Is bluffing just part of the business game?

Is it okay to lie or bluff in business relationships? Bluffing is defined as the intent to attempt to deceive someone as to their abilities or intentions. Bluffing is acceptable and expected in poker, for example, but should it be the same in business dealings? It’s a tough question, especially in 2022 business environments characterized by growing economic uncertainties, talent and equipment issues, and struggling post-pandemic supply chains.

The question is one that economist Albert Z. Carr began to consider in the 1960s. His seminal thoughts on the subject were covered in 1968 Harvard Business Review article, “Is bluffing ethical in business?”

The Game of Business = The Game of Bluffing

Carr—an author, economist, and adviser to two Presidents—argued that business is a game and that bluffing is an acceptable form of gamesmanship.

Consider this statement: “Business ethics are game ethics, different from religion ethics.” In fact, it’s okay to bluff because a company that intends to be a winner in the business game “must have the attitude of a game player.” He suggested that bluffing is so integral to the business game that an executive who does not master the game’s techniques “is not likely to amass much money or power.”

License granted to Lie

Business executives reading Carr’s 1968 HBR The article was essentially given a green light to bluff – aka lie.

Take this quote for example.

“Most executives are at times almost compelled, in the interests of their companies or themselves, to engage in some form of deception when dealing with customers, agents, labor unions, government officials, or even other parts of their companies. By deliberate inaccuracies, concealment of relevant facts or exaggerations – in short, bluffing – they seek to convince others to agree with them. I think it is fair to say that if the individual executive refuses to bluff at times – if he feels compelled to tell the truth, the whole truth and nothing but the truth – he is ignoring the opportunities allowed by the rules and is at a great disadvantage in his business dealings”.

Private Morality – The Double Edge Sword

Carr considered the bluff dynamic a double-edged sword. If executives don’t, they will likely lose ground, but if they bluff, they may not succeed anyway.

This he called private morality. The basis of private ethics, Carr says, “is respect for the truth, and the closer a businessman comes to the truth, the more he deserves respect.”

But Carr had a catch. He suggested that most bluffing in business is viewed simply as a game strategy—like bluffing in poker, which does not reflect the ethics of the bluffer. In essence, Carr’s article gave business leaders permission to dismiss their consciences and bluff their way to winning at the game of business. An executive’s private ethics may tell him it’s not okay to lie, but Carr’s HBR article told them their ethics didn’t apply in the business game.

Playing the game in 2022

The ideas advanced by Carr were certainly prophetic. Unfortunately, too many business leaders in the twenty-first century were raised in an era where they were taught that business was a game and it was okay to bluff.

Flash forward from 1968 to 2022 and we can see how Carr’s conclusions have taken hold in almost every aspect of daily life, politics and business. Just as no one expects poker to be played ethically, are businesses expected to operate ethically? While the expectation is that a company’s mission statement and values ​​may signify integrity and ethical behavior, how much of that is an illusion? How much does anyone care?

If business is a game, I suggest that the game we are playing in 2022 is a race to the bottom. Perhaps this is why concepts such as transparency, conscious contracts, conscious capitalism and relational contracting are on the rise.

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