Business is about life. It takes planning, constant adaptation, resilience, and strength. It also requires patience and the ability to cooperate and collaborate with other people. And you have to learn how to live with your neighbor as well as be able to understand the strategies of your adversaries and the movements in your neck of the woods (read market). Most of all you have to work very hard to succeed.
The 14th scholar historian and scholar Ibn Khaldun wrote about his observations of all these phenomena in the geo-political climate of his day. His magnum opus the Muqaddimah gives us insight into his thoughts on management and work.
We've culled his thoughts on leadership and work directly from the Muqaddimah to give our readers direct access to his thoughts. Commentary is provided but only to drive home the essential point(s) in each passage.
Our goal is to showcase a novel idea of leadership which tries to foster harmony in the ranks and loyalty to the organization through the use of a mentorship based management style. We then move on to Ibn Khaldun's ideas on work, success, and commerce.
What is management/leadership?
Many classical scholars wrote books and treatises which fell into a genre called nasihat al muluk (advice to the kings). This advice to royal authority stemmed from the fact that these scholars served in the courts of sultans, caliphs and princes in various territories which made them intimately aware of the conditions existing in the court. They observed the internal workings, politics, and intrigues between the court's employees as well as the interplay between the court and the masses.
Ibn Khaldun wrote, "Good rulership is equivalent to mildness... If the ruler uses force and is ready to mete out punishment and eager to expose the faults of people... (his subjects) become fearful and depressed and seek to protect themselves against him through lies, ruses, and deceit... If the ruler continues to keep a forceful grip on his subjects, group feeling will be destroyed. If the ruler is mild and overlooks the bad sides of his subjects, they will trust him and take refuge with him... Everything is then in order in the state. (153)
While these comments came from his observations of the political climate in his surroundings they are nonetheless applicable to modern business management theory. His thoughts stress a nurturing approach to management through which managers draw strength by maintaining loyalty from subordinates as a result of their understanding of strengths and weaknesses as they manifest themselves in the organization. The manager is seen as a teacher, motivator, and organizer in his thought.
What motivates people to work?
In addition to writing about the ideal manager (ruler in his context) Ibn Khaldun also left us with food for thought on what motivates a person to work. We know that at times keeping workers motivated becomes a perennial problem in the organization. Ibn Khaldun systematically tells us that a person's need to earn a living begins with the need to provide for his own sustenance but then progressively involves the need to grow in rank so that he/she would be able to gain more influence and wealth in their societies.
Man's need to earn a livelihood
"Man, by nature, needs something to feed him and to provide for him in all conditions and stages of his life, from the time of his early growth to his maturity and in to his old age. God created everything in the world for man and gave it to him, as indicated in several verses of the Qur'an. Man's hand stretches out over the whole world and all that is in it, since God made man His representative on earth."
Ibn Khaldun's commentary on a person's need to earn is based in the Qur'anic understanding of human beings as representatives of God on Earth. By saying that "God created everything... for man" he alludes to the Qur'anic verse which states that the Earth has been made musakhkhar (subservient) to human beings so that they may utilize the resources at their disposal for the benefit of humanity and their prosperity. Their work is directed at that goal mastery over their environment.
What is livelihood?
In the lengthy passage that follows Ibn Khaldun breaks down the different modes of livelihood according to his understanding and the prevailing conditions in his lifetime. Namely, he mentions taxation, hunting, agriculture, crafts, and commerce as valid means of earning sustenance. In essence all of these activities come under the heading of commerce by trading in commodities, products, or, in today's world ideas. An interesting point to note is that he identifies commerce with the observation of market conditions, a trait he does not include with hunting, agriculture or crafts. This last point is covered in more detail below.
"It should be known that 'livelihood' means the desire for sustenance and the effort to obtain it.
Sustenance and profit may be obtained through having the power to take them away from others and to appropriate them according to a generally recognized norm. This is called imposts and taxation. Or from wild animals by killing or catching them whole on land or in the sea. Or either from domesticated animals by extracting surplus products which are used by people, such as milk from animals, silk from silkworms, and honey from bees; or from plants such as are planted in fields or grow as trees, through cultivating and preparing them for the production of their fruits. All this is called agriculture.
