Bridging differences in political and economic systems has always been one of the challenges of international business. Where religious beliefs influence those systems heavily, as is increasingly the case in Islamic countries, the sensitivities can be even greater. While appreciating the distinctiveness of Islam is important, Americans can still find points of connection in such settings, HBS professor emeritus Samuel Hayes told an HBS audience. "Islam is a different culture, but the Western influence is very strong because the current generation of decision-makers has largely been educated in Western colleges and universities."

Hayes's comments, together with those of Harvard Law School adjunct professor Frank Vogel, were delivered as part of the School's "Rising to the Challenge" program, which addresses topics of particular relevance to business leaders in the post-September 11 global context. Hayes and Vogel, coauthors of the 1998 book Islamic Law and Finance: Religion, Risk, and Return, explored issues of doing business in Islamic countries at a presentation in late January.

Hayes noted that despite a common faith, styles of practice among Muslim individuals or nations may be quite diverse. Saudi Arabia and Pakistan, for example, are countries noted for application of Islamic law beyond religious and family life to civic, financial, and commercial affairs, he said. Since the 1970s, other nations such as Jordan, Iran, and Egypt have also moved in this direction. Vogel, who directs the Law School's Islamic Studies Program, explained that such legal systems do not rely on precedents or written codes and have an inherent dependence on religious beliefs. "This law is seen as deriving from direct, divine commands from Islamic scriptures," said Vogel.

Aspects affecting business practices include prohibitions on paying or collecting interest, avoidance of any business dealings considered speculative, ensuring that contracts are fair to all parties, and treating distressed businesses with compassion. Hayes noted, however, that it is often possible to work around differing financial norms. "If you understand the religious principles underlying these restrictions, you can sometimes create contracts or other arrangements that accommodate them," he said, citing leases as one example of a familiar financial tool deemed fully compatible with Islam.

- Laura Singleton (MBA '88)

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