Impact of Religion on Business Ethics in Europe and the Muslim world

Abstract

The concern of the research project is to assess the extent to which religion influences standards and behaviour in business and whether it is only exerted in business modes which refer explicitly to religion or in other practices as well. The objective is to develop a better understanding of cross-cultural business with a view to finding ways of improving the interaction by referring to common ethical standards. The banking sector is taken as an illustrative example. Within this sector, Islamic banking is compared to cooperative banking in both Europe and the Muslim World. While Christianity is the dominant religion in Europe, Islam is the driving force in the Muslim World. In existing work, the research problem has already been identified, but not solved in a satisfactory manner, because a more interdisciplinary approach is missing. There are, however, intercultural studies, studies on religions and studies on business ethics. In a theoretical study, the relevant elements of the project, i.e. the two sample environments, the two sample religions and their respective ethical systems, and the two modes of operations were to be analysed. Thus, the aspects of the business that can be observed and related to the supposed influence, were established. It was found out that they are particular in the business they accept, i.e. in the kind of products they offer, and in their organisation. The key elements of Islamic banking are the Islamic financial instruments. On the other hand, it is the organisation which is key to co-operative banking. It was then planned to investigate in the current practices of Islamic banking in Europe and the Muslim World, and similarly in the practice of co-operative banking in both environments, In the empirical investigation it was found out that Islamic banks offer conventional banking products as well as specifically Islamic ones. These banks could therefore be described as conventional banks with some modifications in the product range according to religious, i.e. Islamic, interdictions. Co-operative banks operate in away that allows mutual help among the poor. Religion, i.e. Christian Faith in Europe and Islam in the Muslim World, provides the objective of these banks 'to help the poor’. As a result it can be said that there is an influence of religion, i.e. of Christian Faith and Islam, on business ethics, expressed in different modes of operation in the banking sector. This influence is varying. Islamic banking is an ethical system which can be shared fundamentally by Muslims only because it is built on Muslim faith. Co-operative banking can be described as a system in which Christians and Muslims share the same ethical principles in that they share the objective to care for their neighbour and to overcome poverty. By referring to this common ethical standard, Muslims and Christians have an opportunity to work together to foster development and to overcome poverty.