To what extent should companies go with business bluffing in order to maximize profit - Essay Example

? 10 June To what extent should companies go with business bluffing in order to maximize profit? In the present age, when the people have become very conscious regarding the environmental issues and the health and safety aspects of business, businessmen are exposed to a lot of challenges. The rise in level of social consciousness comes as a potential threat to the profitability of businesses because the two are on the two extremes of the seesaw. The profitability increases when the standards of ethics are not complied with and vice versa. Businessmen frequently make use of bluffing to maximize their profits. Bluffing in business is essentially a strategy of the like which is used in games like poker. The game strategy has no reflection in the bluffer’s morality. To a certain extent, bluffing increases the profitability without damage to the society whereas after that extent, damage to society is more than profit earned by the businessman. This paper determines that extent. When a businessman respects truth, he/she essentially considers it “the basis of private morality” (Carr). A businessman deserves respect for respecting the truth. Bluffing has become an essential component of many kinds of businesses. For example, in court, when a lawyer fights a case for a client, his/her job is to prove that he/she is not guilty regardless of what the truth is, and this is fully understood by the judge and everyone who is involved in the jury down the line. It is commonly said that the court is blind, which means that a judge can not take a decision if he/she believes one of the parties is right unless that party provides the judge with sufficient evidence against the criminal party. This is perfectly consistent with Henry Taylor’s statement, “falsehood ceases to be falsehood when it is understood on all sides that the truth is not expected to be spoken” (Carr). This description of bluffing is as valid for business as it is for poker. Corporate executives can not make independent decisions. Their actions are guided by the instructions of the top management. However, in addition to being an employee, a corporate executive is just as human as his/her manager. The corporate executive thinks from his/her own mind and is fully capable of analyzing the quality of decision enforced by the manager. Quite often, a corporate executive may not approve of the decision of the top management, but there is nothing he/she can do about it because if he/she attempts to, he/she will risk the job. Therefore, most corporate executives tend to remain silent rather than giving voice to their conflicting views, and this, for many, is the strategy of survival in the workplace. In this way, business ethics resemble the game ethics both of which are totally different from the ethics of religion. Businessmen generally maintain self constructed standards of ethics and tend to comply with them. As long as they are doing good on certain scales of ethics that they value the most, they are happy that they are conducting the business ethically and their conscience is fully satisfied. The Democrat, Omar Burleson from Texas expressed his views about his own business practice in these words: I can tell you that we pride ourselves on our ethics. In thirty years not one customer has ever questioned my word or asked to check our figures. We're loyal to our customers and fair to our suppliers. I regard my handshake on a deal as a contract. I've never entered into price-fixing schemes with my competitors. I've never allowed my salesmen to spread injurious rumors about other companies. Our union contract is the best in our industry. And, if I do say so myself, our ethical standards are of the highest! (Burleson cited in Carr). In fact, the difference arises from the disparity of perceptions about the ethical standards of the businessmen and those of the stakeholders. When a businessman says that his ways are ethical, it most often means that he/she complies with the ethics of business game. From his words, it can be judged that Burleson has maintained the mannerism of a gentlemanlike poker player who did not try to tarnish the image of others at the table but instead, introduced himself as fully as possible. Burleson made the above statement at a time when he was advertising a product with puffery. Milton Friedman is largely known for his interest in the supply of money as a driving factor behind the output’s nominal value. That forms the crux of Milton Friedman’s quantity theory of money. The doctrine of monetarism is linked with the modern quantity theory. Friedman has deeply studied the role of supply of money economic activity and was of the view that the change of money supply affects the output in the short-run, though the long-run influence can be seen on the price level. Milton Friedman asserted that if the Federal Reserve controlled the supply of money centrally, the economic growth of a nation could be enhanced manifolds. The increase in the quantity of money can be made steady and consistent by trying to control the money supply with the help of a mechanical system. What makes Milton Friedman’s theory different and unique in comparison to the conventional theories of economy is that instead of emphasizing upon the involvement of government, Friedman proposed the concept of a non-governmental and more realistic gold standard in which, private market is visualized as the fundamental producer of money. Friedman believed that a real gold standard is an outcome of the liberal principles. Therefore, Friedman totally favored the measures that were meant to promote the development of such a gold standard. In reply to the people’s possible perception of this as a means to revert to the gold standard, Friedman clarified that he did not consider the return to the gold standard feasible at all, though if the extreme predictions about the hyperinflation in the present circumstances turn out to be true, reversion to the gold standard would be a safe way out of the problem. Friedman also mentioned why he considered the reversion to the gold standard unfeasible in the contemporary age. Friedman said that he knew no government would accede to lose the control of its monetary policy. …if you could re-establish a world in which government’s budget accounted for 10 percent of the national income, in which laissez-faire reigned, in which governments did not interfere with economic activities and in which full employment policies had been relegated to the dustbin, in such a world you might be able to restore a real gold standards. (Ebeling). Concluding all what is said above, bluffing in business has become so common that many have started to interpret it as an essential business strategy without which, one can not conduct business in a profitable manner. Businessmen have established their own criteria of ethics which may or may not come as a compromise upon the concerns of the society. In many forums in general and the courts in particular, business bluffing is a fairly understood phenomena and logic is preferred over intuition. Corporate executives are dummies who dance as guided by the threads in the hands of top management. Therefore, top management fundamentally assumes full responsibility for business bluffing. Considering the fact that business bluffing is ingrained in the strategies of a profitable business in the contemporary age, it is OK for companies to bluff as long as the negative impacts upon the society are minimal. Businessmen should go with the optimum way in which they can bluff while causing minimal inconvenience to the stakeholders. Works Cited: Carr, Albert. “Is Business Bluffing Ethical?” Harvard Business Review 46. 1968. Web. 9 Jun. 2011. . Ebeling, Richard M. “Economic Thought.” 6 Nov. 2009. Web. 9 Jun. 2011. . Read More