Int. J. Entrepreneurship and Small Business, Vol. 20, No.

1, 2013 63

Entrepreneurship: an Islamic perspective

Miles K. Davis
Harry F. Byrd School of Business,
Shenandoah University,
14600 University Drive,
Winchester, 22601, Virginia, USA
E-mail: mdavi3@su.edu

Abstract: This paper considers religion as an explanatory variable for

entrepreneurial behaviour. It examines the role religion plays in the
entrepreneurial behaviour of those who adhere to the Islamic faith and a model
is proposed to examine such behaviour in future research.

Keywords: Islam; entrepreneurial behaviour; values; Muslims; religion;

entrepreneurship.

Reference to this paper should be made as follows: Davis, M.K. (2013)

Entrepreneurship: an Islamic perspective, Int. J. Entrepreneurship and Small
Business, Vol. 20, No. 1, pp.6369.

Biographical notes: Miles K. Davis is the George Edward Durell Chair of

Management and Dean of the Harry F. Byrd, Jr. School of Business at
Shenandoah University in Winchester. Prior to becoming the Dean of the
Business School in July 2012, he served as the Founding Director of the
Institute for Entrepreneurship at the Harry F. Byrd, Jr. School of Business. He
continues to teach courses on entrepreneurship, as well as conduct research on
the intersection of religion and entrepreneurship. He also is a member of the
Board of Trustees of the Amana Mutual Fund Trust, the largest shariah
compliant mutual fund in the world.

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)

1 Introduction

Through out history, people with different cultural beliefs and religious values have
viewed entrepreneurial behaviour with varying degrees of legitimacy (Dana, 2010).
Aristotle (384322 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 et al. (1990) and Dana and

Copyright 2013 Inderscience Enterprises Ltd.

64 M.K. Davis

Dana (2008) 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. 1995a),
and empirical evidence suggests that some religions are less conducive to
entrepreneurship than others (Dana, 1995b, 2005).
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). Brammer et al.
(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 et al., 2004). As suggested by
Anderson et al. (2000), it seems reasonable to assume that religion has an impact upon
the legitimisation of enterprise, despite secularisation.

2 Why explore entrepreneurship from Islamic perspective?

The study of Islamic Economics and Islamic Economic Behavior is in its early stages as
an academic discipline (Khan, 1994; Haq, 1995). This early stage development of an
academic body of literature related to economic activity known as entrepreneurship,
from an Islamic perspective, is even sparser than that related to the general discipline of
Islamic economics (Adas, 2006). The lack of academic writings about Islamic
entrepreneurship has many reasons that include, but are not limited to: inaccessibility of
Western scholars to authentic and primary sources for writings on Islamic economic
theory, many of which are written in Arabic, Urdu or other languages not commonly
spoken by non-Muslim academics; the historical assertion by some Western scholars that
Islam is incompatible with capitalism and hence private enterprise (Adas, 2006; Barber,
1995); and a lack of understanding of interpretive activities of Islamic actors
(entrepreneurs) who deconstruct and reconstruct the relationship between Islam,
economy and entrepreneurship [Adas, (2006), p.113].
Despite the challenges outlined above, there is scholarly tradition from which one can
explore Islamic economic theory in general, and entrepreneurship specifically, from an
Islamic perspective. Throughout Islamic history Muslim scholars have written on the
economic teachings of Islam and its application to what we have come to call
entrepreneurial activity (Siddiqi, 1972; Khan, 1994). The Quran (believed to be the
revealed word of God by Muslims), Sunnah (the practices of the Prophet Muhammad),
Fiqh (Islamic jurisprudence), social thought and historical experience have served as the
Islamic basis for the confabulation of Islamic economic activity. It is also these sources
that will form the basis for this article.
The main objective of this article is to present an outline of a general framework to
examine Islamic entrepreneurial behaviour within a modern context. Specifically, it
explores the role Islam plays in the entrepreneurial behaviour of entrepreneurs from the
Islamic faith. The author acknowledges that any attempt to analyse religious and/or
spiritual beliefs is challenged by conceptual and definitional consensus of the terms.
Furthermore, to apply those concepts to a casual relationship stretches the limits of what
can be analysed using objectivist oriented research methods. This article seeks to offer
perceptions on religion and its impact on entrepreneurial behaviour, from the perspective
 Entrepreneurship: an Islamic perspective 65

of those directly involved with the respective religious belief and entrepreneurial
behaviour.
It is important to understand Islamic entrepreneurial behaviour and its underpinnings
as Islamic economic systems and their associate theories are increasingly becoming part
of non-Muslim financial institutions (e.g., HSBC, UBS, Bank of America) and economic
systems (e.g., USA and the UK) (Ayub, 2007; Iqbal and Mirakhor, 2007).

