But seek, with the “wealth” which Allah has bestowed on thee, the home of the hereafter, nor forget thy portion in this world; but do thou good, as Allah has been good to thee, and seek not (occasions for) mischief in the land: for Allah loves not those who do mischief. — Al Quran, 28:77
Introduction
Throughout history, people with different cultural beliefs and religious values have viewed entrepreneurial behaviour with varying degrees of legitimacy (Dana 2010). Aristotle (384–322 BC), one of the leading figures of Greek philosophy and the founder of the field of logic, viewed entrepreneurial behaviour as unnatural and therefore not a legitimate activity for “citizens”; even as slavery and the inherent inferiority of women was seen as natural (Aristotle 1924). Becker (1956) explained that some cultures consider business an unholy occupation. More recently, Enz, Dollinger and Daily (1990) identified different value orientations among various communities, and concluded that value orientation might be an important component in entrepreneurship. Some cultures simply value entrepreneurial activity more than do others (Dana 1995), and empirical evidence suggests that some religions are less conducive to entrepreneurship than others (Dana 1995b; 2010).
At the individual level of analysis a direct connection is beginning to emerge on the role of religion in entrepreneurial behaviour (Dana 2010; Davis 2010). Williams and Zinkin (2007) found that religious individuals tended to hold broader conceptions concerning the social responsibility of businesses than non-religious individuals. Regardless of whether a person is religious, it can be argued that individuals are influenced by cultural values propagated by religions (Inglehart and Baker 2000; Fam, Waller, and Erdogan 2004). As suggested by Anderson, Drakopoulou, Dodd and Scott (2000), it seems reasonable to assume that religion has an impact upon the legitimization of enterprise, despite secularization.
The same is true with regards to earning a living and wealth creation. Different religions have as their foundation different views on wealth acquisition. Christianity has two opposing streams. One stream of reasoning carries forth the view that wealth
and materialism is an evil to be avoided and even combatted (Cobb, 2007). At the other end is a view that casts prosperity and well-being as a blessing from God. The other stream views wealth as a blessing from God and a sign of his “favor” (Miller, 2007). Buddhism views wealth as an attachment that can prevent you from achieving “enlightenment” (Loy, 2001). Judaism views poverty in a negative light and wealth accumulation as a desirable end state (Jacobs, 2009).
According to Mirza (2014) Islam points to the matter of livelihood as inseparable from being alive as a human being. The Quran states: “The earth will be your dwelling place and your means of livelihood for a time” (Quran 2:36; see also 7:24). This verse addresses Adam and Eve, but it is applicable to all humankind for all times. The Quran further says that our means of livelihood is given by God: “It is we who have placed you [humankind] with authority [or ability] on earth, and provided you therein with means of fulfillment of your life [ma’ayash]: small are the thanks you give” (Quran 7:10). Similarly, “And [We] have provided you therein means of subsistence for you [humankind] and for those whose sustenance you are not responsible” (Quran 15:20).
The Prophet Muhammad (peace be upon him) clearly emphasizes the importance of working and earning a livelihood in the following words: “To strive to earn a livelihood through the right means is an obligation after the obligation of prayer,” and “Bread earned by one’s own labor (or effort) is the best of earnings”
(Siddiqi, 1972).
Entrepreneurship and Wealth Creation
There are many means by which one can earn a living. However the path to the greatest wealth creation is through entrepreneurship. During the 7th century, when the religion of Islam was birthed, people were not referred to as “entrepreneurs”.
The word “entrepreneurs” and its associated term “entrepreneurship”, derive from the French verb “entreprendre”. According to Traduction Dictionnaire Collins Francais – Anglais (http://dictionnaire. reverso.net/francais-anglais/entreprendre) the verb “entreprendre” means; to undertake; to launch; to begin. Arguably, contemporary scholarship about entrepreneurship is based in the work of economist Joseph Schumpeter (1883-1950). Schumpeter postulated, “that the main agents of economic growth [leading to wealth creation] are entrepreneurs who produce new products, new methods of production, and other innovations that stimulate economic activity” (Barringer and Bluedorn 1999 p. 422). Cohen and Levintal (1990) make a linguistic distinction between entrepreneurs and entrepreneurship.
“Entrepreneurship” is the action of being an “entrepreneur”: one who undertakes innovations. According to Cohen and Levintal, innovation within the context of entrepreneurship is the development of new customers value through solutions that meet new needs, inarticulate needs, or old customer and market needs in value adding new ways.
