearly defined roles
and goals, management processes should be streamlined and predictable. In an organization
as a political entity, personal influence, people, and skills are more important than formal
positions. Organizations become more political and less rational when different parts of the
organization have potentially conflicting goals. The rational organization, the employee and
employers know each other and what are their obligation. Employee obligation to the firm
must follow the company goals but sometimes the employee act based on their own self-
interest, which is unethical and illegal it’s also known as “white collar crime”.

In political organization, the goal of the organization is to form power or make a coalition.
And the ethical problem arises concerning this power consisting of:

 Right to privacy
Is the element of various legal traditions to restraint the higher up power and private
action that threaten the privacy of individuals
 Freedom of conscience
This covers all ethics and values a human being cherishes, whether of religious nature
or not
 Freedom of speech
Is a freedom to express information, ideas, and opinion free of government or the
higher up restriction.

Contracts are the most important thing for an organization as a rational

structure. Because it is the contract that determines who is wronged and who is
wronged. A contract is a binding document for working according to policies between
an employee and an employer. Contracts are very important as they can prevent fraud.
Dzolim cannot increase or decrease it as it is our distribution of position and rights.
To prevent things from getting out of our control, employees should understand the
company's culture and structure before applying to their work. However, companies
should interview these potential employees through psychological tests and tests at
the hiring stage. A contract can be concluded on the terms described in the previous
chapter only if both parties agree.
A reasonable organization has the obligations and rights of each party set out
in the contract. Among them are employees who must work according to the
company's vision and his goals. It is considered immoral for employees to work for
personal gain instead of working for the company's vision and goals. Muslims must
comply with the agreement.
Prophet Muhammad SAW said: “And the Muslims must fulfil the conditions
they have agreed on except for the conditions that forbid something that is lawful or
make something that is unlawful.” (Hadis narrated by Imam Bukhari 4/451).
For example, from unethical behaviour is bosses corrupting for personal gain
or employees engaging in non-work activities during working hours. Another conflict
that commonly arises is a conflict of interest. This is when an individual has interests
that differ from those of the company. There is two conflict interest by this case: a.
Potential conflict of interest Which means this conflict have potentially happens but
not happen yet, either they keep silent or ignore it. This conflict cannot be called
unethical, nor can it be considered a sin. For example, if a person intends to commit
corruption and has not yet committed it, it is not considered unethical and does not
count as a sin. Unlike good deeds, they are mere intentions and not done, but those
good deeds were counted as rewards by Allah Tara. But if the intention is bad, the sin
does not count until it is actually done. As Muslims who have a very good God, we
are grateful. b. Actual conflict of interest Which mean the conflict already happen,
and it count as a sin. Factors that could turn a potential conflict of interest into an
actual conflict include:
o Bribery or gribe Malicious people are more likely to realize their
malice when they are bribed or bribed.
o Prizes or gratification If the gift is broad, it can take the form of
money, goods, facilities, etc. There are manners when receiving gifts.
According to Velazques, there are several criteria used for receiving
gifts, it is:
 First, when the value is small, Velazquez says it doesn't matter
if the employee receives the gift. On the other hand, from the
Islamic point of view, if a gift is a bribe or a bribe, it must be
refused, whatever its value, if it is a gift. Because the day will
come when you remember your objectivity and influence it.
 Judging from the purpose of the gift-giving, if it's for
commercial purposes, it's no good, but if it's just a gift, it's fine.
 Whether it is openly given, if it is open it can be taken, if it is
secret it should not be taken. Unlike our religion, immorality is
still immorality, whether overt or not. Giving openly is even
worse, because it means that you dared to sin openly and wait
for punishment.
 It depends on the recipient's location.
 It depends on the laws in force in that country.
 Depends on company policy.
 According to local ethics and customs

Conflict of interest is a situation in which an entity or individual becomes

unreliable because of clash between personal or self-serving interest and professional
duties and responsibility. An actual conflict of interest occurs when a person
discharges his or her duties in a way that is prejudicial to the firm. And a potential
conflict of interest is when a person merely motivated or tempted by self-interest to
act in a way that is prejudicial to the firm. An actual conflict of interest is unethical
while the potential conflict of interest may or may not be unethical. The example of
potential conflict of interest is bribery and gift. The firm’s duty to the employee is:

 Compensation of wages
  Working condition: health and safety
 Working condition: job satisfaction
 Working environment
 Job profile
 Growth prospect
 Job rotation

This is the basic of moral obligation that the employer has towards the
employees, it’s to provide them with compensation they have freely and knowingly
agreed to receive in exchange for their service. How to determine wages and salaries?

1. The going wage in the industry and the area

2. The firm’s capabilities
3. The nature of the job
4. Minimum wage laws
5. Relation to other salaries
6. The fairness of wage negotiation.