Is Business Bluffing Ethical - Essay Example

Bluffing in Business In his article Carr (1968) argues that bluffing in business is like a game strategy where the rules are such that bluffing is allowed without necessarily impinging upon the morality of the person who is bluffing. Carr suggests that business sis akin to a poker game in which all the players understand that winning is the ultimate objective. In the achievement of this objective, anything is permitted, including a bending of the rules, unless it amounts to outright cheating. In a similar way, Carr suggests that business involves a special set of rules that businessmen must play by in order to secure a win and this does not necessarily suggest that they are inherently unscrupulous or immoral. Thus, a businessman who is perfectly honest and ethical in his private dealings may consider that such scruples cannot be applied in the business arena where it could result in losses and a failure to seize upon the advantages that are available in a business situation, where the rules of the business game allow a certain degree of manipulation through the practice of bluffing. For example, a lawyer knows that his job is not necessarily to tell the truth but rather to get his client off. Businessmen may lie about their products by omission, or by embroidering the facts or withholding the whole truth in order to secure an agreement or a sale. This is considered workable in the field of business because the justification often provided is that everyone else does it so it must be all right. Businessmen fear that they will lose out on opportunities, which others may usurp if they do not flow along with the general business rule that some general bluffing may be acceptable under the rules of business and only outright cheating or unethical behavior would be considered immoral. One of the weaknesses with Carr’s position is pointed out by Longstaff (1992). He states that Carr’s theory on bluffing equates the notion of what constitutes moral behavior with the majority view. Therefore, if a majority of people feel that in a particular situation, lying may be justified, then it becomes morally acceptable. However the defect in this position is that the majority may be wrong. Longstaff(1992) draws on the example of slavery which was practices in America, which was considered to be right by a majority of people; however the reality is that no matter how many people argued it was right, it was still a morally wrong practice. Therefore, justifying bluffing on the basis that the majority play by those rules is a faulty concept. Another weakness with Carr’s theory that Longstaff points out is the fact that bluffing in business may be considered acceptable, however it only produces short term gains, while it is detrimental in the long term. When businessmen attempt to lie and bluff about their products through deceptive advertising, it distorts the market and damages the credibility of the businessman. In order to ensure long term success and a flourishing business, it is necessary for businessmen to practice ethical dealings and maintain a reputation as honest businessmen so that they are able to earn their customers’ trust and keep it, to gain repeat business. On this basis, therefore Longstaff (1992) argues that the basic principle put forward by Carr that business is like a bluff game is itself flawed. In a case of poker, those who come to play know of their own free will, knowing that they may suffer losses and being prepared to accept that risk. However, this is not the case in business, where the businessmen may play by certain rules, but consumers may not necessarily consent to play the game by the same rules. On the contrary, they may become innocent victims, because they may even be completely unaware that such rules exist and are being applied. On a long term basis, the concept of bluffing being acceptable as a business practice has already been harmful to society in general, notably through recent corporate scandals such as in the case of Enron. These scandals have highlighted the greed and unscrupulous profit making motives of some businessmen who have exploited innocent consumers and members of the public in order to secure huge profits for themselves. Therefore, while there may be some situations where certain information such as copyrighted information or business secrets may be withheld, this cannot extend to presenting a deliberately false picture of business products and deceiving the public. Therefore, on the whole, I tend to disagree with Carr, because the applicability of the limited poker game analogy to the wider sphere of business itself seems suspect. Bluffing in business may occur in some situations, such as for example advertising of products, wherein the general tendency is to exaggerate the merits of a product in question in order to ensure that customers are attracted to it and wish to purchase it, With the plethora of products flooding the market, a businessman may be constrained to enter into some form of exaggeration in order to ensure that his product gets some attention. This kind of business bluffing may be considered acceptable, however it cannot extend to an actual instance when a customer purchases a product and warranties are provided to him which are not satisfied. For example, giving a customer an assurance that the product is a quality product and then handing him a defective product and refusing to replace or take back the product would constitute an unacceptable extension of the bluffing principle. Deliberately lying about a product or service, making an assurance about a quality or service which is then proven to be wrong are examples of instances of unacceptable deception, which is morally wrong. Deliberately deceiving a customer, or exploiting a customer’s ignorance about a product would also constitute a non permissible instance of deception. Cheating a customer by charging him exorbitant rates for a product by capitalizing on his ignorance about the product is another example. Substituting a duplicate, cheaper product, for example imitation diamond and then claiming it is the genuine article and charging the customer for it would also constitute unacceptable levels of deception. All these instances amount to something more than mere exaggeration of the qualities of the product, they are akin to deliberate lying about the product and indulging in acts of cheating and extorting which are morally reprehensible acts. Other actions that would constitute immoral acts also include acts such as those of the former directors of Enron. These directors set out to deliberately cheat the shareholders of their share of profits by ploughing away funds and reporting false amounts on financial statements in order to present a false financial picture to the public and to its investors. This violates not only the requirements of honesty in business but the need to maintain fair dealings with customers and shareholders and to ensure that they receive the benefits of the funds they invest. Therefore, on the whole, it must be concluded that while bluffing may be acceptable in some instances such as mild exaggeration where no real harm occurs, it cannot be tolerated in instances where grave and undue harm may be caused to others through bringing about undue losses. The causation of harm to others cannot be tolerated and this is the ultimate decisive factor that determines whether bluffing is permissible or not in some instances – if it causes harm, it is not morally acceptable. References: * Carr, Albert, 1968. “Is Business bluffing ethical?” Harvard Business review, 46: 143-53 * Longstaff, Simon, 1992. “A time to lie?” [online] available at: http://www.ethics.org.au/about-ethics/ethics-centre-articles/ethics-subjects/business-ethics/article-0125.html Read More