Globalization is connecting the world at an unstoppable rate. In economics, it is when businesses, organizations, and countries operate on an international level. Given the worldwide trade of products and services, the interaction and integration of each country’s economy also bring an exchange of cultures among its population.
Through social and cultural osmosis, business partners will better understand each other’s unique beliefs and taboos. This is essential knowledge to know when trading globally, as certain cultural traits influence their business proceedings.
Religion provides a set of guidelines that its faith deems holy or sacred. These values often affect how a believer views and interacts with the world. This moral code encompasses their daily lives and even affects their behavior regarding economics and trade. This article summarizes how three world religions—namely, Christianity, Islam, and Hinduism— affect their adherents’ business practices.
Christianity is the world’s largest religion comprising 31% of the world’s total population. Their beliefs are based on the Bible, which contains the Old and New Testaments. The top five countries with the largest Christian population are the United States, Brazil, Mexico, Russia, and the Philippines.
The New Testament preaches the obligation of the rich to help the poor. God gave man free will and trusted them to use natural resources wisely. The New Testament doesn’t condemn accumulating wealth as long as its followers worship regularly. Religion doesn’t expressly limit trade so long as they proceed ethically and without sin.
The Prophet Muhammad’s teaching serves as the core of the Quran, the main text of the Islamic religion. He grew up in a family of traders and became one himself, amassing considerable political and economic influence. The Quran reflects his trading activities, wherein 1,400 of 6,226 verses are concerned with economic life.
Countries, including Saudi Arabia, that prescribe to the Sharia Law, Islam’s legal system, provide a specific code of living based on the Quran. Islamic companies are rooted in morals and solid ethical principles. There are three forbidden elements in business transactions that every Islamic company follows. These are Riba, Gharar, and Maisir.
- Riba, or usury, is a concept in Islamic banking. It refers to charged interests. Charging unreasonably high interest rates is strictly forbidden according to Sharia Law. Interest is prohibited because it is one way to gain an unfair advantage. Riba also applies to goods when the exchange of commodities is unequal in value, whether in quality or quantity. For instance, they can incur zero interest charges and still be 100% Halal and Sharia-compliant when looking into Islamic foreign exchange brokerage.
- Gharar is defined in the Islamic dictionary as “the sale of what is not yet present.” It is associated with risk, deception, and uncertainty. An example of Gharar is selling fish that has not yet been caught or crops that have not yet been grown. It is unjust enrichment because there is uncertainty regarding the goods.
- Maisir means gambling, and it is forbidden in Islam. The Quran teaches that people who indulge in games of chance are committing a grave sin. In business, Maisir is not allowed because it is an immoral agreement between two parties. It is based on chance without consideration of possible losses.
The Sharia Law has other restrictions on Islamic businesses in finances, loans, contracts, joint-stock, and trade.
Hinduism is a religion based in India. It is more of an approach to the universe than a theological system. It is a polytheistic religion based on sacred scriptures called Veddas which several authors, called Rishis, wrote. The Veddas contain a few economic concepts, such as wages and profit. Hinduism proclaims four tenets of life: dharma, artha, kama, and moksha. The second one, artha, translates to wealth or economic well-being.
The dharma, their way of life, gives every individual the right to pursue wealth. But particularly in India, where the majority of the population is Hindu, an ancient caste system exists, limiting those who can engage in business. A person’s caste is determined at birth and leads them toward certain occupations. Hindu society is divided into four classes, namely, Brahmanas, Kshatriyas, Vaishyas, and Sudras. Vaishyas run the economy of the country. They are responsible for trade and commerce.
Globalization presents a unique opportunity to trade freely around the world. It also presents certain challenges because of the various cultures and belief systems in every country. At the end of the day, all businesses want to earn and maximize profit. However, the diverse individuals behind these companies would like to do so in a way that adheres to their beliefs and moral principles.