Is business bluffing ethical?

The game calls for distrust of the other fellow.

Here are some excerpts on deception from a classic article by Albert Z. Carr on business ethics called "Is business bluffing ethical?" The author argues that “The ethics of business are not those of society, but rather those of the poker game.” It was published in a 1968 issue of the Harvard Business Review.
A respected businessman with whom I discussed the theme of this article remarked with some heat, "You mean to say you're going to encourage men to bluff? Why, bluffing is nothing more than a form or lying! You're advising them to lie!"

I agreed that the basis of private morality is a respect for truth and that the closer a businessman comes to the truth, the more he deserves respect. At the same time, I suggested that most bluffing in business might be regarded simply as game strategy - much like bluffing in poker, which does not reflect on the morality of the bluffer.

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Most executives from time to time are almost compelled, in the interests of their companies or themselves, to practice some form of deception when negotiating with customers, dealers, labor unions, government officials, or even other departments of their companies. By conscious misstatements, concealment of pertinent facts, or exaggeration - in short, by bluffing they seek to persuade others to agree with them. I think it is fair to say that if the individual executive refuses to bluff from time to time if he feels obligated to tell the truth, the whole truth, and nothing but the truth - he is ignoring opportunities permitted under the rules and is at a heavy disadvantage in his business dealings.

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Poker's own brand of ethics is different from the ethical ideals of civilized human relationships. The game calls for distrust of the other fellow. It ignores the claim of friendship. Cunning deception and concealment of one's strength and intentions, not kindness and openheartedness, are vital in poker. No one thinks any the worse of poker on that account. And no one should think any the worse of the game of business because its standards of right and wrong differ from the prevailing traditions of morality in our society.

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All sensible businessmen prefer to be truthful, but they seldom feel inclined to tell the whole truth. In the business game truth-telling usually has to be kept within narrow limits if trouble is to be avoided. The point was neatly made a long time ago (in 1888) by one of John D. Rockefeller's associates, Paul Babcock, to Standard Oil Company executives who were about to testify before a government investigating committee: "Parry every question with answers which, while perfectly truthful, are evasive of bottom facts." This was, is, and probably always will be regarded as wise and permissible business strategy.

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To be a winner, a man must play to win. This does not mean that he must be ruthless, cruel, harsh, or treacherous. On the contrary, the better his reputation for integrity, honesty, and decency, the better his chances of victory will be in the long run. But from time to time every businessman, like every poker player, is offered a choice between certain loss or bluffing within the legal rules of the game. If he is not resigned to losing, if he wants to rise in his company and industry, then in such a crisis he will bluff - and bluff hard.

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In the last third of the twentieth century even children are aware that if a man has become prosperous in business, he has sometimes departed from the strict truth in order to overcome obstacles or has practiced the more subtle deceptions of the half-truth or the misleading omission. Whatever the form of the bluff, it is an integral part of the game, and the executive who does not master its techniques is not likely to accumulate much money or power.

Is business bluffing ethical? by Albert Z. Carr, from the Harvard Business Review, 1968

To read the entire article, 3 sources: one, two, three.

2 comments:

  1. This is loathsome. A.Z. Carr's analysis is conveniently shallow.

    By the way, not only is business a game, but dating is a game. So there are no moral implications when lying to get someone in bed.

    Oh! and politics is a game, so it's okay to lie to advance a political agenda...

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  2. If the loathsome Mr. Carr were alive, he would try to defend himself with his poker analogy: it's okay to lie to others in poker because it's part of the game, but it's not okay to cheat at poker because that's forbidden by the rules.

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