Kent, Saxon, and Vesper (1982) define entrepreneurship “as the creation of new business enterprises by individuals or small groups, with the entrepreneur assuming the role of society’s major agent of change, initiating the industrial progress that leads to wider cultural shifts”. Hayward, Shepherd, and Griffin (2006) take a more minimalist view of entrepreneurship and simply view it as “new venture creation”. On the other hand Katz and Green (2009) posit that it is innovation that distinctively makes a business entrepreneurial. However, if we limit entrepreneurship only to products, services or goods that are truly novel we cut out a large swath of startup businesses, as they are more imitative than innovative (Katz & Green 2009). Stevenson and Jarillo (1990) offer a definition of entrepreneurship that has taken on currency, based on number of citations, in the entrepreneurship scholarly community: “The process by which individuals – either on their own or inside organizations – pursue opportunities without regard to the resources they currently control” (p. 23). Stevenson’s and Jarillio’s definition puts the focus on entrepreneurship as the pursuit of opportunity regardless of organizational context or the novelty of the opportunity.
Using the definition of entrepreneurship offered by Stevenson we open up the world of entrepreneurship to include those solo projects, which may only involve an individual working part-time, and enterprise-building activities that may involve creating jobs for a large number of people. But in order to distinguish entrepreneurship from employment this article focuses on ownership as the basis to call one an entrepreneur (Katz & Green 2009). Thereby, allowing anyone who is a small business owner, or works for himself or herself instead of others, to be considered an entrepreneur. And it is entrepreneurs, according to research sponsored by the Enterprise Research center, that have the highest household wealth.
While entrepreneurs make up less than 20% of the workers in the US they account for two-thirds of the millionaires, with an average household net worth of US$3.7 million (Stanley & Danko, 2010). While precise data on the religious affiliation of millionaires is hard to come by, indications are that Muslims are the second largest religiously self-identified group of wealthy entrepreneurs, right behind Christians and ahead of Hindus and Jews respectively (Frank, 2015).
Islamic Context of Entrepreneurship and Wealth Creation
There are two main sources that form the basis for Islamic thought; the Quran and the sayings and traditions of the Prophet Muhammad (ahadith) (Muthhari, 1985). The Quran is seen as more than just a book of guidance for Muslims; it is experienced as the literal word of God. And where it is not clear what those words mean Muslims look to the sayings or actions included in the ahadith for interpretation of the meaning of verses
(Beekun and Badawi 1999). Khan (1994), referencing the Quran and hadith, states that:
God, according to the Islamic view, has created the universe for the benefit of all human beings. God has made the resources of this earth available to man who has the responsibility to make use of them, to mold them, and to transform them according to his needs (p.3).
…On earth will be your dwelling place and your means of livelihood for a time — Quran 2:36
…to men is allotted what they earn, and to women what they earn. But ask God of His bounty, for God has full knowledge of all things — Quran 4:32
It is We (God) who have placed you with authority on earth, and provided you therein with means for the fulfillment of your life… — Quran 7:10
And say: Work (‘amal), soon will God observe your work… — Quran 9:105
We have made the night and the day… that we may seek bounty from your Lord… — Quran 17:12
It is out of His Mercy that he has made for you the night and day that you may rest therein and that you may seek of His bounty; in order that you may be grateful — Quran 28:73
The Islamic worldview advanced by Khan clearly puts humankind in an activist role in shaping their destiny. Humans are responsible for pursuing opportunities; regardless of the resources they currently control, to meet their needs. Ergo, one could argue that the Islamic view articulated by Khan places entrepreneurship as the preferred economic behavioural model for Muslims.
In the Quran there are clear references to the “work” one does and the “wealth” or “bounty” that one is expected to seek.
The verses on left page make it clear that Muslims are expected to work for a living and that work is seen as an activity that is consistent with God’s will and has moral value. The verses referenced state that God created the night so that one can rest in order to seek God’s bounty during the day. Additionally, the creation of wealth is seen as God’s bounty, grace and goodness. Interestingly, the Quran also states;
“That man can have nothing but what he strives for” (Quran 53:39). This theme runs through the Quran with both spiritual and secular implications. Related to the theme of this article, a person is expected to work for economic success in this life. In fact, those who beg, or engage in other parasitic lifestyles, without extenuating circumstances, are roundly chastised in the sayings (ahadith) of the Prophet Muhammad (Khan 1994). To not work, when one is able, is seen to be in defiance of God’s law and the resulting poverty from not working is seen to lead one to kufr (denial of God’s teachings) (Asad 1980).
