CHAPTER III

 

THE ETHICAL BOUNDARIES

OF BUSINESS:

QUESTIONS OF INTEGRITY

 

PRAVASAN PILLAY

 

 

An attitude of extreme arrogance permeates the business world today. In the wake of the post-modern discretion of most independent standards of moral behaviour, capitalists the world over are relatively free to worship at the hollow idol of the Market, unhindered by the ethical standards that inform the rest of society. In South Africa this estrangement from the moral has, in one instance, resulted in the mass reduction of permanent positions available to workers in favour of unstable short-term contracts or, what anti-corporate globalisation activists refer to as, McJobs. By ignoring the deep psychological effects that this sort of insecure existence has on employees, the business world has shown itself to be arrogant and indifferent to the ethical standards of the society "outside" of itself.

Indeed, one can spend hours listing the callous results of this estrangement, (e.g., the refusal of pharmaceutical companies to provide life-saving anti-retrovirals at affordable prices to African AIDS victims, the privatisation of water which has resulted in water cut-offs in schools and slums across the country, the slow genocide of the country’s poor, and so on). But the purpose of this essay is not to conduct an empirical study of objective evil. That literature and research already exists. Nor is the purpose of this essay to reduce the eternal pessimism of the left. The recent anti-corporate and enti-globalisation demonstrations in Seattle, Prague, Washington, Davos, Australia, and Durban have shown that this energy-sapping pessimism that, for years, blanketed the left is slowly beginning to lift. Vibrant and militant civil society movements are springing up faster than the Market can contain them. The pessimism of old has given way to a new hope.

What this essay attempts to do is to correct the dangerous, clinical, and anti-human perception that exists amongst businessmen that the world of business must be accorded a different ethical standard from that of the rest of society. In order to justify this stance, businessmen have employed a variety of arguments, but most centre around the claim that the Market functions like a well-oiled machine and, as vital cogs in this machine, they cannot afford to be hindered by human standards of right and wrong. It will be my contention in this essay that not only are such arguments false, but that they are extremely dangerous given the vast powers of multi-national companies today. My essay will take the form of a response to a controversial essay entitled "Is Business Bluffing Ethical?" (i.e., is deception in business ethical?), written in the late sixties by A.Z. Carr. His arguments in favour of business bluffing can, in many ways, be considered as a validation for the "ethical" positions occupied by many businessmen today. By criticising Carr’s stance, I hope to cast a critical light upon the anti-ethical attitudes that inform today’s business world.

I will begin my essay by outlining briefly Carr’s argument that most bluffing or deception in business might be regarded simply as game strategy. In this outline I will highlight two of Carr’s key points. First, our business and private lives are separate from each other, and, as such, we cannot expect the ethical standards of our private lives to rule over the ethical standards of our business lives. Secondly, business has the impersonal character of a game in which the act of deception is considered a legitimate and necessary tool for one to attain success. Thereafter, I will proceed to give two examples wherein I argue that deception within the business world leads to conformity and a loss of personal integrity, values, and identity. This will be followed by a brief explanation of Carr’s poker analogy, wherein he claims that we can learn a great deal about the nature of business by comparing it with the game of poker. He argues that most businessmen are not indifferent to ethics in their private lives, but once these businessmen enter into their office lives they cease to be private citizens; they are instead game players who must be guided by a different set of ethical standards.

I will then proceed to analyse the validity of Carr’s poker analogy by asking if business can, in fact, be regarded as a game. This will be followed by a brief investigation into the feasibility of Carr’s claim that business roles are isolated from private roles – i.e. whether the businessman stops being a private citizen once he enters the business realm. I will support my argument on three fronts. I will claim that the act of deception within the business situation is actually detrimental to the individual; secondly, I will claim that business is, in fact, not a game, as the consequences of bluffing within business situations move well beyond the game arena; finally, I will claim that our business and personal roles cannot be separated, and, as such, the ethical standards of our personal roles must necessarily influence the ethical standards of our business roles.

