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 about 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 the business environments of 2022 marked by growing economic uncertainties, talent and equipment issues, and post-pandemic supply chains.

The question is one that the economist Albert Z. Carr began to address in the 1960s. His main thoughts on the subject were covered in 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 – asserted that business is a game and that bluffing is an acceptable form of gamesmanship.

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

Permission granted to lie

Business executives reading Carr’s 1968 HBR the article was basically given a green light for bluffing – aka lying.

Take this quote for example.

“Most executives are occasionally almost compelled, in the interests of their companies or themselves, to practice some form of deception when negotiating with customers, merchants, unions, government officials, or even other departments of their companies. By deliberate misrepresentation, concealment of relevant facts or exaggeration – in short, bluffing – they try to convince 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 compelled to tell the truth, the whole truth, and nothing but the truth—he is ignoring the opportunities allowed by the rules and is in a serious disadvantage in his business dealings.”

Private morality – A double-edged sword

Carr considered the dynamic of bluffing to be a double-edged sword. If leaders don’t, they’re likely to lose ground, but if they bluff, they may not succeed anyway.

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

But Carr had a catch. He suggested that most bluffing in business is considered mere game strategy—like bluffing in poker, which does not reflect on the bluffer’s morality. In essence, Carr’s article was giving business leaders permission to dismiss their conscience and bluff in order to win at the game of business. A leader’s private morality may tell them it’s not okay to lie, but Carr’s HBR the article told them that their morals did not apply in the business game.

Playing the game in 2022

The ideas Carr promoted were certainly prescient. Sadly, many business leaders in the twenty-first century grew up 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 ​​can proclaim integrity and ethical behavior, how much of this 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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