In addition to the disapproval of not working Islam teaches the dignity of engaging in labor to support oneself:
It is better for anyone of you to take a rope and cut the wood (from the forest) and carry it over his back and sell it [as a means of earning a living] rather than to ask a person for something and that person may give him or not (Sahih Bukhari Volume 2, Book 24, Number 549).
It is this hadith that brings us most clearly back to the entrepreneurship framework offered by Stevenson and Jarill (1990). The Prophet Muhammad (peace be upon him) clearly states it is better to pursue an opportunity to provide for oneself regardless of the resources presently under one’s control than to depend upon someone to provide for you.
In addition to providing for oneself, entrepreneurial behaviour is meant to benefit the person in providing means to lead a more virtuous life and benefit the community in helping to support good works (e.g., giving in charity to those in need or helping to build a mosque). Wafica Ali Ghoul (Dana 2010) sums up the behaviour of a Muslim entrepreneur as follows:
‘’respecting the fundamental values of Islamic Shari’a, which balance the interests of society and individuals. These values include fairness, non-exploitation of the poor, moral responsibility, accountability, and equity in financial dealings’’ (p.273). The pursuit of entrepreneurial success is not to be performed as a means of self-aggrandizement but is to be engaged in as a “spiritual” act in communion with those who help one to be successful and this includes the community at large (Said, Sachs, and Sharify-Funk 2004; Beekun and Badawi 1999). Individuals are seen as the “stewards” of the “gifts” given to them by God (Said, Sachs, and Sharify-Funk 2004; Beekun and Badawi 1999). Management of that stewardship extends beyond the financial success of the firm and into helping society be better.
The Prophet Muhammad (peace be upon him) is an exemplar for Muslims for entrepreneurial behaviour. This proposition can be made on several bases. The first is that Muslims see the Prophet Muhammad (peace be upon him) as the model for all human behaviour (Beekun and Badawi 1999). Additionally, the Quran makes this explicit in sura al-ahzab (The Confederates): “Ye have indeed in the Messenger of Allah an excellent exemplar for him who hopes in Allah and the Final Day. And who remember Allah much”
(Quran 33:21).
Ali and Liu (2004) make the point that before Muhammad Ibn Abdullah was recognized as the prophet of Islam, he was recognized as a businessman. Adas (2006) makes a similar point regarding the entrepreneurial nature of the Prophet Muhammad, both before and after he received his calling to prophet hood. It is these observations, along with the a’hadiths and Quranic verses that support the proposition that the Prophet Muhammad is to serve as the exemplar for entrepreneurial behaviour. It could be argued that his example extends into all areas of commerce and economic activity (Abdas 2006; Ali and Liu 2004; Ayub 2007; Haq 1995).
When a person of any religious background undertakes a business venture, or engages in social or private activities, specifically constructed to conform to the mandates of that faith, it is reasonable to conclude that the person is trying to please the deity (deities) on which the religion is constructed. Islam, by nature of its extensive system of jurisprudence, more so than most religions, seeks to place human activity under the rubric of divine guidance. For Muslim entrepreneurs who are trying to set up enterprises in conformity to their religious doctrine they attempt to be consistent with Shari’a (Islamic principles of living).
By setting up enterprises consistent with Shari’a, the Muslim entrepreneur hopes that these entities will allow them to achieve their economic goals while aiding their spiritual development (Dana 2010). In fact, the word Islam (submission to God) and Muslim (one who submits to God) by their very nature require following of Shari’a , even as there is disagreement on various aspects and interpretation of Shari’a (Faruqi and Faruqi 1986). While following Islamic principles may not serve as the sole motivation for one being an entrepreneur, it clearly shapes the nature of entrepreneurial practice of observant Muslims. It is not only the entrepreneurial practice that brings a Muslim into conformity with Shari’a, it is how the resulting economic gains from enterprise formation are used. The Islamic worldview holds wealth cannot be horded. It is to be circulated within the community to improve the economic well-being of all (Iqbal and Mirakhor 2007). The needs of society must be a consideration for both enterprise formation and economic dispensation (2007). Haq (1995) explains that the idea of enterprise formation and entrepreneurial behaviour within the Islamic community as being motivated by the concept of fard al kifayah (lit. the obligations of sufficiency).
