Ethical Decision-Making in Islamic Financial Institutions in Light of Maqasid Al-Sharia: A Conceptual Framework

This article develops a conceptual framework for ethical decision‐making in Islamic financial institution based on the Islamic methodological approaches on ethics. While making use of the similarities between the scientific method and the Islamic jurisprudence method, a framework is developed by means of argumentation and reasoning to integrate Sharia doctrines with the “plan, do, check and act” (PDCA) cycle as a managerial tool. Using Al‐Raysuni's analysis of Al‐Shatibi's work on maqasid al‐sharia, this article develops a framework to assess the ethical aspects of Islamic financial operations, which is then applied to hypothetical cases. This approach can help overcome the methodological deficiencies in measuring ethical performance in Islamic finance by focusing on the process of ethical decision‐making that leads to the outcomes of organizational behavior beyond legality of contracts. The framework outlines the conditions under which an activity that is considered legal and permissible contractually could lead to outcomes that can make it ethical or unethical

Islamic legal methodologies and Shariah screening standards: application in the Indonesian stock market

This article provides a framework for applying the principles of Islamic legal methodology to determine the optimal Shariah screening standards for Islamic equity markets. It is argued that using maslahah mursalah (unrestricted benefit) is an appropriate method for identifying appropriate financial standards and its principles stipulate that the benchmark that yields the best economic returns to investors should be chosen. The methodological framework is applied to the Indonesia equity market where the economic implications of the Islamic stock screening standards of the Indonesian Islamic Shariah Stock Index and four global indices are assessed. Portfolios are constructed by applying Islamic stock screening standards for each of the indices by using data on 377 stocks listed in the Indonesian stock market for 5 years. The performances measured by the Sharpe ratio, Treynor index, and Jensen alpha reveal that the Dow Jones Islamic Index screening criteria performs the best. Based on the method of maslahah mursalah, the article recommends using the screening standard of this index in the Indonesian stock market to maximize benefits to investors. While the approach used in this article is applied to Islamic equity markets, the methodological framework can also be used for other similar cases in Islamic finance

Ijtihad : antara teks, realitas dan kemaslahatan sosial/ Al-Raysuni

viii, 139 hal.; 24 cm

Ijtihad : antara teks, realitas dan kemaslahatan sosial/ Al-Raysuni

viii, 139 hal.; 24 cm

Ijtihad : antara teks, realitas dan kemaslahatan sosial/ Al-Raysuni

viii, 139 hal.; 24 cm

Ijtihad : antara teks, realitas dan kemaslahatan sosial/ Al-Raysuni

viii, 139 hal.; 24 cm

Ijtihad : antara teks, realitas dan kemaslahatan sosial/ Al-Raysuni

viii, 139 hal.; 24 cm

Ijtihad: antara teks, realitas dan kemaslahatan sosial

viii, 139 hlm. ; 23 cm