3 What is meant by 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. Within the context of modern usage entrepreneurship is the action of being an
entrepreneur: one who undertakes innovations. 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 (Cohen and Levintal, 1990).
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 and Green, 2009). Stevenson and Jarillo (1990) defined
entrepreneurship as: The process by which individuals either on their own or inside
organizations pursue opportunities without regard to the resources they currently
control (p.23). Stevensons and Jarillios definition puts the focus on entrepreneurship as
the pursuit of opportunity regardless of organisational 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 and 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. It is this framework that
shapes our discussion about Islamic entrepreneurs.

4 Islamic perspective on entrepreneurial behaviour

There are two main sources that form the basis for Islamic thought; the Quran and the
sayings and traditions of the Prophet Muhammad (ahadith) (Mutahhari, 1985). The
Quran is seen as more than just a book of guidance for Muslims (those who follow
Islam); 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 (Beekum and Badawi, 1999). Khan (1994)
referencing the Quran and ahadith, states that:
66 M.K. Davis

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)
The Islamic worldview advanced by Khan clearly puts human kind 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.
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 (amalu), 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 verses above make it clear that Muslims are expected to work for a living and that
work is seen as an actively that is consistent with Gods will and has moral value. The
verses referenced clearly state that God created the night so that one can rest in order to
seek Gods bounty during the day. Additionally, the creation of wealth is seen as Gods
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 Gods law and the resulting poverty from not working is
seen to lead one to Kufr (denial of Gods teachings) (Asad, 1980).
In addition to the disapproval of not working Islam teaches the dignity of engaging in
labour 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 ahadith that brings us most clearly back to the entrepreneurship framework
offered by Stevenson and Jarillo (1990). The Prophet Muhammad clearly states it is
better to pursue an opportunity to provide for oneself regardless of the resources
presently under ones control than to depend upon someone to provide for you.
 Entrepreneurship: an Islamic perspective 67

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 Shariah, 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-aggrandisement, 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
et al., 2004; Beekum and Badawi, 1999). Individuals are seen as the stewards of the
gifts given to them by God (Said et al., 2004; Beekum and Badawi, 1999). Management
of that stewardship extends beyond financial success of the firm and into helping society
be better.
Based on the information above Table 1 offers a model to examine the behaviour of
Islamic entrepreneurs. Within the model is the role of the entrepreneur, who is the
exemplar of entrepreneurial behaviour, sources of wisdom for the entrepreneur,
motivation for wanting to be an entrepreneur, and finally, the primary quality an
entrepreneur should have.
Table 1 Entrepreneurial model Muslims follow

Islam
1 Entrepreneur as Steward
2 Exemplars Prophet Muhammad
3 Source of wisdom for entrepreneur The Quran and Hadiths
4 Motivation for entrepreneurship Submission to Gods will
5 Primary quality of an entrepreneur Concern for community

5 Discussion and conclusions

The role of religion in the entrepreneurial behaviour process is a complex one. Research
has already been done that establishes the role personal values play in decision-making
and career selection (Davis, 2008; Brown and Crace, 1996; Barnett and Karson, 1987).
And since personal values can be directly linked to religious beliefs (Garcia-Zamor,
2003; Inglehart and Baker, 2000) it is highly probable that religion influences the
motivation of entrepreneurs (Mentzer, 1988).
It can be argued that Islam itself does not necessary directly promote entrepreneurial
behaviour. However, Islam, as with all religions, teach, promote and propagate cultural
value systems within the societies it is a part of. These value orientations in turn affect
propensity toward entrepreneurial activity. From its early roots Islam was tied in to
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 Khadijas wealth that supported the Prophets mission and
allowed him to spread the message of Islam in its formative years (Faruqi and Faruqi,
1986). That reality coupled with verses from the Quran, which support self-sufficiency
68 M.K. Davis

and entrepreneurial behaviour, should predispose Muslims to engage in venture creation

for support of self and the greater community.
Additional research needs to be done that explores the entrepreneurial behaviour
among Muslims and in Muslim communities. The model proposed in Table 1 is a
framework that can be used to examine such behaviour and determine the validity of the
model. Furthermore, Islamic scholars like Badawi (2006) propose that Islam enjoins a
work ethic that equips the individual to excel in economic pursuits (p.208). An empirical
examination of the impact of Islamic teachings on economic activity, especially
entrepreneurship, could be useful in addressing portions of the world that suffer from
high unemployment and underdevelopment that have large Muslim populations.

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