 

THE INDIVIDUAL IN BUSINESS

 

In his essay Carr makes an argument which many people in and out of the business world consider shocking and even morally repugnant. He argues that most bluffing (deception) in business might be regarded simply as game strategy. The reason for this moral outrage, shock and repugnance, according to him, is to be found in the confusion people make between the ethics of private life and the ethics of business. For Carr these two aspects of our lives (business and private) are distinct and separate from each other, and to expect the ethics of our private lives to rule over our business lives is, in the long run, bad business. He argues that once businessmen are in their work environment they cease to be private citizens and instead become game players who are guided by a different set of ethical standards. Furthermore within the game of business: "Falsehood ceases to be falseness when it is understood on all sides that the truth is not expected to be spoken."(Carr: 1968:99) What this simply means is that deception, as we traditionally understand it, cannot be considered as deception if all people involved in business accept that it is an important part of playing the "game".

According to Carr, business people all, at one time or an other, feel the pressure to deceive. They are compelled, in the interests of their company or themselves, to practise some form of deception when engaged in negotiations with others (e.g. customers, unions). This deception by conscious misstatements, concealment of facts, or exaggeration is undertaken with the strict purpose of seeking to persuade others to agree with them. Agreement, of course, implies a host of benefits for either the individual or the company or for both.

According to Carr, if the individual businessman or executive refuses to engage in these acts of deception from time to time – if he feels an obligation (by way of his personal ethics) to tell the whole truth – then he is ignoring opportunities permitted under the rules of the game and effectively putting his business at a heavy disadvantage. Thus, to forego these personal ethical obligations and misgivings about deception and to realise the effectiveness of the "bluff" as a legitimate tool within the game of business involves first and foremost a recognition by the businessman that in bluffing he will not lose self-respect or become emotionally troubled. What this means is that if the businessman is to achieve a harmonious unity between his personal integrity and high standards of honesty, on the one hand, and, on the other hand, the practical requirements of business, then he must feel that his acts of deception are ethically justified. And, according to Carr, this justification comes from the fact that "business, as practiced by individuals as well as corporations, has the impersonal character of a game – a game that demands both special strategy and an understanding of its special ethics." (Carr 1968:101, italics added) Once the individual enters into a business situation, one is thus necessarily in a game situation and success or failure depends largely on one’s ability, whatever one’s position in the company, to play the game in the appropriate way.

Carr gives the example of a Cornell honour graduate who, in a psychological test, has to indicate which publications he reads regularly. The graduate, however, is concerned that by indicating the actual "progressive" publications he reads he will be considered as a radical and, thus, put himself at a disadvantage. He finally chooses to lie and selects several conservative publications which he thinks will be more in sync with the policies of his employers – his hunch turns out to be right, and he gets the job. According to Carr, the graduate has made a game player’s decision which is consistent with business ethics.

A recent film also provides another example of this sort of dilemma. In Jerry Maguire, Cuba Gooding, Jr. plays a football player approaching retirement, and Tom Cruise plays his sports agent. Throughout his football career Gooding’s character has always played the game to the best of his ability and is regularly featured on the scoring list. However, his on-field ability has never been reflected in monetary terms, as the contracts he signs with the football teams inevitably see him earn less than more popular and less skilled players. His agent advises him that his problem is not with his skill level but rather with the fact that he doesn’t entertain the crowd, as other players do, when he scores a touchdown. This causes him to be unpopular with crowds as he appears to be arrogant which subsequently is reflected negatively on his pay-slips. The solution, Cruise tells him, is to forget about his pride and do a touchdown dance like all the other players. In the films climatic ending Gooding’s character scores the game-winning touchdown but is subsequently knocked unconscious. The crowd cheers for him, and when he eventually awakes, ball still in hand, he is faced with a decision – to dance and get a bigger pay day or to walk away as usual and face a penniless retirement. In the end he decides to dance and the million-dollar offers start rolling in. This clearly is what Carr wants business people to do. To play the game means dancing when and how people tell you to. It means forgetting about personal values and integrity, all in the effort to make money by conforming to questionable standards. The Cornell honours graduate and Cuba Gooding Jr. may have been financially rewarded by deciding to play the game through their acts of deception, but in the long run they have sacrificed something greater, namely, their sense of personal integrity, values and identity. In short, they have given up their individuality for the benefits and warm safety of conformity.

