Abstract

Over thirty years ago, an article entitled Is Business Bluffing Ethical? by Albert Z. Carr (1968) was published in the Harvard Business Review. It argues that business ethics essentially are the ethics of a game, particularly poker, and that they differ significantly from the ethics of private life. Game ethics, maintains Carr, include such practices as bluffing and not telling the whole truth, which the ethics of private life would consider to be immoral. Albert Carr claimed quite brazenly that businesses were perfectly justified in lying, cheating, and bribing, all in the name of achieving business objectives. According to Carr, the ethics of ordinary life were inapplicable to business because the latter was governed by its own gaming morality that required the businessman to leave at home the Golden Rule and his commitment to principles such as honesty and fairness. In the same article, Carr goes on to assert the legitimacy of lying on ones rsum, engaging in industrial espionage, and deceptively adulterating the contents of consumer goods in order to increase profits. Carrs view is a clear example of the problem that arises when one attempts to reduce ethics to compliance with the law. He may claim that if an action is not illegal, it is fair game. However, by providing these examples, Carr demonstrates that he himself recognizes these actions are unethical. Since the time of its appearance, the article has been reprinted in many readings books on business ethics and has become a classic on the subject. Carr even expanded the game analogy into a book (1971). The Article is divided into many parts and in each part the business and the poker game is compared. Each part is discussed as below.

Pressure to Deceive
Most executives, states Carr, from time to time are almost compelled, in the interests of their companies or themselves, to practice some form of deceptionBy conscious misstatements, concealment of pertinent facts, or exaggerationin short, by bluffingthey 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 is the art of reaching mutual agreement and ultimate satisfaction of each negotiants needs through discussion. This does not mean that all of each negotiants needs are met, nor does it mean that none are. A classic work on the art of negotiating by Gerard I. Nierenberg (1968)published ironically in the same year as Carrs articlestates the following: In a successful negotiation, everybody wins. Negotiation is not a gameand it is not war. Its goal is not a dead competitor. A negotiator ignores this point at his own peril. . . . The purpose of negotiation is to achieve agreement, not total victory. Both parties must feel that they have gained something. Even if one side has had to give up a great deal, the overall picture is one of gain. To put it in colloquial business parlance, negotiation should conclude with a win-win deal. The reason Carr thinks bluffing and deception are necessary in negotiation is that negotiants do not reveal to each other either their maximum or minimum terms of settlement. 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 enough of each others position is revealed to permit a settlement. When bluffing and deception, however, are introduced into the discussion, defeat, not agreement, becomes the goal.

The Poker Analogy

In this part, the author compares the rules of business with the rules of playing poker. He says, We can learn a good deal about the nature of business by comparing it with poker. While both have a large element of chance, in the long run the winner is the man who plays with steady skill. 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 economic and social point of view. I would argue that comparing business to the game of poker shows a poor critical understanding of both game and business situations. A game is an activity that operates within a well-defined lexicon of rules and regulations, that is, it constructs boundaries of

acceptable and unacceptable game-play. Vagaries and inconsistencies of rules and regulations are rarely tolerated, and, if they are encountered, efforts are made to make suitable amendments so that such problems are not encountered again. In that regard games can be said to be activities that operate within well-defined boundaries. In a game like poker, which has many well-established rules, the most skilful player is not necessarily the player who has the best comprehension of these rules, but is rather the player who can best manoeuvre within these boundaries. The poker player who is adept at bluffing is considered skilful precisely because he is capable of deceptive manoeuvring within the confines of the game.

Discard the Golden Rule

The author says, That most businessmen are not indifferent to ethics in their private lives, everyone will agree. My point is that in their office lives they cease to be private citizens; they become game players who must be guided by a somewhat different set of ethical standards. Carrs position depends on the view that when a person enters an office he or she abandons his human identity. Not only is this impossible, but this view attributes an autonomy to business that it simply does not have. It is not businesses that make decisions, but people. And it is because our moral status as human beings is neither suspended nor absolved when we engage in business that, like it or not, the conduct of business occurs always within a moral domain that is integral to our human nature.

We Dont Make the Laws

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 someones feelings. Does that seem ethical? Its 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.

The Individual and the Game

The Author says, An individual within a company often finds it difficult to adjust to the requirements of the business game. He tries to preserve his private ethical standards in situations that call for game strategy. A man who intends to be a winner in the business game must have a game players attitude. But this fallacy is easily exposed once we assert that a winner one day can easily be a loser the next. In such a case the appeal is almost inevitably to issues of fairness in other words the loser brings in the standards of the outside world to question decisions made on the basis of a supposedly different standard from that world. But why does the loser do so? This is because he is a citizen of both the business world and the world outside his company, that is, the private world. As Robert C. Solomon writes in his thoughtful essay "Business Ethics: An Aristotelian Approach", "Corporations are not isolated city-states, not even the biggest and most powerful of the multinationals. They are part and parcel of a larger global community. The people that work for them are thus citizens of two communities at once." It is clear that the business world overlaps greatly with the world outside it. Business people work in a company but they also live in the community of which the company is a part.

For Office use only

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.

Playing to Win
The Author says, 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. The goal of business is to earn a profit through customer satisfaction, not to defeat a competitor or to trick a customer into buying a product he or she does not need or want. Competition is not combat; it is a form of social cooperation, the purpose of which is to enable entrepreneurs to find their place in the division of labor. Those who are more successful at satisfying customers will earn more money than those who are less successful. Some entrepreneurs will discover that they are not qualified to be entrepreneurs and will go out of business. The focus of business managersthe mental challenge they must faceis not on beating other competitors but on meeting the needs and wants of consumers. Being better than the competitor is secondary. Carr points out correctly that the purpose of a game is to defeat the opponent by working within the confines of clearly defined rules, but he extends the analogy to business by asserting that the rules of the business game are the laws of the land, that is, the laws that govern the country in which a business operates. This is the view that whatever is legal defines and shapes the ethical, perhaps best described by the line: if its legal, then its moral. One executive operating on this premise, quoted by Carr in his article, even defends industrial espionage as ethical (ignoring the fact that such activity is of dubious legality) (Carr 1968, p. 146). Carr concludes that such executives are simply acting on a game ethics where the rules of the game are defined by the law. 4

References
1. http://www.deceptology.com/2010/12/is-business-bluffing-ethical.html 2. http://www.csupomona.edu/~jkirkpatrick/Papers/CritBluff.pdf 3. http://thisismedeeps.blogspot.in/2011/05/is-business-bluffing-ethical-critique.html 4. http://www.crvp.org/book/Series02/II-7/chapter_iii.htm