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Is bluffing part of the business game?

Is it okay to lie or bluff in a business relationship? Bluff is defined as the intention to try to deceive someone about one’s abilities or intentions. Bluffing is acceptable and expected in poker, for example, but should it be the same in business dealings? This is a tricky question, especially in a 2022 business environment marked by growing economic uncertainty, staffing and equipment issues, and post-pandemic supply chain issues.

This is a question that economist Albert Z. Carr began to address in the 1960s. His founding thoughts on the subject were covered in a 1968 journal. Harvard Business Review article “Is it ethical to bluff in business?”

Playing business = playing bluff

Carr, a writer, economist, and consultant to two presidents, argued that business is a game, and bluffing is an acceptable form of play.

Think about this statement: “The ethics of business is an ethics of play, different from the ethics of religion.” Basically, it’s OK to bluff because a company that intends to be the winner in the business game “must have a player attitude.” He suggested that bluffing is such an integral part of the business game that a manager who does not master the technique of the game “is unlikely to accumulate much money or power.”

It’s allowed to lie

Business executives read Carr’s book “1968” HBR articles, in fact, gave the green light to bluff, that is, lies.

Take, for example, this quote.

“Most executives are almost compelled from time to time, in the interests of their companies or themselves, to resort to some form of deceit when negotiating with customers, dealers, unions, government officials, or even other divisions of their companies. By deliberate misrepresentation, concealment of relevant facts, or exaggeration—in short, bluff—they seek to persuade others to agree with them. I think it’s fair to say that if an 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 the opportunities allowed by the rules and a major flaw in his business dealings.

Personal morality is a double-edged sword

Carr considered the bluff dynamic to be a double-edged sword. If the leaders don’t, they will most likely lose their positions, but if they bluff, they may still not succeed.

He called it private morality. The basis of personal morality, according to Carr, “is respect for the truth, and the closer the businessman comes to the truth, the more respect he deserves.”

But Carr had a lead. He suggested that in most cases bluffing in business is seen as just a game strategy, like bluffing in poker, which does not reflect the morality of the bluffer. Essentially, Carr’s article gave business leaders permission to put aside their conscience and bluff to win the business game. An executive’s personal morality may tell them it’s wrong to lie, but Carr HBR the article told them that their morality did not apply in business.

Game in 2022

The ideas that Carr promoted were certainly prophetic. Unfortunately, too many business leaders in the twenty-first century have grown up in an era where they were taught that business is a game and bluffing is okay.

Fast forward from 1968 to 2022 and we can see how Carr’s insights have taken hold in almost every aspect of everyday life, politics and business. Just as no one expects poker to be played ethically, should businesses act ethically? While it is expected that a company’s mission statement and values ​​may proclaim honesty and ethical behavior, how much of this is an illusion? How much does anyone care?

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

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