To conform, in the Heideggerian sense of the word, means to lose oneself in the crowd, it is a losts of identity and is ultimately a form of self-deception. In the classic existential language, this might also be categorised as a manifestation of bad faith. This extremely useful philosophic concept has been strangely under-utilized by most contemporary philosophers, with the possible exception of several notable critical race and liberation theorists who have used it to explain the situation of the oppressed in a racist/colonial/neo-colonial world.

The South African philosopher, Mabogo More, defines bad faith as follows: "The concept of bad faith popularised by Jean-Paul Sartre basically refers to different modes of human existence characterised by self-deception, self-evasion, flight from one’s freedom and responsibility and the acceptance of values as pre-given.". (More, 1998: 14) More’s North American contemporary, Lewis Gordon, defines it as follows: "Bad Faith consists in the individual’s moving from subject to object in social roles which have congealed consciousness into routine expectancy and which have made of inter-subjectivity a masked and masking reality." (Gordon: 1995: 107)

Bad Faith is a form of self-deception – the paradox of lying to oneself – usually in an attempt to escape the responsibility and freedom of being an individual. We, thus, tend to make excuses, to say that we didn’t make the choices that led us to a certain situation. To be in bad faith is, thus, to deny that one is a free agent. This means that human beings are aware, no matter how hidden that awareness, of their freedom in various situations. And because of this awareness they bear some responsibility for their positions in these situations, that is, they have played a part in constructing their present reality. But what does it mean to lie to oneself? To understand this we must first grasp the structure of a lie or deception – or rather the conditions that are necessarily for a lie or deception to take place.

Firstly, as least two people or two consciousnesses are required for a lie to take place, the liar (deceiver) who is aware of the truth and the lied to (the deceived) who is unaware of the truth. However being in bad faith involves lying within a single consciousness. Thus, the person is both aware and unaware of the truth at the same time.

So in order to play the game the individual must necessarily be in bad faith. One must hide one’s true self and project a false image based on what is expected of one. To live such a life means always being on the alert, never letting ones guard down and always ensuring that one never rises above the crowd. In such an existence all sense of personal integrity, values, and identity is lost in the never-ending effort to avoid the detection of one’s true self. As the honours graduate moves up the corporate ranks, he does so knowing that it is not really he that is getting a promotion but the false image of himself. When he is complimented for completing a good deal, it is not really he that is receiving the compliment as his true self was hidden from view the day he falsified his test and constructed the expected image of himself. Carr argues that deception within the business game is a legitimate tool in seeking to persuade others to agree with you and that such agreement will bring with it a host of benefits for the individual. But it is clear that the individual receives no such benefits – it is in actuality the false image (inauthentic self) of his true self (authentic self) that benefits from these acts of deception. The individual himself neither achieves nor gains anything as long as his true identity remains hidden behind his constructed self. But to reveal one’s true self in order to claim such benefits is to rebel against conformity, and one must then necessarily feel the wrath of the crowd. Thus, the individual becomes a person imprisoned by self-deception. Similarly when the crowds cheer for Gooding’s football player, it is not really for him that they are cheering; the "authentic" player sought to do his job well and not pander to the expectations of the crowds. They cheer not because he has done his job well, but because they have succeeded in pulling him back into the crowd where he loses all sense of himself as an individual with his own set of personal values and his own identity. They cheer because he has chosen to dance to their tune, because he has chosen to deceive himself and others, because he has, in short, chosen to play the game.

 

THE GAME OF BUSINESS

 

But what exactly is the game and what does it involve? The analogy Carr draws on to illustrate his argument is one of business as a game of poker. According to Carr, we can learn a great deal about the nature of business by comparing it with poker. Both rely largely on elements of chance, but in the long run it is the player with the most consistent skill level that wins. Carr claims that to achieve victory in both "games" requires an intimate knowledge of the rules, self-discipline, insight into the psychology of the other "players", and the ability to respond swiftly and decisively to opportunities provided by chance. He adds that poker has its own brand of ethics that is different from the ethical ideals of civilised human relationships. Furthermore, nobody who plays poker expects it to be played on the basis of the ethical principles that are espoused in churches. It is well within the rules of poker to bluff a fellow player and if that bluff is successful the winning player ought not to feel any sympathy for the loser, as it was up to him (the loser) to protect himself from losing. The implication, of course, is that poker isn’t a game for people with weak constitutions. If any sympathy is shown for the loser it is regarded as personal gesture which must be separated from the rules of the game. Thus, it is game that necessitates a certain distrust of the other players and which must also ignore any claims to friendships.

