Entrepreneurship and management in Muslim communities

The study of innovation owes much to the Austrian school’s contribution, particularly Schumpeter pioneering the beginnings of study and research in this field. He was hailed as the “champion of innovation and entrepreneurship”. Schumpeter popularized the “creative destruction” theory, which emphasizes the significance of innovation and entrepreneurship.

The early studies of conventional leadership theories have focused on delineating the foundation stone for entrepreneurship, that being innovation, opportunity, and the entrepreneur

The entrepreneur:

Internal motivations, such as trying to overcome a problem (unemployment, divorce, poverty, etc.), or external ones, like seeking power, wealth, and fulfilling oneself, encourage an entrepreneur to start their own business.

On one hand, several studies and conclusions have been made in this regard, including Maslow's famous theory: the hierarchy of needs, in which he joined incentives and need.

On the other hand, David McClelland (1961) annunciated that stimuli to start a business are thoroughly linked to the call for perfection and power.

Unlike the conventional schools mentioned, Dr Sami B. Ibrahim Suwailem demonstrated that the motivation theory dealing with initiating a project or starting a business (entrepreneurial intention) is all about ruling control and selfishness, which are the major factors that led to the global financial crisis (the credit bubble inflation[1]) in 2008.

Since the Islamic economy is based upon an ethical system, Islamic entrepreneurship and businesses are also based on personal stimuli. Dr Sami also asserts that “personal stimuli are not only limited to ruling control and selfishness, but they also involve giving, altruism, lack of selfishness, and community spirit”. It is acknowledged that Islamic finance or economics are founded on ethical systems. The researchers who have worked on the initiative of the project finance lab at Harvard University, have consistently established "psychological tests" to evaluate the management capacity and credibility of the candidate to finance their projects, which allows the identification of the most qualified, credible entrepreneurs.

Dr Sami explained that the classic economic system failed to anchor a moral culture in the field of finance and business, he also clarified the fact that complying developments and innovations with Islamic law is indeed a feature of Islamic worship.

In another context, Dr. Abdul Hamid al-Ghazali considered Islamic values the core engine for the Islamic economics activities.


This second principle is the core of human relationships.

Capitalism was founded upon individualism and monopolistic competitions. One would only succeed if his competitor lost.

Furthermore, socialism was founded on common ownership, in the sense that one’s assets would be indivisibly held.

The Islamic economy is based on a combination of the individual and the group. Dr. Sami Al-Suwailem explains, through an example extracted from James Wilson's "The Moral Sense", that brotherhood does not deny the independence of individuals, making each one different, even if they share basic common factors.

It is acknowledged that we would be living in a better world, if one loved for his brother what he would love for himself. Such an idealistic view would contradict with selfishness and self-seeking, so one would only serve his best interests. The group would approve of such a belief, while an individual would denounce it. Muhammad, the messenger of Allah (May peace be upon him) said: “A worshipper does not attain the truth of faith until he loves for the people what he loves for himself of good”

Lectures, tutorials and contemporary management methods seek mutual profit between the two parties, a “win-win relationship”, which is a key element to long, healthy relationships. Researchers suggest practical solutions that individuals might be easily convinced with. In his book: Emotional Intelligence, Dr. Daniel Goleman presented “empathy” as a key element for communication and negotiation, which communication between individuals’ schools refer to as “interpersonal communication” : one is actually asked to put himself in the other party’s shoes, in order to interact with them without behavioral or sensory dissonance. This theory is practiced in buying and selling, for persuasion, but is sometimes used to manipulate the other party’s emotions “perception” and reasoning.

Economic relations are based on interchange between the two parties may culminate in one of the four possible results:

- The loss of the two parties

- Gain on both sides

- The first party’s gain and the second’s loss

- The second party’s gain and the first’s loss

Islamic guardianship and Islamic law’s wisdom is stressed here, which considers both parties participants in the goal, so they would both equally win or lose, which is why bank transactions are called, in Islamic financial institutions “Muraba?a ”.

Figure: The principle of zakat attains compassion through brotherhood, which leads to equitable distribution of wealth, differences between members of the group gives them the right to invest, which is the key to individual wealth.

Wealth and equity:

The importance of Islamic economics is highlighted in the focus on sustainable development, and maintaining the stability of the real and the financial markets. The goal of achieving wealth is providing luxury and prosperity, and the goal of distributing it is fairness.

Dr. Sami bin Ibrahim Suwailem, pointed out that accumulating wealth, saving money and not reinvesting it, it would only be held by few people, leading to an acute shortage of liquidity. While middle-class wage earners would lose purchasing power, which has a negative impact. If demand decreases, production declines, which would lead to liquidity crises, and traders would be forced to accept loans, which destroy the market. This practice of charitable giving, which pumps more money into the economy, raises the purchasing power and keeps demand levels high, this was concluded by researchers at Harvard in a workshop, where they proposed redistribution of wealth for the poor to raise the purchasing power and maintain market balance.



Mohamed Alif Kahlani was educated in IHEC:Institut des Hautes Etudes Commerciales in Sousse, Tunisia and Montesquieu-Bordeaux IV University, France-as well as the IFE Francophone Institute for Entrepreneurship in Mauritius where he obtained his master’s degree. He’s been the keynote speaker on entrepreneurship at several conferences. Mohamed is an entrepreneur, webpreneur and auditor in entrepreneurship. He speaks Arabic, French and English fluently


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