Fard al kifayah comprises all the socially obligatory duties that must be performed by the Islamic community (Ummah) under all circumstances until a sufficient level is reached (Qaradawi 1980). This specifically extends to entrepreneurial activity, as Muslims are required to establish the necessary industries and professions, for the viability of the communities in which they live (Haq 1995; Qaradawi 2001). Haq (1995) extends his analysis of fard al kifayah as not just the obligation to form businesses to help the Ummah, but also the resulting employment and spreading of resources (financial and otherwise) as a social obligation.
Based on the information above, Table 1 offers reference points to examine the behaviour of Islamic entrepreneurs. In this context, the entrepreneur serves as steward, Prophet Muhammad (peace be upon him) is the exemplar of entrepreneurial behaviour, source of wisdom is the Holy Quran, motivation for entrepreneurship is submission to God, and finally, the primary concern of an entrepreneur should be social welfare.
Conclusion
In the book “Five Pillars of Prosperity: Essentials of Faith-Based Wealth Building” Dr. Mirza makes the case that Islam promotes entrepreneurial behaviour, especially as a means of wealth building. Mirza (2014) supports this assertion with numerous references from the Quran and hadith including; “for a Muslim, today should be better than yesterday and tomorrow should be better than today”. From its early roots Islam was tied into entrepreneurship, as the first wife of the Prophet Muhammad (Khadija bint Khuwaylid) was a merchant; an entrepreneur if you will (Katz and Green, 2009). She was also the first convert to Islam. It was Khadija’s wealth that supported the Prophet’s mission and allowed him to spread the message of Islam in its formative years (Faruqi and Faruqi 1986; Armstrong 1993). He was known for always charging fair prices and never hoarding any goods. Because of this, the people of Mecca dubbed him Al-Sadiq and Al-Amin (the Truthful and Trustworthy).
Abdur-Rahman ibn Auf, an early believer and Companion of the Prophet, was born in Mecca and became a Muslim when he was thirty years old. He then migrated from Mecca to Medina, where he started his business and soon became the wealthiest merchant in Medina.
Uthman bin Affan, the third Caliph, learned to read and write at an early age, and as a young man became a successful merchant. His generosity had no limits. On various occasions, he spent a great portion of his wealth for the welfare of the Muslims, for charity, and for equipping the Muslim armies. That is why he came to be known as ghani, meaning “generous”.
Imam Abu Hanifah (d. 767 C.E./148 A.H.), founder of the Hanafi school of law, was born into a family of tradesmen. He earned his living through trade and used his earnings to meet the needs of his students. He gave much to charity. Every Friday he would distribute twenty gold coins to the poor for the benefit of his parent’s souls.
The Islamic worldview places compliance with God’s ordinances and support for the community as the bases for economic activity. Social obligation takes precedence over individual needs and the benefit to the community must be considered in the formation of enterprises (Khan 1994; Haq 1995). Hence, while the nature of businesses owned by Muslims may on the surface look the same as businesses owned by non-Muslims (e.g. dental offices, supermarkets, restaurants), it is the exemplar, source of wisdom, underlying motivation and economic framework that distinguishes the Muslim entrepreneur.
With the development of information technology and the growth of the internet as a marketplace, it is becoming easier for more people to become entrepreneurs. As this entrepreneurial trend grows, it is essential that people of faith take leadership roles as entrepreneurs. The world needs business owners who can ensure the call of God as the help build and lead society through faith-based businesses.
One reason the world needs people of faith to engage in business and wealth creation is because their faith guides their ethics. The business practices of Muslim entrepreneurs must be above reproach, because they are obligated to follow the business principles outlined in the Quran:
- Do not engage in bribery or dishonesty
- (Quran 2:188)
- Deal justly in business or trade (Quran 38:24)
- Document and witness agreements (Quran 2:282)
- Do not engage in fraud or deception or mismeasurement (Quran 83:1-3)
- Give everyone his due share (Quran 4:53)
- Do not engage in hoarding or exploitation
- (Quran 10:58)
- Be kind (Quran 5:13)
For Muslims it is not just the wealth that is accumulated that identifies them as successful, it is how the money was made. The Prophet Muhammad emphasized ethics in business. He urged Muslims to be truthful in all business dealings, to honor their promises, to negotiate honestly, and not try to lower the value of goods by berating another’s merchandise nor inflate the value of their own goods through exaggerated claims. He told Muslim entrepreneurs not to avoid payments they owe, and when others owe them to not make it difficult for debtors to repay them.