It follows then that the key to success in poker lies not in kindness and open-heartedness but in cunning deception and in keeping one’s strengths and intentions concealed. These tactics are not held against the poker player, because they are accepted methods of winning the game. Therefore, according to Carr, no one should hold anything against the game of business because its standards of right and wrong differ from the accepted traditions of morality in our society. He maintains that most businessmen are not indifferent to ethics in their private lives, but once these businessmen enter into their office lives, they cease to be private citizens; they are instead game players who must be guided by a different set of ethical standards.

I will address Carr’s argument here on two grounds: First, we should establish whether the analogy he draws between poker and business is accurate. Is business in fact a game that requires a different set of standards of right and wrong from the rest of society? Secondly we should question whether the businessman stops being a private citizen once he enters the business realm. Is it possible to isolate our personal roles from our business roles? To address the first question, 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. Deception, of course, is a vital part of most games. This is primarily because, once all game players reach a certain level of technical proficiency, it becomes difficult to gain victory over opponents using abilities that the other player possesses in equal amounts – the trick in such a situation is to bluff. In that regard boxing – a game with which South Africans are much more familiar – is perhaps one of the leading exponents of the strategy of the bluff. Faking left when you want to punch right or using deceptive foot movement to upset the stance of the other boxer are just some of the instances where the bluff is used to great effect. As an interesting aside, who could forget Mohammed Ali’s famous "roper-dope" strategy employed during his fight against George Foreman. Ali, who was much older than his opponent, played possum for most of the fight, while at the same time using the ropes as support against the onslaught of Foreman before he knocked the tiring boxer out – surely claiming the mantle of the greatest bluff in sport history. But, although deception plays an important part of most games it is seldom frowned upon by other players.

Indeed, many game players will compliment their opponents on successfully deceiving them. In such instances the deceived player will often call the deceiver a "sneaky bastard" or tell him that he "really pulled the wool over my eyes", and on such occasions most deceivers will smile slyly and thank the opponent for the compliment. But in our everyday lives no person wishes to be called a "sneaky bastard" or to have the wool pulled over their eyes primarily because to be called sneaky implies that you are a person who is dishonest or untrustworthy, while having the wool pulled over your eyes implies that you have been unfairly mislead. So why do we accept such "compliments" in the game arena? Precisely because it is a game arena, that is, games are occasions where we suspend the rules of society to participate in artificial or constructed scenarios. These constructed scenarios are morally sterile and deliberately distant from the situations we find ourselves in everyday. After all, games are meant to be fun and to offer a relief from our, very often, mundane lives. This is why games are often called a "suspension of reality". For a few hours we forget about our lived reality to participate in activities that are distant from it. But why are games so distant from our lived reality?

Besides the obvious artificial and contrived nature of these games, the other important factor is that actions and decisions taken within games do not have any consequences on our lived reality. Any deception that occurs within the game arena has an effect only on the outcome of the game. The consequences of the deception resonate only within the well-defined boundaries of the game. This is why poker is able to have a different standard of right and wrong from the rest of society – i.e. because such a standard has no detrimental effect on that society. Furthermore, being called a "sneaky bastard" within a poker game implies that one used the strategy of the bluff effectively in winning the game. It is accepted by all players that such a statement is no reflection whatsoever of the moral standing of the bluffer outside of the game. Now to make a case for business as poker we would have to show that the consequences of business bluffing remain with the "game-arena" of business and have no effect whatsoever on the society outside of that arena. This is quite obviously not so. Decisions made within business situations have a profound effect not only on people working within that company, but also on the people outside of that company. A crude example would be the decision to merge two companies into one larger one which would necessitate the retrenching of approximately half their combined employees. It is clear that such a decision cannot be regarded as a game player’s decision, as its consequences move beyond the boundaries of the game arena (e.g. the entire economies of some small towns can collapse in such mergers) and into society. As we have established, a game ceases to be a game once its standards of right and wrong clash with the standards of the society outside it. Perhaps we should examine a subtler example: an executive deceives an employee into thinking that in one years time he will receive a promotion and a suitable pay increase. The employee was initially reluctant to stay on at the company because he received lucrative offers from other companies, but, once the executive assured him of his future at the company, he made the decision of staying on at his present company. The executive, however, has no intention of promoting this particular employee as he is indispensable in his current position – what he hopes to achieve by his deception is to buy some time to train somebody else to take over in a year’s time.

