The effects of Islamic law on business practices

Date of this Version


Document Type

Journal Article

Publication Details

Interim status: Citation only.

Cerimagic, S. (2010). The effects of Islamic law on business practices. Education, business and society: Contemporary Middle Eastern issues, 3(1), 40 - 47.

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2010 HERDC submission. FoR Code: 150308

© Copyright Emerald Group Publishing Limited, 2010


Purpose – The purpose of this paper is to give professionals working in Islamic countries a better understanding of the legal system in those countries. As a rule, multinational companies are more equipped in dealing with problems when governed by Western legal philosophies and jurisprudence. However, when certain issues fall on the jurisdiction of an Islamic country they have to address it by using the Islamic laws (Shariah laws) maintained in the Qur'an.

Design/methodology/approach – The source of material for this paper is literature review based on texts and references sourced in the business environment. The literature used is Islamic literature in the Bosnian and English languages.

Findings – The findings are that Islamic laws compel companies to be wary of interest, uncertainty or risk. This means that companies that rely on compelling interest on the consumer are prohibited in operating in Islamic states. The law is there to protect the welfare of all the parties involved. The strict nature of these laws often seeks to provide justice and fairness to both parties. Thus, for organisations and international companies who intend to deal with companies based in Islamic countries and adhere to Shariah law should always be mindful of the fairness of their offers and the fairness of the outcomes of these agreements.

Research limitations/implications – Islamic laws tend to adhere strictly on the principles and values intimated in the Qur'an and Hadith. This paper summaries the core of Islamic business laws. However, this research is limited to theory alone. For this reason, future research perhaps could look at case studies and see if what works in theory indeed does work in practice too. The review has been limited to Bosnian and English language texts. In addition, this paper has some limited literature review on such a complicated and sensitive topic.

Originality/value – This paper will provide important business factors that will essentially assist international businesses in their understanding of the legal standards in this region.

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This document has been peer reviewed.