By: Mohd Adib Abd Muin
Islamic Business School (IBS), UUM
BPMS1013 Theory & Practice of Islamic Business 1
Entrepreneurship is a part of Islamic culture. According to Prophet Muhammad
and his companions," there are a lot of Muslims that are successful
entrepreneurs in the world and Islam always invite all Muslims to be innovative,
entrepreneur and active.
Entrepreneurship is a strategic area which has always been attentive and always
changing over time.
For Muslims, entrepreneurship have played a vital role in the formation of
Islamic civilization from the time of the Prophet again.
Entrepreneurship or better known as an area of their business in particular
Muslims in early Islam, but not immune to the Prophet himself.
An entrepreneur‟s behaviour is bound by sharia or the Islamic law. The conduct
of a Muslim entrepreneur is different from the non Muslim counterpart as his or
her main objective of involving in business is to be submissive to Allah, the
Almighty God in every single action taken in business transaction.
BPMS1013 Theory & Practice of Islamic Business 2
Entrepreneurship is an integral parts of Islamic religion
The Muslim entrepreneurs are „khalifah‟ and have the responsibilities to
develop prosperity and sees business as part of „ibadah‟ or good deed.
In Islam, the activity also known as Ibadah –or good deed
Position of Entrepreneurship and business in Islam - encouraged to venture into
business. Prophet Muhammad SAW expounded that 9 out 10 sources of
sustenance are through business.
Islamic Economic System - Islamic Entrepreneurship should operate within the
domain of Islamic Economic system and act as the vehicle towards global
acceptance of Islamic Economic System.
Guiding Principles of Islamic Entrepreneurship is by the al-Quran and al-Hadith
Entrepreneurial Ethics based on exemplary conducts of Prophet Muhammad
BPMS1013 Theory & Practice of Islamic Business 3
M. A. Abdullah & A. Hoetoro (2011) said “Islam does support every
Muslim entrepreneur to have an appropriate vision that directs
his/her enterprise to triumph over business competition within the
“ Thee do we worship, and Thine aid we seek, show us the straight
(Surah al- Fatihah: 5-6)
Allah said in Qur‟an:
al- Talaq: 3
al- Baqarah: 177
Al- Zukhruf: 32
BPMS1013 Theory & Practice of Islamic Business 4
PRINCIPLES OF ISLAMIC BUSINESS
• Transaction without
• Good services
• Protecting the right of
sellers and buyers
• Honest and trust
• Hard working
CONCEPT OF ISLAMIC BUSINESS
• Exchange goods with
goods or money
• The purpose of
making a profit
• Valid contract terms in
• Mutual agreement
between the seller
BPMS1013 Theory & Practice of Islamic Business 5
BUSINESS IN ISLAMIC PERSPECTIVES
BPMS1013 Theory & Practice of Islamic Business 6
BASIC CONCEPTS, SYSTEMS AND BUSINESS PROCESSES
BPMS1013 Theory & Practice of Islamic Business 7
FACTORS OF PRODUCTION
PRAYING FIVE TIMES A DAY
CONCERNED WITH THE PROVISION
PRIORITIZING USER RIGHTS
ALWAYS BE GRATEFUL
BPMS1013 Theory & Practice of Islamic Business 8
Characteristic of Islamic Intrepreneurs
KEEP GOOD RELATIONS WITH HUMANS
RENDER A SERVICE
HELPING OTHER ENTREPRENEURS
STAYING AWAY FROM VICES
BPMS1013 Theory & Practice of Islamic Business 9
Intrepreneurs and Environment
a process of converting input (production resourcess) into finished goods or
semi finished goods.
services are also considered as a product. any preparation of services are
considered as a production.
involves planning, staffing, directing and controlling all activities related to
the production of goods and services.
marketing is a system of business activities designed to plan and execute the
conception, pricing, promotion and distribution of products (including
goods, services, organizations, people, places and ideas) to encourage a
change that could meet the needs of consumers and at the same time
achieving organizational objectives.
BPMS1013 Theory & Practice of Islamic Business 10
FUNCTION OF BUSINESS IN ISLAM
financial management involves the individual financial, business or non-
business organizations, government and non-governmental organizations
and all entities involved with money.
financial functions within a business including forecasting funding needs,
raise funds for the company, managing funds and make sure the fund is used
in the best way.
human resources of an organization is a staff that includes employee and
manager in the organization.
they offer talent, knowledge, skills and experience to the organization.
without human resource organization not only can‟t move but it will not
BPMS1013 Theory & Practice of Islamic Business 11
BPMS1013 Theory & Practice of Islamic Business 12
•Owned by individuals
•Need a small capital
proprietorship in Islam
must follow the rules of
Islamic principal such as
should not deal with
•Is a business run by one,
two or more of the owner
in the profit.
•-You and your partner is
co-owner’s and they will
share profit or risk
•-In Islamic partnership, if
the partner borrows
money to the third party,
which exceeds his capital,
and he commits for
external loans, his
liabilities are unlimited
•Is a relationship held by
two or more in which one
party acts as a supplier
and the other runs the
firms on behalf of them.
•-Division of the rate of
profits based on an
agreement which involves
one party called
‘proprietor’ who supply
capital to the firms, and
the other called
1992, p.216) who accept
the capital and run the
BPMS1013 Theory & Practice of Islamic Business 13
The Types Of Business
BPMS1013 Theory & Practice of Islamic Business 14
CHALLENGES AND BUSINESS PROSPECTS IN ISLAM
There are many challenges in business:
1) Corruption is the acts prohibited in Islam because it cause
hostility and fighting among ourselves in get a services that
are offered by some party. The rich will get richer and the poor
2) There are elements of fraud either from the buyer, the
seller or the goods sales in terms of measurement. For
examples: sell a good that did not own and nowadays in
business there a way to hide other payments that are not
described or explained to the customer during transactions.
3) Gharar ( a sale that involves uncertainty)
For examples: sale of fish and birds that have not been
arrested or shown to the buyer by the seller
BPMS1013 Theory & Practice of Islamic Business 15
In Islamic business, ‘riba’ is not
allowed. Therefore there will no bias
in the community which will cause
the rich become richer and the
poor become poorer. Islamic
business is based on Syariah
Government offer opportunity for
entrepreneur to expand their
business with finding fun especially
in term of financial lending.
For example, government agencies
that involve in helping entrepreneur
such as Amanah Ikhtiar Malaysia
(AIM), Perbadanan Nasional Berhad
(PNB) and others.
Ali, A. A. (1994). The Holy Qur’an: Text and Translation.
Islamic Book Trust. Kuala Lumpur
M. A. Abdullah & A. Hoetoro (2011). Social Entrepreneurship
as an Instrument to Empowering Small and Medium
Enterprise: An Islamic Perspective. International Journal
Management Business Resources
P.R.M. Faizal, A.A.M. Ridhwan, and A.W. Kalsom “ The
Entrepreneur Characteristic from al- Quran and al- Hadis”
International Journal of Trade, Economic and finance. Vol. 4,
No 4, August 2013
BPMS1013 Theory & Practice of Islamic Business 16