A year later the employee is no longer in demand, as the glut in the market has been filled, and he is actually fighting for his position in his present company. This might, on face value, appear to be a case where the consequences of the executive’s deception are restricted within the business scenario – after all his act of deception was a necessary step that had to be taken to save the company money and the employee is always welcome to stay on in his old position, provided he accept that he will not be promoted. In the business game arena, the winner would obviously be the executive and the loser the employee – in this regard in appears to be a neat end to a game situation. But it is clear that the employee is a loser not only in the business arena, but also in the private arena for all his future plans for a prosperous life are now decidedly bleak. If the employee calls the executive a "sneaky bastard", he is quite obviously not paying him a compliment on his skilful deception, but is rather saying that the executive acted in an unfair manner – i.e. he makes recourse to ethical standards outside of the game scenario. This clearly indicates that he has been affected on a private or personal level. The consequences of the bluff thus move beyond the "game" arena and, as such, this cannot be called a game player’s decision. We have now established that Carr’s analogy of business as the game of poker is at best very tenuous as it fails to grasp the notion that the consequences of business decisions or deceptions very often move beyond the business arena.

 

SEPARATING OUR BUSINESS AND PERSONAL ROLES

 

At this point it would be interesting to ponder what the executive would have replied had he heard his employee call him a "sneaky bastard". In all probability he would have answered that he was just conducting good business and that it was nothing personal – i.e. he draws a distinction between his business and private lives. The executive’s attitude seems to be in line with Carr’s claim that these two aspects of our lives (business and private) are distinct and separate from each other, and that to expect the ethics of our private lives to rule over our business lives is in the long run bad business. He further argues that once businessmen are in their work environment they cease to be private citizens and, instead, become game players who are guided by a different set of ethical standards. This attitude can be classified as a winner’s attitude. What this means is that a winner in business will always insist that business decisions have no bearing on the world outside of the business arena – for the winner, business decisions can truly be regarded as game players’ decisions.

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", "[C]orporations 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." (Solomon 1992: 216) It is clear that the business world overlaps greatly with the world outside it. Businesspeople work in a company but they also live in the community of which the company is a part.

Thus, the ethical standards of our community or private lives are bound to influence or overlap with the ethical standards of our business lives. Furthermore, it becomes difficult to draw distinctions between our business and private lives given the current economic and political power of companies today – for instance of the top 53 economies in the world, 41 are multinationals. The might and influence of companies are literally everywhere. With the lines blurred, it becomes virtually impossible to conceive of a neat separation between business and private lives as decisions taken in one sphere can have profound effects on the other. Therefore, Carr’s assertion that our business and private lives are separate can be regarded as an oversimplification of the nuances of business relationships between business people themselves and businesses, on the one hand, and society, on the other. Since we have established that our business and private lives cannot be separated, it becomes clear that the ethical standards of our private lives are bound to influence the ethical standards of our business lives. It is also clear that since deception is considered unacceptable in our private lives we can consider it equally unacceptable in our business lives.

 

REFERENCES

 

Carr, A.Z. 1968 "Is Business Bluffing Ethical?" Harvard Business Review, Jan./Feb.: 143 –153.

Gordon, L.R. 1995 Bad Faith and Anti-Black Racism. New Jersey: Humanities Press.

More, M.P. 1998 "The Philosophic Foundations of Steve Biko’s Thought" in Contributions of the African and German Philosophers to the Formation and Creation of Communities in Transition. Johannesburg: Goethe Institute.

Solomon, R.C. 1992 "Business Ethics: An Aristotelian Approach" in Solomon (ed.) Ethics and Excellence: Cooperation and Integrity in Business. New York: Oxford University Press.