Or profit may be the result of human labor as applied to specific materials. This is called a craft, such as writing, carpentry, tailoring, weaving, and horsemanship. Or it may be applied to non-specific materials. This, then, includes all the other professions and activities. Or profit may come from merchandise and its use in barter; merchants can make such profit either by traveling around with (merchandise) or by hoarding it and observing the market fluctuations that affect it. This is called commerce."
Climbing the ladder
"... rank is widely distributed and ... one's happiness and welfare are intimately connected with the acquisition of rank. ... bestowal of rank implies influence and power."
Despite the brevity of this quote, Ibn Khaldun devotes a considerable discussion to the impact that rank and status have on a person's ability to earn a livelihood. Most of us have directly experienced the need to climb the proverbial ladder to enhance our ability to make money or to gain influence. Rank allows one to access opportunities that were not available without attaining the requisite status and rank gives one control over resources, means, and relationships which were at one time inaccessible.
Attaining rank requires satisfying seniors/leaders; pride will prevent progress
"... a person who seeks and desires rank must be obsequious and use flattery as powerful men and rulers require. Otherwise it will be impossible for him to attain any rank. Therefore, obsequiousness and flattery are the reasons why a person may be able to obtain a rank that produces happiness and profit, and that most wealthy and happy people possess this quality. Thus, too, many people who are proud and supercilious have no use for rank. Their earnings, consequently, are restricted to the results of their own labors..."
While at first glance it may seem that the above passage is referring to flattery as a negative trait which is used to "get ahead" it can be see it in another context. In other words we shouldn't confuse this with "kissing up". When you juxtapose his comments on flattery with the latter part of the quote which talks about false pride his use of the word flattery makes more sense. What Ibn Khaldun is talking about here is how people work with each other. The idea for him is simple if you can work with people you will attain higher ranks and if you can't your ability to earn and gain in rank will be restricted by a false sense of pride.
What are the qualities required to succeed in commerce?
Understanding the market
"... commerce means increasing one's capital by buying merchandise and attempting to sell it for a price higher than its purchase price, either by waiting for market fluctuations or by transporting the merchandise to a country where that particular merchandise is more in demand and brings higher prices, or by selling it for a high price to be paid at a future date." (312)
Business is simple at least in Ibn Khaldun's time you simply bought low and sold high. The same rule applies to most businesses today and it goes without saying that a business person needs to understand his/her market inside and out to do this. It doesn't matter whether you sell bananas, boats, or buildings. Supply, demand, utilization, import and export expenses, etc. they all figure into the final equation depending on what you're selling.
Negotiating Skills
"In the attempt to earn the increase of capital that constitutes profit, it is unavoidable that one's capital gets into the hands of traders, in the process of buying and selling and waiting for payment... All this causes the merchant a great deal of trouble... If he is not afraid of quarrels, knows how to settle an account, and is always willing to enter into a dispute... he stands a better chance of being treated fairly by traders... otherwise he must have the protection of rank... the person who is afraid or unaggressive... must avoid commerce."
Success in business demands tenacity, dedication, perseverance, and the raw will to succeed. It doesn't matter whether you operate a food stall on the corner of 53rd and 6th, trade equities for a bulge bracket investment bank, sell shoes online, or offer your consulting services to multinational corporations the same drive is needed to succeed. And whether you're negotiating a better price on a pair of shoes or a multi million dollar sukuk the same negotiating skills come in handy.
What to take home
Do the ideas of a 14th century historian have any relevance for us? For us that is not a question worth asking. We believe that the key question to ask is how to benefit from these ideas. At first glance Ibn Khaldun's writings may seem to be far removed from the hustle and bustle of the 21st century. But the motivations and dynamics of work and leadership which he details bear a striking resemblance to our modern lives. We all want to earn a living, progress, and succeed in the marketplace whether we're selling nuts and bolts or ideas. Ibn Khaldun talks to us about how to live, work, lead, and succeed.
By Sajjad Chowdhry
© Dinar Standard 2006
