Is it okay to lie or bluff in business relationships? Bluffing is defined as the intent to try to deceive someone as to one’s abilities or intentions. Bluffing is accepted and expected in poker, for example, but should it be the same in business dealings? It’s a tricky question, especially in 2022 business environments marked by mounting economic uncertainties, talent and equipment issues and struggling post-pandemic supply chains.
The question is one that economist Albert Z. Carr began to address in the 1960’s. His seminal thoughts on the subject were covered in a 1968 Harvard Business Review article, “Is Business Bluffing Ethical?”
The Game of Business = The Game of Bluffing
Carr – a writer, economist and a consultant to two Presidents – maintained that business is a game and that bluffing is an acceptable form of gamesmanship.
Consider this statement: “The ethics of business are game ethics, different from the ethics of religion.” In effect, it’s okay to bluff because a company that intends to be a winner in the business game “must have a game player’s attitude.” He suggested that bluffing is so integral to the game of business that an executive who does not master the techniques of the game “is not likely to accumulate much money or power.”
Permission Granted to Lie
Business executives reading Carr’s 1968 HBR article were in essence given a green light to bluff – aka lie.
Take for example this quote.
“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.”
Private Morality – The Double Edge Sword
Carr considered the dynamics of bluffing a double-edged sword. If executives don’t do it, they likely will lose ground, but if they do bluff, they might not succeed anyway.
He called this private morality. The basis of private morality, Carr says, “is a respect for 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 regarded simply as game strategy—like bluffing in poker, which does not reflect on the morality of the bluffer. In essence Carr’s article was giving business leaders permission to dismiss their consciences and bluff in order to win in the game of business. An executive’s private morality may be telling them it’s not ok to lie, but Carr’s HBR article was telling them their morals did not apply in the game of business.
Playing the Game in 2022
The ideas Carr promoted were certainly prescient. Sadly, far too many business leaders in the twenty-first century have been brought up in an era where they were taught that business was a game and it is ok to bluff.
Skip ahead 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 on ethical principles, are businesses expected to operate on ethical principles? While the expectation is that a company’s mission statement and values may profess integrity and ethical behavior, how much of that is an illusion? How much does anyone care?
If business is a game, I suggest the game we are playing in 2022 is a race to the bottom. Perhaps this is why concepts such transparency, Conscious Contracts, Conscious Capitalism and relational contracting are on the rise.