By: Deepti Agarwal and Indrani Handa
In this paper, we could like to show how Albert Carr’s world famous and controversial article on “Is Business Bluffing Ethical?” is flawed both in philosophy and logic.
In his article, Albert Carr makes an interesting analogy. In his endeavor to justify bluffing in business, he compares business to a game of poker and concludes that it’s ethically permissible to bluff in business as long as one follows the rules.
His main argument is as follows:
Premise 1: Business is a game, similar to poker.
Premise 2: In a game there are certain rules, and if one follows the rules of the game, one acts permissibly.
Premise 3: Business also has its own rules, including rules that allow for bluffing.
Conclusion: Therefore, it is permissible to bluff in business.
On analyzing his argument, we found it to be valid as the premises guarantee the truth of the conclusion. However, in order to prove our disagreement with the argument we critique each of the above mentioned premises below.
PREMISE 1: BUSINESS IS A GAME, SIMILAR TO POKER
To support this comparison, Carr highlights that both business and poker have elements of chance and require steady skills. Carr also argues that victory requires knowledge of the rules and an understanding of other players. In order to gain a competitive advantage the businessman should be adept at responding to opportunities provided by chance.
At first sight, the parallel between business and poker seems to be obvious. But some differences exist between the two elements. One difference is the duration of the activity. A game has a beginning and an end, which are well defined, contrary to business, which spreads usually over a longer, unknown time period. Moreover, while a game might be played purely for entertainment purposes, business usually does not have the same objective. Indeed, in opposition to a game, business is a necessity both from an economical and social point of view.
Another issue with Carr lies in issue of the consent. Being part of an economic activity is a requirement of modern life. It cannot be avoided since people must make a living. This is different from a game, which is played by choice and a player has consented to play. It is hard to argue that everyone working has consented or is sufficiently informed about the set of rules in same way as poker players. For instance, a six year old child watching a candy advertisement is not aware that eating the candy can harm his/her teeth in the long term though the advertisers are.
Well known philosopher Robert C. Solomon in this article “Corporate Roles, Personal Virtues: An Aristotelean Approach to Business Ethics” takes this concept on a different path saying: “there is no business world apart from the people who work in business”. In other words, you cannot divorce yourself from your overarching values in the business portion of your life. Solomon may say that business is part of your life and not just a game like poker. The values that you conduct yourself by in business should mirror those in the rest of your life, and should not be imported from the ethics of a card game, he may argue.
In conclusion, even thought we agree a little with Carr on this first premise clearly there are concerns about whether in business stakeholders at large consent to the rules, as do poker players
Premise 2: IN A GAME, THERE ARE CERTAIN RULES AND IF ONE FOLLOWS THE RULES OF THE GAME IT IS ETHICALLY PERMISSIBLE
According to Carr, there is a sharp distinction between the ethical standards of business and those of the churches. He even goes ahead to say, if these standards were to be merged, there would “hardly be a major industry at which an attack could not be aimed”. “As long as they comply with the letter of the law, they are within their rights to operate their business as they see fit”, he says. Clearly, Carr is pointing out that business only operates within the laws set by the government, and no one else possesses the authority to set the rules for business conduct.
While we agree that business must operate within the laws set by the government; we do believe that businessmen have a slightly greater responsibility towards controlling the impact of their activities. Just following the rules of the game may seem perfectly permissible, but what about ethics? Even if we separate the ethics concerning business from those of the churches, actions that cause harm to human life or private property go against all standards of morality.
For instance, consider a hypothetical game, the goal of which is to make an unpopular classmate cry. Winning the game would imply hurting someone’s feelings. Does that seem ethical? It’s quite evident in this case, that the rules themselves were flawed and gave the players an opportunity to cause harm without feeling guilty. What if such cases exist in the real world? It seems unfair for businessmen to take advantage of loop holes in the law to make profits while damaging their environment.
This would become even clearer if we carefully analyze an example which is part of the article. A key manufacturer who makes master keys for automobiles also caters to mail-order customers. He is aware of the possibility of thieves ordering the keys to steal, but does not consider it his responsibility to inquire about the customers’ motives. The law clearly doesn’t require him to do so, and therefore he believes he is behaving just as ethically as any other businessman by rules of the business game. However it is questionable whether in the business environment all the parties clearly understand these rules. In this case, the key manufacturer is turning a blind eye to the fact that he is indirectly causing theft and that is definitely not ethical by any standard.
Carr’s line of thought while emphasizing on just following the law to examine the morality of an action, seems on the same lines as Friedman’s theory. We feel that it is obvious for businesses to follow the law, but in our opinion they should also use their acumen to make a constructive impact on their environment.
Premise 3: BUSINESS ALSO HAS ITS OWN RULES, INCLUDING RULES THAT ALLOW FOR BLUFFING.
In this premise, Carr further builds on the previous premise and says that business decisions are decisions of strategy and not of ethics. According to Carr, in order to gain a competitive advantage, the businessman can indulge in bluffing as long as he/she abides by the rules and laws.
“Most executives,” states Carr, “from time to time are almost compelled, in the interests of their companies or themselves, to practice some form of deception…By conscious misstatements, concealment of pertinent facts, or exaggeration—in short, by bluffing—they seek to persuade others to agree with them.” The executive, who does not bluff, continues Carr, “is ignoring opportunities permitted under the rules and is at a heavy disadvantage in his business dealings”. However, does business negotiation involve bluffing and deception?
Negotiation describes any communication process between individuals that is intended to reach a compromise or agreement to the satisfaction of both parties.
The reason Carr thinks bluffing and deception are essential in negotiation is that the people involved in the act of negotiation do not reveal to each other either their maximum or minimum terms of settlement. For example in a scenario of a seller trying to sell his product to a buyer the relative bargaining power, i.e., the ability and willingness of buyer to buy relative to the ability and willingness of seller to sell, determines where the terms will meet. Thus, eventually through discussion of each other’s position a settlement is reached. When bluffing and deception, however, are introduced into the discussion, defeating, not agreeing, becomes the goal.
According to Merriam Webster to lie means “to make an untrue statement with intent to deceive” and bluffing means “to bluff someone: act deceptively”
To make this distinction clearer, let us consider the two cases that Carr mentions in his article. In the first instance, the graduate from Cornell does not express his interest in Playboy in the interview questionnaire. Would you call this bluffing? Yes, as the candidate acted deceptively but it would not be categorized as lying, because he did not make any untrue statements. All he did was conceal some facts in order to get the job and move ahead in the game. According to Carr, the candidate “made a game player’s decision, consistent with business ethics”
However, the case where the 58 year old man dyes his hair and states his age as 45 in the resume to get a job is clearly a case of lying as he misstated his age and made an untrue statement. If he had just dyed his hair for the interview then it would just be bluffing as again he was just trying to get a competitive advantage by deceiving the employer by his looks.
Hence we disagree with Carr here, who goes on to say that “this was a lie; yet within the accepted rules of the business game, no moral culpability attaches to it.
In our opinion bluffing isn’t lying. Bluffing is a strategy of increasing uncertainty, but it is different from lying, which is just as unacceptable in playing poker as it is in business negotiations. Poker is a practice like business and the integrity of the game is essential for its existence. They are limits to deceiving and just as Carr interprets bluffing as lying, he confuses strategy with unfairness.
Conclusion
Whether Carr’s argument is considered sound or not appears a personal decision. Some may certainly feel that bluffing is acceptable in business, but others may feel that simply following the law is not enough. However, it is very clear that bluffing cannot be equated to lying and this difference should be taken into account while making business decisions.
Article also available on http://one4allcsr.com/csr_news/is_business_bluffing_ethical
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